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Mukesh pay cap stays at Rs 15 crore

Mumbai, May 9: Mukesh Ambani has capped his compensation package at Rs 15 crore for the third year running — even though he has turned Reliance Industries, the company, into a $58 billion juggernaut with a cash mountain worth $9.5 billion.

“The chairman and managing director’s compensation has been set at Rs 15 crore against Rs 38.75 crore that he is eligible under shareholders’ approval, reflecting his desire to continue to set a personal example for moderation in managerial compensation levels,” RIL said in its annual report for 2010-11 that is posted on the company’s website.

In October 2009, Ambani chose to take a 66 per cent pay cut at a time when salaries of corporate India’s top managers had come under the scanner with Prime Minister Manmohan Singh exhorting top executives to show some moderation in executive pay.

In 2007-08, Ambani’s salary stood at Rs 44 crore.

According to the company’s annual report, Mukesh Ambani’s salary was Rs 4.16 crore, commissions doubled to Rs 9.24 crore, retirement benefits fell to Rs 1 crore from Rs 5.6 crore while perquisites and allowances totalled Rs 60 lakh.

Under the Companies Act of 1956, the top manager in a company — in this case Mukesh Ambani — can be paid up to 5 per cent of the net profits of the company. The overall remuneration that can be paid to a cabal of top managers is capped at 10 per cent of net profits.

In the year ended March 2011, RIL had earned a net profit of Rs 20,286 crore.

In April 2008, shareholders of Reliance Industries extended Ambani’s tenure as chairman and managing director by five years. They also approved a monthly salary of Rs 5 lakh a month and perquisites and allowances of another Rs 4 lakh. In addition, he was entitled to a commission on the net profits and fees for attending board meetings. All of these components were clubbed under the 5 per cent cap.

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