We do not pay foreigners for nothing: Samruk Kazyna CEO

The Chief Executive Officer of Samruk Kazyna National Welfare Fund Umirzak Shukeyev has spoken about the wages of the foreigners employed at the Fund, Tengrinews reports.

Samruk-Kazyna National Wealth Fund is a sovereign wealth fund and joint stock company in Kazakhstan which owns, either in whole or in part, many important companies in the country, including the national rail and postal service, the state oil and gas company KazMunayGas, the state uranium company Kazatomprom, Air Astana airlines, and numerous financial groups.

The state is the sole shareholder of the fund that controls $78 billion in assets, which is more than 50% of the country’s GDP. Kazakhstan’s government expects the assets held by its sovereign wealth fund to reach $100 billion in 2015. 

Apart from being the CEO of the Fund, Umirzak Shukeyev is also Chairman of the Management Board of Samruk-Kazyna. Independent directors are Alexander Mirtchev, Sir Richard Harry Evans and Nigel John Stapleton.

At the briefing in the Central Communication Service headquarters in February in Astana, Shukeyev was asked several questions with one of them concerning the salaries of the fund's foreign employees.

“We want to introduce international standards, and to do this we need people with international experience and knowledge. We have hired several world level foreign experts through recruiting companies. Before coming here they used to work in IBM, General Electric, Philip Morris. It is obvious that the wages they get have to be competitive. Our salaries are much lower than in many other countries. Therefore, following the recommendation of the international recruiting companies, the salaries we give our foreign employees consist of two parts: one part is a fixed amount, while the other one is variable. The variable portion directly depends on the results of their work. The ratio is 20 percent, which is fixed, to 80 percent, which constitute the variable portion. It is more like the American wages system. In Europe, it is 50/50. Therefore, they (foreign workers in the Fund) can receive the wage only if they bring profit to the company. We do not pay money for nothing,” Umirzak Shukeyev said.

He added that Samruk Kazyna was cutting its personnel costs. “We are, indeed, reducing the personnel costs, we have been doing that since 2012. More than 2,000 jobs have been cut in the administrative staff,” the head of the Fund said.

Shukeyev was also asked about top managers’ salaries. “I do not think that the wages of top managers is a state secret, but there is corporate culture to consider. We are all hired managers and the shareholder – the Board of Directors – determines the salaries of the top managers. There is a number of independent directors, and it is their decision. They do not even ask our opinion," he claimed.

For the Fund to be competitive at the market, our salaries should be competitive as well, because we must attract people. One study was conducted several times and (according to the results) our wages are several times lower than the wages of our counterparts abroad and twice lower that in Russia. Compared to some of the Kazakhstani companies, our salaries are lower than in the private sector in Kazakhstan. (...) I do not know to what extent it would be useful for attraction of experts if we announce the wages. Moreover, we have no right to do so under the corporate standards,” Shukeyev said declining to name the amounts.

Journalists also asked him what percentage of all the wages the salaries of top managers constituted. He, in turn, said: "I do not think the percentage is big."

Shukeyev also assured that despite the reduction in the Fund's spendings, the salaries of the production personnel would not be cut.

Reporting by Altynai Zhumzhumina, writing by Assel Satubaldina, editing by Tatyana Kuzmina