DFS Proxy Statement

Compensation Discussion and Analysis Donnelley Financial Post-Spin Compensation Program Compensation of executive officers is overseen by the Compensation Committee. The following discussion describes the practices and policies implemented by the Compensation Committee following the Spin Date with respect to the NEOs’ post-Spin compensation for 2016. Other than as described below, the Compensation Committee determined to continue the executive compensation program for the remainder of 2016 with the same elements as RRD’s executive compensation program and will establish objectives, principles and/or elements for the program for 2017 and forward as needed. The Compensation Committee engaged Willis Towers Watson as its executive compensation consultant to provide objective analysis, advice and recommendations on 2016 post-Spin executive officer pay in connection with the Compensation Committee’s decision-making process. In November 2016, the Compensation Committee determined to change compensation consultants and engaged Frederic Cook & Co., Inc., or FW Cook, to provide objective analysis, advice and recommendations on executive officer pay in connection with the Compensation Committee’s decision-making process for 2017 forward. Donnelley Financial Post-Spin Compensation Decisions Following the Spin, the Compensation Committee evaluated the NEOs’ existing pay opportunities relative to market practices for their Donnelley Financial roles and made appropriate adjustments as further described below. In connection with this evaluation, Willis Towers Watson recommended use of general industry published survey data as the primary benchmark perspective until a fully developed peer group could be refined for ongoing compensation decisions. As a general practice, the Compensation Committee targets the market median for cash compensation. Due to certain officers’ limited experience in their new roles, the Compensation Committee determined to use a two to three year approach for reaching market median for total cash compensation, with initial adjustments bringing executives to 85% - 95% of the market median and additional adjustments in future years, assuming successful performance of the executive’s role. Any differences in compensation levels that exist among the NEOs are primarily due to differences in market practices for similar positions, the responsibility, scope and complexity of the NEO’s role at Donnelley Financial, factors related to a newly hired or promoted executive officer and/or the performance of individual officers. BASE SALARY AND TARGET BONUS Base salaries and target bonuses for each executive officer were set considering: • each executive’s role and responsibilities at the time he or she joined Donnelley Financial; • the skills and future potential of the individual with Donnelley Financial; and • salary levels for similar positions in Donnelley Financial’s market survey data. In general, base salary is intended to be the smallest component of the overall compensation package, assuming that Donnelley Financial was achieving or exceeding targeted performance levels for its incentive programs. Following the Spin, the Compensation Committee approved adjustments to the NEOs’ base salaries and target bonuses as follows: Mr. Leib’s salary was increased to $700,000 and target bonus was decreased to 100% of base salary (these and other amendments to Mr. Leib’s employment agreement are further described under the Potential Payments upon Termination or Change in Control section of this proxy statement); Mr. Juhase’s salary was increased to $441,000 and target bonus remained 100% of base salary; Mr. Gardella’s salary was increased to $390,000 and target bonus was increased to 65% of base salary; Ms. Reiners’ salary was increased to $325,000 and target bonus remained 50% of base salary and Ms. Turner’s salary was increased to $260,000 and target bonus was increased to 40% of base salary, in each case to bring the NEOs into the desired competitive positioning as set forth above. 30