Cognizant releases performance targets for top management

At a time when officials of Indian software services are wary about the global slowdown and its likely effect on the business performance next financial year, things seem to be very positive with Cognizant Technology Solutions, which has large operations in India.

Cognizant's compensation performance milestones to its top executives point to strong growth in the year 2012. It released the milestones to the US Securities and Exchange Commission on Monday. While it is not guidance, the metrics indicates on how the company is likely to perform next year.

Performance milestones

The company's compensation committee granted the awards (in the table) of performance units to the top five executive officers.

The units will be subject to certain performance milestones and continued service requirements. All or a portion of the units shall vest based on the level of achievement of the revenue milestone set forth below:

0 per cent of the units, which are awarded, shall vest up on achievement of 2012 revenue of less than $7,243,000,000

50 per cent on achieving revenue of $7,243,000,000

100 per cent on achieving $7,525,000,000 and

200 per cent on achieving $8,087,500,000.

In November or December, Cognizant usually releases the board performance targets for its top management for setting the compensation. This is usually taken as a base level for the next year's guidance.

For instance, last year, the 100 per cent level for vesting was 24 per cent growth and the company guided to 26 per cent initially but is now on track to achieve 33 per cent. “We believe the number is a favourable initial indicator of guidance to be released in February,” said Barclays Capital.

In its report, J.P. Morgan said that Cognizant's revenue growth targets for its management's 2012 performance-based stock awards indicate a continuation of the healthy demand environment next year assuming macro does not deteriorate further.

Pact with AstraZeneca

Meanwhile, Cognizant today announced a multi-year agreement with AstraZeneca to deliver comprehensive biostatistics and medical reporting services to generate clinical study reports.

Under the agreement, Cognizant will provide centralised statistical programming, statistical analysis, medical writing, and document publishing services, spanning the entire chain of clinical data reporting from case report forms to clinical study reports. This will help AstraZeneca increase operational efficiency, reduce cycle times, and optimise costs.

Cognizant will also leverage its proprietary Web 2.0-based platform — Cognizant 2.0 — to support knowledge sharing and collaboration across global teams, allowing clinical studies across different countries to be managed simultaneously, and delivering significant productivity benefits to AstraZeneca.

COMMENT NOW