Eicher Motor’s MD reappointment rejected by shareholders over salary hike: Report

Siddhartha Lal, Managing Director and Chief Executive Officer, Eicher Motors, India at the World Economic Forum on India 2012

Eicher Motor’s Managing Director Siddhartha Lal’s reappointment proposal has been voted down by the shareholders over a 10 percent hike in salary proposed amid the COVID-19 pandemic when the revenues and profits have been slow, a report in The Economic Times said.

The re-appointment proposal was combined with a 10 percent hike in Lal’s salary, which most public institutional shareholders rejected at the company’s 39th Annual General Meeting (AGM) on August 17, even as the average employee’s salary had increased by only 1 percent, the report cited sources as saying.

Moneycontrol could not independently verify the report.

Lal’s salary of Rs 21.13 crore in FY21 was 340 times the average employee salary and grew at a compound annual growth rate of 28 percent over the past three years, while the company’s operating profit and net profit declined by 14 percent and 8percent, respectively, over the same period.

Shareholders had earlier rejected salary hike proposals of former Tata Motors MD Guenter Butschek and Apollo Tyres MD Neeraj Kanwar.

An ordinary resolution was passed re-appointing Lal as a Director on the board of the company. The company is yet to take any decision on re-approaching the shareholders with the revised proposal, the report added. Shareholders didn’t have a problem with Lal’s reappointment as MD but didn’t approve of the salary hike, the sources told ET.

On August 12, Vinod Dasari, the chief executive officer of automobile major Royal Enfield, resigned from his position, Eicher Motors Ltd had said. Apart from stepping down as the CEO of Royal Enfield, Dasari also resigned as Executive Director of the Board of Eicher Motors, the company said. The resignation came into effect the next day.

B Govindarajan, who has been the chief operating officer of Royal Enfield since 2013, succeeds Dasari.