Latest News | Havells Denies Proxy Advisory Firm's Allegation over Remunerations of Two Directors
Get latest articles and stories on Latest News at LatestLY. Havells India on Wednesday justified remunerations proposed to be given to two of its directors, whose reappointments have been advised to be rejected by a proxy advisory firm to the company's shareholders.
New Delhi, Jun 12 (PTI) Havells India on Wednesday justified remunerations proposed to be given to two of its directors, whose reappointments have been advised to be rejected by a proxy advisory firm to the company's shareholders.
Institutional Investor Advisory Services (IiAS) had recommended Havell India's shareholders to vote against the ordinary resolution for reappointment of Ameet Kumar Gupta, a promoter, as a whole time director, and a special resolution for reappointment of Rajesh Kumar Gupta, as group CFO, for five years.
It had stated that the proposed remunerations to be given to them were high for the size and complexity of the business and not in line with peers.
Gupta received Rs 12.2 crore as remuneration in FY24. His estimated FY25 remuneration is Rs 17.64 crore, which is high for the size and complexity of the business and not in line with peers, IiAS had said.
Similarly, Rajesh Kumar Gupta received Rs 27.33 crore as remuneration in FY24. His estimated FY25 remuneration of Rs 35.39 crore is high for the size and complexity of the business and higher than peers, it added.
In its response, Havells India in a regulatory filing said Ameet Kumar Gupta is a professionally qualified and experienced business leader. He has been a key contributor in the growth journey of the company for over two decades.
"His remuneration for the year 2024 is only 0.7 per cent of the net profits, including the variable pay (commission) which is commensurate with the size and nature of the business in which Havells operates.
"It is also well within the prescribed limit of 5 per cent as per section 197 of the Companies Act, 2013. Commission of 0.6 per cent is linked to PBT which varies depending on the performance of the company," it asserted.
The company further said, Rajesh Kumar Gupta is an independent professional, not related to any of the promoters and there is no change in percentage of variable pay (commission) and benefits under the ESPS plan in the proposed resolution vis-a-vis the existing remuneration structure.
"His remuneration for the year 2024 including benefits under ESPS (Employee Stock Purchase Scheme) is 1.6 per cent of the net profits which is commensurate with the size and nature of the business. It is also well within the prescribed limit of 5 per cent as per section 197 of the Companies Act, 2013," it said.
Further, Havells India said, "The overall executive remuneration is 4.1 per cent of the net profit which is well within the prescribed limit of 10 per cent under the Companies Act, 2013."
In its note to shareholders of the company. IiAS had said while a large portion of Ameet Kumar Gupta's remuneration is "variable and linked to company profitability, there is no absolute cap on the remuneration: therefore, as profitability increases, remuneration may be much higher over his tenure. The company must cap his remuneration in absolute terms".
It further said, "Total promoter remuneration was Rs 36.92 crore and Rs 42.73 crore in FY23 and FY24, respectively, which is high in absolute terms. We do not support the resolution."
Similarly, on Rajesh Kumar Gupta's reappointment, IiAS said, "While a large portion of his remuneration is variable and linked to company profitability, there is no absolute cap on the remuneration: therefore, as profitability increases, remuneration may be much higher over his tenure."
It further said, "The company (Havells India) must cap his remuneration in absolute terms – there is no clarity on the stock options that may be granted over his term. Total executive remuneration was Rs 64.46 crore and Rs 70.06 crore in FY23 and FY24, respectively, which is high in absolute terms. We do not support the resolution."
He has been on the board since March 21, 1992. He will attain 70 years of age on June 17 2027, IiAS said, adding, "we do not consider age to be a criterion for board directorships".
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)