Norilsk Shareholders Balance Board

MTNorilsk Nickel minority shareholders sitting in the hall at the Russian Government Financial Academy on Monday.
A record turnout of 77 percent of shareholders voted in favor of increasing the size of its board from nine to 13 members and elected two independent directors Monday, results that seemed to please all parties involved.

That the company didn't give minority shareholders a chance to ask questions probably helped.

Norilsk, the world biggest nickel producer, decided to pay 20 to 25 percent of its net profits for last year of $5,276 billion, which was 11.6 percent below that for 2006.

The changes in the size of the board will only come into effect at the beginning of next year, however, so shareholders elected just nine directors Monday.

Interros president Vladimir Potanin, who owns about a 30 percent stake in the company, was elected to the board along with two supporters -- Andrei Klishas and Andrei Bugrov, both of Interros. The Interros contingent was also strengthened by the election of an independent director, Michael Levitt, who is said to be close to Potanin's company.

RusAl, which brought one-quarter of Norilsk's shares in April, put company owner Oleg Deripaska, managing director Alexander Bulygyn, and new owner of 14 percent of RusAl's shares, Mikhail Prokhorov, on the board. Guy de Selliers and Heinz Schimmelbusch were elected as independent directors.

Victor Vekselberg, a major shareholder of RusAl, who had been angling for a spot on the board, was not elected.

"Now we have balance in the board," said Denis Morozov, Norilsk CEO. "The larger number of members will enable us to make the company's work more efficient."

The reaction from the RusAl side was also positive.

"We support the enlargement of the board," said company spokeswoman Yelena Shuliveystrova." And we are satisfied with the election of two independent directors."

Potanin's spokespeople were not available for comment after the meeting finished Monday evening.

The new board will hold its first meeting on July 7, at which it will elect a chairman.

Another question for the board will be whether Morozov should remain in his current capacity.

"I will put my re-election on the meeting agenda," Morozov said. "If it turns out that my vision for the company diverges from that of the shareholders, I will leave."

Minority shareholders who gathered afterward in the cafeteria of the Russian Government Financial Academy, where the meeting was held, complained that the company didn't actually care about their opinions.

"They even didn't allow us to ask questions, ask for details", said Valentina Klimenkova, 69, who acquired her Norilsk shares as an employee of the company in the 1990s.

Klimenkova said she voted her 267 shares for Potanin.

"He will devote himself fully to the company, while other candidates seem to be concentrating on something else," she said, sparking an animated discussion.

"No, no, Prokhorov is better," said Olga Yeganshina, a middle-aged woman who said she came from Mechengorsk, in the Murmansk region, especially for the event. "He is full of energy, and since he worked as general director, he knows the way the company should be operated."

She wouldn't say how many shares she owned.

Commenting on the minority shareholders' complaints, Morozov said "the company had improved cooperation with minority shareholders this year."