Tata Motors has been considering a hike in salary for its top executives for quite a while now. Back in July last year, minority shareholders had rejected this decision and sources have indicated that the company is likely to face resistance yet again this month as it prepares for another round of voting this month. The result shall be released from the postal ballot sometime on 23rd January.
As per publicly available data, Foreign institutional investors (FIIs) have held about 26% in Tata Motors. Sources have stated that, Boston-based Institutional Shareholder Services (ISS), which had opposed the proposals last year had approved the remuneration proposed for fiscal 2014, whereas this time it has disapproved the same for 2015 and 2016. Back in December last year, the company had approached shareholders with a survey conducted by consultant Aon Hewitt. Adding further, Tata Motors said, “Remuneration paid/payable to the two EDs (executive directors) and late MD (managing director) for FY2013-14 is commensurate with industry standards and board-level positions held in similar-sized companies, taking into consideration the individual responsibilities shouldered.”
The company seems to be confident this time around and the company's spokesperson said, “We appreciate there may be different opinions and continue to engage with our shareholders to ensure we clearly communicate the nuances of these resolutions.” Shriram Subramanian, managing director at InGovern Research Services, a leading proxy advisory firm which was backed by Tata Motors, said, “For a company of the size of Tata Motors, where more than 80% revenue are coming from global operations, I don’t think they are paying outrageous salaries. In order to put things in correct perspective,” he added, “a shareholder has to take into account company’s consolidated financial and consolidated earnings.”
Source: LM
