Executive Compensation Program Highlights

Executive Compensation Program Designed to Support Sustained Performance

The executive compensation program, which uses key performance measures that are tied to the Company’s long-term success, supported the Company’s strong performance in 2016.

New Employment Agreement for CEO

In January 2016, the Company entered into an amended and restated employment agreement with Jeffrey Bewkes to extend the term of his agreement through December 31, 2020. The extension did not change the compensation of Mr. Bewkes. The Compensation and Human Development Committee (“Compensation Committee”) approved the amendment in light of Mr. Bewkes’ strong performance as CEO and to secure his leadership in executing the Company’s strategy and long-range plan.

Strong Governance of Executive Compensation

 

What Time Warner Does		What Time Warner Doesn’t Do
✓   Pay-for-performance		No guaranteed bonuses
✓   Multiple performance metrics and time horizons		No excise tax gross-ups
✓   Share ownership and retention requirements		No change in control severance agreements
✓   Regular engagement with shareholders		No targeting specific percentiles
✓   Limited personal benefits		No tax gross-ups for personal benefits
✓   Policy limiting equity dilution		No repricing or buyouts of stock options
✓   Annual compensation-related risk review		No hedging or pledging by executives
✓   Clawback policy		No excessive overhang or dilution from equity awards
✓   Use of independent compensation consultant		No pension credits for years not worked
		Value of equity awards not included in pension calculations

 

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Governance Highlights

Strong Governance Practices and Policies

The Company is committed to strong governance practices and policies and robust engagement practices.

Key examples of the Company’s long-standing commitment to strong governance practices and policies:

Shareholder Engagement

The Company values the views of its shareholders and has a long-standing practice of engaging with shareholders throughout the year. In the period prior to the 2016 annual meeting of shareholders, the Company contacted its 100 largest shareholders, representing over 50% of the outstanding shares of Time Warner common stock, par value $0.01 per share (“Common Stock”). Following the 2016 annual meeting, the Company continued to engage with shareholders on a range of topics, including executive compensation matters, such as the performance measures used in the executive compensation program and changes to the Company’s secondary peer group, and governance and corporate responsibility matters, reaching out to shareholders representing approximately 45% of the Company’s outstanding shares of Common Stock. The Company also contacted shareholders representing over 50% of the Company’s outstanding shares of Common Stock regarding the Merger in connection with the special meeting of shareholders. The Board and its committees are regularly updated on shareholder feedback and consider the views of shareholders in making their decisions. The Board views this continuing constructive dialogue as an integral part of the process of maintaining strong executive compensation and governance practices.

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One Time Warner Center

New York, NY 10019-8016

PROXY STATEMENT

This Proxy Statement is being provided to holders of Common Stock at the close of business on the record date (April 19, 2017), in connection with the solicitation of proxies by the Board of Directors of Time Warner Inc., a Delaware corporation, for use at the Annual Meeting of Time Warner’s shareholders, and at any adjournment or postponement of the meeting, for the purpose of considering and acting on the matters set forth in the accompanying Notice and this Proxy Statement. The Annual Meeting will be held on Thursday, June 15, 2017, at Warner Bros. Studios, 4000 Warner Boulevard, Burbank, California 91522, commencing at 9:30 a.m., local time.

COMPANY PROPOSALS

Proposal 1: Election of Directors

Director Nominees

The Board of Directors nominated each of the nine nominees named below for election as a director at the Annual Meeting. If elected by the shareholders, they will serve for a one-year term until (i) the next annual meeting of shareholders and until their successors have been duly elected and qualified, (ii) their earlier death, resignation or retirement or (iii) the closing of the Merger. Each of the nominees currently serves as a director of the Company and was elected by the shareholders at the 2016 annual meeting of shareholders. If any nominee is unable or unwilling to serve as a director at the time of the Annual Meeting, the persons named in the proxy card (who are appointed by shareholders as their proxies) intend to vote, in their discretion, for such other persons, if any, as may be designated by the Board. As of the date of this Proxy Statement, the Board has no reason to believe that any of the nominees will be unable or unwilling to serve as a director if elected. The persons named in the proxy card as shareholders’ proxies intend to vote such proxy for the election of each of the nominees, unless a shareholder indicates on the proxy card that the vote should be “against” any or all of the nominees.

Vote Required for Election of Director Nominees

Because the election of the directors at the Annual Meeting is uncontested, a director nominee must receive a majority of the votes duly cast by the holders of Common Stock with respect to that director nominee to be elected ( i.e. , the number of “for” votes for a director nominee must exceed the number of “against” votes for that director nominee). If an incumbent director nominee receives more “against” votes than “for” votes in an uncontested election, the director must submit, no later than two weeks following the certification of the shareholder vote by the Company, an offer to resign from the Board. The Board will consider the resignation offer and may either accept the resignation offer or reject it and seek to address the underlying cause(s) of the “against” votes. The Board is required to make its determination within 90 days following the certification of the shareholder vote and make a public announcement of its decision, including a statement regarding the reasons for its decision if the Board rejects the resignation offer. Abstentions and broker non-votes are not considered votes cast in the election of director nominees and will have no effect on the election of director nominees.

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Director Nomination Process

There are a number of different ways an individual can be nominated for election to the Board.

Nominations Developed by the Nominating Committee.   The Nominating Committee follows the steps described below to identify and propose an individual for election to the Board:

Shareholder Recommendations and Nominations.

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Board Qualifications, Composition and Tenure

Criteria for Membership.   The Nominating Committee and the Board take into consideration many factors in reviewing candidates and apply the same criteria to all candidates, including incumbent directors, and some additional criteria when evaluating the qualifications of new director candidates. The Board believes the Company is best served by a board consisting of individuals who share certain core characteristics, such as a high level of integrity, professional accomplishment and business judgment, and who also bring a variety of complementary skills, professional experience, backgrounds and diverse viewpoints and perspectives to the Board.

Director Succession Planning.   Because of the anticipated retirements of several directors from 2016 through 2018, the Nominating Committee retained an outside search firm and began a search in early 2016 to identify, recruit and appoint several new directors who possess the core characteristics required of all directors and the relevant experience and qualifications, complementary skills and fresh perspectives to work effectively with their fellow directors in fulfilling the Board’s role in reviewing the Company’s strategy and overseeing its businesses. In light of the pending Merger, which is expected to close before year-end 2017, the Board suspended the search in October 2016.

Board Tenure.   The Board recognizes the importance of having new directors join the Board regularly to achieve an optimum mix of institutional knowledge and fresh perspectives. Reflecting a commitment to Board refreshment, the Corporate Governance Policy states that the Board believes the Board and the Company are well-served by having non-employee directors with a mix of tenures and expects the average tenure of non-employee directors will generally not exceed 10 years. In addition, the Corporate Governance Policy provides that non-employee directors are not eligible for nomination for a term during which they will reach age 75. This commitment to Board refreshment has been demonstrated by the Board recruiting and adding four new directors with highly relevant experience since January 2009, including two in 2009 and one in each of 2010 and 2013. Even with the suspension of the director search, the average tenure of the non-employee Director nominees is approximately nine years.

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Directors’ Skills and Qualifications.   The Nominating Committee and Board have identified the following criteria to be considered when evaluating all director candidates, both the incumbent directors selected as nominees and potential new director candidates. The Nominating Committee and Board also considered the business experience listed below under “2017 Annual Meeting Director Nominee Experience” in evaluating the incumbent directors nominated for election.

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Background of Director Nominees

Set forth below is information regarding each of the nine nominees, including their ages as of April 29, 2017 and key skills and professional qualifications. The Board and the Nominating Committee believe that the depth and breadth of qualifications, skills and experiences of the nominees, all of whom are seasoned leaders and current directors of the Company, have contributed to an effective and well-functioning Board and that, individually and as a whole, the nominees possess the necessary qualifications to provide effective oversight of and advice to the Company’s management and businesses.

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		Proposal 1: Election of Directors

 

 

William P. Barr
		Former Attorney General of the United States Of Counsel of Kirkland & Ellis LLP – March 2017 to present   Director since 2009   Age: 66   Independent Director   Board Committees: Compensation (Chair); Nominating
		Prior Professional Experience: Mr. Barr served as Of Counsel of Kirkland & Ellis LLP from January 2009 to July 2009; Executive Vice President and General Counsel of Verizon Communications Inc. from June 2000 to December 2008; Executive Vice President and General Counsel of GTE Corporation from 1994 to June 2000; a partner of Shaw, Pittman, Potts & Trowbridge (now Pillsbury Winthrop Shaw Pittman LLP) from 1993 to 1994; the 77th Attorney General of the United States from 1991 to 1993; Deputy Attorney General of the United States from 1990 to 1991; Assistant Attorney General for the Office of Legal Counsel from 1989 to 1990; and a partner of Shaw, Pittman, Potts & Trowbridge from 1984 to 1989.   Other Public Company Boards: Dominion Resources, Inc. and Och-Ziff Capital Management Group LLC. During the past five years, Mr. Barr served as a director of Selected Funds and a trustee of Clipper Funds.   Key Skills and Qualifications: Mr. Barr, who is Chair of the Company’s Compensation Committee, brings leadership experience in government as a former Attorney General of the United States and head of the U.S. Department of Justice. He also has more than 14 years of leadership and senior management experience in major corporations in the media and telecommunications industries, as the former Executive Vice President and General Counsel of Verizon Communications Inc. and its predecessor, GTE Corporation. As a former senior executive at Verizon Communications Inc. and GTE Corporation, Mr. Barr has knowledge of and experience in broadband and mobile distribution systems, including the distribution of video content, as well as experience in consumer-focused businesses with international operations. As a former Attorney General of the United States, General Counsel and partner of a major law firm, Mr. Barr has a strong background in a wide range of legal, regulatory and government relations matters, including intellectual property and antitrust policy, as well as overseeing the negotiation of and obtaining regulatory approvals for significant mergers and acquisitions, such as the Bell Atlantic Corporation and GTE Corporation merger that formed Verizon Communications Inc. and Verizon Communications Inc.’s subsequent acquisitions of MCI Communications Corporation and Alltel Corporation. As a former director of Selected Funds, where he was a director or trustee of three separate investment companies in the fund complex, Mr. Barr has knowledge of and experience in finance and investments.

 

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		Proposal 1: Election of Directors

 

 

Jeffrey L. Bewkes
		Chairman of the Board and Chief Executive Officer of the Company – January 2009 to present     Director since 2007   Age: 64
		Prior Professional Experience: Mr. Bewkes served as President and Chief Executive Officer of the Company from January 2008 through December 2008; President and Chief Operating Officer of the Company from January 2006 through December 2007; Chairman, Entertainment & Networks Group, of the Company from July 2002 through December 2005; Chairman and Chief Executive Officer of the Home Box Office division of the Company from 1995 to July 2002; and President and Chief Operating Officer of the Home Box Office division of the Company from 1991 to 1995.   Other Public Company Boards: Mr. Bewkes served as a director of Time Inc. for many years, resigning on June 6, 2014 in connection with the legal and structural separation of Time Inc. from the Company. Time Inc. became a public company on May 9, 2014.   Other Boards: Mr. Bewkes is a Trustee of the Yale Corporation of Yale University. He is a member of the board of the Partnership for New York City and the advisory board of the Creative Coalition.   Key Skills and Qualifications: Mr. Bewkes has more than 30 years of experience at the Company and its subsidiaries, including 26 years of leadership and senior management experience serving as the Chief Executive Officer or in other senior executive positions at the Company and Home Box Office. His unique, in-depth knowledge of the Company’s history and businesses, including his deep understanding of the Company’s operations and strategy and the media and entertainment industry, provide him a strong foundation for leading the Board, as Chairman, and facilitating effective communication between management and the Board.

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Robert C. Clark
		Distinguished Service Professor at Harvard University – July 2003 to present     Director since 2004   Age: 73   Lead Independent Director   Board Committees: Audit; Nominating (Chair)
		Prior Professional Experience: Mr. Clark served as the Dean and Royall Professor of Law at Harvard Law School from 1989 to 2003; a professor at Harvard Law School from 1978 to 2003; a professor at Yale Law School from 1974 to 1978; and an associate at Ropes & Gray from 1972 to 1974.   Other Public Company Boards: Omnicom Group, Inc.   Other Boards: During the past five years, Mr. Clark was a trustee of Teachers Insurance and Annuity Association (TIAA), a life insurance company focused on serving the retirement needs of the higher education community.   Key Skills and Qualifications: Mr. Clark has 14 years of leadership experience as a former Dean of Harvard Law School. Mr. Clark’s expertise and insights in the areas of corporate law (including mergers and acquisitions and corporate governance), finance and regulation are useful to the Nominating Committee, which he chairs, as well as the rest of the Board. His experience serving on the boards of directors of other companies provides him with knowledge of a number of industries, including the advertising industry. As a former trustee of a life insurance company, Mr. Clark also brings his understanding of finance, investments and the views of pension funds and other institutional shareholders.

 

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Mathias Döpfner
		Chairman and Chief Executive Officer of Axel Springer SE , an integrated multimedia company based in Berlin, Germany – January 2002 to present   Director since 2006   Age: 54   Independent Director   Board Committees: Compensation
		Prior Professional Experience: Mr. Döpfner has been with Axel Springer SE since 1998, initially as editor-in-chief of Die Welt and since 2000 as a member of the Management Board. Prior to joining Axel Springer SE, Mr. Döpfner held various positions in media companies, including editor-in-chief of the newspapers Wochenpost and Hamburger Morgenpost and as a Brussels-based correspondent for Frankfurter Allgemeine Zeitung .   Other Public Company Boards: Vodafone Group Plc. During the past five years, Mr. Döpfner served as a supervisory board member of RHJ International SA (now known as BHF Kleinwort Benson Group).   Key Skills and Qualifications: Mr. Döpfner brings more than 17 years of leadership and senior management experience serving as Chairman and Chief Executive Officer of Axel Springer SE, a leading digital publisher in Europe. He has a deep understanding of the media and entertainment industry, including the development of new business models to address and capitalize on technological changes within the industry.

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		Proposal 1: Election of Directors

 

 

Jessica P. Einhorn
		Former Dean of the Paul H. Nitze School of Advanced International Studies (SAIS) at The Johns Hopkins University   Director since 2005   Age: 69   Independent Director   Board Committees: Audit; Nominating
		Prior Professional Experience: Ms. Einhorn served as Dean of the Paul H. Nitze School of Advanced International Studies (SAIS) at The Johns Hopkins University from June 2002 through June 2012; a consultant at Clark & Weinstock, a strategic communications and public affairs consulting firm, from 2000 to 2002; a Visiting Fellow at the International Monetary Fund from 1998 to 1999; and in various executive positions (including Managing Director for Finance and Resource Mobilization) at The World Bank from 1978 to 1979 and 1981 to 1999.   Other Public Company Boards: BlackRock, Inc.   Other Boards: Ms. Einhorn serves as a director of the Peterson Institute for International Economics and the National Bureau of Economic Research. Ms. Einhorn is also Resident Senior Advisor and a member of the advisory board of The Rock Creek Group.   Key Skills and Qualifications: Ms. Einhorn brings leadership experience in international organizations and education administration, including 10 years as Dean of the Paul H. Nitze School of Advanced International Studies (SAIS) at The Johns Hopkins University and more than 18 years serving in various staff and executive positions at The World Bank. Ms. Einhorn has extensive knowledge of policies and practices in international finance, economic development and government relations through her roles at the International Monetary Fund and The World Bank, membership on the boards of research and public policy institutions and her ongoing research interest in finance. As a member of the board of a major investment firm, BlackRock, Inc., and as an advisory board member of The Rock Creek Group, a global alternative asset manager, she also brings the perspective and experience of investment firms.

 

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Carlos M. Gutierrez
		Chair of Albright Stonebridge Group , a global strategy firm – February 2014 to present   Director since 2013   Age: 63   Independent Director   Board Committees: Audit
		Prior Professional Experience: Mr. Gutierrez served as Vice Chair of Albright Stonebridge Group from April 2013 to February 2014; Vice Chairman of the Institutional Clients Group at Citigroup Inc. from January 2011 to February 2013; Chairman of the Global Political Strategies division of APCO Worldwide Inc., a communications and public affairs consulting firm from January 2010 to January 2011; the 35th U.S. Secretary of Commerce from February 2005 to January 2009; Kellogg Company’s Chairman of the Board (from April 2000 to February 2005), Chief Executive Officer (from April 1999 to February 2005) and President (from 1998 to September 2003); and in various executive and non-executive positions at Kellogg Company from 1975 to 1998.   Other Public Company Boards: MetLife, Inc. and Occidental Petroleum Corporation.   Key Skills and Qualifications: Mr. Gutierrez brings nearly 30 years of experience in leading, managing and growing international business operations at Kellogg Company, a global consumer-focused company with international operations. At Kellogg Company, Mr. Gutierrez was responsible for major consumer brands in a complex worldwide business. As a result of this experience, Mr. Gutierrez brings significant knowledge of brand management, marketing and product development. He also brings leadership experience and knowledge of international commerce and government relations as former U.S. Secretary of Commerce.

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Fred Hassan
		Partner and Managing Director at Warburg Pincus LLC , a private equity firm – January 2011 to present   Director since 2009   Age: 71   Independent Director   Board Committees: Compensation; Nominating
		Prior Professional Experience: Mr. Hassan served as Senior Advisor at Warburg Pincus from November 2009 through December 2010; Chairman and Chief Executive Officer of Schering Plough Corporation (now part of Merck & Co., Inc.) from 2003 to November 2009; Chairman and Chief Executive Officer of Pharmacia Corporation from 2001 to 2003; Chief Executive Officer of Pharmacia Corporation from 2000 to 2001; and Chief Executive Officer of Pharmacia & Upjohn, Inc. from 1997 to 2000.   Other Public Company Boards: Amgen, Inc. and Intrexon Corporation. During the past five years, Mr. Hassan served as a director of Avon Products Inc. and Valeant Pharmaceuticals International, Inc.   Key Skills and Qualifications: Mr. Hassan brings more than 12 years of leadership and senior management experience as a former Chairman and/or Chief Executive Officer of major pharmaceutical companies with intellectual-property based business models and international operations, which provided him with strong and relevant operational and strategic experience. Because the pharmaceutical business is a highly regulated field, Mr. Hassan also has knowledge and experience in regulatory matters and government relations. As a partner and managing director at Warburg Pincus, Mr. Hassan also brings his knowledge of finance and investments to the Board and the Audit Committee. Mr. Hassan also brings his significant experience with large mergers and acquisitions to the Board. As Chairman and Chief Executive Officer of Schering Plough Corporation, he oversaw Schering Plough’s merger with Merck & Co., Inc., and as Chairman and Chief Executive Officer of Pharmacia Corporation, he oversaw its sale to Pfizer, Inc.

 

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		Proposal 1: Election of Directors

 

 

Paul D. Wachter
		Founder and Chief Executive Officer of Main Street Advisors, Inc. , a private company that provides investment and financial advisory services to businesses and high net worth individuals – 1997 to present   Director since 2010   Age: 60   Independent Director   Board Committees: Compensation
		Prior Professional Experience: Mr. Wachter served as Managing Director of Schroder & Co. Incorporated from 1993 to 1997; Managing Director of Kidder Peabody from 1987 to 1993; an investment banker at Bear, Stearns & Co., Inc. from 1985 to 1997; and an attorney at Paul, Weiss, Rifkind, Wharton and Garrison from 1982 to 1985.   Other Public Company Boards: During the past five years, Mr. Wachter served as a director of Avalanche Biotechnologies, Inc. and Virgin America, Inc.   Other Boards: Mr. Wachter serves in the noted capacities at the following privately held companies: a director of Haworth Marketing and Media Company, Oak Productions, Inc. and Content Partners LLC (Co-Chairman). Mr. Wachter also serves as Chairman of the Board of After-School All-Stars, a national non-profit organization that provides comprehensive after-school programs.   Key Skills and Qualifications: Mr. Wachter brings his knowledge of and experience in finance, investments and banking as the founder and Chief Executive Officer of Main Street Advisors, through serving as the former Chairman of the Investment Committee of the Board of Regents of the University of California, and as a former Managing Director at several investment banks. Mr. Wachter also has a background in the media and entertainment industry as a former investment banker focusing on the media and entertainment industry, a former member of the board of managers of Beats Electronics, LLC and Beats Music, LLC (companies focused on headphones and related products and music streaming services, respectively, both now part of Apple Inc.), and a director of Content Partners LLC (a company that acquires profit participations in films, television shows and music). Mr. Wachter also has experience in regulatory matters and government relations through his former service on the Board of Regents of the University of California, as an adviser to the former Governor of California and through his work as a tax attorney at a major law firm.

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Deborah C. Wright
		Former Chairman of Carver Bancorp, Inc.   Director since 2005   Age: 59   Independent Director   Board Committees: Audit (Chair)
		Prior Professional Experience: Ms. Wright served as Non-Executive Chairman of Carver Bancorp, Inc. from January 2015 through December 2016; a Senior Fellow in the Economic Opportunity and Assets Division of the Ford Foundation from January 2015 through June 2016; Chairman and Chief Executive Officer of Carver Bancorp, Inc. from February 2005 through December 2014; President and Chief Executive Officer of Carver Bancorp, Inc. and Carver Federal Savings Bank from 1999 to 2005; President and Chief Executive Officer of the Upper Manhattan Empowerment Zone Development Corporation from 1996 to 1999; Commissioner of the Department of Housing Preservation and Development from 1994 to 1996; a member of the New York City Housing Authority Board from 1992 to 1994; and a member of the New York City Planning Commission from 1990 to 1992.   Other Public Company Boards: Citigroup Inc. and Voya Financial, Inc. During the past five years, Ms. Wright served as director of Carver Bancorp, Inc.   Key Skills and Qualifications: Ms. Wright brings to the Board and to her role as Chair of the Audit Committee leadership, senior management and financial experience through her 17 years of service as the Chairman and/or Chief Executive Officer of Carver Bancorp, Inc. and Carver Federal Savings Bank and approximately 11 years of leadership roles at non-profit organizations or governmental bodies. Ms. Wright also brings to the Board her experience with businesses that provide products or services directly to customers gained through her service at Carver Bancorp, Inc. and Carver Federal Savings Bank, as well as her prior long-term service as a director of Kraft Foods Inc. Ms. Wright also has extensive experience in regulatory matters and government relations through her senior roles in government and non-profit organizations.

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Proposal 2: Ratification of Appointment of

Independent Auditor

The Audit Committee is responsible for the appointment, compensation and oversight of the Company’s independent auditor. The Audit Committee annually reviews the independent auditor’s qualifications, performance, fees and independence. Following its review in December 2016, the Audit Committee appointed Ernst & Young LLP (“EY”) as the Company’s independent auditor for 2017. EY has served as the Company’s independent auditor since 2001, when the Company was formed through the merger of America Online, Inc. (now known as Historic AOL LLC) and Time Warner Inc. (now named Historic TW Inc.). The Company is requesting that the shareholders ratify the appointment of EY as the Company’s independent auditor for 2017. The Audit Committee and the Board believe EY is independent and that it is in the best interests of the Company and its shareholders to retain EY as the Company’s independent auditor.

Rotation of Lead Audit Partner and Annual Consideration of Audit Firm Rotation

The Audit Committee believes it is important for the independent auditor to maintain its objectivity and independence. Accordingly, since 2004 the Audit Committee has reviewed on an annual basis whether the Audit Committee should have a policy requiring the regular rotation of the independent auditor and reports its conclusion to the Board. To date, the Audit Committee has determined not to adopt such a policy. In addition, in accordance with SEC rules and the Company’s Policy Regarding Audit Partner Rotation, audit partners are subject to limitations on the number of consecutive years they may provide services to the Company. For the lead audit partner, the maximum number of consecutive years in that capacity is five years. Consistent with these requirements, a new lead audit partner was selected for the audit of the Company’s 2014 financial statements. The Audit Committee and its Chair are involved in the process for selecting the lead audit partner.

EY’s Attendance at the Annual Meeting

Representatives of EY will be present at the Annual Meeting with the opportunity to make a statement if they desire to do so and to respond to appropriate questions from shareholders.

Vote Required for Approval

The affirmative vote of a majority of the votes duly cast by the holders of Common Stock is required to ratify the appointment of EY ( i.e. , the number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal). However, shareholder approval is not required for the appointment of EY because the Audit Committee is responsible for selecting the Company’s independent auditor. No determination has been made as to what action the Audit Committee or the Board would take if shareholders do not ratify the appointment.

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Proposal 3: Annual Advisory Vote to Approve Named Executive Officer Compensation

In accordance with SEC rules, Time Warner is asking shareholders to approve the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 2017 Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narratives.”

2016 was a successful year for Time Warner. The Company delivered strong financial performance in 2016, including 4% growth in revenues, 10% growth in both Operating Income and Adjusted Operating Income, 8% growth in EPS and 23% growth in Adjusted EPS. The Company also achieved significant milestones in 2016, not only in making progress on its key long-term strategic objectives, but also in entering into the Merger Agreement. The Merger will accelerate the Company’s strategy and its ability to innovate, and will provide an attractive premium to shareholders. The Company’s stock performance during 2016 also was very strong with a total shareholder return of 52% for the year compared to 12% for the S&P 500 and an 11% average for its entertainment industry peer group. The Compensation Committee and the Board believe (i) the Company’s compensation program and the compensation actions taken to encourage and reward performance during 2016 effectively supported the execution of the Company’s long-range plans, (ii) the compensation actions appropriately reflected the Company’s financial performance and the NEOs’ individual performance, and (iii) the transaction-related program implemented in connection with the Merger provides effective incentives for the NEOs to support the closing of the Merger and to continue delivering successful company performance while the Merger is pending.

The pay-for-performance design of the Company’s compensation program, the Company’s 2016 performance, the NEOs’ individual performance, and the Compensation Committee’s determination of the 2016 compensation paid to the NEOs are described in the “Compensation Discussion and Analysis” (“CD&A”) beginning on page 47. Shareholders are encouraged to read the CD&A before deciding how to vote on this proposal. Subject to both the earlier closing of the Merger and the Board’s consideration of the vote at the Annual Meeting on the Company’s proposal on the frequency of holding an advisory vote on NEO compensation, the next advisory vote on NEO compensation is expected to take place at the 2018 annual meeting of shareholders.

Vote Required for Approval

The affirmative vote of a majority of the votes duly cast by the holders of Common Stock is required to approve this proposal ( i.e. , the number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal). However, the vote on executive compensation is advisory and, therefore, not binding on the Company, the Board or the Compensation Committee. The Board and the Compensation Committee will consider the outcome of the vote when making future executive compensation decisions.

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Proposal 4: Advisory Vote on the Frequency of Holding an Advisory Vote to Approve Named Executive Officer Compensation

In accordance with SEC rules, the Company is providing shareholders the opportunity to vote, on an advisory basis, on whether future advisory votes to approve NEO compensation should be held every one, two or three years.

The Company has provided shareholders the opportunity to vote, on an advisory basis, on NEO compensation each year starting with the 2011 annual meeting of shareholders. The Board has determined that continuing to include a proposal for shareholders to vote, on an advisory basis, on NEO compensation every year is appropriate for the Company and its shareholders because shareholders have expressed a preference for annual votes not only in the 2011 advisory vote on the subject, but also during their engagement with the Company. Subject to both the earlier closing of the Merger and the Board’s consideration of the vote on this proposal, the Company expects the next advisory vote on NEO compensation to take place at the 2018 annual meeting of shareholders.

Shareholders may cast their vote on their preferred voting frequency by choosing the option of one year, two years or three years or may abstain from voting. In considering this vote, shareholders may wish to review the information presented in connection with Proposal 3 (the advisory vote to approve NEO compensation) on page 22 and in the “Compensation Discussion and Analysis” beginning on page 47.

Vote Required for Approval

The vote on this proposal is not intended to approve or disapprove the recommendation of the Board. If one of the frequency options (one year, two years or three years) receives the vote of a majority of the votes duly cast by the holders of Common Stock, it will be the frequency preferred by shareholders. However, the vote is advisory and, therefore, not binding on the Company or the Board. The Board will consider the vote when deciding whether shareholders are provided an advisory vote to approve NEO compensation every one, two or three years. Based on the expected timing of the Merger, the Company does not expect to provide shareholders another advisory vote on NEO compensation.

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CORPORATE GOVERNANCE

Strong Governance Practices

Time Warner has strong corporate governance practices and policies, including the Corporate Governance Policy (initially adopted in 2002), which help ensure that the Board not only provides independent oversight of management, but also has the experience, expertise and information to work effectively with management in making strategic and other key business decisions for the Company. Because corporate governance practices evolve, the Board reviews its Corporate Governance Policy, committee charters, and other governance documents at least annually and updates them as necessary or appropriate, taking into account the effectiveness of the Company’s policies and practices, legal requirements, industry practices and shareholder views.

Key Examples of Strong Governance Practices

Key examples of Time Warner’s long-standing commitment to strong corporate governance policies and practices include the following:

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Proxy Access

In January 2016, the Board amended the Company’s By-laws to implement proxy access, which provides shareholders the ability to nominate individuals for election as a director and to have the nominee included in the Company’s proxy statement and proxy. The Board’s adoption of proxy access followed (i) discussions with the Company’s major institutional shareholders beginning in 2014, including a series of conversations in autumn 2015 and early 2016 with institutional shareholders representing over 40% of the Company’s outstanding shares of Common Stock, which included discussions of their views on specific proxy access provisions; (ii) a careful evaluation by the Nominating Committee of shareholder views, policies and votes at other companies on proxy access, evolving practices at other large corporations, relevant academic research, the potential impact on the Company of the adoption of proxy access, alternatives to proxy access and proxy access frameworks adopted by other companies; and (iii) the receipt of a shareholder proposal in late December 2015 requesting the Company adopt proxy access with 3% ownership/3-year holding requirements. The Company’s proxy access provision has the following key features:

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The Board’s adoption of proxy access enhanced shareholders’ rights without taking away any of the existing rights shareholders had to nominate directors. The Nominating Committee also amended the Policy Statement regarding Director Nominations to provide that, if timely requested by the shareholder(s) who nominate director candidates through proxy access, the Committee will review proxy access candidates using the same criteria it applies to other new director candidates.

The Board believes the Company’s proxy access framework is responsive to the views expressed by the Company’s shareholders, strikes an appropriate balance between enhancing shareholder rights and adequately protecting the interests of all shareholders, provides shareholders a meaningful voice in the nomination and election of directors and is consistent with prevailing practices and the proxy access frameworks adopted by other Fortune 500 companies.

By-law Amendment in Connection with the AT&T Merger Agreement

In connection with entering into the Merger Agreement with AT&T, the Board amended the By-laws to provide that, unless the Company consents in writing to an alternative forum, any of the following types of lawsuits must be brought in the Delaware courts: (i) any shareholder action brought on behalf of the Company, (ii) any claim asserting a breach of a fiduciary duty owed by any current or former director, officer or shareholder of the Company to the Company or its shareholders, (iii) any state law-based claims arising under the General Corporation Law of the State of Delaware, (iv) any claims seeking to enforce remedies under the Company’s Certificate of Incorporation or By-laws, (v) any claims as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Delaware courts, or (vi) claims governed by the internal affairs doctrine (collectively, the “Covered Claims”). The Board believes that the adoption of this amendment to the By-laws was in the best interests of the Company and its shareholders. The Delaware courts are best suited to address any Covered Claims given that the Company is incorporated in Delaware and the Delaware courts have expertise in overseeing claims governed by Delaware law, including in the context of mergers and acquisitions. In addition, designating the Delaware courts as the exclusive forum for any Covered Claims reduces the costs of litigation compared to litigation conducted in multiple jurisdictions as well as the risk of disparate outcomes.

Shareholder Engagement

The Board values the views of the Company’s shareholders and believes shareholder engagement is a key component of its strong governance practices. For more than a decade, the Company has had a practice of engaging with shareholders on governance and related matters throughout the year. In the period prior to the 2016 annual meeting of shareholders, the Company contacted its 100 largest shareholders, representing over 50% of the Company’s outstanding shares of Common Stock. Following the 2016 annual meeting, the Company continued to engage with shareholders on a range of topics, including executive compensation matters, such as the performance measures used in the executive compensation program and changes to the Company’s secondary peer group, and governance and corporate responsibility matters, reaching out to shareholders representing approximately 45% of the Company’s outstanding shares of Common Stock. The Company also contacted shareholders representing over 50% of the Company’s outstanding shares of Common Stock regarding the Merger in connection with the special meeting of shareholders. The Board and its committees are regularly updated on shareholder feedback and consider the views of shareholders in making their decisions.

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Highly Qualified and Independent Directors

Time Warner’s Board consists of ten highly qualified, skilled and dedicated directors, nine of whom are independent. These directors possess a combination of qualifications, skills and experiences that enable them to provide effective oversight of the Company and management. Mr. Barksdale will retire from the Board at the Annual Meeting in accordance with the retirement provisions in the Corporate Governance Policy and, in light of the pending Merger, the size of the Board will be reduced and the position not filled with a new director. For a detailed discussion of the qualifications, skills and experience of each of the nominees for director, see “Background of Director Nominees” beginning on page 11.

To conclude that a director is independent, the Board must determine that the director has no material relationship with the Company or its subsidiaries and that the director is free of any other relationship that would interfere with the director’s exercise of independent judgment. The Board has established guidelines on director independence that address employment and commercial relationships that may affect a director’s independence, as well as categories of relationships that are not deemed material for purposes of director independence. In addition to applying these guidelines, which are included in the Corporate Governance Policy, the Board considers the NYSE listing standards and the Company’s By-laws. Based on its annual review of director independence, the Board determined that all of the current directors and all of the nominees for director are independent, except for Mr. Bewkes, who is an executive officer of the Company and thus cannot qualify as an independent director. In determining the independence of the Company’s directors, as described under “Transactions Considered in Making Independence Determinations” beginning on page 36, the Board considered relevant transactions, relationships and arrangements as required by the guidelines, NYSE listing standards and the Company’s By-laws.

Board Leadership

The current leadership structure consists of one individual serving as Chairman of the Board and CEO and an independent director serving as Lead Independent Director with meaningful responsibilities and authority, who serve as part of a Board consisting of ten engaged and effective directors, nine of whom are independent. The Board’s Policy on Determining the Leadership Structure of the Board of Directors requires the Nominating Committee and the Board to conduct an annual review of the Board’s leadership structure. In its annual review in January 2017, the Board determined that the current leadership structure is effective and continues to be the optimal structure for the Company.

Lead Independent Director’s Authority and Responsibilities

The Lead Independent Director’s authority and responsibilities include:

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Selection of Lead Independent Director

The Corporate Governance Policy provides that the Chair of the Nominating Committee will serve as Lead Independent Director unless the independent directors determine to appoint another independent director to the role. Stephen Bollenbach served as Lead Independent Director from May 2012 until his death in October 2016. Mr. Bollenbach had more than 15 years of leadership experience and extensive knowledge and experience in finance and accounting matters from senior roles at several major companies with international operations, including from serving as Chief Executive Officer of Hilton Hotels Corporation and Chief Financial Officer of The Walt Disney Company. Mr. Bollenbach also had deep knowledge of the Company from his more than 15 years of service as a director, including from previously serving as Chair of two of the Board’s committees.

Upon Mr. Bollenbach’s death, Robert Clark became Lead Independent Director pursuant to the Corporate Governance Policy. At its next meeting, in late October 2016, the Nominating Committee (without Mr. Clark participating) considered whether to recommend that Mr. Clark or another director should serve as Lead Independent Director. The Nominating Committee reviewed Mr. Clark’s background and skills and concluded they are well matched to the role of Lead Independent Director, particularly given that a significant focus of the Company during the coming year would be on the consummation of the Merger. Mr. Clark has 14 years of leadership experience as a former Dean of Harvard Law School and expertise in corporate law (including mergers and acquisitions and corporate governance), finance and regulation. Mr. Clark has deep knowledge of the Company from his years of service as a director, his service on the Audit Committee, as well as his effective independent leadership serving as Chair of the Nominating Committee. As a result of its review, the Nominating Committee recommended to the Board that Mr. Clark remain as Lead Independent Director.

Policy on Determining the Leadership Structure of the Board of Directors

For more than a decade, the Nominating Committee and Board have annually reviewed the leadership structure of the Board. In January 2009, the Board enhanced and further documented the Company’s practices in this area by adopting the Policy on Determining the Leadership Structure of the Board of Directors, which provides for the review of the Board’s leadership structure and the performance of the individuals who serve in Board leadership positions annually and whenever there are changes in the individuals serving in Board leadership positions. As part of this review, the Nominating Committee evaluates:

The Nominating Committee makes its recommendations to the Board, which is responsible for approving the leadership structure of the Board.

Determination of Current Leadership Structure

In January 2017, on the recommendation of the Nominating Committee, the Board determined that the current Board leadership structure continues to work effectively and is appropriate for Time Warner at this time. In reaching its determination, the Board considered a number of factors, including the following:

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The report on the Board’s determination of its leadership structure is posted on the Company’s website at www.timewarner.com/leadership .

Board and Committee Responsibilities

Board Responsibilities

The Board’s primary responsibility is to seek to maximize long-term shareholder value. The Board selects senior management of the Company, oversees and monitors the performance of management and the Company, and provides advice and counsel to management. The Board annually, or more often, as circumstances warrant, reviews the Company’s strategy and approves a long-range plan that includes an annual budget and capital plan. The Board reviews and approves transactions pursuant to guidelines the Board has established and reviews from time to time.

Board’s Role in Company Strategy

While the formulation and implementation of the Company’s strategy is primarily the responsibility of management, the Board plays an active role with respect to the strategy. This includes not only monitoring progress made in executing the Company’s strategy, but also regularly evaluating the strategy in light of evolving business, industry, and global operating and economic conditions. The Board carries out its role primarily through regular strategic reviews and discussions with management, which include both broad-based presentations and more in-depth analyses and discussions of specific areas of focus. For several years, the Board has held a full-day meeting devoted to the Company’s strategy. In addition, regular Board meetings throughout the year include discussions with management of the Company or senior operating executives of the Company’s divisions on a key aspect of the strategy, significant initiatives to implement the strategy, or developments in or affecting an area of the Company’s businesses, or on trends, competitive positioning, and emerging challenges and opportunities in the media and entertainment industry. The Board also reviews the strategy, including actions taken and planned to implement the strategy, as part of its review and approval of the annual budget and long-range plan. In addition, in determining whether to approve the entry into the Merger Agreement, the Board considered the Company’s strategic direction and prospects, including the Board’s view that the Merger would accelerate, and reduce the risk in, the Company’s strategy to distribute content across platforms, including through services offered directly to consumers, and develop more targeted advertising offerings.

The Board’s oversight of risk management (as described below) enhances the directors’ understanding of the risks associated with the Company’s strategy and its ability to provide guidance to and oversight of senior management in executing the strategy. The Lead Independent Director helps facilitate the Board’s oversight of strategy by ensuring directors receive adequate information about the Company’s strategy, key initiatives and operations.

Oversight of Risk

The Board is charged with general oversight of the management of the Company’s risks. The Board considers, as appropriate, risks to the Company among other factors in reviewing the Company’s strategy, long-range plan, budget, capital plan and major transactions. The Board carries out its risk oversight function both as a whole and through delegating to the Board committees the oversight of risks that come within the committee’s substantive areas, as set forth in the listing of committee responsibilities. In particular:

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In fulfilling the Board’s responsibilities, directors have full access to the Company’s management, internal and external auditors, and outside advisors selected by the Board or its committees.

Executive Sessions of the Board

The Company’s independent directors generally meet by themselves, without management or any non-independent directors present, at each regularly scheduled Board meeting, and at other times upon the request of any independent director. These executive sessions are led by the Lead Independent Director, except when it is more appropriate for the Chair of the committee that has primary responsibility for the matter being discussed to lead the discussion.

Board Meetings and Attendance

Board Meetings . The Board generally meets at least seven times each year; during 2016, the Board met 10 times.

Attendance . Each incumbent director attended at least 75% of the aggregate of (i) the total number of Board meetings during 2016 and (ii) the total number of meetings of committees on which such member served during 2016 (or the period of 2016 during which the director was a member of the committee, if less than the full year). The Company’s directors are encouraged and expected to attend the annual meetings of the Company’s shareholders. Ten of the eleven directors nominated for election at the 2016 annual meeting of shareholders attended that meeting. In addition, most of the directors attended the special meeting of shareholders on February  15, 2017.

Board Committees and their Responsibilities

The Board has three standing committees: the Audit Committee, the Nominating Committee and the Compensation Committee . All members of the committees are independent and satisfy the standards of independence applicable to the respective committee . Each committee meets periodically throughout the year, reports its actions and recommendations to the Board, evaluates its performance annually and holds regular executive sessions at which management is not present. Except as otherwise prohibited by law or Time Warner’s Certificate of Incorporation or By-laws, each committee may delegate its responsibilities to subcommittees or individuals.

Each committee is authorized to retain its own outside consultants, legal counsel and other advisors, as it desires. The Compensation Committee’s charter requires that the Committee assess the independence of any compensation consultant, legal counsel or other advisor prior to retaining the advisor or receiving advice from the advisor (subject to certain exceptions). The assessment considers factors relevant to such advisor’s independence, including the factors specified in the NYSE listing standards. The Nominating Committee’s charter contains similar requirements with respect to any consultant, legal counsel or other advisor who will provide the Committee advice regarding non-employee director compensation.

The Board reviews and determines the membership of the Board committees annually, with input from the Nominating Committee. As part of committee succession planning, because of the anticipated retirements of several directors over the next few years, three of whom were serving on the Nominating Committee, in June 2016, the Board approved the rotation of Fred Hassan off the Audit Committee and onto the Nominating Committee. The Board determined that Mr. Hassan was a particularly good fit for the Nominating Committee given his deep corporate and board experience. Mr. Hassan served as former Chairman and Chief Executive Officer of Schering Plough Corporation and Pharmacia Corporation; and as a non-executive Chairman of Avon Products Inc.

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Nominating Committee:
Robert C. Clark Chair and Lead Independent Director		Committee Members : James L. Barksdale, William P. Barr, Robert C. Clark (Chair), Jessica P. Einhorn and Fred Hassan   Number of Meetings in 2016 : 5
Primary Responsibilities of the Committee : The Nominating Committee is responsible for the following:   •      corporate governance, including regulatory developments relating to corporate governance,   •      director nominations,   •      Board leadership structure,   •      Board committee structure and appointments,   •      Chairman and CEO performance evaluations and CEO succession planning,   •      annual Board performance evaluations,   •      non-employee director compensation,   •      shareholder proposals and communications,   •      related person transactions review and approval, and   •      the Company’s public policy and corporate responsibility activities.

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