Advisory firm Institutional Investor Advisory Services India Limited (IiAS) has opposed the proposal to reappoint Vijay Shekhar Sharma as the Chief Executive Officer (CEO) of Paytm for another five years.
The advisory firm is also against the reappointment of Ravi Chandra Adusumalli as Paytm director. IiAS is a proxy advisory firm that provides suggestions to funds on how to vote for corporate actions.
“Vijay Shekhar Sharma has made several commitments in the past to make the company profitable, however, these have not played out. We believe the board must consider professionalising the management,” the firm said in its report.
IiAS added, “We raise concerns that he (Sharma) is not liable to retire by rotation, and that he will get board-permanency if he continues in a non-executive capacity following the end of his term as managing director.”
It said, “The company is seeking shareholder approval for the proposed remuneration as minimum remuneration – which will be paid to him even if the company continues to report losses”.
“Sharma was granted 46.5 percent of the entire stock option pool, which is equal to 3.2 percent of the outstanding share capital. There is no disclosure regarding the vesting conditions relating to the stock option grants and thus, no alignment with the interest of shareholders,” the advisory firm added.
The board has also approved reimbursement of all legitimate expenses incurred by Sharma in the performance of his professional duties including but not limited to communication, travel, and business entertainment expenses.
The remuneration is part of the OCL annual general meeting resolution scheduled to be held on August 19.
IiAS estimates Sharma’s FY23 remuneration at Rs 796.28 crore, which comprises 2.1 crore stock options at an exercise price of Rs 9 which is a deep discount to the market price on the date of grant.
The advisory firm said that Sharma was granted 46.5 per cent of the entire stock option pool, which is equal to 3.2 per cent of the outstanding share capital.