New Delhi, July 23 -- Information technology (IT) services firms have long used shares to reward chief executives. Now, as the CEOs cash in stock awards accumulated over the years, companies are seeking shareholder nod to raise the statutory remuneration cap, drawing scrutiny from investors and proxy advisory firms over compensation disclosures.

Under the Companies Act, a company can pay up to 5% of its net profit in remuneration to its chief executive, and a shareholder nod is needed if companies want to pay more.

On Monday, Mphasis Ltd sought shareholder approval to increase the remuneration threshold payable to CEO Nitin Rakesh from 5% of the company's net profit to 7%, citing the value of shares that may be encashed. Blackstone-back...