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MUMBAI, July 3 (Reuters) - Shareholders of Tata Motors Ltd , India's biggest auto manufacturer by revenue, have rejected a pay proposal for three of its directors, the company said in a notice to the stock exchange on Thursday.
Indian companies law introduced last year requires listed firms that make a low or no profit to limit the salary they pay to their executives, depending on the size of the company. To exceed the limit, firms need approval from 75 percent of shareholders.
Tata Motors had sought shareholder approval not to reclaim 31.95 million rupees ($534,900) from executive director of commercial vehicles Ravindra Pisharody, 24.36 million rupees from executive director of quality Satish Borwankar and 146.4 million rupees from the legal heir of late managing director Karl Slym for the fiscal year ended March 31.
These amounts are in excess of what is proposed by the companies law when an entity makes a low or no profit for that fiscal year. Tata Motors posted a loss of 8.2 million rupees for its India unit in the fiscal year ended March 31 compared with a profit of 12.5 million a year ago.
Only 70 percent shareholders voted for the proposal, according to the statement by Tata Motors.
"The company takes cognisance of the shareholders' views; at the same time, it is necessary to balance this with recruiting and retaining an industry-proven management team through the long-term," a spokeswoman said in an emailed response.
"The company is currently considering its options and will move ahead taking into account this commitment to the best and most equitable interests of all stakeholders," she said.
$1 = 59.7350 Indian Rupees Reporting by Aditi Shah; Editing by David Holmes and David Evans