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IiAS opposes Hindustan Zinc CEO's reappointment over remuneration terms
The key resolution flagged by IiAS concerns the reappointment of HZL's whole-time director and chief executive officer, Arun Misra. While supporting his continuation as CEO, the advisory firm has opposed the terms of his remuneration.
Misra drew Rs 13.54 crore in FY25 from HZL, in addition to stock options worth Rs 6.37 crore from holding company Vedanta, taking his total package to Rs 19.9 crore. IiAS estimates his FY26 remuneration at Rs 31.42 crore.
HZL does not have a stock option scheme, and its senior executives are allotted stock options by Vedanta.
'As stated in the annual report, the cost of the stock options is borne by Hindustan Zinc under an agreement between Vedanta and Hindustan Zinc. We believe that, since Misra is an executive director at Vedanta, the cost of stock options should be shared by Vedanta and Hindustan Zinc in proportion to the duties discharged, rather than borne solely by Hindustan Zinc. We also call for greater transparency on the quantum of proposed stock options and disclosure of performance metrics for variable payouts,' IiAS said in its report.
Requests for comment from HZL on the IiAS report went unanswered at the time of going to press.
IiAS is also opposing the reappointment of two independent directors, Pallavi Joshi Bakhru and Anoop Mittal.
Bakhru, a senior leader at Grant Thornton Bharat, previously served as group head–taxation at Vedanta between 2015 and 2020. IiAS stressed that best governance practice discourages the appointment of former executives alongside their prior supervisors within a five-year cooling-off period — a threshold not met in her case.
Further, Grant Thornton advised HZL on the Black Mountain Mining deal in 2023, raising potential conflict-of-interest concerns regarding her role, the advisory firm said.
IiAS also opposed the reappointment of Chatterjee, a 1999-batch IAS officer representing the government of India, which holds a 27.92 per cent stake in HZL. It said the resolution contravenes board independence norms.
Since the chairperson of HZL is a non-executive promoter, regulations mandate that half of the company's board comprise independent directors. As of August 8, HZL's independent representation stood at only 33 per cent, IiAS noted.
'This matter is pending with the Ministry of Mines, government of India, for the appointment of more independent directors. We expect the government to first address board composition before appointing nominees. We do not support this resolution,' IiAS said.
The advisory firm has, however, recommended 'for' votes on the other seven resolutions put forth by HZL, which will be voted on between August 20 and August 24, ahead of the company's annual general meeting on August 25.
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