2018 Guide to Effective Proxies

2.17.5 Elements of pay tables | 353 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES COMPENSATION DISCUSSION AND ANALYSIS COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM Compensation Component Description and Purpose Committee Actions for 2017 Base Salary • Provides a minimum level of fixed compensation necessary to attract and retain senior executives. • Set at a level that recognizes the skills, experience, leadership and individual contribution of each executive as well as the scope and complexity of the executive’s role, including due consideration given to appropriate comparator group benchmarking. • In 2017, the Committee increased base salaries for the following executives relative to 2016: – Mr. Frese to $700,000 (an increase of $20,000). – Mr. Concannon to $700,000 (an increase of $25,000). • The other named executive officers did not receive base salary increases for 2017 relative to 2016. Annual Performance Awards • Variable cash incentive opportunity tied to achievement of financial and individual strategic objectives. • The financial performance measure used to determine a significant portion of each executive’s earned award is adjusted EBITDA as measured at the global level and, for Mr. Concannon, also as measured at the GWS business level. • We believe that adjusted EBITDA is the best measure to evaluate our operating performance because it excludes certain items that management does not consider directly indicative of the company’s ongoing performance. • Each executive had a target cash performance award opportunity, 80% of which (the “financial portion”) was impacted by the company’s financial performance and 20% of which (the “strategic measures portion”) was impacted by both the company’s financial performance and the executive’s personal performance against strategic performance objectives. • An executive may also earn a supplemental and discretionary bonus award in cases of exceptional and exceedingly deserving circumstances. • In 2017, the Committee increased the target annual performance award for the following executives relative to 2016: – Mr. Sulentic to $1,980,000 (an increase of $495,000). – Mr. Frese to $1,050,000 (an increase of $30,000). – Mr. Concannon to $1,000,000 (an increase of $25,000). • 2017 target annual performance award opportunities for the other named executive officers were unchanged from 2016. • Global Adjusted EBITDA for 2017 was $1.7 billion, which was above the target level and resulted in a financial adjustment factor of 117.3%. Adjusted EBITDA for our Global Workplace Solutions business line was $517.3 million, which was also above target, and resulted in a financial adjustment factor of 117.0%. The financial adjustment factor for Messrs. Sulentic, Groch, Lafitte and Frese was based solely on Global Adjusted EBITDA, whereas Global Adjusted EBITDA comprised half of the financial adjustment factor for Mr. Concannon and Adjusted EBITDA for our Global Workplace Solutions business line determined the other half. • Each named executive officer exceeded their strategic performance objectives, resulting in strategic adjustment factors ranging from 130% to 140%. • In addition, the CEO recommended, and the Committee approved supplemental bonus awards for Messrs. Groch, Lafitte, and Concannon for their exemplary leadership and outstanding performance in growing the company during 2017. • For more detail on each named executive officer’s target bonus opportunity and the performance factors considered in determining actual earned bonuses for 2017, please refer to the discussion beginning on page 41 in this CD&A. Annual Long- Term Incentives • Annual grants of restricted stock units intended to align the interests of our executives with those of stockholders over a multi-year period, and to support executive retention objectives. • Generally, our executives will receive two-thirds of their target annual long-term incentive award value in the form of a Time Vesting Equity Award, and one-third of their target award value in the form of an Adjusted EPS Equity Award. (We describe these two types of awards in greater detail under the heading “Components of Our Program—Elements of our compensation program” beginning on page 47). • In 2017, the Committee increased the annual long-term equity target for the following executives relative to 2016: – Mr. Sulentic to $5,630,000 (an increase of $1,505,000). After his 2017 target long-term equity incentive award had been established by our Board of Directors, Mr. Sulentic requested, and our Board agreed, to reduce his 2017 target long-term equity incentive award by $500,000. Therefore, Mr. Sulentic’s actual long-term equity incentive target for 2017 was $5,130,000 (an increase of $1,005,000). – Mr. Frese to $2,320,000 (an increase of $70,000). – Mr. Concannon to $2,170,000 (an increase of $120,000). • 2017 annual long-term equity targets for the other named executive officers were unchanged from 2016. • In 2016, the Committee changed our annual equity grant date from August to March, effective March 2017. To effectuate this change in annual grant timing, in August 2016, the Committee awarded our executives a “stub” grant, as a bridge between August 2016 and the date of the next annual grant in March 2017. The “stub” grant value was equal to 50% of each named executive officer’s target annual 34 CBRE - 2018 Proxy Statement Total of 02 pages in section CBRE GROUP, INC.