Remuneration and compensation policy
CALCULATION OF REMUNERATIONS DUE TO THE BOARD OF DIRECTORS
The Annual General Meeting of Stockholders, conducted on 18.06.2015, adopted Amended and Restated Regulations of Remunerations and Compensations due to the Board of Directors at OAO IDGC of Urals. In compliance with the Regulations remunerations comprise a lump sum payment for participation in the Board activities and additional payment from the net profit if Company’s market value increases during the Board’s tenure.
The exact amount of remunerations due to each Board member for the service shall be calculated, factoring in the total number of Board meetings conducted during the previous corporate year and number of attended meetings. The basic amount of remunerations (Rbase) shall be set upon the annual RAS revenues of the Company. The following increments shall be added to the remunerations: 30% for the Board Chair, 20% for the Chair of a Board Committee, 10% for a membership in a Board Committee. Increments for the Chair and/or membership in a Board Committee shall not be paid in case there were less than three Board meetings during the corporate year. Overall remunerations and increments shall not exceed Rbase. Remunerations shall not be paid to a Board member, if such member missed more than 50% of Board meetings (conducted during his service).
Additional remunerations, due to each Board member, for the increased market value of the Company shall total 0.0175 per cent of increased market value of the Company (IMC), calculated for a period between his/her election and election of a new Board. IMC remunerations shall be paid only if average monthly traded value of the Company’s common shares during the Board’s tenure totals at least RUR 1.5 mn. Overall remunerations, paid to the Board members, shall not exceed 5% of RAS annual net profit. Remunerations shall be paid within 60 days since the annual general meeting. Remunerations shall not be charged and paid to the Board Chairperson and members, subject to legal restrictions or prohibition of any allowances from businesses.
Meeting-related expenses of a Board member shall be reimbursed in compliance with Company’s trip reimbursement rates existing at the moment when a meeting was conducted. Compensations shall be paid within three business days since the filing of documents certifying incurred costs.
Visit “Incorporating Documents and Bylaws” Section of our official web-site to view the Regulations.
CALCULATION OF REMUNERATIONS DUE TO THE EXECUTIVE BOARD AND GENERAL DIRECTORS.
Achievement of Company’s priorities is assessed by the KPI system. OAO IDGC of Urals General Director’s KPI system was set by the Apr.03, 2017 Board of Directors resolution with regard to agenda item No.10 “Adoption of the Company’s General Director KPI Calculation and Evaluation Methodology to be enforced in 2017”. The resolution established the following FY2017 KPI composition and targets:
Key Performance Indicators
|The list of KPIs||FY2017 targets|
|EBITDA||3,6,9M ≥ 0;
12M ≥ 5.3%
|Consolidated Net Debt / EBITDA||1, 2, 3, 4 quarter ≤ 3.0|
|Completion of receivables reduction action plan||≥ 100.0%|
|Plateauing of large-scale incidents||plateauing|
|Plateauing of the number of people injured in accidents||plateauing|
|The list of KPIs||FY2017 targets|
|Consolidated net cash flow||≥ RUB 833.0 million|
|Reduction of per-unit opex||≥ 3.0%|
|Enhancement of grid facility load||done|
|Electricity loss level||≤ 8.05%|
|Reduction of per-unit investment costs||≤ 1.00|
|Increase in labor productivity||≥ 4.48%|
|Efficiency of innovative activities||≥ 90%|
|Compliance with the facility launch schedule||≥ 90%|
|Compliance with connection terms||≤ 1.1|
|Service reliability||≤ 1.00|
At the time of report preparation, the Board of Directors has not approved real KPI values, with due regard to the timeline of the reports used for their calculation. The FY2017 values cannot be compared with the previous periods due to the revised methods used for setting targets and calculating real KPIs. The KPI system enforced by the Company is coupled with variable remuneration of the management: each indicator has its own weight, quarterly and annual remunerations are to be paid as long as the relevant KPIs are completed.
Total remunerations and/or compensations due to each governing body:
|Type of remunerations, RUB thousand||Board of Directors||Executive Board|
Amount of individual annual remuneration due to each Board of Directors member, Company’s expenses on D&O insurance:
The Board of Directors members receive service remunerations and reimbursement of meeting-related expenses. FY2017 payments to the Board of Directors are as follows:
- Sergey Aleksandrovich Semerikov: RUB 1,254 thousand (service remunerations) and RUB 313 thousand (reimbursement of meeting-related expenses).
- Aleksandr Nikolayevich Fadeev: RUB 1,341 thousand (service remunerations) and RUB 60 thousand (reimbursement of meeting-related expenses).
- Natalya Aleksandrovna Ozhe: RUB 1,341 thousand (service remunerations).
- Yury Vladimirovich Goncharov: RUB 1,272 thousand (service remunerations).
- Yakov Savelyevich Tesis: RUB 1,111 thousand (service remunerations).
- Yulia Vitalyevna Yascheritsyna: RUB 1,272 thousand (service remunerations).
- Vladimir Vladimirovich Sofyin: RUB 1,341 thousand (service remunerations) and RUB 91 thousand (reimbursement of meeting-related expenses).
- Aleksandr Viktorovich Shevchuk: RUB 1,341 thousand (service remunerations).
- Roman Avgustovich Dmitrik, RUB 1,341 thousand (service remunerations).
In 2017 the Company has not insured directors’ liability.
Total annual remunerations of:
- at least 5 top-paying members of executive bodies and other key management personnel, with a breakdown by category of remunerations;
- all executive bodies and other key management personnel covered by the Company’s remuneration policy, with a breakdown by category of remunerations:
Information in clauses a) and b) covers a group of the Executive Board members, net of the General Director. Total remuneration of the Executive Board members in 2017 is RUB 58,671 thousand:
- service remuneration: RUB 18,059 thousand.
- extra pay (security pay): RUB 181 thousand.
- bonuses (one-time, quarterly and annual): RUB 26,202 thousand.
- vacation pay: RUB 7,134 thousand.
- sickness benefits: RUB 53 thousand.
- regional salary coefficient: RUB 5,235 thousand.
- Reimbursement of rental expenses: 1,807 thousand.
Total annual remunerations of the sole executive body received or to be received from the company (legal entity from the group of entities to which the company belongs) with a breakdown by category of remunerations for the SEB and other services:
Total remuneration of the SEB (General Director) in 2017 is RUB 55,125 thousand, namely:
- service remuneration: RUB 34,164 thousand.
- extra pay (security pay): RUB 792 thousand.
- bonuses (one-time, quarterly, annual and other proceeds): RUB 13,600 thousand.
- vacation pay: RUB 5,252 thousand.
- regional salary coefficient: RUB 1,317 thousand.
Information on borrowings (loans) issued by the company (legal entity from the group of entities to which the company belongs) to the Board of Directors and Executive Board members, compliance of borrowing terms with market terms:
The Board of Directors and Executive Board members received no borrowings and loans in 2017.