Mukesh Ambani Caps Pay at 15 crore Again

At a time of global angst against unbridled CEO compensation, Mukesh Ambani, chairman and managing director of Reliance Industries, India's largest private sector enterprise has voluntarily decided to cap his compensation at . 15 crore, even though he has shareholders' approval to earn 61% more. 

Ambani has the approval of his company's 3.4 million shareholders to earn up to . 38.8 crore from RIL, where he is the chief promoter. However, "reflecting his desire to continue to set a personal example for moderation in managerial compensation levels," his compensation has been yet again capped at . 15 crore, the annual report for the financial year 2011-12 revealed. 

Ambani first announced his intention to moderate his compensation at . 15 crore in 2009, around the time when the world was reeling under the global financial crisis which saw the governments in Europe and the US shoring up their economies with multi-billion dollar bailout packages. 

Since then, RIL's net profit has risen 28% to . 20,040 crore. However, a better comparison of how RIL fared during FY12 can be gauged by studying its share price. It has trailed the Sensex by a huge margin. RIL shares have shed 28.6% during the year, when the benchmark Sensex lost only 10.50%. For a two-year comparison, RIL shares lost 30.4% compared with the Sensex's 0.7% loss. 

Moreover, Ambani and his family own 44.8% of RIL, thus compensation for India Inc's first family in terms of wealth is loose change for India's wealthiest man. Dividends alone would earn the family . 1,244.3 crore for the financial year 2011-12.

Mukesh Ambani