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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

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We cordially invite you to attend our 2017 Annual Meeting of Stockholders.

Items of Business:

The record date for determining which stockholders may vote at this meeting or any adjournment is March 17, 2017. The Annual Meeting will be a completely virtual meeting. You will be able to attend, vote, and submit questions during the Annual Meeting via the Internet by visiting www.virtualshareholdermeeting.com/DST2017.

We are distributing our proxy materials to our stockholders primarily via the Internet under the "Notice and Access" method of delivery. This approach saves printing and mailing costs and reduces the environmental impact of our Annual Meeting, while providing a convenient way to access the materials and vote. On March 24, 2017, we mailed a Notice of Internet Availability of Proxy Materials to stockholders of record. The Notice contains instructions on how to access our proxy materials and how to vote online or by telephone.

Whether or not you expect to attend the Annual Meeting, please take the time to vote now. Please either sign and return the accompanying proxy card or instruct us by telephone or Internet as to how you would like your shares voted. Please follow the voting instructions on your proxy card. Regardless of the manner in which you vote, we greatly appreciate your prompt response.

By Order of the Board of Directors,

Randall D. Young
Senior Vice President, General Counsel and Secretary
March 24, 2017

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to
be held on May 9, 2017. Our Notice of Meeting, Proxy Statement and Annual Report for the year ended
December 31, 2016 are available at www.proxyvote.com.

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This summary highlights information contained in the Proxy Statement. It does not contain all of the information you should consider. Please see the Annual Meeting Matters section beginning on Page 57 for important information about the Annual Meeting and Proxy Materials.

When: Tuesday, May 9, 2017 at 8:00 a.m. Central Daylight Time
Where: www.virtualshareholdermeeting.com/DST2017

This year's Annual Meeting will be a completely virtual meeting of stockholders, which we will conduct via live webcast. You will be able to attend the Annual Meeting online and submit your questions during the meeting. You will also be able to electronically vote your shares during the meeting.

We are excited to use technology to provide expanded access, improved communication, and cost savings for our stockholders and the Company. Details on how to attend are more fully described on page 57.

We encourage you to vote at your earliest convenience, by one of the following means, before the Annual Meeting:

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By visiting www.proxyvote.com on the Internet through your computer or mobile device,

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By calling 1-800-690-6903, or

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By signing, dating, and returning your proxy card or voting instruction form, if you received your Proxy Materials by mail.

You may also vote during the Annual Meeting via the Internet by visiting www.virtualshareholdermeeting.com/DST2017 and following the instructions.

Please vote as soon as possible,
even if you plan to attend the 2017 Annual Meeting.

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Recent move initiated the phased-in declassification of our Board



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Lead Independent Director



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Majority voting standard for uncontested director elections



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88% of our directors are independent



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No shareholder rights plan or "poison pill"



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Independent directors meet regularly without management



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Anti-hedging policy applicable to all associates, officers, and directors



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Strong Code of Ethics



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Corporate Governance Guidelines and Committee Charters require annual evaluation of the Board and each Committee



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Average director tenure is just over three years

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This Proxy Statement and accompanying proxy are being provided to stockholders of record on March 17, 2017 in connection with the solicitation of proxies by the Board of Directors (the "Board") of DST Systems, Inc. ("DST," "we," "us," "our," or the "Company") to be voted at the 2017 Annual Meeting of Stockholders on May 9, 2017.

Election Process.    Members of the Board will be elected at the Annual Meeting to serve until the next Annual Meeting and until their successors are elected and qualified or until their death, resignation, or removal. We have no reason to believe that any of the nominees will be unable to serve. However, if any nominee should be unavailable to serve for any reason, the Board may reduce the number of directors fixed in accordance with our Bylaws, or shares represented by proxies may be voted for a substitute director. Proxies cannot be voted for a greater number of persons than the nominees named.

Selection Criteria.    In considering nominees for the Board, the Corporate Governance/Nominating Committee (the "Nominating Committee") considers each individual's personal and professional experiences and background, in addition to the general qualifications. All nominees for election at the Annual Meeting (the "Nominees") must possess good judgment, an inquiring and independent mind, and a reputation for the highest personal and professional ethics, integrity, and values. Nominees must be willing to devote sufficient time and effort in carrying out their duties and responsibilities and should be committed to serving on the Board for an extended period of time. Nominees are evaluated in the context of the Board as a whole, with a focus on achieving an appropriate mix of skills needed to lead the Company at the Board level. The Nominating Committee regularly assesses and communicates with the Board about the current and future skills and backgrounds that would ensure the Board maintains the appropriate mix. Such skills include, among others:

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Financial or health care industry knowledge that is necessary to oversee the Company's business performance and strategic development;

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Corporate governance and public company board experience ensuring directors have the background and knowledge necessary to understand oversight and governance roles;

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Accounting and finance experience enabling directors to analyze our financial statements, understand our capital structure, financial transactions, and financial reporting processes; and

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Global business and strategy experience that is necessary for directors to have in their oversight role at a complex global organization like DST.

The Nominating Committee identifies and evaluates nominees through multiple sources, including Board and management referrals. The Nominating Committee's charter allows it to seek assistance from third-party executive search firms in identifying nominees.

The Nominating Committee also considers:

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whether the nominee has the requisite or appropriate experience, qualifications, and skills, as described above;

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the nominee's commitment to prepare for and regularly attend meetings of the Board and committees;

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potential conflicts of interest; and

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whether, if applicable, the nominee meets the New York Stock Exchange ("NYSE") standards for independence and has qualifications and attributes necessary under applicable listing standards and laws and regulations for service on Board committees.

In considering these items, the Nominating Committee may contemplate the interplay of the nominee's attributes with those of the other Board members and appraise the extent to which a candidate would be a desirable addition to the Board and, as applicable, its committees. Although the Board does not have a specific policy for Board diversity, the Board may, as stated in the Corporate Governance Guidelines, consider whether the nominee's background would add to the diversity of experiences, qualifications, and skills the various directors bring to their Board service. Additionally, in recommending an incumbent director for re-election, the Nominating Committee considers the nominee's prior service on the Board, continued commitment to Board service, and any changes in employment or other status that are likely to affect such nominee's qualifications to serve. Stockholders may propose director candidates for consideration by our Nominating Committee. Any recommendations should include the candidate's name and qualifications for membership on our Board of Directors, and should be directed to the Corporate Secretary of DST at the address set forth on page 61.

Declassification.    In 2015, we amended our Certificate of Incorporation to eliminate the classification of our Board. All directors elected at the 2016 Annual Meeting and beyond will be elected to one-year terms. Declassification of our Board will be complete by the 2018 Annual Meeting and, at that time, all directors will be voted on annually.

Votes Required.    Each stockholder is entitled to one vote for each share held in the election of directors.

Majority Vote Standard for Election of Directors.    Our Bylaws and Corporate Governance Guidelines provide for a majority voting standard for the election of directors. This means that any director who, in an uncontested election, receives a greater number of "against" votes than "for" votes must promptly tender his or her resignation to the Board of Directors, subject to its acceptance. The Nominating Committee will promptly consider the tendered resignation and recommend to the Board whether to accept or reject it. Both the Nominating Committee and the Board may consider any factors they deem appropriate and relevant to their actions.

The Board will act on the tendered resignation, taking into account the Nominating Committee's recommendation. The affected director cannot participate in any part of the process. We will publicly disclose the Board's decision by a press release, a filing with the Securities and Exchange Commission ("SEC"), or other broadly disseminated means of communication within four days after the decision is made.

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 votes cast by the holders of shares entitled to vote on the election of directors, provided a quorum is present.

Age Restrictions.    The Nominating Committee generally will not recommend the nomination of any individual who is age 75 or older at the date of nomination. The Board may approve an exception to this policy under extraordinary circumstances, on a case-by-case basis.

Independence.    Our Board has determined that seven of our eight directors are "independent" as defined by applicable law, NYSE Listing Standards, and our Corporate Governance Guidelines. Based on such standards, Mr. Hooley is not an independent director because he is an executive officer of the Company. Each of our committees is comprised solely of independent directors.

Number of Directors.    The Board has currently fixed its size at eight.

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Nominees Whose Terms Will Expire at the 2017 Annual Meeting

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OUR BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE BOARD NOMINEES.

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Directors who are Continuing in Office.

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Our Board has been refreshed over the past few years as many of our long-standing directors retired. In 2012, our average director tenure was approximately 12 years. Now, our directors have an average tenure of approximately three years.

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The Board has three standing Board committees: the Audit, Nominating, and Compensation Committees. The charters for each of these Committees are available at investors.dstsystems.com/govdocs. We also have a code of ethics, which we call our Code of Business Conduct, which is available at investors.dstsystems.com/codeofbusinessconduct.

In 2016, the Board met eleven times. Each incumbent director attended at least 75% of all regular and special Board meetings and all meetings of Board committees on which the director served.

Our directors shall, whenever reasonably practicable, attend annual meetings. All directors attended the 2016 Annual Meeting.

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DST has a strong history of corporate governance, which is a critical element of our success in driving profitable growth. The Board continuously reviews our governance practices, assesses the regulatory and legislative environment, and adopts governance practices that best serve the interest of DST's stockholders, including:

The Board has determined that the current leadership structure, in which the offices of Chairman and Chief Executive Officer are held by one individual and an independent director acts as lead director ensuring the appropriate level of oversight, independence, and responsibility is applied to all Board decisions, including risk oversight, is in the best interest of DST and its stockholders.

Chairman/Chief Executive Officer

The Board has selected a combined Chairman/CEO position because it provides:

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accountability to the Board;

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clear and effective leadership and direction for the Board and executive management;

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a single focus to execute on strategic initiatives and business plans;

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leadership for the Board and the Company, while avoiding any potential for confusion or duplication of efforts between the CEO and a separate Chairman; and

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the benefit from our CEO's strategic and operational insights.

Lead Independent Director

Our Corporate Governance Guidelines, which are available on our website, investors.dstsystems.com/govdocs, provide for a strong lead independent director role. Currently, Lowell L. Bryan has been selected as Lead Independent Director.

Our Lead Independent Director:

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was chosen by and from the independent members of the Board and serves as a liaison between the independent directors and the Chairman of the Board;

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has the authority to call meetings of the independent directors;

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presides at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the Board at which only independent directors are permitted to be present;

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advises the Chairman of the Board with respect to Board agenda items (including items suggested by any independent director), meeting schedules, and information to be provided to the Board; and

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serves as a point of contact for stockholders wishing to communicate with the Board other than through the Chairman of the Board.

Executive Sessions

The independent directors of the Board regularly meet in executive session without management, and at such other times as the Lead Independent Director chooses. In 2016, our independent directors met six times in executive session.

The Board has adopted a guideline that its non-employee directors are expected to beneficially own an amount of DST stock with a fair market value equal to at least five times the annual cash retainer for serving as a Board member. (Retainer information is included under "Non-Employee Director Compensation.") The ownership guideline provides a five-year grace period for achievement of such ownership level after joining the Board. The Board will consider personal circumstances, length of service on the Board, and the effect of market conditions in applying the guideline.

The Board, with the assistance of the Audit Committee, has oversight of the Company's risk assessment and risk management, with particular focus by the Board on material corporate governance and business strategy risks. The Audit Committee assists the Board with oversight of the Company's material financial risk exposures, including, without limitation, liquidity, credit, operational and investment risks, and the Company's material financial statement and financial reporting risks.

The Compensation Committee assists the Board with oversight of whether the Company's compensation policies and practices for all employees, including non-executive officers, create risks that are reasonably likely to have a material adverse effect on the Company, and whether the effect of incentive compensation structures for executive officers may cause inappropriate risk-taking. In each case, the Board or the applicable committee oversees the steps Company management has taken to monitor and control such exposures.

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The Chairman and Chief Executive Officer, by leading Board meetings, facilitates reporting by the Audit and Compensation Committees to the Board of their respective activities in risk oversight assistance. The Lead Independent Director, who serves on both committees, suggests risk management topics to be discussed at Board meetings as he and other independent directors deem appropriate. He may lead risk management discussions in executive sessions of independent directors. The Chairman and Chief Executive Officer's collaboration with the Board allows him to gauge whether management is providing adequate information for the Board to understand the interrelationships of our various business risks. He is available to the Board to address any questions from directors regarding executive management's ability to identify and mitigate risks and weigh them against potential rewards.

Our governance processes, including the Board's involvement in developing and implementing strategy, active oversight of risk, regular review of business results, and thorough evaluation of our Chief Executive Officer's performance and compensation, provide rigorous Board oversight of Mr. Hooley as he fulfills his various responsibilities, including his duties as the Chairman of the Board.

The Board regularly reviews short and long-term succession plans for the CEO and for other senior management positions. In assessing possible CEO candidates, the independent directors identify the skills, experience, and attributes they believe are required to be an effective CEO in light of the Company's business strategies, opportunities, and challenges. Our Board also periodically identifies persons qualified to replace key officers if they are no longer available to the Company.

NYSE listing standards, certain securities and tax laws, and our Corporate Governance Guidelines govern the independence of non-employee directors. A majority of our Board must be independent, and directors must be independent for purposes of Board committee service. Our Board has determined the independence for Board service and for service on their respective Board committees of each of Directors Antonellis, Bailey, Bleil, Bryan, Forsee, Haldeman, and Liss.

As a group, the independent directors constitute a majority of the Board. Mr. Hooley, our Chairman, CEO, and President, is the only member of the Board who is also an employee and is the only director who is not independent under applicable independence standards.

To determine independence for service on the Board and its committees, the Board has adopted categorical independence standards consistent with the NYSE listing standards and contained in our Corporate Governance Guidelines. The Board has applied these categorical standards in determining the independence of each non-employee director. It uses these standards to determine whether a non-employee director has a material relationship with us, either directly or as a partner, stockholder, or officer of an organization that has a relationship with us.

Under the Corporate Governance Guidelines, the Board presumes a non-employee director is independent if the director:

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during the preceding three years:

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has not been our employee and has no immediate family member (as defined in the Corporate Governance Guidelines) whom we have employed as an executive officer, and

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has not received, and has no immediate family member who has received, more than $120,000 in any 12-month period in direct compensation from us (other than in certain allowable circumstances including serving in his or her capacity as a member of the Board or of any Board committee);

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is not and has not been within the last three years, and has no immediate family member who is or has been within the last three years, employed as an executive officer by any company on whose compensation committee any one of our current executive officers concurrently serves or served;

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is not a current employee, and has no immediate family member who is a current executive officer, of:

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the Company,

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a company that made payments to or received payments from us for property or services in any of the last three fiscal years in an amount which exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues, as reported in the last completed fiscal year of such company, or

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a charitable organization to which we contributed in any of the last three fiscal years more than 2% of such charitable organization's consolidated gross revenues or $1 million, whichever is greater;

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has no immediate family member who is a current partner of a firm that is our internal or external auditor;

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has no immediate family member who is a current employee of a firm that is our internal or external auditor and personally works on the Company's audit;

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has no immediate family member who was, within the last three years, a partner or employee of such a firm and personally worked on our audit within that time; and

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is not a current partner or employee of a firm that is our internal or external auditor, and who was not within the last three years a partner or employee of such a firm and personally worked on our audit within that time.

The Corporate Governance Guidelines explain circumstances in which a director can be independent, even though one or more of the above circumstances exist.

The Corporate Governance Guidelines provide that a non-employee director is independent for purposes of serving on the Audit Committee only if he has not received any consulting, advisory, or other compensatory fee other than for serving on the Board or a Board committee, and he is not considered an affiliated person of the Company under applicable securities regulations.

The Corporate Governance Guidelines provide that the Board must consider whether, for purposes of serving on the Compensation Committee, a non-employee director has received any consulting, advisory or other compensatory fee other than for serving on the Board or Board committees or is affiliated with the Company or one of its subsidiaries or affiliates. The Board also considers independence under applicable tax and securities regulations in assessing independence for Compensation Committee service.

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As of March 3, 2017, we had 31,339,677 shares of DST common stock outstanding. The following table shows share ownership as of such date based upon available information.

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The securities regulations require our non-employee directors, certain of our officers, and each person who owns more than 10% of DST stock to file ownership reports with the Securities and Exchange Commission. Based on our review of the reports, and our officers' and directors' written representations to us, we believe all required reports were timely filed during the relevant period, except as follows: DST files Forms 3, 4, and 5 on behalf of its directors and officers. DST filed a Form 5 reporting late four transactions in 2016 and three transactions in 2015 in connection with the reinvestment of dividends in the Company's Directors' Deferred Fee Plan for each of Messrs. Forsee and Haldeman. DST also filed a Form 5 reporting late three transactions in 2016 for Ms. Bleil in connection with the reinvestment of dividends in the Company's Directors' Deferred Fee Plan.

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We reviewed and discussed the Company's consolidated financial statements with management and PricewaterhouseCoopers LLP ("PWC"), DST's independent registered public accounting firm. PWC gave us its opinion, and management represented, that the Company prepared its consolidated financial statements in accordance with generally accepted accounting principles in the United States of America. We discussed with the Company's independent registered public accountants the matters that Auditing Standard No. 16 (Communications with Audit Committees), as adopted by the Public Company Accounting Oversight Board ("PCAOB"), requires the Committee and the auditors to discuss.

PWC gave us and we reviewed the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with us concerning independence. We also discussed with PWC its independence from management.

Based on the above discussions, we recommended to the Board that the audited consolidated financial statements be included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

THE AUDIT COMMITTEE
Jerome H. Bailey, Chair
Joseph C. Antonellis
Lynn Dorsey Bleil
Lowell L. Bryan
Gary D. Forsee
Charles E. Haldeman, Jr.
Samuel G. Liss

We reviewed and discussed with management the "Compensation Discussion and Analysis" section of this Proxy Statement. Based on such review and discussion, we recommended to the Board that this Proxy Statement include the "Compensation Discussion and Analysis."

THE COMPENSATION COMMITTEE
Gary D. Forsee, Chair
Jerome H. Bailey
Lynn Dorsey Bleil
Lowell L. Bryan
Charles E. Haldeman, Jr.
Samuel G. Liss

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Engagement.    PricewaterhouseCoopers LLP ("PWC") served as our independent registered public accounting firm as of and for the year ended December 31, 2016. PWC performed professional services in connection with the audit of our consolidated financial statements and internal control over financial reporting and the review of reports we filed with the Securities and Exchange Commission. It also reviewed control procedures of our mutual fund processing services and provided us certain other accounting, auditing, and tax services.

PWC's fees for services related to 2016 and 2015 were as follows:

Engagement Procedures.    Audit Committee procedures prohibit the Committee from engaging an independent registered public accounting firm to perform any service it may not perform under the securities laws. The Audit Committee must pre-approve the independent registered public accounting firm's annual audit of our consolidated financial statements. The procedures require the Committee or its Chairperson to pre-approve or reject any other audit or non-audit services the independent registered public accounting firm is to perform. The Committee has directed that its Chairperson, with the assistance of our Chief Financial Officer, present and describe at regularly scheduled Audit Committee meetings all pre-approved services. The Committee has required management to present services for pre-approval within a specified period in advance of the date the services are to commence. The Committee regularly examines whether the fees for audit services exceed estimates. Securities regulations waive pre-approval requirements for certain non-audit services if their aggregate amount does not exceed specified amounts we pay to the independent registered public accounting firm. The procedures require the Committee or its Chairperson to approve, prior to completion of the audit, any services subject to this waiver. The Committee has not applied the waiver to a non-audit service. The Audit Committee pre-approved all services PWC rendered to us and our subsidiaries for 2016.

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The Audit Committee has selected PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2017. Our Board requests stockholders to ratify such selection.

PricewaterhouseCoopers LLP will:

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audit our consolidated financial statements and internal control over financial reporting;

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review certain reports we will file with the Securities and Exchange Commission;

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provide you and our Board with certain reports; and

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provide such other services as determined by the Audit Committee and its Chairperson from time to time.

PricewaterhouseCoopers LLP served as our independent registered public accounting firm for 2016, performing professional services for us. We expect representatives of PricewaterhouseCoopers LLP to attend the Annual Meeting. We will allow them to make a statement if they desire and to respond to appropriate questions.

The Audit Committee is responsible for selecting the Company's independent registered public accounting firm for 2017. Accordingly, stockholder approval is not required to appoint PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm. However, our Board believes that the submission of the Audit Committee's selection to the stockholders for ratification is a matter of good corporate governance. If the Company's stockholders do not ratify the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm, the Audit Committee will review its future selection of an independent registered public accounting firm. The Audit Committee may retain another independent registered public accounting firm at any time during the year if it concludes that such change would be in the best interests of the Company.

OUR BOARD RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THE AUDIT COMMITTEE'S
SELECTION OF PRICEWATERHOUSECOOPERS LLP.

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The Committee reviews non-employee director compensation annually. This review includes an analysis by Deloitte of peer company director compensation and other public company director compensation practices and trends. The Committee recommends components of non-employee director compensation to the Board. The Board is responsible for and has the authority to determine the components of non-employee director compensation.

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The Compensation Committee believes that the compensation of the executive officers is appropriate based on DST's performance and the competitive market. For 2016, the compensation of the NEOs consisted of three primary components: base salary, annual cash incentive, and long-term equity incentives in the form of time-based restricted stock units (RSUs) and performance stock units (PSUs). Base salary helps to attract and retain executive talent and is the fixed component of our pay program. We use annual cash incentive pay to link executive compensation to attainment of key Company objectives. Long-term equity pay is designed to align executive compensation with the long-term interests of the Company's stockholders, focus on achievement of strategic long-term financial objectives, and retain a high performing executive team. The Compensation Committee believes that this mix of pay is an appropriate balance between short-term and long-term focus.

Our NEO compensation program reflects many best practices.

At DST, we...

At DST, we do not...

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The purpose of this Compensation Discussion and Analysis (CD&A) is to provide information about DST's compensation policies for our NEOs. Our NEOs for 2016 are:

Executive Pay Philosopy

The Company's business strategy for creating growth is to leverage the capabilities of its employees to execute its growth strategy while remaining committed to maintaining a strong financial position with appropriate flexibility and liquidity. Our compensation philosophy supports this strategy by stressing the importance of pay for corporate and individual performance in meeting strategic and business goals for growth, value creation and financial strength, while maintaining flexibility to meet the changing employee, business and market conditions. Our executive compensation program is designed to attract and retain a talented team of executives who are expected to provide leadership for the Company's success in a challenging business environment. The Company accomplishes this by motivating executives with an appropriate mix of compensation elements described below.

Objectives of our Executive Compensation Program

We use the following principles to determine our Executive Compensation Program:

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Attract, Retain, and Motivate High-Performing Executives: Our executive base salaries and target incentive compensation opportunities are designed to be market competitive so that we can attract, retain, and motivate individuals who will drive superior business performance.



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Pay for Performance:Pay for Performance: We seek to build and support a performance-driven culture by incorporating an at-risk component into a significant portion of each executive's pay. The at-risk component varies based on individual responsibility levels as well as organizational and, as applicable, business unit performance results.



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Align with Stockholder Interests: The majority of NEO compensation is tied to organizational performance and is, therefore, at risk. We incorporate into our program two performance-based compensation vehicles that align executive compensation with creation of stockholder value.



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Annual Short-Term Cash Incentive: This annual opportunity rewards performance as measured by achievement against pre-set annual financial goals.



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Long-Term Equity Incentive: Our equity grants align executive and stockholder interests in long-term stock appreciation.



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Integrate with Our Corporate Values: Our compensation is designed to motivate and inspire behavior that fosters a high-performance culture while upholding our corporate governance standards and avoiding unreasonable risk.

Since talent is critical to our long-term success, we seek to pay executives at levels that are competitive with other employers with whom we compete for talent. Our goal is to target executive compensation, on average, to be at the median of this market, with the opportunity to earn above-market compensation for superior performance within any given year or performance period. Our program incorporates several features that seek to drive business performance over both the short- and long-term. A higher percentage of total compensation is at-risk for the most senior levels in order to reflect the additional responsibilities associated with these positions.

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Components of 2016 Compensation

Pay for Performance

Our philosophy is to link pay to performance so that the interests of our executives and stockholders are aligned.

A significant portion of our NEO's total compensation reflects both upside and downside risk. The portion of the compensation of the CEO and other NEOs that is considered at-risk, (i.e., tied to Company performance over the short- and/or long-term) exceeds the fixed portion. We set goals based on growth objectives, our mix of businesses, projections, and competitive outlooks.

We believe the additional emphasis on at-risk compensation for the CEO (when compared to the other NEOs) reflects his additional responsibility and overall contribution to Company performance.

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The charts below highlight how the Company views the allocation of NEO target compensation between fixed pay (base pay and Time RSUs) and pay at risk (annual cash incentives and PSUs).

Risk Taking

Our compensation program is designed to put pay at risk for performance while at the same time discouraging unnecessary risk-taking. The Committee evaluates the potential for unacceptable risk-taking when designing the compensation program. We believe that the design of our executive compensation program does not encourage excessive risk-taking or incent our NEOs to take actions that may conflict with our risk-based decision making. Material risk in our compensation design is mitigated in several ways:

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Earnings goals and award opportunities in our annual cash incentive program are at levels intended to be challenging without the need to take inappropriate risks;



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Our long-term incentives consist of time-based RSUs that vest over a multi-year period and performance shares that are earned at the end of a three-year period, both of which provide upside potential and downside risk;



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The use of RSUs versus stock options mitigates the likelihood of risk-taking because RSUs, unlike stock options, retain some value even in a down market;



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Payouts under the long-term incentive plans were capped at 150% of target for grants prior to 2016, and for grants made during 2016 at 200% of target;



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Payouts under our annual incentive plan are capped at 150% of target;



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Adjusted EBITDA is used as a performance metric in our long-term PSUs while award opportunities under our annual cash incentive program are based on adjusted earnings per share (EPS) and adjusted operating revenue, thereby minimizing the opportunity to manipulate results; and



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Adoption of a clawback policy.

In addition, we have policies in place that prohibit our NEOs from pledging or hedging shares of Company securities owned by them.

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Named Executive Officer Compensation Practices

The processes and procedures for determining executive officer compensation are written and were approved by the Committee. The Committee is responsible for and has the authority under its charter to determine the components of executive officer compensation.

In support of its pay-for-performance philosophy, the Committee ties a significant portion of executive officer compensation to the creation of stockholder value over the long term, structures executive officer compensation so that a significant portion of total compensation is at-risk rather than fixed, and uses balanced performance goals that incent both short- and long-term business results.

The Committee reviews executive officer compensation annually. For each review, the Committee may consider, and decide the weight it will give to, among other things, any combination of the following:

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market competitive data;



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individual responsibilities;



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individual results against established goals;



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Company or business unit performance and objectives and other Company financial and strategic information;



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tax and accounting impact of proposed compensation;



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retention;



§

internal pay equity among the executives; and



§

effects of a potential severance, change in control or other transaction.

The Committee may request our Chief Executive Officer or Chief Human Resources Officer recommend compensation package components. Such officers communicate executive hiring and retention concerns to the Committee. The Committee may ask the Chief Executive Officer, Chief Human Resources Officer, Chief Financial Officer or General Counsel to provide the Committee with:

§

market analysis data;



§

proposed benefit plan terms and conditions;



§

financial, accounting, and tax information;



§

legal requirements for benefit plan and award structures;



§

valuation information regarding outstanding awards and undistributed account balances and other historical Company compensation data; and



§

Company performance data and individual performance evaluations.

The Committee develops the criteria for evaluating Chief Executive Officer performance and annually reviews his performance against such criteria. The Chief Executive Officer periodically discusses with the Committee his view of the performance of the other executive officers.

The 2015 Equity and Incentive Plan permits the Committee to delegate certain administrative matters, and the Committee has made administrative delegations to the Chief Executive Officer, Chief Human Resources Officer, and Chief Financial Officer.

The Committee and the Board rely on the Chief Human Resources Officer to implement compensation decisions and adopt appropriate compensation policies, procedures, and internal controls.

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Annual Base Salaries

The following table shows the base salaries of each NEO named in last year's proxy statement and summarizes their 2016 base salary increases. Increases shown below were based on considerations including: the relative position of the individual to the market competitive benchmarks, individual performance, and retention considerations.

New NEOs not named in last year's proxy statement are Vercie L. Lark, whose base salary at December 31, 2016 was $460,000 and Randall D. Young, whose base salary at December 31, 2016 was $465,000.

Annual Cash Incentives

The following table summarizes the 2016 annual cash incentive opportunity levels for the CEO and other NEOs as a percentage of base salary.

The following table summarizes the 2016 annual incentive payout 'curve' as a percentage of target goal achievement and states the corresponding weighted financial goals.

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For the 2016 performance year, the annual incentive goal result was as follows:

The following table summarizes the annual cash incentives awarded and paid for the 2016 performance period:

Long-Term Equity Incentives – PSUs and Time RSUs

DST is committed to pay-for-performance and ensuring the alignment of our executives' and our stockholders' interests. Equity awards are made at the first regularly scheduled Committee meeting of the year. Any subsequent awards for onboarding, promotions, or special rewards are made at regularly scheduled Committee meetings.

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Performance Stock Units

Two-thirds of 2016 equity awards are in the form of PSUs and are subject to the following terms, including a challenging performance metric that prevents awards from vesting if Adjusted EBITDA targets are not met:

§

Vesting of PSUs is based on performance against pre-determined cumulative Adjusted EBITDA goals at the end of a three-year performance period.



§

If the threshold goal is not achieved, no vesting occurs, no shares are issued, and all PSUs are forfeited.



§

If the threshold goal is achieved, the number of shares to be issued is 50% for awards granted before 2016, and 25% for awards granted in 2016 and beyond, of the target number of units, and the remaining PSUs are forfeited.



§

If the target goal is achieved, the number of shares to be issued equals the target number of units granted.



§

If the maximum goal is achieved, the number of shares to be issued equals 150% for awards granted before 2016 and 200% for awards granted in 2016 and beyond of the target number of units granted.



§

Linear interpolation is used to determine the number of shares to be issued between goal levels (so that, for instance, there could be 54%, or 123%, of the target number vesting).

Time Restricted Stock Units

One-third of the 2016 equity awards delivered to our NEOs in the form of Time RSUs that vest annually in one-third increments.

Grants Awarded in 2016

This table shows the aggregate grant date fair value of the 2016 long-term incentive grants and the allocation of the awards between PSUs and Time RSUs for each NEO.

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Vesting of 2014-2016 PSUs

The following table summarizes the vesting as a percentage of the target number of units for all NEOs as well as the corresponding financial goals for the 2014-2016 performance cycle:

 

Peer Group

Benchmarking data is gathered and presented to the Committee by its independent compensation consultant, Deloitte Consulting LLP ("Deloitte"). Deloitte supplements peer group data with published survey data from general industry and computer and data processing companies of a similar financial size. The Committee has developed an industry peer group of similarly-sized companies in the data processing and software services industries in order to assess competitive market compensation levels for the NEOs. The following sixteen companies comprised the compensation benchmarking industry peer group for 2016:

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Role of the Compensation Consultant and Management

Deloitte provided various data, analyses, and advice to the Committee on executive compensation matters during 2016. Deloitte reports directly to the Committee and attends Committee meetings as requested. In 2016, such services included benchmarking executive compensation, providing competitive information on incentive plan practices, reviewing the 2016 Compensation Discussion and Analysis, and reviewing peer group compensation practices.

The Committee welcomes the CEO's input as it designs NEO compensation programs and sets the compensation of the other NEOs. However, the CEO is not present during discussions at Committee meetings or between the Committee and Deloitte regarding his compensation.

The Committee alone makes decisions about the amounts and forms of NEO compensation, and its decisions may reflect factors and considerations other than information and advice from the CEO, Deloitte, and members of management.

Flexibility in Determining Compensation

The Committee considers market benchmark compensation data for individual positions, considers additional information from management when setting pay levels, and also considers:

§

the responsibilities of each individual NEO position;



§

internal equity among the executives;



§

the compensation levels we believe are necessary to incent and retain individual NEOs; and



§

the performance of individual NEOs, including, but not limited to, the ability to meet business challenges strategically, plan long-range, achieve short-term and long-term financial results, lead and develop a team for which the officer is responsible, prudently steward our business and operational resources, and promote legal and ethical compliance.

The Committee does not follow precise formulas when determining NEO compensation levels. Rather, it considers whether the various components of our compensation programs justify the cost to the Company and provide value to our stockholders.

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Benefits and Perquisites

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Double Trigger Change in Control Protections

Our award agreements provide generally for full vesting of unvested deferred cash and equity awards upon a "double trigger" (i.e., a change in control followed by a qualifying termination of employment). We believe these protections promote stability during a change in control by encouraging our executives to cooperate with and achieve a change in control approved by the Board without being distracted by the possibility of termination or demotion following the transaction. All NEOs are entitled to severance benefits for certain terminations within a limited period of time following a change in control, either as a result of their employment agreement (Messrs. Hooley and Young) or their participation in the Executive Severance Plan (Messrs. Givens, Boehm, and Lark), as further described under "Termination Payments and Potential Termination Payments."

Say-on-Pay

At the 2016 Annual Meeting, the percentage of the votes cast in favor of the Say-on-Pay proposal was 96.47%, indicating stockholder confidence in our pay-for-performance philosophy. The Committee considered the strong support of our stockholders in continuing the current design of the executive compensation program.

Clawback Policy

To mitigate the risk that incentives would be based on erroneous financial results, executive officers that receive incentive compensation, including our NEOs, are subject to our clawback policy. The policy mandates Company recoupment of various award amounts in the event of certain accounting restatements. Such a restatement would trigger the return (or clawback) of incentive compensation for 2016 performance resulting from the Company's material noncompliance with financial reporting requirements under the securities laws. The amount to be returned would equal the portion of a covered annual and/or long-term incentive award in excess of what would have been paid if the results as stated in the restated financials had applied to the award determination. If a clawback is triggered, NEOs would be required to return the value of their covered awards, or a portion thereof, regardless of whether their individual conduct contributed to the financial restatement. The policy also allows the Compensation Committee, in its discretion, to clawback incentive compensation in the event of either a significant ethics policy violation or of non-compliance with a restrictive covenant such as a non-disclosure, non-competition, or non-solicitation obligation, or an obligation to protect and take other actions with respect to Company intellectual property.

Tax Deductibility/Section 162(m)

The annual and long-term incentive plans are both governed by our 2015 Equity and Incentive Plan. We obtained approval of the Plan by our stockholders, which facilitates the deductibility of performance-based compensation under Section 162(m) of the Internal Revenue Code. Our primary focus is applying our executive compensation philosophy in order to attract, retain, and incent our NEOs, and we reserve the right to determine whether to utilize the performance-based compensation exemption.

To facilitate deductibility under the performance-based compensation exemption, the Committee determines NEO participation in the annual short-term cash incentive program, makes PSU grants to NEOs, and sets performance goals for NEO awards within the first ninety days of a performance year. It also determines prior to the end of a performance year whether to make adjustments to performance goals or award payouts if a non-recurring or unexpected event occurs during a performance period.

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Chief Executive Officer Matters

Employment Agreement

Mr. Hooley's legacy employment agreement was entered into June 30, 2009 and does not provide for employment through a set date. Prior to approving the agreement, we reviewed leading market and industry practice regarding appropriate and common provisions for executives in senior leadership positions. The agreement:

§

provides for separation benefits (base salary, life/health premium reimbursements) in the event of a termination without cause within a 24-month period and a pro-rated annual incentive award for the year of termination based on actual goal achievement, subject to Mr. Hooley's execution of a release of claims;



§

protects Mr. Hooley for a three-year period following a change in control in the event of a termination without cause or resignation for good reason; these "double trigger events" (change in control followed by the qualifying termination) would cause payouts, based on the remainder of the three-year period, of base salary, life/health premium reimbursements and annual incentives, calculated as described under "Termination Payments and Potential Termination Payments"; and



§

prohibits Mr. Hooley from soliciting employees, soliciting customers for the benefit of a competitor, acquiring an interest in a competitor other than an insignificant interest in a public company, or becoming employed by or consulting on behalf of a competitor for three years following any type of termination of employment.

Although the agreement contains an excise tax gross-up provision, we have committed not to include excise tax gross-up provisions in future executive employment agreements.

The agreement entitles him to a base salary of at least $550,000 and provides that he is to receive an incentive program opportunity as determined by the Compensation Committee. The agreement is further addressed in "Termination Payments and Potential Termination Payments."

Stock Ownership Guidelines

To further align CEO and stockholder interests, we have guidelines that the CEO must maintain stock ownership of at least six times his base salary. Mr. Hooley has reached the ownership threshold. (The non-employee director stock ownership requirements are described under "Board of Directors.")

Retention Award for Mr. Abbaei

In connection with the divestiture of the Company's North American Customer Communications business, the Company entered into a Retention Bonus Agreement with Mr. Abbaei, which provided:

§

for a cash award of $1,500,000, provided that he remained employed with the Company through the closing date of the transaction; and



§

for a release of claims and an agreement by Mr. Abbaei of certain restrictive covenants.

The Retention Bonus Agreement also stated that in no event would Mr. Abbaei be entitled to a duplication of benefits under the Company's Executive Severance Plan and the Retention Bonus Agreement. For a description of the payments received by Mr. Abbaei in connection with his departure from DST, please see the section titled "Termination Payments and Potential Termination Payments" beginning on page 45.

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Deferral Activity and Balances.    The following table provides information regarding NEOs' non-qualified deferred compensation accounts. We describe the various forms of non-qualified deferral programs following the table:

Annual Incentive Program Deferred Cash

Non-qualified Deferral Programs.

Arrangements for Incentive and Equity Awards.    For performance years prior to 2014, we mandated deferral of a portion of each year's annual incentive award. Earnings and losses are credited or debited at least annually. Prior to 2014, NEOs could, by making an election by June 30 of the performance year, extend the future payout of vested deferred cash awards. The elected periods could either be a number of years or until separation from service. Beginning with awards for 2014 compensation, we discontinued deferral elections. Currently, Mr. Boehm is the only NEO who made a deferral election. Upon retirement he will receive his balance in a lump sum.

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The following table and notes show annual incentive opportunity levels that existed at the beginning of 2016 for, and equity grants during 2016 to, each of the NEOs:

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(December 31, 2016)

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The Compensation Committee has incorporated accelerated vesting terms and conditions into its awards for certain termination of employment events. In the following table, we show the vesting and payout valuations for hypothetical terminations of employment as if they had occurred at December 31, 2016. Shown in the table are termination events* other than the following:

•

a voluntary termination of employment that is not a "retirement"

•

a termination for "cause"

*

each event as defined in the applicable award agreement or plan

These two types of terminations would not have caused accelerated award vesting or separation benefits. Following the table, we give details regarding the valuations as well as the reasons for termination benefits.

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Actual Termination Event

NOTES REGARDING EFFECT OF VARIOUS EVENTS:

A.  Death or Disability:

Time RSUs granted in 2014 and 2015 would have accelerated. The performance period for the PSUs granted in 2014 expired on December 31, 2016. These shares will vest on the regularly scheduled vesting date at certification of goal achievement by the Compensation Committee of the Board of Directors. PSUs granted in 2015 would vest on the regularly scheduled vesting date at certification of goal achievement by the Compensation Committee of the Board of Directors. No equity granted in 2016 would have vested because a one-year holding period would not have been satisfied.

Mr. Boehm would have received a payout of his deferred cash balance.

No benefits would have been paid under employment agreements or the Executive Severance Plan ("ESP").

Prorated annual incentive awards for the year of the death or disability are to be paid at a target level of performance (which by year-end was already earned by the NEOs and therefore is not shown in the table).

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B.  Retirement:

Messrs. Givens, Boehm, and Young were retirement-eligible at year-end for purposes of the 2014 Time RSUs. A pro rata portion of the 2014 Time RSUs scheduled to vest on March 10, 2017 would have vested, based on the number of months worked since the previous grant/vesting dates. The unvested portion of the 2015 Time RSUs would have vested at the time of the event. The performance period for the PSUs granted in 2014 expired at December 31, 2016. Vesting of PSUs granted in 2015 would occur in 2018, based on actual goal achievement for 2015-2017, which has been projected (actual results may differ). No equity granted in 2016 would have vested because a one-year holding period would not have been satisfied.

Mr. Boehm was retirement-eligible at year-end for purposes of his deferred cash balance.

No benefits would have been paid under employment agreements or the ESP.

Prorated annual incentive awards for the year of the retirement are to be paid to retiring executives at the actual level of performance (which by year-end was already earned by Messrs. Givens, Boehm, and Young and therefore is not shown in the table).

C.  Reduction in Force:

A pro rata portion of the 2014 Time RSUs scheduled to vest on March 10, 2017 would have vested, based on the number of months worked since the previous grant/vesting dates. The unvested portion of the 2015 Time RSUs would have vested at the time of the event. The performance period for the PSUs granted in 2014 expired at December 31, 2016. Vesting of PSUs granted in 2015 would occur in 2018, based on actual goal achievement for 2015-2017, which has been projected (actual results may differ). No equity granted in 2016 would have vested because a one-year holding period would not have been satisfied.

Mr. Boehm would have received a payout of his deferred cash balance.

Employment agreement benefits to Messrs. Hooley and Young would have been paid as described in note (F).

ESP benefits would have been paid to Messrs. Givens, Boehm, and Lark as described in note (I).

D.  Business Unit Divestiture:

A pro rata portion of the 2014 Time RSUs scheduled to vest on March 10, 2017 would have vested, based on the number of months worked since the previous grant/vesting dates. The unvested portion of the 2015 Time RSUs would have vested at the time of the event. The performance period for the PSUs granted in 2014 expired at December 31, 2016. Vesting of PSUs granted in 2015 would occur in 2018, based on actual goal achievement for 2015-2017, which has been projected (actual results may differ). No equity granted in 2016 would have vested because a one-year holding period would not have been satisfied.

Mr. Boehm would have received a payout of his deferred cash balance.

Employment agreement benefits to Messrs. Hooley and Young would have been paid as described in note (F).

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Under certain circumstances, ESP benefits would have been paid to Messrs. Givens, Boehm, and Lark as described in note (I).

E.  Change in Control Followed within a Limited Period by a Termination without Cause or Resignation for Good Reason:

Vesting of Time RSUs would have accelerated. The performance period for the PSUs granted in 2014 expired at December 31, 2016. Vesting of PSUs granted in 2015 and 2016 as if the target performance level had been achieved.

Mr. Boehm would have received a payout of his deferred cash balance.

Employment agreement benefits to Messrs. Hooley and Young would have been paid as described in note (F).

ESP benefits would have been paid to Messrs. Givens, Boehm, and Lark as described in note (J).

F.  Employment Agreement Separation Provisions:

Employment agreements provide for separation benefits (base salary, life/health premium reimbursements) based on a 24-month period for Mr. Hooley and a 12-month period for Mr. Young, as well as a prorated annual incentive award for the year of termination at the actual level of performance (which by year-end was already earned and therefore not shown in the table as an additional benefit).

For purposes of this table, we calculated health insurance premiums using 2016 COBRA continuation rates and life insurance premiums using 2016 rates.

The agreement entitles Messrs. Hooley and Young to premium gross-ups as described in note (G).

G.  Employment Agreement Health and Life Insurance Premium Gross-Ups:

The estimates for Messrs. Hooley and Young are based on our monthly cost of health and life insurance premiums as explained in note (F). To determine the aggregate value of the insurance coverage continuation, we multiplied the monthly health and life insurance premiums by the number of months of taxable insurance coverage continuation to which the executive is entitled under his employment agreement. We then calculated the additional tax gross-up payment we would have been obligated to make in order to put the executive in an after-tax position as if he had never received the taxable insurance coverage continuation.

H.  Employment Agreement Change in Control Separation Provisions; Parachute Taxes:

Under the employment agreements of Messrs. Hooley and Young, the following benefits are provided upon a termination without cause or resignation for good reason that occurs within the three-year period following the change in control. For purposes of this table, December 31, 2016 is treated as both the date of termination and the change in control.

Ø

Base salary for the remainder of the three-year period.

Ø

Benefit continuation amounts for the remainder of the three-year period consisting of life and health insurance premiums and estimated 401(k) profit sharing contributions. Note (F) describes the determination of the monthly life and health insurance premium amounts. The profit sharing contribution amounts are based on contributions made for 2016.

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Ø

A severance incentive award equal to the aggregate of the annual incentive awards for the three-year period at a target level of performance.

Ø

Internal Revenue Code Section 4999 imposes a 20% excise tax on parachute payments ("parachute tax"). The Compensation Committee has formally determined not to include excise tax gross-up provisions in future executive employment agreements. The legacy employment agreements for each of Messrs. Hooley and Young provide that the executive is eligible for a gross-up payment relating to the parachute tax. Any gross-up payment is intended to put the executive in the same after-tax position as if he had not been subject to the parachute tax. For Mr. Hooley, the potential parachute payment is generally subject to a scaleback equal to the largest amount that can be paid without triggering the parachute tax. If the payment is scaled back, there would be no parachute tax and no gross-up payment. However, if Mr. Hooley would retain, after tax, more than 120% of the amount he would retain if the potential parachute payments were scaled back, the cap does not apply and he is entitled to a gross-up payment, not to exceed five times the parachute tax. Mr. Hooley's estimated parachute payments do not exceed the 120% cap; therefore, his payments would be reduced so that he is not subject to the excise tax. Mr. Young's estimated parachute payments do not trigger the excise tax; therefore, he is not subject to an excise tax gross-up.

I.  Executive Severance Plan Separation Provisions:

Messrs. Givens, Boehm, and Lark participate in our ESP and receive benefits for qualifying terminations of employment, which are terminations for reasons other than death, disability, or by the Company for cause. Upon a qualifying termination, the NEOs will receive the following ESP benefits:

Ø

The amount of his annual base salary;

Ø

Health plan continuation premiums for 12 months (calculated for purposes of the table using 2017 COBRA continuation rates);

Ø

A severance incentive award equal to the annual incentive award at a target level of performance, as well as a prorated annual incentive award at the actual level of performance (which by year-end was already earned by the NEOs and therefore not shown in the table as an additional benefit); and

Ø

Reimbursement for outplacement consulting fees of up to $25,000.

J.  Executive Severance Plan Change in Control Separation Provisions:

The ESP also provides benefits for a qualifying termination of employment during a two-year protection period that begins on the earlier of a potential change in control or actual change in control, each as addressed in the plan. The qualifying terminations include terminations for reasons other than death, disability, or by the Company for cause, as well as terminations by the NEOs for good reason. For purposes of this table, December 31, 2016 is treated as the date of both the qualifying termination and the change in control. Upon a qualifying termination, the NEO will receive:

Ø

Twice the amount of his annual base salary;

Ø

Health plan continuation premiums for 24 months (calculated for purposes of the table using 2017 COBRA continuation rates);

Ø

A severance incentive award equal to twice the annual incentive award at a target level of performance, plus an additional annual incentive award at a target level of performance (which by year-end was already earned by the NEOs and therefore not shown in the table as an additional benefit); and

Ø

Reimbursement for outplacement consulting fees of up to $25,000.

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The ESP contains a "best-net cutback" provision such that if the payment of any of these amounts would subject the Company and the executive to the excise tax gross-up provisions of Section 280G of the Internal Revenue Code, the payments would be reduced to an amount below the threshold at which such penalty tax provisions apply if such a reduction (and the avoidance of such penalty taxes) would be more favorable to the executive on an after-tax basis. Mr. Lark's estimated payments would be reduced so that he would not be subject to an excise tax.

K.  Abbaei Termination in Connection with the North American Customer Communications Business Divestiture:

Mr. Abbaei's service with DST terminated on July 1, 2016 in connection with the divestiture of the Company's North American Customer Communications Business. In connection with his termination, Mr. Abbaei's:

Ø

Annual incentive compensation was prorated and paid at target;

Ø

Unvested Time RSUs were deemed vested;

Ø

PSUs were deemed to have met the time based component but the performance elements remain outstanding. The 2016-2018 PSUs included above are valued based on target level of performance at the Company's stock price of $117.28 on July 1, 2016, the 2014-2016 PSUs and 2015-2017 PSUs were valued as described in the table below; and

Ø

Deferred Cash Accounts were paid in accordance with their terms.

Valuation Methods for the Table.

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REASONS FOR TERMINATION OF EMPLOYMENT PROTECTIONS

The Compensation Committee believes these limited termination of employment protections:

§

promote NEO retention by generally protecting NEOs against forfeiture of awards for termination of employment outside of their control;

§

further each NEO's commitment to the Company by accelerating the vesting date of certain awards and accounts if the NEO terminates employment after eligibility for retirement; and

§

provide stability in the event of a possible change in control.

In consideration of these protections, NEOs accept award agreements in which they commit not to solicit Company employees and customers for one year after termination of employment.

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Pursuant to Section 14A of the Exchange Act, DST asks stockholders to cast an advisory vote to approve the compensation of our Named Executive Officers disclosed in the "Compensation Discussion and Analysis" section beginning on page 24 of this Proxy Statement.

While this vote is non-binding, DST values the opinions of its stockholders and, consistent with our record of stockholder engagement, will consider the outcome of the vote when making future compensation decisions. In considering your vote, we invite you to review the Compensation Discussion and Analysis.

As described in the Compensation Discussion and Analysis, we believe that DST's executive compensation programs effectively align the interests of our executive officers with those of our stockholders by tying a significant portion of their compensation to DST's performance and by providing a competitive level of compensation needed to recruit, retain, and motivate talented executives critical to DST's long-term success.

We are asking our stockholders to vote FOR, in a non-binding vote, the following resolution:

RESOLVED, that the compensation paid to the Company's Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation as described in Compensation Discussion and Analysis, tabular compensation disclosures, and other narrative executive compensation disclosures in this Proxy Statement, is hereby APPROVED.

The Board has adopted a policy of providing annual advisory votes on the compensation of our Named Executive Officers. The next advisory vote to approve our executive compensation will occur at the 2018 Annual Meeting of Stockholders, unless the Board of Directors modifies its policy on the frequency of holding such advisory votes.

OUR BOARD RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

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As described in Proposal 3 above, our stockholders are being provided the opportunity to cast an advisory vote on the Company's executive compensation program. The advisory vote on executive compensation described in Proposal No. 3 above is referred to as a "say-on-pay vote."

This Proposal 4 affords stockholders the opportunity to cast an advisory vote on how often the Company should include a say-on-pay vote in its proxy materials for future annual stockholders meetings (or special stockholders meeting for which the Company must include executive compensation information in the proxy statement for that meeting). Under this Proposal 4, stockholders may vote to have the say-on-pay vote every year, every two years, or every three years. The alternative securing the most votes will be considered the alternative recommended by the stockholders.

We believe that say-on-pay votes should be conducted every year so that stockholders may annually express their views on our executive compensation program. Our Compensation Committee, which administers our executive compensation program, values the opinions expressed by stockholders in these votes and will continue to consider the outcome of these votes in making its decisions on executive compensation.

OUR BOARD RECOMMENDS THAT YOU VOTE FOR "ANNUAL" ADVISORY SAY-ON-PAY VOTING.

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Beneficial Owners.

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BR233326-NPS-0117

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