2018 Guide to Effective Proxies

2.17.4 Compensation mix | 341 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES COMPENSATIONDISCUSSION&ANALYSIS The compensation program for our NEOs is primarily focused on incentive compensation, putting a significant portion of total compensation at risk. Consistent with our philosophy of aligning the compensation of our executive officers with creating long-term value for our stockholders, heaviest weighting is on long-term incentive compensation. The mix of fixed versus variable compensation at target for our NEOs for 2017 was as follows. 2017 TOTALCOMPENSATIONMIX CEO (Knotts) 86% AtRisk 14% Baseas% of totalcomp 18% AIPatTargetas% of totalcomp 68% LTIas %of totalcomp 74% AtRisk CFO (Peterson) 26% Baseas% of totalcomp 21% AIPatTargetas %of totalcomp 53% LTIas %of totalcomp 72% AtRisk OTHER NEOs - Average (Carroll,PecaricandSteiner) 28% Baseas% of totalcomp 23% AIPatTargetas %of totalcomp 49% LTIas %of totalcomp Base Salary Base salaries for our NEOs were adjusted on October 1, 2016 to reflect each NEO’s new position and competitive positioning reflecting the reduced size and complexity of the Company following the Spin-Offs. As a result, the HR Committee provided no base salary increases to any NEOs in 2017. Name December 31, 2016 December 31, 2017 Percent Change Daniel L. Knotts $950,000 $950,000 0% Terry D. Peterson $550,000 $550,000 0% John P. Pecaric $475,000 $475,000 0% Deborah L. Steiner $350,000 $350,000 0% Thomas M. Carroll $450,000 * * * Mr.CarrolllefttheCompanyasofJune1,2017. Annual Incentive Plan Consistent with our compensation philosophy, the HR Committee sets the corporate financial target under the AIP for 2017 with the goal of motivating our executive team to meet operational and financial targets to enhance long-term stockholder value. The targets, along with individual performance goals, are set by the HR Committee at the beginning of the year following the presentation of the annual operating budget. The minimum and maximum payout levels range from 0% to 200% of target, with no payout for performance below 90% of the corporate financial target. NEOs do not receive a payout for achievement of individual performance goals unless the threshold corporate financial target is achieved. Thereafter, individual performance goals can only modify an NEO’s AIP payout downward if these individual performance goals are not achieved. The corporate financial target under the AIP for 2017 was non-GAAP adjusted EBITDA. Adjusted EBITDA is defined as net earnings attributable to RRD common stockholders adjusted for income attributable to non-controlling interests, income taxes, interest expense, investment and other income, depreciation and amortization, restructurings and impairments, acquisition-related expenses and certain other charges or credits. The non-GAAP adjusted EBITDA target for 2017 was set at $505 million. This performance level was set by the HR Committee at the beginning of the year after thorough discussion with management regarding the Company’s forecasted performance, and was a challenging goal. 2017TOTALCOMPENSATIONMIXCEO(Knotts)CFO(Peterson)OTHERNEOs–Average(PecaricandSteiner)*14%baseas%oftotalcomp18%AIPattargetas%oftotalcomp68%LTIas%oftotalcomp26%baseas%oftotalcomp21%AIPattargetas%oftotalcomp53%LTIas%oftotalcomp28%baseas%oftotalcomp22%AIPattargetas%oftotalcomp49%LTIas%oftotalcomp86%atrisk74%atrisk71%atrisk 22 RRD 2018NoticeofMeetingandProxyStatement RR DONNELLEY