Religare’s Board of Directors on Monday asserted that the ESOPs of CARE Health Insurance, a subsidiary of Religare Enterprises, granted to Rashmi Saluja was above board and in full conformity with the insurance regulator IRDAI’s guidelines.

The CARE Health Insurance ESOPs were granted to Rashmi Saluja only in her capacity as an employee/ executive director and Chairperson of Religare Enterprises Ltd (REL), the Board of Directors of REL said in a statement.

These CARE ESOPs — 2,27,11,327 options to purchase shares of CARE — were not to be granted in her capacity as Non-executive Chairperson of Care Health Insurance, it added.

The latest statement from REL Board is significant, as it comes on the heels of proxy advisory firm InGovern calling for a detailed investigation by IRDAI and SEBI. 

InGovern report

InGovern had, in a recent report, alleged that the ESOPs were issued to Saluja despite IRDAI’s rejection and without REL shareholder approval.

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

The InGovern report valued the stock options issued to Saluja, Executive Chair of REL and non-executive chairperson of CARE Health, over the last three-four years at over ₹480 crore. This included grant of stock options of CARE, valued at over ₹250 crore.

ESOP pool

In its statement, the REL Board said that CARE Health has an ESOP pool of 12.5 per cent of equity for its employees, another 2.5 per cent pool is meant for employees of the Religare Group in consideration of their contribution to the growth of CARE Health.

From the 2.5 per cent pool, Saluja, as an employee of REL, was granted 2.27 crore options with exercise price per option at ₹45.32 per share in June 2022, the REL Board said.

The REL Board statement goes on to elaborate that as per the ESOP terms, as much as 33.33 per cent (75,69,685) options would vest upon one year from the date of grant and issuance of minimum primary capital of ₹250 crore by CARE Health Insurance is completed.

The next 33.33 per cent would vest two years from the date of grant and two years from the vesting commencement date. The remaining 33.33 per cent would vest at earlier of (i) five years from the date of grant of options to the REL employee or (ii) the listing of shares of CARE.

Reviving REL

REL Board also highlighted in the statement the revival journey of Religare Enterprises under Saluja’s helm and how she was instrumental in creating shareholder value in recent years.

“The allegation that the Executive Chairperson draws a remuneration of more than ₹150 crore per annum is completely false and erroneous. As per the annual report for FY2022-23 of REL, the remuneration for the Executive Chairman was ₹8.12 crore. Even after including the perquisite value of the ESOPs, it reached a figure of ₹42.06 crore,” the statement added.

The reported remuneration includes the perquisites value of ESOPs exercised only and not of unexercised ESOPs as the gain (if any) accrued only at the time of exercise of ESOPs, it added.