Telia Lietuva

Remuneration Information • Apr 26, 2024

Remuneration report for the year 2023

Introduction

This report describes how the guidelines of the Policy for Remuneration of CEO and Members of the Board of Telia Lietuva, AB (hereinafter 'the Policy') adopted by the Annual General Meeting of Telia Lietuva, AB (hereinafter 'the Company') shareholders on 28 April 2020, were implemented in 2023. Following the requirement of the Lithuanian Law on Companies the Policy is publicly available at the Company's website https://www.telia.lt/eng/about-us/corporate-governance.

This report has been prepared following the requirements of the Law on Companies of the Republic of Lithuania. The report provides information on remuneration to the CEO and member of the Board of the Company in 2023.

Information on remuneration to the Company's key management is available in Note 27 (Related party transactions) of the Company's financial statements for the year ended 31 December 2023. Information on the activities of the Remuneration Committee in 2023 is set out in the Corporate Governance part of the Company's Annual Report for the year 2023.

Remuneration of the member of the Board is resolved annually by the Annual General Meeting of the Company's shareholders.

Key developments

During 2023, the Company's revenue grew by 7.2% and amounted to EUR 476.6 million (2022: EUR 444.6 million). EBITDA increased by 12% and amounted to EUR 165.2 million (2022: EUR 147.5 million). Profit for the period went up by 12.8% to EUR 63.6 million (2022: EUR 56.4 million). The Company's share price and market capitalization went down by 16.1%

The Company's overall performance in 2023 is summarised in Management Report in the Company's Annual Report for the year 2023.

As of 28 February 2023, Dan Strömberg resigned from position of CEO of Telia Lietuva, and the Board has appointed Giedrė Kaminskaitė-Salters as a new CEO of the Company from 1 March 2023.

Remuneration Guidelines

The design of the remuneration system in the Company is consistent and aligned with the Company's strategy as well as long-term goals and interest of the Company, including its sustainability goals, in the following manners:

• remuneration system in the Company is based on fairness and consistency with the responsibilities assigned and the capabilities demonstrated, it ensures balance between long-term and short-term performance criteria,
• a successful implementation of remuneration system ensures that the Company can attract, motivate and retain the best people, enabling the Company to execute its business strategies and serve the Company's long-term interests,
• ensure that contractual terms, and any payments made, are fair to the individual and to the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognized.

Principles of CEO remuneration

The Policy provides that the remuneration package of the CEO consists of:

• (i) the fixed salary,
• (ii) variable pay which are paid out taking into consideration the financial results of the Company and personal performance results of the CEO; and
• (iii) other benefits.

No deferred payments mechanisms are applied to the remuneration of the CEO unless it is agreed otherwise by mutual agreement of the Company and CEO. The maximum amount of the variable pay to the CEO may amount to 50 percent of the CEO's annual salary. The Company may provide other benefits and programs in accordance with market practice which may change from time to time. The CEO may be entitled to a company car, health and care provisions, etc. Premiums and other costs relating to such benefits may amount to not more than 10 percent of the fixed annual cash salary.

CEO remuneration in 2023

No deviations from the guidelines have been decided and no derogations from the procedure for implementation of the guidelines have been made for the CEO. No remuneration has been reclaimed.

Name of CEO	Fixed salary	Variable pay	Other benefits	Total remuneration	Employer's contribution	Daily allowance
Dan Strömberg (till 28-02-2023)	68,309	-	4,171	72,480	1,283	2,207
Giedrė Kaminskaitė Salters (from 01-03-2023)	202,388	-	2,800	205,188	3,632	1,539
Total	270,697	-	6,971	277,668	4,915	3,746

The information about remuneration of CEO of Telia Lietuva, AB paid during 2023 (in EUR):

Dan Strömberg, CEO of the Company till 28 February 2023, from August 2020 till August 2023 was also Senior Vice President & Head of cluster Lithuania, Estonia and Denmark (LED) at Telia Company as well as member of Telia Company Group Executive Management (GEM). Following Telia Company policies members of GEM are not entitled to variable pay.

Variable pay is paid for the Company's financial results and goals achieved during the previous financial year following the Board's approval.

Other benefits (income in kind) implied lease of apartment for Dan Strömberg, who expatriated from his home country Sweden to work in Lithuania, transportation and other. Other benefits amounted to 6.1 per cent of Dan Strömberg's and 1.4 per cent of Giedrė Kaminskaitė-Salters' fixed CEO's salary. Following the Law, the employer's contribution to Social Insurance Fund in 2023 amounted to 1.77 per cent of the employee's remuneration. In addition, in case of Dan Strömberg the Company had to contribute a difference, if any, following the agreement of Double taxation between the Republic of Lithuania and the Kingdom of Sweden. The Company does not offer any share-related incentive plans to the CEO.

The CEO is also offered a standard benefits package under the same terms and conditions as for all employees of the Company. The package includes such benefits as the additional health insurance, contributions to the third pillar pension fund (optional) and others. During 2023 the Company's contribution to Giedrė Kaminskaitė-Salters' third pillar pension fund amounted to EUR 5,475.

Principles of members of the Board remuneration

The Policy states that the General Meeting may decide to make payments for the members of the Board, according to the provisions of the Law on Companies of the Republic of Lithuania. Members of the Board who are employees of Telia Company AB, a controlling shareholder holding 88.15 per cent the Company's shares, get remuneration according to the signed employment contracts with their respective employers. No additional payments for their activities as members of the Board (tantiemes) are made to them by the Company. The Company only remunerates independent members of the Board, who receive a fixed annual payment. The General Meeting decides on the exact amount of such a payment, while approving the distribution of profit. Such payments are not treated as employment related income, instead they are payments for the activities of the member of the Board (tantiemes). The payments to the independent members of the Board are set by taking into account relevant information from comparable companies (market benchmark).

Remuneration of members of the Board in 2023

Following the Policy that provides that members of the Board that are employed by Telia Company AB, a largest shareholder of the Company, are not entitled to any remuneration from the Company, only two independent members of the Board – Dovilė Grigienė and Mindaugas Glodas – by decision of the Annual General Meeting in 2023 received tantiemes (annual payment) for the year 2022: Dovilė Grigienė (resigned from the Board on 15 December 2022) – EUR 7,500 and Mindaugas Glodas – EUR 17,500. No other remuneration or pay-outs from the Company to the Board members was allocated.

Name of the Board member	Member of the Audit Committee	Member of the Remuneration Committee	Employed by Telia Company	Independent member of the Board	Annual payment (tantiemes)	Other pay outs
Dan Strömberg*	-	-	X**	-	-	-
Agneta Wallmark	X	-	X	-	-	-
Claes Nycander	-	X	X	-	-	-
Hannu-Matti Mäkinen	-	X	X	-	-	-
Leda Iržikevičienė*	X	-	-	X	-	-
Mindaugas Glodas	X	X	-	X	17,500	-
Dovilė Grigienė***	X	-	-	X	7,500	-

The information about remuneration of Telia Lietuva, AB Board members paid during 2023 (in EUR):

* Member of the Board from 16 March 2023

** Till August 2023 Dan Strömberg was Senior Vice President & Head of cluster Lithuania, Estonia and Denmark (LED) at Telia Company

*** Resigned from the Board on 15 December 2022

Comparative information on the change of remuneration and the Company's performance

The information on change of remuneration and the Company's performance (in thousands of EUR):

Year	Remuneration of CEO	The Company's profit for the period	Average employee salary (EUR)
2020	561	55,914	1,864
change	-46 (-8.3%)	+894 (+1.6%)	+240 (+12.9%)
2021	515	56,808	2,104
change	-62 (-11.9%)	-410 (-0.7%)	+253 (+12.0%)
2022	453	56,398	2,357
change	-175 (-38.6%)	+7,196 (+12.8%)	+245 (+10.4%)
2023	278	63,594	2,602