Eicher Motors on Monday got the nod from its shareholders for the re-appointment of Siddhartha Lal as the company’s managing director for a period of five years and also his revised remuneration.
The proposal for reappointment was cleared with almost 93.8 per cent of the total 226 million votes casted going in favour of the resolution. On the other hand, the one for revised payment was cleared with almost 98.6 per cent of the total votes going in favour of the move.
On August 17, at its 39th annual general meeting, shareholders of the company had voted down the reappointment and pay hike of 10 per cent for Lal. Shareholders had sought more clarity on an enabling provision that allowed payment of remuneration up to 3 per cent of profit. Later on August 23, the company’s board of directors had decided to unanimously reappoint him as MD with a revised remuneration package.
This time, the company had approached the shareholders with two ordinary resolutions – one seeking the reappointment of Lal for five years with effect from May 1, 2021 and the another one for clearing his remuneration. Ordinary resolutions need a simple majority of only 50 per cent votes to be approved. The company presented both as a combined resolution on August 17, which the analysts cited as a major reason for his reappointment. The board had approved a revised remuneration structure with a maximum cap of 1.5 per cent of profits.
Lal was credited with reviving the brand image of Royal Enfield since he took charge as MD in 2006-07. The annual sales volume in the two-wheeler segment, which was a mere 32,612 units in 2006-07, increased over 18-fold to 609,403 in 2020-21. The two-wheeler sales volume had even touched 822,724 in 2018-19, just before the pandemic set in. His remuneration too had increased multifold from Rs 1.06 crore in 2010 to Rs 21.12 crore in 2020-21.
The company’s revenues have grown from Rs 375 crore in calendar year 2009 to Rs 8,720 crore (consolidated revenues) in FY21, while the joint venture with Volvo – VE Commercial Vehicles Ltd had revenues of Rs 8,676 crore. This has resulted in unprecedented shareholder value growth of over 17,500 per cent in 12 years, S Sandilya, chairman of Eicher Motors had said in a statement after his reappointment.
Similarly, the company’s export volumes zoomed over three-fold from just 8,800 motorcycles in 2015-16 to 35,675 in 2020-21. The overseas markets’ share in revenue also grew from nearly 3 per cent in 2016-17 to 9 per cent in 2020-21.
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