Apollo Tyres Cuts Kanwars’ Pay After Shareholder Rebuff
Apollo Tyres Ltd. cut Chairman Onkar Kanwar and his son and Vice-Chairman Neeraj Kanwar’s pay after shareholders rejected Neeraj’s reappointment as managing director in a rare rebuff for a promoter in India.
The Nominations and Remuneration Committee of the board of Apollo Tyres proposed a pay cut to lower their overall compensation by 30 percent in the financial year 2018-19 against the previous arrangement, the company said in a statement. The committee recommended a cap of 7.5 percent of the profit before tax for promoter pay, saying that it could be reduced over a period of time. The Kanwars have agreed to the pay cut.
Here’s what else the panel suggested:
- Performance-based remuneration will be targeted at approximately 70 percent of the total compensation.
- Annual increments for the fixed portion of promoter compensation will be in line with that of the senior professionals of the company.
The special resolution to re-appoint Neeraj Kanwar was defeated in a postal ballot on Sept. 12 as more than half of the public institutions that voted were against it. As a result, 72.71 percent of the votes polled were in favour, falling short of the mandatory 75 percent.
Neeraj’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 had nearly doubled. Similarly, the combined salary-to-profit ratio of the father and the son also doubled in the last financial year.