PORTLAND GENERAL ELECTRIC CO /OR/ Stock Compensation Disclosure

NOTE 14: STOCK-BASED COMPENSATION

A total of 4,687,500 shares of common stock were registered for issuance under the Plan, of which 779,123 shares remain available for future issuance as of December 31, 2025.

Outstanding RSUs provide for the payment of one Dividend Equivalent Right (DER) for each stock unit. Each DER represents an amount equal to dividends paid to shareholders on a share of PGE’s common stock and vests on the same schedule as the related RSU. The DERs are settled in shares of PGE common stock valued either at the closing stock price on the vesting date (for performance-based RSUs) or dividend payment date (for all other grants).

Time-based RSUs generally vest over a period of up to three years from the grant date. The fair value of time-based RSUs is measured based on the closing price of PGE common stock on the date of grant and charged to compensation expense on a straight-line basis over the requisite service period for the entire award. The total value of time-based RSUs vested was $10 million for the year ended December 31, 2025, $8 million for 2024, and $9 million for 2023.

Performance-based RSUs vest based on the extent to which performance goals are met at the end of a three-year performance period, subject to adjustment by the Compensation, Culture and Talent Committee of PGE’s Board of Directors. The number of RSUs that may vest under the grants is based on three equally-weighted metrics: i) actual return on equity relative to allowed return on equity (ROE); ii) average EPS growth; and iii) average megawatts of forecast energy from clean or certain low-carbon emitting resources added to PGE’s energy supply portfolio—and relative total shareholder return (TSR) as a modifier to the total of the three equally-weighted metrics for 2023 and 2024 grants. For 2025 grants, ROE is replaced with TSR as one of the three equally-weighted metrics, and there is no modifier. Based on the attainment of the goals, the number of RSUs that vest can range from zero to 200% of the RSUs granted.

For return on equity, average EPS growth, and carbon reduction metrics of the performance-based RSUs, fair value is measured based on the NYSE closing price of PGE common stock on the date of grant. For the TSR portion of the performance-based RSUs, fair value is determined using a Monte Carlo simulation with the following weighted average assumptions:

There is no expected dividend yield used in the valuation, as it is assumed that all dividends distributed during the performance period are reinvested in the Company’s underlying stock. The fair value of performance-based RSUs is charged to compensation expense on a straight-line basis over the requisite service period for the entire award based on the number of shares expected to vest. Stock-based compensation expense was calculated assuming the attainment of performance goals that would allow the weighted average vesting of 98.40%, 115.07%, and 81.65% of awarded performance-based RSUs for the respective 2025, 2024, and 2023 grants, with an estimated 5% forfeiture rate on the grant date.

The total value of performance-based RSUs vested was $8 million for the year ended December 31, 2025, $6 million for 2024, and $7 million for 2023.

Stock-based compensation, included in Administrative and other expense in the consolidated statements of income, was $16 million for the year ended December 31, 2025, $24 million for 2024, and $17 million in 2023. Such amounts differ from those reported in the consolidated statements of shareholders’ equity for stock-based compensation due primarily to the impact from the income tax payments made on behalf of employees. The Company withholds a portion of the vested shares for the payment of income taxes on behalf of the employees. Not included in Administrative and other expenses in the consolidated statements of income, is the net impact from these income tax payments, partially offset by the issuance of DERs, resulting in a charge to shareholders’ equity of $4 million in 2025, 2024 and 2023.

As of December 31, 2025, unrecognized stock-based compensation expense was $9 million, which is expected to be recognized over a weighted average period of one to three years. No stock-based compensation costs have been capitalized.