2018 Guide to Effective Proxies

2.17.5 Elements of pay tables | 363 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES its determinations for the total direct compensation packages for our executive officers, including base salary, target annual cash bonus opportunities, and long-term incentive compensation opportunities. The Committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group. In December 2017, the Committee approved the following updates to the peer group for 2018: • Removing : Demandware and RetailMeNot, which were each acquired, and MercadoLibre, which was above the market capitalization and revenue ranges. • Adding : Benefitfocus, Care.com, Cars.com, Cloudera, and Shutterfly, using the same criteria described above. Competitive compensation data is one of several factors that the Committee considers in making its decisions with respect to the compensation of our executive officers, including our NEOs. Key Components and Design of the Executive Compensation Program ELEMENT TYPE Base Salary Annual Incentive Bonus Variable Variable Long-Term Incentive PRIMARY OBJECTIVE REWARDREALIZED ONACHIEVEMENTOF Attract and Retain Short-Term Company and Individual Performance Shareholder Alignment and Long-term Value Creation Stock Price Service Net Revenue, Adjusted EBDITA Margin, GMS, Individual Goals Fixed We also provide post-employment compensation payments and benefits and other benefits such as health and wellness benefits, management coaching, skills workshops and training, and a Section 401(k) plan. In general, our executive officers participate in the standard employee benefit plans and programs available to our other employees. Base Salary Base salary represents the fixed portion of the compensation of our executive officers, including our NEOs. Generally, although the Committee seeks to set base salaries at competitive levels, the actual positioning will also be based on the Committee’s assessment of the factors described above. The 2017 base salary decisions are described below as part of the holistic presentation of each NEO’s 2017 target total compensation. Etsy 2018 Proxy Statement 33 Total of 04 pages in section ETSY