Our executive compensation philosophy Our executive compensation program is designed to contribute to our long-term sustainable growth by rewarding executives for strong performance in executing our business strategy and achieving strategic initiatives. Pay for performance is at the core of our approach to executive compensation. Most of what our executives earn is variable, tied to performance, and not guaranteed. In practice, executives earn more when performance is strong and earn less when performance is mixed. The board also has the discretion to adjust annual incentive and PSU payouts when significant events outside management’s control impact performance that make payouts unreasonable, unrepresentative, or inappropriate. Five principles guide every compensation decision Compensation is Compensation is aligned with aligned with long-term risk management shareholder value objectives Pay for performance is at the core of our Compensation is compensation Compensation is aligned with approach aligned with good governance business strategy practices Compensation and performance are benchmarked against peer companies 48 Manulife Financial Corporation