Diversified group ITC Friday termed as “unfounded, misleading and defamatory” recommendations by proxy advisory firm liAS to its shareholders to reject a proposal to pay salary of Rs 1 crore per month to its non- executive chairperson Y C Deveshwar.
ITC is seeking shareholders’ nod for additional remuneration for Deveshwar, who stepped down from executive role in February this year, that includes a monthly salary of Rs 1 crore, among others, in the upcoming AGM on July 28.
However, liAS has recommended that ITC’s shareholders must vote against such resolution saying that the Kolkata- headquartered company has recently appointed Sanjiv Puri as CEO and Deveshwar’s presence will undermine his authority.
Responding to the recommendation, an ITC spokesperson said: “Had the proxy advisory firm studied the company documents available in the public domain, it would not have made such unfounded, misleading and defamatory statements concerning the chairman of the company.”
At the last AGM of the company held on July 22, 2016, shareholders had approved appointment of Deveshwar as non-executive director and chairman of the company for a period of three years with effect from February 5, 2017. Defending the proposal for his salary, the spokesperson added Deveshwar agreed to continue as non-executive chairman and also play the role of mentor to the new executive management at the request of the Nomination and Compensation Committee and the Board.
This was done after recognising the need for orderly transition in a company of ITC’s size and complexity, the spokesperson said. IiAS had said that the board structure, and the proposed remuneration, signalled Deveshwar’s continuing control over the company, “which undermines the recently appointed CEO Sanjiv Puri”.
“Once YC Deveshwar has stepped down, he must let go,” the proxy advisory firm said. Besides, the proxy firm claimed that at an aggregate remuneration estimated at Rs 12.71 crore, “proposed remuneration is in the
same range as that of the chief executive officer, Sanjiv Puri, IiAS estimates that, based on the past, his remuneration – in actual terms – will be higher than that of Sanjiv Puri”.