Public shareholders, particularly large institutional investors, are becoming a dominant voice at company meetings, proxy advisory InGovern said in a new report assessing the rise of shareholder activism in India.

Varied issues

For instance, public shareholders defeated a proposal by IDFC to re-price stock options and grant stock options to employees of its subsidiaries.

Shareholders at Zee Entertainment voted down a proposal to create a charge on the company’s assets to secure borrowings.

InGovern’s report listed several other examples of top-100 companies where resolutions were voted against by more than 20 per cent of voting institutional shareholders, including directorial appointments and proposals on remuneration, auditor appointments and the grant of stock options.

Subhash Chandra of Zee and Rajashree Birla of Hindalco were voted significantly against because of their low attendance in the board meetings on proposals of director appointments, while there were votes against Paul Bradford Edgerly as Independent Director of Hero MotoCorp because he was serving as a non-independent member on the board immediately prior to his appointment as an Independent Director.

Remuneration to Siddhartha Lal of Eicher Motors was significantly voted against because of non-clarity of his pay structure while auditor re-appointments at Reliance Industries and Sun Pharma were also significantly voted against.

InGovern said that in all, 9,664 resolutions were proposed in the 2016 proxy voting season (January 2016 to September 2016) by 1,344 Indian listed companies. This included 8,731 resolutions tabled at AGMs, 698 resolutions through postal ballots, 182 resolutions at EGMs and 53 at Court Convened Meetings (CCMs).

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