Norilsk Departing CEO Strzhalkovsky Said to Get $100 Million
Stock Chart for MMC Norilsk Nickel OJSC (GMKN)
OAO GMK Norilsk Nickel’s chief executive officer is set to pocket about $100 million upon stepping down after its billionaire owners struck a deal to end a four-year feud, three people with knowledge of the plan said.
The terms of the so-called golden parachute for Vladimir Strzhalkovsky have been agreed on by all major shareholders and will be put to a vote at a Dec. 17 board meeting, the people said, asking not to be named before the information is public.
Strzhalkovsky’s exit was a condition of an accord reached by Norilsk’s main shareholders this week to end a dispute that’s hampered operations since 2008. Billionaire Vladimir Potanin, whose Interros Holding Co. owns 28 percent, will probably take the CEO role pending board approval, according to a Dec. 11 filing from Interros and fellow holder United Co. Rusal. (486)
Officials at Norilsk, Rusal and Interros declined to comment on any payout for Strzhalkovsky.
“This is the largest payout in Russia’s corporate history,” said Georgy Abdushelishvili, a senior partner at Ward Howell International, a headhunting company. “It’s an indecent amount.”
Strzhalkovsky’s potential exit bonus will be equivalent to about 3 percent of Norilsk’s net income for 2012, according to Sberbank Investment Research.
The departing CEO is set to receive $50 million of compensation immediately upon retirement, $25 million six months later and $25 million a year after that, Vedomosti reported today, citing two people with knowledge of the plan.
Strzhalkovsky was ninth on the list of the 25 best-paid Russian managers this year, according to Forbes, with estimated annual compensation of $10 million.
Strzhalkovsky, 58, a former Russian tourism agency chief, was named Norilsk CEO in August 2008, an appointment backed by Interros and opposed by 25 percent shareholder Rusal. Rusal’s billionaire chief Oleg Deripaska has since criticized management for its strategy and use of cash, including spending $9 billion on buybacks last year.
Strzhalkovsky was an officer with the KGB for 11 years. He served in the Leningrad branch of the Soviet security agency from 1980 to 1991. Before joining Norilsk, Russia’s biggest mining company, his only business experience was when he headed the Neva travel agency in the 1990s, according to his official biography.
“The main reason for Strzhalkovsky’s appointment as CEO was believed that he would help Potanin by his lobbying power in government,” Alexei Morozov, an analyst at UBS AG, said by phone.
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