Page 309 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes

Task The Board of Directors of a public company met on three times in the previous year,
the fourth meeting though called, but not held for want of quorum on two occasions
successively. Discuss whether any provisions of the Companies Act have been contravened.

Self Assessment

Fill in the blanks:

13. Duties of directors may be divided under two heads which are………………….; and Duties
of a general nature.
14. Every public company having paid up capital of ………………or more shall constitute a
committee of the board of directors known as Audit Committee.
15. Where a director acts dishonestly in disregard to the interests of the company, he will be
held liable for breach of ……………….duty.

Case Study Key Executives Pay Packages

—by Vishwanath Kulkarni and Adith Charlie
ompensation packages of key non-promoter executives at the country’s top three
IT firms - TCS, Infosys and Wipro - grew faster than the companies’ net revenues
Cfor fiscal 2009 over previous year. Their pays were also more than the industry
wage inflation of 12-15 per cent. The remuneration for top executives at Infosys grew
faster than that of their counterparts at TCS and Wipro. The net revenues of these three
firms grew an average of 17.5 per cent.
Interestingly, much of the growth in the compensation packages was driven by an increase
in incentives and commissions, even as stock options or restricted stock units lost their
charm.
For Infosys promoters such as the Co-chairman, Mr Nandan Nilekani, CEO
Mr S. Gopalakrishnan, COO, Mr S. D. Shibulal and Director, Mr K. Dinesh, the compensation
grew by about 11 per cent each. However, the CFO, Mr V. Balakrishnan’s package saw a
dramatic increase of 274 per cent at ` 2.36 crore, followed by Director’s Mr Srinath Batni at
47 per cent and Mr T.V. Mohandas Pai’s at 44 per cent.

The TCS Chief Executive and Managing Director, Mr S. Ramadorai’s total compensation
grew 21 per cent to ` 4.09 crore, while the CFO, Mr S. Mahalingam’s remuneration rose
30 per cent to ` 1.70 crore. The COO and CEO-designate, Mr N. Chandrasekaran’s package
increased 36 per cent to ` 1.92 crore over fiscal 2008, while the Executive Director,
Mr Phiroz Vandrevala’s remuneration saw the highest increase of 41 per cent at ` 1.41crore.
Though the Wipro Chairman, Mr Azim Premji, took a cut of eight per cent in his package,
the compensation of other key executives went up. The Joint CEO, Mr Girish Paranjpe’s
package saw the highest rise of 38.6 per cent to $363,000, while the other Joint CEO,
Mr Suresh Vaswani’s remuneration grew 35.4 per cent to $384,000. The CFO, Mr Suresh
Senapaty, and the Head of HR, Mr Pratik Kumar, got jumps of 26 per cent each at $364,000
and $270,000, respectively.
Contd...

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