Wipro chairman Rishad Premji took a 50% cut in salary in FY23

`Macroeconomic conditions such as potential credit crisis in the global financial system could result in financial difficulties and this could eventually impact the company’s cash flow adversely’

Rishad Premji. File | Photo Credit: K. Murali Kumar K

Wipro executive chairman Rishad Premji has taken a 50% pay cut in fiscal 2022-23, as per a regulatory filing made by the Bengaluru-based tech firm on Thursday.

In the last fiscal, Mr. Premji earned a total annual compensation of $951,353, which was close to 50% less than his previous year’s earnings of $1,819,022, therefore taking a huge cut of about $867,669. As per the company’s annual report (Form 20-F) made available on the stock exchanges, his income comprised $861,620 in salary and allowances, $74,343 in long-term compensation benefits, and $15,390 in other incomes.

The document also said Mr. Premji’s ongoing five-year term as Executive Chairman of Wipro Limited would conclude on July 30, 2024.

Wipro, in the filing, said its business and financial performance would continue to be affected by economic conditions globally. Macroeconomic conditions such as potential credit crisis in the global financial system could result in financial difficulties for its clients and this could lead to clients’ inability in paying dues which eventually may adversely impact the company’s cash flow, the company said.

“Increased protectionism may result in weaker global trade and economic activity, which could adversely affect our business. Many of our client contracts can be terminated without cause, which could negatively impact our revenue and profitability,” it said.

Any economic slowdown or factors that affect the economic health of the U.S. and Europe would adversely affect the company’s business considering the fact that the Americas accounted for 60% and Europe accounted for 28.6% of IT services revenue.

Signalling further caution, Wipro said, geopolitical conflict between Russia and Ukraine and the resulting international political crisis could have significant negative macroeconomic consequences, such as rise in inflation or slow-down in GDP growth rates, which in turn may negatively impact clients’ IT budgets. “Reduction in spending on IT services may lower the demand for our services and negatively affect our revenues and profitability,” the company said.

The annual document further said South Asia has from time to time experienced instances of civil unrest and hostilities among neighboring countries. “Such activities could disrupt communications, make travel more difficult, and create a greater perception that investments in Indian companies involve a higher degree of risk,” it further said.