IndiGo seeks shareholder nod for payment of salary to CEO Ronojoy Dutta

Approval from shareholders has been sought by way of a special resolution which will be put to vote at the company's annual general meeting on September 4

IndiGo Chief Executive Officer (CEO) Ronojoy Dutta, who recently took a 35 per cent pay cut, was paid Rs 11.4 crore in salary for FY20, the company disclosed in its latest annual report.

InterGlobe Aviation, which runs IndiGo, has sought shareholders’ nod for Dutta’s appointment as a whole-time director and CEO and remuneration payable to him for three years, including FY20.

The company said remuneration to be paid to Dutta required approval of shareholders by way of a special resolution in case of no profit or inadequacy of profit made by the firm. This is as per the provisions of Companies Act.

The resolution will be put to vote at the company’s annual general meeting on September 4.

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.

According to the annual report, Dutta’s remuneration 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.

In FY20, he received a remuneration of Rs 11.4 crore in his role as CEO and whole-time director. “Besides the remuneration paid to him during FY20, an amount of Rs 56.18 million (Rs 5.6 crore) has also been provided towards committed bonus as per the terms of the contract, being amount accrued till March 31,” the company said in its annual report.

IndiGo made a pre-tax loss of Rs 275 crore in FY20 largely contributed by a sharp reduction in air travel in the fourth quarter FY20. “Given the uncertainty, it is difficult to predict the timing of return to normalcy, but we are determined to come out of this crisis in a stronger position than when we entered,” Dutta said in his letter to the shareholders.

The airline’s focus has shifted from profitability and growth to cash management and liquidity. It has taken a series of cost-saving and efficiency measures, including salary cut, leave without pay, capacity right sizing, and renegotiation of vendor contracts. 

The airline hopes to generate Rs 3,000-4,000 crore from these measures.