2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 366 Overview of Principal Components of Executive Compensation The principal components of executive officer compensation for 2017 were (1) base salaries, (2) annual incentive awards and (3) long-term incentive awards in the form of PSUs and stock options. In addition, we provide our executives with certain personal benefits and perquisites, as well as post-employment compensation. The principal components are summarized as follows: 2017 Executive Compensation Program Compensation Element Characteristics Base Salary • Fixed cash compensation • Used to calculate other compensation elements Annual Incentive Program (AIP) • Annual variable cash compensation based on pre-established performance metrics • Formula-driven plan using the following metrics (weighted as indicated) to determine target and earned awards: Financial (consolidated adjusted EBITDA; debt reduction; capital expenditures; total PTFI cash distributions) 50% Operational (Americas copper sales and Americas net unit cash costs of copper) 25% Safety 15% Environmental & Social Responsibility 10% • Annual cash awards capped at a multiple of base salary (for our CEO in 2017, target = 1.5x base salary; maximum = 1.75x target). Long-Term Incentive Program (LTI Program) • PSU award (50% of LTI Program awards) – payable in shares of stock after a three- year performance period, all of which is at risk based on performance measured by a combination of annual achievement of financial and operational objectives during the performance period and TSR. - Range of payout of the PSUs is 0% to 200% depending on our achievement of the performance goals. • Stock options (50% of LTI Program awards) – vest over a four-year period from date of grant. • See page 36 for changes to LTI Program for 2018. Freeport-McMoRan ⎪ 2018 Proxy Statement 31 FREEPORT-MCMORAN, INC.