The board of directors at Apollo Tyres will seek shareholders’ guidance along with an independent counsel on the compensation level for the company’s vice chairman and managing director Neeraj Kanwar. Kanwar’ s re-appointment as the managing director was rejected by minority shareholders owing to his salary, which increased in spite of a fall in the company’s profitability. This is a rare case in corporate India where a promoter’s re-appointment has been rejected by minority shareholders.
Kanwar has received a reiteration of support from the company’s board of directors in a meeting held on Monday. “The Board of Directors, in its meeting held on October 1, 2018, reiterated its unanimous approval on Neeraj Kanwar’s leadership. Kanwar has spearheaded Apollo Tyres' growth in India, taken the brand onto the world stage, and grown its market capitalisation approximately 700 per cent since his appointment as the company's managing director,” said a spokesperson at Apollo Tyres.
The Board has full confidence in Neeraj Kanwar to continue Apollo’s sustainable development and expansion, the statement added. The spokesperson said the Board will now seek shareholder guidance and independent counsel, on a compensation level commensurate with the position. Once this process is complete, it will re-nominate Neeraj Kanwar to be re-appointed as Managing Director, effective May 28, 2019. Kanwar’s total compensation in FY18 rose 38 per cent to Rs 427.6 million even as the company’s profit declined 34 per cent.
Only 72.72 per cent of shareholders voted in favour of the resolution, which required a minimum of 75 per cent shareholders voting for it. Over 56 per cent of the public institutions category and nearly 49 per cent of the non-public shareholders voted against the reappointment.
“The board and management of Apollo Tyres wishes to reiterate its commitment to maximising shareholder value through the strategy of profitable growth across all markets and product segments the company operates in,” the statement added.