New Delhi: Reliance Industries Ltd has announced that it will reduce the salaries of some of its employees in the hydrocarbon division by 10% t in view of the “adverse impact” of the coronavirus pandemic on fuel demand.
The company’s board of directors would forgo 30% to 50% of their salary, and Chairman Mukesh Ambani, India’s richest man, his entire compensation, according to a letter signed by Reliance Industries executive director Hital R. Meswani.
“The hydrocarbons business has been adversely impacted due to reduction in demand for refined products and petrochemicals … 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,” Meswani said in the letter.
“Our Chairman has agreed to forgo his entire compensation,” he added, referring to Ambani.
These pay cuts would apply to the employees in the hydrocarbon division who are earning more than Rs 15 lakh a year. Those earning less than that would not be impacted, the letter clarified.
The annual cash bonus and performance-linked incentives which are normally paid in the first quarter of a year have also been deferred.
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The letter said that the company would “closely monitor the economic and business environment,” and re-evaluate its response to the situation on a continuous basis “to improve the earning capacity” of the business.
It was not immediately clear whether other Reliance divisions were affected, but three of the sources said that the company’s telecom unit, Reliance Jio Infocomm, did not appear to have been impacted as of Thursday.
Reliance this week also said it would consider its first rights issue in almost 30 years, part of its broader commitment to eliminating net debt by March 2021. Reliance’s outstanding debt was about $43 billion at the end of last year.
(With inputs from Business Standard and Reuters)