Balaji Telefilms Ltd.’s shareholders rejected proposals on salary to be paid to Managing Director Shobha Kapoor and Joint Managing Director Ekta Kapoor. The Kapoor family, including veteran actor and now chairman Jeetendra, founded the company in 1994.
For two years starting Nov. 10, the board of Balaji had approved a basic salary of Rs 2.40 crore each, along with perquisites, to Ekta and Shobha Kapoor, similar to previous years. But the resolutions failed to pass muster at the annual shareholder meeting, according to the company’s filings.
Interestingly, a very small percentage of public shareholders sealed their fate. “The voting pattern is unlike what we see in most companies. The promoters did not vote, neither did the institutional shareholders. A fraction of the total shares got voted—just 0.21%,” Amit Tandon, founder and managing director at proxy firm Institutional Investors Advisory Services, told BloombergQuint. Of the votes cast, he said, a little more than half were against the salary proposals.
Being special resolutions, the two remuneration proposals needed atleast 75% of the votes cast to be in favour. Shareholder activism is growing in India, driven by large institutional investors who have voted again resolutions ranging from executive pay to reappointment of directors.
Last month, Vedanta Ltd. failed to get institutional shareholder support to pass its financial accounts and to elect a renowned independent director — though the proposals passed due to promoter support. At Eicher Motors Ltd., institutional shareholders voted against the re-appointment of Siddhartha Lal as managing director on account of remuneration concerns. This year, several companies’ employee stock option programs have been vetoed by institutional shareholders.
The case of Balaji Telefilms, however, is different with large shareholders staying away. Promoters own 34.34% of Balaji Telefilms while public shareholders own 65.6%, according to disclosures as of June. Among public shareholders, foreign portfolio investors hold 18.43%, retail shareholders own 12% and Reliance Industries Ltd. has a 24.9% stake. The data shows neither FPIs nor RIL voted on the two resolutions that failed. Infact, they didn’t vote on any of the six resolutions at the AGM. Emailed queries to the Ambani- promoted company remained unanswered. Balaji Telefilms held the annual general meeting on Aug. 31. According to the result disclosed on Sept. 2:
Ekta Kapoor, Joint Managing Director: Remuneration Proposal
Shareholders representing 0.21% of the total outstanding shares cast votes. Promoters did not vote on the proposal. No votes were cast by public institutional shareholders. 0.4% of public non-institutional shares were voted on. 55.4% of those votes were against the proposal.
Shobha Kapoor, Managing Director: Remuneration Proposal
Shareholders representing 0.21% of the total outstanding shares cast votes. Promoters did not vote on the proposal. No votes were cast by public institutional shareholders. 0.4% of public non-institutional shares were voted on. 56.7% of those votes were against the proposals.
Bajali Telefilms has been making losses for the past seven years. The loss widened in the pandemic-marred FY21.
Last year, Ekta Kapoor had foregone her salary of Rs 2.4 crore to provide financial aid to co-workers. Ekta Kapoor has yet to respond to BloombergQuint’s messages and queries on the voting outcomes.