In one of the rare incidences, shareholders have voted down the appointment of Siddhartha Lal as the MD of the Company due to the proposed pay hike of 10%.
Shareholders had primarily voted against the pay hike – it being higher than the median employee salary hike of 1% and also the financial performance of the Company over the last few years has been modest both due to the sectoral issues and Covid impact.
MD vote down was incidental as MD reappointment and pay hike proposals were clubbed in a single resolution.
The Company will surely be putting up a revised proposal for shareholders’ approval and in all likelihood it should be getting resolved soon.
On August 23, 2021 the Company informed that the Board has unanimously reappointed Siddhartha Lal as MD.
The proposal with revised remuneration package will be put up for shareholder approval via postal ballot. His remuneration has been capped at 1.5% of profits as against the earlier limit of 3% – though in reality he was always paid at less than1.5%
As against 10% increment vs 1% average employees, Company says that actual increment for all employees has been 9.7% and 1% is only the mathematical calculation due to employee churn.
Another important point to note is that Union came in support of Siddhartha and wanted him to continue despite them being at loggerheads with the management earlier.
All in all, though the rejection seemed a worthy activism and a step in the right direction, it seems business as usual for Eicher and Siddhartha is expected to emerge stronger after this.