Institutional Shareholders Of IndiGo Vote Against Stock Options For CEO Ronojoy Dutta
BloombergQuint is tracking institutional investor votes this proxy season—especially the proposals they vote against.
Majority of institutional shareholders of Interglobe Aviation Ltd., the parent of Indigo Airlines, have voted against a proposal to grant stock options to Chief Executive Officer and Whole-Time Director Ronojoy Dutta.
More than 61% of the institutional shareholder votes cast were against the plan to offer minimum remuneration to Dutta by granting stock options on April 10, according to data compiled by Institutional Investor Advisory Services.
Over a third of the non-institutional public votes cast were also against the resolution. The proposal, however, was passed due to promoter support 88% of the total votes were cast in favour of it.
IndiGo’s board proposed to grant 1.85 lakh stock options to Dutta under the company’s ESOP scheme. The stock options would serve as his minimum pay in case the company failed to make sufficient, or any profit during a financial year for the remainder of his tenure.
Granting stock options to Dutta is not new and only an extension of the same practice by IndiGo from the previous year. In the financial year ended March 2021, Dutta was granted the same amount of stock options that can be exercised at a price of Rs 765 per share, taking the total value to up to Rs 14 crore. All options need to be exercised within four years of being vested in three tranches.
This is over and above the Rs 8.2 crore that has been paid to him till Dec. 31, 2020. This includes a committed bonus of Rs 3.75 crore.
Dutta was appointed the CEO of the budget airline in early 2019. He took over as the whole-time director a year later. In FY20, Dutta received Rs 11.42 crore as remuneration. In addition, he had received Rs 5.6 crore as a commitment bonus payout, according to its annual report.