UGRO Capital has defended the proposed ₹10 crore compensation for its Managing Director, Shachindra Nath, following a report from proxy advisory firm SES. In its response, UGRO stated that its Nomination and Remuneration Committee had engaged Aon, a prominent compensation advisory firm, to benchmark Nath’s pay against similar peers in April.
Aon assessed the proposed remuneration across three groups: promoter MDs, founder MDs, and MDs of non-banking financial companies (NBFCs) with assets exceeding ₹15,000 crore. The company noted, “The majority of comparable MDs in India earn more than Nath is proposed to be paid,” as detailed in UGRO’s filing.
According to UGRO, Nath is classified as a promoter under SEBI regulations, which precludes him from receiving Employee Stock Option Plans (ESOPs), stock appreciation rights, and other equity-linked compensations typically available to professional MDs. The firm emphasized that any comparison focusing solely on cash pay while excluding equity components is “structurally incomplete.”
Importantly, the proposed package does not introduce an increase in Nath’s fixed compensation, which remains at ₹7 crore. The deferred fixed component of ₹3 crore is described as a replacement for the variable pay he has been receiving, meaning the total compensation remains the same as before.
In response to SES’s concerns regarding variable pay, UGRO clarified that the variable pay resolution for shareholders is merely an enabling authority. Actual variable pay can only be disbursed if shareholders pass a separate Special Resolution with a 75 percent supermajority. Should this occur, the Nomination and Remuneration Committee, comprised entirely of independent directors, will set parameters, performance metrics, caps, and clawback provisions, with share price appreciation among the proposed criteria.
Satyananda Mishra, IAS (Retd.), Independent Chairman of UGRO Capital’s Board, stated that if the variable pay resolution is approved, any compensation will be independently benchmarked against comparable companies to ensure alignment of the Founder’s interests with those of all shareholders.
Nath has personally guaranteed ₹1,830 crore of the company’s borrowings without any commission or fee, while overseeing an organization that employs 2,500 professionals and serves 250,000 micro, small, and medium enterprises (MSMEs) across India. The Board has unanimously advocated for what it believes is fair recognition for Nath’s contributions.
