Shareholders of Zee Entertainment Enterprises Ltd. failed to vote in favour of the re-appointment of Punit Goenka as the company's director, a few days after his resignation from the post of managing director.
Goenka lost his re-appointment bid by a slim margin, as 50.45% voted against the proposal, at the company's 42nd Annual General Meeting on Nov. 28. A huge setback for the chief executive officer came from non-public institutions, as 88.4% voted against his re-appointment proposal.
While Goenka announced his resignation as managing director last week, he will continue to hold the position of chief executive officer and will entirely focus on his operational responsibilities.
In view of the resignation and withdrawal of his consent for reappointment of Goenka from the office of managing director, proposing his reappointment became infructuous, the company said in an exchange filing on Thursday.
The company also approved a dividend of Re 1 per equity share for the financial year ended March 31, 2024, at the AGM.
Earlier, the board approved higher targets to evaluate Goenka's performance, which includes quarterly consolidated revenue and Ebitda outlook for the next four quarters commencing in October and a payout of 25% of consolidated net profits as a dividend to the shareholders.
The CEO's performance will be tracked on the basis of these targets, and the variable portion of the salary (which is 40%) will be paid to him based on achievements, subject to a maximum cap as defined by the board, the company said.
The Securities and Exchange Board of India had barred him from holding a key managerial position over an alleged fund diversion. While he won relief from the Securities Appellate Tribunal, the regulatory scrutiny continues.
Shares of Zee have fallen 50% during the last 12 months and declined by 55% on a year-to-date basis. Nine of the 20 analysts tracking the company have a 'buy' rating on the stock, four suggest a 'hold' and seven recommend 'sell', according to Bloomberg data. The average of 12-month analysts' consensus price target implies a potential upside of 30%.
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