SCHN 2017 Proxy Statement

Compensation Discussion and Analysis The relationship between fixed and variable pay in our compensation program is illustrated by the following charts, which show (i) the relative portions of base salary, target annual incentive, and target value of equity awards that, in aggregate, comprised the fiscal 2017 target total direct compensation of our CEO and of our other NEOs, and (ii) the relative portions of base salary, actual annual incentive, and grant date fair value of the equity awards that, in aggregate, comprised the fiscal 2017 actual total direct compensation of our CEO and our other NEOs. Chief Executive Officer – Total Direct Compensation – Fiscal 2017 Salary Annual Incentive Long-Term Stock Based Incentive At Target 17% 27% 56% Actual Salary Annual Incentive Long-Term Stock Based Incentive 12% 47% 41% Named Executive Officers other than CEO – Total Direct Compensation – Fiscal 2017 Average At Target Annual Incentive Salary Long-Term Stock Based Incentive 31% 23% 46% Average Actual Salary Annual Incentive Long-Term Stock Based Incentive 27% 39% 34% Realizable Compensation The table below supplements the “Summary Compensation Table” (“SCT”) (which follows this Compensation Discussion and Analysis) and shows the compensation actually realizable in fiscal 2017 for the CEO. The primary difference between this supplemental table and the “Summary Compensation Table” is the method used to value performance shares and RSU awards. The SEC rules require that the grant date fair value of all performance shares and RSU awards be reported in the SCT for the year in which they were granted. As a result, a significant portion of the total compensation reported in the SCT is in the form of grant date fair value of performance shares and RSU awards, which are designed to align our management incentives with long-term shareholder value. While the amounts shown in the SCT reflect the grant date fair value of equity awards granted to an NEO in the year of the grant, those awards have not vested and the amounts shown in the SCT do not reflect the impact of performance- based metrics or stock price performance on realizable pay, which may be considerably more or less based on (i) the number of performance shares and RSUs that vest during the performance period, (ii) the actual number of performance shares which are earned based on actual performance achieved, and (iii) the impact of actual stock price performance on the value of performance shares and RSUs that vest. In contrast, the supplemental table below includes only performance shares that vested based on actual performance achieved for performance periods completed in fiscal 2017 and RSUs that vested during fiscal 2017. In addition, equity-based compensation included in the table below is valued based on the Company’s share price on August 31, 2017 ($26.90). Notice of Annual Meeting of Shareholders and 2017 Proxy Statement | 41