Vijay Shekhar Sharma To Stay On As Paytm MD & CEO; 99.67% Shareholders Vote In Favour

Vijay Shekhar Sharma won the approval of the shareholders to take the reins of the listed fintech giant Paytm after his reappointment as the company’s MD and CEO for the next five years back in May this year.

According to Paytm’s filings with the Bombay Stock Exchange, which showed the results of the resolutions tabled at the AGM concluded on Friday (August 19), shareholders voted favourably for both Sharma’s reappointment and his remuneration.

Shareholders voted almost unanimously for Vijay Shekhar Sharma’s reappointment, as 99.67% of the shareholders voted in favour of the resolution. The matter of his remuneration faced slightly more resistance, but 94.48% of the Paytm shareholders still voted in favour.

Other resolutions passed by Paytm’s shareholders included the adoption of the financial results for the year ended March 31, 2022, the re-appointment of Ravi Chandra Adusumalli to the board of directors, and the appointment of Madhur Deora as executive director, president and group CFO of Paytm and contributions to charities.

In the run-up to the AGM, multiple proxy advisory firms opposed Sharma’s reappointment at the helm of Paytm and his remuneration.

Speaking on the share price and his own remuneration, Sharma reiterated at the AGM that his ESOP grant will only vest after Paytm’s share price crossed the IPO price. According to estimates by IiAS, Sharma will be receiving over INR 796 Cr as remuneration in FY23, comprising 21 Mn stock options at an INR 9 apiece.

Last week, Institutional Investor Advisory Services India Limited (IiAS) opposed reappointing Sharma as Paytm CEO, followed by similar opposition from InGovern and Stakeholders Empowerment Services (SES). This resulted in an air of uncertainty around Sharma’s position in the company he founded.

However, the vote of confidence reflects that a vast majority of shareholders still have faith in Sharma’s ability to steer Paytm towards kinder seas. 

After completing India’s largest-ever IPO at the time, Paytm quickly lost a large chunk of its market capitalisation, with shares dropping as far as INR 511 apiece, 76% lower than the IPO price of INR 2,150 apiece. Paytm’s shares closed at INR 771 apiece, 64% lower than the IPO price, on Friday (August 19).

However, Sharma has repeatedly stated that the Paytm team is working to achieve profitability and that the share price is not a priority at the moment. The fintech major has set September 2023 as the time by when it will finally be profitable. 

In the first quarter of FY23, the fintech major saw its losses jump 70% year-on-year, while its revenue from operations also increased 89%. Interestingly, Paytm’s loss declined 15.3% from INR 762.5 Cr, making Q1 FY23 the third consecutive quarter with a sequential decline in the loss.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.