The state ownership policy approved by the government in late November envisages optimization of the state asset portfolio based on the results of a triage analysis of all state assets and their division into categories: those that remain in state ownership, those that will be privatized or liquidated, says First Deputy Prime Minister and Minister of Economy Yulia Sviridenko.
“The government plans to reduce the number of state-owned companies to about a hundred, instead of the more than three thousand that exist today. The purpose of this optimization is to improve the efficiency of state-owned companies, increase their contribution to the economy and reduce the state budget’s maintenance costs,” she wrote in an op-ed for Interfax-Ukraine.
Svyrydenko added that the policy defines the grounds for a company to remain in state ownership.
“This can be meeting public needs for certain services (Guaranteed Buyer), ensuring national interests (Energoatom, Ukroboronprom), ensuring an affordable price level (Ukrposhta, Ukrzaliznytsia), belonging to natural monopolies (Ukrenergo), etc.” the First Deputy Prime Minister gave examples.
According to her, the adopted document also improves the work of supervisory boards: the annexes contain a policy on remuneration of managers and members of supervisory boards, as this issue has always been sensitive to society. The maximum remuneration of a supervisory board member cannot exceed 40% of the maximum remuneration of the CEO, which is set at the market level, Svyrydenko said.
“How is this level determined? The government commissions an independent study of salaries in different sectors where companies of similar size and direction operate,” she explained.
The First Vice Prime Minister also pointed out that an important change is the emergence of waiting lists, a new document in the planning system.
“This is a tool through which the state sets specific goals for companies – expectations of profitability, liquidity and other indicators, as well as the amount of funding from the state budget and payments to the state. Waiting lists are a kind of KPIs, the failure to fulfill which may lead to the termination of powers of members of management bodies,” Svyrydenko said.
She also drew attention to an important section on the dividend policy. Clarifying that during martial law, dividends of state-owned companies account for 75% of profits, the First Deputy Prime Minister added that after the war is over, the dividend determination will take into account the funds that the company spends on important investments, such as reconstruction.
“In the future, the amount of dividends may depend on how efficiently the company uses its funds (ROE). The higher the efficiency, the less dividends will need to be paid. The value of the company’s assets, the specifics of the industry, the financial goals of the state, the proposals of the supervisory board and the company’s competitiveness in the market will also be taken into account,” Svyrydenko explained.
She reminded that after the adoption of the State Ownership Policy, the next important steps are to conduct a triage, privatize or liquidate assets unnecessary for the state, form supervisory boards in a number of state-owned companies, and separate commercial and non-commercial activities.
