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.