Abidali Neemuchwala, who became Wipro Ltd’s chief executive officer (CEO) in February, earned $1.8 million in compensation in 2015-16, regulatory filings showed, more than what the previous CEO earned at Wipro, but less than what CEOs earn at rival firms Infosys Ltd and Tata Consultancy Services Ltd (TCS).
Wipro’s last CEO and current executive vice-chairman T.K. Kurien earned $2.1 million and 75,000 stock options in 2015-16. But when he held the post of CEO in 2014-15, he earned $1.4 million and received 150,000 shares.
“Both Mr Abidali and Mr Kurien are based out of different geographies. Hence, it is not correct to compare Mr Abidali’s compensation with that of Mr Kurien. Mr Kurien is based out of India, while Mr Abidali is based out of the US. Each geography has its own compensation structure. So, this will not be an apple to apple comparison,” a company spokesperson said.
Experts added that Neemuchwala’s compensation is more for his role as a chief operating officer (COO) and group president, since he became CEO only in February. Neemuchwala was appointed as COO in April 2015.
“Usually, first-time CEO’s compensation in a company is positioned between first quartile and median of market compensation levels. This positioning decision, however, very heavily depends on what kind of roles the compensation is benchmarked against and which geography the CEO is from,” says Anubhav Gupta, head of executive compensation and governance (South Asia) at human resources firm Aon Hewitt.
Neemuchwala, a former TCS executive, was also given 200,000 in stock options in the fiscal year ended 31 March 2016, worth $2.4 million worth at current market price, said a company spokesperson.
When you include stock options, Neemuchwala’s compensation becomes quite attractive, said Gupta.
When Infosys appointed Vishal Sikka as CEO in August 2014, it paid him $5.08 million in annual salary, including $2 million worth stock options. In fiscal year 2016, his salary was $7.4 million and was revised to $11 million for 2017, making him the highest paid CEO among Wipro, TCS and Infosys.
TCS managing director and CEO N. Chandrasekaran earned Rs.25.6 crore, or $3.8 million, in FY16, in addition to a special bonus of $1.49 million, according to the company’s annual report.
After Wipro’s underperformance last year, topped with a weak outlook for the current April-June quarter, Neemuchwala has his work cut out for him as he will be steering the company to achieve the ambitious target he laid out—of expanding Wipro’s revenue to $15 billion with 23% profitability by 2020.
Wipro posted a revenue growth of 7.6% in constant currency terms to touch $7.35 billion in 2015-16, versus Infosys’s growth of 13.3% to $9.50 billion. Industry lobby group Nasscom had estimated a growth of 12.3% for the country’s $150 billion outsourcing sector last year.