Washington/New Delhi: Bank of America has given shares worth nearly Rs 11 lakh to Mukesh Ambani as part of annual retainer fee to the billionaire industrialist, who joined the US banking giant’s board last month.
Ambani may get a total of over Rs 1 crore of annual compensation in cash and stocks, going by the bank’s director compensation policy.
However, the bank has not disclosed its specific director fees for Ambani, chief of energy giant Reliance Industries.
Emailed queries sent to Bank of America and Reliance Industries remained unanswered on what would be Ambani’s exact remuneration for his role as a director.
Ambani leads one of India’s biggest corporate groups with presence spanning across energy, retail and telecom businesses and plans underway for financial services entry.
As chairman and managing director of RIL, Ambani was paid Rs 15 crore for the financial year ended 31 March, 2010.
He has decided to take a lower salary than his eligibility of Rs 39.36 crore, as per shareholders’ approval, to reflect “his desire to set a personal example for moderation in managerial compensation levels.” The salary figure for the fiscal ended 31 March, 2011, is not yet known.
Bank of America has informed the US market regulator SEC that it has allotted 1835 Bank of America shares, worth over $24,500 (about Rs 11 lakh), to Ambani as a “portion of the annual retainer” payment to its directors.
Bank of America appointed Ambani as an independent director on its board on 16 March.
Ambani is the first non-American to join the board of one of the world’s largest financial institutions, which currently commands a market value of over $ 136 billion and had a revenue of more than $111 billion last year.
The bank has said that it would benefit from Ambani’s expertise in “risk management and strategic planning across a diverse range of businesses, including energy, information and communications technology, and retail networks.”
The Bank has sought shareholders’ approval for Ambani’s appointment in its upcoming AGM on 11 May.
As per the document sent to the shareholders for this AGM, the bank pays a total of $2,40,000 (over Rs 1 crore) to its non-management directors in cash and stocks.
This includes a cash award of $80,000 and restricted stock award of USD 160,000. The stocks are allotted under the Bank of America Corporation Directors’ Stock Plan, which restricts sale of these shares within one year of allotment.
The directors joining mid-year get the pro-rated amount of this annual compensation package for the first year.