Remuneration to Members of the Board and Committees

Remuneration Policy

In 2016, the Shareholders’ Assembly adopted the current Policy for Remunerating Members of the Board of Directors and Members of Committees of the Board of Directors. The Policy provides that the remuneration should be attractive and competitive to attract and retain the persons meeting professional and other criteria required for the Company as members of the Board of Directors and members of the Committees of the Board of Directors. At the same time, the remuneration should not significantly deviate from the compensation paid to members of the Board of Directors and members of the Board of Directors Committees in other companies with the same or similar activities, size and scope of operations.

Remuneration for executive directors

The remuneration policy provides that remuneration for executive directors is specified under an employment contract or another contract of hire for each executive director of the Company, without them receiving any compensation for membership on the Board of Directors and Committees of the Board of Directors, except for the compensation of costs and professional liability insurance in connection with the membership and work as part of the Board of Directors and its Committees.

Remuneration Structure

The remuneration policy policy stipulates that the remuneration consists of:
• Fixed portion;
• Reimbursement of expenses and
• Liability insurance of members of the Board of Directors and Committees of the Board of Directors.

Fixed (permanent) portion of the remuneration to members consists of a fixed portion of the annual membership fee for the Board of Directors and the fixed annual fee for participation in the Committees of the Board of Directors. Such type of remuneration includes the fee for the time and effort of the members of the Board of Directors or members of the Committees of the Board of Directors, with respect to their role and is related to the preparation and active participation in the meetings of the Board of Directors or Committees of the Board of Directors, which requires the members to study the documents in advance, be present and take an active part in the meetings.

Reimbursement of expenses – Members of the Board of Directors and Committees of the Board of Directors are entitled to reimbursement for all expenses incurred in connection with their membership on the Board of Directors or Committees of the Board of Directors, within the limits of norms determined by internal corporate acts.

Liability insurance of members of the Board of Directors – Members of the Board of Directors are entitled to liability insurance (Directors & Officers Liability Insurance) in accordance with internal corporate acts.

Amendment to the Remuneration Policy

In order to maintain the remuneration at an appropriate level, the Remuneration Policy is subject to periodic reviews and analyses, and should reflect the needs, abilities and interests of the Company and other changes in relevant criteria. As recommended by the Remuneration Committee, the Shareholders’ Assembly Meeting adopted the current Remuneration Policy for the members of the Board of Directors and Committees of the Board of Directors on 28 June 2016, when the previous policy version ceased to apply.

Remuneration Committee Report

At least once a year, the Remuneration Committee prepares a report on the assessment of the amount and structure of remuneration for the Shareholders’ Assembly of the Company. Acting within its competence, the Remuneration Committee carries out the evaluation of the adequacy of the amount and structure of remuneration of members of the Board of Directors against the principles, framework and criteria defined by the current Remuneration Policy.

Long-Term Incentive Programme

The long-term incentive programme for non-executive directors and members of governing bodies is subject to separate Rules on the Long-Term Incentive Programme for Non-Executive Directors and Members of Governing Bodies, which lay down the programme’s underlying principles and parameters.

The programme is one of the key elements of the incentive system for non-executive directors and members of governing bodies of the Company, aimed at stimulating non-executive directors and members of governing bodies towards the fulfilment of the Company’s long-term objectives.

The purpose of the long-term incentive programme is to create a link between the interests of programme participants and the long-term interests of the Company and Company Shareholders, ensure incentives for programme participants enabling a sustainable development of the Company in the long run and the fulfilment of its strategic objectives, which incentives, in turn, reflect the possibilities and requirements of the Company and are tied to the positive performance of the Company during a period sufficient to establish that an added value has been made for Company Shareholders.

The long-term incentive programme is divided into consecutive cycles. Programme parameters and method of inclusion into the programme are defined in advance in the foregoing Rules, whereas the premiums are paid following the completion of a full cycle.

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