Mumbai (Maharashtra) [India], August 19 (ANI): India's leading digital payments and financial services company Paytm has reiterated its compliance with the market regulator Securities and Exchange Board of India (SEBI) norms while replying to the observations of proxy firms.
The company also offered a point-by-point rebuttal to issues raised by proxy advisory firms, confirms the documents exclusively accessed by ANI.
Earlier this month, multiple proxy advisory firms shared their observations about the resolutions on the reappointments and the remunerations of the management. Sources informed ANI that Paytm had replied to these proxy firms ahead of the annual general meeting (AGM).
As per the documents, Paytm has said that Vijay Shekhar Sharma is the right person to lead the Company as its Managing Director and CEO. Under Sharma's leadership, Paytm has become a market leader in digital payments, constantly innovating in payments and digital financial services. The Company continues to comply with guidelines and laws set by the regulators and remains committed to protecting the interest of all its shareholders.
Additionally, the company has told the proxy firms that SEBI, in February 2022, had made it voluntary for India Inc. to have a separate Chairperson and Managing Director / Chief Executive Officer.
"There is no power of voting bestowed on the Chairman of our company. Also, for most Nifty 50 companies, the Managing Director is appointed on a non-rotational basis," sources said.
The proxy firms report talked about Sharma's ESOPs and the non-disclosure of the same. Paytm in its reply, had said this is incorrect as the ESOPs were already approved by the shareholders granted to Sharma in compliance with applicable laws and with all necessary approvals before the IPO was looked at.
The conditions for the grant had been disclosed in the shareholder letter of April 2022, where it has been clearly stated that these ESOPs will vest only when the market cap crosses the IPO level on a sustained basis.
The company's growing revenues and a strong path to becoming operating EBITDA profitable by the quarter ending September 2023 is also under his guidance. Paytm further shared that Sharma had communicated the same to shareholders through a letter in April 2022) and that his ESOPs will only vest when the market cap of the company exceeds the IPO market cap.
"This indicates his leadership, seriousness and commitment to the desired path of the Company. In the first quarterly results, the Company has posted results showing that it is on the path to operating EBITDA profitability," the company said in its response document to proxy firms as accessed by ANI.
Furthermore, Sharma's remuneration is fixed for the next three years without any annual increment, unlike the policy/practice applicable to all other employees. As per sources, the company said that Sharma has received a salary lower than companies of comparable size and has not received ESOPs in the past.
Meanwhile, Paytm's Group Chief Financial Officer (CFO) Madhur Deora's remuneration, also discussed in the proxy firms' reports, is in line with the market practice and the remuneration paid to Executive Directors by other top NIFTY 100 companies by market cap. Deora joined the company in 2016 and has played a vital role in getting marquee investors on board and shaping the company's growth plans. (ANI)