After leaving India’s fourth-largest outsourcing company ahead of schedule, outgoing Wipro CEO Thierry Delaporte is expected to receive a separation payment of Rs 92.1 crore, or roughly $11 million.
According to the employment agreement with the previous CEO of the company, pursuant to the terms of the employment arrangement with Mr. Delaporte, if his employment is terminated by the company without cause, the company is required to pay Mr. Delaporte severance pay of 12 months’ base salary as last applicable when in service, payable over a 12-month period following the date of termination.”
These payments will cease if Mr. Delaporte obtains new employment within the 12-month period or becomes a consultant to any company.”
Unanswered until the release of this article was ET’s communication to Wipro regarding the severance payment to be made to the departing CEO.
According to an examination of the employment contracts of prominent figures in the IT industry, payments made to departing CEOs at firms like Wipro, Cognizant, and Tata Consultancy Services (TCS) have ranged from Rs 92 crore to Rs 48 crore in recent years.
“When the tenure of an IT services company’s CEO is abruptly cut short, the exit compensation is determined by the contract or industry practices, which could amount to up to one year of their salary,” said Pareekh Jain, CEO of EIIRTrend. “Generally, these CEOs do not receive further employment opportunities from other service providers, making it a fair industry practice to compensate them accordingly.”
The board approved expenditures totaling Rs 48 crore upon the resignation of TCS’s former CEO and MD, Rajesh Gopinathan, in 2023, according to usual filings.
Brian Humphries, the former CEO of Cognizant, left the position on January 12, 2023, and remained a special advisor until March 15, 2023. According to the Humphries employment agreement, he would have been entitled to three types of severance compensation in the event of an involuntary termination without cause: a basic income, yearly cash incentives, and accelerated vesting of stock awards. According to the company’s regulatory filings, these totaled $6.6 million.
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