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Recent Compensation Actions

In late 2012, the Company began implementing pricing and other strategic investments designed to position the Company for future growth. In evaluating the 2013 design of the Company’s executive compensation program, the Compensation Committee considered that many of the strategic investments implemented by the Company beginning in late 2012 were expected to have a negative impact on 2013 financial performance. Accordingly, for 2013, many of the compensation decisions were designed to further align the program with the Company’s mid- and long-term operating plans, increase participant accountability, and drive motivation and retention beyond 2013. These decisions included:

• No Executive Base Salary Increases for 2013 or 2014: There was no change in our named executive officers’ base salary levels for 2013 or 2014 from levels effective March 2012.
   
• No 2012 Chief Executive Officer Bonus: Based on 2012 Company performance, our Chief Executive Officer did not receive a bonus in 2013.
   
• 2013 Annual Incentive Includes Restricted Stock Unit Component: In 2013, we modified the Company’s Annual Incentive Plan design to include individual and/or business unit performance objectives, and a restricted stock unit award to be granted based on the achievement of strategic objectives and a threshold operating income goal to further focus participants on the long-term performance of the Company.
   
• 2013 Long-Term Incentive Includes TSR Modifier: We modified the Company’s 2006 Long-Term Incentive Plan (the “Long-Term Incentive Plan”) design to include 2013 and 2014 financial performance metrics, while still maintaining a longer-term perspective in the program with a total stockholder return (“TSR”) payout modifier.
   
• Realizable Compensation Lower than Reported Compensation: Our named executive officers’ realizable compensation has been lower than the compensation disclosed in our Summary Compensation Table for fiscal years 2011 to 2013. See the “2013 Realizable Compensation Table” on page 42.

Chief Executive Officer Compensation

For 2013 performance, Mr. Ersek received a cash payout under the 2013 Annual Incentive Plan of 84% of target, as compared to no payout for 2012 performance. Because he is the leader of the Company, the Compensation Committee based Mr. Ersek’s cash opportunity under the Annual Incentive Plan entirely on the achievement of corporate financial goals, as measured by total revenue and operating income. In 2013, the Compensation Committee adjusted the performance targets associated with these performance measures from the levels set in 2012 to reflect that many of the strategic actions implemented by the Company beginning in late 2012 were designed to position the Company for future growth, and were expected to have a negative impact on 2013 financial performance. The Company achieved revenue and operating income at 99.5% and 100.1% of target, respectively, for an overall cash payout achievement level of 84%.

Also, under the 2013 Annual Incentive Plan, Mr. Ersek had an opportunity to receive a restricted stock unit award for various levels of achievement of strategic performance objectives. Achievement of the Company’s internal operating plan for these strategic objectives would result in a restricted stock unit payout equal to 25% of target and maximum achievement would result in a payout equal to 75% of target. Mr. Ersek substantially met key objectives in support of the Company’s 2013 strategic objectives, as demonstrated by consumer-to-consumer transaction growth, revenue growth in electronic channels, and growth in business-to-business revenue described under “-Executive Summary-Business Overview”, and “-The Western Union Executive Compensation Program – Annual Incentive Compensation,” below in the Compensation Discussion and Analysis. Accordingly, the committee certified a restricted stock unit award payout under the 2013 Annual Incentive Plan of 17% of target, based on the Company’s achievement of its strategic performance goals (versus a payout of 25% of target that would have been paid had the Company achieved its internal plan for its strategic performance goals).

The following chart demonstrates that variable, performance-based pay elements comprised approximately 88% of the targeted 2013 annual compensation for Mr. Ersek (consisting of target payout opportunity under the Annual Incentive Plan and stock option and performance-based restricted stock unit components under the Long-Term Incentive Plan). Pay is based on the annual base salary and target incentive opportunities applicable to Mr. Ersek as of December 31, 2013.

Since a significant portion of Mr. Ersek’s compensation is both performance-based and “at risk,” we are providing the following supplemental graph to demonstrate the difference between the compensation granted to Mr. Ersek as required to be reported by the Securities and Exchange Commission (the “SEC”) rules in the 2013 Summary Compensation Table, and the compensation “realizable” by him for 2011 to 2013. For each of the years reported, the compensation “realizable” by Mr. Ersek is lower than the amount required to be reported by the SEC in the Summary Compensation Table.

The Board of Directors (“Board of Directors” or “Board”) of The Western Union Company (“Western Union” or the “Company”) is soliciting your proxy to vote at the 2014 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 16, 2014 at 8:00 a.m., local time, and any adjournment or postponement of that meeting. The meeting will be held at 505 Fifth Avenue, 7th Floor, New York, NY 10017.

In accordance with rules and regulations of the SEC, instead of mailing a printed copy of our proxy materials to each stockholder of record or beneficial owner, we furnish proxy materials, which include this Proxy Statement and the accompanying Proxy Card, Notice of Meeting, and Annual Report to Stockholders, to our stockholders over the Internet unless otherwise instructed by the stockholder. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials.

The Notice of Internet Availability of Proxy Materials was first mailed on or before April 2, 2014 to all stockholders of record as of March 20, 2014 (the “Record Date”). The only voting securities of the Company are shares of

the Company’s common stock, $0.01 par value per share (the “Common Stock”), of which there were 538,854,385 shares outstanding as of the Record Date. The closing price of the Company’s Common Stock on the Record Date was $16.50 per share.

The Company’s Annual Report to Stockholders, which contains consolidated financial statements for the year ended December 31, 2013, accompanies this Proxy Statement. You also may obtain a copy of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 that was filed with the SEC, without charge, by writing to Investor Relations, The Western Union Company, 12500 East Belford Avenue, Mailstop M23IR, Englewood, CO 80112. If you would like to receive a copy of any exhibits listed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, please call (866) 405-5012 or submit a request in writing to Investor Relations at the above address, and the Company will provide you with the exhibits upon the payment of a nominal fee (which fee will be limited to the expenses we incur in providing you with the requested exhibits). The Company’s Annual Report on Form 10-K and these exhibits are also available in the “Investor Relations” section of www.wu.com.

The Board of Directors was previously divided into three classes. At the Company’s 2012 Annual Meeting of Stockholders, the Company’s stockholders approved a proposal to amend the Company’s Amended and Restated Certificate of Incorporation to declassify the Board of Directors such that each director standing for election or re-election will be elected to a one-year term beginning with the directors elected at the 2013 Annual Meeting of Stockholders. The terms of office of Mr. Devitre, Mr. Ersek, Mr. Greenberg, Ms. Holden, Ms. Fayne Levinson, Mr. von Schimmelmann, Ms. Fragos Townsend, and Mr. Trujillo expire at the 2014 Annual Meeting of Stockholders. Mr. von Schimmelmann has declined to stand for re-election. Upon the recommendation of the Corporate Governance and Public Policy Committee, the Board of Directors appointed Ms. Fragos Townsend as a director in August 2013, subject to election by the stockholders at the 2014 Annual Meeting. Ms. Fragos Townsend was originally recommended to the Corporate Governance and Public Policy Committee by a search firm. Mr. Devitre, Mr. Ersek, Mr. Greenberg, Ms. Holden, Ms. Fayne Levinson, and Mr. Trujillo have been nominated for re-election, and Ms. Fragos Townsend has been nominated for election, through the 2015 Annual Meeting of Stockholders, or until a successor is elected and qualified. (See the “Board of Directors Information” section of this Proxy Statement for information concerning all directors.) In the case of a vacancy, the Board of Directors may elect another director as a replacement, may leave the vacancy unfilled or may reduce the number of directors.

If re-elected or elected, as applicable, the terms of Mr. Devitre, Mr. Ersek, Mr. Greenberg, Ms. Holden, Ms. Fayne Levinson, Ms. Fragos Townsend, and Mr. Trujillo will expire at the 2015 Annual Meeting of Stockholders. The terms of Mr. Goodman, Mr. Mendoza, and Mr. Miles also expire at the 2015 Annual Meeting of Stockholders. At the 2015 Annual Meeting of Stockholders, and at subsequent Annual Meetings of Stockholders, all directors will be elected on an annual basis for one-year terms.

The Company’s By-Laws require directors to be elected by the majority of votes cast with respect to such director in uncontested elections (the number of shares voted “for” a director must exceed the number of votes cast “against” that director). In a contested election (a situation in which

the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors.

Under the Company’s By-Laws, if an incumbent director is not elected, the director will promptly tender his or her resignation to the Board of Directors. The Corporate Governance and Public Policy Committee will make a recommendation to the Board of Directors as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board of Directors will act on the resignation, taking into account the Corporate Governance and Public Policy Committee’s recommendation, and publicly disclose (by a press release, a filing with the SEC or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days following certification of the election results. If such incumbent director’s resignation is not accepted by the Board of Directors, such director will continue to serve until the next annual meeting and until his or her successor is duly elected or his or her earlier resignation or removal.

Your shares will be voted as you instruct via the telephone or Internet voting procedure described on the Proxy Card or the Notice of Internet Availability of Proxy Materials, or as you specify on your Proxy Card(s) if you elect to vote by mail. If unforeseen circumstances (such as death or disability) require the Board of Directors to substitute another person for any of the director nominees, your shares will be voted for that other person.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO RE-ELECT MR. DEVITRE, MR. ERSEK, MR. GREENBERG, MS. HOLDEN, MS. FAYNE LEVINSON AND MR. TRUJILLO, AND TO ELECT MS. FRAGOS TOWNSEND, AS DIRECTORS TO SERVE UNTIL THE 2015 ANNUAL MEETING OF STOCKHOLDERS OR UNTIL THEIR RESPECTIVE SUCCESSORS ARE ELECTED AND QUALIFIED.

The Board of Directors believes that strong corporate governance is key to long-term stockholder value creation. Over the years, our Board of Directors has responded to evolving governance standards by enhancing our practices to best serve the interests of the Company’s stockholders, including:

You can learn more about our corporate governance by visiting the “Investor Relations, Corporate Governance” portion of the Company’s website, www.wu.com, or by writing to the attention of: Investor Relations, The Western Union Company, 12500 East Belford Avenue, Mailstop M23IR, Englewood, CO 80112.

The Board of Directors has adopted Corporate Governance Guidelines, which contain the standards that the Board of Directors will use to determine whether a director is independent. A director is not independent under these categorical standards if:

• The director is, or has been within the last three years, an employee of Western Union, or an immediate family member of the director is, or has been within the last three years, an executive officer of Western Union.
   
• The director has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from Western Union, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
   
• (i) The director is a current partner or employee of a firm that is Western Union’s internal or external auditor; (ii) the director has an immediate family member who is a current partner of such a firm; (iii) the director has an immediate family member who is a current employee of such a firm and personally works on Western Union’s audit; or (iv) the director or an immediate family member was within the last three years a partner or employee of such firm and personally worked on Western Union’s audit within that time.
   
• The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of Western Union’s present executive officers at the same time serves or served on that company’s compensation committee.

• The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, Western Union for property or services in an amount which, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of such other company’s consolidated gross revenues.
   
• The director is a current employee, or an immediate family member is a current executive officer, of a company which was indebted to Western Union, or to which Western Union was indebted, where the total amount of either company’s indebtedness to the other, in any of the last three fiscal years, exceeded 5% or more of such other company’s total consolidated assets.
   
• The director or an immediate family member is a current officer, director, or trustee of a charitable organization where Western Union’s (or an affiliated charitable foundation’s) annual discretionary charitable contributions to the charitable organization, in any of the last three fiscal years, exceeded the greater of $1 million or 5% of such charitable organization’s consolidated gross revenues.

The Board has reviewed the independence of the current directors under these standards and the rules of the New York Stock Exchange (the “NYSE”) and found Mr. Devitre, Mr. Goodman, Mr. Greenberg, Ms. Holden, Ms. Fayne Levinson, Mr. Mendoza, Mr. Miles, Mr. von Schimmelmann, Ms. Fragos Townsend and Mr. Trujillo to be independent.

The Board has a non-executive Chairman. This position is independent from management. The Chairman sets the agendas for and presides over the Board meetings as well as meetings of the independent directors. The Chief Executive Officer is a member of the Board and participates in its meetings. The Board believes that this leadership structure is appropriate for the Company at this time because it allows for independent oversight of management, increases management accountability, and encourages an objective evaluation of management’s performance relative to compensation.

The Board regularly devotes time during its meetings to review and discuss the most significant risks facing the Company, and management’s process for identifying, prioritizing, and responding to those risks. During these discussions, the Chief Executive Officer, the General Counsel, and the Chief Financial Officer present management’s process for assessment of risks, a description of the most significant risks facing the Company, and any mitigating factors, plans, or policies in place to address and monitor those risks. The Board has also delegated risk oversight authority to its committees.

Consistent with the NYSE listing standards, to which the Company is subject, the Audit Committee bears responsibility for oversight of the Company’s policies with respect to risk assessment and risk management and must discuss with management the major risk exposures facing the Company and the steps the Company has taken to monitor and control such exposures. The Audit Committee is also responsible for the oversight of the Company’s compliance with legal and regulatory requirements, which

represent many of the most significant risks the Company faces. During the Audit Committee’s discussion of risk, the Company’s Chief Executive Officer, General Counsel, Chief Financial Officer, Chief Compliance Officer, and Chief Internal Auditor present information and participate in discussions with the Audit Committee regarding risk and risk management.

While the Board committee with primary oversight of risk is the Audit Committee, the Board has delegated to other committees the oversight of risks within their areas of responsibility and expertise. For example, in light of the breadth and number of responsibilities that the Audit Committee must oversee, and the importance of the evaluation and management of risk related to the Company’s compliance programs and policies associated with anti-money laundering laws, including investigations or other matters that may arise in relation to such laws, the Board formed a Compliance Committee to assist the Audit Committee and the Board with oversight of those risks to such Committee in 2013 (this function was previously performed by the Corporate Governance and Public Policy Committee). The Compliance Committee reports regularly on these matters to the Board and Audit Committee and during the Compliance Committee’s meetings, each of the General Counsel and Chief Compliance Officer regularly present to and participate in discussions. In addition, the Compensation Committee oversees the risks associated with the Company’s compensation practices, including an annual review of the Company’s risk assessment of its compensation policies and practices for its employees and the Company’s succession planning process.

In February 2014, the Board approved resolutions appointing Ms. Fragos Townsend as Chair of the Compliance Committee in place of Mr. Greenberg, who will cease serving as a member of the Compliance Committee but continue to attend its meetings in his role as Chairman of the Board of Directors. The Board also approved resolutions appointing Ms. Fragos Townsend as a member of the Corporate Governance and Public Policy Committee. These changes are subject to, and will be effective upon the date of, the election by the stockholders of Ms. Fragos Townsend and the re-election by the stockholders of Mr. Greenberg as directors at the 2014 Annual Meeting of Stockholders.

Board and Committee Governing Documents

Each committee operates under a charter approved by the Board. The Company’s Audit Committee Charter, Compensation and Benefits Committee Charter, Corporate Governance and Public Policy Committee Charter, Compliance Committee Charter, and Corporate Governance Guidelines are available without charge through the “Investor Relations, Corporate Governance” portion of the Company’s website, www.wu.com, or by writing to the attention of: Investor Relations, The Western Union Company, 12500 East Belford Avenue, Mailstop M23IR, Englewood, CO 80112.

Audit Committee

Richard A. Goodman Committee Chair

Additional Committee Members: Dinyar S. Devitre, Linda Fayne Levinson, Roberto G. Mendoza and Michael A. Miles, Jr.

Meetings Held in 2013: 11

Primary Responsibilities: Pursuant to its charter, the Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to:

• integrity of the Company’s consolidated financial statements;

• compliance with legal and regulatory requirements;

• independent registered public accounting firm qualifications and independence; and

• performance of the Company’s internal audit function and independent registered public accounting firm.

Independence: Each member of the Audit Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company. Each member of the Audit Committee is financially literate, knowledgeable, and qualified to review financial statements. The Board has designated Mr. Goodman and Mr. Devitre as “financial experts” as defined by Item 407(d) of Regulation S-K.

Service on Other Audit Committees: No director may serve as a member of the Audit Committee if such director serves on the audit committees of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the Audit Committee. Currently, none of the Audit Committee members serve on more than three audit committees (including the Company’s Audit Committee).

Compensation and Benefits Committee

Betsy D. Holden Committee Chair

Additional Committee Members: Richard A. Goodman, Roberto G. Mendoza, and Solomon D. Trujillo

Meetings Held in 2013: 6

Primary Responsibilities: Pursuant to its charter, the Compensation Committee has the authority to administer, interpret, and take any actions it deems appropriate in connection with any incentive compensation or equity-based plans of the Company, any salary or other compensation plans for officers and other key employees of the Company, and any employee benefit or fringe benefit plans, programs or policies of the Company. Among other things, the Compensation Committee is responsible for:

• in consultation with senior management, establishing the Company’s general compensation philosophy, and overseeing the development and implementation of compensation and benefits policies;

• reviewing and approving corporate goals and objectives relevant to the compensation of the Chief Executive Officer and other executive officers, evaluating the performance of the Chief Executive Officer and other executive officers in light thereof, and setting compensation levels and other benefits for the Chief Executive Officer (with the ratification by the independent directors of the Board) and other executive officers based on this evaluation;

• reviewing and making recommendations to the Board regarding severance or similar termination agreements with the Company’s Chief Executive Officer or to any person being considered for promotion or hire into the position of Chief Executive Officer;

• approving grants and/or awards of options, restricted stock, restricted stock units, and other forms of equity-based compensation under the Company’s equity-based plans;

• reviewing with management and preparing an annual report regarding the Company’s Compensation Discussion and Analysis to be included in the Company’s Proxy Statement and Annual Report;

• in consultation with the Chief Executive Officer, reviewing management succession planning;

• reviewing and recommending to the Board of Directors compensation for non-employee directors; and

• periodically reviewing the overall effectiveness of the Company’s principal strategies related to human capital management, recruiting, retention, career development, and diversity.

Independence: Each member of the Compensation Committee meets the definitions of “outside director” under Section 162(m) of the Internal Revenue Code and “non-employee director” under Rule 16b-3 of the Exchange Act. Each member of the Compensation Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company.

Compliance Committee

Jack M. Greenberg Committee Chair and Chairman of the Board

Additional Committee Members: Dinyar S. Devitre, Hikmet Ersek (non-voting member), Michael A. Miles, Jr., and Frances Fragos Townsend

Meetings Held in 2013: 8

Primary Responsibilities: Pursuant to its charter, the Compliance Committee assists the Audit Committee and the Board in fulfilling the Board’s oversight responsibility for the Company’s compliance with legal and regulatory requirements. Among other things, the Compliance Committee is responsible for reviewing:

• the Company’s compliance programs and policies relating to anti-money laundering laws, including establishing procedures to be apprised of material investigations or other material matters that may arise in relation to such laws; and

• legal, compliance or other regulatory matters that may have a material effect on the Company’s business, financial statements or compliance policies, including material notices to or inquiries received from governmental agencies.

Independence: Each voting member of the Compliance Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company. The Board may appoint non-voting members to the Compliance Committee that are not independent from the Company. The Company’s Chief Executive Officer is currently a non-voting member of the Compliance Committee.

Corporate Governance and Public Policy Committee

Dinyar S. Devitre Committee Chair

Additional Committee Members: Betsy D. Holden, Linda Fayne Levinson, and Wulf von Schimmelmann

Meetings Held in 2013: 9

Primary Responsibilities: Pursuant to its charter, the Corporate Governance and Public Policy Committee is responsible for:

• recommending to the Board of Directors criteria for Board and committee membership;

• considering, in consultation with the Chairman of the Board and the Chief Executive Officer, and recruiting candidates to fill positions on the Board of Directors;

• evaluating current directors for re-nomination to the Board of Directors;

• recommending the director nominees for approval by the Board of Directors and the stockholders;

• recommending to the Board of Directors appointments to committees of the Board of Directors;

• recommending to the Board of Directors corporate governance guidelines, reviewing the corporate governance guidelines at least annually, and recommending modifications to the corporate governance guidelines to the Board of Directors;

• establishing and implementing self-evaluation procedures for the Board of Directors and its committees;

• reviewing stockholder proposals submitted for inclusion in the Company’s Proxy Statement;

• reviewing the Company’s related persons transaction policy, and as necessary, reviewing specific related person transactions; and

• reviewing and advising the Board of Directors regarding matters of public policy and social responsibility that are relevant to the Company or the industries in which the Company operates.

Independence: Each member of the Corporate Governance and Public Policy Committee meets the independence requirements of our Corporate Governance Guidelines, the NYSE and the Exchange Act, and as the Board has determined, has no material relationship with the Company.

The Company’s Board of Directors has developed a governance framework for Chief Executive Officer succession planning that is intended to provide for a talent-rich leadership organization that can drive the Company’s strategic objectives. Under its governance framework, the Board of Directors:

• Reviews succession planning for the Chief Executive Officer on an annual basis. As part of this process, the Chief Executive Officer reviews the annual performance of each member of the management team with the Board and the Board engages in a discussion with the

Chief Executive Officer and the Chief Human Resources Officer regarding each team member and the team member’s development;

• Maintains a confidential plan to address any unexpected short-term absence of the Chief Executive Officer and identifies candidates who could act as interim Chief Executive Officer in the event of any such unexpected absence; and

• Ideally three to five years before the retirement of the current Chief Executive Officer, manages the succession process and determines the current Chief Executive Officer’s role in that process.

Any stockholder or other interested party who desires to contact the non-management directors or the other members of the Company’s Board of Directors may do so by writing to: The Western Union Company, Board of Directors, 12500 East Belford Avenue, Mailstop M21A2, Englewood, CO 80112. Communications that are intended specifically for non-management directors should be

addressed to the attention of the Chairperson of the Corporate Governance and Public Policy Committee. All communications will be forwarded to the Chairperson of the Corporate Governance and Public Policy Committee unless the communication is specifically addressed to another member of the Board, in which case, the communication will be forwarded to that director.

Although the Company does not have a formal policy regarding attendance by members of the Board of Directors at the Company’s Annual Meeting of Stockholders, it encourages directors to attend.

Nine of our ten members of the Board of Directors serving at the time attended the Company’s 2013 Annual Meeting of Stockholders.

The Company’s Board of Directors is responsible for nominating directors for election by the stockholders and filling any vacancies on the Board that may occur. The Corporate Governance and Public Policy Committee is responsible for identifying, screening, and recommending candidates to the Board for Board membership. The

Corporate Governance and Public Policy Committee does not have any single method for identifying director candidates but will consider candidates suggested by a wide range of sources, including by any stockholder, director, or officer of the Company.

Director Qualifications

General criteria for the nomination of director candidates include experience, high ethical standards and integrity, skills, diversity, ability to make independent analytical inquiries, understanding of the Company’s business environment, and willingness to devote adequate time to Board duties—all in the context of an assessment of the perceived needs of the Board at that point in time. In exercising its director nomination responsibilities, the Corporate Governance and Public Policy Committee considers diversity in gender, ethnicity, background, and cultural viewpoints when considering director nominees, given the global nature of the Company’s business. However, the Board has not adopted a formal policy governing director diversity. The effectiveness of the nomination process is evaluated by the Board each year as part of its annual self-evaluation and by the Corporate Governance and Public Policy Committee as it evaluates and identifies director candidates.

Each director is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as a Board or Committee member. The Corporate Governance and Public Policy Committee will consider candidates for election to the Board suggested in writing by a stockholder and will make a recommendation to the Board using the same criteria as it does in evaluating candidates submitted by members of the Board of Directors. If the Company receives such a suggestion, the Company may request additional information from the candidate to assist in its evaluation.

Stockholder Nominees

Stockholders may submit nominations for director candidates by giving notice to the Secretary of the Company at 12500 East Belford Avenue, Mailstop M21A2, Englewood, CO 80112. The requirements for the submission of such stockholder nominations are set forth in Article II of the Company’s By-Laws, which are available on the Company’s website, www.wu.com.

Stockholder proposals, including stockholder director nominations, requested to be included in the Company’s Proxy Statement for its 2015 Annual Meeting of Stockholders must be received by the Company not later than December 3, 2014 and comply with the requirements of Rule 14a-8, if applicable, and the Company’s By-laws. Even if a proposal is not submitted in time to be considered for inclusion in the Company’s Proxy Statement for its 2015 Annual Meeting of Stockholders, a proper stockholder proposal or director

nomination may still be considered at the Company’s 2015 Annual Meeting of Stockholders, but only if the proposal or nomination is received by the Company no sooner than January 16, 2015 and no later than February 15, 2015 and otherwise complies with the Company’s By-Laws. All proposals or nominations a stockholder wishes to submit at the meeting should be directed to Corporate Secretary, The Western Union Company, 12500 East Belford Avenue, Mailstop M21A2, Englewood, CO 80112.

The Company’s Director’s Code of Conduct, Code of Ethics for Senior Financial Officers, Reporting Procedure for Accounting and Auditing Concerns, Professional Conduct Policy for Attorneys, and the Code of Conduct are available without charge through the “Investor Relations, Corporate Governance” portion of the Company’s website, www.wu.com, or by writing to the attention

of: Investor Relations, The Western Union Company, 12500 East Belford Avenue, Mailstop M23IR, Englewood, CO 80112. In the event of an amendment to, or a waiver from, the Company’s Code of Ethics for Senior Financial Officers, the Company intends to post such information on its website, www.wu.com.

Cash Compensation

In 2013, each outside director (other than our Non-Executive Chairman) received the following cash compensation for service on our Board and committees of our Board:

• an annual Board retainer fee of $85,000; and

• an annual committee chair retainer fee of $25,000 for the chairperson of each of the Audit Committee, the Compensation Committee, and the Corporate Governance and Public Policy Committee of our Board, and a $10,000 committee member retainer fee for each other member of the Audit Committee of our Board.

Equity Compensation

The 2013 outside director equity awards were granted pursuant to our 2006 Non-Employee Director Equity Compensation Plan and the Long-Term Incentive Plan. All director equity awards will be settled in shares of Common Stock. The purpose of these awards is to advance the interest of Western Union and its stockholders by encouraging increased stock ownership by our outside directors and by helping the Company attract, motivate, and retain highly qualified outside directors.

Each outside director, except for our non-United States resident director, has the option of electing to receive such director’s annual retainer fees described above in the form of (a) all cash, (b) a combination of cash, fully vested stock options, and fully vested stock units, (c) all fully vested stock options, (d) all fully vested stock units, (e) a combination of 75% fully vested stock options and 25% fully vested stock units, (f) a combination of 50% fully vested stock options and 50% fully vested stock units, or (g) a combination of 75% fully vested stock units and 25% fully vested stock options. Each outside director may also elect to receive such director’s annual equity grant in the form of any of the above alternatives, other than alternatives that include cash.

Each outside director (other than our Non-Executive Chairman) is eligible to receive an annual equity grant with a value of $130,000 for service on our Board and committees of our Board.

Compensation of Our Non-Executive Chairman

Our Non-Executive Chairman receives the following compensation in lieu of the compensation described above for our other outside directors:

• an annual retainer fee of $125,000; and

• an annual equity grant with a value of $350,000.

Our Non-Executive Chairman has the option to receive his annual retainer fee in the forms discussed above under “-Equity Compensation.”

Charitable Contributions

Outside directors may participate in the Company’s gift matching program on the same terms as Western Union’s executive officers and employees. Under this program, contributions up to $100,000 per calendar year that the director makes to the Western Union Foundation (the “Foundation”) without designating a recipient organization will be matched by the Company $2 for every $1 contributed. Contributions made or directed to be made to an eligible organization, as defined in the program, up to an aggregate amount of $25,000 per calendar year will be equally matched by the Company through the Foundation.

Reimbursements

Directors are reimbursed for their expenses incurred in attending Board, committee and stockholder meetings, including those for travel, meals, and lodging.

Indemnification Agreements

Each outside director has entered into a Director Indemnification Agreement with the Company to clarify indemnification procedures. Consistent with the indemnification rights already provided to directors of the Company in the Company’s Amended and Restated Certificate of Incorporation, each agreement provides

that the Company will indemnify and hold harmless each outside director to the fullest extent permitted or authorized by the General Corporation Law of the State of Delaware in effect on the date of the agreement or as such laws may be amended or replaced to increase the extent to which a corporation may indemnify its directors.

Equity Ownership Guidelines

Each outside director is expected to maintain an equity investment in Western Union equal to five times his or her annual cash retainer, which must be achieved within five years of the director’s initial election to the Board. The holdings that generally may be counted toward achieving the equity investment guidelines include outstanding stock awards or units, shares obtained through stock option exercise, shares owned jointly with or separately by the director’s spouse, shares purchased on the open market and outstanding stock options received in lieu of cash retainer fees. As of March 20, 2014, all outside directors have met or, within the applicable period, are expected to meet, these equity ownership guidelines.

Prohibition on Pledging and Hedging of the Company’s Securities

The Company’s Insider Trading Policy prohibits the Company’s directors from pledging the Company’s securities or engaging in hedging or short-term speculative trading of the Company’s securities, including, without limitation, short sales or put or call options involving the Company’s securities.

Business Overview

The Western Union Company provides people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. Western Union offers its services in more than 200 countries and territories. Our business is complex: our regulatory environment is disparate and developing; our consumers are different from those addressed by traditional financial services firms; and our agent and client relationships are numerous and varied. Managing these complexities is at the center of Western Union’s success, and our leadership must be capable of supporting our Company’s goals amid this complexity.

In late 2012, the Company began implementing pricing and other strategic investments designed to position the Company for future growth, and which were expected to, and did, have a negative impact on 2013 financial performance. The Company’s 2013 financial results were also impacted by increased compliance-related expenses.

Selected 2013 results are as follows:

• TSR of 30.6% compared to -23.5% in 2012;

• Revenue of $5.5 billion, down 2% from 2012;

• Operating income of $1.1 billion, down 17% from 2012;

• Operating income margin of 20.0%, compared to 23.5% in 2012; and

• Cash flow from operations of $1.1 billion, down 8% from 2012.

Please see our 2013 Annual Report on Form 10-K for more information regarding our performance.

The Company’s 2013 strategies were focused on strengthening our consumer money transfer business, increasing customers and usage in our business-to-business payments business, and generating and deploying strong cash flow for our stockholders. The performance goals and objectives under our Annual Incentive Plan were designed to support these strategies and the Compensation Committee adjusted the performance targets from the levels set in 2012 to reflect the Company’s expected 2013 financial performance. See pages 44-47 for more details regarding these targets.

In evaluating the 2013 results and compensation decisions, the Compensation Committee considered that the Company’s named executive officers substantially met key objectives in support of the 2013 strategies and that the 2013 strategic investments produced the following positive results:

• Consumer-to-consumer transaction growth increased to 5%, compared to 2% growth in 2012, with growth accelerating in the second half of the year;

• Continued investments also helped deliver 25% revenue growth in electronic channels;

• Execution of key strategies contributed to a 7% increase in business-to-business revenue; and

• The Company generated $1.1 billion of cash flow from operating activities, with over $670 million returned to stockholders through dividends and stock repurchases.

Recent Compensation Actions

For 2013, many of the compensation decisions were designed to further align the program with the Company’s mid- and long-term operating plans, increase participant accountability, and drive motivation and retention beyond 2013. These decisions included:

• No Executive Base Salary Increases for 2013 or 2014: There was no change in our named executive officers’ base salary levels for 2013 or 2014 from levels effective March 2012.

• No 2012 Chief Executive Officer Bonus: Based on 2012 Company performance, our Chief Executive Officer did not receive a bonus in 2013.

• 2013 Annual Incentive Includes Restricted Stock Unit Component: In 2013, we modified the Company’s Annual Incentive Plan design to include individual and/or business unit performance objectives, and a restricted stock unit award to be granted based on the achievement of strategic objectives and a threshold operating income goal to further focus participants on the long-term performance of the Company.

• 2013 Long-Term Incentive Includes TSR Modifier: We modified the Long-Term Incentive Plan design to include 2013 and 2014 financial performance metrics, while still maintaining a longer-term perspective in the program with a TSR payout modifier.

• Realizable Compensation Lower than Reported Compensation: Our named executive officers’ realizable compensation has been lower than the compensation disclosed in our Summary Compensation Table for fiscal years 2011 to 2013. See the “2013 Realizable Compensation Table” on page 42.

Chief Executive Officer Compensation

For 2013 performance, Mr. Ersek received a cash payout under the 2013 Annual Incentive Plan of 84% of target, as compared to no payout for 2012 performance. Because he is the leader of the Company, the Compensation Committee based Mr. Ersek’s cash opportunity under the Annual Incentive Plan entirely on the achievement of corporate financial goals, as measured by total revenue and operating income. In 2013, the Compensation Committee adjusted the performance targets associated with these performance measures from the levels set in 2012 to reflect that many of the strategic actions implemented by the Company beginning in late 2012 were designed to position the Company for future growth, and were expected to have a negative impact on 2013 financial performance. The Company achieved revenue and operating income at 99.5% and 100.1% of target, respectively, for an overall cash payout achievement level of 84%.

Also, under the 2013 Annual Incentive Plan, Mr. Ersek had an opportunity to receive a restricted stock unit award for various levels of achievement of strategic performance objectives. Achievement of the Company’s internal operating plan for these strategic objectives would result in a restricted stock unit payout equal to 25% of target and maximum achievement would result in a payout equal to 75% of target. Mr. Ersek substantially met key objectives in support of the Company’s 2013 strategic objectives, as demonstrated by consumer-to-consumer transaction growth, revenue growth in electronic channels, and growth in business-to-business revenue described under “-Executive Summary – Business Overview” above, and under “-The Western Union Executive Compensation Program – Annual Incentive Compensation,” below. Accordingly, the committee certified a restricted stock unit award payout under the 2013 Annual Incentive Plan of 17% of target, based on the Company’s achievement of its strategic performance goals (versus a payout of 25% of target that would have been paid had the Company achieved its internal plan for its strategic performance goals).

The following chart demonstrates that variable, performance-based pay elements comprised approximately 88% of the targeted 2013 annual compensation for Mr. Ersek (consisting of target payout opportunity under the Annual Incentive Plan and stock option and performance-based restricted stock unit components under the Long-Term Incentive Plan). Pay is based on the annual base salary and target incentive opportunities applicable to Mr. Ersek as of December 31, 2013.

Since a significant portion of Mr. Ersek’s compensation is both performance-based and “at risk,” we are providing the following supplemental graph to demonstrate the difference between the compensation granted to Mr. Ersek as required to be reported by the SEC rules in the 2013 Summary Compensation Table, and the compensation “realizable” by him for 2011 to 2013. For each of the years reported, the compensation “realizable” by Mr. Ersek is lower than the amount required to be reported by the SEC in the Summary Compensation Table.

What We Do:

What We Don’t Do:

2013 Say On Pay Vote

As noted above, in its compensation review process, the committee considers whether the Company’s executive compensation and benefits program serves the interests of the Company’s stockholders. In that respect, as part of its on-going review of the Company’s executive compensation program, the Compensation Committee considered the approval by more than 97% of the

votes cast for the Company’s “say on pay” vote at the Company’s 2013 Annual Meeting of Stockholders. The committee determined that the Company’s executive compensation philosophy, compensation objectives, and compensation elements continued to be appropriate and did not make any specific changes to the Company’s executive compensation program in response to the 2013 “say on pay” vote.

• Created Standalone TSR Performance-Based Restricted Stock Units: We replaced the TSR modifier from our 2013 Long-Term Incentive Plan design with a standalone relative TSR metric in order to enhance focus on stockholder returns. These performance-based restricted stock units require the Company to achieve 60th percentile relative TSR performance versus the S&P 500 Index over a three-year performance period in order to earn target payout, with 30^th percentile relative TSR performance resulting in threshold payout and 90^th percentile relative TSR resulting in maximum payout.

• Increased Performance Period for Performance-Based Restricted Stock Units: We increased the performance period of our financial performance-based restricted stock units so that they will be subject to a three-year total performance period, versus the two-year performance period used in prior years.

• Diversified Long-Term Incentive Plan Mix and Increased Weighting of At-Risk Awards: We increased the percentage of our annual equity grants that has vesting provisions that are strictly performance-based and are at-risk. For 2014, awards under the Long-Term Incentive Plan will consist of 80% performance-based restricted stock units (60% financial performance-based restricted stock units (incorporating both revenue growth and profit) and 20% TSR performance-based restricted stock units) and 20% stock options, as compared to 67% performance-based restricted stock units and 33% stock options in 2013.

• Established Goals Exceeding Performance During Prior Three Years: The financial performance target objectives for the 2014 compensation program are set at constant currency growth rates that are higher than the Company’s average annual constant currency results achieved over 2011 through 2013. The 2014 Annual Incentive Plan financial performance target objectives are also set higher than the constant currency financial performance target objectives and actual results under the 2013 Annual Incentive Plan. (Target objectives are not projections of future performance.) For the 2014 Annual Incentive Plan, performance at 184% of the target revenue growth rate and at 200% of the target operating income growth rate is required for a maximum payout equal to 150% of the target award. Further, the Company’s relative TSR performance rank versus the S&P 500 Index over a 2014-2016 performance period that is required to earn a target payout under the terms of the 2014 TSR performance-based restricted stock units is higher than the Company’s annual relative TSR performance versus the S&P 500 Index in each of 2011, 2012, and 2013.

Governance Highlights

Introduction

This Compensation Discussion and Analysis describes how the Board’s Compensation Committee determined 2013 executive compensation, the elements of our executive compensation program and the compensation of each of our named executive officers. The information provided should be read together with the information presented in the “Executive Compensation” section of this Proxy Statement. For 2013, the named executive officers were:

• Hikmet Ersek, President and Chief Executive Officer (September 2010 to present)

• Scott T. Scheirman, Executive Vice President, Chief Financial Officer (September 2006 through December 2013)

• Rajesh K. Agrawal, Executive Vice President and Interim Chief Financial Officer (January 2014 to present), Executive Vice President (November 2011 through December 2013) and President, Western Union Business Solutions (August 2011 through December 2013)

• J. David Thompson, Executive Vice President, Global Operations (November 2012 to present) and Chief Information Officer (April 2012 to present)

• John R. Dye, Executive Vice President, General Counsel and Secretary (November 2011 to present)

The Compensation Committee believes the Company’s executive compensation program should reward actions and behaviors that build a foundation for the long-term strength and performance of the Company, while also rewarding the achievement of short-term performance

goals. To ensure that the Company’s incentive compensation program is aligned with the Company’s overall executive compensation philosophy and objectives, the Compensation Committee has adopted the key principles identified in the table below.

The Board of Directors and the Compensation Committee

The Board of Directors oversees the goals and objectives of the Company and of the Chief Executive Officer, evaluates succession planning with respect to the Chief Executive Officer and evaluates the Chief Executive Officer’s performance. The Compensation Committee supports the Board by establishing the Company’s general compensation philosophies and overseeing the development and implementation of the Company’s compensation and benefits policies. The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the Chief Executive Officer and other executive officers, sets the compensation levels of each of the Executive Vice Presidents and approves the compensation of the Chief Executive Officer, with the ratification by the independent directors of the Board. The Compensation Committee’s responsibilities under its charter are further described in the “Corporate Governance” section of this Proxy Statement. While not members of the Compensation Committee, the Chairman of the Board and the Chief Executive Officer attended all but one of the meetings of the Compensation Committee in 2013 to contribute to and understand the committee’s oversight of and decisions relating to executive compensation. The Chief Executive Officer did not attend portions of the meetings relating to his compensation. The Compensation Committee regularly conducts executive sessions without management present.

The committee also engages in an ongoing dialog with the Chief Executive Officer and the Compensation Committee’s compensation consultant in the evaluation and establishment of the elements of our executive compensation program. The committee also received input from the Chief Human Resources Officer in making executive compensation decisions.

Compensation Consultants

Frederic W. Cook & Co., Inc. (the “Compensation Consultant”) provides executive and director compensation consulting services to the Compensation Committee. The Compensation Consultant is retained by and reports to the Compensation Committee and participates in the committee meetings. The Compensation Consultant informs the committee on market trends, as well as regulatory issues and developments and how they may impact the Company’s executive compensation programs. The Compensation Consultant also:

• Participates in the design of executive compensation programs to help the committee evaluate the linkage between pay and performance;

• Reviews market data and advises the committee regarding the compensation of the Company’s executive officers;

• Reviews and advises the committee regarding director compensation; and

• Performs an annual risk assessment of the Company’s compensation programs, as described in the “Executive Compensation-Risk Management and Compensation” section of this Proxy Statement.

The Compensation Consultant does not provide any other services to the Company. The Compensation Committee has assessed the independence of the Compensation Consultant pursuant to the NYSE rules and the Company concluded that the Compensation Consultant’s work for the Compensation Committee did not raise any conflict of interest.

During 2013, the Company also retained the services of Towers Watson to assist the Company in evaluating the Company’s annual and long-term incentive programs. Specifically, Towers Watson was instructed to review the incentive design to assist the Company in developing a program that would increase the executives’ focus on growth, strategic business drivers and individual accountability. The Compensation Committee evaluated the findings of Towers Watson in its review of the 2013 incentive program design. The Compensation Committee has assessed the independence of Towers Watson pursuant to the NYSE rules and the Company concluded that Towers Watson’s work did not raise any conflict of interest.

Setting 2013 Compensation

In late 2012, the Compensation Committee, working with the Compensation Consultant and the Chief Executive Officer, engaged in a detailed review of the Company’s executive compensation programs to evaluate whether the design and levels of each compensation element were:

• Appropriate to support the Company’s strategic performance objectives;

• Consistent with the philosophy and objectives described under “-Our Executive Compensation Philosophy and Objectives” above; and

• Reasonable when compared to market pay practices (see “-Market Comparison” below).

Specifically in evaluating the 2013 design of the Company’s executive compensation programs, the Compensation Committee considered that many of the strategic actions implemented by the Company in 2013 were designed to position the Company for future

growth, and were expected to have a negative impact on 2013 financial performance. For 2013, a number of changes were made to the Company’s executive compensation program to further align the program with the Company’s mid- and long-term operating plans, increase participant accountability, and drive motivation and retention beyond 2013. These changes included:

• Modifying the Company’s Annual Incentive Plan design to include individual and/or business unit performance objectives;

• Adding a restricted stock unit award to the Annual Incentive Plan to be granted based on the achievement of strategic objectives and a threshold operating income goal; and

• Modifying the Long-Term Incentive Plan design to include 2013 and 2014 financial performance metrics while still maintaining a longer-term perspective in the program with a TSR payout modifier.

In early 2013, Mr. Ersek presented to the Compensation Committee his evaluation of each of the then serving Executive Vice Presidents and the level of his or her salary, annual bonus targets under the Annual Incentive Plan, and long-term incentive award targets under the Long-Term Incentive Plan. Mr. Ersek based his assessments on each executive’s performance and relative contributions to the Company’s success, the performance of the executive’s respective business unit or functional area, employee retention considerations, compensation history and internal equity. Mr. Ersek also reviewed with the committee tally sheets that presented comprehensive historical and current compensation data for each of the Company’s executive officers. Please see “-Use of Tally Sheets” below for a description of this tool. The Compensation Consultant participated in the committee meetings to provide peer group and market data regarding executive compensation. Please see “-Market Comparison” for a discussion of the use of peer group and market data.

In early 2013, Mr. Ersek also submitted a self-evaluation to the Compensation Committee. The committee shared Mr. Ersek’s goals for the year and his self-evaluation with the independent members of the Board of Directors, who then evaluated Mr. Ersek’s performance in 2012 based on his actual performance versus such goals. In setting Mr. Ersek’s compensation, the committee considered this

evaluation, market data regarding chief executive officer compensation levels provided by the Compensation Consultant, and a tally sheet of Mr. Ersek’s historical and current compensation data. No member of management, including Mr. Ersek, made any recommendations regarding Mr. Ersek’s compensation or participated in the portions of the Compensation Committee meeting or in the meeting of the independent directors of the Board during which Mr. Ersek’s compensation was determined and ratified.

Market Comparison

For 2013, the Compensation Committee considered market pay practices when setting executive compensation, but did not target the specific compensation elements or total compensation against the market data. Instead, the committee used market data to assess the overall competitiveness and reasonableness of the Company’s executive compensation program. In evaluating 2013 market data, the committee considered both peer group proxy data and compensation survey data, but did not assign a specific weight to either data source. While the Compensation Committee considers relevant market pay practices when setting executive compensation, it does not believe it appropriate to

establish compensation levels based only on market practices. The Compensation Committee believes that compensation decisions are complex and require a deliberate review of Company performance and peer compensation levels. The factors that influence the amount of compensation awarded include market competition for a particular position, an individual’s experience and past performance inside or outside the Company, compensation history, role and responsibilities within the Company, tenure with the Company and associated institutional knowledge, long-term potential with the Company, contributions derived from creative and innovative thinking and leadership, money transfer or financial services industry expertise, past and future performance objectives and value of the position within the Company.

The Compensation Committee believes that the Company’s peer group should reflect the markets in which the Company competes for business, executive talent and capital. Accordingly, the Company’s peer group includes companies meeting either of the following criteria:

• Global brands providing virtual products or services; or
   
• Companies involved with payment and processing services.

In October 2013, the Compensation Consultant was asked to re-evaluate the Company’s peer group with respect to revenue, operating income, number of employees, market capitalization, and other factors. Based on this review of the members of the peer group in December 2013, the committee approved the deletion from the peer group of Visa and MasterCard, primarily due to the size of their revenue, operating income and market capitalization in relation to the Company. The revised peer group will be used for evaluating 2014 compensation decisions.

The Compensation Committee also uses general industry compensation survey data in evaluating executive pay. Survey data relies upon responses from participating companies to survey questions, which are compiled and sorted by the surveyor based on various factors, such as the period covered, the location of the company, and the positions under review. Survey data provides insight into positions that may not generally be reported in proxy statements and information about the compensation of executives of non-public companies.

In some instances, survey data is a useful complement to the peer group proxy data. To assist the committee in its review of the general industry compensation survey data, the Compensation Consultant extracts compensation information from the surveys with respect to companies with annual revenues ranging from $3 billion to $10 billion. For the 2013 compensation review, the Compensation Consultant compiled compensation data from the following general industry compensation surveys: 2012 U.S. Mercer Benchmark Database-Executive (which included data from 21 companies with annual revenues between $5 billion and $10 billion); Equilar Top 25 (which included custom data from 14 of the companies in the Company’s peer group described above: Ameriprise Financial, Automatic Data Processing, Charles Schwab, CME Group, Discover Financial Services, eBay, Fidelity National Information Services, Global Payments, MasterCard, MoneyGram, NASDAQ OMX, State Street, Total Systems Services, and Visa); 2012 Hewitt Total

Compensation Measurement Database (which included data from 50 companies with annual revenues between $5 billion and $10 billion); and 2012 Towers Watson U.S. Compensation Data Bank General Industry Executive Database (which included data from 102 companies with annual revenues between $3 billion and $6 billion).

Use of Tally Sheets

The Compensation Committee reviews tally sheets that present comprehensive data on the total compensation package for each of the Company’s executives. These tally sheets include historical and current compensation data, valuations of future equity vesting, value of option exercises in the past five years as well as analyses for hypothetical terminations and retirements to allow the Compensation Committee to consider the Company’s obligations under such circumstances. The tally sheets provide context for the committee in determining the elements and amounts of compensation paid.

Pay-For-Performance

The principal components of the 2013 executive compensation program were annual base salary, annual incentives in the form of cash and restricted stock unit awards, and long-term incentive awards in the form of stock options and performance-based restricted stock units. The Compensation Committee designed the 2013 executive compensation program so that performance-based pay elements (cash and restricted stock unit components under the Annual Incentive Plan and stock option and performance-based restricted stock unit components under the Long-Term Incentive

Plan) constituted a significant portion of the executive compensation awarded, determined at target levels. The following charts demonstrate that these variable pay elements comprised approximately 88% of the targeted annual compensation for the Chief Executive Officer and, on average, 78% of the targeted annual compensation for the other named executive officers. For purposes of these charts, the percentage of targeted annual compensation was determined based on the annual base salary and target incentive opportunities applicable to the named executive officer as of December 31, 2013.

Since a significant portion of the compensation of our named executive officers is both performance-based and “at risk,” we are providing the following supplemental table to demonstrate the difference between the compensation granted to our named executive officers, as required to be reported by SEC rules in the 2013 Summary Compensation Table, and the compensation “realizable” by such named executive officers for the 2011 to 2013 fiscal years. While the manner for reporting equity compensation as “realizable” compensation differs from

the SEC rules relating to the reporting of compensation in the 2013 Summary Compensation Table, we believe this table serves as a useful supplement to the 2013 Summary Compensation Table. The 2013 Realizable Compensation Table and the total realizable compensation reported in the table provides supplemental information regarding the compensation paid to the named executive officers and should not be viewed as a substitute for the 2013 Summary Compensation Table.

Elements of 2013 Executive Compensation Program

The following table lists the material elements of the Company’s 2013 executive compensation program. The committee believes that the design of the Company’s executive compensation program balances fixed and

variable compensation elements, provides alignment with the Company’s short and long-term financial and strategic priorities through the annual and long-term incentive programs, and provides alignment with stockholder interests.

Each of Western Union’s 2013 executive compensation program elements is described in further detail below and individual compensation decisions are discussed in “-Compensation of Our Named Executive Officers.”

Base Salary

Our philosophy is that base salaries should meet the objectives of attracting and retaining the executives needed to lead the business. Base salary is a fixed compensation component payable in cash. In setting base salary levels, the committee considered the peer group and survey data as well as the performance of the individual executive. None of the named executive officers received a base salary increase in 2013 or 2014 from the levels established in March 2012 (or, if later, the executive’s date of hire). Please see “-Compensation of Our Named Executive Officers” for further information regarding the 2013 base salary levels.

Annual Incentive Compensation

Our Annual Incentive Plan is designed to motivate and reward executive officers for achieving short-term performance objectives. The Annual Incentive Plan design is intended to provide annual incentive awards that qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code. Participants in the Annual Incentive Plan in 2013 were Mr. Ersek and the Company’s Executive Vice Presidents, which included all of the named executive officers.

Compensation under the Annual Incentive Plan is intended to be a significant component of an executive’s total compensation opportunity in a given year, helping create a “pay for performance” culture. Annual Incentive Plan compensation holds executives accountable and rewards them based on the Company’s performance. As noted earlier, in 2013 the Company made strategic investments intended to position the Company for future growth, which were expected to have a negative impact on 2013 financial performance. Accordingly, the Compensation

Committee adjusted the performance targets under the Annual Incentive Plan from the levels set in 2012 to reflect the Company’s expected 2013 financial performance.

The Compensation Committee believes the design of the 2013 Annual Incentive Plan appropriately motivated participants to achieve the Company’s short-term performance objectives, while also focusing participants on the long-term performance of the Company through the use of the restricted stock unit award.

Target payout opportunities under the Annual Incentive Plan are expressed as a percentage of a participant’s annual base salary. Actual payouts with respect to the cash component

could have ranged from 0% to 125% of target based on financial performance (with up to a 25% reduction in the payout level if the 2013 strategic objectives were not obtained) and payouts with respect to the restricted stock unit component could have ranged from 0% to 75% of target based on strategic performance. The following table sets forth each named executive officer’s 2013 target award opportunity and the weighting of the corporate and individual/business unit measures used in determining the cash payout level. Each named executive officer’s 2013 target award opportunity was unchanged from the level established for the executive in 2012.

Financial Performance Metrics. As it had in previous years, the Compensation Committee set the executives’ 2013 annual incentive compensation cash award targets for financial performance by establishing a grid based on the Company’s revenue and operating income. These performance measures were used in order to tie annual incentive compensation to measures of the Company’s financial performance the committee deemed meaningful to and readily accessible by our investors.

The Compensation Committee established the grid metrics and corresponding payout percentages based upon input from management regarding the Company’s expected performance in the upcoming year, which included the impact of the Company’s strategic initiatives as well as

external factors on the Company, such as increasing competition. For 2013, the committee designed the grid to encourage strong, focused performance by our executives. The 2013 grid provided a payout of 90% of target in cash if the Company achieved its internal operating plan for operating income and revenue (revenue of approximately $5.6 billion and operating income of approximately $1.1 billion), with a maximum payout level of 125% of target if revenue and operating income were at least equal to 102% and 104%, respectively, of the 2013 operating plan. Within the grid, a higher rate of increase for one metric could counterbalance a lower rate of increase for the other metric. For 2013, the grid range for the revenue and operating income performance goals as well as the 2013 achievement was as follows: