Moderation Pays

On the Rs 23.5 crore salary cut of an Ambani

So there I was sipping my morning tea and reading my morning newspaper when my eye chances on this news item. My throat goes dry, my heart races a little faster and a solitary tear at the edge of my left eye asks for permission to come out. Reliance Industries Chairman and Managing Director Mukesh Ambani, says the single column article on the front page, has taken a salary cut for the third year running. He is entitled to Rs 38.5 crore but has been content with just Rs 15 crore—a Rs 23.5 crore cut.

I go to Google News and key in ‘mukesh salary’. There are reams of links all saying the same thing— Mukheshbhai wants to ‘…set a personal example for moderation in managerial compensation levels’. Now, if he had been a banker, I would have decidedly felt different. Till January, Vikram Pandit, the CEO of Citibank, had earned just one dollar per year since 2009, but you never saw me shed a tear for him. He’s an overlord of that once magical land that floated Ponzi schemes and then used them to nuke itself.

Reliance Industries, though, has a compounded annual growth rate of 23 per cent in net profits over the last decade. To ‘forgo’ so much after delivering so much—that was something. I almost let the tear on my left eye come out. But then I found myself wondering—if only Rs 15 crore goes into Ambani’s salary slip, where will the remaining Rs 23.5 crore go? Presumably, it would be added to the topline (the turnover) and since Reliance is a profit-making company, it would latch itself to the bottomline. Reliance’s promoters, its annual report told me, own 44 per cent of RIL. So I found myself asking this—technically, isn’t 44 per cent of what Ambani is forgoing going back to his family? It’s not hard cash, but then Reliance Industries puts it to good use in making Ambani comfortable.

For example, housing. Antilla, the high-rise in south Mumbai into which Ambani moved some time ago. And then, what about the private jet(s)—that’s not coming out of conveyance allowance, right? But these were the envious murmurs of a doubting mind. I mostly agree with Ambani. What is important is to set an example in moderation. If I had a skyscraper, a private jet and 44 per cent of a Rs 310,000 crore company, I would take salary cuts all the time.

About The Author

Madhavankutty Pillai

Madhavankutty Pillai has no specialisations whatsoever. He is among the last of the generalists. And also Open chief of bureau, Mumbai  

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