Institutional Investors Advisory Services has asked shareholders of Thomas Cook (India) Ltd. to vote against resolutions proposing to fix the remuneration for Chairperson and Managing Director Madhavan Menon and that of Chief Executive Officer Mahesh Iyer.
For Menon, the proposal is to fix the remuneration he's being paid currently as the minimum for two years, from March 2023 to February 2025. Proxy advisory firm IiAS has cited governance and transparency issues as a reason for its recommendation.
The remuneration payable to Madhavan Menon, which it estimates to be Rs 7.9 crore including variable pay and the fair value of stock options, is high in terms of the profitability of the company, the advisory firm said.
TCIL's leisure businesses, Sterling Holiday and Resorts and Digital Imaging Solutions, which are the most profitable businesses on a consolidated basis, have their own independent management, according to IiAs.
We believe Madhavan Menon's estimated remuneration is high given the size and profitability of the standalone business. Further, the company should have capped the variable pay and provided details on the stock options that shall be granted to him during the remainder of his tenure.IiAS Advisory Statement
For Iyer too, the aggregate executive remuneration is high given the size of the standalone business, IiAS said. As per the firm's estimate, Iyer's remuneration is Rs 4.4 crore, and total aggregate executive remuneration is Rs 12.32 crore. The proposal is to fix this as a minimum for the next three years, starting from May 2023. His aggregate remuneration is high given the size of the standalone business, the advisory firm said.
"The company should have provided details on the stock options that will be granted to him and capped the variable pay in absolute amounts," IiAS says.
Thomas Cook didn't immediately respond to BQ Prime queries.
The shareholders vote on these resolutions from March 28 to April 26.
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