Minority shareholders rejected the re-appointment of Neeraj Kanwar as the managing director of Apollo Tyres Ltd. in a rare rebuff for a promoter in India.
The special resolution to re-appoint Kanwar was defeated in a postal ballot held on Sept. 12, according to the nation's second-largest tyremaker's filings to the exchanges. That's because more than half of the public institutions that voted were against it even as promoters and non-institutions supported the move.
As a result, 72.71 percent of the votes polled were in favour of the special resolution, falling short of the mandatory 75 percent. The reason that institutions didn't fully back the re-appointment was higher pay to Kanwar, one such investor told BloombergQuint requesting anonymity. Kanwar is currently also the vice-chairman of the company.
The voting results showed that there were concerns about the increase in Kanwar's salary, Amit Tandon, managing director of shareholder advisory firm IiAS, said in an interview with BloombergQuint. “There should be an absolute cap for salary payments as a large pay bothers shareholders.”
Kanwar's assured pay jumped 41 percent in the year ended March even as the company's profit fell 34 percent during the period, according to BloombergQuint's calculations based on company filings. In terms of pay-to-profit ratio, his compensation nearly doubled.
Neeraj Kanwar is son of Apollo Tyres Chairman Onkar Kanwar. The combined salary-to-profit ratio of the father and the son also doubled in the last financial year.
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