Ambani succession plan: Children to receive board meeting fees, no salary

Billionaire Mukesh Ambani's three children, who are set to become directors of Reliance Industries Ltd, will be compensated solely through fees for attending board and committee meetings, as stated in a resolution requesting shareholder approval for their appointment to the board.

While Mukesh Ambani himself has not drawn a salary from the company since the 2020-21 fiscal year, other executive directors, including his cousins Nikhil and Hital, receive salaries, perquisites, allowances, and commissions.

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No Salary for Mukesh Ambani's Children

Ambani's three children—twins Akash and Isha (both 31 years old) and Anant (28 years old)—will receive sitting fees and a commission based on the firm's profits.

Their appointment terms are in line with those of Ambani's wife, Nita Ambani, who joined the company's board in 2014. She earned a sitting fee of Rs 6 lakh and a commission of Rs 2 crore in the 2022-23 fiscal year, according to the company's latest annual report.

Mukesh Ambani announced at the company's annual shareholders meeting last month that his three children would join Reliance's board of directors. He also stated that he would continue as the company's chairman and CEO for another five years, focusing on grooming and empowering the next-generation leaders.

Reliance has now sent out a postal ballot to shareholders to seek approval for their appointment as board directors. They will be remunerated through fees for attending board meetings, expense reimbursements, and profit-related commissions, as stated in the notice.

Ambani first unveiled a succession plan for the conglomerate in 2022, with each of his three children slated to head various divisions of the company. However, the succession plan for Reliance's core oil-to-chemicals (O2C) division has not been revealed.

At the annual general meeting last month, Reliance shareholders approved Ambani's five-year term extension as the head of India's most valuable company. Ambani has opted not to receive a salary for this period, continuing a trend he started in FY21 due to the COVID-19 pandemic.

As part of the succession planning, Nita Ambani resigned as a director of Reliance but has been made a permanent invitee to all board meetings, a status none of the other directors enjoy. Mukesh Ambani and other directors require shareholders' approval for any extension beyond their current approved terms, but Nita will continue on the board indefinitely.

Isha holds 0.12% equity shares of the company, and Mukesh Ambani owns 41.46% of Reliance shares.

Akash heads India's largest telecom company, Jio, and spearheads the development of products and services leveraging new-age technologies.

Anant is responsible for the expansion of Reliance's energy and materials businesses, as well as its global operations in renewable and green energy.

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Both Akash and Isha have been on the boards of directors of both Jio and Reliance Retail since October 2014. Anant is on the boards of retail and Jio, in addition to firms focused on new energy businesses.

Mukesh Ambani has been a member of Reliance's board since 1977 and became chairman of the company in July 2002 after his father's passing.

He capped his annual remuneration at Rs 15 crore from FY08-09 to FY20 and, since FY21, chose not to receive a salary due to the pandemic until the company and its businesses returned to their earnings potential. The company's board has recommended that he continue to forego a salary and profit-based commission from April 19, 2024, to April 18, 2029.