Introducing a Success Fee System
Ukraine's State Property Fund (SPFU) is advocating for a bonus system tied to successful privatization deals, known as a success fee. According to SPFU Chairman Dmytro Natalukha, this initiative stems from low employee salaries and a severe staffing shortage. While a 1% success fee on sanctioned asset sales is already in place, the payout procedure remains undefined. This proposal aims to address these systemic issues by incentivizing staff performance.
Natalukha highlighted that salaries at the Fund are far from ideal. A department director earns between 35,000 and 40,000 UAH monthly, a specialist receives 22,000 UAH, and a regional office head makes 25,000 UAH. These figures, he explained, are a key reason for the SPFU's acute personnel deficit.
'This is, by the way, one of the ideas we are trying to lobby. Then the Fund would be motivated to push as many assets as possible to sale and sell them at higher prices, rather than managing them,' - Dmytro Natalukha
Outlook for Success Fee Implementation
Currently, the success fee applies only to sanctioned assets, but its broader rollout could mark a significant reform in state property management. The SPFU is also auditing state assets and preparing objects for privatization, signaling increased activity in this sector. Implementing the success fee system could fundamentally shift Ukraine's approach to privatizing state assets.
If realized, this initiative might boost SPFU employees' interest in actively driving privatization, potentially enhancing process efficiency. Moreover, ramping up privatization could help the state secure additional financial resources, a critical need amid ongoing economic challenges.
As the State Property Fund pushes for a performance-based bonus system, it coincides with plans to privatize several major factories by the end of the year. This strategic move could not only enhance the Fund's operational efficiency but also pave the way for a more robust privatization framework, addressing the pressing economic needs of the country.