BENGALURU
:
Wipro Ltd’s new chief executive officer Srinivas Pallia stands to make up to $7 million in remuneration in his first year. India’s fourth-largest technology services company has also agreed to pay $4.33 million to former CEO Thierry Delaporte, a first-of-its-kind cash payment made to any outgoing executive in the company’s history. Delaporte’s annual remuneration, when he was in office, was $10.1 million.
The remuneration of Pallia, who took over on 7 April for five years, includes a basic salary between $1.75 million and $3 million, and targeted variable pay of up to $3 million, depending on how the compares fares on growth and profitability, according to an exchange filing made by Wipro on Monday.
Plus, Pallia gets $4 million worth of stocks. The stocks include $1.4 million of restricted stock units (RSUs) and $2.6 million of performance stock units (PSUs). But 25% of RSUs and PSUs worth $1 million will vest to Pallia on 2 May 2025, which brings his total remuneration to $7 million in the first year. Another 25% of stocks will vest on 2 May 2026, and the rest on 2 May 2027.
“Vesting of PSUs shall be subject to achievement of revenue, margin, and free cash flow targets as per company policy, and such other criteria as may be determined by the Board of Directors, from time to time,” said Wipro in its filing dated 29 April. “The stock compensation is aimed at promoting a culture of ownership by providing an opportunity to share in future growth and profitability of the company, which would thereby lead to improved engagement, motivation, and retention,” said Wipro in the filing.
Wipro also decided to pay $4.33 million to Delaporte, who resigned earlier this month, 14 months short of when his five-year term was to end on 5 July 2025. Wipro chair Rishad Premji asked Delaporte to resign, as the company trailed rivals amid an employee exodus.
“The payment is proposed to be made in recognition of Mr. Delaporte’s contributions in driving significant transformation at Wipro 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),” said Wipro in the filing.
“Well, in simple words, this cash payment to an outgoing executive is separation payment,” said the head of a proxy advisory firm, on the condition of anonymity. “But since the company continues to maintain that the former CEO resigned and we don’t know if this payment was part of some contract, we can only say it was a payment to an outgoing executive.”
Until now, Wipro, which has had eight CEOs since the turn of the century, has only allowed an accelerated vesting of stock options to outgoing CEOs. For now, the company has not clarified if Delaporte, too, will be allowed the option of accelerated vesting of stocks.
Cognizant Technology Solutions Corp. paid about $3.8 million in severance payments to its former chief Brian Humphries after the board sacked the CEO last January.
Shareholders of Wipro can vote on the two resolutions of remuneration to Pallia and the cash payment to Delaporte between 30 April and 29 May. To be sure, founder chairman Azim Premji owns 72.89% of Wipro.
Cognizant’s chief executive officer Ravi Kumar Singisetti got $22.56 million in compensation in 2023, thanks to a one-time stock reward, making him the highest-paid Indian boss at a technology services company.
For now, if CEO remuneration as a percentage of the company’s revenue is taken, then Kumar takes the podium in the Indian IT services space. Kumar’s remuneration is 0.11% of Cognizant’s $19.35 billion in revenue last year.
Pallia’s $7-million remuneration at Wipro is 0.064% of the company’s $10.8 billion in revenue in FY24, while C. Vijayakumar’s promised remuneration of $10.65 million is 0.085% of HCL Technologies Ltd’s $12.58 billion in revenue in FY23.
Accenture Plc, more than six times the size of Wipro, paid $31.55 million in remuneration to chair and CEO Julie Sweet in 2023. This implies that Sweet’s remuneration is 0.049% of the $64.1 billion in revenue at Accenture, which follows a September-August fiscal year. The $6.8 million remuneration of Infosys CEO Salil Parekh is 0.037% of the $18.1 billion revenue of Infosys in FY23. Tata Consultancy Services Ltd paid $3.5 million or 0.012% of its $27.9 billion in FY23 revenue as salary to its former CEO Rajesh Gopinathan, who was succeeded by K. Krithivasan in June last year.