Page 29 - MIC 2014 - English

How We Look at Performance. We look at performance from a number of perspectives with the intention of aligning

short-term financial and operational metrics with long-term shareholder value creation:

Operational
Financial Results
Excellence
Leadership
Shareholder Value
Cash flow from Safety Personal performance, which Relative total shareholder return

operations(1)
Environment includes the successful execution of (‘‘TSR’’) in our performance share
Reliability operational and capital plans.
unit (‘‘PSU’’) plan (‘‘PSU Plan’’).
Return on capital
employed(1)
People
Absolute share price appreciation
through stock options.

(1) Cash flow from operations and return on capital employed are non-GAAP measures. See the ‘‘Advisories’’ section beginning on page 74 of this
management proxy circular.

How Total Direct Compensation is Delivered. Our mix of total direct compensation programs is designed to provide

competitive pay and align all our executives with performance objectives over short-, medium- and long-term
time periods.

Component Performance Orientation
Time Frame

Salary Reflects the market value of the position.
Annual reviews
(15-35% of compensation)
Annual reviews and Salary increases reflect performance
adjustments
demonstrated on the job.
.......................................................................................................................................................................................................................................................
Annual Incentive Aligned with financial and operational Annual performance
(15-17% of compensation) performance objectives.

Reflects corporate, business unit and personal

performance.
.......................................................................................................................................................................................................................................................

PSUs Rewards relative share price performance. Three-year rolling performance
(25-35% of compensation) cycles
Fully at-risk with a 0% to 200% of target
payout range (three of the six awards granted
from 2006 to 2011 resulted in no payout as

performance conditions were not met).
.......................................................................................................................................................................................................................................................

Stock Options
Rewards absolute share price performance.
Seven-year term
(25-35% of compensation)
Only delivers value if our share price Vest over three years
appreciates (as at December 31, 2013, four of
the five most recent annual grants are

‘‘in-the-money’’).

Pay Alignment to Total Shareholder Return. We have a long standing pay-for-performance philosophy that is reflected
in the design of our programs. A significant portion of the Named Executive Officers’ total direct compensation is variable

and is linked to Suncor’s performance, including financial and operating results and stock performance. We look at the
alignment of our pay programs with performance over short- and mid- to long-term periods, to ensure that our
short-term actions lead to long-term increases in shareholder value.

SUNCOR ENERGY INC. MANAGEMENT PROXY CIRCULAR 2014 27