Simon 2018 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

2017 PEER GROUP (In $MMs)

MARKET CAPITALIZATION ASSETS

PEER COMPANY

(12/31/17)

(12/31/17)

COMPANY TYPE

American Tower Corp. (NYSE:AMT)

$ 61,185

$ 33,214

Specialized REIT

Crown Castle International Corp. (NYSE:CCI)

$ 45,101

$ 32,230

Specialized REIT

Public Storage (NYSE:PSA)

$ 36,375

$ 10,733

Specialized REIT

Prologis, Inc. (NYSE:PLD)

$ 35,245

$ 29,481

Industrial REIT

Equity Residential (NYSE:EQR)

$ 24,384

$ 20,571

Residential REIT

Welltower, Inc. (NYSE:HCN)

$ 23,705

$ 27,944

Health Care REIT

GGP, Inc. (NYSE:GGP)

$ 22,622

$ 23,350

Retail REIT

Realty Income Corp. (NYSE:O)

$ 16,229

$ 14,058

Retail REIT

CBRE Group, Inc. (NYSE:CBG)

$ 14,702

$ 11,484

Real Estate Services

Macerich Co. (NYSE:MAC)

$ 9,940

$ 9,606

Retail REIT

Federal Realty Investment Trust (NYSE:FRT)

$ 9,812

$ 6,276

Retail REIT

Kimco Realty Corp. (NYSE:KIM)

$ 8,755

$ 11,764

Retail REIT

Jones Lang LaSalle, Inc. (NYSE:JLL)

$ 6,756

$ 8,015

Real Estate Services

The Howard Hughes Corp. (NYSE:HHC)

$ 5,896

$ 6,729 Real Estate Development

Brixmor Property Group, Inc. (NYSE:BRX)

$ 5,684

$ 9,154

Retail REIT

Realogy Holdings Corp. (NYSE:RLGY)

$ 3,567 $ 61,573

$ 7,337 $32,258

Real Estate Services

Simon Property Group

Retail REIT

COMPENSATION IN 2017 The Committee held six meetings during 2017. The meetings were designed, among other things, to facilitate and encourage free and frank discussions among Committee members, executive management, the Committee’s compensation consultant and other Company personnel involved in executive compensation matters. The Committee made decisions impacting the type and amount of compensation paid to our NEOs as reported in the 2017 Summary Compensation Table. These decisions related to: Base Salaries, Annual Cash Incentive Compensation for 2017 performance, and Performance-Based Long-Term Incentive opportunities in the form of performance-based LTIP unit awards.

2017 BASE SALARIES

During 2017, we maintained 2016 base salary levels for our NEOs. The Committee periodically reviews base salaries for the NEOs and makes adjustments to reflect market conditions, changes in responsibilities, and merit increases.

2017 ANNUAL CASH INCENTIVE COMPENSATION

The Committee rewards executive officers with Annual Cash Incentive Compensation for achieving the Company’s financial and operating plan as well as an assessment of each NEO’s contributions to those achievements. Payouts under our Annual Cash Incentive Compensation program are the result of both the Company and the individuals reaching established performance targets. The Committee follows a two-step process to determine what amounts will be paid under the Annual Cash Incentive Compensation program each year: 1. The Company must deliver certain FFO performance during the year before any payments may be made under the program. If threshold performance is not achieved, no payments are made. For 2017, the Company generated comparable FFO of $11.57 per share before taking into account the $0.36 per share charge associated with the early redemption of certain senior notes of the Company. Because this amount exceeded the threshold FFO performance of $11.40 per share, the Committee moved to step two in this process. See ‘‘Where do I find reconciliation of non-GAAP terms to GAAP terms?’’ in the section of the Proxy Statement titled ‘‘Frequently Asked Questions and Answers’’ on page 52. 2. Each individual’s performance is assessed by the CEO and the Committee against defined goals and objectives which are established at the beginning of each year. The assessment delivers a total score for each individual. Each individual’s total score then determines the portion of that NEO’s target Annual Cash Incentive Compensation that has been earned.

SIMON PROPERTY GROUP 2018 PROXY STATEMENT 29