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Uralkali’s Management Board is the team of dedicated professionals, focused on ensuring an appropriate level of control over the business processes and aimed at delivering solid performance.

Dmitry Osipov

General Director
Chairman of the Management Board

Member of the Management Board since December 2013

For more information see page Effective and transparent leadership

Victor Belyakov

Director for Economics and Finance

Appointment

Member of the Management Board since 2007.

Skills and experience

Director for Economics and Finance in OJSC “Uralkali” since 2007.

External appointments

Member of the boards of directors of several companies affiliated with OJSC “Uralkali”. Current member of the Board of Directors of OJSC ACB “Ecoprombank”, LLC SA “Sheriff-Berezniki”.

Boris Serebrennikov

Production Director

Appointment

Member of the Management Board since 2012.

Skills and experience

In 1994-2011 held various senior posts in OJSC “Silvinit” supervising the mines of the company. In 2011 — Director of the mine Solikamsk −1. Since April 2012 — Production Director in OJSC “Uralkali”.

External appointments

Not a member of governance bodies in other organisations.

Yevgeny Kotlyar

Chief Engineer

Appointment

Member of the Management Board since 2011.

Skills and experience

From 2000 until 2007 and from 2010 until 2011 worked as Production Director in OJSC “Silvinit”. Production Director of OJSC “Uralkali” after the merger of OJSC “Silvinit” and OJSC “Uralkali” in June 2011.

External appointments

Member of the boards of directors of several companies affiliated with OJSC “Uralkali”. Current member of the Board of Directors of OJSC “Kopeisk Machine-Building Plant”

Nadezhda Kiryanova

Procurement Director

Appointment

Member of the Management Board since March 2014.

Skills and experience

1992-2007 — various positions in OJSC “Azot” (Berezniki), 2007-2014 — held various managerial positions in the “Azot” brunch of OJSC UCC “URALCHEM” in Berezniki, most recently — commercial director (2010-March 20014) Since March 2014 — Purchasing Director of OJSC Uralkali.

External appointments

Not a member of governance bodies in other organisations.

Stanislav Seleznev

HSE Director

Appointment

Member of the Management Board since 2011.

Skills and experience

In 2007-2010 — HSE Director in LLC “Lafarge-Cement” Since 2010 — HSE Director of OJSC “Uralkali”.

External appointments

Not a member of governance bodies in other organisations.

Oleg Petrov

Sales and Marketing Director

Appointment

Member of the Management Board since 2010.

Skills and experience

In 2005-2010 — First Deputy General Director of CJSC “Belarusian Potash Company”. Since 2010 — Sales and Marketing Director of OJSC “Uralkali”.

External appointments

Member of the Supervisory Board of CJSC “Belarusian Potash Company”.

Marina Shvetsova

Director for Legal and Corporate Affairs

Appointment

Member of the Management Board since 2005.

Skills and experience

Since 2006 — Director for Legal and Corporate Affairs of OJSC “Uralkali”.

External appointments

Member of the boards of directors of several companies affiliated with OJSC “Uralkali”.

Elena Samsonova

HR Director

Appointment

Member of the Management Board since 2004.

Skills and experience

Since 2004 — HR Director of OJSC “Uralkali”.

External appointments

Member of the boards of directors of several companies affiliated with OJSC “Uralkali”.

Nikolay Morozov

Director for Internal Control

Appointment

Member of the Management Board since April 2014.

Skills and experience

1989-1993 worked as an economist in the Ministry of Foreign Affairs of the USSR and RF. 1993-1998 worked in various banks (Mosbusinessbank, International Financial Club, ONEXIMBank) where he was in charge of internal controls and risk management. 1998-2003 — member of the Management Board and Head of the Internal Controls Department in ACB Rosbank. From 2003 until August 2008 — Director of the Department of Internal Control in Norilsk Nickel. From September 2008 until end of March 2013 – Deputy General Director for internal control in CJSC Polyus. Since April 2013 – Executive Director of ONEXIM Group.

External appointments

Not a member of governance bodies in other organisations.

Note: The current Management Board has been appointed following the decision of Uralkali Board of Directors meeting on the 26 March, 2014

Information about major and related party transactions

In 2013, the Company entered into a number of transactions, which were deemed major and/or related party transactions pursuant to the Russian Federal Law “On joint-stock companies” (the Law). The Law also stipulates that such transactions must be approved by the general meeting or the Board of Directors depending on the value of transactions, the identity and number of related parties, and explain the approval procedure.

Most of the transactions in questions were approved by the AGM as related party transactions and as transactions witch can be entered into in the future in the normal course of business within the established limits (transactions with Uralkali’s subsidiaries and affiliates). The transactions were deemed related party transactions on the grounds that members of Uralkali’s Management Board had parallel positions in the subsidiaries and affiliates’ management bodies. As was mentioned before, following the change in the management process in relation to the subsidiaries and affiliates, the number of transactions submitted to general meetings of shareholders should decrease significantly.

All the transactions were approved in line with a corresponding procedure specified in the Law to avoid any conflicts of interest arising from the transactions.

Also in 2013, general meetings approved two other related party transactions, under which all directors were deemed related parties. In particular, the general meeting approved:

  • The Directors' & Officers insurance agreement, which is extended annually;
  • Deeds of Indemnity between Uralkali and each director. Also, as the aggregate value of the Company’s property, which can be alienated as a result of such deeds of indemnity (which are also deemed related party transactions), exceeds 2% of the total book value, pursuant to the Law this fact becomes a separate ground for submitting the transactions to the general meeting.

An EGM held on 22 October 2013 also approved two major transactions: financing agreements with OJSC Sberbank of Russia and OJSC VTB Bank. Each of these two transactions had to be approved by the Board of Directors according to the transaction evaluation procedure. However, as major transactions require unanimous approval of the directors, the Board of Directors was unable to approve them for external reasons, as Vladislav Baumgertner was physically unable to discharge his duties as a director of the Company.

Executive bodies of the Company

The Chief Executive Officer and the Management Board

The Chief Executive Officer is the sole executive body of Uralkali, whose competence is determined by the Company’s Charter. The CEO is also the head of the Management Board.

On 24 December 2013, Dmitry Osipov replaced Vladislav Baumgertner as Uralkali’s CEO.

The Management Board is a collective executive body of the Company. Its quantitative and personal composition is determined by the Board of Directors. Currently, the Management Board has 10 members.

As the term of office for the Management Board members directly depends on the tenure of directors, who elected the current Management Board, in 2013 the Board of Directors considered the Management Board’s composition on two occasions: in June and November. Both times, the directors confirmed the authority of the Management Board members who had been elected in 2012.

The composition of the Management Board changed in December 2013, following Vladislav Baumgertner’s resignation from the Company and Dmitry Osipov’s appointment as the CEO and the new head of the management team.

The Management Board had the following composition as of 31 December 2013: Dmitry Osipov, Alexander Babinsky, Vladimir Bezzubov, Viktor Belyakov, Pavel Vakhnin, Yevgeny Kotlyar, Andrey Motovilov, Oleg Petrov, Ildar Sabirov, Elena Samsonova, Stanislav Seleznev, Boris Serebrennikov and Marina Shvetsova.

In 2013, the Management Board held nine meetings and considered 51 agenda items. It continued to optimise the Company’s organisational structure and the subsidiary management process, discuss specific business-area strategies and status of current projects, and review performance reports by various subdivisions.

It is important to note that in 2013 the Appointments and Remuneration Committee of the Board of Directors initiated a change in how Uralkali manages its subsidiaries and affiliates. In most of them, Boards of Directors were abolished, while Uralkali created the Subsidiary Management Committee under the CEO. The new committee was joined by several members of the Management Board, who had previously acted as directors of the subsidiaries and affiliates. The new approach helped to significantly ease the management process and has significantly reduced the number of related party transactions, which had to be approved by the Board of Directors only on formal grounds.

Committees under the CEO (Working Groups)

The current structure of management and control bodies in Uralkali is based on Russian legal requirements. At the same time, we have our in-house Corporate Governance Policy, which helps us develop and optimise the management structure by creating special advisory bodies to deepen reviews of important matters. For instance, in 2013 the existing corporate committees under the CEO (the Working Groups):

  • The Health, Safety, Environment and Corporate Social Responsibility Committee;
  • The Risk and Internal Control Committee;
  • The Procurement Committee;
  • The Investment Committee;

were joined by the newly created Subsidiary Management Committee, mentioned earlier in this Report.

The Working Groups were initially formed to ensure a single approach to decision-making in these areas of activity. Every committee is represented by members of the Management Board personally led by the CEO. The Working Groups’ competence includes monitoring and review of relevant information; preliminary discussions and risk analysis; and follow-up of scheduled activities. In 2013, the Working Groups had a busy schedule: in total, 44 meetings were held. The work of the Working Groups provided a great degree of support both to the CEO and the Management Board as a whole.

Management’s Remuneration

Remuneration payable to members of the Management Board consists of two parts: a monthly salary, whose size is specified in individual employment contracts; and an annual bonus. The amount of the bonus depends on the achievement of individual annual KPIs, which reflect the contribution of a member of the management team to the achievement of the strategic and operating goals of the Company.

In April 2011, the Board of Directors approved the key principles of a longterm incentive plan (LTIP) for senior executives of Uralkali. These principles aim at increasing motivation of the top management in their efforts to enhance the market capitalisation of the Company pursuant to shareholders’ and investors’ interests.

The LTIP was originally designed for three calendar years starting from Q2 2011. Under the plan, the remuneration amount depended on Uralkali’s relative return on equity versus its peers (Mosaic Company and Potash Corporation of Saskatchewan) with an allowance for the performance of the Russian versus the US stock markets. The LTIP also had early termination and payment provisions, and so the recent major change in the shareholding structure became the trigger for the termination of the LTIP in December 2013.

All outstanding payments to the LTIP participants were made in January 2014, except for Vladislav Baumgertner, who received his LTIP award in December 2013 due to his resignation from the Company.

On 18 December 2013, the Appointments and Remuneration Committee reviewed the fulfilment of the 2013 performance charts by members of the Management Board and several other executives of the Company.

The total remuneration paid to the Management Board for 2013 was as follows:

In RUBIncluding personal income tax. In USDUsing the exchange rate set for 31 December 2013 (32.7292 RUB/US$)
Salary 649,528,389Including all the payments to Vladislav Baumgertner due to his leave at the end of 2013. 19,845,532
Annual bonus 90,400,199 2,849,110
LTIP award 4 499,330,046 15,256,409
Total: 1,239,258,634 37,951,051

Information about directors’ equity ownership

According to JSC Registrator Intraco, which maintains the register of holders of registered securities of Uralkali, as of 31 December 2013, Yevgeny Kotlyar, who is a member of the Management Board, is registered in the Company’s share register with 53,608 ordinary shares of Uralkali, which is equal to 0.0018% of the Company’s authorised capital. There are no other members who currently hold or previously held positions in management bodies of Uralkali in 2013 in the Company’s share register either as of 1 January 2013 or as of 31 December 2013. There is no record of any transactions made by members of Uralkali’s management bodies to acquire or alienate shares of the Company, including dates and subject of transactions, the category (type) and number of Uralkali shares which were the subject matter of such transactions from 1 January 2013 until 31 December 2013. The share register has no record of nominal share holders as of 1 January 2013 and 31 December 2013.

Prevention of fraud and corruption

In 2011, Uralkali introduced an Anti-Fraud Programme, which aims to create a mechanism preventing instances of fraud. In the course of 2013, the Company implemented various activities as part of this programme to improve its security. We will also continue to use a very powerful tool of raising awareness among our employees and partners about the existence of the Anti-Fraud Programme so that they know about our zero-tolerance approach to any kind of fraud.

Also in 2013, Uralkali began the development of an anti-corruption compliance system. As part of this system, we developed an Anti-Corruption Policy and conducted extensive training for employees in anti-corruption principles, ways of responding to corruptive actions, receiving and making business gifts, and charity. The training covered all levels of personnel in the Company, from the CEO to line managers to support staff. All key business processes in the Company were enhanced with additional controls to prevent, identify and respond to instances of corruption and fraud.

To further pursue the development of the anti-corruption compliance system, Uralkali introduced a new position of a compliance manager. As for our plans for the future, our next activities include creation of a regulation on conflicts of interest, and development and introduction of a media plan to promote anti-corruption principles in the Company. Finally, we intend to introduce the anti-corruption principles at our subsidiaries to expand this single approach to the whole Group.