Eicher Motors got the requisite approval from its shareholders for reappointing Siddhartha Lal as its Managing Director (MD) as well as the approval for payment of remuneration to him, a little over two months after a common resolution failed to get the required number of votes at the company’s 39th annual general meeting.
The company which makes niche bikes under the Royal Enfield brand and trucks and buses under the VE Commercial Vehicles brand faced criticism in August when the two ordinary resolutions that were passed on October 25, were clubbed together under a special resolution.
In all, the appointment of Lal as MD fetched 93.75 percent votes in favour, as per voting data disclosed by Eicher Motors. Public institutions led the protest against this resolution which saw a total of 6.25 percent votes cast against the resolution.
Lal’s pay package got lesser resistance with only 1.44 percent votes cast against it. 98.56 percent votes were found to be in favour of this ordinary resolution. Both the resolutions will remain in effect for a period of five years starting May 1, 2021.
The nomination and remuneration committee of Eicher Motors tweaked Lal’s pay package back in August. As per the revised structure, his fixed pay, including allowances, now stands revised at Rs 12 crore per annum as against his FY21 salary of Rs 7.38 crore.
Perquisites now have a maximum limit of Rs 1 crore per annum, as against Rs 7.04 crore last year. Lal has been operating out of the UK since 2015.
As per the details provided by Eicher Motors, Lal gets a fully furnished residence and reimbursement of utilities, two company-provided and maintained cars, reimbursement of hospitalisation expenses and insurance premium for self and family, leave travel reimbursement as well as club membership for self and family. Eicher Motors has not provided any estimate of such expenses.
Lal’s pay package also includes statutory contributions in accordance with UK laws and payment of commission subject to a maximum limit of 80 percent of fixed pay (Rs 9.6 crore).
The commission paid shall be subject to the recommendations of the NomRem Committee and subsequent approval by the board, the company clarified. While Eicher Motors did not provide an estimate on the statutory and commission packages, Lal had received a commission of Rs 6.70 crore in FY21.
After his reappointment as the MD on August 23, Eicher Motors announced a revision of Lal’s total pay package. The company clarified that his overall remuneration, including fixed pay, perquisites, other benefits and commission, shall not exceed 1.5 percent of the net profits of the company in any particular financial year as computed in the manner referred to in Section 198 of the Companies Act, 2013. The previous cap was 3 percent.
The actual remuneration during FY21 was at 1.04 percent of profits, and it was at a lower percentage in the preceding years, Eicher Motors clarified.
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