State-owned companies will be decorated with modesty – Newspaper Kommersant No. 215 (7416) of 11/21/2022

The White House continues to expand control over the remuneration of the management of state-owned companies, linking the system of remuneration of top management with its performance – the achievement of key performance indicators and the implementation of significant projects. After the already implemented restrictions on the amount of remuneration of management in state JSCs and state-owned companies in 2022, there is a further tightening of the rules and unification. Now, not 43, but 117 organizations should be guided by uniform rules, they will have to agree on the ceiling of annual remuneration with the Ministry of Finance and the government commission.

As it became known to Kommersant, the White House approved a government decree that corrects the bonus system for the management of state-owned companies. According to the new rules, the amount of remuneration in 117 organizations with state participation will depend on the implementation of certain significant projects by them and on the achievement of key performance indicators (KPIs). The latter, we recall, include financial indicators that characterize the profitability of the organization, and sectoral indicators linked to national development goals.

The authorities have repeatedly studied the possibility of strengthening control over the work of the management of state-owned companies. The Federal Property Management Agency developed the methodology for linking the remuneration of the management of state-owned companies to a unified KPI system in the wake of the first sanctions, in 2014, but in 2015 the Kremlin abandoned the initiative, deciding that the issue of reducing the salaries of top managers of the state JSC should be decided at the corporate level. In 2022, the authorities also discussed the possibility of introducing a salary cap for top managers of state companies and state corporations – at the level of three minimum earnings of the prime minister, that is, no more than 30 million rubles. per year with exceptions by decision of the President of the Russian Federation. At the same time, the KPI list itself was proposed to be optimized. However, in October, the Ministry of Finance abandoned the salary limit in favor of taking into account market rates when determining the amount of remuneration.

The government made the first approach to unify the remuneration system for top managers of large state-owned companies in June. Decree No. 1127 of June 23, 2022 introduced provisions on the maximum possible total remuneration for company management, which consists of an official salary, compensation and incentive payments, as well as payments from participation in the management bodies of other legal entities. The amount of the annual remuneration is set depending on the complexity of managing the organization and its sectoral affiliation. Initially, the state controlled the payments of managers, their deputies, chief accountants and members of collegial executive bodies of 43 organizations (DIA, VEB, Rosatom, Roskosmos, Avtodor, as well as Russian Railways, USC, Russian Post, Promsvyazbank, “Transneft”).

The government amendments extend the rules to a wide range of organizations in which the state owns more than 50% of the shares. Organizations are divided into five groups in the document. The first includes 12 largest organizations implementing individual significant projects (VEB, Dom.RF, Russian Railways, Rosseti, RusHydro). The second group included five banks and other large organizations (Post of Russia, Rosselkhozbank, Promsvyazbank). The third group – nine organizations responsible for the development of individual territories (“Corporation for the Development of the Far East and the Arctic”, “Tourism.RF Corporation”), the fourth – responsible for certain areas of the economy (GTLK, USC, Rosgeologiya). In the fifth group, there are 81 more organizations, while the amount of remuneration does not depend on the grouping.

Proposals on the terms of remuneration and the ceiling of annual payments in these organizations are formed by sectoral departments and boards of directors of organizations and sent to the Ministry of Finance along with data on the financial result of organizations and subsidies received by them. The Ministry of Finance, in turn, must coordinate with the working group under the government commission on issues of optimizing and increasing the efficiency of budget spending. The Decree also regulates the payment of bonuses that are due to management when they achieve KPI: annual bonus – within 30-50% of the annual maximum remuneration, total quarterly bonuses – no more than 10% of the same indicator.

At the same time, the government recommends following the new wage rules for public companies and joint-stock companies that are controlled by state corporations and state-owned companies, for example, organizations of the VEB group. In the future, the government will continue to expand control over payments in the public sector, a White House source said.

Diana Galieva