Equinor : 2022 Executive remuneration report

2022 Remuneration report

Corporate executive committee, board of directors and corporate assembly

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Contents

1 PREAMBLE

1.1	Introduction	3
1.2	Letter from the chair of the board
	of directors	3

2 KEY DEVELOPMENTS IN
REMUNERATION - 2022
2.1 Overall company performance in 2022	5
Safety, security and sustainability	5
People and organisation	5
Operations	5
Market	5
Finance	5
2.2 Performance-based modifiers used in
calculating variable pay	6
Threshold for payments under variable
pay plans	6
Company performance modifier	6
2.3 The board of directors' assessment of
the chief executive officer's performance	6

2.4 Summary of targets and achievement of corporate KPIs and goals forming the

basis for annual variable pay

7

2.5	Key developments in corporate
	executive remuneration in 2022	8
	Execution of policy on executive
	remuneration in 2022	8
	Remuneration policy changes	8
	General notes on remuneration elements	8
	Notes on roles and remuneration of
	CEC members in 2022	9
2.6	Derogations and deviations from
	remuneration policy	10
2.7	Right to reclaim ('malus and clawback')	10
2.8	Shareholder feedback on the
	remuneration report for 2021	10
2.9	Remuneration committee activities in 2022	10

3 REMUNERATION AND SHARE OWNERSHIP OF THE BOARD OF DIRECTORS AND CORPORATE ASSEMBLY

3.1	Remuneration of the board of directors	11
3.2	Total number and value of shares held by
	the members of the board of directors	11
3.3	Remuneration of the corporate assembly	12
3.4	Shares held by the members of the
	corporate assembly	12

4 REMUNERATION AND SHARE OWNERSHIP OF THE CEC

4.1	Remuneration of the CEC	13
4.2	Shares awarded or due to the CEC for
	the reported financial year	17
4.3	Total number and value of shares held
	by the CEC	24
4.4	Performance and AVP awarded to the CEC
	members in the reported financial year	25
4.5	Key performance indicators and
	behaviour goals forming the basis for
	AVP for the CEC in 2023	34

5 REMUNERATION AND COMPANY PERFORMANCE FOR 2017-2022

5.1 Comparative tables over the remuneration and company performance compared to

the last five reported financial years	35
Executive remuneration for 2017-2022	35
Employee remuneration and company
performance 2017-2022	38

1. STATEMENT BY THE BOARD OF DIRECTORS ON THE REMUNERATION REPORT
2. INDEPENDENT AUDITOR'S STATEMENT ON THE REMUNERATION REPORT
3. APPENDIX: EXECUTIVE REMUNERATION POLICY 2021

8.1	Remuneration to the board of directors	41
8.2	Remuneration to the corporate assembly	41
8.3	Remuneration to the CEC	42

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1 Preamble

1.1 Introduction

The remuneration report contains information on:

• the remuneration for Equinor's corporate executive committee ("CEC") consisting of the chief executive officer ("CEO") and the executive vice presidents ("EVPs")
• the remuneration for Equinor's corporate assembly and board of directors ("the board")

The remuneration report is proposed by the board of directors, where an advisory vote shall be held by the 2023 annual general meeting ("AGM"), pursuant to the Norwegian Public Limited Liability Companies Act, section 6-16b and regulation 2020-12-11-2730 and the Norwegian Accounting Act section 7-31b.

The remuneration report should be read in conjunction with the remuneration policy, which is included in the Appendix.

1.2 Letter from the chair of the board of directors

On behalf of the board of directors, I present to you Equinor's remuneration report for 2022. Our objective is to provide a comprehensive and transparent overview of the remuneration of the board of directors, the corporate assembly and the corporate executive committee in 2022.

Equinor in 2022

The role of Equinor as a reliable energy provider is more important than ever. The Russian war in Ukraine

has changed the energy markets, reduced energy availability and increased prices. Equinor continued to provide stable flow and record-level production in 2022, with an increased focus on safety in a challenging global environment. High production combined with high price levels resulted in very strong financial results.

Developing new solutions for the energy transition remained a high priority in 2022. Equinor continued strengthening workforce capacity and capabilities both on the Norwegian continental shelf and in locations around the world, ramping up recruitment, strengthening learning activities and focusing on diversity, inclusion and wellbeing.

More details on Equinor's performance results within the different perspectives of our performance assessment are presented further in this report and in Equinor's annual report.

Work on improving the information in the remuneration policy and remuneration report

The Norwegian Ministry of Trade, Industry and Fisheries ("MTIF") that represents Equinor's majority shareholder issued a statement to Equinor which was presented at the 2022 annual general meeting, as follows:

The Ministry of Trade, Industry and Fisheries (MTIF) refers to the State's Guidelines for the Remuneration of Senior Executives in Companies with State Ownership stipulated on 20 April 2021. The MTIF wants to emphasise the state's expectations in the executive remuneration area, including paying due regard to the principle of moderation. The state finds it important that the remuneration of senior executives is competitive, enabling the company to succeed in

recruiting and retaining good executives. At the same time the remuneration shall not be market-leading compared with similar companies, and shall be set with due regard to the principle of moderation. This, among other things, means that the remuneration shall not be higher than necessary to attract and retain the desired expertise. It is neither in the interest of the company, nor the owners, if the company pays more remuneration, including bonus, than necessary. When evaluating moderation, the ratio between the remuneration of executive personnel and other employees in the company may be relevant. The state finds it important that this ratio does not increase without a good justification. Increased difference in the remuneration between executive personnel and other employees in the company may be ill-judged, among other things because it may be harmful to the company's reputation by contributing to unreasonable disparities in the company and society at large. The state finds it important that the board pays due regard to the principle of moderation in determining the total remuneration. The state, as an owner, emphasises transparency associated with executive remuneration. Transparency as regards the formulation, level and development of executive remuneration, including that that the programmes are unambiguous, is important in order to enable owners and other stakeholders to evaluate the executive remuneration. The state, as an owner, will continue the dialogue with Equinor about how the board of directors' executive remuneration policy can be better aligned with the state's expectations in the executive remuneration area, and expects the board of directors to present an updated policy for the 2023 annual general meeting.

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Over the course of 2022, Equinor worked on revising the remuneration policy and remuneration report to address the expectations in the above note, with a particular focus on clarifying the application of the pay-for-performance approach, paying due regard to the principle of moderation and ensuring transparency in the formulation and level of executive remuneration.

The review also included adjustments to the structure, wording and presentation of the information contained in the remuneration policy and remuneration report, aiming for a more logical, modern and user-friendly style for the reader. As of 2022 the remuneration report is presented as a stand-alone document, separate to Equinor's annual report.

The new remuneration policy is presented for the

2023 AGM for approval and will be effective as of the reporting year 2024. The 2022 report is therefore based on the remuneration policy approved in the 2021 AGM.

Equinor executive performance and remuneration in 2022

The general salary increases for the members of the CEC in 2022 were in line with the general salary increase frame in the relevant Equinor entity.

Equinor's strong financial and operational performance in 2022, as well as a strong position compared to peers was reflected in the annual variable pay awards.

An important focus area in 2022 was improving the clarity and consistency in documenting the targets for measuring the performance of the CEC members. Individual performance contracts are in place as of 2022 outlining the respective KPIs and goals used as a basis for assessing results and translating those into annual variable pay awards.

On 12 December, the Norwegian government issued amendments to "The State's Guidelines for the

Remuneration of Senior Executives in Companies with State Ownership (Stipulated by the Ministry of Trade, Industry and Fisheries on 30 April 2021)" ("state guidelines"). Among other things it includes an expectation for state-owned companies in Norway such as Equinor to reduce the maximum rate of bonuses payable to leading personnel from 50% to 25%. Equinor has implemented these changes in the revised policy referred to above.

Changes in the CEC in 2022

• The CEC was expanded on 1 March to formally include the position of EVP Communication held by Jannik Lindbæk (COM).
• Aksel Stenerud joined the CEC on 1 March taking

over as EVP People & Organisation (PO) from Ana Fonseca Nordang who took on another role in the company.

• Geir Tungesvik joined the CEC as EVP Projects, Drilling & Procurement (PDP) on 1 May, taking over from Arne Sigve Nylund who retired from the company on 31 July.
• Hege Skryseth joined Equinor and the CEC as EVP Technology, Digital & Innovation (TDI) on 1 September. She succeeded Elisabeth Birkeland Kvalheim who acted in this role after Carri Lockhart left the CEC on 21 March and resigned from the company on 30 June.

• Torgrim Reitan joined the CEC on 6 October as EVP and chief financial officer (CFO). He succeeded Ulrica Fearn who stepped down from the CEC on 5 October and resigned from the company on 31 December.
• Alasdair Cook resigned from the CEC on 31 December. He is succeeded by Philippe François Mathieu.

The board believes that Equinor is in a strong position to drive the execution of our strategy and take on new challenges with this strong and renewed corporate executive team.

Jon Erik Reinhardsen

Chair of the board of directors

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2 Key developments in remuneration - 2022

2.1 Overall company performance in 2022

The below summarises Equinor's results for 2022 within the five perspectives of our performance assessment, as described in the annual report.

SAFETY, SECURITY AND SUSTAINABILITY

Strategic objective: An industry leader in safety, security and sustainability

The serious incident frequency (SIF) indicator has been stable in 2022 compared to the 2021 result. The development on the total recordable injury frequency (TRIF) ratio indicator was negative compared to 2021. The CO₂ intensity came in well below the target, impacted by high gas production and high regularity from low intensity fields. The scope 1 & 2 greenhouse gas (GHG) net emission reduction forecast is according to plan towards the 2030 target, but it is highly affected by progress of the abatement projects.

PEOPLE AND ORGANISATION

Strategic objective: A values-based and learning organisation enabled by the right capabilities

The result on the 2022 competence indicator is positive compared to 2021. There is still a gap to close towards reaching the target within inclusion. To address the capacity gap around 2,600 new employees have been recruited during 2022. Close follow- up of development in manning level is expected going forward. The global people survey (GPS) shows increasing scores in important areas from 2021 to 2022 such as commitment, motivation and health, safety and environment (HSE). There is however remaining work and adjustments needed to achieve the effects from the new operating model.

OPERATIONS

Strategic objective: A top performing energy company driving the industry transformation

The total equity production of gas and liquids decreased by around 2% from 2,079 boe/d in 2021 to 2,039 boe/d

in 2022. The total gas production increased by around 2.3%, whilst liquid production decreased by around 6%. Gas production from NCS to Europe increased by 8% from 2021 to 2022. The total 2022 production is approximately on par with 2021.

The total power generation from renewables has increased by around 5.6% from 2021 to 2022 (from 1,562 GWh to 1,649 GWh).

MARKET

Strategic objective: a flexible and resilient energy portfolio

We are progressing on our energy transition plan and remain commited to the ambition of net zero. Following the Capital Market Update (CMU) responses, the performance status is well received by the investor market. Equinor's total portfolio value has grown year on year, but slightly less than target. Our oil and gas portfolio continues to be competitive, with break evens for projects coming on stream the next ten years around 35 USD/ boe. We see good progress within low carbon solution (LCS), particularly with RWE, Engie partnerships and Smeaheia licence award.

Within renewables Equinor has an attractive development portfolio, but the targeted accessed offshore wind capacity in 2022 was not achieved.

FINANCE

Strategic objective: A cash generating, profitable and competitive company delivering value to our stakeholders

Equinor ended on top in the peer group¹ ranking on return on average capital employed (RoACE) and ended at number 6 out of 12 on the total shareholder return (TSR) ranking. The financial robustness is still strong and 2022 has shown strong earnings and cash flow from operations.

Cost level is under pressure due to significant inflation in 2022, giving reduced robustness for non-sanctioned projects. Existing contracts for our sanctioned project portfolio are less affected. Organic capex ended below guided level in 2022.

The Exploration & Production Norway (EPN) portfolio has a positive trend in break-even compared to the June assessment, whilst Exploration & Production International (EPI) experience an increase in break-even numbers.

¹ The composition of Equinor's defined peer group can be found on equinor.com

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