Wipro chairman Rishad Premji takes 50 percent pay cut after company cuts employees' variable pay

By Ankita Garg: Wipro’s Chairman Rishad Premji has taken a big compensation cut for the financial year ended March 2023. A report from CNBC claimed that the executive took around a 50 percent cut in his remuneration and that he is now entitled to get a total compensation of $951,353. This is almost half the amount of what he received in the last fiscal, as per the cited source.

According to Form 20-F filed with US Securities and Exchange Commission, Premji’s remuneration in the last fiscal year was $1,819,022. This clearly suggests that he lost about $867,669. It is being said that the executive hasn’t received a cut since the pandemic and this one is its biggest cut yet. During the pandemic, he reportedly received a cut of 31 percent.

The Form 20-F that has been submitted by Wipro reveals that Premji’s total remuneration includes $861,620 in salary and allowances, $74,343 in long-term compensation benefits, and $15,390 in other categories. His salary also consists of a cash bonus, but he doesn’t seem to have been given stock options in the fiscal year 2023.

But, Premji is not alone as Wipro’s Chief Financial Officer, Jatin Pravinchandra Dalal, also received a reduction in his compensation. For the financial year 2022 to 2023, he got a total compensation of $1.1 million as against $1.6 million (around Rs 12.1 crore) that he received in the previous year. This is basically a cut of around 32 percent. The reasons behind the cut in remuneration are not revealed.

There are chances that this could be to save costs as revenue growth is slower. The company has a small number of layoffs and has also slashed the pay of freshers, as per reports. This year, Wipro reportedly informed its employees that it would release only 80.25 percent variable pay to employees.

“Given our overall performance across Wipro, and with the company multiplier at 1, the variable pay for Q4 FY 2023 is 80.25 percent for employees whose payout is linked to Wipro’s overall financial performance,” the company said.

The reason behind not paying full variable pay is not known, but the move could be attributed to the decline in revenue growth. There are reports claiming that Wipro witnessed a decline of 0.6 percent in revenue for Q4 FY23. It is being said that the company had expected a drop of up to 3 percent in the April-June quarter on the basis of its analysis.

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