22 - 09 - 2026

Proxy advisories spilt on Hikal’s move to appoint Sameer Hiremath as CMD

​Proxy advisory firm InGovern Research Services has asked Hikal shareholders to vote against the appointment of Sameer Hiremath as Chairman and Managing Director (CMD), citing governance concerns and lack of transparency.

The recommendation comes ahead of the company’s annual general meeting scheduled on Tuesday (September 23, 2026). Hikal, incorporated in 1988, is a pharmaceutical and chemicals company.

However, two other proxy advisory firms — Institutional Investor Advisory Services (IiAS) and Stakeholders Empowerment Services (SES) — have recommended that shareholders support the resolution.

“The proposal combines the roles of board chairman and managing director in a promoter-family executive, reducing the separation between executive management and board oversight. Even though not a regulatory mandate, we recommend an independent chair be appointed as a governance best practice,” InGovern said in a note to shareholders.

Hikal has not proposed an independent chair, lead independent director or other formally defined mechanism to ensure independent board leadership and oversight of the CMD, it said.

The resolution permits payment of minimum remuneration in the event of inadequate profits but does not disclose the maximum annual or aggregate remuneration payable during the three-year approval period, InGovern said.

This comes at a time when the company has reported a net loss. For the fiscal FY26, the company posted a net loss of ₹48.7 crore, compared with a net profit of ₹90.9 crore in FY25, even as revenue and EBITDA declined.

The proposed remuneration terms include broad perquisites, reimbursements, benefits, schemes and awards that may be determined by the board, without a specific monetary cap or detailed shareholder disclosure.

“The proposal is being considered amidst revenue-recognition irregularities, employee document alteration, the statutory auditor’s ADT-4 filing, audit-trail exceptions, USFDA remediation and unresolved environmental litigation. These circumstances warrant a stronger independent governance architecture and a clearly performance-linked, transparent executive remuneration framework before combining the chairman and MD roles,” it added.

Hikal, according to a stock exchange notice, is seeking shareholders’ approval for the appointment of Sameer Hiremath as CMD for a five-year period from October 1, 2026, to September 30, 2031. It has also sought approval of remuneration for the initial three years of the proposed term from October 1, 2026.

On its part, InGovern recommended voting “FOR” all other resolutions.

Hikal’s response

In response to InGovern’s voting recommendation of Sameer Hiremath, Hikal stated that combining the roles is essential to ensure organisational stability, leadership continuity, and aligned strategic execution following the retirement of executive chairperson Jai Hiremath.

The company highlighted that its board comprises 11 directors, including seven independent directors who chair the Audit and Nomination & Remuneration Committees, and they have conducted dedicated evaluations of board leadership in line with statutory requirements.

Addressing remuneration concerns, Hikal clarified that because the company was not in profit for FY26, Hiremath’s maximum remuneration was strictly capped at ₹1.34 crore per annum and requires new fresh shareholder approvals for any future increase.

At present, Sameer Hiremath serves as vice chairman and managing director, and his term expires on September 30, 2026. The proposed appointment follows the Jai Hiremath’s, Founder and Executive Chairman, decision to step down with effect from October 1, 2026.

The other two proxy advisory firms IiAS and SES have asked shareholders to support the resolution.

“Given his long association with the company and the need for continuity on the board during the period of dispute (Kalyani-Hiremath dispute), we support the resolution,” IiAS said in a note.

“Although there is no legal bar on the chairperson of the company from holding a management position, SES is of the view that as a good governance practice, the company should have separated the position of chairperson from the management position. This is because holding such positions by the same person may lead to concentration of powers in the hands of a single person,” SES said.

As per the revised SES policy, in the ordinary course, the firm does not take a strict view on such ​a combined position, unless there are compliance or governance concerns.

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