2015 Annual Report

ru

Remuneration for the Supervisory Board and Management

Role of the HR and Remuneration Committee

In terms of forming an effective system of remuneration of the members of Supervisory Board, executive bodies, and other Sberbank’s employees, the main functions of the HR and Remuneration Committee are the following:

  • Development and periodic reviewing of the bank’s remuneration policy regarding the members of the Supervisory Board, executive bodies, and other Sberbank’s employees
  • Development of criteria for determining the amount of remuneration of members of the Supervisory Board and executive bodies of the bank and development of criteria for the programme of long-term remuneration of members of executive bodies of the bank
  • Analysis and elaboration of recommendations to the Supervisory Board regarding each constituent part of remuneration of the members of executive bodies and other employees of Sberbank as well as their proportion
  • Preliminary review of the work of the executive bodies and other employees of the Sberbank according to the results of the year in accordance with the criteria included in the remuneration policy and preparation of proposals to the Supervisory Board as to the amount of adjustment of remuneration under the programme of long-term remuneration of the members of executive bodies of the Bank
  • Elaboration of proposals on determination of material conditions of the agreements entered into with the members of executive bodies of the bank, including the conditions of their early termination (including all material obligations of the bank and the conditions of their provision)
  • Elaboration of proposals on selecting an independent consultant on the issues of remuneration of the members of executive bodies and other employees of Sberbank
  • Elaboration of recommendations to the Supervisory Board on determining the amount of remuneration and principles for giving bonuses to the Corporate Secretary of Sberbank and preliminary evaluation of the performance of the Corporate Secretary according to the results of the year.
Remuneration for Members of the Supervisory Board

Payment of remuneration to members of the Supervisory Board and compensation of expenses connected with their participation in the work of the Supervisory Board shall be made in the amount and according to the procedure established by the Group’s internal document—that is, the Regulation on Remuneration and Compensation to the Members of the Supervisory Board approved by the annual General Shareholders’ Meeting on 31 May, 2013.

Remuneration consists of a base part (RUB 4.2 million) paid to a member of the Supervisory Board, provided that they have participated in at least half of the Supervisory Board meetings held in the accounting period, and additional remuneration for work in Committees (+10 percent of the base remuneration), for chairing Committees and fulfilment of duties of a senior independent director (+20 percent of the base remuneration), or for chairing the Supervisory Board (+30 percent of the base remuneration).

The total amount of remuneration paid to members of the Supervisory Board for 2015 for their participation in the management body of the Group was RUB 59.9 million (in 2014, RUB 53.0), including:

  • RUB 52.76 million as base remuneration (13 persons)
  • RUB 1.7 million for performing the duties of Committee chairpersons (RUB 840,000 to each chairperson)
  • RUB 5.5 million for performing the duties of Committee members (RUB 420,000 to each member)

Operating expenses connected with the performance of functions of board members were compensated to one member of the Supervisory Board in the amount of RUB 35,300.

Information about payment of remuneration and compensation of expenses in 2015 is provided for members of the Supervisory Board who expressed their consent in writing during the specified period to receive compensation and who submitted written requests for the compensation of expenses to Sberbank.

The total sum of remuneration received by members of the Supervisory Board in 2014 for their participation in this Sberbank’s governing body amounted to RUB 53 million:

  • RUB 46.2 million as base remuneration (11 persons)
  • RUB 1.7 roubles for performance of the duties of two Committee chairpersons (RUB 840,000 to each chairperson)
  • RUB 4.2 million for performance of the duties of the members of the Committees (10 persons, 420,000 roubles to each person)

Operating expenses connected with the performance of the functions of board members were compensated to three members of the Supervisory Board in the amount of RUB 879,000.

Information on the payment of remuneration and compensation of expenses in 2014 is provided with regard to the members of the Supervisory Board who expressed their consent in writing in 2014 to receive compensation and who submitted written requests to the Bank for compensation of expenses.

Remunerations for Executive Board Members

For the year ended 31 December 2015, regular remuneration of the members of the Executive Board comprised salaries and bonuses totalling RUB 2.5 billion (for the year ended 31 December 2014: RUB 2.8 billion) including:

  • Fixed remuneration (official salary, paid leave, payment of average earnings during business trips) in the amount of RUB 0.64 bln (RUB 0.65 bln in 2014)
  • Variable remuneration (bonuses, remuneration based on year-end results) in the amount of RUB 1.85 bln (for 2014, RUB 2.14 bln)
  • Remuneration paid to Executive Board members for performing the functions of Supervisory Board members amounted to RUB 0.01 bln (for 2014, RUB 0.01 bln)

The amount of all payments accrued to the members of the Executive Board includes salaries, bonuses, payment of annual leave and sick leave, payment of average earnings during business trips, social payments, payments for years of service, remuneration at the end of the year, remuneration for participation in the activities of the Supervisory Board, and other payments established by the laws and regulations of Sberbank. The annual remuneration is reflected for the period used in the performance evaluation.

Sberbank’s Policy for the remuneration of Executive Board members provides for the dependence of remuneration on the results of the Group’s performance and each Executive Board member’s personal contribution to the achievement of such a result through the use of tools for regular performance evaluations through a system of balanced performance indicators. The wage structure includes fixed and variable components. Variable remuneration is directly associated with the results of the achievement and overachievement of a set of key performance indicators: individual and group, financial and nonfinancial. The basic elements of the variable component of remuneration are quarterly bonuses and remuneration depending on performance results for the year.

Also in 2015 the Bank introduced a long term cash settled motivation programme for the key management personnel with share-based features. The programme was designed within a framework of risk oriented remuneration and was in full compliance with the requirements of the Bank of Russia on the remuneration system for Russian credit institutions. The programme parameters are as follows:

  • 40% of the variable part of the annual compensation is deferred and is paid in 3 annual installments;
  • payments to the participants of the programme are contingent upon the Bank’s positive performance, e.g. if the Bank has a loss in any of the 3 years following the year in which the award was granted, payments to the participants are forfeited for that particular year;
  • awards may be fully or partially forfeited, for example, due to individual misconduct (including a breach of regulations) or termination for cause and also due to negative individual contributions to the Bank’s results.

For the year ended 31 December 2015 share-based long term compensation amounted to RUB 0.6 billion (for the year ended 31 December 2014: nil).

Share-based long term compensation is payable in cash, and is remeasured to fair value at each reporting date based on the average value of the Bank’s ordinary shares for the preceding 6 months. The related obligations are included in other financial liabilities in the consolidated statement of financial position until paid.