Oleg Deripaska, the billionaire chief executive officer of United Company RusAl, said he would donate to charity two-thirds of the $62 million of stock he was given for helping the world's largest aluminum maker sell shares in Hong Kong.
The stock will be sold after a two-year lockup, and the proceeds will be spent on local economies in the 20 cities and regions where RusAl operates, Deripaska, 42, said in an interview. The money will be given to Volnoye Delo, his charitable fund, and RusAl’s center for social programs, he said.
Deripaska, who controls 48 percent of RusAl, is defending his bonus as the shares trade 14 percent lower than their January initial public offering price. His basic pay is five times more than the comparable compensation for the chief executive of BHP Billiton, the world’s largest mining company.
“To take a company with a negative $10 billion value last year and make it worth $20 billion, to not lose a single key asset, to restructure capacities and make it the world’s lowest-cost producer” means management should be rewarded, Deripaska said. Deripaska repeated a statement last week that the shares will double and the company will reach a market value of $40 billion.
BHP Billiton paid its chief executive Marius Kloppers $10.4 million in the fiscal 2009, including a base salary of $2 million. Deripaska’s remuneration includes a base salary of $10 million, with a cash bonus that may be 200 percent of his pay.
“Spending time in London or New York is very different to flying into Nigeria to free staff or to oversee a construction in minus 42 degrees in Siberia,” said Deripaska. “It’s certainly nicer to sit at home by 7 wearing carpet slippers.”
Nigerian militants held two RusAl workers hostage for two months before they were freed in February last year. Lenders supported Deripaska’s pay package because they want to retain his services, Oleg Mukhamedshin, deputy chief executive officer of capital markets at RusAl, said Jan 11.
RusAl and Volnoye Delo plan to help start service companies, industrial ventures and other projects in places where RusAl operates, Deripaska said. There’s a need to ensure that workers stay in mining regions in Russia, as demand for commodities will continue to gain in the next seven years because of urbanization in China and India, he said.
“Russia’s biggest corporations are re-evaluating their production sites on the basis of competitiveness and have to bear some social costs optimizing the business,” said Bulat Stolyarov, a director at the Institute of Regional Policy in Moscow. “It’s clear why Deripaska is announcing this. Good regional policy always needs publicity, and he’s sending a signal to authorities about being socially responsible.”
The government gave emergency bailout loans to domestic companies, including $4.5 billion to RusAl, at the end of 2008.
“The shareholders are happy,” Deripaska said. “I’d kick out the politicians who make a fuss of this. The state budget deficits we see today, no company could carry for even a month.”