On September 3, 2024, a webinar on “Requirements to the Regulations and Report on Remuneration of Members of the Supervisory Board, Board of Directors and Executive Body of a Joint Stock Company” was held, which addressed important issues of applying the decision of the National Securities and Stock Market Commission (NSSMC) dated 02.05.24 No. 549 (hereinafter – the Requirements).

The speakers of the event were Maxim Libanov, a member of the NSSMC, and Oleksandr Okuniev, Chairman of the CGPA Board of Directors, and representatives of more than 65 Ukrainian joint stock companies participated in the event.

The main issues discussed during the event:

Who is subject to the Requirements and what reports must already comply with them?

The participants discussed the requirements for different categories of joint-stock companies that are subject to the requirements and the specifics of their application to banks, financial companies, and companies with significant state shares. Attention was also drawn to the already adopted NBU regulation regulating these issues and the peculiarity of the adoption of the ownership policy by the Cabinet of Ministers of Ukraine for state-owned companies, which is to be adopted and may replace the requirements of the NSSMC.

The requirements came into force in May 2024, but the reports for 2024 must already comply with them: what to do:

The webinar participants raised the question of how to act for companies that have not been informed of the new requirements for almost six months, and what steps should be taken to ensure compliance.

Conflict of interest in the context of determining remuneration for members of the supervisory board:

The participants discussed the principle of avoiding conflicts of interest outlined in clause 11 of the Requirements, which limits the influence of supervisory board members as members of the remuneration committee on the determination of their remuneration, and how this relates to the Law of Ukraine On Joint Stock Companies.

Restrictions on bonuses for members of the supervisory board (board of directors):

The discussion focused on the provisions of the Requirements that prohibit the award of bonuses if a member of the supervisory board simultaneously performs administrative functions as chairman of several committees, and why the NSSMC may set requirements for the form and procedure for approval, as well as for the content of the Regulation.

An alternative to the return of remuneration is the deposit in an escrow account:

It was proposed to discuss the possibility of depositing part of the remuneration in an escrow account until the end of the term as an alternative to the mechanism of returning the remuneration already paid.

Availability of information on remuneration in affiliated companies:

Participants discussed possible ways to obtain information on remuneration received by members of management bodies in companies related to control or affiliated with the joint-stock company itself and the corresponding disclosure in the report.

Comparison of paragraphs 30 and 31 of the Remuneration Disclosure Requirements:

There was a discussion on how to disclose the remuneration of each supervisory board member in an impersonal manner, as required by the Requirements.

Recommendations for the regulation of remuneration provisions:

The speakers expressed their recommendations on the main points that should be regulated in the Regulations on remuneration of members of the supervisory board (board of directors) of a joint-stock company, for example: a system for assessing the performance of the supervisory board or executive body.

Identification of key personnel:

The speakers outlined who can be classified as the company’s key personnel depending on the company’s activities.

The webinar became a platform for constructive discussion and exchange of views on topical issues of applying new requirements and reporting.

If you were unable to participate in the webinar on remuneration of members of boards and executive bodies, you can purchase a video recording of the event. To do so, please fill out the form on our organizer’s website. This will give you the opportunity to review all the issues discussed and get important information at your convenience.