Annual report 2016

Remuneration payable to members of the Executive Board

In 2016, the Supervisory Board of the Moscow Exchange approved the Policy on Remuneration and Compensations to Members of Executive Bodies.

The Moscow Exchange is committed to provide a competitive remuneration sufficient to attract, motivate and retain members of the executive bodies. Their remuneration is linked to the performance of the Moscow Exchange and personal contribution of each executive body member to the achievement of its strategic and financial goals. The Moscow Exchange seeks to maintain an optimal balance between these two components.

Its Supervisory Board jointly with its Nomination and Remuneration Commission, determines the amount of remuneration payable to executive body members, including its structure, types of payments, benefits and perquisites, as well as the list of reimbursable expenses, reimbursement (compensation) conditions, procedure and amounts.

The remuneration amount and the balance between the fixed and the variable components depend on each executive body member's contribution to the financial results and overall performance of the Moscow Exchange, as well as their scope and area of their responsibility. When determining the same, the Moscow Exchange also relies on the results of top management remuneration surveys (research) purchased from leading international consulting agencies.

pay) payable in the event of executive body members’ early resignation (voluntary termination), subject to no fraudulent actions on their part shall be no more than double of the fixed part of their annual remuneration. No compensation is determined or paid in case a member of an executive body is dismissed on grounds related to disciplinary penalty or their employment is terminated as a result of a guilty act (or omission) committed by the said member.

The variable part, which constitutes a larger portion of the remuneration payable to the Executive Board members, consists of short- and long-term components.

The short-term variable part is linked to performance via the key performance indicators reviewed and approved annually for the Executive Board members and embracing both corporate and individual KPIs. In 2016, their proportion was forty per cent and sixty per cent, respectively.

Annual bonuses are discussed annually by the Supervisory Board based on the recommendations of the Nomination and Remuneration Commission in respect of each executive body member. When determining the bonus size, the Supervisory Board also takes into account the following criteria: results of reviewing annual performance reports from executive body members, data derived from financial and accounting statements, results of external and internal audits and audits by regulatory bodies, performance of the assignments the Supervisory Board and its commissions, implementation of strategic projects and achievement of strategic targets not included in the KPIs, and other operating factors.

To increase personal responsibility of each executive body member, the Supervisory Board regularly defers payment of a portion of bonuses to the members responsible for certain operations and projects until it receives the information on their financial and other achievements; the delayed portion may be reduced or cancelled in the event of negative

Type Amount , RUB thousand
Remuneration for serving in a supervisory body
Salaries 135,150.27
Bonuses 125,073.98
Compensation for expenses 4,430.40
Other 2,629.36
TOTAL 267,284.01

Expense reimbursement for members of the Executive Board is set out in their employment agreements. Exchange’s standard practice is to authorise the members to use a corporate car with a driver for work-related and private journeys pursuant to the company’s internal regulations; to be paid up to 100% of official salary for not more than 10 (in aggregate) working days of incapacity for work per year; to use corporate credit cards in accordance with the Exchange’s internal documents; to be provided with compulsory social insurance (including insurance against accidents and occupational diseases) subject to the federal laws; to be repaid all travelling, hotel and daily living expenses associated with his business travels in the amount set by the company’s regulations, but no less than in that set forth by the law of the Russian Federation if applicable; to be repaid for professional training expenses; be entitled to benefits, guarantees and reimbursements stipulated by the law of the Russian Federation and company’s regulations; to be given free medical insurance (corporate voluntary medical insurance and international medical insurance), including insurances for the member’s spouse and children subject to a program selected by the member, as well as with accident and illness insurance; and to be compensated for mobile phone expenses as provided for in the company’s internal documents.