Tennessee Valley Authority

This Compensation Discussion and Analysis ("CD&A") provides information on the objectives, goals, and structure of TVA's executive compensation program and the 2025 compensation awarded to TVA's CEO and CFO, TVA's retired CEO and CFSO, the three other most highly compensated employees serving as executive officers at the end of 2025, and the two most highly compensated employees who served as executive officers during 2025 but were not serving as executive officers at the end of 2025. Collectively, these officers are TVA's 2025 Named Executive Officers ("NEOs"):

Notes

(1) Mr. Moul was named President and Chief Executive Officer effective April 9, 2025.

(2) On January 29, 2025, Mr. Lyash gave notice to the TVA Board of his intent to retire. The TVA Board conducted a search for a new CEO, and Mr. Moul was selected effective April 9, 2025. Mr. Lyash assisted with the CEO transition and retired effective May 1, 2025.

(3) Mr. Rice was named Senior Vice President and Chief Financial Officer effective January 27, 2025, and his title changed to Executive Vice President and Chief Financial Officer effective July 28, 2025.

(4) Mr. Thomas was named Executive Vice President and Chief Financial and Strategy Officer ("CFSO") in June 2021 and held the Chief Financial Officer position since June 2010. He retired on March 8, 2025.

(5) Mr. Rausch was named Executive Vice President and Chief Nuclear Officer in October 2018. On July 14, 2025, Mr. Rausch informed Mr. Moul of his intention to separate from service no later than March 1, 2026. As of September 30, 2025, Mr. Rausch was not performing the functions of an executive officer.

(6) Mr. Fountain separated from service from TVA on June 1, 2025.

Executive Summary

Financial Performance Highlights Related to Incentive Plans. For 2025, the scorecard results for the Executive Annual Incentive Plan ("EAIP") were 145.6 percent of the target opportunity, except for the retired CEO, for whom the scorecard results were 114.8 percent. The following factors contributed to overall performance:

•Achieved top decile performance in Serious Injury Incident Rate;

•Remained in sound financial health;

•Strong combined cycle, hydro, and coal reliability performance achieved during record demand peaks; and

•Lower than threshold Nuclear Performance Indicator due to unplanned outages and derates at all sites.

In addition, for the three-year performance cycle ending September 30, 2025, the TVA Board approved a Long-Term Performance (“LTP”) payout of 98 percent of the target opportunity for all participants except for the retired CEO. For the retired CEO, the TVA Board approved a payout of 83 percent, which reflects the LTP Scorecard range of 0 percent to 150 percent for the retired CEO. The following factors contributed to overall performance:

•Maintained competitiveness in total effective power rates;

•Strengthened the grid with several enhancements, including installations of 114 miles of transmission line and 249 miles of fiber;

•Strong transmission system reliability performance;

•Strong customer survey results; and

•Lower than threshold External Performance Indicators for the TVA Nuclear Fleet due to unplanned outages and derates at all sites.

Changes to Compensation Plans. On January 30, 2025, TVA amended and restated the EAIP to eliminate the use of the corporate multiplier and to authorize the TVA Board to utilize a standard discretionary range to adjust the scorecard achievement by plus or minus 20 percent beginning with the 2025 performance cycle. This standard discretionary range allows the TVA Board to account for extraordinary events or significant occurrences that impact TVA’s performance, among other things.

In addition, on March 25, 2025, in connection with approving the appointment of Mr. Moul as President and CEO, the TVA Board approved amendments to the EAIP, the Long-Term Incentive Plan ("LTIP"), and the Executive Severance Plan

(“ESP”) that will impact payouts under these plans to any CEO appointed by the TVA Board on or after March 25, 2025, which includes Mr. Moul.

•EAIP. The EAIP was amended to (1) increase the scorecard achievement range for the CEO from (a) 0% to 150% to (b) 0% to 200% and (2) increase the maximum payout for the CEO from 150% to 225% of the CEO’s target EAIP award.

•LTIP. The LTIP was amended to (1) increase the scorecard achievement range for the CEO from (a) 0% to 150% to (b) 0% to 200% and (2) increase the maximum LTP award for the CEO from 150% to 200% of the LTP grant unless a different maximum is approved by an authorized party.

•ESP. The ESP was amended to provide that the cash separation payment for the CEO will be calculated by multiplying the severance multiple by (a) the sum of annual salary and target EAIP rather than (b) annual salary.

These changes are designed to align the scorecard achievement ranges and maximum awards for the CEO under the EAIP and LTIP, as well as the formula for calculating cash severance payments, with those applicable to other executives.

Departure of NEOs. During 2025, Mr. Lyash and Mr. Thomas both retired, Mr. Fountain's tenure ended, and Mr. Rausch announced his intention to separate from service in 2026. See Potential Payments on Account of Resignation, Retirement, Termination without Cause, Termination with Cause, Death, or Disability for information regarding amounts that these individuals received or will receive in connection with their separation from service.

TVA's Executive Compensation Philosophy

TVA has a public mission — one that is uniquely focused on serving the people of the Tennessee Valley and making their lives better. TVA's pay philosophy aims to strike a balance by competing with investor-owned utilities ("IOUs") to attract, retain, and motivate highly qualified and committed executives while also fulfilling its commitments to the public power mission.

TVA’s Compensation Plan as adopted by the TVA Board is designed to:

•Align compensation with TVA performance and productivity improvement.

•Set performance goals that are aligned with TVA's strategic priorities.

•Provide market-based, competitive compensation levels so TVA can attract, retain, and motivate highly competent employees. Total direct compensation ("TDC"), which includes annual cash and short-term and long-term incentives, generally is set by considering several factors, including reference to the median (50th percentile) of the relevant labor market, as well as factors such as individual performance, experience, and internal equity. Executives may be positioned above or below the median based on labor market conditions and other factors such as tenure in the role. See Establishing Competitive Compensation for a discussion of benchmarking practices and competitive compensation decisions at TVA.

•Motivate and reward short-term and long-term performance by providing a mix of short-term and long-term incentives and placing a greater emphasis on long-term incentives for executives in the form of at-risk, performance-based compensation.

The TVA Board follows the requirements of the TVA Act, which include the approval of a compensation plan and other notable considerations:

•Compensation will be based on an annual survey of benchmark compensation for similar positions in private industry, including engineering and electric energy companies, publicly owned electric companies, and federal, state, and local governments; and

•Compensation will take into account education, experience, level of responsibility, geographic differences, and retention and recruitment needs.

TVA's Executive Compensation Program Aligns Pay with Performance

Nearly two-thirds of the CEO's target TDC is performance-based and at-risk, based on achievement of performance goals that further advance TVA's mission and strategic objectives. Approximately half of the other NEOs' target TDC opportunity is performance-based and at-risk. This alignment of compensation with performance also results in compensation being aligned with value delivered to TVA's stakeholders, including LPCs, businesses, and communities, and to the economy of the Tennessee Valley.

Note

(1) CEO Target TDC Compensation Mix chart reflects the mix for Mr. Moul.

(2) Other NEO Target TDC Compensation Mix chart does not include retired, retiring, or former NEOs that are discussed in this document.

Note

(1) Incentive compensation measures align with strategic priorities and are further described below in Total Direct Compensation— Executive Annual Incentive Plan— 2025 EAIP Performance Measuresand —Long-Term Incentive Plan.

Establishing Compensation and Governance Practices

The TVA Board, under the authority of the TVA Act, has responsibility for establishing compensation for TVA employees, including the NEOs. The TVA Board is directed under Section 2 of the TVA Act to establish a plan that specifies all compensation (such as salary and any other pay, benefits, incentives, or other forms of remuneration) for the CEO and TVA employees. The TVA Act also provides that the TVA Board will annually approve all compensation (such as salary and any other pay, benefits, incentives, or other forms of remuneration) for all managers and technical personnel who report directly to the CEO (including any adjustments to compensation). The TVA Board has established a People and Governance Committee (the “Committee”) that is responsible for, among other things, recommending to the TVA Board payouts to the CEO under supplemental compensation plans; reviewing and making recommendations to the TVA Board regarding TVA’s executive and TVA-wide performance incentive plans and the goals and measures for those plans; reviewing the TVA Compensation Plan at least once annually and recommending any changes to the TVA Board; periodically reviewing the compensation and benefits programs for all TVA employees; and reviewing this CD&A and recommending to the TVA Board whether the CD&A should be included in this Annual Report. The CEO is authorized to approve, or delegate to others the authority to approve, compensation matters that are not specifically reserved to the TVA Board, a member of the TVA Board, or the Committee.

The Committee engaged the independent consulting firm Meridian Compensation Partners, LLC ("Meridian") to help evaluate TVA’s 2025 competitive compensation decisions, peer group, and benchmarking processes. The Committee assessed certain independence factors and determined the firm's work raised no potential conflict of interest.

Establishing Competitive Compensation

A fundamental goal of TVA's executive compensation program is to attract, retain, and motivate the highly competent talent necessary to manage TVA's complex operations and achieve superior performance. TVA competes for this talent with large IOUs, and thus TVA needs to offer compensation programs that are competitive with those peers.

Use of Market Data and Benchmarking. TVA generally determines target TDC for executives considering the median of the relevant labor market as well as other factors such as individual performance, experience, and internal equity.

After compiling market compensation for the positions at the beginning of 2025, the Committee, with assistance from Meridian, used the information to:

•Assess target compensation level and incentive opportunity competitiveness; and

•Determine appropriate target compensation levels and incentive opportunities to maintain the desired degree of market competitiveness.

The relevant labor market for the NEOs consists of both IOUs and government/non-profit entities in the energy services industry that have similar revenue and scope as TVA. The process for gathering and analyzing information about executive compensation in the relevant labor market is as follows:

•Each year, the Committee's compensation consultant recommends a relevant labor market peer group for approvalby the Committee. For 2025 compensation opportunities, TVA's market data was determined based on a review of executive compensation survey data and/or public proxy statement data for members of this peer group.

•For the survey-based analysis, TVA referenced a sample from the 2024 Willis Towers Watson ("WTW") Energy Services Executive Compensation Database consisting of (1) 28 IOUs with revenue greater than or equal to $3.0 billion plus (2) 11 additional government/non-profit entities with revenue greater than or equal to $1.0 billion.

•The survey analysis was supplemented with public compensation data from a separate proxy peer group of IOUs. The Committee reviews the proxy peers annually to ensure continued appropriateness, including comparable business content and model, company size measured primarily by revenue and assets, and other refining factors such as generating capacity, number of employees, and number of customers.

Compensation Peer Companies. The following chart outlines the companies that constituted the survey sample and proxy peer group used to benchmark NEO compensation for 2025.