CHFC 2018 Proxy Statement

Our 2017 Peer Group consisted of the following 16 companies: BancorpSouth, Inc. Hancock Holding Company TFS Financial Corp BankUnited, Inc. IBERIABANK Corporation Trustmark Corporation F.N.B. Corporation MB Financial, Inc. UMB Financial Corporation Flagstar Bancorp, Inc. Old National Bancorp United Bankshares, Inc. Fulton Financial Corporation TCF Financial Corporation Valley National Bancorp Texas Capital Bancshares, Inc. As we evolve, we continue to revisit and refine this peer group as needed. To select peers for 2017, we worked withAon to consider regional banks or chartered thrifts that generally fit within the following criteria: • Assets between $10 billion and $25 billion, based on fiscal year 2016 results; and • Market capitalization of at least $500 million. 30 Elements of Compensation The compensation of our named executive officers primarily consists of base salary, annual incentive awards, and annual grants of equity awards. The amount and mix of these elements are individually calibrated to each executive based on his or her level of responsibility and impact on our results. Executives also participate in our retirement plans, and may receive discretionary awards to recognize extraordinary performance as approved by theCompensationCommittee. Each component of compensation is intended to accomplish one or more of the compensation objectives discussed earlier. Base Salary Annual base salaries are established to provide fair and competitive levels of compensation to attract and retain executives and senior officers with exceptional abilities and talent. The Compensation Committee determines base salaries by considering a variety of factors, including: • Individual performance and achievements; • Level of experience and corresponding current compensation; • Equity of pay opportunity for executives with similar levels of responsibility for and impact on our performance results; • Magnitude of responsibilities within the Corporation; • Current competitive practices of peer group companies; and • Recommendations from the Chief Executive Officer and Vice Chair and President and Chief Executive Officer of Chemical Bank for executives (other than themselves). The Compensation Committee considers all of these factors and ultimately establishes the annual base salaries for all executive officers at a level that it considers to be reasonable, appropriate and in the best interest of the Corporation and our shareholders. As noted above, Mr. Provost and Mr. Torgow entered into new one-year employment agreements effective September 1, 2017. Under the terms of these agreements, beginning in September 2017, Mr. Provost’s and Mr. Torgow’s base salary was decreased to $1.00 per year. Prior to this agreement, Mr. Provost and Mr. Torgow were subject to service agreements which set their base salaries at $1.0 million annually. In February 2018, Mr. Provost and Mr. Torgow entered into new employment agreements that provide, effective July 2018 for annual base salaries of $950,000, which represents the one year period since Mr. Provost was retained as our Chief Executive Officer. Following his appointment as Vice Chair and President and Chief Executive Officer of Chemical Bank, we also entered into a new employment agreement with Mr. Shafer, which increased his base salary from $425,000 to $750,000.