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ЕВРАЗ. Годовой отчет за 2021 год - часть 8
ANNUAL REPORT & ACCOUNTS 2021
REMUNERATION
Annual remuneration report
of reference, approved the remuneration
The design of the LTIP is based on key
of the senior executives operating
measures of performance designed to align
REPORT
The second part of the report,
immediately under the CEO.
the CEO and other senior executives
the Annual Remuneration Report, sets
with the shareholder experience. In this way
out details of remuneration paid in 2021
In line with its commitment to good
four key steps of the Program exist in parallel
and how the Group intends to apply its
corporate governance, the Committee
within every year.
I am pleased to present EVRAZ’ annual
his remuneration accordingly. We
Remuneration Policy in 2022. This section
will continue to monitor investors’ views,
report on directors’ and CEO remuneration
are therefore bringing the Remuneration
will be put to an advisory shareholder vote
developments in best practices and market
1.
Awarding (Grant) to the program
and to confirm that the committee
Policy to be voted upon by shareholders
at the forthcoming AGM.
trends on executive remuneration. These will
members;
has taken its decisions fully in line
again this year to ensure the policy
be considered when deciding on executive
The Remuneration Committee
with the shareholder-approved policy.
appropriately applies to our new CEO
remuneration at EVRAZ, in order to ensure
approves the grant for the CEO
Whilst our new CEO was not a Director
and as there is a share based incentive
that its Remuneration Policy remains
and the grants proposed by the CEO
of the Company during 2021, we have
in place. This policy is designed to help
Key decisions taken during
appropriate in the context of business
for employees. Employees can
applied our Remuneration Policy as if
deliver the Group’s sustainable business
the year
performance and strategy.
be included in the long term incentive
he were a Director until his appointment
objectives and maximise long-term returns
program based on an individual
to the Board in February 2022 and disclose
to shareholders.
The Committee operated under its terms
decision on the value of the employee
of reference (as described on pages 152-153)
for Company business, the market
without conflicts of interest and having
Link with business strategy
practice, the position level (grade),
sought advice to determine the future policy.
compliance with Companys corporate
EVRAZ’ strategic priorities define
values. Participants are awarded shares
Alexander Izosimov
Alexander Frolov stepped down from his
the selection of KPIs for the CEO.
in the Company. The number of shares
Independent Non-executive Director
role of CEO, effective from 31 August 2021.
is determined based on the grant
and Chairman of the Nominations
He received no payments in connection
These strategic priorities are reflected
amount in USD and the average share
Committee
with ceasing to be an executive director;
in the Group’s approach to executive
price for the month preceding the date
his annual bonus has been earned based
remuneration. A large proportion
of the Remuneration Committee meeting
on a pro-rata amount for the time worked
of the CEO’s remuneration is linked to longer
approving the grants.
in the year and he received his base salary
term performance through the annual bonus
2.
Definition of the performance metrics used
until he stepped down. Alexander Frolov
and share based incentive.
for vesting.
is now a non-executive director. His fee
The Committee is reviewing what these
for this role is included on page 149 which
The determination of the annual bonus
should be and will include the 2022
was pro-rated for the period of the year
is based on the Group’s key quantitative
performance metrics in the summary
INTRODUCTION
worked.
financial, operational and strategic measures
of the LTIP that shareholders will be asked
to ensure focus is spread across the key
to approve at the June 2022 AGM
Aleksey Ivanov was promoted to CEO
aspects of Group’s performance and strategy.
3.
Communication of the performance
This report has been prepared
Directors’ and CEO
The proposed policy is broadly unchanged,
on 1 September 2021 and has since
The exact measures and associated weighting
regularly.
in accordance with the relevant
remuneration policy
save for the introduction of an LTIP. This
been appointed to the Board effective
are determined on an annual basis according
4.
Determination of the performance
UK company laws and regulations
follows a review by the Committee, who felt
1 February 2022. He receives a base salary
to the Company’s strategic priorities
calculations and confirmation
(the “Regulations”). It also meets
The current Executive Directors' Remuneration
that it was appropriate to continue to make
of US$2,000,000 per annum, lower than that
for the year.
to participants of how awards vest.
the relevant requirements of the Financial
Policy was approved by shareholders
awards to Aleksey Ivanov following his
of Alexander Frolov, a bonus of maximum
For the CEO there will be an additional
Conduct Authority’s Listing Rules
at the Annual General Meeting (AGM)
promotion.
200% of base salary and it is intended
For 2021, the following five indicators,
two year period during which he will retain
and describes how the Board has applied
in June 2020. We are putting a new policy
he will receive a share based incentive
each with an equal weighting of 20%,
any shares that vest (net of sales to meet
the principles of good governance as set
to vote at the next AGM in June 2022
Accordingly, the Committee has made
equivalent to 200% of salary. Aleksey Ivanov
were considered when determining both
taxes).
out in the 2018 UK Corporate Governance
to incorporate changes for our new CEO.
some changes to ensure key elements
is expected to retain shares up to 300%
the former and current CEO’s annual bonus:
Code (July 2018).
This policy is then intended to apply
of the policy can be applied to him. These
of his base salary.
LTIFR, EBITDA, Free Cash Flow, Cash Cost
for the next three years until the AGM
changes include the following:
Index and the Committee’s assessment
This report contains both auditable
in 2025. Whilst Aleksey Ivanov was not
•introducing bonus deferral; and
Through an ongoing dialogue
of overall performance against strategic
and non-auditable information.
a Director of the Company in 2021 and until
with management, the Committee
objectives.
•introducing an LTIP to ensure our new
The information subject to audit
early 2022, we have treated him as such
CEO is better aligned with shareholders
maintained a thorough understanding
by the Group’s auditors, Ernst & Young
under our existing remuneration policy. This
through the use of regular share
of remuneration arrangements across
The KPIs are specific and focus
LLP, is set out in the Annual Remuneration
approach is required under the Remuneration
based incentive payments, subject
the Group and, under its amended terms
on deliverables to support the Group’s
Report and has been identified accordingly.
Reporting Regulations for an individual
to performance.
strategy.
who occupies the role of CEO even if that
individual is not also a member of the Board.
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CORPORATE GOVERNANCE
Financial statements
Additional information
ANNUAL REPORT & ACCOUNTS 2021
How business strategic priorities align to overall reward at EVRAZ
Remuneration Policy
ELEMENT PURPOSE
OPERATION
MAXIMUM POTENTIAL
PERFORMANCE METRICS
CEO KPIS
WEIGHTING SUSTAINABLE
DEBT
PRUDENT RETENTION OF LOW-
DEVELOPMENT
AND LINK TO
VALUE
DEVELOPMENT MANAGEMENT
CAPEX
COST POSITION
OF PRODUCT
STRATEGY
AND STABLE
PORTFOLIO AND
DIVIDENDS
CUSTOMER BASE
Executive directors
LTIFR
20%
X
Base salary
Provides a
Normally reviewed annually,
Generally, the maximum
None
level of base
considering individual and market
increase per year will be
EBITDA
20%
X
X
X
X
pay to reflect
conditions, including: size and nature
in line with the overall
individual
of the role; relevant market pay
level of increases within
Adjusted FCF
20%
X
X
X
X
experience
levels; individual experience and pay
the Group.
Cash Cost Index
20%
X
X
and role to
increases for employees across the
However, there is
attract and
Group.
no overall maximum
Strategic
20%
X
X
X
X
retain high
For the current CEO, base salary may
opportunity as increases
Objectives
calibre talent.
incorporate a director’s fee (paid for
may be made above this
participation in the work of the Board
level at the committee’s
committees and Board meetings - see
discretion, to take
the section on Non-executive Director
account of individual
Remuneration Policy below). Where a
circumstances such as
POLICY REPORT
salary is paid in a currency other than
increases in scope and
US dollars, the committee may make
responsibility and to
additional payments to ensure that the
reflect the individual’s
This policy shall be put to vote at the 2022
level of performance and aligns the interests
of the payment were agreed before the
total annual salary equals the level of
development and
annual salary in US dollars.
performance in the role.
AGM. A full version of the policy has been
of management with those of shareholders.
policy came into effect or at a time when
included below. The following key changes
the relevant individual was not a director
Benefits
To provide a
Benefits currently include private
The cost of benefits
None
market level
healthcare. Other benefits (including
will generally be in
are included within the proposed policy:
The CEO’s incentive arrangements are
of the Company and, in the opinion of
of benefits, as
pension benefits) may be provided
line with that for the
subject to “malus”, under which the
the Committee, the payment was not in
•A new long term incentive plan which has
appropriate
if the committee considers it
senior management
been operating for a number of years
сommittee may adjust bonus payments
consideration of the individual becoming a
for individual
appropriate. The current CEO does
team. However, the cost
for senior executives below the executive
downwards to reflect the Group’s overall
director of the Company.
circumstances,
not participate in any pension
of insurance benefits
director level and with the appointment
performance, including the safety of
to recruit
scheme at this time.
may vary from year to
of A. Ivanov as CEO the committee
underlying practices and resulting
The Committee may make minor
and retain
year depending on the
In the event that an executive
wishes to ensure continues to incentivise
performance. The сommittee does not
amendments to the Remuneration Policy set
executive and
director is required by the Group
individual’s circumstances.
CEO talent.
and reward him in his new role.
operate clawback arrangements on
out below (for regulatory, exchange control,
to relocate, or do so following
The overall benefit value
recruitment, benefits may include,
will be set at a level the
directors’ remuneration on the basis
tax or administrative purposes, or to take
•Deferral of cash bonus into Company
but are not limited to, a relocation,
committee considers
shares where the shareholding guideline
that such arrangements would not be
account of a change in legislation) without
housing, travel and education
proportionate and
of 300% of salary is not met.
enforceable under the Russian Labour
obtaining shareholder approval for that
allowance.
appropriate to reflect
Code. The committee will keep this under
amendment.
•Other changes to reflect the
individual circumstances,
appointment of an executive director
review and should the Russian Labour
in line with market
who does not hold a significant
Code change, it will revisit the inclusion
In order to avoid any conflict of interest,
practices. There is no total
shareholding in the Company.
of such provisions in the Group’s variable
remuneration is managed through well-
maximum opportunity.
remuneration plans in order to comply with
defined processes ensuring no individual
Annual
To align
The Group operates an annual bonus
Up to 200% of base
The bonus is based on achievement
The Remuneration Policy’s primary objectives
the 2018 UK Corporate Governance Code.
is involved in the decision-making process
bonus
executive
arrangement under which awards are
salary in respect of any
of the Group’s key quantitative
remuneration
generally delivered in cash.
financial year of the
financial, operational and strategic
are to attract, retain and reward talented staff
related to their own remuneration. In
to Group
Group.
measures in the year to ensure focus
and management by offering compensation
The Committee reserves the right to make
particular, the remuneration of the CEO is
Deferral into shares for at least two
strategy by
is spread across the key aspects of the
years will apply for the CEO for half
that is competitive within the industry,
any remuneration payments and payments
set and approved by the Committee and he
rewarding the
Group’s performance and strategy.
of the bonus, if at the year end he is
motivates management to achieve the
for loss of office that are not in line with
is not involved in the determination of his
achievement
not meeting the 300% of salary share
The exact measures and associated
Group’s business objectives, encourages high
the policy set out below where the terms
own remuneration arrangements.
of annual
ownership requirement.
weighting will be determined on an
financial and
annual basis, according to the Group’s
Targets are reviewed annually and
strategic
strategic priorities, however at least
linked to corporate performance
business
60% will be based on the Group’s
based on predetermined targets.
targets.
financial measures.
For achievement of threshold
performance, 0% of maximum will
be paid, rising in a straight line to
no more than 50% of the maximum
for target performance and 100%
of the maximum for outstanding
performance.
The committee retains discretion to
adjust bonus payments to reflect the
Group’s overall performance.
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Additional information
ANNUAL REPORT & ACCOUNTS 2021
ELEMENT PURPOSE
OPERATION
MAXIMUM POTENTIAL PERFORMANCE METRICS
of more than 200% of base salary, for the
On the appointment of a new chairman
of the financial year of their cessation.
AND LINK TO
VALUE
annual bonus and 200% of base salary for
or non-executive director, their
However, where an executive director leaves
STRATEGY
the LTIP.
remuneration will typically be in line with
by reason of death, disability, ill-health,
Long-Term To align
The Group operates a an LTIP with
Up to 200% of base
Awards are subject to continued
the Remuneration Policy as set out above.
or other reasons that the committee may
incentive
executive
awards granted annually subject to
salary in respect of any
employment and performance
The committee’s intention would be for any
Any specific cash or share arrangements
determine, a bonus may be awarded. Any
remuneration
a three year performance period,
financial year of the
targets determined annually by the
share-based incentive awards to be subject
delivered to the chairman or non-executive
such bonus would normally be subject to
to the Group
followed by a two year holding
Group.
committee.
to performance conditions.
directors will not include share options or
performance and time pro-rating, unless
strategy by
period.
any other performance-related elements.
the committee determines otherwise. In
encouraging
When setting salaries for new hires, the
addition, they would not ordinarily be
long term
committee will consider all relevant factors,
granted an award under an LTIP following
value creation.
including the skills and experience of the
cessation.
Non-executive directors
individual, the market from which they are
Policy on shareholdings of
Chairman
To provide
Director fees are normally paid in the form of cash, but with the flexibility to forgo all or part of such fees
recruited, and the market rate for the role.
executive directors
and non-
remuneration
(after deduction of applicable income tax and social taxes) to acquire shares in the Company should the non-
For interim positions, a cash supplement
CEO
executive
that is
executive director so wish. Non-executive director fees are reviewed from time to time.
director
sufficient to
may be paid rather than salary (for
The Company’s policy is that executive
Non-executive directors receive an annual fee for Board membership.
Aleksey Ivanov
remuneration attract and
example, a non-executive director taking
directors should hold shares in the
Additional fees are payable by reference to other Board responsibilities taken on by the non-executive directors
DATE OF CONTRACT
retain high
on an executive function on a short-term
Company and any new executive director
(for example, membership and chairmanship of the Board committees).
calibre non-
1 September 2021
basis).
will be required to build and retain a
executive
The chairman of the Board receives an all-inclusive annual fee.
level of shareholding in the Company.
NOTICE PERIOD (MONTHS)
talent.
Costs incurred in the performance of non-executive directors’ duties for the Company may be reimbursed
To facilitate recruitment, the committee may
The application of this policy will be
or paid for directly by the Company, including any tax due on the costs. This may include travel expenses,
1
need to compensate an executive director
contained from time to time in the Annual
professional fees incurred in the furtherance of duties as a director, and the provision of training and
development. In addition, the Company contributes an annual amount towards secretarial and administrative
for the loss of remuneration arrangements
Remuneration Report and is currently set at
expenses of non-executive directors.
forfeited on joining the Company. In
a level of at least 300% of salary.
Non-executive directors’
Non-executive directors may not participate in the Company’s share incentive schemes or pension
granting any buyout award, the committee
letters of appointment
arrangements.
will consider relevant factors, including any
This level of shareholding (or the actual
Total fees paid to non-executive directors will remain within the limit stated in the Articles of Association.
performance conditions attached to the
level on departure if it is lower) will
Each non-executive director has a letter
awards forfeited, the form in which they
normally have to be retained for two years
of appointment setting out the terms and
were granted (eg cash or shares) and the
following the departure of an executive
conditions covering their appointment.
timeframe of the awards. The committee
director from their position. The current
Performance measures and
the components and remuneration levels
Policy on recruitment
will generally seek to structure the buyout
CEO is currently encouraged to build his
They are required to stand for election at
targets
for different employees may differ in parts
of executive directors
on a comparable basis to awards forfeited.
shareholding since appointment until he
the first AGM following their appointment
from the policy set out above.
The overriding principle is that any buyout
reaches 300% of salary.
and, subject to the outcome of the AGM,
Annual bonus measures and targets are
This part of the Remuneration Policy has been
award would be at or below the commercial
the appointment is for a further one-year
selected to ensure an appropriate balance
For instance, in addition to a base salary, a
developed to enable the Group to recruit
value of remuneration forfeited.
term. Over and above this arrangement,
between providing the director with
performance-related bonus (calculated by
the best possible candidate and one able to
the appointment may be terminated by the
incentives to meet financial objectives for
reference to KPIs aligned with the Group’s
contribute to the Group’s performance and
The committee retains the flexibility to alter
Executive director’s service
director giving three months’ notice or in
the year and achieving key operational
strategy) and benefits, senior managers
able to help it reach its goals.
the performance measures of the annual
contract and loss of office
accordance with the Articles of Association.
objectives. LTIP measures and targets are
are also entitled to participate in a long-
bonus for the first year of appointment, if
policy
Letters of appointment do not provide for
similarly set annually by the committee and
term incentive programme. This is designed
When hiring a new executive director,
it determines that the circumstances of the
any payments in the event of loss of office.
cover a three year period. The Remuneration
to align the interests of these individuals
remuneration is determined in line with the
recruitment merit such alteration.
The CEO, as an Executive Director and
Committee reviews them annually to ensure
to the delivery of long-term growth in
following Remuneration Policy.
any new executive directors’ contracts
All directors are subject to annual
that the measures and weightings are in line
shareholder value.
Where an executive director is appointed
will normally provide for a notice period
re-appointment and will stand for
with the strategic priorities and needs of the
So far as is practicable and appropriate,
from within the organisation, the normal
of no more than 12 months and for any
re-election at the upcoming AGM in
business.
the Remuneration Committee will seek to
policy is that any legacy arrangements
compensation provisions for termination
June 2022.
Illustration of the application
structure the pay and benefits of any new
would be honoured in line with the original
without notice to be capped at 12 months’
of the Remuneration Policy
executive directors in line with the current
terms and conditions. Similarly, if an
base salary and contractual benefits.
Remuneration arrangements
Remuneration Policy.
executive director is appointed following
throughout the Group
The following chart provides an indication
an acquisition of, or merger with another
There is no automatic entitlement to annual
of what could be received by the CEO
Regarding any pension benefits, these will
company, legacy terms and conditions will
bonus and executive directors would
This remuneration approach and
under the Remuneration Policy.
not exceed the percentage of salary earned
be honoured.
not normally receive a bonus in respect
philosophy is applied consistently at all
by the majority of the workforce (either
levels, up to and including the CEO and
Application of the remuneration policy,
of the Group or the country in which the
US$ thousand
any executive directors.
executive director works).
Minimum
2,028
This ensures that there is alignment with the
The maximum level of variable
In line with
expectations
5,028
business strategy throughout the Group.
remuneration which may be granted in
Maximum
10,028
Remuneration arrangements below the
Maximum +
respect of recruitment (excluding any
50% share
12,028
price growth
Board level reflect the seniority of the role
buyouts) will not exceed the ongoing policy
Base pay (incl. benefits)
144
and local market practices, and therefore
145
Annual bonus
LTIP
50% share price increase
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ANNUAL REPORT & ACCOUNTS 2021
Key terms of non-executive directors’ appointment letters
Single total figure of remuneration (audited)
NON-EXECUTIVE DIRECTORS
DATE OF CONTRACT
NOTICE PERIOD
Key elements of the CEO’s remuneration package received in relation to 2021 (compared with the prior year).
Alexander Abramov
14 October 2011
Three months
All amounts are in US Dollars.
Karl Gruber
14 October 2011
Three months
Alexander Izosimov
28 February 2012
Three months
ALEKSEY IVANOV3
ALEXANDER FROLOV
45
Sir Michael Peat
14 October 2011
Three months
2021
2020
2021
2020
Maria Gordon
1 February 2022
Three Months
Deborah Gudgeon
31 March 2015
Three months
Salary and director fees
666,667
-
1,750,000
2,625,000
Eugene Shvidler
14 October 2011
Three months
Benefits
9,333
-
22,017
26,909
Eugene Tenenbaum
14 October 2011
Three months
Pension
0
-
0
0
Stephen Odell2
20 May 2021
Three months
Annual bonus
903,503
-
2,196,696
3,136,930
James Rutherford2
20 May 2021
Three months
LTIP
0
-
0
0
Sandra Stash2
20 May 2021
Three months
Total Fixed remuneration
676,000
-
1,772,017
2,651,909
Total variable remuneration
903,503
-
2,196,696
3,136,930
Total Remuneration
1,579,503
-
3,968,713
5,788,839
Copies of the directors’ letters of appointment
The committee takes this into account when
Consideration of shareholder
or, in the case of the CEO, the service
setting the CEO’s remuneration.
views
contract, are available for inspection by
shareholders at the Group’s registered office.
However, it does not consider any direct
When determining the Remuneration Policy,
Pension and benefits (audited)
The bonus is linked to achieving
each with an equal weighting of 20%, were
comparison measures between the
the committee considers investor body
performance conditions based on
considered when determining the CEO’s
executive director and wider employee
guidelines and shareholder views.
The current CEO and former CEO did not
predetermined targets set by the Board of
annual bonus: LTIFR, EBITDA, Free Cash
Consideration of conditions
pay. The Group does not formally consult
receive any pension benefit or allowance.
Directors. The target bonus is 100% of base
Flow, Cash Cost Index and the committee’s
elsewhere in the Group
with employees on executive director
Benefits consist principally of private
salary with a maximum potential of 200%
assessment of overall performance against
remuneration.
healthcare. The pension and benefits will
of base salary.
strategic objectives.
Management prepares the details of all-
continue on the same basis for the current
employee pay and conditions, and the
CEO, pro-rated for the period of the year
The committee reviews the resulting
committee considers them on an annual basis.
worked as an executive director.
bonus payout to ensure that it is
Annual bonus for 2021
appropriate considering the Group’s overall
(audited)
performance, as well as safety record and
procedures.
Annual bonus
The bonus is linked to the Group’s main
ANNUAL REMUNERATION REPORT
quantitative financial, operational and
In 2021, EVRAZ outperformed the threshold
The current and former CEOs are eligible
strategic measures during the year to
target for all of its operational and financial
for a performance-related bonus that is
ensure alignment with the key aspects of
KPIs, resulting in an annual bonus payout
This section summarises remuneration paid out to directors for the 2021 financial year and details of how
the Remuneration Policy will be implemented in the 2022 financial year.
paid in cash following the year-end, subject
Group performance and strategy.
of 72% of the maximum.
to the committee’s agreement and the
Board of Directors’ approval.
For 2021, the annual bonus plan was based
The bonus payout was adjusted based on
Executive director’s and CEO’s
Base salary
from subsidiaries of EVRAZ plc. The
on the same metrics for the former and
the part of the year worked as CEO for
remuneration
former CEO’s salary remained constant at
current CEO. The following five indicators,
both A. Frolov and A. Ivanov.
The committee approved the new
US$2,625,000 during the year.
In 2021, Aleksey Ivanov was not a Director
CEO’s current salary on appointment as
of the Company, however in order
CEO at the level of US$2,000,000. This
to comply with disclosure requirements
salary level will remain unchanged for
and to provide full transparency we have
2022 and includes, for the avoidance of
included details of his remuneration in 2021
doubt, the director’s fee, fees paid for
as his role as CEO
committee membership and any salary
3. This represents the period following appointment as CEO on 1 September 2021.
1. Laurie Argo stepped down as a director on 15 June 2021
4. The salary is paid in roubles and the amounts paid in the year are reconciled at the year-end so as to equal US$2,625,000.
146
2. The appointment took effect on 15 June 2021
5. Alexander Frolov’s remuneration for the year represents the period as CEO and an Executive Director, until he stepped down on 31 August 2021
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Details of the targets set for each KPI, the actual achievement in the year,
and total payout level for the 2021 bonus
Single total figure of remuneration (audited)
KPIs
RESULT MEASUREMENT
NON-EXECUTIVE DIRECTOR
2021 (US$ THOUSAND)
2020 (US$ THOUSAND)
THRESHOLD PLANNED LEVEL OUTSTANDING ACTUAL 2021
BONUS PAYOUT
TOTAL FEES1
ADMIN2
TOTAL
TOTAL FEES1
ADMIN2
TOTAL
(% OF TARGET)
(% OF MAX)
Alexander Abramov
750
30
780
750
30
780
LTIFR
1.63
1.36
1.09
1.21
78%
Alexander Izosimov
288
30
316
272
30
302
EBITDA
US$1.646m
US$2.057m
US$2.469m
US$5.015m
100%
Eugene Shvidler
174
30
204
174
30
204
Adjusted FCF
US$273
US$341
US$409
US$2,548
100%
Eugene Tenenbaum
150
30
180
150
30
180
Cash cost index
110%
100%
90%
108%
11%
Karl Gruber
184
30
214
224
30
254
Discretion for A. Frolov
Remuneration Committee assessment of overall performance against
25%
Sir Michael Peat
184
30
214
224
30
254
strategic objectives
Deborah Gudgeon
292
30
322
274
30
304
Discretion for A. Ivanov
Remuneration Committee assessment of overall performance against
50%
Laurie Argo
102
14
115
222
30
252
strategic objectives
Alexander Frolov
58
10
68
TOTAL (A. FROLOV)
62.8%
Stephen Odell
121
16
138
TOTAL (A. IVANOV)
67.8%
James Rutherford
108
16
125
TOTAL PAYOUT TO A. FROLOV
US$ 2,196,696
Sandra Stash
135
16
152
TOTAL PAYOUT TO A. IVANOV
US$903,503
Remuneration committee
to reflect the Group’s overall performance
For reference, the fees payable
The current CEO is expected to build
Policy on external appointments
•The efficiency improvement
assessment of overall
programme delivered an EBITDA effect
including underlying safety practices
for the chairmanship of a committee
and hold 300% of base salary in shares.
performance
of US$301 million from cost-cutting
and resulting performance.
include the membership fee,
As at 31 December 2021 with a share price
The committee believes that the Group can
initiatives and US$289 million from
and any director elected as chairman
of 602p his holding amounted to 303%
benefit from executive directors holding
EVRAZ’ Remuneration Policy stipulates that
customer focus initiatives.
of more than one committee is generally
of his salary.
approved non-executive directorships in other
the discretionary portion of the bonus should
entitled to receive fees in respect of one
companies, offering executive directors
•The value of cash cost index is lower
reflect the CEO’s performance in relation
than the target value due to high
Non-executive directors’
chairmanship only. The fee for the chairman
The directors’ interests in EVRAZ shares
the opportunity to broaden their experience
to the Group’s key strategic priorities,
inflation in 2021
remuneration
of the Board amounts to US$750,000
as of 31 December 2021 were as follows.
and knowledge. EVRAZ’ policy is to allow
as well as his efforts to ensure its long-
from 1 March 2012 (this fee includes,
executive directors to retain fees paid from
term success. During the year, the business
The committee exercised its judgement to
Non-executive directors’ fixed remuneration
for the avoidance of doubt, director’s fees
There have been no changes
any such appointment.
continued to deliver in relation to key strategic
award 25% and 50% of the maximum for
payable in respect of 2021 and 2020 is set
and fees paid for committee membership).
in the directors’ interests from 31 December
priorities and creating long-term returns
Mr Frolov and Mr Ivanov respectively for
out in the table below.
2021 through 24 February 2022.The shares
The former CEO and the current CEO do not
for shareholders.
the discretionary 20% of bonus opportunity.
Fees will remain unchanged for 2022.
held by Alexander Abramov, Alexander Frolov
currently hold a non-executive directorship
The lower amount for Mr Frolov reflected
A non-executive director’s remuneration
and Eugene Shivdler were acquired at the time
of another publicly listed company.
The committee assessed the strategic
the safety record during the part of the
consists of an annual fee of US$150,000
of IPO.
achievements in the business in 2021
year he was CEO. .
and a fee for committee membership
and there are:
(US$24,000) or chairmanship (US$100,000
Aggregate directors’
The shares held by Alexander Izosimov
•
Sustainable focus on health and safety
for chairmanship of the Audit Committee
remuneration
were acquired in 2012 when he was appointed
Engagement with the workforce
initiatives helped to bring the LTIFR
and US$50,000 for other committees).
as an independent non-executive director.
down to 1.21, the best historical number
Annual bonus for 2022
The fee for employee engagement
The aggregate amount of directors’
EVRAZ is committed to regularly engaging
for EVRAZ.
responsibilities is set at US$24,000.
and CEO remuneration payable in respect
All shares detailed above held by directors,
with its workforce and realises the value
Strong free cash flow
For 2022, the bonus framework will
of qualifying services for the year ended
including the CEO, are held outright with no
of listening to and acting on employee
•
of US$2,548 million, which made
be in line with 2021. The Board considers
31 December 2021 was US$ 8,376 thousand
performance or other conditions attached
views across the organisation. These insights
it possible to pay dividends
forward-looking targets to be commercially
(2020: US$8,319 thousand).
to them, other than those applicable to all
are vital to attracting and retaining employees,
of US$1,549 million.
sensitive; however, they will generally
shares of the same class.
which is key to delivering and executing
Net debt of US$2,667 million, remaining
be disclosed in the subsequent year.
the Group’s vision and strategy. It also
•
below the medium term target
In line with previous years, a malus
Other directors do not currently hold EVRAZ
allows for informative decisions to be made
of US$4,000 million from, bringing
arrangement will apply under which bonus
Share ownership by the Board
shares.
throughout the business. Considering
the Net debt / EBITDA ratio to 0.53.
payouts may be adjusted downwards
of Directors (audited)
the views of the wider workforce has been
in place at the Group for many years.
There were no formal minimum
Employees participate in an employee
shareholding requirements in place
engagement survey aimed at gathering wider
for the former CEO, reflecting the former
workforce views on various topics.
CEO’s shareholding in EVRAZ.
1. Total fees include annual fees and fees for committee membership or chairmanship (pro rata working days).
2. The Group contributes an annual amount of US$30,000 towards secretarial and administrative expenses of non-executive directors. In addition to the amounts
148
disclosed above, the Group reimburses directors’ travel and accommodation expenses incurred in the discharge of their duties.
149
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EVRAZ in figures
Strategic report
CORPORATE GOVERNANCE
Financial statements
Additional information
ANNUAL REPORT & ACCOUNTS 2021
The survey has historically been
In 2021, EVRAZ continued with the additional
behalf. Alexander Izosimov undertakes
Total Shareholder Return Performance, %
successful in driving numerous employee-
tools introduced the previous year aimed
the role for the Russian based business
Performance graph
focused initiatives and helps to set key
at engaging with employees during
units and Sandra Stash acts in the same
YEAR ENDS
FTSE 350 BASIC RESOURCES INDEX
EVRAZ
priorities for the forthcoming year, aimed
the pandemic. Virtual meetings with senior
capacity for the north American business.
The following graph shows the Group’s
31.12.2011
100
100
at improving the engagement of all
management were regularly held, allowing
Contact with business units has in 2021
performance as measured by total
31.12.2012
103.00
74.09
employees.
employees to participate and ask questions.
been impeded by the COVID 19 restrictions,
shareholder return compared
The 24/7 corporate hotlines were opened
but where possible virtual events have
with the performance of the FTSE 350 Basic
31.12.2013
89.80
32.02
The Board reviews the engagement data
for employees if they have questions or
been held, alongside some site visits
Resources Index for the last ten years.
31.12.2014
81.19
45.86
and is therefore aware of any trends,
encounter problems.
involving small groups of staff. Findings
31.12.2015
45.84
21.74
comments or concerns in relation to executive
are fed back to the Remuneration
The FTSE 350 Basic Resources Index has
31.12.2016
92.33
65.84
pay. The Board also receives a quarterly
The Board has appointed two independent
Committee and considered alongside other
been selected as an appropriate benchmark,
31.12.2017
120.90
110.01
summary report of complaints made
non-executive directors to undertake
management reports on employee relations.
as it is a broad-based index of which
31.12.2018
116.42
184.59
on the EVRAZ employee telephone hotline.
the employee engagement role on its
the Group is a constituent member.
31.12.2019
136.58
172.81
The following table shows as a single figure
31.12.2020
162.27
233.78
Directors’ interest in EVRAZ shares as of 31 December 2021
the CEO’s total remuneration over the past
31.12.2021
198.18
345.42
eight years, along with a comparison
DIRECTORS
NUMBER OF SHARES
NUMBER OF SHARES
TOTAL HOLDING, ORDINARY
of variable payments as a percentage
CONDITIONALLY OWNED
UNCONDITIONALLY OWNED
SHARES, %
of the maximum bonus available.
Alexander Abramov
-
281,870,003
19.32
Total Shareholder Return Performance, %
350
Alexander Frolov
-
140,723,705
9.65
300
Eugene Shvidler
-
40,488,242
2.78
250
Aleksey Ivanov
1,120,3812
1,007,557
0.07
200
Alexander Izosimov
-
80,000
0.01
150
100
50
The committee also considers executive
in the local markets. General pay increases
Gender pay gap and CEO pay
0
remuneration in the context of the wider
take into account local salary norms,
ratio
31.12.2012
31.12.2021
employee population and is kept regularly
inflation and business conditions.
FTSE 350 Basic Resources Index
updated on pay and conditions across
EVRAZ had less than 10 UK employees
EVRAZ
the Group. The proportion of variable
Finally, 2018 changes to the UK Corporate
during the year and does not therefore
pay increases with progression through
Governance Code (UKCGC) placed new
have any gender pay or CEO pay ratio
management levels with the highest
expectations on FTSE Boards of Directors
information to report under the Regulations.
CEO’s total remuneration paid in 2013—2021
proportion of variable pay
for quoted companies. Specifically,
Percentage change
at executive director level, as defined
companies are expected to ensure that
in remuneration
(US$)
CEO SINGLE FIGURE
ANNUAL BONUS PAYOUT
by the Remuneration Policy. Variable pay
views and concerns of the workforce
OF TOTAL REMUNERATION
(AS A % OF MAXIMUM
cascades down through the next tiers
are considered by directors and that
Relative importance of spend
The following table sets out the percentage
OPPORTUNITY)
of management with appropriate reductions
workforce policies and practices are consistent
on pay
change in the elements of remuneration
2021 (A.Ivanov)
1,579,503
67.8%
in opportunity levels based on seniority.
with the companys values and support its
for the directors of EVRAZ, compared
2021 (A.Frolov)
3,968,713
62.8%
long-term sustainable success. Independent
The following table shows a comparison
with average figures for Russia-based
In addition, the Group operates pension
Non-Executive Director, Sandra Stash, visited
of the total cost of remuneration paid
administrative personnel.
2020
5,788,839
59.75%
arrangements in some of its businesses
EVRAZ plants in Canada and the USA in late
to all employees between the current
2019
2,657,970
0%
around the world, where this is relevant
2021 and took the opportunity to speak
and previous years and financial metrics
This group of employees has been selected
2018
5,393,884
57.21%
to the local conditions. The key element
with small groups of employees to understand
in US$ millions.
as an appropriate comparator, as they
2017
5,516,553
59.82%
of remuneration for those below senior
the opportunities and challenges of their
are based in the same geographic market
management grades is base salary
roles. Findings have been discussed
EBITDA was chosen for the comparison
as the CEO, and so are subject to a similar
2016
4,560,054
40.78%
and the Group’s policy is to ensure that
with executive leadership and will be fed back
as it is the KPI that best shows the Group’s
external environment and pressures.
2015
3,186,585
13.33%
base salaries are fair and competitive
to the Remuneration Committee in 2022.
financial performance.
2014
5,808,752
77.00%
The population of employees
the calculation has been performed
2013
4,894,286
50.00%
US$ MILLION
2021
2020
for includes administrative personnel
EBITDA
5,015
2,212
in the Head Office and the Ural and Siberia
Share buybacks
0
0
management companies. This provides
Dividends
1,823
872
a representative calculation across
Total employee pay
1,332
1,331
the Russian businesses.
For more information on the definition of EBITDA, please read page 290
2. These are grants made under the LTIP in the years before appointment as CEO, which require continued employment until dates up to 15 May 2025. 298,980 shares
150
remain subject to performance in 2021 which will be assessed in 2022. The remainder have met previously set performance targets.
151
Meet EVRAZ
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Strategic report
CORPORATE GOVERNANCE
Financial statements
Additional information
ANNUAL REPORT & ACCOUNTS 2021
Percentage change in the elements of remuneration for the directors compared
contractual terms and the Remuneration
for the departure of the former CEO
of the Group’s pay arrangements. The total
with average figures for Russia-based administrative personnel
Policy, and that such compensation
and to be updated on pay across
fee for advice provided to the committee
2020-2021
2019-2020
is otherwise fair and not excessive
the workforce.
during the year was £59,158.
for the Group.
ROLE
SALARY1
BENEFITS
ANNUAL
SALARY1
BENEFITS
ANNUAL
Oversee any major changes
The committee is satisfied that the advice
•
BONUS
BONUS
in the structure of employee benefits
Advisers
it has received has been objective
Russia-based administrative personnel
6%
2%
7%
3%
40%
2%
throughout the Group and report
and independent.
Aleksey Ivanov (CEO)
n/a
n/a
n/a
on what engagement has taken place
The committee had previously appointed
with the workforce on executive pay.
Korn Ferry (UK) Limited (Korn Ferry)
Alexander Frolov (NED/Former CEO)
n/a/0%
n/a/25%
n/a/5%
0%
(9)%
100%
to provide independent remuneration
Shareholder considerations
Alexander Abramov (NED)
0%
n/a
n/a
0%
n/a
n/a
During 2021, the committee met
consultancy services to the Group. Korn
Alexander Izosimov (NED)
5%
n/a
n/a
9%
n/a
n/a
six times. The main purpose
Ferry is a member of the Remuneration
EVRAZ remains committed to ongoing
Eugene Shvidler (NED)
0%
n/a
n/a
0%
n/a
n/a
of the meetings was to consider
Consultants’ Group and, as such,
shareholder dialogue and takes an active
and make recommendations to the Board
voluntarily operates under the code
interest in feedback received from its
Eugene Tenenbaum (NED)
0%
n/a
n/a
0%
n/a
n/a
in relation to the remuneration packages
of conduct in relation to executive
shareholders and from voting outcomes.
Karl Gruber (NED)
-16%
n/a
n/a
0%
n/a
n/a
of the executive director and key senior
remuneration consulting in the UK.
Sir Michael Peat (NED)
-16%
n/a
n/a
0%
n/a
n/a
managers; to approve the annual bonus
The code of conduct can be found at www.
Where there are substantial votes against
for the 2020 results; to approve the 2021
remunerationconsultantsgroup.com.
resolutions in relation to directors’
Deborah Gudgeon (NED)
6%
n/a
n/a
0%
n/a
n/a
long-term incentive plan (LTIP) awards
remuneration, the Group shall seek
Laurie Argo (NED)
-54%
n/a
n/a
24%
n/a
n/a
for key senior management, to agree
During the year, Korn Ferry principally
to understand the reasons for any such
Stephen Odell (NED)
n/a
n/a
n/a
the remuneration for the appointment
advised the committee on developments
vote and will detail any actions in response
James Rutherford (NED)
n/a
n/a
n/a
of the current CEO and terms
in the regulatory environment and market
to these.
practice, and on the development
Sandra Stash (NED)
n/a
n/a
n/a
Committee composition
the business. No-one is allowed
Take into account all factors that it deems
•
Actual voting results from the AGM, which was held, in respect of the
to participate in any matter directly
necessary to interpret and determine,
previous remuneration report and Remuneration Policy
This section details the Remuneration
concerning the details of their own
the provisions and recommendations
Committee’s composition and activities
remuneration or conditions of service.
of the 2018 UK Corporate Governance
NUMBER OF VOTES
FOR
AGAINST
WITHHELD
TOTAL VOTES AS %
OF ISSUED SHARE
undertaken over the past year.
Code and associated guidance (such
CAPITAL
The committee may invite other individuals
as framework or policies), including all
to attend all or part of any committee
relevant legal and regulatory requirements.
To approve the Directors Remuneration Policy as set
1,189,736,031
51,449,970
3,329,067
85.20%
out on pages 131-135 of the 2019 Annual Report
Committee members
meeting, as and when appropriate
•
Review and consider remuneration trends
(95.85%)2
(4.15%)
and Accounts
and necessary, in particular the CEO,
across the Group and the alignment
The committee’s composition changed
the head of human resources and external
of incentives and rewards with culture
To approve the Annual Remuneration Report set
1,070,842,969
163,394,671
5,339,125
77.76%
out on pages 128-139 of the 2020 Annual Report
in the year with Sir Michael Peat retiring
advisers.
when setting the Remuneration Policy.
(94.41%)
(5.59%)
and Accounts
from the committee and the retirement
Review regularly the Remuneration
•
of Laurie Argo from the Board.
Policy’s appropriateness and relevance.
Role
Determine the total individual
•
Its current members are:
remuneration package of the chairman
The Remuneration Committee is a formal
of the Board, the company secretary
•Alexander Izosimov.
committee of the Board and can operate
and other senior executives, including
Signed on behalf of the Board
•Deborah Gudgeon.
•Stephen Odell.
with a quorum of two committee
pension rights, bonuses, benefits in kind,
of Directors,
members. It is operated according to its
incentive payments and share options,
•Sandra Stash.
Terms of Reference, which were reviewed
or other share-based remuneration
All members of the Committee
and updated in the year to reflect changes
within the terms of the agreed policy.
Alexander Izosimov
are independent non-Executive
required to reflect the appointment
Approve awards for participants where
Chairman of the Remuneration
•
Directors. This is fundamental to ensuring
of the CEO. A copy can be found
existing share incentive plans are in place.
Committee
Executive Directors and senior
on the Group’s website.
Review and approve any compensation
24.02.2022
•
executives’ remuneration is set by people
payable to executive directors and other
who are independent and have no
The committee’s main responsibilities are to:
senior executives in connection
personal financial interest, other than
with any dismissal, loss of office or
•Set and implement the Remuneration
as shareholders, in the matters discussed.
Policy covering the chairman
termination (whether for misconduct
There are no potential conflicts of interest
of the Board, the CEO, the company
or otherwise) to ensure that such
arising from cross-directorships and there
secretary and other senior executives.
compensation is determined
is no day-to-day involvement in running
in accordance with the relevant
152
1. Total fixed remuneration for NEDs.
2. Percentage of votes cast.
153
Meet EVRAZ
EVRAZ in figures
Strategic report
CORPORATE GOVERNANCE
Financial statements
Additional information
ANNUAL REPORT & ACCOUNTS 2021
DIRECTOR'S
Directors’ interests
Information on share ownership by directors can be found in this Report and in the Remuneration Report.
REPORT
See page 150 of the Annual Remuneration Report.
Directors’
As of the date of this report, the Company has granted qualifying third-party indemnities to each of its directors against
indemnities
any liability they may face in defending proceedings brought against them, to the extent permitted by the Companies
and director
Act. In addition, directors and officers of the Company and its subsidiaries have been and continue to be covered
INTRODUCTION
and officer liability
by director and officer liability insurance.
insurance
Powers
Subject to the Company’s Articles of Association, UK legislation and to any directions given by a special resolution,
In accordance with section 415
Report section of this report, together
The Company was incorporated under
of directors
the Company’s business is managed by the Board, which may exercise all the powers of the Company. The Articles
of the Companies Act 2006, the directors
with the sections of the annual report
the name EVRAZ plc as a public company
of Association contain specific provisions concerning the Company’s power to borrow money and provide the power
to make purchases of any of its own shares.
of EVRAZ plc present their report
incorporated by reference. As permitted
limited by shares on 23 September
to shareholders for the financial year ended
by legislation, some of the matters normally
2011 under registered number 7784342.
The directors have the authority to allot shares or grant rights to subscribe for or to convert any security into shares
in the Company. Further details of the proposed authorities are set out in the notice of the AGM.
31 December 2021, which they are required
included in the Directors’ Report have instead
EVRAZ plc listed on the London
to produce by the applicable UK company law.
been included in other sections of the annual
Stock Exchange in November 2011
Major interests
Notifiable major share interests of which the Company has been made aware are set out in this Directors’ Report.
The Directors’ Report comprises the Directors’
report, as indicated below.
and is a member of the FTSE 100 Index.
in shares
Research
EVRAZ is constantly engaged in process and product innovation. The research and development centres located
and development
at the Company’s production sites improve and develop high-quality steel products to better meet customers’ needs
and to ensure that EVRAZ remains competitive in the global and local markets.
For examples of the Company’s efforts in research and development in different operations, see the Sustainable R&D
Dividends
The underlying cash flow generation and continuing success with deleveraging have allowed the Company to continue
on pages 79-82
to pay dividends in line with its dividend policy. For more details, see page 26.
The Company paid an interim dividend of US$0.30 per ordinary share, totalling US$437 million, on 7 April 2021
Sustainable
The Corporate Social Responsibility section of this report focuses on the health and safety, environmental
to shareholders on the register as of 12 March 2021.
development
and employment performance of the Company’s operations, and outlines the Company’s core values and commitment
to the principles of sustainable development and the development of community relations programmes.
The Company paid an interim dividend of US$0.20 per ordinary share, totalling US$292 million, on 25 June 2021
For more details on the Company’s policies and performance, see the Sustainability section on pages 54-78.
to shareholders on the register as of 28 May 2021.
The Company paid an interim dividend of US$0.55 per ordinary share, totalling US$802 million, on 10 September 2021
Payments
EVRAZ published its 2020 report on payments to governments in June 2021. The report provides citizens, authorities
to shareholders on the register as of 13 August 2021.
to governments
and independent users with information on payments made to governments where the Company conducts its extractive
activities. The report is prepared in accordance with the requirements of the Disclosure Guidance and Transparency
The Company paid an interim dividend of US$0.20 per ordinary share, totalling US$292 million, on 14 January 2022
Rules. Instrument 2014 “Report on payments to governments”, issued by the UK Financial Conduct Authority.
to shareholders on the register as of 24 December 2021.
The report is available on the Company’s website at www.evraz.com.
The Board of Directors has declared an interim dividend of US$0.50 per share, totalling US$729 million, to be paid
on 6 April 2022 to shareholders on the register as of 18 March 2022.
Political donations
No political contributions were made in 2021.
Share capital
Details of the Company’s share capital are set out in Note 20 to the Consolidated Financial Statements, including details
Greenhouse gas
In 2021, in accordance with the requirements of the Companies Act 2006 (Strategic and Directors’ Report), Regulations
on the movements in the Company’s issued share capital during the year.
emissions
2013, and Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations
As of 31 December 2021, the Company’s issued share capital consisted of 1,506,527,294 ordinary shares, of which
2018, EVRAZ undertook to assess full emissions of greenhouse gases (GHGs) from facilities under its control. For more
47,837,582 shares are held in treasury. Therefore, the total number of voting rights in the Company is 1,458,689,712.
details, see the Sustainability section on pages 62-66.
The Company’s issued ordinary share capital ranks pari-passu in all respects and carries the right to receive all dividends
Employees
Information regarding the Company’s employees can be found in the Our People section on pages 71-73.
and distributions declared, made or paid on or in respect of the ordinary shares. There are currently no redeemable
Overseas branches
EVRAZ does not have any branches. A full list of the Group’s controlled subsidiaries is disclosed in Note 34
non-voting preference shares or subscriber shares of the Company in issue.
of the Consolidated Financial Statements.
Authority
The authority given at the 2021 AGM for the Company to make market purchases of 145,687,260 of its shares,
Financial risk
Information regarding the financial risk management and internal control processes and policies, as well as details
to purchase
representing 10% of the issued share capital (excluding shares held in treasury), expires on the earlier of the 2022 AGM
management
about hedging policy and exposure to the risks associated with financial instruments can be found in Note 28
own shares
or 30 June 2022. EVRAZ will ask shareholders to give a similar authority at the 2022 AGM. During 2021, no shares
and financial
to the Consolidated Financial Statements, the Corporate Governance Report and Risk Management and Internal Control
and transfer
were purchased under this authority.
instruments
section on pages 114-121, 122-123 and the Financial Review section on pages 36-47.
of treasury shares
Details of the Company’s authority to purchase its own shares, which will be sought at the Company’s forthcoming
to Company’s
Going concern
The financial position and performance of the Group and its cash flows are set out in the Financial Review section
Annual General Meeting (AGM), will be set out in the notice of meeting for that AGM.
Employee Share
of the report on pages 36-47.
On 13 May 2021, the Company transferred 1,817,109 ordinary shares out of treasury to the Company’s Employee Share
Trust
Based on the currently available facts and circumstances, the directors and management have a reasonable expectation
Trust.
that the Group has adequate resources to continue in operational existence for the foreseeable future.
Directors
Biographies of the directors who served on the Board during the year are provided in the Board of Directors section
For more details, see Note 2 to the Consolidated Financial Statements on page 189.
on page 104 to 108.
Auditor
The Audit Committee conducted a tender for the Group’s external audit in July 2016. Since then Ernst & Young LLP have
Directors’
The Board has the power at any time to elect any person to be a director, but the number of directors must not exceed
continued as auditor, following a review of performance each year by the Audit Committee on behalf of the Board.
appointment
the maximum number fixed by the Company’s Articles of Association.
and re-election
The Board intend to run a full tender process during the summer of 2022 to consider whether to replace the auditor for
Any person so appointed by the directors will retire at the next AGM and then be eligible for election. In accordance
the audit of the 2023 financial year end.
with the UK Corporate Governance Code, the directors are subject to annual re-election by shareholders.
Ernst & Young LLP has indicated its willingness to continue conducting audits and a resolution seeking to re-appoint it
For additional information about directors’ appointment and resignation, see page 140-153 of the Remuneration
will be proposed at the forthcoming AGM.
Report.
Future
Information on the Group and its subsidiaries’ future developments is provided in the Strategic Report on pages 6-101.
Sir Michael Peat, Karl Gruber and Alexander Isozimov will not be seeking re-election as directors at the AGM, having
developments
completed their terms of nine years. All of the other directors intend to stand for re-election at the 2022 AGM to be held
later this year.
154
155
Meet EVRAZ
EVRAZ in figures
Strategic report
CORPORATE GOVERNANCE
Financial statements
Additional information
ANNUAL REPORT & ACCOUNTS 2021
Events since
The major events after 31 December 2021 are disclosed in Note 33 to the Consolidated Financial Statements
The Company is aware of the following individuals who each have a beneficial interest in three percent or more of EVRAZ plc’s issued
the reporting date
on page 261.
share capital (held indirectly in each case, except for Gennady Kozovoy) as of 31 December 2021:
Annual general
The 2022 AGM will be held later this year in London. At the AGM, shareholders will have the opportunity to put
meeting (AGM)
questions to the Board, including the chairmen of the Board committees.
Number of ordinary shares
% of voting rights
Full details about the AGM, including explanatory notes, are contained in the notice of the AGM, which will
Roman Abramovich
417,767,314
28.64
be distributed at least 20 working days before the meeting. The notice sets out the resolutions to be proposed
at the AGM and an explanation of each resolution.
Alexander Abramov
281,870,003
19.32
All documents relating to the AGM will be available on the Company’s website at www.evraz.com.
Alexander Frolov
140,723,705
9.65
Electronic
A copy of the 2021 annual report, the notice of the AGM and other corporate publications, reports and announcements
Gennady Kozovoy
83,751,827
5.74
will be available on the Company’s website at the following link: https://www.evraz.com/en/investors/.
communications
Maxim Vorobyev
43,872,001
3.01
Shareholders may elect to receive notification by email of the availability of the annual report on the Company’s website
instead of receiving paper copies.
Corporate
The Disclosure Guidance and Transparency Rules (DTR7.2) require that certain information be included in a corporate
On 1 February 2022, the Company issued 848,188,421 deferred shares of US$9.66766321843 each which were subsequently cancelled on
governance
governance statement set out in a company’s Directors’ Report.
8 February 2022 further to a Court-approved reduction of capital. There have been no other changes in the Company’s issued share
statement
As many companies do, EVRAZ has an existing practice of issuing a Corporate Governance Report within its
capital from 31 December 2021 through 24 February 2022. On 16 February 2022, the Company has received a notification under Disclosure
annual report that is separate from its Directors’ Report. The information that fulfils the requirement of DTR7.2
and Transparency Rule 5 that Greenleas International Holdings Ltd has reduced its shareholding to 0% and Mr. Roman Abramovich
is located in the EVRAZ Corporate Governance Report (and is incorporated into this Directors’ Report by reference),
subsequently increased its shareholding to 28.64%.
with the exception of the information cited in DTR7.2.6, which is located in this Directors’ Report.
Section 172
The Company’s Section 172 Statement can be found in the Strategic Report on page 98-99.
Statement
Employee
Details of how the Company engages with its workforce can be found in the Strategic Report on page 8, 57, 73.
LISTING RULE DISCLOSURES
engagement
Stakeholder
Details of the Board’s key decisions and discussions during the year and the main stakeholder inputs into those decisions
engagement
are set out in the Corporate Governance Report on page 115-118.
For the purposes of LR 9.8.4CR, the information required to be disclosed by LR 9.8.4R can be found in the following locations:
on key decisions
Interest capitalised
Note 9 to the Consolidated Financial Statements
Publication of unaudited financial information
Not applicable
MAJOR SHAREHOLDINGS
Details of long-term incentive schemes
Note 21 to the Consolidated Financial Statements, Remuneration Report
Waiver of emoluments by a director
None
The Company’s issued share capital as of 31 December 2021 was 1,506,527,294 ordinary shares, of which 47,837,582 shares are held
Waiver of future emoluments by a director
None
in treasury. Therefore, the total number of voting rights in the Company is 1,458,689,712.
Non pre-emptive issues of equity for cash
None
As of 31 December 2021, the following significant holdings of voting rights in the Company’s share capital were disclosed to the Company
Non pre-emptive issues of equity for cash in relation
None
under Disclosure and Transparency Rule 5. On 16 February 2022, the Company has received a notification under Disclosure and
to major subsidiary undertakings
Transparency Rule 5 that Greenleas International Holdings Ltd has reduced its shareholding to 0% and Mr. Roman Abramovich
Parent participation in a placing by a listed subsidiary
None
subsequently increased its shareholding to 28.64%.
Contract of significance in which a director is interested
None
Contracts of significance with a controlling shareholder
Relationship Agreements section below
NUMBER OF ORDINARY SHARES
% OF VOTING RIGHTS
Provision of services by a controlling shareholder
None
Greenleas International Holdings Ltd1
417,767,314
28.64
Shareholder waiver of dividends
None
Abiglaze Ltd22
281,870,003
19.32
Shareholder waiver of future dividends
None
Crosland Global Limited3
140,723,705
9.65
Agreements with controlling shareholder
Relationship Agreements section below
Kadre Enterprises Ltd4
83,751,827
5.74
Amereus Group Pte. Ltd
43,872,001
3.01
1. The Company understands that Roman Abramovich has an indirect economic interest in the 417,767,314 shares held by Greenleas International Holdings Ltd.
2. The Company understands that Alexander Abramov has an indirect economic interest in the 281,870,003 shares held by Abiglaze Ltd.
3. The Company understands that Alexander Frolov has an indirect economic interest in the 140,723,705 shares held by Crosland Global Limited.
4. Includes shares held by Gennady Kozovoy directly. The number of shares is as per TR-1 Form: Notification of major interest in shares dated 6 February 2013.
156
157
Meet EVRAZ
EVRAZ in figures
Strategic report
CORPORATE GOVERNANCE
Financial statements
Additional information
ANNUAL REPORT & ACCOUNTS 2021
(on the other), such matter must
EVRAZ warrant to each other that all assets
2026. Pursuant to the Coal Offtake
SIGNIFICANT CONTRACTUAL ARRANGEMENTS
be approved at a duly convened
and losses pertaining to the coal and steel
Agreements, EVRAZ NTMK and EVRAZ
meeting of the Independent
businesses are held by Raspadskaya Group
ZSMK will purchase certain grades of
Committee or in writing by a majority
and EVRAZ (respectively).
coal from Raspadskaya, accounting for
Relationship agreements
The Controlling Shareholders and their
The Controlling Shareholders shall
of the Independent Committee.
up to approximately 60% of the EVRAZ'
•
•
associates shall not take any action that
not, and shall procure, insofar as they
For so long as Roman Abramovich
EVRAZ and Raspadskaya have agreed
post-Demerger coal requirements for the
•
Due to the changes in the Company's
would have the effect of preventing
are legally able to do so, that each
(and his affiliates) holds an interest
to ensure that, following the Demerger,
purposes of steelmaking. The price to be
shareholder structure that took place on
the Company from complying with its
member of the respective Controlling
of 25% or more in the Company
historical liabilities (as well as any future
paid by EVRAZ NTMK and EVRAZ ZSMK
16 February 2022, particularly, the transfer
obligations under the Companies Act,
Shareholder group shall not, take
in aggregate, Roman Abramovich
liabilities from events that occurred before
will be determined in accordance with an
of the Company's shares from Greenlease
the Listing Rules and the Disclosure
any action that precludes or inhibits
undertakes that his will not become,
the completion of the Demerger) relating
agreed formula linked to global coal index
International Holdings Ltd to the personal
Guidance and Transparency Rules.
the Company and/or any of its
and will use his reasonable endeavours
to the steel and coal businesses are to be
prices, over which EVRAZ has no control,
account of Roman Abramovich, the
Neither the Controlling Shareholders nor
subsidiaries from conducting its business
to procure that no other member
borne by the post-Demerger EVRAZ and
and taking into account foreign-exchange
•
Company has terminated the previous
any of their associates shall propose or
independently of the Controlling
of his group becomes, involved
Raspadskaya (respectively). Such mutual
movements and quality.
relationship agreements entered with
procure the proposal of any shareholder
Shareholders or any member
in any competing business (subject
indemnity undertakings are capped at
each of Greenlease International Holdings
resolution that is intended or appears
of the respective Controlling
to certain exceptions) in Russia, Ukraine
US$100 million for each party.
On 8 November 2021, Raspadskaya, as the
Ltd., Abiglaze Ltd and Crosland Limited
to be intended to circumvent the proper
Shareholder group.
or the CIS without giving the Company
Seller, and EMAG, the trading subsidiary
as controlling shareholders and entered
application of the Listing Rules.
The quorum for any Board meeting
the opportunity to participate
of EVRAZ, as the Buyer, entered into an
•
into new relationship agreements (the
Transactions, relationships
of the Company shall be three, of which
in the relevant competing business.
Strategic Cooperation Deed
agreement for the sale of bituminous
•
"Relationship Agreements") with each of
and agreements between the Company
at least one must be a Shareholder
•
For so long as Abiglaze Ltd
coal. Pursuant to the agreement, the coal
Roman Abramovich, Abiglaze Ltd and
and/or its subsidiaries (on the one
Director appointed by Roman
and Crosland Global Limited (and their
On 15 December 2021, EVRAZ and
is shipped to South Korea, China, Japan,
Crosland Global Limited (the "Controlling
hand) and the Controlling Shareholders
Abramovich, at least one must
respective affiliates) hold an interest
Raspadskaya entered into a Strategic
Taiwan, Vietnam, Slovakia, Turkey, Romania,
Shareholders") that regulate the ongoing
shall be entered into and conducted
be a Shareholder Director appointed
of 25% or more in the Company
Cooperation Deed to acknowledge that
Serbia, Poland, Lithuania, the Czech
relationship between the Controlling
on arm’s length terms and on a normal
by Abiglaze Ltd and/or Crosland
in aggregate, Abiglaze Ltd and Crosland
they will continue providing certain services
Republic, Ukraine and India. It is anticipated
Shareholders and the Company. This ensures
commercial basis, unless otherwise
Global Limited and at least one must
Global Ltd undertake that they will not
and supplying certain goods to each other,
that arrangements agreement will continue
that the Company is in compliance with the
agreed by a committee comprising
be a non-executive director whom
become, and will use their reasonable
pursuant to the agreements entered into
until 31 December 2022, with a possible
provisions of the Listing Rules and capable
the Company’s non-executive
the Board considers to be independent
endeavours to procure that no other
between them before the Demerger.
extension to 31 March 2023.
of conducting its business independently of
directors whom the Board considers
in accordance with the UK Corporate
member of the respective Controlling
the Controlling Shareholders, and ensures
to be independent in accordance
Governance Code.
Shareholder group becomes, involved
Under the Strategic Cooperation
More information about the Demerger
that any transactions and relationships
with the UK Corporate Governance
•
The Controlling Shareholders shall
in any competing business (subject
Deed, EVRAZ and Raspadskaya will,
Agreement, Strategic Cooperation Deed
between the Company and the Controlling
Code (the “Independent Committee”).
not, and shall procure, insofar as they
to certain exceptions) in Russia, Ukraine
and acknowledge that their respective
and Coal Offtake Agreements that have
Shareholders are at arm’s length and on
The Controlling Shareholders shall,
are legally able to do so, that each
or the CIS without giving the Company
subsidiaries will, up to and including 31
been entered into between EVRAZ and
•
normal commercial terms.
insofar as they are legally able to do so,
member of the respective Controlling
the opportunity to participate
December 2022, supply services and
Raspadskaya can be found in the Circular to
exercise their powers, and shall procure
Shareholder group shall not, exercise
in the relevant competing business.
perform certain other agreements between
Shareholders at https://www.evraz.com/files/
The Relationship Agreements terminate
that each member of the respective
any of their voting or other rights
them in accordance with their terms. Unless
en/demerger/circular.pd
if the Controlling Shareholders cease
Controlling Shareholder group does
and powers to procure any amendment
The Board is satisfied that the Company
the parties agree otherwise, both shall
to own or control (directly or indirectly)
the same, so that the Company
to the Memorandum and Articles that
is capable of conducting its business
endeavour to terminate all such service
in aggregate at least 30% of the issued
is managed in accordance
would be inconsistent with, undermine
independently of the Controlling
and other arrangements by 1 January 2023
Other agreements
ordinary shares in the Company (or
with the principles of good governance
or breach any of the provisions
Shareholders and that the Board makes its
(unless Raspadskaya requires the earlier
at least 30% of the aggregate voting rights
set out in the UK Corporate Governance
of the Relationship Agreements,
decisions in a manner consistent with its
termination of any arrangements, in which
The change of control provisions contained
in the Company).
Code, save as agreed in writing
and shall abstain from voting on,
duties to the Company and stakeholders
case the parties shall endeavour to terminate
in several loan agreements with a total
by a majority of the Independent
and shall procure that the Controlling
of EVRAZ plc.
the respective agreements as may be so
principal amount of US$1,766 million
Under the Relationship Agreements,
Committee.
Shareholder Directors abstain from
requested).
outstanding as of 31 December 2021 specify
the Controlling Shareholders
The Controlling Shareholders shall,
voting on, any resolution to approve
that if a change of control occurs, each
•
and the Company agree that:
and shall procure (as far as is reasonably
a transaction with a related party
Significant contractual
Under the Strategic Cooperation Deed, any
lender under these agreements has a right
possible) that each member
(as defined in the Listing Rules)
arrangements between
potential liability of each party is capped at
to cancel their commitments and request
•The Controlling Shareholders have
the right to appoint the maximum
of the respective Controlling
involving the Controlling Shareholders
EVRAZ and Raspadskaya
US$20 million. This cap is independent of
repayment of their portion of the respective
number of non-executive directors
Shareholder group shall, treat
or any member of the respective
the parties’ liabilities under the respective
loans ahead of schedule.
that may be appointed while ensuring
as confidential all information (subject
Controlling Shareholder group.
Demerger Agreement
underlying agreements.
that the composition of the Board
to certain exceptions) acquired relating
•
In any matter that, in the opinion
remains compliant with the UK
to the Company and its subsidiaries.
of an independent director, gives
On 15 December 2021, EVRAZ and
Corporate Governance Code for so
The provision of, access
rise to a potential conflict of interest
Raspadskaya entered into a Demerger
Coal Offtake Agreements
•
long as the Controlling Shareholders
to and use of information pursuant
between the Company and/or
Agreement to effect the Demerger of
hold an interest of 30% or more
to the Relationship Agreements shall
any of its subsidiaries (on the one
EVRAZ' coal business govern the post-
On 1 November 2021, EVRAZ NTMK and
of the Company in aggregate (or hold
be governed by applicable laws relating
hand) and the Shareholder Directors,
Demerger obligations of the two parties
EVRAZ ZSMK entered into separate Coal
30% or more of the aggregate voting
to insider information, including, without
the Controlling Shareholders or
in respect of, among other matters, their
Offtake Agreements with Raspadskaya,
rights in the Company) with each
limitation, the Disclosure Guidance
any member of the respective
respective indemnity obligations. Under the
to take effect immediately on completion
appointee being a “Shareholder Director”.
and Transparency Rules.
Controlling Shareholder group
Demerger Agreement, Raspadskaya and
of the Demerger and until 31 December
158
159
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