Remuneration report
Board of Directors remuneration
GRI 2‑19, 2‑20
When deciding on the Board composition, the General Meeting of Shareholders approves the amount and the rules for determining and paying remuneration and compensation to the Board members. The Board remuneration shall be in line with current market conditions and shall be sufficient to enable the Company to attract, motivate and retain highly skilled professionals to help drive the future growth and performance.
At the same time, the Company avoids higher‑than‑necessary remuneration. The existing amounts and rules for determining and paying remuneration and compensation to the Board members were approved by the General Meeting of Shareholders on 30 June 2024.
| Full name of the member of the Board of Directors: | 2022 | 2023 | 2024 |
|---|---|---|---|
| Sven Ombudstvedt | 12,171,879.00 | – | – |
| James Rogers | 10,143,232.50 | – | – |
| Marcus Rhodes | 10,143,232.50 | – | – |
| Xavier Rolet | 5,717,786.80 | – | – |
| Irina Bokova | 5,115,232.97 | – | – |
| Ivan Rodionov | 9,581,287.50 | 5,781,472.50 | – |
| Andrey Sharonov | 14,418,297.00 | 15,805,053.00 | 16,762,783.5 |
| Victor Cherepov | 12,746,475.00 | 42,146,808.00 | 44,700,756 |
| Victor Ivanov | 5,748,772.50 | 15,805,053.00 | 16,762,783.5 |
| Vladimir Trukhachev | – | 12,336,169.50 | 16,762,783.5 |
| Total | 85,786,195.77 | 91,874,556.00 | 94,989,106.50 |
Remuneration of the management
Remuneration principles
PhosAgro’s remuneration policy for executive bodies and other key employees is determined by the Board of Directors based on the recommendations of the Remuneration and Human Resources Committee.
The Remuneration and Human Resources Committee conducts a detailed bi‑annual review of the incentive system, evaluating its effectiveness and, if necessary, making recommendations for its improvement.
The remuneration due to the Company’s senior executives consists of a monthly base salary plus additional compensation payable twice a year. Additional remuneration is linked to achieving the Company’s KPIs and completeness and quality of accomplishment of additional tasks, as determined by the Board of Directors and the CEO for the reporting period, as well as the Company’s achievement of the EBITDA target.
All KPIs are aligned with the Company’s strategic goals defined in its Strategy to 2025 and oriented towards their achievement.
The amount of additional remuneration ranges from 30% to 150% of the annual base salary and depends on the level of the position held and the functional area of the manager. The Remuneration and Human Resources Committee of the Board of Directors, during its annual evaluation of the incentive system, ensures an effective proportion of fixed and variable components of remuneration.
KPIs for each senior manager are set annually and take into account metrics related to operational efficiency and individual contribution to the corporate growth and strategic performance.
To assess the performance of Phosagro’s CEO, a number of indicators are used, which aim to improve the efficiency of investments and sales, control costs, and reduce employee injury rates for the Company and its contractors.
Values of the CEO KPIs in the range of base case / target / challenge, as well as their actual values at the end of the reporting period are approved by the Chairman of the Board of Directors. Taken together, these indicators contribute to the achievement of the Company’s strategic goals and serve the interests of shareholders both in terms of the Company’s development and in terms of minimising the risks arising from incentivising excessively risky management decisions.
KPIs of the CEO and N‑1 level managers, including sustainable development indicators, are cascaded down and decomposed into KPI scorecards of lower‑level management. The indicators themselves and their weights are modified depending on the nature of a particular manager’s focus area with due regard to their strategic fit. Specific KPI wordings and their weights are established by PhosAgro’s KPI Committee, taking into account the opinion of the KPI holder and their immediate supervisor.
When determining the amount of additional annual remuneration for the top management, we look at the achievement of the EBITDA target as an integral indicator of the Company’s performance. The managers’ performance is adjusted by the percentage of delivering on the EBITDA target. The Company does not provide for any compensation payable to managers in case of their dismissal or voluntary resignation or the Company’s takeover or the change of its owner (golden parachutes). Neither does it use options, pre‑determined unconditional bonuses or a clawback mechanism.
As can be seen from the above statistics, PhosAgro Group is focused on sustainable development, and the KPI framework includes the following indicators:
- reduction of unit emissions to the atmosphere;
- share of waste recycling, neutralisation, and processing;
- efficiency of the second line of defence in the area of negative environmental impact facilities (discharges, emissions, waste);
- implementation of a programme to improve the energy efficiency of Apatit’s facilities and branches;
- growth in subscriptions to the ProAgro Lectorium communication platform (online lectures and training from leading agricultural technology experts and consultants);
- work under the Carbon Farm project;
- implementation of key social projects;
- % of completion of the programme to improve social and working conditions;
- increase in the number of employees involved in healthy lifestyle programmes;
- industrial safety indicator within the framework of the Safety Culture Transformation Project;
- percentage of staff covered with methods and tools implemented under the Safety Culture Transformation Project;
- zero accidents;
- zero occupational injuries among the Company and contractor employees.
- reduction in the number of accidents (incident, fire, ignition, road traffic accident, railway transport accident).
For information on total remuneration paid to all members of the Company’s executive bodies over the year with a breakdown by type of remuneration, see the issuer’s report for the reporting year
No loans were extended to members of the Board of Directors or the Management Board as at 31 December 2024.
Remuneration of members of executive bodies
The amount of remuneration and additional compensation due to PhosAgro’s CEO is regulated by a contract between them and the Company, which is signed by the Chairman of the Board of Directors. The total remuneration reflects the CEO’s qualifications and their personal contribution to the Company’s financial results.
External auditor’s remuneration
PhosAgro engaged independent auditor JSC Technologies of Trust – Audit to audit its IFRS consolidated financial statements for 2023 and 2024. The actual remuneration paid to the auditor for the audit of the IFRS consolidated financial statements of PJSC PhosAgro and the RAS accounting statements of the entities controlled by PJSC PhosAgro amounted to RUB 28.2 mln for 2024 (vs RUB 24.9 mln for 2023), net of VAT and overhead costs.
In addition to that, in 2024 JSC Technologies of Trust – Audit and its affiliated companies performed review of the IFRS consolidated financial statements of PJSC PhosAgro and the entities controlled by it and provided other services for the total amount of RUB 25.5 mln (vs RUB 21.4 mln in 2023), net of VAT. All additional services provided by the external auditor were duly approved by the Chairman of the Audit Committee of PhosAgro’s Board of Directors in line with the applicable independence requirements.
The actual remuneration of JSC Unicon to audit PhosAgro’s RAS financial statements for 2024 was RUB 883,700 (vs RUB 752,100 in 2023), net of VAT.
Additionally, in 2023 JSC Unicon provided tax consulting services to PJSC PhosAgro and the entities controlled by it for the total amount of RUB 200,000 net of VAT.