Remuneration of Members of the Parent Entity’s Bodies

Detailed principles for setting the terms of remuneration of the Management Board Members were established by the Supervisory Board in accordance with “Remuneration Policy for Members of the KGHM Polska Miedź S.A. Management Board and Supervisory Board”, adopted by the General Meeting of Shareholders of KGHM Polska Miedź S.A., in the templates for the management services contracts concluded on behalf of the Company by the Supervisory Board with Management Board Members (set forth in the form of resolutions, separately for the President of the Management Board and for the Vice Presidents of the Management Board).

Total remuneration received on their basis consists of a fixed part in the form of basic monthly remuneration, as well as variable remuneration representing supplementary remuneration for the Company’s financial year.

The fixed monthly remuneration for individual members of the Company’s Management Board amounts to fifteen times (in the case of the President of the Management Board) and fourteen times (in the case of the Vice Presidents of the Management Board) of the average monthly salary in the corporate sector, excluding payments from profit in the fourth quarter of the previous year, announced by the President of the Central Statistical Office.

Variable remuneration depends on the level of achievement of the management goals set by the Supervisory Board for a given financial year and may not exceed 100% of the annual fixed remuneration of the given Manager. In the case of a Manager functioning in the position for a period of less than one reporting year, with the provision that the contract was performed for a period of at least three months, variable remuneration is calculated proportionally.

Payment of variable remuneration is made following the submission by individual members of the Management Board of reports on the achievement of the management goals. Payment of the variable part is contingent on the achievement by a manager of the aforementioned management goals, approval of the Management Board’s report on the activities of the Company and the Company’s financial statements for the prior financial year, and the granting of approval by the General Meeting for the given Management Board Member’s performance of duties. On this basis, the Supervisory Board evaluates the execution of the aforementioned goals and sets the amount of the variable remuneration due.

The management services contracts also regulate issues involving the granting of other benefits deriving from the Remuneration Policy:

The Contracts also provide that if the Management Board Member serves as a member of a body in a subsidiary of the Company within the Group, the Management Board Member will not receive additional remuneration for this function, apart from the remuneration provided for in the management services contract. In addition, the Management Board Member is obligated to inform the Supervisory Board of the possession of shares in publicly-listed companies and to gain its consent for accepting a position or serving in a function in the body of another commercial law company – excluding companies of the Group, the acquisition or possession of shares in another commercial law company, as well as performing work or services on behalf of other entities based on an employment contract, mandate contract or based on any other legal relationship.

The contracts with the Members of the Management Board – both during the period of employment as well as following the period of employment – deal with the question of forbidding competition. In particular, they establish that for a period of six months from the date when employment in the function ceases, the Management Board Member is not allowed to engage in any competing activities. For adherence to the clause on forbidding competitive activities, KGHM pays the Management Board Member compensation throughout the period during which competitive activities are banned in the amount of 50% (and in the case of the President of the Management Board 100%) of the monthly fixed remuneration. The payment of compensation is conditional on the Management Board Member’s having served in the function for at least six months and having provided the Company with an appropriate written declaration.

The remuneration of members of supervisory boards was set on 7 June 2019 by the General Meeting based on the Act dated 9 June 2016 on the terms of setting the remuneration of individuals managing certain companies. According to “Remuneration Policy for Members of the KGHM Polska Miedź S.A. Management Board and Supervisory Board” the amount of monthly remuneration of individual members of the Supervisory Board depends on the function served and is set as 2.2x or twice the average monthly remuneration in the corporate sector excluding payments from profit in the fourth quarter of the previous year, announced by the President of the Central Statistical Office. Members of the Supervisory Board are not remunerated for any month in which they did not attend any of the formally convened meetings for unjustified reasons, which are assessed and qualified by the Supervisory Board.

Apart from the above-mentioned remuneration, Members of the Supervisory Board are not entitled to receive any additional remuneration components, including bonuses or other cash benefits.

According to the Commercial Companies and Partnerships Code, the Company also covers or reimburses costs related to participation in the work of the Supervisory Board.

Detailed information on the amount of remuneration and other benefits for Supervisory Board and Management Board members may be found in the „Report on the remuneration of Members of the Management Board and Supervisory Board KGHM Polska Miedź S.A. for 2022”.

The principles of the remuneration of key managers of KGHM Polska Miedź S.A. – the Executive Directors of the Head Office and the Executive Directors of the Company’s divisions – is set by the Company’s Management Board.