Top business house Reliance Industries has given its chief Mukesh Ambani, the country's richest person and presumably top-paid executive, a hefty pay hike of about 45 per cent to take his annual remuneration to over $10 million.
Mukesh Ambani, chairman and managing director of Reliance Industries, got a total payout of Rs 44.02 crore (Rs 440 million) in financial year 2007-08, marking an increase of about Rs 13.5 crore (Rs 135 million) from the previous fiscal.
In fiscal 2006-07, Ambani's annual remuneration had increased to Rs 30.46 crore (Rs 304.6 million), from Rs 24.77 crore (Rs 247.7 million) previously.
However, a large part of Ambani's full-year pay cheque comes in the form of commissions that the company pays to select executives as a ratio of its net profits.
According to the company's annual report being sent to shareholders, Ambani got a salary of Rs 60 lakh (Rs 500,000 per month) and another Rs 48 lakh (Rs 400,000 per month) in the name of "perquisites and allowances".
In addition, he got Rs 18.75 lakh (Rs 1.9 million) under the head of "retiral benfits" and Rs 4,275.44 lakh toward commission on net profit, taking his total to Rs 4,402.19 lakh for 2007-08.
RIL chief was the top-paid executive in fiscal 2006-07, followed by Madras Cement's chairman and MD P R R Rajha, who had an annual payout of about Rs 24.8 crore (Rs 248 million).
However, Ambani, who was ranked as world's fifth richest by Forbes magazine earlier this year with a net worth of $43 billion, may not find a place even among the 200 most paid chiefs globally.
In a separate list, Forbes named Oracle's CEO Larry Ellision at the top of 500 most paid CEOs in the US with a pay cheque of $192.9 million. A total 177 CEOs in the list had a salary of over $10 million.
It is not yet clear whether Ambani would be highest paid executive in India for 2007-08, as most of the companies are yet to disclose the remuneration figures for that year.
Among the Indian companies that have disclosed their top-management salaries so far for 2007-08, managing directors of Merck, ICI India and Crisil have their annual pay cheques running into crores -- but they are way behind Ambani.
Merck's M Dziki got Rs 2.02 crore (Rs 20 million), while ICI India's Rajiv Jain and Crisil's Roopa Kudva got Rs 1.25 crore (Rs 12 million) and Rs 1.1 crore (Rs 11 million) respectively in the latest fiscal.
Mukesh Ambani has been CMD of RIL since July 31, 2002. His current term expires on April 18, 2009. RIL's board of directors at a meeting held on April 21, 2008 approved re-appointment of Ambani for a further five years at a remuneration determined by the concerned committee.
The shareholders would vote on these board decisions at the company's 34th AGM to be held on June 12, 2008.
Addressing the shareholders, Ambani said in the annual report that the company "set new records for turnover, net profits and dividend payout."
He said that RIL has become India's first private sector company to surpass cash profit of Rs 25,000 crore (Rs 250 billion) and net profit of Rs 15,000 crore (RS 150 billion).
"India's growth is creating wealth and jobs across the world. We are an integral part of this evolution and have the responsibility to accelerate India's growth by reinvesting our cash flow in our business," he wrote.
Ambani's pay hike of about 45 per cent is even higher than the rise in total managerial remuneration given by RIL in the latest fiscal.
RIL paid total managerial remuneration of Rs 67.53 crore (Rs 675 million) in 2007-08, up 43 per cent from Rs 47.14 crore in the previous fiscal. The figure stood at Rs 44.36 crore (Rs 443.6 million) in 2005-06.
The company paid its non-executive directors a total of Rs 1.85 crore (Rs 18 million) in the latest fiscal, up from Rs 1 crore (Rs 10 million) in 2006-07 but down from Rs 2 crore (Rs 20 million) in 2005-06.
The perquisites and allowances include accommodation or house rent allowance in lieu thereof, house maintenance allowance together with reimbursement of expenses for gas, electricity, water, furnishing and repairs, medical reimbursement, leave travel concession for self and family, club fees and medical insurance, among others.
However, reimbursement for expenses like business trips, car use for company business and residence telephone expenses are not considered as perquisites, although they would be reimbursed, the annual report said.