Sitting On The Fence?
Curiously, for many proposals involving reappointment of promoter family members or veteran company officials as directors or ESOP-related resolutions, LIC took a negative view of the resolutions but didn’t vote against them, choosing to abstain instead.
Remuneration Concerns
LIC noted on a remuneration proposal involving Hero MotoCorp Ltd.’s Pawan Munjal that the pay was disproportionate when compared to other employees. Yet, it didn’t veto it and abstained instead.
Three proposals at Alembic Pharmaceuticals Ltd. involving reappointment of founder Chirayu Amin as director; his son Pranav Amin as managing director; and the company’s chief financial officer found no support from LIC as the remuneration appeared to be “unreasonable and disproportionate” and unclear. But no veto either.
LIC abstained from voting on a minimum remuneration proposal (in case of losses or inadequate profits) involving BSE Ltd. Managing Director and Chief Executive Officer Ashishkumar Chauhan. It was not compliant with regulations, the insurer’s disclosure said.
Remuneration proposals for N Srinivasan, promoter and managing director at India Cements Ltd.; Tanya Dubash, whole-time director at Godrej industries; Hemant Bharat Ram, managing director at DCM Nouvelle Ltd.; Ravi Jhunjhunwala, chairman and managing director at HEG Ltd. were abstained from, either due to lack of a cap on pay or because the amounts were higher than peers or not commensurate with the size and complexity of the business.
The reappointment of Eicher Motors Ltd.’s MD and CEO Siddhartha Lal was another proposal that the insurance giant refrained from voting on. Earlier in 2021, Eicher shareholders had rejected Lal’s reappointment due to the remuneration structure. The company fixed his pay, issued a clarification and reappointed him saying it will seek shareholder nod again. LIC abstained but noted that that reappointing the MD from a retrospective date after the proposal was rejected by shareholders once is not compliant with the law.
Regulatory Concerns
At Shree Cement Ltd., LIC abstained from voting on Hari Mohan Bangur’s reappointment as managing director as the proposed pay was higher than peers and not commensurate with size and scale. It also opposed Benu Gopal Bangur’s reappointment as director of the company as the appointment was not as per extant regulations. The Bangurs are the company’s promoters.
For the same reason, it abstained from voting on reappointment of Pranav Adani as director of Adani Enterprises Ltd. and reappointment of Larsen & Toubro Chief Financial Officer Shankar Raman as a whole-time director.
Dilip Shanghvi, promoter and director of Sun Pharmaceutical Industries Ltd., was up for reappointment. LIC abstained from voting on the proposal as “the director holds two full time positions in companies which are in different streams of business”.
At Vedanta again, LIC abstained from voting on a proposal to reappoint company founder Anil Agarwal as a non-executive, non-independent director. Reason – the appointment was not as per extant regulations of the Companies Act, 2013.
At Piramal Enterprises Ltd. AGM, LIC abstained from voting on appointment of Snapdeal Founder Kunal Bahl as independent director for the same reason—the appointment is not as per extant regulations. It also abstained from voting on the company’s ESOP proposals due to inadequate disclosures.
LIC also abstained from voting on ESOP-related resolutions at JSW Steel Ltd., JSW Energy Ltd., Hero Motocorp Ltd., Britannia Industries Ltd., Lupin Ltd. for the same reason.
