SES report on Analjit’s pay is inaccurate, says Max Financial

Our Bureau Mumbai | Updated on April 27, 2021

Singh’s compensation capped at ₹3 crore

Max Financial Services (MFS) informed the stock exchanges that commission, in monetary terms, for the company’s non-executive chairman Analjit Singh will not exceed ₹3 crore. The clarification notice was issued by the company to the stock exchanges on April 19.

In March, MFS had issued a notice to the shareholders wherein it sought their approval via voting for paying commission to Singh. In that notice, MFS had sought approval for paying a 2 per cent commission of the total profits of the company to Singh for a financial year. However, a clarification was issued by the company in April to the stock exchanges to say that the commission in ‘monetary terms’ would be capped at ₹3 crore.

“Considering the extensive involvement of Analjit Singh in the strategic developments at the company, a compensation is proposed in the form of commission to him for the financial year ended March 31, 2021, for which the limit sought from the shareholders is to up to 2 per cent of the net profits of the company as detailed in resolution of the postal ballot notice. We would further like to state that the commission in monetary terms shall not exceed ₹3 crore for the said financial year, which is subject to the decision of the board of directors at a subsequent meeting,” the MFS notice said.

Reject resolution: SES

Proxy advisory firm SES has asked investors to vote against the company’s proposal wherein it is seeking to pay hefty commission to Singh. BusinessLine reported that considering MFS’ annual profit for the past year, a 2 per cent commission would amount to around ₹16 crore.

Max Financial Services spokesperson said, “The advisory circulated by SES has major factual inaccuracies. Max Financial has asked shareholder approval for Promoter and Chairman’s compensation up to a maximum of ₹3 crore. SES inaccurately reports it could be as high as ₹16 crore. The proposed compensation is relatively conservative in comparison to other listed entities of our size.”

‘Singh still a value creator’

MFS further stated that Singh, the founder, continues to contribute significant value.

"For instance he played an anchor role in the conclusion of Max Life – Axis Entities joint venture, ensuring long term stability and growth of the Life insurance business. This has led to significant value creation for shareholders. While other established proxy advisory firms have explained the proposal correctly in their reports, the inaccuracies in SES’s advisory, and their overlooking of our stock exchange clarification of 19th April, will create confusion in shareholders mind. We would encourage all proxy advisories to diligently follow the process of dialogue with us to properly understand the shareholder proposals and thus advise equipped with full knowledge,” the MFS spokesperson added

Published on April 27, 2021

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