InGovern Research, a proxy advisory firm, has valued the stock options issued to Rashmi Saluja, the Executive Chair of Religare Enterprises and non-executive chairperson of its subsidiary Care Health Insurance (CARE), over last 3-4 years at over ₹480 crore.

Calling for detailed investigations by IRDAI and SEBI, it said the ESOPs of CARE were issued to Saluja despite IRDAI’s rejection and without REL shareholder approval.

Moreover, it said REL’s annual report lacks disclosure regarding CARE ESOPs being included in Saluja’s compensation.

Higher compensation

In all, InGovern said 1.05 crore options of REL was granted to Saluja since her appointment as Executive Chairperson of REL in February 2020 and this is valued at over ₹230 crore.

Moreover, it said shareholders of REL are bearing the cost of excessive grants of stock options of CARE, valued at over ₹250 crore.

InGovern said in the year ended September 2022, her compensation as an ‘employee of REL’ underwent a material increase through the grant of 22,711,327 CARE options. However, no shareholder approval was sought for such a material change in her remuneration.

The resolution of REL approving the remuneration dated September 23, 2022, was void on grounds of failure to disclose material facts regarding CARE options issued to Saluja and accordingly her remuneration through the allotment of CARE Options ought to be clawed back as per the provisions of the Companies Act, said the InGovern report.

ESOPs of REL issued to her have been issued at a discount and exercise price (EP) of these ESOPs are much lower than the EP of ESOPs issued to other KMPs and the average stock price of REL.

While REL Board consists of 1 executive and 5 Independent Directors, it said there were Related Party Transactions between the company and the entities of the independent directors’ or have significant influence on thereby raising serious concerns on their true independence.

However, REL in a statement on Tuesday said the remuneration, including salary and employee stock options was ₹42.06 crore for FY23. The compensation was approved via special resolution passed by the shareholders, Religare added.

The statement was in response to a complaint filed by the Burman family, the promoters of Dabur, with market regulator SEBI. Burmans owned 20.15 per cent stake in Religare and bought an additional 5 per cent stake from the market taking their stake beyond the threshold limit to make the mandatory open offer.