PJSC Tatneft. Annual report 2017
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PJSC Tatneft. Annual report 2017

Remuneration for members of Management bodies

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The Board of Directors defines the Company policy on remuneration and/or reimbursement of expenses (compensation) for members of the Board of Directors, executive bodies, and other key managers of the Company.

Remuneration of members of executive bodies and other key managers of the Company is defined so that to ensure reasonable ratio between fixed and variable part of remuneration, the latter depending on performance of the Company and individual contribution of the person.

Committee for remunerations consisting of independent directors and headed by an independent director who is not the chairman of the Board of Directors was established to carry out preliminary assessment of issues relating to developing efficient and transparent remuneration practices.

While developing the remuneration system and determining the specific remuneration amount for members of management bodies of the Company, it is assumed that remuneration should be sufficient to attract, motivate, and retain persons with expertise and qualifications required by the Company.

The remuneration system is based on the rules and recommendations contained in the Corporate Governance Code in view of the Company’s current practice of calculating remuneration and compensation.

The Company seeks to establish remuneration for members of the Board of Directors depending on their contribution to the development of the Company. An adequate level of remuneration promotes involvement of highly qualified candidates and should ensure compensation for their time and efforts spent on preparation of and participation in meetings of the Board of Directors.

The management remuneration system is being formed with a view to the strategic goals of the Company, that has set the task to double the value of the Company by 2025.

The incentives for management policy of the Company is aimed at establishing a unified remuneration system with the variable part tied to key performance indicators reflecting successful achievement of the strategic goals of the Company.

Remuneration for members of the Board of Directors

Remuneration for members of the Board of Directors of TATNEFT is paid in accordance with the «Regulation on Payment of Financial Remuneration to Members of the Board of Directors and the Revision Committee of TATNEFT.» Remuneration for members of the Board of Directors consists of a fixed and a variable part. The fixed part of the remuneration is set out in the Regulation and is subject to indexing along with changes in rates and wages of TATNEFT employees.

The variable part of the remuneration for members of the Board of Directors depends on the following key indicators:

  • The ratio between the capitalization level of the Company at the year-end as compared to the previous year
  • The ratio between dividend expenses and net profits (as compared to the previous year)
  • The size of additional profitability as compared to baseline profitability

Amounts of remuneration for members of the Board of Directors are fixed by decision of the General Shareholders’ Meeting and include, in particular:

  • Remuneration for performing duties of a member of the Board of Directors
  • Remuneration for performing functions of the Chairman of a committee of the Board of Directors

In 2017, the total amount of remuneration for members of the Board of Directors of the Company was RUB 167,240,111.13, including remuneration for participation in activities of the Board of Directors, salaries, bonuses, and other types of remuneration. Compensation for members of the Board of Directors of the Company was RUB 6,962,787.31.

Payments to members of the Board of Directors in 2017
Выплаты членам Совета директоров за 2017 год RUB
Remuneration for participation in work of a management body 121,801,186.00
Salary 16,178,367.65
Bonuses 29,044,554.91
Commissions 0
Other types of remuneration 216,002.57
Compensation 6,962,787.31

Remuneration for members of the Management Board

Payments to members of the Management Board are made in accordance with the principal conditions of the agreements regarding obligations of a member of the Management Board.

In 2017, the total amount of remuneration for members of the Management Board of the Company was RUB 170,252,627.44, including remuneration for participation in the work of the Management Board, salaries, bonuses, and other types of remuneration.

Compensation for members of the Management Board of the Company was RUB 786,635.

Payments to members of the Management Board in 2017
Payments to members of the Management Board in 2017 RUB
Remuneration for participation in work of a management body 8,663,911.00
Salary 80,950,652.20
Bonuses 79,525,100.72
Commissions 0
Other types of remuneration 1,112,963.52
Compensation 786,635.00