The shareholders of Balaji Telefilms have reportedly rejected the proposal to raise Ekta Kapoor and her mother, Shobha Kapoor’s salaries for the upcoming year. Ekta serves as the Joint Managing Director of the company whereas Shobha is the Managing Director.
According to Bloomberg Quint, the general meeting took place on August 31 and the results were declared on September 2. While 55.4% votes were against Ekta’s remuneration proposal, 56.7% votes were against Shobha’s proposal.
Strangely, only a small group of public shareholders participated in the voting. According to Business Standard, the promoter group, that holds 34.34 % stake in the company, withheld from the voting. The publication also reported that Reliance Industries, which has 24.92% stake in the company, also did not participate in the special resolution voting.
“This is a very peculiar case. Where neither the promoter or large public shareholders or FIIs have voted. It remains to be seen if there is any clause that prevented the promoters from casting their vote on this particular resolution under the share purchase agreement,” Amit Tandon, founder and MD, Institutional Investor Advisory Services (IiAS) told the financial daily.
“Shobha Kapoor, MD, was paid ₹2.1 crore in FY21, which was 59.7 times the median employee remuneration. Assuming inadequacy of profits in FY22, we estimate her remuneration at ₹2.69 crore, which is in line with peers and reasonable compared to the size and complexity of business,” they added. IiAS also said, “Ekta Kapoor has a poor attendance record, having attended 50 per cent (2 out of 4) of the board meetings in FY21 and 75 per cent (9 out of 12) board meetings over the last three years. Ekta Kapoor did not receive remuneration from the company in FY21. Assuming inadequacy of profits in FY22, we estimate her remuneration at ₹2.69 crore, which is in line with peers and reasonable compared to the size and complexity of business.”
Ekta Kapoor and her family founded Balaji Telefilms in 1994. Bloomberg reported that the company has been incurring losses for the past seven year. The pandemic led to a loss further. Last year, Ekta had foregone her salary of ₹2.5 crore to provide financial aid to her employees.