2018 Guide to Effective Proxies

2.17.1 CD&A table of contents | 245 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES PMT Insert COMPENSATION DISCUSSION AND ANALYSIS TABLE OF CONTENTS Introduction This Compensation Discussion and Analysis describes the Company’s executive compensation philosophy and programs, focusing in particular on the Compensation Committee’s decisions about named executive officers (“NEOs”) in 2017. OUR NEOS FOR 2017 ARE: Richard J. Kramer Chairman, Chief Executive Officer and President Laura K. Thompson Executive Vice President and Chief Financial Officer Stephen R. McClellan President, Americas Christopher R. Delaney President, Europe, Middle East and Africa David L. Bialosky Senior Vice President, General Counsel and Secretary Table of Contents 21 Executive Summary 21 2017 Operating Results and Our Strong Pay and Performance Alignment 24 2017 Shareholder Engagement 24 Elements of Executive Compensation 26 Compensation Best Practices 27 Compensation Philosophy 27 Components of Executive Compensation 29 Compensation Decision-Making 31 Role of Compensation Consultant 31 Peer Group Benchmarking of Primary Compensation 32 Target Setting 33 Annual Compensation Targets 33 Long-Term Compensation Targets 34 Annual Compensation 34 2017 Base Salary Decisions 34 2017 Annual Cash Incentive Payouts 37 Long-Term Compensation 37 2017 Grants of Performance-Based Incentives 39 Performance for the 2017 Performance Period 41 Impact of TSR Modifier and Payout of 2015-2017 Long- Term Incentive Awards 42 2017 Stock Option Grants 43 2017 Restricted Stock Awards 43 Retirement and Other Benefits 43 Retirement Benefits 44 Severance and Change-in-Control Benefits 45 Perquisites 46 Executive Deferred Compensation Plan 46 Compensation Policies and Practices 46 Stockholding Guidelines 47 Prohibition on Hedging and Pledging 47 Recovery of Compensation (Clawback Policy) USE OF NON-GAAP FINANCIAL MEASURES For additional information regarding segment operating income, a non-GAAP financial measure, including reconciliations to the most directly comparable GAAP financial measure, see Exhibit A to this Proxy Statement. 20 GOODYEAR TIRE & RUBBER COMPANY