Incentivizing effective work

Our goal is to recruit, retain, and motivate employees whose qualifications and performance will ensure the successful performance of the Company’s mission and the attainment of stated business goals.

We strive to maintain an effective employee remuneration system.

Under an agreement between PJSC LUKOIL and trade unions, the minimum labor rate in Russian companies is set at being at least equal to the minimum subsistence level of the working population. The level of base salary depends on the duties performed, the complexity of tasks to be solved, and the respective responsibility level, and is established for each employee taking into account their education and practical experience.

In 2018, the initial level salary A maximum of three values is used as the initial level salary in subsidiaries operating in a particular region: the subsistence minimum in the Russian Federation as a whole, the subsistence minimum in the respective region of the Russian Federation, and the regional minimum monthly wage. in the Russian entities of LUKOIL Group in significant regions of activitiesThe key (significant) regions of activity are the constituent entities of the Russian Federation and countries where LUKOIL Group entities with a staff of 500 or more (within one entity) are located, as well as the constituent entities of the Russian Federation and countries where the total number of people employed by the Company's entities is 500 or more. corresponded to or exceeded the regional minimum wage. The initial salary of the employees of LUKOIL Group foreign entities is set as being no lower than the minimum wage in the respective country of operation, as established by labor legislation regulations, collective agreements, and/or local regulations.

The average salary in the Russian entities of LUKOIL Group in significant regions of operation was at least 1.3 times higher than the average salary in the respective regions.

The employee motivation system in Russian entities also consists of a wide range of benefits and compensations, established by an agreement between the employer and the professional organization, collective agreements, and other bylaws. Issues relating to the living standards of employees, such as health care, providing support to employees and their families, and housing assistance, are given significant attention in the benefits and compensation structure. Social support is also provided to employees that have retired from the Company.

Voluntary medical insurance

Voluntary medical insurance programs cover over 90% of the employees of Russian entities; employees can at their own expense tailor these programs to meet their personal needs.

Housing program

The housing program is implemented in accordance with the Basics of the Housing Policy of LUKOIL Group and is aimed at providing housing to production personnel (invited and young specialists) and at helping employees improve their living conditions by subsidizing mortgage interest rates. In 2018, 1,400 employees participated in the program.

Pension plan

In 2018, pension programs covered more than 49,000 employees of the Russian and foreign entities of LUKOIL Group.

The Russian entities of LUKOIL Group finance a fixed-payment corporate pension program that covers over half of personnel. One type of pension plan is calculated based on years of employment and the salary amount as of the end of 2003, as well as awards received while being employed at the Company. The other type of pension plan is calculated in proportion to salary. These programs are solely financed using LUKOIL Group entity funds. Employees can also make pension contributions via share participation by the Company (up to 4% of the employee's annual salary). Over 41,000  employees participate in the corporate pension plan. JSC Non-Governmental Pension Fund Otkritie manages the pension plan assets of LUKOIL Group and pays pensions.

Non-state pension support in Russian entities of LUKOIL Group
2016 2017 2018
Number of former employees receiving a corporate pension 43,094 46,294 49,441
Average size of non-state pension, RUB 2,290 2,240 2,272

Pension support for employees of LUKOIL Group foreign entities is calculated in accordance with the legislation of the country of operation, as well as the local regulations of the entities on pension plans, and are financed both using only an entity’s funds and on a shared basis (both the employee and employer contribute).

Pension liabilities of LUKOIL Group, RUB million