2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 438 TEJON RANCH COMPANY CEO Compensation vs. TSR: 2012 through 2017 The chart below compares the five-year change in CEO SCT pay and the change in value of $100 invested in the Company (indexed total stock return, or TSR). CEO compensation has increased over the period, while the change in value of the $100 investment has decreased over the period. CEO compensation in 2014 and 2017 was higher than in other years due to three-year performance milestone grants being awarded during those years, and 2016 compensation increased as a result of supplemental performance milestone award grants that have measurement periods at the end of 2017 and 2019. The 2014 and 2017 milestone grants, which comprised a significant portion of long-term compensation, represented long-term pay opportunity for 2014 – 2016 and 2017 – 2019. $0 $50 $100 $150 $200 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 Indexed TSR CEO Total Compensation CEO Total Compensation Indexed TSR Linear (CEO Total Compensation) Linear (Indexed TSR) 2012 2013 2014 2015 2016 2017 CEOTotalCompensation$4,000,000$3,000,000$2,000,000$1,000,000$0201220132014201520162017$200$150$100$50$0IndexedTSRCEOTotalCompensationIndexedTSRLinear(CEOTotalCompensation)Linear(IndexedTSR) 34 Total of 02 pages in section