Building on Our Values

CORPORATE SOCIAL RESPONSIBILITY REPORT T. ROWE PRICE | 2014 Quick facts about our firm As of December 31, 2014

Headquartered in Baltimore, Maryland, with offices in ABOUT THIS REPORT Accountability and transparency are funda- 14 TABLE OF CONTENTS mental to our business and, we believe, countries around the world

essential to building and maintaining trust Founded in 1 About this report and confidence in our firm. In line with 2 A message from our president 3 Our values our timetable of publishing comprehen- 1937 5 Conducting business responsibly sive Corporate Social Responsibility (CSR) 6 Managing portfolio risk Managing 8 Committed to reducing our environmental impact Reports biannually and updates in the inter- 13 Building financial capability in communities vening years, this report spans the 2014 $692.4 14 Inspiring wise financial habits calendar year unless otherwise noted and 16 Nurturing collaborations sparked by a common vision billion in assets 19 Empowering our associates is a companion to our T. Rowe Price 2014 Employing over 20 Enabling associates to excel Annual Report1 and 2014 Proxy Statement.2 22 Extending our values to the community The information in this report reflects both 25 T. Rowe Price Foundation 5,800 26 Building partnerships, empowering communities the U.S. and international operations of associates worldwide 31 About T. Rowe Price T. Rowe Price Group, Inc., with financial data 31 Leadership presented in U.S. dollars.3 Together, they T. Rowe Price, through its subsidiaries, 32 A collaborative approach to corporate governance is a global asset manager focused on 34 Fostering a culture of integrity and ethics communicate our overall performance as an delivering investment management 35 Engaging on key industry issues excellence and retirement services that 36 Rewarding associates, investing in our future investment management firm as well as how investors can rely on now, and over the 37 Ensuring next-generation leadership our business conduct affects the community long term. We provide separate account management, subadvisory services, an and the environment. array of mutual funds, and recordkeeping and related services for institutions, As we continue to strengthen and inte- retirement plan sponsors, advisors, and individuals. We believe that adhering to grate our CSR efforts, we invite your feed- our principles—putting our clients’ interests first; following an active, disciplined back and welcome you to e-mail us at investment process rooted in proprietary [email protected]. research; and nurturing a collaborative culture where experienced professionals share insights in pursuit of durable solutions for clients—leads to better outcomes for our clients. 1 www.troweprice.com/annualreport2014 2 http://trow.client.shareholder.com/financials.cfm 3 As of December 31, 2014. Corporate Social Responsibility 2014 | 1 A MESSAGE FROM OUR PRESIDENT OUR VALUES Building on our heritage of integrity and values Our values guide our behavior and They are also the foundation that shape our culture. They are embedded supports us to help our clients achieve Our firm has always engaged in our business guided by a set of values that in the principles and practices that their long-term investment goals. our founder, Thomas Rowe Price, Jr., set forth more than 75 years ago— have served us well since our beginning. values which set a foundation for everything we do. In our first Corporate Act with integrity Social Responsibility Report (CSR) in 2011–2012, we began to share the Cultivate “At T. Rowe Price, CSR story of our longstanding commitment to honoring and affirming these Put clients first intellectual curiosity is part of our holistic values. Today, I am pleased to present our 2014 report. Our view of conducting In this report, we continue to tell the In an effort to extend the reach of benefited from $7.5 million in grants Values business the right story of our CSR efforts, including our these tools and resources, we engage through the Foundation. Embrace Pursue excellence dedication to conducting business with national partners to help us way­—from our core Looking ahead, we are excited about differences and with passion responsibly for our clients; helping positively affect those most in need collaboration and humility operations to our the momentum of our CSR work and promote financial education for kids; in our communities. Last year alone commitment to the and giving back to our communities our initiatives continued to have a look forward to building upon our Apply disciplined through financial support, outreach, direct impact in many communities, accomplishments. Every day we strive thinking and process communities where and volunteerism. reaching over 750,000 children, parents, to continue our legacy of being a good we live and work.” and educators. corporate citizen—always guided by our Our approach to CSR reflects our belief core values. And, as one of the largest Renee Christoff, in the deep connection between our Throughout 2014 we also concentrated employers headquartered in Baltimore, T. Rowe Price, Head of Corporate Social Responsibility actions and the growth and develop- on improving our results in other we are especially proud to be an integral Our approach to corporate social responsibility ment of the communities where we live CSR focus areas, such as finding part of our hometown. We continue “If we take care of our clients, they’ll We believe that investing in the and work. We know that our conduct ways to use natural resources more to identify how the firm can provide take care of us.” Our founder, Thomas communities where we live and as a corporate citizen has an impact far efficiently and reducing our impact on resources to help address the city’s Rowe Price, Jr., articulated this prin- work goes hand in hand with our beyond our walls. the environment. Through programs urgent needs and long-term issues. We ciple decades ago, and we have been longstanding culture of putting aimed at making meaningful progress are committed to making a strong, posi- building on his vision ever since. our clients’ needs first. Our client-first philosophy attracts and with the help of our associates, we tive impact on the local community now associates who possess a desire to have made significant strides in waste and in the future. help others and who believe that being reduction and recycling. For instance, part of a community means giving and On behalf of our more than 5,800 though our associate population has CSR Focus Areas serving. Our people are the reason increased by 30% since 2010, we associates worldwide, thank you for we are able to successfully carry out a have increased recycling by 79% and your interest as we continue to share variety of community initiatives year after decreased landfill waste by 49% during our progress. year. I am proud to say that in 2014, that same time frame. over 50% of our associates volunteered Sincerely, over 60,000 hours to nonprofits in our Finally, in this report, I am pleased to communities and pledged over $1.5 share the work of the T. Rowe Price Conducting Business Building Financial Empowering Our million through our annual Workplace Foundation, which is funded by dona- Responsibly Capability in Communities Associates Giving Campaign. tions from the firm. We are exception- ally proud of the long-term impact the Building financial capabilities in our Foundation’s support has had in our James A.C. Kennedy communities is a cornerstone in our communities. From its earliest days, CEO and President, commitment to social responsibility. the Foundation has been committed to T. Rowe Price Group Using proprietary research, we develop advancing education, arts and culture, tools and resources that assist kids, civic and community endeavors, and parents, and educators in learning or human services. In 2014, nonprofits teaching basic financial concepts.

2 | BUILDING ON OUR VALUES Corporate Social Responsibility 2014 | 3 CONDUCTING BUSINESS RESPONSIBLY

We protect the long-term interests of our clients, associates, and stockholders by integrating responsible processes and approaches throughout our business efforts. In this section, we’ll discuss our environmental, social, and governance (ESG) strategy and how it impacts related topics, including port- folio risk management, investment analysis, engagement with portfolio companies, and associate engagement.

“Environmental, social, and governance considerations are important to many of our clients when implementing their investment strategies. It relates to better governance, risk diversification, strong demographic trends, and climate change, as well as the increase in global prosperity. As we integrate ESG issues in our investment analysis and portfolio construction,

The newest buildings on our Owings Mills, Maryland, campus are designed we help our clients meet their goals.” to be friendly to the environment, earning LEED Gold certification, while Wim de Ruijter, offering associates a comfortable, professional atmosphere for collaboration. T. Rowe Price Amsterdam, Relationship Management Mid-Europe

Corporate Social Responsibility 2014 | 5 MANAGING PORTFOLIO RISK We engage with portfolio How external factors As a global investment manage- incorporating environmental, social, Our Environmental, Social, companies in a variety of ways influenced our ment firm, we recognize the and governance considerations into and Governance Strategy Engaging with companies, we consider Light engagement investment analysis influence we have on social and our investment process. and analyze proxies and voting posi- At this level, we hold hundreds of brief, While ESG considerations alone don’t environmental issues through our tions. Assessing a broad range of invest- direct conversations with companies ESG factors comprise a broad spec- always tip the scale one way or the other investment portfolios. ment concerns (including environmental over the course of each year, focused trum of considerations—positive and when making our investment decisions, and social issues) is integral to our on issues that may fall outside the scope The central mission of our company negative—that our investment analysts Collaboration a recent example illustrates the signifi- investment process. In our view, the of our analysts’ normal, ongoing due is to help our clients reach their consider in the context of a given We believe companies, investors, and cant role ESG issues and other factors following questions are, at their core, diligence meetings with companies. long-term financial goals through a company, industry, or region of the governments all have a role to play in can play within our investment process. improving corporate disclosures and investment issues: thoughtful, disciplined approach to world. They maintain primary respon- Our objective in these conversations is We were leery of several debt issuers in strengthening the sustainability of §§ Who represents shareholders on a managing investments. Consistent sibility for integrating ESG factors business practices over time. to gather information about a specific Russia, Brazil, and Mexico that practiced company’s Board? with our mission, we have an obliga- into their research using the following topic of an environmental, social, or predatory lending—loaning money §§ What drives the executive incentive tion to understand the long-term guiding principles: collaboration, governance nature. It may be a general at high interest rates to ill-informed program? sustainability of a company’s busi- accountability, fundamental research, exchange of views on the topic, or it borrowers who could not service ness model and the factors that could stewardship, and materiality. §§ How robust are shareholders’ rights Accountability may be a conversation centered on an the debt. cause it to change. We do this by at the company? Our investment analysts are upcoming vote. responsible for assessing the §§ How is the company managing full range of factors likely to have its environmental risks, human Heavy engagement a meaningful impact on the resources, facilities, stakeholder This heavier level is characterized by a company’s performance, and they relations, and long-term access to deep investment of time and resources. Principles for Responsible Investment receive specialized resources and critical resources? These engagements are in-depth (PRI) signatory since 2010. training to enable them to make exchanges with a company’s manage- PRI these assessments. Based on this view, our interactions ment or Board, often extending over are driven by portfolio management more than a year. Typically, they are and supported by the expertise of initiated with a formal letter to the Board, our industry-focused analysts and our followed by multiple in-person meetings. Fundamental Research in-house specialists in corporate gover- We believe ESG analysis and nance and sustainability. Our priorities in Our objective in this type of activity is to engagement are most effective these efforts are tightly connected to our share our perspective with the Board when led by experienced investors investment views on a company, so we about what we view as a significant who know the company well and conduct our company-level engagement impediment to our ability to meet our are best positioned to evaluate these considerations in the activities privately. In contrast, we tend to investment goals, and to explore ways to appropriate context. collaborate with other shareholders on work constructively with the company to policy-level concerns, such as advo- remove the impediment. cating with regulators for better disclo- “Integrating ESG considerations into our sure or stronger shareholder rights. We believe our approach is best Stewardship suited to our firm’s resources and fundamental research has helped the firm Such companies can earn enormous We believe our responsibilities as After many years of dialogue with investment strategies. profits at certain points of the interest identify well-managed companies that are diligent investors do not cease with management and Board members of the decision to purchase a security. the companies in our clients’ port- rate cycle, but we decided not to invest leaders in their industries, more forward- We maintain regular dialogue with the folios, T. Rowe Price’s practice has in any of them, reasoning that this thinking, better at anticipating and mitigating management of companies held in focused primarily on two distinct levels business model has negative societal our portfolio. of interplay. implications and tends to be a long-term risk, and focused on the long term.” loser, primarily due to potential targeting Bill Stromberg, by regulators. T. Rowe Price, Head of Equity Materiality Light Engagement Heavy Engagement We focus on the ESG factors we High number of brief Two Primary Low number of intensive, consider most likely to have a material interactions Engagement often multiyear activities impact on the performance of the Fewer resources devoted More resources devoted companies in our clients’ portfolios to each encounter Levels to each action over their investment time horizons.

6 | BUILDING ON OUR VALUES | Conducting Business Responsibly Corporate Social Responsibility 2014 | 7 COMMITTED TO REDUCING OUR ENVIRONMENTAL IMPACT Reducing waste and expanding recycling waste We remain committed to conducting continuing to improve our environ- areas, evaluates progress, and reports % As a knowledge-based firm, our §§ Widened use of convenient – reduction business in ways that have minimal mental management capabilities, our results to the Management Committee. 49 modest waste generation stems personal waste and recycling impact on the environment. We ability to measure and report progress, mostly from our office operations. receptacles to all owned Since 2010, we have expanded believe that the long-term sustainability and our capacity to increase associate In 2014, the Environmental By regularly assessing the firm’s U.S. offices, in addition to recycling while reducing our of our business requires forward- awareness and engagement. Sustainability Committee developed waste management practices our Baltimore, Maryland, waste by 49%, amid 30% thinking environmental practices. Our the firm’s first Environmental 4 and implementing improve- headquarters. employee growth. environmental strategy is to balance To guide this strategy, the Environmental Sustainability Policy. ments, we have made significant operating a global business with Sustainability Committee, chaired by the §§ Extended composting in firm’s head of CSR, establishes priority progress toward reducing waste cafeteria operations to all owned Waste and Recycling and increasing recycling since U.S. facilities. 2010. We attribute this to the §§ Expanded our energy-from-waste Baseline 2010 2011 2012 2013 2014 1000 following initiatives: program from our London office 900 5 5 800 to our headquarters in Baltimore, 344 337 508 576 615 700 §§ Utilized single-stream recycling 600 Maryland. Twenty-seven percent 500 programs in 98% of our office 400 of our associates now work in % 300 space, allowing for the convenient Recycling +79 200 Environmental collection of a variety of office locations that participate in Tons (U.S.) 2010–2014 100 0 MEASURE this sustainable waste disposal 0 management recyclables in a single container. Waste -49% -100 Measure program, which diverts waste -200 Tons (U.S.) 2010–2014 -300 Pursuing continuous progress from landfills to generate energy. -400 -500 improvement -600 5 -700 Our environmental management 650 622 611 497 334 -800 -900 capabilities are maturing, and as a 2010 2011 2012 2013 2014 -1000 result, we have invested in new tools Baseline to help us make more informed and REPORT ANALYZE Creating more timely decisions that support our goal Environmental Report impact Identify sustainable workplaces of continual improvement. Management and make opportunities for The Leadership in Energy and obtain LEED certification or other adjustments Process improvement Our structured environmental manage- Environmental Design (LEED) prominent certifications such as ment process guides our approach for building rating system is designed Building Research Establishment measuring, identifying, implementing, to promote construction and Environmental Assessment Method as well as reporting and evaluating renovation practices that reduce (BREEAM). new initiatives. IMPROVE the impact on the environment Implement new while creating a pleasant Currently, 32% of our real estate We believe this approach will help programs, workspace. LEED certification is an portfolio has achieved a sustainable training, and certification, representing more us effectively reduce waste and communications important standard of measure that increase recycling throughout reflects the sustainability levels of than 630,000 square feet. Over the our facilities and establish more our buildings. coming years we expect to achieve sustainable work environments. additional certifications as we work Our goal with all new construction through a multiyear plan to renovate and major renovation projects is to older buildings.

square feet 400,000 of progress Our two newest buildings in Maryland—with over Our London office was awarded the BREEAM Good environmental certification. 400,000 square feet (SF) of office space—are the most recent to receive LEED Gold certifications. The City of London recognized our London office for exceptional waste management and sustainability practices through its Clean City Awards Scheme. 4 www.troweprice.com/environmentalpolicy 5 Due to improved reporting capabilities, we are restating results.

8 | BUILDING ON OUR VALUES | Conducting Business Responsibly Corporate Social Responsibility 2014 | 9 Reporting and transparency A note about our Engaging associates Energy and greenhouse GHG calculations Since the 2011 launch of our first ground for the first corporate garden gas emissions Our calculations are based on the regional CSR committee in Florida, in the spring of 2013 at our campus We have been measuring our global our associate population and expan- World Resources Institute/World all of our major locations globally in Maryland. In 2014, our Colorado greenhouse gas (GHG) emissions sion of our workforce into previously Business Council for Sustainable now provide associates with the office followed suit with a garden of since 2008 to better understand unoccupied office space. Growth of Development Corporate GHG opportunity to participate on a its own. Associate volunteers plant, climate change risks and opportunities our real estate portfolio and associate CDP Protocol, the industry standard for regional committee. water, weed, and harvest produce We have partici- associated with our operations. We population is the result of extensive GHG accounting and reporting. throughout the growing season. The committees follow an associate- have significantly enhanced our data forecasting and planning. We apply a pated in the Carbon In addition to helping associates led approach to identify opportunities measurement and reporting capa- similar approach to managing the envi- Disclosure Project In measuring global Scope 1 and 2 develop a valuable hobby, garden- based on local community needs, bilities by adopting new technology ronmental impact of our growth. Since (CDP) since 2005 emissions, data were available for fresh produce is donated to local develop recommendations, and ulti- that allows us to measure the global energy consumption—specifically and have been a CDP 97% of the firm’s square footage. For organizations that distribute it to those mately implement their ideas at their impact of our real estate portfolio in electricity—makes up 84% of our GHG Signatory since 2011. the remaining facility space, we used in need. In 2014, the two gardens sites or within their communities. the areas of energy, waste, and water emissions, we are assessing opportu- estimates based on national building produced over 250 pounds of fresh energy benchmarks. fruits and vegetables for donation. consumption. This improves our ability nities to reduce our electricity demand, One example of a CSR committee-led to make faster short-term correc- such as the adoption of renewable We engaged third-party consul- initiative is the creation of corporate tions and strategic long-term capital energy sources. tants to ensure that best practices gardens at two of our sites. We broke allocation decisions. To assess the quality and complete- were applied and high-quality data Total GHG emissions have decreased ness of GHG emissions data, an were collected. 3% since the 2010 baseline year. We independent third party verified Jones Lang LaSalle, a global real have, however, experienced slight 2013 and 2014 Scope 1, 2, and 3 estate services firm, collected Scope 1 increases for two consecutive years. GHG emissions. and 2 data for T. Rowe Price facilities. This is primarily due to the growth of ICF International, a professional services firm with expertise in carbon measurement and reporting, calculated GHG emissions inventory + % + % - % and comparisons. 30 employees 1 office space 3 emissions CVenture, a third-party firm, verified Since 2010, our associate population has increased and our office space has grown, yet we the quality and completeness of GHG have reduced emissions. inventory data.

Baseline Baseline Baseline 2010 2011 2012 2013 2014 2010 201175000 2012 2013 2014 15 45 65625 2010 2011 2012 2013 2014 6 12 36 43,17243,63137,55440,731 42,005 8.98.256250 7.1 6.7 6.6 19.2 19.0 16.4 17.7 18.5 46875 9 27 37500 28125 6 18 % 18750 % % -3 -25 3 -4 9 Metric Tons (MT) CO2e 2010–2014 MT CO2e/Associate9375 2010–2014 MT CO2e/Thousands SF 2010–2014 0 0 0 Scope 1, 2, and 3 GHG Scope 1, 2, and 3 GHG Scope 1, 2, and 3 GHG Emissions Emissions per Associate7 Emissions per Square Foot

Erica Schneider, sustainability lead for the Colorado regional CSR committee, harvests carrots and potatoes from the corporate garden. 6 Due to improved reporting capabilities, we are restating 2013 results. 7 Full-time employees and contractors. Scope definitions: Scope 1 emissions are the result of GHGs emitted on T. Rowe Price sites, either from directly burning fossil fuels in the buildings or on-site vehicles or from chemicals used in the buildings’ ventilation and air conditioning equipment. Scope 2 emissions are the result of energy that T. Rowe Price purchases but is generated elsewhere, such as electricity. Scope 3 emissions are indirect emissions from sources that are not owned or controlled by T. Rowe Price but are related to business activities, such as employee travel.

10 | BUILDING ON OUR VALUES | Conducting Business Responsibly Corporate Social Responsibility 2014 | 11 BUILDING FINANCIAL CAPABILITY IN COMMUNITIES We share our expertise in ways that build long- term financial competency. By helping people develop the capability to make sound financial decisions, we hope to improve the quality of life of individuals in our communities. In this section we spotlight innovative approaches to financial literacy, including results from our annual Parents, Kids & Money Survey.

“Financial education is a natural extension of us, our firm, and our business. We not only work to educate investors, but also the children, parents, and educators in our communities.” A student tests out The Great Piggy Bank Adventure® mobile app. The game is one component of our Money Confident Kids® program. Meredith Callanan, T. Rowe Price, Head of Corporate Marketing and Communications

12 | INVEST WITH CONFIDENCE Corporate Social Responsibility 2014 | 13 INSPIRING WISE FINANCIAL HABITS When people apply good financial We use MoneyConfidentKids.com as marketing communications, and §§ Kids save for college when college on their own, as opposed Many parents admit to having some behavior, they can achieve fiscal our main vehicle for the distribution of we were pleased to accept the parents discuss it with them: 58% to just 25% of kids whose parents reluctance to talk with their kids about stability and make wise money our program assets, and we extend following awards for our work in of kids whose parents frequently talk do not frequently talk about invest- financial topics, most often because decisions that benefit their families and our reach through the firm’s local financial education: to them about saving for college say ment vehicles. they don’t want their kids to worry communities. As an extension of our volunteer programs as well as with they are saving for college on their about finances. To help parents have §§ Kids identify themselves as mission to educate investors, building national partners, such as Junior §§ Gold trophy for best own, as opposed to 23% of kids money conversations with their sons “savers”: 60% of kids whose financial capabilities has become a Achievement (JA), Walt Disney website—T. Rowe Price Money whose parents do not frequently and daughters, we have developed ® parents frequently talk to them cornerstone in our commitment to Imagineering, and the Council on Confident Kids discuss college savings. a variety of resources available at about setting financial goals our communities and society as a Economic Education. §§ Gold trophy for best mobile §§ Investment-savvy kids are even MoneyConfidentKids.com. The site identify themselves as “savers” whole. We do this through our Money application—The Great Piggy Bank more likely to save for college: provides free online games and activi- versus “spenders,” as opposed to Confident Kids® program, which Our efforts garnered recognition Adventure® mobile app 81% of kids whose parents ties for kids; lessons for educators; 46% of kids whose parents do not focuses on three key areas: learning from the Financial Communications § frequently talk to them about and tips for parents to help families § Digital media best in show—T. Rowe frequently talk to them about setting good financial habits early, having Society, a nonprofit organization ® investment vehicles like stocks and save for college and discuss the key Price Money Confident Kids financial goals. weekly talks about money matters, and dedicated to improving professional bonds say they are saving for financial concepts of setting a goal, improving educator confidence. standards in U.S. financial saving and spending wisely, inflation, asset allocation, and diversification.

We Focus on Three Areas to Improve Financial Education

Starting Young Money Talks Confidence BOYS GIRLS Kids should start learning good Encourage parents to talk to their Improve educator confidence in financial habits by age 8 or as kids weekly about money matters. teaching financial concepts. soon as they begin to notice that buying things is a part of life. 53% 42% Findings from our annual Parents, Kids & Money Survey say their parents are saving for their college education In 2014, we conducted our sixth saver rather than a spender, feeling Findings on the impact Money Talk: annual Parents, Kids & Money Survey.8 confident about money, and saving for of having money The survey is designed to help us gain their own college education. conversations Boys vs. Girls understanding of the basic financial §§ Kids feel smarter about money: % % “Boys and girls should have the same Among other knowledge, attitudes, and behaviors of 66% of kids whose parents opportunities to learn about money 45 38 parents of children ages 8 to 14 and frequently talk about family finances important findings, matters at home so they can grow think they are smart about money their children. say they feel smart about money, into financially savvy adults,” says our 2014 Parents, as opposed to 37% of kids whose Survey results revealed that boys and Judith Ward, CFP®, a senior financial parents don’t frequently talk about Kids & Money girls are not equally prepared when planner at T. Rowe Price and mother family finances. Additionally, 60% of it comes to learning about money of two. “If you want to invest in your Survey revealed % % kids whose parents frequently talk matters at home. The survey also kids’ futures, start by talking to them that boys and girls to them about budgeting feel they 12 6 uncovered a correlation between about money matters weekly. The are smart about money, as opposed have access to credit cards talking to kids of either gender about correlation between the frequency are not equally to just 34% of kids whose parents financial concepts and kids devel- of conversations about money and prepared for their do not frequently talk with them oping positive financial behaviors, kids’ smart financial decision-making about budgeting. financial future. such as identifying themselves as a is undeniable.” 58% 50% say their parents are talking with them about 8 The sixth annual T. Rowe Price Parents, Kids & Money Survey, conducted by MarketTools, Inc., was fielded from January 29, 2014, through setting financial goals January 31, 2014, with a sample size of 1,000 parents and 924 kids ages 8 to 14. The margin of error is +/- 3.0 percentage points.

14 | BUILDING ON OUR VALUES | Building Financial Capability in Communities Corporate Social Responsibility 2014 | 15 NURTURING COLLABORATIONS SPARKED Building educator BY A COMMON VISION confidence The T. Rowe Price Foundation could integrate the concepts into reached over 6,000 students with ® Strategic partnerships Junior Achievement Walt Disney World Resort funded the Maryland Council on their curriculum and meet standards financial literacy lessons. The institute strengthen communities T. Rowe Price and the T. Rowe Price As part of our ongoing collabora- Economic Education’s Financial recently mandated in the Maryland also influenced financial behaviors of While the results of our research help Foundation continue to support tion with Walt Disney Imagineering, Literacy Institute to help elementary State Curriculum for Personal the attendees, with teachers reporting inform the wide range of projects financial education outreach programs T. Rowe Price held a sweepstakes educators better understand financial Financial Literacy Education. The a 75% increase in setting their own we initiate to help strengthen our with JA, a nonprofit organization contest to promote The Great Piggy concepts. Consequently, teachers institute engaged 80 teachers who financial goals.10 communities, we also recognize that that provides business, economic Bank Adventure®, a free online board it’s a job we cannot do alone. That’s and financial literacy, and life skill game; a mobile app; and a hands-on, why we are committed to working with programs to young people. interactive exhibit at INNOVENTIONS other organizations to develop and in Epcot® at the Walt Disney World® Through our partnership with JA, we expand outreach programs aimed at Resort in Lake Buena Vista, Florida. engaged 10 sites across the U.S. in preparing kids for financial success. improving financial knowledge of Because the sweepstakes was “T. Rowe Price recognizes that it is easier to equip students with In addition to our sponsorship of kids using financial education games open to the general public, a wider JA’s national programs, associates and tools delivered on the Web portal audience had the opportunity to the proper financial knowledge than to remediate poor financial across the firm volunteered with JA MoneyConfidentKids.com/JA. The learn about the financial education decision-making later on and has generously funded the Maryland in their local communities to provide engagement reached 18,000 people, resources and tools accessible from Council on Economic Education’s Financial Literacy Institute for hands-on teaching of basic math and students showed a 26% average T. Rowe Price. The grand prize winner and financial education concepts to increase in knowledge of basic finan- received a three-night family vacation teachers of grades K–5. Over the past three years, Maryland program participants. cial concepts after using the games on for four to the Walt Disney World® teachers participating in the elementary institute have learned the portal.9 Resort in Orlando, Florida. The trip included a special tour of The Great financial concepts for use in the classroom.” Piggy Bank Adventure® interactive Mary Ann Hewitt, exhibit at INNOVENTIONS at Epcot® Maryland Council on Economic Education, Executive Director prior to the exhibition’s close in 2015 and a discussion with a CERTIFIED FINANCIAL PLANNER™ professional about saving for college.

Total Outreach 2010 455,000 This graph shows the number of parents, children, and educa- tors we reached to build core 2011 385,000 financial capabilities that we believe will contribute to more stable communities and a 2012 472,000 healthier U.S. economy.11

2013 615,000

2014 750,000

The T. Rowe Price Investor Center for teens is located at JA Biztown®, Maryland.

10 Maryland Council on Economic Education Financial Literacy Institute, “MCEE Financial Literacy Institute Teacher Survey Results,” 9 100000 Junior Achievement, “T. Rowe Price and The Great Piggy Bank This fun interactive display is a feature of August 2014. 0 200000 300000 400000 500000 600000 700000 800000 ® 11 Adventure Visitor Research,” January–May 2014. The Great Piggy Bank Adventure® at Epcot® Total reach of T. Rowe Price financial education websites, online games, apps, exhibits, programs with JA, and sponsored events. at the Walt Disney World® Resort, Florida. 16 | BUILDING ON OUR VALUES | Building Financial Capability in Communities Corporate Social Responsibility 2014 | 17 EMPOWERING OUR ASSOCIATES We value our associates and strive to create a culture that encourages diverse thinking, productive teamwork, and a sense of responsibility beyond the confines of the business. In the next section, we will discuss the programs we have in place to encourage and assist associates in realizing their professional and personal aspirations both at work and in the community.

“It is critically important that we provide an environment supportive of our associates’ aspirations, where differences and differing opinions are respected and valued and individuals are enabled to contribute to the success of our company and our communities

Associates are encouraged to collaborate and share across the globe.” insights to ensure that we are harnessing our best James A.C. Kennedy, thinking on behalf of our clients. T. Rowe Price, CEO and President

18 | INVEST WITH CONFIDENCE Corporate Social Responsibility 2014 | 19 ENABLING We recognize that we must continually Our Diversity and Inclusion Structure and purposefully create an environment ASSOCIATES that encourages and nurtures a spirit of respect. To accomplish this, we created New apprenticeships are an TO EXCEL Management Committee a formal accountability structure around investment in the community’s future Our mission is to help our clients Final decision-making body responsible for endorsing strategy, ensuring diversity and inclusion that includes achieve their long-term financial goals. ownership and commitment among business leaders, and reporting Around the world, we strive business unit leaders, human resources, We believe our associates are the key progress to the Board of Directors on stated goals. to enhance our communities to succeeding, and we are committed and working groups. Together, they by creating initiatives that to enabling them to pursue growth, guide our D&I efforts. support and align with our professionally and personally, and Over the past year, we have made values. In 2014, as part of flourish to the benefit of our clients, the our investment in the London Diversity Advisory Council noticeable strides in our D&I programs company, and our communities. and initiatives: community, we began piloting Advisory and governing Board composed of business unit leaders a new apprenticeship program Building on diversity responsible for overseeing and driving our D&I strategy; building §§ Talent: Strengthened recruiting designed to help young people and inclusion ownership and commitment; and evaluating, assessing, and making efforts to attract undergraduate and gain experience and training We strive to ensure that every voice is recommendations to the Management Committee on critical issues— graduate talent through partnerships in the field of finance. The heard—and valued. To us, diversity and including monitoring and reporting progress. with diverse organizations and program, which currently hosts inclusion (D&I) is an inherent aspect schools, including: two student apprentices, is the of our own values and integral to our ú Robert Toigo MBA Fellowship result of a collaboration with success. To drive and support our ú MBA JumpStart East London Business Alliance, an organization dedicated to bringing work, we have created a D&I frame- Human Resources D&I Team ú Management Leaders for Tomorrow about positive change in East London. work around three strategic pillars: Accountable for collaborating on shaping and executing strategy and §§ Culture: Earned the highest talent, culture, and leadership. By While still in its infancy, this program is an important step toward are thought leaders responsible for consulting with stakeholders on possible score of 100 in the Human utilizing this framework, we are able to strengthening the local community—aimed particularly at young people best practices, trends, and metrics. Rights Campaign Foundation’s attract and retain superior talent, create for whom attending a university is out of reach. “This effort has really Corporate Equality Index. The index an environment where our associates helped us become more involved in our community. We now have a scores companies in five categories: can do their best work, and engage our greater understanding of the challenges our young people face and nondiscrimination policies, leaders in championing our goals. have been able to offer two bright individuals a chance they may other- employee benefits, organizational Business Units wise not have had,” says Mandy Maskell, London CSR committee lead. competency and accountability Responsible for their own diversity action plans, which provide around LGBT diversity and inclusion, After completing their apprenticeships, students receive a National Diversity and Inclusion accountability for what will be achieved within each operating unit positive engagement with the Vocational Qualification (NVQ) certificate. The NVQ is a work-based by the Numbers in the firm. external LGBT community, and qualification in England, Wales, and Northern Ireland that recognizes responsible citizenship. a person’s skills and knowledge for a particular job. §§ Leadership: Recognized for our % The students aren’t the only benefactors. Our associates have Board diversity by Black Enterprise expressed enthusiasm and excitement about interacting with the 47 magazine. women in Women’s Roundtable students and helping them grow throughout their 12-month tenure Ethnic Diversity Roundtable with the firm. the workforce PRIDE @ T. Rowe Price Continuing our journey We will continue to focus on the strategic Based on the success of the pilot, the firm intends to roll out a larger, Working groups responsible pillars outlined in our D&I framework with more sustainable program in the future. for influencing strategy by evaluating, the goal of increasing the diversity of our assessing, and refining recommenda- % associate population, with an emphasis tions on issues, opportunities, on initiatives to increase our female and 23 and challenges related to the minority representation. minorities in firm’s female, minority, and LGBT associates. the workforce We realize we still have work to do, but we are excited to share our progress as we continue to carry out our commit- ment to more actionable D&I practices.

20 | BUILDING ON OUR VALUES | Empowering Our Associates Corporate Social Responsibility 2014 | 21 EXTENDING OUR VALUES TO THE COMMUNITY Earth Week Associate volunteering Associates offer their time and talent through a variety of activities. Our core values flow seamlessly from the business decisions we make every day through our involvement in the The firm’s annual Earth Week To promote and encourage volunteerism, the firm offers each associate communities where we live and work. It’s who we are. Celebration gives associates an opportu- one paid volunteer workday each year. In 2014, our associates volunteered nity to appreciate the Earth’s resources over 60,000 hours through personal and company-sponsored volunteering. Our commitment to upholding and acting upon our values is evident in the spirit our associates display through providing and reflect on their own commitments financial support, volunteering their time, and sharing their expertise. to environmental sustainability. Each year, associates participate in the weeklong festivities.

Associate Impact in the Community §§ All associates received seeds to plant at home. Associate Volunteers Associate Volunteer Hours §§ Associates were given the opportunity 2,992 2014 60,240 to participate in recycling drives 2,287 2013 51,361 % + of less traditional items, such as million electronics, eyeglasses, batteries, 12 $4.2 51 300 3,180 2012 76,520 in associate of associates associates serve on mobile phones, and shoes. 2,254 2011 37,070 workplace giving volunteered in 2014 nonprofit Boards §§ Associates were encouraged to participate in company-sponsored 1,963 2010 22,044 outdoor cleanup volunteer events. 1,911 2009 26,600 Financial Support Time Expertise § Matching Gifts § Volunteer Days § Skilled Volunteerism 2,321 2008 20,679

§ Annual Workplace Giving § Regional CSR Committees § Pro Bono Consultation 2,117 2007 16,680 Campaign § Paid Volunteer Time Off § Nonprofit Board Service 2006 § Holiday Giving § Volunteer Team Building 1,944 17,216

1,711 2005 15,505 -3500 -3000 -2500 -2000 -1500 -1000 -500 0 01000020000300004000050000600007000080000

1,571 2004 16,095

Financial support Tokyo associates planted vegetable In addition to volunteering our time provided associates with a convenient Our associates responded by contrib- and flower seeds on the veranda and at Sharing our expertise and expertise, financial support plays way to financially support causes that uting to the annual Workplace Giving their homes. Many of our associates go beyond traditional volunteer activities and an integral role in addressing the chal- are important to them. Campaign at record levels, exceeding choose to serve on Boards or in leadership positions for nonprofits. Born lenges that face many in our neighbor- $1.5 million. We remain committed out of a desire to make a difference for a cause in which they believe, asso- hoods. As a firm, we believe we can In 2014, with help from the T. Rowe to developing innovative ways of ciates contribute their talents and skills, giving them a unique opportunity accomplish more together than any of Price Foundation, associates were engaging everyone in our workforce to affect an organization’s ability to fulfill its mission. us can alone, and this idea is demon- given the opportunity to make an to foster an ongoing spirit of giving to strated through the generous financial even greater impact on those in need our communities. Through their service, associates hone leadership skills by gaining support of our associates. by taking advantage of a dollar-for- exposure to challenges that require creative and diverse approaches. By dollar match by the Foundation, up to connecting with and learning from colleagues who share their passion For over 20 years, our annual specified limits. but may offer a different perspective or solution, associates benefit both Workplace Giving Campaign has % personally and professionally through their collaboration. 23 London volunteers made benches from increase in pledges recycled concrete lintels and revamped by associates through the pool area at the Lambourne End Centre for Outdoor Learning, a small annual Workplace charity that provides outdoor learning Giving Campaign opportunities for children to build self- esteem, confidence, and social skills. 12 2012 was a unique year for volunteerism. As part of our 75th anniversary celebration, associates were challenged to reach 75,000 volunteer hours, a goal they exceeded.

22 | BUILDING ON OUR VALUES | Empowering Our Associates Corporate Social Responsibility 2014 | 23 T. ROWE PRICE FOUNDATION Since its founding in 1981, the T. Rowe Price Foundation has worked closely with nonprofits to identify innovative solutions that improve educa- tional outcomes for youth, empower individuals, and enrich community life. The following pages highlight some of the Foundation’s community efforts as well as data on the direct grants and matching gifts over the past five years.

“We work closely with communities to bring about significant, sustainable change. It’s a partnership that has always benefited

The T. Rowe Price Foundation directs a major portion of giving everyone involved.” to in-school and after-school programs to enhance academic Ann Allston Boyce, success and help build skills. T. Rowe Price Foundation, President

24 | INVEST WITH CONFIDENCE Corporate Social Responsibility 2014 | 25 BUILDING PARTNERSHIPS, EMPOWERING COMMUNITIES Supporting the library’s role The T. Rowe Price Foundation is and support public institutions that through volunteerism and financial as a community hub committed to working for the long- offer educational experiences in the contributions. The Foundation helps Enoch Pratt Free Library Pikes Peak Library term success of communities where arts, history, and the sciences. associates maximize their charitable For more than 25 years, the The Foundation has been an active As part of its mission to build T. Rowe Price associates work and impact by matching their contributions Foundation has supported the partner with the library in providing educational opportunities, the As part of T. Rowe Price’s commit- live. The Foundation pursues initia- up to certain annual limits and making Enoch Pratt Free Library in Baltimore, a wide range of educational and Foundation made a capital grant 10 ment to community outreach, the tives that spark change, focusing on grants to organizations where associ- Maryland, and its mission to “provide life opportunities for both adults in 2014 to the Pikes Peak Library company encourages associates grants to foster excellence in educa- ates volunteer on an ongoing basis. equal access to information and and children: in Colorado Springs, Colorado, to to support nonprofit organizations 8 tion; provide services to those in need; services that empower, enrich, and support a new Children’s Learning enhance the quality of life for all.” §§ A $250,000 capital grant (in Center. The center promotes early 6 2008) helped upgrade technology childhood literacy, basic computer The library welcomed more than offerings in two of the library’s science concepts, and financial Historical Giving 1.7 million visitors in 2014 across busiest branches 4 literacy. T. Rowe Price’s online 23 locations thanks to the diverse §§ A $250,000 capital grant (in 2014) financial education game for children million in total giving services it offers to the community. In supported the addition of a new is offered in the computer lab. 2 from 1981–2014 addition to its traditional role of loaning Teen Center to the central library, $83.7 books, the library offers free programs including state-of-the-art technology and computer access. A new Job and 0 Career Center helps with job searches, The new Teen Center enables resume writing, and interviewing tech- students to develop valuable skills for Recent Giving: Five years of growth Matching gifts niques and provides e-mail access to the digital economy by writing code, filming videos, and exploring robotics Direct Grants (in millions) grew by job seekers. Matching Gifts (in millions) and computer-generated animation. Total 8 Total $7.5 Total $6.3 % 7 Total $5.9 Total $5.3 45 Preparing students for business 6 $5.0 $3.1 over the past five years University of South Florida 5 $3.2 Since 2009, the Foundation has Tampa office meet regularly with these Maryland to learn more about the firm. 4 $2.7 $3.4 and represented $2.6 funded a program with the University students and provide opportunities to Two students who were part of the 3 of South Florida (USF) in Tampa that attend business meetings. This gives mentoring program now have full-time 2 % $3.1 $4.4 gives business majors experience in students a realistic feel for life in an positions with T. Rowe Price. 1 $2.4 $2.6 $2.5 59 the corporate world. actual business environment. 0 of giving in 2014 2010 2011 2012 2013 2014 The Foundation’s grants support The program has been so successful first-generation college students, that USF students and administrators and volunteers from T. Rowe Price’s visited T. Rowe Price headquarters in

Direct Grants 7% Education & Youth 12% Development 36% Civic & Community Human Services “Over the past 10 years, T. Rowe Price has 19 0 23% organizations received Arts & History become very involved in the success of our direct grants in 2014 22% Higher Education students on many levels. T. Rowe Price is an excellent partner, and we value the support.” Jackie Nelson, University of South Florida, Senior Director of Undergraduate Studies

26 | BUILDING ON OUR VALUES | Giving Back to the Community Corporate Social Responsibility 2014 | 27 Using art to bring new life to downtown Baltimore Promoting innovation in education Station North Arts and Bard High School Entertainment District Early College (BHSEC) (SNAED) Due in part to a one-time grant of of study. The rigorous course work Project CYCLE is an innovative pilot The Foundation’s support of the SNAED has shown that artists bring a century and won the National $100,000 from the Foundation, needed to complete the program program designed to test the effective- SNAED is a prime example of how pioneering spirit to a community and Affordable Housing Management BHSEC will open its first school in better prepares graduates to ness of mentoring teachers through the it supports strategic opportunities to can play a key role in strengthening Association’s Affordable Housing Baltimore, Maryland, in the fall of succeed in college and beyond. use of video and an online platform that promote the development and revital- a neighborhood and improving its Vanguard Award in 2011. 2015—one of seven nationwide. connects teachers with experienced BHSEC has achieved an impressive ization of our communities. SNAED residents’ quality of life. To jump- §§ A $200,000 pledge to the Maryland coaches. This makes expert instruc- BHSEC gives students in urban record of success—the 2014 gradua- is located in an area of Baltimore start redevelopment of the area, the Institute College of Art to help tional coaching available to schools school environments an opportu- tion rates for its schools were 100% City that has suffered from significant Foundation made several grants: renovate its Graduate Studio Center that cannot afford in-person training. nity to accelerate their education. in New York, New York; Newark, New disinvestment for many years. Over building, which features exhibit Teachers receive meaningful feedback §§ A $300,000 investment to support Students receive a high school Jersey; and New Orleans, Louisiana. the past several years, this trend has galleries, academic space, and to strengthen their instructional skills The Reinvestment Fund, which diploma and an associate in arts been reversed through investment artist studios. and enhance classroom management degree from Bard College within Project CYCLE in a diverse collection of art spaces, developed secure and affordable to benefit student learning. §§ Two grants to the nonprofit Station four years at no cost to them or their A $100,000 Foundation grant helped galleries, row houses, and businesses. housing for artists in Baltimore at the City Arts Apartments. It was North Arts and Entertainment, Inc., families. All classes are taught by bring Project CYCLE to Baltimore the first new residence built in to plan events and encourage college faculty, with most holding City elementary schools for a three- the neighborhood since the 19th visitors to the district. Ph.D. degrees in their chosen field year pilot program.

The Station North Arts and Entertainment District located in Baltimore, Maryland.

28 | BUILDING ON OUR VALUES | Giving Back to the Community Corporate Social Responsibility 2014 | 29 ABOUT T. ROWE PRICE

LEADERSHIP T. Rowe Price T. Rowe Price Board of Directors Management Committee Our firm is governed by a Board of senior management. The Board also The committee is composed of six Directors, elected by the company’s reviews and establishes procedures to members who are responsible for the shareholders. The Board represents help ensure that the business upholds firm’s overall vision and leadership. the ultimate decision-making body the highest legal and ethical conduct See our committee members’ profiles for the firm and is responsible for at all times. for more details.13 selecting, advising, and monitoring

FRONT ROW EDWARD C. OLYMPIA J. SNOWE MARK S. BARTLETT ANNE MARIE DWIGHT S. TAYLOR BERNARD Chief Executive Retired Managing WHITTEMORE Retired President Vice Chairman Partner Partner

T. Rowe Price Olympia Snowe, LLC Ernst & Young McGuireWoods LLP COPT Development & Construction Services, LLC BACK ROW ROBERT F. DR. FREEMAN A. DONALD B. BRIAN C. ROGERS MARY K. BUSH DR. ALFRED JAMES A.C. MACLELLAN HRABOWSKI III HEBB, JR. Chairman and Chief President SOMMER KENNEDY Non-Executive President Chairman Investment Officer Dean Emeritus and Chief Executive Officer Chairman University Distinguished and President Service Professor Northleaf Capital University of ABS Capital Partners T. Rowe Price Bush International, LLC Johns Hopkins T. Rowe Price Partners Maryland, Bloomberg School Baltimore County of Public Health

13 http://corporate.troweprice.com/ccw/home/about/leadership.do

30 | INVEST WITH CONFIDENCE Corporate Social Responsibility 2014 | 31 A COLLABORATIVE APPROACH TO CORPORATE GOVERNANCE Steering committees We have established a system of §§ Business continuity risk efforts by partnering with business We apply a disciplined process to adheres to sound corporate gover- Our approach to corporate gover- steering committees to oversee various §§ Human capital risk units to identify risks, understanding investing, and our approach to corpo- nance policies that align with both our nance is centered on four key func- aspects of risk management at T. Rowe acceptable levels of risk, and imple- rate governance is no less rigorous. values and those of our stakeholders, tions: business units, enterprise risk §§ Compliance risk Price. There are 10 committees in menting solutions that mitigate expo- We have established a governance our associates carry out the firm’s management, firmwide compliance, §§ Financial risk addition to the firm’s Management sure to risk. structure and processes to ensure policies and strategies on a day-to- and internal audit—each of which Committee, which sets strategic policy The firm takes both a centralized stakeholders have confidence in our day basis—all the time maintaining performs its tasks in a highly collabora- Firmwide compliance and direction for broad activities of the and a decentralized approach to risk commitment to safeguarding their the firm’s reputation for integrity tive environment. While the accom- Our compliance program is designed firm. These include: management. The framework of our interests. While our senior leadership and service. panying illustration demonstrates the to ensure we maintain sound compli- §§ Ethics Committee centralized approach includes depart- and Board of Directors are ultimately structure and responsibilities, we’ll ance practices according to local laws ments and committees charged with responsible for ensuring that the firm discuss briefly how each operates. §§ U.S. Equity Steering Committee and regulations as we expand globally. developing risk management policies §§ Fixed Income Steering Committee and practices and monitoring their The U.S. director of Strategic §§ International Steering Committee implementation. From a decentralized Compliance coordinates, oversees, §§ Asset Allocation Steering perspective, the business units and and supports T. Rowe Price’s overall Committee associates manage risk on a “bottom compliance program. Our head of §§ Risk Management Oversight up” basis under their own internal International Compliance, based in the Committee controls. UK, is charged with overseeing inter- §§ Finance Committee national compliance matters. This role Informally, we have a well-established §§ Management Compensation is responsible for ensuring that the Corporate Governance Structure culture that supports and encourages Committee firm operates in accordance with the associates at all levels to alert manage- regulations of each individual country Leads and coordinates business §§ Product Strategy Committee ment of any sign of wrongdoing or and investment risk activities § in which T. Rowe Price operates. Ensures risk awareness and • Guides strategy and manages § Operational Steering Committee excessive risk taking. compliance within day-to-day risk framework En Internal audit operations terp • Identifies risks and assesses Business units The Risk Management Oversight s rise • Operates governance committees nit R acceptable risk levels Reporting to the Audit Committee of U isk Each business unit retains first- Committee, chaired by the chief risk ss g Comm M • Establishes investment steering e rin ittee 1 a • Ensures risk awareness the T. Rowe Price Board of Directors, in tee s 4 n line responsibility for its business officer, offers a forum for business s S a committees u g • Establishes solutions to mitigate B e Internal Audit is managed by the head • Enacts independent internal m risk exposure processes, control environment, and leaders from across the firm—including d of Direc e oar tor n of Audit. The department prepares controls B s t • Oversees a robust enterprise risk. All T. Rowe Price associates the chief financial officer, chief legal

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e and approved by the Audit Committee. O m Governance integrity and ethics. This philosophy management strategy and oversee Conducts annual financial audits e Assures the adequacy and e v n ti and other oversight t u implementation of procedures is applied to all business processes firmwide risk efforts. The committee C c The department conducts reviews • Prepares and administers annual o xe • Prevents and detects violations m E and reinforced regularly through our also meets regularly with the CEO mit ief of our processes to ensure the risk-based strategic audit plan R tee Ch e of security laws i e c I s te n hiring criteria, our associate training, and has access to the CEO at any • Proposes audits based on risk n k it a • Reviews client contractual adequacy of our operational controls te M m li rn an m p attributes, process maturity, and a ag Co m obligations and our Code of Ethics and Conduct time beyond the regular meetings. l eme ight o and recommends remediation where industry developments Au nt Overs C • Monitors firm’s Code of Ethics d de (the Code). This structure allows the CEO and • Conducts reviews of processes to it wi and Conduct necessary. Audit findings are provided Firm Management Committee to quickly ensure the adequacy of operational Enterprise risk to the head of the business unit controls address identified issues and continue responsible for each activity, the firm’s • Recommends remediation where management to strengthen the firm’s overall risk Management Committee, and the necessary Enterprise risk management focuses management program. Audit Committee. The findings require on how the firm proactively identifies written responses from the pertinent and manages business risk within the The Enterprise Risk Management responsible process owner, and organization, particularly these specific Group, headed by the chief risk Internal Audit monitors implementation For more information about our privacy policy15 and security measures,16 visit our website. types of risk: officer, collaborates with Internal Audit and Firmwide Compliance to ensure strategies and resolution. §§ Reputational risk that risks are adequately controlled 14 Steering committees in addition to the Risk Management Oversight and Management Committees include: Ethics Committee, U.S. §§ Strategic risk and monitored. This group is respon- Equity Steering Committee, Fixed Income Steering Committee, International Steering Committee, Asset Allocation Steering Committee, §§ Operational risk sible for leading our risk management Finance Committee, Management Compensation Committee, Product Strategy Committee, and Operational Steering Committee. 15 http://corporate.troweprice.com/ccw/home/privacyPolicy.do 16 http://corporate.troweprice.com/ccw/home/privacyPolicy/securityMeasures.do

32 | BUILDING ON OUR VALUES | About T. Rowe Price Corporate Social Responsibility 2014 | 33 FOSTERING A CULTURE OF INTEGRITY AND ETHICS ENGAGING ON KEY INDUSTRY ISSUES Education and training Ethics Committee Anti-bribery policy Membership in public Shaping policy through keeps us true to our Code The firm’s Ethics Committee, The values and global business prac- policy associations public forums Our commitment to always acting with whose members are appointed by tices of T. Rowe Price are expressly We maintain memberships The firm’s management regularly Leaders across the firm’s busi- integrity is formalized and reinforced the Management Committee, has designed to help prevent bribery and and participate in industry monitors and evaluates public policy ness units, as well as our Legal and through our Code of Ethics and overall responsibility for developing, corruption. As such, the firm main- associations, including: issues affecting our business. We Compliance departments, work Conduct, which has been in force for maintaining, and administering the tains a strict compliance program believe it is critical to play a role in closely to determine whether, and in over three decades. The Code is appli- Code. As such, the committee seeks designed to prevent illegal payments §§ American Benefits Counsel enhancing the integrity and structure what way, to engage lawmakers, regu- cable to all associates and directors of to identify and address activities and to provide guidelines for associ- §§ Australian Institute of of our industry. lators, trade associations, or other third the company, as well as contractors, that could create conflicts with the ates regarding acceptable business Superannuation Trustees parties in the dialogue. Our advocacy consultants, vendors, and tempo- interests of our clients, associates, activities. To ensure understanding §§ European Fund and Asset When appropriate, we engage with key methods include: rary workers who perform ongoing or the firm itself. Moreover, subject and compliance, all associates are Management Association lawmakers to help shape the laws and regulations they adopt. Over the years, §§ Public comment letters services for the firm. All associates to the approval of the Management required to complete annual anti- §§ Financial Services Information we have focused our public policy § must participate annually in continuing Committee, the Ethics Committee can bribery training. Sharing and Analysis Center § Speaking engagements efforts on many areas affecting our education and training related to the and does impose sanctions for viola- (FS–ISAC) §§ Educational meetings with tions of the Code. Policy on campaign clients, including ensuring fairness and Code. The intention is to promote §§ Forum of European Asset Managers industry groups, regulators, honest conduct; full, timely, and accu- contributions best practices in investment manage- and policymakers §§ Hong Kong Investment rate reporting; compliance with laws; Whistleblower program We adhere to rules and regulations ment, mutual funds, retirement savings, Management Association and accountability for adherence to We have an established whistleblower that limit the political activities of tax policies, and capital markets. Given the Code, including internal reporting program that provides employees investment advisors that provide advi- §§ Investment Adviser Association that we are a global company, we are of any violations. the opportunity to submit a complaint sory services to government entities. §§ Investment Company Institute (ICI) sensitive to international developments without the fear of dismissal or retalia- §§ ICI Global and the need for regulatory coordina- A copy of our Code is available tion. The program is clearly and regu- We do not make corporate contribu- tion and cooperation across jurisdic- §§ SPARK Institute upon request: larly communicated through the Code tions to political candidates, parties, tions around the world. § and through the firm’s intranet site and or committees, nor does the firm § UK Investment Association T. Rowe Price maintain a political action committee. is reinforced through annual training. At any time, a number of T. Rowe Attn.: Corporate Secretary Employees are required to receive Price associates may be actively 100 East Pratt Street Complaints can be filed in writing or prior approval from the Legal involved with these and other industry Baltimore, MD 21202 through a toll-free, 24/7 anonymous Department for all political contribu- organizations through leadership roles hotline. All complaints are directed to tions in the United States. the chief legal counsel and are kept or committee participation. confidential to the strictest extent possible while allowing for a thorough investigation. Reporting structures are in place to track the date of complaint, the status, a description of the investi- gation, and the resolution. “Effectively participating in industry associations is another way that T. Rowe Price associates are able to ensure that our firm and indeed our industry put clients first by helping to ensure high standards of practice and seeking to positively influence the policy and regulatory environment. I seek to contribute to this on behalf of T. Rowe Price and our clients as a member of the Investment Company Institute’s Global Steering Committee, a Board member of the UK Investment Association, and a member of the Forum of European Asset Managers’ Steering Committee.” Robert Higginbotham, T. Rowe Price, Head of Global Investment Services

34 | BUILDING ON OUR VALUES | About T. Rowe Price Corporate Social Responsibility 2014 | 35 REWARDING ASSOCIATES, INVESTING IN OUR FUTURE ENSURING NEXT-GENERATION LEADERSHIP Associate compensation Succession planning In our view, compensation is more CompensationCompensation Oversight oversight and and Governance governance Succession planning is an integral part The Nominating and Corporate than an overhead cost—it is an of our business continuity plan and Governance Committees of the Board investment in talent. And to be effec- critical to our long-term success. The of Directors oversee the process for tive, we realize our program must firm’s continued growth depends on succession planning for the chief ensure external market competi- our ability to identify and develop the executive officer and other most senior tiveness, internal equity, and pay right people to fill vital roles, reinforce officers of the firm. In addition, each for performance. Executive Compensation Committee our values, guide key business strate- business unit oversees and actively of the Board of Directors In that spirit, the T. Rowe Price Compensation program oversight. gies, and direct new initiatives. manages a succession plan for key management positions. compensation program rewards asso- As with our disciplined investment ciates who are able to create lasting style, we view succession planning An example of our careful approach value for our clients without undue with a long-term vision. Our succession to succession planning is the planned risk. For example, portfolio managers plan is the result of well-structured, retirement of James A.C. Kennedy, are compensated on several long-term formal processes across the firm, CEO and President after a 38 year factors, including the consistency of Management Compensation Committee including an ongoing evaluation and career with the firm, nine years as CEO their portfolios’ performance, rather Sets policy for the firm s overall compensation program and manages the compensation for investments, assessment of our talent pipeline. and President. The appointment of than on short-term factors, such distribution, and other senior operating associates. Our approach to succession planning Bill Stromberg, head of Global Equity as asset growth or current assets The committee is composed of: flows seamlessly from our collabora- and Global Equity Research, by the under management. tive culture, coaching, and leadership Board of Directors as Mr. Kennedy’s In addition, to help align the interests of development programs, creating successor is the culmination of a invaluable opportunities for leaders thoughtful and planned transition of our associates with those of our stock- CEO Chairman Vice Head of holders, key executives are eligible for Chairman Global Equity across the firm to help grow and leadership. This event is consistent stock incentive plans that are subject nurture other leaders and deepen our with our long history of thoughtful to five-year vesting periods for all bench strength. management transitions. participants and certain “clawbacks” for the most senior executives if certain operating measures are not met. Staff Compensation Committee The firm also offers associates an Headed by the vice chairman. employee stock purchase program as Executes staff compensation program. The committee is composed of several part of a companywide total compensa- business leaders. tion program. As a result, 80% of our associates own T. Rowe Price stock.

For information on executive compensation, please view our online proxy statement.17

17 http://trow.client.shareholder.com/financials.cfm

36 | BUILDING ON OUR VALUES | About T. Rowe Price Corporate Social Responsibility 2014 | 37 We welcome your insight and comments We invite you to visit troweprice.com for additional information about corporate social responsibility at T. Rowe Price and to access our Annual Report and other public filings.

To ask questions or provide feedback, please contact us at: T. Rowe Price Corporate Social Responsibility [email protected] T. Rowe Price Group, Inc. 100 East Pratt Street Baltimore, Maryland 21202 (410) 345-2000 troweprice.com

T. Rowe Price, Invest With Confidence, and the bighorn sheep are registered trademarks of T. Rowe Price Group, Inc., in the United States and other countries.

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