From shareholder activism on salary hike to 120 years of the Royal Enfield brand, 2021 has been nothing short of a ‘Himalayan Odyssey’ for the Eicher top boss.
2021 is not a year that Siddhartha Lal will forget in a hurry. Vinod Dasari stepped down from the MD’s position and Eicher Motor shareholders rejected Lal's reappointment as MD over the proposed 10 percent hike in the managing director's salary.
While the shareholders were not opposed to see Lal as the MD of the company, what they took a severe exception to is the salary hike that was proposed and specifically the timing of the proposal. Amid the Covid-driven uncertainties, the hardships that people were going through, low profit margins and median employee salary rise of a paltry one percent across the group, the proposal stood out like a sore thumb. The rationale to hike the Managing Director’s salary by 10 percent just did not cut ice and eventually failed to get the shareholders’ nod.
More than the eventual decision, it is the drama that revolved around the ‘what was thought to be a regular annual general meeting’, that made headlines. As many industry veterans pointed out, this also served as a wake-up call for companies to ensure a more inclusive relationship with every shareholder category.
But Eicher is not alone. Shareholder activism has been on the rise. More than anything else, it is a case of a message going out loud and clear to the board that accountability is crucial. Perhaps in the recent past, one of the most-talked-about instances include Tata Motors shareholders rejecting hike in the remuneration of the then MD Karl Slym (now deceased) and two executive directors. Apollo Tyres Chairman and MD Neeraj Kanwar and Zee Entertainment MD and CEO Punit Goenka also were at the receiving end. Kinetic Engineering is one of the latest to join the list when shareholders rejected a proposal to increase MD, Ajinkya A Firodia’s salary. Without a doubt, the compensation proposals have attracted the maximum furore and there is significant brainstorming across corporate circles to hit middle ground.
The company eventually appointed B Govindarajan as Executive Director, Royal Enfield (Whole Time, Additional Director) of Eicher Motors. While that’s a tricky trail and shareholder activism is something that companies need to pay heed to more seriously, it did not halt the journey for road warrior Lal, credited with turning around the iconic Royal Enfield brand — the world’s oldest motorcycle brand.
As celebrations get underway to mark Royal Enfield’s 120th anniversary with the launch of the limited edition 650 twins and Royal Enfield leading a first-of-its-kind motorcycle expedition to the South Pole, Lal calls it a “test of endurance and perseverance for man and machine.” Even as the expedition team is trying to limit its carbon footprint during this rough ride, Eicher Motors has made its debut on the Dow Jones Sustainability Indices in the Emerging Markets category. Speaking on the move, Lal puts the focus on “effective and impactful Environmental, Social and Governance (ESG) vision.”
All eyes on how the motorcycle major and its gutsy CEO chart the course in the new year.