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 Broadridge’s Pay-for-Performance Compensation Philosophy October 2009 © 2009 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. |
 1 Contents Our Pay-for-Performance Compensation Philosophy Pay-for-Performance in Practice Compensation and Corporate Governance Looking Ahead: Fiscal Year 2010 and Beyond |
 2 Our Pay-for-Performance Compensation Philosophy Since our spin-off in April 2007, Broadridge has cultivated a strong commitment to “Pay-for-Performance” among our associates. Our goals are: Provide a clear “line of sight” and linkage between individual performance, organization performance and compensation Attract, engage and retain the associates that help ensure our future success Motivate and inspire associate behavior that fosters a high- performance culture while maintaining a reasonable level of risk Ensure that our associates are motivated to increase stockholder value |
 3 We believe that this pay-for-performance philosophy has been a major contributor to the financial performance of our business 1. TSR = Total Stockholder Return = Stock Price Gain + Dividend Yield. 2. April 2, 2007 = first day of Broadridge stock trading on the New York Stock Exchange. 3. Source: Yahoo! Finance Historical Prices for BR, using Closing Prices Adjusted for Dividends and Splits (http://finance.yahoo.com/q/hp?s=BR). 4. Source: Yahoo! Finance Historical Prices for ^MID, using Closing Prices Adjusted for Dividends and Splits (http://finance.yahoo.com/q/hp?s=%5EMID). Our Pay-for-Performance Compensation Philosophy Broadridge TSR vs. S&P 400 Midcap Index 1 April 2, 2007 = 100.0 2 40 60 80 100 120 140 4/2/07 10/2/07 4/2/08 10/2/08 4/2/09 10/2/09 BR = 115.35 3 on 10/19/09 S&P 400 = 83.95 4 on 10/19/09 |
 4 Pay-for-Performance in Practice - Bonuses Every full-time Broadridge associate is eligible for some type of annual cash incentive Hourly and non-supervisory associates are eligible for a World Class Service bonus, which is funded by meeting Client Satisfaction goals • Client Satisfaction surveys must show year-over-year improvement in average scores in order to receive a payment Supervisory associates and above are eligible for a Management By Objectives (MBO) cash incentive plan • All associate MBO plans have both Non-GAAP Earnings Per Share (EPS) and Client Satisfaction goals, along with other financial and operational objectives such as Revenue and Net Sales • Non-GAAP EPS has the highest weight, and funds the bonus pool |
 5 Pay-for-Performance in Practice - Bonuses CEO FY09 Bonus: Richard Daly’s MBO Cash Incentive payment decreased 14% in fiscal year 2009 vs. fiscal year 2008, despite an increase in Broadridge’s Non-GAAP EPS Fiscal year 2009 Non-GAAP EPS = $1.51, vs. $1.42 in fiscal year 2008 (6% growth) According to a May 2009 article published by Towers Perrin, an independent compensation consultant, less than one-quarter of companies examined in the past year have taken this action 1. The fiscal year 2009 GAAP EPS was $1.58 and the fiscal year 2008 GAAP EPS was $1.36. In fiscal year 2009, this measure excluded the one-time gain from the purchase of $125.0 million principal amount of the Company’s 6.125% senior notes due 2017, and the one-time benefit from a state tax credit. In fiscal year 2008, this measure excluded one-time transition expenses and interest on new debt and other. Pay-For-Performance Linkage Source: Equilar, Inc. (via Towers Perrin ECR Onlne, May 2009) Increased Year-over-year change in company performance 32% Decreased According to Towers Perrin, 58% of companies they examined showed year-over-year increases in net income in the most recent fiscal year. Of those companies: -- 34% increased the CEO bonus payment vs. the previous year -- 24% decreased the CEO bonus payment vs. the previous year With Richard Daly's FY09 bonus payment, Broadridge was aligned with the 24% that increased year- over-year net income and paid their CEO a lower bonus. 10% 34% 24% 1 |
 6 Pay-for-Performance in Practice - Equity Restricted Stock Units (RSUs): Broadridge has granted over one million RSUs per year to our associates 24% of our associate population received RSU grants in the past three years (2007-2009) 70% of our RSU grants since the spin-off have been made to associates not at the executive officer level RSUs vest as shares, creating employee owners Performance-based vesting tied to two-year EPS goals for executive officers Stock Options: Multi-year effort underway to increase alignment between stockholders and newly-created executive officers through a special stock option grant program Described in a Form 8-K filed with the SEC on February 26, 2008 No special grants were given to these officers prior to the spin-off Goal = 5% of total shares dedicated to ownership by the officer population Most special stock options are premium-priced grants, with strike prices up to 20% above BR fair market value on the grant date, providing for lower accounting cost and higher hurdles for personal gain |
 7 Pay-for-Performance in Practice 72% of average Broadridge Named Executive Officer compensation in fiscal year 2009 was “at-risk,” in the form of an annual cash incentive or equity grants (stock options and restricted stock units) Over 80% of Richard Daly’s fiscal year 2009 pay was “at-risk” In April 2008, the Broadridge Board of Directors approved executive officer share ownership guidelines The only stock options exercised among our executive officers since the spin-off are those that were scheduled to expire within three months of exercise -- Richard Daly converted his September 2009 net gain on exercised options into Broadridge shares The Broadridge Board of Directors has also approved a Pre- Clearance Trading Policy for the Company’s executive officers and directors Broadridge officers and directors or their immediate family members cannot engage in any transaction in Broadridge securities without first obtaining the approval of the Company’s General Counsel |
 8 Compensation and Corporate Governance Our four-member Compensation Committee, with the guidance of their independent compensation consultant, reviews and approves executive officer compensation every year Salary: The Committee approved 0% fiscal year 2010 Officer merit increases Annual cash incentive targets, goals, and measures are set at the beginning of each year Long-term equity grants such as RSUs and Options, including the multi-year performance goals for RSU vesting Executive-level benefits, policies, and programs Through the compensation consultant, they use their select 18-company Peer Group, a general industry group of companies with similar revenues, and select third-party surveys to evaluate market trends and compensation levels Focus on discouraging excessive risk-taking through: Multi-year vesting on equity grants Multi-year performance period for earning RSUs Officer stock ownership guidelines |
 9 We believe that our reward programs are well-positioned to reinforce our business strategy, as exemplified through our “Five Pillars of Growth” Accelerate Sales Client Retention Leverage Industry Position Margin Improvement Offer New Solutions Annual earnings growth is expected to be driven by many strategic initiatives Sales growth, especially recurring revenue sales New Products developed internally Strategic acquisitions Looking Ahead: Fiscal Year 2010 and Beyond |
 10 To help foster this growth strategy, we have asked stockholders to approve an increase in the number of shares issuable under our Omnibus Award Plan at our November annual meeting Request of 2.5 million shares, of which no more than 1.5 million shares can be used as “full-share” grants such as RSUs 1.8% of total shares outstanding as of September 21, 2009 (record date for the November 2009 Annual Meeting) Fiscal year 2010 special stock option grants are not included in this share issuance – those options are available under our existing share reserve This increase in shares issuable will allow us to: Continue with our existing RSU grant policy for the next 12 months (covers our planned October 2010 grant, and we will likely request additional shares at November 2010 annual meeting) Make annual option grants for the next 24 months Develop a share reserve for grants related to strategic new hires and acquisitions We have a share repurchase plan in place to buy back shares to cover option exercises, reducing the Omnibus Award Plan’s dilutive effect Looking Ahead: Fiscal Year 2010 and Beyond |
 11 Beyond fiscal year 2010, we expect that… The special stock option grant process will be completed, with 5% alignment goal achieved for executive officers Broadridge options that were converted from ADP options at the time of the spin-off, 17 million in total, will be exercised • Average strike price of converted ADP options at the time of the spin-off was $18.62; October 20, 2009 Broadridge stock price = $21.82 • Total share overhang decreases as a result Our annual RSU grants will reinforce our employee ownership culture • 30-month vesting schedule serves as a strong retention tool for associates • Manageable, consistent annual dilution (under 2% per year) and accounting cost We will have a sufficient number of shares issuable under our Omnibus Award Plan for strategic initiatives • Acquisitions • Officer and senior executive hires Looking Ahead: Fiscal Year 2010 and Beyond |