Lukoil directors to consider company plan for 2013-2015 on Dec 4
MOSCOW. Nov 27 (Interfax) - The board of directors at Russian oil major Lukoil will on December 4 address the main aspects of the group's middle-term plan for 2013-2015, a company statement says.
Also on the agenda will be long-term incentives for Lukoil and its subsidiaries' employees and approving the rules for an external audit.
According to the company's US GAAP reporting, since December 2009, Lukoil has employed a program to reward certain top-managers in 2010-2012. This program foresees the distribution of secured shares and the payment of remuneration in two parts. The first part is an annual payment of remuneration, based on the number of conditionally secured shares and the dividend rate per share approved by shareholders. The payment of this remuneration hinges on the Lukoil Group's ability to meet certain key operational goals on an annual basis. The second part of the remuneration is based on gains made by the company's stock in 2010-2012, as well as the right for their acquisition at the end of the program's term. The size of conditionally secured stock comes to around 17.3 million shares.
According to the first part of the program for conditional shares, the group recognizes the obligation, based on forecast dividends and the number of conditionally secured shares. The program's second part is classified as part of shareholder capital. A fair value for this program on the date of its introduction was set at $295 million and planned out using the Black-Scholes-Merton option model. As of September 30, 2012, the company had undeclared expenditures totalling $25 million, the unconditional right for remuneration on which still has not been provided. These expenditures should be recognized during a three-month period ending December 31, 2012.
