Mukesh Ambani to forgo salary, Reliance Industries sees pay cuts

The compensation for the company’s Board of Directors has been reduced by 30-50%.
Mukesh Ambani to forgo salary, Reliance Industries sees pay cuts
Mukesh Ambani to forgo salary, Reliance Industries sees pay cuts

The COVID-19 pandemic seems to have hit the richest man in Asia and his company too. Reliance Industries, led by Mukesh Ambani has announced pay cuts for senior executives and employees in the Hydrocarbons business, with Mukesh Ambani forgoing his entire salary until the impact of COVID-19 abates. 

Along with pay cuts, employees in Reliance Industries will see bonuses and performance-linked incentives being deferred.

In an internal note accessed by TNM, Reliance Industries said that apart from Ambani, the company’s board of directors, including Executive Directors, EC members and senior leaders will see a 30-50% cut in pay.

Ambani’s salary has been Rs 15 crore unchanged for the past 11 years. Despite forgoing his salary, Ambani is still reportedly eligible for a huge dividend payment for his holding in the company.

“Reliance is no stranger to facing adversities and even in the current situation we have ensured that all our manufacturing sites continue to run at near capacity levels and our supply chains are re-engineered for business continuity,” Hital Meswani, Executive Director and Board Member of Reliance Industries said in the note.

The pay cuts will not affect those earning less than Rs 15 lakh per annum. Those earning more will see a 10% cut in fixed pay.

“Annual Cash Bonus and Performance Linked Incentives normally paid in the first quarter stand deferred,” Reliance said.

The note said that the hydrocarbons business was adversely impacted due to reduction in demand for refined products and petrochemicals.

“This has of course put pressure on our Hydrocarbons business necessitating optimisation and cost reduction across 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,” he added.

These measures are effective from April 1.

The company said in the note that it will closely monitor the economic and business environment, re-evaluate its response to the situation on a continuous basis.

The pay cuts come close on the heels of the conglomerate announcing a massive $ 5.7 billion investment from Facebook into its telecom and digital business Reliance Jio.

The energy to telecom conglomerate is set to announce its financial earnings for Q4 of FY20 and for the entire fiscal year on Thursday.

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