Remuneration of the managing and supervising persons

The solutions assumed in the Policy shall contribute to the execution of the business strategy as well as maintaining the long-term interest and stability of the Company and the Capital Group, specifically by ensuring:

• complete engagement in the fulfilment of functions at the Company;
• incentives to perform the assumed strategy and business plans, with balanced and responsible risk bearing;
• interest in the Capital Group and long-term binding to the Group of high-level specialists;
• the value of remuneration which is adequate to the financial and business results of the Capital Group, including the Company, as well as the level of responsibility;
• attitudes which exclude assumption of excessive risk when fulfilling the functions entrusted within the Company;
• transparency of the remuneration system and lack of discrimination.

The performance of the function of a Member of the Company Management Board takes place through the conclusion of an employment contract and appointment by resolution of the Company Supervisory Board. Management Board Members may be additionally employed based on an employment contract or appointed to act at the Management Board of the Capital Group companies, including within the managed and supervised Operating Segment.

Fixed remuneration is granted in consideration of the analyses of the solutions applied on the market, depending on the financial results generated by the Capital Group and the growth rate of the Company quotations at the Warsaw Stock Exchange.

The variable remuneration of the Management Board Members paid out in 2023 (for the year 2022) comprised: as regards the President of the Management Board/General Director and Management Board Member/Financial Director – annual incentive partly depending on the value of fixed remuneration and EBITDA growth rate (profit on operating activities plus depreciation) and net profit growth rate generated by the Capital Group in the respective reporting year compared to budget assumptions for that year. As regards the Management Board Members supervising the particular operating segments, the variable remuneration partly depended on both the parameters described above for the Capital Group, and the parameters of the supervised operating segment in equal parts.

The rest of the incentive for the Management Board Members depended on non-financial objectives with regard to GHG emissions reduction, performance of projects for local communities and reduction of the Total Recordable Incident Rate (TRIR).

Within the 12 months ended 31 December 2023, a provision was established for the potential incentives for the Management Board Members in reference to 2023, to be paid out in 2024, in the total amount of PLN 9,412,000.

In 2023, the Issuer received a notification from Mr Dariusz Mańko on the donation of 164,363 shares of Grupa KĘTY S.A. to a closely related entity, i.e. Seven Trees Family Foundation, and from Mr Piotr Wysocki on the donation of 51,873 shares of Grupa KĘTY S.A. to a closely related entity, i.e. Wysoccy Family Foundation, about which the Issuer has informed in its current reports.

In accordance with the information provided as at the balance-sheet date, the persons managing the Company held 237,984 ordinary bearer shares of Grupa KĘTY S.A., including: Dariusz Mańko – 164,363 shares (no shares directly and 164,363 shares indirectly through closely related entity of Seven Trees Family Foundation), Rafał Warpechowski – 0 shares, Piotr Wysocki – 51,873 shares (no shares directly and 51,873 shares indirectly through closely related entity of Wysoccy Family Foundation), Tomasz Grela – 21,748 shares.

The Company has been regularly performing incentive plans based on new-issue shares. Information on the current plans may be found in section 8.5 of this report. Within the incentive plan adopted at the Extraordinary General Meeting on 13 December 2023, amending the principles of implementation of the plan which has been initially adopted by the General Meeting on 20 August 2020, the Management Board Members are eligible to acquire:

• 30,000 D series warrants entitling to the take-up of K series ordinary bearer shares, and in that number Dariusz Mańko – 9,000 warrants, Rafał Warpechowski – 7,000 warrants, Piotr Wysocki – 7,000 warrants, and Tomasz Grela – 7,000 warrants;
• 30,000 E series warrants entitling to the take-up of L series ordinary bearer shares, and in that number Dariusz Mańko – 9,000 warrants, Rafał Warpechowski – 7,000 warrants, Piotr Wysocki – 7,000 warrants, and Tomasz Grela – 7,000 warrants, providing that the conditions specified in the plan rules are fulfilled. The fulfilment will be verified upon the approval of financial statements for 2023 by the Annual General Meeting;
• 30,000 F series warrants entitling to the take-up of L series ordinary bearer shares, and in that number Dariusz Mańko – 9,000 warrants, Rafał Warpechowski – 7,000 warrants, Piotr Wysocki – 7,000 warrants, and Tomasz Grela – 7,000 warrants, providing that the conditions specified in the plan rules are fulfilled. The fulfilment will be verified upon the approval of financial statements for 2024 by the Annual General Meeting.

The performance of series E and F warrants acquisition depends on whether the Annual General Meeting passes a resolution on issuing the warrants, conditional share capital increase, and amendment of the Company Articles in that regard.

Within the incentive plan adopted by the General Meeting on 21 June 2023, the Management Board members hold the right to acquire 30,000 A series warrants entitling to the take-up of J series ordinary bearer shares, and in that number Dariusz Mańko – 9,000 warrants, Rafał Warpechowski – 7,000 warrants, Piotr Wysocki – 7,000 warrants, and Tomasz Grela – 7,000 warrants, providing that the conditions specified in the plan rules are fulfilled. The fulfilment will be verified upon the approval of financial statements for 2025 by the Annual General Meeting.

In the reporting year, owing to the fulfilment of the conditions specified in the plan rules, the Management Board Members were vested the rights to acquire D series warrants entitling to the take-up of K series ordinary bearer shares in the number identified in the above paragraph.

However, the Management Board Members did not acquire the said warrants or take-up shares within the incentive plan in the year covered with the report.

The Management Board Members do not possess shares or interest in the Company subsidiaries or affiliates.

A Member of the Supervisory Board may receive remuneration from the Company for the fulfilment of function in the supervising body solely in the form of a fixed, flat-rate monthly gross amount.

The remuneration of the Supervisory Board Members is granted based on relevant resolutions of the Company General Meeting.

The table below presents the value of remuneration paid to the Company Supervisory Board Members in 2022 and 2023, comprising additional in-kind benefits (Employee Capital Plans [PPK] contributions).

The Supervisory Board Members of Grupa KĘTY S.A. do not hold Grupa KĘTY S.A. shares and are not eligible to participate in incentive plans related to the Company shares.

The Supervisory Board Members do not possess shares or interest in the Company subsidiaries or affiliates.

None of the Capital Group companies has commitments related to retirement payments or other payment of similar nature regarding the current or former members of the managing and supervising bodies.