Reliance Industries Limited, one of the top performing business conglomerates in the country, has announced salary cut for its employees of the Hydrocarbon business. As the Oil and Petroleum products have witnessed huge decline due to the lockdown owing to Corona Virus pandemic, the company’s business is said to be severely hit due to weak demand.
Notwithstanding government’s repeated requests to not announce salary cuts, the country’s most valued company too has joined the legion of corporate who announced pay cuts to its staff. Meanwhile, the top executives including the Board of Directors and the Executive Directors and other senior leaders of the company would get a pay cut ranging from 30 to 50 percent. The Chairman & Managing Director Mukesh Ambani has decided to forgo his entire compensation. Ambani’s salary in 2018-19 was Rs 15 crore, unchanged for the eleventh consecutive year. Even as he forgoes his compensation, he would still be eligible for a hefty dividend payment for his shareholding in the energy conglomerate.
The company’s staff working in its hydrocarbon business would suffer flat 10 percent cut in salary for the pay bracket above Rs 15 lakh per annum whereas the employees who are under below Rs 15 lakh compensation wouldn’t be touched which is a blessing in disguise.
The company has confirmed the same in its letter to its employees. “The hydrocarbon business has been adversely impacted due to reduction in demand for refined products and petrochemicals. This has of course put pressure on a hydrocarbons business necessitating optimization and cost reduction across all fronts. The situation demands that we maintain a razor sharp focus on operating cost and fixed costs and all of us need to contribute to make this happen,” Executive Director Hital Meswani said in the letter.
This is not all. The annual incentives and cash bonus and performance linked incentives too are deferred. Usually these are paid in the first quarter of a fiscal year. Meanwhile, the pay cuts are now confined to hydrocarbon business. Whether the salary cut is across all other businesses in the group or not is yet to be known.