MERCER MOBILITY ASSESSMENT Company XYZ

Custom Comparator Group and Mercer Select Benchmarking Group

October 7, 2013

Introduction

INTRODUCTION

Introduction

1- COL/G&S Adjustments 7- Transportation

2- Employee Support 8- Dependent Education

3- Program Compliance 9- Relocation Assistance

4- Housing 10- Program design and Administration

5- Incentives and Hardship 11- Taxes

Methodology Details

1-

2-

3-

4-

5-

6-

This WIAPP combines the two longest-running and most respected surveys in the industry. We have enhanced it

to be a complete, current resource for global mobility managers. It covers trends in mobility program

management as well as a wide range of policies and practices areas for typical long-term assignments.

It is important to note the following methodology when reviewing and applying the information contained within

this report:

For some questions, participants could select more than one response; as such, totals for those

questions may add up to more than 100%.

Most percentages are presented without decimals; as such, some data does not add up to 100% due to

rounding.

Unless otherwise noted, "average" always means the arithmetic mean.

Reported currency amounts were converted into USD, using 1 July 2012 exchange rates from Oanda.

Mercer has assigned a rating value to 2012 WIAPP questions and a value associated with each

potential response to determine the ratings.

Mercer has developed a new way to benchmark your international assignment package by using policy survey

responses to the 2012 Worldwide International Policies and Practices (WIAPP) Survey questionnaire we have

created a unique assessment of Company XYZ's comparative position versus a custom comparator group and

other top multinational companies.

The following report provides a comprehensive comparison of Company XYZ's key global mobility policy elements

versus those of a custom comparator group. Further, it includes a series of customized metrics deigned to enable

you to identify your overall competitive position, as well as which of Company XYZ's policy elements are above, at

or below market. Those global mobility policy elements that will be evaluated in this report are the following:

Each section will be given a rating and their percentage difference from the median will be calculated.

The percentage difference is calculated by the following:

The WIAPP was conducted from 29 March through 31 July 2012. The survey was conducted in English, Spanish,

Korean and Japanese. Since then, more companies have completed the survey bringing the total to 789

companies.

( ) Sum User Mediums

Sum Market Mediums - 1 = % Market Median Difference

3

INTRODUCTION

7-

A: 100 - 81

B: 80 - 61

C: 60 - 41

D: 40 - 21

F: 20 - 0

Data Scrubbing

The Report ItselfWhat this report has done is divide the global mobility function into ten different categories. Each category forms

a section in this report. These categories has been defined, assessed and measured using data from the 2012

WIAPP. Each section will follow the same presentation of data.

We will first present a summary of the findings of the section and define relevant terms that are used throughout

the specific section. We will then go through the questions that are used as the evaluative measures for each

section. We will show Company XYZ's position within the custom comparator group as it relates to each individual

evaluative measure.

Our data cleaning process involved re-categorizing some answers (typically, "other" answers that could be

attributed to a more-specific answer), reformatting some numeric answers, or skipping a few answers that were

inconsistent or contradictory. We are confident that the results in this report accurately reflect the data.

From that, an overall ranking is derived from the sum of the individual evaluative measures that will show

Company XYZ's position within the custom comparator group for each section. After we have gone though and

presented the case of individual section, a final ranking will be presented that will be derived from the sum of the

overall individual section rankings. This will present an overall benchmark for market position within the custom

comparator group.

10% < Value-10% < Value < 10%Value < -10%

When summed, these rating values will be assigned a Mercer Grade to facilitate intercompany

comparisons. The following is the grading scale:

The percentage difference from median will be highlighted in the following manner:

4

INTRODUCTION

• Company 1

• Company 2

• Company 3

• Company 4

• Company 5

• Company 6

• Company 7

• Company 8

• Company 9

• Company 10

• Company 11

• Company 12

• Company 13

• Company 14

• Company 15

• Company 16

• Company 17

• Company 18

• Company 19

• Company 20

• Company 21

• Company 22

• Company 23

• Company 24

• Company 25

• Company 26

• Company 27

• Company 28

Custom Comparator Group as defined by Company XYZ

5

INTRODUCTION

• 3M • Hilton Worldwide

• Abbott • InterContinental Hotels Group

• AECOM • Jacobs

• Alcoa Inc • John Deere

• Amgen • Johnson & Johnson

• AstraZeneca • JT International S.A.

• Atkins Limited • Kellogg's

• Baker Hughes International • Kiewit Corporation

• Bechtel Corporation • Lafarge

• Black & Veatch • Lockheed Martin Corporation

• Boeing • Marriott International, Inc.

• Bombardier Transportation • McDermott International

• Bristol-Myers Squibb Company • McDonald's Corporation

• Bunge Limited • Medtronic, Inc.

• CB&I • Merck KGaA

• CEMEX • Merck Sharp & Dohme Corp.

• CH2M HILL • Metropolitan Life Insurance

• Chrysler Group LLC • MWH Global

• Cisco Systems, Inc. • Novartis Pharmaceuticals Corporation

• Citigroup • Parsons Corporation

• Cummins Inc. • PepsiCo

• Delphi Corporation • Pfizer Inc

• Eli Lilly and Company • Philips Electronics N.V.

• Ericsson • Roche

• Exxon Mobil Corporation • Sanofi

• Fluor Corporation • SAP AG

• Ford Motor Company • Shell

• Four Seasons Hotels and Resorts • The Proctor & Gamble Company

• General Motors Company • The Walt Disney Company

• GlaxoSmithKline • TOTAL SA

• Hewlett Packard • United Technologies Corporation

• URS Corporation

Mercer Select Benchmarking Group Members

The Select Benchmarking Group (SBG) provides an ongoing and exclusive benchmarking resource to a group of

60+ companies with the largest and recognized as “best in class” international assignment programs. Primarily

Fortune 500 multinationals, members of this all-industry run global mobility programs that often define “best

practice” in the market.

Please note that Company XYZ has been removed from the SBG cut so as not to influence the SBG data and

provide the most accuracte ranking of Company XYZ within the SBG Comparator Group.

6

Executive Summary

7

EXECUTIVE SUMMARY

DONE

DONE

DONE

DONE

DONE

DONE

DONE

DONE

DONE

DONE

89

52.5

80

55

75

42.5

68

69.5

48

55

87

60

85

55

75

40

65

71

45

50

79

100

65

85

60

61

73

80

60

33

Summary of Rankings for all Elements

CUSTOM SBG XYZ

CUSTOM Median SBG Median XYZ Median

Program Design and Administration

Incentives and Hardship

COL/G&S Allowance

Housing

Compliance, Taxes and Social Security

Transportation

Employee Support

Dependent Education

Relocation Assistance

Home Leave

8

EXECUTIVE SUMMARY

Total Ranking of Company XYZ vs. Custom vs. SBG

XYZCustom

Median

SBG

Median

503 447 443.5

C 6 of 29 4 of 63

13% 13%Company XYZ 's percentage difference from comparator group

Medians:

XYZ vs. Market

PracticeGrade and Ranking

Company XYZ's

Company XYZ's score compared to Custom and SBG median

values:

Mercer Grade and Rank based on Median scores:

0 100 200 300 400 500 600

Total Ranking of Company XYZ vs. Custom vs. SBG

Custom (N=28) SBG (N=62) XYZ Quartile (25th, Median, 75th)

9

Cost of Living and Goods & Services Allowance

10

COLA, GOODS AND SERVICES

Market Position

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2-

3-

4-

5- What if the cost of living in lower is the assignment location (application of negative index)?

Do you pay a G&S/COL allowance to your typical long-term assignees?

The following questions were used as the evaluative measures for the cost of living and goods & services

allowance of Company XYZ's global mobility policies and practices:

Given availability, what index pricing level do you primarily use for typical long-term assignments?

Do you modify the index to exclude certain items/categories from the market basket?

Is there a cap or limit on the amount paid for goods and services differentials/COLA?

20

10

10

20

20

20

10

20

15

20

20

10

5

10

20

COLA/G&S

Index Pricing

Modify the Index

Cap on COLA/G&S

Negative Index

COLA/G&S Ratings by Section

CUSTOM (N=28) SBG (N=62) XYZ

11

COLA, GOODS AND SERVICES

Current

Practice

Custom=20

(N=28)

SBG=20

(N=61)

20 86% 90%

7% 2%

7% 5%

0% 3%

Current

Practice

Custom=10

(N=26)

SBG=10

(N=56)

4% 9%

77% 63%

10 8% 7%

8% 11%

0% 5%

4% 5%

Current

Practice

Custom=10

(N=26)

SBG=20

(N=55)

5 35% 29%

15% 9%

50% 62%

Current

Practice

Custom=20

(N=26)

SBG=15

(N=56)

10 74% 80%

15% 13%

0% 2%

7% 5%

Current

Practice

Custom=20

(N=27)

SBG=20

(N=56)

20 74% 80%

15% 13%

0% 2%

7% 5%

4% 0%

4- A combination

Company XYZ's Current Practice Market Practice

Do you pay a G&S/COL allowance to your typical long-term

assignees?

1- Yes, separately identified in the remuneration package as an

allowance or a differential

2- Yes, paid as part of a single expatriate allowance covering other

items in addition to goods and services

3- No

4- Other

Given availability, what index pricing level do you primarily use

for typical long-term assignments?

1- Expensive, Expatriate

2- Moderate, Legacy

3- Least expensive, reversible index

What if the cost of living is lower in the assignment location

(application of negative index)?

5- Other

6- We do not use one primary pricing methodology for typical long-

term assignments

Do you modify the index to exclude certain items/categories from

the market basket?

1- Yes, for all or nearly all assignees

2- Yes, case-by-case

3- No

Is there a cap or limit on the amount paid for goods and services

differentials/COLA?

1- Yes, for assignees with salaries above a predefined threshold

2- Yes, based on a flat amount

3- Yes, other

4- No

1- We never apply a negative cost-of-living index; assignee received

windfall

2- We apply negative index

3- We make a deduction from other assignment related allowances

4- We handle case-by-case

5- No assignees assigned to such locations

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COLA, GOODS AND SERVICES

XYZ Custom SBG

65 80 85

B 18 of 29 40 of 63

-19% -24%

XYZ vs. Market

Practice

Company XYZ's score compared to Custom and SBG median

values:

Company XYZ 's percentage difference from comparator group

Medians:

Mercer Grade and Rank based on Median scores:

COLA and Goods & Services Grade and Ranking

13

COLA, GOODS AND SERVICES

Market Position

The following graph is derived from the sum of the value of the points earned in accordance to the individual

questions. The red line represents Company XYZ, the dark blue lines represent those companies within the

custom comparator group and the light blue lines are those companies that are members of the Mercer SBG.

They are all shown here together so as to compare Company XYZ's position against their custom comparator

group and the Mercer SBG.

0 10 20 30 40 50 60 70 80 90 100

COLA/G&S Range of Total Ratings of Company XYZ vs. Custom vs. SBG

CUSTOM (N=28) SBG (N=62) P&G

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COLA, GOODS AND SERVICES

Rating by Question

Pt.Val. Question Answers Pt.Val.

71 20 1- Yes, separately identified in the

remuneration package as an allowance or a

differential

20

2- Yes, paid as part of a single expatriate

allowance covering other items in addition to

goods and services

10

3- No 0

4- Other 10

74a 20 1- Expensive, Expatriate 20

2- Moderate, Legacy 10

3- Least expensive, reversible index 10

4- A combination 10

5- Other 10

6- We do not use one primary pricing

methodology for typical long-term

assignments

10

76a 20 1- Yes, for all or nearly all assignees 5

2- Yes, case-by-case 10

3- No 20

77a 20 1- Yes, for assignees with salaries above a

predefined threshold10

2- Yes, based on a flat amount 10

3- Yes, other 10

4- No 20

79a 20 1- We never apply a negative cost-of-living 20

2- We apply negative index 0

3- We make a deduction from other

assignment related allowances10

4- We handle case-by-case 10

5- No assignees assigned to such locations 10

WIAPP Question Number and Text

What if the cost of living is lower

in the assignment location

(application of negative index)?

Given availability, what index

pricing level do you primarily use

for typical long-term assignments?

Do you pay a G&S/COL allowance

to your typical long-term

assignees?

Do you modify the index to

exclude certain items/categories

from the market basket?

Is there a cap or limit on the

amount paid for goods and

services differentials/COLA?

15