A relatively new term has appeared in the vocabulary of Russian business - the "golden parachute." What is this phenomenon? What are the prospects for its further popularization among Russian entrepreneurs?
Why a parachute and why a golden one?
The term "golden parachute" came from English - there the phrase "Golden Parachute" means impressive compensation (usually to the address of the top manager) if the employment contract is terminated. "Parachute" - because when you leave the person a "soft landing" is guaranteed, and "golden" - because the numbers in such agreements are sometimes simply astronomical, sometimes they amount to millions of dollars. Compensation may also have an indirect format, when the dismissed employee gains access to the company's shares at preferential prices. The question is, what is the benefit of the company from such generosity?
The answer is simple: a "golden parachute" helps protect the business from takeovers. A company that intends to buy shares of competitors will think very well before doing this - possible payments to managers sitting on golden parachutes can become an overwhelming financial burden. Of course, there is a loophole for corruption here as well - managers who have signed gold contracts can intentionally help competitors absorb their employer. However, if a competent lawyer worked in the preparation of the employment contract, then it is possible to prescribe points that protect the business from such tricks. In addition to the “gold”, world practice knows “silver” (mid-level managers receive them) and “tin” (paid to ordinary employees) parachutes.
With a "golden parachute" - retired
One of the largest Russian companies in terms of financial turnover is Gazprom. “Golden parachutes” as a phenomenon are not alien to this company, however, the practice of their use in the “gas giant” has a rather mild form - these are mostly pension payments that are received by employees with many years of experience upon completion of their labor activities.
True, as it was written in some media, Gazprom can significantly reduce its “golden” social network - for example, in some regions where the concern operates, the length of service that other employees need for a “golden retirement parachute” is no longer taken into account . Some experts believe that such a policy of the “gas giant” is the result of the president’s appeal about cutting costs in this company, a controlling stake in which belongs to the state. There is also a version that the leaders of Gazprom subsidiaries themselves are not opposed to the revision of social support measures for employees.
Golden Parachutes and Russian Reality
The economy of our country was built in extremely difficult conditions. Therefore, the "golden parachutes" in Russia inevitably acquired national characteristics. First of all, because they appeared as a noticeable phenomenon relatively recently: only in 2009 the Federal Service for Financial Markets put forward an amendment to the Law on Joint Stock Companies, according to which a clause on compensation for termination of an employment contract appeared in senior positions.
Therefore, the legislative regulation of "parachutes" is complicated by the fact that the practice of accruing "golden" bonuses in Russia is very young. Some experts note: the payment of compensation to top managers does not always take place within the framework of “white” schemes. This is a typical Russian problem. Very often, the real numbers regarding the size of the “parachutes” remain a mystery - the contract values ​​are written down, and the person receives completely different money in his hands.
Judge's weighty word and public opinion
In Russian judicial practice, there is a precedent for recognizing payments under "golden parachutes" as unauthorized. At the same time, this fact caused a wide public outcry. To receive an amount of several million rubles upon the fact of early dismissal was supposed to be the top manager of Rostelecom Alexander Provotorov. The "Golden Parachute" for him, appointed by the telecommunications giant, caused a tangible resonance in the business community.
The company's shareholders filed a lawsuit against this decision (it was accepted by the board of directors). The outcome of the hearing - the purpose of the payments was declared unauthorized. True, this court decision was appealed. But the most important thing in this story is that the widest sections of the public have learned what a "golden parachute" is. Rostelecom involuntarily contributed to this. Representatives of the highest echelons of power expressed their opinion about the huge payments for the dismissals of top managers.
On the "golden parachutes" through the mouths of activists
Work on the law signed by the president began on the initiative of activists of the Popular Front political union. It is believed that it was during a meeting of social activists of this organization with the president that the question arose of the need for government intervention in the disposal of financial resources of state-owned companies. As regards the fact of accruing a “golden parachute” in the amount of 200 million rubles noted above, activists expressed bewilderment to Alexander Pravotorov from Rostelecom. The President of Russia supported these sentiments.
It was planned that the size of the "golden parachutes" would be limited to 6 salaries, but the State Duma deputies spoke in favor of a significantly larger limit - three average monthly payments. At the same time, activists of the Popular Front are planning to lobby for new laws, including those that will limit the size of the maximum monthly earnings, not only for top managers of state-owned companies, but also for employees at all levels.
State controlled parachutes
The State Duma, in response to public initiatives, approved a bill according to which the amount of benefits for the dismissal of people holding senior management positions in state (and municipal) companies would be limited to three salaries. The full abolition of the "golden parachutes", however, was not considered by lawmakers. At the beginning of 2014, the Russian president signed a law that restricts the payment of "golden parachutes" to top managers of corporations, the majority of which belongs to government agencies. Thus, the initiative of the Federal Service for Financial Markets received additional legislative regulation. Some media reported that restrictions on the payment of "golden parachutes" may also affect state extrabudgetary funds. Also, the compensation limit for dismissal may affect not only directors of state organizations, but also accountants and members of supervisory boards.
Catch up with and overtake Rostelecom
Even before the resonance with the largest telecommunications corporation in Russia, some market players whose controlling stake was controlled by the state did not hesitate to indulge their top managers with golden parachutes. So, the facts are known when top managers at large energy companies received considerable payments (sometimes the figures exceeded 130 million rubles). The precedent associated with the "golden parachutes" in Rostelecom, experts say, may not affect the segment of private corporations. There are examples when the CEOs of the largest metallurgical companies received dismissal payments of several tens of millions of dollars. In 2010, when a controlling stake in Uralkali changed ownership, several top executives quit the company. One of them received compensation in the amount of more than 200 million rubles.
"Parachutes" - an international phenomenon
Experts estimate that the average size of “golden parachutes” in the US is about 12% of the profit that the company receives for the year (which is approximately equal to 1.7% of the company's share price). However, after the crisis in 2008-2009, the countries with the world's largest economies adopted a number of resolutions implying restrictions on such payments (though in the original wording - with reference to the top leadership positions of banks).
The countries of the “Big Twenty”, including Russia, pledged to develop criteria for evaluating the work of the leaders of credit organizations so that there are no cases when the bank is unprofitable and the director drives a Mercedes. True, this initiative, as experts note, is nevertheless advisory in nature. The position of the G20 is understandable - in times of crisis, despite the collapse of markets and the ruin of banks, managers of some financial institutions received very large bonuses after leaving.
Europe against the "parachutes"!
In Switzerland - in the main "banking institution" of the world - "golden parachutes", as one of the referenda showed, are not held in high esteem. Citizens advocated that salaries and bonuses to managers of large firms be limited. And such a thing as compensation for dismissal should be canceled altogether. The idea to hold a referendum in the country came under the influence of the global crisis. Low performance indicators of corporations and banks were striking against the background of huge salaries of managers. There was a precedent among pharmaceutical companies with the payment of $ 80 million as a "golden parachute" to the former president of the company. In response, he promised not to get a job in competitive firms.
The Swiss public has nicknamed the highly paid top managers "fat cats." Experts note that the parliament and government of Switzerland do not support the public’s mood, which can be poured into a separate bill on "golden parachutes." This, according to the authorities, can reduce the competitiveness of the state, will provoke the migration of talented people who are able to manage. But there are also supporters of the initiative, noting that investments in Switzerland will go just as actively, as firms will pay stable dividends to shareholders instead of spending money on another "golden parachute."