Equity shareholders of EIH, the flagship company of the Oberoi Group, have been asked by proxy advisory firm Institutional Investors’ Advisory Services (IiAS) to vote against the resolution for appointment of Prithvi Raj Singh Oberoi as Chairman Emeritus and fix his remuneration.
Fondly called as Biki Oberoi, the 93-year-old hotelier, relinquished the position of executive chairperson of EIH in May due to his deteriorating health; holding the position for two decades. Arjun Oberoi, the son of Biki’s late elder brother Tilak Raj (Tikki) Oberoi, was made the executive chairperson of EIH.
As per the ordinary resolution, PRS Oberoi can be appointed as Chairman Emeritus for life besides being entitled for a host of benefits and perquisites after securing the required majority in votes.
The benefits and perquisites which may exceed ₹2.5 lakh a month, includes reimbursement of house maintenance expenses along with expenses on gas, electricity, water and furnishings for the accommodation, including maintenance and repairing thereof, first class air fare for self and family to and from any destination in India and abroad plus all other travel related expenses.
In addition, there is reimbursement of expenses for car with chauffeur, telephone, internet connection, household staff, security and reimbursement of medical expenses for self, family members including premium for medical insurance and reimbursement of premium for personal accident insurance.
“Other benefits and perquisites as are customary in appointments of a similar position. The value of the aforesaid benefits and perquisites will be calculated on actual,” the resolution said. EIH has not put any cap on the value of such benefits and perquisites.
IiAS said in its report, “We do not support resolutions which are perpetual in nature as we believe the shareholders must get an opportunity to exercise their vote periodically. Further, the company has not made any clear disclosures regarding his remuneration as Chairperson Emeritus. As a good practice, we expect companies to cap the value of these benefits/perquisites.”
PRS Oberoi, the recipient of the Padma Vibhushan, India’s second highest civilian honour, has over 70 year of experience in the hospitality industry. Under his leadership EIH expanded from 13 properties to 30 operational properties which are a mix of owned and managed.
“While holding the position as the Chairman Emeritus in the Company, Mr Oberoi will not hold the position of the Director in the Board of Directors of the Company, but would be a permanent invitee to all the Board meetings for his valuable counsel. While holding the position as the Chairman Emeritus for life in the company, Mr Oberoi will not draw a salary from the company, but will only be entitled to the certain benefits and perquisites commensurate with the position of the Chairman Emeritus as given in the resolution, the value of benefits and perquisites may exceed ₹2.50 lakh per month,” the resolution said.