2018 Guide to Effective Proxies

2.17.2 Executive summary | 269 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES JPMORGAN CHASE & CO. Compensation discussion and analysis (“CD&A”) TableofContents JPMORGANCHASE&CO. • 2018PROXYSTATEMENT 45 The followingCD&A isorganizedaround five key factorswebelieve shareholders should consider in theirevaluation ofourSay-on-Payproposal. Summaryof factors for shareholder consideration 1 Adjustednet income,adjustedearningsper share (“EPS”)andadjusted returnon tangible commonequity (“ROTCE”)exclude the impactof theenactmentof the TaxCutsand JobsActof$2.4billion (after-tax)andofa legalbenefitof$406million (after-tax).Reportednet income,EPSandROTCEwere$24.4B,$6.31and 12%, respectively.ROTCE,adjustednet incomeandadjustedEPSareeachnon-GAAP financialmeasures; for furtherexplanation, seepage115. 2 Represents commondividendsand stock repurchasesnetof stock issued toemployees. 3 Total compensation range forOtherNEOs includesMr.Pinto.Paymix components forOtherNEOsexcludeMr.Pinto.The termsand conditionsofMr.Pinto’s compensation reflect the requirementsofE.U.andU.K. regulations.Foradditional informationonMr.Pinto’spaymix, see footnote1onpage56. 4 Seepage67 formoredetailson clawbacks. Formula PerformanceShareUnits (“PSUs”) linkultimatepayout topre-estab- lished absolute and relativeROTCEgoals 3 Sound pay practices 1 Strong performance 2017BusinessResults Risk,Controls&Conduct „ Creatednew role -ChiefCulture andConductOfficer „ Embedded conduct risk intoour riskmanagementprocesses „ Continued to invest inour cyberdefense capabilities Client/CustomerFocus „ CCB:Ranked#1 inRetailBankingby TNS for the 5th year in a row „ CIB:Enhancedpayments solutionsanddigital capabilities „ CB:Addednewdigital capabilities, includingonlineaccountopening „ AWM:Building amore robustdigitalplatform for clients Teamwork&Leadership „ Broadened responsibilities for severalof the OperatingCommitteemembers „ Announced in January 2018: Increasedwages 10%on average for 22,000 employees, ranging frombetween $15 and $18perhour 2 Disciplined performance assessment to determine pay BalancedDiscretion Variablepayaward levelsbasedon fourbroadcategories: „ BusinessResults „ Risk,Controls&Conduct 4 Pay is aligned with performance „ TheBoard awardedMr.Dimon $29.5millionof total compensation for 2017, an increaseof $1.5million from 2016 „ TheBoard considered theFirm’s consistently strongmulti-year performanceunderMr.Dimon’s stewardship ShareholderFeedback „ In response to92%Say-on-Pay support andpositive shareholder feedback, theCMDCmaintained the key featuresofour compensationprogram 2017Updates „ Calibrated theAbsoluteROTCEgoal for the 2017PSU award to 17% basedon current forecastof futureperformance „ Introduced a risk-based capitalhurdle to thePSUprogram „ Updated thestockownershipguideline forOperatingCommitteemembers 5 Rigorous accountability and recovery provisions „ Robust risk, controls and conduct reviewprocess can impact compensationpools and individualpay „ Strong cancellation and clawbackprovisions coverboth cash and equity awards TRIGGER 4 VESTED UNVESTED Restatement   Misconduct   Risk-related   Protectionbased vv  $26.5B Adjusted net income 1 13% Adjusted ROTCE 1 $6.87 Adjusted EPS 1 $22.3B Net capital distributions 2 „ Client/CustomerFocus „ Teamwork& Leadership  Shareholder-aligned compensationphilosophy  Strong stockownership guidelines and retention requirements  Responsibleuseof equity for employee compensation  No special executivebenefits/ severanceorgoldenparachutes Mr.Dimon $1.5MSalary Hasnot changed from2016 $5MCash Incentives Hasnot changed from2016 $23MPSUs  $1.5M from2016 ~95%ofpay is “at-risk” Total Compensation $29.5M OtherNEOs 3 Salary 4% -6% Cash Incentives 38% -39% PSUs 28% -29% ~95%ofpay is “at-risk” RestrictedStockUnits (RSUs) 28% -29% Total Compensation $13.5M - $21M EXECUTIVECOMPENSATION MANPOWERGROUP CompensationDiscussionandAnalysis WeFocusonThreeKeyPerformanceMetrics In2017,wecontinuedtofocusonthreeperformancemetricsthatwebelievereflectwhetherwearerunningour businessessuccessfullyforourshareholders. • EarningsPerShare.FocusesourNEOsonproducingfinancialresultsthatalignwiththeinterestsofour shareholders.Webelievethismetricisacriticalmeasureofexecutiveperformance. • ReturnonInvestedCapital.Eventhoughweoperateintheservicesindustry,ourbusinessiscapitalintensive. Wemustpayourassociatesandconsultantsbeforewetypicallybillandcollectfromourclients.Our“ROIC” metricmeasureshowefficientlyandquicklyweareconvertingourservicesintocash. • OperatingProfitMarginPercent.MeasureshowefficientlyourNEOshavedeployedouroperatingresourcesto generateaprofit.Webelieveusingthismetricdrivesalong-termfocusonachievingsustainableprofits. Inadditiontothesethreemetrics,theCommitteealsosetsindividualoperatingobjectivesforeachexecutive officer. WeUtilizeaBroadGroupofComparatorsforCompensation Itisdifficulttofindanindustry-specificgroupofpeercompaniesforbenchmarkingourexecutivecompensation.We aresignificantlylargerthanotherU.S.listedcompaniesinourindustry(with$21.0billioninrevenuein2017, comparedto$5.4billionofournearestU.S.-listedcompetitor).Ourtwolargestcompetitors,AdeccoandRandstad, arebasedinEurope,andalthoughtheCommitteereviewsavailablecompensationdataforthesetwocompanies, theirpaypracticesaredifferent,andfullcompensationinformationisnotdisclosed.Toensurethatweareutilizing meaningfuldata,theCommittee’sindependentcompensationconsultant,Mercer,hascustomizedapeergroup, whichconsistsof89companieswithintheS&P500andisdesignedtoproperlybenchmarkourNEOs’ compensationagainsttherelevanttalentmarketplace.TheCommitteebelievesthatusingthisgroupprovidesa robustbasisforcomparingustocompaniesofsimilarscaleandalsorepresentstheuniverseoftop-tiercompanies weconsiderwhenlookingforexecutivetalent.Themedianrevenueofthepeersapproximatesthatof ManpowerGroup,witharangeofapproximately70%toapproximately200%ofourrevenue. 27 | ManpowerGroup Total of 05 pages in section CompensationDiscussionandAnalysis RestructuringCosts.Lastly,for2017theCommitteedeterminedthat,forpurposesofourcompensationplans,the EPSandROICcalculationsshouldexcluderestructuringcosts,netofthesavingsrelatedtothesecosts,asthis betterreflectstheCompany’sperformancefortheyear.ThisadjustmentincreasedEPSby$0.13andresultedin anEPSfigurefor2017of$6.96underourcompensationplans.ROICincreasedby0.2%andresultedinanROIC figurefor2017of14.4%underourcompensationplans . For2017,theCommitteedeterminedOPMPwould excludeallrestructuringcharges,whichincreasedOPMPfrom3.75%to3.92%. Ourkeyperformancemetrics,ascalculatedunderourcompensationplansfor2017and2016inconstantcurrency, wereasfollows: EarningsPerShare -Diluted ("EPS"),under our compensation plans $0 $2 $4 $6 $8 Returnon InvestedCapital ("ROIC"), under our compensation plans 0% 5% 10% 15% 20% OperatingProfitMarginPercent ("OPMP"), under our compensation plans 0% 1% 2% 3% 4% 2016 $6.14 $6.96 2017 14.6% 2016 14.4% 2017 3.82% 2016 3.92% 2017 Seepage41foranexplanationofthecalculationsforEPSandROICandpage46forOPMP. WeManageOurBusinessinLightofGlobalMacroeconomicForces,BusinessCyclesandComplexity Wederiveapproximately87%ofourrevenuefromoutsidetheUnitedStates,withthelargestportionscomingfrom ouroperatingsegmentsinSouthernEurope(41%),NorthernEurope(25%)andAsiaPacificMiddleEast(13%). Ourbusinessistrulyglobalinnatureandcomplexity.Throughourglobalnetworkofnearly2,700officesin80 countriesandterritories,weputmillionsofpeopletoworkin2017withourglobal,multinationalandlocalclients acrossallmajorindustrysegmentsandprovidedabroadrangeofworkforcesolutionsincludingrecruitmentand assessment,traininganddevelopment,careermanagement,outsourcingandworkforceconsulting. Ourresultsarehighlydependentonlabormarketconditions,businesscyclesandothermacroeconomicforces. Duringperiodsofrecovery,wetypicallyexpecttoseeimprovementsinrevenue,operatingprofitmargin,andROIC. Duringdeclinesintheeconomiccycle,orperiodsofeconomicuncertainty,ourrevenuewilloftendeclineasour clientsscalebackuseofourservicesduetoreduceddemandfortheirproductsandservices.Wehaveused periodsofeconomicweaknessanduncertaintytostreamlineourcoststructure,focusingonenhancingproductivity andefficiencythroughoutourbusiness.Strongrevenuegrowthandourcontinuedoperatingdisciplinecontributed toanincreaseinearningsof22.9%asreported,or21.3%inconstantcurrency,forManpowerGroupin2017. Excludingtheone-timebenefitresultingfromU.S.andFrenchtaxreform,earningsincreased6.3%or4.7%in constantcurrencyin2017. OurExecutivePayisDesignedtobeVariableandAffordable Webelievetheinterestsofourshareholdersareservedwhenstrongoperatingperformancedrivesenhanced financialperformance.Therefore,thepayforourCEOandourotherseniorexecutivesiscloselyalignedwithour results,andtheircompensationvariesyear-over-yearbasedonwhethertheyhaveachievedcollectiveand individualperformancegoalssetbyourCommittee.Thisalsoreflectsourphilosophyofaffordability— compensationishigherwhenourexecutiveshavedeliveredfinancialresultsthatmakeitaffordableforthe CompanyandlowerwhenfinancialresultsdeclineandmakeitlessaffordablefortheCompany. EarningsPerShare-Diluted(“EPS”),underourcompensationplansReturnonInvestedCapital(“ROIC”),underourcompensationplansOperatingProfitMarginPercent(“OPMP”),underourcompensationplans 2018ProxyStatement | 26 CompensationDiscussionandAnalysis Background Thiscompensationdiscussionandanalysis(“CD&A”) describesManpowerGroup’sexecutivecompensation program for our executiveofficers for whom disclosureis requiredunder the rules of the SecuritiesandExchange Commission(“SEC”). We refer to this group of executivesas our named executiveofficers (“NEOs”). ManpowerGroup’sNEOs for the year endedDecember 31, 2017are the ChiefExecutiveOfficer (CEO), Chief FinancialOfficer (CFO) andthe three most highlycompensatedexecutiveofficers (other than the CEO andCFO), whowere servingas executiveofficers as of December 31, 2017. Our NEOs are listedbelowwiththeir titles as of December 31, 2017: • JonasPrising— ChairmanandChiefExecutiveOfficer • JohnT. McGinnis — ExecutiveVicePresidentandCFO • Darryl Green — PresidentandChiefOperating Officer • Ram Chandrashekar— ExecutiveVicePresident, OperationalExcellenceandIT, andPresident, AsiaPacificMiddleEast • Mara E. Swan— ExecutiveVicePresident, GlobalStrategy andTalent Executive Summary 2017CompensationReflected Strong 2017Financial Results Our executivecompensationprograms are designedto reward performance, and2017wasa strong year, with revenuegrowth inconstant currency inmost of our major markets. Management continuedto focus on improving our operatingleverageandoperationalefficiency. We enjoyedstrong results inour key performance metrics of EarningsPer Share, Return on Invested CapitalandOperating Profit Margin Percent, as shownbelow.The Committee determined the compensationof our NEOs for 2017basedon our results on these three metrics, as further describedinthis CD&A. EarningsPerShare -Diluted ("EPS"), as reported $0 $2 $4 $6 $10 $8 Returnon InvestedCapital ("ROIC") 0% 5% 10% 15% 20% OperatingProfitMarginPercent ("OPMP") , as reported 3.82% 3.75% 0% 1% 2% 3% 4% 2017 2016 16.6% 2017 14.3% 2016 $8.04 2017 2016 $6.27 Constant Currency. TheCommittee has determined that, for purposesof our compensationplans,our key performance metrics of EPSandROIC shouldbe calculatedon a constant currency basisto ensur our annual incentivesreflect the underlyingperformance of our businesses.By eliminatingthe impact of changesinforeign currency exchangerates, weare better ableto capture year-over-year changesinunderlyingperformance. As such, for compensationpurposesweusedEPSof $7.94 andROIC of 16.4% whichare calculatedon a constant currency basis. ShareRepurchases.Additionally,the Committee has alsodetermined that, for purposesof our compensation plans,the EPScalculationshouldexcludethe benefit of share repurchases the company completedinthe year, except to the extent necessary to offset dilutionresultingfrom shares issuedunder equityplans.For 2017, this reducedthe constant currency EPSfrom $7.94 to $7.92 for purposesof the compensationplan. Tax Reform. For 2017, the Committee further excludedfrom the EPSandROIC calculationsone-time benefits resultingfrom U.S. andFrench tax reform. Thisfurther reducedEPSby $1.09 to $6.83 andROIC by 2.2% to 14.2%. EarningsPerShare-Diluted(“EPS”),asreportedReturnonInvestedCapital(“ROIC”)OperatingProfitMarginPercent(“OPMP”) , asreported 25 | ManpowerGroup