Russian Oligarchs Withdraw Unprecedented $20 Billion in Dividends Despite Economic Downturn

Russia’s wealthiest business tycoons withdrew an unprecedented sum from their companies in 2024, primarily in the form of dividends, according to a recent report by Forbes Russia.

This development occurs as the nation’s economy teeters on the brink of recession.

Forbes Russia reports that the total dividend distributions from leading Russian firms to the 50 richest individuals reached a record 1.769 trillion rubles (approximately $20 billion) in 2024. This marks a significant increase compared to figures below 1.4 trillion rubles (around $18.2 billion) observed in both 2022 and 2023.

Last year, at least 11 people each received dividend payments exceeding 50 billion rubles (about $650 million).

Leading the list was Alexei Mordashov, the major stakeholder in the steel manufacturer Severstal, who, along with associated entities, received an impressive 201.8 billion rubles (around $2.62 billion).

Following closely was Lukoil co-owner Vagit Alekperov, who withdrew 201 billion rubles (approximately $2.61 billion).

Steel magnate Vladimir Lisin, who made a return to the ranks of billionaires this year, secured third place, collecting nearly 152 billion rubles (about $1.98 billion), largely from dividends of his company NLMK.

Completing the top five were Leonid Mikhelson, a principal shareholder in gas and petrochemical companies Novatek and Sibur, with 104 billion rubles (or $1.35 billion), and Alisher Usmanov, head of holding company USM, who took home 96.2 billion rubles (around $1.25 billion).

The Russian Union of Industrialists and Entrepreneurs (RSPP), which represents many of the mentioned corporations, has expressed growing concern over the economy’s condition for the past two years. It cautioned that current borrowing costs have become untenable due to the Central Bank’s high interest rates, with numerous companies nearing technical default.

The RSPP indicated clear signs of recession in the Russian economy, particularly in civilian sectors that continue to suffer from Western sanctions, starting in late 2024.

Conversely, over 50 companies opted to retain their earnings in 2024. Igor Danilenko, investment director at Renaissance Capital, noted that these firms chose to focus on maintaining liquidity and channeling profits towards operational goals and investments.

However, the richest individuals in the country seem to prefer extracting personal dividends at the expense of corporate stability.

Severstal CEO Alexander Shevelev even warned that should the current financial strain continue, steel producers might have to completely cease operations.