Reliance Industries cuts employee salaries by up to 50%, freezes bonuses — Chairman Mukesh Ambani will forgo full compensation
- The pay cuts affect employees and senior leaders in Reliance’s hydrocarbon division.
- Employees earning less than ₹15 lakh per annum have been spared, while those earning more than ₹15 lakh will have to take a pay cut of 10% on fixed pay.
- Senior leaders will see a reduction of up to 50% of compensation, while Mukesh Ambani will forgo his full compensation.
- Annual cash bonus and performance-linked incentives have also been deferred.
According to a letter seen by Business Insider, employees who earn more than ₹15 lakh per annum will face a 10% reduction in fixed pay. Those with a pay of less than ₹15 lakh per annum have been spared from reductions, for now.
The reduction will be to the tune of 30-50% in the compensation to the Board of Directors including Executive Directors and senior leaders. The company’s chairman, Mukesh Ambani will forgo his entire compensation.
The letter cited the slowdown in hydrocarbon business has been the most affected due to Covid-19 as demand for refined petroleum and petrochemical products has declined. Added to that, the sudden decline in crude oil prices also alters the math for its Jamnagar refinery which is export-oriented.
Cash bonus and performance-linked incentives deferred
Annual cash bonuses and performance-linked incentives have also been deferred for the first quarter. Reliance said that this lockdown has offered it an opportunity to reorganize its businesses and digitalize its processors to improve efficiency and costs.
Reliance was scheduled to hold a meeting of its Board of Directors to approve the audited financial reports for the year ended March 31, 2020. Reliance is said to come out with a rights issue after many years in order to reduce its debt burden.
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