Proxy advisory firm SES objects to Dabur pay package to Whole-time Director

Mumbai-based proxy advisory firm Shareholder Empowerment Services (SES) has asked shareholders of Dabur to reject the re-appointment of PD Narang as Whole-time Director of the company, citing retirement benefits that are in poor taste of corporate governance.

At the age of 63, Narang, who has a pay package of around ₹9 crore, has been offered benefits including lifetime housing accommodation/HRA, chauffeur-driven car and telephone. All these post-retirement benefits will also be offered to Narang’s spouse, in case of his death, Dabur said in a notice to shareholders, who will be voting on it on Wednesday.

Other benefits to Narang include ex-gratis equivalent to three years’ basic pay to be computed on the basis of last salary drawn, monthly pension equivalent to 50 per cent of the last salary drawn (to be linked to inaction), medical reimbursement for self and family members for the actual amount incurred by him during his lifetime, and all this in circumstances or disablement whilst in service. Also, the spouse will, after death of the appointee, continue to get all such benefits for her lifetime.

Narang is also on the board of two dozen other companies, most part of the Dabur group. As on March 31, Narang held 35,05,273 equity shares of Dabur valued at over ₹105 crore. SES is of the view that providing benefits for lifetime and, in this case, even after lifetime, are not a good governance practice and is against the interest of the shareholders. “Dabur India should have a built-in pension or superannuation system for an employee, that can be accounted for in books,” said JN Gupta, promoter, SES. “The company is not showing full benefits that will be paid to the employee in future. Where will it be accounted for?”

Replying to an email query from BusinessLine , Dabur said: “This resolution has been in existence since 1998, and there is no fresh change therein. The same has already been conveyed to SES also. This is basically a retention tool, to retain a highly qualified and excellent performer like Mr Narang with the group. And is part of the contract terms negotiated with him two decades ago. In turn, he will always continue to provide his services and will remain with the group. He cannot join any other company, leave apart competitor.”

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