Notice of 2018 Annual Meeting of Shareowners and Proxy Statement Thursday, May 10, 2018 8:00 a.m. Eastern Time Hotel du Pont Wilmington, Delaware Scan this QR code with your smartphone or tablet for access to the Proxy Materials and Annual Report. Table of Contents Letter to Our Shareowners 4 Ownership of Our Securities 59 Securities Ownership of Certain Beneficial Owners Notice of UPS 2018 Annual Meeting 5 and Management 59 Proxy Statement Summary 6 Additional Ownership 60 Section 16(a) Beneficial Ownership Reporting Compliance 61 Corporate Governance 10 Selecting Director Nominees 10 Audit Committee Matters 62 Board Diversity 11 Proposal 3 — Ratification of Auditors 62 Board Refreshment and Succession Planning 11 Report of the Audit Committee 62 Director Independence 11 Principal Accounting Firm Fees 64 Board Leadership 12 Shareowner Proposals 65 Executive Sessions of Independent Directors 13 Proposal 4 — Shareowner Proposal to Prepare an Annual Board and Committee Evaluations 13 Report on Lobbying Activities 65 Majority Voting and Director Resignation Policy 14 Proposal 5 — Shareowner Proposal to Reduce the Voting Risk Oversight 14 Power of Class A Stock from 10 Votes Per Share to One Vote Strategic Planning 15 Per Share 67 Management Succession Planning and Development 15 Proposal 6 — Integrate Sustainability Metrics into Meeting Attendance 16 Executive Compensation 68 Code of Business Conduct 16 Important Information About Voting at the 2018 Conflicts of Interest and Related Person Transactions 16 Annual Meeting 71 Transactions in Company Stock 16 Other Information for Shareowners 75 Shareowner Engagement 17 Solicitation of Proxies 75 Communicating with our Board of Directors 18 Eliminating Duplicative Proxy Materials 75 Political Contributions and Lobbying 18 Proxy Access, Shareowner Proposals and Nominations for Sustainability 19 Director at the 2019 Annual Meeting 75 Corporate Governance Guidelines and Committee Charters 20 2017 Annual Report on Form 10-K 76 Your Board of Directors 21 Other Business 76 Proposal 1 — Director Elections 21 Annex A - United Parcel Service, Inc. 2018 Omnibus Committees of the Board of Directors 28 Incentive Compensation Plan 77 Director Compensation 29 Executive Compensation 30 Compensation Committee Report 30 2017 Compensation Discussion and Analysis 30 Summary Compensation Table for 2017 41 2017 Grants of Plan-Based Awards 42 Outstanding Equity Awards at Fiscal Year-End 2017 43 Option Exercises and Stock Vested in 2017 44 2017 Pension Benefits 45 2017 Non-Qualified Deferred Compensation 46 Potential Payments on Termination or Change in Control 48 Equity Compensation Plans 50 Median Employee to CEO Pay Ratio 50 Proposal 2 — Approve the 2018 Omnibus Incentive Compensation Plan 51 www.upsannualmeeting.com 3 United Parcel Service, Inc. 55 Glenlake Parkway, N.E. Atlanta, GA 30328 March 16, 2018 Dear Shareowners: It is my pleasure to invite you to join us at UPS’s 2018 Annual Meeting of Shareowners. Since our last Annual Meeting, we had the occasion to celebrate UPS’s 110th anniversary. This celebration reminds us how we have succeeded The growth for more than a century by adapting to the many social and technological changes that have transformed the world. Disruptive technologies like the investments we telephone, automobile, aircraft and computer prompted UPS to transform are making today many times — from a bicycle messenger service to a retail delivery provider, a nationwide common carrier and an airline. We have continued to transform will ensure we can in the decades since, becoming the leading global logistics company that you continue to offer the know today. most reliable service Today, we find ourselves in another of these major transformational periods. in the industry. The pace of business is quickening and disruptive new technologies are threatening the traditional ways of doing business. Yes, these disruptive technologies create new risks. But they also offer tremendous opportunities for companies like UPS that can rise to these challenges. Already, the structural evolution of ecommerce is increasing demand for our services. We are confident that we have the right strategy to meet the challenges ahead. The UPS Board of Directors is highly engaged in our long-term strategy and oversight of our enterprise risks. They are challenging us to consider transformational change to our business model in connection with the opportunities associated with global ecommerce. The board’s Risk Committee helps monitor our most significant enterprise risks. The feedback and insights provided by our board are essential to our long-term success. To fulfill the opportunities created by ecommerce, we are executing a multi-year, growth investment initiative to add more technology, efficiency and capacity to our global network. Our objective is to create a highly efficient and reliable, interconnected structure we call the Smart Global Logistics Network. Incorporated into our strategy are considerations of all our stakeholders, including shareowners, employees, customers, and the communities in which we operate. We recognize that our long-term success depends on customers and communities growing along with us. The growth investments we are making today will ensure we can continue to offer the most reliable service in the industry. And we recognize that these investments must be made responsibly and sustainably. Whatever the future holds, UPS will be there — ready to provide customers with the reliability and value they have come to expect. Finally, I want to encourage all of our shareowners to vote. This is your opportunity to share your views with the Company. We look for meaningful ways to engage with our investors as we continually seek to grow our business, improve governance and increase shareowner value. We are grateful to those shareowners who have previously shared their views. As we approach the Annual Meeting, I encourage you to contact us with any questions or feedback at 404-828-6059. On behalf of the entire Board of Directors, thank you for your continued support of UPS. David P. Abney Chairman and Chief Executive Officer 4 Notice of Annual Meeting of Shareowners and 2018 Proxy Statement Notice of UPS 2018 Annual Meeting UNITED PARCEL SERVICE, INC. 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 • Date and Time: May 10, 2018, at 8:00 a.m. Eastern Time • Place: Hotel du Pont, 11th and Market Streets, Wilmington, Delaware • Record Date: March 12, 2018 • Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement is first being sent to shareowners on or about March 16, 2018. • Voting: Holders of class A common stock are entitled to 10 votes per share; holders of class B common stock are entitled to one vote per share. Your vote is important. Please vote as soon as possible by using the Internet, by telephone or by signing and returning your proxy card (if you received a paper copy of the proxy card by mail). Your voting options are described on the Notice of Internet Availability of Proxy Materials or proxy card. • Admission: To attend the meeting in person you will need proof of your share ownership (see page 73 for acceptable proof of ownership) as of the record date and a form of government-issued photo identification. Important Notice Regarding the Availability of Proxy Materials for the Shareowner Meeting to be held on May 10, 2018: The Proxy Statement and our 2017 Annual Report are available at www.proxyvote.com. You may also view the Proxy Statement and other materials about the 2018 Annual Meeting at www.upsannualmeeting.com. Questions? Call 404-828-6059 (option 2). Norman M. Brothers, Jr. Secretary Atlanta, Georgia March 16, 2018 Items of Business Voting Board Voting Choices Recommendations Page Company Proposals: 1. Elect 13 directors named in the Proxy • Vote for all nominees FOR ALL 21 Statement to serve until the 2019 • Vote against all nominees Annual Meeting and until their respective • Vote for some nominees and against others successors are elected and qualified • Abstain from voting on one or more nominees 2. Approve the 2018 Omnibus Incentive • Vote for the approval of the 2018 Plan FOR 51 Compensation Plan, including the • Vote against the approval of the 2018 Plan reservation of 26,000,000 shares • Abstain from voting on the proposal available for issuance thereunder 3. Ratify the appointment of Deloitte • Vote for ratification FOR 62 & Touche LLP as our independent • Vote against ratification registered public accounting firm • Abstain from voting on the proposal for 2018 Shareowner Proposals (if properly presented): 4. Prepare an annual report on lobbying • Vote for the proposal AGAINST 65 activities • Vote against the proposal • Abstain from voting on the proposal 5. Reduce the voting power of class A • Vote for the proposal AGAINST 67 stock from 10 votes per share to one • Vote against the proposal vote per share • Abstain from voting on the proposal 6. Integrate sustainability metrics into • Vote for the proposal AGAINST 68 executive compensation • Vote against the proposal • Abstain from voting on the proposal www.upsannualmeeting.com 5 Proxy Statement UNITED PARCEL SERVICE, INC. 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 This Proxy Statement contains important information on company matters that require your vote at the Annual Meeting. We are providing these proxy materials to you because you own shares of United Parcel Service, Inc. common stock and our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting of Shareowners. We are first mailing this Proxy Statement to our shareowners on or about March 16, 2018. The Annual Meeting will be held May 10, 2018, at 8:00 a.m. Eastern Time at Hotel du Pont, 11th and Market Streets, Wilmington, Delaware. All properly executed written proxies, and all properly completed proxies submitted by telephone or the internet, that are delivered pursuant to this solicitation will be voted at the meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting.