Siddhartha Lal reappointed as MD of Eicher with revised pay structure

After facing a setback from shareholders during the Annual General Meeting (AGM) last week, the board of directors of Eicher Motor’s Ltd have decided to reappoint Siddhartha Lal as Managing Director with a revised compensation package. The revised pay package of Lal, as approved by the board, would be capped at 1.5% of profits. However, the decision is subject to approval from shareholders through a postal ballot, Business Standard reported.

During the company’s AGM on August 17, shareholders had voted down Lal’s reappointment and the pay hike of 10%.

Median salary still lower despite an increase in average salary

According to the company, investors were not concerned about Lal’s reappointment or the proposed remuneration but were seeking clarity in accordance with the provision that had the potential of paying compensation of up to 3% of profits.

The company had the same limit of 3% in the last four years but had only paid a fraction of that amount. During FY21 the remuneration was at 1.04% of profits, which was higher in terms of percentage as compared to the preceding years, it said.

In FY 21, Lal got a hike of around 9.97% when the median employee hike was 1%. This was another important aspect highlighted by the company. Also, the company hired 267 employees, out of which 77% were paid below the median salary, and about 284 of them had left the company. Among those 284,  66% were drawing salaries which were higher than the median. Due to these factors, the median showed an increase of only 1%, despite an increase of 9.7% in average salaries, it added.