Raymond Lifestyle Shareholders Urged To Reject Gautam Singhania's Appointment As Chairperson
Advisory firm IiAS Advisory Services has cited Singhania's remuneration and his divorce case has reasons for the opposition.
Corporate governance advisory firms are advising shareholders to vote against the proposed appointment of Gautam Singhania as the executive chairperson of Raymond Lifestyle Ltd.
In its report, Institutional Investor Advisory Services India (IiAS) has raised concerns over several aspects of the proposal, including Singhania's remuneration package and the company's governance practices.
Singhania, the chairperson and managing director of Raymond Ltd., is seeking reappointment as executive chairperson of the recently-listed Raymond Lifestyle for five years, starting Sept. 1, 2024, with a minimum remuneration commitment for three years.
The report mentions that Singhania's payment composition is a major reason for the opposition to his appointment. The terms suggest a monthly salary ranging between Rs 55 lakh to Rs 80 lakh along with allowances for medical reimbursement, leave travel, and retirement benefits, totaling an estimated Rs 12.35 crore annually.
However, the resolution to appoint him is devoid of clarity on major issues, such as commission details and performance-linked targets.
IiAS also mentioned that the proposal does not specify a ceiling limit on Singhania’s total pay, which could exceed 5% of Raymond Lifestyle's net profit. As per the report, this could raise concerns about unchecked salary growth. Additionally, the firm pointed out the absence of malus or claw-back clauses and ESG (Environmental, Social, and Governance) targets tied to performance.
Moreover, the company has failed to provide adequate disclosures on the performance metrics required for Singhania to earn the proposed remuneration, making it difficult for shareholders to assess whether the pay is in tune with the company’s performance.
However, that's not all on the list of woes that stand against Singhania as per the report. Further complicating matters are ongoing personal issues involving Singhania. He is currently engaged in divorce proceedings with his wife, Nawaz Modi, with allegations of domestic violence and misusing company funds for personal benefits against him.
While the board has not commented on these allegations, IiAS expressed concerns about the possible impact on the company’s governance and reputation.
Given the lack of clarity on his remuneration, potential conflicts of interest, and unresolved legal matters, IiAS has advised shareholders to reject the resolution and vote against Singhania’s appointment. The advisory firm stressed that it is crucial for shareholders to protect the company from any governance risks stemming from these issues.
Interestingly, the report also included a comparison of Singhania's proposed remuneration with peers in the industry. While his exact earnings at Raymond Lifestyle cannot be determined, his remuneration at Raymond Ltd. in FY24 was Rs 19.93 crore.
Meanwhile, the remuneration packages of other executives in similar roles at companies such as Trent Ltd., Arvind Ltd., and Shoppers Stop Ltd. were lower, raising questions about the appropriateness of Singhania’s proposed pay scale for Raymond Lifestyle.
