Institutional EYE

Commentary on Corporate Governance Issues

CEO Pay: Sector Analysis (Key Sectors)

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This tenth piece in the series is focused on pay levels across several key sectors. An IiAS study on executive remuneration reveals that, in the past five years, CEO pay in the top 500 companies has outpaced performance. This is a worrying trend across most sectors, especially the Automobiles, FMCG and Engineering companies. Furthe

Investors: Asking for change they believe in

Seventy plus resolutions have been defeated since the new Companies Act was legislated. These and the steady increase in ‘against’ votes is a sign that investors have started to offer companies push-back on their decisions. But the investor focus has remained on operations. It’s cannot be that they don’t have a view on other matters - it’s just that they are more comfortable voicing these in one-one-one conversations. The coming AGM season is an opportunity for investors to signal how they view a broader set of developments, not merely through their reactions i.e. voting, but through shareholder resolutions they propose - change they will like to see. Read the full article here.

Fortis Healthcare: A vote to reboot

Fortis’ EGM result, decisively in favour of removing the old board and vote in the members proposed by shareholders, speak of investor discontent with the way the board has conducted itself and with what has been proposed. The result can be interpreted only in one way: the vote signals that the new board needs to quickly correct course and amend the past mistakes. For the full report, please click here.

CEO Pay: Sector Analysis (Engineering)

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This ninth piece in the series is focused on pay levels in the Engineering sector. The remuneration levels in the Engineering sector are reasonable. The median pay for both CEOs and Executive Directors is aligned with that of S&P BSE 500. The industry has been thoughtful in setting CEO remuneration, which is reflected in a moderate

Fortis Healthcare: Is it over?

Fortis board’s announcement that they have accepted the Munjal-Burman offer may just be the beginning of a new round of battle with shareholders and bidders. The shareholders’ decision on the 22 May 2018 EGM on removal of directors will be critical in deciding how the situation plays out, as will be the shareholder meeting to vote on the ‘sale’. Fortis Healthcare Limited’s (Fortis) board has decided to whom it will like to ‘sell’ the business. Given that the process had its infirmities, questions will continue to be raised on the decision, and clarity sought on how the decision was reached. But, till the board reconsiders the decision, the decision stands. The legitimacy of the ’establishmen

CEO Pay: Sector Analysis (Construction Materials)

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This eighth piece in the series is focused on pay levels in the construction materials sector. The remuneration levels in the Construction Materials sector are high - the median pay for both CEOs and Executive Directors is well above market standards and the CEO pay to the median employee salary is close to 150 times. Four out of e

SEBI on the Kotak Committee Recommendations

SEBI, in its board meeting held on 28 March 2018, reviewed the recommendations made by the Kotak Committee on Corporate Governance. Last week SEBI released its final set of decisions on the various recommendations of the committee. These can be viewed by clicking this link.

CEO Pay: Sector Analysis (FMCG)

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This seventh piece in the series is focused on pay levels in FMCG companies. Several companies in the FMCG sector have foreign ownership. Executive directors in such companies are often appointed from the parent leadership team and their pay is benchmarked to global peers. This creates an upward bias on the pay levels across the se

The Battle for Fortis

Fortis in its board meeting on 19 April 2017, constituted an expert advisory committee to evaluate the offers submitted to the board by the five bidders. The bidders, other than Manipal-TPG, were required to submit their final bids by 1 May 2018, while Manipal-TPG can submit their final bid by 6 May 2018. IiAS has evaluated the bids submitted to the board and what it means for the shareholders. For full report, please click here.

CEO Pay: Sector Analysis (Information Technology)

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This sixth piece in the series is focused on pay levels in IT companies. The remuneration levels in the IT sector are moderate. While a fourth of the CEOs draw a remuneration of Rs.100 mn or more, the overall median pay in the sector is broadly in line with the market. Further, the ratio of CEO-pay to median employee pay, at 62x, i

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