3.5. Financial Incentives for Employees

The financial motivation system established for employees of PJSC Gazprom is aimed at creating a competitive advantage for the Company as an employer and at increasing each employee’s commitment to delivering best possible results.

PJSC Gazprom and its entities apply uniform corporate labour remuneration standards governed by the PJSC Gazprom Employee Remuneration Management PolicyApproved by Order of OJSC Gazprom No. 133 dated March 20, 2015 (as amended by Orders of PJSC Gazprom No. 52 dated February 3, 2016, No. 740 dated November 1, 2017, No. 378 dated July 5, 2018, No. 432 dated September 27, 2019, and No. 590 dated December 24, 2019).. The purpose of the Policy is to create conditions for attracting and retaining personnel with the required qualifications and incentivize employees to carry out tasks at hand. The Policy applies to the entities included into the Gazprom Group.

The Policy provides for the fixed part of remuneration (salaries / tariff rates) and the variable part (extra payments, allowances, and bonuses). Linked to the remuneration system, the fixed part constitutes up to 70% of the remuneration.

In 2019, an average monthly salary at the entities included into PJSC Gazprom’s budgeting system (including PJSC Gazprom Administration) stood at RUB 104,900.

Gazprom ensures equal pay and remuneration for men and women at the positions requiring the same level of professional expertise.

The ratio of fixed and variable remuneration is also the same for both genders.

Salaries and tariff rates take into account qualifications and business skills. Employees receive extra payments and allowances depending on labour conditions and workload, and monthly bonuses are paid on the basis of the performance demonstrated. One-off bonuses are paid for launching new production facilities and construction projects, adoption of new technical equipment, energy resource saving, and discovery of new hydrocarbon deposits. PJSC Gazprom also pays its staff year-end performance bonuses.

From January 1, 2019, the employees of PJSC Gazprom’s budgeted entities located in Russia saw their salaries and tariff rates increase by 4.6% based on the growth of the consumer price index projected by the Ministry of Economic Development of the Russian Federation.

The tariff rates of employees payable on the basis of the Uniform Tariff System were raised by 15% on October 1, 2019.