The government has struck down United Spirits’ proposed pay packages for its CEO Anand Kripalu and CFO P A Murali at Rs 6.49 crore and Rs 15.31 crore, respectively, which were in excess of limits prescribed under the companies law.
The company, which had got shareholders’ approval in September 2014 for remuneration of the two top executives, said in a regulatory filing it has approached the government to reconsider the decision and approve its proposal.
USL is now controlled by British liquor giant Diageo which had acquired majority stake in the Indian company from beleaguered businessman Vijay Mallya-led UB Group. The company has been in regulatory cross-hairs in recent past over alleged irregularities including about financial dealings with Mallya, long-grounded Kingfisher Airlines and some other UB firms.
“The managerial remuneration for the financial year ended March 31, 2015 aggregating Rs 6.49 crore and Rs 15.31 crore towards remuneration of the MD and CEO (Kripalu) and the Executive Director and Chief Financial Officer (Murali), respectively, was approved by the shareholders of the company at the Annual General Meeting of the company held on September 30, 2014,” USL said in the filing.
The aforesaid remuneration included amounts paid in excess of the limits prescribed under the relevant provisions of the Companies Act, 2013, the company said, while adding it had sought approval from the central government for the excess amounts.
“Subsequent to the year-end, the company has received communication from the central government not approving such excess remuneration. The company has responded to the central government requesting reconsideration of its application for approval of such excess remuneration,” it said.
As per records on BSE, USL had sought shareholders nod in the 2014 AGM for a basic salary of Rs 26,33,890 per month for Kripalu with increments as may be determined by the board from time to time, in the range of Rs 20 lakh to Rs 35 lakh.
Besides, he was to be entitled to special allowance at the rate of 50 per cent of the basic salary per month and personal allowance of Rs 9,53,400 per month in the range of Rs 9-16 lakh per month and other perks.
USL had proposed to pay Murali basic salary of Rs 18.65 lakh per month from April 1, 2014 to June 30, 2014 and Rs 25,93,390 per month from July 2014 onwards. His increments were to be determined by the board in the range of Rs 18 lakh to Rs 30 lakh per month.
Apart from special allowance at the rate of 50 per cent of the basic salary per month, he was to be entitled personal allowance of Rs 4,13,150 per month from April 1, 2014 to June 30, 2014 and Rs 4,22,150 per month from July 1, 2014 onwards, which was to be in range of Rs 4-8 lakh per month.
USL had also sought to pay a one-time bonus of Rs 5 crore during the financial year 2014-15 to Murali.