Corporate governance advisory firms are urging shareholders to vote against Gautam Singhania’s proposed appointment as executive chairperson of Raymond Lifestyle Ltd.
IiAS raises remuneration issues
Institutional Investor Advisory Services India (IiAS) has raised concerns over several aspects of the proposal, including Singhania’s remuneration package and the company’s governance practices.
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Singhania, the chairperson and managing director of Raymond Ltd., is seeking reappointment as executive chairperson of Raymond Lifestyle for five years, starting September 1, 2024, with a minimum remuneration commitment for three years. However, the terms of his appointment have raised eyebrows, with a monthly salary ranging between INR 55 lakh to INR 80 lakh, along with allowances for medical reimbursement, leave travel, and retirement benefits, totaling an estimated INR 12.35 crore annually.
IiAS has pointed out that the resolution to appoint Singhania lacks clarity on major issues, such as commission details and performance-linked targets. Furthermore, the proposal does not specify a ceiling limit on Singhania’s total pay, which could exceed 5% of Raymond Lifestyle’s net profit, raising concerns about unchecked salary growth.
Raymond Lifestyle fails to show adequate performance metric
The firm has also expressed concerns about the absence of malus or claw-back clauses and ESG targets tied to performance. Additionally, the company has failed to provide adequate disclosures on the performance metrics required for Singhania to earn the proposed remuneration, making it difficult for shareholders to assess whether the pay is in tune with the company’s performance.
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To make matters worse, Singhania is currently engaged in divorce proceedings with his wife, Nawaz Modi, who has accused him of domestic violence and misusing company funds for personal benefits. While the board has not commented on these allegations, IiAS has expressed concerns about the possible impact on the company’s governance and reputation.
Given the lack of clarity on his remuneration, potential conflicts of interest, and unresolved legal matters, IiAS has advised shareholders to reject the resolution and vote against Singhania’s appointment. The advisory firm has stressed that it is crucial for shareholders to protect the company from any governance risks stemming from these issues.
