The wide gap between boardroom and shop floor

Click on graphic

Indian regulations give shareholders a significant authority in executive pay matters in comparison to the US. Yet, shareholders in India have rarely taken a principled stand when excessive remuneration was paid to the directors.

But, recent events at Tata Motors (where proposals of remuneration to directors were voted against) and Apollo Hospitals (where more than 46% voting institutions voted against appointment and pay of the vice-chairperson and MDs) show that shareholders are actively analysing and voting on remuneration proposals.

The pay ratio disclosures under the new Companies Act help them with more information to take voting decisions