Mumbai: The board of Eicher Motors Ltd (EML) on Monday decided to re-appoint Siddhartha Lal as managing director, with effect from 1 May.

Earlier on 17 August, the shareholders, at the company's 39th Annual General Meeting (AGM) had rejected the proposal for the re-appointment of Lal as MD. The shareholders had also rejected the payment of remuneration to Lal.
“The matter pertaining to the appointment of Siddhartha Lal as managing director and the remuneration proposal was discussed comprehensively, and the board unanimously decided to reappoint Siddhartha Lal as Managing Director, with effect from May 1, 2021," the company said in a regulatory filing. 

Speaking about the outcome of the AGM and specifically about the remuneration issue, EML chairman, S Sandilya said, “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 upto 3 per cent of profits."

"Over the last four years, we have had the same limit of 3 per cent, but in reality have paid only a fraction of that amount. The actual remuneration during FY2021 was at 1.04 per cent of profits, with the preceding years being at a lower percentage," Sandilya added.

Given the background of actual remuneration paid to the managing director in preceding years, the board has now 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 company further stated.