With Zomato likely to file its draft red herring prospectus or DRHP anytime soon, the company has rewarded its co-founder and CEO Deepinder Goyal with fresh equity options and appointed him the Managing Director for the next five years.
In a special resolution passed in an extraordinary general meeting held on April 5, the board approved the allocation of 36.85 lakh options to Goyal out of the total 50.25 lakh options outlined in its ‘Zomato Employee Stock Option Plan, 2021’.
Post this allotment, Goyal will hold 5.53% of the issued capital after considering the proposed bonus issuance and conversion of all classes of preference shares.
According to Entrackr’s exclusive report in August 2020 – he held 7.7% stake in Zomato at that time. Since then the company has raised a significant amount of capital, hence his stake would also have been diluted.
Besides the allotment of options under the new share plan, regulatory filings sourced from MCA show that Goyal has been appointed as the MD of the company for five consecutive years – from March 24, 2021, to March 23, 2026.
The conditions of appointment include the payment of remuneration inclusive of base salary up to Rs 3.5 crore which may be increased from time to time.
Importantly, Goyal has sent a waiver letter, waiving his rights to receive basic salary for a period of 36 months from April 2021 and the company’s board have taken that on record.
While Zomato didn’t offer any comment on the reasons for this, it appears to be a good move by the company’s top executive.
According to some analysts, Goyal’s letter further invigorates the faith of all stakeholders and employees in Zomato.
“Technically, promoters of most of the IPO bound companies continue to withdraw salaries. Goyal’s decision is unusual and shows that he wants to be paid once the company gets established as a stable public company,” said one of the analysts requesting anonymity.
The Gurugram-based firm has accelerated its pre-IPO process from early April. It had converted into a public limited entity last week and finalised a clutch of bankers including Kotak Mahindra Bank, Morgan Stanley, Citi Bank, Credit Suisse and Bank of America as bankers for the IPO.
Entrackr had exclusively reported these developments on April 14.
According to Entrackr’s sources, Zomato Limited is likely to file its DRHP on Tuesday or Wednesday next week. Zomato declined to answer specific queries on the timeline of DRHP.
On Friday, Goyal also revealed the company’s eight board members including five independent directors: Kaushik Dutta, Aparna Popat, Gunjan Tilak Raj Soni, Namita Gupta, Sutapa Banerjee and two non-executive directors: Sanjeev Bikhchandani and Douglas Feagin.