2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 246 COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis presents in detail our compensation policies and practices, describing each element of compensation and the decision-making process that supports it. It addresses how we compensate our Named Executive Officers, and how we uphold our compensation philosophy through a governance system that includes internal oversight as well as expert independent outside review. We believe that our compensation policies and practices achieve our compensation goals, and that the total mix of compensation provided to our Named Executive Officers is consistent with a philosophy of motivating and rewarding for actual achievements. In this proxy statement, we refer to our “Named Executive Officers,” or “NEOs,” which include (i) Bruce D. Broussard, our President and Chief Executive Officer, (ii) Brian A. Kane, our Chief Financial Officer, and (iii) each of our three other highest compensated executive officers serving at December 31, 2017. CD&A Table of Contents Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Humana’s 2017 Performance Results Under our 2017 Compensation Programs Refreshing Certain Elements of Our Compensation Programs 36 How We Determine Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Humana’s Compensation Program Design Principles The Role of the Committee The Role of Management The Role of the Independent Compensation Consultant Use of a Peer Group Investor Outreach and the Say-on-Pay Vote Total Direct Compensation 40 Our Compensation Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Design of Our Compensation Program At a Glance – Humana’s Best Practice Compensation Program Governance At a Glance – Significant Pay at Risk 46 Elements of Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Base Salary Short-Term Incentives Long-Term Incentives 49 Other Compensation Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Severance/Change in Control Perquisites Clawbacks Hedging and Pledging Transactions Stock Ownership Guidelines 56 Organization & Compensation Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 35 HUMANA, INC.