After some shareholders stated that they thought that the salary of Anil Rai Gupta, chairman and managing director, Havells India, was too high in absolute terms and way higher than his peers, the company has issued a clarification.
As per the shareholders, “the total promoter remuneration was Rs 385.9 mn and Rs. 369.2 mn in FY22 and FY23 respectively, which is high in absolute terms”. The shareholders had sought that the matter be discussed in the upcoming annual general meeting on 27 June 2023.
The company, meanwhile, has justified Gupta’s salary in its regulatory filing, by clarifying that the overall remuneration for the financial year 2023 is approximately1.8 per cent of the profit before tax (PBT), which is proportionate to the nature and size of the company. It clarified that the percentage of commission in the proposed remuneration is in line with the current pay structure, and that it has not undergone any changes in the past one decade.
The commission, as per the company, is linked to the PBT. Therefore, it will change as per the company’s performance.
Gupta’s remuneration for FY23 of about 1.8 per cent of the net profit (last 4 years average of approximately1.8 per cent) has not exceeded the cap of five per cent stated in Section 197 of the Companies Act, 2013.