Disha Mitra
IiAS opposes reappointment of Paytm CEO Vijay Shekhar Sharma, his compensation.
Source: Fortune India news
Reports specify how Institutional Investor Advisory Service India Limited had expressed their opposition to the reappointment of Paytm head Vijay Shekhar Sharma to the company for half a decade. Along with it, it was against the compensation set to be offered to him for the post. They say how it is much more than what any of the 30 executives of Sensex.
IiAS have guided the company’s shareholders to give their votes in opposition to the step. It provided a recommendation reported right before the company holds its annual general meeting in the coming week. In it, Paytm is set to ask for the approval of shareholders for the return of the chief executive. In it, it stated how though the he had previously made various commitments to facilitate profit in the company, which did not end up playing out.
It said how the Paytm board should consider steps to professionalise the management. It went on to say how they are impressed with the declaration from the board about Paytm having a working plan for succession of its executives such as directors and senior management employees. The reportedly pointed out worries regarding the CEO getting wide permanency in case he goes on in this non-executive manner after the end of his tenure as managing director.
What else did the advisory company suggest?
Specifying concerns regarding Sharma being unsuitable, it indicated how the shares of the company dropped 63.6% this week from their listed price Rs. 2150 since its listing of Rs. 825.50, draining shareholder pockets. In the last quarter, the company ended up posting a net loss of about Rs. 644 crores. The report went on to add how as Paytm looks to shareholders for approval of suggested pay, which Sharma would get even if Paytm faces further losses.
As estimated by the advisory company, the CEO would end up pulling a compensation of more than Rs.796 crore in the coming financial year, with stock option worth 21 million, each priced at Rs. 9. It stated how he was provided a stock option pool of 46.5% equivalent to 3.2% of the entire share capital.
It added how there were not any revelations connected to the investing situation linked to the stock option grants, leading no match with shareholders’ goals. It went on to emphasise on about the CEO often taking about the profitability of the company, which ended up not getting fulfilled.