CWB-Management Proxy Circular-2023-EN

Selection of Comparator Peer Group

To ensure compensation competitiveness, the HR Committee regularly evaluates overall executive compensation against a peer group of Canadian organizations that are of comparable size and complexity to CWB.

Meridian periodically assists in the review and determination of a comparator peer group. In 2022, the HR Committee retained Meridian to conduct a review of the peer group used for executive compensation benchmarking. As a result of this review, the HR Committee, after consulting with Meridian, confirmed the following selection criteria and peer group:

Peer Selection Criteria

• Canadian public companies in the financial sector. • Financial parameters were used to narrow the field of peers: - Total company assets was the main screening measure; candidates would ideally have assets between 0.33x and 3x the total assets of CWB, although out-of-range peers were also considered. - Revenue and market capitalization were used as secondary measures, also with a range between 0.33x and 3x. • Reviewed additional factors, such as business descriptions and geographic location for business similarities and direct talent competitors. • Considered CWB’s existing compensation benchmarking peers (e.g., companies viewed as significant competitors for business) an d to the peer groups used by certain other companies in the Canadian financial sector.

Comparator Peer Group for Overall Compensation Benchmarking

• ATB Financial • CI Financial Corp. • Definity Financial Corporation • ECN Capital Corp. • E-L Financial Corporation Limited • EQB Inc. • First National Financial Corporation • Home Capital Group Inc. • HSBC Bank Canada • iA Financial Corporation Inc. • IGM Financial Inc.

• Intact Financial Corporation • Laurentian Bank of Canada • TMX Group Limited

Compensation Benchmarking and Assessment

The HR Committee reviews and benchmarks total compensation for our executives against the comparator peer group to ensure we provide competitive compensation.

There are no Canadian publicly traded financial institutions of a similar size with a similar business mix and geographic focus as CWB. As a result, the HR Committee also uses executive compensation survey data to help determine base salary, incentive compensation, and total compensation for senior executives. The benchmarking data, along with other relevant factors such as internal equity, are used to develop a target compensation mix and an aggregate compensation package for each executive position in the median range of the comparator market compensation data. Throughout the compensation benchmarking and assessment process, the HR Committee engages and receives expert advice from its independent compensation consultant who provides competitive data and market trends, and the HR Committee may consider management recommendations.

2. SET CWB AND INDIVIDUAL PERFORMANCE OBJECTIVES

The HR Committee establishes financial and non-financial performance objectives for compensation purposes. Financial and operational performance objectives are based on Board-approved medium-term financial and operational performance targets. Non-financial performance objectives include specific strategic initiatives and leadership objectives, focused on delivering strategic results that are best for people, best for clients and best for investors. For example, our ESG approach forms part of the executive compensation metrics, integrating categories such as client satisfaction and employee engagement into executive LTIP and STIP qualitative performance factors, and diversity metrics and implementation of ESG strategy into the CEO and CFO STIP qualitative performance factors, respectively. The HR Committee sets target compensation levels for each executive officer based on the benchmarking and assessment process described above. In addition, the CPCO and the external compensation consultant support the HR Committee and provide relevant market data and other information as requested to inform the HR Committee ’ s deliberations.

3. EVALUATE PERFORMANCE AGAINST OBJECTIVES

Following the end of the fiscal year, the CEO provides the HR Committee with his assessment of executive officer performance and provides recommendations regarding incentive compensation awards. The CEO also performs a self-assessment of his own performance. The HR Committee then c onsiders CWB’s performance by reference to key financial and operational performance metrics, as well as individual executive officer performance on strategic initiatives and leadership objectives.

4. DETERMINE PERFORMANCE-BASED COMPENSATION AWARDS

Based on the achievement of specified financial and operational performance metrics and individual performance objectives, the HR Committee determines the appropriate STIP compensation to be awarded to each executive officer for that fiscal year. The HR Committee also determines the amount of the LTIP pool for the next fiscal year. The HR Committee exercises appropriate discretion to adjust incentive compensation as described under the heading “Executive Compensation Philosophy” on page 35.

41 | Canadian Western Bank- Management Proxy Circular

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