Mumbai: Proxy advisory firm IiAS has recommended Bajaj Finance Ltd’s shareholders to vote against the reappointment of Rajeev Jain as vice-chairman and executive director, citing lack of clarity over the full remuneration, including stock options granted to him.
According to IiAS, Bajaj Finance has not disclosed the stock options granted to Jain in FY25 and the proposed terms are silent on the future grants from the company and Bajaj Finserv, the holding company.
Jain was paid ₹22.9 crore in FY25, excluding fair value of stock options, and ₹54.63 crore in FY24, including fair value of stock options. Between FY20 and FY24, stock options comprised more than 50% of his total remuneration.
“Given the lack of clarity on stock options, we are unable to make a reasonable estimate of his remuneration,” said the proxy advisory firm in its recommendation.
An email sent to Bajaj Finance did not yield any response till press time.
According to IiAS, Jain’s fixed pay can range between ₹12.7 crore and ₹30 crore and variable pay can range between ₹12.7 crore and ₹150 crore, bringing his maximum pay at ₹180 crore, which is very high.
“We believe the company should provide a reasonable cap for overall remuneration including fair value of stock options and provide performance metrics that determine his variable pay. The Nomination and Remuneration Committee (NRC) should also disclose the process used for benchmarking his remuneration. In the absence of this, we are unable to support the resolution,” it added.
On 8 May, Bajaj Finance’s board had sought approval from shareholders to reappoint Jain as vice-chairman for three years from April 2025 and to redesignate Anup Kumar Saha as the managing director of the company for the remainder of his current tenure till March 2028. The voting commenced on 9 May and will end on 7 June.
Mint had reported last year that Jain was one of the highest paid bankers from among the non-banking finance companies, taking home a total salary of ₹102 crore, including employee stock options and sitting fees during FY24. In the year prior, he was paid ₹49 crore.
“The variable component of 5 times of fixed payment includes both Bonus and ESOPs. As per the remuneration policy, bonus payout is divided over 4 years and ESOPs vest in equal tranche of 25% each as per the approved ESOPs policy of the Company,” said people in the know, referring to the notice to the shareholders
Jain, who joined Bajaj Finance as chief executive officer in 2007, went on to become the managing director in 2015. Before joining Bajaj, he worked with GE, American Express and the American International Group (AIG). He is considered to be the force behind transforming Bajaj Finance from a small auto finance business to a financial conglomerate.
IiAS had similarly voted against the appointment of Arvind Kapil as the managing director and chief executive officer (CEO) of Poonawalla Fincorp for five years from 10 June 2024, citing concerns regarding his remuneration. Kapil’s fixed remuneration stood at ₹6.9 crore with one-time joining bonus of ₹40 crore and fair value of 8 million employee stock options (ESOPs), taking the total payout to ₹174 crore.
“The proposed remuneration is not commensurate with the size of the company and much higher than that paid to peers in the industry. We raise further concern that the one-time bonus of Rs. 400 mn does not carry any malus or claw-back provisions,” said IiAS. “The company must disclose performance metrics that determine variable pay. Although we support Arvind Kapil’s appointment as Managing Director and CEO, we do not support the proposed remuneration. Therefore, we do not support the resolution,” it had said.