DLF pension plan to help only promoter directors: InGovern
Minority shareholders of the Company will be burdened with a pension scheme made purely for the benefit of promoter directors of the Company.
Mohan Kumar K
In July this year, the DLF board proposed to introduce a specific and limited pension scheme aimed at extending retirement benefits to the Directors of the Company, and sought shareholder approval through a postal ballot.
The proposal that was put forth was an enabling resolution, which once passed by shareholders, allowed the Company to draw up the entire pension scheme at the sole discretion of the Board of Directors.
The resolution requires eligible directors of the special pension scheme to have a minimum service tenure requirement of over 20 years. However, the new Companies Act requires all independent directors to have a maximum tenure of 10 years. With the introduction of the new Companies Act, none of the Independent Directors of the Company will be eligible for this special pension scheme going forward.
Minority shareholders of the Company will be burdened with a pension scheme made purely for the benefit of promoter directors of the Company. Moreover, the quantum of the payouts will be at the sole discretion of the Board which primarily consists of members from the Promoter Group.
(The author is lead analyst, InGovern Research Services, a proxy advisory firm)
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