Eicher Motors Ltd shareholders voted against Siddhartha Lal's reappointment as managing director.
In a special resolution recommending Eicher MD Siddhartha Lal's reappointment - with a salary raise proposal - the majority of public institutional shareholders voted against his reappointment at the company's 39th annual general meeting on August 17. Shareholders questioned why Lal's pay should be increased by 10% in FY21, despite the fact that the median employee wage had increased by just 1%.
Proxy advisory company Institutional Investor Advisory Services (IIAS) projected that his proposed compensation in FY22 would be 23.23 crores, up from 21.2 crores in FY21, based on the previous fiscal year's trend.
This decision comes only days after Vinod Dasari resigned as CEO of Royal Enfield, the well-known maker of Bullet motorcycles and a subsidiary of Eicher Motors, who promptly recruited B Govindarajan as the company's chief operating officer to take over.
However, shareholders passed an ordinary resolution, re-appointing Lal, to the board of directors of Eicher Motors. The proposal to reappoint Lal as MD and raise his salary was rejected.
It is not decided whether revised proposals will re-submit to shareholders.
Lal is credited for the success of Eicher Motors' success, his laser-like concentration on the Royal Enfield brand, and a joint venture with Volvo, a Swedish truck and bus maker.
The board has now approved a revised remuneration structure for the managing director, with a maximum cap of 1.5 per cent of profits.