UGRO Defends MD's Compensation Amid Advisory Concerns

UGRO, a non-banking financial company focused on MSMEs, has refuted concerns from a proxy advisory firm about the re-appointment and salary package of its managing director, Shachindra Nath. The advisory firm recommended shareholders oppose Nath's re-appointment, citing salary concerns.

In response, UGRO stated in a regulatory filing that Nath's compensation is consistent with industry norms and has been validated by Aon, a leading compensation advisory firm. This assessment was initiated by UGRO's independent Nomination and Remuneration Committee. UGRO also noted that similar concerns have been overruled by shareholders in other companies, with management retaining their positions regardless of contrary advisory opinions.

The report primarily objected to a variable pay component linked to share price, which was described as similar to Stock Appreciation Rights (SARs) not permitted under SEBI regulations for promoters. However, UGRO believes Nath's commitment to the company, evidenced by his personal financial investments, sets a precedent in Indian corporate life.

The company highlighted Nath's backing of company debts amounting to Rs 1,830 crores without personal gain. It was also noted that his promoter entity had increased stake in UGRO, demonstrating ongoing confidence and engagement. Since founding UGRO in 2018, Nath has overseen significant growth and financial capitalization.

(With inputs from agencies.)