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(Precious) Words of Wisdom : "Beware of little expenses. A small leak will sink a great ship." ~ Benjamin Franklin

Mukesh Ambani forgoes Rs.24 crore in salary - How Promoters and Media mislead people

As declared by Reliance Industries in its annual accounts for the FY 2012-13 "The Chairman and Managing Director's compensation has been set at Rs.15 crore as against Rs.38.93 crore he is eligible as per shareholders' approval reflecting his desire to continue to set a personal example in managerial compensation levels".

Accordingly, as widely reported by the media, by taking only Rs.15 crore Mr. Mukesh Ambani is forgoing Rs.24 crore as salary.

What a 'cruel' joke to play on the unsuspecting public!


As per the results declared for FY 2012-13, Reliance will pay out Rs.2628 crore as dividend.

As per the shareholding pattern as on Mar 31, 2013, promoter and promoter companies hold 45.35%.

This works out to Rs.1192 crore that Mr. Mukesh Ambani and his family and family-owned companies would receive as dividend.

So the seemingly huge sum of Rs.24 crore forgone by Mr. Mukesh Ambani works out to a mere 2%.

To put the numbers in perspective : Suppose your salary is Rs.50,000 p.m. i.e. Rs.6 lakh per annum. Then forgoing 2% would mean an amount of mere Rs.12,000. I guess you too can afford to forgo this petty amount (especially if you get this kind of publicity). So what's the big deal if Mr. Mukesh Ambani is doing so.

I am sure the so-called 'informed media' could have reported the dividend numbers too to give a right perspective to the news. 


By the way, these numbers pertain to Reliance Industries only. What about salary/dividends from the other group companies in the Reliance Group? 

(Also, as you may be aware, on salary the income tax is 30%, whereas dividend is taxed at 15% only.)

Of course, there are absolutely no issues with Mr. Ambani taking a Rs.1000+ crore payout. He fully deserves it. However, trying to take a moral high ground, on such an insignificant amount,is not in the right spirit.

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