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Mukesh Ambani earns Rs 864,000 a day!
October 01, 2007 18:29 IST
Last Updated: October 01, 2007 19:39 IST
Top corporate honcho Mukesh Ambani makes close to Rs 1,000 every second for his flagship company Reliance Industries [Get Quote] and, in turn, gets a reward of one per cent of this additional profit or Rs 10 per second.
The paycheck of Ambani, already the richest Indian and highest paid corporate chief in India, got fatter by over Rs 5 crore (Rs 50 million) to Rs 30.46 crore (Rs 304.6 million) in the financial year 2006-07.
This represents an increase of Rs 2 per second from his previous fiscal's paycheck of Rs 24.77 crore (Rs 247.7 million), reveals RIL's annual report for 2006-07 currently being sent to investors.
However, the hike of more than 20 per cent has come along with a jump of about 32 per cent in RIL's net profit to Rs 11,943 crore (Rs 119.43 billion) in the latest fiscal, as against Rs 9,069 crore (Rs 90.69 billion) in the previous year. The company's turnover also rose by over 32 per cent to Rs 1,18,354 crore (Rs 1183.54 billion) in the year.
"RIL has become first and only private sector company to record turnover of over Rs 1,00,000 crore (Rs 1000 billion) and net profit exceeding Rs 10,000 crore (Rs 100 billion)," the company's annual report quoted Ambani as saying.
The company's "excellent performance" has cemented its position as the largest private sector enterprise in terms of revenue, profit, net worth, assets and market cap, he added.
Earlier this month, RIL became India's first company to achieve a market cap of more than Rs 3,00,000 crore (Rs 3000 billion).
The hike of over Rs 5 crore (Rs 50 million) in Mukesh Ambani's annual remuneration further extends the gap from the annual paycheck of his younger brother Anil, with whom he separated in June 2005, to more than Rs 27 crore (Rs 270 million).
Anil's annual pay as chief of four group firms, Reliance Energy [Get Quote], Reliance Communications [Get Quote], Reliance Natural Resources Ltd [Get Quote] and Reliance Capital Ltd [Get Quote], totals to less than Rs 3 crore, according to their annual reports.
In terms of pay per second, Anil Ambani's pay comes out to be about Rs 1 for the fiscal year 2006-07. There are about 3.15 crore seconds in a year. The two brothers were taking equal salary of about Rs 21 crore (Rs 210 million) till they were together.
However, Mukesh Ambani's salary has grown much bigger by virtue of higher profits clocked by his company, even though it has cut the percentage of net profit doled out as key managerial payments.
In 2006-07, RIL's salaries and other payments for MD and executive directors was calculated at a rate of 0.402 per cent of net profit. In the previous year it was 0.67 per cent till June 18, 2005, the day the two brothers reached a settlement to go separate ways, and 0.402 per cent per annum thereafter.
Mukesh Ambani was accompanied by two other key top-level executives -- executive directors Nikhil Meswani and Hital Meswani -- to get a pay hike. Hardev Singh Kohil, also an Executive Director, however, took a pay cut of about Rs 35 lakh to get Rs 1.15 crore (Rs 11.5 million).
Nikhil, responsible for RIL's petrochemicals and polyester businesses, got a hike of Rs 1.46 crore (Rs 14.6 million) to take his annual paycheck to Rs 7.77 crore (Rs 77.7 million). Hital, responsible for petroleum business, also got a similar hike to Rs 7.76 crore (Rs 77.6 million) in 2006-07.
RIL paid Rs 47.14 crore (Rs 471.4 million) in total managerial remuneration, up from Rs 44.36 crore (Rs 443.6 million) in the previous year. Besides, it paid Rs 1 crore (Rs 10 million) as commission to non-executive directors, half of the Rs 2 crore (Rs 20 million) paid in 2005-06.
While the salary component came down to Rs 1.3 crore from Rs 1.41 crore in the previous year, the commission rose to Rs 43.59 crore (Rs 435.9 million) from Rs 40.22 crore (Rs 402.2 million).
Payments like perquisites, contribution to provident and superannuation funds, leave salary/encashments and gratuity provision came down, while RIL also took into account sitting fees paid to erstwhile IPCL [Get Quote] directors last fiscal.