DFS Proxy Statement

Compensation Discussion and Analysis 2016 Pre-Spin RRD Peer Group In 2015, Willis Towers Watson completed a thorough review of the compensation peer group at the request of the RRD HR Committee. As a result of this analysis, several changes were made to the peer group. The primary focus of this process was to include industrial companies of generally similar or larger size, complexity and scope rather than companies only in RRD’s industry, since RRD was significantly larger than all of its direct competitors and the markets for talent were necessarily broader. The resulting peer group, approved in 2015 and continued without change until the Spin Date, was comprised of the following 26 companies: International Paper Company Automatic Data Processing, Inc. Fidelity National Information Services, Inc. Danaher Corp. Huntsman Corporation Avery Dennison Corporation Xerox Corporation The Sherwin-Williams Company Ashland Inc. WPP plc Air Products & Chemicals Inc. Packaging Corporation of America PPG Industries, Inc. WestRock Company Quad/Graphics, Inc. Genuine Parts Company Crown Holdings Inc. Graphic Packaging Holding Company CH Robinson Worldwide Inc. Ball Corporation Adobe Systems Incorporated Parker-Hannifin Corporation Praxair Inc. Sealed Air Corporation Owens-Illinois, Inc. Pitney Bowes Inc. 2016 Pre-Spin RRD Compensation Overview RRD recognized the need for its compensation programs to be appropriately modified to take into account the Spin, which was scheduled to be completed during 2016. Guided by the principles noted above, the RRD HR Committee kept the overall construct of RRD’s 2016 compensation programs straightforward, with a focus on simplicity and consistency. To that end, the RRD HR Committee determined that for 2016: • any compensation changes for the Pre-Spin NEOs would be managed by their employer after the Spin, as appropriate, with such employer taking into account each individual’s new role and responsibility as well as the individual’s experience level; • the Annual Incentive Plan, or AIP, would consist of three key metrics: a 12-month metric in compliance with Section 162(m) of the Internal Revenue Code that would be determined by the post-Spin RRD HR Committee; a corporate financial metric applicable from the beginning of the year and pro-rated to the Spin Date as agreed by the RRD HR Committee; and a stub-period corporate financial metric applicable from the Spin Date through the end of the fiscal year; • an additional bonus would be provided to incentivize key employees, including the NEOs (other than Mr. Quinlan) regarding Spin- related costs (as described under “ — RRD Spin Cost Reduction Initiative ”); • since setting three year performance goals for each of RRD, LSC and Donnelley Financial prior to the Spin would not be meaningful, awards under the long-term incentive plan would be time vested to allow focus on the goals related to timing and execution of the Spin as well as retention of key executives through the Spin; and • outstanding equity incentives granted in previous years would be converted into equity in the post-Spin entities, as appropriate (as further described under “ — Treatment of RRD Equity and Cash Awards in Connection with the Spin ”). Consistent with prior years, compensation for the Pre-Spin NEOs was comprised of three major components: base salary, annual incentive compensation and long-term incentive compensation. In addition, the Pre-Spin NEOs were eligible to participate in benefit programs generally available to other executives within RRD and other benefits provided to certain executives as further described under “ — RRD Pre-Spin Benefit Programs .” In general, compensation levels for the Pre-Spin NEOs were targeted at the 50th percentile of peer group data, when available for a position, and by market survey data from the Willis Towers Watson 2016 CDB General Industry Executive Compensation Survey Report and Mercer’s 2016 US MDB: Executive Compensation Survey. This 50th percentile target level provided a total competitive anchor point for RRD’s executive compensation program. Actual compensation levels varied up or down from targeted levels based on RRD performance, individual performance and individual experience levels. 2017 Proxy Statement 23