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Debt-laden wind turbine maker Suzlon Energy Ltd has won approval from shareholders to reappoint managing director Tulsi Tanti and a proposal to raise his annual compensation by 50 Percent. Proxy advisory firms had asked shareholders to vote against the company’s proposals, suggesting that any increase in pay must be linked to an improvement in the firm’s financial performance.

The shareholders approved Tanti’s reappointment as managing director for three years with effect from 1 April, Suzlon Energy said in a filing to BSE on Thursday. Though some have voted against the proposal, the resolutions were passed with a majority.

On 25 February, Suzlon Energy had sought approval through postal ballots. Tanti’s remuneration was proposed to be increased to INR 3 crore from INR 2 crore. The voting on the proposals ended on Wednesday. “Tanti, who founded Suzlon in 1995, has been instrumental in establishing the company among top five wind turbine suppliers globally. Despite the tough times, the company has managed to retain its prized customers and he remains sanguine about bringing a positive turnaround for Suzlon in the future,” Suzlon said in a statement.

Suzlon’s performance has continued to falter under Tanti’s leadership, Institutional Investor Advisory Services India Ltd (IiAS) said in a report released to the media on 26 March, adding that it “believes that promoters’ interests will also be served by bringing in new management”. “Given that IiAS recommends voting against the reappointment of Tanti as managing director, any discussion over his compensation is moot,” it had said.

InGovern Research Services, another proxy advisory firm, had also opposed the resolutions. These criticisms come at a time when Suzlon Energy, which is going through a Rs.9,500 crore corporate debt restructuring exercise, had reported a loss of Rs.1,075.25 crore for the quarter ended 31 December, compared with a loss of Rs.1,154.53 crore in the year-ago period.

“I don’t see only 14 Percent of institutional investors voting as a half empty glass. Given that Suzlon Energy has an atypical list of shareholders-mostly government-owned banks-and yet 71 Percent of the investors who had exercised their rights, voted against the reappointment of Tanti, shows that the glass is filling up,” said Amit Tandon, founder and managing director of IiAS, referring to the results of postal ballot. He indicated that shareholders are increasingly becoming vigilant.

State-owned banks hold sizeable stakes in Suzlon following the conversion of their debt into equity. IDBI Bank Ltd holds 6.5 Percent in Suzlon. State Bank of India (3.5 Percent), Life Insurance Corporation of India (2.6 Percent), Punjab National Bank (1.8 Percent) and Bank of Baroda (1.4 Percent) are other prominent shareholders. On Thursday, shares of Suzlon Energy fell 1.94 Percent to INR 9.62 , while the Sensex rose 0.54 P to 22,214.37 points.

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