2018 Guide to Effective Proxies

2.17.5 Elements of pay tables | 381 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES COMPENSATION DISCUSSION AND ANALYSIS Key Elements of Executive Compensation Program The primary elements of our compensation structure are base salary, annual cash incentive bonuses, long-term equity- based incentive awards and certain employee benefits and perquisites. A brief description of, objectives of, and any changes in 2017 to each principal element of our executive compensation program for 2017 are summarized in the following table and described in more detail below. Key Compensation Program Elements — Overview Compensation Element Brief Description Objectives Changes in 2017 Base Salary Fixed compensation Provide a competitive, fixed level of cash compensation to attract and retain talented and skilled executives Base salary increases were effective as of April 2, 2017 and were provided to our named executive officers as follows: Mr. Sherman—approximately 2.4%. There was no change to Ms. Palmer’s or Mr. Cone’s base salaries for 2017. Annual Cash Incentive Bonuses Variable, performance-based cash compensation earned based on achieving pre-established annual goals Motivate executives to achieve or exceed our current-year financial goals and reward them for their achievements Aid in retention of key executives in a highly competitive market for talent There were no changes to the bonus targets as a percentage of base salary for Ms. Palmer or Mr. Cone for 2017. Mr. Sherman’s target bonus percentage was increased from 125% to 145% of his base salary paid in 2017. Performance goals and attainment percentage levels were updated in light of our short-term and long- term strategic objectives as discussed below. Long-Term Incentives — Equity Based Variable, equity-based compensation to promote achievement of longer-term goals Align executives’ interests with those of our stockholders and encourage executive decision- making that maximizes growth and value creation over the long- term Aid in retention of key executives and ensure continuity of management in a highly competitive market for talent There was no change in the mix of our annual equity awards granted to our executive officers: 25% are service-based vesting stock options, 25% are service-based vesting RSUs and 50% are performance-based vesting RSUs. Mr. Sherman’s target equity award opportunity was increased from 125% to 150% of his base salary. Employee Benefits and Perquisites (discussed below under “Other Program Attributes”) Participation in all broad-based employee health and welfare programs and retirement plans Employee benefits vary based on individual elections; auto allowance and certain commuting expense reimbursements are the only perquisites provided to our named executive officers Aid in retention of key executives in a highly competitive market for talent by providing overall benefits package competitive with industry peers None. Base Salary The base salary component of executive officer compensation is intended to provide a competitive, stable level of minimum compensation to each officer commensurate with the executive’s role, experience and duties. The 24 | Taylor Morrison Home Corporation Notice of 2018 Annual Meeting of Stockholders and Proxy Statement Total of 02 pages in section TAYLOR MORRISON