FX.co ★ Golden parachute fails to open

Senior management team of the Russian governmental organizations will be no longer able to get a golden parachute after resignation. President Putin has signed a decree to limit a severance payment destined for executive managers to the amount of 3 salaries. The new rules are applied to “CEOs, their deputies, chief accountants, and members of collegial executive bodies,” who used to receive $100 million as compensation. However, what that compensation is for had never been specified. From now on, after terminating an employment contract, an employee gets at most 3 salaries, honor, respect, and a right to be paid for the unused vacation. In 2013, the Russian State Duma already discussed several draft laws regulating the management board’s pay. The documents were initiated by the Bank of Russia, which suggested curbing benefits obtained by the management teams of the Russian companies to 2 salaries. Meanwhile, the CEOs had been expected to get a minimum payoff.
Vladimir Putin has put an end to that as the bill became a law. It is important to remember the hefty golden parachute worth 200 million rubles for Alexander Provotorov, the former Rostelecom president, made a lot of fuss. At that time, the minority shareholders sued the chairman for the illegal severance pay and won. There were examples in the private sector as well. For instance, Vladimir Strzhalkovsky, the ex-chief executive of Norilsk Nickel, was paid $100 million.