Shareholders of Eicher Motors Ltd, the parent company of iconic motorcycle brand, Royal Enfield, have voted against the re-appointment of Siddhartha Lal as managing director at the company’s 39th Annual general meeting. The special resolution which needed support from 75% of the votes, was reportedly shot down over a proposed salary hike of 10%. According to Economic Times, shareholders questioned the company’s rationale behind the salary hike in the midst of the pandemic, even as the median employee salary had increased by only 1%.
The report cites the estimates made by proxy advisory firm Institutional Investor Advisory Services (IIAS), based on the trend of previous fiscal year, pegging the proposed salary in FY22 at ₹23.23 crore as compared to ₹21.2 crore in FY21. The Rs 21.2 crore compensation also included salary, perquisites and commission, a 9.97 percent hike from FY20.
On the proposal to reappoint Lal, the IIAS recommended shareholders vote against both proposals. The firm, in its report, said: “While we support his reappointment as Managing Director, his
remuneration has not been commensurate with the overall performance of the company. Further, we raise concern over poor disclosure of his remuneration terms.”
Meanwhile, an ordinary resolution seeking Lal’s re-appointment as a director on Eicher Motors’ board was approved by shareholders. Though, 36.66% of the public institutional votes cast were against it.
The development comes nearly a week after Vinod Dasari stepped down from his role as the Chief Executive Officer of Royal Enfield and Executive Director of the Board of Eicher Motors. The company B Govindarajan, who= has been the Chief Operating Officer at Royal Enfield since 2013, took the responsibility of leading Royal Enfield. He has been inducted as a full time director on the Board of Eicher Motors.
Eicher Motors reported a consolidated net profit of Rs 237 crore during the first quarter of 2021-22 as against a loss of Rs 55 crore same time last year. The surge in revenues is largely attributed to a low base last year when the nationwide lockdown had caused sales to slump.