The Variable Remuneration of a Member of the Management Board depends on the degree to which Managerial Objectives have been achieved and may not exceed 100% of the fixed remuneration received by a Member of the Management Board in the financial year for which the variable remuneration is to be granted.

The catalogue of general Managerial Objectives includes in particular the following:

• the achievement of EBITDA for the PGE Capital Group at the level specified in the approved material and financial plan for a given financial year;
• compliance with the covenants under credit agreements – (net debt/EBITDA);
• the achievement of the required availability index for the selected power generation units of the Capital Group;
• the implementation of particular strategic investment projects and programmes;
• adaptation to the essence of structural changes in the sector through the implementation of strategic programmes and projects other than in the item above;
• the effective utilization of the potential of innovation;
• the development of a systemic approach to communication within the PGE Capital Group with respect to projects.

In each financial year, additional Managerial Objectives are established whose achievement determines the possibility of achieving the Variable Remuneration. Such additional Managerial Objectives include in particular the following:

• the development and application of the principles of establishing remuneration for Members of management and supervisory bodies in subsidiaries in accordance with the principles specified in the Remuneration Act;
• the fulfilment of the obligations referred to in the Act of December 16, 2016 on the principles of state property management.
• The Supervisory Board is authorized to determine detailed Managerial Objectives, their respective weights, as well as objective and measurable criteria of their accomplishment and settlement (KPI – key performance indicators), subject to the following conditions:
• a given Member of the Management Board is entitled to the variable remuneration after the approval of the Management Board’s report on the Company’s activities and the Company’s financial statements for a given financial year and after the acknowledgement of their discharge of duties in a given financial year by the General Meeting;
• the payment of a part of the variable remuneration may be delayed for up to 36 months depending on the fulfilment of conditions, by a specified deadline, in accordance with the established Managerial Objectives; then such a part of the variable remuneration may be paid in full or in part at the end of a settlement period;
• the variable remuneration is calculated on a pro-rata basis. Proportionality depends on the number of days on which a Member of the Management Board has provided their services in a given financial year;
• the Supervisory Board ascertains the fulfilment of the conditions for the granting of the variable remuneration by particular Members of the Management Board for whom Managerial Objectives have been established for a given financial year and who have performed their functions in the year under assessment, determining the due amount on the basis of financial statements checked by certified auditors as well as other documents, depending on the established Managerial Objectives. Issues related to the recovery of the variable remuneration are regulated by the binding provisions of the law.

The expiry of the mandate of a Member of the Management Board during the financial year under evaluation in terms of the performance of the Managerial Objectives does not result in the loss of the right to the variable remuneration, under the conditions set out above, provided, however, that the time in office during the financial year under evaluation was longer than three months.

The criteria for the award of the variable remuneration (as defined above by the general Managerial Objectives) also relate (at a detailed level – determined by the Supervisory Board) to the consideration of social interests, the Company’s and the Group’s contribution to environmental protection and the taking of measures aimed at preventing and eliminating the negative social effects of the Company’s and the Group’s activities through the modernisation of the Company and the Group (ESG). The criteria set out in the Managerial Objectives are intended to contribute to the achievement of the objectives set out in the Act of July 29, 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies (the “Public Offering Act”) by linking the remuneration to the execution of management processes involving the implementation of the Company’s and the Group’s Business Strategy.

In 2024, 30% of the variable remuneration of the Members of the Management Board of PGE S.A. depended on the achievement of objectives in the ESG area.

The Supervisory Board and a Member of the Management Board may enter into a non-competition agreement binding and effective after discontinuation in the performance of the function; such a non-competition agreement may be entered into only if a Member of the Management Board has performed their function for a period of at least six months, with the proviso that the amount of a monthly compensation may not exceed 100% of the fixed remuneration.

Entering into a non-competition agreement after the dissolution or termination of the Agreement is not permissible.

The period of the prohibition against competition may not exceed six months from the discontinuation of the performance of the function of a Member of the Management Board.

Should a Member of the Management Board fail to perform, or improperly perform, a non-competition agreement, such a Member will be obliged to pay the Company a contractual penalty in the amount not lower than the amount of compensation due for the whole non-competition period.

In a non-competition agreement, the Supervisory Board is obliged to determine at least activities competitive to those of the Company, the amount of compensation for complying with the prohibition against competition, the deadline for the payment of such compensation, information provision obligations of a Member of the Management Board, as well as cases in which the prohibition against competition becomes ineffective. The Supervisory Board may determine the Company’s right to withdraw from a non-competition agreement or the Parties’ rights to terminate a non-competition agreement.

Apart from the remuneration referred to above, the Supervisory Board may additionally, in justified cases, under the Agreement, grant Members of  the Management Board the right to additional benefits.

In the Agreement, the Supervisory Board determines the scope and principles of providing a Member of the Management Board with technical equipment and resources constituting the Company’s assets and necessary for the performance of the function; the Supervisory Board may also determine limits or a manner of determining limits concerning costs incurred by the Company in connection with providing a Member of the Management Board with such equipment and resources as well as a Member’s using such equipment and resources for business purposes.

The total remuneration achieved by the Management Board members in 2024 amounted to PLN 6 375  thousand  (according to PIT11). In cost perspective (including mark-ups and provisions), in 2024 the remuneration cost of all persons who acted as Management Board members of PGE S.A., amounted to PLN 9 510  thousand.