IndiGo CEO consents 2-year non-compete post his retirement in September

InterGlobe Aviation, the parent company of IndiGo CEO Ronojoy Dutta, who will be stepping down in September ahead of his tenure, has agreed to an enhanced two-year non-compete period wherein he will not engage with any similar business or in competition with the company.

Dutta is to step down as the Whole Time Director and CEO of InterGlobe Aviation, the parent of the country’s largest airline IndiGo, on September 30 whereas his current tenure is till January 23, 2024.

On Tuesday, August 30, the company said it will seek shareholders’ approval for the remuneration of Dutta for this fiscal “as minimum remuneration in the event of absence or inadequacy of profits”.

IndiGo CEO consents 2-year non-compete post his retirement in September

The e-voting on the proposal will be open from August 31 to September 29 and the results will be declared on or before October 1.

According to the filing, Dutta has agreed to an enhanced non-compete period of two years as against one year that was originally agreed to after stepping down.

Under the non-compete restrictions, “he shall not engage with any business or allied business that is in any way similar, identical or competitive with the business, activities or services of the company, or with customers or suppliers of the company with whom he had any contact during his employment”.

Further, the restrictions would apply in the event Dutta is engaged in the Indian (domestic) aviation sector or providing consultancy services to an entity engaged in the Indian (domestic) aviation sector with any airline or potential airline within 4,800 kilometres of India, as per the filing.

Pieter Elbers has been appointed as Ronojoy Dutta’s successor after Ronojoy Dutta decides to retire by September.

Dutta was appointed as CEO in January 2019.

ALSO READ – IndiGo appoints Pieter Elbers as new CEO after Ronojoy Dutta decides to retire by September

Pieter Elbers has been appointed as Ronojoy Dutta’s successor after Ronojoy Dutta decides to retire by September. He will be joining IndiGo on or before October 01, 2022.

Elbers has served as the President & Chief Executive Officer of KLM Royal Dutch Airline since 2014. Elbers is also a member of the Executive Committee of the Air France – KLM Group.

Shareholders of InterGlobe Aviation had approved Dutta’s annual fixed salary.

The filing also said that as per the original terms of appointment, Dutta was required to serve a six-month notice period but at the management’s request, “he (Dutta) agreed to be relieved by serving 4.5 months of notice thereby foregoing 1.5 months of notice pay”.

Shareholders of InterGlobe Aviation had approved Dutta’s annual fixed salary. “This notice pay is calculated based on 4.5 months (from May 15, 2022, to September 30, 2022) of the annual fixed salary amounting to Indian rupees equivalent to USD 393,000,” it noted.

Also, Dutta is currently taking a pay cut of 17.5% and the same would apply while calculating his notice pay. The bonus payable to him has been approved by the shareholders and is due to be paid in December-end and the amount will be equivalent to USD 1,270,000. Besides, there will be an accelerated payment for stock options.

InterGlobe Aviation posted a net loss of INR 1,065.4 crore in the three months ended June, mainly due to the depreciating rupee and higher fuel prices.

In the filing, the company said that independent of financial performance for FY 2022-23, it may have inadequate profits for managerial remuneration, considering the losses accumulated over the last two financial years, which were driven by the impact of the pandemic on operations.

“Apart from the pandemic, the recent geopolitical developments have led to a significant increase in fuel prices and depreciation of the rupee. All these factors together materially impacted the company’s financial performance resulting in significant accumulated losses during the period of FY2021 through FY2022,” the filing said.

ALSO READ – IndiGo reports net loss of INR 1,064 crore in Q1

InterGlobe Aviation posted a net loss of INR 1,065.4 crore in the three months ended June, mainly due to the depreciating rupee and higher fuel prices.

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