Tata Motors shareholders reject pay package for late Carl Slym

Shareholders of Tata Motors Ltd have rejected a compensation package for three of its directors, including the carmaker's late India head Carl Slym, obliging his family to return most of the Rs15.25 crore ($2.6 million) pay package, the company said in a notice to the stock exchange on Thursday.

Tata Motors Ltd had sought shareholder approval for not reclaiming Rs3.20 crore from executive director of commercial vehicles Ravindra Pisharody, Rs2.44 crore from executive director of quality Satish Borwankar and Rs14.64 million from the legal heirs of late managing director Karl Slym for the fiscal year ended 31 March.

The Companies Law introduced last year requires listed companies that make low profits or no profit at all to limit the salary of their executives according to the size of the company. Any breach of the prescribed limit would need approval from 75 per cent of shareholders.

Tata Motors Ltd, India's biggest auto manufacturer by revenue, is legally bound to limit the pay of its late managing director Karl Slym to Rs48 lakh and any amount exceeding this needs approval of its shareholders.

Tata Motors posted a loss of Rs82 lakh for its local unit in the fiscal year ended 31 March compared with a profit of Rs1.25 crore a year ago.

Only 70 per cent shareholders voted for the proposal, according to the statement by Tata Motors. Tata Motors said it is weighing options and will move ahead taking into account this commitment to the best and most equitable interests of all stakeholders.

''This involves ensuring that the company's leadership and talent base is appropriately remunerated,'' Tata Motors spokesperson Minari Shah said. ''This is particularly important when the company has ongoing significant turnaround and growth strategies under execution.''

This sort of shareholder rejection of executive compensation hasn't happened at a large company and the move to reject Slym's salary package is a sign of the growing investor activism in India.

Maruti Suzuki India Ltd. (MSIL), India's largest carmaker, earlier this year faced a backlash from minority shareholders after the automaker announced a supply agreement with its Japanese parent