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

News Snippets

  • Supreme Court approves two-child norm for government jobs in Rajasthan
  • DMK issues rocket ad with Chinese flag, PM Modi slams party
  • BJP alleges that Congress workers raised slogans like 'Pakistan jindabad' outside Karnataka assembly after the results for the RS polls were declared. CM Siddaramaiah promises stern action if claim found true
  • Calcutta HC says any agency can arrest absconding Sandeshkhali TMC strongman Sk Shahjahan
  • Himachal Pradesh Speaker suspends 15 BJP MLAs for unruly behaviour
  • Joint teams of Navy, NCB and Gujarat ATS seized a boat with 3200kgs of narcotics in high seas off Gujarat coast. Five crew members were also arrested
  • Centre tells Supreme Court that economic disaster will follow if states are allowed to tax mineral land
  • NCLT asks Byju's to keep rights issue funds in a different account
  • Sunil Bharti Mittal of Bharti Enterprises was conferred the honorary Knighthood by Britain's King Charles III for services rendered in furthering business relations between the UK & India
  • RIL to merge Viacom18 with Disney's Star in $8.5bn deal, Nita Ambani to lead the board of merged entity
  • Vodafone Idea shares fall nearly 15% over fears of huge fund raising
  • Stock markets crash on Wednesday: Sensex loses 790 points to 72304 and Nifty 247 points to 21951
  • BCCI gets tough, removes Shreyas Iyer and Ishan Kishan from central contracts for missing Ranji Trophy. In a first, it starts fast bowling contracts to reward emerging players like Akash Deep and four others
  • Tennis: Sumit Nagal loses in first round of Dubai Duty Free tournament
  • WPL: UP Warriorz beat Mumbai Indians by 7 wickets
Bengal police arrests TMC leader Sk Shahjahan, the prime accused in the Sandeshkhali disturbances
oppn parties
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.