Remuneration of Members of the Board of Directors

Rosneft’s existing remuneration system for members of its Board of Directors is based on compliance with legislative provisions and the Company’s internal documents developed in line with recommendations of the Bank of Russia and best practices for developing an incentive system for members of governing bodies.

Remuneration of members of the Company’s Board of Directors is covered by the Regulations on Payment of Remuneration and Compensation of Expenses of Members of the Board of Directors listing all types and terms of payments to directors, which ensures transparent remuneration payment and criteria.

The Regulations set the fixed remuneration of a member of the Board of Directors (for discharging functions of a Board member) at USD 500,000 for a corporate year, on par with global director remuneration practices in major oil companies. Additional remuneration may be paid for discharging the functions of: the Chairman of the Board of Directors (USD 100,000 for a corporate year), a member of Committees of the Board of Directors (USD 50,000 to the Chairman of the Board of Directors’ Committee for a corporate year and USD 30,000 to a member of the Board of Directors’ Committee for a corporate year).

The total remuneration is calculated pro-rata to the time served by the relevant member on the Board (acting as Chairman of the Board of Directors / member of a Committee / Chairman of a Committee). At the same time, remuneration is not be paid to a Board member who has attended less than 2/3 of the meetings held, which ensures fair calculation of remuneration.

To promote alignment between the interests of directors, the Company’s long-term goals, and financial interests of its shareholders, the Regulations provide for share-based remuneration and set limits on transactions with such shares: following the recommendations of the Bank of Russia’s Code, directors are recommended not to sell the greater part of their shares of the Company (50% or more) and abstain from using any hedging options during all acting period and within at least one year after their withdrawal from the Board of Directors.

The Regulations on Payment of Remuneration and Compensation of Expenses of Members of the Board of Directors are posted on Rosneft’s official website.

On 22 June 2017, the Annual General Shareholders Meeting (minutes w/n dated 27 June 2017) resolved to pay the following remuneration amounts to members of the Company’s Board of Directors pro-rata to the time served:
  • Andrey Akimov: USD 545,000 (USD 500,000 as fixed remuneration, USD 30,000 as remuneration for discharging the functions of a member of the Strategic Planning Committee, and USD 15,000 as remuneration for discharging the functions of a member of the HR and Remuneration Committee (pro-rata to the time spent discharging these functions in the corporate year (15 June to 23 December 2016))
  • Matthias Warnig: USD 580,000 (USD 500,000 as fixed remuneration, USD 50,000 as remuneration for discharging the functions of the Chairman of the HR and Remuneration Committee, and USD 30,000 as remuneration for discharging the functions of a member of the Audit Committee)
  • Oleg Viyugin: USD 580,000 (USD 500,000 as fixed remuneration, USD 50,000 as remuneration for discharging the functions of the Chairman of the Strategic Planning Committee, and USD 30,000 as remuneration for discharging the functions of a member of the Audit Committee)
  • Donald Humphreys: USD 565,000 (USD 500,000 as fixed remuneration, USD 50,000 as remuneration for discharging the functions of the Chairman of the Audit Committee, and USD 15,000 as remuneration for discharging the functions of a member of the HR and Remuneration Committee (pro-rata to the time spent discharging these functions in the corporate year (23 December 2016 to 22 June 2017)).

In accordance with Russian laws and pursuant to the restrictions imposed by the Regulations, no remuneration for the corporate year 2016–2017 was paid to the Chairman of the Board of Directors Andrey Belousov (who is a government official), to the Deputy Chairman of the Board of Directors, Chief Executive Officer of the Company Igor Sechin, and to the member of the Board of Directors Alexander Novak (who holds public office as Minister of Energy of the Russian Federation).

Furthermore, based on statements received from Robert Dudley and Guillermo Quintero, members of the Board of Directors who represent BP (Rosneft shareholder), no remuneration was paid to these directors.

The total remuneration to members of the Board of Directors for the 2016–2017 corporate year amounted to USD 2.27 mln.