Minority shareholders of Tata Motors have approved all five resolutions relating to remuneration for two of its senior executives...
Minority shareholders of Tata Motors have approved all five resolutions relating to remuneration for two of its senior executives and the late Karl Slym, who was chief executive officer of the automobile company.
The approval of shareholders was necessitated since the remuneration exceeded the limit in a year when the company had not reported adequate profits, as stipulated in the Companies Act. Shareholders were asked to vote on the company’s proposal to waive the excess remuneration paid to the executives.
The results of the postal ballot, held on January 19, show that more than three-fourths of the votes cast — the minimum required as per the Companies Act before it was amended — were in favour of the proposals to waive the excess remuneration paid to executive directors Ravindra Pisharody, who oversees the commercial vehicles business, and Satish Borwankar, in charge of quality, as also to Slym for 2013- 2014.
The shareholders also approved the minimum remuneration for Pisharody and Borwankar for FY15 and FY16. The minimum percentage of votes polled was 80.96% while the maximum percentage was 99.6%. The promoter and promoter groups voted in favour of the resolution. The same set of proposals had been rejected by shareholders at the postal ballot held in June last year, albeit by a very small margin since 70% of the votes polled were in favour.
A report by IIAS, a proxy advisory firm, observed that the first time the resolutions were defeated primarily on account of a large number of ADR holders taking a narrow interpretation of the rules governing the remuneration and consequently not supporting the resolution.
“The investors seem to have realised that the two executive directors are professionals, with significant experience in the automobile industry. Further, that their proposed remuneration is in line with industry peers, and commensurate with the size and nature of a large and complex company like Tata Motors,” the report noted.
The Tata Motors’ stock closed at R551.40, down 1.38% on the BSE; the results of the postal ballot were released after the close of market hours.
In a statement, Tata Motors said the results are an endorsement of the company’s disclosure and governance policies and indicate the shareholders’ faith in the company’s management, especially as it works towards a turnaround in a challenging market situation.