SUMMARY
IiAS’ report said, “Sharma has made several commitments in the past to make the company profitable, however, these have not played out. We believe the board must consider professionalising the management.”
According to IiAS estimates, Sharma will be receiving over INR 796 Cr as remuneration in the fiscal year 2023, comprising 21 Mn stock options at an INR 9 apiece
At the time of reporting, Paytm’s shares are trading at INR 780.90 as of today (12:10 PM) on BSE
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Advisory firm Institutional Investor Advisory Services India Limited (IiAS) has opposed reappointing Vijay Shekhar Sharma as the CEO of Paytm for the next five years.
Besides this, IiAS condemns the remuneration decided for Paytm’s new CEO. It advises stakeholders of the listed fintech startup to vote against the company’s recent move.
IiAS’ report, which comes ahead of Paytm’s AGM taking place on August 19th, informed, “Vijay Shekhar Sharma has made several commitments in the past to make the company profitable, however, these have not played out. We believe the board must consider professionalising the management.”
In its report, IiAS mentioned that Paytm’s shares have tanked 63.6% from the issue price of INR 2,150 apiece to INR 825.11 as of August 11th thus, wiping out investors’ wealth.
The report stated, “We take comfort in the board’s assertion that the company has an effective mechanism for succession planning for the orderly succession of directors and senior management personnel. We raise concerns that Sharma is not liable to retire by rotation, and that he will get board permanency if he continues in a non-executive capacity following the end of his term as managing director.”
At the time of reporting, Paytm’s shares were trading over 5% lower at INR 780.90 as of today (12:10 PM) on BSE.
The report informed that Paytm will seek stakeholders’ approval in the upcoming AGM for the proposed remuneration as minimum remuneration– which will be paid to Sharma even if the startup reports losses.
According to IiAS estimates, Sharma will be receiving over INR 796 Cr as remuneration in the fiscal year 2023, comprising 21 Mn stock options at an INR 9 apiece.
The latest development has come after Paytm’s parent One97 Communications widened its losses by 69% to INR 645.4 Cr in June quarter of the FY22-23.
Meanwhile, the fintech unicorn’s operating revenue surged by 89% YoY to INR 1,680 Cr in the corresponding quarter.
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