Powszechny Zaklad Ubezpiecze? Spólka Akcyjna : Report on remuneration of members of the Management Board and Supervisory Board of PZU SA for 2022

Attachment to the resolution adopted by the PZU SA Shareholder Meeting on 7 June 2023

REPORT ON COMPENSATION FOR PZU SA MANAGEMENT BOARD AND SUPERVISORY BOARD MEMBERS IN 2022

Table of contents
1.	Introduction	2
1.1 Changes in the composition of the Management Board	2
1.2 Changes in the composition of the Supervisory Board	3
2.	Management Board	5
3.	Supervisory Board	9
4.	Compliance with the adopted compensation policy	11
5.	Criteria for results	12

6. Changes of compensation of Management Board and Supervisory Board members, PZU

	results and average compensation of PZU employees other than Management Board or
	Supervisory Board members, over the five most recent financial years	13
7.	Information on the number of awarded or offered financial instruments	16
8.	Information on the use of the possibility to reclaim variable compensation components ....	16

9. Information on departures from the procedure for implementing the compensation policy

and temporary exceptions to the application of the compensation policy

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10. Pecuniary or non-pecuniary benefits granted to relatives of Management Board and

Supervisory Board Members

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11. Information on taking into consideration a resolution adopted by the Shareholder Meeting

to issue an opinion on the previous report on compensation of Management Board and
Supervisory Board Members	16

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1. Introduction

The report presents a review of compensation, including any benefits, regardless of their form, received by each Management Board and Supervisory Board member of Powszechny Zakład Ubezpieczeń Spółka Akcyjna (hereinafter referred to as "PZU SA" or the "Company").

The duty to prepare the report follows from Article 90g of the Act on Public Offerings and the Conditions for Offering Financial Instruments in an Organized Trading System and on Public Companies of 29 July 20051 (hereinafter referred to as the "Act"), pursuant to which a company's supervisory board is obligated to prepare every year a report on compensation of management board and supervisory board members.

The document takes into consideration the "Compensation Policy for the PZU SA Management Board and Supervisory Board Members" (hereinafter referred to as the "Compensation Policy"), adopted on 26 May 2020 with resolution no. 36/2020 by the Company's Ordinary Shareholder Meeting; the Compensation Policy defines in particular:

1. a description of fixed and variable compensation components that may be granted to the Management Board Members and Supervisory Board Members and their mutual proportions;
2. the period for which contracts are executed with Management Board Members and specification of the periods and terms and conditions for terminating them;
3. a description of measures taken to avoid conflicts of interest connected with the compensation policy or management of such conflicts of interest.

In 2022, the changes in the composition of the PZU SA Management Board and Supervisory Board took place as described in items 1.1 and 1.2.

1.1 Changes in the composition of the Management Board

The previous term of office of the PZU SA Management Board spanning three full consecutive financial years from 2020 to 2022, ended as at 31 December 2022.

As at 1 January 2022, the composition of the Management Board was as follows:

1. Beata Kozłowska-Chyła - President of the Management Board;
2. Ernest Bejda - Management Board Member;
3. Małgorzata Kot - Management Board Member;
4. Krzysztof Kozłowski - Management Board Member;
5. Tomasz Kulik - Management Board Member;
6. Maciej Rapkiewicz - Management Board Member;
7. Małgorzata Sadurska - Management Board Member;
8. Krzysztof Szypuła - Management Board Member.

On 4 February 2022, Krzysztof Szypuła tendered his resignation from the PZU SA Management Board.

1 consolidated text: Journal of Laws of 2022, Item 2554

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As a result, as of 5 February 2022, the composition of the PZU SA Management Board was as follows:

1. Beata Kozłowska-Chyła - President of the Management Board;
2. Ernest Bejda - Management Board Member;
3. Małgorzata Kot - Management Board Member;
4. Krzysztof Kozłowski - Management Board Member;
5. Tomasz Kulik - Management Board Member;
6. Maciej Rapkiewicz - Management Board Member;
7. Małgorzata Sadurska - Management Board Member.

On 27 April 2022, the PZU SA Supervisory Board appointed Piotr Nowak as a Member of the PZU SA Management Board, effective as of 28 April 2022.

Accordingly, from 28 April 2022 the Management Board composition was as follows:

1. Beata Kozłowska-Chyła - President of the Management Board;
2. Ernest Bejda - Management Board Member;
3. Małgorzata Kot - Management Board Member;
4. Krzysztof Kozłowski - Management Board Member;
5. Tomasz Kulik - Management Board Member;
6. Piotr Nowak - Management Board Member;
7. Maciej Rapkiewicz - Management Board Member;
8. Małgorzata Sadurska - Management Board Member.

On 16 December 2022, the PZU SA Supervisory Board appointed the PZU SA Management Board for the next joint office spanning financial years from 2023 to 2025, effective as of 1 January 2023. The following were elected for the Management Board of the new term of office: Beata Kozłowska-Chyła, Ernest Bejda, Małgorzata Kot, Krzysztof Kozłowski, Tomasz Kulik, Piotr Nowak, Maciej Rapkiewicz and Małgorzata Sadurska.

1.2 Changes in the composition of the Supervisory Board

The previous term of office of the PZU SA Supervisory Board spanning three full consecutive financial years from 2020 to 2022, ended as at 31 December 2022. The mandates of Supervisory Board Members will expire not later than on the date of the Shareholder Meeting approving the financial statements for the last full financial year of their term, i.e. for 2022.

As at 1 January 2022, the composition of the PZU SA Supervisory Board was as follows:

1. Paweł Mucha - Supervisory Board Chairman;
2. Paweł Górecki - Supervisory Board Deputy Chairman;
3. Robert Śnitko - Supervisory Board Secretary;
4. Marcin Chludziński - Supervisory Board Member;
5. Agata Górnicka - Supervisory Board Member;
6. Robert Jastrzębski - Supervisory Board Member;
7. Elżbieta Mączyńska-Ziemacka - Supervisory Board Member;
8. Krzysztof Opolski - Supervisory Board Member;

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1. Radosław Sierpiński - Supervisory Board Member;
2. Józef Wierzbowski - Supervisory Board Member;
3. Maciej Zaborowski - Supervisory Board Member.

On 31 August 2022, Paweł Mucha submitted his resignation as the Chairman of the PZU SA Supervisory Board and as a member of the PZU SA Supervisory Board.

On 1 June 2022, the PZU SA Extraordinary Shareholder Meeting appointed Piotr Wachowiak to the PZU SA Supervisory Board.

As a result, as of 1 September 2022, the composition of the PZU SA Supervisory Board was as follows:

1. Paweł Górecki - Supervisory Board Deputy Chairman;
2. Robert Śnitko - Supervisory Board Secretary;
3. Marcin Chludziński - Supervisory Board Member;
4. Agata Górnicka - Supervisory Board Member;
5. Robert Jastrzębski - Supervisory Board Member;
6. Elżbieta Mączyńska-Ziemacka - Supervisory Board Member;
7. Krzysztof Opolski - Supervisory Board Member;
8. Radosław Sierpiński - Supervisory Board Member;
9. Piotr Wachowiak - Supervisory Board Member;
10. Józef Wierzbowski - Supervisory Board Member;
11. Maciej Zaborowski - Supervisory Board Member.

On 27 October 2022, the PZU SA Supervisory Board appointed Robert Jastrzębski to the position of the Chairman of the PZU SA Supervisory Board.

Accordingly, from 27 October 2022 to 31 December 2022, the composition of the PZU SA Supervisory Board was as follows:

1. Robert Jastrzębski - Supervisory Board Chairman;
2. Paweł Górecki - Supervisory Board Deputy Chairman;
3. Robert Śnitko - Supervisory Board Secretary;
4. Marcin Chludziński - Supervisory Board Member;
5. Agata Górnicka - Supervisory Board Member;
6. Elżbieta Mączyńska-Ziemacka - Supervisory Board Member;
7. Krzysztof Opolski - Supervisory Board Member;
8. Radosław Sierpiński - Supervisory Board Member;
9. Józef Wierzbowski - Supervisory Board Member;
10. Piotr Wachowiak - Supervisory Board Member;
11. Maciej Zaborowski - Supervisory Board Member.

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2. Management Board

The table below presents a review of compensation of PZU SA Management Board Members for 2022. The table includes persons discharging functions in the Company's Management Board for a part of or the entire reporting period. Pursuant to the Compensation Policy in force at PZU SA, the compensation of the Management Board Members is presented split out into the fixed part and the variable part. The table distinguishes between the value of fixed compensation paid in 2022 and the value of additional benefits received by the Management Board Members, broken down into training and other benefits, either pecuniary or non-pecuniary.

The status of the PZU Group as the only financial conglomerate (made up of insurance undertakings, banks, mutual and pension funds as well as companies operating in diverse areas of the economy and in international markets) obligates it to manage its assets correctly and effectively. Furthermore, the status of a public company significant for the Polish economy and the financial market translates into the Management Board Members' duty to continue to improve their knowledge and qualifications pertaining to the business activity of the Company and the whole PZU Group. For this reason, the Company finances its management's participation in domestic and foreign training courses, achieving in practice a direct advantage from expended funds through having highly-qualified management staff, which as a result serves the achievement of the objectives set by the Supervisory Board in the conditions of strong competition and the unfavorable investment environment. The financing also increases the trust of existing shareholders and enables the acquisition of new ones, both in Poland and abroad. It also serves the implementation of the principles of adequacy defined by legal regulations and expectations of the Polish Financial Supervision Authority.

Apart from fixed compensation, the list below includes the amount of variable compensation disbursed in 2022, with a breakdown into deferred and non-deferred variable compensation. Detailed rules for setting the amount of variable compensation are described more extensively in sections 4 and 5 of the report. When setting the amount of variable compensation due for 2022, taken into consideration was the level of achievement of management objectives, including:

1. improvement of economic and financial ratios, such as: financial result attributed to the parent company, return on equity (ROE),
2. taking activities taking into consideration social interests, including such that make the Company contribute to environmental protection,
3. increase in the value of the Group, i.e. the degree of attainment of the key metrics set forth in the PZU Group Strategy describing the value of the PZU Group, including: net financial result of the banking segment attributed to the PZU Group, revenues of PZU Zdrowie SA, the PZU Group's share in the market of non-life insurance, operating margin of group and individually continued insurance.

The Company finances a pension scheme only for its employees, therefore it does not grant Management Board Members or Supervisory Board Members any pension packages.

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