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 of the Management Board but encourages them to invest in Nornickel shares.
Remuneration paid to members of the Board of Directors and of the Management Board in 2023 totalled RUB 6.6 billion (USD 77.9 million).The amount of remuneration paid does not include the remuneration accrued but not yet paid as at 2023‑end, as well as insurance premiums and voluntary health insurance (VHI) contributions. Adding the amounts above, remuneration of members of Nornickel’s governance bodies for 2023 as per the IFRS statements totalled RUB 7.7 billion (USD 90 million).
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. Members of the Company’s Board of Directors are covered by liability insurance at the Company’s expense under the directors’ liability insurance programme. In addition, indemnity agreements are signed with members of the Board of Directors, covering the losses that they may incur in connection with their service on the Board of Directors. The Corporate Governance Code recommends that companies pay for their directors’ liability insurance to be able to recover potential losses through the insurer.
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, benefits package, or pension plans.
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.
Remuneration of executive bodies
In line with Nornickel’s Articles of Association, the remuneration and reimbursement payable to members of the Management Board are determined by the Board of Directors.
Remuneration of members of the Management Board is fixed.Remuneration of the Company’s senior management, including individuals who are members of the Management Board, is comprised of basic salary and bonuses (variable part). Bonuses comprising the variable part of senior management’s remuneration are based on the KPI system aligned with Nornickel’s strategic goals, depend on the Company’s performance, and are linked to both financial (EBITDA) and non‑financial metrics (work‑related injury rate (weight: 10%), GHG reduction (weight: 5%), zero environmental incidents (weight: 5%), and other individual KPIs). KPIs are updated on an annual basis by the Corporate Governance, Nomination, and Remuneration Committee of the Board of Directors. In 2023, KPIs for industrial safety, occupational health, and environment had a significant weight (20%) in senior management’s KPI scorecards, which confirms that safety culture remains top of mind for Nornickel.
Determining the remuneration and reimbursement payable to the Company’s President is within the remit of the Board of Directors. Remuneration payable to the President is comprised of basic salary and bonuses. The Board of Directors decides whether to pay the President of the Company a performance bonus for the reporting year.
Audit Commission’s remuneration
The Annual General Meeting of Shareholders held on 6 June 2023 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 2022. Members who are Nornickel employees are not paid remuneration for their work as part of the Audit Commission. No bonuses or other rewards were paid in 2023.
Auditor
Auditor’s fee
The fee paid to Kept for its audit and auxiliary audit services as well as other audit‑related services in 2023 totalled around RUB 232 million (USD 2.7 million), net of VAT, with the share of other audit‑related services (non‑audit services) accounting for 30% of the total.