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Articles & publications
25.05.2010
Boards of Directors of Svyazinvest subsidiaries to review management options program at the end of MayInterfax
The boards of directors of Svyazinvest’s regional telecommunications operators (RTOs) are scheduled to examine the issue of approving the management options program on May 31.
The Board of Directors of another Svyazinvest subsidiary – Rostelecom (RTS: RTKM) – is slated to discuss the program on May 28, according to a statement issued by Svyazinvest.
The total amount of financing for the program is approximately $350 mln. According to earlier reports, up to 3.5% of the combined shares of the merged Rostelecom could be allocated as options.
On Monday a joint meeting of the executive salary committee and business strategy committees of RTOS and Rostelecom were held, at which the issue of a long-term incentives program for the company’s employees was discussed. A resolution was passed which recommended the boards of directors to vote for the approval of this program.
The committees also approved a trust management agreement for securities investment fund Gazprombank – Telecommunications, which is to be established in order to supervise this program.
The program lays down the key management incentive principles for the implementation of tasks both related to the reorganization of the group and the establishment of a single national operator on the basis of Rostelecom and subsequently in order to achieve the company’s business goals in the long-term outlook.
The term of validity of the program is 2.5 years. In addition, the plan is for options to be exercised gradually: 60% are to be exercised in November 2011, i.e. 1.5 years from the date of the program’s launch. The rest are to be exercised within 2.5 years (in November 2012).
Closed-ended mutual investment fund Gazprombank – Telecommunications was founded by Gazprom – Asset Management for the purpose of buying back the shares of RTOs and Rostelecom under the options program. Svyazinvest’s subsidiaries are to acquire fund units, and the holding is to buy up the shares.
All managers signed up for the options program will have to pay dues. Each recipient should day an entry fee of RUR 30,000, which counts as advance payment for the price of the option. On the date when the option is exercised the participant pays the price of the option which was established at the time when the program was launched.
The participants of the program at Svyazinvest companies will be general directors, members of the management board, heads of branches, and also “other key employees (experts who produce outstanding results and are admitted to the program on the basis of a decision by the general director of the company”).
According to earlier reports, the options program was worked out by Deloitee and its participants numbers 350 key managers of Svyazinvest, Rostelecom and RTOs.
Svyazinvest owns controlling equity stakes in Rostelecom and seven regional telecommunications operators – CenterTelecom (RTS: ESMO), North-West Telecom (RTS: SPTL), VolgaTelecom (RTS: NNSI), UTK (RTS: KUBN), Uralsvyazinform (RTS: URSI), Sibirtelecom (RTS: ENCO) and Far East Telecom (RTS: ESPK).
The reorganization of the state holding, which is expected to be completed in the middle of 2011, provides for the merger of all RTOs and Dagsvyazinform with Rostelecom.
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