Sustainability Management

In accordance with PJSC Gazprom’s Corporate Governance CodeApproved by resolution of the annual General Shareholders Meeting of PJSC Gazprom dated June 30, 2017, minutes No. 1., corporate governance and control bodies include: General Shareholders Meeting, Board of Directors, Management Committee, Chairman of the Management Committee, Audit Commission, and PJSC Gazprom’s auditor.

General Shareholders Meeting is the supreme governance body responsible for the most important matters, such as:

• electing the Board of Directors and Audit Commission;
• appointing an auditor;
• resolving on paying (announcing) dividends;
• approving annual reports and annual accounting (financial) statements;
• approving internal documents governing the PJSC Gazprom’s bodies.

The Board of Directors engages in strategic governance and has the following functions:

• defining priority business lines, approving forward-looking plans and major programs, including an annual budget and investment programs;
• outlining risk management, internal audit and control principles and approaches;
• establishing a procedure for transactions;
• approving internal documents on matters within its remit, including sustainability (for instance, the Sustainable Development Policy, Code of Corporate EthicsApproved by resolution of the Board of Directors of PJSC Gazprom No. 2309 dated February 25, 2014 (as amended)., and Anti-Corruption PolicyApproved by resolution of the Board of Directors of PJSC Gazprom No. 2846 dated November 15, 2016 (as amended).).

The composition of the Board of Directors is well-balanced so as to achieve targets that benefit the shareholders and PJSC Gazprom at large. The members of the Board of Directors possess a broad range of competencies to fit the scale and nature of PJSC Gazprom’s operations, including corporate governance and sustainable development. Independent directors take an active part in the Board of Directors’ activities and propose for discussion matters among other things related to corporate governance and sustainability

The number of members of PJSC Gazprom’s Board of Directors, their election and early termination of powers lie within the competence of the General Shareholders Meeting. A shareholder (shareholders) collectively owning at least 2% of PJSC Gazprom’s voting shares may propose nominees to the Board of Directors whose number shall not exceed the established number of directors.

The annual General Shareholders Meeting held on June 30, 2023 resolved to elect 11 directors to PJSC Gazprom’s Board of Directors for a period starting from the election date until the third annual General Shareholders Meeting thereafter.

Sustainable Development Committee of the Board of Directors

Key functions:

• issuing recommendations to the Board of Directors on defining areas of the Gazprom Group’s sustainable development;
• previewing the Gazprom Group’s social impact reports and checking them for completeness, accuracy and reliability;
• issuing recommendations to the Board of Directors on improving information disclosure in the Gazprom Group’s social impact reporting;
• issuing recommendations to the Board of Directors on assessing progress against the Sustainable Development Policy.

Audit Committee of the Board of Directors

Key functions:

• evaluating PJSC Gazprom’s auditor candidates and the auditor’s report;
• ensuring the independence and objectivity of internal and external audits;
• verifying PJSC Gazprom’s financial statements for completeness, accuracy and reliability;
• checking risk management and internal controls for reliability and efficiency.

Nomination and Remuneration Committee of the Board of Directors

Its competencies include:

• issuing recommendations to the Board of Directors on PJSC Gazprom’s remuneration policy for the Board of Directors, incentivizing the members of the Management Committee and the Chairman of the Management Committee, and control over its implementation;
• preview of nomination matters taking into account succession planning for the Management Committee, among other things, issuing recommendations to the Board of Directors as regards nominees to the Chairman of the Management Committee, deputies Chairman of the Management Committee, Management Committee members, candidates to heads of PJSC Gazprom’s structural units performing the role of a Corporate Secretary and other PJSC Gazprom’s key managers specified by the Board of Directors;
• issuing recommendations to the Board of Directors on an annual detailed formalized self-assessment or an external assessment of the Board of Directors, its members and committees, and on defining priority areas for reinforcing the Board of Directors;
• liaising with shareholders, including but not limited to major shareholders, to make recommendations on electing nominees to the Board of Directors upon the latter’s request.

Import Substitution and Technological Development Committee of the Board of Directors

Key functions:

• issuing recommendations to the Board of Directors on defining areas of the Group’s import substitution and technological development activities;
• issuing recommendations to the Board of Directors on assessing the outcomes of import substitution measures;
• previewing proposals on improving relevant documents.

The Board of Directors’ committees are set up and operate in line with respective regulations approved by the Board of Directors:

• Regulation on the Audit Committee of the Board of Directors of PJSC GazpromApproved by resolution of the Board of Directors of PJSC Gazprom No. 2314 dated February 25, 2014, (as amended).;
• Regulation on the Nomination and Remuneration Committee of the Board of Directors of PJSC GazpromApproved by resolution of the Board of Directors of PJSC Gazprom No. 2819 dated September 30, 2016 (as amended).;
• Regulation on the Sustainable Development Committee of the Board of Directors of PJSC GazpromApproved by resolution of the Board of Directors of PJSC Gazprom No. 3627 dated July 13, 2021.;
• Regulation on the Import Substitution and Technological Development Committee of the Board of Directors of PJSC GazpromApproved by resolution of the Board of Directors of PJSC Gazprom No. 3707 dated January 18, 2022..

Persons entitled to convene or request Board of Directors meetings to be convened in accordance with PJSC Gazprom’s Articles of AssociationApproved by resolution of the annual General Shareholders Meeting of OJSC Gazprom dated June 26, 2015, minutes No. 1 (as amended). can make proposals on committees and nominees to the Board of Directors.

The General Shareholders Meeting may resolve to pay remuneration to members of the Board of Directors during their term in office. The remuneration size is determined by the General Shareholders Meeting based on the Board of Directors’ recommendations issued in compliance with the Remuneration Procedure for PJSC Gazprom’s Board of DirectorsApproved by resolution of the Board of Directors of OJSC Gazprom No. 2523 dated April 15, 2015, (as amended). (the “Procedure”). The document also stipulates that the Board of Directors may recommend that the General Shareholders Meeting do not pay remuneration to the members of the Board of Directors or pay less remuneration than calculated under the Procedure. It also provides for paying no remuneration to the Board of Directors if the Board unilaterally decides not to pay interest on bonds with no maturity date issued by PJSC Gazprom’s subsidiary.

Board of Directors members holding public or civil offices receive no remuneration from PJSC Gazprom. The Board of Directors of PJSC Gazprom established the Nomination and Remuneration Committee.

Remuneration to members of PJSC Gazprom’s Board of Directors generally complies with the recommendations of Clause 4.2 of the Russian Corporate Governance CodeRecommended for application by Bank of Russia’s letter No. 06-52/2463 On the Corporate Governance Code dated April 10, 2014.. In particular, remuneration payable to members of the Board of Directors is not linked to their participation in individual meetings of the Board of Directors and Board committees. No additional material incentives are used in the structure of remuneration payable to members of the Board of Directors. No stock option plan is provided for members of the Board of Directors. PJSC Gazprom makes no additional payments or reimbursements in case of early termination of powers of members of the Board of Directors.

Remuneration of the Board of Directors has three components — base, additional, and bonus. The base part is paid for performing the director’s duties, and is the same for all directors.

An additional remuneration is paid for performing additional duties, including sitting on the Board’s committees, acting as Chairman or Deputy Chairman of the Board. An additional remuneration is also fixed and not linked to participation in individual meetings of Board committees.

A bonus is paid for achieving corporate KPIs, such as total shareholder return, return on equity, labor productivity, and an integrated KPI for innovation.

On June 30, 2023, the Annual General Shareholders Meeting resolvedVoting results are included in minutes No. 1 of the General Shareholders Meeting dated June 30, 2023. to pay a remuneration to the members of PJSC Gazprom’s Board of Directors who hold no public or civil office in Russia in the amount recommended by the Board of Directors.

The General Shareholders Meeting may resolve to pay remuneration to members of the Audit Commission during their term in office. The remuneration size is determined by the General Shareholders Meeting based on the Board of Directors’ recommendations issued in compliance with the Remuneration Procedure for PJSC Gazprom’s Audit CommissionApproved by resolution of the Board of Directors of PJSC Gazprom No. 2641 dated December 9, 2015 (as amended)..

Remuneration is paid to Audit Commission members for performing their duties in the corporate year and is linked to a personal contribution indicator which also covers additional duties performed by a member as a Chairman of the Audit Commission. In case of early termination of powers and election of an Audit Commission member at an extraordinary General Shareholders Meeting, remuneration shall take into account the actual participation of such member in meetings. Remuneration shall be paid pro rata the actual period of service.

Audit Commission members holding public or civil offices receive no remuneration.