Key Provisions of the Remuneration and Compensation Policy for the Executive Body and Other Key Employees

The management incentive system aims to improve the efficiency of individual and collective work and is based on the year‑end KPI achievement results of the Company. The principles of setting up the KPI system, defining a set of indicators, the procedure for their approval and performance monitoring are set out in the Regulations on the KPI SystemRegulations on the KPIs for Awarding Bonuses to the Executives of JSC FPC, approved by the Board of Directors (Minutes No. 9 dated 26 December 2024). The Regulations were developed in pursuance of the Russian Federation Government Order No. 3579‑r dated 28 December 2020 “Methodological Recommendations on the Formation and Application of Key Performance Indicators of Joint Stock Companies, the shares of which are owned by the Russian Federation, and certain non‑profit organisations for the purpose of determining the amount of remuneration for their management personnel” and the Model Regulations on the System of Key Performance Indicators for the Bonus Payments to Managers of the Parent Company's Controlled Entity, approved by Order of OJSC Russian Railways No. 2659/r dated 29 October 2024 “On approving standard provisions governing the incentive system for managers of companies controlled by OJSC Russian Railways”..

The principles, procedure for remuneration and annual bonus payments to executives are set out in the Regulations on the Executive Remuneration SystemRegulations on the Executive Remuneration System of JSC FPC approved by the Board of Directors (Minutes No. 9 dated 26 December 2024). The Regulations were developed in pursuance of Resolution of the Government of the Russian Federation No. 209 dated 13 February 2023 “On the terms of remuneration of managers, their deputies, chief accountants and members of collegial executive bodies of state corporations, state‑owned companies, business entities, shares in the charter capital of which are owned by the Russian Federation” and the model regulation on the system of remuneration of executives of the major shareholder's controlled company, approved by Order of OJSC Russian Railways No. 2659/r dated 29 October 2024 “On approving standard provisions governing the incentive system for managers of companies controlled by OJSC Russian Railways”..

Management remuneration consists of a fixed and a bonus parts. The bonus part depends on the Company's performance for the year and is determined by financial, economic and industry‑related indicators. Its size is based on KPIs, the set and target values of which are reviewed annually by the Strategic Planning, Digital Transformation and Information Technology Committee and approved by the Board of Directors. The current incentive system does not provide for long‑term incentive programmes for the Director General and their deputies.

The decision on whether to award bonuses to management based on the results for the reporting year is made by the Board of Directors based on the KPI achievement report, the conclusion of JSC FPC's Internal Audit Department and recommendations of the Human Resources, Remuneration and Corporate Governance Committee.