Latest news with #EmployeeStockOptionPlans
Mint
28-05-2025
- Business
- Mint
Primer: Can dissenters aid shareholder democracy?
In Nifty 500 companies, even when a majority of public shareholders oppose a resolution, it's not enough to stop it from being approved, a report by Institutional Investor Advisory Services (IiAS), a proxy advisory firm, found. Mint explains this anomaly. How do no-votes get bypassed? According to IiAS's review, most shareholder resolutions of Nifty 500 companies pass because the promoters hold the majority 51% of shares. Their holdings are significant. Public shareholders, including institutional investors, big money managers like mutual funds, insurance firms, pension funds and foreign portfolio investors, make up about 27% of ownership. Then, there are 'others' —a mix of retail investors, HNIs, family offices and private equity players. These groups do not have a majority and have lower voter participation. So even when many of them vote against a proposal, they can be ignored. Do investors show a voting pattern? In 2024, institutional investors held over a quarter of shares in Nifty 500 companies and voted on nearly 80% of the proposals. Of 4,840 resolutions put before shareholders during the year, only 24 were rejected, meaning 99.5% were approved, underlining promoter dominance. Resolutions on pay packets were opposed. Adani Ports and Special Economic Zone Ltd saw 46.91% institutions vote against a compensation proposal, yet it passed. Similarly, 45.26% opposed a resolution at Persistent Systems Ltd but it passed. Employee Stock Option Plans faced the most dissent from institutional investors. What does the report say on types of resolutions? Those on owner-manager remuneration are classified as 'ordinary' and need a simple majority. Since promoters vote on these, they always get approved. The report suggests reclassifying these to 'majority-of-minority', requiring more votes and stopping promoters from voting on their compensation. This could result in greater accountability and fairness. Do retail and small investors have a say? They have very little say in company decisions. In calendar year 2024, retail investors owned 22% of the shares in Nifty 500 companies, but only 19% of them exercised their voting rights. Even when they did vote, fewer than 1% voted against. In contrast, promoters who owned more than 51% of the shares voted on the majority of their holdings, giving them higher influence. Because of this imbalance, even if small investors disagree with a decision, it rarely changes the outcome. Their voices often go unheard. How can the dissent mechanism improve? IiAS proposes a dissent review mechanism, where more than 10% of votes against a resolution would trigger a formal response from the company. After engaging with dissenting shareholders, the board would disclose any action taken, such as amendments made to the resolution. This is inspired by the Indian Constitution, which allows the President to return a bill to Parliament for reconsideration. Translated for resolutions with more than 10% dissent it means fewer than one in ten resolutions will need to be revisited.
&w=3840&q=100)
Business Standard
28-05-2025
- Business
- Business Standard
Lokpal dismisses complaints against ex-Sebi chief Buch in Adani case
The Lokpal of India has disposed of petitions filed against Madhabi Puri Buch, former chairperson of the Securities and Exchange Board of India (Sebi), relating to allegations of corruption in the Adani-Hindenburg matter. The complaints against Buch were based on allegations made by the now-disbanded short-seller Hindenburg Research. Hindenburg had questioned Sebi's investigations into the Adani matter, alleging a 'conflict of interest' involving Buch. However, the Lokpal concluded that the allegations were based on presumptions and assumptions, lacked verifiable evidence, and failed to meet the criteria for offences under Part III of the Prevention of Corruption Act, 1988. As a result, the Lokpal refused to pursue further investigations. While the Lokpal had previously noted that the Hindenburg report alone could not serve as the basis for action against Buch, the complainants had presented their allegations independently of the report. Nevertheless, the Lokpal found these to be untenable, unsubstantiated and frivolous. One of the key allegations was a quid pro quo involving a settlement by ICICI Bank relating to Employee Stock Option Plans (ESOPs) granted to Buch during her tenure with the bank. The Lokpal dismissed this claim as meritless, stating that it was unreasonable to link stock options granted in 2011 to actions taken years later, particularly in the absence of any evidence that Buch was involved in the decision-making process of Sebi's High-Powered Committee. Buch had also sought action against one of the complainants for obtaining and publicising her income-tax returns without consent, thereby invading her privacy. The Lokpal advised Buch to approach the appropriate forum for this matter. Regarding allegations that Puri Buch's husband, Dhaval Buch, had a quid pro quo arrangement due to his association with Blackstone and its involvement with Real Estate Investment Trusts (REITs), the Lokpal noted that Sebi had registered the first set of REITs before Dhaval joined Blackstone. It further observed that Buch had disclosed her advisory firms and the transfer of holdings to her husband, with no evidence suggesting she continued consultancy work after joining Sebi.
Business Upturn
08-05-2025
- Business
- Business Upturn
SEBI bars Vijay Shekhar Sharma from receiving fresh ESOPs for 3 years in settlement order
By News Desk Published on May 8, 2025, 18:33 IST The Securities and Exchange Board of India (SEBI) has issued a settlement order in the matter concerning One97 Communications, the parent company of Paytm, involving alleged irregularities related to Employee Stock Option Plans (ESOPs). As per the order, Paytm founder Vijay Shekhar Sharma has settled the case with SEBI and has been barred from accepting any fresh ESOPs from listed companies for a period of three years. In addition to the restriction, Sharma and Paytm have each paid ₹1.11 crore to settle the matter. SEBI's action also includes Ajay Shekhar Sharma, who has settled the case by agreeing to the cancellation of 2.23 lakh ESOPs. The settlement pertains to violations observed in the company's ESOP framework and related disclosures. While neither party has admitted or denied the findings, the case has been settled through SEBI's consent mechanism with monetary and non-monetary penalties imposed. This development adds further regulatory scrutiny on the company at a time when Paytm has already been facing operational challenges post the RBI's action against its payments bank arm. News desk at
India.com
24-04-2025
- Business
- India.com
Narayana Murthy's Infosys approves Rs 510000000 Employee Stock Option Plans for…
India's second-largest IT firm, Infosys, has announced that its board has approved stock incentives, including Employee Stock Option Plans (ESOPs), valued at Rs 51 crore for CEO and Managing Director Salil Parekh. These incentives, which fall under categories like ESG and equity-based rewards, are part of Parekh's annual grants. According to a recent regulatory filing, the decision was based on recommendations from the Nomination and Remuneration Committee and as per the terms of Parekh's employment agreement, which had earlier received shareholder approval. Among them is 'grant of annual performance-based stock incentives (Annual Performance Equity Grant) in the form of Restricted Stock Units (RSUs) covering company's equity shares having a market value of Rs 34.75 crore as on the date of the grant under the 2015 Stock Incentive Compensation Plan (2015 plan)'. The nod also includes grant of annual performance-based stock incentives (Annual performance equity ESG grant) in the form of RSUs covering company's equity shares having a market value of Rs 2 crore as on the date of the grant under the 2015 Plan, which shall vest 12 months from the date of the grant, subject to the company's achievement of certain environment, social and governance milestones as determined by the board. It also greenlit grant of annual performance-based stock incentives (Annual performance Equity TSR grant) in the form of RSUs covering company's equity shares having a market value of Rs 5 crore as on the date of the grant under the 2015 Plan. This will vest on or after March 31, 2027 subject to certain criteria. Infosys also informed that the nod includes: 'The grant of annual performance-based stock incentives (2019 Annual Performance Equity Grant) in the form of Restricted Stock Units (RSU's) covering Company's equity shares having a market value of Rs 10 crore as on the date of the grant under the Infosys Expanded Stock Ownership Program-2019 (2019 Plan), which shall vest 12 months from the date of the grant subject to the company's achievement of certain performance criteria as laid out in the 2019 Plan.' The ESOPs will be granted with effect from May 2, 2025 and the number of RSUs will be calculated based on the market price at the close of trading on May 2, 2025, the company informed in a BSE filing on Thursday, as it released the Q4 and full year FY25 scorecard. (With Inputs From PTI)
