Corporate governance advisory firms are urging shareholders to vote against the proposed reappointment of Gautam Singhania as the executive chairperson of Raymond Lifestyle Ltd., due to concerns regarding his remuneration package, unclear governance practices, and ongoing personal controversies. Singhania, who is currently the chairperson and managing director of Raymond Ltd., has sought a five-year term as the executive chairperson of Raymond Lifestyle starting from September 1, 2024. His proposed remuneration package includes a monthly salary ranging from Rs 55 lakh to Rs 80 lakh, in addition to allowances for medical reimbursement, leave travel, and retirement benefits, totaling around Rs 12.35 crore annually.

The Institutional Investor Advisory Services India (IiAS) report raises several red flags regarding the lack of clarity in the proposal. The terms of Singhania's reappointment fail to provide details on key issues such as commission structures and performance-linked incentives. The report also highlights the absence of a ceiling on Singhania’s total compensation, which could exceed 5% of Raymond Lifestyle's net profit, prompting concerns about unchecked salary growth. Furthermore, there are no provisions for claw-back clauses or performance metrics tied to environmental, social, and governance (ESG) targets, leaving shareholders unable to evaluate whether his pay is justified based on the company's performance.

In addition to these governance concerns, Singhania’s personal matters have added complexity to the situation. He is currently engaged in a divorce case involving his wife, Nawaz Modi, with allegations of domestic violence and misuse of company funds for personal gain. While the Raymond Lifestyle board has not commented on these issues, IiAS raised concerns about the potential negative impact on the company's governance and reputation.

The advisory firm also compared Singhania's proposed remuneration to that of executives in similar roles in the industry, such as at Trent Ltd., Arvind Ltd., and Shoppers Stop Ltd. The comparison showed that Singhania's proposed pay package is considerably higher, which has raised questions about its appropriateness. Given these concerns, IiAS strongly advises shareholders to reject the resolution and vote against Singhania's reappointment to safeguard the company from potential governance risks.