In a bonanza for its independent directors, Reliance Industries has proposed to raise the commission payable to non-executive directors on its board from Rs 21 lakh (Rs 2.1 million) to an aggregate of Rs 5 crore (Rs 50 million) annually.
Besides paying a fixed sitting fees for attending the meetings of the Board of Directors or its Committees, RIL has proposed to its shareholders that the commission on profits to its independent directors be raised from Rs 21 lakh per annum to Rs 5 crore.
RIL has moved a resolution for raising the commission for consideration to its shareholders, who will put it for vote at the company's June 6 Annual General Meeting (AGM).
"...pursuant to the provisions of Sections 309, 310 and other applicable provisions, if any, of the Companies Act, 1956, the Non-Executive Directors of the company (i.e. Directors other than the Managing Director and whole-time Directors) be paid, by way of an annual payment, in addition to the sitting fees for attending the meetings of the Board of Directors or Committees thereof, a commission as the Board of Directors may from time to time determine, not exceeding Rs 5 crore per annum in the aggregate, for a period of five years from the financial year ending March 31, 2013," the resolution said.
"The aforesaid commission shall be paid to all such Directors in addition to the sitting fees paid to them for attending meetings of the Board and Committees thereof," RIL said.
The 13-member RIL board, headed by Chairman and Managing Director Mukesh D Ambani, has seven independent directors.
The non-executive directors include eminent lawyers Mansingh L Bhakta, Yogendra P Trivedi, former NTPC Chairman Dharam Vir apur, former bureaucrat Mahesh P Modi, former IIT Kanpur Director Ashok Misra, eminent scientist Raghunath A Mashelkar and former Dean of the Kellogg School of Management Dipak C Jain.
Besides Ambani, executive director's on RIL board include Nikhil R Meswani, Hital R Meswani, Ramniklal H Ambani, P M S Prasad and Pawan Kumar Kapil.
RIL said: "The role, responsibilities and participation of the Non-Executive Directors in the affairs of the company have increased over a period of time. The compensation payable to the Non-Executive Directors should therefore be commensurate with their increased role and responsibilities."
The company shareholders had at RIL's 33rd AGM held on October 12, 2007 approved payment of commission of Rs 21 lakh per annum to each non-executive director of the company for five years commencing from the financial year ending on March 31, 2008.
The independent directors took up between Rs 100,000 to Rs 340,000 as sitting fee during 2012-13, according to RIL annual report.