Proposal fails to win 75% votes, remuneration seen as issue
Shareholders of Eicher Motors, the manufacturer of Royal Enfield motorcycles, have voted against the reappointment of Siddhartha Lal as managing director (MD) of the company.
According to a regulatory filing, the special resolution to consider and approve Mr. Lal’s reappointment for a period of five years and payment of remuneration, failed to muster the requisite majority at the 39th AGM.
A total of 21,74,67,139 votes were cast for this special resolution, of which only 15,88,49,543 votes (73%) were in favour of the resolution, with the rest against. For a special resolution to be passed, 75% votes need to be in favour of the resolution.
More than 70% of institutional investors who participated had voted against the resolution, likely due to the proposal relating to Mr. Lal’s remuneration.
While the company did not specify details of the proposed remuneration in the notice for the AGM, Eicher had said the total remuneration payable to Mr. Lal for any financial year ‘shall not exceed 3% of its net profits’.
According to the company’s annual report for 2020-21, the total remuneration for Mr. Lal, who is credited with turning the company around, stood at about ₹21 crore for the financial year ended March 31, 2021. This included salary of ₹7.38 crore, commission of ₹6.7 crore and perquisites of ₹7.04 crore.
Meanwhile, a separate ordinary resolution to reappoint Mr. Lal as a director was passed with more than 86% shareholders voting in favour of the resolution.
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