Shareholders reject special incentives for PVR chief, joint MD

Mumbai: Shareholders of India's largest multiplex operator PVR last week rejected two resolutions to approve special incentives for its chairman and managing director Ajay Bijli and joint managing director Sanjeev Kumar for FY22.

The company sought shareholders' approval for payment of a special incentive of ₹6 crore to Bijli and ₹4 crore to Kumar. This is in addition to a fixed pay of ₹6.42 crore to Bijli and of ₹4.43 crore to Kumar for FY22.

About 52% of the institutional investors and 25% of the non-institutional public investors voted against proposals of special incentives for the two senior executives of PVR. About 64% of the shareholders voted in favour of the resolution. A special resolution requires the approval of shareholders holding at least 75% of the total equity.

Promoters including Bijli, who held 16.99% in the company as of June 30, voted in favour of the proposals. Foreign and domestic institutional investors respectively held 36.56% and 26.19% stakes in the company as of June 30, while retail investors owned 20.26%.

An email query sent to PVR did not elicit any response till Sunday press time.

Proxy advisory agency Stakeholders Empowerment Services (SES), in a report, had recommended opposing special incentives to Bijli and Kumar citing implementation of pay cuts to the company's employees in the period till the half year of FY22.

"SES raises governance concerns against the nomination and remuneration committee (NRC) as the company on one side is compensating the executive director's performance by payment of special incentive and on another side no such plan for the employees of the company despite consistent pay cuts since last two financial years," SES said in the report.

PVR reported losses of ₹748 crore in FY21 and ₹488 crore in FY22 as cinema operations were impacted due to restrictions imposed by various state governments to curb the spread of the Covid-19 pandemic since March 2020.

PVR's annual general meeting was held on July 21 while voting for various resolutions, including the adoption of audited financials and remuneration to the various directors, which was held between July 18 and July 20. While most institutional investors voted against two of the twelve resolutions, the remaining resolutions did not see resistance.

SES, in its earlier report, had raised concern over the 'unfair remuneration practice' of the company during FY20 and FY21. The proxy governance firm said the company is proposing a normal salary with an increment at 8% per annum on the fixed component as minimum remuneration for promoter executive directors (ED), but on the other hand, retrenched employees and reduced their salaries.