Reliance Industries Limited (RIL) has announced pay cuts for the employees of the hydrocarbon division as the business has suffered badly due to unprecedented fall in oil prices due to spread of coronavirus ( COVID-19 ) even as chairman Mukesh Ambani has decided to forgo his full compensation for this year.
Also Read | Economy in lockdown: On India’s worst case scenario The pay cuts were announced even as Prime Minister Narendra Modi has urged the industry not to cut jobs even as companies struggle due to the crisis created by the pandemic and the subsequent nationwide lockdown .
Hital Meswani, executive director, RIL in letter to employees said, "The hydrocarbons business has been adversely impacted due to reduction in demand for refined products and petrochemicals. This has of course put pressure on our hydrocarbon business necessitating optimisation and cost reduction on all fronts. The situation demands that we maintain razor sharp focus on operating costs and fixed costs and all of us need to contribute to make this happen."
With effect from April 1, 2020, the board of directors, including executive directors and other senior leaders, will see a 30-50% deduction in their compensation while the hydrocrbons employees earning over ₹15 lakh per annum will see 10% pay cut.
Performance-based pay and annual cash bonuses also stands deferred. A RIL official confirmed to The Hindu about the pay cuts. So far, the pay cuts will affect the employees in the hydrocarbon division as no such announcement has yet been made about other businesses.
“We will closely monitor the economic and business environment, re-evaluate a response to the situation on a continuous basis and strive to improve the earning capacity of our business. The lockdown period has also provided us with several opportunities to reorganise ourselves and digitalise our business process to generate significant improvements in our productivity, efficiency and costs. Together we will embrace these opportunities and work towards restoring our compensation levels to normalcy,” said Mr. Meswani's letter dated April 29, 2020.
Coronavirus | Opeds and editorialsThe Hindu has copy of the Mr. Meswani's letter addressed to RIL employees. Mukesh Ambani’s salary in 2018-19 stood at ₹15 crore, unchanged for the eleventh consecutive years. Even as he forgoes his compensation, he would still be eligible for a hefty dividend payment for his shareholding in the company.
