Rishad Premji, the executive chairman of Wipro, did not receive any variable or commission pay as part of his annual compensation package in the fiscal year 2024. This marks the second consecutive year that Premji has not taken this portion of his remuneration.
According to the company’s recent 20-F filing with the US Securities and Exchange Commission, the decision to withhold the commission element was due to the negative incremental consolidated net profit for the year.
According to an ET report, Premji’s total compensation for FY24 amounted to $769,456 (approximately Rs 6.5 crore), reflecting a decrease of around 20% compared to the previous year’s package of $951,353 (approximately Rs 7.9 crore).
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The filing, released on Thursday, revealed that his salary declined to $692,641 (around Rs 5.8 crore) from $861,000 (around Rs 7.2 crore) in the previous year, with the remaining amount being classified as other long-term compensation.
As the son of Wipro chairman Azim Premji, Rishad Premji is entitled to a commission of 0.35% on the incremental consolidated net profits of Wipro compared to the previous fiscal year.
“However, in light of the fact that the incremental consolidated net profits for fiscal year 2024 was negative, the Company determined that no commission was payable for fiscal year 2024 to Mr. Rishad A. Premji,” the company filing stated.
Furthermore, Rishad Premji did not receive any stock options this year. At the age of 46, he assumed the role of chairman of Wipro in 2019 for an initial term of five years. His tenure has been extended for an additional five years, set to conclude on July 30, 2029.
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In the fiscal year 2023, Premji’s remuneration decreased by 43.34% compared to the previous year, while Wipro’s former CEO and managing director, Thierry Delaporte, saw a 3.26% increase in his compensation.
Delaporte became the highest-paid CEO in the IT sector, earning a total compensation of $20.11 million (approximately Rs 166.5 crore) in FY24. His salary package included a base salary of $3.9 million, a variable pay of $5.06 million, long-term compensation of $4.32 million, and other payouts amounting to $6.84 million. In comparison, his total compensation in FY23 was just over $10 million.
Following his resignation in April, it was reported that Delaporte was granted a separation payment of Rs 92.1 crore (roughly $11 million). The company was required to pay Mr. Delaporte, severance pay of 12 months’ base salary as last applicable when in service, payable over a 12-month period following the date of termination.
These payouts come at a challenging time for Wipro, as the company struggles to keep up with its competitors in terms of growth, while the entire $254 billion IT sector faces a slowdown in business.
Wipro has provided guidance for the first quarter of FY25 ending June 2024, projecting revenue growth between -1.5% and 0.5%, citing ongoing weakness in demand and a challenging macroeconomic environment.
For the full year FY24 ending March, Wipro’s revenue declined by 3.8% year-on-year (YoY) and 4.4% in constant currency terms to $10.8 billion (Rs 89,760 crore). The company’s net profit also decreased by 2.7% YoY to $1.3 billion for the full year.
Republished. Link to Original Article: https://timesofindia.indiatimes.com/business/india-business/rishad-premji-wipros-executive-chairman-takes-pat-cut-no-variable-or-commission-pay-in-fy24/articleshow/110360789.cms