16% of Reliance Shareholders Reject Aramco Chairman’s Return as Independent Director

Reliance Industries’ shareholders have approved the reappointment of Yasir Othman H Al-Rumayyan, the Chairman of Saudi Aramco, as an independent director on its board for another five years. However, more than 16% of shareholders voted against this decision. In a stock exchange filing, Reliance stated that the reappointment of Al-Rumayyan, as well as the appointment of Haigreve Khaitan, were approved through a postal ballot. The reappointment of long-time executive P.M.S. Prasad as a director for another five years was also confirmed.

Key Vote Outcomes

The resolution for Al-Rumayyan’s reappointment was supported by 83.97% of the votes, while 16.02% were against it. Al-Rumayyan, who also leads Saudi Arabia’s Public Investment Fund—one of the world’s largest sovereign wealth funds—was first appointed to the Reliance board in 2021 for a three-year term, which ends on July 18, 2024. His new term will extend until July 18, 2029.

Legal Expertise on the Board

Haigreve Khaitan, a partner at Khaitan & Co, has been appointed as an independent director starting April 1, 2024, for a five-year term. However, nearly 13% of shareholders opposed his appointment. The resolution saw 87.15% support. Khaitan’s addition is intended to bring legal expertise to the board, filling a gap left since 2019 when the last legal professional, M.L. Bhakta, stepped down due to age. The company’s resolution emphasised the need for experienced legal professionals given the complexity of its operations and evolving regulatory environments.

Prasad’s Reappointment

P.M.S. Prasad, who is 72, was reappointed as an executive director through a special resolution due to his age exceeding the 70-year limit for ordinary resolutions. Prasad has been on the Reliance board since August 21, 2009, and currently oversees the company’s exploration, production, and refining businesses. His reappointment was approved with 93.69% of votes in favour and 6.3% against.

Directors’ Compensation

Both Al-Rumayyan and Khaitan will receive fees for attending board or committee meetings, reimbursement of related expenses, and a commission based on company profits. Prasad’s compensation includes a salary, perks, and allowances ranging from Rs 10 crore to Rs 15 crore per year, subject to annual increments set by the Human Resources, Nomination and Remuneration Committee. This package includes accommodation or a house rent allowance, maintenance costs, medical assistance, and travel allowances for him and his family. He will also be reimbursed for business-related travel expenses, including those for his spouse and attendants, and will have access to company-provided cars and communication facilities at home.

The Current Board

Reliance’s board is led by its chairman and managing director, Mukesh D. Ambani, and includes his three children—Isha, Akash, and Anant—as well as his cousins Hital Meswani and Nikhil Meswani. Independent directors on the board include former finance secretary Raminder Singh Gujral, former Booz & Company CEO Shumeet Banerji, former SBI chairman Arundhati Bhattacharya, former CVC K.V. Chowdary, and veteran banker K.V. Kamath.