Mumbai: Two corporate governance advisory firms – Stakeholders Empowerment Services (SES) and Institutional Investor Advisory Services India (IiAS) – have recommended shareholders of Raymond Lifestyle to vote against Gautam Singhania‘s appointment as executive chairperson. The proxy advisors cited Singhania’s appointment ahead of the board approval, concerns over remuneration policies and potential “reputational risks” as among the key reasons for the recommendation.
The company is seeking shareholders’ approval for the appointment of Gautam Singhania as the executive chairman for five years from September 1, 2024, to August 31, 2029. The e-voting, which started on November 5, will conclude on December 4.
Raymond did not respond to ET’s queries.
SES said the company went ahead and appointed Singhania as the executive chairman before getting the board’s approval. According to the proxy advisor, “excessive time commitments” due to holding two full-time positions, the absence of an absolute cap on the variable pay and commission, and a lack of clarity on business restructuring are among the reasons for its recommendation.
The lifestyle business of Raymond was demerged into Raymond Lifestyle which was listed separately on September 5. Singhania holds executive positions on the boards of both Raymond and Raymond Lifestyle.
SES said an individual should not hold more than one full-time position unless the directorships are held in companies engaged in similar lines of business.
The stock, which listed at ₹2,850 on September 5, has declined 28.5% since then to close at ₹2,026 on the BSE on Monday.
IiAS said that Raymond has not provided any details regarding the commission payable to him.
“The proposed remuneration structure is open-ended with limited contours, which limits our ability to estimate aggregate remuneration,” said IiAS in a note to shareholders. “There is no maximum cap on the remuneration, no disclosures on the performance targets required to be achieved for the commission to be paid, nor any clarity on whether malus or clawback clauses have been built into the remuneration structure.”
Promoters held 54.67% stake in the company as of September 30, 2024, while foreign portfolio investors held a 12.63% stake and domestic institutional investors 7.89%.
According to the firm, Singhania is currently undergoing divorce proceedings and his wife, Nawaz Modi, has accused him of domestic violence and alleged that he has used company funds for personal benefits.
“The board has not issued an update since their last statement in December 2023, and it is unclear if it has sought an independent investigation into these accusations,” IiAS said.
