Eicher Motors reappoints Siddhartha Lal as MD; clears air on remuneration

The Board of Eicher Motors Ltd on Monday decided to re-appoint Siddhartha Lal as Managing Director, with effect from May 1, 2021. The Board will go back to their shareholders for approval through postal ballot.

The decision was taken after the company’s 39th annual general meeting held on August 17, where matters pertaining to Lal’s re-appointment as well as the remuneration proposal were discussed.

“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% of profits. Over the last four years, we have had the same limit of 3%, but in reality have paid only a fraction of that amount. The actual remuneration during FY2021 was at 1.04% of profits, with the preceding years being at a lower percentage,” said S Sandilya, Chairman of Eicher Motors, while addressing the remuneration issue.

The Board also approved a revised remuneration structure for the Managing Director, with a maximum cap of 1.5 per cent of profits as per Section 198 of the Companies Act.

“The remuneration increase in FY2021 is in line with the average 9.7% increment given to all company employees for the year. The median, which is a measure of central tendency, is impacted by entry and exits of employees,” said Manvi Sinha, Independent Director, and Chairperson of the NRC.

She further added, “The board fully supports Siddhartha’s appointment as Managing Director and his proposed compensation, and we are confident that our shareholders will support these resolutions as well.”

Making a specific note of Siddhartha’s contribution to the growth of the company, Sandilya said, “Siddhartha has been the architect of Eicher Motors’ growth story over the last two decades. When he took over as CEO of Royal Enfield in 2000, the division was making large losses and was slated for closure. Siddhartha has transformed Royal Enfield into a formidable premium motorcycling brand in India, pioneering the leisure riding segment.”

“Going forward, Siddhartha and his team at EML have charted out exciting and robust plans for the future. Royal Enfield, already the global leader in middleweight motorcycles (250cc-750cc), is on the path to growing this segment multi-fold globally and becoming the first global consumer brand to emerge from India. Also, under the chairmanship of Siddhartha, VE Commercial Vehicles is all set to attain new heights by leading the modernisation and transformation of India’s commercial vehicle sector,” added Sandilya.

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