DFS Proxy Statement

Compensation Discussion and Analysis The table below sets out the elements of the compensation program for the Pre-Spin NEOs. Component Description/Rationale Determining Factors Base Salary • Compensate for roles and responsibilities • Stable compensation element • Intended to be the smallest component of the overall compensation package, assuming that RRD was achieving or exceeding targeted performance levels for its incentive programs • Level of responsibility • Individual role, responsibilities, experience and performance • Skills and future potential • Median of market and peer group data Annual Incentive Plan • Annual cash bonus plan • Target amount of bonus is determined as a percentage of base salary • Reward achievement against specific, pre-set annual threshold target, corporate financial target and individual performance goals • No payout made unless the threshold target is achieved • Awards subject to a payout which ranges from 0% to 150% of target with no payout for performance below 90% of the corporate financial target • Awards may be modified downward by achievement levels on individual performance goals • Individual performance goals set for participants • Corporate financial target set at the beginning of the year Long-Term Incentive Plan • Links awards to RRD performance to increase alignment with stockholders • Key component to attract and retain executive officers • Time vested awards granted in 2016 as a result of the Spin • Annual value intended to be a substantial component of overall compensation package • Level of responsibility • Individual skills, experience and performance • Median of peer group and market survey data Other Benefits • Basic benefits including medical, 401(k), a frozen pension plan and other broad-based plans • Limited supplemental benefits including supplemental retirement, insurance and deferred compensation • Minimal perquisites with no tax gross-ups • Benefits determined by level of the employee in the organization BASE SALARY The RRD HR Committee provided no base salary increases to the Pre-Spin NEOs in 2016. 24