Report on Remuneration of the Governing and Control Bodies 102–35

Remuneration of the Board of Directors and Board committees

The Company adopted a short-term incentive system for the Board of Directors (see the Regulations on Payment of Remuneration and Compensation to Members of RusHydro's Board of Directors). The system relies on the following remuneration principles:

  • the Regulations are not applicable to the members of the Board of Directors who act (during their term in office as members of the Board of Directors whether partial or entire) as members of the Company’s collective executive body or as the Company’s sole executive body;
  • remuneration is not accrued or paid to the members of the Board of Directors for the period during their term in office as members of the Board of Directors when they were subject to restrictions or bans on receiving any payments from business entities in accordance with the applicable Russian laws;
  • remuneration is paid to the members the Board of Directors for the period from their appointment as members of the Board of Directors to the election of a new Board of Directors;
  • remuneration depends on the number of meetings attended;
  • base remuneration of a member of the Board of Directors is RUB 3.51 mn;
  • remuneration is increased if the member of the Board of Directors is Chairman of the Board of Directors (by 30%), Chairman of a Board committee (by 20%), Senior Independent Director (by 15%), or member of a Board committee (by 10%).

The Board of Directors annually adopts a resolution on the Recommendations to the Annual General Meeting of Shareholders Regarding Payment of Remuneration to Members of the Board of Directors Who are Not Public Officers in the Amount Set by the Internal Regulations.

The Regulations also provide for the possibility of reimbursing members of the Board of Directors for actual expenses related to participation in meetings of the Board of Directors and General Meetings of Shareholders in presentia. Compensation is paid by the Company in cash (Russian rubles) within 30 (thirty) business days after submission of the application and original documents. No applications for reimbursement of expenses were received from members of the Board of Directors during the reporting period.

The Company has no long-term incentive and stock option plans for the members of the Board of Directors in place.

The Remuneration Regulations define the amount of remuneration for directors who are members of the Board committees and set out the procedure for payment of such remuneration.

On September 30, 2020, RusHydro's General Meeting of Shareholders resolved to pay remuneration to the members of the Board of Directors for their services for the period from June 28, 2019 to September 30, 2020 in the amount, within the timeframes, and in accordance with the procedure set out in the Remuneration Regulations.Minutes No. 19 of October 2, 2020.

Board of Directors’ remunerationExcluding personal income tax.‘000 RUB
Type of remuneration 2018 2019 2020
Remuneration for membership in governing bodies 27,945.0 24,840.0 27,264.4
Salary 0 0 0
Bonus 0 0 0
Commissions 0 0 0
Other types of remuneration 0 0 0
Total 27,945.0 24,840.0 27,264.4
Personal remuneration of the Board of Directors in the reporting year, ‘000 RUB
Full name Meetings held Meetings attended Senior Independent Director Member of a Board committee Aggregate bonus Remune-ration Bonus Total remune-ration Remune-ration payablеExcluding personal income tax.
Maxim Bystrov 24 21 0 30% 30% 2,362.5 708.8 3,071.3 2,672.0
Pavel Grachev 24 24 15% 40% 55% 2,700.0 1,485.0 4,185.0 3,640.9
Lev Kuznetsov 24 24 0 30% 30% 2,700.0 810.0 3,510.0 3,053.7
Pavel Livinsky 24 22 0 0% 0% 2,475.0 0.0 2,475.0 2,153.3
Vyacheslav Pivovarov 24 23 0 50% 50% 2,587.5 1,293.8 3,881.3 3,376.7
Mikhail RasstriginRemuneration paid pro rata to the time served in the capacity of a public officer. 24 23 0 0% 0% 2,587.5 0.0 646.9 562.8
Nikolay Rogalev 24 24 0 40% 40% 2,700.0 1,080.0 3,780.0 3,288.6
Alexei Chekunkov 24 24 0 20% 20% 2,700.0 540.0 3,240.0 2,818.8
Andrey Shishkin 24 22 0 0% 0% 2,475.0 0.0 2,475.0 2,153.3
Total 23,287.5 5,917.6 27,264.4 23,720.1

Remuneration of the Management Board

Remuneration to members of the Management Board, including Chairman of the Management Board – General Director, is paid in accordance with the employment contracts and the Regulations on Payment of Remuneration and Compensation to Members of RusHydro's Management BoardApproved by the Company’s Board of Directors (Minutes No. 243 of November 14, 2016), amended as per Minutes No. 283 of February 21, 2019. .

In 2016, the Company engaged Ernst & Young (CIS) B.V. (Moscow branch), a global consultancy firm, to develop recommendations on remuneration for the collective executive and sole executive bodies in line with the best Russian practices. Market benchmarking of the remuneration structure and amount focused on major peer companies. The research results were used to revise the incentive system for the Management Board.

Since January 1, 2017, the remuneration system has become more transparent and is now directly linked to the achievement of the Company’s short- and long-term KPIs as recommended by the Nomination and Compensation Committee and approved by the Board of Directors.

The new incentive system relies on the following principles:

  • transparency, balanced approach (interests of shareholders are aligned with the management's interests in achieving the Company’s long- and short-term goals);
  • impartiality (the remuneration depends on the RusHydro's performance and outcomes from the implementation of significant projects).

The current remuneration system includes a Long-Term Incentive Plan for the Management Board linked to the growth in share price and achievement of KPIs set by the Company's Board of Directors. The Plan aims to ensure closer alignment of interests of the management and shareholders in delivering consistent growth of the Company's value and developing the business. The key objectives and principles underpinning the Plan are to motivate the Company’s management to achieve strategic objectives and pursue openness to shareholders as remuneration is dependent on the achievement of the KPIs, is calculated using the unified methodology and is based on equal payment conditions.

The amount and terms of payment of remuneration to the members of the Management Board upon early termination of employment are determined in the regulation on payment of remuneration and compensation to RusHydro's Management Board approved by the Board of Directors. The Company does not make “golden parachute” payouts for early termination. The maximum compensation paid to members of the Management Board upon early termination of employment is limited to three average monthly salaries as provided for by the Russian legislation.

Pursuant to the Regulations on Payment of Remuneration and Compensation to Members of RusHydro’s Management Board, members of the Management Board are reimbursed for:

  • hotel booking and accommodation costs, return tickets on business trips and other expenses associated with business trip assignments;
  • representation expenditures.

The members of the Management Board may receive other compensations associated with performing their job duties to the extent and in manner prescribed by the Company’s internal regulations.

Remuneration of the Management BoardIncluding personal income tax.‘000 RUB
Type of remuneration 2018 2019 2020
Remuneration for membership in governing bodies 0 0 0
Salary 157,616.6 172,190.2 181,072.6
Bonus 244,368.6 260,281.3 242,290.3
Commissions 0 0 0
Other types of remuneration 0 0 0
Total 401,985.2 432,471.5 423,362.9
Compensations 861.6 638.1 118.2

Remuneration of the Internal Audit Commission

Remuneration to members of the Internal Audit Commission is based on the following principles approved by the Regulations on Payment of Remuneration and Compensation to Members of RusHydro’s Internal Audit CommissionThe current version of the Regulations was approved by resolution of the Annual General Meeting of Shareholders (Minutes No. 19 of October 2, 2020). (the “Regulations”):

  • the remuneration and compensation are paid to members of the Internal Audit Commission for a corporate year (the period from the appointment of new members of the Internal Audit Commission at the General Meeting of Shareholders until the next General Meeting of Shareholders charged with considering election of new members to the Internal Audit Commission);
  • base remuneration is set at 15% of the average annual remuneration for a member of the Board of Directors;
  • remuneration is not accrued or paid to the members of the Internal Audit Commission for the period during their term in office when they were subject to restrictions or bans on receiving any payments from business entities in accordance with the applicable Russian laws. If any such restriction or ban is lifted on the grounds specified in the applicable Russian legislation, the remuneration shall be calculated from the date on which the Company’s Board of Directors is notified in writing of any such restriction or ban being lifted as per the Regulations;
  • remuneration is not paid to members of the Internal Audit Commission who attended less than 50% of meetings held during their term in office.

There are no agreements in place on the amount of remuneration to members of the Internal Audit Commission.

Remuneration of the Internal Audit CommissionExcluding personal income tax.‘000 RUB
Type of remuneration 2018 2019 2020
Remuneration for membership in a control body overseeing the Company’s financial and business activities 370.8 550.5 1,005.9
Expenses related to duties in the control body overseeing the Company’s financial and business activities and compensated by the Company 0 0 0
Individual remuneration packages for work in the Internal Audit Commission in 2020, ‘000 RUB
Member of the Internal Audit Commission Remuneration amount
Natalia Annikova 330.3
Tatyana Zobkova (Chair of the Internal Audit Commission)Remuneration was not paid as the member of the Internal Audit Commission is a public officer.
Denis Konstantinov 315.3
Igor Repin 360.3
Dmitry SimochkinRemuneration was not paid as the member of the Internal Audit Commission is a public officer.

Auditor’s fee

The auditor’s fee is determined by the Board of Directors based on the results of competitive bidding and after prior consideration of the matter by the Audit Committee under the Board of Directors of PJSC RusHydro.

Auditor’s fee, RUB mn (incl. VAT)
Type of remuneration 2018 2019 2020
Audit of the annual RAS financial (accounting) statements and IFRS consolidated statements 84.2 83.4 82.2
Non-audit services