2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 368 COMPENSATION DISCUSSION AND ANALYSIS Company plc was added to the peer group as the Committee believes that its size and business mix makes it a suitable comparator for LabCorp. The companies included in the 2017 comparative peer group were: Agilent Technologies, Inc. Owens & Minor, Inc. Baxter International Inc. Perrigo Company plc Becton, Dickinson and Company Quest Diagnostics Incorporated Boston Scientific Corporation IQVIA Holdings Inc. DaVita Healthcare Partners Inc. St. Jude Medical, Inc. Henry Schein, Inc. Stryker Corporation Mylan N.V. Thermo Fisher Scientific Annually, FW Cook prepares a review of competitive total compensation for the Company’s executives versus total compensation for similar positions at our peer group companies and utilizes national general industry survey data for executives for whom there is insufficient comparable information in the peer company proxy statements. Shareholder Input In addition to the overall comparative framework and the other factors discussed above and below, we also consider input from our shareholders. We engage with shareholders throughout the year relating to executive compensation matters (representing more than 75 percent of our shares outstanding) and will continue our outreach and consider input from shareholders. We also consider the outcome of our annual say on pay votes when making executive compensation decisions. See “Proposal No. 2” below for this year’s “say on pay” proposal. Last year, approximately 94% of the shareholders’ votes cast on this proposal were voted in favor of the proposal. The Committee believes that this approval by a substantial majority of our shareholders demonstrates strong support for our approach to executive compensation and, as a result, the Committee will continue to evaluate executive compensation using the same clear principles of performance-based compensation. 2017 Actions Our executive compensation program focuses on three key elements of compensation: (i) annual salary; (ii) annual cash incentive pay; and (iii) long-term incentive awards. The following chart shows how these elements were used by the Committee in 2017. LABCORP - 2017 EXECUTIVE COMPENSATION STRUCTURE AND ACTIONS BASE SALARY For 2017, the Committee increased Mr. King’s base pay by 4.3% (which increase he declined in light of the reduction of the Company’s guidance after the first quarter of 2017) and the base salaries of the other NEOs as follows: Messrs. Eisenberg and Ratliff by 3% and Mr. Eberts by 5.3%. Mr. Huff’s salary was set in connection with his promotion to Chief Executive Officer of LabCorp Diagnostics. ANNUAL CASH INCENTIVE (MIB Plan) PERFORMANCE METRICS Consolidated Net Revenues Payouts under the 2017 MIB Plan were 113.6% of Target for the CEO and above Target for the other NEOs excluding Mr. Ratliff Consolidated Adjusted Operating Income Strategic Objectives LONG TERM INCENTIVE (LTI) PERCENT OF LTI PERFORMANCE METRICS 60% – Performance Shares 70% –EPS Growth Payouts of 2015-2017 performance share cycle were 172.7% of Target 30% – Revenue Total Shareholder Return (25% Modifier) 20% – Restricted Stock Units Service During Vesting Period 20% – Non-qualified Stock Options Service During Vesting Period LABORATORY CORPORATION OF AMERICA HOLDINGS • 2018 Proxy Statement 33 LABORATORY CORPORATION OF AMERICA HOLDINGS