You are cordially invited to the 20142016 Annual Meeting of Shareholders of Graham Holdings Company (the “Company”), which will be held in the Auditorium, the Graham Holdings Headquarters Building, 1150 15thCorporate Executive Board Waterview Conference Center, 1919 North Lynn Street, NW, Washington, DC 20071,24th Floor, Arlington, VA 22209, on Thursday, May 8,12, 2016, at 9:008:30 a.m.

At the Company’s 20142016 Annual Meeting of Shareholders (the “Meeting”), there will be a report on the Company’s activities, and Directors will be elected for the ensuing year. In addition, the Class A Shareholders will have an advisory vote on whether to approve the compensation paid to the Company’s named executive officers for 2013.

It is important that your shares be represented at the Meeting. Please sign the accompanying Proxy and return it promptly in the envelope provided. If you plan to attend, kindly so indicate in the space provided on the Proxy. You may also vote your shares by telephone or on the Internet. If you choose to vote your shares by telephone or on the Internet, please follow the instructions in the enclosed Proxy.

The 20142016 Annual Meeting of Shareholders of Graham Holdings Company will be held inat the Auditorium, the Graham Holdings Headquarters Building, 1150 15thCorporate Executive Board Waterview Conference Center, 1919 North Lynn Street, NW, Washington, DC 20071,24th Floor, Arlington, VA 22209, on Thursday, May 8, 2014,12, 2016, at 9:008:30 a.m., Eastern Daylight Saving Time, for the following purposes:

The Board of Directors of the Company (the “Board”) has fixed the close of business on March 12, 2014,16, 2016, as the record date for the determination of shareholders entitled to notice of and to vote at the Meeting.

It is important that your shares be represented and voted at the Meeting. Please sign and return your Proxy at your earliest convenience. You may also vote your shares by telephone or on the Internet. If you choose to vote your shares by telephone or on the Internet, please follow the instructions in the enclosed Proxy. You may revoke your Proxy at any time before it has been voted at the Meeting. You may vote in person at the Meeting even if you returned a Proxy, provided that you first revoke your previously voted Proxy.

The Company seeks Directors of the highest personal and professional ethics, integrity and business acumen who are committed to representing the long-term interests of the Company’s shareholders. In considering its composition, the Board considers the skills and experience of prospective nominees in the context of the needs of the Board and seeks Directors who are “independent” under applicable law and listing standards, despite being exempt from such requirement as a “controlled company.” The Company’s Corporate Governance Guidelines do not prescribe specific standards regarding the diversity of the Board, but the Board considers as a matter of practice the diversity of prospective nominees (including incumbent Directors), both culturally and in terms of the range of perspectives that the Board as a whole brings to its work. The following nominees for Director have established records of accomplishment in areas relevant to the Company’s strategy and operations and share characteristics identified in the Company’s Corporate Governance Guidelines and Statement of Ethical Principles as essential to a well-functioning deliberative body: honesty, integrity, independence, competence, diligence and commitment to the interests of all shareholders to build long-term shareholder value.

The Company is a diversified education and media company serving customers in a rapidly evolving, highly regulated, competitive and technological environment. The Directors’ expertise and experience encompass the areas of education, media, technology, marketing, international business and finance, journalism, law and public policy. All of the Directors have held senior positions as leaders of complex organizations (both for-profit and non-profit) and gained expertise in core management skills, such as strategy and business development, innovation, line operations, brand management, finance, compensation and leadership development, compliance and risk management. They have significant experience in corporate governance and oversight through their positions as senior executives and as Directors (or Trustees) of public companies and other institutions, and many have served as members of audit, compensation and governance committees at such companies or institutions, as well as at the Company. These skills and experience are pertinent to the Company’s current and evolving business strategies, as well as to the Board’s oversight role, and enable the Company’s Directors to provide diverse perspectives about the complex issues facing the Company.

The following biographies highlight specific qualifications, skills and experience of each of the Director nominees.

During 2013,2015, non-employee Directors received the following annual payments:

Each non-employee Chair of a committee of the Board received an additional $10,000.$20,000. Members of the Audit Committee received an additional $12,000$20,000 annually for their service on that committee. Employee Directors received no compensation for serving on the Board.

The total 20132015 compensation of non-employee Directors is shown on the following table:

The descendants of Katharine Graham (including the Company’s Chief Executive Officer and Chairman of the Board) and trusts for the benefit of those descendants own the majority of the shares of Class A Common Stock and have the right to vote for 70% of the Board of Directors; thus the Company is a “controlled company” for purposes of Section 303A.00 of the New York Stock Exchange Listed Company Manual. As a “controlled company,” the Company is exempt from certain governance requirements, including the requirement that it have a nominating/corporate governance committee, and the Company does not deem it necessary to have such a committee. The Company does not have a procedure by which shareholders may recommend nominees to the Board, given the Company’s ownership structure. Notwithstanding the fact that as a “controlled company,” the Company is not required to have a Board of Directors that comprises a majority of “independent” directors, the Board has determined that current members Lee C. Bollinger, Christopher C. Davis, Barry Diller, Thomas S. Gayner, Anne M. Mulcahy, Ronald L. Olson, James H. Shelton, Larry D. Thompson and G. Richard Wagoner, Jr. (who, together, constitute a majority of the Board) are “independent” within the meaning of Section 303A.02 of the New York Stock Exchange Listed Company Manual. In reaching this conclusion, the Board considered commercial relationships with companies at which Directors or their family members served as outside directors or executive officers. These relationships involved the Company’s purchases of services in the ordinary course of business that were made on arm’s-length terms under circumstances and in amounts that did not affect the relevant Directors’ independence.

The listing requirements of the New York Stock Exchange call for the non-management Directors of the Company to meet regularly in executive session without management. The Board has appointed Christopher C. Davis as lead Director and has authorized him to preside at the executive sessions. The non-management Directors met in executive session in November 2013May and September 2015 and expect to meet in executive session in 20142016 as appropriate.

Lee C. Bollinger, Barry Diller, Anne M. Mulcahy and Larry D. Thompson served as members of the Compensation Committee in 2013.2015. No member of the Compensation Committee has ever been an employee of the Company. No executive officer of the Company serves on the compensation committee of any other entity that has, or has had, one or more of its executive officers serving on the Company’s Board of Directors.

Until November 2015, Donald E. Graham servesserved as Chairman of the Board of the Company, as well as Chief Executive Officer of the Company. TheIn November 2015, Timothy J. O’Shaughnessy became President and Chief Executive Officer, and Mr. Graham continued to serve as Chairman of the Board of Directors. Mr. O’Shaughnessy had been named President of the Company and served as a Director of the Company since November 2014. Until the separation of the roles in 2015, the Board of Directors believesbelieved that Mr. Graham’s service as both Chairman of the Board and Chief Executive Officer iswas in the best interests of the Company. This structure iswas appropriate, given the significant shareholdings in the Company of Mr. Graham and the Graham family, and also servesserved other purposes. Mr. Graham possesses in-depth strategic and operational knowledge of the opportunities and challenges facing the Company and iswas best positioned to develop agendas that focusfocused on matters that meritmerited Board attention. At his request, Mr. Graham has not received a raise in his annual salary nor received an annual bonus in 2325 years in his current non-Board roles. BecauseIn connection with his shareholdings represent his main financial interest in the Company, the Board believes thatresignation as Chief Executive Officer, Mr. Graham’s interests are well aligned with those of shareholderssalary was reduced from $400,000 to $100,000, and that his dual role promotes decisive leadership, accountability and clarityhe no longer participates in the overall direction of the Company’s business strategy. The Board also believes that this approach facilitates clear and consistent communication of the Company’s strategy to all stakeholders.

While as a “controlled company,” the Company is not legally required to have a majority of independent Directors, the majority of the Board, in fact, comprises independent Directors who act as an effective counterbalance to Mr. Graham, in his dual role.Chairman of the Board, and Mr. O’Shaughnessy, as President and Chief Executive Officer. The Board also appoints a lead independent Director. Christopher C. Davis serves in this capacity. The lead independent Director typically chairs executive sessions of Board meetings and consults with Mr. Graham and Mr. O’Shaughnessy and senior management regarding issues to be included in Board meeting agendas. The lead independent Director is also expected to collaborate with Mr. GrahamO’Shaughnessy in reviewing key operational and other matters and to act as a liaison between Mr.Messrs. Graham and O’Shaughnessy and the independent Directors.

The Board as a whole actively considers strategic decisions proposed by management, including matters affecting the business strategy and competitive and financial positions of the Company, and monitors the Company’s risk profile. Board meetings are focused on strategic matters affecting major areas of the Company’s business, including operational, execution and competitive risks and risk management initiatives. The Board fulfills certain risk oversight functions through its standing committees. For example, the Finance Committee reviews and makes recommendations to the Board related to major acquisitions or dispositions, including with respect to attendant risks, and the Compensation Committee addresses the risk profile of the Company’s compensation program and arrangements. The Audit Committee also plays a key role in risk oversight, particularly with respect to financial reporting, accounting and compliance matters.

Risk oversight activities are supported by internal reporting structures that aim to surface directly to the Board key matters that can affect the Company’s risk exposures. For example, the head of the Company’s internal audit function reports directly to the Audit Committee. The Company has also established a management-level compliance committeeCompliance Committee that reports periodically to the Audit Committee about regulatory risks affecting the Company’s education businesses, as well as a Disclosure Controls Committee, chaired by the General Counsel, that reports directly to the Audit Committee on certain matters relating to the Company’s public disclosures.

The information in the following two tables relates to each person who, on February 3, 2014,1, 2016, was a “beneficial owner” (as defined under the proxy rules of the Securities and Exchange Commission) of more than 5% of the Company’s Class A or Class B Stock and to the stock holdings of Directors and officers. Under the proxy rules, a person is deemed to be the “beneficial owner” of stock if such person has (or shares) either investment power or voting power over such stock or has (or shares) the right to acquire such stock within 60 days by any of a number of means, including the conversion of another security that is convertible into such stock. A substantial number of shares of the Company’s Class A and Class B Common Stock are held in trusts or subject to other agreements that provide for the sharing of investment power, voting power or both among several persons, each of whom is deemed by the Securities and Exchange Commission to be a “beneficial owner” of the shares so held. Furthermore, in many cases, such persons do not include the beneficiary of the trust who, although not deemed to be a “beneficial owner” in the absence of voting or investment power over the shares, is nevertheless shown below as a “beneficial owner” because of the beneficiary’s economic interest in the shares. In addition, since all of the shares of Class A Stock are convertible at the option of the holder into Class B Stock on a share-for-share basis, each “beneficial owner” of shares of Class A Stock is deemed by the Securities and Exchange Commission to be a “beneficial owner” of the same number of shares of Class B Stock. In indicating below a person’s “beneficial ownership” of shares of Class B Stock, it has been

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s Directors, officers and persons who own more than 10% of a registered class of the Company’s equity securities to file with SEC initial reports of ownership and reports of changes in ownership of Class B Stock. During the fiscal year ended December 31, 2013, the Company isBased upon information furnished by these persons, we believe that all required filings for 2015 were made in a timely manner, except that a Form 4 on behalf of Mr. Graham was not awarefiled on a timely basis to report 66 shares owned by his wife of any deficiency in reporting.

As required by ScheduleSection 14A of the Securities Exchange Act of 1934 and the corresponding SEC rules, the Company is seeking an advisory, non-binding shareholder vote from its Class A Shareholders with respect to compensation awarded to its named executive officers for 2013.2015. On May 12, 2011, the majority of the Company’s Class A Shareholders voted in favor of an annual, non-binding shareholder advisory vote on executive compensation and, in consideration of the outcome of the frequency vote, the Board determined to hold such advisory vote each year. The Company’s executive compensation program and compensation paid to its named executive officers are described under the heading "Executive Compensation"“Executive Compensation” in this Proxy Statement. The Compensation Committee oversees the program and compensation awarded, adopting changes to the program and awarding compensation as appropriate to reflect the Company’s circumstances and to promote the main objective of the program: to motivate talented employees in order to increase value for shareholders by facilitating long-term growth of the Company. If you are a Class A Shareholder, you may vote for or against the following resolution, or you may abstain. The Compensation Committee will consider the outcome of the vote, along with other relevant factors, in evaluating its executive compensation program. Following the Meeting, the next such non-binding advisory vote to approve the Company’s executive compensation is scheduled to occur at the 20152017 Annual Meeting of Shareholders.

Key Leadership Changes

In November 2015, Donald E. Graham, Chairman of the Board and Chief Executive Officer of the Company, resigned from his position as Chief Executive Officer but remained Chairman of the Board. Timothy J. O’Shaughnessy was elected Chief Executive Officer in addition to his role as President by the Board of Directors. In August 2015, Andrew S. Rosen, Executive Vice President of the Company and Chairman of Kaplan, Inc., assumed the role of Chief Executive Officer of Kaplan, Inc. in addition to his role as Chairman of Kaplan, Inc. Additionally, effective April 2015, Nicole M. Maddrey was named Senior Vice President, General Counsel and Secretary.

Overview of Compensation Program

The Committee has responsibility for establishing and continually monitoring adherence to the Company’s compensation philosophy—philosophy–a philosophy designed to attract, retain and motivate qualified and talented employees who are enthusiastic about the Company’s mission and culture. The Committee, which is composed entirely of independent directors, is chaired by Anne M. Mulcahy and includes Lee C. Bollinger, Barry Diller and Larry D. Thompson, seeks to establish total compensation packages that are attractive to employees and comparable to, but not dramatically different from, those offered by peer companies with comparable revenue in the education and mediasimilar industries. Through regular meetings and discussions with management, the Committee ensures that the total compensation paid to all executives, including named executive officers of the Company, and all employees earning more than $300,000 in salary, is fair, reasonable and based on performance goals established to increase value for Shareholdersshareholders by facilitating the long-term growth of the Company. The Committee considers both the Company’s short-term and long-term plans in determining compensation. Annual plans are used to motivate and reward management for achieving specific yearly goals. Long-term plans, typically three or four years in duration, are designed to reward cumulative long-term goals. All performance criteria, however, including those in annual or relatively short-term plans, are designed to reward executives for making decisions that will enhance the long-term value of the Company. Except in the case of sales executives or executives in high-growth revenue-focused business units, no targets are based on quarterly or partial-year results. Some ofCompensation paid pursuant to these plans reward withmay be cash and others reward withor stock-based compensation. The Company has nohistorically favored cash compensation over non-cash compensation, as management and the Committee believe that cash incentives provide more targeted rewards for specific performance. However, the Company does not apply a specific formula for allocating between cash and non-cash compensation or betweenshort- and long-term and current compensation. ManagementInstead, management and the Committee select the method of compensation thought most likely to lead to achievement of the particular goal; however, the Company has historically favored cash compensation over non-cash compensation. Management and the Committee believe that cash incentives provide more targeted rewards for specific performance.

The named executive officers receive an annual salary and, except Donald E. Graham, Chairman of the Board, and Chief Executive Officer, receive an annual salary and restricted stock awards every other year and participate in performance-based annual bonus plans and four-year cash-based Performance Unit Plans. Named executive officersPlans and, others occasionally receivein certain circumstances, have received restricted stock or stock option grants in off-cycle yearsoptions, as a reward for past performancedetermined by the Committee on an individual basis. With the exception of Mr. O’Shaughnessy and incentive for future performance. TheyMs. Maddrey, the named executive officers also receive the benefits ofpursuant to the Supplemental Executive Retirement Plan (the “SERP”). Mr. Graham receives an annual salary and participates, which was closed to new participants in the Performance Unit Plans and the defined benefit portion of the SERP as described below.

The Board has delegated to the Committee the responsibility of overseeing the administration of the Company’s compensation plans and the preparation of all reports and documents required by the rules and regulations of the SEC. To meet this responsibility, the Committee is required to meet at least once a year. The Committee annually reviews and approves the corporate goals and objectives upon which the compensation of the President and Chief Executive Officer and senior management, including the named executive officers, is based. The Committee evaluates the President and Chief Executive Officer’s performance in light of these goals and objectives. Furthermore, the Committee reviews and makes recommendations to the Board with respect to any incentive compensation plans, including equity-based plans, to be

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adopted or submitted to the Company’s shareholders for approval. The Committee reviews the Company’s succession plans, including (i) the ChairmanPresident and Chief Executive Officer’s recommendations as to a successor, should he bebecome disabled or unable to perform his duties for an extended period of time, and, annually, (ii) annually, the Company’s efforts at management development.

The Committee may request that any officer or employee of the Company, includingor any of its affiliates, or the Company’s outside counsel or an independent auditor, attend meetings of the Committee or meet with any members of, or consultants to, the Committee. The Committee has authority to retain or terminate any compensation consultant used to assist in the evaluation of Director, President and Chief Executive Officer or senior management compensation and has sole authority to approve the consultant’s fees and other retention terms. The Committee did not retain any consultant for such purpose in 2013. The Committee also has authority to obtain advice and assistance from internal or external legal, accounting or other advisors.

During 2013,2015, the Committee met sevensix times. A copy of the Company’s Compensation Committee Charter is available under the “Investor Relations” tab at www.ghco.com.

At his request, Mr. Graham has not received a raisean increase in his annual salary nor has he receivedor an annual bonus award since 1991. He stopped acceptingIn connection with his resignation as Chief Executive Officer in November 2015, Mr. Graham requested that his annual salary be decreased to $100,000. Beginning in 2004, he no longer accepted grants of restricted stock in the Company, in 2004 and requested that he receive no payment forwaived rights to payments pursuant to his performance units beginning with the 2007–2010 award cycle. Allperformance cycle and, beginning in 2015, he no longer receives performance units. Mr. O’Shaughnessy was not present at Committee meetings when his compensation, for Ms. McDaniel is determined solely by theor that of his wife (Laura O’Shaughnessy, President and Chief Executive Officer andof Social Code LLC, a subsidiary of the Committee. The Chief Executive Officer andCompany) was discussed by the Committee use the same performance-based criteria to set Ms. McDaniel’s compensation as they do for all other named executive officers and other senior staff (other than Mr. Graham). Ms. McDaniel is asked to leave the Committee meetings when her performance is discussed.

To meet the Committee’s objectives, at its objectives,request, the Committee asks thePresident and Chief Executive Officer and the secretary of the Committee to draft annual and long-term incentive-based cash and non-cash executive compensation plans. The Committee reviews and, in its sole discretion, modifies the formula and goals established for various awards under the plans before the plans take effect, which is typically no later than the end of the first quarter of the first year covered by the plan.

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The Company adopts a holistic view on executive compensation. The Company compares its executive salaries, annual bonuses, and long-term incentives to those of companies in similar industries and with comparable revenues and generally considers the programscompensation structures maintained by similarly situated companies, but does not target its executive compensation at a certain level or percentage based upon other companies’ arrangements. At least once a year, the Committee evaluates the individual compensation of the Company’s senior executives (including the named executive officers) against market data provided by outside surveys or public information (such as the proxy filings of peer companies). The Committee defines its peer group as companies operating in the same industries (Conglomerates, Education, and Media) with one-half to two times the Company’s prior fiscal year revenue. In 2015, the Committee reviewed data from the Equilar Executive Compensation Survey and the U.S. Mercer Benchmark Database (MBD): Executive Survey. Where public data for comparable roles were available, the Committee also considered the compensation of its senior executives (including the named executive officers) in relation to the following peer companies:

As described below, a significant portion of the Company’s executive compensation is linked directly to business unit and corporate performance and stock price appreciation. The Committee intends to continue the policy of linking executive compensation to corporate performance and returns to shareholders and deems it desirableshareholders. The Committee intends to provide that certainsuch compensation be paid under the 2012 Incentive Compensation Plan meet(the “2012 ICP”), which provides for the payment of compensation in accordance with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), concerning the deductibility of executive compensation. However, theThe Committee reserves the right to put in place certainmay, however, establish compensation programs or grant compensation that do not meet thosethe requirements under Section 162(m) of the Code and which, therefore, may result in compensation payments that are not be deductible to the Company, if the Committee determines that such programs or the payment of such compensation are otherwise in the best interests of the Company.

The compensation package offered by the Company to its executive officers comprises the following components:

The Company pays named executive officers base salaries to compensate them for services rendered during the fiscal year. Salaries for named executive officers are based on their responsibilities, their prior experience and their recent performance and are evaluated against market data provided by outside surveys. In 2013, the Committee reviewed data from Towers Watson surveys of U.S. General Industry and Media executives and the Equilar Top 25 Survey. The Company compares its management salaries to those of companies in similar industries and with comparable revenues in order to get a general understanding of the compensation structures maintained by similarly situated companies, but does not target its executive compensation at a certain level or percentage based upon other companies’ arrangements. Salaries are typically reviewed on a 12-month or longer cycle, except when there is a significant change in an executive’s responsibilities during a shorter period of time.such cycle. Such adjustments are determined by evaluating (i) the scope of the new responsibilities, (ii) the competitive market value of that role, (iii) the performance of the individual and (iv) the performance of the Company.

With respect to the base salary paid to Mr.Messrs. Graham and O’Shaughnessy in 2013,2015, the Committee took into account a comparison ofconsidered the base salaries paid to chief executive officers of peer educationcompanies and media companies, the Company’s results in 2012 and2014. With regard to Mr. Graham’s performance since 1979, when he became publisher of The Washington Post. TheGraham, the Committee noted that Mr. Graham’s base salary was, and has long been, significantly below the median of base salaries paid to chief executive officers of these peer companies: other prominent media companies, including The New York Times Company and Gannett Co., Inc.; and publicly held education companies, including Apollo Group, Inc., DeVry, Inc., Strayer Education, Inc., and Corinthian Colleges, Inc.companies. However, at Mr. Graham’s request, the Committee left his salary at $400,000.$400,000, and further reduced it to $100,000 at Mr. Graham’s request in November 2015 in connection with his resignation from the role of Chief Executive Officer. The Committee does not give significance toweigh Mr. Graham’s below-market salary when reviewing and establishing salaries for other named executive officers.

To supplement base salaries and to reward management (including named executive officers and other employees key to the long-term success of the Company) for meeting specific individual and financial goals, the Class A Shareholders of the Company adopted in December 1981 the Long-Term Incentive Compensation Plan. In 2001, the Annual Compensation Plan, originally approved by the Class A Shareholders in February 1974, was combined with the Long-Term Incentive Compensation Plan to create the Incentive Compensation Plan. In May 2012, the Class A and Class B Shareholders of the Company adopted the 2012 ICP in May 2012. Prior to the adoption of the 2012 ICP, performance-based incentive compensation was awarded under the Incentive Compensation Plan (the “Plan”). The Incentive Compensation Plan was combined with(adopted in 2001) or the Stock Option Plan which the shareholders reauthorized(reauthorized in 2003, to create the Plan. 2003).

The purpose of these plans was and is to provide greater incentives to those employees who have been or will be responsible for the Company’s future growth, profitability and continued success and to strengthen the ability of the Company to attract, motivate and retain such employees. There are at present approximately 167156 employees of the Company who are participants under the Plan2012 ICP and receive annual bonus awards and/or hold restricted stock, and/or stock options and/or grants of Performance Units.performance units granted under the 2012 ICP. Each named executive officer, except Mr. Graham, (who only participates in the Performance Units portion of the Plan), participates in each of these programs.

The Plan calls2012 ICP provides for annual incentive compensation awards based on the Company and its business units’ financial performance compared to goals set immediately prior to or at the beginning of the year in which the award is to be earned. The payout upon the achievement of such goals is equal to a percentage of base salary, which is also set at the beginning of the year. Those percentages are determined on an individual basis, taking into account the responsibilities, prior experience and recent performance of the relevant employee. The 20132015 target percentage of base salaryannual bonus award for each of the named executive officers, as a percentage of base salary, was as follows: Mr. O’Shaughnessy, 100%; Mr. Rosen, 100%; Mr. Jones, 50%; Mr. Rosberg, 40%; Ms. McDaniel, 70% (to reflect additional responsibilities relating to the management of Slate, Post–Newsweek Media and The Herald); and Ms. Dillon,Maddrey, 40%. Mr. Graham has asked the Committee not to grant him an annual bonus award.

In 2014, Ms. McDaniel's bonus target was reduced to 50% of base salary to reflect the sales of Post–Newsweek Media and the Herald, which both occurred in 2013.

In addition, for Mr. Rosen, 50% of his bonus was based on the diluted earnings per share target for the Company, and the remaining 50% was tied to Kaplan’s enterprise operating income target of $114 million weighted at 80% and Kaplan’s enterprise revenue target of $1,943 million weighted at 20%. The potential payouts for the Kaplan component of Mr. Rosen’s

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bonus amount range from 0% to 200% of target, with the maximum potential payout available in the event 125% of the operating income target is attained. Due to continued operating environment challenges in the U.S. higher education industry, Kaplan engaged and completed a number of unplanned restructuring activities in 2015 with the objective and result of significantly reducing its expenses to be more in line with current revenue levels. In addition, Kaplan disposed of certain loss-making businesses. Given the impact and importance of these restructuring charges and discontinued operations, in calculating the 50% of Mr. Rosen’s bonus based on Kaplan’s enterprise operating income and enterprise revenue, the Committee excluded these restructuring charges and discontinued operations as they are not tied to Kaplan’s continuing operations. On this basis, Kaplan achieved adjusted operating income of $133.1 million versus a target of $165.5 million, or 80% achievement, which resulted in payout of the portion of Mr. Rosen’s bonus attributable to Kaplan’s enterprise operating income of 25% of target. Kaplan enterprise revenue totaled $1,778.1 million versus a target of $1,882.0 million, which did not result in a payout under the bonus plan. Thus, the total percentage achievement of the Kaplan portion of Mr. Rosen’s bonus totaled 21% of target, or $169,579.

The original diluted earnings per share goal for 20132015 was $20.12; however$37.53. However, in connection with the spin-off of Cable ONE, the Company’s cable systems and related operations division, completed as of July 1, 2015, the Committee established that the 2015 goal would be adjusted for the goal to excludeperiod that the impact of discontinued operations,Company did not own Cable ONE, resulting in a revised diluted earnings per share goal, as approved by the Committee, of $23.54.$29.72. In setting the original goal, the Committee established a formula for bonus purposes that included adjustments for certain items, to the extent that actual amounts varied from those in the 20132015 annual budget. Specifically, these adjustments included creditsadditions for unbudgeted divestitures and a pension budget variance,variance; foreign exchange losses; unbudgeted new acquisitions, investments and divestitures; and unbudgeted costs associated with the Cable ONE spin-off; these were offset by additionscredits for foreign exchange losses, acquisitions and a Kaplan stock compensation expense budget variance.

In calculating the Company’s achievement of 20132015 diluted earnings per share for purposes of making its final bonus determinations for the named executive officers, the Committee also exercised its discretion to exclude certain unusual and unbudgeted items, in addition to the adjustments included in the diluted earnings per share formula. Specifically, the adjustments included unbudgeted intangible and long-lived asset impairment charges, unbudgeted restructuring charges at Kaplan a non-cash intangible and other long-lived assets impairment chargecorporate, unbudgeted stock compensation expense due to award modifications, LTIP expense variance from budget at one of the Kaplan businesses, a write-down of a marketable equity security, other investment write-downs andSocialCode, unbudgeted costs related toat the broadcasting division and Forney, and a gain on the sale of certain publishing businesses.land. The Committee adjusted for these items as they do not relate to the regular operating results that are customarily considered by the Committee in determining bonus amounts. The

Taking into account these adjustments, the Company’s 20132015 diluted earnings per share, as adjusted for purposes of the bonus determination, was $30.14$32.29 (compared to reported diluted earningslosses per share from continuing operations of $25.78)$17.87), resulting in the Company’s achievement of 128%108.6% of its revised earnings per share goal for 2013. Annual bonuses are paid at a maximum of 175% of target for earnings per share performance of 135% of budget.2015. As a result, the annual bonus payout was approximately 165%121% of target, based on the established annual formula.

In addition to the annual bonus based on a pre-established formula,awards, in 2013,2015, the Committee exercised its discretion to award special bonus payments to certain individuals, including three of the named executive officers,Mr. Jones and Ms. Maddrey, who were integral to the closingcompletion of the sale of mostCable ONE spin-off. In recognition of the Company’s newspaper publishing and affiliated businesses, which is defined below asextraordinary efforts of each executive in connection with the WPM Transaction. Specifically,spin-off, the Committee awarded each of Mr. Jones and Ms. Maddrey a special paymentsbonus payment in the amount of $500,000 to each of Ms. Dillon$200,000 and Mr. Jones and $200,000 to Ms. McDaniel in recognition of their extraordinary efforts in connection with the WPM Transaction.    

To align the interests of Shareholdersthe Company’s shareholders and management and to ensure that the full potential of an executive’s compensation package cannot be realized unless stock appreciation occurs over a number of years, the Plan2012 ICP also provides for grants of restricted stock inof the Company. To determine the number of shares to be granted, the Committee considers on an individual basis the likelyestimated value of shares already held, the level of contribution the employee has previously made and the potential of the employee to bring additional value to the Company. The shares are vestedgenerally cliff vest at the endconclusion of the restrictiona four-year vesting period usually four years, and accelerate vesting does not accelerate under their terms, exceptonly at the discretion of the Committee.

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The performance measure used for PNSGMG (Broadcasting) for both the 2011–20142013–2016 and 2013–2016the 2015–2018 cycles is PNS’sGMG’s cumulative cash flow margin ranking over the applicable four-year period compared to the cash flow margins of selected peer companies at the end of the award cycle. Cash flow margin is computed based on operating income plus depreciation and amortization, as a percentage of revenue. As soon as practical after the award cycle, the Committee determines PNS’sGMG’s cash flow margin rank among the cash flow margins of the peer companies and determines the payout value of each performance unit. The value of each performance unit is determined as set forth in the following table:

For the 2013–2016 cycle, the Kaplan performance measure is based on Kaplan’s cumulative operating income for 2013–2016. For the 2015–2018 cycle, the performance measure used for Kaplan for the 2014–2017 Kaplan Long-Term Incentive Plan is Kaplan enterprise operating income growth. A baseline Kaplan enterprise operating income of $75 million was established in 2014 and increases year-over-year by 10%. Provided Kaplan achieves incremental operating income growth above the baseline, the aggregate amount of awards available are calculated as 12% of such growth.

For the 2015–2018 cycle, the performance measure during the four-year period for SocialCode, Slate, Celtic Healthcare, Residential Healthcare Group, Forney Corporation and Joyce/Dayton Corporation is based on cumulative operating income.

Because the performance measures that compose the valuation formula for performance units are cumulative for the measures applicable to Kaplan, WPM, Cable ONE, GMG and PNS,the other applicable business units, it is not possible to calculate with certainty any interim

Pursuant to the Company grants stock options sparingly,terms of the Plan provides that2012 ICP, shares of Class B Stock canmay be issued upon the exercise of stock options that have been granted to key employees of the Company. The Committee, however, does not grant stock options on a consistent basis and grants stock options only when a key employee has made a significant contribution to the Company and demonstrates the ability to contribute more.make additional contributions. The options generally vest 25% per year, over four years, and expire ten years from the grant date. AsIn November 2015, in connection with his assumption of the endrole of Chief Executive Officer in addition to his role as President of the Company’s 2013 fiscal year,Company, Mr. Jones heldO’Shaughnessy received an additional grant of options to acquire 4,00022,742 shares of Class B Stock (3,000 grantedso that as of December 31, 2015, he held 100,000 Company options. For a description of the terms of Mr. O’Shaughnessy’s options, see the section below titled “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table: Stock Options.”

In addition, in 2008 and 1,000 granted in 2010); Mr. Rosberg held options to acquire 1,000 shares of Class B Stock, granted in 2008; Ms. McDaniel held options to acquire 2,000 shares of Class B Stock (1,000 granted in 2004 and 1,000 granted in 2008); and Ms. Dillon held options to acquire 1,000 shares of Class B Stock, granted in 2008. Given Mr. Graham’s significant ownership inconnection with the Cable ONE spin-off, the Company adjusted both the Committee has not granted anynumber of shares underlying, and the exercise price of, outstanding stock options held by employees who remained employed by the Company following the Cable ONE spin-off, including stock options held by each of Messrs. O’Shaughnessy, Jones, Rosen and Rosberg. Such adjustments resulted in incremental stock compensation expense with respect to Mr. Graham.

The Company provides few perquisites for the named executive officers. In 2013,2015, Ms. McDanielMaddrey received $960 for paid garage parking at the Company’s headquarters in Arlington, VA, and financial and tax advice valued at $10,466. Ms. Dillon received financial planning services$24,920.

Retirement Benefits

Qualified Defined Contribution and reimbursement for living expenses valued at $75,729.

Most employees inof the Company, including certain named executive officers, are eligible to participate in the Company’s qualified defined contribution 401(k) and defined benefit retirement programs. Benefits under these plans are determined on the basis of base salary only, exclusive of all bonuses, deferred compensation and other forms of remuneration.

Eligible Corporate employees hired on or after September 1, 2009, participate in the Cash Balance Retirement Program (“CBRP”). Eligible Corporate employees who were actively employed on or after August 1, 2012, also participate in the Secure Retirement Account (“SRA”). Both the CBRP and the SRA are defined benefit programs in which participant account balances grow through quarterly pay-based credits and quarterly interest credits. Corporate employees hired prior to September 1, 2009, including allcertain named executive officers who are vested and who begin to take their pension benefit at age 65 or whose age and years of service when added together equal 90 (the “Rule of 90”), receive an annual pension equal to 1.75% of their highest average 60-month base salary annualized up to the limits permitted by the Internal Revenue Code, minus Social Security-covered compensation multiplied by the appropriate Social Security offset percentage and early retirement factor, multiplied by the number of years of credited service under the Graham Holdings Retirement Benefits Schedule.^(A)Schedule (“Graham Schedule”). An annual cash pension supplement is also provided to assist in payment of retiree medical coverage equal to $200 multiplied by the number of years of credited service under the Graham Holdings Retirement Benefits Schedule. An additional cash pension supplement of $3,000 per year is provided to participants who retire and commence benefit payment at or after age 55, but prior to age 65, and who had ten years of vesting service at retirement. The pre-age 65 supplement is discontinued when the retiree qualifies for Medicare (the month prior to the 65th65^th birthday).

Non-Qualified Supplemental Executive Retirement Plan for Graham Holdings Company (formerly The Retirement Plan for Washington Post Companies) were transferred to the Pension Plan for The Washington Post and Companies.

The Company maintains an unfunded Supplemental Executive Retirement Plan (“SERP”),SERP which is designed to retain and recruit key executives. Participants in the SERP, including certain named executive officers, arewere selected by management as employees whom management most wantswanted to retain because of their superior performance and arewere approved for participation by the Committee.

To offset IRS limitations placed on the income that can be considered in the formulas of retirement plans and benefits that can be payable from the plans, the SERP provides a “supplemental retirement benefit.” This benefit is calculated

The SERP also provides key executives, including thecertain named executive officers, with tax-deferred accruals of amounts proportionate to the benefits available to non-highly compensated participants in the Company’s 401(k) savings plan, to the extent that benefits exceed those under the Company’s basic plans because of the tax law limitations ($52,000 in 2014)(currently $53,000). The executive is required to defer compensation to the SERP savings plan in order to receive the applicable matching company credit each year. Mr. Graham has waived his right to maintain a separate unfunded savings plan account under the SERP.

Mr. O’Shaughnessy’s Agreement

The Company entered into a letter agreement with its policy,Mr. O’Shaughnessy in October 2014 to incentivize him to accept the position of President of the Company. Pursuant to his employment agreement, Mr. O’Shaughnessy was entitled to a grant of 5,000 performance units in the 2013–2016 performance cycle, 7,500 performance units in the 2015–2018 cycle, and was granted a new-hire option award of 50,000 stock options. In addition, pursuant to Mr. O’Shaughnessy’s employment agreement, if he is terminated for any reason other than cause while his new-hire option award remains outstanding, subject to the execution of a separation and release agreement within 30 days following his termination, he will vest in the next tranche of options that is scheduled to vest after his termination, and he will have up to three months (or shorter if through the expiration date of the award) following termination to exercise any vested options.

Under the terms of Mr. O’Shaughnessy’s letter agreement, and as consideration for the benefits provided in the agreement, Mr. O’Shaughnessy agreed to non-competition, non-solicitation of customers and employees and no-hire restrictions for a one-year period following termination, as well as to maintain the confidentiality of certain information related to the Company has notand its businesses at all times following termination.

Mr. Rosen’s Agreement

The Company entered into any employment agreementsa letter agreement with or guaranteed severance packagesMr. Rosen in April 2014 to anyincentivize him to accept the position of Chairman of Kaplan and Executive Vice President of the named executive officers.

At the 20132015 Annual Meeting of Shareholders, the Company’s Class A Shareholders unanimously approved the overall 20122014 compensation for its named executive officers, including the policies and practices related thereto. The Company believes this vote reflected Class A Shareholder approval of its pay-for-performance philosophy and the absence of pay practices that shareholders consider problematic. Accordingly, the Compensation Committee generally continued to apply the same principles in determining the amounts and types of executive compensation for 20132015, as outlined in its compensation philosophy and framework. The Compensation Committee values the shareholder feedback provided through the vote and will consider the results of the vote, as well as future votes, in refining the development of our compensation program and goal setting in the future.

The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

The following table shows the compensation paid by the Company during the most recent three years to theeach individual who served as principal executive officer at any time during 2015, the principal financial officer and the three other most highly compensated executive officers of the Company.