2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 370 LINCOLN NATIONAL CORPORATION 2018 PROXY STATEMENT 3 5 ELEMENTS OF OUR COMPENSATION PROGRAM The following table outlines the elements of targeted direct compensation and how each element aligns with our objectives and guiding principles. COMPENSATION ELEMENT WHAT IT REWARDS HOW IT ALIGNS WITH OUR OBJECTIVES PERFORMANCE MEASURED AT RISK CASH OR EQUITY BASE SALARY ■ Sustained high level of performance ■ Demonstrated success in meeting or exceeding key objectives ■ Highly developed skills and abilities critical to success of the business ■ Experience and time in position ■ Competitive base salaries enable us to attract and retain top talent ■ Merit-based salary increases align with our pay-for- performance philosophy INDIVIDUAL FIXED CASH ANNUAL INCENTIVE AWARDS ■ Company performance during the year against key financial goals ■ Specific business-segment performance during the year, measured against strategic business-segment goals ■ Competitive targets enable us to attract and retain top talent ■ Payouts depend on the achievement of established performance measures and goals that align pay with performance CORPORATE AND BUSINESS SEGMENT AT RISK CASH LONG-TERM INCENTIVE AWARDS NONQUALIFIED STOCK OPTIONS ■ Increase in stock price ■ Continued service ■ Value is dependent on our stock price;options have no value unless the stock price increases ■ Three-year ratable vesting supports retention CORPORATE AT RISK EQUITY RESTRICTED STOCK UNITS ■ Increase in stock price and dividends ■ Continued service ■ Value rises or falls as our stock price and dividend increase or decrease ■ Three-year cliff vesting supports retention CORPORATE AT RISK EQUITY PERFORMANCE SHARES ■ Meeting or exceeding our return on equity goal ■ Total shareholder return performance relative to that of other companies ■ Payout is based on metrics important to our shareholders and critical to value creation ■ Three-year performance period supports retention and aligns pay with performance over an extended period of time ■ Relative performance metric creates incentive to outperform peers,with absolute metric rewarding performance versus plan CORPORATE AT RISK EQUITY COMPENSATION DISCUSSION & ANALYSIS Elements of Our Compensation Program LINCOLN NATIONAL CORPORATION