OKEA : Report on remuneration of leading persons 2023

Report on remuneration of leading persons

2023

Table of contents
1.0.	Introduction	3
2.0.	Elements of remuneration	4
	2.1. Total remuneration for 2023 and 2022	4
	2.2. Shares awarded or due for the reported financial year	7
3.0. Performance in the reported financial year	9
4.0.	Compliance and governance	10
5.0. Annual changes of remuneration and the company's results	13
6.0. Shareholder vote on guideline	14
7.0.	Independent auditor's assurance report	15

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Report on remuneration of leading persons 2023

OKEA ASA presents the 2023 report on remuneration as approved by the board of directors on 4 April 2024. The report is designed to comply with the provisions of the Public Limited Liability Companies Act § 6-16a and b, and 5-6 third paragraph, supplemented by the regulations on guidelines and reports on remuneration of leading personnel, as well as to provide a transparent account of remuneration of leading persons to our shareholders and other stakeholders in line with Norwegian practice and principles for good governance. The report is based on the guideline on remuneration approved by shareholders at the annual general meeting on 11 May 2023 and will be presented to the annual general meeting scheduled for 14 May 2024. The guideline on remuneration is available on www.okea.no/investors. Norwegian legislation also requires that the annual financial report includes certain information on remuneration in the notes to the financial statements. This information is included in note 10 to the financial statements.

1.0. Introduction

2023 was an eventful year for OKEA with solid operational performance from operated assets, while adverse developments on Yme and in relation to the acquisition of Statfjord assets caused large impairments.

OKEA delivered on the growth strategy launched in the fall of 2021 by adding 28% WI in the Statfjord area (PL037, comprising 23.93123% WI in Statfjord Unit, 28% WI in Statfjord Nord, 14% WI in Statfjord Øst Unit and 15.4% WI in Sygna Unit) through a transaction with Equinor. The transaction was completed in December with effective date 1 January 2023.

OKEA's clear ambition is to deliver competitive shareholder returns driven by solid growth, value creation and capital discipline, and the strategy will be centred around three growth levers:

• actively pursue further value creation in current portfolio,
• pursuing mergers and acquisitions to add new legs to the portfolio, and
• considering organic projects either adjacent to existing hubs or pursuing new hubs, dependent on financial headroom and attractive risk-reward.

Ida Ianssen Lundh was appointed interim senior vice president for subsurface on 1 September and filled the position permanently from 1 January 2024, replacing Andrew McCann who left the position on 31 August. Ms Lundh formerly held the position of vice president business development.

There were no other changes in the OKEA senior management team during the year.

At the general meeting held on 11 May 2023 there were several changes to the board of directors and the committees. Grethe Moen and Saowapap Sumeksri was not proposed

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for re-election after their service period ended. In addition to this, Paul Murray stepped down. Additions to the board of directors at the general meeting include Jon Arnt Jacobsen, Phatpuree Chinkulkitnivat and Elizabeth Williamson. For the employee elected and deputy members the following changes was made through election: Sverre Nes, Ragnhild Aas and Per Magne Bjellvåg replaced John Kristian Larsen, Jan Atle Johansen and Anne Lene Rømuld as board members. As deputy members Harmonie Wiesenberg, Jan Atle Johansen and Gry Anette Haga replaced Ragnhild Aas, Jens Arne Megaard and Gro Anita Markussen. Mike Fischer was elected as vice chair of the board at the general meeting.

For more background information see the board of director's report.

The guideline on remuneration approved by the general meeting in 2023 was consistent with previous practice and policies in the company.

1. Elements of remuneration
2. Total remuneration for 2023 and 2022

Table 1a below provides information on total remuneration of each individual leading person split by various components. Compensation in the form of salaries, bonuses and fees is included in the year paid. Other compensation is included as incurred.

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Table 1a - Remuneration of CEO and senior management for the reported financial year

All amounts are in NOK 1000

			1	2	3	4	5	6
		Fixed	Variable	Extra-	Pension	Total	Proportion of
		remuneration	remun-	ordinary	expense	remun-	fixed and variable
					eration	items		eration	remuneration
	Financial	Base		Fringe	One-year				Fixed	Variable
	year	salary		benefits	variable*
Name,
position

Svein J. Liknes,

CEO

Birte Norheim,

CFO

Tor Bjerkestrand,

SVP operations

Dag Eggan,

SVP special projects

Espen Myhra,

SVP strategy, business development & commercial

Knut Gjertsen,

SVP projects & technology

Marit Vik-Langlie,

VP legal

Kjersti Hovdal,

SVP business performance **

Børge Nerland,

SVP drilling & Wells***

Ida Ianssen Lundh,

SVP subsurface****

Andrew McCann,

SVP subsurface*****

Ørjan Johannessen,

VP drilling & wells******

	2023	5 608	342	2 523	0	201	8 673	71 %	29 %
	2022	4 560	337	4 349	0	190	9 435	54 %	46 %
	2023	3 566	18	1 438	0	201	5 222	72 %	28 %
	2022	3 281	113	2 560	0	190	6 144	58 %	42 %
	2023
	3 544	18	1 383	0	201	5 145	73 %	27 %
	2022	3 298	13	2 846	0	190	6 346	55 %	45 %
	2023	3 115	18	1 142	0	201	4 475	74 %	26 %
	2022	2 870	13	1 902	0	190	4 975	62 %	38 %
	2023	3 094	18	1 141	0	201	4 454	74 %	26 %
	2022	2 791	14	2 434	0	190	5 429	55 %	45 %
	2023	3 518	596	1 188	0	201	5 503	78 %	22 %
	2022	3 336	577	2 945	0	190	7 048	58 %	42 %
	2023	2 024	27	763	0	201	3 015	75 %	25 %
	2022	1 851	21	1 888	0	190	3 950	52 %	48 %
	2023	2 902	81	1 078	0	201	4 262	75 %	25 %
	2022	1 673	7	1 523	0	111	3 314	54 %	46 %
	2023
	2 811	18	1 398	0	201	4 428	68 %	32 %
	2022	492	2	138	600	32	1 263	42 %	58 %
	2023
	619	4	585	0	67	1 275	54 %	46 %
	2022	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
	2023	2 058	13	694	0	134	2 900	76 %	24 %
	2022	2 865	13	2 305	0	190	5 373	57 %	43 %
	2023	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
	2022	937	5	262	0	79	1 284	80 %	20 %

• One year variable includes accrued LTIP for 5 months in 2023

• Kjersti Hovdal became part of the senior management on 1 June 2022. Amounts for 2022 therefore include seven months.
• Børge Nerland joined OKEA on 1 November 2022. Amounts for 2022 therefore include two months. One year variable for 2022 includes sign-on bonus.
• Ida Ianssen Lundh became part of the senior management on 1 September 2023. Amounts for 2023 therefore include four months.
• Andrew McCann was part of the senior management until 31 August 2023. Amounts for 2023 therefore include eight months.

****** Ørjan Johannessen was part of the senior management from 1 June 2022 to 1 November 2022. Amounts for 2022 therefore include five months.

1. Fixed remuneration includes base salary. Fringe benefits include housing, pension compensation, free telephone, free broadband connection, newspapers, and health insurance.

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1. Variable remuneration includes the following elements:
2. • The corporate share-based bonus scheme. The relative allocation under the corporate share-based bonus scheme is the same for all employees and can be up to 40% of base salary with a target value of 20%. Reference is made to section 3.0 "Performance in the reported financial year" for further details.
   • Value of exercised warrants in 2022 for senior management.
   • Benefits from the company's long-term share incentive scheme (LTIP) as further described in section 2.22 "Shares awarded or due for the reported financial year".
3. Pension expense is equal to the pension premium paid for each individual. For persons only in senior management for parts of the year pension expense for that period is included.
4. Total remuneration is the total of items 1)-3) above.
5. The proportion of fixed remuneration includes base salary, fringe benefits and pension expense relative to the total remuneration. The proportion of variable remuneration includes and variable remuneration and extraordinary items relative to the total remuneration.

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Table 1b below provides information of remuneration paid to each individual board member including remuneration related to work undertaken in various board sub-committees, in addition to other benefits.

Table 1b - Remuneration of board of directors for the reported financial year*

Remuneration amounts are in NOK 1000

Remuneration amounts are in NOK 1000

				BoD
	Financial		Other	meetings
Board members	year	Fees	benefits**	attended
Chaiwat Kovavisarach,	2023	696	252	14
board chairman	2022	664	252	10
Mike Fischer,	2023	692	168	14
vice chair	2022	573	168	10
Rune Olav Pedersen,	2023	616	168	13
board member	2022	583	168	10
Nicola Gordon,	2023	644	168	14
board member	2022	550	168	10
Finn Haugan,	2023	717	168	14
board member	2022	651	168	10
Jon Arnt Jacobsen,	2023	438	168	11
board member	2022	n/a	n/a	n/a
Phatpuree Chinkulkitnivat,	2023	374	168	10
board member	2022	n/a	n/a	n/a
Elizabeth Williamson,	2023	410	168	11
board member	2022	n/a	n/a	n/a
Paul Murray,	2023	177	0	2
board member***	2022	516	168	10
Saowapap Sumeksri,	2023	254	0	3
board member***	2022	541	168	10
Grethe Moen,	2023	184	0	3
board member***	2022	555	168	10

				BoD
Employee elected board	Financial		Other	meetings
members	year	Fees	benefits**	attended
Sverre Nes,	2023	239	97	10
board member	2022	n/a	n/a	n/a
Ragnhild Aas,	2023	220	97	11
board member****	2022	0	0	0
Per Magne Bjellvåg,	2023	220	97	11
board member	2022	n/a	n/a	n/a
Harmonie Wiesenberg,	2023	0	0	0
deputy member	2022	n/a	n/a	n/a
Jan Atle Johansen,	2023	97	0	3
deputy member***	2022	286	97	9
Gry Anette Haga,	2023	0	0	0
deputy member	2022	n/a	n/a	n/a
Anne Lene Rømuld,	2023	105	0	3
board member***	2022	313	97	10
John Kristian Larsen,	2023	113	0	3
board member***	2022	312	97	10
Gro Anita Markussen,	2023	0	0	0
Deputy board member***	2022	11	0	1

• For presentation purposes, the table is changed from 2022 Report on remuneration of leading persons to display earned remuneration instead of paid remuneration in the year

• The column "Other benefits" relates to an additional compensation, in accordance with the company's general meeting on 11 May 2023, to the board of directors with an obligation to purchase OKEA shares. The shares are subject to a 12-monthlock-up period from the date of purchase
• Part of the board of directors until general meeting 11 May 2023
• Deputy board member until 11 May 2023

For split of fees between board meetings and sub-committee meetings, reference is made to table 5b in section 5.0 "Annual changes of remuneration and the company's results".

2.2. Shares awarded or due for the reported financial year

The CEO and senior management were in 2023 eligible to participate in the company's long-term incentive program (LTIP), which purpose was to further align the interests of the company and its shareholders by providing a long-term program to incentivise and retain key employees who the company has identified as being critical for delivering on the company strategy. Under the LTIP, each participant is eligible to be allocated and awarded a number of synthetic restricted stock units (RSUs), each of which will entitle the participant to receive the value equivalent to one share in the company. The participants were allocated a pre-determined number of synthetic RSUs for the three- year duration of the LTIP. Eligibility for the LTIP was assessed by the CEO at the time of allocation and award. The board determined allocation to the CEO, and the CEO determined allocation to other participants. Under the LTIP, 50% of the awarded RSUs will be awarded as a cash amount.

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The remaining 50% may be awarded through shares should the company's share performance outperform a defined group of peers in the 12-month period from 1 August to 1 August each year during the LTIP (first period being 1 August 2022 to 1 August 2023).

Award is contingent upon the person remaining member of senior management, or that terms of the termination of employment being in accordance with LTIP regulations. Shares purchased under the LTIP have a lock-up period of 24 months.

	Table 3 - Shares awarded or due to the Directors for the reported financial year
		The main conditions of share award plans	Information regarding the reported financial year
		During the year
		Speci-	Performance	Award	End of	Shares	Value at	Shares	Shares
		fication	period	date	lock-up	awared	award	awarded	subject to a
		of plan			period		All amounts	and	holding
Name,							are in NOK	unvested	period
						1000
position							at year end
Svein Jakob Liknes,		LTIP	2022	09.06.22	09.06.23	25 000	2 949	25 000	25 000
CEO
Birte Norheim,		LTIP	2022	09.06.22	09.06.23	13 800	1 628	13 800	13 800
CFO
Tor Bjerkestrand,		LTIP	2022	09.06.22	09.06.23	9 200	1 085	9 200	9 200
SVP operations
Dag Eggan,		LTIP	2022	09.06.22	09.06.23	9 200	1 085	9 200	9 200
SVP special projects
Espen Myhra,		LTIP	2022	09.06.22	09.06.23	13 750	1 622	13 750	13 750
SVP strategy, business
development & commercial
Knut Gjertsen,		LTIP	2022	09.06.22	09.06.23	17 250	2 035	17 250	17 250
SVP projects & technology
Marit Vik-Langlie,		LTIP	2022	09.06.22	09.06.23	11 500	1 357	11 500	11 500
VP legal
Kjersti Hovdal,		LTIP	2022	09.06.22	09.06.23	13 750	1 085	13 750	13 750
SVP business performance
Børge Nerland,		LTIP	2022	N/A	N/A	N/A	N/A	N/A	N/A
SVP drilling & wells
Ida Ianssen Lundh,*		LTIP	2022	N/A	N/A	N/A	N/A	N/A	N/A
SVP subsurface
Andrew McCann, **		LTIP	2022	09.06.22	09.06.23	12 560	1 492	12 560	12 560
SVP subsurface
						126 010	14 339	126 010	126 010

• Not part of senior management in earnings period for LTIP
  ** Not part of senior management at time of award

Under the LTIP scheme described under section 2.2 applicable for 2023 and onwards each participant is awarded a cash amount corresponding to an amount of synthetic RSU's, including a performance element which if met is awarded as cash with an obligation to purchase OKEA shares. In the table 3b below the variable remuneration of senior management is for transparency set out in a OKEA specific table, showing LTIP, corporate bonus scheme and cash awarded for purchase of shares under the purchase obligation pursuant to both the LTIP and the corporate bonus scheme.

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Table 3b - Variable remuneration to senior Management under 2023 LTIP and corporate bonus scheme

	All amounts are in NOK 1000
Svein J. Liknes,		2023
CEO
Birte Norheim,		2023
CFO
Tor Bjerkestrand,		2023
SVP operations
Dag Eggan,		2023
SVP special projects
Espen Myhra,		2023
SVP strategy, business development & commercial
Knut Gjertsen,		2023
SVP projects & technology
Marit Vik-Langlie,		2023
VP legal
Kjersti Hovdal,		2023
SVP business performance
Børge Nerland,		2023
SVP drilling & Wells
Ida Ianssen Lundh,		2023
SVP subsurface
Ørjan Johannessen,		2023
VP drilling & wells
Andrew McCann,		2023
SVP subsurface

LTIP*

• 143
  618
  573
  427
  427
  414
  298
  400
  680
  158
  n/a
  n/a

Corporate bonus scheme

1 380

820

810

715

714

774

465

678

718

427

n/a

694

Total	Cash used to
purchase shares**

2 523		1 317
1 438
	735
1 383
	712
1 142
	572
1 141
	572
1 188
	602
763
	389
1 078
	554
1 398
	854
585
	213
n/a		n/a
694
	347

• LTIP 2023 explained in section 2.2

• Trade date and share price for shares purchased under purchase obligation (2023) 2023 LTIP: Trade date: 13.09.23. Purchase price: 38.90 NOK/share.
  After tax amount of share purchase 2023: 1.4 MNOK

3.0. Performance in the reported financial year

As a part of its salary system, the company has a bonus scheme applicable for all employees. The relative allocation under the share bonus scheme is the same for all employees and can be up to 40% of base salary with a target value of 20%. The specific criteria (KPIs) for the bonus are determined by the board of directors on an annual basis and are designed to promote the corporate strategy. The bonus awarded is split between cash and shares, where 50% of the awarded bonus is withheld as employee tax, 25% is paid as cash and 25% is awarded in shares.

The bonus amount earned in 2023 for the CEO and the senior management is included in the amount specified in Table 1a as "Variable remuneration - one-year variable".

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The bonus earned in 2023 was 23% and was settled in first half of 2024. While bonus earned for 2022 of 28% was settled in first half of 2023.

Table 4 - Performance in 2023 with bonus payment in 2024

		1	2	3 Information about performance target	4
			Relative	a) Minimum	b) Achieved %		a)
			weighting of the	target/	a) Maximum/	Achieved
			of target
		Description of the performance criteria and type of	performance	threshold	target	performa
Element	Strategic objective	applicable remuneration	criteria	performance		performance	nce
Deliver	Deliver	Severall criteria related to asset performance and
shareholder value	45 %	0 %	13 %	40 %	6.0 %
profitability	profitability
creation
Value accretive	Deliver sustainable	Severall criteria based on the delivery of OKEA's
growth strategy. Addition of reserves, Capex- and	42.5 %	0 %	35 %	40 %	15.0 %
growth	new business	start-up target for projects
Maintain license to	Maintain a safe	Specific targets related to projects, ESG, QHSSE and	12.5 %	0 %	16 %	40 %	2.0 %
operate	working	workforce
environment
Total performance	achieved						23.0 %

4.0. Compliance and governance

The individual elements and the total remuneration of leading persons during 2023 were implemented in line with the guideline on remuneration approved by shareholders at the annual general meeting on 11 May 2023 and as presented in this report. The board and the people and organisation (P&O) committee are satisfied that the company's remuneration principles enable recruitment, motivation and retainment of high calibre senior management capable of achieving the objectives of the company and support the company's strategy, shareholders' long-term interests and sustainable business practices. OKEA's strategy and long-term ambitions are further described in the annual report for 2023 and on the website www.okea.no

About the people and organisation committee (P&O committee) and its role The board has established a charter for the P&O committee, stating its tasks and duties. The charter stipulates that the P&O committee shall:

• Evaluate and recommend the compensation of the company's CEO, administer the company's incentive programmes, and provide advice on general compensation and organisation related matters to the board,
• advice the board on the annual report on the compensation of the senior management team and other leading persons, pursuant to applicable rules and regulations,
• advise the CEO on matters relating to other material employment issues in respect of the senior management, and
• endorse the overall limits for the annual salary adjustments for employees, within the budget set by the board.

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