In a news item coming out today from its Mumbai bureau, Bloomberg TV’s Sunanda Jayaseelan reported that in a rare display of investor activism, the share holders of Tata Motors Limited (ADR) (NYSE:TTM), rejected the compensation package of $2.6 million that the company had announced as payout for its former India head Karl Slym, who died in January this year under tragic circumstances.
The report went on to highlight that the rejection of the compensation package by the share holders of Tata Motors Limited (ADR) (NYSE:TTM), (which is the biggest commercial vehicle manufacturer in the country) to Mr. Slym’s grieving family as a surprise development. The report goes on to claim that this was one of the first instances of decisive investor activism in corporate India, where in share holders have rejected a compensation offer, which has already been paid out by the company to the grieving family members of Mr. Slym.
Jayaseelan goes on to underscore that since Tata Motors Limited (ADR) (NYSE:TTM) failed to get the required approval of 75% of its shareholders for Mr. Slym’s compensation package, the family members of Mr Slym are likely to be compelled to payback the nearly $2.6 million. The same report also goes on to indicate that the share holders of Tata Motors Limited (ADR) (NYSE:TTM)have also decided to reject the payout recommendations of two of its directors along with Mr Slym’s package.
While analysing the display of this surprisingly robust activism by Indian investors, Jayaseelan goes on to explain that in the recent past quarters, Tata Motors Limited (ADR) (NYSE:TTM) overall performance has come under immense pressure due to the steady slowing down in demand for its passenger vehicles in India and other markets, on a month on month compare. She also goes on to opine that, the “threat of a deficient monsoon” in the country this year, is also going to impact the expected pickup in demand for its commercial vehicles.
Tata Motors Limited (ADR) (NYSE:TTM), which owns the popular luxury segment icons Jaguar and Land Rovers and generated 80% of its revenue from the sale of these two brands, would have been in even greater financial stress in this fiscal, if not for the close to 10 billion Rupees ($167 million) tax refund it was awarded by the tax authorities this year.