Tata Motors has received shareholders’ approval for a proposal seeking pay hikes for its three directors after the resolutions were put to vote for the second time. The resolutions were rejected the first time in July last year.
On Wednesday, the country’s largest automaker got approvals from more than three-fourth of its shareholders vide postal ballots. Tata Motors had sought consent to provide a minimum remuneration to three executives in case of inadequacy of profits for financial years 2014-15 and 2015-16.
The proposals were to pay minimum remuneration to Executive Director (Commercial Vehicles) Ravindra Pisharodi and Executive Director (Quality) Satish Borwankar, and the legal heir to former Managing Director Karl Slym. The company also got approvals for death-related benefits for the family of Slym, who died in January 2014.
“We were committed to a completely transparent process and through deeper direct engagement with the shareholders that enriched our mutual understanding, we proactively addressed their concerns and queries before we put the resolutions to a re-vote,” said a Tata Motors spokesperson.
The Companies Act caps the compensation limit at ₹48-lakh per annum if a firm posts a loss during a financial year, and higher compensation requires shareholder clearance.
Since, on a standalone basis Tata Motors had posted a loss for the year ended March 31, 2014, shareholders had to approve the compensation packages, which had been approved by the board earlier in the year.
Shares in Tata Motors’ ended down 1.38 per cent at ₹551.40 on a steady BSE, which ended up 0.36 per cent on Wednesday.