Shareholders of Paytm — the country’s largest listed fintech unicorn— have in a significant majority (99.67 per cent) voted in favour of the company founder Vijay Shekhar Sharma’s reappointment as the Managing Director for five more years. He will be designated as Managing Director and Chief Executive Officer of the company.
The vote of confidence came at the 22nd Annual General Meeting of One 97 Communications Ltd (OCL) — which owns the Paytm brand —held virtually on Friday. This was the first AGM for OCL after it became a publicly listed company in the year 2021.
Each of the seven resolutions, including Sharma’s reappointment as Managing Director, and his remuneration (special resolution), were duly passed with over 94 per cent of votes cast in their favour.
Sharma’s reappointment is significant as it came in the backdrop of proxy advisory firm Institutional Investor Advisory Services India Ltd (IIAS) urging shareholders earlier this month to vote against Sharma’s reappointment. The proxy advisory firm had also asked them to replace founder Vijay Shekhar Sharma as the company’s Chief Executive Officer. Paytm’s Board should bring a professional to the role of MD &CEO, the proxy advisory firm had suggested.
IIAS had highlighted that Sharma had, before the listing, on several instances publicly talked about the company turning profitable and yet it has not happened even at an operational level. It had also raised concerns over the current CEO’s ability to lead Paytm to profitability.
In a letter to shareholders dated April 6, Sharma had said Paytm should be operating EBITDA breakeven in the next 6 quarters (i.e. EBITDA before ESOP cost, and by the quarter ending September 2023).
It maybe recalled that OCL’s Board of Directors had in May approved the re-appointment of Vijay Shekhar Sharma as Managing Director.
The special resolution for Sharma’s remuneration received 94.48 per cent votes in its favour. His remuneration is fixed for the next three years without any annual increment, unlike the policy/practice applicable to all other employees of the company. Furthermore, in his letter to shareholders dated April 6, Sharma had informed the public that his ESOPs will vest only when the market cap crosses the IPO level on a sustained basis. The ESOPs were already approved by the shareholders in compliance with applicable laws and with all necessary approvals before the IPO was looked at.
Commenting on the outcome of the AGM where all resolutions got passed, a Paytm spokesperson said, “We are thankful to our shareholders for their unwavering support and faith in our leadership. We remain committed to building a large, profitable company and creating long-term shareholder value, while driving financial inclusion in the country.”
During the AGM, the shareholders also duly passed the resolutions for reappointment of Ravi Chandra Adusumalli to the Board, appointment of Madhur Deora as Whole-time Director designated as Executive Director, President and Group Chief Financial Officer of the company along with his remuneration, and approval of contribution to charitable and other funds. The AGM also adopted the financial statements for the year ended March 31, 2022.