Russia: CEO Compensation Limit Clarified

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By Sergei Blagov

The Russian labor ministry recently released guidelines on new legislation limiting the compensation of executives of state-controlled corporations and state-run businesses and organizations. Federal Law No. 347-FZ stipulates that the gap between CEO and average employee compensation cannot exceed certain limits approved by federal and local authorities. Under the current limits, CEOs of state-controlled and state-run businesses cannot make more than eight to 10 times what an average worker makes, according to the guidelines. CEO compensation includes bonuses and other forms of compensation as stipulated by Article 129 of the Labor Code.

According to Decree No. 1521, CEO compensation information must be released no later than May 15 of the year following the year in which the compensation was earned. Under Articles 192 and 278 of the Labor Code, the failure of a CEO to comply with the provisions governing compensation limits and disclosure requirements can result in termination of the employment contract.

Federal Law No. 347-FZ applies to CEOs, their deputies and CFOs of corporations in which the government holds more than a 50-percent interest, state-controlled and state-run businesses and organizations.

To contact the reporter on this story: Sergei Blagov in Moscow at

To contact the editor responsible for this story: Rick Vollmar at

For More Information

The full text of the guidelines is available here, of Federal Law No. 347-FZ here, both in Russian.

For more information on Russian HR law and regulation, see the Russia primer.

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