2018 Guide to Effective Proxies

2.17.3 Business strategy | 289 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES EXECUTIVE COMPENSATION AND OTHER INFORMATION COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis describes and provides disclosure about the objectives and policies underlying our executive compensation programs. Executive Summary Edwards is the global leader in patient-focused medical innovations for structural heart disease, as well as critical care and surgical monitoring. Driven by a passion to help patients, we collaborate with the world’s leading clinicians and researchers to address unmet healthcare needs, working to improve patient outcomes and enhance lives. Pay-for-Performance Philosophy. The Compensation Committee strives to create a pay-for-performance culture and strongly believes that executive compensation should be tied not only to performance but also directly to the successful implementation of our corporate strategy. We embrace a corporate strategy that puts patients first and creates value with therapies that transform care. We execute our strategy by focusing on the right thing for patients, identifying unmet clinical needs and developing breakthrough therapies, doing so in a way that establishes trusted relationships with our stakeholders. As a direct result of our strategy, we have introduced new therapies such as transcatheter aortic valve replacement, rapid-deployment surgical heart valves and noninvasive advanced hemodynamic monitoring, all while achieving our stated financial and operating objectives, and strengthening our leadership positions. Managing our business well in a challenging, highly regulated, dynamic environment requires talented and energetic leaders who champion our strategy and deliver on our commitments. Our executive compensation programs are designed to emphasize performance-based compensation, reward financial performance and the implementation of our corporate strategy, and align the financial interests of our executives with those of our stockholders. EDWARDS’ CORPORATE STRATEGY INFORMS PAY DESIGN Our Corporate Strategy is translated into Strategic Imperatives Financial Drivers Market Drivers Create Meaningful Value by Transforming Patient Care Revenue Net Income Cash Flow Financial Results Evaluated relative to target goals Results weighted 50% Revenue 30% Net Income 20% Free Cash Flow Lead in emerging structural heart therapies Extend leadership for heart valve and critical care patients Business excellence Equity Vehicles Determined by multiplying financial measure achievement by KOD achievement by achievement of individual Performance Objectives Annual Cash Incentive Compensation Performance Objectives 2017 Key Operating Drivers (KODs) (MeasureexecutionagainstStrategic Imperatives) Share Price Total Stock Return (Relative to a subset of the S&P Healthcare Equipment Select Industry Index) Focus Leadership Innovation Singular focus on the large unmet needs of structural heart and critically ill patients Pioneer breakthrough technologies with superior evidence Lead and accelerate the adoption of transcatheter therapy for aortic valve patients Assessed against individual objectives focused on financial measures and operational goals within a named executive officer’s area of responsibility Stock Options Restricted Stock Units (”RSUs”) Performance-Based RSUs (”PBRSUs”) Lead groundbreaking standards of care through trusted relationships Long-Term Equity Compensation 55% Options 20% RSUs 25% PBRSUs Edwards Lifesciences Corporation | 2018 Proxy Statement 25 EDWARDS LIFESCIENCES CORPORATION