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Proxy advisory company finds Sun's pay cheque for Kavery Kalanithi 'excessive

N Sundaresha Subramanian / New Delhi 17 Sep 16 | 12:43 AM

Kavery Kalanithi

Sun TV network’s director Kavery Kalanithi, one of the highest paid executives of corporate India, has come under fire for her remuneration package. For the year ended March 2016, Sun TV paid her Rs 71.46 crore, slightly lower than Rs 71.47 crore it paid her husband and promoter Kalanithi Maran.

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In comparison, other directors of the company earned much lower. While Krishnaswamy Vijayakumar, managing director, took home Rs 1.08 crore, other directors earned between Rs 50,000 and Rs 1.76 lakh. The worst off was S Selvam, who earned Rs 50,000 for the year.

Even when compared with peer groups, Kavery’s remuneration was substantially higher. Punit Goenka of Zee Entertainment, which clocked similar amount of profits as Sun, earned Rs 6.79 crore.

Corporate governance experts have criticised the wide discrimination and questioned the process followed by the nomination and remuneration committee of the company in arriving at such arbitrary numbers.

In a voting recommendation released ahead of the company’s annual general meeting next week, proxy advisory firm Stakeholders’ Empowerment Services (SES) asked shareholders to vote against a resolution to reappoint Kavery for another term.

“No concern has been identified regarding the profile and time commitment of Kavery Kalanithi. SES is of the opinion that the remuneration paid to Kavery Kalanithi is excessive compared to non-promoter executive directors of the company and the company has not provided adequate justification for the same. Such high remuneration without any rationale is not a good governance practice. Hence, SES recommends that shareholders vote against the resolution," the SES report said.

An email seeking comments sent on Wednesday and subsequent reminders sent to SUN TV executives including its compliance officer R Ravi did not elicit any response.

The Marans have been drawing similar remuneration for the past three financial years.

The remuneration of the other directors was increased from Rs 8,000 to Rs 50,000 per annum for non-executive non-independent directors and from Rs 96,000 to Rs 6 lakh for independent directors in 2015-16 over 2014-15.

“Otherwise, the ratio of promoter’s salary to other directors was a mind-boggling 77,000 for NED NID and 25,700 for ID in 2014-15. One can only imagine how small other board members must be feeling in front of two promoter directors, whose capability and contribution is almost 77,000 times that of the other Board members. Such capable people till now were found only in religious story books – not in boardrooms. The Marans have made imagination a reality," SES said comparing the pay practice to British-era discrimination.

SES felt that the remuneration of the executive directors was not based on their performance, but some sort of a family settlement in a family-run business, where all the executive family members agree to draw the same remuneration irrespective of their performance.

“It reflects poorly on the Nomination and Remuneration Committee as it appears that the remuneration practice is delinked from performance; otherwise, how is it possible that both promoter executives are evaluated 100 per cent same consistently? Even machines do not give such coordinated performance. SES is of the opinion that the remuneration practice at the company does not reflect a good governance practice," the firm concluded.

ALL IN THE FAMILYFor the year ended March 2016, Sun TV paid its  director, Kavery Kalanithi, Rs 71.46 crore

 This was slightly lower than Rs 71.47 crore it paid her husband and promoter Kalanithi Maran

 In comparison, other directors of the company earned much lower

 While Krishnaswamy Vijayakumar, managing director, took home Rs 1.08 crore, other directors earned between Rs 50,000 and Rs 1.76 lakh

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