Wipro has indicated that chairman designate Rishad Premji may cease to play an executive role from next year when Sebi’s mandate regarding chairpersons of listed companies kicks in.
The stock market regulator had amended its rules last year to mandate that the top 500 listed companies should ensure, with effect from April 2020, that the chairperson of the board must be a non-executive director.
In its annual report for 2018-19 that has just been released, Wipro said, “As and when the amendments to Regulation 17(1B) of the listing regulations requiring appointment of non-executive chairman by listed entities come into effect, Mr Rishad A Premji will cease to perform any executive roles in the company and continue in the capacity of non-executive director (designated as “non-executive chairman” by the Board of Directors) of the company, such that the company remains compliant with the listing regulations in force at all times.”
If that happens, it will be one of the rare instances where the promoter family, even though having voting rights to the extent of almost 74% of the shareholding in the company, will play no role in the day-to-day running of it. Azim Premji has committed 67% of Wipro shares to his philanthropic foundation, but the family continues to have the voting rights on these shares.
It is probably because of the likely change in role that Rishad Premji’s fixed salary has been proposed to be in a range – of Rs 4.5 crore and Rs 9 crore, according to the annual report. Shareholders will vote on this at the company’s annual general meeting (AGM) on 16th July.
The fixed salary comprises of various allowances and reimbursements under the Wipro Benefits Plans & Allowances. Premji will also get a commission of 0.35% of the incremental consolidated net profit of the company.
Last year, as chief strategy officer, Premji had received a gross salary of Rs 1.09 crore, a variable pay of Rs 4.82 crore, and allowances, retiral and other annual compensation of Rs 0.92 crore, adding to a total of Rs 6.83 crore. As chairman, he will earn a higher fixed salary, and his variable pay will be replaced by the commission on profit.
A Wipro spokesperson said the roles and responsibilities of Premji as executive chairman are different from that of his previous role and a comparison of compensation in the two roles would be “unfair and erroneous.” He said the AGM would seek shareholder approval for a compensation range proposed to be paid over five years and not for a particular year.
The Premjis have traditionally not taken much by way of salary. But they earn significantly through the dividends on their shareholding. However, that too is now down sharply, after Azim Premji committed most of the shareholding to his foundation.
Rishad Premji will take over as chairman from his father effective 31st July.
The annual report shows that among the senior management, Wipro CFO Jatin Dalal and COO Bhanumurthy BM’s gross remunerations saw sharp increases in 2018-19. Dalal got a 30% increase to Rs 6.09 crore, and Bhanumurthy received a 23.4% to Rs 6.91 crore. The remuneration comprises of salary, allowances, commissions, performance-based payments and other perks. It also includes the perquisites value of restricted stock units (RSUs) as exercised by the executives.
The number of people in Wipro’s crorepati club reduced to 67 in 2018-19, from 86 in the previous year. In contrast, the number of Infosys executives with compensation above Rs 1 crore rose sharply to 64 in 2018-19, from 28 in the year before.
Rishad Premji can leave executive role from 2020 : Wipro
