Wipro’s ex-CEO to receive $4.3Mn severance despite public shareholder dissent
BENGALURU, INDIA — Thierry Delaporte, the former CEO and Managing Director of Wipro, is set to receive a staggering $4.3 million as a cash severance package, despite facing opposition from a significant portion of the company’s public shareholders.
Public shareholder dissent
Nearly 78.4% of Wipro’s public shareholders, accounting for 10.31% of the total shareholders, voted against the resolution to award Delaporte the substantial $4.33 million cash compensation.
This opposition from public shareholders, including prominent institutional investors like LICI Gratuity Plus Income Fund, JP Morgan Chase Bank, and SBI Arbitrage Opportunities Fund, highlights the concerns raised over excessive executive compensation.
Promoter group’s influence
Despite the public dissent, the resolution passed with an overwhelming 89.7% approval, primarily due to Wipro’s high promoter shareholding of nearly 73% held by Founder-Chairman Azim Premji and related entities.
The significant promoter stake played a pivotal role in the resolution’s passage, overshadowing the opposition from public shareholders.
Justification for severance pay
Wipro justified the substantial severance payout, stating it was essential for ensuring a smooth transition, maintaining business continuity, and adhering to post-employment obligations, such as confidentiality, non-solicitation, non-disparagement, and other obligations.
The company cited Delaporte’s contributions in driving significant transformation during his tenure as the rationale behind the compensation.
Highest-paid CEO in Indian IT
Delaporte’s total compensation for the financial year 2023-24 amounted to $20.1 million, making him the highest-paid CEO in the Indian IT industry for the second consecutive year.
His compensation package included a salary and allowance of over $3.9 million, commission/variable pay of over $5 million, nearly $7 million classified as ‘others,’ and over $4 million as long-term compensation, including the cost of accelerated vesting of unvested stock options.
Successor’s compensation
Delaporte’s successor, Srinivas Pallia, a 32-year company veteran, will receive an annual remuneration package of approximately Rs50 crore (US$6 million), ranking second among CEOs in the Indian IT industry for FY25.
The controversy surrounding Delaporte’s substantial compensation has reignited debates around executive pay, shareholder rights, and corporate governance practices within the Indian IT sector.
As companies navigate the competitive landscape, striking a balance between rewarding leadership and addressing stakeholder concerns remains a delicate endeavor.
