'Shareholders may get to decide exec pay soon'

HYDERABAD: Shareholders may soon be able to decide on the remuneration of executives across the corporate sector. A proposal to this effect is before Parliament and it rests on the Parliamentary standing committee to take a final call on it, Union corporate affairs minister Salman Khurshid said.

���As of now, the proposal is that shareholders will decide the pay. In which manner the shareholders will decide is something the legislation will provide. Also, this requires greater disclosures and transparency on behalf of the companies,��� the minister said. He was here to address the 37th national convention of company secretaries.

According to him, the Companies Bill 2009 had not proposed any cap on the pay of executives, whereas the existing law has an 11% cap. ���Shareholders should able to take the decision with freedom, rationality, information and there should be enough disclosures to enable him to take a free and transparent decision,��� he said.

The standing committee report is most likely to be ready by the budget session. The ministry, on the other hand, is also working on early warning systems that would help prevent Satyam-like incidents and further protect shareholder and company interest.

���We are trying to put in place a behavior pattern that indicates things possibly going wrong in any sector. While it is quite possible that a company shows exceptional performance, but at least it requires a special look by the ministry,��� said Khurshid.The minister also indicated that the Serious Frauds Investigations Office (SFIO) probe in the Satyam scam is nearing completion. ���SFIO���s investigations and prosecutions relate to violations of company law, which has both civil and criminal consequences. Where as the Central Bureau of Investigation will look into IPC violations and the offences related to foreign exchange it will be reviewed by the Enforcement Directorate. And revenue issues will be sorted by Internal Revenue Service,��� Khurshid clarified.

Under the new Company Law, SFIO would be given specific powers to make it an effective investigating agency. ���They have to take every investigation through the court. These powers will help them become an effective agency while they have already been strengthened as far as personnel are concerned,��� he said.