The
amount of remuneration of BoD members
is determined by decision of the shareholders at the Company
AGM. Prior to 2007 the amount of remuneration was set
in conditional monetary units (one unit was the rouble equivalent of one USD at the
RF Central Bank exchange rate as at the AGM date). From
the AGM held on June 28, 2007 the amount of remuneration of the BoD
members is set in roubles.
The amount of remuneration paid to each BoD member for
performing the duties of a member of the BoD was 125,000 conditional units
in 2007 and 4,300,000 roubles in 2008.
According to the decision of the AGM held on 26 June 2008,
the remuneration paid for performing the duties of the newly elected BoD
members amounts to 4,470,000 roubles. In addition to a basic sum, board
members receive extra remuneration for assuming the responsibilities of Board
Chairman and Chairman of a Board Committee, for attending Board meetings in
person, and for long-distance flights to attend meetings of the Board or Board
Committees. The AGM also determines a list of reimbursable expenses associated
with duties of BoD members.
Remuneration
of Management Committee Members consists
of:
- Remuneration
in accordance with an agreement signed with members of the Management
Committee*
- Basic remuneration (salary as set out in the employment
contract)
- Annual performance bonuses for the previous year
- Additional social benefits
*
Management
Committee members are paid remuneration in the amount of one monthly salary for
primary employment depending on the achievement of corporate-wide key
performance indicators during the reporting period.
Total remuneration paid to all members
of the BoD and Management Committee for 2007 was 661.5 million
roubles.
The LUKOIL BoD approved the Regulations on long-term incentives
for employees of OAO LUKOIL and its subsidiaries on November 29, 2006. It
applies to Company executives, heads of subsidiaries, key employees approved
by a BoD decision. In accordance with the Regulations the
employees to whom the Regulations apply are assigned a conventional number
of shares on the basis of which long-term bonus payments are calculated. This
program is aimed at maintaining continuous and stable incentives for the
Company’s employees, ensuring their interest in the growth of the Company’s
share price and capitalization. It is a continuation and development of the
previous Employee Restricted Share Plan of OAO LUKOIL and its
subsidiaries.