Akhmetov, Pinchuk, and Verevskyi no longer want Russian top managers. How Ukrainian businesses are addressing the "toxic passport" issue.
Russia's invasion has closed the Ukrainian market to Russian expats. Who was laid off, and will managers willing to work in Ukraine retain their jobs? Denis Katsilo asks. Forbes
Letters of happiness
In early March, top managers of Rinat Akhmetov and Vadim Novinsky's Russian mining and metals holding Metinvest received letters asking them to terminate their contracts, according to two company executives who spoke on condition of anonymity. A top manager at a competing company also confirmed this information to Forbes.
In the midst of the war with Russia, having citizens of the aggressor country in the management team carries reputational risks, even if these managers have pro-Ukrainian views and have lived in Ukraine for many years. Furthermore, after February 24, disputes began to escalate within the team between Ukrainian and Russian executives, even those who had worked together for many years, according to one of Forbes' sources. It was necessary to let off some steam while maintaining control.
В Metinvest Forbes' request was left unanswered. It's not yet known how many Russians remain in their positions—the company has removed information about its management team from its website. Cached data indicates that, as of February 24, Russians held almost a third of the positions on Metinvest's board of directors.
Of the company's 11 directors, the following were Russian citizens: Director of Logistics and Procurement Alexey Gromakov (previously worked at Russian companies VimpelCom, Aeroflot and Sibur; at Metinvest since April 2018), Director of Sustainable Development and Team Engagement Alexey Komlik (Sistema and Uralkali; at Metinvest since 2013), Director of Economics and Business System Development Olga Ovchinnikova (Severstal-Resource and Alliancetransoil; at Metinvest since 2010), and Chief Operating Officer Alexander Pogozhev (American Severstal International and Russian Severstal; at Metinvest since 2010).
The metallurgical holding has already parted ways with more than a dozen Russian managers (the exact number is unknown and could be much higher) who worked at lower management levels, including department directors. Upon dismissal, they received between three and six monthly salaries (depending on their length of service at Metinvest). Contract termination terms with senior managers were negotiated individually.
Russian employees were offered two options: resign by mutual agreement or, if there were legal grounds (number of years of residence, residence permit, etc.), apply for Ukrainian citizenship. "However, job security and salary were not guaranteed while they were obtaining a passport," says a Forbes source at Metinvest who decided to leave the company.
According to Forbes, Alexey Gromakov and Alexander Pogozhev have already left the company. Several top managers who have long resided in Ukraine have begun the process of obtaining Ukrainian citizenship.
Trendsetters
The fashion for Russian top managers in Ukraine in the mid-2000s was introduced by the holding companies of Rinat Akhmetov and Viktor Pinchuk, says Andrey Krivokorytov, CEO of the recruiting company Brain Source.
In addition to Western education and experience working in international companies, Akhmetov's key criteria for selecting executives was a candidate's understanding of post-Soviet realities. Since the Russian market was more developed in the large industrial sector, there was a wider selection of people with the required skills, says Krivokorytov.
Most of the top managers for Akhmetov and Pinchuk's company were brought in by Russian headhunters Rosexpert and Ward Howell. Russian Kirill Rubinsky led Pinchuk's EastOne group for five years and left the company in 2017. At various times, Pinchuk's main metallurgical asset, Interpipe, was headed by Russians Evgeny Bernshtam and Artem Polyakov. Currently, Interpipe has no top managers with Russian citizenship, the company's press service reported.
Why are so many of them still at Metinvest? To a certain extent, the recruitment of Russian talent was facilitated by Natalia Strelkova, a Russian citizen who was responsible for HR from 2010 to 2018, according to a Forbes source at Metinvest. Akhmetov himself has completely handed over the reins to management and has no influence over the HR policies of SCM Group companies, according to a response from SCM's press service.
DTEK, the country's largest private energy holding company, which is also owned by Akhmetov, has no individuals holding citizenship of the aggressor country, DTEK's press service told Forbes. Russian Igor Shchurov, who heads DTEK Oil & Gas, holds an Israeli passport, as does Dmitry Skornyakov, the head of another Akhmetov company, Harveast. It is unknown when both received Israeli citizenship.
Who else fired Russians, and who hasn't decided yet?
At the end of March 2022, Grigory Bakunov, former Director of Technology Distribution at Yandex Russia, resigned from the gambling company Parimatch. He explained the reason: "In my personal opinion, there is no place, and cannot be, for Russian top managers in Ukrainian companies... Whatever my position, I now feel that managing Ukrainians while holding a Russian passport is wrong." Bakunov oversaw Parimatch's technological transformation. According to the holding's CEO, Maksym Lyashko, Bakunov remains a consultant to Parimatch.
The company also terminated employment and business relationships with several employees with Russian citizenship, Lyashko said.
ArcelorMittal Kryvyi Rih, part of Lakshmi Mittal's steel empire, terminated its partnership with Russian national Diana Medved, who held the position of Director of Logistics, at the start of the active phase of the 2022 war. Ukrainian Andrey Myagkov has been appointed in her place. There are no more Russians at AMKR, the company's press service reported.
On March 12, Andrey Verevsky's Kernel agricultural holding granted Russian citizen Sergey Shibaev's request to remove him from the board of directors. Shibaev had worked at Kernel since 2012.
Since September 2021, Russian citizen Alexey Pertin has remained the chairman of the supervisory board of Vadim Novinsky's Smart Holding. He previously served as the company's CEO. He is also a member of the supervisory board of Metinvest. Last year, Pertin applied to the Migration Service of Ukraine for Ukrainian citizenship. Smart Holding's press service did not specify whether Kirill Chebunin, appointed Director of Strategy and Investments in July 2021, will remain in his position.
Just a few weeks before the war began, Alexey Belkin, a McKinsey & Company exporter in Russia, became the executive director of the Silpo chain and deputy president of Fozzy Group. Fozzy Group did not respond to Forbes' request for comment. "Belkin continues to work," said a former Fozzy Group employee familiar with the situation at Vladimir Kostelman's company.
Since 2019, Russian citizens Alexander Lukanov and Dmitry Serezhin have served on Alfa-Bank's board. A source close to the aforementioned top managers reported that Alexander Lukanov received a Cypriot passport back in 2014, and Serezhin will soon be removed from the board. Alfa-Bank's press service did not respond to Forbes' inquiry about whether Lukanov and Serezhin continue to serve on the bank's board.
By agreement of the parties
On what grounds can Russian citizens be dismissed? Ukrainian companies are not allowed to dismiss employees based on their citizenship, says Yolana Kamenchuk, HR manager at Epicenter-K. To do this, Ukraine must impose appropriate sanctions.
A common practice is to part ways amicably. The standard condition for terminating a contract during wartime is force majeure, says Andrey Krivokorytov.
Compensation payments are entirely dependent on the employer's goodwill. Under normal circumstances, such as during layoffs due to reorganization or the closure of a foreign company branch, top managers are paid six to twelve times their salary, and mid-level managers three to six times their salary.
In Ukrainian companies, this is usually two months' salary, unless otherwise stipulated in the contract. Furthermore, in the event of a reorganization, the employee must be given two months' notice and paid at least one month's salary in severance pay.
Changing your passport
A long-term solution to the "Russian personnel problem" is obtaining Ukrainian citizenship. "This is becoming a trend among Russian top managers," one of Ukraine's top executive search consultants told Forbes.
Former Carlsberg Ukraine CEO Yevhen Shevchenko plans to renounce his Russian citizenship in favor of Ukrainian citizenship. "The Russian passport is toxic," he states.
FILE: Vadim Novinsky. From Raiders to Peacekeepers
Viktor Pinchuk: Ukraine's richest son-in-law
Farmer Andriy Verevskyi: The success story of a former Party of Regions and BYuT member
Vladimir Kostelman – Fraudster from Fozzy Group (Documents)
Subscribe to our channels in Telegram, Facebook, Twitter, VC — Only new faces from the section CRYPT!