Newly-listed Zomato Ltd.'s employee stock option plan failed to get a nod from majority of its institutional investors even as it was passed with overall votes being in favour.
All 100% of Zomato's shares were voted on for each of the seven proposals put to vote in the postal ballot that includes e-voting. Most of the company's shares are held by public shareholders, of which institutional investors hold a 15.5% stake in the food delivery company.
As many as 61% of the food aggregator's institutional investors voted against ratifying the Zomato ESOP Plan 2021 on Sept. 18, according to data collated by Institutional Investors Advisory Services Ltd. But, as 100% of public non-institutional shareholders voted in favour, the resolution was passed - with 90% of the total votes supporting it.
Zomato's ESOP plan for 2021 was approved by then shareholders in April, before its highly popular initial public offering in July. The same proposal had to be now ratified by the new shareholders that got on board since the company listed on the bourses.
The food aggregator, which is yet to turn a profit, had seen its losses widen to Rs 356 crore in the quarter ended June. That was mainly due to the ESOPs that were issued to Founder and Chief Executive Officer Deepinder Goyal.
The same proportion of institutional investors rejected five of the other six proposals - related to ESOPs and amending the company's Article's of Associations.
Approve 103A of Articles of Association.
Ratify extension of Zomato ESOP Plan 2018 to employees of subsidiary companies.
Ratify extension of Zomato ESOP Plan 2021 to employees of subsidiary companies.
Ratify extension of Foodie Bay ESOP Plan 2014 to employees of subsidiary companies.
Ratify extension of Foodie Bay ESOP Plan 2014.
Ratify Zomato ESOP Plan 2018 - This resolution won wide support across institutional and other public shareholder
Other Key Institutional Rejections
The highlight of the week ended Sept. 24, however, was shareholders of IDFC Ltd. rejecting the appointment of Vinod Rai as non-independent, non executive director. Over 58% of the institutional votes were cast against the proposal.
Honda India Power Products Ltd. saw 72% of institutional votes veto a proposal that would approve related-party transactions with group companies between April 1, 2020 and March 31, 2023. The resolution failed.
Majority of the institutional shareholders of Gati Ltd. were against adopting the consolidated financial results for FY21 and the reappointment of Kaiwan Kalyaniwalla as non-executive, non-independent director. Both proposals saw over 75% institutional votes against it but yet passed.
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