5.5 REMUNERATION TO THE MANAGEMENT BODIES

Remuneration to the Board of Directors

Remuneration to members of the Board of Directors is based on the Regulations on Compensation and Remuneration to Members of the Board of Directors.

Remuneration paid to each member of the Board of Directors is based on the total number of meetings of the Board of Directors during the past corporate year, the number of meetings that the member of the Board of Directors participated in and the Company’s revenues for the financial year. In addition to remuneration, the Company has benefits in place for serving as the Chairman and taking part in Committees of the Board of Directors. Total remuneration, including benefits, cannot exceed RUR 900,000.

Remuneration is not paid to members of the Board of Directors who are subject to any legislative limitations or prohibitions on receiving any payments from commercial organizations, or to members of the Board of Directors who at the same time serve as either the Chairman or members of the Company’s Management Board.

Name Remuneration for participating in a Board of Directors’ meeting, RUR Other personal compensation, insurance premium under the VPLI *, RUR Total , RUR
Sergey Shmatko 0 0 0
Mikhail Kurbatov 38 822,72 0 38 822,72
Oleg Budargin 0 0 0
Georgy Kutovoy 0 0 0
Yuri Soloviev 0 0 0
Igor Khvalin 0 0 0
Andrey Malyshev 165 687,00 123 215,93 288 902,93
Alexey Makarov 141 369,00 123 215,93 264 584,93
Sergey Maslov 177 288,00 123 215,93 300 503,93
Ernesto Ferlenghi 153 342,00 123 215,93 276 557,93
Vladimir Tatsiy 105 450,00 101 863,43 300 503,93
Rashid Sharipov 154 086,00 123 215,93 277 301,83
Boris Ayuyev 177 288,00 123 215,93 300 503,93
Evgeny Dod 129 768,00 162 038,65 291 806,65
Dmitry Ponomarev 165 315,00 123 215,93 288 530,93
Total 1 408 415,72 1 126 413,59 2 628 019,71

* Voluntary personal individual liability

Remuneration to the Management Board

Federal Grid Company has a unified well-balanced employee remuneration and motivation system which differentiates between employee position categories and the performance of the Company, its structural departments and employees. The motivation system directly depends on the performance achieved by the Company and its employees (in accordance with key performance indicators (KPIs)) and is based on the Company’s long-term objectives.

Remuneration paid to the Chairman and members of the Management Board are based on the Company achieving key performance indicators. Respective key performance indicators, their calculation methods and target levels are approved by the Board of Directors.

In 2010 the following KPIs for top executives were used:

Half-year indicators:

  • Relative share of restrictions and limitations on electricity transmission services, %;
  • No workplace incidents with fatalities and no incidents that injured several people, with at least one of them gravely injured;
  • Meeting the target current liquidity limit.

Annual indicators:

  • EBITDA;
  • No major accidents;
  • Losses in electricity transmission in the grid used by Federal Grid Company for providing electricity transmission services, %;
  • Ratio of new production capacity launch, %;
  • Ratio of capital investment utilization, %.

The Company met approved KPIs for 1H, 2H and FY 2010.

2010 total compensation paid to members of the Management Board (RUR) 175 756 541
including:
Salary (RUR) 109 375 902
Bonuses (RUR) 63 797 110
Commission (RUR) none
Benefits (RUR) none
Other personal compensation (RUR) (Voluntary personal liability insurance) 2 583 529

Information on Remuneration, Benefits and Expenses Paid to Members of Federal Grid Company’s Management Board:

2010 total compensation paid to members of the Management Board (RUR) 19 434 570
including:
Salary (RUR) 11 083 467
Bonuses (RUR) 7 781 653
Commission (RUR) none
Benefits (RUR) none
Other personal compensation (RUR) (Voluntary personal liability insurance) 569 450

Information on remuneration paid to members of the Company’s Board of Directors and the Management Board, as of the end of the financial reporting year, is disclosed in the Company's 1Q report. The Company’s quarterly reports are also disclosed on the official web site of Federal Grid Company.