2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 468 LINCOLN NATIONAL CORPORATION 2018 PROXY STATEMENT 40 SETTING TARGET COMPENSATION The Compensation Committee made compensation decisions for the 2017 calendar year for the NEOs based on a detailed analysis of Company-specific and external data. BENCHMARKING To help the Compensation Committee set 2017 target direct compensation levels for our NEOs,Pay Governance LLC performed a comprehensive competitive compensation analysis in November 2016.They analyzed base pay,annual incentive opportunities, long-term incentive values,and total direct compensation (the sum of the elements listed here) to establish market rates for each executive officer position.They then compared our current executive compensation levels to the market median of our peers. For each of our NEOs,Pay Governance used market data drawn from the stock companies included in the Towers Watson 2016 Diversified Insurance Study of Executive Compensation (the “Towers DI Study”),which at the time were: COMPENSATION DISCUSSION & ANALYSIS SettingTarget Compensation COMPENSATION PEER GROUP FOR BENCHMARKING 2016 TOWERS DI STUDY PARTICIPANT COMPETITOR FOR OUR CORE BUSINESS UNITS LISTS LNC AS A PEER TOP 15 COMPETITORS IN OUR CORE BUSINESS UNITS 1 COMPETITOR FOR DISTRIBUTION AND TALENT LIFE GROUP PROTECTION ANNUITIES RETIREMENT PLAN SERVICES Aegon/Transamerica • • • • • Aflac • • • • Allstate • • • AXA Group • • • • Cigna • • • CNO Financial • • Genworth • • • Hartford Financial Services • • • • John Hancock/Manulife • • • MetLife • • • • • Phoenix Companies • Principal Financial • • • • • Prudential Financial • • • • • • • Sun Life Financial • • • Unum Group • • • • Voya Financial Inc. • • • • • Total Market Share ofTop 15 Competitors 1 62% 80% 71% 84% LINCOLN NATIONAL CORPORATION