Equity boom spurs shareholder activism

Large investors now assert their right to have a say in investee companies, underscore analysts

- DEV CHATTERJEE

Punit Goenka, the former director of Zee Entertainment Enterprises, is not the only one who lost his board seat due to shareholders' activism last week. In recent past, institutional shareholders of several companies, including Nestle and Wipro, have pushed back against board proposals by taking an aggressive stance while voting.

In May this year, shareholders of food major Nestle rejected the company's resolution to raise the royalty payment to the parent firm with 57 per cent of non-promoter shareholders voting against the hike. Nestle had proposed to hike the royalty payment from 4.5 per cent to 5.25 per cent of turnover over the next five years beginning this year.