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Faced with shareholders’ rejection of Siddhartha Lal’s reappointment as Managing Director for five years, Eicher Motors, the parent company of Royal Enfield, is now looking to approach the shareholders again with a revised proposal.
This could be the next step that the board is contemplating in view of the latest development, sources said. The resolution to reappoint him also included an increase in Lal’s compensation/remuneration that did not go well with shareholders voting in a special resolution, they said.
“The board has been informed about the development and they are thinking about the next step. The stock exchanges will be informed accordingly,” a company spokesperson told BusinessLine when asked about the next step.
The shareholders had, at the company’s 39th Annual General Meeting (AGM) held recently, rejected the special resolution on the grounds that the proposed increase in Lal’s remuneration was more when looked against the subdued overall sales of the Group in the recent period.
In the voting to consider and approve the re-appointment of Lal as MD for a period of five years with effect from May 1, 2021 and payment of remuneration (Special Resolution), a total of 21,74,67,139 votes were cast in which 15,88,49,543 voted were in favour and 5,86,17,596 were against.
This means while 73 per cent of the votes favoured the re-appointment, 27 per cent were against it, and the special resolution needed support from 75 per cent of the votes to pass the proposal.
“The resolution was not passed with requisite majority,” the company mentioned in a notification to the stock exchanges on Tuesday.
According to proxy advisory firm Institutional Investor Advisory Services (IIAS), it estimated that Lal’s proposed salary in fiscal year (FY) 2021-22 would be ₹23.23 crore of which 32 per cent is variable paycompared with ₹21.2 crore in the previous FY.
However, an ordinary resolution seeking Lal’s re-appointment as a Director on the company’s board was approved by the shareholders.
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