While there can be no risk of Reliance Industries Ltd chairman Mukesh Ambani not being able to make ends meet after he decided to take a 66% pay cut in 2008-09, his decision to practise some moderation needs to be seen in the right context.
Sure, Ambani still got paid Rs15 crore last year, and stands to earn dividend on his holding in Reliance (in 2008-09, he and other promoters earned at least Rs1,100 crore as dividend income), but his decision to take a pay cut is still welcome —even though it does come at a time when he and his estranged brother Anil Ambani are in the midst of a bitter legal and media battle where every bit of positive news helps.
Mukesh Ambani, one of the richest men in India—he owns a cricket team and once gifted his wife an Airbus 319 corporate jet—has decided to react to the ongoing debate on executive pay by pruning his own significantly. This makes his salary lower than those of CEOs at some lesser companies—ones that aren’t doing as well as Reliance. Will they follow suit?