Chennai: Institutional Investors Advisory Services, or IIAS, has opposed a proposed hike in salaries for the promoters of Sun TV Network Ltd, Kalanithi Maran and his wife Kavery Kalanithi.
The activist advisory firm has advised investors to vote against Sun TV Network’s resolution seeking to increase remunerations for the promoters, though this may only amount to a symbolic protest.
The proposed remuneration is not in line with the performance of the company or with the salaries paid by other media companies either in terms of pay hike or absolute values, IIAS said in a statement.
“We, therefore, recommend voting against the re-appointment of these directors,” IIAS spokesperson said in an email reply to Mint.
There may not be any significance in the shareholders attempting to stop the resolution as Maran and his wife hold 77% of the shares and their remuneration is within the 5% norms prescribed under the Companies Act, said a Mumbai-based analyst who tracks the company, but did not wanted to be named.
IIAS’s opposition is a sign of shareholder activism that can have an indirect impact on the company’s management before the resolution is passed, although they may not be able stop it, said Jagannadham Thunuguntla, strategist and head of research, SMC Global Securities Ltd.
Foreign institutional investors held 14.21%, domestic institutional investors 2.8% and others held 5.9% in Sun TV Network as on 31 March 2011.
Sun TV shares were trading at Rs258.10, up 9%, at 2.33pm on BSE, while the Sensex was down 0.68% at 16,535.67 points.
Maran and his wife together took home a remuneration of Rs128.8 crore in 2010-11. The package is expected to be lesser for 2011-12 at around Rs115 crore as the Chennai-based broadcasting company posted a lower profit as revenue from its cable business was affected by the revival of state-run Arasu Cable Corporation.
The special resolutions to be passed by shareholders through postal ballot will be to fix the remunerations and the elevation of chief executive K.Vijay Kumar as the managing director.
Maran will relinquish his managing director’s post and become the executive chairman and Kavery Kalanithi, currently the joint managing director, will be executive director. The board of directors approved both the resolutions in a meeting on 20 April.