Despite the top management of Paytm putting up a confident face to the market and its shareholders, everything doesn’t seem to be falling in place for its CEO Vijay Shekhar Shama.
One97 Communications, the listed company of Paytm (PAYT.NS), has been subject to another round of investor shaming. Approx 75.6% of its public institution owners voted against the pay package of Vijay Shekhar Sharma. But it was not just Sharma alone who faced the wrath of such investors. Madhur Deora, Chief Financial Officer – Paytm, also faced severe criticism due to his pay package.
However, the $6 billion company didn’t suffer any immediate consequences because the overall vote was in its favor. Nearly 60% of Paytm’s stock is owned by friendly investors, including entities related to China’s Alibaba, SoftBank, and Sharma himself, who essentially stood poised at the company’s vision and mission, and didn’t go along with the group of public institutions owners opposing the pay package of Sharma and Deora.
A number of Indian shareholder advisory groups, led by IiAS, highlighted that Sharma’s total remuneration was significantly higher than his peers in other companies included in the S&P BSE Sensex index. The group also emphasized the fact that most of these companies are profitable and still their top bosses’ pay package is comparatively lesser than loss-making Paytm.
The above development clearly indicates that the resistance against Paytm’s leadership is increasing. The company is losing more money than ever since its debut on the stock market, which is also dubbed as the worst listing in the last decade. Paytm’s share value is now being traded at 64% lower than the listed price.
The company is making every possible move to bounce back but moving very slowly on the path of recovery. Walmart-owned PhonePe, the unlisted entity, is a stiff competitor and continues to dominate in the UPI segment. But PhonePe is the only challenge for Paytm to tackle. The Reserve Bank of India continues to tighten rules, making it more difficult for payment companies to become profitable.
While the current investors’ equations seem to favor Sharma, he may in a tough spot once his friendly friends will start cashing out. At present, Vijay Shekhar Sharma is once again appointed as CEO and MD of One97 Communications as the resolution of reappointment was backed by 99.67 percent of shareholders who voted at the company’s annual general meeting. It’s also a bit surprising to learn that 99.48 percent of voters backed Sharma’s current remuneration, despite the disastrous IPO debut in November last year, which made investors lose billions of dollars.