It has published a proxy advisory report advising shareholders to protest at certain resolutions in the coming annual general meeting. It also raised concerns about the concentration of control in the hands of chairman and managing director Sajjan Jindal and his pay package of a little over Rs 20 crore per annum.
SES said, “It should be noted that the remuneration paid to Mr Sajjan Jindal (promoter-chairman & MD) is more than seven times the average paid to the non-promoter executive directors (EDs) of the company. Mr Jindal was the only executive director who received profit-based commission. SES believes the remuneration policy is not fair and is skewed in favour of the promoter-director.”
It noted that when combined with the Rs 7.25 crore Jindal received from JSW energy in FY13, his total yearly remuneration was Rs 27.5 crore.” This total remuneration was three times the remuneration to other EDs put together and almost nine times the average remuneration to non-promoter EDs. SES (feels) such skewed remuneration policy is not good governance practice.”
In response, JSW Steel said it had been following the best remuneration practices, comparable with those of companies of repute of similar size and stature in the industry. Seshagiri Rao, joint MD and group chief financial officer, said the company maintained the highest standards of corporate governance.
“Mr Sajjan Jindal is a visionary who is instrumental in not only creating the largest steel company in India in just over a decade but also in positioning the company among the top 34 world class steel companies,” Rao said in an emailed response. (His own yearly remuneration is Rs 3.6 crore).
He also noted Jindal had been accorded the prestigious Willy Korf\Ken Iverson Steel Vision award. “In recognition of his immense contribution to the steel industry and his technical excellence, he has become a council member of Indian Institute of Metals, member of the executive committee and chairman of the sustainability committee of the World Steel Association.”
The company statement added: “Considering his exemplary track record in creating a sustainable value enhancing business venture, industry norms and industry practices, pursuant to the recommendations of the remuneration committee, the board of directors have been authorised to fix the remuneration not exceeding the limit fixed by the shareholders of the company.
Accordingly, the remuneration has been fixed strictly in accordance with the approval of the shareholders. JSW steel is a professionally-driven, board-managed company, with several independent directors of international repute and is committed to follow the best practices of governance structures.”