After rewarding its shareholders with a 1:1 bonus issue, Reliance Industries is offering performance-linked incentives to its employees this Diwali, though lower than last year’s.
A RIL official, speaking on condition of anonymity, said they received the incentives this week. He said this time incentives ranged between 2.5-7.5% of the annual compensation, half of last year’s pay out. RIL employees generally get the incentives in April.
Last year, the company launched a drastic cost cutting and belt-tightening initiative to combat the global economic slowdown. Code named Mission Kurukshetra, the exercise was aimed at cutting costs across all its major industrial operations—from refineries to petrochemicals, oil exploration to retail—as well as across the value chain.
A senior RIL official confirmed that incentives were being paid to employees. He said: Mission Kurukshetra paid off well. He, however, declined to comment on the quantum of cash outgo for payment of incentives. RIL has nearly 25,000 employees. An external spokesperson for RIL declined to comment. Mukesh Ambani, RIL’s chairman, last week took a pay cut of 66% to Rs 15 crore for fiscal year 2008-09.
RIL recently announced that each shareholders would get a free share for every share they held, first time after a gap of 12 years. It also announced a 130% dividend pay out to the shareholders.
Mr Ambani had said the bonus offer was to reward the shareholders on completion of two world class projects— a new refinery at Jamnagar SEZ and the gas project at Krishna Godavari basin on the eastern coast. Analysts believe that these two projects will start generating strong cash flow for RIL.