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Shri Mukesh Ambani, Chairman and Managing Director, Reliance Industries Limited (RIL), has set a paradigm for moderation in executive pay by lowering his annual salary to two thirds i.e. from Rs. 44 crores in FY08 to Rs. 15 crores in FY09. Simultaneously, RIL, the largest private sector firm in India has announced new structure for salaries and remuneration of top executives wherein the pay packets would be capped, as against the prevailing system of commission linked to profits.
Due to this, Mr Mukesh Ambani, would get a lot less as compared to the top honchos heading companies with a size one tenth of RIL.
Indian Government has applauded Mukesh Ambani on his remarkable sensitivity towards the prevailing scenario. “What Mukesh Ambani has done is laudable…it’s a good decision,” said Corporate Affairs Minister Salman Khurshid, who recently sparked a debate on executive compensation by advising the industry to shun vulgar CEO salaries.
Last week, Reliance had announced a 1:1 bonus share issue and recommended an interim dividend of 13 rupees per share.
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