The Telegraph
Friday , July 4 , 2014
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Investors snub Tata Motors

Proposal rejected

Mumbai, July 3: The shareholders of Tata Motors have rejected the company’s proposal to pay a higher remuneration to some of its top executives, including Ravindra Pisharody and Satish Borwankar and late Karl Slym or his legal heir.

Tata Motors had sought shareholders’ approval through a postal ballot on May 22. The company today informed the bourses that the proposals did not receive the requisite majority.

The resolutions required a three-fourth majority. Of the total votes cast, a little over 70 per cent voted in favour, lower than the requisite 75 per cent.

For executive director (commercial vehicles) Ravindra Pisharody, Tata Motors had proposed a salary of Rs 7 lakh per month apart from incentive remuneration, perquisites, allowances and other benefits.

Under the terms of the appointment of MDs and executive directors, the board or a committee has the authority to fix salaries, annual increments or incentives based on merit and performance.

However, in case of no profits or inadequacy of profits in any fiscal, the managing directors and executive directors are entitled to a minimum remuneration.

According to the provisions of Sections 198 and 309 and Schedule XIII of the Companies Act, 1956, in case of no profits or inadequacy of profits, a company may pay a remuneration by way of salary, dearness allowance, perquisites and any other allowances (excluding commission) up to the ceiling limits set through a special resolution. However, the amount paid in excess of the limit becomes refundable unless a company waives the recovery .

Tata Motors had proposed the waiver of the recovery of excess remuneration paid by the company up to March 31 in case of Pisharody and Satish Borwankar, and up to January 26, in case of Slym.