UGRO Capital has justified the proposed compensation of ₹10 crore paid to its Managing Director Shachindra Nath.

In a response to proxy advisory firm SES’ report, UGRO said the company’s Nomination and Remuneration Committee had commissioned Aon — a leading compensation advisory firm — to benchmark Nath’s pay against comparable peers in April.

Aon compared the proposed remuneration against three peer groups — promoter MDs, founder MDs, and MDs of NBFCs managing assets above ₹15,000 crore. “The majority of comparable MDs in India earn more than Nath is proposed to be paid,” said the NBFC’s filing.

Since Nath is classified as a promoter under SEBI regulations, he is permanently barred from ESOPs, stock appreciation rights and every form of equity-linked compensation that comparable professional MDs receive routinely, it said. Any benchmark that compares only his cash pay against peers’ cash pay, while excluding the equity component those peers receive, is “structurally incomplete,” it added.

Notably, the proposed package involves zero increase in Nath’s existing fixed compensation of ₹7 crore. The deferred fixed component of ₹3 crore represents a replacement of the variable pay he had been drawing — not an addition to it. In effect, the total compensation proposed for the renewed term is same as what Nath was receiving.

On the issue of variable pay raised by SES, the company said the variable pay resolution before shareholders is an enabling authority only.

No variable pay can be paid until shareholders pass a separate Special Resolution by a 75 per cent super majority, said UGRO.

Even then, the NRC — comprising only independent directors — will design all parameters, including performance metrics, cap, and clawback provisions. Share price appreciation is one of the proposed criteria — not the sole criterion, it said.

Satyananda Mishra, IAS (Retd.), Independent Chairman of UGRO Capital’s Board, 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.”

Nath has voluntarily guaranteed ₹1,830 crore 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. The Board unanimously believes it deserves fair recognition, Mishra said.

Published on May 29, 2026