WIPRO WILL PAY ITS EX CEO RS 92.1 CRORE AS SEVERANCE PAY BUT ONLY IF HE DOES NOT JOIN ANY OTHER COMPANY
Wipro will be paying its outgoing CEO, Thierry Delaporte, a hefty severance package of Rs 92.1 crore (around $11 million) following his ahead-of-schedule departure from the company. However, there's a key condition attached to this payout: the company will only pay if Delaporte does not take a position at another company within a year of his departure.
According to a report by Economic Times, Delaporte will only receive the full amount if he refrains from taking up employment or consulting work with any other company for a period of twelve months after his official departure date on May 31, 2024. This condition is reportedly outlined in Delaporte's employment contract, which specifies that if his employment is terminated without cause, the company is required to pay him 12 months of base salary, as last applicable when in service. "These payments will cease if Mr. Delaporte obtains new employment within the 12-month period or becomes a consultant to any company," reads the official employment letter of Thierry Delaporte with Wipro.
Notably, this is not the first time that major IT companies have paid hefty sums after the departure of their senior executives. In 2023, when Rajesh Gopinathan, former CEO of TCS, resigned from his position, the company approved expenses totaling Rs 48 crore as part of his departure agreement. This was in line with the company's commitment to honouring contractual obligations with its top executives. Similarly, Cognizant's former CEO, Brian Humphries, stepped down from his position in early 2023 and received a severance package worth $6.6 million. This package included his base salary, annual cash incentives, and accelerated vesting of stock awards.
Reportedly, it is common practice for IT services companies to offer generous exit compensation packages to departing CEOs in line with their employment contracts or prevailing industry norms. These practices aim to provide equitable financial support to executives whose tenure has been unexpectedly cut short, especially given the potential limitations on their future employment opportunities within the sector.
Meanwhile, following Delaporte's exit, Wipro has appointed Srinivas Pallia as the new CEO of the company. "Thierry will continue until the end of May, working closely with Srini and me to ensure a smooth transition," said Rishad Premji, Executive Chairman.
Srini has been part of Wipro since joining the company in 1992. He has held many leadership positions, including President of Wipro's Consumer Business Unit and Global Head of Business Application Services. "I am excited to build on the strong foundation established by Thierry and lead Wipro on its next growth trajectory. I have built my entire career at Wipro, and I have a deep appreciation of our 78-year history and our incredible team of more than 240,000 associates. We have the right strategy, and tremendous people and capabilities throughout the organisation, and I am excited about the opportunities for future growth," said Srini in the official announcement.
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2024-04-26T13:07:47Z dg43tfdfdgfd