publishes an annual ranking of "Top 30 Highest Paid CEOs of Ukrainian Private Companies 2021". In it, we have assessed the level of income of the senior executives from the 300 largest private companies in Ukraine.
The senior executive salary usually consists of a basic part and a remuneration. In our assessment, we used data on net salaries provided to us by the largest HR agencies in Ukraine. The names of these agencies we do not disclose at their request. It is also important that we have estimated the income of hired managers, and not the owners of the companies.
The ranking leaders for the third consecutive year were the heads of Rinat Akhmetov's companies: DTEK—Maksym Tymchenko and Metinvest—Yuriy Ryzhenkov with monthly rates of about $60,000. But taking into account bonuses, compensations and other payments, the total amount can be much higher. The top five also included James North from Ferrexpo with a monthly income of $50,000, Ihor Hutsal from Optima-Farm—$40,000, and Oleg Gez from Ukrnafta—$40,000.
The salaries of a significant number of participants in the ranking are in the range of $20,000-30,000 per month. At the bottom of the ranking is the General Director of Auchan Retail Ukraine Victoria Lutsenko with a salary of $10,000 per month.
How the salaries of senior executives have changed in 2021
Oleksiy Komlichenko, partner at the HR company Odgers Berndtson Ukraine, says that salary offers for the senior executives have not changed significantly in 2021. Despite the lockdown, the key persons of the companies are constantly looking for new solutions in order to ensure the further business development. So the lockdown not only did not reduce, but also increased their occupancy.
At the same time, the quarantine, rather, affected the structure of their income. Many companies began to depart from the KPI system (Key Performance Indicators) and shift to the OKR system (Objectives and Key Results). Personal and team goals came to the fore. Attention is paid to how the business is moving towards achieving them and how it understands that the goal has been achieved.
The owners have also learned the golden rule well: if you say goodbye to a person, you will hardly find anyone cheaper. "When a person is not looking for a job, but he is offered one, he usually asks for some kind of bonus," says Komlichenko. After all, people understand that they are offered a job because it is a forced step and that, perhaps, the employer's company is in a near-crisis state. And in such cases, another principle applies: last—in, first—out. That is, "you come last, you go first."
How the crisis affected the salaries structure
In 2021, some companies decided to reduce the fixed part of the senior executives remuneration and increased the bonus component. In some of them, the payment procedure has changed—bonuses can now be paid not at the end of the year, but quarterly.
The crisis brought business not only problems, but also new opportunities. And this had an impact on the relations between business owners and senior executives. There have been cases when the owner did not pay what was promised. For example, when the company showed an extraordinary result and it turned out that the senior executive needed to be paid out not one, but five annual salaries. After gaining success, there were talks like: "What is your personal contribution? Let's reconsider... Let's postpone ..."
Such situations have always existed, but now applicants have begun to define in their contracts more often what to do in such cases.
Reducing quarantine restrictions adds stability to the business. But this does not mean that companies in this and next year as well are going to renounce the approaches to paying employees that they have developed over the past year.
Experts believe that the downward trend in the fixed part of remuneration will continue up to 30% of the total amount of payments. The remaining part will depend on the results. At the same time, employees will continue to expect payments not at the end of the year, but on a quarterly basis. Perhaps this approach will become dominant in the remuneration of the senior executives in the coming years.