Simon 2018 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

LTIP units are designed to qualify as ‘‘profits interests’’ in the Operating Partnership for federal income tax purposes. During the performance period, holders of LTIP units will be allocated taxable profits and losses equal to one-tenth of the amounts allocated to an Operating Partnership unit and will receive distributions equal to one-tenth of the amount of regular quarterly distributions paid on an Operating Partnership unit, and certain special distributions. As a general matter, the profits interests characteristics of the LTIP units mean that they will not be economically equivalent in value at the time of award to the economic value of an Operating Partnership unit. The value of the LTIP units can increase over time until the value of the LTIP units is equivalent to the value of the Operating Partnership units on a one-for-one basis. After the end of the performance period, to the extent that the required performance has been achieved, holders of earned LTIP units, both vested and unvested, will be entitled to receive distributions in an amount per LTIP unit equal to the distributions, both regular and special, payable on a unit. Vested LTIP units are exchangeable for shares of the Company’s common stock on a one-for-one basis, or cash as selected by the Company. The number of performance-based LTIP units earned is determined by the Committee at the end of the performance period using the pre-established payout matrices (with linear interpolation between the specified payout percentages).

2015-2017 LTIP PAYOUT MATRICES

RELATIVE TSR

ABSOLUTE TSR WEIGHT 20%

VS. MSCI REIT INDEX

VS. S&P 500 INDEX WEIGHT 20%

WEIGHT 60%

PERFORMANCE PAYOUT % OF TARGET

PERFORMANCE PAYOUT % OF TARGET

PERFORMANCE PAYOUT % OF TARGET

20%

0.0%

Index 1%

0.0%

Index 2%

0.0%

24%

33.3%

Index

33.3%

Index

33.3%

27%

50.0%

Index + 1%

50.0%

Index + 2%

100.0%

30%

66.7%

Index + 2%

66.7%

33%

83.3%

Index + 3%

100.0%

36%

100.0%

2015-2017 LTIP PROGRAM RESULTS

In February 2018, the Committee reviewed calculations that had been prepared by management and reviewed by the Company’s internal auditor and determined that the Company’s performance during the three-year performance period ending December 31, 2017, did not satisfy any of the performance criteria for the 2015-2017 LTIP Program, as reflected in the table below.

2015-2017 PERFORMANCE-BASED LTIP ACTUAL PERFORMANCE RESULTS

PERFORMANCE REQUIRED TO

ACTUAL

COMPONENT

WEIGHTING

EARN MINIMUM PERFORMANCE % EARNED

Absolute TSR

20%

> 20%

2.03%

0.0%

Relative TSR vs. MSCI U.S. REIT Index (RMS)

60%

> Index 1% 14.6% below the Index

0.0%

Relative TSR vs. S&P 500 Index

20%

> Index 2% 35.7% below the Index

0.0%

No units were earned under our 2015-2017 LTIP Program. Despite the Company’s strong operating performance, due to the rigorous performance targets associated with the 2015-2017 LTIP Program, the Company was not able to achieve either the threshold absolute TSR or the relative TSR necessary for the NEOs to earn any LTIP units. This result shows that the Company’s executive compensation program does not reward the NEOs when previously established performance thresholds have not been met. OTHER ELEMENTS OF COMPENSATION Retirement and Health and Welfare Benefits. We have never had a traditional defined benefit pension plan. We maintain a 401(k) retirement plan in which all salaried employees can participate on the same terms. During 2017, our basic contribution to the 401(k) retirement plan was equal to 1.0% of the participant’s base salary and Annual Cash Incentive Compensation which vests 20% after the completion of two years and an additional 20% after each additional year of service until fully vested after six years. We match 100% of the first 3% of the participant’s contribution and 50% of the next 2% of the participant’s contribution. Our matching contributions are vested when made. Our basic and matching contributions are subject to applicable IRS limits and regulations. The limit for Company contributions for any participant in 2017 was $13,500. The contributions we made to the 401(k) accounts of the

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