IndiGo CEO Ronojoy Dutta gets stock worth Rs 14 core through ESOP

This is over and above Dutta's last year's salary of Rs 11.9 crore which he has received till 31 December

IndiGo, country’s largest airline by market share, has proposed to issue 185,000 shares worth to CEO and whole time director Ronojoy Dutta, under the company’s Employee Stock Option Plan (ESOP).

The shares which can be exercised at a price of Rs 765 per share is worth Rs 14,15,25,000. Dutta can exercise 25 per cent of that at the end of first year, 35 per cent at the end of second year and remaining 40 per cent in December 2023 when his current tenure ends.

This is over and above Rs 11.9 crore of compensation that has been paid to Dutta by the company till December 31. The remuneration package was approved by the company’s shareholders in the Annual General Meeting of FY20 in September. The compensation also includes Rs 3.7 crore which Dutta is entitled to as commitment bonus.

The company, citing the reason to give ESOP to Dutta, said that the board felt that IndiGo is one of the leading airlines in the world which doesn’t grant stock options to its CEO. “A study analysing global airlines’ CEO compensation, revealed that the company is pretty much an outlier where the CEO does not have stock-based compensation that will encourage better long-term orientation. In order to better align CEO compensation with the Members’ interests, the Nomination and Remuneration Committee, at its meeting held on January 29, 2021, considered and approved inclusion of stock options (“Options”) in the remuneration of the Whole Time Director & CEO and approved the grant of 185,000 Options at an exercise price of Rs 765 per share,” it said.

According to the remuneration details provided by the company in its annual report, Dutta’s salary package includes a gross annual salary of $1.27 million, which would be payable in rupees. Also, he is entitled for a commitment bonus payout.

Dutta, who is a US citizen, is also entitled to eight business class tickets in a year beside benefits like medical and life insurance and accommodation.

Dutta, an aviation veteran, joined IndiGo first as a consultant and was appointed as its CEO in early 2019. He took charge as the whole-time director in January. Earlier, Dutta had served as president of Sahara Airlines and United Airlines.

IndiGo, like other airlines in the world, has been severely impacted by the Covid-19 pandemic. To mitigate it, the company laid off 10 per cent of their workforce besides implementing salary cut of up to 35 per cent