Many shareholders of consumer electronics maker Havells India had sought clarification on the remuneration of Anil Rai Gupta, who was reappointed as

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the Chairman, Managing Director and the Chief Executive Officer of the company.

Clarification had been sought on a recent Annual General Meeting (AGM) resolution that proposes Gupta’s estimated remuneration at Rs 28.82 crore in FY24. Some shareholders are saying this is high in absolute terms and also higher than peers.

While a large portion of Gupta's remuneration is variable and linked to the company's profitability, there is no absolute cap on the remuneration. Therefore, as profitability increases, the remuneration may be much higher over his tenure. The total promoter remuneration was Rs 38.59 crore and Rs 36.92 crore in FY22 and FY23, respectively.

In response, Havells India said that there is no change in the percentage of commission in the proposed resolution vis-a-vis the existing remuneration structure and it has been the same for the past ten years.

As per the company, Gupta's overall remuneration for FY23 is about 1.8 percent of the Profit before Tax (PBT), which is commensurate with the size and nature of the business. This 1.8 percent is well within the limit of 5 percent as prescribed in Section 197 of the Companies Act, 2013, the company said.

The press release to exchanges further added that the commission is linked to PBT and will vary depending on the performance of the company.

In the recently concluded fourth quarter of FY23, the company reported moderate revenue growth amidst a sluggish consumer demand environment. The company said there is persistent business and consumer inflation, but is optimistic about opportunities ahead and confident of capitalising on the same.

The stock is trading flat on the exchanges at Rs 1,347 per share at 9:30 am on June 19.