"Sekret Firmy (Kommersant)" (Moscow), May 22, 2002

Who is eligible for share opions

Should share options be the privilege of top management? Can there be a lot of optionees at the company? Leonid Zabezhinsky expressed a common view on this matter: "If share options are given to everybody, it looks like a social security program, similar to a kind of medical insurance. It will be a bead-house, and the motivation factor will be totally devaluated. Share options only for management are neither good nor bad. I think that the company should give options to key employees.

A share option plan, which is being drafted by RBC (this company conducted an IPO on MICEX and RTS a month ago), will be launched not only for the top management, but also for those who made the greatest contribution to the development of the company. "It can be sales managers and other employees. We have already opened investment accounts and transferred one share to each employee (the staff consists of about 500 employees). We don't know who will be the most valuable employee yet and opened accounts for everybody just in case. At the same time, RBC is not going to stop paying incentive bonuses," said RBC General Director Yury Rovensky.

Yukos has the most extensive share option plan for the time being. RAO UES of Russia is planning to allocate about 400 share options among the general directors of its power-generating plants and companies and senior officials of the parent company. So far only about ten managers were given share options at VimpelCom.

A thorough evaluation of the managerial staff should precede the allocation of share options. "Each manager is assigned goals for the next year. Depending on the completion of these assignments, we determine those who measured up. Both a year-end bonus and the size of the option hinges on the evaluation," said Sergey Gorkov.

Usually a specially established committee makes a decision on the allocation of share options. As a rule companies set out the number of shares reserved in an option and option allocation conditions in an individual contract with each manager. From this very moment an employee becomes a real optioneer.

Yulia Fukolova