A proxy advisory firm has called for the removal of Vijay Shekhar Sharma, PayTM’s founder and CEO.

Proxy advisory firm Institutional Investor Advisory Services India Ltd. (IiAS) has issued a note ahead of PayTM’s (NSE: PAYTM) annual shareholders’ meeting on August 19 calling for the replacement of Sharma by a professional.

The note said PayTM had been unable to reach profitability at an operational level, even though Sharma had frequently given public reassurances of the company turning profitable. The advisor therefore raised doubts about Sharma’s ability to achieve these targets. (Bloomberg)

Ant Group Co.’s Antfin (Netherlands) Holding BV., SoftBank Group Corp. and Canada Pension Plan Investment Board are among the top shareholders in the company.

IiAS also called for other changes to PayTM:

• IiAS disagreed with Sharma’s definition of “operational profitability” as EBITDA before ESOP costs. Sharma, according to IiAS has again deferred the time line for achieving “operational profitability” to September 2023.
• Shareholders should vote against the appointment of Ravi Chandra Adusumalli, the managing partner of Elevation Capital, to the PayTM board as he attended only 47% of board meetings in FY22
• IiAS opposed the proposed remuneration of Madhur Deora, President and group chief financial officer. It did not, however, oppose his appointment.

IiAS also objected to the amount of Sharma’s remuneration which was overall higher than the remuneration levels of the CEOs of all S&P BSE Sensex company, most of which were profitable.

“The company is seeking shareholder approval for the proposed remuneration as minimum remuneration — which will be paid to him even if the company continues to report losses,” the report said. IIAS estimated Sharma’s FY23 remuneration at more than Rs 796 crore, which comprises stock options of 21 million at an exercise price of Rs 9, a deep discount to the market price on the date of grant (fair value spread across the vesting period).”

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