Tata Motors wins investor nod for Slym's salary

  • Jan 22, 2015
  • Views : 3863
  • 2 min read

  • By Tnn
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Rules mandate companies that make little or no profit to get 75% of shareholder approval for remuneration packages exceeding Rs 48 lakh, or 5%, of the firm's profit, hence Tata Motors required shareholder approval

Tata Motors deceased Managing Director, Karl Slym

Shareholders of Tata Motors, India's biggest automobile company, have finally approved the compensation package of the late managing director, Karl Slym, giving a major relief to his surviving family members, who will now be able to retain the entire Rs 15 crore.

Slym, who joined Tata Motors in 2012, died in January 2014 after falling from a high-rise hotel in Bangkok. Tata Motors, which had already paid the money to Slym's legal heir, has now won more than the needed 75% approval rate from investors for his compensation benefits exceeding the permissible limit of Rs 48 lakh. In other words, after obtaining the shareholder approval, Tata Motors need not reclaim Rs 14.52 crore from Slym's family for the fiscal year ended March 31, 2014.

Rules mandate companies that make little or no profit to get 75% of shareholder approval for remuneration packages exceeding Rs 48 lakh, or 5%, of the firm's profit. Tata Motors made a loss in FY14 on its India operations, which was headed by Slym.

In addition to Slym's pay, Tata Motors' shareholders voted in favour of the remuneration packages of two other full-time directors - Ravindra Pisharody, head (commercial vehicles), and Satish Borwankar, head (quality) - for the fiscal years 2014, 2015 and 2016. The pay packages of Pisharody and Borwankar for FY14 were Rs 3.67 crore and Rs 2.76 crore, respectively. The approval also means that Tata Motors need not take the excess amounts - of Rs 3.19 crore and Rs 2.28 crore, respectively - from the two executives.

Shareholders had earlier rejected the pay proposals in July 2014. However, in December 2014, Tata Motors approached the shareholders again, seeking to arrest their concerns by highlighting that the remuneration paid/payable to its executives were in line with industry standards and board-level positions held in similar-sized companies. It was then that the proposals were approved in the second round of voting.

Tata Motors estimates that the remuneration of Pisharody and Borwankar could see a cut of 12% to Rs 3.31 crore and 6% to Rs 2.67 crore, respectively, for FY15 in case of inadequacy of profits.

In a statement, the company said, "These positive results are an endorsement of the company's disclosure and governance policies and indicate the shareholders' faith in the company's management especially as it works towards a turnaround in a challenging market situation."

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