OCTOBER EDITION SAMPLE GLOBAL COMPENSATION PLANNING REPORT

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1 SA M OCTOBER EDITION PL GLOBAL COMPENSATION PLANNING REPORT E 2017

2 ORDER ONLINE Learn more about our extensive range of publications at WE WANT TO HEAR FROM YOU! We love getting feedback from our clients on how we can improve our publications. We also make every effort to promptly answer any questions you may have about our data or analysis. Share your thoughts with us or contact us directly with any questions. Condition of Sale Copyright All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or be transmitted in any form or by any means, electronic or mechanical, photocopying, recording or otherwise, without the prior written permission of the publishers. No responsibility for loss occurring to any person acting or refraining from acting as a result of the material in this publication can be accepted by the authors or the publishers. PUBLICATIONS DIRECTOR CHRISY WILSON PRODUCT MANAGER DUSTIN THOMAS PRODUCTION MANAGER SUMIT BAJAJ PROJECT MANAGER RAHI SARDANA DESIGN MANAGER BHUPESH PERIWAL ANALYSTS DEEPAK GAUR DIVYA M KARUNANJALI TANDON KAVITA RAI RISHI KUMAR SUNIL KAUSHAL VAIBHAV JAIN VIKASH VARNVAL WRITER AUSTIN LOTZ COPYEDITORS ANKITA RAWAT DIVYA PRAKASH DESIGNERS ANUJ PANDEY NIDHI RASTOGI KOMAL AGGARWAL RAHUL KHANNAWALIA SAYKA FATIMA VISHAL KAPOOR CONTENT TECHNICIAN NIYATI RASTOGI For information about your order or other Mercer products, contact your nearest Mercer office: ASIA, MIDDLE EAST, AND AFRICA Singapore Tel: hrsolutions.ap@mercer.com AUSTRALIA Sydney Tel: customerservice@mercer.com CANADA Toronto Tel: surveys@mercer.com EUROPE Poland Tel: indirect.sales.emea@mercer.com LATIN AMERICA Argentina: Brazil: client.services.la@mercer.com UNITED STATES Louisville Tel: surveys@mercer.com PUBLISHED BY: MERCER 1166 Avenue of the Americas, New York, New York 10036, United States

3 4 MERCER'S GLOBAL PUBLICATIONS 5 INTRODUCTION 7 REPORT STRUCTURE 8 READING THIS REPORT 11 ECONOMIC TRENDS 12 AFRICA REGION 19 AMERICAS REGION 25 ASIA PACIFIC REGION 30 CENTRAL AND EASTERN EUROPE REGION 35 MIDDLE EAST REGION 40 WESTERN EUROPE REGION 42 SALARY INCREASE TRENDS 44 AFRICA REGION 45 AMERICAS REGION 46 ASIA PACIFIC REGION 47 CENTRAL AND EASTERN EUROPE REGION 48 MIDDLE EAST REGION 49 WESTERN EUROPE REGION 50 SHORT-TERM INCENTIVE TRENDS 51 AFRICA REGION 52 AMERICAS REGION 53 ASIA PACIFIC REGION 54 CENTRAL AND EASTERN EUROPE REGION 55 MIDDLE EAST REGION 56 WESTERN EUROPE REGION 50 AFRICA REGION 51 ALGERIA 52 ANGOLA 53 BOTSWANA 54 CAMEROON 55 CÔTE D IVOIRE 56 DEMOCRATIC REPUBLIC OF CONGO 57 EGYPT 58 ETHIOPIA 59 GABON 60 GHANA 61 GUINEA 62 KENYA 63 LIBYA 64 MALAWI 65 MAURITIUS 66 MOROCCO 67 MOZAMBIQUE 68 NAMIBIA 69 NIGERIA 70 RWANDA 71 SENEGAL 72 SOUTH AFRICA 73 TANZANIA 74 TUNISIA 75 UGANDA 76 ZAMBIA 77 ZIMBABWE 85 AMERICAS REGION 89 ARGENTINA 90 BOLIVIA 91 BRAZIL 92 CANADA 93 CHILE 94 COLOMBIA 95 COSTA RICA 96 DOMINICAN REPUBLIC 97 ECUADOR 98 EL SALVADOR 99 GUATEMALA 100 HONDURAS 110 MEXICO 111 MEXICO BAJIO 112 MEXICO MONTERREY SALTILLO 113 MEXICO REYNOSA 114 NICARAGUA 115 PANAMA 116 PARAGUAY 117 PERU 118 PUERTO RICO 119 TRINIDAD AND TOBAGO 120 UNITED STATES 121 URUGUAY 122 VENEZUELA 130 ASIA PACIFIC REGION 131 AUSTRALIA 132 BANGLADESH 133 CAMBODIA 134 CHINA 135 CHINA BEIJING 136 CHINA CHANGSHA 137 CHINA CHANGZHOU 138 CHINA CHENGDU 139 CHINA CHONGQING 140 CHINA DALIAN 141 CHINA GUANGDONG 142 CHINA HANGZHOU NINGBO 143 CHINA HEFEI/WUHU 144 CHINA NANJING 145 CHINA QINGDAO 146 CHINA SHANGHAI 147 CHINA SHENYANG CHANGCHUN 148 CHINA SUZHOU 149 CHINA TIANJIN 150 CHINA WUHAN 151 CHINA WUXI CHANGZHOU 152 CHINA XIAMEN FUZHOU 153 CHINA XIAN 154 HONG KONG 155 INDIA 156 INDONESIA 157 JAPAN 160 MALAYSIA 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 3 TABLE OF CONTENTS

4 161 MYANMAR 162 NEW ZEALAND 163 PAKISTAN 164 PHILIPPINES 165 SINGAPORE 166 SOUTH KOREA 167 SRI LANKA 168 TAIWAN 169 THAILAND 170 VIETNAM 175 CENTRAL AND EASTERN EUROPE REGION 176 ALBANIA 177 ARMENIA 178 AZERBAIJAN 179 BELARUS 180 BOSNIA AND HERZEGOVINA 181 BULGARIA 182 CROATIA 183 CZECH REPUBLIC 184 ESTONIA 185 GEORGIA 186 HUNGARY 187 KAZAKHSTAN 188 LATVIA 189 LITHUANIA 190 MACEDONIA 191 MOLDOVA 192 MONTENEGRO 193 POLAND 194 ROMANIA 195 RUSSIA 196 SERBIA 197 SLOVAKIA 198 SLOVENIA 199 TURKEY 200 UKRAINE 201 UZBEKISTAN 205 MIDDLE EAST REGION 210 BAHRAIN 211 IRAN 212 ISRAEL 213 IRAQ 214 JORDAN 215 KUWAIT 216 LEBANON 217 OMAN 218 QATAR 219 SAUDI ARABIA 220 UNITED ARAB EMIRATES 225 WESTERN EUROPE REGION 226 AUSTRIA 227 BELGIUM 228 CYPRUS 229 DENMARK 230 FINLAND 231 FRANCE 232 GREECE 233 IRELAND 234 ITALY 235 LUXEMBOURG 236 MALTA 237 NETHERLANDS 238 NORWAY 239 PORTUGAL 240 SPAIN 241 SWEDEN 242 SWITZERLAND 243 UNITED KINGDOM 246 ABOUT THIS REPORT 247 METHODOLOGY 248 GLOSSARY 230 ABOUT MERCER 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 4 TABLE OF CONTENTS

5 In today s competitive race to attract and retain highly skilled global talent, organizations require current, in-depth information on everything from local statutory benefits, to salary trends, to managing a diverse workforce. Through Mercer s own extensive global presence, we collect and analyze data and insights that help companies take the actions necessary to support their human capital strategies. You can order any of the publications below by clicking on the title links or by visiting FULL ACCESS TO ALL GLOBAL PUBLICATIONS Subscribe to our Talent All Access Portal for exclusive online access to our entire suite of publications and tools. HEALTH & BENEFITS Car Benefit Policies Around the World LGBT Benefits Around The World Vacation and Other Leave Policies Around The World WORKFORCE & CAREERS Global Compensation Planning Report Short-Term Incentives Around the World Global Compensation Planning Report 20 Year Look Back HANDBOOKS & GUIDES Compensation Handbook HR Guide to Doing Business Worldwide Benefit & Employment Guidelines Total Employment Costs Around the World Global Mobility Handbook HR Atlas Asia Pacific Global Parental Leave Severance Pay Policies Around The World Global Pay Summary Workforce Turnover Around the World HR Management Terms Global Parental Leave Industry Scorecard International Geographic Salary Differentials

6 INTRODUCTION The information revolution has touched almost every aspect of the modern business environment. As market competitors race to outthink and outmatch one another, the difference between yesterday s and today s data is often the margin between stagnation and success. This distinction is particularly true in the modern labor market, where talent scarcity and the ease of mobility are making it increasingly critical that HR professionals retain the top performers in their company while attracting outside talent. Mercer s Global Compensation Planning Report October Edition is an asset to those individuals tasked with confronting this challenge. This annual publication arms HR professionals with the data they need to plan for next year's salary increase budget adjustments. THE VALUE OF GETTING THE WHOLE PICTURE While salary increase figures are undoubtedly valuable to any HR or business manager responsible for budget planning, these data alone are insufficient to effectively plan ahead. As employees in markets with skyrocketing inflation rates (for example, Venezuela) can attest, employers must account for local economic conditions when fixing a budget for salary increases. By doing so, organizations can ensure that their employees retain their purchasing power in the market and do not suffer an unintentional pay decrease. However, data alone cannot dictate these decisions, and employers should be wary of outliers. For example, the projected 54% GDP growth in Libya in 2017 may exceed, by far, that in other markets, but this does not mean employees or employers should adjust their expectations. In markets with severe volatility, a single event (such as the resumption of crude oil exports, in this case) can belie conditions on the ground. Indeed, when planning salary increase budgets, it truly is critical that employers take all available information into account. NOT ALL EMPLOYEES ARE ALIKE While some organizations strive to be egalitarian in their salary increases, many differentiate their salary increase substantially based on the employee s career level. Whether due to local market conditions, public sentiment, labor relations, or legislation, specific bands of employees within a single market may see a dramatic shift in their salary increase from year to year. If large organizations or those with global or regional HR functions miss these shifts, they may find themselves losing position in the local labor market. For this reason, it is critical that business and HR professionals consider all factors when comparing and employing salary increase data MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 6

7 THINK IT OVER Using this report, employers and HR professionals can find answers to common questions that arise during the salary increase budgeting process: How might economic conditions affect the impact of salary increases on my workforce? Should my organization adjust salary increases based on an employee s career level? Are the salary increases that my organization offers in a given market more or less than those offered in similar markets? Which markets are experiencing the greatest changes in salary increases? 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 7

8 INTRODUCTION REPORT STRUCTURE One of Mercer s most widely recognized and valued products, the Global Compensation Planning Report (GCPR) returns for its October Edition with fresh compensation and economic data for 146 markets in 125 countries around the world. In addition to economic indicators for each market in the report (including GDP growth, inflation, and unemployment rates), this publication offers salary increase forecasts, including and excluding zeroes, that can assist HR professionals establish or calibrate their own salary increase budgets for the upcoming year. With data that cover the past (2016), current (2017), and upcoming (2018) years and isolate six different career levels, this report is a critical resource for working HR professionals responsible for the annual compensation planning process. The report has the following sections: The Summary of Key Findings serves as an executive summary for those looking for Mercer s insights and observations. This section focuses on forecasted figures for 2018 and highlights the countries within each region with the highest and lowest GDP growth, inflation, or unemployment rates, and salary increases. The Economic Trends section includes basic economic indicators (GDP change, inflation rate, and unemployment rate) for each market in the report. These key pieces of data are provided for each market, in a quick reference table format. Tables are organized by region. The Salary Increase Trends section contains quick reference tables with salary increase data, including and excluding zeroes, for each market in the publication, separated by career level. The Short-Term Incentive Trends section includes countrylevel data on the prevalence of bonus programs and the median target and maximum bonuses for six different career levels. The Country Pages offer specific data for individual countries, including economic trends, base salary practices, and incentive programs. They also include details on the data sources used. The About this Report section delineates the methods of data-gathering and cleaning used for the report and lists key definitions MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 8

9 INTRODUCTION READING THIS REPORT The following pages provide tips and guidelines to help navigate the report content. GROSS DOMESTIC PRODUCT CHANGE, INFLATION, AND UNEMPLOYMENT, 2018 AFRICA AMERICAS ASIA PACIFIC CENTRAL AND EASTERN EUROPE MIDDLE EAST GDP CHANGE (%) INFLATION RATE (%) UNEMPLOYMENT RATE (%) Ghana 9.2 Throughout the report, content is color coded. GDP content is yellow, inflation rates are pink, unemployment rates are green. Zimbabwe -1.5 Dominican Republic 5.0 Uzbekistan 6.0 Belarus 0.6 Libya 32.1 Cameroon 1.4 Venezuela DATA Venezuela -4.1 Ecuador 1.5 India 7.7 This country has the lowest percent GDP change Japan in this region. In some 0.6 cases change may be negative, meaning the country's GDP retracted. Yemen 13.7 Saudi Arabia 1.3 Myanmar 6.7 Japan 1.0 This country has the highest inflation rate in this region. Ukraine 9.5 Montenegro, Bulgaria, Croatia 1.5 Yemen 17.0 Israel 1.4 Highest Lowest Highest Lowest Highest Lowest The Summary of Key Findings presents some high level insights into 2018 forecasts. South Africa 26.5 Rwanda 0.6 Dominican Republic 13.9 Guatemala 2.7 Pakistan 6.1 Cambodia 0.6 Bosnia and Herzegovina 25.1 Belarus 1.0 Iraq 17.4 Qatar MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 9

10 INTRODUCTION SALARY INCREASE TRENDS AFRICA REGION SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY All markets are organized by region. ALL EMPLOYEES EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON DATA CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO All salary increase tables and graphics are shaded purple. The Economic Trends and Salary Increase Trends sections provide three years of data for each market/country. EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS Note: Salary increase data presented refers to an average of all industries and generally represents median values MERCER LLC. The Salary Increase Trends section provides content for "all employees" and for six career levels. Data for 2016 Data for 2017 Data for 2018 A dash indicates data are not available. Some markets do not have 2018 forecasts available at this time. Actual/Estimated Budgeted/Estimated Forecast Amounts are percentages and are provided both excluding and including zeroes (i.e., salary freezes). GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 10

11 INTRODUCTION SHORT-TERM INCENTIVE TRENDS AFRICA REGION SHORT-TERM INCENTIVE TRENDS COUNTRY BONUS PROGRAM ELIGIBILITY EXECUTIVE MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) BONUS PROGRAM ELIGIBILITY MANAGEMENT MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) ALGERIA ANGOLA This number indicates the percentage of companies BOTSWANA CAMEROON that allow each career level to DATA CÔTE D IVOIRE participate in a bonus program. DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON This column provides the median target bonus amount as a percentage of base salary. Short-term Incentive definitions can be found in the Glossary. GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS Note: Values are percentages. Content related to Shortterm Incentives is blue. This column provides the median maximum bonus amount as a percentage of base salary. In the Americas region, median actual bonus amounts are reported. The target and maximum amounts indicate the variable pay earning potential for an individual. For example, an employee may have a target bonus of 20%, but could receive up to 30% of base salary if their performance exceeds expectations MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 11

12 INTRODUCTION COUNTRY ECONOMIC TRENDS GROSS DOMESTIC PRODUCT CHANGE SALARY REVIEW FREQUENCY INFLATION RATE UNEMPLOYMENT RATE 0.3% 0.7% 1.1% 6.3% 5.4% 5.3% 26.7% 27.6% 28.3% BASE SALARY INCREASES ONCE A YEAR MORE OFTEN Each country includes six pages of detailed content. 92% 6% DATA SALARY INCREASE EFFECTIVE DATE 2% 19% JANUARY This figure represents the percentage of NO SET REVIEW DATE companies that increase salaries in the These figures indicate the 1% 3 rd month of April each year. The top three percentage of companies that months are listed and may vary from one review salaries according to each 17% JULY country to another. listed time frame. Once a year is the most common practice in most 2017 MERCER LLC. markets. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 12 1 st 2 nd 47% APRIL

13 INTRODUCTION COUNTRY SALARY INCREASES EXCLUDING AND INCLUDING ZEROES PERCENTAGE OF COMPANIES REPORTING ZERO SALARY INCREASES Data for 2016 Data for 2017 Data for ALL EMPLOYEES 7.5 percentage of companies EXECUTIVE 7.5 that reported a 0% increase budget for each MANAGEMENT career level. PROFESSIONAL SALES PROFESSIONAL NONSALES PARA-PROFESSIONAL WHITE COLLAR PARA-PROFESSIONAL BLUE COLLAR Actual Actual Forecast MEDIAN SALARY INCREASES EXCLUDING ZEROES MEDIAN SALARY INCREASES INCLUDING ZEROES ALL EMPLOYEES EXECUTIVE Median salary increases are reported MANAGEMENT 6.5 for each career 7.0 level, both 7.0 excluding and PROFESSIONAL SALES The type of salary increase 6.6 including zeroes PROFESSIONAL ("total" NONSALES or "merit") is noted PARA-PROFESSIONAL below the table. WHITE COLLAR PARA-PROFESSIONAL BLUE COLLAR Note: Values are percentages. This graphic indicates whether actual, forecast, or projected salary increase budgets are being reported for the country. DATA Note: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). This table indicates the This figure is slightly lower than the 6.6% excluding zeroes amount for this career level. In the table below, there are 11.4% of companies that reported 0% budgets for this group in The impact of a 0% increase is not always visible in the data as the median is reported MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 13

14 INTRODUCTION DATA SOURCES ECONOMIC DATA YEAR SOURCE EFFECTIVE DATE GROSS DOMESTIC PRODUCT CHANGE 2016 International Monetary Fund, World Economic Outlook Database October International Monetary Fund, World Economic Outlook Database October International Monetary Fund, World Economic Outlook Database October 2017 INFLATION RATE A detailed list of data sources can be found at the end of each set of country pages International Monetary Fund, World Economic Outlook Database October International Monetary Fund, World Economic Outlook Database DATA October International Monetary Fund, World Economic Outlook Database October 2017 UNEMPLOYMENT RATE 2016 International Labour Organization, World Employment and Social Outlook Trends 2017 International Labour Organization, World Employment and Social Outlook Trends 2018 International Labour Organization, World Employment and Social Outlook Trends The data source is listed seperately for each year as there are some instances where the source differs for one of the three years. The majority of the economic data (GDP, inflation, and unemployment) are sourced outside of Mercer MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 14

15 ECONOMIC TRENDS CONOMIC TRENDS

16 ECONOMIC TRENDS REGION GROSS DOMESTIC PRODUCT CHANGE, INFLATION RATE, AND UNEMPLOYMENT RATE COUNTRY Data for 2016 GDP CHANGE (%) INFLATION RATE (%) UNEMPLOYMENT RATE (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D'IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGERIA Note: GDP change and inflation rate figures represent percentage change over the previous year. Data for 2017 Data for MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 16 Actual Estimated/Budgeted Forecast

17 SALARY INCREASE TRENDS 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 17 CONOMIC TRENDS

18 SALARY INCREASE TRENDS REGION SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY ALL EMPLOYEES EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA Notes: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Updated salary increases values will be available on November 29, 2017 for Libya MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 18

19 SALARY INCREASE TRENDS SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY EXECUTIVE EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGERIA Notes: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Updated salary increases values will be available on November 29, 2017 for Libya MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 19

20 SALARY INCREASE TRENDS SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY MANAGEMENT EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGERIA Notes: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Updated salary increases values will be available on November 29, 2017 for Libya MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 20

21 SALARY INCREASE TRENDS SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY PROFESSIONAL SALES EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGERIA Notes: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Updated salary increases values will be available on November 29, 2017 for Libya MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 21

22 SALARY INCREASE TRENDS SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY PROFESSIONAL NONSALES EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGERIA Notes: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Updated salary increases values will be available on November 29, 2017 for Libya MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 22

23 SALARY INCREASE TRENDS SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY PARA-PROFESSIONAL WHITE COLLAR EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGERIA Notes: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Updated salary increases values will be available on November 29, 2017 for Libya MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 23

24 SALARY INCREASE TRENDS SALARY INCREASES EXCLUDING AND INCLUDING ZEROES COUNTRY PARA-PROFESSIONAL BLUE COLLAR EXCLUDING ZEROES (%) INCLUDING ZEROES (%) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGERIA Notes: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Updated salary increases values will be available on November 29, 2017 for Libya MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 24

25 SHORT-TERM INCENTIVE TRENDS HORT-TERM INCENTIVE TRENDS

26 SHORT-TERM INCENTIVE TRENDS REGION SHORT-TERM INCENTIVE TRENDS COUNTRY BONUS PROGRAM ELIGIBILITY EXECUTIVE MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) BONUS PROGRAM ELIGIBILITY MANAGEMENT MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA Note: Values are percentages MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 26

27 SHORT-TERM INCENTIVE TRENDS SHORT-TERM INCENTIVE TRENDS COUNTRY BONUS PROGRAM ELIGIBILITY PROFESSIONAL SALES MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) BONUS PROGRAM ELIGIBILITY PROFESSIONAL NONSALES MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA Notes: Values are percentages. Data will be available on November 29, 2017 for Libya. Please download an updated version of this report after that date MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 27

28 SHORT-TERM INCENTIVE TRENDS SHORT-TERM INCENTIVE TRENDS COUNTRY BONUS PROGRAM ELIGIBILITY PARA-PROFESSIONAL WHITE COLLAR MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) BONUS PROGRAM ELIGIBILITY PARA-PROFESSIONAL BLUE COLLAR MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) ALGERIA ANGOLA BOTSWANA CAMEROON CÔTE D IVOIRE DEMOCRATIC REPUBLIC OF CONGO EGYPT ETHIOPIA GABON GHANA GUINEA KENYA LIBYA MALAWI MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA Notes: Values are percentages. Data will be available on November 29, 2017 for Libya. Please download an updated version of this report after that date MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 28

29 COUNTRY NAME ECONOMIC TRENDS SALARY REVIEW FREQUENCY ONCE A YEAR TWICE A YEAR GROSS DOMESTIC PRODUCT CHANGE MORE THAN TWICE A YEAR 25% 50% 25% INFLATION RATE UNEMPLOYMENT RATE 4.3% 3.8% 3.4% 4.3% 3.8% 3.4% 4.3% 3.8% 3.4% BASE SALARY INCREASES SALARY INCREASE EFFECTIVE DATE 1 st 50% JANUARY 2 nd FEBRUARY 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 29 15% 3 rd 5% MARCH

30 COUNTRY NAME SALARY INCREASES EXCLUDING AND INCLUDING ZEROES MEDIAN SALARY INCREASES EXCLUDING ZEROES PERCENTAGE OF COMPANIES REPORTING ZERO SALARY INCREASES Data for 2016 Data for 2017 Data for ALL EMPLOYEES EXECUTIVE MANAGEMENT PROFESSIONAL SALES PROFESSIONAL NONSALES PARA-PROFESSIONAL WHITE COLLAR PARA-PROFESSIONAL BLUE COLLAR MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 30 Actual Estimated/Budgeted Forecast MEDIAN SALARY INCREASES INCLUDING ZEROES ALL EMPLOYEES EXECUTIVE MANAGEMENT PROFESSIONAL SALES PROFESSIONAL NONSALES PARA-PROFESSIONAL WHITE COLLAR PARA-PROFESSIONAL BLUE COLLAR Note: Values are percentages and represent Total Salary Increase Budgets (see Glossary for definition). Note: Values are percentages.

31 COUNTRY NAME FACTORS THAT DETERMINE INDIVIDUAL SALARY INCREASES ORGANIZATION PERFORMANCE INDIVIDUAL PERFORMANCE INFLATION JOB LEVEL LENGTH OF SERVICE MARKET POSITION/COMPETIVENESS POSITION IN SALARY RANGE 50% 50% 50% 0% 50% 50% 50% MANDATORY PAY INCREASE SCHEMES Country Name has a mandatory pay increase of 10% in MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 31

32 COUNTRY NAME SHORT-TERM INCENTIVES VARIABLE BONUS BY EMPLOYEE LEVEL Note: Values are percentages. EXECUTIVE MANAGEMENT PROFESSIONAL SALES PROFESSIONAL NONSALES PARA- PROFESSIONAL WHITE COLLAR PARA- PROFESSIONAL BLUE COLLAR BONUS PROGRAM ELIGIBILITY MEDIAN TARGET BONUS (% OF BASE PAY) MEDIAN MAXIMUM BONUS (% OF BASE PAY) FREQUENCY OF VARIABLE BONUS PAYOUTS 80% ANNUALLY 15% SEMI-ANNUALLY QUARTERLY ATTRACTING AND RETAINING EMPLOYEES DIFFICULT TO ATTRACT JOB FAMILIES AND LEVELS JOB FAMILY SALES SALES & MARKETING SUPPLY & LOGISTICS TOP MANAGEMENT LEVEL All Levels, Management All Levels All Levels All Levels 5% 0% MONTHLY DIFFICULT TO RETAIN JOB FAMILIES AND LEVELS JOB FAMILY ENGINEERING MANUFACTURING 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 32 LEVEL All Levels SALES SUPPLY & LOGISTICS All Levels All Levels All Levels

33 COUNTRY NAME DATA SOURCES ECONOMIC DATA YEAR SOURCE EFFECTIVE DATE GROSS DOMESTIC PRODUCT CHANGE 2016 International Monetary Fund, World Economic Outlook Database October International Monetary Fund, World Economic Outlook Database October International Monetary Fund, World Economic Outlook Database October 2017 INFLATION RATE 2016 International Monetary Fund, World Economic Outlook Database October International Monetary Fund, World Economic Outlook Database October International Monetary Fund, World Economic Outlook Database October 2017 UNEMPLOYMENT RATE 2016 International Labour Organization, World Employment and Social Outlook Trends 2017 International Labour Organization, World Employment and Social Outlook Trends 2018 International Labour Organization, World Employment and Social Outlook Trends 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 33

34 COUNTRY NAME DATA SOURCES SALARY INCREASES, SHORT-TERM INCENTIVES, OTHER DATA YEAR SOURCE NUMBER OF PARTICIPANTS EFFECTIVE DATE SALARY INCREASES 2016 Mercer's Salary Movement Snapshot 31 October Mercer's Salary Movement Snapshot 28 September Mercer's Salary Movement Snapshot 23 September 2017 SHORT-TERM INCENTIVES 2017 Mercer's Total Remuneration Survey 26 October 2016 OTHER DATA (POLICY CONTENT RELATED TO SALARY INCREASES, STI, AND ATTRACTION & RETENTION) 2017 Mercer's Total Remuneration Survey 26 October MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 34

35 ABOUT THIS REPORT BOUT THIS REPORT

36 ABOUT THIS REPORT This section provides information on the methods of collecting, Para-professional white collar collating, and analyzing data for this publication. Below are notes on exceptions and exclusions in the data, relevant equations, Para-professional blue collar and currency conversions rates. Readers will also find a glossary The October edition includes updated information, where of key terms. available, for: METHODOLOGY Economic trends GCPR s methodology primarily relies on proprietary Mercer data Base salary increases combined with a comprehensive review and update process. The report allows HR practitioners to easily understand the Mandatory pay increase schemes economic climate and market trends in the locations in which they have employees. Short-term incentives The salary increase data in the report provide insights into pay Attracting and retaining employees trends for budgeting and pay budget forecasts. These data are available for a period of three years overall, as well as for six SALARY INCREASE DATA specific career levels by country. Salary increase data are provided excluding and including The GCPR October 2017 report covers salary increase zeroes: information for the previous year (2016) and the current year (2017), as well as a forecast for the upcoming year (2018). The Excluding zeroes represents pay increases of companies that categorization of career levels is: actually do increase pay (excluding pay freezes). All employees Including zeroes shows the increases of all companies, Executive including those with pay freezes. Management Professional Sales Professional Nonsales 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 36 ETHODOLOGY

37 ABOUT THIS REPORT UPDATE PROCESS GCPR combines regional and local salary increase survey data to offer a global planning resource for Mercer s clients. The basis for salary increase figures includes country survey data (TRS and SMS) and regional sources (such as the Latin America Economic Trends Report), which are locally and/or regionally peer reviewed, then integrated into GCPR. Regular quarterly reviews of GCPR-Online and in-between updates, if applicable, ensure that GCPR is up-to-date and provides the latest trends. IMPORTANT: Availability of data for some markets was limited at the time of release; all markets will be updated in GCPR-Online as data become available. The following markets will be updated in a revised copy of this PDF report available on November 10: China Changsha China Dalian China Hefei Wuhu China Qingdao China Wuhan China Xian Israel Norway Oman Sweden Uzbekistan Yemen The following markets will be updated in a revised copy of this PDF report available on November 29: Armenia Bosnia and Herzegovina Georgia India Iraq Libya Paraguay Trinidad and Tobago Uruguay 2017 MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 37 ETHODOLOGY

38 ABOUT THIS REPORT CURRENCY CONVERSION RATES COUNTRY CURRENCY CONVERSION AFRICA CODE USD 1= EUR 1= ALGERIA DZD ANGOLA AOA BOTSWANA BWP CAMEROON XAF CÔTE D IVOIRE XOF DEMOCRATIC REPUBLIC OF CONGO CDF 1, ,857.1 EGYPT EGP ETHIOPIA ETB GABON XAF GHANA GHS GUINEA GNF 8, ,693.2 KENYA KES LIBYA LYD MALAWI MWK Note: Currency conversion rates as of October 06, COUNTRY CURRENCY CONVERSION AFRICA CODE USD 1= EUR 1= MAURITIUS MUR MOROCCO MAD MOZAMBIQUE MZN NAMIBIA NAD NIGERIA NGN RWANDA RWF SENEGAL XOF SOUTH AFRICA ZAR TANZANIA TZS 2, ,675.8 TUNISIA TND UGANDA UGX 3, ,295.2 ZAMBIA ZMW ZIMBABWE ZWL MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 38 ETHODOLOGY

39 ABOUT THIS REPORT CURRENCY CONVERSION RATES COUNTRY CURRENCY CONVERSION AMERICAS CODE USD 1= EUR 1= ARGENTINA ARS BOLIVIA BOB BRAZIL BRL CANADA CAD CHILE CLP COLOMBIA COP 2, ,477.9 COSTA RICA CRC DOMINICAN REPUBLIC DOP ECUADOR USD EL SALVADOR USD GUATEMALA GTQ HONDURAS HNL MEXICO MXN NICARAGUA NIO PANAMA PAB PARAGUAY PYG 5, ,753.9 PERU PEN PUERTO RICO USD TRINIDAD AND TOBAGO TTD UNITED STATES USD URUGUAY UYU VENEZUELA VEF 11, ,479.3 Note: Currency conversion rates as of October 06, COUNTRY CURRENCY CONVERSION ASIA PACIFIC CODE USD 1= EUR 1= AUSTRALIA AUD BANGLADESH BDT CAMBODIA KHR 4, ,835.3 CHINA CNY HONG KONG HKD INDIA INR INDONESIA IDR 13, ,869.9 JAPAN JPY MALAYSIA MYR MYANMAR MMK 1, ,621.3 NEW ZEALAND NZD PAKISTAN PKR PHILIPPINES PHP SINGAPORE SGD SOUTH KOREA KRW 1, ,350.0 SRI LANKA LKR TAIWAN TWD THAILAND THB VIETNAM VND 22, , MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 39 ETHODOLOGY

40 ABOUT THIS REPORT CURRENCY CONVERSION RATES COUNTRY CURRENCY CONVERSION CENTRAL AND EASTERN EUROPE CODE USD 1= EUR 1= ALBANIA ALL ARMENIA AMD AZERBAIJAN AZN BELARUS BYN BOSNIA AND HERZEGOVINA BAM BULGARIA BGN CROATIA HRK CZECH REPUBLIC CZK ESTONIA EUR GEORGIA GEL HUNGARY HUF KAZAKHSTAN KZT LATVIA EUR Note: Currency conversion rates as of October 06, COUNTRY CURRENCY CONVERSION CENTRAL AND EASTERN EUROPE CODE USD 1= EUR 1= LITHUANIA EUR MACEDONIA MKD MOLDOVA MDL MONTENEGRO EUR POLAND PLN ROMANIA RON RUSSIA RUB SERBIA RSD SLOVAKIA EUR SLOVENIA EUR TURKEY TRY UKRAINE UAH UZBEKISTAN UZS 7, , MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 40 ETHODOLOGY

41 ABOUT THIS REPORT CURRENCY CONVERSION RATES COUNTRY CURRENCY CONVERSION MIDDLE EAST CODE USD 1= EUR 1= BAHRAIN BHD IRAN IRR 33, ,516.6 IRAQ IQD 1, ,398.5 ISRAEL ILS JORDAN JOD KUWAIT KWD LEBANON LBP 1, ,799.3 OMAN OMR QATAR QAR SAUDI ARABIA SAR UNITED ARAB EMIRATES AED YEMEN YER Note: Currency conversion rates as of October 06, COUNTRY CURRENCY CONVERSION WESTERN EUROPE CODE USD 1= EUR 1= AUSTRIA EUR BELGIUM EUR CYPRUS EUR DENMARK DKK FINLAND EUR FRANCE EUR GERMANY EUR GREECE EUR IRELAND EUR ITALY EUR LUXEMBOURG EUR MALTA EUR NETHERLANDS EUR NORWAY NOK PORTUGAL EUR SPAIN EUR SWEDEN SEK SWITZERLAND CHF UNITED KINGDOM GBP MERCER LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 41 ETHODOLOGY

42 ABOUT THIS REPORT ECONOMIC MARKET GROSS DOMESTIC PRODUCT (GDP) The output of goods and services produced by labor and property. GDP has five main components: private consumption expenditure, fixed capital formation, increase in stocks, government consumption expenditure, and the net of exports of goods and services less imports of goods and services. The GDP data in this report refers to percentage change over the previous year s GDP, at a constant price. INFLATION A term that refers to increases in prices for a constant market basket of goods. It is the average annual change in the consumer price index, which may differ from end-of-year figures. The cause of inflation is a general increase in the money supply, without a corresponding increase in the amount of goods and services available. UNEMPLOYMENT RATE The percentage of economically active persons wholly unemployed or temporarily laid off. Unemployment generally comprises all persons above a specified age who, during the reference period, were without work, currently available for work, and seeking work. National definitions of employment and unemployment differ from country to country MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 42 LOSSARY

43 ABOUT THIS REPORT COMPENSATION TERMS ANNUAL BASE SALARY (ABS) Monthly base salary multiplied by the number of months per year that salary is paid (according to company policy). ANNUAL GUARANTEED CASH (AGC) Annual base salary plus guaranteed allowances, which include meal allowance, vehicle allowance, and so on. ANNUAL TOTAL CASH COMPENSATION (ATC) Annual base salary (ABS) plus annual guaranteed cash (AGC) and short-term incentives, which include bonus (for example, bonus, sales commission, profit sharing) but exclude share options. The figures reported include the actual award amounts received over last 12 months. ANNUAL TOTAL REMUNERATION (ATR) Annual total cash (ATC) plus long-term incentives. Also known as Annual Total Direct Compensation. ANNUAL TOTAL EMPLOYMENT COST (TEC) The total fixed cost of an employee s package to the employer, including base salary, allowances, motor vehicles (benefit vehicles only), car allowances (benefit allowances only), company superannuation associated with fixed cost, car parking, leave loading, and all other benefits and associated fringe benefit tax. It excludes STIs and long-term incentives, staff on-costs such as workers compensation and payroll tax, bonuses, and/or commissions, and superannuation associated with variable cost. ALLOWANCES Salary supplements paid to employees to cover job requirements, with reimbursement usually based on actual costs. Typical allowances, depending on country or company culture, might include allowances for maternity, festival, transition, meal, car, childcare, family, vacation, sickness, housing, and others. They can be either paid out in cash, as an addition to the base salary or in the form of vouchers or coupons and may vary significantly from country to country. COMPENSATION MANAGEMENT The process of engaging with line managers regarding their recommendations for individual pay increases and bonuses. It relies on managers being guided towards fair and consistent awards with robust market data and being enabled using technology. Approaches vary from directional (limited manager discretion) to discretionary MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 43 LOSSARY

44 ABOUT THIS REPORT COMPENSATION PLANNING The process of modeling company and market data to build insights into how budgets should be distributed within the company for compensation review. It may be a top-down process linked to affordability and market movement, or a bottom-up process linked to competitive position and individual performance, or both. Also see Salary Increase. COMPENSATION STRATEGY/ PHILOSOPHY/POLICY The principles that guide the design, implementation and administration of an organization s compensation program. The strategy ensures that a compensation program, consisting of both pay and benefits, supports an organization s mission, goals, and business objectives. It may also specify what programs will be used and how they will be administered. The philosophy ensures that a compensation program supports an organization s culture. The policy ensures that a compensation program carries out the compensation strategy while supporting the compensation philosophy. COMPETITIVE PAY POLICY The strategic decision an organization makes about which labor markets to use as comparison groups and how to set pay levels for those groups. After choosing the comparison group, the organization decides its market position with respect to the group. EQUITY EXTERNAL EQUITY A measure of an organization s pay levels, bands, or going market rates compared to that of its competitors. As a fairness criterion, external equity implies that the employer pays wages that correspond to prevailing external market rates, as determined by market pricing. INTERNAL EQUITY A fairness criterion that directs an employer to establish wage rates that correspond to each job s relative value to the organization. EXTERNAL COMPETITIVENESS A comparison of the organization s pay structure with its competitors. FIXED ALLOWANCE See Allowances. FULL-TIME EQUIVALENTS (FTES) The number of full-time equivalent (FTE) employees includes locals, local plus, expatriates, union personnel, and contract staff. Seasonal staff are not included. An FTE of 1.0 is equivalent to a full-time worker, while an FTE of 0.5 signals half of a full-time worker. GEOGRAPHIC DIFFERENTIAL A pay difference set for the same job based on variations in cost of living or cost of labor among two or more geographical areas MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 44 LOSSARY

45 ABOUT THIS REPORT GUARANTEED CASH ALLOWANCES Cash allowances that are guaranteed to the employee regardless of their performance. Also see Allowances. GROSS PAY The total amount of money earned by an employee in a specific period, before tax and other deductions. Also see Net Pay. INCENTIVES SHORT-TERM INCENTIVE (STI) Rewards relating to the performance against selected criteria over a period of one year or less. These include performance related bonuses, sales bonuses, sales commissions, profitsharing schemes, other bonuses, and exceptional premiums Actual Short-term Incentive: The performance-based variable bonus amount paid out in the previous 12 months. This figure may be provided as a percentage of annual base salary or the actual award amount. Target Short-term Incentive: The performance-based variable bonus amount targeted to be paid for the upcoming year. This figure is displayed as a percentage of annual base salary. Maximum Short-term Incentive: The maximum or capped performance-based variable bonus amount. This figure is displayed as a percentage of annual base salary. Percentage Receiving: The percentage of employees that received a short-term incentive in the prior year. LONG-TERM INCENTIVE (LTI) Variable pay based on measures that extend for a period of more than one year. Their role is to link the financial rewards of executives and, increasingly, broader levels of employees to the organization s long-term performance. They include stock/share options, stock grants, deferred cash compensation, equitybased, and cash plans. Performance Cash Units: Conditional grant denominated in units other than notional or actual shares, with payment contingent upon achievement of specified performance goals over a multi-year performance period. They are cashdenominated and not tied to the price of a share of stock. Although units are usually cash-denominated, their value may also be based on other constructs, such as dividends or earnings per share (EPS). Where the value of each unit is equal to one, the incentive type is also known as long-term cash. Performance Share Units (PSUs): Conditional grant of notional or actual shares, with payment or vesting contingent upon achievement of specified performance goals over a multi-year performance period. While the number of performance shares/share units earned depends on the extent to which the performance goals are achieved, the value of each performance share/share unit depends upon the market value of the share at the end of the performance period. Restricted Share Units (RSUs): Conditional grants of notional, actual or phantom shares of stock with vesting contingent upon employment for a specified period. The value of each share depends upon the market value of the share at the end of the vesting period MERCER Mercer LLC. GLOBAL COMPENSATION PLANNING REPORT OCTOBER EDITION 45 LOSSARY