Bharti Airtel will seek shareholders' approval for a waiver of recovery of excess remuneration paid to company chairman Sunil Bharti Mittal and CEO Gopal Vittal in 2018-19, the telecom company said Sunday.
According to the regulatory filing, Mittal's remuneration in 2018-19 was Rs 21.19 crore more than the ceiling of 11 per cent of the company's net profit. Vittal was paid Rs 8.87 crore in excess of that limit in the last fiscal.
Bharti Airtel will seek the approval at its annual general meeting to be held on August 14 in New Delhi, the filing said.
"...the approval of the members of the Company be and is hereby accorded to ratify and confirm the waiver of recovery of the excess remuneration amounting to Rs 211.90 million paid to Mr Sunil Bharti Mittal, chairman for the financial year 2018-19," Bharti Airtel said.
According to the rule, total managerial remuneration payable by a public company to its directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed 11 per cent of the net profits of that company.
Total remuneration paid to Mittal was over Rs 31 crore and Vittal was paid Rs 20.9 crore against the ceiling of around Rs 9.8 crore and Rs 12 crore respectively for 2018-19.
Bharti Airtel's revenue and profit have been eroding due to a fierce tariff war after the launch of services by Mukesh Ambani-promoted Reliance Jio.
The standalone revenue of Airtel dropped to Rs 49,608 crore while the net loss for the financial year ended on March 31, 2019, was at Rs 1,829 crore against a net profit of Rs 79.2 crore for the previous year.
"...the financial performance of the Company in the financial year ended March 31, 2019, did not meet expectations and it is possible that the Company may also have inadequate profits in coming years," the company said in a notice.
Bharti Airtel will also seek shareholders nod to fix and regularise minimum pay for Mittal and Vittal in case the company has no profit or inadequate profit for period between April 1, 2019, to September 30, 2021, and April 1 to March 31, 2022, respectively.
"The management of the Company believes that the remuneration as previously approved by the members of the Company and paid to Mr Sunil Bharti Mittal and Mr Gopal Vittal is justified in terms of their key role within the Company," Airtel said.
The HR and Nomination Committee and the Board have at their respective meetings, subject to the approval of the members of Bharti Airtel, accorded their approvals for waiver of the recovery of excess managerial remuneration paid by the company to Mittal and Vittal
"Since the said remuneration of Mr Sunil Bharti Mittal and Mr Gopal Vittal was earlier approved as Ordinary Resolutions, the approval of members is now being sought to regularise such minimum remuneration by passing Special Resolutions," the notice said.
Mittal was paid around Rs 30.1 crore in 2017-18 and 2016-17.
Vittal's remuneration, on the other hand, has seen an increase of around 68 per cent between 2016-17 to 2018-19. He was paid Rs 16.97 crore in 2017-18 and Rs 12.4 crore in 2016-17 in the form of fixed pay, performance-linked incentives, perquisites and other benefits.