Employee cost at Wipro grew 10% in FY19, slowest among IT majors

Employee cost at Wipro grew 10 per cent in FY19 compared to 17.8 per cent at TCS and 16.8 per cent at Infosys, according to the annual reports of these companies. 

In general, IT services companies around the world are seeing a rise in their employee-related costs in the backdrop of severe talent crunch faced by these companies and increasing dependence on sub-contractors in their largest market of North America. 

HCL Tech, which is also in the top league in the IT sector in India, has not released its annual report.

Among the top IT services firms, even though the growth of Wipro’s expenses towards employee cost was the least, the Bengaluru-headquartered company’s CEO saw a handsome rise in his annual compensation in FY19. 

According to the company’s regulatory filing with Nasdaq, CEO Abidali Neemuchwala’s compensation stood at $3.95 million (almost Rs 27.3 crore) in FY19, a growth of nearly 41 per cent over the previous year, though variable pay formed a significant chunk in it.

As compared to this, Rajesh Gopinathan, CEO of Tata Consultancy Services, saw a relatively moderate 28 per cent rise in his annual compensation in FY19. Interestingly, TCS was the best performing company among the Indian biggies in this space followed by Infosys.

Gopinathan’s compensation included Rs 1.15 crore towards salary, Rs 1.26 crore perquisites, Rs 13 crore commission and over Rs 60 lakh towards other allowances, adding up to a remuneration of Rs 16.02 crore. 

In FY17-18, his compensation stood at Rs 12.49 crore. TCS employees received an average wage hike of 2-6 per cent in the fiscal.

Infosys CEO Salil Parekh’s compensation is not comparable since he took charge a little more than a year back. Parekh earned Rs 24.67 crore (almost $3.7 million) in FY19. The annual wage hikes for Infosys employees was around 6 per cent.

Wipro also said the compensation of Rishad Premji, the company’s chief strategy officer who is now chairman-designate, increased by 9 per cent in FY19. The average compensation hike for Wipro employees was reported to be around 6-8 per cent. 

For Infosys, the cost of efforts, comprising employee cost and cost of technical subcontractors, increased as a percentage of revenue from 55.3 per cent in FY18 to 56.3 per cent in FY19. In the case of TCS, employee-related cost as a percentage of overall revenues actually dropped to 53.6 per cent in FY19 from 53.9 per cent in FY18 though in absolute term it went up.

Although HCL Technologies, the third largest Indian IT provider, is yet to publish their annual report, last year CEO C Vijaykumar's salary was Rs 33 crore in FY18 which was among the highest in the industry. The highest last year was CP Gurnani, CEO TEch Mahindra who earns a huge chunk of his compensation through stock options among other variables.