Big earners: What are Gazprom’s top executives paid for?

Gazprom CEO Alexei Miller attends a news conference after the annual general meeting of the company's shareholders in Moscow, June 27, 2014. Source: Reuters

Gazprom CEO Alexei Miller attends a news conference after the annual general meeting of the company's shareholders in Moscow, June 27, 2014. Source: Reuters

Reuters
Free medical treatment, free vacations and various supplements on birthdays and on Russian and professional holidays – Russian gas giant Gazprom’s senior employees enjoy a range of perks besides monthly salaries and bonuses.

According to Forbes, the income of Alexei Miller, CEO of Russia’s gas giant Gazprom was estimated at $25 million in 2014 – but what makes up the earnings of senior officials at the gas monopoly and what kind of extra benefits do they receive?

Information about Miller's salary and bonuses in 2014 is not in the public domain. However, from the company's accounts it can be deduced that the monopoly's management in 2014 earned 2.543 billion rubles ($40.3 million). Thus, each of the 17 management committee members received about 150 million rubles ($2.3 million) or 12.5 million rubles ($198,000) a month.

RBK learned that these figures come not only from the salary and the bonus but also from various supplements, whose calculation system is explained in Gazprom's collective agreement with its central administration collaborators for 2013-2015. The payments are calculated according to the company's minimum wage rate: In 2015 this is 8,370 rubles ($132).

For example, Gazprom's management receives a supplement for access to information that is a state secret (this amount is not mentioned in the agreement). Another premium is given for professional accomplishments.

 

Holiday payouts

Gazprom's certificate of honor entitles the collaborator to receive 25,000 rubles (three monthly salaries at the minimum wage) and with the special services award they receive more than 251,000 rubles (30 times the minimum wage).

Rem Vyakhirev, who headed Gazprom between 1992 and 2001, used to receive the latter award. The traditional premium, in the amount of a monthly salary, is given to all collaborators in August, on the Day of the Oil and Gas Industry.

Administration collaborators also receive a monthly salary on Gazprom's anniversaries. Furthermore, men receive 168,000 rubles (20 times the minimum wage) on Feb. 23, the Defender of the Fatherland Day. Women receive this amount on March 8. One monthly salary is also given on each collaborator's birthday after the age of 50, but only if he or she has worked in the monopoly for more than 15 years.

 

Reimbursement of expenses

Until recently a Gazprom employee could vacation in any part of the world and be reimbursed for up to 92,000 rubles. This year a change has been introduced in the collective agreement: from now on the monopoly reimburses the employee for the entire amount, but only if he or she spends the vacation in the Gazprom pensions and health resorts in Russia, Armenia or Belarus.

A view of the Gazprom mountain resort, near Sochi. Source: TASS/ Valery Matytsin

Company managers are entitled to free medical treatment in Gazprom clinics, including dental care and prosthetics, as well as eye surgery.

Besides paying for medical treatment, Gazprom also compensates expenses for costly medicine, on the condition that the employee buys it for at least 75,000 rubles (nine times the minimum wage).

 

The bonus hierarchy

Gazprom's managers also receive bonuses.

Gazprom CEO's annual bonus depends 100 percent on the corporate key performance indicator (KPI): the company's financial and economic results and the implementation of the investment program. The bonus is paid out as one annual base salary.

For Miller's bonus the determining factor is Gazprom's financial-economic results, for which he receives 70 percent of the bonus. The remaining 30 percent is determined by sector indicators: the volume of gas sold (15 percent) and the introduction of priority production objects (15 percent).

Miller's deputy, management committee members and company directors have an annual bonus formula that is more complex. The general performance indicators of Gazprom managers are supplemented with sectoral and individual ones. All directors of the central organ and the company's branches are divided into several groups and each has its own evaluation criteria.

The deputy chairmen of the management committee, including the CFO and all the management members who have the rank of Gazprom Department Director, are entitled to 75 percent of their annual salaries as a bonus.

General Directors of Gazprom branches are entitled to 70 percent, while deputy directors of the management organ, the secretariat of the council of directors, Miller's press secretary and his advisors receive 60 percent. Deputy department directors, directors of situation centers and deputy branch directors receive 50 percent and section directors receive 40 percent.

First pubblished in Russian in RBC Daily.

Salaries and bonuses for CEOs of foreign oil companies:

ExxonMobil Chairman and CEO Rex Tillerson's salary in 2014 was $2,867,000 and his bonuses in 2014 amounted to $3,670,000.

BP CEO and Director Bob Dudley's salary in 2014 was $1,827,000 and his 2014 bonuses amounted to $1,005,000.

Royal Dutch Shell CEO Ben van Beurden's 2014 salary was $1,435,000 and his 2014 bonuses amounted to $4,163,000.

Chevron CEO and Chairman of the Board John Watson's 2014 salary was $1,800,000 and his 2014 bonuses amounted to $3,100,000.

PetroChina CEO Wang Dongjin's 2014 salary was 1,081,000 yuan (in the company's annual statement salaries and bonuses are presented as one figure).

 

All rights reserved by Rossiyskaya Gazeta.

More exciting stories and videos on Russia Beyond's Facebook page

This website uses cookies. Click here to find out more.

Accept cookies