Sobha shareholders vote against resolution for increased remuneration to Ravi Menon
Shareholders of Sobha Ltd have rejected two key resolutions proposed by the company for payment of increased remuneration to non-executive director and Chairman Ravi PNC Menon, and to non-executive directors.
Both special resolutions required at least 75 per cent of the votes in favour, to be approved. One resolution sought approval for payment of up to 5 per cent of the net profit for five years from April 1, 2023, as remuneration or commission to non-executive directors. The second resolution sought approval for payment of remuneration to Menon as non-executive director and chairman in excess of 50 per cent of the total remuneration payable to all non-executive directors.
An exchange filing on the results of the voting shows that less than 75 per cent of the votes were in favour of the resolutions. Institutional shareholders voted overwhelmingly – 86 to 89 per cent – against the resolution.
Ravi PNC Menon was inducted on the board in 2004 and took over as chairman in June 2012. Though he relinquished his executive role with effect from April 1, he is still continuing as the chairman.
He is part of the promoter group and held 3.36 per cent stake at the end of December.
The real estate developer’s annual report for FY22 showed that his remuneration was over Rs 8.4 crore that year, rising 77.7 per cent on year.
The company did not respond to an email sent by businessline seeking clarification, while telephone calls also remained unanswered.
In its explanation for the remuneration of non-executive directors in general and Ravi Menon in particular, the company said he would continue to play an important role in the company as a mentor and in guiding the senior management in business strategy.
The resolution said apart from the sitting fees as a non-executive director, other facilities such as travel expenses inside and outside India, guest house facilities, free residential accommodation, and a chauffeur-driven car would also be extended. Several other reimbursements were also proposed that would not be classified as remuneration.
Shareholders of companies – especially institutional shareholders – are increasingly rejecting resolutions that they feel are not in the interest of all stakeholders. Last month the pubic shareholders of Max Financial Services rejected a special resolution that proposed an annual remuneration of Rs 3 crore to Chairman Analjit Singh in FY24. In 2021, shareholders had rejected increasing the salary of Eicher’s Managing Director Siddhartha Lal, while last year Dish TV shareholders opposed the appointment of Rakesh Mohan as independent director on its board.