December 14, 2012 7:39 pm

Norilsk to pay chief $100m to quit

Vladimir Strzhalkovsky, the controversial chief executive of Norilsk Nickel, will receive a $100m payout to step down from his position under a new agreement between the miner’s oligarch shareholders.

Mr Strzhalkovsky, who has been chief executive of Norilsk since 2008, will receive an initial one-off payment of $50m from the company, followed by two separate payments of $25m, the first after six months and the second after a year.

Norilsk’s board is expected to vote on Mr Strzhalkovsky’s golden parachute at a board meeting on Monday, where it will also discuss the details of a new shareholder ­agreement.

This month Norilsk’s two biggest shareholders – Vladimir Potanin and Oleg Deripaska – reached a resolution in their long-running corporate dispute after a third oligarch, Roman Abramovich, agreed to step in as the company’s third-biggest shareholder and an arbiter between the two rivals.

As part of the resolution, Mr Potanin has consented to the departure of Mr Strzhalkovsky as chief executive – a longstanding demand of Mr Deripaska’s Rusal.

Mr Strzhalkovsky, an ally of Russia’s President Vladimir Putin and a former KGB agent, was appointed in August 2008 with Mr Potanin’s support.

Over the past two years, he has faced off with Rusal, which claimed that he was colluding with Mr Potanin to reduce Rusal’s own representation on the board, most notably through a 2011 management buyback.

In October, a Krasnoyarsk arbitration court sided with Rusal to rule that Mr Potanin’s Interros and Norilsk’s management had been acting together against Mr Deripaska’s interests and ruled the buyback to be invalid.

Under this month’s shareholders’ agreement with Mr Abramovich, the treasury shares issued in the buyback will be cancelled.

Representatives for Rusal, Interros and Mr Abramovich’s Millhouse are expected to approve Mr Strzhalkovsky’s package. However, a person close to Mr Deripaska complained that the payout was “astronomical”.

Steven Dashevsky, of Dashevsky & Partners, a Moscow investment company, agreed, calling the payout “unprecedented by whatever metric you want to judge it”.

“If I was an employee at Norilsk Nickel I think I would be completely incensed,” he added.

A person close to Mr Potanin countered that the sum was appropriate for Mr Strzhalkovsky’s four-year tenure at the company.

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