Billionaire Mukesh Ambani’s three children as directors of Reliance Industries Ltd will be paid only a fee for attending board and committee meetings, the company said in a resolution seeking shareholder nod for their appointment on its board.
While Ambani, 66, drew nil salary from the company since the 2020-21 fiscal year, other executive directors including his cousins Nikhil and Hital are paid a salary, perquisites, allowances and commission.
His three children – twins Akash and Isha (both 31) and Anant (28 years) – will get only a sitting fee and a commission on the profit earned by the firm.
The terms of the appointment of the three are the same as the ones on which Ambani’s wife Nita was appointed to the company board in 2014. She earned a sitting fee of ₹6 lakh and a commission of ₹2 crore in the 2022-23 fiscal year (April 2022 to March 2023), according to the company’s latest annual report.
Ambani, 66, had at the company’s annual shareholders meeting last month announced that his three children Akash, Isha and Anant would be inducted into Reliance’s board of directors (BoD).
He also stated that he would continue to be the chairman and CEO of the company for five more years, with a focus on grooming and empowering its ‘next-gen’ leaders.
Reliance has now sent out a postal ballot to shareholders seeking a nod for their appointment as board of directors of the company.
“They shall be paid remuneration by way of fee for attending meetings of the Board or Committees thereof or for any other meetings as may be decided by the Board, reimbursement of expenses for participating in the Board and other meetings and profit-related commission,” the notice said.
Reliance has five broad verticals – the oil-to-chemical (O2C) business that houses the world’s largest single-location refining complex and petrochemical plants, telecom and digital business, retail (both physical and online), new energy, and recently launched financial services.
Ambani first talked of a succession plan at the oil-to-telecom conglomerate in 2022, where he announced that each of his three children would head various divisions of the company (Akash to head telecom, Isha to head retail, and Anant to head new energy).
He did not divulge the succession plan for Reliance’s mainstay oil-to-chemicals or O2C business division.
Reliance shareholders at the annual general meeting (AGM) last month gave a nod to Ambani getting another five-year term till 2029 as the head of India’s most valuable company. And just like the past three years, he has opted to draw nil salary during this period.
As part of the succession planning, Nita resigned as a director of Reliance but she has been made a permanent invitee to all board meetings – a status which none on the board enjoy – Mukesh Ambani and other directors need shareholders’ nod for any extension beyond their current approved terms but she will continue on the board in perpetuity.
Isha, a graduate of Yale University with a double major in Psychology and South Asia Studies and an MBA from Stanford University, “is driving the expansion of Reliance Retail into new categories, geographies and formats,” the shareholder notice said.
“She has been instrumental in the expansion of Reliance Retail’s own brand portfolio including the acquisition of some exciting Indian brands and launch of the ‘Independence’ brand,” it added.
Isha directly holds 0.12 per cent equity shares of the company.
Ambani owns 41.46 per cent of Reliance shares.
Akash, an economics graduate of Brown University, US, heads India’s biggest telecom company Jio. “At Jio, he spearheads the creation of products and services that leverage new-age technologies like 5G, Artificial Intelligence, Blockchain and the Internet of Things,” it said.
Anant, also a graduate of Brown University, “is driving the expansion of energy and materials businesses of Reliance and its global operations in renewable and green energy.”
“Under his leadership, Reliance aims to become a Net Carbon Zero company by 2035 by building world-scale capabilities in the production of clean fuels and materials of the future, developing next-generation carbon capture and storage technologies, creating holistic and circular materials businesses, and maximising crude to chemicals conversion,” the notice said.
Akash and Isha have been on the board of directors of both Jio and Reliance Retail since October 2014. Besides being on the boards of firms helming new energy businesses, Anant is also on boards of retail and Jio. Isha has been appointed director on the board of Jio Financial Services.
Mukesh Ambani has been on the board of Reliance since 1977 and was elevated as chairman of the company after the death of his father and group patriarch Dhiburhai Ambani in July 2002.
He had capped his annual remuneration at ₹15 crore from financial year 2008-09 (April 2008 to March 2009) to FY20 – 11 years; and since FY21, he opted to forego his salary, due to the COVID-19 pandemic, until the company and all its businesses were fully back to their earnings potential.
Accordingly, he has not been paid any salary and profit-based commission for three years in a row beginning FY21.
At his request, the company Board has recommended that no salary or profit-based commission be paid to him for the new term from April 19, 2024, till April 18, 2029.
The remuneration of his cousins Nikhil and Hital Meswani rose to ₹25 crore each, including ₹17.28 crore commission (unchanged from the previous fiscal year), according to the annual report for 2022-23.
Executive Directors P M S Prasad and Pawan Kumar Kapil saw their remuneration rise.
While Prasad drew ₹13.50 crore in 2022-23 including performance-linked incentives for 2021-22 which was paid in 2022-23. In 2021-22, he drew ₹11.89 crore.
Kapil got ₹4.40 crore, up from ₹4.22 crore in 2021-22. He completed his 5-year term on May 15, 2023, and has since ceased to be a director of the company.
Ambani’s wife Nita, a non-executive director on the company’s board, earned ₹6 lakh as a sitting fee (up from ₹5 lakh in 2021-22) and another ₹2 crore commission for 2022-23 (unchanged from the previous fiscal). She had in 2020-21 got ₹8 lakh sitting fee and another ₹1.65 crore commission.
Besides Nita Ambani, other non-executive directors include Dipak C Jain, Raghunath A Mashelkar, Adil Zainulbhai, Raminder Singh Gujral, Shumeet Banerji, former SBI chairperson Arundhati Bhattacharya, former CVC K V Chowdary and Saudi sovereign wealth fund nominee Yasir Othman H Al Rumayyan. All independent directors got a ₹2 crore commission and sitting fee.
K V Kamath who was appointed on the Reliance board in January 2023 was paid a sitting fee of ₹3 lakh and a commission of ₹39 lakh.