Calculation of remunerations paid to the Board of Directors
Description of the procedure, applied prior to 18.06.2015:
The RegulationsNo.56-ref envisage criteria, used for determination of amount and intervals of remunerations paid to the Company’s Board of Directors and amount of compensated Board-related expenses.
Pursuant to the Regulations, remunerations, paid to the Board of Directors, had fixed and variable components and comprised 3 payment categories:
- Per-meeting remuneration (to be paid if a director visits a Board meeting).
- RAS net-profit remuneration.
- Market-value remuneration (to be paid if Company’s market value increases during the Board’s tenure).
Description of the procedure, enforced since 18.06.2015:
The Annual General Meeting of Stockholders, conducted on 18.06.2015, adopted Amended and Restated Regulations of Remunerations and Compensations paid to the Board of Directors at IDGC of Urals (OAO). 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 paid 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, paid to each Board member, 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 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.
The Regulations can be found at our corporate web-site (Section “Incorporating Documents and Bylaws”.
Calculation of remunerations paid to the Executive Board and General Director:
As stated by the charter, the Board of Directors or an entity duly authorized by the Board, perform rights and duties of employer with regard to the Executive Board on behalf of the Company. Conditions of labor contracts (incl. amount and payment procedures) of the executive directors are determined by Sergey Georgievich Dregval, the Chair of the Executive Board, as assigned by the Board of Directors.
The system of C-Suite’s KPIs includes achievement of objectives and goals, envisaged by the strategyNo.1-ref. The Board of Directors has approved and enforced the GD’s KPI calculation and evaluation methodology since 01.01.2015. The structure and target KPIS for 2015 are presented in the table below:
|Structure||Target KPIs for 2015|
|Plateauing of large-scale incidents (1Q – 4Q)||Plateauing, ≤ 3|
|Plateauing of casualties (1Q – 4Q)||Plateauing, ≤ 0.0354|
1Q≤ 0.90 (B-level credit profile)
2Q≤ 0.89 (B-level credit profile)
3Q≤ 0.90 (B-level credit profile)
4Q≤ 0.89 (B-level credit profile)
|TSR (total shareholder return)||≥ average value for companies comprising the MICEX PWR index as of the year-end (≥__%), or ≥ average value of TSR for the last 3 preceding years (≥-22.55%)|
|Reduction of per-unit opex||≥ 18.14|
|Loss level||≤ 7.9|
|Achievement of service reliability||1|
|Reduction of per-unit investment expenditures||≥ 15%|
|Fulfilment of commissioning schedule||≥ 95%|
|Compliance of connection terms||≤ 1.1|
|Labor efficiency||≥ 2,265|
Total remunerations and/or compensations on each governing body:
|Type of remunerations, RUB thous..||Board of Directors||Executive Board|
|TOTAL||12 620.23||80 814.197|
The table represents remunerations of the Board of Directors paid to all directors serving on the Board during the reported period. No compensations were paid to the Board of Directors and Executive Board.