Andriy Kobolyev, the head of Ukraine’s state-owned oil and gas monopoly Naftogaz, might keep his current position after all as the enterprise’s supervisory board unanimously proposed on March 12 to renew his contract at least for one more year.
Prime Minister Volodymyr Groysman received the endorsement in a letter asking to extend Kobolyev’s position until March 2020.
Earlier, on March 6, the government said that it would not renew its contract with Kobolyev and that his contract expired on March 22. Kobolyev, in turn, fired back saying that the prime minister’s decision was illegal.
The conflict got heated when Kobolyev’s salary and bonuses became public. In May, the company’s top management paid themselves $46 million in bonuses after winning a $2.6-billion case against Russian energy giant Gazprom. Naftogaz’s head alone received $7.9 million in bonuses and a monthly salary of Hr 2 million ($74,000).
In response to the supervisory board’s letter, Groysman said it contained “new conditions which are quite close to what I have requested. This is one of the first reasonable offers received by the government.”
The prime minister added that his government and Naftogaz would discuss their final decision, according to a report on the website of news magazine Novoye Vremya.
After the scandal erupted, Kobolyev promised to transfer his salary to charity, but stated that he will not transfer his $7.9-million bonus, which had been transferred to his mother’s U.S. bank account.
Back in 2017, he received a total of $1.7 million.
The board suggested that Kobolyev’s “remuneration will be limited to 50 percent of the fixed monthly salary of the current contract, with no monthly nor quarterly bonus but with the annual bonus … as approved by the government,” reads the letter, which is available on Ekonomichna Pravda, a popular business news website.
In a recent interview with the Kyiv Post, Kobolyev alleged that the actual goal of the government was not to cut his salary, but to minimize the decision-making capacities of the independent supervisory board that would be transferred to the government instead.
“This brings me to the conclusion that salary was not the object or major aim of this political request. Corporate governance was. What happens when supervisory boards are put under severe political pressure? They might resign. For Naftogaz, in a year of elections, the resignation of the supervisory board can mean a full reverse of all we have done so far,” Kobolyev told Kyiv Post in Feb. 8 interview.
Both the government and the supervisory board set similar goals for Naftogaz in 2019: to complete the unbundling of the gas transit system and to increase gas production to at least 20.1 billion cubic meters per year.
In addition, the government expects Kobolyev to ensure flawless functioning of the gas transport system after the unbundling, as well as a new contract with Russia on the transit of natural gas to Europe.
