UGRO dismisses concerns raised by proxy advisory firm over its MD salary

New Delhi, May 28 (PTI) MSME-focused NBFC UGRO on Thursday dismissed concerns raised by a proxy advisory firm over the re-appointment and salary compensation of its vice-chairman and managing director, Shachindra Nath.

Proxy advisory firm has advised its institutional investor clients to vote against the resolution for the re-appointment in the upcoming annual general meeting scheduled for September 29.

In a regulatory filing to stock exchanges, UGRO said the proposed compensation for Nath is at or below market median, as independently confirmed by Aon, one of the world’s foremost compensation advisory firms, commissioned by the company’s 100 per cent independent Nomination and Remuneration Committee in April.

UGRO alleged that these proxy advisory

firms have routinely advised ‘against’ the appointment of managing directors of comparable NBFCs, it said.

In each case, the compensation was similar or higher, shareholders rejected the advisory recommendation, and the respective individuals continue in their roles today, it said.

The proxy advisory report’s most pressing concern was the proposed share price-linked variable pay component — which the firm characterised as akin to cash-settled Stock Appreciation Rights (SARs) prohibited for promoters under SEBI’s share-based employee benefits regulations.

UGRO chairman Satyananda Mishra, ex-Chief Information Commissioner of India, in a statement, said should the variable pay resolution be approved, any compensation determined will be benchmarked independently against comparable companies, with the sole objective of aligning the founder’s interests with those of all shareholders.

It will be fair, market-referenced, and never excessive – only alignment, never enrichment, he said.

“One fact deserves recognition: Nath has voluntarily guaranteed Rs 1,830 crores of the company’s borrowings – without a single rupee of commission or fee, while building an institution that employs 2,500 professionals and serves 2,50,000 MSMEs across India. This level of personal commitment is rare in Indian corporate life,” he said.

It is to be noted that during March and April 2026, the same period in which the governance controversy was building, Nath’s promoter entity, Poshika Financial Ecosystem Private Ltd, raised stake in the company via share purchase from the open market.

Poshika acquired 18,54,374 equity shares at prevailing market prices — between Rs 107.65 and Rs 110.94 per share — investing approximately Rs 20 crore of personal capital. The purchases increased the cumulative promoter holding to 2.88 per cent of the company’s total diluted share capital.

Nath founded UGRO Capital in 2018, built it from a dormant listed shell into India’s first listed MSME-focused DataTech lending NBFC, and enabled more than Rs 2,500 crore of equity capital raises over eight years.

The filing further said that his own shareholding was diluted to below 3 per cent as a direct consequence – dilution-to-build, not disengagement.

This promoter classification permanently excludes him from ESOPs, SARs, and every equity-linked long-term incentive that every comparable professional MD in India receives in addition to cash, it said. PTI DP DP MR