Georgy Malginov attended a round table discussion of issues related to public companies governance efficiency

Representatives of the federal administrative bodies, managers of large companies with public participation, portfolio investors and members of academic community participated in the discussion.

Among round table discussants were: Olga Dergunova, Deputy Minister of Economic Development of Russia, Head of the Rosimushchestvo, employees of Rosimushchestvo. Alexander Auzan, member of the Economic Council under the President of Russia, member of the Government Commission on the implementation of administrative reform, chair of the Economic Department of the MSU, served as

Attendees focused on the issues of long-term incentives programs designed for the management of Russian companies with public participation. Several presentations were made on these issues. As a result of discussion and exchange of opinion with subsequent ballot on various issues the following points of view became clear.

The vast majority of attendees supported the expediency of long-term remuneration payouts to members of Board of Directors. Although, significant part of experts were in favor of restricting the sphere of its application by public companies alone.

Regarding the long-term remuneration of the management, the experts agreed on the three year period and regarding the amount of remuneration of the Board members they were equally divided between those who were for payment of a half of their aggregate income and those who were for payment of around 30-40% of their aggregate income.

They accepted the expediency of the wide scale of long term incentive program which would cover not only General Director, Board members, but also heads of departments and other key employees by the decision of the Board of Directors.

Conditions of long term incentive program should take account of both indices of the company and the results of their competitors. However, compulsory condition of such payouts should depend on meeting planned targets of long term development programs which will justify partial intermediary payouts prior to the expiry of long term incentive program life.

The issue of incentives for development institutes has its own features. Long term remuneration of their top management can be tied to financial results after the expiration of certain projects. In case when financial and economic situation of a company is determined by decisions taken by regulatory bodies, the role of management should come down to cutting costs.

Experts named ownership of shares and payment of part of remuneration with shares with postponement of delivery as preferable implementation of long term incentive program.