InvestorQ : Is it correct on the part of the shareholders to reject the reappointment of Siddharth *** as MD of Eicher Ltd?
Lavanya Subramanian made post

Is it correct on the part of the shareholders to reject the reappointment of Siddharth *** as MD of Eicher Ltd?

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Anamika Sodhani answered.
4 months ago
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Theoretically, there is nothing wrong because shareholders can exercise their right and institutional investors can and must take a lead. There are enough recent instances of this kind. Here is a sampler. Recently, Lupin shareholders had rejected the ESOP plan for employees. Similarly, Vedanta had rejected the proposal to induct UK Sinha into the board. In case of Eicher, investors had problems with a 10% hike in salary for MD in tough times.

There is a slightly more nuanced point to understand here. Eicher is up 14% in the last 5 years or just about 2.5% return per year, which is less than a savings bank account. If that was the argument, it is short-termism since Eicher had rallied 86 times between 2008 and 2016. If the argument was cost cuts in the pandemic, that that is a more acceptable argument for rejecting the Eicher special resolution.

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