Wipro Chairman Rishad Premji Takes 50% Pay Cut Amidst Layoffs, Demonstrating Commitment to Company
Wipro Withholds Commission for Chairman Rishad Premji as Net Profits Turn Negative in FY23
25 May 2023
Wipro chairman Rishad Premji has taken a nearly 50% pay cut for the fiscal year 2023, as revealed in a recent filing to the Securities and Exchange Commission.
Premji's total compensation for FY23 was $951,353, including salary, allowances, long-term benefits, and other incomes. However, he did not receive a commission due to negative net profits.
This is not the first time Premji has reduced his pay; during the pandemic, he slashed his salary by 31% in 2019-20, showcasing his commitment to the company during challenging times.
In a recent filing made to the Securities and Exchange Commission in the US, it was revealed that Rishad Premji, the chairman of Wipro, has taken a substantial pay cut of almost 50% for the financial year 2023. This decision comes amidst ongoing layoffs in the tech industry, and it demonstrates Premji's commitment to the company during a challenging period. Let's delve into the details of this development and its implications.
According to the filing, Premji's total compensation for the fiscal year ending March 2023 amounted to $951,353. This figure includes his salary and allowances of $861,620, long-term compensation benefits of $74,343, and other incomes of $15,390. Additionally, as chairman, Premji is entitled to a commission at a rate of 0.35% on incremental consolidated net profits. However, due to negative incremental consolidated net profits for the year, he did not receive this commission.
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Premji's salary exceeds that of CEOs of other Indian IT companies like Infosys and TCS, but it is lower than his own previous year's earnings. It is worth noting that this is not the first time Rishad Premji has taken a pay cut. During the COVID-19 pandemic, he slashed his pay by 31% for the year 2019-20, showcasing his willingness to make personal sacrifices during challenging times. On the other hand, Wipro CEO Thierry Delaporte remained one of the highest-paid CEOs despite a minor reduction in salary.
The decision for Premji's pay cut aligns with Wipro's financial performance in the fiscal year 2023. The company reported earnings that fell short of estimates due to a global slowdown and uncertain market conditions. Wipro's net profit declined by 0.4% year-on-year in Q4, and revenue from operations experienced a slight decline. The management attributed these results to market uncertainty and a slowdown in discretionary spending.
Rishad Premji joined Wipro in 2007 and became the executive chairman in 2019. He has played a crucial role in shaping the company's strategy for sustained and profitable growth. His leadership includes spearheading Wipro's M&A strategy and the establishment of Wipro Ventures, a $250 million fund to invest in promising start-ups. As executive chairman, Premji works closely with the leadership team, providing strategic insight and direction to the business.