SCHN 2017 Proxy Statement

Proxy Summary Fiscal 2017 Compensation Summary Our fiscal 2017 compensation program links pay to performance. As a result of this linkage of pay to performance, actual compensation in fiscal 2017 was higher than target levels, except with respect to the Performance Improvement Bonus Plan (“PIBP”), as represented by the following: • Aligned with our strong performance in fiscal 2017, the fiscal 2017 Annual Performance Bonus Program (“APBP”) paid out at 2.35x of target for the CEO and the fiscal 2017 Annual Incentive Compensation Plan (“AICP”) paid out for the other NEOs at either 1.55x or 1.56x of target • Fiscal 2017 compensation also included the second half of the one-year PIBP established by the Compensation Committee in order to incentivize the execution of $30 million in critical new cost savings and productivity initiatives launched in response to significantly weakened market conditions in the first half of fiscal 2016. The PIBP performance period commenced in the second half of 2016 and continued through the first half of fiscal 2017. The PIBP included a “gateway” mechanism with no credit for any quarter in which we reported an adjusted loss per share and a retention component with no payout for the CEO and other NEOs until after the end of such 12-month period. Because we experienced an adjusted loss per share in the first quarter of fiscal 2017, the CEO and other NEOs did not receive credit for the first three months of the fiscal 2017 PIBP performance period. As a result, the overall PIBP payout for the NEOs, including the CEO, for amounts earned in fiscal 2017 was equivalent to 0.5x of the PIBP target (equal to approximately 0.1x of the participant’s AICP/APBP target) and totaled less than $300,000 for all NEOs, including the CEO, combined. • No performance shares vested in fiscal 2017 as a result of the transition to a three-year performance period for performance share plans. • Realizable pay on average over the past three years as compared to total compensation reported in the summary compensation table, as described below, was 79% for the CEO and 72% for the other NEOs • 10% increase in the base salary for the CEO effective July 2017, the first base salary increase for the CEO since May 2011 Fiscal 2017 Executive Compensation Program At-A-Glance Program (1) Purpose Relevant Performance Metrics Annual Base Salary CEO: 17% Other NEOs: 31% To provide a competitive foundation and fixed rate of pay for the position and associated level of responsibility Not Applicable Annual Incentive CEO: 27% Other NEOs: 23% To incentivize achievement of operating, financial, and management goals EPS (50% – 55%) Safety Performance (2) Cost Savings Operating Cash Flow Strategic Objectives (CEO) Performance Improvements (3) Long Term Restricted Stock Units CEO: 28% Other NEOs: 23% To focus NEOs on long-term shareholder value creation and promote retention Absolute share price appreciation Performance Share Awards CEO: 28% Other NEOs: 23% To focus NEOs on achievement of financial goals and long-term shareholder value creation Relative Total Shareholder Return (TSR) (50%) Cash Flow Return on Investment (CFROI) (50%) (1) Represents a percentage of total targeted compensation. (2) Lost Time Incident Rate (“LTIR”); Total Case Incident Rate (“TCIR”); and Days Away, Restricted or Transferred Rate (“DART”) (3) Separate one-year PIBP for the 12-month period ending February 28, 2017 described below under “Components of Compensation—Performance Improvement Bonus Plan”. Linking Pay to Performance To promote a performance-based culture that aligns the interests of management and shareholders, our executive compensation program focuses extensively on performance-based and equity-based compensation. As illustrated in the charts below, the substantial majority of our NEOs’ target compensation in fiscal 2017 was in the form of “at-risk” compensation (short-term and Notice of Annual Meeting of Shareholders and 2017 Proxy Statement | 11