Bonuses and losses
Last year Gazprombank will pay its top management (Board of Directors and the Board) to 1.8 billion rubles, including bonuses for 600 million rubles, follows from the statements of the Bank under IFRS. This is 1.9 times more than in 2014. In Gazprombank 16 Board members and 12 members of the Board of Directors. Thus, on average, to the head accounted for about 64 million rubles, the Board of Directors as a whole received almost twice less than in 2014 to 138 million rubles, said in the statement. Thus, the Board went to 1.66 billion rubles, or an average of 104 million rbl. on a member.
In 2014, the top management did not receive bonuses. In reporting States that management bonuses tied to the results under IFRS. Loss that the Gazprombank has received in 2015, worth 47.7 billion rubles, which is 3.5 times more loss 2014. “The main reason for negative financial result of the group in 2015 is a significant growth of expenses on creation of reserves, caused by the deterioration of credit quality of assets”, — stated in the release of Gazprombank.
The press service of Gazprombank explained that the only bonus accrued but unpaid. “The basis for their payment will be the implementation of the Bank’s key performance indicators approved by the Board of Directors”, — says the press service of the request . The representative of the Bank Andrey Serov said that even if a positive decision is made, according to the requirements of the Central Bank at least half of the payments will be deferred for a period of not less than three years.
In August 2014 the Central Bank issued the instruction “On the procedure of appraisal of the remuneration system in a credit organization and the order of sending credit institution orders on elimination of violations in the wage system”, which introduced a requirement that the remuneration of Board members of banks is at least 40% consist of bonuses, the payment may be deferred for three years. At this time, the payment of bonus may be deferred if the Bank received negative financial result. Gazprombank bonuses to the Board amount to 36% of the remuneration.
What the competition
In other banks with state participation, which published their annual accounts under IFRS as well as a growth in expenses on top managers. In particular, VTB, which received by the end of 2015 symbolic net profit of 1.7 billion rubles, the total amount of payments to the Bank’s management and key employees for the year increased from 5.9 billion to 6.1 billion rubles. these costs include short-term payments to members of the management Board, Supervisory Board, audit Committee and top management of subsidiary banks said in statements.
Key management of the savings Bank received 2.5 billion rubles But compared with 2014 payments reduced — then it was RUB 2.8 billion In the accounts of Sberbank under IFRS, it is said that 40% of the variable part of annual compensation is 1 billion rubles will be paid within three years. By the end of 2015, the savings Bank reported profit 222,9 bn a Year earlier it stood at over 290 billion rubles.
The agricultural Bank in accordance with IFRS has not reported.
“The decision on remuneration of members of the Board are usually adopted by the Board of Directors, which benefits from individual performance indicators top managers — KPI”, — says Executive Director of the Association of independent Directors Igor Rozanov. He notes that the profitability or revenue, as a rule, determine the remuneration of only 20-30%, the rest depends on other criteria — reducing costs in the direction that the Manager oversees, to the extent of its participation in strategic projects of the company.
“To directly tie bonus payouts with profits at year-end, not always correctly, because the reward can take into account other factors. For example, if the Bank maintained market share or its business has remained stable in the crisis situation on the market,” agrees senior Executive of a major Bank. According to him, in the case of state-owned banks to assess the performance of their leaders often have other criteria. “For example, everyone understands what happened with VEB, and to blame his leadership while no one is going,” he says. In addition, according to the banker, the payment of remuneration to top managers may occur under long-term bonus programs and to be a reflection of the results of the previous periods, when the Bank earned a profit.