2018 Guide to Effective Proxies

2.17.10 Peer groups | 459 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES Š a competitive pay analysis of peer companies with data from proxy statements and the McLagan 2016 Top Management Survey, Š each executive’s experience, responsibilities, individual performance, and pay relative to internal peers, and Š reports prepared by the company’s compensation consultant and or Human Resources Department on each executive’s pay history with: Š actual total compensation from 2013 to 2016, Š projected 2017 compensation, Š option exercises, equity vesting amounts, dividend equivalents, 401(k) balances, deferred compensation balances, and other cash compensation (e.g., company match for the 401(k) plan and wellness incentives), Š the value and vesting schedule of outstanding long-term awards, and Š each component of pay as a percentage of total compensation. The Compensation Committee does not use a formula or assign a weighting to various factors considered in setting compensation. It does not target a specific percentage mix between cash compensation and long-term incentives or any specific percentage of total compensation for each compensation component. The Compensation Committee uses a peer group as a source of market data to assess the competitiveness of compensation and pay practices for executive officers and non-employee directors. The data is not used to set compensation targets. Peers were selected considering the following factors: Š Quantitative: revenue, market capitalization, and number of employees Š Qualitative: business model, geographic coverage, and competition for customers and/or employees. Because the company has few competitors comparable in terms of business model and geographic coverage, the peer group includes a mix of brokerage firms, banking and asset management companies, and companies that provide custody services and process a significant daily volume of consumer financial transactions. The peer group of 23 companies used for compensation for 2017 was: BB&T Corporation Fifth Third Bancorp PNC Financial Services Group, Inc. Regions Financial Corporation Sun Trust Banks, Inc. U.S. Bancorp Discover Financial Services Bank of New York Mellon Mastercard, Inc. State Street Visa, Inc. E*TRADE Financial Fidelity Investments LPL Financial Holdings Raymond James Financial TD Ameritrade Holding Ameriprise Financial BlackRock, Inc. Franklin Resources Invesco Legg Mason Northern Trust T. Rowe Price Group Asset Management 7 peers Banking 6 peers Custody and Processing 5 peers Brokerage 5 peers 26 THE CHARLES SCHWAB CORPORATION