COMPENSATIONDISCUSSIONANDANALYSIS AnnualIncentivePlan TheCompensationCommitteedetermineseachofourNEOsannualtargetvaluesbasedoninformationavailableatthe beginningoftheyear(or,iflater,at the time of appointment),includingcompanyandindividualperformanceandpotential andcompetitivemarketdata.The2022LTIawardsforourNEOsweredividedequallyinto(i)PBRSUswithathree-year performanceperiodand(ii)service-basedRSUsthatvestoverthreeyears(withone-thirdoftheRSUsvestingonthefirst anniversaryof the grant date, and the remaindervestingratablyeachsubsequentquarterovertheremainingvesting period). Basedontheaboveguidelines,inJanuary2022,theCompensationCommitteeapprovedthetarget2022LTI awardsforourthen-servingNEOs.Seethe“CFO-TransitionRelatedCompensation”sectionforadiscussionofthegrants madetoMr.JorgensenandMs.RabinovitchinconnectionwiththeirappointmentstotheCFOrole. 2022 2022 Target 2022 1 TargetLTI PBRSUs Service-Based NEO GrantValue($) (Shares) RSUs(Shares) 2 DanielH.Schulman $24,000,000 88,396 88,396 3 Gabrielle Rabinovitch $ 2,750,000 10,129 10,129 PeggyAlford $10,000,000 36,832 36,832 JonathanAuerbach $10,000,000 36,832 36,832 AaronKarczmer $10,000,000 36,832 36,832 4 JohnD.Rainey $10,000,000 36,832 36,832 MarkBritto $15,000,000 55,248 55,248 1 ThetargetnumberofPBRSUsandnumberofservice-basedRSUsgrantedweredeterminedbydividingthetotalgrantvalueoftheawardbytheAverageClosingPrice.ThePBRSUs andservice-basedRSUsweregrantedonMarch1,2022tothethen-servingNEOs.InconnectionwithMs.RabinovitchsappointmentasinterimCFO,shewasgrantedadditional PBRSUsandRSUswithanaggregatetargetgrantdatevalueof$3milliononJune15,2022,andinconnectionwithherappointmentasactingCFOshewasgrantedadditionalRSUs with an aggregatetargetgrantdatevalueof$1.25milliononOctober15,2022andPBRSUswithanaggregatetargetgrantdatevalueof$1.25milliononMarch1,2023.Newhire PBRSUsandRSUswithanaggregatetargetgrantdatevalueof$10millionweregrantedtoMr.JorgensenonSeptember15,2022. 2 FollowingdiscussionwithMr.SchulmanandtakingintoaccountoverallmarketconditionsandCompanyperformance,theCompensationCommitteedecreasedMr.Schulmans annualtargetvaluefrom$27millionin2021. 3 Ms.Rabinovitchwasawardedher2022LTIawardspriortobecominganNEO.ShereceivedtwosetsofLTIawardsonMarch1,2022:herannualawardwithatargetvalueof $2,500,000andasupplementalkeytalentawardwithatargetvalueof$250,000. 4 Mr. Rainey forfeited his 2022 annual LTI Awards in connectionwith his resignation. Performance-BasedRestrictedStockUnits(PBRSUs) In January 2022, the CompensationCommitteeapprovedthefollowingstructureforthemulti-yearPBRSUsgrantedin2022 (the “2022-2024PBRSUs”). • Three-yearperformanceperiodfromJanuary1,2022throughDecember31,2024,toemphasizetheimportanceoflong- term, sustainedstrategicgrowth. • AwardstobesettledinsharesofPayPalcommonstock,subjecttotheCompensationCommitteesapprovalofthe level of achievementagainstthepre-establishedgoalsfortwoperformancemeasures:“FX-Neutral”Revenue compoundannualgrowthrate(“CAGR”)andFreeCashFlowCAGR. PerformanceMeasuresandRationales TheCompensationCommitteebelievesthatmeasuringCAGRoverthethree-yearperformanceperiodisanappropriate performancemeasureasitisalignedwithourlong-termgoalofgrowingrevenueandfreecashflow. Thefollowingtabledescribesthetwoperformancemeasuresforthe2022-2024PBRSUsandtheCompensation Committeesrationalefortheirselection. Measure Weighting Definition Purpose The Compensation Committee believes that the FX-Neutral Revenue FX-Neutral Revenue calculated on a fixed measure is an important factor in stockholder value creation and Revenue 50% foreign exchange basis (referred makes our executive officers accountable for driving profitable CAGR to as “FX-Neutral”). growth while making appropriate tradeoffs between investments that increase future revenue growth and operating expense. “Free Cash Flow” as described in The Compensation Committee believes that the Free Cash Flow Free Cash “AppendixA: Reconciliation of Non- measure reinforces the importance of PayPals cash generation Flow CAGR 50% GAAP Financial Measures” to this capability so we can finance continued growth and investment proxy statement. requirements and remain well-positioned to take advantage of inorganic growth opportunities. 62 •2023ProxyStatement