Eicher Motors shareholders ratify reappointment of Siddhartha Lal as MD

Eicher Motors shareholders ratify reappointment of Siddhartha Lal as MD

Shareholders of Motors on Monday ratified the reappointment of Siddhartha Lal as the managing director of the company two months after a similar proposal had been defeated due to concerns over his remuneration.

Two ordinary resolutions – one approving Lal’s reappointment for five years effective from 1 May and the second fixing his annual compensation at a maximum of 1.5% of the company’s profits – were passed with 93.75% and 98.56% votes in their favour.

This comes after a special resolution to reappoint Lal as the MD and to approve his annual remuneration with a cap at 3% of profits failed to pass muster at the company’s annual general meeting (AGM) on 17 August. Special resolutions need 75% of shareholder votes to be approved.

More than 72% of the institutional shareholder votes cast at the AGM were against the resolution after proxy advisory firms raised red flags citing high remuneration for Lal despite a decline in the company’s profit. Lal’s salary grew by 66% between FY19 and FY21 to over Rs 21 crore and was expected to be over Rs 22 crore. During this period, the company’s profit declined by 35% to Rs 1,329 crore.

ET had reported in its edition on 14 October that most proxy advisory firms had given their thumbs up to these resolutions. On Monday, 83.73% institutional votes cast were in favour of the proposal to reappoint Lal as the MD while 96.28% were in favour of the resolution regarding his salary.

Proxy advisory firms give recommendations to institutional shareholders on how to vote on resolutions proposed by the companies they have invested in. Institutional shareholders like mutual funds, foreign portfolio investors and insurance companies hold about 38.4% stake in Eicher Motors.

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