ALE

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.)
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x			Definitive Proxy Statement
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o			Soliciting Material Pursuant to §240.14a-12
ALLETE, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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ALLETE, Inc. 30 West Superior Street Duluth, Minnesota 55802

NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS OF ALLETE, INC. ___________________________________________________________________________

Date and Time:						Tuesday, May 9, 2023 10:30 a.m. Central Daylight Time
Location:						The Annual Meeting will be held as a virtual-only webcast. Virtual Annual Meeting Site: www.virtualshareholdermeeting.com/ALE2023
Business Items:						1. To elect a Board of Directors to serve for the ensuing year;
						2. To hold an advisory vote to approve ALLETE's executive compensation;
						3. To hold an advisory vote on the frequency of future advisory votes on ALLETE's executive compensation;
						4. To ratify the selection of PricewaterhouseCoopers LLP as ALLETE's independent registered public accounting firm for 2023; and
						5. To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.
Who Can Vote:						Shareholders of record at the close of business on March 10, 2023
Proxy Voting:						Your vote is important. We encourage you to vote your shares in advance, even if you plan to attend the Annual Meeting. You can vote by proxy as a shareholder of record:
						1. By visiting www.proxyvote.com on the Internet;
						2. By calling, toll-free within the U.S. (800) 690-6903; or
						3. By signing and returning your proxy card if you have received a paper copy of the proxy materials.
						If you hold shares through a broker, bank, or other nominee, you may vote by submitting your voting instructions to your broker, bank, or other nominee.

________________________________________________________________

DEFINITIONS			iii
PROXY STATEMENT			1
FREQUENTLY ASKED QUESTIONS			2
OWNERSHIP OF ALLETE COMMON STOCK			8
Securities Owned by Certain Beneficial Owners			8
Securities Owned by Directors and Management			8
Pledging, Hedging, and Short Sales of Common Stock Prohibited			10
ITEM NO. 1—ELECTION OF DIRECTORS			11
Nominees for Director			11
CORPORATE GOVERNANCE			17
Governance Policies			17
Director Independence			18
Director Independence Determinations			19
ALLETE's Board of Directors			20
Board Diversity and Director Nominations			22
Board Leadership			23
Board Committees			24
Board Role in Risk Oversight			25
Code of Business Conduct and Ethics			26
Shareholder Engagement			26
Political Contributions and Lobbying			26
Sustainability and Corporate Responsibility			27
Meetings of Independent Directors			29
Board Contact With Management and Independent Advisors			29
Board and Committee Evaluation			29
Meeting Attendance			30
Director Continuing Education			30
Share Ownership Guidelines			30
Related Person Transactions			31
Communications between Shareholders and Other Interested Parties and the Board			31
ITEM NO. 2—ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION			32
COMPENSATION DISCUSSION AND ANALYSIS			33
Executive Summary			33
Compensation Philosophy			33
Compensation Practices			33
2022 Performance for Incentive Plans			35
2022 Compensation Decisions			38
Shareholder Advisory Voting on Executive Compensation			51
Compensation Elements: What We Pay and Why			39
Process for Determining Executive Compensation			40
How We Link Executive Pay to Performance			42
Other Guidelines, Policies, Benefits, and Practices			50
Executive Share Ownership Guidelines			50
Compensation Recovery Policy			51

Pledging, Hedging, and Short Sales by NEOs Prohibited			51
Retirement and Other Broad-Based Benefits			52
Perquisites			53
Severance Benefits			53
Tax and Accounting Considerations			54
EXECUTIVE COMPENSATION AND HUMAN CAPITAL COMMITTEE REPORT			55
EXECUTIVE COMPENSATION TABLES			56
Summary Compensation			56
Grants of Plan-Based Awards			58
Grants of Plan-Based Awards Discussion			60
Outstanding Equity Awards			63
Option Exercises and Stock Vested			64
Pension Benefits			64
Pension Benefits Discussion			65
Non-Qualified Deferred Compensation			68
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			69
Estimated Potential Payments Upon Termination Associated with a Change in Control			70
Estimated Potential Payments Upon Termination Due to Retirement, Disability, or Death			71
CEO PAY RATIO			72
PAY VERSUS PERFORMANCE			73
DIRECTOR COMPENSATION			78
ITEM NO. 3— ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION			81
ITEM NO. 4—RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			82
AUDIT COMMITTEE REPORT			83
OTHER BUSINESS			85
Shareholder Proposals for the 2023 Annual Meeting			86

The following abbreviations or acronyms are used in this Proxy Statement. References to "we," "us," and "our" are to ALLETE, Inc.

Abbreviation or Acronym			Term
ACE			ALLETE Clean Energy, Inc.
AIP			ALLETE Executive Annual Incentive Plan
ALLETE, or Company			ALLETE, Inc.
Annual Meeting			Annual Meeting of Shareholders of ALLETE, Inc.
ASC			Financial Accounting Standards Board Accounting Standards Codification
Audit Committee			Audit Committee of the Board
Board, or Directors			ALLETE's Board of Directors
CAGR			Compound Annual Growth Rate
CD&A			Compensation Discussion and Analysis Section of this Proxy Statement
CEO			ALLETE's Chief Executive Officer
CFO			ALLETE's Chief Financial Officer
CG Committee			Corporate Governance and Nominating Committee of the Board
CIC Severance Plan			ALLETE and Affiliated Companies Change in Control Severance Plan
Common Stock			ALLETE Common Stock
Compensation Recovery Policy			ALLETE and Affiliated Companies Compensation Recovery Policy
DE&I			Diversity, Equity, and Inclusion
Deferral Plan I			ALLETE Non-Employee Director Compensation Deferral Plan I
Deferral Plan II			ALLETE Non-Employee Director Compensation Deferral Plan II
Deferral Plans			Deferral Plan I and Deferral Plan II, collectively
ECHC Committee			Executive Compensation and Human Capital Committee of the Board
EEI			Edison Electric Institute
EPS			Diluted Earnings Per Share
ERM			Enterprise Risk Management
ESG			Environmental, Social, and Governance
Exchange Act			Securities Exchange Act of 1934, as amended
LTIP			ALLETE Executive Long-Term Incentive Compensation Plan
NEO			Named Executive Officer
New Energy			New Energy Equity LLC
NYSE			New York Stock Exchange
Pearl Meyer			Pearl Meyer & Partners, LLC
PricewaterhouseCoopers			PricewaterhouseCoopers LLP
PSA			Performance Share Award
RSOP			ALLETE and Affiliated Companies Retirement Savings and Stock Ownership Plan
RSU			Restricted Stock Unit
SEC			Securities and Exchange Commission
SERP			SERP I and SERP II, collectively
SERP I			ALLETE and Affiliated Companies Supplemental Executive Retirement Plan I
SERP II			ALLETE and Affiliated Companies Supplemental Executive Retirement Plan II
Tax Code			Internal Revenue Code of 1986, as amended
TSR			Total Shareholder Return

The virtual Annual Meeting Site is www.virtualshareholdermeeting.com/ALE2023.

We are primarily providing our shareholders internet access to our proxy materials to facilitate prompt delivery of this important information, to reduce the environmental impacts of our Annual Meeting, and to manage costs. On March 10, 2023, we began delivery, primarily by mail, of a Notice of Internet Availability of Proxy Materials to our shareholders and we posted our proxy materials on the website referenced in the Notice of Internet Availability of Proxy Materials: www.proxyvote.com.

Internet: Go to www.proxyvote.com. Follow the instructions to log in and order copies.

Telephone: Call, toll-free in the U.S., (800) 579-1639. Follow the instructions to log in and order copies.

Email: Send an email to sendmaterial@proxyvote.com with your 16-digit control number in the subject line. (Your control number can be found next to the label “Control Number” on your Notice of Internet Availability, proxy card, or voting instruction form.)
The email needs to include:

•Your preference to receive printed materials via the mail or to receive an email with links to the electronic materials;

•If you choose email delivery, you must include the email address to which you want the proxy materials sent; and

•If you would like your election to apply to delivery of material for all future meetings, write the word “Permanent” and include the last four digits of your Social Security Number or
Tax Identification Number in the email.

1.Log onto the Internet at www.allete.com.

2.Click on “Investors.”

3.Click on “Shareholder Services.”

4.Click on “Proxy Electronic Delivery.”

1.Elect a Board of ten Directors to serve for the ensuing year. The Director nominees are:
Bethany M. Owen, Susan K. Nestegard, George G. Goldfarb, James J. Hoolihan,
Madeleine W. Ludlow, Charles R. Matthews, Douglas C. Neve, Barbara A. Nick,
Robert P. Powers, and Charlene A. Thomas;

2.Hold an advisory vote to approve executive compensation;

3.Hold an advisory vote on the frequency of future advisory votes on executive compensation;

4.Ratify the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2023; and

5.Transact such other business as may properly come before the meeting or any adjournments or postponements thereof.

The 2023 Annual Meeting will be conducted solely through a live webcast. There will be no physical meeting location. No advance registration is required to attend the Annual meeting. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/ALE2023 as a shareholder, you must enter the 16-digit control number found next to the label “Control Number” on your Notice of Internet Availability, proxy card, or voting instruction form. If you are a registered shareholder and do not have a control number, you can call ALLETE Shareholder Services at (218) 355-3114 for assistance.

Item 1. "FOR" each Director nominee;

Item 2. "FOR" the advisory approval of ALLETE's executive compensation;

Item 3. To hold an advisory vote to approve executive compensation every "ONE YEAR;"

Item 4.    "FOR" ratification of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2023; and

Item 5.    In accordance with the discretion of the persons acting under the proxy concerning such other business as may properly be brought before the meeting or any adjournments or postponements thereof.

Internet: Vote online at www.proxyvote.com.

Telephone: Vote by calling, toll-free in the U.S., (800) 690-6903.

By Mail: If you would like to vote by mail, please request a paper proxy card in accordance with the instructions contained in the Notice of Internet Availability of Proxy Materials and then complete, sign, and date the proxy card and return it in the postage-paid envelope provided. Your proxy card must be received by May 8, 2023. For shares held in "street name," please use the voting instruction card provided by your broker, bank, or other nominee and mark, sign, date, and mail it back to your broker, bank, or other nominee in accordance with their instructions.

Online During the Annual Meeting: If you are a registered shareholder, you can vote your shares online during the Annual Meeting, although we encourage you to vote your shares in advance of the Annual Meeting even if you plan to attend the Annual Meeting. Voting your proxy electronically via the Internet, by telephone, or by mail does not limit your right to vote at the Annual Meeting.

Securities Owned by Certain Beneficial Owners

Title of Class

Name and Address of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percent of Class1

Common Stock

BlackRock, Inc.2 55 East 52nd Street New York, NY 10055

7,254,952

12.7%

Common Stock

The Vanguard Group3 100 Vanguard Boulevard Malvern, PA 19355

6,208,467

10.8%

The following table shows the shares of Common Stock beneficially owned, as of March 10, 2023, by Directors, nominees for Director, executive officers named in the Summary Compensation Table on page 56, and all Directors, nominees for Director, and executive officers as a group. Except as otherwise indicated, the persons shown have sole voting and investment power over the Common Stock listed.

Securities Owned by Directors and Management
									Other2
			Name of Beneficial Owner			Number of Shares Beneficially Owned1			Restricted Stock Units			Deferred Shares Under the Director Deferred Stock Plan			Total Shares Beneficially Owned for Common Stock Ownership Guideline Purposes			Number of Shares Needed to Meet Common Stock Ownership Guidelines3
Non-Employee			George G. Goldfarb			2,851			—			15,914			18,765			7,047
Directors and			James J. Hoolihan			12,003			—			10,212			22,215			7,047
Nominees for			Madeleine W. Ludlow			15,564			—			4,636			20,200			7,047
Director			Charles W. Matthews			639			—			1,390			2,029			7,047
			Susan K. Nestegard			686			—			7,725			8,411			7,047
			Douglas C. Neve			9,850			—			14,198			24,048			7,047
			Barbara A. Nick			7,515			—			—			7,515			7,047
			Robert P. Powers			664			—			8,188			8,852			7,047
			Charlene A. Thomas			3,091			—			—			3,091			7,047
Named			Bethany M. Owen			15,373			10,388			—			25,761			60,949
Executive			Steven W. Morris			7,945			2,942			—			10,887			19,914
Officers			Margaret A. Thickens			2,906			2,548			—			5,454			6,477
			Nicole R. Johnson			7,293			2,758			—			10,051			6,133
			Patrick L. Cutshall			5,950			2,352			—			8,302			4,913
			Robert J. Adams			12,556			—			—			12,556			—
All Directors, nominees for Director,  and executive officers as a group (15):						115,258

3 The stock ownership guideline amounts shown have been calculated using a Common Stock valuation of $60.31 per share, the closing price on March 10, 2023. The amount shown for non-employee Directors was determined based on the annual cash retainer in effect for Directors as of March 10, 2023. Stock ownership guidelines shown for all NEOs were determined based on the NEO's salary as of March 10, 2023.

Ten Director nominees have been recommended by the CG Committee and nominated by the Board. Each Director elected will serve until the next annual election of Directors and until a successor is qualified and elected, or until the Director's earlier resignation or removal. If any nominee should become unavailable, which is not anticipated, the Board may provide by resolution for a lesser number of Directors, or designate substitute nominees, who would receive the votes represented by proxies.

Unless otherwise directed, all shares represented by proxy will be voted “FOR” the election of the ten nominees for Director named below and on the following pages.

Nominees for Director
			Qualifications and Experience Ms. Owen has served in a wide variety of roles with increasing responsibility over two decades since first joining the Company as an attorney. She has extensive experience with business strategy development and implementation, regulatory policy development and implementation, renewable energy, enterprise risk management, cyber security, information and operations technology strategy, compliance, corporate governance, and leading business transformation. Ms. Owen also serves on a variety of community and non-profit boards. Business Experience •Chair, President, and CEO, ALLETE (Since May 2021) •President and CEO, ALLETE (February 2020 to May 2021) •President, ALLETE (January 2019 to February 2020) •Senior Vice President, Chief Legal and Administrative Officer, and Secretary, ALLETE (2016 to January 2019) •Vice President–ALLETE Information Technology Solutions, Vice President, Minnesota Power, an operating division of ALLETE and President, Superior Water, Light and Power Company, a wholly owned subsidiary of ALLETE (2014 to 2016) •Vice President, Minnesota Power, an operating division of ALLETE and President, Superior Water, Light and Power Company (2012 to 2014) •President, Superior Water, Light and Power Company (2010 to 2012) Other Public Company Boards •None Other •Member, University of Minnesota Foundation Board of Trustees, which oversees and supports fundraising activities for the University of Minnesota's campuses, colleges, and programs, as well as the management and investment of the university's endowed funds (Since 2021)
Bethany M. Owen Board Chair
Age: 57
Director Since: 2019

Nominees for Director
			Qualifications and Experience Ms. Nestegard brings extensive business experience, including audit committee experience, strategy development, enterprise risk management, a background in innovation and disruptive technologies, and experience driving growth through mergers and acquisitions. Ms. Nestegard has a demonstrated passion for supporting women in sciences and corporate leadership. She holds 26 patents in her name. As Lead Director, Ms. Nestegard is an ex officio member of each Board committee. Business Experience •Advisor, True Wealth Ventures, a venture capital fund focusing on investments in women-led businesses in high-growth markets where women are the primary customers (Since July 2017) •President of Global Healthcare, Ecolab, Inc. (NYSE:ECL), a global supplier of water, hygiene, and energy services (2010 to 2012) •Executive Vice President of Global Healthcare, Ecolab, Inc. (2008 to 2010) •Senior Vice President of Research, Development, and Engineering, and Chief Technical Officer, Ecolab, Inc. (2003 to 2008) •More than 20 years' experience with 3M Company (NYSE:MMM) in product development and business unit management, driving revenue expansion through innovation Other Public Company Boards •Hormel Foods, Inc. (NYSE:HRL) (Since 2009) ◦Governance Committee ◦Audit committee (2009 to 2019)
Susan K. Nestegard Lead Director
Age 62
Director Since 2018
Committees Audit Committee (ex officio) ECHC Committee (ex officio) CG Committee (ex officio)
			Qualifications and Experience Mr. Goldfarb is an audit committee financial expert within the meaning of SEC rules. He brings a wealth of business knowledge and executive experience that includes deep ties to and insights into the local and regional economy, as well as extensive national branding experience. Business Experience •Director and Chair Emeritus, Maurices Incorporated, a specialty retailer selling women's apparel in approximately 900 stores and online (March 2021 to present) •President and CEO, Maurices Incorporated (2015 to March 2021) •President, Maurices Incorporated (2011 to 2015) •President and CEO of Value Fashion Segment of Ascena Retail Group, Inc., which included the Maurices and the Dressbarn brands (2016 to January 2018) •Vice Chair, Ascena Retail Group, Inc.'s wholly owned subsidiary, Catherines Stores, Inc. (2015 to 2016) •Chief Operating Officer, Maurices Incorporated (2006 to 2011) •CFO, Maurices Incorporated (2001 to 2006) Other Public Company Boards •None Other •Director, Essentia Health (Since 2019) ◦Board Vice Chair, Planning and Finance Committee Chair, and Audit Committee Member
George G. Goldfarb
Age 63
Director Since 2012
Committee Audit Committee Chair

Nominees for Director
			Qualifications and Experience Mr. Hoolihan is a long-time business and community leader within the Company's electric utility service area. He brings a deep knowledge of the industries and political dynamics of our regional service area, as well as extensive business experience related to serving the large industries in the region. Business Experience •Owner and CEO, Can-Jer Industrial Lubricant, Ltd., which provides industrial supplies and services to mining and railroad industries that operate in Canada (Since 1983) •Owner, JHAC, LLC, a real estate investment company (Since October 2000) •CEO and Chair, Industrial Lubricant Company, which provides industrial supplies and services to mining and railroad industries (2011 to 2017) •President and CEO, Blandin Foundation, a private, philanthropic foundation whose mission is to strengthen communities in rural Minnesota (2004 to 2011) ◦Trustee, Blandin Foundation (Since 2012) ◦Co-trustee for the Charles K. Blandin Residuary Trust (Since 2012) •President, Industrial Lubricant Company (1981 to 2004) Other Public Company Boards •None Other •Served as Elected Mayor of the City of Grand Rapids, Minnesota (1990 to 1995)
James J. Hoolihan
Age 70
Director Since 2006
Committee CG Committee
			Qualifications and Experience Ms. Ludlow brings deep experience with and a sophisticated understanding of investment banking, finance, and accounting. Ms. Ludlow was a senior executive at a public utility and has worked closely with entrepreneurial and diversified businesses. Other areas of expertise include strategy development and execution, mergers and acquisitions, and business transformations. She also is qualified as an audit committee financial expert within the meaning of the SEC rules Business Experience •Founder and Managing Director, West Capital Advisors, LLC, which provides strategic and development advisory services for corporate innovation in private equity transactions (Since 2011) •Principal, Market Capital Partners LLC, Ohio-based investment banking firm serving mid-size-market companies (2009 to 2011) •LudlowWard Capital Advisors, LLC, Ohio-based investment banking firm serving mid-size market companies (2005 to 2009) •Chair, CEO, and President of Cadence Network, Inc., an internet-based provider of utility expense management services (2000 to 2004) •Vice President and CFO of Cinergy Corp., a Cincinnati-based energy company acquired by Duke Energy in 2006 (1997 to 2000) Other Public Company Boards •Director, Ohio National Fund, Inc., a registered investment company with 25 separate investment funds (Since 2012)
Madeleine W. Ludlow
Age 68
Director Since 2004
Committees CG Committee Chair ECHC Committee

Nominees for Director
			Qualifications and Experience Mr. Matthews, an audit committee financial expert within the meaning of the SEC rules, brings extensive financial expertise, strategic leadership experience in the energy industry, as well as risk management and cybersecurity oversight expertise. He has a demonstrated understanding of the importance of serving customers with excellence, creating a more diverse and inclusive workforce, and supporting our communities to foster a more equitable society, all while creating value for shareholders. Mr. Matthews has served on numerous energy industry boards, as well as non-profit organizations. His experiences give him significant insight into environmental, social, and governance matters. Business Experience •President, Peoples Energy, LLC and President and CEO, The Peoples Gas Light and Coke Company and North Shore Gas Company, each of which is a subsidiary of WEC Energy Group Inc. (NYSE:WEC) (2015 to July 2022) •Senior Vice President – Wholesale Energy and Fuels, WE Energies, also a subsidiary of WEC Energy Group (2012 to 2015) •During his more than 40 years in the energy industry, Mr. Matthews also held leadership and other finance and regulatory positions with Mirant Corporation, Southern Company Services, and Exxon Company, U.S.A. Other Public Company Boards •None Other •Director, BMO Financial Corp. and BMO Harris Bank, N.A (Since May 2019) ◦Member, Audit Committee and Human Resource Committee
Charles R. Matthews
Age 66
Director Since 2022
Committees Audit Committee
			Qualifications and Experience Mr. Neve is a certified public accountant and an audit committee financial expert within the meaning of the SEC rules. He brings extensive knowledge of public accounting, corporate reporting, risk management, corporate finance, and compliance. Mr. Neve's background includes broad corporate leadership experience as an executive of a publicly traded company, and as a director, audit committee chair, compensation committee member, and governance committee member for publicly traded and privately held corporations, as well as public and non-profit entities. Mr. Neve also brings experience with mergers and acquisitions, energy industry experience, and renewable energy experience. Business Experience •Executive Vice President and CFO, Ceridian Corp., a Minneapolis-based multinational human resources company (2005 to 2007) •Audit Partner, Deloitte & Touche LLP, a public accounting firm (2002 to 2005)     Other Public Company Boards •None
Douglas C. Neve
Age 67
Director Since 2007
Committees Audit Committee CG Committee

Nominees for Director
			Qualifications and Experience With a career in the electric and gas energy industry that spanned four decades, Ms. Nick brings a wealth of knowledge and skills to the Board. She has extensive leadership, strategic, regulatory, operational, and developmental experience in five Midwest states. Ms. Nick also has strong financial skills and a long, proven record of principled corporate governance. Ms. Nick brings experience with mergers and acquisitions, renewable energy, and business transformations. She also has received a cyber security certification from the National Association of Corporate Directors. Business Experience •CEO, Dairyland Power Cooperative (2014 to July 2020) •President, Minnesota Energy Resources Corporation and President of Michigan Gas Utilities Corporation, both subsidiaries of what was then Integrys Energy Group (NYSE:TEG) and is now WEC Energy Group Inc. (NYSE:WEC) (2012 to 2014) •Senior Vice President of Energy Delivery and Customer Service, Wisconsin Public Service Company and President, Upper Peninsula Power Company, both also subsidiaries of what was then Integrys Energy Group and is now WEC Energy Group Inc. (2007 to 2012) •Vice President of Corporate Services, what was then WPS Resources Corporation (NYSE:WPS), now WEC Energy Group Inc. (2004 to 2007) Other Public Company Boards •None Other •Chair, State of Wisconsin Investment Board, which provides oversight of the eighth-largest pension fund in the United States and the 25th-largest pension fund globally with investments valued at over $120 billion (Since 2015) •Director, Mead & Hunt, a national architecture and engineering firm (Since 2019) ◦Audit Committee ◦Chair, Governance Committee
Barbara A. Nick
Age 65
Director Since 2020
Committees Audit Committee ECHC Committee

Nominees for Director
			Qualifications and Experience Mr. Powers brings extensive and diverse regulated utility experience and strategic leadership, including expertise in strategic planning, executive compensation, mergers and acquisitions, renewable energy, business transformations, and cybersecurity oversight. Mr. Powers was an active member of utility industry associations and worked to recruit technical talent to utilities. Business Experience •Vice Chair and Senior Advisor to the Chair and CEO, American Electric Power Company (NYSE:AEP), one of the largest electric utilities in the United States with more than five million customers in eleven states (January 2017 to August 2017) •Executive Vice President and COO, AEP (2010 to December 2016) •President, AEP Utilities (2008 to 2010) •Executive Vice President, AEP East Utilities (2006 to 2008) •Executive Vice President of Generation, AEP East Utilities (2003 to 2006) •Worked for 16 years with Pacific Gas and Electric Company, rising to Site Vice President and Plant Manager at the Diablo Canyon Nuclear Generating Station; and six years with the Tennessee Valley Authority as a health physicist. Other Public Company Boards •None
Robert P. Powers
Age 69
Director Since 2017
Committees ECHC Committee Chair
			Qualifications and Experience Ms. Thomas brings a breadth of executive leadership skills, including broad strategy design and implementation experiences in industrial and business operations and large-scale human resources operations, having led strategic human resources initiatives for a workforce of more than 525,000 employees worldwide. Ms. Thomas has public company experience, has lead business transformations, and has demonstrated financial acumen. Ms. Thomas has expertise in complex distributed operations and has received an artificial intelligence certification from MIT. Business Experience •Executive Vice President and Chief Diversity, Equity and Inclusion Officer, United Parcel Service, Inc. (NYSE:UPS) (UPS) (January 2021 to October 2022) •Executive Vice President and Chief Human Resources Officer, UPS (July 2019 to December 2020) (March 2019 to June 2019) •President of Human Capital Transformation, UPS (March 2019 to June 2019) •President, UPS’s west region, with responsibility for product growth and delivery operations in 25 U.S. central and western states (April 2018 to February 2019) •President, UPS's mid-south district, with responsibility for package delivery operations in seven U.S. southern states (2016 to April 2018) Other Public Company Boards •None Other •Director, National Urban League (Since 2019) •Member, Executive Leadership Council, an independent non-profit organization that opens channels of opportunity for the development of Black executives to positively impact businesses and communities (Since 2020)
Charlene A. Thomas
Age 55
Director Since 2021
Committees Audit Committee ECHC Committee

ALLETE's key governance documents, including our Corporate Governance Guidelines, are available on our website at www.allete.com/Governance.

1.The Director is or has been employed by the Company within the last three years (other than as a former interim Chair or a former interim CEO); or the Director’s immediate family member is or has been employed by the Company within the last three years as an executive officer;

2.The Director has received, or the Director has an immediate family member who has received, during any 12-month period in any of the last three years, more than $120,000 in direct compensation from the Company (other than Director and committee fees, pension, or other forms of deferred compensation for prior service so long as such compensation is not contingent on continued service);

3.The Director is a current partner or employee of a firm that is the Company’s current independent registered public accounting firm; the Director has an immediate family member who is a current partner of the Company’s current independent registered public accounting firm; the Director has an immediate family member who is a current employee of the Company’s current independent registered public accounting firm and who personally works on the Company’s audit; or the Director or an immediate family member was, within the last three years, a partner or employee of the Company’s current independent registered public accounting firm and personally worked on the Company’s audit within that time;

4.The Director or an immediate family member is or has been, within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee;

5.The Director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or two percent of such other company’s consolidated gross revenues; or

6.The Director or an immediate family member has been an executive officer of a foundation, university, non-profit trust, or other tax-exempt charitable organization, within the last three years, for which contributions from the Company and its respective trusts or foundations, account or accounted for more than the greater of $1 million, or two percent of such charitable organization’s consolidated gross revenue.

Board Structure

Independent Lead Director

All committees comprised of and chaired by independent Directors

All Directors, except Ms. Owen, are independent

Board Members and Committee Memberships

Independent

Director Since

Audit Committee

ECHC Committee

CG Committee

Bethany M. Owen, Chair

2019

Susan K. Nestegard, Lead Director

l

2018

u

u

u

George G. Goldfarb

l

2012

v«

James J. Hoolihan

l

2006

u

Madeleine W. Ludlow

l

2004

u

v

Charles R. Matthews

l

2022

u «

Douglas C. Neve

l

2007

u «

u

Barbara A. Nick

l

2020

u

u

Robert P. Powers

l

2017

v

Charlene A. Thomas

l

2021

u

u

v Chair u Member « Audit committee financial expert within the meaning of SEC rules

Board Composition

50% of Directors self identify as women

20% of Directors self identify as Black or African American

50% of Directors have served on the Board less than five years

The Board has identified key skills, attributes, and expertise that are important for our Board based on the Company’s strategy and operations. Each Director brings a wealth of experience. The CG Committee regularly reviews with the Board the experience and attributes desired for effective governance in our changing industry and evaluates Board composition.

Leadership and Strategy

Directors who hold or have held significant leadership positions provide valuable leadership and strategy insights, as well as the ability to identify and help develop those qualities in others. They have practical understanding of strategy development, know how to create growth, and value and prioritize a strong corporate culture. All of our Directors have experience with public company leadership and corporate governance, as well as experience in owning and driving strategy. Particular Director leadership and strategy experience includes:

CEO Experience Ms. Owen, Mr. Goldfarb, Mr. Hoolihan, Ms. Ludlow, Mr. Matthews, and Ms. Nick Legal & Regulatory Expertise Ms. Owen, Ms. Ludlow, Mr. Matthews, Mr. Neve, Ms. Nick, and Mr. Powers Executive Compensation Expertise: Ms. Owen, Ms. Nestegard, Mr. Goldfarb, Ms. Ludlow, Mr. Matthews, Mr. Neve, Ms. Nick, Mr. Powers, and Ms. Thomas Regional Business Expertise Ms. Owen, Ms. Nestegard, Mr. Goldfarb, Mr. Hoolihan, Mr. Matthews, Mr. Neve, and Ms. Nick

Finance & Risk Management

Directors who have financial experience, including experience with complex financings and financial reporting, provide important skills and insight to the Board, especially given the highly capital-intensive nature of our business. Effectively managing risk in a rapidly changing environment is also critical to our success. All of our Directors have financial experience as well as experience in identifying and executing processes to mitigate risk. Particular Director finance and risk management experience includes:

Chief Financial Officer Experience Mr. Goldfarb, Ms. Ludlow, and Mr. Neve Qualify as Audit Committee Financial Experts Mr. Goldfarb, Ms. Ludlow, Mr. Matthews, and Mr. Neve Cybersecurity Expertise Ms. Owen, Mr. Matthews, Mr. Neve, Ms. Nick, and Mr. Powers

Energy/Renewable Energy Industries & Business Transformation

Directors with experience leading dynamic, evolving, and complex operations in a rapidly changing industry environment are strategically equipped to oversee ALLETE's "sustainability in action" strategy execution. All of all Directors have experience in dynamic industries that require extensive compliance obligations. Particular Director expertise includes:

Business Transformation Experience Ms. Owen, Ms. Nestegard, Mr. Goldfarb, Mr. Hoolihan, Ms. Ludlow, Mr. Matthews, Ms. Nick, Mr. Powers, and Ms. Thomas Transactional Experience: Ms. Owen, Ms. Nestegard, Mr. Goldfarb, Mr. Hoolihan, Ms. Ludlow, Mr. Matthews, Mr. Neve, Ms. Nick, and Mr. Powers

•presides when the Board meets in executive session;

•presides at Board meetings when the Chair is not present to lead the Board's deliberations;

•serves as an ex officio member of each Board committee;

•serves as a liaison between the Chair and the independent Directors when necessary to provide a supplemental communication channel;

•works with the Chair to develop Board meeting agendas, schedules, and information to be provided to Directors;

•leads the evaluation of CEO performance in consultation with the CG Committee; and

•performs other duties as requested by the independent Directors.

George G. Goldfarb (Chair) Susan K. Nestegard (ex officio) Douglas C. Neve Barbara A. Nick Charles R. Matthews Charlene A. Thomas Five meetings during 2022 Audit Committee Report—page 83			The Audit Committee helps oversee and monitor the following: •Integrity of financial statements •Internal controls over financial reporting •Compliance with corporate policies and procedures •Compliance with legal and regulatory requirements •Qualifications, independence, and performance of independent registered public accounting firm •Performance of internal audit function •Review of the adequacy and effectiveness of information security policies and internal controls regarding information security •Review and evaluation of accounting policies •Review of periodic financial reports to be provided to the public, and, upon favorable review, recommending approval of ALLETE's Consolidated Financial Statements All Audit Committee members are independent under ALLETE's Corporate Governance Guidelines, within the meaning of SEC rules, and in accordance with NYSE listing standards. All Audit Committee members are financially literate and three Audit Committee members qualify as an "audit committee financial expert" as defined by SEC rules.

Robert P. Powers (Chair) Susan K. Nestegard (ex officio) Madeleine W. Ludlow Barbara A. Nick Charlene A. Thomas Five meetings during 2022 ECHC Committee Report—page 55			The ECHC Committee helps oversee and monitor Director and executive compensation and workforce strategy by: •Establishing compensation philosophy and policies related to Director and executives •Setting CEO compensation •Ensuring links between executive compensation and sustainability strategy as described in the Corporate Sustainability Report •Ensuring that design of Director and executive compensation is equitable, competitive, and aligned with compensation philosophy •Overseeing the administration of ALLETE's Director and executive compensation programs •Overseeing policies and strategies related to culture, safety, and human capital management, including DE&I All members of the ECHC Committee qualify as “independent directors” under NYSE rules, “non-employee directors” under Rule 16b-3 under the Exchange Act, and “outside directors” under Section 162(m) of the Tax Code.

Madeleine W. Ludlow (Chair) Susan K. Nestegard (ex officio) James J. Hoolihan Douglas C. Neve Four meetings during 2022			The CG Committee assists with corporate governance oversight by: •Making recommendations to the Board with respect to Board membership, function, committee structure and membership, succession planning for executive management, and application of corporate governance principles •Performing the functions of a Director-nominating committee •Overseeing the Board's annual evaluation of the CEO •Developing and recommending to the Board standards for determining a director's independence •Providing recommendations to the Board with respect to independence determinations •Establishing guidelines for stock ownership •Reviewing ESG activities and overseeing ESG reporting   The CG Committee is authorized to exercise the authority of the Board in the intervals between Board meetings.

Board of Directors

Directly oversees ALLETE's strategy and critical risk areas with enterprise-wide significance to the Company; Reviews and discusses with management significant risks affecting ALLETE, including matters identified by Board committees from within their respective oversight areas, and oversees how senior management manages enterprise-level risks.

Audit Committee

ECHC Committee

CG Committee

Oversees: financial reporting processes, business conduct, tax, and other financial risks; the appointment, evaluation, and oversight of the Company's independent registered public accounting firm; the internal audit function; legal and regulatory compliance, significant legal matters; insurance programs; market and credit risks; and physical and cybersecurity risks.

Oversees: the design and administration of executive compensation policies and programs and ensures that executive compensation programs link to ALLETE's sustainability strategy. Also has primary responsibility for assisting the Board with oversight of ALLETE's talent strategy and programs to attract, develop, engage, and retain talent; ALLETE's safety policies, and strategies; DE&I initiatives; and human capital risks.

Oversees: Board structure and function, including corporate governance risks; Board independence; Board succession and composition; CEO succession planning; code of ethics; and political contributions and lobbying policy. Also has primary responsibility for assisting the Board with oversight of ESG reporting.

Senior Management

ALLETE's CEO, CFO, Chief Legal Officer, Chief Risk Officer, and other senior leaders are responsible for implementing and supervising enterprise risk-management processes. Management confers with and reports to the Board and its committees with respect to key enterprise risk indicators, risk management and mitigation practices, and other significant matters.

Internal Audit Function						Enterprise Risk Management Program
Directly overseen by the Audit Committee. Prepares audit plans that are reviewed and approved by the Audit Committee at least annually.						Ensures that strategic goals align with ALLETE’s mission, vision, and values and that decision-making and strategy execution includes adequate consideration of the associated risks. Includes the ALLETE Risk Management Committee, made up of executive officers and ALLETE's Chief Risk Officer, which regularly identifies and assesses key risks and defines procedures for mitigating and reporting significant risks.

ALLETE has adopted a written Code of Business Conduct (which includes our code of ethics) that applies to all Directors and employees and officers, including the CEO and the CFO, who is also the Company's principal accounting officer. The Code of Business Conduct also applies to our contractors, suppliers, and vendors. ALLETE's Code of Business Conduct is available on our website at www.allete.com/governance. Any amendment to the Code of Business Conduct, or waiver the Code of Business Conduct involving a Director or NEO, will be published on ALLETE's website promptly following the date of such amendment or waiver.

ALLETE's Political Contributions and Lobbying Policy is available at on our website at
www.allete.com/Governance.

Our commitment to sustainability is led and supported through strong Board leadership, intentional management focus, and sound corporate governance practices. The Board oversees ALLETE’s strategy, Enterprise Risk Management program, and ESG-related matters, including the evaluation of sustainability-related risks and opportunities, all in a manner designed to drive performance for our shareholders and other stakeholders. We honor our commitments to our customers, our communities, and the climate by acting to advance sustainability goals. Corporate responsibility is integrated into our governance processes and is embedded in our strategy and our core values, namely: integrity, safety, people, and planet.

The CG Committee oversees the process related to ESG matters and receives regular updates from senior management on such matters. During 2022, management actively engaged with investors and other key stakeholders to discuss ALLETE's sustainability strategy and initiatives and to gain insights into stakeholders' perspectives about sustainability and corporate responsibility, and how to effectively measure, communicate, and disclose our efforts. In January 2023, we released an update to our Corporate Sustainability Report, which can be found at our website www.allete.com/sustainability.

Climate Milestones and Initiatives
			Expand Renewable Energy Sources			For the past two years, ALLETE has ranked first among U.S.-based investor-owned utilities for investment in renewable energy based on market capitalization. Minnesota Power received approval for a resource plan that calls for adding up to 400 megawatts of wind energy and up to 300 megawatts of solar energy.
			Reduce Overall Carbon Emissions			ALLETE’s approach to decarbonization includes coal fleet retirements, conversion to natural gas, and partnering with customers on carbon capture and sequestration projects.
			Carbon-Free Vision			In 2021, Minnesota Power announced its vision to deliver 100% carbon-free energy by 2050. We expect a new Minnesota law requiring 100% carbon-free energy by 2040 to drive additional clean-energy opportunities in our next integrated resource plan.
			Strengthen the Electric Grid			ALLETE is investing in infrastructure for managing the delivery of increasing amounts of renewable energy and enhancing the resiliency and reliability of the transmission and distribution grid.
			Solar Projects			In April 2022, ALLETE acquired New Energy, one of the nation's leading distributed solar developers that has successfully completed hundreds of solar projects around the country, which together produce more than 580,000,000 kilowatt hours of electricity per year.
			Adopt Innovative Solutions			We are reducing water use, investing in infrastructure that will be more resistant to weather changes, and implementing strategic underground replacements for energy-delivery components to reduce vulnerability to climate impacts.

Sustainability-Focused Workforce Practices
			Leadership Diversity Recognition			Recognized by the Minnesota Census of Women in Corporate Leadership as an "Honor Roll" company since 2017, with additional special distinction since 2019 for having women representing at least 30 percent of our executive officers. In 2021, Moody’s Investors Service recognized ALLETE as having the most gender diverse board among 45 publicly traded utilities.
			Diversity, Equity and Inclusion			Regularly updating recruitment practices and requiring training for all employees to enhance workplace DE&I; focus corporate giving and scholarships to help bridge community opportunity gaps.
			Supply Chain			Expanding and partnering with diverse suppliers, better reflecting the diversity of the communities we serve; ALLETE provides equal access for all qualified businesses in our supply chain.
			Veteran Outreach and Support			Minnesota Power and ALLETE Clean Energy each has been designated a "Yellow Ribbon" company, in recognition of the support provided for the needs of military-connected employees and families.
			Employee Well-Being			Comprehensive health and wellness benefits and safety resources that support healthy, productive, and engaged employees.

The Board recognizes that in the ordinary course of business, transactions may occur between ALLETE and its subsidiaries and entities with which some of our Directors and officers are or may have been affiliated. Such transactions are evaluated in accordance with ALLETE's Related Person Transaction Policy, which was last reviewed and approved by the Board in July 2022, and is available at www.allete.com/Governance.

•the extent of the related person's interest in the transaction;

•the availability of comparable products or services from non-related persons;

•whether the transaction is on terms comparable to those that could be obtained in an arm's-length dealing with an unrelated third party;

•the business reasons to enter into the transaction;

•whether the transaction could impair the independence of a Director;

•whether the annual amount involved exceeds the greater of $200,000 or 5 percent of the recipient's gross revenues for the year; and

ALLETE's executive compensation program is designed to enhance shareholder value while attracting and retaining experienced, qualified executives. To fully understand ALLETE's 2022 executive compensation, we encourage you to read the CD&A, starting on page 33 as well as the compensation tables and narrative disclosures that follow the CD&A. Those sections describe how our compensation programs are designed to achieve ALLETE's compensation objectives and provide detailed information on the 2022 compensation of our NEOs. We believe our executive compensation program reflects a pay-for-performance philosophy and is aligned with shareholders' long-term interests.

						Bethany M. Owen			Chair, President, and CEO
						Steven W. Morris			Senior Vice President and CFO
						Margaret A. Thickens			Vice President, Chief Legal Officer, and Corporate Secretary
						Nicole R. Johnson			Vice President; President of ALLETE Clean Energy
						Patrick L. Cutshall			Vice President and Corporate Treasurer
						Robert J. Adams			Retired Senior Vice President; and former CFO

•We require executive stock ownership to align executives' interests with shareholders' interests.

What We Do
			þ						Ensure that a substantial portion of each NEO's compensation is variable, at-risk, and subject to performance-based metrics.
			þ						Cap incentive compensation.
			þ						Use multiple metrics to measure performance.
			þ						Use an independent compensation consultant.
			þ						Require executive stock ownership.
			þ						Require each NEO to hold shares until satisfying stock ownership guidelines.
			þ						Prohibit hedging, pledging, and short sales.
			þ						Require a double-trigger for a CIC Severance Plan payment.
			þ						Apply a compensation recovery ("clawback") policy to incentive compensation.

What We Don't Do
			ý						Enter into employment agreements with our NEOs.
			ý						Pay dividend equivalents on unvested RSUs or unearned performance shares.
			ý						Award stock options.
			ý						Provide excessive perquisites.
			ý						Pay tax gross-ups (except on relocation expenses paid under ALLETE's broad-based policy).

As disclosed in ALLETE's Form 10-K for the year ended December 31, 2022, Net Income Attributable to ALLETE for the year ended December 31, 2022, prior to adjustment, was $189.3 million (compared to $169.2 million for 2021). As described in detail starting on page 44, for AIP purposes, Net Income Attributable to ALLETE was increased by an overall $10.72 million to reflect the following adjustments:
(1) decreased net income to exclude ALLETE Properties financial results, (2) increased net income to reflect the strategic decision to defer into 2023 a solar project budgeted for 2022; (3) increased net income to reflect the reserve adjustment following the Minnesota Power rate case outcome in 2022; and (4) increased net income to capture post-acquisition operations of New Energy, with a corresponding decrease to net income to reflect acquisition activities.

As disclosed in ALLETE's Form 10-K for the year ended December 31, 2022, Cash from Operating Activities for the year ended December 31, 2022, prior to adjustment, was $221.3 million (compared to $263.5 million for 2021). As described in detail on page 45, for AIP purposes, cash from operating activities was increased by $114.82 million to reflect: (1) the exclusion of cash associated with ALLETE Properties operations; (2) the exclusion of cash to reflect timing of accounting for the Minnesota Power fuel adjustment clause true-up; (3) the inclusion of cash to reflect ACE's build-own-transfer construction projects included in inventory; and (4) the inclusion of cash associated with the acquisition of New Energy.

In addition to financial metrics, the annual incentive also measures performance tied to strategic, operational, and safety goals. Strategic goals vary from year to year, but consistently incorporate our ESG objectives, growth objectives, operational improvements for our businesses, and the evolving needs of our customers and other stakeholders. Operational goals are tied to ALLETE's reliability performance and safety goals are tied to injury-prevention awareness and safety performance. For 2022, the ECHC Committee determined that the Company’s strategic performance fell between target and superior based on the Company’s performance in addressing customer competitiveness and advancing sustainability. The ECHC Committee determined that both the Company's operational and safety goals performance fell between threshold and target.

2022 ALLETE AIP Results

Financial Metrics

Measurement

Threshold

Target

Superior

Actual

Weighting

Unweighted Results

Payout

Net Income

$181.19 million

$201.3 million

$221.45 million

$202.4 million

50.0%

105.6%

52.8%

Cash from Operating Activities

$330.57 million

$367.3 million

$404.03 million

$336.12 million

20.0%

55.5%

11.1%

Strategic Goals

Threshold

Target

Superior

Actual

Weighting

Unweighted Results

Payout

Competitiveness and Sustainability

Advance Customer Competitiveness and Advance Renewable Enabling Transmission Projects

Between Target and Superior

10.0%

160.0%

16.0%

Advance Sustainability

Between Target and Superior

8.0%

162.5%

13.0%

Operational Goals

Threshold 50th percentile

Target 62.5 percentile

Superior 75th percentile

Actual

Weighting

Unweighted Results

Payout

Outage Duration (System Average Interruption Duration Index)

Q1: 14.63 Q2: 31.65 Q3: 40.21 Q4: 21.18

Q1: 12.87 Q2: 27.84 Q3: 35.37 Q4: 18.63

Q1: 11.10 Q2: 24.02 Q3: 30.53 Q4: 16.08

Q1: 7.61 Q2: 44.54 Q3: 31.73 Q4: 28.81

Q1: 0.5% Q2: 0.5% Q3: 0.5% Q4: 0.5%

94%

1.88%

Outage Frequency (System Average Interruption Frequency Index)

Q1: 0.16 Q2: 0.32 Q3: 0.36 Q4: 0.17

Q1: 0.14 Q2: 0.29 Q3: 0.32 Q4: 0.16

Q1: 0.13 Q2: 0.26 Q3: 0.29 Q4: 0.14

Q1: 0.13 Q2: 0.26 Q3: 0.29 Q4: 0.14

Q1: 0.5% Q2: 0.5% Q3: 0.5% Q4: 0.5%

62.5%

1.25%

Outage Interruptions (Customer Average Interruption Duration Index)

Q1: 94.70 Q2: 101.82 Q3: 116.09 Q4: 125.38

Q1: 88.20 Q2: 94.83 Q3: 108.13 Q4: 116.77

Q1: 81.70 Q2: 87.85 Q3: 100.16 Q4: 108.17

Q1: 87.66 Q2: 120.07 Q3: 94.58 Q4: 91.03

Q1: 0.5% Q2: 0.5% Q3: 0.5% Q4: 0.5%

127%

2.54%

Safety Goals

Threshold

Target

Superior

Actual

Weighting

Unweighted Results

Payout

Safety Conversations

98%

99%

100%

99%

1.0%

100%

1.0%

ALLETE Moves Stretching Program

.75 x week

1.0 x week

1.25 x week

.89 x week

1.0%

60%

0.6%

Safety Incident Rate (reportable injuries per 100 employees)

60th percentile (1.9)

75th percentile (1.4)

80th percentile (0.9)

below 60th percentile (2.3)

2.0%

0%

0.0%

Safety Severity Rate (Lost workdays per 100 employees)

60th percentile (16.91)

75th percentile (10.88)

80th percentile (5.6)

80th percentile (5.6)

2.0%

2%

4.0%

Total

104.2%

ALLETE's TSR for the three-year period ended December 31, 2022, was negative 10.3 percent, ranking us in the second percentile among the peer group, which was below threshold and resulted in no payout for TSR-related PSAs that were granted in 2020. ALLETE's EPS CAGR for the three-year period ended December 31, 2022, was negative two percent, which was also below threshold and resulted in no payout for the EPS CAGR-related PSAs that were granted in 2020.

2020 - 2022 LTIP Results

TSR Ranking Relative to Peer Companies

EPS CAGR

85th percentile

Superior

8 percent

Superior

50th percentile

Target

6 percent

Target

30th percentile

Threshold

4 percent

Threshold

Actual: 2nd percentile à

Actual: negative two percent à

The ECHC Committee increased base salaries for all NEOs in 2022, except for Mr. Adams who retired in June 2022. Ms. Owen's base salary increased by eight percent in recognition of her performance in the CEO role to which she was promoted in 2020 and to bring her compensation closer to the market median. Mr. Morris received base salary increases in 2022 totaling 24 percent in recognition of his promotion to Senior Vice President and CFO and to bring his compensation closer to market median. Ms. Johnson received base salary increases in 2022 totaling 11 percent in recognition of her new role as ALLETE Vice President and President of ALLETE Clean Energy and to bring her compensation closer to the market median. Ms. Thickens and Mr. Cutshall each received base salary increases in 2022 totaling 13 percent due to expanded responsibilities and to bring compensation closer to the market median.

						Target AIP Opportunity (% of Base Salary)																		Target LTIP Opportunity ($)
						2022						2021												2022						2021
Ms. Owen						90%						85%									Ms. Owen			$850,000						$700,000
Mr. Morris						55%						45%									Mr. Morris			$250,000						$175,000
Ms. Thickens						50%						45%									Ms. Thickens			$200,000						$175,000
Ms. Johnson						50%						45%									Ms. Johnson			$225,000						$200,000
																					Mr. Cutshall			$200,000						$175,000

COMPENSATION ELEMENTS SUMMARIZED: WHAT WE PAY AND WHY

Element

Key Characteristics

Why We Pay this Element

How the Amount is Determined

2022 Decisions and Outcomes

Fixed

Base Salary

Competitive cash compensation.

Helps attract and retain executive talent.

We consider market data and other information from the ECHC Committee's independent compensation consultant, as well as experience, responsibilities, role within the executive group, and individual performance.

Base salary increases:  Ms. Owen–8 percent;  Mr. Morris–24 percent;  Ms. Thickens–13 percent;  Ms. Johnson–11 percent; and  Mr. Cutshall–13 percent. Increases reflected job performance and additional responsibilities and were designed to bring base compensation closer to, the market median. Mr. Morris' increase was associated with his promotion to CFO in 2022.

Variable: Short-term Incentive

AIP

Payable in cash based on achievement of annual goals including financial targets, strategic and operational goals linked to operational objectives, and safety goals.

Rewards achievement of annual financial, strategic, operational, and safety goals.

The ECHC Committee approves performance measures, targets, and individual award opportunities, sets terms, and has discretion to reduce, increase, or eliminate awards.

ALLETE achieved above-target performance for net income, below-target cash flow from operating activities, above-target strategic performance, and below-target operational and safety results; resulting in payout of 104.2 percent of target for all NEOs except Ms. Johnson, whose 2022 AIP payout was at 87.3 percent of target, reflecting the combination of ALLETE's results and ACE's results.

Variable: Long-term Incentive

PSAs with TSR Metric

Payable in Common Stock at the end of the period based on achieving relative TSR goal over a three-year period; 37.5% of total target LTIP opportunity for the 2021-2023 and 2022-2024 performance periods.

Links NEO pay to performance; facilitates stock ownership, aligns NEO's interests with long-term shareholder value; and helps retain executive talent.

ALLETE's TSR relative to peer companies at the end of the three-year period determines the payout factor. Dividend equivalent shares are paid in connection with earned PSAs.

ALLETE's TSR for the three-year performance period ending December 31, 2022, ranked in 2nd percentile among peer group, resulting in no payout.   For the 2020-2022 performance period, the TSR metric applied to 37.5% of the total target LTIP opportunity.

PSAs with EPS CAGR Metric

Payable in Common Stock at the end of the period based on achieving EPS CAGR goal over a three-year period; 37.5% of total target LTIP opportunity for the 2021-2023 and 2022-2024 performance periods.

Links NEO pay to performance; facilitates stock ownership, aligns NEO's interest with financial measures important to Company growth; and helps retain executive talent.

ALLETE's EPS CAGR at the end of the three-year period determines the payout factor. Dividend equivalent shares are paid in connection with earned PSAs.

ALLETE's EPS CAGR for the three-year performance period ending December 31, 2022, negative two percent, resulting in no payout. For the 2020-2022 performance periods, the EPS CAGR metric applied to 37.5% of the total target LTIP opportunity.

RSUs

Payable in Common Stock at the time of vesting; 25% of total target LTIP opportunity; subject to time-based vesting.

Coupled with PSAs, facilitates stock ownership, aligns the interests of officers with long-term shareholder value, and helps retain executive talent.

One RSU entitles the NEO to receive one share of Common Stock (and dividend equivalents) when the RSU vests at the end of a three-year period.

RSUs granted in 2020 vested on December 31, 2022.

Annually, the ECHC Committee reviews the peer group that ALLETE uses for compensation benchmarking purposes. Compensation benchmarking is based on published salary surveys and proxy statement data from compensation benchmarking peer companies. Because there is a strong correlation between executive compensation pay levels and company size, the ECHC Committee compares executive pay levels with those at companies that are similar in size to ALLETE as measured by market capitalization and revenue. ALLETE's compensation peer group was made up of a subset of all the companies in the EEI Stock Index in 2021, which is the group used to determine the Company's relative TSR under the LTIP. Even within this subset, however, the companies range in size significantly. Accordingly, the compensation data is size-adjusted to establish appropriate market compensation comparisons for ALLETE. In 2021, the ECHC Committee approved the following 15-company peer group for 2022:

Compensation Benchmarking Peer Group
Alliant Energy Corporation			MDU Resources Group, Inc.			Otter Tail Corporation
Avista Corporation			MGE Energy, Inc.			PNM Resources, Inc.
Black Hills Corporation			NiSource, Inc.			Pinnacle West Capital Corporation
Hawaiian Electric Industries, Inc.			NorthWestern Corporation			Portland General Electric Company
IDACORP, Inc.			OGE Energy Corp.			Unitil Corporation

At the beginning of each year, the ECHC Committee, with the CEO's recommendations, approves performance measures and targets for the annual incentive awards, as well as individual target award opportunities. The ECHC Committee has discretion to establish the terms of annual incentive awards and also the ability to reduce, increase, or eliminate awards, regardless of whether applicable performance goals have been achieved. The ECHC Committee sets annual incentive opportunity levels such that if the Company achieves target goals, the combination of salary and annual incentives will result in total cash compensation near the market median for ALLETE's compensation peer group.

2022 AIP Target Opportunities
									AIP Target Opportunity as a Percentage of Base Salary
			Ms. Owen						90.0%
			Mr. Morris1						54.2%
			Ms. Thickens2						48.3%
			Ms. Johnson						50.0%
			Mr. Cutshall						45.0%
			Mr. Adams						65.0%

ALLETE AIP Performance Goals, Weighting, and Measures

Performance Goals

Weighting

Measures

Threshold

Target

Superior

Net Income1

50%

$179.0 million

$198.9 million

$218.8 million

Cash from Operating Activities2

20%

$330.6 million

$367.3 million

$404.0 million

Strategic

18%

Described Below

Operational

6%

Safety

6%

Strategic, operational, and safety goals are linked to strategic, operational, and safety objectives and are also aligned with ALLETE's core values: integrity, safety, people, and planet.

The AIP results were calculated as follows:

2022 ALLETE AIP Payout
Performance Goal						Weighting						Unweighted Results						Payout1
Net Income						50%						105.6%						52.8%
Cash from Operating Activities						20%						55.5%						11.1%
Strategic Goals						18%						161.1%						29.0%
Operational Goals						6%						95.0%						5.7%
Safety Goals						6%						93.3%						5.6%
Total						100%												104.2%

ACE 2022 AIP Performance Goals, Weighting, Measures, and Results
			Threshold			Target			Superior			Actual			Weighting			Unweighted Results			Payout1
Financial Metrics
ALLETE Net Income2			$179.0 million			$198.9 million			$218.8 million			$200 million			15.0%			105.3%			15.8%
ACE Net Income3			$38.2 million			$42.4 million			$46.6 million			$16.3 million			30.0%			—%			—%
ACE Return on Capital4			4.7%			5.5%			6%			1.9%			15.0%			—%			—%
Strategic Goals
Portfolio Optimization			Develop Long-term Solutions for Legacy Fleet									Threshold			15.0%			50.0%			7.5%
			Advance and Execute Project Development Pipeline									Below Threshold			15.0%			—%			—%
Operational and Safety Goals
Revenue-Weighted Fleet Availability (Relative to three-year historical fleet-wide average)			95.0%			97.0%			98.0%			95.6%			5.00%			66%			3.3%
Safety Conversations			98%			99%			100%			100%			1.25%			200%			2.5%
Safety Conversations: Quality Surveys Participation			70%			80%			90%			95.4%			1.25%			200%			2.5%
ALLETE Moves Stretching Program (Employees record activity sessions at least eight times per month)			85%			90%			100%			100%			1.25%			200%			2.5%
Safety Severity Rate (Lost workdays per 100 employees)			60th percentile (16.91)			75th percentile (10.88)			80th percentile (5.6)			100th percentile (0)			1.25%			200%			2.5%
															Total						36.6%

1 Payout is expressed as a percentage of annual incentive target opportunity.

The EEI Stock Index companies as of December 31, 2022, based on information published as of that date, were as follows:

TSR Peer Group Companies*
Alliant Energy Corporation			Entergy Corporation			Otter Tail Corporation
Ameren Corporation			Evergy, Inc.			PG&E Corporation
American Electric Power Company			Eversource Energy			Pinnacle West Capital Corporation
Avangrid, Inc.			Exelon Corporation			PNM Resources, Inc.
Avista Corporation			FirstEnergy Corp.			Portland General Electric Company
Black Hills Corporation			Hawaiian Electric Industries, Inc.			PPL Corporation
CenterPoint Energy, Inc.			IDACORP, Inc.			Public Service Enterprise Group, Inc.
CMS Energy Corporation			MDU Resources Group, Inc.			Sempra Energy
Consolidated Edison, Inc.			MGE Energy, Inc.			The Southern Company
Dominion Energy, Inc.			NextEra Energy, Inc.			Unitil Corporation
DTE Energy Company			NiSource, Inc.			WEC Energy Group, Inc.
Duke Energy Corporation			NorthWestern Corporation			Xcel Energy Inc.
Edison International			OGE Energy Corp.

* Companies can be dropped from or added to the EEI Stock Index during the performance period due to mergers or other activities. If a company is dropped from the EEI Stock Index during the performance period, no information related to that company will be included in the performance calculation. A company that is newly added to the EEI Stock Index after the start of the performance period also will be excluded from the performance calculation. If a company in the EEI Stock Index at the beginning of a performance period undergoes a corporate restructuring during the performance period and the company remains in the EEI Stock Index following the transaction, the company will be included in the performance calculation. During 2019, SCANA Corporation merged with Dominion Energy, Inc., and Vectren Corporation merged with CenterPoint Energy, Inc. During 2020, El Paso Electric was dropped from the EEI Stock Index after being acquired by a private investment fund.

For the 2021-2023 performance period, EPS CAGR will be measured using as a baseline ALLETE's EPS for the year ending December 31, 2020 and calculating ALLETE's annual EPS at the end of the
three-year performance period. For the 2022-2024 performance period, EPS CAGR will be measured using as a baseline ALLETE's EPS for the year ending December 31, 2020 and calculating ALLETE's annual EPS at the end of the three-year performance period. Target was set at the midpoint of earnings guidance, or six percent, with threshold at four percent, and superior at eight percent. If the EPS CAGR percentage result at the end of the performance period is below threshold, no PSAs with the EPS CAGR performance metric will be earned. Straight-line interpolation will be used to determine earned awards based on the EPS CAGR percentage result between threshold, target, and superior.

LTIP Target Opportunities for 2022–2024 Performance Period
			Total Target Opportunity						Allocation of Long-Term Incentive Plan Target Opportunity
									PSAs with TSR Performance Metric			PSAs with EPS CAGR Performance Metric			PSAs as % of Total Target Opportunity			RSUs			RSUs as % of Total Target Opportunity
Ms. Owen			$850,000						4,107			4,804			75%			3,203			25%
Mr. Morris			$250,000						1,208			1,413			75%			942			25%
Ms. Thickens			$200,000						966			1,130			75%			754			25%
Ms. Johnson			$225,000						1,087			1,272			75%			848			25%
Mr. Cutshall			$200,000						966			1,130			75%			754			25%
Mr. Adams			$350,000						1,691			1,978			75%			1,319			25%