The Paytm stock was under pressure as markets opened on Friday after advisory firm IiAS asked shareholders to vote out Paytm Managing Director Vijay Shekhar Sharma from the company's board in the upcoming annual general meeting scheduled on August 19.
In an interview with CNBC-TV18, IiAS' Amit Tandon argued that they prefer a professional CEO for the company and also oppose Sharma's outsized compensation.
“I will kind of begin with a caveat that asking for the removal of a founder is not a recommendation we make very easily... If you were to look at the AGM notice, the resolution that triggered the decision from our perspective was about the compensation," said Tandon.
It is reported that Vijay Shekar Sharma earns Rs 6 crore as fixed pay.
"But he is also getting about Rs 790 crore worth of stock options — that's the fair value of stock options for about five years. So, it's just under Rs 4,000 crore. And we felt that for someone it’s a fairly large sum of money,” Tandon said.
Tandon said that Paytm has a well-defined succession plan and, thus, the board should trigger the removal of Sharma.
A strong July business update has failed to cheer the stock.
Despite the show in July, brokerage firm Macquarie has maintained its "underperform" rating on the stock and put a target of Rs 450 per share which is a 42 percent decrease from the current trading price of Rs 781 per share and roughly 80 percent down from its listing price.
For a ball-by-ball commentary on today's (Aug 12) market action, please click here