Hero MotoCorp, a leading player in the automotive industry, is set to reduce Chairman Pawan Munjal’s fixed salary by 20%. This decision, as per the company’s statement filed with the stock exchange, reflects Hero MotoCorp’s commitment to evolving its corporate governance structure.
Separation of Chairman and CEO Roles
In 2023, Pawan Munjal undertook an essential step to separate the roles of Chairman and CEO. As a result, a CEO was appointed to lead the two-wheeler manufacturer. Munjal’s annual salary, as disclosed in Hero MotoCorp’s most recent annual report, amounted to INR 99.6 crore in the fiscal year 2023, marking an 18% increase from the previous fiscal year.
Approval by Hero MotoCorp’s Board
The proposed pay cut by Pawan Munjal received the green light from Hero MotoCorp’s board. This decision aligns with the recommendations provided by the Nomination & Remuneration Committee. The updated remuneration for the Executive Chairman will become effective on January 1, 2024.
Robust Financial Performance
Hero MotoCorp also revealed a robust financial performance, reporting a 47.6% increase in consolidated Profit After Tax (PAT), which amounted to INR 1,007.04 crore in the September quarter. This impressive growth was primarily driven by higher revenue. In the prior fiscal year, the company had reported a consolidated PAT of INR 682.28 crore. The revenue generated from combined operations during Q2FY24 stood at INR 9,533.07 crore, representing an increase from INR 9,158.23 crore in the corresponding period of the previous year.
Positive Market Trends
Hero MotoCorp’s Chief Executive Officer, Niranjan Gupta, noted that the strong demand during the festive season, particularly in the auto sector, exemplifies the market’s resilience. The return of consumer confidence is seen as a positive indicator for future growth momentum.