Wipro gives CEO, chairman generous increments despite low growth

 

Even though Wipro, India's third largest IT services company is yet to catch up with peers in terms of performance, the Bangalore-based company has given its Chief Executive Officer, T K Kurien over 20% increase in compensation (including variable pay and other benefits) during FY14.

During the year, Kurien's annual compensation crossed the $1 million-mark for the first time at $1.1 million (around Rs 6.5 crore). The average hikes in the Indian IT services sector in FY14 were limited to 5-9%.

Additionally, the compensation of promoter and Chairman Azim Premji more-than-doubled during the year to $1.7 million (around Rs 10 crore) from $733,827 a year ago.

While some investors are of the view that there is nothing 'unfair' or 'wrong' in these sharp increments, several others are of the view that it was 'unjustified', considering the fact that the top leadership of close peer Infosys, which is also faced with similar challenges, has accepted to work at an annual compensation of Rs 1.

"Premji is a majority shareholder in Wipro and so he earns a good amount of wealth from the company as an investor also," said an IT analyst with a domestic brokerage. "It does seem unfair for him to get such a huge sum as compensation."

Analysts added that Kurien's performance over the past three years, since he joined Wipro, has not been satisfactory enough for him to be rewarded so generously.

"We have only heard promises from Kurien so far, and there is nothing extraordinary in the company's performance under him. So one wonders, what is the company rewarding him for," said another analyst.