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Structure of Management and Supervisory Bodies of MTS PJSC in 2021

Management bodies

General meeting of shareholders

Higher Governance Body of MTS PJSC.

Procedure for holding the General Meeting of Shareholders is aimed at ensuring the adherence to the rights of shareholders, and meets all the requirements of the Russian Federation legislation.

Procedure for the preparation, convocation, holding and summarizing of results of the General Meeting of Shareholders is defined by the Chart and the Regulations on the General Meeting of Shareholders of MTS PJSC.

Bоard of Directors

The Board of Directors carries out general management of MTS PJSC activities.

It is a key element of the Company’s corporate governance system, representing the interests of shareholders through an effective management organization.

Establishment procedure, status, composition, functions, tasks and objectives, powers of the Board of Directors, its operating procedure and interaction with other management bodies of the company are determined by the Charter and the Regulations on the Board of Directors of MTS PJSC.

Management Board

Collective executive body of MTS PJSC.

It organizes the effective day-to-day management of the Company’s current activities, including the implementation of decisions taken by the Board of Directors within its current competences.

The number and identities of the Management Board members shall be approved by the Board of Directors upon a proposal by the President. The Management Board Chairman is the President of the Company.

The Management Board follows the Charter and the Regulations on the Management Board of MTS PJSC in its activities.

President

The sole executive body of MTS PJSC who exercises a day-to-day management of the company’s current activities.

The activities of the President should ensure the profitability and competitiveness of the Company, its financial and economic stability, enforcement of rights of the shareholders and social guarantees of Company’s employees.

The President governs the Company’s activities in accordance with the Charter and the Regulation on President of MTS PJSC.

Internal Control System

Audit Committee of the Board of Directors

The Audit Committee is a collective advisory body of the Board of Directors of MTS PJSC that reviews issues related to the monitoring of risk-management and internal-control system’s performance, compliance and corporate governance system, reliability of the financial statements of the MTS Group, the independence and objectivity of internal and external audit functions performance, consideration of nominees and assessment of the performance of external auditors, and also provides recommendations to the Board of Directors of MTS PJSC for it to make decisions on such issues.

Auditing Commission

The Auditing Commission is a permanent elective body of the Company, exercising periodic control over the financial and economic activities of the Company, and the activities of its management bodies and executive officers.

Its activities are regulated by the Charter and the Regulations on the Auditing Commission of MTS PJSC.

Internal Audit Block (IAB)

The Internal Audit Block is a standalone structural division of MTS PJSC and consists of the Corporate Interaction Department, the Special Audit Department, and the Process Audit Department. Head of the Internal Audit Block is the Director for Internal Audit who is functionally subordinated to the Board of Directors of MTS PJSC, and administratively subordinated directly to the President of MTS PJSC.

The objectives, tasks, obligations, principles of functioning and powers of the Internal Audit Block are set forth in the “Internal Control and Audit” Policy. The Internal Audit Block carries out its activities while complying with the mandatory guidance of the international Institute of Internal Auditors, which includes the Main Principles of Professional Practice of Internal Audit, Code of Ethics, International Professional Standards of Internal Audit and Internal Audit Definition.

Internal Control Systems Department (ICSD)

The Internal Control Systems Department is a structural division to be a part of the Finance Block of the Corporate Center of MTS PJSC and consists of the ICS development department for the key business, the ICS development department for integrator business, the ICS development department for financial technologies and commerce, the Functional Group for Certification and General ICS Methodology. The Department of Internal Control Systems is headed by the director of the department, who is directly subordinated to the Member of the Management Board and Vice President for Finance of MTS PJSC and reports to the Audit Committee of the Board of Directors of MTS PJSC.

Business Ethics & Compliance Department

The Ethics and Compliance Department is a  standalone structural division, consisting of the Periodic Risk Assessment, Monitoring and Testing Functional Group, the Transactional Compliance and Integration of Compliance with SC Functional Group, Center for Interaction with Regulatory Authorities, Regulatory Control, Compliance Communications and Training Functional Group, Internal Investigations Functional Group, Regional Support Division. The Vice President for Ethics and Compliance is directly subordinated to the President of MTS PJSC and reports to the Audit Committee of the Board of Directors and the Board of Directors of MTS PJSC.

The activities of the department are regulated by the Regulations on the Ethics and Compliance Department.

Auditor

In order to audit and approve the annual financial statements of the Company, the General Meeting of Shareholders of MTS PJSC annually approves the Auditor. The auditor conducts independent assessment of reliability of accounting (financial) statements of the Company.

General Meeting of Shareholders

The General Meeting of Shareholders is the supreme management body of the Company, exercising its activities in accordance with provisions of the Company’s Charter, Regulations on the General Meeting of Shareholders of MTS PJSC, and the requirements of the legislation of the Russian Federation.

In making decisions at the General Meeting of Shareholders, the Company’s shareholders take part in governance over the Company and may significantly influence its business. In particular, powers of the General Meeting of Shareholders on their meetings encompass the approval of an annual report and financial statements, distribution of profit, including payment of dividends, election of key management and control bodies of the Company, adoption of decisions on reorganization of the Company and a number of other important matters.

Procedure for holding the General Meeting of Shareholders is aimed at ensuring the adherence to the rights of shareholders, and meets all the requirements of the Russian Federation legislation

Informing shareholders about the General Meeting of Shareholders, as well as providing shareholders with access to information and materials of the General Meeting of Shareholders

Shareholders shall be notified on holding of the General Meeting of Shareholders through publication of this information on the official website of the Company at least thirty (30) calendar days prior to its date.

The message on holding of the General Meeting of Shareholders may be additionally sent to the persons entitled to participate in the General Meeting of Shareholders and registered in the Company’s shareholders register, by registered mail to the address specified in the register of the Company’s shareholders, or delivered personally to such persons against signature simultaneously with sending or handing over the voting ballots. The information and files on the agenda of the General Meeting of Shareholders are provided to persons registering their rights to the Company’s shares in a depositary by providing them to the Company’s registrar for direction to a nominee holder entered in the register of shareholders in accordance with the Russian Law on securities.

With regard to recommendation of the Corporate Governance Code, aimed at creation for the shareholders of best possible conditions for participation in the general meeting, a model proxy form for voting shall be published on the official website of the Company.

Within the framework of preparation to the General Meeting of MTS Shareholders, the shareholders get the opportunity to ask members of executive bodies and the Board of Directors on issues of the agenda of the General Meeting of Shareholders, and to voice their opinion on issues of the Meeting’s agenda by sending e-mails to the address: shareholder@mts.ru.

The Company aims to present materials for the General Meeting in a comprehensible form. To achieve that, a special section (microsite) is created dedicated to the annual General Meeting of Shareholders, which contains materials on the agenda of the meeting (certificates, presentations, documents, comments thereto, extended information about candidates), and also provides access to the online broadcast of the annual General Meeting.

Holding of the General Meeting of Shareholders

Shareholders may implement their voting right by most simple and convenient for them ways without any encumbrance. Voting at General Meetings of Shareholders is carried out by direct participation in the meeting or by filling out and sending to the Company (as well as its registrar) ballots on agenda items or by filling out an electronic form of voting ballots on the MTS website via electronic services.

The General Meetings of Shareholders shall be organized and held in a way allowing for easy access of all the shareholders. General meetings held in the form of joint attendance shall be organized at locations convenient for coming and personal participation of the shareholders and their representatives. During the registration and during the break, the innovative technologies of MTS are demonstrated to shareholders, and the shareholders are also provided with an opportunity to receive the necessary consultations on various projects of the Company.

Over the past years, the Company has been giving its shareholders the opportunity to follow the meeting in real time on the MTS website. Video record of the meeting is available after the end of the meeting on the MTS website in the “General Meetings of Shareholders” section.

General Meetings of Shareholders in 2021

The experience previously gained in terms of on-line support for shareholders during the Annual General Meeting of Shareholders has strengthened the trend for remote communication with shareholders and had a positive impact on the format of the AGMS 2021.

On June 23, 2021, MTS PJSC held the Annual General Meeting of Shareholders (AGMS) using the E-Voting services of the National Settlement Depository (NSD) and Registry-Online of “Reestr” JSC.

According to the recommendation of the Bank of Russia, aimed at containment of the spread of coronavirus, the MTS AGMS was held in absentia. The shareholders were provided with the most comfortable conditions for exercising their rights, with the possibility to choose the electronic voting system.

On June 24, an online conference following the results of the 2021 AGMS was held on the dedicated website named “2021 AGMS”, and the top management of MTS presented their speeches with a detailed review of the results of MTS work in 2020 and answers to questions in real time.

Electronic services for shareholders

In 2021, the successful experience in using e-voting through the internet when holding shareholder meetings was continued. For the first time, MTS shareholders voted electronically at the extraordinary general meeting of shareholders on September 30, 2016. For the last years of using e-voting, the number of shareholders voting through the Internet has increased substantially. At the annual General Meeting of Shareholders held on June 23, 2021, 99% of those participating in the meeting voted electronically.

Our services help MTS shareholders save time!

We have created digital products and services targeted at our shareholders.

State-of-the-art technologies make it possible not to waste time attending offline events, but to vote in comfortable conditions right from home.

Results of the 2021 General Meetings of Shareholders

Extraordinary general meeting of shareholders of MTS PJSC on February 15, 2021 — Report (mts.ru).

Annual general meeting of shareholders of MTS PJSC on June 14, 2021 — Report (mts.ru).

Extraordinary general meeting of shareholders of MTS PJSC on September 30, 2021 — Report (mts.ru).

Board of Directors

The Board of Directors is a strategic management body, whose main objective is to implement general management of the company’s activities, as well as to exercise supervisory and overseeing functions. First of all, its competences include the most important issues of the Company’s management, such as strategy definition, investment and budget planning, developing management motivation and assessment system, as well as supervision of the company’s assets, reliability and effectiveness of risk management systems, internal control, internal audit and corporate governance system.

The Board of Directors of MTS PJSC exercises general governance over the Company’s activities in accordance with the provisions of the Company’s Charter, the Regulations on the Board of Directors of MTS PJSC, and the requirements of the legislation of the Russian Federation.

The primary goals of the Board of Directors include:

  • developing and analyzing general corporate strategy, and exercising control over its implementation;
  • providing for the control over executive bodies and chief executive officers of the Company, and assessing their activities;
  • increasing the Company’s capitalization, expanding its market positions, achieving and preserving the Company’s competitiveness;
  • aintaining financial stability, and increasing revenues and profitability;
  • protecting rights and lawful interests of the Company’s shareholders.

Composition of the Board of Directors

The composition and structure of the Board of Directors affects its performance, and thus performance of the entire Company; with that, the important aspect is the balance of the composition in terms of qualifications of its members, their experience, knowledge and business qualities.

A member of the Board of Directors should, first of all, be able to communicate effectively with people, participate efficiently in a discussion, understand a difficult situation based on information prepared by management, relying on their experience and ability to quickly analyze information.

The present members of the Board of Directors were elected at the annual General Meeting of Shareholders of MTS PJSC on June 23, 2021.

Throughout 2021, the Board of Directors consisted of nine members. Such number of members of the Board of Directors makes it possible to form the composition, which is balanced from the point of view of professional qualification, experience and business skills of the members of the Board of Directors, and to provide high efficiency of work, and it fully meets the needs of the Company and the interests of its shareholders. Issues related to the needs of the Board of Directors in the area of professional qualification, background and business skills of the members of the Board of Directors, and also to the numerical composition, were considered within the framework of the procedure for assessing the Board of Directors’ work (for more details, see section “Assessment of the Performance of the Board of Directors”).

A high-quality corporate governance system and an efficiently operating Board of Directors are the most important prerequisites for long-term sustainable development of a modern company.

Boards of Directors’ compositions effective in 2021

June 24, 2020 — June 23, 2021June 23, 2021 — December 31, 2021
Felix Evtuschenkov
Chairman of the Board of Directors,
Non-Executive Director
Felix Evtuschenkov
Chairman of the Board of Directors
Artem Zassoursky
Non-Executive Director
Artem Zassoursky
Non-Executive Director
Aleksey Kornya
Executive Director1 
Vyacheslav Nikolaev
Executive Director2
Regina von Flemming
Independent Director
Regina von Flemming
Independent Director3
Shaygan Kheradpir
Independent Director
Shaygan Kheradpir
Independent Director
Thomas Holtrop
Independent Director
Thomas Holtrop
Independent Director
Nadia Shouraboura
Independent Director
Nadia Shouraboura
Independent Director
Konstantin Ernst
Independent Director4
Konstantin Ernst
Independent Director4
Valentin Yumashev
Independent Director
Valentin Yumashev
Independent Director

1 By decision of the Annual General Meeting of Shareholders dated June 23, 2021, the powers of the following member of the Board of Directors were terminated.

2 By decision of the Annual General Meeting of Shareholders dated June 23, 2021, the following member was elected.

3 From June 24, 2021 — Deputy Chairperson of the Board of Directors.

4 Retired member of the Board of Directors of MTS PJSC. Voluntarily resigned as a member of the Board of Directors of MTS PJSC based on application dated  March 17, 2022.

Information on members of the Board of Directors of MTS as of December 31, 2021

Felix Evtuschenkov

Non-Executive Director

Chairman of the Board of Directors

Chairman of the Strategy Committee of the Board of Directors

Biography

He was born in 1978, in Moscow.

In 2000, he graduated from the Griboedov Institute of International Law and Economics, majoring in Law.

Professional experience

  • 1999–2000  — Assistant to the President of Sistema-Invest CJSC, Executive Director of the Industry Department of Sistema PJSFC.
  • 2000–2006 — Deputy General Director, General Director of Sistema-Gals CJSC.
  • 2006–2008 — President of Sistema-Gals OJSC.
  • 2008–2011 —Vice President, Head of the Consumer Assets Business Unit of Sistema PJSFC.
  • 2011–2012 — First Vice President, Head of the Basic Assets Business Unit of Sistema PJSFC.
  • 2012–2018 — First Vice President of Sistema PJSFC.
  • 2018–2020 — Chairman of the Board of Sistema Charitable Fund.
  • 2020 — till present — Chairman of the Board of Trustees of Sistema Charitable Fund.
  • 2018 – 2021 – Director of Sistema PJSFC.
  • 2021 – present time – Managing Partner of Sistema PJSFC.

Citiz enship: Russian Federation.

Member of the Board of Directors of Sistema PJSFC, Element JSC, OZON HOLDING PLC and other companies.

Member of the Board of Directors of MTS PJSC in 2011 to 2012.

He was reelected as a member of MTS PJSC Board of Directors at the General Meeting of Shareholders on June 27, 2019.

As of December 31, 2021, he did not own shares in MTS PJSC (directly/indirectly).

Artem Zassoursky

Non-Executive Director

Member of the Corporate Governance, Environmental and Social Responsibility Committee of the Board of Directors

Member of the Strategy Committee of the Board of Directors

Member of the Special Committee of MTS PJSC Board of Directors on compliance

Biography

He was born in October 1979, in Moscow.

In 2005, he graduated from the fellowship of the Faculty of Journalism in the Lomonosov Moscow State University.

In 2001, he graduated from the Lomonosov Moscow State University with a degree in “Social and Economic Geography of Foreign Countries, Translator/Interpreter”.

Professional experience

  • 2002–2003 — Director, Directorate of Development Department, Crossmedia Solutions LLC.
  • 2003–2005 — founder of several companies in the field of digital services and content.
  • 2005–2006 — Executive Director of Game Territory, LLC.
  • 2007–2011 — General Director, Dragonara LLC.
  • 2011–2011 — Development Director, Stream LLC.
  • 2012–2013 — Vice President for Development, SMM OJSC.
  • 2013–2016 — CEO, Stream LLC.
  • 2016–2018 — Vice President, Head of the Strategy Complex, Sistema PJSFC.
  • 2018–2020 — Vice President for Strategy of the Strategy Department, Sistema PJSFC.
  • 2020 — till present — Vice President, Strategy and Development, Sistema PJSFC.

Member of the Board of Directors of Medsi Group of Companies JSC, Sistema Asia Capital PTE, LTD, ALIUM JSC.

Citizenship: Russian Federation.

He was elected as a member of MTS PJSC Board of Directors for the first time at the General Meeting of Shareholders on June 29, 2017.

As of December 31, 2020, he did not own shares in MTS PJSC (directly/indirectly).

Vyacheslav Nikolaev

President, Management Board Chairman of MTS PJSC

Biography

He was born in 1970 in Moscow.

In 1992, he graduated from the Faculty of Computational Mathematics and Cybernetics of the Lomonosov Moscow State University.

In 1994, he completed management training at the Krieble Institute, Washington, DC.

Professional experience

  • 1994–1999 — international consulting company European Public Policy Advisers, Senior Advisor.
  • 1999–2000 — J’son and Partners (telecommunications consulting), Advisor.
  • 2000–2003 — investment bank Renaissance Capital, Telecommunications Analyst.
  • 2003–2004 — investment bank Trust, Vice President, Stock Market Research Department.
  • 2004–2006 — MTS PJSC, Director, Scheduling and Analysis Department, Sales and Subscriber Service Block.
  • 2006–2008 — MTS PJSC, Director, Regional Management Department.
  • 2008–2011: MTS PJSC, Deputy Director, Business Unit Russia for Regional Development and Operations Support.
  • 2011–2017 — MTS PJSC, Director for Consumer Market Marketing.
  • 2017–2019 — MTS PJSC, Management Board member — Vice President for Marketing.
  • 2019–2020 — MTS PJSC, First Vice President for Customer Experience and Marketing, Management Board member.
  • 2017–2019 — MTS PJSC, First Vice President for Client Experience, Marketing and Ecosystem Development, Management Board member.
  • 2021 – till present — MTS PJSC, President, Management Board Chairman.

Board of Directors member at RTC JSC, MTS Bank PJSC, MTS Media LLC, MTS AI LLC and other companies.

Member of the Management Board of MTS PJSC since 2017.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,0058%.

Regina von Flemming

Deputy Chairperson of the Board of Directors

Independent Director

Chairperson of the Remuneration and Nomination Committee of the Board of Directors

Chairperson of the Corporate Governance, Environmental and Social Responsibility Committee of the Board of Directors

Member of the Audit Committee of the Board of Directors

Member of the Strategy Committee of the Board of Directors

Member of the Special Committee of MTS PJSC Board of Directors on compliance

Member of the Special Committee under BoD on the project of uniting the personnel of MTS PJSC in Moscow in a single office space

Biography

She was born in 1965, in Lubeck.

In 1992, she graduated from the Free University of Berlin with a specialty in Political Science, and from the Institute for Political Studies (Paris).

In 1993, she was a fellow of INSEAD Business School (Paris), and also completed an advanced training course at the German Development and Trade Institute (Germany).

Professional experience

  • 1996–1999 — CEO of Krone Russia.
  • 1999–2000 — CEO of Ehrmann AG.
  • 2000–2003 — Vice President of the American-Russian Investment Fund “Delta Capital”.
  • 2003–2009 — founder and owner of the consulting company Flemming&Partner GmbH Berlin.
  • 2005–2015 — CEO of Axel Springer Russia Publishing House.
  • 2014–2018 — Advisor to ANK company.
  • 2018 — till present — Advisor to the General Director of ACCENTURE LLC.
  • 2020–2020 — Weinstube LLC, Marketing Director.

Member of the Board of Directors of Raspadskaya PJSC, member of the Board of Trustees of the Russian Standard Charitable Foundation.

Citizenship: Germany.

She was elected as a member of MTS PJSC Board of Directors for the first time at the General Meeting of Shareholders on June 25, 2015.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,00285%.

Shaygan Kheradpir

Independent Director

Deputy Chairman of the Remuneration and Nomination Committee of the Board of Directors

Member of the Audit Committee of the Board of Directors

Member of the Special Committee of MTS PJSC Board of Directors on compliance

Member of the Special Committee of the Board of Directors

Biography

He was born in 1960, in London.

Graduated from the Cornell University (USA) with BA/MA and PhD in Electrical Engineering.

Professional experience

  • 2015–2018 — Coriant Inc., President, Chairman of the Board of Directors.
  • 2014–2014 — Juniper Networks, CEO.
  • 2011–2014 — Barclays Bank, COO.
  • 2000–2010 — Verizon, Vice President for Engineering, previously IT Director.
  • 2020 — till present — President of Shaygan Technology Partners.

Chairman of the Board of Directors of Live Earth, Member of the Board of Directors of MTN Group, Aura Network Systems, Pivotal Commware and other companies.

Citizenship: USA

He was elected as a member of MTS PJSC Board of Directors for the first time at the General Meeting of Shareholders on June 24, 2020.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,00075%.

Thomas Holtrop

Independent Director

Finance Expert

Chairman of the Audit Committee of the Board of Directors

Chairman of the Special Committee of MTS PJSC Board of Directors on compliance

Chairman of the Special Committee for the project of MTS’s staff co-location In Moscow In the united office space

Member of the Special Committee of the Board of Directors

Member of the Remuneration and Nomination Committee of the Board of Directors

Biography

He was born in 1954, in Dortmund.

He studied psychology at the University of Freiburg and business administration with a specialty in economics and production organization at the German Academy of Civil Employees.

Professional experience

  • 1990 – 1999 — Vice President of American Express International Inc. in New York, Frankfurt and London, member of the Board of Directors at Bank 24 AG and Deutsche Bank 24 AG.
  • 2001–2004 — President of T-Online International AG.
  • 2002 – 2004 — member of Deutsche Telekom AG Board of Directors.
  • 2005–2006 — Chief Executive Officer of Thomas Cook AG.
  • 2005–2011 — member of the Supervisory Board of Gruner + Jahr Publishing House (Hamburg).
  • 2009 – 2011 — member of Komstar-OTS OJSC Board of Directors, Chairman of the Audit Committee, the Strategy Committee and the Remuneration and Nomination Committee of the Board of Directors of Komstar-OTS OJSC.

Citizenship: Germany.

He was elected as a member of MTS PJSC Board of Directors for the first time at the General Meeting of Shareholders on February 14, 2013.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,00231%.

Nadia Shouraboura

Independent Director

Finance Expert

Chairperson of the Special Committee for the Development of Cloud and Infrastructure Assets

Deputy Chairperson of the Audit Committee of the Board of Directors

Member of the Strategy Committee of the Board of Directors

Member of the Special Committee of the Board of Directors

Biography

She was born in 1970, in Moscow.

1990 — M.V. Lomonosov Moscow State University, Faculty of Mathematics and Cybernetics

1991 — Tel Aviv University (Israel), master

1994 — Princeton University (USA), PhD in Mathematics

Professional experience

  • 1994–2001 — Diamond Management & Technology (USA), chief principal.
  • 2002–2004 — Exelon Corporation (USA), Head of Energy Trading Systems Development.
  • 2004–2012 — AMAZON (USA), Vice President for Technology (Supply Chain/Fulfillment Global Platform).
  • 2012–2018 — HOINTER (USA), founder and CEO.

Member of the Board of Directors of TOSCA, FERGUSON PLC, Blue Yonder and other companies.

Citizenship: USD.

She was elected as a member of MTS PJSC Board of Directors for the first time at the General Meeting of Shareholders on June 24, 2020.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,00075%.

Valentin Yumashev

Independent Director

Deputy Chairman of the Corporate Governance, Environmental and Social Responsibility Committee of the Board of Directors

Member of the Remuneration and Nomination Committee of the Board of Directors

Member of the Special Committee under BoD on the project of uniting the personnel of MTS PJSC in Moscow in a single office space

Biography

Born in 1957 in Perm.

In 1984, he graduated from the Lomonosov Moscow State University, Faculty of Journalism.

Professional experience

  • 1987–1995 — Member of the editorial board, editor of department, deputy chief editor, general director of the magazine Ogoniok.
  • 1996–1997 — Advisor to the President of the Russian Federation on interaction with the media.
  • 1997–1998 — Head of the Administration of the Russian Federation President.
  • 2006 — till present: Millhouse LLC, General Director’s Office, Advisor

In 2000 he became one of the founders of the Fund of the first Russian president B.N. Yeltsin, currently called the Yeltsin Presidential Center Foundation, or the Yeltsin Center.

He is an advisor to the Fund and since 2009 he has been a management board member of the Yeltsin Presidential Center .

He was twice honored with Commendation by the President of the Russian Federation (1996, 1997).

Citizenship: Russian Federation.

He was elected as a member of MTS PJSC Board of Directors for the first time at the General Meeting of Shareholders on June 27, 2019.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,00183%.

Chairman of the Board of Directors

The Chairman of the Board of Directors of MTS PJSC bears the main responsibility for ensuring the implementation of the rights and interests of the shareholders and achieving a balance between the short-term financial result and the long-term strategic positioning of the business.

In terms of the personal qualities of the chairman, this means the ability to combine pragmatism and specificity in solving tactical issues with the role of a strategist and visionary who deeply understands the processes occurring in the company and has a clear vision of the local market situation. The Chairman of the Board of Directors has the highest level of personal responsibility for the long-term sustainability of the business and strives to ensure the growth of shareholder value.

Felix Vladimirovich Evtuschenkov was elected Chairman of the Board of Directors of MTS by unanimous decision of the MTS Board of Directors on June 23, 2021.

According to members of the MTS Board of Directors, the nomination of Felix Evtuschenkov is most suitable for fulfilling the role of the Company’s Chairman of the Board of Directors, defined by corporate law, the Corporate Governance Code and the Regulations on the Board of Directors of MTS.

The Chairman of the Board of Directors of MTS is not an independent director, however, on June 24, 2021, an independent director, Ms. Regina von Flemming, was elected Deputy Chairperson of the Board of Directors of MTS. The Board of Directors of MTS considered the election of Ms. Flemming to this position appropriate, since Regina von Flemming has the status of an “independent director” for a long period of time; involved in the work of committees of the Board of Directors and the Board of Directors; has specialized expertise in important ecosystem areas — telecom, media, digital, tech, compliance; is recognized by the professional and business community. In this position, Ms. Flemming, in fact, replacing the senior independent director, performs all of its functions provided for by the Corporate Governance Code — coordinating the work of independent directors and implementing (organizing) the interaction of independent directors with the Chairman of the Board of Directors of MTS.

The Board of Directors is a well-coordinated mechanism, a united team, where everyone contributes to the management decision-making process. Within the MTS Board of Directors, there is a strong independent block of directors, and six places out of nine have been occupied by independent directors for the last years. The Board of Directors is well-balanced both in terms of numerical composition and in terms of experience and qualification of its members. Each member of the Board of Directors is a high level professional possessing industry-specific knowledge and business expertise, and a generator of advanced ideas. The Chairman is the leader, the central figure of the Board whose main task is to make the subordinated team of professionals work as efficiently as possible. In the course of establishing business-oriented, dynamic, positive atmosphere of work of the Board of Directors, the Chairman moderates the discussion so that each participant can show their best qualities while ensuring that the result of discussions is a unified, balanced, justified and specific managerial decision.

Independent directors

Independent directors shall be members of the Board of Directors for the purpose of effective implementation of its functions and making informed, grounded decisions, ensuring control over management for the benefit of the company’s shareholders. Independent directors make it possible to ensure a reasonable balance of interests of all the parties concerned: the Company itself, its shareholders and other stakeholders. For the independent directors to be able to influence the decisions taken by the Board of Directors, their number shall equal at least one third of the total composition of the Board of Directors.

In June 2020, the number of independent directors in the Board of Directors was increased to six directors. The increase of the independent directors’ number allows the independent standpoint within the Board of Directors to exercise greater influence on the business decisions taken, on the Company’s corporate policy and strategy. In addition, for the first time in the history of our Company, two female independent directors became members in the Board of Directors.

Criteria of independence of the Board of Directors’ members are defined in the Regulations on the Board of Directors of MTS PJSC and correspond to advanced international practices of corporate governance.

NYSE listing also adds additional obligations for us related to the composition of the Board of Directors: the Company is required to have at least one member of the Board of Directors (in the Audit Committee) with expertise in accounting or relevant financial management experience (financial expert). The Audit Committee of the Board of Directors is headed by Thomas Holtrop, who has experience and knowledge in the preparation, analysis, evaluation and audit of financial statements.

According to recommendations of the Code, the key committees of the Board of Directors (Audit, Remuneration and Nomination) are formed exclusively from independent directors. Other committees include at least one or two independent directors.

For key projects, Special Committees are established, which also include independent directors. For example, in 2019, a Special Committee on Compliance was established, and in 2020 — a Special Committee of Independent Directors on the project for uniting the personnel of MTS PJSC in the integrated office space in Moscow, and at the beginning of 2022 — Special Committee for the Development of Cloud and Infrastructure Assets.

A large proportion of independent directors contributes to an increase in the efficiency of representing the interests of MTS shareholders.

When holding strategic sessions where issues of updating the Company’s strategy are discussed with the participation of members of the Board of Directors, representatives of shareholders and the Company’s management, independent directors contribute to the objective control of the strategic planning process.

Independent directors are actively involved in preliminary discussions of many related party transactions that are significant to the Company. The Company has also introduced the practice of preliminary consideration of a number of related party transactions, including transactions with companies being part of the Sistema Group, at a meeting of the Audit Committee of the Board of Directors, which consists exclusively of independent directors. As common practice shows, this noticeably facilitates the work of independent BoD members as to approval of and agreeing upon transactions.

Our independent directors are professional managers, whose experience and knowledge make a significant contribution to the development of the Company’s corporate governance system. Mastering of the best practices, great managerial experience, understanding of business needs and HR management specifics, proactive approach, strategic thinking, openness in discussions: all this makes an invaluable contribution not only to the results of the activity of the Board of Directors, but also to those of the Company in general.

Roman Safronov

Director for Corporate Governance of MTS PJSC

Director of Corporate Governance Department

Secretary of the Board of Directors

Corporate Secretary

Biography

Born in 1980.

In 2003 he gratuated from Moscow State Open University with the specialty in Law.

In 2014 he graduated from University of London Diploma in the Common Law.

In 2016, he received a certificate of corporate secretary from the National Association of Corporate Lawyers.

Professional experience

  • MTS PJSC — Corporate Governance Director (2021 — present date)
  • Chelyabinsk Pipe Rolling Plant, PJSC — Corporate Secretary (2011–2021)
  • ARKLEY CAPITAL — senior lawyer (2005–2011)
  • Chelyabinsk Zinc Plant, JSC — Corporate Secretary (2005–2007)
  • RDTS PARITET, JSC – (specialized registrar) legal adviser (2003-2005)

The Corporate Governance Director of MTS PJSC is also responsible for:

  • preparation and holding of meetings with the shareholders of MTS PJSC;
  • management of subsidiaries of the MTS Group;
  • ensuring the timely disclosure of information in accordance with the requirements of the securities market legislation;
  • development of the Corporate Governance System of the MTS Group;
  • integrated management of intangible assets;
  • other functions.

Citizenship: Russian Federation.

He owns (directly/indirectly) neither MTS PJSC shares nor stocks or shares in MTS PJSC subsidiaries; he is not a relative of any persons who are members of management and/or control bodies overseeing financial and business activities of MTS PJSC.

According to the information available to the Company, in the reporting year, there were no conflicts of interest among the Secretary of the Board of Directors, including those related to his participation in the management bodies of competitors of MTS PJSC.

Results of independent assessment of performance of the Board of Directors for 2020/2021

In 2021, MTS conducted an assessment of  performance of the Board of Directors of MTS in the form of a self-assessment. A questionnaire survey was conducted to evaluate the performance of the Board of Directors and its committees.  All members of the Board of Directors of MTS and 17 representatives of management, members and invited experts of committees of the Board of Directors of MTS took part in the questionnaire survey.

Based on the results of the questionnaire survey, the Corporate Governance Director submitted for consideration by the ESG Committee of the Board of Directors of MTS the Preliminary Report on the results of the assessment. The final report was presented to the MTS Board of Directors.

The results of the assessment proved that the principles of work of the Board of Directors of MTS  
correspond to the best practice. At the same time, some areas for improvement and increasing the efficiency of the Board of Directors performance have been outlined:

In line with international best practice, the Board of Directors will continue conducting self-assessment of its performance on an annual basis, as well as an external independent assessment every three years in order to ensure continuous improvement of the performance by the Board of Directors, its committees and directors.

Committees of the Board

Committees of the Board of Directors serve as a tool for the preliminary in-depth study of issues before they are submitted to the meeting of the Board of Directors. Committee members thoroughly study an issue under consideration and propose to the members of the Board of Directors the elaborated alternative decisions, making it possible for them to join the discussion of the issue more promptly.

Committees of the Board of Directors increase the effectiveness of decisions made by the Board of Directors, since important issues within the competence of the Board of Directors are preliminarily considered by committees of the Board of Directors. At the end of 2021, the following committees were active: Audit Committee, Remuneration and Nomination Committee, ESG Committee (Corporate Governance, Environmental and Social Responsibility Committee), Strategy Committee, Special Committee on Compliance, Special Committee for the project of MTS’s staff co-location in Moscow in the united office space.

Powers of and requirements to compositions of the committees shall be determined by regulations on the committees approved by the Board of Directors. The committees may involve external experts and consultants to carry out their tasks. The results of reviews of agenda issues by the Committees are communicated to the Board of Directors members prior to every meeting of the Board of Directors.

Management representatives can take part in committee meetings to accompany agenda items with detailed explanations, if necessary.

CommitteeCommittee tasks overview
Audit CommitteePreparation of recommendations to the Board of Directors with respect to supervision over the Company’s financial and operational activities
Remuneration and Nomination CommitteePreparation of recommendations to the Board of Directors on issues of HR policy, determination of the incentive and remuneration system, generation of the Company’s corporate culture development strategy
ESG  Committee (Corporate Governance and Environmental and Social Responsibility Committee)The Committee was established to control the implementation of the principles of sustainable development, as well as to assist the management bodies of MTS PJSC in the development of a common strategy regarding corporate governance, environmental and social responsibility
Strategy CommitteePreparation of recommendations to the Board of Directors upon review of a strategic development of key functions, projects and the Company in general, and implementation of investment projects and long-term investment programs
Special Committee on ComplianceOverall supervision in the sphere of compliance, review of issues and preparation of recommendations for the Board of Directors on compliance issues.
Special Committee for the project of MTS’s staff co-location in Moscow in the united office spaceThe Committee was established to ensure that the terms of the project of MTS’s staff co-location in Moscow in the united office space meet the interests of the Company and all its shareholders

Audit Committee

The Audit Committee is an auxiliary, collective advisory body of the Company’s Board of Directors. The committee was established for the purposes of assisting in efficient implementation of functions of the Board of Directors in terms of control over financial and economic activities of the Company.

In their activities, the Committee members are guided by the applicable law, the Charter and the internal documents of the Company, the Corporate Governance Code1, the Code of Business Conduct and Ethics of MTS PJSC, decisions of the Company’s management bodies, and the Regulations on the Audit Committee.

1 The Corporate Governance Code recommended for use by the Bank of Russia (Letter No. 06-52/2463 dd. April 10, 2014).

The main task of the Committee is to assist the Board of Directors in performing its oversight functions in relation to financial reporting, risk management, internal controls system, compliance, adherence to the Code of Business Conduct and Ethics of MTS PJSC, conducting internal and external audits, counteracting unfair actions committed by the members of management bodies and employees of MTS PJSC and its subsidiaries (hereinafter referred to as the “Group” or “MTS Group”) and third parties.

In 2021, the Audit Committee focused on assessing and monitoring the implementation of procedures in the field of risk management, compliance and the internal control system. The Committee monitors the development of promising digital areas of the Company and compliance with corporate governance rules, compliance regulations, as well as ensuring the effectiveness of the risk management and internal control system.

The Audit Committee plays a key role in ensuring the effective functioning of the internal audit service and the external auditor, monitoring their independence and objectivity, and overseeing the quality of their activities.

The Committee continued its work together with the management to ensure the completeness and reliability of the financial statements of MTS Group, including monitoring the disclosure of relevant information.

Thomas Holtrop,
Chairman of the Audit Committee

Key areas of the Audit Committee’s activities and matters considered in 2021

In financial reporting

During 2021, the Audit Committee reviewed the interim financial data of the MTS Group for the Q1, Q2, Q3 of 2021 in order to determine the completeness, consistency of information and presentation of reasonable assessment of financial standing, performance indicators and prospects of the MTS Group.

The consolidated financial statements of the MTS Group for 2021, prepared in accordance with the international financial reporting standards, and the financial statements of MTS PJSC for 2021, prepared in accordance with the Russian accounting and reporting standards, were considered, and an analysis of audit results was carried out together with the management and the external auditor.

The reports on the financial and operating performance of the MTS Group for Q1, Q2, Q3, Q4 and 2021 as a whole were reviewed and recommended for subsequent disclosure.

In risk management, internal controls and corporate governance system

During 2021, the Audit Committee monitored the effectiveness of risk management, the internal control system and corporate governance of the MTS Group.

The Committee reviewed the 20-F report for 2021 and the reports on risk management at MTS PJSC for the first six months and 20, gave positive assessment of work in the field of risk management at the MTS Group in 2021.

Based on the instructions given by the Audit Committee, a third party consultant completed a project to analyze the level of maturity of the information security management processes of the MTS Group. The Audit Committee gave relevant instructions to the management of MTS and will continue to oversee the development of the information security program in MTS PJSC and its key subsidiaries.

During 2021, the Committee controlled the procedures providing for the Group’s compliance with the requirements of Sarbanes-Oxley Act. Plan for 2021 and the results of activities of the Internal Control Systems Department for the first six months of the year and for 2021 as a whole were reviewed, including the results of testing and certification of the internal control system for reliability of the financial statements of the MTS Group. The Committee gave a positive assessment of the unit performance results.

The Committee discussed and took note of the report of the Internal Audit Unit on the results of assessing the effectiveness of the internal control system, risk management and corporate governance of the MTS Group for 2021.

During 2021, the Committee conducted a preliminary review of MTS PJSC transactions with related parties, including materials on upcoming mergers and acquisitions, and subsequent review of transactions of MTS Bank, PJSC, MGTS PJSC, MTS Armenia CJSC and RTC JSC with related parties in accordance with the procedure described in the Regulations on the Audit Committee. The results of analysis of economic feasibility and compliance with the requirements of the regulations when making such transactions carried out by the Internal Audit Block of CC of the MTS Group and subsidiary companies, respectively, were discussed and taken into account.

In compliance and observance of the standards of business conduct and ethics

The restated Code of Business Conduct and Ethics of MTS PJSC was reviewed by the Audit Committee and recommended for approval by the Board of Directors.

The Committee considered the report on development of the Unified Compliance System of MTS PJSC for 2021.

The Committee reviewed and approved the functional strategy of the MTS Group in the field of business ethics and compliance for 2021. The report on implementation of the corporate anti-corruption compliance program of MTS PJSC and subsidiaries based on the results of the first six months of the year and for 2021 as a whole was reviewed. The Committee gave a positive assessment to the performance results of the Ethics and Compliance Department. In December 2021, the Committee reviewed and took note of the 2022 plan for the development of a corporate anti-corruption compliance program at MTS PJSC and subsidiary companies.

In 2021, the Committee reviewed and took note of the reports on the implementation of the compliance program at MTS Belarus JLLC.

During the year, the committee reviewed information on the status of conflict of interest management of members of governing bodies, as well as a number of other issues in the field of compliance, compliance with business conduct and ethics of MTS PJSC and subsidiaries in accordance with the Regulations on the Audit Committee.

In the field of internal audit

In 2021, the Audit Committee reviewed the progress of implementation of strategic initiatives in the field of internal audit, including optimization of internal audit processes, improvement of the audit methodology and the process of eliminating deficiencies identified by internal audit in MTS PJSC and its subsidiaries, expansion of data analysis projects and other activities.

In August 2021, the Committee reviewed the main changes to the audit schedule and approved the revised audit schedule for 2021.

Based on the instructions given by the Audit Committee, in 2021 an external assessment of the quality of internal audit activities was carried out, following the results of which its activities were recognized as complying with the International Standards for the Professional Practice of Internal Auditing and the Code of Ethics of the Institute of Internal Auditors and effective in fulfilling its goals and meeting the expectations of stakeholders.

The Committee reviewed and approved the performance results of the internal audit of MTS PJSC and subsidiary companies in the first six months and for 2021 as a whole. The Committee gave a positive assessment to the results of the internal audit performance and believes that the key performance indicators and objectives of the internal audit for 2021 have been achieved in full volume.

In December 2021, the Committee reviewed and approved the internal audit strategy, audit schedule, KPIs and budget for 2022, as well as took into account the audit schedules for 2022 of the internal audit units of significant subsidiaries.

In external audit

The Audit Committee recommended Deloitte JSC and Touche CIS as the auditor of financial statements of MTS PJSC for 2021, which was confirmed by the recommendation of the Board of Directors and by shareholders of the Company at the Annual General Meeting of Shareholders
in June 2021. The Committee previously approved and recommended that the Board of Directors approve the remuneration of the auditor.

Evaluation of efficiency and quality of the audit process shall be prepared by the Committee according to the results of analysis of the auditor’s reports. The Audit Committee discussed and took into account the results and conclusions of the external auditor based on the review of quarterly overviews of MTS Group financial information for Q1, Q2 and Q3 of 2021 and the annual audit, including conclusions on the effectiveness of the internal control system over the preparation of financial statements at the MTS Group.

At the end of 2021, the Committee gave a positive assessment of the quality of the audit and the auditor’s opinions based on the results of the audit of MTS PJSC financial statements for 2021 prepared in accordance with the Russian accounting standards, and consolidated financial statements of MTS PJSC and its subsidiaries for 2021 prepared in accordance with the international financial reporting standards.

The Committee exercised supervision over compliance of the auditors with the independence principles. During 2021, the Committee considered information on permissible auditing and non-auditing services, which was provided by the external auditor, and discussed with the auditor a possible impact of the service on independence of the auditor. Permissible auditing and non-auditing services were preliminarily approved by the Committee in accordance with the procedure described in the Regulation on Audit Committee.

In prevention of fraud of the Group’s employees and third parties

The Audit Committee reviewed and took note of the main initiatives to improve the administration of the MTS Group Unified Hotline and the conduct of internal investigations, as well as the disciplinary action.

The Committee reviewed the results of work of the Unified Hotline of the MTS Group of Companies in the first six months and for 2021 as a whole.

The Audit Committee made recommendations to the Board of Directors regarding the consideration and approval of the following items:
  • restated Code of Business Conduct and Ethics of  MTS PJSC.
  • report on implementation of the corporate anti-corruption compliance program of MTS PJSC and subsidiaries for 2021;
  • risk management reports of MTS PJSC for the first six months and for 2021 and assessment of the risk management performance of the MTS Group in 2021;
  • nominations of the auditor and remuneration of Deloitte & Touche CIS JSC for audit services in 2021;
  • major transactions and M&A transactions, with interest falling within the competences of review by the Board of Directors.

Work results in 2021

In the reporting year, the Audit Committee remained focused on the effectiveness of the systems for internal control, risk management, corporate governance, business ethics and compliance, overseeing the ensuring of completeness and reliability of the financial statements of the MTS Group.

The Audit Committee continues its activities aimed at ensuring the effective functioning of the internal audit service and the external auditor, monitoring their independence and objectivity, and overseeing the quality of their activities.

The Audit Committee developed an operation plan for the next year in the main functional areas and approved it in December 2021.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee is an auxiliary collective deliberative body of the Board of Directors. Main purposes of the Committee are: formulation of HR policy of the Company, determination of the system for remuneration of chief officers of the Company, shaping the strategy for development of corporate culture in MTS Group.

Committee members follow leading international practices and trends in preparation of effective solutions within the terms of their reference.

In its activities the committee follows the recommendations and requirements of the relevant legislation, the Charter and internal documents of the Company, Code of Ethics and Business Conduct, decisions of management bodies of the Company, and Regulation on the Committee.

In 2021, the Remuneration and Nomination Committee performed its assigned function as a consultant to the Board of Directors of MTS PJSC in priority areas of personnel management, relying on international experience of corporate governance and best professional practices in its work.

The task of the committee is to help ensure that the MTS policy in the field of personnel management and corporate culture serve as important factors that retain and attract the best market professionals to the Company. In view of the above, the Committee monitors the implementation of all strategic initiatives for the development of MTS aimed at fulfillment of this task, and gives recommendations to the management and the Board of Directors of MTS, based on deep expertise and practical experience of the Committee members.

The key tasks of the Committee in the past reporting year were:

— approval of new long-term employee motivation programs, including a separate motivation program for product teams. The reconfiguration of the LTI programs and the implementation of OKRs became an integral part of the culture transformation and change management program;

— approval of the CEO succession policy and launch of succession programs for the CEO and members of the Board of Directors of MTS PJSC;

— ensuring the efficient membership of the Boards of Directors of MTS subsidiaries and engaging third party experts — recommending and considering nominations of independent candidates;

— Ensuring adhering to compliance requirements in HR management processes, including the implementation of compliance indicators and compliance triggers in the Company’s bonus policy (together with the Audit Committee).

The activities of the Remuneration and Nomination Committee and its contribution to building the MTS ecosystem are highly appreciated by the members of the Board of Directors of MTS PJSC.

Regina von Flemming,
Chairperson of the Remuneration and Nomination Committee

Tasks

  • Development and updating of the HR Policy of MTS PJSC, preparation of a succession pool for the positions of chief officers;
  • Drawing up proposals on candidates and on the determination of significant conditions for remuneration of the chief executives, and proposals on an early termination of office;
  • Evaluation of performance results of the Company’s President and Management Board members, direct subordinates of the Company’s President for the reporting period and preparation of proposals on their reappointment and appointment of the Corporate Secretary;
  • Development and submission for BoD review of internal documents related to the implementation of the Company’s Options Plan;
  • Control over meeting the requirements of the effective legislation, MTS PJSC Charter and internal regulatory acts of MTS PJSC as to compliance with the Company’s HR Policy, standards and procedures in the sphere of remuneration and appointments;
  • Determining methods and evaluation of performance of the Company’s Board of Directors;
  • The Committee preliminarily addresses the issues reviewed at meetings of the Company’s Board of Directors in the sphere of appointment and remuneration of top managers of the Company.

Main areas of activities of the Remuneration and Nomination Committee in 2021

1. Issues in the field of appointment to the management and control bodies of MTS

Recommendations to the Board of Directors regarding candidates for the positions of members of the Management Board, President and other key employees of the Company.

Elaboration of proposals on the essential terms of employment contracts concluded with key employees of the Company.

2. Issues in the field of organizational structure, system of motivation and remuneration of employees of the Company and members of the management and control bodies of the Company

Preparation of recommendations to the Board of Directors on approval of the organizational structure of the Company.

Preliminary review of provisions on short-term and long-term motivation of members of the Company’s executive bodies.

Preliminary review of internal documents related to the implementation of the Company’s option program.

Consideration of a set of measures aimed at implementing the personnel policy at MTS PJSC and providing relevant recommendations to the Board of Directors.

Discussion of ecosystem issues affecting the Company’s personnel development strategy.

4. Assessment of the Board of Directors and Committees of the Board of Directors

Preliminary consideration of the Report on the annual assessment of performance of the Board of Directors and Committees of the Board of Directors.

5. Succession planning for members of the Board of Directors and key employees of the Company

Consideration of organization of the succession planning process for members of the Board of Directors and key employees of the Company, including the annual analysis of the composition of the Board of Directors in terms of the needs of the Company, updating the succession plan, participation in the selection of candidates for members of the Board of Directors.

The Committee has provided the following recommendations to the Board of Directors

On all of the issues discussed, the Committee provided recommendations for appropriate decisions in accordance with the best world practices, the current business environment and the Company’s development strategy.

Work results in 2021

In the reporting year, the Committee reviewed all the necessary issues related to the competences of the Committee required to effectively support the Company’s activities and its development.

The key topics for discussion at the Committee meetings were the launch of succession programs for members of the Board of Directors and the President of MTS PJSC, approval of a new long-term incentive program for MTS management.

ESG Committee (Corporate Governance, Environmental and Social Responsibility Committee)

The ESG Committee (Corporate Governance, Environmental and Social Responsibility Committee) was established to ensure compliance with the principles of environmental, social and corporate responsibility in the activities of the MTS Group.

Within its competence, the committee takes part in the development of initiatives and policies of MTS in the field of sustainable development, monitors the implementation of the principles of sustainable development in the Company, carries out a preliminary review of the most important issues in the field of corporate governance and sustainable development, falling within the competence of the Board of Directors, and prepares recommendations for the Board of Directors to take appropriate decisions.

The committee follows in its activities the recommendations and requirements of the relevant legislation, the Charter and internal documents of the Company, Code of Ethics and Business Conduct, decisions of management bodies of the Company, Regulations on the Audit Committee and best global practices of ESG-agenda management.

In the reporting year, MTS made significant steps in the development of the agenda in the company. The decision adopted by the Board of Directors to transform the Corporate Governance Committee into the ESG Committee (Corporate Governance, Environmental and Social Responsibility Committee) of the Board of Directors of MTS, was an important milestone in this ESG process. The decision was aimed at ensuring the integrated and comprehensive review at one site of the MTS corporate governance (“G”) issues, environmental (“E”) issues as well as social (“S”) responsibility issues.  This change was not accidental. An increasing number of stakeholders are considering these three areas – corporate governance, environmental and social responsibility, on an aggregate basis. This is an important step for all of us, which will allow us to focus on our long-term goals and determine the ways of their efficient achievement.

In 2021, the main work of the committee was focused on the development of the MTS ESG strategy as a whole and its individual areas. The Company also continued to develop best corporate governance practices, including the assessment of performance of the Board of Directors. We believe that a comprehensive coverage of sustainability issues is one of the important elements of the Company’s business strategy, while the involvement of the Board of Directors and the relevant committee in the consideration of ESG agenda issues emphasizes the importance thereof in the management of the Company.

Regina von Flemming,
Chairperson of the ESG Committee (Corporate Governance, Environmental and Social Responsibility Committee)

Issues reviewed in 2021:

  • Members of the ESG Committee and external international experts were presented with the current status of the project to develop the MTS ESG strategy. The main components of the developed ESG strategy were reviewed by the ESG Committee and included in the overall strategy of MTS PJSC.
  • Materials on the social profile of MTS Group employees were considered.
  • The DE&I policy developed by MTS, taking into account the best Russian and international practices, was considered. The policy was approved by the MTS Board of Directors.
  • The main strategic initiatives of MTS PJSC in the field of DE&I were determined.
  • The main directions of the social responsibility strategy of MTS PJSC for 2022 were considered and taken into account.
  • Monitoring and assessment of the level of culture of business ethics and compliance at the MTS Group were carried out.
  • The procedural issues were considered as part of the annual assessment of the Board of Directors’ performance.
  • Materials for meetings of shareholders were considered.
  • The Annual Report and the Sustainability Report (SR) for 2020 were considered.

Work results in 2021

In the reporting year, the main focus of the Committee’s work was aimed at identifying and developing key strategic initiatives in the field of ESG, including the development of an ESG strategy, determining development directions in DE&I and other areas of social responsibility. The Committee alsoconsidered all the necessary issues related to the development of corporate governance in the Company, including the assessment of the Board of Directors’s performance. Besides, the Committee considered the development of the compliance system and the formation of a culture of business ethics in the MTS Group.

Strategy Committee

The Committee is an auxiliary body of the MTS PJSC Board of Directors for the preparation of recommendations to the Board of Directors upon review of general strategy issues of the MTS Group, strategic development of key functions, projects and the Company in general, and the implementation of M&A transactions and investment projects.

Tasks

  • preliminary review and provision of recommendations to the Board of Directors on issues falling within the competence of the Strategy Committee;
  • discussion and drawing up of recommendations on strategic activity areas and projects of the Company.

At the meetings of the Strategy Committee under the MTS Board of Directors in 2021, we considered the strategy of the MTS Group’s ecosystem and individual functional and business areas of the Company, M&A transactions, the practicability of developing the MTS ecosystem in new directions, organizational and cultural transformation issues. A particular focus was made on discussing the vertical and functional horizontal strategies of the ecosystem and individual potential M&A transactions as part of implementation of these strategies.

Felix Evtuschenkov,
Chairman of the Strategy Committee

Main issues reviewed by the Committee in 2021

  • MTS Group Strategy for 2022–2024.
  • Strategies for business verticals and key functional horizontals.
  • MTS cultural reorganization plan.
  • Approval of the MTS Group budget for 2022.
  • Reports on the current fulfilment of the budget.
  • On acquisition and sale of assets.
  • On reorganization of MTS PJSC in the form of acquisition of its subsidiaries.
The Committee has provided the following recommendations to the Company’s Board of Directors and management, including but not limited to:
  • finalizing and approving the strategy of the MTS Group for 2022–2024;
  • finalizing business vertical strategies;
  • approving transactions;
  • approving the MTS Group budget for 2022.

Work results in 2021

In the reporting year, the Committee considered issues related to the process of strategic planning of the Company’s operations, strategies on the business verticals and key functional areas, M&A transactions and financial issues. Several recommendations were provided to the Company’s Board of Directors and management following the review of issues.

Special Committee on Compliance

The objective of the Special Committee is overall supervision in the sphere of compliance, review of issues and preparation of recommendations for the Board of Directors on compliance issues.

Issues and recommendations reviewed

In 2021, the work of the Special Committee on Compliance was focused on promoting the effective improvement of the compliance system at MTS in accordance with the best Russian and international practices, including with the participation of parties independent of the Company.

The Committee provided the following recommendations to the Company’s Board of Directors

None.

Work results in 2021

In the reporting year, the Committee reviewed issues related to compliance supervision measures implemented by the Company.

Remuneration paid to members of the Board of Directors

The procedure and terms of remuneration payment to members of the Board of Directors of MTS PJSC are defined in accordance with the Regulations on remunerations and compensations paid to members of the Board of Directors of MTS PJSC.

The remuneration system applicable to the members of the Board of Directors provides for approach of financial interests of directors with long-term financial interests of shareholders.

Detailed information is disclosed in clause 4.2.1 of the Report on Fulfilment of the Principles and Recommendations of the Corporate Governance Code.

Remuneration paid to members of the Board of Directors in 2021
Indicator nameTotal, RUB
Remuneration for participation in operations of the management body177,208,924.50
Cost compensations267,177.66
TOTAL177,476,102.16

Remuneration Components:

$400,000 — to the Chairperson
$300,000 — to the Director

Base remuneration
paid for fulfilment of Director’s duties during the corporate year and does not depend on the quantity of meetings attended

$50,000/$30,000 for sitting on a mandatory committee
$50,000/$30,000 for sitting on a special committee
$30,000/$25,000 for sitting on another committee

Remuneration for sitting on Committees1 paid for fulfilment of additional obligations related to the work in BoD Committees

1 Mandatory Committees: Audit Committee, Remuneration and Nomination Committee, ESG Committee, Strategy Committee.
Special committees: Special Committee on Compliance, Special Committee for the project of MTS’s staff co-location in Moscow in the united office space, Special Committee for Cloud & Infrastructure Development, Special Committee.

$100,000

Granting of shares/ADR
additional remuneration in the form of remuneration with shares is paid following work results for the corporate year. There are restrictions in respect to shares2.

2 Director may dispose of the shares/ADR received starting from the fourth year after receiving the first stock of shares.

Total amount of remuneration may not exceed:
$500,000 — to the Chairperson
$400,000 — to the Director

President and Management Board of MTS

A key role in pursuing the selected strategy, organizing efficient implementation of resolutions of the Board of Directors and managing current operations of the Company is played by the Company’s Executive Bodies: The President (sole executive body) and the Management Board (collective executive body).

The executive bodies are accountable to the Board of Directors and the General Meeting of Shareholders.

The executive bodies of the Company shall be established by the Board of Directors.

The President and the Management Board act on the basis of the Charter of MTS PJSC, the Regulations on the President of MTS PJSC and the Regulations on the Management Board of MTS PJSC.

Executive bodies:

  • shall organize the Company’s activities and be responsible for results of these activities, ensure the enforcement of decisions made by the General Meetings of Shareholders and by the Board of Directors;
  • shall assure establishment and maintenance of operation of the efficient risk management and internal control system at the Company, are responsible for implementation of resolutions of the Board of Directors in terms of organization of the risk management and internal control system;
  • are responsible for the effective economic, financial, scientific and technical and social policies of the Company.

The Board of Directors is entitled at any time to adopt a resolution on the early termination of a President’s powers, as well as on the termination of the powers of an individual member of the Management Board or all members of the Management Board and on establishment of new Executive Bodies.

Duties of the President of MTS PJSC since March 13, 2021 have been performed by Vyacheslav Nikolaev.

Before March 13, 2021 the duties of the President of MTS PJSC were performed by Alexey Kornya.

Composition of the Management Board in 2021

  • Alexey Barsegian (has been a member of the Management Board since 2020)
  • Viktor Belov (has been a member of the Management Board since 2021)
  • Sergey Belyakov (has been a member of the Management Board since June 16, 2021)
  • Pavel Voronin (has been a member of the Management Board since 2021)
  • Inessa Galaktionova (has been a member of the Management Board since 2019)
  • Alexander Gorbunov (has been a member of the Management Board since 2018)
  • Igor Egorov (has been a member of the Management Board since 2021)
  • Olga Ziborova (has been a member of the Management Board since 2021)
  • Ruslan Ibragimov (has been a member of the Management Board since 2007)
  • Farid Kamalov (has been a member of the Management Board since 2021)
  • Andrey Kamenskiy (has been a member of the Management Board since 2018)
  • Alexey Kornya (has been a member of the Management Board since March 12, 2021)
  • Igor Mishin (has been a member of the Management Board since 2019)
  • Vyacheslav Nikolaev (has been a member of the Management Board since 2017)
  • Ilya Filatov (has been a member of the Management Board since 2019)
  • Dmitry Khalin (has been a member of the Management Board before June 30, 2021)
  • Alexander Khanin (has been a member of the Management Board since 2020)
  • Dmitry Khomchenko (has been a member of the Management Board before June 16, 2021)
  • Tatiana Chernyshova (has been a member of the Management Board before June 30, 2021)

Information about the President and members of the Management Board as of December 31, 2021

Vyacheslav Nikolaev

President, Chairman of the Management Board of MTS PJSC (since March 13, 2021)

Biography

He was born in 1970 in Moscow.

In 1992, he graduated from the Faculty of Computational Mathematics and Cybernetics of the Lomonosov Moscow State University.

In 1994, he completed management training at the Krieble Institute, Washington, DC.

Professional experience

  • 1994–1999 — international consulting company European Public Policy Advisers, Senior Advisor.
  • 1999–2000 — J’son and Partners (telecommunications consulting), Advisor.
  • 2000–2003 — investment bank Renaissance Capital, Telecommunications Analyst.
  • 2003–2004 — investment bank Trust, Vice President, Stock Market Research Department.
  • 2004–2006 — MTS PJSC, Director, Scheduling and Analysis Department, Sales and Subscriber Service Block.
  • 2006–2008 — MTS PJSC, Director, Regional Management Department.
  • 2008–2011: MTS PJSC, Deputy Director, Business Unit Russia for Regional Development and Operations Support.
  • 2011–2017 — MTS PJSC, Director for Consumer Market Marketing.
  • 2017–2019 — MTS PJSC, Management Board member — Vice President for Marketing.
  • 2019–2020 — MTS PJSC, First Vice President for Customer Experience and Marketing, Management Board member.
  • 2017–2019 — MTS PJSC, First Vice President for Client Experience, Marketing and Ecosystem Development, Management Board member.
  • 2021 – to present — MTS PJSC, President, Management Board Chairman.

Board of Directors member at RTK JSC, MTS Bank PJSC, MTS Media LLC, MTS AI LLC and other companies.

Member of the Management Board of MTS PJSC since 2017.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,0058%.

Alexey Barsegian

Management Board Member — Vice President for Corporate and Legal Issues

Biography

Born in 1973.

In 2017, he completed a professional retraining course at the Faculty of Economics of the Lomonosov Moscow State University under the “Corporate Director” program.

In 2011, he received an MBA certificate from the American Institute of Business and Economics.

In 2002, he graduated from MGIMO University with a degree in Jurisprudence, International Trade Law.

Professional experience

  • 2003–2011 — Sistema PJSFC, held positions from legal advisor of the Legal Department to Deputy Director of the Department.
  • 2011–2013 — Sistema PJSFC, Director of the Legal Department.
  • 2013–2018 — Sistema PJSFC, Executive Vice President for Legal Issues.
  • 2018–2019 — Sistema PJSFC, Executive Director for Legal Issues.
  • 2019–2020 — MTS PJSC, Vice President for Corporate and Legal Issues.
  • 2020 — to present — MTS PJSC, Management Board Member — Vice President for Corporate and Legal Issues.

Member of the Board of Directors of MGTS PJSC, MTS Armenia CJSC, MTS AI LLC, member of the Board of Trustees of Sistema Charity Fund.

As of December 31, 2021, he did not own shares in MTS PJSC (directly/indirectly).

Victor Belov

Management Board Member — Vice President for Engineering

Biography

He was born in 1975 in Moscow

In 1998 he graduated from the Moscow State Institute of Radio Engineering, Electronics and Automatics majoring in computing machines, complexes, systems and networks

Professional experience

  • 1998 — 2008 — held managing positions in MTU-Intel CJSC, System Multimedia LLC, Enterprise of Business Communications JSC, Zenon N.S.P. LLC.
  • 2009–2011 — Komstar-OTS JSC, Director for development of service networks and platforms.
  • 2011–2018 MTS OJSC Director of Backbone and Internet Network
  • 2018–2020 MTS PJSC Director for Converged and Transport Networks
  • 2020 — 2021 — MTS PJSC, Vice President for Engineering
  • 2022 to present — MTS PJSC, member of the Management Board — Vice-President for Engineering

Member of the Board of Directors of MGTS PJSC, METRO-TELECOM JSC, MTS-TM Business Entity and other companies.

Has been a member of the Management Board of MTS since 2021.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,00002%.

Pavel Voronin

Management Board Member — First Vice President for Technologies

Biography

He was born in 1991 in Moscow.

He graduated from Moscow State University with the specialty in mathematics

Professional experience

  • 2016 — 2020 — S7 Group, the first deputy Chief Executive Officer for information technology
  • 2020–2021 — SBER, Vice President for technological development of subsidiaries and affiliates.
  • 2021 — 2022 — MTS PJSC, Management Board Member — Vice President for Technology
  • 2022 to present — MTS PJSC, First Vice President for Technology — Member of the Management Board

Has been a member of the Management Board of MTS PJSC since 2021.

As of December 31, 2021, he did not own shares in MTS PJSC (directly/indirectly).

Inessa Galaktionova

Management Board Member — First Vice President for Telecommunication Business

Biography

She was born in 1974, in Vilnius.

In 1997, she graduated from the Vilnius State University’s Department of Economics.

Professional experience

  • 1996–2009 — PHILIPS LLC, Marketing Director, Chairperson of the Brand Development Council of the Philips representative office in Russia, Director for Video and Television Business.
  • 2009–2013 — Tele2 Russia OJSC, Commercial Director.
  • 2013–2019 — FSUE Post of Russia, Deputy General Director.
  • 2019–2019 — FSUE Post of Russia, Advisor to the General Director.
  • 2019 — to present — MTS PJSC, first Vice President for Telecommunications Business, MTS PJSC Management Board Member.

Board of Directors member in RTK JSC, MGTS PJSC, MTS AI LLC, MTS Armenia CJSC.

Member of the Management Board of MTS PJSC since 2019.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,0008%.

Alexander Gorbunov

Management Board Member — Vice President for Strategy & Development

Biography

He was born in 1967 in Moscow.

He graduated from Moscow Engineering Physics Institute with specialty in experimental nuclear physics and plasma physics.

In 1999, he earned an МBA from the Harvard University.

Professional experience

  • 2002–2003 — NTP Intellect Telecom OJSC, Deputy General Director.
  • 2003–2005 — MTS OJSC, head of the Strategic Analysis Service, Chief Strategy Officer of the Strategic Analysis Department.
  • 2005–2006 — Sistema PJSFC, head of the Corporate Development Department, acting First Vice President and the Director of Strategy and Development Complex.
  • 2006–2010 — Komstar-OTS OJSC, Vice President for Strategy and Development.
  • 2010–2012 — Sitronics OJSC, Counselor of the President.
  • 2010–2012 — Sistema PJSFC, Executive Vice President for Telecommunication Assets Development of “Basic Assets” Business Unit.
  • 2012–2015 — Sistema PJSFC, Executive Vice President (Investment Portfolio).
  • 2015–2018 — Sistema PJSFC, Vice President, manager of telecommunication assets.
  • 2018 – to present — MTS PJSC, Management Board Member, Vice President for Strategy and Development.

Member of the Board of Directors of YOUDO WEB TECHNOLOGIES LIMITED, member of the Board of Directors, member of the Strategy and Risk Management Committee of MTS Bank PJSC.

Member of the Management Board of MTS PJSC since 2018.

As of December 31, 2021, he did not own shares in MTS PJSC (directly/indirectly).

Igor Egorov

Management Board Member — Vice President for Infrastructure Development

Biography

He was born in 1968, in Irkutsk town

He graduated from:

1993 — St. Petersburg State Electrotechnical University, Automated Control Systems

2010 — State Educational Institution of Higher Vocational Education Academy of National Economy under the Government of the Russian Federation, Moscow, MBA, Master of Business Administration

Professional experience

  • 2006–2007 — MTS OJSC, Director of Branch in Chita Region
  • 2007–2008 — MTS OJSC, Director of Marketing, MR Far East
  • 2008–2011 — MTS OJSC, Commercial Director for Retail Market, MR Far East
  • 2011–2014 — MTS OJSC, Director of MR Far East
  • 2014–2016 — MTS OJSC, Director of MR Center
  • 2016–2019 — MTS PJSC, Member of the Management Board — Director of the Moscow Region
  • 2019–2021 — MTS PJSC, Vice President for Regional Development
  • 2021 – to present — MTS PJSC, Management Board Member — Vice President for Infrastructure Development
  • 2021 — to present — MVS JSC, CEO

Member of the Board of Directors of MGTS PJSC, GDC ENERGY GROUP LLC.

Has been a member of the Management Board of MTS PJSC since 2021.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,0112%.

Olga Ziborova

Management Board Member — Vice President for Ecosystem Development and Marketing

Biography

She was born in 1964, in Novgorod

In 1986 she graduated from the Leningrad Order of Lenin and Order of the Red Banner of Labor State University named after A.A. Zhda­nov majoring in chemistry

Professional experience

  • 2013–2020 — MTS PJSC, Director of Marketing Department
  • 2020–2021 — MTS PJSC, Director of Ecosystem Marketing
  • 2021 — to present — MTS PJSC, member of the Management Board — Vice President for Ecosystem Development and Marketing

Board of Directors member in RTK JSC, MTS AI LLC, MTS Armenia CJSC and other companies.

Has been a member of the Management Board of MTS since 2021.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,0001%.

Ruslan Ibragimov

Management Board Member — Vice President for Government Relations

Biography

He was born in 1963 in the town of Taldykorgan.

In 1986, he graduated from the faculty of law of the Lomonosov Moscow State University.

In 1992, he completed postgraduate studies in Lumumba RUDN (Peoples’ Friendship University of Russia), with a Ph.D. in Law.

Professional experience

  • 1992–1996 — he worked in commercial banks, headed legal services.
  • 1996–2002 — RSM Top Audit, took the office of the director of legal service, director-partner, deputy general director, head of the department of tax and legal advice, director, partner, tax and legal consulting.
  • 2002–2004 — he worked as a lawyer in various bar associations.
  • 2004–2006 — Moscow bar association “Ibgragimov, Kagan and partners”, associate.
  • 2006–2007 — MTS PJSC, Director of Legal Department, he was then transferred to the post of the Chief Legal Officer.
  • 2007–2008 — MTS PJSC, Vice President for Corporate and Legal Issues.
  • 2008–2019 — MTS PJSC, Management Board Member — Vice-President, Corporate and Legal Issues.
  • 2019 — 2021 — MTS PJSC, Management Board member — Vice President for Government and Public Relations.
  • 2021 – to present — MTS PJSC, Management Board Member, Vice President for Government Relations.

Member of the Management Board, Vice President of the Association of Corporate Lawyers Non-profit Partnership, Member of the All-Russian Non-Governmental Organization Association of Layers of Russia, Senior Director of the Association of Independent Directors, Member of the Supervisory Board of the Autonomous Non-Profit Organization Digital Economy, Independent Director of Vysshaya Shkola Publishing House JSC.

Has been a member of the Management Board of MTS since 2007.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,0197%.

Farid Kamalov

Management Board Member — Vice President for Retail Business Development

Biography

He was born in 1980 in Moscow

In 2003 he graduated from the Moscow State Institute of Electronic Technology (TU), majoring in Microelectronics and Solid State Electronics

In 2016 he graduated from the Moscow International Higher School of Business, MBA “strategic management and innovations”

Professional experience

  • 2003 — 2010 — MVideo-Management LLC, salesman, manager, store director
  • 2010 — 2012 — Korablik-R LLC — Head of Retail Sales
  • 2012 — 2021 — Detsky Mir PJSC — Deputy Director for Regional Management, Director of Trade Management Department, COO Deputy CEO for Operations, COO, Member of the Management Board
  • 2021 – to present — MTS PJSC, Management Board Member — Vice President for Retail Business Development
  • 2021 — to — RTK CJSC, CEO

Member of the Board of Directors of RTK JSC.

Has been a member of the Management Board of MTS PJSC since 2021.

As of December 31, 2021, he did not own shares in MTS PJSC (directly/indirectly).

Andrey Kamenskiy

Management Board Member — Vice President for Finance

Biography

He was born in 1972, in Moscow.

In 1995, he graduated from the Moscow State University of Geodetics and Cartography and in 1999 — from the Financial Academy under the Government of the Russian Federation majoring in “Financial Credit”.

Professional experience

  • 1997–2011 — managerial positions in the field of finances at Trade House Perekrestok, SAN InBev, ING Bank (Eurasia).
  • 2011–2018  — Sistema PJSFC, Executive Vice President for Finance and Economics.
  • 2018–2019 — MTS PJSC, Member of the Management Board — Vice President for Finance and Investment, Mergers and Acquisitions.
  • 2019 — to present — MTS PJSC, Management Board member, Vice President for Finance.

Member of the Board of Directors of RTK JSC, MTS Media LLC, MTS AI LLC, Mobile TeleSystems JLLC.

Member of the Management Board of MTS PJSC since 2018.

As of December 31, 2020, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,0035%.

Igor Mishin

Management Board Member — Vice President of MTS Media

Biography

He was born in 1962 in Yekaterinburg.

In 1985, he graduated from the Gorky Ural State University, majoring in philosophy.

Professional experience

  • 1991–2007 — founder and President of Channel Four, the largest private regional media holding.
  • In 1995, he became one of the founders of the Independent Broadcasting System association of non-state regional television companies (REN-TV/NVS network).
  • 1997–2002 — participated in creation of TNT-Teleset OJSC.
  • 2005–2007 — founder and General Director of National Television Syndicate OJSC.
  • 2006–2007 — General Director of Amedia CJSC.
  • In 2008, he became a shareholder of Media-1 company that became a part of YuTV Holding in 2010, where he took over the position of general producer of TV Service CJSC (Muz-TV channel).
  • 2011–2014 — head of A-One Concept Media Inc.
  • 2014–2016 — General Director of TNT-Teleset OJSC.
  • 2019 — to present — MTS PJSC, Management Board member, Vice President of MTS Media.

Producer, Vice President of the Academy of Russian Television, Member of the European Film Academy, recipient of the Prize of the Russian Federation Government in Science and Technology, Chairman of the Board of Trustees of the Street Cinema Festival. From 2008 to present — film producer, developer of the author’s methodology for public protection of film projects, a teacher in film schools.

General Director and member of the Board of Directors of MTS Media LLC, President of City Quarter LLC, General Director of MIG PiCTURES Cinema Company LLC, Chairman of the Board of Guardians of MEDIAMIR Cultural Projects and Cinematic Art Support Foundation, member of the Management Board of the Association of Cinema and TV Producers.

Has been a member of Management Board of MTS since 2019.

As of December 31, 2021, he did not own shares in MTS PJSC (directly/indirectly).

Ilya Filatov

Management Board Member — Vice President for Financial Services

Biography

Born in 1976 in Klin.

In 1998, he graduated from the Moscow State Academy of Water Transport; in 2009, he received an MBA degree from the Higher School of International Business Economics at the Academy of National Economy under the Government of the Russian Federation.

Professional experience

  • 2005–2014  — BANK URALSIB PJSC, held managerial positions, including the position of Deputy Chairman of the Management Board of the Bank since 2008.
  • 2014–2015 — MTS Bank PJSC, First Deputy Chairman of the Management Board.
  • 2015 — to present — MTS Bank PJSC, Chairman of the Management Board.
  • 2019 — to present — MTS PJSC, Management Board member, Vice President for Financial Services.

Member of the Board of Directors of MTS Bank PJSC, RTK JSC, Sistema Capital MC LLC.

Has been a member of Management Board of MTS since 2019.

As of December 31, 2021, the share in the authorized capital of MTS PJSC and the share of ordinary shares held is 0,165%.

Alexander Khanin

Management Board Member — Vice President for Artificial Intelligence

Biography

Was born in 1987 in Nevinnomyssk.

Graduated from the Bauman Moscow State Technical University with a degree in Robotics.

Professional experience

  • 2012–2020 — CEO of VisionLabs.
  • 2009–2012 — Head of Department at VNIINS named after V.V. Solomatin.
  • 2020 — to present — MTS PJSC, Management Board member, Vice President for Artificial Intelligence.
  • 2020 — to present — MTS AI LLC, CEO.

Founder of VisionLabs — one of the world leaders in the development of software and devices using biometric facial personal characteristics and video analytics.

Chairman of the Board of Directors of VisionLabs, LLC and VL Solutions LLC, Chairman of the Supervisory Board of VisionLabs, member of the Board of Directors of Intema S.a r.l.

Member of the Management Board of MTS PJSC since 2020.

As of December 31, 2021, he did not own shares in MTS PJSC (directly/indirectly).

Remuneration of Management Board members and senior executive officers

Principles of remuneration of Management Board members and senior executive officers

A contract is entered into with every Management Board member, which defines labour terms, procedure for definition of the amount of remuneration, terms of compensation of expenses connected with execution of duties of the Management Board member and contract termination procedure. The contract shall be signed on behalf of the Company by the Chairperson of the Board of Directors of the Company or by a person authorized by the Board of Directors. The Board of Directors is entitled at any time to terminate the contract with a member of the Company’s Management Board. Terms and conditions of the contract shall be approved by the Board of Directors of the Company.

Remuneration of senior executive officers is fixed and calculated based on the Policy for labor payment of employees of MTS PJSC and meets the following principles:

  • observation of fairness and competitiveness of remuneration;
  • connection of remuneration with personal contribution and final work results in the Company in general;
  • motivation for achievement of target business development parameters in accordance with strategic development guidelines approved by the Board of Directors.

The system of remuneration to senior executive officers includes elements of base remuneration and variable premium part:

  • base remuneration — monthly official salary;
  • variable part of remuneration is determined by the results of the Company’s business in the reporting period in accordance with the Company’s internal regulations and approved by the Company’s Board of Directors and consists of:
    • short-term motivation system is an annual premium paid for fulfilment of key performance indicators (“KPI”) fixed in general for the Company for a corresponding reporting period, as well as for fulfilment of functional individual tasks defined by the Board of Directors.
    • the long-term material incentive program is aimed at increasing the Company’s shareholder value, acceleration of its capitalization growth, as well as preserving long-term labor and corporate relations between the Company and its management.

MTS PJSC Business Key Performance Indicators System

  • Ecosystem indicators, which are formed on the basis of the Company’s business plan and include the main financial and economic, industrial and strategic indicators. They reflect the general corporate responsibility for the results of the MTS Group business and make it possible to track the generalized results of the Company’s business and adjust the strategy.
  • Functional indicators, which are formed on the basis of business unit performance strategies.
  • Individual indicators of performance are formed on the basis of strategic objectives of a specific director of the Company.

The list of indicators and their target values for the Company’s directors are approved by the Board of Directors of the Company with preliminary discussion at the dedicated committees on an annual basis.

The list of corporate performance indicators of the MTS PJSC President includes such indicators as:

  • OIBDA;
  • income;
  • ecosystem indicators;
  • integral assessment of the implementation of strategic projects and business development.

Structure of remuneration for top management in 2021

The remuneration structure consists of base and variable payments and depends on the level of the position in the structure of the Company.

Achievement of the established KPIs is the basis for being entitled to receive a variable payment, as it pertains to long-term payments, including an increase in the shareholder value of the Company and growth of its capitalization.

Evaluation of performance of the President and members of the Management Board

One of the tasks of the Board of Directors is to assure control of operation of the President and members of the Management Board, as well as to evaluate their performance which is performed based on materials approved by the Remuneration and Appointment Committee.

The assessment of the President and members of the Management Board for 2021 was performed in accordance with an existing method based on fulfilment of key performance indicators of the Company in general, functional individual tasks and competence development level.

Remuneration for members of the Management Board and senior executive officers based on 2021 results

Remuneration paid to members of the Management Board in 2021
Indicator nameTotal, RUB
Salary279,888,418
Bonuses713,103,972
Cost compensations34,697,976
Other remuneration types3,689,786
TOTAL1,031,380,152
Remuneration paid to senior executive officers in 20211

1 Includes information on remuneration of 31 top officials of the Company (including members of the Management Board).
Remuneration paid to the top officials in 2021 is below the amount of the remuneration paid in 2020, in connection with payment of a portion of the 2020 annual bonus in December 2020.

Indicator nameTotal, RUB
Salary397,140,020
Bonuses807,307,830
Cost compensations41,410,241
Other remuneration types8,478,447
TOTAL1,254,336,539