Independent Directors at a Discount
The Association of Independent Directors of Russia presented statistics yesterday that indicate that independent directors in Russia receive salaries of $70,000-250,000 annually. The sums have been falling and are now close to world averages. Several years ago, independent directors received extremely high salaries. In Gazprombank and Nortgaz, for example, they received $1-3 million.
Now, according to the association, independent directors at Norilsk Nickel receive $160,000, at Rosbank $85,000, at Rosneft $195,000, at GAZ $125,000 and at Evraz Group $150,000. Association head and member of the boards of MICEX and OGK-2 Alexander Filatov said that the pay situation began to change three years ago, when the “British” payment system, a set sum regardless of the performance of the company, began to give way to the “American” system, where compensation is dependent on the company's performance and at least 50 percent of it is paid in stock.
Norilsk Nickel, Tatneft, SUEK, LUKOIL, Gazprom, Northwestern Telecom, Baltica, Wimm-Bill-Dann and Sberbank are among companies that have maintained the British system, while AFK Sistema, VimpelCom, Polyus-Zolota, Severstal-avto and TMK have switched to the American system. Observers note that paying directors in stock helps bring the interests of the directors and stockholders closer. On the other hand, directors are usually prosperous professionals who may prefer to make their own stock ownership decisions.
www.kommersant.com
All the Article in Russian as of Dec. 19, 2007
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