Two months after shareholders opposed the special resolution that sought the reappointment of Eicher Motors promoter and Managing Director, Siddhartha Lal finally got the required number of votes that allows him to resume office as before.
On October 26, Eicher Motors said that it had secured the requisite number of votes for two ordinary resolutions that individually sought Lal’s re-appointment as MD and ratify his pay.
Lal had been in the thick of the controversy that saw proxy advisory firms raise objections against Eicher Motors’ special resolution that sought Lal’s reappointment and approve his pay package.
The controversy was further fuelled when Maruti Suzuki Chairman RC Bhargava advised to company managements to "curtail expenditures on themselves personally" with the COVID-19 pandemic highlighting the need to build internal resources.
Eicher tweaked Lal’s pay package back in August. It brought down the cap of total payment to Lal in a year to 1.5 percent of the company’s net profit from 3 percent earlier. Lal’s actual remuneration during FY21 was at 1.04 percent of profits.
Lal’s reappointment comes shortly after a slight hiccup in the decision-making structure at Royal Enfield following the sudden exit of automotive veteran and CEO Vinod Dasari. B Govindarajan, who has been the chief commercial officer of Royal Enfield, was appointed the executive director.
Selling 609,403 motorcycles in FY21 Royal Enfield is the most high-margin and profitable automotive entity in India. Lal has been credited with turning around Royal Enfield’s fortunes after taking on the MD’s role in FY07 when its volumes stood at 32,612 units. The niche bike brand has a market share of 94 percent in the middleweight (250cc-750cc) motorcycle category.
Lal also successfully brought on board Swedish commercial vehicle giant Volvo into a joint venture with Eicher Motors. Over the course of the last several years the VE Commercial Vehicles rolled out several truck and bus models. The brand claims to have a market share of 30.1 percent in the light and medium duty CV segment as at the end of FY21.
Besides managing the shift to electric mobility, both under Royal Enfield and VE Commercial Vehicles, Lal has to also defend its turf from competition. More companies are looking to have Royal Enfield-type bikes than ever before.
While Honda and Mahindra-owned Jawa have debuted in the middleweight segment with offerings that are similar to those offered by Royal Enfield, the combine of Bajaj Auto and Triumph, TVS Motor Company-owned Norton and the combine of Hero MotoCorp and Harley-Davidson are readying new products for the same segment.
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