Remuneration of Members of the Executive Bodies and the Management in 2018
Remuneration of the Company’s management is paid in accordance with the Regulation on Labour Incentives for the Management.
The Regulation sets forth the amount and procedure of remuneration payable to the CEO, First Deputy CEOs, Deputy CEOs, First Deputy CFO, executive officers in business lines, the Chief Accountant and the Chief Engineer (21 key executive officers).
Incentives for the management are aimed at increasing management efficiency, achieving the Company’s strategic goals, and retaining qualified personnel based on the following key principles:
- transparency in determining the amount and the structure of total remuneration;
- simplicity of calculating the amount of total remuneration;
- competitiveness in terms of the level and the structure of remuneration;
- striking a balance between the interests of shareholders and the management.
Total remuneration (the incentives package) of the management consists of a fixed part of the remuneration (basic salary or fixed wages) established by the employment contract and a variable part of the remuneration including bonuses and long-term incentives (employee stock plan), as well as other payments stipulated by labour legislation of the Russian Federation, the Collective Bargaining Agreement or local regulations.
The level of remuneration of the management is determined depending on the levels of remuneration observed in the labour market for positions that are comparable to those of the management.
|Item||Fixed part of the remuneration (salary/wages and other types of remuneration)||Variable part of the remuneration (bonuses)|
|Total amountTotal amount means the amount of wages payable excluding in-kind income before withholding taxes and other deductions in accordance with the Regulation on Labour Incentives for the Management. (Total amount paid to members of the Executive Board.) paid as remuneration to members of the Executive Board (including the CEO) in 2018, RUB Total, RUB|| Salaries & wages || Other types of remuneration || || || |
|Total amountTotal amount means the amount of wages payable excluding in-kind income before withholding taxes and other deductions in accordance with the Regulation on Labour Incentives for the Management. (Total amount paid to the management, including members of the Executive Board.) paid as remuneration to the management (including the Executive Board and the CEO) in 2018, RUB||Salaries & wages 176,420,339.60||Other types of remuneration 95,968,604.61||117,460,645.86||186,226,427.74||(45,000,000.00)|
|Purpose||Competitive basic incentives package to attract and retain highly qualified managers||Incentives for the management to steer the Company towards short-term financial and production targets||Incentives for the management to meet corporate and individual key performance indicators (KPIs)||Incentives for achieving strategic objectives established by the Board of Directors, certain projects and/or key works of a nonsystematic nature|
|Description||The fixed part of remuneration is determined based on the manager’s knowledge, experience, role in the Company and the level of remuneration in the labour market||Bonuses are paid subject to the Company’s and each manager’s performance in the reporting quarter||Full-year bonuses are paid subject to meeting KPIs. The amount of each manager’s full-year bonus is determined as the product of the fixed part of remuneration and the sum of coefficients that assess the manager in terms of meeting corporate and individual KPIs||The amount of a one-off bonus is determined by the Board of Directors depending on the significance, complexity, and achievement of the strategic objective|
|Terms of payments||Monthly||Quarterly||Annually||After the Board of Directors has decided to pay a one-off bonus|
|Maximum possible payments||Determined in the manager’s employment agreement||CEO – 3.5x of the fixed part of quarterly remuneration; managers – 1.5x of the fixed part of quarterly remuneration||Full-year bonus at 100% of the fixed part of annual remuneration. For calculating an additional full-year bonus, the maximum percent of meeting the net income target is 150%.||–|
In 2017, total remuneration of key executive officers stood at RUB 485,647,300.16, including the remuneration of the CEO and members of the Executive Board in the amount of RUB 257,827,507.56.
In 2018, total remuneration of key executive officers stood at RUB 621,076,017.87Total remuneration of 31 key executive officers of the Company during the reporting period (including staff changes in the Company)., including the remuneration of the CEO and members of the Executive Board in the amount of RUB 344,983,550.00.
In the reporting period, there were no loans extended by the Company to members of the Executive Board.