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Securities and Exchange Board of India seeks uniformity in guidelines for similarly placed companies — private sector and public sector companies. At the same time, it desires to make remuneration committee mandatory for all corporates just like stock exchanges.
Minimum requirement
Addressing an event organised by International Management Institute (IMI), SEBI Chairman U.K. Sinha unveiled long-term vision of the regulator. As a part of this, he said, “Similarly placed companies need to be treated equally. Public and Private Sector companies are treated differently by the Government and even SEBI. This should be removed.”
Uniformity in guidelines may mean 25 per cent minimum public shareholding for the public sector companies. The present regulation prescribes all the listed public sector undertaking to achieve minimum public shareholding of 10 per cent by August 2013. The listed private sector companies have to achieve 25 per cent minimum public shareholding by June 2013.
However, he clarified that some of these measures are part of the internal discussions of the regulator, while some are still at the thinking stage. “We in SEBI are looking at these issues. No decision is expected tomorrow, it will take some time,” he emphasised.
Taking cues from the regulations for the stock exchanges, he felt a need for remuneration committee for every corporate.
“There should also be provision for performance linked bonus and at the same time there should be provision of claw back,” Sinha added. Clawing back means if a company has suffered over a period of time because of some decision of the executive who has been offered bonus, there should be a provision of taking back part of the bonus.
The remuneration committee should be headed by an independent director and most of the members should also be independent directors. Another item on long-term vision is publication of agenda of AGM or EGM. He said, “There should be disclosure of agenda items of AGM/EGM on Group’s Web site or in the notice to the stock exchanges.” Of course there should be enough safeguard in terms of strategic issues.
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