Information technology (IT) services firm Coforge is seeking an approval from shareholders to increase the remuneration limit of Sudhir Singh who is the CEO and Executive Director of the company, from 5 per cent to up to 10 per cent of net profit. Sudhir Singh was appointed as an Executive Director and CEO for five years from January 29, 2020 and his remuneration was also approved for five years up to January 28, 2025, Coforge said in a regulatory filing. “The company is now seeking approval to increase the remuneration limit from 5 per cent to up to 10 per cent of net profits as per section 197 of the Companies Act, 2013,” it said.
The tenure of Sudhir Singh is till January 2025 and hence all the granted ESOPS will vest by FY25 and no further grants, the company said, will vest in his balance term as ED. “Out of the total grants issued during his tenure as ED, only 14 per cent grants are time-based grants,” it said, while maintaining that the majority of ESOP grants are performance/milestone based and hence the cost is estimated and might reduce provided the performance targets are not met. Also, it maintained that the cash bonus component is expected to be much lower in FY24 and FY25 in comparison to FY23. Coforge stated that there will be no increase in his fixed salary over his balanced term.
Further, Coforge also asked for approval of payment of commission to Basab Pradhan who is the Chairperson of the company. The commission for Basab Pradhan, who was appointed as an Independent Director and Chairperson of the Board for a period of 3 years w.e.f June 29, 2021 upto June 28, 2024, was fixed at $220,000.
According to the filing by Coforge, out of 7 non-executive directors, only 3 are paid commission, including Basab Pradhan. And since the four do not voluntarily charge any commission from the Company and Basab Pradhan exceeds 50 per cent of the total annual remuneration payable to all non-executive directors.
Earlier in April, Coforge posted its financial results for the quarter ended March 2023. It posted revenue at Rs 8014.60 crore for the financial year, up 24.6 per cent. PAT for the year, excluding one off expenses, was at Rs 811.70 crore, up 22.7 per cent YoY. During the fourth quarter of FY23, the total order book executable over the next 12 months stood at $869 million, up 20.7 per cent YoY. “Order intake was at $301 million while 10 new client logos were added during the quarter,” it had said.
“For FY24, the firm issued an annual revenue growth guidance of 13-16 per cent in constant currency terms, expecting a gross margin increase of about 50 bps and adjusted EBITDA margin to be at similar levels as FY23,” Sudhir Singh has said.