2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 112 GENERAL MOTORS MCKESSON CORPORATION PEABODY ENERGY CORPORATION TENET HEALTHCARE CORPORATION 20132014201520162017ActionsWeTookCompanyexitedTARPFinalyearofgrantingSalaryStockUnits,whichwerevestedondateofgranttoNEOsActionsWeTookIntroducednon-competeandnon-solicitationtermsintoallLTIPawardsforallSeniorLeadersbeginningwiththeDrivingStockholderValuegrantActionsWeTookSTIP–IncreasedfocusonEBIT-Adjustedtodriveprofitablegrowth40%EBIT-Adjusted25%AdjustedAFCF10%GlobalMarketShare25%GlobalQualityActionsWeTookIntroducedstockownershiprequirementsIntroducedaperformance-basedcompensationstructurewithbothSTIPandLTIPSTIP–Performancebasedonthefollowingmeasures:25%EBIT-Adjusted25%AdjustedAFCF25%GlobalMarketShare25%GlobalQualityLTIP–StructureforNEOsincludes75%PSUsand25%RSUsPSUs–Performance-basedvestingon100%ROICAdjustedwithaGlobalMarketSharemodifier,PSUsvestattheendofthethreeyearperformanceperiodRSUs–Time-basedvestinginequaltranchesoverthreeyearsActionsWeTookSTIP–IncreasedfocusonkeyfinancialmeasuresandaddedanindividualperformanceelementtoincorporateindividualperformancegoalsforeachNEO50%EBIT-Adjusted25%AdjustedAFCF25% IndividualPerformanceLTIP–Eliminatedtime-vestedRSUsandreplacedwithStockOptions.NEOswillhaveamixof75%PSUsand25%StockOptionsIncorporatedrelativeperformancemeasuresintoPSUsRelativeROIC-Adjusted–50%ofLTIPRelativeTSR–25%ofLTIP2017STIP2017LTI EXECUTIVECOMPENSATION Compensation Program Evolution Ourcompensationprogramshavecontinuedtofocusourleadersonthekeyareasthatbothdrivethebusinessforwardandalignto the short-term and long-term interests of our shareholders. The Compensation Committee regularly reviews and discusses plan performanceateachCompensationCommitteemeeting.TheCompensationCommitteeconsidersmanyfactorswhenelectingto makeplanchangesforfutureincentiveplans,includingresults,markettrends,andinvestorfeedback.Thetablebelowshowshow thecompensationprogramhascontinuedtoevolvetoalignwithshareholders’interests. ActionsWeTook • CompanyexitedTARP • Finalyearofgranting SalaryStockUnits, whichwerevestedon dateofgrant toNEOs ActionsWeTook • Introduced stockownership requirements • Introducedaperformance-based compensation structurewithbothSTIPand LTIP • STIP–Performancebasedon the followingmeasures: •25%EBIT-adjusted •25%AdjustedAFCF •25%GlobalMarketShare •25%GlobalQuality • LTIP–Structure forNEOs includes75%PSUsand25% RSUs •PSUs–Performance-basedvestingon 100%ROIC- adjustedwithaGlobalMarketSharemodifier,PSUs vestat theendof the three-yearperformanceperiod •RSUs–Time-basedvesting inequal tranchesover threeyears 2013 2015 2016 2017 2014 ActionsWeTook • STIP– Increased focusonkey financialmeasures andaddedan individualperformanceelement to incorporate individualperformancegoals foreachNEO •50%EBIT-adjusted •25%AdjustedAFCF •25% IndividualPerformance • LTIP–Eliminated time-vestedRSUsand replaced withStockOptions. NEOshaveamixof75%PSUs and25%StockOptions • Incorporated relativeperformancemeasures intoPSUs ActionsWeTook • Introducednon-compete andnon-solicitation terms intoall LTIPawards forallSenior Leaders beginningwith theDriving StockholderValuegrant ActionsWeTook • STIP– Increased focus onEBIT-adjusted todrive profitablegrowth •40%EBIT-adjusted •25%AdjustedAFCF •10%GlobalMarketShare •25%GlobalQuality •RelativeROIC-adjusted–50%of LTIP •RelativeTSR–25%of LTIP 2017STIP 25% Adjusted AFCF 50% EBIT - adjusted 75% Financial Performance 25% PSUs - Relative TSR 50% PSUs - Relative ROIC 75% PSUs 2017 LTIP 25% Individual Perfor- mance 25% Stock Options G E N E R A L M O T O R S 2018 PROXYSTATEMENT 39 ITEM1.ELECTIONOFDIRECTORS Corporate Social Responsibility Our approach to corporate social responsibility is rooted in our commitment to better health – for our employees, our communities and beyond. We create better health for patients, and we mirror that commitment by advancing the health of our employees,ourcommunitiesandtheplanetweallshare. McKesson’sFocuson HumanCapital Wearecommittedtodevelopingandinvestinginourmostimportantasset–ourpeople.Weknow that the well-being of our employees is an essential component of a healthy company, and we continually strive to promote a culture in which all employees feel supported and valued. Our culture is grounded in our shared ICARE (integrity, customer-first, accountability, respect and excellence)andILEAD(inspire,leverage,execute,advanceanddevelop)principles.Thesevalues guide all that we do, and help advance our company across every dimension, creating maximum valueforourcustomersandmakingMcKessonagreatplacetowork. We seek opportunities to create excitement among our employees about their careers. We invest heavily in employee growth and development through rewarding job assignments, one-on-one developmentwithmanagersandopportunitiesforcontinuedlearning. FY2018Education&DevelopmentHighlights • McKesson’seducationalassistanceprogramprovided$3.13milliontoemployeespursuinghighereducation; • McKesson employees in the U.S. and Canada completed 211,458 hours of management, professional development, technicalandotheremployeetraining; • Our Medical-Surgical business created a three-year strategic plan focused on developing leaders within McKesson ratherthanrelyingonexternaltalent;and • McKesson expanded its investment in developing rising C-suite talent, focusing on assessment, coaching and experiencemanagement. McKesson’sCommitment to Diversity andEqualPay BecausewebelievethatourpeopledriveourCompany’ssuccess,McKessontakesveryseriouslyitscommitmenttotheprinciplesof equalopportunity,payequity,diversityandinclusion.Aswefocusondeliveringbetterhealthinatransformativehealthcarelandscape, weknowitwilltakethebestandbrightesttokeepusaheadofthecurve.Ourdiversityandinclusionstrategyisaboutbuildingastrong pipeline of future leaders, whose diverse backgrounds and view-points infuse innovation, agility and creativity into our mission of delivering better health for the future. Our Board of Directors and management team have a long track record of advancing these important principles throughout the organization, which includes the creation of a diversity and inclusion organization (“D&I Organization”)morethantenyearsago,followedshortlythereafterbytheappointmentofourfirstChiefDiversityOfficer. Our Board of Directors routinely receives reports from management on McKesson’s diversity and inclusion efforts. Our U.S. practicesandpoliciesaredisclosedonourwebsiteandhelpMcKessonensureourworkforceisreflectiveofourcommunities, valuesandculturaldifferences,andleveragestheviewsandexperiencesofeachothertocreatethebestpossiblesolutions. 2006 Boardof Directors approves first diversity strategy 2008 McKesson approves firstChief Diversity Officer 2007 DiversityScorecard launches and ties tobonus-eligible compensation 2010 EmployeeResource Groups formalized and standardized at an enterprise level 2014 D&IOrganization developsBlueprint strategy to improve representation of groups experiencing slower growth tomarket parity–People of Color,MilitaryandDisability. DiversityScorecard tiesmarket parity tobonus-eligible compensation 2011 WomenonBoard WinningCompany (7th year ina row in2018) 2013 Chairman’sDiversity Council established to formulate enterprise strategy 2015 Blueprint launches across U.S.with positive improvement in first year Instrumental in developingand launchingFons TrompenaarsCulturalFluency training forpeople leaders Diversity & Inclusion Timeline 20 -2018ProxyStatement PROXY STATEMENT SUMMARY 2017: A YEAR OF TRANSITION 2017wasayearofsignificanttransition.TheBoardactedtoimplementseveralsignificantchangesthatwouldtransformtheCompanyand repositionitforthefuture,includingachangeinleadership.RonaldA.RittenmeyerwasnamedTenet’sExecutiveChairmaninAugust2017 andChiefExecutiveOfficerinOctober2017.Mr.RittenmeyerhasservedonourBoardsince2010,mostrecentlyasindependentLead Director.Mr.Rittenmeyerhasextensiveexperienceinturnaroundsituations,havingpreviouslyledMillenniumHealth,LLCfollowingits emergencefrombankruptcy,aswellasnumerousothercompaniesthroughtheirin-andout-of-courtrestructuringandtransitionprocesses. SinceMr.RittenmeyerassumedtheroleofChiefExecutiveOfficer,Tenethastakenanumberofadditionaldecisiveactions,including implementingmanagementchangesatitsUnitedSurgicalPartners(“USPI”)andConiferHealthSolutions(“Conifer”)businesses,announcing anenterprise-wide$250millioncostreductioninitiativeandinitiatingastrategicreviewofitsportfoliothathasresultedintheexplorationofa saleofTenet’sConiferbusiness.Atthesametime,TenethasworkedtoenhancetheoversightcapabilitiesofitsBoard,throughadditional Boardrefreshment,anditsaccountabilitytoshareholders,throughdirectBoardandmanagementengagementwithshareholdersand improvementstoTenet’sgovernancestructures.Certainoftheseactionsaredescribedinfurtherdetailbelow. Inlightoftheseconcurrentandtransformationalchanges,2017wasultimatelyatransitionalyearforTenet,andonethathaspositionedthe Companytodelivervaluetoitsshareholdersandotherstakeholdersinthefuture.UnderMr.Rittenmeyer’sleadership,ourBoardand managementteamhavebeenhighlyfocusedonexecutingaspeedyandsuccessfulturnaroundofthebusiness.Theirefforts,andthoseofall ofouremployees,havealreadybeguntoshowprogress. Momentum in Business TheBoardandmanagementteamhavetakenanumberofdecisivestepsduringthistimeofsignificanttransitionforTenet,asshowninthe timelinebelow. September October November December January February March Board appoints RonRittenmeyer CEO (October 23) Announces $150million cost reduction initiative; JamesBierman joins theBoard (October 27) Initiatesprocess to explorea saleofConifer , increases cost reduction savings to $250million and issues Outlook for 2018 (December 19) RichardFisherand RichardMark join theBoard (November 9) Boardappoints RonRittenmeyer ExecutiveChairman (August 31) NewChief Human Resources Officer, SandiKarrmann (November 27) Definitive agreement to sellGoldenState HealthPlan (February 21) HospitalOperations restructuringcommences with elimination of regional management layer (October 5) Definitive agreement to sellMacNeal Hospital (October 11) Definitiveagreement to sellminority position in BaylorScott& WhiteMedical Center –WhiteRock (December 26) Definitive agreement to restructure NorthTexas joint venture withBaylorScott &WhiteHealth (January 4) Definitive agreement to sell DesPeres Hospital (January 5) QualityGatekeeper implemented inmanagement compensationprogram (effective for 2018AIP) Completes sale of two hospitals in Philadelphia (January 11) Boardamends Tenet’sbylaws toprovide shareholders theability tocalla specialmeeting (January 21) NewChief HumanResources Officer for Hospital Operations, MargieArion (January 31) Combined sales organizations for hospitalsand USPI underPhilSpencer, newSVPofSales (January 29) NewGeneral Counselof Conifer, TomArnst (January 16) SpecialMeeting BylawAmendments; ShareholderRights PlanTermination; and Eliminationof ExecutiveCommittee (March 5) NewCOO of Conifer, KyleBurtnett (October 25) BUSINESS INITIATIVES Cost Reduction Initiative InDecember2017,Tenetannouncedasetofexpandedenterprise-widecostreductioninitiatives.Theseinitiativesareexpectedtorealize $125millionincostsavingsin2018and$250millionofannualizedrun-ratecostsavingsbytheendof2018.Thecostreductioninitiativeis expectedtoeliminateapproximately2,000positions,reducecorporateoverheadbyapproximately20%comparedto2016andeliminate regionalmanagementofthehospitalbusiness. 2 TENETHEALTHCARE Š 2018PROXYSTATEMENT Total of 02 pages in section ExecutiveCompensationTimeline BankruptcyCourtandCreditorsapproved: NewCommi�eesapproved: • Short-term Incen�ve Plan (“STIP”) • KeyEmployee Incen�vePlan (“KEIP”) • Canceledpriorequity awards • GrantedEmergence RSUawards toall ac�veemployees • Adjustedbase salaries • Revised2017STIP • KEIPachievement • Base salarieseffec�ve April1,2018 • 2018STIPopportunity • 2018 long-term incen�ve plan (“LTIP”)opportunity Chapter11 Jan1 -Apr2,2017 Emergence Apr3,2017 Post-Emergence Apr4 -Dec31,2017 2018Compensa�on Jan1 -Dec31,2018 Thetwocompensationprogramsinplaceduringtheyear–the2017executivecompensationprogramand Chapter11relatedcompensation–aresummarizedinthefollowingtable: Key2017ExecutiveCompensationElements Element PerformanceMetric(s) GeneralDescription AnticipatedChangefor2018 BaseSalary N/A Fixedcashcompensation;reviewed annuallyandsubjecttoadjustment MarketadjustmentseffectiveApril1, 2018 STIP AdjustedEBITDAR 2 Safety Individualobjectives Short-termincentivecash compensationearnedbasedon performanceagainst2017financial, safetyandindividualperformance goals Performanceobjectivesconsistof FreeCashFlowperShare, 3 Adjusted EBITDA 2 andsafetygoals.Individual performancegoalsareexcludedfrom the2018STIPtoplacegreater emphasisonmeasurableCompany performance LTIP N/A N/A Thereintroduced2018LTIPincludesa mixofperformanceshareunits(60%) andrestrictedstockunits(40%) Key2017Chapter11CompensationElements Element PerformanceMetric(s) GeneralDescription AnticipatedChangefor2018 KEIP ConsolidatedAdjustedEBITDAR (excludingAustralia) 4 AustralianAdjustedEBITDAR 4 ConsolidatedCashFlow(before RestructuringCosts) 4 EnvironmentalReclamation Performance-basedcash compensationpayableonlyupon successfulemergencefromChapter11 Thesewereone-time,Chapter 11-specificincentivesapprovedbythe BankruptcyCourtandourmajor creditorsandwillnotapplygoing forward Notapplicable Emergence Grant:Restricted StockUnits (“RSUs”) WebelievetheseRSUsrecognizethe company’sperformanceduring Chapter11andalignourNEOs’ compensationinterestswithour stockholders’investmentinterestsin thatincreasinglevelsofvaluerealized byNEOsiscontingentonincreasesin thecompany’sstockprice Awardsgenerallyvestratablyonan annualbasisoverthreeyears,subject tocontinuedemployment Thesewereone-time,Chapter11 specificincentivesapprovedbythe BankruptcyCourtandourmajor creditorsandwillnotapplygoing forward Notapplicable 2 AdjustedEBITDARandAdjustedEBITDAarenotrecognizedtermsunderGAAP.Thesemeasuresaredefinedandreconciledtothenearest GAAPmeasurein AppendixB . 3 FreeCashFlowperShareisanon-GAAPmeasuredefinedasnetcashprovidedbyoperatingactivitieslessnetcashusedininvesting activities,dividedbyweightedaveragedilutedsharesoutstanding.FreeCashFlowperShareisusedbymanagementasameasureofour financialperformanceandourabilitytogenerateexcesscashflowfromourbusinessoperationsonapersharebasis.FreeCashFlowper ShareisnotintendedtoserveasanalternativetoU.S.GAAPmeasuresofperformanceandmaynotbecomparabletosimilarly-titled measurespresentedbyothercompanies. 4 ConsolidatedAdjustedEBITDAR(excludingAustralia),AustralianAdjustedEBITDARandConsolidatedCashFlow(beforeRestructuring Costs)arenotrecognizedtermsunderGAAP.ThesemeasuresaredefinedandreconciledtothenearestGAAPmeasurein AppendixC. Peabody |Noticeof2018AnnualMeetingofStockholdersandProxyStatement 5