According to the research published by the Banglore Based secretarial practices firm, all the Nifty 50 companies complied with the requirements of minimum one woman independent Director. Nifty 50 companies are the listed entities whose share prices determine the value of the NSE Index NIFTY.
The more interesting aspect of this research was sitting fees and the commission paid by the Nifty 50 companies. UltraTech Cements paid the highest commission to their Non-executive Directors at ₹21.25 crores and Axis Bank paid the highest sitting fess to their directors of ₹195 lakhs.
The Nifty 50 companies paid an average sitting fee of INR 60 Lakh to non-executive directors.
According to this research, the companies like Dr Reddy’s, Infosys, Bharti Infratel etc. do not pay sitting fees due to the restriction of fees to Rs. 1 Lakh but pay a commission based on profits earned
There are few companies which do not pay sitting fees to its directors for attending board and committee meetings. Companies such as Dr Reddy’s, Infosys, Bharti Infratel and Tech Mahindra do not pay the sitting fee. These companies, however, pay a commission based on profits earned. Tech Mahindra and Infosys paid a commission of INR 868 Lakh and 871 Lakh respectively, during FY 2018.
The Nifty 50 group of companies paid an average sitting fee of INR 60 Lakh to non-executive directors, including the independent directors during FY 2017-18 (Ranging from a cumulative payout of INR 11 lakh to INR 195 lakh). Profit-linked commission received by non-executive directors was even higher. The average commission paid by Nifty 50 was estimated INR 505 Lakh (Ranging between INR 31 Lakh and INR 21 Crore).
One of the several companies which fall under Nifty 50 is Axis Bank, which ranked at the top with the highest sitting fee payout of INR 195 Lakh during FY 2018. According to The Companies Act, it permits a maximum remuneration of INR 1 Lakh per meeting to each director as a sitting fee.
In addition to Axis Bank, its peers from the financial sector which paid the maximum permissible sitting fee of INR 1 Lakh were Yes bank, IndusInd Bank, ICICI and HDFC Bank. These banks were the most generous regarding payment of sitting fees to non-executive directors as banks are restricted to pay commission to their non-executive directors. Mahindra & Mahindra, Sun Pharma, Hero MotoCorp, ITC, Bharti Airtel, Vedanta, and Bajaj Auto were among the other companies which paid the maximum sitting fee of INR 1 Lakh for each meeting.
An employee stock ownership plan (ESOP) cannot be issued to independent directors. However, The Companies Act allows them profit-linked commission to be paid, as approved by shareholders. Speaking of commission payout to non-executive directors, UltraTech Cements topped the list with a payout of INR 21.25 Crore.
On the other hand, public sector companies that fall under Nifty 50 with the likes of Coal India, Bharat Petroleum, Indian Oil, Gail, ONGC, Power Grid Corporation, and SBI did not pay any commission to its non-executive directors.
