Compensation Agreement India

15 Sep 2021

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Compensation Agreement India

Upon the entry into force of the Wage Code, the governments of the Länder will also be allowed to appoint inspectors and court facilitators and to set up web-based inspection systems to ensure the effective implementation of the Wage Code. What are the rules applicable to the remuneration and performance of non-executive directors? Following the board meeting, SEBI issued a show-cause-notice (SCN) to multiplex operator PVR Limited (“PVR”) in relation to similar profit-making agreements entered into by PVR with its pe investors, which claimed that this was a violation of the listing regulations for the secrecy of those agreements with the stock markets. SEBI asserts that these agreements are sensitive price information in accordance with the listing rules, as they are linked to the performance of listed companies. The main objective of an investor executing a compensation agreement is to increase the value of the investment by incentivizing staff or management. This in turn increases the value of public shareholders` investments. One perspective could be that the goal of implementing such an agreement is to motivate employees to continue their growth. SEBI now wants to prohibit employees, including SMEs, directors or promoters of listed companies, from entering into agreements with shareholders or other third parties. Are there any restrictions on individuals or groups who are entitled to compensation? Are there aspects of the regulation that can only be extended to certain groups of workers? Is it permissible, in certain circumstances, to require the reimbursement of an incentive indemnity? Are there circumstances in which such a refund is mandatory? In addition, sebi recently highlighted the applicability of these remuneration-related agreements in two separate informal guidance letters from the 2003 Sebi (Informatil Guidance Scheme), as discussed below: are there general limits to the level or structure of incentive remuneration? Are there limits that affect the tax treatment of remuneration vis-à-vis the employer or manager? one…