Frenchman Delaporte’s remuneration doubled from FY23, when he earned about $10 million in annual compensation. His salary increase in FY24 was primarily driven by a cash severance payment of $4.33 million, and the cost of accelerated vesting of 9,89,130 unvested stock options. Additionally, while his base salary and other payouts more than doubled from FY23, his commission increased four-fold in FY24.
“The accelerated vesting of Delaporte’s stock options added a significant amount to his FY24 remuneration. Wipro’s stock has been in the ascendancy over the last year so Delaporte profited nicely from that. This is a problem with many CEO’s compensation where they are too focused on stock price over other key performance areas. This is not restricted to Wipro,” said Phil Fersht, chief executive officer of US-based HFS Research, an outsourcing research firm.
Also Read: Wipro’s outgoing CEO adds to his resignation bounty with $4 million share sale
Stock of Wipro settled at 465.85 on Thursday on the National Stock Exchange, up 1% from the previous close. It has gained nearly 17% over the past year.
“In recognition of Delaporte’s contributions in driving significant transformation at the company during his tenure as chief executive officer and managing director, and with a view to enable a smooth transition, ensure business continuity and to ensure adherence to post-engagement obligations (including, but not limited to, confidentiality, non-solicitation, non-disparagement, and other obligations), his compensation for the year ended March 31, 2024 includes, inter alia, cost of accelerated vesting of 989,130 unvested stock options and cash compensation in the amount of US$4.33 million and applicable social security contributions, subject to appropriate deductions. Delaporte’s payment in the form of cash compensation shall be subject to shareholders’ approval,” read the company’s filing.
Also Read: CEO Pallia overhauls Wipro top management
Mint had reported on 16 May that Thierry Delaporte sold shares to the tune of $4.1 million over the past month after the company allowed accelerated vesting of shares awarded to him, taking his total earnings since he resigned from the company on 6 April, to about $8.5 million.
Pallia is expected to earn $7 million in his first year as CEO
Delaporte, who joined the Bengaluru-based IT company on 6 July 2020, resigned as Wipro’s CEO on 6 April 2024, a year before his five-year tenure was to end. His abrupt exit prompted the company to put Srinivas Pallia in his place. Pallia is expected to earn $7 million in his first year as CEO, according to a company filing. In contrast, Thierry in his first year as CEO earned $8.8 million as remuneration in the year ended March 2021, according to another filing.
Delaporte’s salary, while highest among his Indian IT peers, is a tad lower than the Nasdaq-listed Cognizant Technology Solutions’ CEO Ravi Kumar Singisetti, who earned $22.6 million in the year ended December 2023. Cognizant follows a January-December accounting year, whereas Indian software exporters follow an April-March financial calendar.
Tata Consultancy Services Ltd, India’s largest IT company and thrice the size of Wipro, paid $3.1 million to CEO K. Krithivasan for the financial year ended March 2024.
While HCL Technologies Ltd and Infosys Ltd are yet to disclose their annual reports for the current financial year, as of the 12 months ended March 2023, HCL Tech CEO C. Vijayakumar and Infosys CEO Salil Parekh earned $10.6 million and $6.8 million respectively.
Delaporte’s doubling of remuneration comes even as Wipro’s executive chairman Rishad Premji did not get a commission for a second successive year. As per the company filings, Premji was entitled to receive a commission that is 0.35% of the company’s incremental net profit over the previous financial year. However, since Wipro’s net profit did not grow in this time, he did not receive the commission.
Premji earned less in FY24 compared with FY23. He pocketed $0.77 million in FY24, down from $0.95 million that he had earned in the 12 months through March 2023.
Wipro reported a consolidated net profit of $1.3 billion for the 12 months ended March 2024, which is 3.6% lower than in FY23.
Delaporte’s salary also doubled at a time India’s fourth-largest IT company is struggling to grow. Wipro is the only company among the country’s top four IT firms to report a yearly revenue decline. The IT company reported $10.8 billion in revenue for FY24, which is 3.8% lower than in the previous year.
You are on Mint! India’s #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!
Download The Mint News App to get Daily Market Updates & Live Business News.
Published: 23 May 2024, 07:07 PM IST