Eicher Motors Ltd shareholders have voted down the re-appointment of Siddhartha Lal as managing director. As per ET, the shareholders voted against the reappointment as Lal had proposed an increase of 10% in salary. The hike demand outpaced the revenue and profit growth last year because of the pandemic.
The voting happened during the Eicher Motors 39th Annual General Meeting (AGM) on August 17. The special resolution seeking his reappointment was clubbed with the compensation hike proposal. However, most of the public shareholders voted against the resolution.
Shareholders in turn asked the company’s rationale for increasing Lal’s salary by 10% in FY21, even as the median employee salary saw an increase of only 1%. The development is yet to be announced publicly by Eicher Motors, which also owns the Royal Enfield brand.
ET reports that Eicher did not respond to the queries.
Proposed salary of Rs 23.23 crore per annum
Proxy advisory firms – Institutional Investor Advisory Services (IIAS), estimated Lal’s proposed salary in FY22 would be INR 23.23 crore, of which – 32% is variable pay. The estimation is based on the trend in the previous fiscal year. In FY21, Lal’s salary was Rs 21.2 crore.
The move comes only a few days after Vinod Dasari announced that he is quitting Royal Enfield as chief executive officer. V Govindarajan was appointed as his replacement soon after.
Siddharth Lal remains as director
An ordinary resolution during the AGM was approved by the shareholders. The ordinary resolution seeks the re-appointment of Lal as the director on the Eicher Motors board. There were at least six resolutions put forth for voting. The one pertaining to Lal’s appointment as MD and his salary hike failed to get enough votes.
The company may reapproach the shareholders with a revised proposal. However, they have not done the same till now.
IIAS said that it supports the reappointment of Siddharth Lal as the MD of Eicher Motors but not the revised remuneration package as it has not been commensurate with the company’s overall performance in the past.
Lal’s salary of Rs 21.12 crore in FY12 is 340 times the median employee salary of Eicher. The salary saw annual growth of 28% in the past three years. In the same period, the company’s operating profit dropped by 14% and operating profit dropped by 8%.
Royal Enfield to launch all-new Classic
Royal Enfield will launch the all-new Classic in the Indian market soon. The much-awaited bike will get a new chassis while there are a few design changes as well. The bike will come with modern features like a Tripper Meter, which is already available with a few other Royal Enfield models.
Royal Enfield has a slew of upcoming motorcycles in the Indian market, especially the ones powered by the 650cc twin-cylinder engines. One of them is the highly awaited cruiser motorcycle that has been spotted testing on the Indian roads multiple times now.