2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 500 AMERICAN AIRLINES GROUP ARTHUR J. GALLAGHER & CO. BANK OF AMERICA CORPORATION CHURCH & DWIGHT CO. EXECUTIVE COMPENSATION Summary Compensation Table ThefollowingtableprovidescompensationearnedbyournamedexecutiveofficersintheyearsendedDecember31, 2017,2016and2015. NameandPrincipal Position Year Salary ($) Bonus ($) Stock Awards ($) (b) Non-Equity IncentivePlan Compensation ($) (c) Changein PensionValue andNon- Qualified Deferred Compensation Earnings ($) (d) AllOther Compensation ($) (e) Total ($) DougParker (a) 2017 - - 11,974,000 - - 201,486 12,175,486 ChairmanandChief 2016 - - 11,000,000 - - 140,763 11,140,763 ExecutiveOfficer 2015 231,538 - 10,330,000 387,450 - 469,559 11,418,547 DerekKerr 2017 616,396 - 2,792,000 615,264 - 84,806 4,108,466 ExecutiveVice 2016 600,936 - 2,575,000 948,525 - 66,521 4,190,982 PresidentandChief 2015 584,178 - 2,920,000 1,350,317 - 366,448 5,220,943 FinancialOfficer RobertIsom 2017 710,769 - 5,263,000 993,235 - 126,877 7,093,881 President 2016 641,306 - 4,635,000 1,176,667 - 99,141 6,552,114 2015 609,577 - 3,500,000 1,409,027 - 650,014 6,168,618 MayaLeibman 2017 616,396 - 2,792,000 615,264 41,220 93,933 4,158,813 ExecutiveVice 2016 600,936 2,575,000 948,525 31,652 95,814 4,251,927 PresidentandChief InformationOfficer SteveJohnson 2017 616,396 - 2,792,000 615,264 - 122,536 4,146,196 ExecutiveVice 2016 600,936 - 2,575,000 948,525 - 96,025 4,220,486 PresidentCorporate 2015 584,178 - 2,920,000 1,350,317 - 236,537 5,091,032 Affairs (a) OnApril20,2015,theCompensationCommitteeadjustedthecompensationprogramfromMr.Parkertoprovide100%ofhisdirectcompensationin theformofequityincentives.EffectiveasofMay1,2015,theCompanynolongerpaidMr.Parkeracashbasesalary,andheceasedparticipationin theCompany’sannualcashincentiveprogram.Mr.Parker’sApril2017equitygrantwassetatalevelintendedto,amongotherthings,capturethe valueofhisforgonebasesalary,targetcashincentiveopportunityunderthe2017Short-termIncentiveProgramandthevalueofhis401(k)match. (b) Amountsinthiscolumnrepresenttheaggregategrantdatefairvalue,ascalculatedinaccordancewithASCTopic718,ofRSUsgrantedbythe CompanyduringeachofthefiscalyearsendingDecember31,2017,2016and2015,respectively,tothenamedexecutiveofficers.Thegrantdatefair value,ascalculatedinaccordancewithASCTopic718,oftime-basedRSUsisequaltothenumberofsharesunderlyingtheRSUs,multipliedbythe closingpriceofourCommonStockonthedateofgrant.Withrespecttotheperformance-basedRSUswithaTSRmodifiermarketcondition,as describedintheCompensationDiscussionandAnalysis—Long-TermIncentiveProgramsonpage51,grantedduringfiscalyear2017,thegrantdate fairvalueisequaltothenumberofsharesunderlyingtheprobableoutcomeoftherelativepre-taxincomemarginperformancecondition,multipliedby thefairvaluepersharedeterminedusingaMonteCarlosimulationmodelinaccordancewithapplicableaccountingrules.Notethatasaresultofthe requirementtouseaMonteCarlovaluationduetotheTSRmodifiermarketcondition,thegrantdatefairvaluesoftheRSUsgrantedduring2017as showninthiscolumnarehigherthantargetgrantvaluesapprovedbytheCompensationCommittee,whichwerebasedonourclosingstockpriceon thedateofgrant.Theaggregatemaximumfairvalueofthe2017performance-basedRSUsassumingthehighestlevelofachievementofthe performanceconditionisasfollows:Mr.Parker$10,819,000,Mr.Kerr$2,345,000,Mr.Isom$4,421,000,Ms.Leibman$2,345,000andMr.Johnson $2,345,000. (c) For2017,amountsrepresentpaymentsundertheAAG2017Short-termIncentiveProgram.Foradditionalinformationonthesepayouts,seethe sectionentitled“CompensationDiscussionandAnalysis—AnnualCashIncentiveProgram”beginningonpage50. (d) AmountrepresentsthechangeintheactuarialpresentvalueoftheaccumulatedbenefitundertheAMRRetirementBenefitPlanandtheAMR Non-QualifiedPlanfromJanuary1,2017toDecember31,2017.BothoftheseplanswerefrozenasofOctober2012.Foradditionalinformationon theseplans,seethesectionsentitled“CompensationDiscussionandAnalysis—AMRLegacyRetirementPrograms”beginningonpage54and “PensionBenefits”onpage64. 60 2018ProxyStatement | Executive Compensation Tables 2017 Summary Compensation Table Nameand PrincipalPosition (1) Year Salary ($) Bonus ($) (2) Stock Awards ($) (3) Option Awards ($) (4) Non-Equity IncentivePlan Compensation ($) (2)(5) Changein Pension Valueand Nonqualified Deferred Compensation Earnings ($) (6) AllOther Compensation ($) (7) Total ($) PatGallagher Chairman,Presidentand ChiefExecutiveOfficer 2017 1,250,000 — 1,856,479 665,786 2,812,500 87,165 1,214,561 7,886,491 2016 1,000,000 — 823,934 531,505 2,250,000 37,215 1,096,513 5,739,167 2015 1,000,000 — 727,178 471,750 2,250,000 0 1,024,349 5,473,277 DougHowell ChiefFinancialOfficer 2017 850,000 — 841,528 226,116 1,275,000 2,630 580,302 3,775,576 2016 850,000 — 701,546 225,615 1,275,000 1,638 572,447 3,626,246 2015 750,000 — 547,115 176,675 1,125,000 0 610,700 3,209,490 JimGault CorporateVP,Chairman– GlobalP/CBrokerage 2017 800,000 — — — 1,200,000 82,149 1,136,247 3,218,396 2016 800,000 — 330,011 318,565 1,200,000 35,073 524,001 3,207,650 2015 800,000 200,000 290,871 283,050 800,000 0 553,746 2,927,667 JimDurkin CorporateVP,Chairman– EmployeeBenefit ConsultingandBrokerage 2017 725,000 — — — 1,087,500 97,440 1,072,008 2,981,948 2016 725,000 — 299,414 288,990 1,087,500 41,420 532,067 2,974,391 2015 725,000 — 263,169 256,225 1,087,500 5,256 506,046 2,843,196 TomGallagher CorporateVP,CEO– GlobalP/CBrokerage 2017 800,000 — 594,187 425,966 1,200,000 69,973 505,932 3,596,058 2016 750,000 — 310,341 299,130 1,125,000 28,886 2,115,624 4,628,981 2015 700,000 525,000 253,935 247,900 350,000 0 1,175,265 3,252,100 (1) PrincipalpositionsareasofDecember31,2017. (2) Amountsinthiscolumnarereportedfortheyearinwhichtheyareearned,regardlessoftheyearinwhichtheyarepaid. (3) ThiscolumnincludesthefullgrantdatefairvalueofPSUsandrestrictedstockunitsgrantedduringeachfiscalyear.Theamountsreportedinthiscolumnhave beencalculatedinaccordancewithFASBASCTopic718, Compensation–StockCompensation .TheamountsreportedinthiscolumnforPSUsgrantedduring eachfiscalyearrepresentthevalueofeachawardatthegrantdatebasedupontheprobableoutcomeoftheperformanceconditionsundertheprogram, determinedinaccordancewithFASBASCTopic718.InaccordancewithSECrules,anyestimateforforfeituresisexcludedfrom,anddoesnotreduce,such amounts.MaximumpayoutsforthePSUawardsasofthedateofgrantwereasfollows:PatGallagher–$3,712,958;DougHowell–$1,262,292;andTom Gallagher–$1,188,374.ForadiscussionofPSUs,seepage21.Foradditionalinformationonthevaluationassumptionswithrespecttostockgrants,refertoNote 11toourconsolidatedfinancialstatementsintheAnnualReportonForm10-KfortheyearendedDecember31,2017. (4) Thiscolumnrepresentsthefullgrantdatefairvalueofstockoptionawardsgrantedduringeachfiscalyear.Theamountsreportedinthiscolumnhavebeen calculatedinaccordancewithFASBASCTopic718.InaccordancewithSECrules,anyestimateforforfeitureisexcludedfrom,anddoesnotreduce,such amounts.Foradditionalinformationonthevaluationassumptionswithrespecttooptiongrants,refertoNote9toourconsolidatedfinancialstatementsinthe AnnualReportonForm10-KfortheyearendedDecember31,2017. (5) Thiscolumnrepresentsannualperformance-basedcashincentiveawardsrelatedtoservicesrenderedin2015,2016and2017.Awardsarereportedfortheyearin whichtheyareearned,regardlessoftheyearinwhichtheyarepaid.TheseawardswerepaidfullyincashinAprilof2016and2017andMarchof2018, respectively. (6) Theamountsshowninthiscolumnrepresenttheaggregatechangeinactuarialpresentvalueofeachnamedexecutiveofficer’sbenefitsunderourpensionplan, exceptwheresuchchangeisanegativevalue.Whenthatisthecase,SECrulesrequirethatazerobeincludedinthistable.In2015,suchfigureswereasfollows: PatGallagher–$(419);DougHowell–$(557);JimGault–$(395);andTomGallagher–$(7,851). 2018PROXYSTATEMENT 27 Total of 02 pages in section 2017SUMMARYCOMPENSATIONTABLE 2017 SUMMARY COMPENSATION TABLE The following table sets forth information regarding the compensation for 2017, 2016, and 2015 of our President and CEO, our Executive Vice President and CFO, and each of the persons who were the next three most highly paid executive officers in 2017. We sometimes refer to these persons as our “named executive officers,” as definedinItem402of RegulationS-K. NameandPrincipalPosition Year Salary ($) (1) Bonus ($) Stock Awards (2) Option Awards ($) (2) Non-Equity Incentive Plan Compensation ($) (1)(3) AllOther Compensation ($) Total ($) MatthewT.Farrell (5) 2017 1,000,000 3,849,993 1,150,000 259,622 (6) 6,259,615 PresidentandChief 2016 998,845 3,750,000 1,438,300 223,164 6,410,309 ExecutiveOfficerandformer ChiefOperatingOfficerand ChiefFinancialOfficer 2015 690,000 1,146,831 641,700 128,515 (4) 2,607,046 RichardA.Dierker (7) 2017 562,750 754,156 393,900 110,919 (8) 1,821,725 ExecutiveVicePresident, 2016 548,865 731,500 474,200 98,938 1,853,503 ChiefFinancialOfficer LouisH.Tursi,Jr. 2017 434,750 1,000,000 443,201 217,400 76,226 (9) 2,171,577 ExecutiveVicePresident, 2016 413,250 500,000 414,920 297,500 83,295 1,708,965 NorthAmericaSales 2015 395,000 402,783 244,900 68,442 (4) 1,111,124 CarlosLinares (10) 2017 391,945 220,000 763,754 196,000 117,352 (11) 1,689,051 ExecutiveVicePresident, GlobalResearch& Development JudyA.Zagorski (12) 2017 390,504 410,000 631,759 195,300 37,552 (13) 1,665,115 ExecutiveVicePresident, GlobalHumanResources (1) Someofournamedexecutiveofficersdeferredaportionoftheirsalaryandnon-equityincentiveplancompensationin2017underthe EDCP as follows: Mr. Farrell, $108,415; Mr. Dierker, $128,591; Mr. Tursi, $594,606; Mr. Linares, $343,689; and Ms. Zagorski, $308,656. (2) TheamountsshownforoptionandstockawardsarebasedonthegrantdatefairvalueofawardscalculatedinaccordancewithASC Topic 718. The assumptions used in determining the amounts in this column are set forth in note 11 to our consolidated financial statementsinourAnnualReportonForm10-KforthefiscalyearendedDecember31,2017filedwiththeSEConFebruary23,2018. For information regarding the number of shares subject to 2017 stock option and restricted stock grants and other features of those grants,seethe“2017GrantsofPlan-BasedAwards”tableonpage50. (3) Includes payments under the Annual Incentive Plan based on achievement of corporate performance measures. See “Compensation DiscussionandAnalysis—2017Compensation—AnnualIncentivePlan”forfurtherinformationregardingpaymentsfor2017. (4) Includes the portion of the Medicare tax liability attributable to the executive paid by the Company in respect of certain historical deferredcompensationplanaccountbalancesasfollows:Mr.Farrell,$4,007,andMr.Tursi,$2,888. (5) Mr.Farrell’sbasesalaryincreasedto$1,000,000effectiveJanuary4,2016whenhewasappointedPresidentandCEO. (6) Includes$243,830ofemployerretirementsavingscontributions,ofwhich$135,415wascontributedtoMr.Farrell’saccountunderthe Savings and Profit Sharing Plan for Salaried Employees and $108,415 was contributed to his account under the EDCP, based on statutory limits. This also includes reimbursement for a physical examination and donations of $14,000 that we made to non-profit organizationswithwhichMr.Farrellisinvolved. (7) Mr.Dierker’sbasesalaryincreasedto$567,000effectiveApril1,2017. (8) Includes $103,696 of the employer retirementsavings contributions,of which $65,348 was contributedto Mr.Dierker’s accountunder the Savings and Profit Sharing Plan for Salaried Employees and $38,348 was contributed to his account under the EDCP, based on statutory limits. This also includes reimbursement for a physical examination and donations of $5,000 that we made to non-profit organizationswithwhichMr.Dierkerisinvolved. 48 Church&DwightCo. | 2018ProxyStatement ExecutiveCompensation Executive Compensation Summary Compensation Table Thefollowingtableshowscompensationpaid,accrued,orawardedwithrespecttoournamedexecutiveofficersduringthe yearsindicated: 2017 Summary Compensation Table (1) Nameand PrincipalPosition (2) Year Salary ($) (3) Bonus ($) (3)(4) Stock Awards ($) (5) Non-Equity IncentivePlan Compensation ($) Changein PensionValue and Nonqualified Deferred Compensation Earnings ($) (6) AllOther Compensation ($) (7) Total ($) BrianT.Moynihan Chairmanand ChiefExecutiveOfficer 2017 1,500,000 0 19,524,730 0 494,838 260,264 21,779,832 2016 1,500,000 0 13,752,000 0 495,467 192,665 15,940,132 2015 1,500,000 0 11,791,073 0 100,505 431,776 13,823,354 PaulM.Donofrio ChiefFinancialOfficer 2017 987,500 4,400,000 6,585,670 0 124,139 80,325 12,177,634 2016 850,000 4,160,000 5,491,312 0 59,762 51,018 10,612,092 2015 645,833 3,860,000 5,959,618 0 0 124,937 10,590,388 GeoffreyS.Greener ChiefRiskOfficer 2017 987,500 4,200,000 6,110,735 0 1,071 54,298 11,353,604 2016 850,000 3,860,000 4,780,000 0 900 52,229 9,543,129 2015 850,000 3,360,000 4,398,594 0 1,013 49,446 8,659,053 TerrenceP.Laughlin ViceChairmanandHead ofGlobalWealth& InvestmentManagement 2017 987,500 4,100,000 5,952,440 0 7,553 50,862 11,098,355 2016 850,000 3,760,000 4,922,277 0 0 57,940 9,590,217 2015 850,000 3,460,000 4,398,594 0 0 51,506 8,760,100 ThomasK.Montag ChiefOperatingOfficer 2017 1,229,167 7,100,000 10,131,778 0 0 17,500 18,478,445 2016 1,000,000 6,400,000 8,251,212 0 0 17,500 15,668,712 2015 1,000,000 5,800,000 7,997,416 0 0 17,500 14,814,916 (1) SECrulesrequiretheSummaryCompensationTabletoincludeineachyear’samounttheaggregategrantdatefairvalueofstockawardsgrantedduring theyear.Typically,wegrantstockawardsearlyintheyearaspartoftotalyear-endcompensationawardedforprioryearperformance.Asaresult,the amountsforstockawardsgenerallyappearintheSummaryCompensationTablefortheyearaftertheperformanceyearuponwhichtheywerebased,and thereforetheSummaryCompensationTabledoesnotfullyreflectourCompensationandBenefitsCommittee’sviewofitspay-for-performanceexecutive compensationprogramforaparticularperformanceyear.Forexample,amountsshownas2017compensationinthe“StockAwards”columnreflectstock awardsgrantedinFebruary2017for2016performance.See“CompensationDiscussionandAnalysis”onpage37foradiscussionabouthowthe Committeeviewedits2017compensationdecisionsforthenamedexecutiveofficers. (2) AlllistednamedexecutiveofficerpositionsarethoseheldasofDecember31,2017. (3) Includesanyamountsvoluntarilydeferredunderourqualified401(k)plansandournonqualifieddeferredcompensationplan.See“NonqualifiedDeferred CompensationTable”onpage60. (4) Amountsreflectannualcashincentiveawardsreceivedbythenamedexecutiveofficersforperformanceintheapplicableyear. (5) AmountsshownaretheaggregategrantdatefairvalueofCRSUs,PRSUs,andTRSUsgrantedintheyearindicated.Grantsofstock-basedawards (excludingCRSUs)includetherighttoreceivecashdividendsonlyifandwhentheunderlyingawardbecomesvestedandpayable.Thegrantdatefairvalue isbasedontheclosingpriceofourcommonstockontheapplicablegrantdate(for2017,$24.58).ForthePRSUsgrantedin2017,theactualnumberof PRSUsearned(0%uptothemaximumlevelof100%)willdependonourcompany’sfutureachievementofspecificROAandgrowthinadjustedTBVgoals overathree-yearperformanceperiodendingDecember31,2019.ValuesintheStockAwardscolumnassumethat100%(themaximumlevel)ofthePRSUs grantedwouldvestastheprobableoutcomeforpurposesofdeterminingthegrantdatefairvalue.See“GrantsofPlan-BasedAwardsTable”onpage54for adescriptionoftheCRSUs,PRSUs,andTRSUsgrantedin2017. BankofAmericaCorporation2018ProxyStatement 51