InvestorQ : Why are the proxy firms calling for the ouster of Vijay Sekhar Sharma from the top job at Paytm?
Dia Deshpande made post

Why are the proxy firms calling for the ouster of Vijay Sekhar Sharma from the top job at Paytm?

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Sam Eswaran answered.
2 months ago
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In the previous week, there were growing calls by proxy firms like IIAS, InGovern and Shareholder Empowerment Services (SES) for the removal of the CEO of Paytm, Vijay Sekhar Sharma. The objection they have is to the dual role that Sharma holds as the MD and CEO of Paytm? Broadly, there are the 3 key proxy firms as mentioned above who have raised these objections and called for the ouster. They have even asked the shareholders of Paytm to vote against the continuation of Sharma in the dual posts and force him to resign.

Vijay Sekhar Sharma is the founder of Paytm and has also been one of the most prominent faces of Paytm over the years. He has also been the man who virtually changed the face of the payment system in India and virtually reinvented the mass payment model with Paytm wallets. Now their demand for removal comes for different reasons. One concern expressed by the proxy firms is corporate governance. This maybe broadly justified since combining the post of CEO and MD in a single person is never a great idea.

However, the other 2 reasons appear like the proxy firms are overstepping their brief. Firstly, these proxy firms have called for the removal of Sharma from the post of CEO and induction of professional managers to the top post. This has been justified on the grounds that Paytm stock had destroyed a lot of wealth. To be fair, performance of the stock price is public knowledge, although it is more systemic. The third concern is the delay in Paytm turning around to operating profits. This is correct, and also quite surprising.

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