Remuneration System for Key Management

The key managers include members of the Board of Directors and the Management Board of Transneft (including the sole executive body of the Company) as well as directors general of significant Transneft subsidiaries.

Remuneration for the key management is governed by the regulatory documents adopted by Transneft. Control over the introduction and implementation of the Company's remuneration policy (including the payment) is exercised in accordance with the Systems and Regulations adopted by Transneft:

  • Regarding members of the Board of Directors, through resolutions of the Federal Agency for State Property Management (Rosimushchestvo)
  • Regarding members of the Management Board (including the Sole Management Body of the Company) and directors general of significant Transneft subsidiaries, through respective resolutions of the Board of Directors

Remuneration for Members of the Board of Directors

Remuneration is governed by the Regulations on Remuneration to Members of the Board of Directors of Transneft adopted by the Annual General Meeting of Shareholders (Order of the Federal Agency for State Property ManagementNo. 541-r dated 30 June 2015). No amendments were made to the said Regulations in 2018.

Members of the Board of Directors receive remuneration for participation in the operations of the governing body. Remuneration of the members of the Board of Directors is approved at the Annual General Meeting of Shareholders. According to the Regulations on Remuneration to Members of the Board of Directors, the remuneration consists of the following parts:

  • Fixed part (payable for exercising the powers of a member of the Board of Directors)
  • Variable part (payable for achieving the key performance indicators established by the Regulations)
  • Allowances for additional duties (payable to members of the Board of Directors for performing additional duties related to exercising the powers of the Chairman of the Board of Directors and work in the specialised Committees under the Board of Directors).

The remuneration paid to members of the Board of Directors in 2018 amounted to RUB 52,727 thousand.

Individual Remuneration to Members of the Board of Directors in 2018 (RUB thousand )
Member of the Board of Directors / Full Name Fixed Part Variable Part Allowances for Participation in the Committees under the Board of Directors Total
Matthias Warnig 1,080.4 5,646.2 672.7 7,399.3
Kirill Aleksandrovich Dmitriev 1,080.4 5,646.2 1,345.3 8,071.9
Nikolay Petrovich Tokarev 1,080.4 5,646.2 672.7 7,399.3
Valery Pavlinovich Shantsev 540.2 2,823.1 259.6 3,622.9
Genadii Iosifovich Shmal 1,080.4 5,646.2 2,017.9 8,744.5
Ilya Iosifovich Klebanov 1,080.4 5,646.2 2,017.9 8,744.5
Alexander Leonidovich Korsik 1,080.4 5,646.2 2,017.9 8,744.5
52,727.0

No separate remuneration was payable for the costs associated with the performance of the duties of members of the Board of Directors. Remuneration was not paid to the members of the Board of Directors who were subject to restriction or prohibition on receiving remuneration from commercial organisations (A. Novak and D. Vasilevskaya are public employees).

The remuneration paid to members of the Board of Directors over time ( RUB million)
Year 2016 2017 2018
Total 43.8 50.5 52.7

Remuneration for Members of Executive Bodies and Directors General of Transneft Subsidiaries

Members of the Management Board of Transneft are paid remuneration as employees of the Company, including monthly salaries and other payments determined by their employment agreements:

  • Performance-based remuneration payable to the sole executive body of the Company in accordance with the Regulations on Remuneration to the Sole Executive Body of Transneft Approved by resolution of the Board of Directors of Transneft on 23 April 2018, Minutes No. 5.
  • Annual performance-based remuneration payable to other Management Board members and to directors general of Transneft subsidiaries in accordance with the System for Annual Performance-Based Approved by the Board of Directors of Transneft on 15 December 2011, Minutes No. 18, as amended. Remuneration to the Managers and the Employees of Transneft and Transneft Subsidiaries, and with the Regulations on Annual Performance-Based Remuneration to the Managers and the Employees of Transneft and Transneft Subsidiaries . Approved by the Management Board of Transneft on 29 December 2011, Minutes No. 45, as amended.

In 2018, the key managers’ remuneration policy was not subject to any significant changes.

The total remuneration, benefits and compensation paid to the Management Board members of Transneft Including the sole executive body. in 2018 ( RUB thousand )
Types of Remuneration Amount
Remuneration for Participation in the Governing Body
Salary 537,224.2
Bonuses 783,284.7
Commission Fees
Benefits 128,452.9
Compensation of Expenses 22,587.9
Other Types of Remuneration
Total 1,471,549.7

No separate remuneration is payable for the performance of the duties of members of the Management Board, additional costs are not reimbursed. No remuneration on the basis of shares was paid at Transneft in 2018.

The remuneration paid to members of the Management Board over time ( RUB million)
Year 2016 2017 2018
Total 902.3 1,035.1 1,471.5

The total payments to directors general of significant Transneft subsidiaries The following companies are regarded as Essential Transneft subsidiaries: Transneft Siberia, JSC; Transneft Druzhba, JSC; Transneft Volga Region, JSC; Transneft Urals, JSC; Transneft Baltic, LLC; Transneft Upper Volga, JSC; Svyaztransneft, JSC; Transneft Kama Region, JSC; Chernomortransneft, JSC; Transneft East, LLC; Transneft Far East, LLC; Transneft Western Siberia, JSC; Transneft Finance, LLC; Transneft Security Services, LLC. reached RUB 511,667 thousand in 2018.