IIAS Advisory To Vote Against Vijay Shekhar Sharma's Reappointment As Paytm CEO
The shareholders are also likely to vote on the adoption of financial statements, appointment of Madhur Deora as whole-time director for five years and there will also be resolutions to approve contributions to charitable trusts and other funds of up to INR 10 crore
Institutional Investor Advisory Services India (IIAS) has expressed the disappointment against the reappointment of Vijay Shekhar Sharma as the chief executive officer of Paytm parent One97. The proxy advisory also advised the shareholders of Paytm to vote against Sharma's reappointment as well as against his remuneration.
According to a recommendation report that comes ahead of Paytm's annual general meeting which is to be held on August 19, IIAS said that, "Vijay Shekhar Sharma has made several commitments in the past to make the company profitable, however, these have not played out. We believe the board must consider professionalizing the management."
The report also added that, "We take comfort in the board's assertion that the company has an effective mechanism for succession planning for the orderly succession of directors and senior management personnel. We raise concerns that Sharma is not liable to retire by rotation and that he will get board permanency if he continues in a non-executive capacity following the end of his term as managing director."
As per reports, the shareholders are likely to vote on the adoption of financial statements, appointment of Madhur Deora as whole-time director for five years and there will also be resolutions to approve contributions to charitable trusts and other funds of up to INR 10 crore.
The advisory firm also emphasized that, on August 11, Paytm's shares have declined to 63.6 per cent from their issue price of INR 2150 since the listing to INR 825.50. Later on, Paytm posted net losses worth INR 644 crore in the April to June quarter.
On this ground, IIAS also blames that Sharma is likely to take remuneration of over INR 796 crore in the FY23. The firm stated that, "Sharma has spoken several times about Paytm becoming profitable one day and his statement has not seen fruition. He has moved the floodgates again and promised an operating margin for the quarter ending September 2023, that company has come up with its own definition of operating margin that we do not support."