Home » News » Business » Paytm CEO's Reappointment: All 3 Domestic Voting Advisory Firms Recommend Against Proposal
2-MIN READ

Paytm CEO's Reappointment: All 3 Domestic Voting Advisory Firms Recommend Against Proposal

By: Business Desk

News18.com

Last Updated: August 13, 2022, 16:43 IST

New Delhi, India

Paytm founder and CEO Vijay Shekhar Sharma.

Paytm founder and CEO Vijay Shekhar Sharma.

Vijay Shekhar Sharma has made several commitments in the past to make the company profitable, however, these have not played out, says IiAS in its report

All three domestic voting advisory firms — Stakeholders Empowerment Services (SES), Institutional Investor Advisory Services (IiAS) and InGovern Research Services — have given their recommendations against the reappointment of Vijay Shekhar Sharma as Paytm’s CEO and MD. The companies have cited different reasons for that.

IiAS in its report said, “Vijay Shekhar Sharma has made several commitments in the past to make the company profitable, however, these have not played out. We believe the board must consider professionalizing the management.” IiAS raises concerns that Sharma is not liable to retire by rotation.

“He (Sharma) will get board permanency if he continues in a non-executive capacity following the end of his term as managing director,” the report said. The One97 Communications (OCL) board approved annual remuneration of Rs 4 crore for Sharma along with perquisites up to 25 per cent of the remuneration, two vehicles and related expenses, utility and other expenses in relation to the company leased accommodation and club subscription.

IiAS also issued an advisory against remuneration for Paytm group chief financial officer Madhur Deora while favouring his appointment as a whole-time director designated as Executive Director, President and Group Chief Financial Officer for five years from May 20, 2022. The remuneration is part of the OCL annual general meeting resolution scheduled to be held on August 19.

Meanwhile, InGovern founder and Managing Director Shriram Subramanian said, “Sharma is not liable to retire as director by rotation, that’s the main problem in our view. As far as the share price performance is concerned, Paytm is not a unique case. All new-age companies have seen their stock prices tank from the highs. Also, most of them happen to be non-profitable. MFs and insurance companies are still trying to understand how and when these companies will turn profitable. This was something that was known at the time of the IPO”, according to a Business Standard report.

Raising concerns over Sharma holding the position of chairman as well as MD and his “excessive” remuneration, SES said in its report said, “Although, there is no legal bar on the chairman of the company from holding executive position, SES is of the view that the company should have separated the position since combining both positions may lead to concentration of powers in the hands of a single person.”

In FY22, the company reported a cash loss of Rs 1,200 crore, and losses in the first quarter of FY23 are high.

Shares of One97 Communications on Friday declined 4.65 per cent to close at Rs 787.15 apiece on BSE. IiAS said its stock price has fallen by 63.6 per cent from the issue price of Rs 2,150 apiece.

Meanwhile, Paytm has shared its monthly business operating performance update for July 2022. The company has strengthened its loan distribution business, with disbursals at an annualised run rate of over Rs 25,000 crore. It has further deepened its offline payments leadership with over four million total device deployments across the country.

In a stock exchange filing, Paytm said it has disbursed 2.9 million loans in July 2022, marking a year-on-year growth of 296 per cent. This aggregates to a loan value of Rs 2,090 crore ($264 million), a y-o-y growth of 512 per cent. The company further said that it continues to see ample growth and upsell opportunities in the loan distribution business.

Read the Latest News and Breaking News here

first published:August 13, 2022, 15:04 IST
last updated:August 13, 2022, 16:43 IST