Benefits and compensation paid to managers of state companies will be limited to six months of pay. A bill to that effect was submitted to the government by the Ministry of Labor on Wednesday. The initial draft document provided for limiting the size of severance pay at the minimum level currently mandated by the Labor Code of the Russian Federation, that is by the three-month salary.
The Labor Ministry submitted to the government a bill limiting the size of payments, as well as compensation and severance paid to top executives of state companies and state-owned corporations. Now these payments should not exceed six times the size of an average monthly salary.
How the “White House” cut “golden parachutes”
In July, the government decided to take some tough measures against the issue of “golden parachutes” for top managers of state companies, limiting the amount of severance pay by the statutory minimum level currently set in the Labor Code now, that is the three-month salary…
Let’s remember that in April 2013, Vladimir Putin ordered the prime minister Dmitry Medvedev to develop by July 1 measures to limit the size of “golden parachutes” for top executives of state corporations. It was triggered by the payment of 200 million roubles to Alexander Provorotov, the outgoing CEO of “Rostelecom”. The President found out about this from Valery Trapeznikov, a deputy from the United Russia party, at a conference of the All-Russia People’s Front. The proactive deputy became one of the authors of the United Russia bill that proposed to pay outgoing top executives of state corporations 3 to 12 months’ salary, and the CEOs of state-owned companies the amount of not less than 50%, that is up to 18 monthly salaries. Later, a similar proposal was made by the communists. They called for limiting the amount of payments to the six months salary, but proposed to set the size of the base salary of top management of state-owned companies: no more than eight average monthly salaries of the employees of such an organization.
It should be noted that the third bill on this subject, submitted by the Ministry of Labor, was the most drastic. The agency argued for limiting the size of severance pay by the minimum level currently mandated by the Labour Code, that is by a three-month salary. It is reported that the current version of the measure is based on the results of the public discussion launched by the Ministry
How “golden parachutes” could hit the ceiling
In June, the Ministry of Labor and the Ministry of Finance launched an initiative to limit the size of “golden parachutes” for outgoing top managers of state corporations by no more than five months’ salary.