Reliance Industries chief Mukesh Ambani has capped his salary for the second straight year at Rs. 15 crore, less than half of what he is eligible to draw, while rest of the RIL top brass got a pay hike in FY’10.
“The Chairman and Managing Director’s compensation has been set at Rs. 15 crore as against Rs. 39.36 crore that he is eligible as per the shareholders’ approval, reflecting his desire to set a personal example for moderation in managerial compensation levels,” RIL has told its shareholders.
The remuneration for 2009-10 fiscal to Mukesh Ambani, the country’s richest person with a net worth of $ 29 billion and fourth wealthiest in the world as per Forbes magazine, is still higher than any other director of Reliance Industries.
But, all the existing executive directors of the company saw their pay packages increase from the levels in 2008-09, as per the latest annual report to the shareholders.
PMS Prasad, who played a crucial role in RIL’s legal battle with Anil Ambani group and became executive director in August last year, saw his remuneration rise to Rs. 1.53 crore.
The company’s total managerial remuneration rose to Rs. 40.90 crore in 2009-10, from Rs. 38.21 crore, while commission paid to non-executive directors fell from Rs. 1.89 crore to Rs. 1.75 crore.
The payment to key management personnel included Rs. 15 crore to Mukesh, unchanged from Rs. 15 crore in previous year, Rs. 11.14 crore each to Nikhil Meswani and Hital R. Meswani (up from Rs. 10.93 crore to each of them in 2008—09).
The remuneration paid to H. S. Kohli declined from Rs. 1.35 crore to Rs. 1.32 crore, but he is no more associated with the company and resigned on May 16, 2010. The remuneration rose from nil to Rs. 77 lakh to another former director R. Ravimohan, who passed away on December 28, 2009.
The company has appointed Pawan Kumar Kapil as an additional director, following Kohli’s resignation, with Rs. 50 lakh as salary and Rs. 75 lakh towards perquisites and allowances per annum.
At a time when there was a raging debate on right-sizing of CEO salaries, RIL announced in October last year that Mukesh Ambani would take a pay cut as a result of which his pay package dropped to Rs. 15 crore for 2008-09 fiscal from over Rs. 44 crore in 2007-08. Mukesh Ambani was the top-paid executive in India during 2007-08.
Days before Ambani’s decision, Corporate Affairs Minister Salman Khurshid had advised the industry to shun “vulgar” salaries and Planning Commission Deputy Chairman Montek Singh Ahluwalia had also agreed that there should be no “indecent” compensation. At that time, the company had also decided to adopt the capped structure method of deciding executive compensation in RIL, instead of pegging it as a percentage of net profit.
As per RIL’s latest annual report, the company paid higher amounts to its key managerial personnel in terms of salaries, perquisites and allowances, provident and superannuation fund contributions and gratuity provisions, but cut down heavily on commission payments.
The company paid total managerial salaries of Rs. 7.42 crore in 2009-10, up from Rs. 1.34 crore in previous year, perquisites and allowances of Rs. 5.57 crore (up from Rs. 1.66 crore), commissions of Rs. 19.94 crore (down from Rs. 34.23 crore).
Towards leave salary/ encashments, RIL paid Rs. 55 lakh (unchanged), contribution to provident fund and superannuation fund of Rs. 1.06 crore (up from Rs. 36 lakh) and gratuity provision of Rs. 6.36 crore (up from Rs. 7 lakh).
Mr. Mukesh’s pay included Rs. 4.16 crore as salary, Rs. 60 lakh as perquisites and allowances, Rs. 5.60 crore of retiral benefits and Rs. 4.64 crore as commission.
