Proxy advisory firms InGovern Research and Institutional Investor Advisory Services have taken opposing views in their recommendations to Finolex Cables shareholders ahead of the upcoming AGM
While InGovern has recommended that the shareholders defer two resolutions related to the re-appointment of its Executive Chairman Deepak Chhabria for five years and payment of commission, Institutional Investor Advisory Services has recommended a vote in favour of the proposals.
InGovern has observed that the corrigendum does not meet the requirement of the Companies Act and ICSI Secretarial Standards, of giving investors adequate time to decide on the proposal.
The original notice was issued on September 4, 25 days ahead of the AGM scheduled for September 29. Subsequently, the corrigendum was made on September 16, without giving adequate notice period.
The ICSI Secretarial Standards 2 states that in case of an amendment to the notice, investors have to be given at least 21 days before the meeting.
Denying InGovern Research’s observations, the company said it has not added any additional item, but has made a few insertions in the existing resolutions proposed under item numbers 4 and 6 in the AGM. This corrigendum was issued to provide shareholders better clarity and transparency on the concerned items and as a good corporate governance practice, it said.
“Issuing of corrigendum prior to the AGM is a normal practice followed by corporate groups,” it said.
Meanwhile, Institutional Investor Advisory Services said Chhabria’s proposed remuneration for FY24 is estimated at Rs 12 crore, including commission based on profit, where increments are capped at 10 per cent each year. The proposed remuneration for five years is commensurate with the size and complexities of the business and comparable with that paid to peers in the industry. The company must consider disclosing metrics that determine variable pay, it said.
On payment of one per cent commission or Rs 2 crore, whichever is lower, to non-executive directors for five years, it said: “We expect the company to be judicious in its pay-outs, as it has been in the past. The company has capped the commission in absolute amounts, which is a good practice.” Last fiscal, non-executive directors were paid Rs 76 lakh.