Reliance Cuts Pay At Oil & Gas Unit, Mukesh Ambani To Forgo Entire Salary
Reliance Industries Ltd. has announced pay cuts for employees in its hydrocarbons business with Chairman Mukesh Ambani forgoing his entire salary till the ongoing Covid-19 pandemic abates.
The board of directors and all other senior executives of the company will take a 30-50 percent reduction in their salaries, RIL said in an internal note to its staff. Employees in the oil and gas unit earning over Rs 15 lakh per annum will take a 10 percent pay cut; those below this threshold will remain unaffected.
The annual cash bonuses and performance-linked incentives, normally paid in the first quarter of the year, have been deferred. The cuts will be effective from April 1, 2020.
According to RIL’s annual report for 2019, Asia’s richest man Ambani’s annual compensation stood at Rs 15 crore. It has remained unchanged since 2009.
The pay cuts at India’s most valuable company show how the lockdowns triggered by the coronavirus outbreak across the globe have left businesses reeling. RIL expects a sharp fall in oil demand and prices to impact the company.
“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 hydrocarbons business necessitating optimisation and cost reduction across all fronts,” RIL’s internal note said. “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.”
On Thursday, RIL shares rose 2.60 percent to Rs 1,464.00 apiece on the National Stock Exchange while the benchmark Nifty 50 gained 3.21 percent to end the day at 9,859.90 points.