ComBank directors defeated at EGM

The Commercial Bank Extra Ordinary General Meeting (EGM) saw much drama this Wednesday, when the bank's director board put forward a resolution for Employee Share Option Plan (ESOP) which the shareholders defeated, saying it is unfair and does not cover a majority of Commercial Bank's employees.

"The resolution said that the ESOP should be granted to only very senior employees. In fact it only covered 115 employees, whereas the Executive Officers' Association together with other employees and shareholders were of the opinion that it should be for at least 3,000 officers.

The management has always confined the ESOP to a narrow segment," a Commercial Bank official noted. It was the first time a proposal by the directors had been shot down by shareholders.

He said the resolution at the EGM, which immediately followed the AGM, saw a vociferous disagreement by various shareholders.
"The shareholders were in favour of expanding the ESOP to other employees and asked the directors to consider it, but it appeared that they had not done so, because they did not even know how many employees were entitled for the ESOP.

They had to request the information from an employee to disclose it to the shareholders," a shareholder, who was present at the EGM, said.

He said that amidst protests by shareholders, Chairman of the EGM, B.R.L. Fernando (in the absence of Chairman Commercial Bank Mahendra Amarasuriya) had put the ESOP to the house to be voted by a show of hands. "Only three shareholders voted for the resolution and it was defeated," he added.