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

News Snippets

  • Crude prices fall sharply as Saudi Arabia assures normal production in a few weeks. Prices fall by 5.4% to $65.30 per barrel
  • Sensex tumbles 700 points over fears that rising crude prices will deal a body blow to the tottering Indian economy
  • As Rajeev Kumar fails to appear before the CBI despite several notices, the agency forms a special team to locate and apprehend him
  • S Jaishankar says Pakistan is not a normal neighbour and its behaviour is a "set of aberrations"
  • External Affairs Minister S Jaishankar says PoK in Indian territory and the country hopes to have physical jurisdiction over it one day
  • Barasat Sessions court near Kolkata rejects Rajeev Kumar anticipatory bail application citing lack of jurisdiction as the reason
  • PM Modi celebrates his birthday with Narmada aarti and later has lunch with his mother.
  • All 6 Bahujan Samaj Party MLAs merge with the Congress in Rajasthan
  • Bengal CM Mamata Banerjee to meet PM Modi on Wednesday, state issues on the agenda
  • Pakistan to open Kartarpur corridor on Nov 9
  • Rajeev Kumar, ex-police commissioner of Kolkata and wanted for questioning in the Sarada scam does not appear before the CBI despite the state administration requesting him to do so
  • Supreme Court asks the Centre to restore normalcy in J&K but keeping national interest in mind
  • As Trump accepts the invitation to attend a programme in Houston with PM Modi, India rushes to settle trade issues with US
  • After drone attack on Aramco's Suadi Arabia facility, oil prices jump 19% in intra-day trading causing worries for India
  • Imran Khan raises nuclear war bogey again, says if Pakistan loses a conventional war, it might fight till the end with its nuclear arsenal
Sunni Wakf Board and Nirvani Akhara write to the Supreme Court for a negotiated settlement to the Ayodhya dispute
oppn parties
Good Companies Free To Raise Salaries Without Threshold If Shareholders Permit

By A Special Correspondent

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.