The brightest resignations and appointments in 2016

Operational managers replaced anti-crisis ones. 
In 2016 the general directors of the major mobile operators were changed, the president of AvtoVAZ was re-elected, the top management of Bashneft was fired overnight, managers of retailers and banks were actively replaced. In the past year, Vedomosti counted about 30 of high-profile resignations and appointments. The investment analysts, headhunters, industry experts and employees of the companies themselves evaluated the significance of these changed at the request of the newspaper.

The year passed under the slogan of the struggle for efficiency and cost reduction, and the majority of resignations are the replacements of the anti-crisis managers to executives, whose strength lies in regular operational management, explains Vladislav Bykhanov, partner of Cornerstone. Approximately 40% of assignments were due to the fact that shareholders were dissatisfied with the way the director general implemented the approved strategy, says Marina Tarnopolskaya, managing partner of Contact. The same number of high-level changes was associated with the change of shareholders and the purchase and sale transactions, she clarifies. About 15% was due to the reorganization of the management structure. Most of the reshuffle was in six sectors: telecommunications, banking, oil and gas, construction, retail trade and energy. Vedomosti sent requests to the press service of 30 companies asking to comment on the reasons for the new top management appointments.

Quitting for a good reason

Only 5% of the reshuffle was due to force majeure, says Tarnopolskaya. In September, Mikhail Slobodin, general director of the Russian VimpelCom resigned immediately after the Investigative Committee of Russia called him a suspect in a criminal case on bribery. The case is related to T Plus, the former KES-Holding, which was headed by Slobodin in 2002-2010. The resignation came as a surprise, since recently VimpelCom had extended its contract with the top manager for three years. After the resignation, Slobodin's place was occupied by Morton Kjell Johnsen, who was in charge for Russia and Italy within the company. Under Slobodin, the market share of VimpelCom among the big three operators began to grow (in 2016 the increase totaled 0.5 percentage points, while the MTS share decreased by 0.1 pp, Megaphone by 0,4 p. p.), said Raiffeisenbank analyst Sergey Libin. And his resignation the analyst sees as negative for the company: the shareholders are likely to have been satisfied with his work, since the contract was extended.

General Director of Severstal Management Vadim Larin and its subsidiary Vorkutaugol Vadim Shablakov in November left the company: both become suspects on charges of bribing heads of supervisory authorities in the Komi Republic and the Vorkuta mines for connivance with checks. The investigation began after the explosion at the North mine, which happened in February and took the lives of 36 people. Larin left the company at his own request, said the representative of Severstal. General Director of Severstal Management appointed Alexander Shevelev, which had extensive experience as an operating manager, with his task being to reduce costs and increase the focus on customers, said a company spokesman.

In recent years, personal risks of the top managers increased, says the director of the Russian Institute of Directors, Igor Belikov. The expert recalls the arrest of the general director of Uralkali Vladislav Baumgertner, charges against several leaders of the AFK Sistema after the house arrest of Vladimir Yevtushenko, the detention of two other managers: Yevgeny Olkhovik and Boris Vainzikher.

Aiming for efficiency

In April, Megafon saw Sergey Soldatenkov back: many years he led the company until the arrival of Ivan Tavrin, who left the post of director general. Tavrin worked to reduce costs and Soldatenkov is primarily interested in the growth and development of the business. He's a teleman by profession and knows the industry, says Libin. Soldatenkov's task is to return the financial performance of Megafon back to its peak levels of previous years and prevent the company from losing its market position. 2016 was difficult for the operators: revenues from mobile services decreased under the pressure of competition, profitability fell due to the increasing proportion of lower margin mobile retail business, says Libin. Megafon was the only operator to experience a significant decline in net profit in the 3Q of 2015 (-51.1%), while the VimpelCom saw net profit growth by 13 times, MTS by 14.3%. Net profit of Megafon for the first nine months of 2016 decreased by 33.44%, VimpelCom by 2.8%, and MTS is the only one of the "Big Three", whose net income for the period increased (17,5%). Shortly after the appointment, Soldatenkov said he wanted to stop the decline of profitability and return the company to growth, albeit by small loss of market share and decreasing capitalization, Libin says.

Expensive heads

EUR 1 million may be the minimum annual payment, estimated the company Cornerstone, for each of the three new foreign appointees: Enrique Fernandez, chief executive officer of M.Video, Nicolas Mora, the new president of AvtoVAZ and Pedro Pereira da Silva, the president of Dixie.

AvtoVAZ saw its head Bo Andersson resigned ahad of schedule; he handed over the responsibilities to his successor Nicolas Mora. In 2015, AvtoVAZ had a loss of 74 billion rubles per IFRS and a negative cash flow. As the representative  of Rostec (shareholder of AvtoVAZ) told Vedomosti back then, the actual cause for the dismissal of Andersson was his ineffectiveness as a manager. He used to work in the system of coordinates without regard to the goals set by the Russian party represented by Rostec, said the representative of the state corporation. In an interview with WSJ, Rostec's head Sergey Chemezov criticized Andersson for his preference for foreign suppliers instead of Russian one: because of the procurement of foreign parts, the production costs for the new Lada models became more than its retail price.

Andersson is one of the best professionals in the automotive industry, but he made a mistake with the choice of strategy: it did not work well with the devaluation of the ruble, the focus on quality and foreign suppliers failed, says the analyst of Aton Mikhail Ganelin. Add to this authoritarian management style, strong self-confidence, as the ex-president of AvtoVAZ had managed to get GAZ company out of the crisis before, says Ganelin. Andersson had to develop new products output, increase the share of Lada in Russia to 20%, to take the company to break even. But by the end of 2015 the company increased its net loss by 3 times and while the share of the local market of passenger cars and light commercial vehicles increased by 3%, it was still only 16% (according to AEB). In addition, Chemezov criticized Andersson for big layoffs at the company. The job cuts accumulating tensions and led to protests in Togliatti at the end of last year. Andersson's successor Mor in the first months of work brought back the top managers dismissed by Andersson. Among them, Vice-President for Human Resources and Social Policy Dmitry Mikhalenko and Vice-President of supply chain management Paul Miller, who had worked in this position in 2014-2015.


Many appointments occurred in the largest retail chains: Dixie, Magnit, The Seventh Continent, M.Video. Retailers are actively changing the management structure in order to adjust it to a reduction in consumer demand, says Tarnopolskaya. And managers who specialize in regional expansion and launch of new stores, are now replaced by managers who know how to make the existing stores fore efficient, say the representatives of the retail chains themselves.

The most notable changes in top management occurred in Dixie, says the analyst of Aton Yelizaveta Lebedeva. At the end of 2015, the company's president Ilya Yakubson quitted his post, in February 2016 the general director Fedor Rybasov followed him. General Director's position was taken by Sergey Belyakov. And Pedro Pereira da Silva was invited to become the president; he has experience in managing large-scale retailers in Europe. Personnel changes are related to the reorganization of the management system, said the representative of Dixie. Operational management functions have been trasferred from the president to CEO, as specified the company. In the 2016, Dixie's financial results deteriorated due to reduction in the rate of opening of shops, although the new management changed the policy in the area of inventory management, pricing and calculations, Lebedeva said. When the changes are implemented, the results should improve, she hopes. The new CEO will be able to apply the European experience in Russia, he will be able to increase efficiency and customer return traffic, the analyst believes. His total remuneration as estimated by Cornerstone will be about 70 million rubles per year.

The retailer Magnit had the head of JSC "Tander" (its managing company) changed twice in 2016. Instead of Alexander Barsukov, who worked from January 2016, it is now headed by Denis Fedotov. There were also changes withing the Magnit's existing management team, Lebedev said. Revenue growth rate slowed to 13.5% in the 11 months of 2016 from 24.5% in 2015, the EBITDA margin decreased slightly due to the promotional campaign. The deterioration of the results is due to the struggle for efficiency and closing of unprofitable stores, said the analyst.

This year there was a new post in the M.Video electronics retail chain: Chief Executive Officer, which in March was occupied by Michael Thach, who had headed Svyaznoy for 7 years. However, in August, he left the company. and Touch, despite the solidarity in matters of strategy, disagreed on the methods of execution of strategic plans, said a company spokesman. After his resignation, the retail chain was headed by an internal appointee, Enrique Fernandez. All operational matters were taken over by the chief executive officer, explained M.Video.

Oil and gas industry

The main newsmaker was Rosneft, which completely and in a record short time changed the management of Bashneft after its purchase. President of Bashneft, Alexey Korsik and all the board members were dismissed immediately after the transaction had been completed. The new Board of Directors of Bashneft appointed Andrey Shishkin as the president of the company, who had been the former vice-president of Rosneft in the energy sector before. Also, the new board was elected from Rosneft management. This was an intercept of the tactical operational management, comments the analyst of Finam, Alexey Kalachev. In addition to changing the management team, there also was the revision of contracts with the former partners of the company (Lukoil) and audits in the subdivision.

In 2016, Rosneft also changed the management of its subsidiary, Angarsk Petrochemical Company (APCC). Vasily Zakharov was appointed its General Director. Major thefts of diesel fuel were revealed within the company. The former CEO of the company, Igor Pavlov, was fired at the end of August. According to TASS, he is suspected of theft of diesel fuel, and the law enforcement authorities of the Irkutsk region initiated a criminal case against him. Rosneft refused to comment on the reason for the resignation of Pavlov. The main task for the new management of APCC is obvious: the establishment of order in the company after the detection of theft, commented Kalachev. From this perspective, the appointment of Zakharov was logical, said Kalachev: he understands the refinery process equipment well, since he was the former chief engineer of the Saratov Oil Refinery and Yaroslavl Refinery.

The head of another company controlled by Rosneft was changed in Udmurtneft (joint venture of Rosneft and Chinese Sinopec). The powers of the general director Yevgeny Maslennikov were terminated. Andrey Topal (first deputy general director of yet another subsidiary of Rosneft, Samotlorneftegaz) was appointed to his place for the period of three years. At the same time, an early change of the company's board of directors was reported. Experts suggest that these are horizontal changes in the group. Kalachev recalls that two years ago was replaced the early predecessor of Maslennikov, Sergey Anzhigura, who was transferred to Tomskneft.


Especially many personnel changes in top management occurred in the banking sector due to the tightening of banking supervision and consolidation of the sector. During the first 11 months of 2016, the licenses of 95 Russian banks were revoked, and the number of credit institutions decreased to 975. Of these, 30 are in rehabilitation mode. The main reasons for the resignations and appointments was the need for crisis management, says the analyst of Finam, Bogdan Zvarich.

The most high profile personnel rearrangement was a change management of Vnesheconombank (VEB). Vladimir Dmitriev, who had headed the State Corporation for 12 years, was replaced by Sberbank's Sergey Gorkov (ex-deputy chairman of the board). Following this, the key positions in the management of VEB were taken by a number of Sberbank top managers. They were engaged in rehabilitation of VEB. VEB indicators are improving, but it remains unprofitable. The net loss under RAS as of the end of 2016 could reach about 130 billion rubles, said Sergey Gorkov. Initially, the management expected worse results, with an annual loss of 200-250 billion rubles.

Uralsib Bank (23rd place in terms of assets in the 1Q of 2016), which is currently under rehabilitation, had both its supervisory board and management  changed as a result of a change of ownership and the beginning of rehabilitation. At the end of 2015, the businessman Vladimir Kogan, acquired 82% stake in the bank and began to reorganize it with the participation of the Deposit Insurance Agency (DIA). Uralsib was headed Konstantin Bobrov (previously worked in Otkrytiye and Sankt-Peterburg Banks). From the previous composition of the Supervisory Board, there remained only the former owner of the bank Nikolay Tsvetkov. The hole in the Uralsib's capital before the rehabilitation was estimated at about 44 billion rubles, says Bogdan. Fitch recently revised its outlook on the bank's rating from "negative" to "stable". "Vladimir Kogan is known as a talented manager, able to effectively manage large-scale projects," says Ganelin.

The Russian Standard Bank (21st place in terms of assets) in 2016 replaced Dmitry Levin, chairman of the board, who had worked for 15 years, by Ilya Zibarev, who had previously worked at Alfa-Bank and Home Credit. The new team has the task to restore the bank's position in retail lending, said Bykhanov.

This year, the integration of banking subsidiaries of the Otkrytiye financial coup completed. Since 2006, the group absorbed more than 10 banks and reorganized Trust Bank. As a result, the Russia's largest private bank formed (5th place in terms of assets). Yevgeny Dankevich was appointed the CEO of FC Otkrytiye; before, he headed KhMB Otkrytiye (former Khanty-Mansiysk Bank). 

Nikolay Myl'nikov who specializes in the recovery of bank assets was appointed the chairman of the board of Trust Bank, which is currently under rehabilitation.