1. Purpose
This Compensation Policy (the “Policy”) is designed in accordance with the laws and regulations in force in Argentina, the Bylaws and the Rules of the Nomination and Compensation Committee (the “Committee”), and it will provide guidance on the principles pursuant to which the compensation payable to the members of the Board of Directors of Pampa Energía S.A. (“Pampa”) will be made up and effected. It will be used by the Shareholders’ Meeting, the Board of Directors and the Committee as standard practice, and it may be amended as the case so requires based on the circumstances surrounding the individual performance of each member of the Board in each fiscal year. The Policy will be disclosed at Pampa’s Investor Relations website.
2. Legal Framework
2.1. Pursuant to the Argentine Business Organization Law No. 19,550, as amended, (the “ABOL”), the maximum amount of compensation that Board members may benefit for any reason shall not exceed twenty-five percent (25%) of profits.

2.2. Such maximum amount will be limited to five percent (5%) if no dividend is distributed to the shareholders, and it will be increased pro rata based on the distribution, up to such cap if all profits are distributed.

2.3. For purposes of application of this provision, the values and limits will be calculated in accordance with the rules of the Argentine Securities Commission.

2.4. If any such limits are exceeded, compensation may be disbursed, provided that it is complied with the ABOL.

3. Shareholders’ Meeting
3.1. On an annual basis, the Board of Directors will propose to the Shareholders’ Meeting an aggregate amount of fees for all Directors for analysis. The Shareholders’ Meeting may authorize payment of fees in advance during the course of the fiscal year. If the so payment in advance exceeds the amount eventually approved by the Shareholders’ Meeting upon discussing the fiscal year, any excess amount shall be returned.

3.2. The compensation payable to the Board members will be consistent with compensation received by Directors at other comparable local companies. For such purposes, the aggregate amount will be previously submitted to the Committee for an opinion.

3.3. A fixed amount will be established to be payable to each Director. It may vary based on the tasks performed by each member within Pampa’s organization. Should a Director performing executive functions, he or she may receive additional amounts for his or her services as Pampa’s employee, in the form of a fixed or variable payment scheme or payable in stock or ADRs of Pampa. The total compensation to be approved by the Shareholders’ Meeting shall take into account these amounts pursuant to the rules of the Argentine Securities Commission.

3.4. The fees paid to the directors will be adjusted at least annually in accordance with an average of indexes reflecting changes in prices and on a comparative basis taking into account market adjustments.

4. Expenses and Reimbursement
Pampa will reimburse the Board members for any expenses incurred as a result of performance of their functions subject to standards of reasonableness, responsibility and timing, upon approval by the Chair of the Board of Directors in accordance with the procedures established for such purposes.
5. Miscellaneous
5.1. This document will be effective as from the date of approval by the Board of Directors.

5.2. If any amendments are made to the Legislation, the Rules of the Argentine Securities Commission or Pampa’s Bylaws, such changes will have effect on the relevant parties in the event of any inconsistency within this document.