Religare Enterprises (REL), raising eyebrows. Proxy Advisory Firm InGovern Research raised concerns, alleging a “vested interest" and regulatory breaches in the remuneration provided to REL’s chairperson; media reports refer to employee stock option programme (ESOP) benefits exceeding ₹480 crore doled out by REL and its health-insurance subsidiary CARE, in addition to other perks, despite their financial challenges. It has been alleged that ESOP shares of CARE were issued despite rejection by India’s insurance-sector regulator (bit.ly/3uWmkTp), which has raised questions on it.
These allegations have been specifically denied by the firm. Similar instances involving companies like Amara Raja Batteries have also raised concerns about the urgency of reassessing compensation practices. The issue is stark from the perspective of recent economic turmoil globally caused by the pandemic.
This upheaval resulted in distress for junior managers and working classes, as layoffs were part of cost-cutting plans. While enlightened managements took care to design benign and productive remuneration policies for sustainable value creation, there are several other companies where senior executives at the C-suite level took hefty pay cheques and benefits, some of them several hundred times their staff’s median salaries. Worldwide too, it was noticed that after the 2008-09 financial crisis, unreasonably high pay (unlinked with company performance) was paid to the top executives of some financial institutions even though they were sinking.
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