oppn parties Good Companies Free To Raise Salaries Without Threshold If Shareholders Permit

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  • Karnataka HC has ruled that a harassment complaint lodged by a wife after receiving a divorce notice from the husband loses its weight in the eye of the law and quashed the FIR filed by a women against her husband and in-laws
  • 35 people killed in renewed violence in Manipur, 30 of them militants
  • Manipur boils on the eve of Home minister Amit Shah's visit as militants strike, vandalize MLAs home and loot armouries
  • Kerala chief minister P Vijayan says Centre's decision to cut the borrowing limit of the state is 'sadistic' and shows its negative mentality towards the state's development
  • Rahul Gandhi recieves passport, set to travel to the US
  • Centre said that the march-to-Parliament by wrestlers was a 'deliberate provocation'
  • Prime Minister Modi inaugurates the new Parliament building, calls it 'cradle of empowerment'
  • Mamata Banerjee will most likely attend the opposition meet called by Nitish Kumar in Patna
  • With container prices, which were on fire, crashing by 40% YoY, importers and exporters in India heaved a sigh of relief as the burden of high freight costs will reduce
  • In an aim to push lenders to manage risks better after the US financial crisis, the RBI has reviewed bond value norms
  • 14 countries under the Indo-Pacific Economic Framework (IPEF), including India, entered into an agreement to boost supply chains and counter China
  • Malaysia Cup badminton- H S Prannoy wins the title beating Weng Hong Yang of China 21-19,13-21, 21-18
  • Yashasvi Jaiswal replaces Ruturaj gaikwad as stand-by opener for the WTC final
  • IPL final washed out due to rain, rescheduled for today, the reserve day
  • In a shameful incident, Delhi Police manhandled international wrestlers when they sought to march peacefully to the new Parliament building to highlight their greivances, detained some top wrestlers
Fifth IPL title for Chennai as Ravindra Jadeja hits 10 off last two balls to spoil the party for Gujarat Titans
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Good Companies Free To Raise Salaries Without Threshold If Shareholders Permit

By A Special Correspondent
First publised on 2018-09-15 08:29:21

In this age of extreme competition, too many business entities are chasing too few talented people. Hence, it has become a difficult task to recruit and then retain employees. This is especially true when it comes to the higher levels. Also, employee recruitment is a very time consuming and costly affair. Things go out of gear if a top level employee leaves and a replacement is not found soon. Although money is not always the top reason why people leave, it is one of the biggest factors. Companies were hitherto bound by the government regulation that prevented them from raising the cumulative salaries of their employees beyond the threshold of 11 percent of net profits without the permission of the ministry of corporate affairs. But this has now changed.

Companies that have not defaulted on payment of dues to a bank, other secured creditors and non-convertible debenture holders will now be able to raise the salaries beyond the threshold without seeking government permission by just getting a nod from the shareholders. This will also empower the shareholders. Defaulting companies however, will still have to seek government permission before seeking shareholder nod.

This is the latest move in a series of moves the government has taken recently to remove unnecessary hurdles in the working of good companies and in empowering shareholders. There are still many areas where companies need to take permission from the government. The ministry must identify these and do away with the ones that are not necessary. However, shareholder empowerment is meaningless if not accompanied by tightening of corporate governance rules as the views of minority shareholders are almost never given any importance in closely held companies and resolutions are pushed through by brute numbers.