Board of Directors of JSOC Bashneft
Board of Directors of JSOC Bashneft
Annual report JSOC Bashneft 2013
120
Annual report JSOC Bashneft 2013
121
ABOUT
THE COMPANY
OPERATING RESULTS
CORPORATE GOVERNANCE
APPENDICES
INFORMATION FOR
SHAREHOLDERS AND INVESTORS
By level of significance and
impact on current operations
of JSOC Bashneft
By % of JSOC Bashneft stake
100% ownership
(2 subsidiaries)
<100% ownership
(2 subsidiaries
and affiliates)
100% ownership
(>20 subsidiaries)
<100% ownership
(<5 subsidiaries and
affiliates)
Key decision-making level
Board of Directors
of Bashneft
Board of Directors
of Bashneft
Management Board
of Bashneft
Management Board
of Bashneft
Non-key decision-making level
President of Bashneft / Management bodies of subsidiaries and affiliates
Instruments
Making decisions
on AGM/EGM issues
Define the position
on AGM/EGM issues
Making decisions
on AGM/EGM issues
Define the position
on AGM/EGM issues
Management matrix for subsidiaries and affiliates
Remuneration of JSOC Bashneft’s Directors
Procedures governing the determination and payment of fees and compen-
sation to directors are set out in the Regulations on Remunerations and
Compensations Payable to the Members of the Board of Directors of JSOC
Bashneft (“Regulation”). The Regulations were amended twice in 2013 (in
June and December) by decision of the General Meeting of Shareholders,
in order to reflect directors’ role, commitment, and individual contributions
to JSOC Bashneft’s operations.
Under the Regulations, remuneration and compensation for serving on the
Company’s Board of Directors are paid to directors who are not employed
by and do not serve on management bodies of:
· companies forming part of the Group’s parent group (as defined in the
Federal Law on the Protection of Competition), and/or
· affiliates of the companies that form part of the Group (as defined in the
Federal Law on the Protection of Competition).
Since June 2013 the Company has applied a differentiated index to reflect
time independent directors spend on work for the Board of Directors and
committees. The amount of director fees payable to non-resident directors
is set at 130% of fees calculated in line with the general terms stipulated
in the Regulations.
Through its flexible approach to Board member remuneration, the Com-
pany is ideally placed to attract directors who are top professionals and
who boast extensive experience in leading international oil companies.
The Regulations on Remu-
nerations and Compensa-
tions Payable to the Members
of the Board of Directors
of JSOC Bashneft are avail-
able on our website:
CORE
AUXILIARY
Fees payable to directors of JSOC Bashneft comprise the following components:
Fee type
Fee amount
Payment procedure
Basic fee
· A fixed fee of US$48,000 for a corporate year.
· A fee for participation in Board meetings – from US$2,200 to US$4,300
per meeting, depending on the format of the Board meeting and the
form of director’s participation therein.
The total amount of the basic fee shall not exceed US$100,000 for
a corporate year.
Payable in cash, monthly (a fixed fee
– in equal instalments throughout the
corporate year, a fee for participation
in Board meetings – depending on direc-
tors’ actual participation in the meetings
of the Board of Directors).
Fee for participation in the
meetings of the Committees
of the Board of Directors
· From US$250 to US$500 for each Committee, meeting depending
on its format and the form of the director’s participation therein, but
not more than US$4,000 per quarter.
· For the Chairman of any Board committee other than the Project
Assurance Committee – US$2,000 per meeting, but not more than
US$10,000 for the corporate year.
· For the Chairman of the Project Assurance Committee – 19% of the
fixed fee (US$9,120) per month.
Payable in cash, monthly.
Fee based on the results for the
corporate year
A variable portion of director fees which depends on the difference
between the estimated value of ordinary shares in JSOC Bashneft as of
the beginning and the end of the corporate year. If the value of ordinary
shares increases, the fee will be more than US$100,000, if it decreases
– less than US$100,000.
The fee is due if the Company reports net
income in its IFRS financial statements.
The estimated value of an ordinary share
in JSOC Bashneft shall be calculated
on the basis of an annual independent
valuation.
Payable in cash within 90 days of the An-
nual General Meeting.
Under the Regulations, Board members may be reimbursed for expenses within approved limits:
· up to US$250,000 during the corporate year – for expenses related to the performance of their duties as directors (travel, ac-
commodation and meals in connection with meetings of the Board of Directors and Board committees);
· up to US$5,000 during the corporate year – for other expenses.
In 2013, the total amount of remuneration accrued and paid to members of the Board of Directors on the basis of annual results
was RUB 29,837,100. The amount of compensation for directors’ expenses was RUB 4,114,500.
Breakdown of remuneration paid to members of the Board of Directors in 2013
28
Director
Basis fee, USD
Fee for the participation
in Committees of the
Board of Directors, USD
Additional fee based
on annual results, USD
Total, USD
Artyukhov V.G.
97,900
11,500
115,536
224,936
Pustovgarov Y.L.
100,000
4,750
115,536
220,286
Watson C.
115,000
15,929
115,536
246,466
Gossen R.
115,000
14,783
115,536
245,319
Total
427,899
46,962
462,146
937,007
28. Figures concerning remuneration paid in 2013 have been aligned with JSOC Bashneft’s financial accounts under Russian Accounting Standards.
