SuccessFactors Compensation Armando Ortega Senior Manager, Product Marketing

Million Users Customers 185 Countries 60+ Industries 35 Languages Enabling Customer Success Around the World Since 2001

Challenges of Compensation Management Source: U.S. Department of Labor Bureau of Labor Statistics Since early 90’s the usage of variable pay in the US has almost doubled to 80% of all companies More Complexity Merit pay Lump sum adjustments Bonus Pay Stock Awards Focal salary planning Off-cycle Adjustments Global Currency Compliance Executive 65% of Executives think that performance is linked to compensation at their company, but only 38% of employees agree Employee As many as 57% of employees don’t understand how their pay is determined Manager Only 29% of employees say that when they do a good job, their performance is rewarded Source: Watson Wyatt Work, Mercer US compensation practice Less Satisfaction

SuccessFactors Compensation Management Overview Optimize your budget and maintain compliance Determine compensation based on objective performance metrics, ensure managers stay within their budgets, stop overpaying low performers and defend your compensation strategy with objective data Through pay-for-performance, signal your commitment to high performance, reward top performers that increases engagement and retention Save time and cost, and eliminate errors Through an easy-to-use automated system, comp administrators and managers save time and costs as well as reducing errors Create a high performance culture Compliance Secure environment Compensation audit trail Budget overage rules and alerts Planning and Analysis Executive and Manager Dashboards Support what-if scenario planning Benchmarking All Pay Components Salary Bonus Stock Promotions Global Currency Complex calculations Pay for Performance On individual goals and performance Incentive pay on various division and company metrics Best-in-class Compensation Management Solution Easy to use | Integrated Talent Management Suite | Self - Service

Create a high performance culture Maintain greater plan compliance, plus reduced budget risk Better return on workforce investment, an organization’s costliest asset Increased retention of top performers Create a high performance culture Maintain greater plan compliance, plus reduced budget risk Better return on workforce investment, an organization’s costliest asset Increased retention of top performers Benefits at Every Level Executives Managers Admin Employee Better compensation decision making with suggestions based upon actual performance and budget data Greater ability to drive productivity with performance-based rewards Better compensation decision making with suggestions based upon actual performance and budget data Greater ability to drive productivity with performance-based rewards Seamlessly handle complex compensation rules Save time through powerful and easy to use admin interface Avoid calculation errors and ensure privacy through calculation engine and secure environment Seamlessly handle complex compensation rules Save time through powerful and easy to use admin interface Avoid calculation errors and ensure privacy through calculation engine and secure environment Increased engagement and motivation in a pay-for-performance culture More influence over and understanding of total compensation package Increased engagement and motivation in a pay-for-performance culture More influence over and understanding of total compensation package

Compensation as part of SuccessFactors Integrated Suite is the Most Powerful Solution Insights from Suite drive Powerful Compensation Insights based on Overall performance ratings by managers and peers Performance on specific goals and competencies most important to organization How critical the position or role is to organization Industry benchmarks and similar roles in organization Extend the value of your investment in goal and performance by optimizing employee compensation SuccessFactors has Strongest Integrated Talent Management Suite customers, majority have multiple modules including goal and performance Positioned in Leaders Quadrant for the Gartner’s Magic Quadrant for EPM Software Single code-base organically built resulting in tight integration and consistent user experience

Integrated Pay for Performance Process Performance Management Compensation Management Calibration View ALL Performance and Compensation data in Calibration module Make adjustments in Calibration module; write them back in source forms 7

Managers can see additional details of their employees through tight integration with Employee Profile Merit increases are auto-calculated based on performance rating, which managers can adjust Administrator can easily define eligibility rules for which employees can receive a promotion, merit increase, lump sum and other pay components such as bonus and stock Compensation Administrator can easily set the merit guidelines and limits for manager adjustments Managers can view their allocated budget set by the administrator, and are alerted if budget is exceeded Managers can promote eligible employees and further adjust their salaryMulti-currency support to manage employees in different countries Managers can view their employee information in a single place and make informed merit increase decisions Managers can view detailed performance review information through tight integration with Goal and Performance Management SuccessFactors Compensation Management - Salary

Incentive pay based on individual as well as corporate goal and performance metrics Corporate payout automatically calculated based on company and division-level metrics Administrator can easily define incentive pay rules for the company or specific division SuccessFactors Compensation Management - Bonus

SuccessFactors Compensation Management - Stock Managers can also easily allocate stock and options based on administrator-set guidelines and limits

Fully integrated with SuccessFactors Calibration Pay for performance

SuccessFactors Compensation Customers are seeing Business Impact Business Impact Study by Top 3 Management Consulting Firm (n=520) Business ImpactAverage Compensation Customers Productivity improvement2.9%3.68% Faster communication of strategy change1 week1.5 weeks Increased time spent on strategic priorities5.5%5.65% Increase in high performers4.9%11% Decrease in low performers13.9%16.5% Decrease in turnover rate8.9%12.67% Business Impact Add 1% of revenue to the bottom line Earn 10X return on SuccessFactors investment In one year Increase engagement and reduce turnover especially for high performers Shift performance to right through performance discrepancy and pay for performance

Case Study - Vail Resorts Results Situation Vail Resorts has 3 division; mountain, lodging and real estate. Each division had different pay component ratios for merit, bonus and stock Each division tied pay to different performance metrics. For example, for the real estate division tied performance to property units sold whereas mountain division tied to customer satisfaction. SuccessFactors Solution Calculation engine seamlessly handled multiple complex compensation rules Supported all pay components of merit, bonus and stock with flexibility to tailor for each division Integration with Goal and Performance management allowed for automatic compensation calculations based on goal completion and performance reviews Transparency- Empowered executive and managers to make real time decisions and check process status Time savings and Error free– no more spreadsheets, better approval workflow and in-built analytics High Performance Distribution.. And pay tied to it. Pay for performance and variable pay calculated based on unique needs of each division

Successful Compensation Management Customers This is an investment in your business so that you can properly manage goals, performance and tie that all into your compensation in a seamless, efficient, productive manner so that you can go about your business of growing your company, and that's really the most important thing that you need to be doing. Dr. Jay Greenstein, CEO This is an investment in your business so that you can properly manage goals, performance and tie that all into your compensation in a seamless, efficient, productive manner so that you can go about your business of growing your company, and that's really the most important thing that you need to be doing. Dr. Jay Greenstein, CEO “I am really happy with compensation. The linkage between performance and compensation is excellent. It has surpassed my expectations. This is really best in breed.” Don Hopkins, VP and CIO “I am really happy with compensation. The linkage between performance and compensation is excellent. It has surpassed my expectations. This is really best in breed.” Don Hopkins, VP and CIO “SuccessFactors has been especially helpful with compensation. There was inconsistency in the way we paid people. Employees hired from outside were often paid differently than workers in same role who were promoted internally — a disparity that was more arbitrary than performance-based.” Brian Reilly, CFO “SuccessFactors has been especially helpful with compensation. There was inconsistency in the way we paid people. Employees hired from outside were often paid differently than workers in same role who were promoted internally — a disparity that was more arbitrary than performance-based.” Brian Reilly, CFO

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