Remuneration
The Board of Directors directly supervises the remuneration framework at Nornickel. The Corporate Governance, Nomination and Remuneration Committee of the Board of Directors is responsible for:
- developing the Remuneration Policy for Members of the Board of Directors, Members of the Management Board and the President of Nornickel;
- overseeing the implementation and execution of the Policy;
- reviewing the Policy on a regular basis.
Nornickel does not issue loans to members of the Board of Directors and the Management Board but encourages them to invest in Nornickel shares.
Remuneration paid to members of Nornickel’s governance bodies in 2022 totalled RUB 4.8 billion
Directors’ remuneration
The Board of Directors’ annual remuneration is set out in the Remuneration Policy. By resolution of the General Meeting of Shareholders, members of the Board of Directors are remunerated for their service on the Board of Directors and reimbursed for expenses incurred by them in performing their duties as Board members. Additional benefits for all Board members include liability insurance and reimbursement of losses incurred in connection with their service on the Board of Directors. The Bank of Russia’s Corporate Governance Code recommends that companies pay for their directors’ liability insurance to be able to recover potential losses through the insurer. Apart from securing stronger commitment from directors, this insurance coverage encourages competent leaders to join the Board.
Remuneration of the Chairman of the Board of Directors
Remuneration of the Chairman of the Board of Directors differs from the remuneration payable to other non-executive directors, due to the Chairman’s enhanced scope of expertise and responsibilities. Subject to a resolution of the General Meeting of Shareholders, the Chairman of the Board of Directors may be entitled to additional remuneration and benefits other than those set out in the Policy. Under the Policy, the annual base remuneration of the Chairman of the Board of Directors is USD 1 million. The Chairman of the Board of Directors is not entitled to any additional remuneration for serving on Board committees.
Remuneration of non-executive directors
All non-executive directors receive equal remuneration. The Policy sets forth the following annual remuneration for non-executive directors:
- Base remuneration of USD 120 thousand for Board membership;
- Additional remuneration of USD 50 thousand for serving on a Board committee;
- Additional remuneration of USD 150 thousand for chairing a Board committee.
Non-executive directors are not eligible for any forms of short-term or long-term cash incentives, or non-cash remuneration, including shares (or share-based payments), share options (option agreements) or other non-cash rewards or benefits.
Remuneration of executive directors
In line with the approved Policy, executive directors do not receive any additional remuneration for their service on the Board of Directors to avoid any potential conflict of interest.
Management Board’s remuneration
Key performance indicators (KPIs) used to assess senior management’s performance are aligned with Nornickel’s strategic goals. In line with Nornickel’s Articles of Association, the remuneration and reimbursement payable to the President and members of the Management Board are determined by the Board of Directors.
Remuneration payable to senior management is comprised of basic salary and bonuses. Bonuses are linked to Nornickel’s performance, including both financial (EBITDA) and non-financial metrics (work-related injury rate, GHG reduction and work plan). The variable component of the remuneration payable to members of the Management Board reflects KPIs, which are annually updated by the Corporate Governance, Nomination and Remuneration Committee of the Board of Directors. The Board of Directors decides whether to pay the President a performance bonus for the reporting year. In 2022, the GHG Reduction metric was included in senior management’s KPIs with a 5% weight (among all KPIs) and a quantitative target.
Audit Commission’s remuneration
The Annual General Meeting of Shareholders held on 3 June 2022 set total remuneration at RUB 1.8 million per year (before taxes) for each member of Nornickel’s Audit Commission who is not an employee of the Company. The above remuneration level is similar to the remuneration rate set for members of the Audit Commission in 2021. Members who are Nornickel employees are not paid remuneration for their work as part of the Audit Commission.
In 2022, the members of the Audit Commission received remuneration for their work in the body in the amount of RUB 7.2 million (USD 105 thousand). No bonuses or other rewards were paid.
Auditor’s fee
The fee paid to Kept for its audit, auxiliary audit services, as well as other audit-related services in 2022 totalled RUB 339.8 million (USD 4.9 million), net of VAT, with the share of other audit-related services accounting for 49% of the total. To prevent conflict of interest, Kept has in place a specific policy covering different types of services they provide to auditees, which complies with the requirements of the International Ethics Standards Board for Accountants (IESBA), the Russian Independence Rules for Auditors and Audit Firms, and other applicable standards.