Aramco Joins Saudi Companies Boosting Pay After Royal Orders

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Kuwait City/Riyadh: Saudi Arabian Oil Co. and some of the kingdom’s biggest companies said they’ll pay Saudi staff more money, matching a royal order that extended handouts to government workers to ease public discontent over rising prices.

Aramco, preparing for what could be the world’s largest initial public offering, will pay “eligible employees” an extra 1,000 riyals ($267) a month for one year beginning in January, it said in response to questions from Bloomberg. The payments will be for workers inside the kingdom who make 20,000 riyals a month or less, according to two people familiar with the decision.

Aramco joins some of the kingdom’s largest companies in the decision to temporarily boost wages after King Salman decided to pay Saudi civil servants an extra 1,000 riyals a month to ease the burden of austerity.

Saudi Basic Industries Co, Al Rajhi Bank and National Commercial Bank announced similar measures, according to Saudi-owned Al Arabiya television.

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Samba Financial Group, Saudi Research and Marketing Group, Saudi Electricity Co. and the local stock exchange are among other companies giving allowances to employees.

People who belong to the apprenticeship and college degree programme will get an extra 10 per cent of their monthly stipend over the same period, Saudi Aramco said.

The decision may not go down well with investors as Saudi Arabia seeks to sell as much as 5 per cent of the company. The share sale is part of Crown Prince Mohammad Bin Salman’s plan to set up the world’s biggest sovereign wealth fund and reduce the economy’s reliance on hydrocarbons.

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Investors considering the IPO “will look at efficiency and cost control” to achieve the best possible returns, said Tariq Qaqish, managing director of the asset-management division at Mena Corp. Financial Services LLC in Dubai. If Aramco wants to attract long-term investors, its management should watch key performance indicators closely, he said.

Source Credit: Gulf News


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