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Old 3rd July 2014, 22:43   #1
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Default Tata Motors Shareholders reject executive salary proposal

NDTV Times reports that shareholders have rejected Tata Motor's plans to pay their executives.

"Companies law introduced last year requires listed firms that make a low or no profit to limit the salary they pay to their executives, depending on the size of the company. To exceed the limit, firms need approval from 75 percent of shareholders " - reports NDTV

This is definitely a new dawn, an expression of shareholders' anger at the management's non-performance. But the question is
1. Is it fair
2. What effect will it have on TML

What do the forum members think?


(disclaimer- I am no way related to TML, the auto industry or any media outlet, before you ask )


http://profit.ndtv.com/news/corporat...roposal-578607

Last edited by Contrapunto : 3rd July 2014 at 22:43. Reason: bad spelling
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Old 4th July 2014, 08:29   #2
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Default re: Tata Motors Shareholders reject executive salary proposal

Its more than fair. TML is not a PSU - is it?
Ache din aane wale hain!!
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Old 4th July 2014, 11:38   #3
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Default re: Tata Motors Shareholders reject executive salary proposal

Quote:
Originally Posted by Contrapunto View Post
1. Is it fair
2. What effect will it have on TML
The phenomenon is market driven. So the question of fairness and unfair should not even arise.

The effect will this:
1. The management will be forced to pull up their socks
2. A percentage will make an exit and join other auto firms
3. The auto firms that do have majority (I think it is 75% by law) stake by the principals abroad will not care, but the shareholders for other firms (where the ownership is scattered) will also follow the suit
4. Soon all the non performing but highly paid will start concentrating in firms where shareholders do not exercise their ownership or are fully owned subsidiary or carry 75% ownership by the principals
5. These firms with a concentration of non performing but highly paid management will ultimately wind up their shops in India.

Last edited by alpha1 : 4th July 2014 at 11:39.
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Old 4th July 2014, 12:07   #4
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Default re: Tata Motors Shareholders reject executive salary proposal

In India, This is only possible with TATA motors.

Tata Motors is one of the very few companies in automobile sector worldwide, where majority shares are not owned by a single family and therefore having batter corporate governance.
Other international examples having public ownership in auto sector are General Motors (Which almost became a US govt. company due to bail out, not sure about current structure) and Renauls-Nissan (also partially owned by French Govt.).

Most of other companies including Mahindra and Mahindra, Suzuki, Honda, Toyota, Fiat-Chrysler, VW group, Ford, etc. are controlled by single person / family , therefore nobody would be there to raise voices in such issues.

Also this was only for top three executives, therefore IMHO possibility of any effect on middle/second top tier management is very less.
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