Eicher Motors board re-appoints Lal as MD; tweaks package
New Delhi, Aug. 23: Eicher Motors on Monday said it has 'unanimously' decided to re-appoint Siddhartha Lal as managing director of the company with effect from May 1, 2021, with changes in his remuneration package, a week after the company's shareholders rejected the proposal.
The company said that the board of directors on Monday discussed the outcome of the 39th AGM held on August 17.
The matter pertaining to the re-appointment of Lal as MD and the remuneration proposal was discussed comprehensively, and the board unanimously decided to reappoint him as MD with effect from May 1, Eicher Motors said in a statement.
The board will now go back to shareholders for approval through postal ballot, it added.
Last week, the company's shareholders had rejected the re-appointment of Lal as MD. The shareholders had voted against the proposal mainly due to the proposed 10 per cent increase in Lal's remuneration package.
"The nomination and remuneration committee (NRC) of the company has considered all the factors, including inputs from various stakeholders including institutional investors before recommending remuneration for key managerial persons. The primary concern with investors was not Siddhartha's reappointment as managing director or the proposed
compensation; it was the lack of clarity regarding the enabling provision that potentially allowed payment of remuneration up to 3 per cent of profits," Eicher Motors chairman S. Sandilya said.
Over the last four years, the company has had the same limit of 3 per cent, but in reality have paid only a fraction of that amount, he added.
"The actual remuneration during FY2021 was at 1.04 per cent of profits, with the preceding years being at a lower percentage," Sandilya said.
Given the background of actual remuneration paid to the managing director in preceding years, the board has now approved a revised remuneration structure for the managing director, with a maximum cap of 1.5 per cent of profits, the company said.
Specific details of the remuneration are being shared via the postal ballot, it added. The remuneration increase in FY2021 is in line with the average 9.7 per cent increment given to all company employees for the year, the firm said.