The billionaire founder of Paytm emerged unscathed in a crucial test of investor confidence, with a forceful majority of shareholders voting to keep him at the helm of the fintech pioneer that made one of the worst market debuts in Indian history.
An emphatic 99.67 per cent of shareholders voted to maintain Vijay Shekhar Sharma as the managing director and CEO, among the items decided on at the company’s annual general meeting. A proxy advisory firm last week recommended that shareholders replace the founder as managing director and CEO, citing concerns about his ability to reverse losses at the payments provider.
Sharma got a “resounding vote of confidence from shareholders for reappointment” as managing director and CEO, the company said in an exchange filing and a press statement on Sunday. Each of seven resolutions, including one detailing Sharma’s remuneration, were passed with at least 94 per cent of votes in favor.
Paytm, the poster boy for India’s tech startups, has lost more than 60 per cent of its value since its high-profile initial public offering in November as it struggled to convince investors of its earnings potential. In an interview last month, 44-year-old Sharma said Paytm is set to become India’s first internet company to hit $1 billion in annual revenue and pledged a shift from growth toward profitability.
Institutional Investor Advisory Services India Ltd last week said investors should vote against Sharma’s reappointment and that the board must bring in a professional to the role. On several occasions before the IPO Sharma talked publicly about the company turning profitable, and yet it hasn’t happened even at an operational level, the firm said.
Paytm, listed on the bourse as One 97 Communications Ltd., counts Ant Group Co.’s Antfin (Netherlands) Holding BV., SoftBank Group Corp. and Canada Pension Plan Investment Board among its top shareholders. Of the dozen analysts covering the firm, six have a buy rating, while three have a hold and the remaining three recommend investors sell their shares.
Sharma’s remuneration is fixed for the next three years without any annual increment, the company said on Sunday.
The founder had earlier said that his employee share incentives will vest after the company’s market value crosses the IPO level on a sustained basis.
Shareholders also approved the reappointment of Ravi Adusumalli to the board, which the proxy adviser had recommended against, as well as the appointment of Madhur Deora as whole-time director and group chief financial officer.
