Norilsk shareholders do not support changes to independent director criteria
MOSCOW. Feb 7 (Interfax) - Shareholders in MMC Norilsk Nickel did not adopt the decision at an extraordinary meeting by absentee on February 1 to introduce changes to the company's charter on the criteria for classifying board of directors members as independent, Norilsk said in a press release.
In the presence of a quorum of 140,213,614 votes (73.55% of charter capital), 60% of shareholders voted in favor, and 39% voted against.
According to Norilsk's proposed changes to the company statute, at least two members of the board of directors could lose their independent status. As former head of the board of directors, Alexander Voloshin is subject to an amendment stipulating that over the course of three years from the moment of his election, an independent director must not hold a position in the company's management or be the chairman of its board of directors. Farhad Moshiri, who represents Metalloinvest, falls under another recommended amendment - an independent director cannot be a shareholder (direct or indirect, including together with a group of individuals) with a stake of over 2% of votes, or the employee of such a shareholder. This provision also applies to Claude Dauphin from Trafigura - on the condition that the commodity trader, to whose structures 8% of the Treasury's stake in Norilsk was sold at the end of 2010, will remain a beneficiary of no less than 2% of votes.
According to Norilsk's current charter, a director is considered independent if he represents owners of less than 10% of the company's shares. The board of directors currently has 13 members, six of which are qualified as independent - Alexander Voloshin, Bradford Mills, Enos Banda, Farhad Moshiri, Lucian Bebchuk and Claude Dauphin.
Russian aluminum company UC Rusal voted against the proposed changes, a Rusal representative told Interfax. In the aluminum company's opinion, the changes put together by Interros were poorly prepared. "The clause stipulating that a director cannot be considered independent if he occupies the position of chairman of the board within three years of his election provokes serious questions. It turns out that if an independent director is elected chairman, once the board is reelected, this director won't be considered independent anymore. Where is the logic in that?" the Rusal representative said.
At another meeting on February 3, Norilsk shareholders were supposed to approve the amount of remuneration for independent directors. At their annual meeting on June 21, 2011, they rejected points on remuneration and an options plan for independent directors, although they were unchanged from 2010. Management and principal shareholder Interros voted against, as did minority shareholders on the recommendation of ISS and Glass Lewis. Dissatisfaction with consultants then led to other proposals on remuneration for independent directors and the chairman of the board of directors (up to $10 million per year). The board is currently headed by Interros representative Andrei Bugrov.
Although the February 3 meeting was held, the voting results have not yet been disclosed.
Rusal voted in favor of remunerating independent board members on February 3. "If remuneration for independent members of the board of directors is not approved, this will exclusively be the result of voting by Interros and the management. It is obvious that the management and Interros would therefore be trying to de-motivate independent directors and exclude the presence of strong independent directors from the board of directors in the future," Rusal said.
The remunerations committee recommended that shareholders approve the same amount of remuneration that was in place before the annual shareholders meeting: $62,500 quarterly, plus $32,500 per quarter if an independent director heads the committee, up to 2 million rubles per year in compensation for documented expenses, plus 20,000 phantom shares. There is a limit - the total annual compensation for one independent director cannot exceed $1 million.