SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [_]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[x] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

THE SERVICEMASTER COMPANY
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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Notes: Vernon Squires
Sr. Vice President & General Counsel
The ServiceMaster Company
630-271-2609

March 23, 1999

Dear Stockholder:

We are pleased to invite you to attend the 1999 Annual Meeting of
Shareholders of The ServiceMaster Company on Friday, April 30, 1999 at 2:00
p.m. Central Time. The meeting will be held at the Company's headquarters at
One ServiceMaster Way, Downers Grove, Illinois.

As more fully set forth in the notice of the meeting and proxy statement
which appear on the following pages, the principal items of business at the
meeting will be the election of six directors and the ratification of the
selection of independent public accountants for the year 1999. We will also
report to you at the meeting on the business and affairs of the Company.

Our Annual Report for 1998 accompanies this statement.

Your vote is important no matter how many shares you own. We hope you will be
able to attend the meeting in person, but if you cannot, please sign and date
the enclosed proxy and return it in the accompanying envelope or use the "vote-
by-phone" option described on the enclosed proxy card.

C. William Pollard Carlos H. Cantu
Chairman President and Chief Executive Officer

THE SERVICEMASTER COMPANY

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on April 30, 1999

TO THE STOCKHOLDERS OF THE SERVICEMASTER COMPANY:

The Annual Meeting of Shareholders of The ServiceMaster Company, a Delaware
corporation, will be held at One ServiceMaster Way, Downers Grove, Illinois,
at 2:00 p.m. Chicago time on April 30, 1999, for the purpose of considering
and voting on the following matters:

1. Election of six (6) Directors;

2. Ratification of the selection of Arthur Andersen LLP as auditors; and

3. Such other matters as may properly come before the meeting.

Only such stockholders of record at the close of business on March 15, 1999
are entitled to notice of and to vote at the meeting or any adjournment
thereof.

Your attention is directed to the accompanying Proxy Statement. Whether or
not you plan to attend the meeting in person, you are urged to use the "vote-
by-phone" option described on the enclosed proxy card, or to mark, sign, date
and return the enclosed proxy card in the enclosed postage-paid envelope. The
proxy may be revoked by appropriate notice to the Secretary and will not
affect the right of stockholders of record attending the meeting to vote in
person.

Vernon T. Squires
Senior Vice President, General
Counsel and Corporate Secretary

March 23, 1999

THE SERVICEMASTER COMPANY

PROXY STATEMENT

1999 ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is provided in connection with the 1999 Annual Meeting
of Shareholders of The ServiceMaster Company (the "Company") to be held at the
Company's principal office at One ServiceMaster Way, Downers Grove, Illinois
on Friday, April 30, 1999, at 2:00 p.m. Central Time or any adjournment
thereof for the purposes set forth in the accompanying notice. This Proxy
Statement and the accompanying proxy card are being mailed to shareholders on
or about March 23, 1999.

General Information

Shareholders Entitled to Vote. Holders of record of the common stock of the
Company at the close of business on March 15, 1999 (the "Record Date") are
entitled to vote at the meeting. On that date there were approximately
300,000,000 shares of common stock, par value $0.01 per share (the "Common
Stock"), entitled to vote. With respect to all matters submitted to a vote at
the meeting, each share of Common Stock is entitled to one vote.

Quorum. The presence, in person or by proxy, of the holders of a majority of
the shares of Common Stock outstanding on the Record Date will constitute a
quorum to conduct business.

Voting. The enclosed proxy is solicited by the Board of Directors of the
Company. If the proxy is properly executed and returned or if the telephone
voting instructions are properly executed, the shares will be voted in
accordance with the shareholder's instructions. If no instructions are given
with respect to a matter, the proxy will be voted in accordance with the
recommendations of the Board of Directors as set forth herein.

A shareholder may, with respect to the election of directors, vote for all
six nominees named herein, withhold authority to vote for any or all such
nominees or vote for all such nominees other than any nominee for whom the
shareholder withholds authority to vote. Shareholders do not have the right to
cumulate votes in the election of directors. Directors will be elected by a
plurality of the votes cast at the Annual Meeting. Therefore, the nominees
receiving the highest number of votes cast for the number of positions to be
filled shall be elected.

A shareholder may, with respect to each other matter specified in the notice
of the meeting, vote "FOR", vote "AGAINST", or "ABSTAIN" from voting. A
majority of the votes cast is required for approval of other matters presented
which are not of an extraordinary nature. Shares specifically voted to
"abstain" on any particular issue shall be counted in determining the number
of votes cast with respect to that issue. Therefore, a decision to "abstain"
will have the same effect as a vote against such matters. Proxies relating to
"street name" shares that are voted by brokers on one or more but less than
all matters will be treated as shares present for purposes of determining the
presence of a quorum, but will not be treated as shares presented and entitled
to vote at the Annual Meeting as to such non-voted matter or matters.

Revocation of Proxies. A shareholder returning a proxy may revoke it prior
to exercise of the proxy at the Annual Meeting by executing and delivering a
later-dated proxy that is voted at the Annual Meeting, by voting in person by
ballot at the Annual Meeting, or by delivering a written notice of revocation
to the Secretary of the Company. Shareholders whose shares are held in the
name of a broker, bank or other holder of record may not vote in person at the
meeting unless they have first obtained a proxy, executed in the shareholder's
favor, from the holder of record.

Deadline for Receipt of Shareholder Proposals and Nominees. Proposals of
shareholders of the Company which are intended to be presented by such
shareholders at the Company's 2000 Annual Meeting must be received by the
General Counsel of the Company no later than March 1, 2000 or earlier than
January 31, 2000 in order to be eligible for inclusion in the proxy
solicitation materials relating to that meeting.

Procedure for Nominations by Shareholders. The Nominating Committee of the
Board of Directors will consider nominees for the Board of Directors as
recommended by stockholders. For such a nominee to be a "qualified candidate"
for the Board within the meaning of the bylaws of the Company, the nomination
must be made for an election at a meeting at which the Board has determined
that candidates will be elected; the nominee must be nominated by a
shareholder who will be a record owner on the record date for that meeting and
who is entitled to vote at the meeting; the nominating shareholder must
deliver a written nomination note to the office of the Company's General
Counsel which provides the information required by the bylaws of the Company;
and such notice must be actually delivered not later than the close of
business on the 60th day or earlier than the close of business on the 90th day
prior to the first anniversary of the preceding year's annual meeting of the
shareholders. For the Company's 2000 Annual Meeting, these dates are March 1,
2000 and January 31, 2000, respectively. The notice must set out all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, be
accompanied by the nominee's written consent to be named in the proxy
statement as a nominee and to serving as a director if elected, set forth the
name and address of the shareholder giving the notice and how the shareholder
may be contacted, and set forth the number of shares of the Company owned
beneficially and of record by the shareholder and the beneficial owner if
different from the owner of record.

ELECTION OF DIRECTORS
Proposal One
(Item 1 on the Proxy Card)

The Board of Directors of the Company consists of 17 persons. Pursuant to
the Company's Certificate of Incorporation and the Company's bylaws, the Board
is divided into three classes with staggered terms of three years each so that
the term of office of one class expires at each Annual Meeting of the
Stockholders. Each class is identified by the year in which its term of office
expires. The classes of directors as of the date of this Proxy Statement are:
the Class of 1999, consisting of six persons; the Class of 2000, consisting of
six persons; and the Class of 2001, consisting of five persons. The terms of
the directors identified below as the Class of 1999 expire at the Annual
Meeting of the Stockholders for the year 1999. Persons elected as directors at
such meeting will become members of the Class of 2002 and will hold office as
directors until the next triennial election of directors which first occurs in
respect of directors elected as members of the Class of 2002.

Although the Board of Directors presently consists of 17 persons, the Board
has set as an objective to be accomplished over the next two to three years a
reduction in the size of the Board to 13 to 15 persons.

Unless otherwise directed, proxies in the form which accompanies this Proxy
Statement will be voted for the nominees listed below. If any of the nominees
becomes unavailable for election (which is not anticipated), the enclosed
proxy may be voted for the election of a substitute nominee as may be selected
by the Board.

Information regarding each of the nominees and the other directors
continuing in office is set forth below. The descriptions of the business
experience of these persons include the principal positions held by them from
March 1994 to the date of this Proxy Statement. The bylaws of the Company
require that a candidate for election as a director be less than 70 years of
age at the time he or she is to be elected. Each of the nominees meets that
requirement.

The Board of Directors recommends a vote FOR the election of the named
nominees as directors of the Company.

NOMINEES

Paul W. Berezny

President, Berezny Investments, Inc., a real estate and
development company. He is a member of the Audit Committee.
Class of 1999. Age 64. Director since October 7, 1995.

Henry O. Boswell

Retired President of Amoco Production Company and Chairman of
the Board of Amoco Canada. Mr. Boswell is a director of Rowan
Companies, Inc., Houston, Texas, an offshore oil drilling
company; and Cabot Oil & Gas Corp., Houston, Texas, an oil and
gas production company. He is a member of the Executive
Committee, the Compensation Committee (of which he is the
chairman), the Nominating Committee, the Employee Benefit Plan
Oversight Committee, and the Finance Committee. Class of 1999.
Age 69. Director since 1985.

Carlos H. Cantu

President and Chief Executive Officer of the Company since
January 1, 1994. Mr. Cantu is a director of First Tennessee
National Corporation, Memphis, Tennessee, a financial
institution and of Unicom Corporation, Chicago, Illinois, the
parent company of Commonwealth Edison, an electric utility
company. He is a member of the Executive Committee, the
Nominating Committee, the Finance Committee, and the Employee
Benefit Plan Oversight Committee. Class of 1999. Age 65.
Director since 1988.

Vincent C. Nelson

Business investor. Mr. Nelson is a member of the Executive
Committee, the Nominating Committee (of which he is the
chairman), and the Audit Committee. Class of 1999. Age 57.
Director since 1978.

Steven S Reinemund

Chairman and Chief Executive Officer of the Frito-Lay Company,
the packaged foods division of PepsiCo, Inc. Mr. Reinemund is
a director of PepsiCo, Inc., a food and beverage conglomerate,
and a director of Provident Companies, Inc., Chattanooga,
Tennessee, an insurance company. He is a member of the
Nominating Committee. Class of 1999. Age 50. Director since
January 1998.

NOMINEES (Cont'd)

Charles W. Stair

Vice Chairman of the Board of Directors. He was President and
Chief Executive Officer of ServiceMaster Management Services
L.P. from May 1991 to December 31, 1994. He is a member of the
Nominating Committee. Class of 1999. Age 58. Director since
December 1986.

DIRECTORS CONTINUING IN OFFICE

Herbert P. Hess

Managing Director of Berents & Hess Capital Management, Inc.,
Boston, Massachusetts, an investment management firm. He is a
member of the Executive Committee, the Finance Committee (of
which he is the chairman), the Employee Benefit Plan Oversight
Committee, and the Compensation Committee. Class of 2000. Age
62. Director since December 1981.

Michele M. Hunt

Private business consultant. During the period from July 1990
to July 1993, she served as Corporate Vice President for
People and Quality for Herman Miller, Inc., an office
furniture manufacturer. Ms. Hunt is a member of the Nominating
Committee. Class of 2000. Age 49. Director since October 1995.

Dallen W. Peterson

Retired Chairman, Merry Maids Limited Partnership. He is a
member of the Finance Committee and the Employee Benefit Plan
Oversight Committee. Class of 2000. Age 62. Director since
October 1995.

Phillip B. Rooney

Vice Chairman of the Board of Directors. From June 5, 1996 to
February 17, 1997, he was President and Chief Executive
Officer of WMX Technologies, Inc., Oak Brook, Illinois ("WMX")
and from November 1984 to May 1996 he was President and Chief
Operating Officer of WMI. Mr. Rooney is a director of Van
Kampen American Capital, Oak Brook, Illinois, an investment
management company; Illinois Tool Works, Inc., Glenview,
Illinois, a diversified manufacturing company; and Urban
Shopping Centers, Inc., Chicago, Illinois, a retail real
estate management company. Class of 2000. Age 54. Director
since January 1994.

DIRECTORS CONTINUING IN OFFICE (Cont'd)

Burton E. Sorensen

Investor. From December 1984 to December 1995 he served as
Chairman, President and Chief Executive Officer of Lord
Securities Corporation. Mr. Sorensen is a director of
Provident Companies, Inc., Chattanooga, Tennessee, an
insurance company. He is a member of the Executive Committee,
the Finance Committee, the Employee Benefit Plan Oversight
Committee, and the Compensation Committee. Class of 2000. Age
69. Director since May 1984.

David K. Wessner

President and Chief Executive Officer, HealthSystem Minnesota.
From August 1994 to July 1998 he served as Executive Vice
President, HealthSystem Minnesota. He is a member of the
Executive Committee, the Nominating Committee, and the
Compensation Committee. Class of 2000. Age 47. Director since
March 1987.

Lord Brian Griffiths of Fforestfach

International advisor to Goldman, Sachs & Co. concerned with
strategic issues related to their United Kingdom and European
operations and business development activities worldwide. He
was made a life peer at the conclusion of his service to the
British Prime Minister during the period 1985 to 1990. Lord
Griffiths is a director of Times Newspapers Holding Ltd.,
London, England, a newspaper company; English, Welsh and
Scottish railways, London, England, a rail freight company;
Herman Miller, Inc., Zeeland, Michigan, an office furniture
manufacturer; and Trillium Investments GP Limited, London,
England, a facilities management company. He is a member of
the Executive Committee and the Nominating Committee. Class of
2001. Age 57. Director since 1992.

Sidney E. Harris

Dean, Robinson College of Business Administration, Georgia
State University. From July 1987 to July 1997, Dr. Harris was
Professor of Management at the Peter F. Drucker Graduate
Management Center at the Claremont Graduate School, Claremont,
California. He was Dean of the Graduate Management Center from
September 1991 to July 1996. Dr. Harris is a director of
Transamerica Investors, Inc., Los Angeles, California, a
mutual funds investment company; and Amresco, Inc., Dallas,
Texas, a financial services company. He is a member of the
Executive Committee. Class of 2001. Age 49. Director since
December 1994.

DIRECTORS CONTINUING IN OFFICE (Cont'd)

Gunther H. Knoedler

Retired Executive Vice President and Director Emeritus of Bell
Federal Savings and Loan Association, Chicago, Illinois. He is
a member of the Executive Committee and the Audit Committee
(of which he is the chairman). Class of 2001. Age 69. Director
since 1979.

James D. McLennan

President of McLennan Company, a full-service real estate
company. Mr. McLennan is a director of The Loewen Group, Inc.,
Burnaby, B.C., Canada, a provider of funeral services; and
Advocate Health Systems, Oak Brook, Illinois, a health care
provider. He is a member of the Audit Committee and the
Compensation Committee. Class of 2001. Age 62. Director since
1986.

C. William Pollard

Chairman of the Board of Directors. He served as Chief
Executive Officer of the Company from May 1983 to December 31,
1993. Mr. Pollard is a director of Herman Miller, Inc.,
Zeeland, Michigan, an office furniture manufacturer; and
Provident Companies, Inc., Chattanooga, Tennessee, an
insurance company. He is a member of the Executive Committee
(of which he is the chairman), the Finance Committee, the
Employee Benefit Plan Oversight Committee, and the Nominating
Committee. Class of 2001. Age 60. Director since 1977.

Meetings of the Board and Committees of the Board.

The Board of Directors held five meetings during 1998. Each incumbent
director attended at least 75% of such Board meetings. Each incumbent director
attended 75% or more of the meetings of all committees of the Board on which
such director was a member during 1998.

The following committees are standing committees of the Board of Directors
of the Company:

Executive Committee

The Executive Committee has the power to grant any authorization or approval
and to take any other action which the Board could take except for matters
reserved to the Board of Directors by law or the bylaws of the Company and
except for any action establishing the compensation for any member of the
Executive Committee. The members of the Executive Committee are: C. W. Pollard
(chairman), H. O. Boswell, C. H. Cantu, B. Griffiths, S. E. Harris, H. P.
Hess, G. H. Knoedler, V. C. Nelson, B. E. Sorensen and D. K. Wessner. The
Executive Committee met four times in 1998.

Audit Committee

The Audit Committee makes annual recommendations to the Board of Directors
concerning the appointment of independent public accountants to act as
auditors for the Company and its subsidiaries, reviews with the auditors the
scope of their annual audit, the accounting principles, policies and practices
of the Company; reviews with the auditors the results of their audit; reviews
with the Company's internal financial personnel the adequacy of the
accounting, financial and operations controls of the Company; and exercises
such other authority as may be delegated to the Audit Committee by the Board.
The members of the Audit Committee are: G. H. Knoedler (chairman), P. B.
Berezny, J. D. McLennan and V. C. Nelson. The Audit Committee met three times
in 1998.

Nominating Committee

The Nominating Committee recommends to the Board of Directors the persons to
be nominated by the Board for election by the stockholders at each annual
meeting of the stockholders and the persons to be elected to any vacancy on
the Board. The members of the Nominating Committee are: V. C. Nelson
(chairman), H. O. Boswell, C. H. Cantu, B. Griffiths, M. M. Hunt, C. W.
Pollard, S. S Reinemund, C. W. Stair and D. K. Wessner. The Nominating
Committee met two times in 1998.

Compensation Committee

The Compensation Committee periodically reviews the compensation of members
of senior management of the Company, including base compensation and long-term
compensation arrangements, and makes recommendations to the Board of Directors
in the case of the Chairman and the Chief Executive Officer. The Compensation
Committee has the authority to adopt rules and guidelines and to make final
administrative determinations in connection with the ServiceMaster 1998 Equity
Incentive Plan and the ServiceMaster 1998 Long-Term Performance Award Plan and
the ServiceMaster 1998 Non-Employee Directors Stock Option Plan. In addition
to the foregoing matters, the Board has delegated to the Compensation
Committee the following additional responsibilities: (i) determination,
subject to Board approval, of the compensation of the Chief Executive Officer
and the Chairman of the Board of Directors; (ii) review and approval of the
recommendations of the Chief Executive Officer on other compensation matters,
including base salaries, annual and long-term incentive plans and payments,
option planning and employee benefits; and (iii) certification or reporting on
compensation performance and payments as needed for compliance with
governmental regulations. The members of the Compensation Committee are: H. O.
Boswell (chairman), H. P. Hess, J. D. McLennan, B. E. Sorensen and D. K.
Wessner. The Compensation Committee met four times in 1998.

Finance Committee

The Finance Committee serves as a committee of special expertise on
financial matters affecting the ServiceMaster enterprise or any segment
thereof. The committee reviews financial reports and analyses, makes
recommendations on financial matters to the Board of Directors or the
Executive Committee and grants final approval on those financial transactions
for which it has been authorized to do so by the Board. The members of the
Finance Committee are: H. P. Hess (chairman), H. O. Boswell, C. H. Cantu, D.
W. Peterson, C. W. Pollard and B. E. Sorensen. The Finance Committee met six
times in 1998.

Employee Benefit Plan Oversight Committee

The Finance Committee, acting as the Employee Benefit Plan Oversight
Committee, periodically reviews the scope, investment policies and
administration of the Company's various employee benefit plans for the purpose
of ascertaining whether such plans fully comply with legal requirements and
are functioning consistently with the objectives for the plans as established
by the Board. The members of the Finance Committee are as stated above. The
Employee Benefit Plan Oversight Committee met two times in 1998.

Compensation of Directors

During the year 1998, directors who were not employees ("independent
directors") received $3,000 for each meeting of the Board of Directors and
each meeting of a committee of the Board which they attended. In addition, the
independent directors each received an annual stipend of $12,000. The Chairman
of the Audit Committee received an additional annual stipend of $2,000. In
1999, the annual stipend for independent directors of the Company will be
$15,000. The chairman of the Audit Committee and the Chairman of the
Compensation Committee will be paid an additional stipend of $2,000. Directors
who are employees of the Company or any subsidiary do not receive either a
retainer or meeting fee.

The ServiceMaster 1998 Non-Employee Directors Discounted Stock Option Plan
as approved by the Board of Directors in December 1997 and by the shareholders
of the Company in May 1998 provides that options to purchase shares of the
Company may be granted to those independent members of the Board who elect to
accept such options in lieu of retainer and meeting fees that would otherwise
be paid in cash. The total amount of retainer and attendance fees for which
share options may be granted under this plan is $42,000 each year. Each option
granted under this plan has an exercise price per share equal to 85% of the
fair market value per share of the underlying shares of common stock of the
Company on the date the option is granted. The number of shares for which each
is granted is determined by dividing the retainer or fee each by 15%. In 1998,
options for a total of 114,903 shares were granted to eleven independent
directors under the Discounted Stock Option Plan.

Each independent director may enter into a deferred fee agreement whereby
part or all of the fees payable in cash to him or her as a director are
deferred and will either earn interest based on the average five-year
borrowing rate for ServiceMaster or be used to purchase shares of the Company
in a number determined by the fair market value of such shares on the date of
purchase. Upon termination of a director's services as an independent director
or attainment of age 70, whichever occurs first, the director will receive the
amount for his or her deferred fee account in a lump sum or in installments or
in shares of the Company, depending on which deferral plan the director has
elected.

RATIFICATION OF SELECTION OF AUDITORS
Proposal Two
(Item 62 on the Proxy Card)

The Board of Directors has selected Arthur Andersen LLP to serve as the
Company's independent certified public accountants for 1999. Arthur Andersen
LLP has audited and rendered its opinion on the financial statements of the
Company for many years. Representatives of Arthur Andersen LLP will be present
at the 1999 Annual Meeting and will be available to respond to appropriate
questions and to make a statement if they desire to do so.

Approval of this Proposal Two requires the affirmative vote of a majority of
the votes of all shares voted with respect to this matter.

The Board of Directors recommends a vote FOR this proposal.

EXECUTIVE COMPENSATION

Compensation Committee Report on Executive Compensation

Overview

With respect to the year 1998, the Company's compensation plans and policies
for its executive officers were the same as had been in effect for many years
except for the introduction of the 1998 Equity Incentive Plan and the Long-
Term Performance Award Plan (each approved by the shareholders in May 1998).
These plans and policies are designed to attract and retain executives of the
highest caliber and, if specified performance targets were achieved, to
produce levels of compensation commensurate with the compensation paid to
executives of similar service organizations with which the Company compares
itself when those organizations achieve high performance.

The 1998 compensation package for the Company's executive officers consisted
of five components: (1) an annual base salary established at the beginning of
the year and based on the standards described below; (2) a bonus established
by the Company's Incentive Compensation Plan (under which bonus amounts were
determined by the extent to which the actual performance of the Company (or
the relevant division thereof) achieved its budget objectives); (3) awards
under the ServiceMaster Long-Term Performance Award Plan; (4) incentive or
nonqualified stock options (the character and number of which was based upon
the recommendation of the executive's superior officer and by decision of the
Chief Executive Officer and the Compensation Committee); and (5) the Company's
profit sharing and retirement plans.

The 1999 compensation package for executive officers will include items (1),
(2), (3) and (4) above and incentive or nonqualified options and/or stock
grants under the 1998 Equity Incentive Plan.

The foregoing components of the Company's compensation policies for
executive officers are described in greater detail below.

Base Salary

Base salaries for executive officers are generally established to reflect
the duties and level of responsibilities attendant to the officer's position
and, in conjunction with the Company's incentive bonus plan and the Company's
Long-Term Performance Award Plan, to be competitive with base salaries paid by
other companies with whom the Company compares itself. However, the
performance and contribution of the individual remains a critical factor in
regard to any salary adjustment. The Company utilizes surveys of salary
information for comparable positions as furnished by independent salary
consulting firms engaged by the Company for this purpose. Base salaries for
executive officers are approved by the Compensation Committee in December of
the year immediately preceding the year in which the salaries are to take
effect.

The base salary paid to Carlos H. Cantu, President and Chief Executive
Officer, for the year 1998 was established in December 1997 in the amount of
$475,000. Such amount represented an increase of $25,000 (5.5%) over his base
salary for 1997. The base salary and the amount of the increase relative to
1998 reflected the factors discussed above and the fact that the Company
achieved an excellent performance for the year 1997. For the year 1999, the
base salary for Mr. Cantu has been set at $550,000. Such amount represents an
increase of $75,000 (15.8%) over the 1998 base salary level and reflects the
factors discussed above.

Incentive Compensation Plan

The Company has for many years maintained an incentive bonus plan known as
the ServiceMaster Incentive Compensation Plan. The plan provides for an annual
bonus which is largely based upon the performance of the Company and/or the
performance of an individual business unit, if applicable, in terms of
achieving its budget as established at the beginning of the year. The plan
provides for bonuses in amounts which represent percentages of executives'
base compensation. These amounts can range from 0%, if the relevant business
unit fails to achieve at least 90% of its budget target (except that in some
cases payment may be earned by reason of the performance of a higher level
unit or achievement of individual performance goals) to120% of base salary
(175% of base salary in the case of the Chief Executive Officer) if the
relevant business unit exceeds its budget target.

The Incentive Compensation Plan reflects the philosophy of the Company that
a very significant part of an executive's total compensation should be based
upon the financial performance of the Company and/or the business unit in
which the executive is employed. The ServiceMaster Incentive Compensation Plan
will continue in effect in 1999.

For the year 1998, Mr. Cantu was paid $570,000 pursuant to the Incentive
Compensation Plan. Such amount represented 120% of his base salary and
reflected the fact that the Company achieved high performance in 1997 and the
level of compensation for chief executive officers in organizations with which
the Company compares itself.

Long-Term Performance Award Plan

The ServiceMaster Long-Term Performance Award Plan was approved by the
stockholders in May 1998. The amount paid out with respect to the year 1998
was based upon three factors, as prescribed by the plan: (1) growth in
earnings per share relative to 1997, (2) growth in economic value added (EVA)
relative to 1997, and (3) growth in revenue relative to 1997. The pool amounts
established for each of these factors were combined into a total preliminary
pool amount which was subject to adjustment depending upon the total return
achieved by the Company compared to the S&P 500 total return figure for 1998.
The Company achieved a three-year average total return which exceeded the 75th
percentile of the S&P 500 resulting in a 20% increase to the preliminary pool
amount. In accordance with the provisions of the plan, 20% of the pool amount
figure was held back for payment in early 2001. The amount of the 2001 payment
will depend upon the extent to which the Company achieves its strategic
planning objectives for the five-year planning cycle which ends on December
31, 2000.

For the year 1998, Mr. Cantu was paid $469,580 pursuant to the Long-Term
Performance Award Plan. Such amount represented 99% of his base salary. The
total amount paid to participants in the Long-Term Performance Award Plan for
the year 1998 was $4,621,301.

Stock Options

The Compensation Committee believes that the interests of shareholders and
executive officers and other key employees become more closely aligned when
executives are provided an opportunity to acquire proprietary interests in the
Company through ownership of the Company's common stock. In accordance with
established practice, the Compensation Committee approved grants of options to
executive officers and other key employees in February 1998 under the
ServiceMaster 1998 Equity Incentive Plan. All of such options were for terms
of 10 years and were subject to a vesting schedule under which 20% of the
option became exercisable on each anniversary of the grant date such that by
the fifth anniversary of the grant date the options were fully exercisable.
The vast majority of options were granted with an exercise price of $18.26 per
share (after adjustment to reflect the June 1998 3-for-2 share split), which
was the fair market value of the underlying limited partner shares on the date
of the grant. Individual option grants were determined on the basis of the
individual's and the Company's performance in 1997. Options to purchase a
total of 703,500 shares (adjusted to reflect the June 1998 3-for-2 share
split) were granted to 13 executive officers as a group; Mr. Cantu was granted
an option for 150,000 shares (adjusted to reflect the June 1998 3-for-2 share
split).

In February 1999, the Compensation Committee approved option grants under
the ServiceMaster 1998 Equity Incentive Plan for approximately 1,700
employees, including 13 executive officers. All of such options were for terms
of 10 years and were subject to a vesting schedule under which 20% of the
option became exercisable on each anniversary of the grant date such that by
the fifth anniversary of the grant date, the options were fully exercisable.
All options were granted with an exercise price of $18.075 per share, which
was the fair market value of the underlying shares of common stock on the date
of the grant. Individual option grants were determined on the basis of the
individual's and the Company's performance in 1998. Options to purchase a
total of 997,000 shares were granted to executive officers as a group. Mr.
Cantu was granted an option for 150,000 shares.

Benefit Programs

Executive officers of the Company participate in various health, life,
disability and retirement benefit programs which are generally available to
all salaried employees. Executive officers may participate in a deferred
compensation program which is intended to allow for the inability of such
officers to contribute to the Company's 401(k) plan in desired amounts due to
restrictions imposed on 401(k) plan contributions by the federal tax laws.
Executive officers also receive traditional benefits and perquisites that are
customary and usual for their positions.

Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code imposes a limit of $1,000,000 on
the deduction which a publicly traded corporation may take for certain
executive compensation payments unless payments in excess of $1,000,000 are
"performance based" in accordance with conditions specified in Section 162(m).
Section 162(m) will be a factor in 1999 and subsequent years in regard to the
Company's compensation planning for those executive officers to which Section
162(m) applies. The compensation plans which were approved by the shareholders
at the May 1998 annual meeting of the shareholders are intended to enable the
Company to obtain a tax deduction for payments to executive officers pursuant
to these plans.

Compensation Committee Interlocks and Insider Participation

The persons who served as members of the Compensation Committee of the Board
of Directors during 1998 were Henry O. Boswell (Chairman), Herbert P. Hess,
James D. McLennan, Burton D. Sorensen and David K. Wessner. The Compensation
Committee consists solely of independent members of the Board of Directors.
There are no interlocking arrangements involving service by any executive
officer on the Compensation Committee of another entity and an executive
officer of such other entity serving on the ServiceMaster Compensation
Committee.

Henry G. Boswell, Chairman
Herbert P. Hess
James D. McLennan
Burton E. Sorensen
David K. Wessner

Summary Compensation Table

The following table sets forth all compensation awarded to, earned by, or
paid to the Chief Executive Officer of ServiceMaster and ServiceMaster's next
four most highly compensated executive officers during or in respect of the
year 1998. Each of the listed persons was holding the office indicated in the
table on the last day of December 1998.

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
-----------------------------------------
ANNUAL COMPENSATION (B) Awards Payouts
--------------------------------- ----------------------- -----------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name and Other Annual Restricted Underlying LTIP
Principal Salary Bonus Compensation Stock Options/SARs Payouts All Other
Position Year ($) ($) (C) ($) Awards ($) (#) (D) ($) (E) ($)
- --------- ---- ------- ------- ------------ ---------- ------------ ------- ---------

Carlos H.
Cantu
President
and Chief 1998 475,000 570,000 -- -- 150,000 469,580 --
Executive 1997 450,000 900,021 -- -- 225,000 -- --
Officer 1996 388,000 679,000 -- -- 168,750 -- --
C. William 1998 400,000 300,000 -- -- 112,500 349,368 --
Pollard 1997 375,000 550,934 -- -- 168,750 -- --
Chairman 1996 300,000 300,000 -- -- 168,750 -- --
Phillip B.
Rooney
(A) 1998 300,000 325,000 -- -- 75,000 338,098 --
Vice 1997 166,667 200,000 -- -- 348,750 -- --
Chairman 1996 -- -- -- -- 10,125 -- --
Ernest J.
Mrozek
Group
President, 1998 290,000 290,000 -- -- 52,500 270,948 --
Consumer 1997 275,000 382,618 -- -- 303,750 -- --
Services 1996 220,000 264,000 -- -- 84,375 -- --
Steven C.
Preston
(A)
Executive
Vice
President
and Chief 1998 256,250 281,250 -- -- 45,000 253,573 --
Financial 1997 180,000 242,983 -- -- 337,500 -- --
Officer 1996 -- -- -- -- 0 -- --

- --------

(A) Neither Mr. Rooney nor Mr. Preston were employed by the Company in 1996.
The option shares shown for Mr. Rooney in column (g) for the year 1996
were issued in connection with his service as a director.

(B) The Summary Compensation Table does not include the cash distributions
made in respect of the year 1997 by ServiceMaster Management Corporation
(the managing general partner of ServiceMaster Limited Partnership and The
ServiceMaster Company Limited Partnership) to the persons listed in the
table in their capacity as stockholders of ServiceMaster Management
Corporation. Such distributions were dividends and represented a return on
the investment made by such persons in the corporation. The source of
these dividends was the cash distributions made to ServiceMaster
Management Corporation by ServiceMaster Limited Partnership and The
ServiceMaster Company Limited Partnership on the 1% carried interests held
by ServiceMaster Management Corporation in each of these two partnerships
throughout the year 1997. As part of the Reincorporating Merger which was
completed at the end of 1997, the two partnerships were terminated,
ServiceMaster Management Corporation was dissolved, and the requirement
for direct investments by senior management in a managing general partner
of the parent entity and the principal subsidiary was eliminated.
Accordingly, the foregoing dividend payments did not occur in 1998 and
will not occur thereafter. Effective January 1, 1998, the Company
instituted a long-term performance based award program. The following
table has been prepared as a supplement to the Summary Compensation Table
in order to show both the 1997 payments reflected in the Summary
Compensation Table and the ServiceMaster Management Corporation dividends
paid to the persons listed in the Summary Compensation Table for the year
1997.

1997 Summary Compensation and ServiceMaster
Management Corporation Dividend Table
(Supplement to the Summary Compensation Table)

(a) (b) (c) (d)
Total Annual
Compensation
for 1997 ServiceMaster
(from Management Total of
Compensation Corporation Columns
Name and Principal Position Table) Dividends (b) and (c)
- --------------------------- ------------ ------------- ------------

Carlos H. Cantu....................... $1,350,021 $727,742 $2,077,763
President and Chief Executive Officer
C. William Pollard.................... $ 932,434 $698,118 $1,631,052
Chairman
Phillip B. Rooney..................... $ 366,667 N/A $ 366,667
Vice Chairman
Ernest J. Mrozek...................... $ 657,618 $340,283 $ 997,901
Group President, Consumer Services
Steven C. Preston..................... $ 525,000 $174,555 $ 699,555
Executive Vice President and Chief
Financial Officer

- --------
Footnotes to Summary Compensation Table (continued)

(C) The amounts shown in column (d) of the Summary Compensation Table include
payments made under the ServiceMaster Incentive Compensation Plan plus
payments made in connection with a gain arising from the Reincorporation.
(D) The numbers of shares listed in column (g) of the Summary Compensation
Table have been adjusted, where appropriate, for 3-for-2 share splits
occurring in June 1996, June 1997 and August 1998.
(E) This column (h) shows the amounts paid or credited to the five named
executive officers in respect of the year 1998 pursuant to the Company's
1998 Long-Term Performance Award Plan (the "LTPA Plan") as approved by the
Company's stockholders in May 1998. The LTPA Plan did not exist prior to
1998. Awards under the LTPA Plan are paid (or credited, if a participant
elects to defer payment pursuant to the Company's deferred compensation
plan) either in cash or in shares of common stock. To the extent that
stock is elected as the form of payment, such election will entitle the
participant to shares in a number which, at their then fair market value,
reflects 120% of the amount which would be paid if the payment were made
in cash. The total amount payable each year under the LTPA Plan is
determined by the performance of the Company with respect to growth in
earnings per share relative to the preceding year, growth in economic
value relative to the preceding year, growth in revenue relative to the
preceding year and a comparison of the Company's total return to
stockholders relative to the S&P 500 total return. 20% of the total payout
for the year 1998 was, in accordance with the LTPA Plan, held back for
payment in whole or in part in early 2001. The extent to which the held-
back amount is paid will depend upon the extent to which the Company
achieved its strategic planning objectives for the five-year planning
cycle ending on December 31, 2000. A participant's interest in the held-
back amount is forfeited in the case of certain terminations of his or her
employment. The amount held back for each of the five named executive
officers in respect of the year 1998 in shown in the Long-Term Incentive
Plans table on page 17.

The following table summarizes the number and terms of the stock options
granted during the year 1998 to the named executive officers.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

(a) (b) (c) (d) (e) (f)
Number of
Securities % of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or Grant
Name and Principal Granted (#) Employees Base Price Expiration Date
Position (A) 1998 ($/Sh) (A) Date Value (B)
------------------ ------------ ------------ ----------- ---------- ---------

Carlos H. Cantu,
President and Chief
Executive Officer...... 150,000 4.6% $18.2583 2-15-08 $762,000
C. William Pollard,
Chairman............... 112,500 3.4% $18.2583 2-15-08 $571,500
Phillip P. Rooney, Vice
Chairman............... 75,000 2.3% $18.2583 2-15-08 $381,000
Ernest J. Mrozek, Group
President, Consumer
Services............... 52,500 1.7% $18.2583 2-15-08 $266,700
Steven C. Preston,
Executive Vice
President
and Chief Financial
Officer................ 45,000 1.4% $18.2583 2-15-08 $228,600

- --------

Notes:

(A) The options listed in column (b) were granted in February 1998. The number
of shares shown in column (b) and the exercise price shown in column (d)
have been adjusted to reflect the 3-for-2 split in the Company's shares
effected in August 1998. Each of the options listed in column (b) is
subject to a vesting schedule under which the option becomes exercisable
in 20% increments on the 1st, 2nd, 3rd, 4th and 5th anniversaries of grant
date.
(B) In accordance with Item 402(c)(2)(vi)(B) of Regulation S-K of the
Commission, the grant date value of each of these options has been
estimated based on the Black-Scholes option pricing model by an independent
consulting firm using the following assumptions: a risk-free rate of
interest of 5.6%, a volatility rate of 22%, a 1.9% distribution yield, and
an expected life of seven years. The values of the options which are shown
in the table are theoretical and do not necessarily reflect the actual
values which the option holders may eventually realize. Such actual values
will depend on the extent to which the market value of the Company's shares
at a future date exceeds the exercise price of the options.

The following table summarizes the exercises of stock options during the
year 1998 by the named executive officers and the number of, and the spread
on, unexercised options held by such officers at December 31, 1998.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES

(a) (b) (c) (d) (e)
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options/SARs at the-Money Options/SARs at
Value FY-End(#) FY-End($)
Shares Acquired Realized ------------------------- -------------------------
Name on Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- -------- ------------------------- -------------------------

Carlos H. Cantu,
Chief Executive
Officer................ 0 $ 0 112,500/431,250 1,249,587/3,664,676
C. William Pollard...... 0 $ 0 101,250/348,750 1,127,628/3,034,163
Phillip B. Rooney....... 0 $ 0 71,775/360,075 602,773/2,368,214
Ernest J. Mrozek........ 0 $ 0 109,808/346,125 1,311,648/3,482,248
Steven C. Preston....... 0 $ 0 67,500/315,000 706,453/2,744,627

LONG-TERM INCENTIVE PLANS--AWARDS IN 1998 (A)

(a) (b) (c) (d) (e) (f)
Performance Estimated future payouts
or Other Under non-stock price-
period based plans
until -------------------------
Number of shares, Maturation Target
units or other or Threshold ($ or Maximum
Name rights (#) Payout ($ or #) #) ($ or #)
---- ----------------- ----------- --------- ------ --------

Carlos. H. Cantu, CEO.. 1,000 2001 $117,395
C. William Pollard..... 620 2001 $ 87,342
Phillip B. Rooney...... 600 2001 $ 84,525
Ernest J. Mrozek....... 577 2001 $ 67,737
Steven C. Preston...... 500 2001 $ 63,393

- --------

(A) This table pertains to the awards made in respect of the year 1998 under
the Company's 1998 Long-Term Performance Award Plan (the "LTPA Plan"). See
footnote (D) to the Summary Compensation Table for a description of the
LTPA Plan. The figures in column (b) show the number of units awarded for
the year 1998 to each of the named executive officers. The LTPA Plan has a
total of 10,000 participation units. The figures in column (f) reflect the
amounts held back from the awards to each of such persons for the year
1998 for payment in 2001. The extent to which such held-back amounts are
in fact paid will depend upon the extent to which the Company achieved its
strategic planning objectives for the five-year planning cycle ending on
December 31, 2000. If and to the extent such held-back amounts are not
paid to the named executive officers, the unpaid sums will revert to the
Company.

Severance Arrangements

The Company does not presently have employment agreements with any members
of the Company's senior management under which termination benefits are
provided if a change in control of the Company occurs. The Board of Directors
is considering the desirability of such arrangements, as well as the
desirability of a more broadly based plan to cover employees who are not
members of senior management and who meet certain employment longevity
standards.

The ServiceMaster 1998 Equity Incentive Plan provides that all stock options
granted prior to the occurrence of a change in control shall become
immediately exercisable upon the occurrence of a change in control and shall
remain exercisable thereafter throughout the entire terms of the options.
"Change in control" is defined as any of the following transactions or events:
a business combination involving the Company in which less than 75% of the
outstanding voting securities of the surviving entity are owned by persons who
were the stockholders of the Company immediately prior to the transaction; a
sale by the Company of substantially all of its business or assets to an
entity in which less than 75% of the outstanding voting securities or other
capital interests are owned by the persons who were the stockholders of the
Company immediately prior to the transactions; the filing of a Schedule 13D or
Schedule 14D-1 report by a person or group under the Securities Exchange Act
of 1934 which reflects the acquisition of 20% or more of the issued and
outstanding shares of voting securities of the Company; or, during any period
of two consecutive years, individuals who at the beginning of the period
constituted the board of directors of the Company ceased for any reason to
constitute at least a majority of the board unless the election or the
nomination for election by the Company's stockholders of each new director was
approved by a vote of at least two-thirds of such directors then still in
office who were directors of the Company at the beginning of the period.

Performance Graph

The following graph compares the five-year cumulative total return to
shareholders of the Company with the five year cumulative return as determined
under the Standard & Poor's 500 Index and under the Dow Jones Consumer
Services Index.

Comparison of Five Year Cumulative Total Return*
Among The ServiceMaster Company, The S&P 500 Index
The Dow Jones Consumer Services Index

*$100 invested on 12/31/93 in stock or index--
including Reinvestment of Dividends.
Fiscal Year Ending December 31.

1993 1994 1995 1996 1997 1998
------- ------- ------- ------- ------- -------

ServiceMaster................ $100.00 $ 92.40 $118.91 $158.38 $271.21 $311.56
S & P 500 Index.............. $100.00 $101.32 $139.39 $171.37 $228.55 $293.86
Dow Jones Consumer Services
Index....................... $100.00 $ 97.64 $126.12 $126.97 $187.58 $316.06

Indebtedness of Management

No executive officer was indebted to the Company in excess of $60,000 at any
time during the year 1998.

OWNERSHIP INFORMATION

As of March 1, 1999, no one is the beneficial owner of more than five
percent of the Company's common stock.

The following table sets forth as of March 1, 1999 the beneficial ownership
of the Company's common stock with respect to ServiceMaster's directors and
senior management advisers, those executive officers named in the Summary
Compensation Table (page 14) and the Company's directors and officers as a
group:

Amount and Nature of Beneficial Ownership
(1)
-----------------------------------------
(1) (2) (3) (4) (5)
Sole
Voting and
Investment Total Percent
Name of Beneficial Owner Power Other Ownership Ownership
------------------------ ---------- --------- ---------- ---------

Paul W. Berezny (3)(4)(6)(8)......... 139,607 1,198,779 1,338,386 0.448%
Henry O. Boswell (2)(4).............. 83,706 91,108 174,814 0.058%
Carlos H. Cantu (4)(5)(12)........... 693,031 2,428,929 3,121,960 1.043%
Robert D. Erickson (4)(5)(7)......... 1,044,268 123,391 1,167,659 0.390%
Brian Griffiths (4).................. 34,723 0 34,723 0.012%
Sidney E. Harris (4)................. 22,710 1,687 24,397 0.008%
Herbert P. Hess (4)(8)............... 251,725 30,375 282,100 0.094%
Michele M. Hunt (4).................. 22,136 0 22,136 0.007%
Donald K. Karnes (4)................. 1,948,459 0 1,948,459 0.651%
Robert F. Keith (4)(5)............... 457,100 104,339 561,439 0.188%
Gunther H. Knoedler (4).............. 76,277 0 76,277 0.026%
James D. McLennan (4)................ 65,744 0 65,744 0.022%
Ernest J. Mrozek (4)(5).............. 519,096 61,189 580,285 0.193%
Vincent C. Nelson (4)(8)(9)(10)...... 59,386 787,547 846,933 0.283%
Dallen W. Peterson (4)............... 2,473,273 0 2,473,273 0.827%
C. William Pollard (4)(5)(11)........ 1,120,978 223,540 1,344,518 0.449%
Steven C. Preston (4)................ 144,000 0 144,000 0.048%
Steven S Reinemund (4)............... 10,002 15,000 25,002 0.008%
Phillip B. Rooney (3)(4)............. 419,581 13,500 433,081 0.145%
David M. Slott (4)................... 622,227 439,938 1,062,165 0.355%
Burton E. Sorensen (4)............... 43,477 0 43,477 0.015%
Charles W. Stair (5)(6)(13).......... 891,824 103,092 994,916 0.333%
David K. Wessner (3)(4)(8)(14)(15)... 299,727 1,710,459 2,010,186 0.672%
All directors and officers as a group
(128 persons) (16).................. 21,021,936 9,107,406 30,129,342 9.898%

- --------

(1) The shares owned by each person and by all directors and officers as a
group, and the shares included in the total number of shares, have been
adjusted, and the percentage ownership figures have been computed, in
accordance with Rule 13d-3(d)(1)(i).
(2) Shares in column (3) include 60,658 shares owned by spouse as to which
beneficial ownership is disclaimed.
(3) Shares in column (3) include shares held by spouse and/or other family
members.
(4) Shares in column (2) include shares which may be acquired within sixty
days under options granted under the ServiceMaster Share Option Plan, the
ServiceMaster 10-Plus Option Plan, the ServiceMaster 1998 Equity
Incentive Plan, the ServiceMaster Non-Employee Directors Option Plan
and/or the ServiceMaster 1998 Non-Employee Directors Discounted Stock
Option Plan.
(5) Shares in column (3) include shares held in one or more investment
partnerships in which the listed person is a partner with shared voting
power and investment power.

(6) Shares in column (2) include shares held in trust for the benefit of
family members as to which beneficial ownership is disclaimed.
(7) Shares in column (3) include 97,168 shares owned by spouse or held in
trust for the benefit of family members as to which beneficial ownership
is disclaimed.
(8) Shares in column (3) include shares held in trust for benefit of self
and/or family members.
(9) Shares in column (2) include 43,804 shares in trust for the benefit of
family members as to which beneficial ownership is disclaimed. Shares in
column (3) include 16,252 shares held in trust for the benefit of family
members as to which beneficial ownership is disclaimed.
(10) Shares in column (3) include 353,211 shares owned by a charitable trust
of which Vincent C. Nelson is a trustee. Mr. Nelson disclaims beneficial
ownership of such shares.
(11) Shares in column (3) include 35,620 shares owned by a charitable
foundation of which C. William Pollard is a director. Mr. Pollard
disclaims beneficial ownership of such shares. Shares in column (3) also
include 34,426 shares in trust for the benefit of family members.
(12) Shares in column (3) include 11,523 shares owned by a charitable
foundation of which Carlos H. Cantu is an officer. Mr. Cantu disclaims
beneficial ownership of such shares.
(13) Shares in column (3) include 59,400 shares owned by a charitable
foundation of which Charles W. Stair is a director. Mr. Stair disclaims
beneficial ownership of such shares.
(14) Shares in column (3) include 731,162 shares owned by a charitable
foundation of which David K. Wessner is a director. Mr. Wessner disclaims
beneficial ownership of such shares.
(15) Shares in column (3) include 545,620 shares held by an investment company
of which David K. Wessner is a shareholder and one of four directors.
(16) Includes 5,419,879 shares which certain officers of ServiceMaster,
through the exercise of their respective rights, may acquire within 60
days under share purchase agreements, options granted under the
ServiceMaster Share Option Plan and options granted under the
ServiceMaster 10-Plus Option Plan. 20% of the options granted under the
ServiceMaster 1998 Equity Incentive Plan in February 1998 were
exercisable on March 1, 1999. None of the options granted under the
ServiceMaster 1998 Equity Incentive Plan in February 1999 were
exercisable on March 1, 1999. Shares purchasable by the persons
identified in the Summary Compensation Table under one or more of the
foregoing plans are as follows: Mr. Cantu--187,500 shares; Mr. Pollard--
157,500 shares; Mr. Rooney--91,050 shares; Mr. Mrozek--197,933 shares;
Mr. Preston--144,000 shares; and all executive officers as a group
1,502,981 shares.

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors does not know
if any matters will be presented to the meeting other than those described
above. If other maters properly come before the meeting, the persons named in
the accompanying proxy will vote said proxy in accordance with their best
judgment.

Expenses incurred in connection with the solicitation of proxies will be
paid by the Company. Following the initial solicitation of proxies by mail,
directors, officers and regular employees of the Company may solicit proxies
in person, by telephone or facsimile transmission, but without extra
compensation. In addition, the Company has retained Morrow & Company to assist
in the solicitation of proxies at an estimated cost to the Company of
approximately $7,000 plus out-of-pocket expenses. Such solicitation may be
made by mail, telephone, facsimile transmission or in person. The Company
will, upon request, reimburse the reasonable charges and expense of brokerage
houses or other nominees or fiduciaries for forwarding proxy materials to, and
obtaining authority to execute proxies from, beneficial owners for whose
account they hold Common Stock.

The Company's 1998 Annual Report is enclosed, but the report is not
incorporated in this Proxy Statement and is not part of the proxy soliciting
material. A copy of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 filed with the Securities and Exchange
Commission, without exhibits, will be provided without charge to any
stockholder submitting a request therefor to the Corporate Secretary, The
ServiceMaster Company, One ServiceMaster Way, Downers Grove, Illinois 60515,
or telephone 630-271-1300.

By Order of the Board of Directors

Vernon T. Squires,
Sr. Vice President, General Counsel
and Corporate Secretary

Dated: March 23, 1999

-- --

PROXY PROXY
THE SERVICEMASTER COMPANY

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS--APRIL 30, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned appoints C. William Pollard, Carlos H. Cantu and Vernon T.
Squires or each one or more of them as shall be in attendance at the meeting,
as proxy or proxies, with full power of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of The ServiceMaster Company
to be held on April 30, 1999 and at any adjournment thereof, and to vote as
specified on this Proxy the number of shares of common stock of The
ServiceMaster Company the undersigned would be entitled to vote, if personally
present, upon the matters referred to on the reverse side hereof, and, in
their discretion, upon any other business as may properly come before the
meeting.

IF NOT MARKED TO THE CONTRARY, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND
2.

IMPORTANT: THIS PROXY IS CONTINUED AND MUST BE SIGNED AND DATED ON THE REVERSE
SIDE.

IMPORTANT: THIS IS YOUR PROXY CARD. CAREFULLY FOLD AND TEAR ALONG PERFORATION.
WHETHER OR NOT YOU ARE ABLE TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS, IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. PLEASE SIGN AND RETURN THE PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE OR FOLLOW THE TELEPHONE VOTING
INSTRUCTIONS ON THE REVERSE SIDE.

. FOLD AND DETACH HERE .
- --------------------------------------------------------------------------------

-- --

THE SERVICEMASTER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. (0)

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR 1 AND 2.
1. Election of six directors--
Nominees: 01-P. W. Berezny, 02-H. O. Boswell,
03-C. H. Cantu, 04-V. C. Nelson, 05-S. S Reinemund, 06-C. W. Stair

--------------------------------------------------------------------
(Except nominee(s) written above.)

For All ( ) Withhold All ( ) For All Except ( )

2. Proposal to ratify Arthur Andersen LLP as Independent Accountants.

For All ( ) Withhold All ( ) For All Except ( )

In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ITEMS 1 AND 2.

Dated: __________________________________________ , 1999
Signature(s)______________________________________________________________

- --------------------------------------------------------------------------

Please sign exactly as your name or names appear above. For joint accounts,
each owner should sign. When signing as executor, administrator, attorney,
trustee or guardian, etc., please give your full title.

. DETACH PROXY CARD HERE .
- --------------------------------------------------------------------------------
CONTROL
NUMBER

[LOGO OF SERVICEMASTER APPEARS HERE]

NOW YOU CAN VOTE YOUR SHARES BY TELEPHONE

QUICK . EASY . IMMEDIATE . AVAILABLE 24 HOURS A DAY . 7 DAYS A WEEK

The SERVICEMASTER COMPANY encourages you to take advantage of a new and
convenient way to vote your shares. If voting by proxy, this year you may vote
by mail or telephone. Your telephone vote authorizes the named proxies to vote
your shares in the same manner as if you marked, signed, and returned your
proxy card. To vote by telephone, read the accompanying proxy statement and
then follow these easy steps:

TO VOTE BY PHONE Call toll free 1-888-215-6477 in the United States or
Canada any time on a touch tone telephone. There is NO
CHARGE to you for the call.

Enter the 6-digit CONTROL NUMBER located above.

Option #1:
To vote as the Board of Directors recommends on
ALL proposals: Press 1

When asked, please confirm your vote by pressing
1

Option #2:
If you choose to vote on each proposal
separately, press 0 and follow the simple
recorded instructions.

If you vote by telephone, DO NOT mail back the proxy card.

THANK YOU FOR VOTING!