Kinetic Engineering shareholders reject proposal to raise MD's remuneration

Shareholders of Pune-based Kinetic Engineering Ltd have rejected a proposal by the company to increase the remuneration of its Managing Director Ajinkya A Firodia, according to a regulatory filing by the company.

The special resolution for approval on remuneration payable to Firodia was declined by the shareholders with 62.04 per cent votes against it and 37.95 per cent in favour, the company said in a filing to the BSE.

According to a special resolution passed on March 27, 2019, the shareholders had approved the appointment of Firodia as the company's managing director for five years effective from April 23, 2019, and also approved his terms of remuneration for a maximum period of three years.

Accordingly, the approval for his remuneration was to expire on April 22, 2022, thereby necessitating the company to take a fresh approval from the shareholders through a special resolution for Firodia's remuneration as the company's managing director for a further period of two years starting from April 1, 2022.

Among others in the proposed resolution for his remuneration, the company had sought approval for a basic salary of Rs 46,58,500 and a house rent allowance (HRA) of Rs 13,88,200 with a 10 per cent increase every year in both.

Besides, he was proposed to be given an LTA of Rs 1 lakh, medical expenses of Rs 15,000 and variable pay of two per cent of the operating profit (Ebitda) of the company.

Ebitda stands for earnings before interest, tax, depreciation and amortisation.

According to the company's annual report for 2020-21, Firodia's total remuneration in 2019-20 stood at Rs 58.45 lakh, Rs 52.11 lakh in 2018-19, and Rs 58.39 lakh in 2017-18.

The company, which was into two-wheelers with the 'Luna' moped brand and gearless scooter Kinetic Honda of yesteryears, is currently a major player in the auto components space. It offers a range of products in transmission parts like gears, shafts and axles; engine components, including crankshafts, cylinder heads, camshafts, with complete gearbox and engine assemblies for auto and non-auto products.

In the recent past, shareholders of some publicly listed companies have rejected proposals to increase the remuneration of key managerial personnel.

Last month, shareholders of Eicher Motors had rejected the re-appointment of Siddhartha Lal as managing director, as they voted against the proposal mainly due to the proposed increase in his remuneration package. Subsequently, the company reappointed him as MD with effect from May 1, 2021, with changes in his remuneration package.

Similarly, shareholders of Balaji Telefilms had rejected proposals to hike the remunerations of Managing Director Shobha Kapoor and Joint Managing Director Ekta Kapoor.