Beginning with an economic slowdown, which was exacerbated by the Covid pandemic at the end, FY20 was a tough year for India’s auto sector. But that didn’t stop top executives at some 2-wheeler makers from riding away with pay hikes
Financial year 2019-20 may have been a challenging year for the auto industry but that has not stopped the promoters of some two-wheeler makers from giving themselves a healthy raise.
Two of the four promoters of publicly listed two-wheeler producing firms have seen their pay packages swell way beyond the increase in profits recorded by their companies during the same year, according to data in their FY20 annual reports.
Eicher Motors Managing Director Siddhartha Lal saw his remuneration jump 50 percent in FY20 to Rs 19.21 crore, from Rs 12.81 crore in FY19. Lal owns nearly 3 lakh shares of Eicher Motors, translating to a 1.08 percent stake. Eicher’s promoter entity owns nearly half of the company’s equity.
Eicher Motors, which controls Royal Enfield, the niche bike brand engaged in producing leisure motorcycles, clocked Rs 1,827 crore in net profit last year, a drop of 17 percent compared to FY19. The last three years saw Lal’s salary nearly double and it is now higher than that of TVS Motor Company Chairman Venu Srinivasan, who retained the third spot in the two-wheeler category until FY19.
Bajaj Auto Managing Director Rajiv Bajaj also saw his pay package grow significantly in FY20. The 53-year-old’s remuneration grew 23 percent to Rs 39.86 crore last year from Rs 32.31 crore in FY19.
However, unlike Eicher Motors, the Pune-based company recorded a growth in net profit in FY20. At Rs 5,100 crore, Bajaj Auto’s net profit grew 9 percent from FY19. This helped the maker of the Bajaj Pulsar and Bajaj Avenger remain the highest profit-generating company in the two- and three-wheeler category.
Bajaj retains his spot as the second-highest paid executive in the two-wheeler space, behind Pawan Munjal of Hero MotoCorp. Only Bajaj Auto and Hero Motocorp recorded net profit growth last year.
The Chairman and Managing Director of Hero Motocorp, India’s largest two-wheeler maker, saw his pay package rise 5 percent last year. Not only is Pawan Munjal’s remuneration the highest in the two-wheeler space, it is bigger than the combined salaries of Bajaj, Lal and Srinivasan.
Munjal’s pay package for FY20 stood at Rs 84.59 crore, against Rs 80.41 crore reported for FY19. While he remains one of the highest-paid executives in corporate India, his company, Hero MotoCorp, would have recorded a drop in net profit had it not been for the inclusion of an exceptional item. The maker of the Splendor and Passion bikes recorded a 7 percent increase in net profit to Rs 3,633 crore in FY20 compared to FY19.
Venu Srinivasan takes a pay cut
TVS Motor Company Chairman and Managing Director Venu Srinivasan was the only executive who voluntarily took a pay cut last fiscal year following the economic uncertainty brought in by the Covid-19 pandemic. The 67-year-old patriarch of the TVS Group saw his remuneration go down 22 percent in FY20.Srinivasan’s pay package in FY20 stood at Rs 18.64 crore, the lowest in more than three years, against Rs 23.77 crore clocked in FY19. TVS, the maker of the Apache and Jupiter bikes, saw a net profit decline of 12 per cent, at Rs 592 crore, from FY19. Srinivasan’s son Sudarshan Venu, who is the Joint Managing Director of the company, also took a voluntary pay cut of 15 per cent last year.