Reliance Industries Limited (RIL) has announced pay cuts for employees of the hydrocarbon division as the business has suffered badly due to an unprecedented fall in oil prices consequent to the spread of COVID-19. Chairman Mukesh Ambani decided to forgo his full compensation for this year.
Hital Meswani, executive director, RIL, in a 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.”
Effective April 1, 2020, the board of directors, including executive directors and other senior leaders, will see a 30-50% cut in compensation, while the hydrocarbon division employees earning over ₹15 lakh a year will see a 10% pay cut. Performance-based pay and annual cash bonuses also stand deferred.
“We will closely monitor the economic and business environment, re-evaluate a response to the situation on a continuous basis,” Mr. Meswani said in his letter to RIL staff, dated April 29, 2020.
“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.” The Hindu has a copy of the letter.
Mr. Mukesh Ambani’s salary in 2018-19 stood at ₹15 crore, unchanged for the eleventh consecutive year.
The Reliance Industries board approved Mr. Ambani’s proposal to forgo his salary till the impact of COVID-19 abates.