Internet and telephone voting are available 24 hours a day, seven days a week up to these deadlines:

  When  g April 30, 2018, 12:00 p.m. Central Time

  Where g The Northern Trust  Company,

                  50 South LaSalle  Street, Sixth Floor Assembly Room, Chicago, Illinois  

Railcar leasing is our core business, accounting for approximately 85% of our 2017 revenue. Our rail customers operate in cyclical markets, such as the petroleum, chemical, fertilizer, food/agricultural, transportation, and construction industries. Combined with changing macroeconomic conditions and swings in railcar supply, this results in significant volatility in utilization and lease rates for railcars over time. At the same time, railcars have very long useful lives of 20-45 years. Thus, we have to proactively manage our business with a long-term view, which includes buying, leasing, maintaining, and selling railcars into these constantly changing business conditions over decades.

Our compensation programs reflect this cyclicality by appropriately rewarding management to emphasize current financial returns over growth in capital employed during stronger markets and, conversely, to emphasize growth in capital employed over current financial returns in weaker markets. In this way, our Compensation Committee believes that our plans have been designed to reward executives for achieving those goals that will maximize long-term shareholder value.

The North American railcar leasing market experienced its third year of a downturn in 2017. Large numbers of idle

existing railcars, combined with the overbuilding of new railcars, caused a continued oversupply situation in the market. Despite relatively stable underlying demand and modest improvement in railcar loadings, this oversupply of railcars tempered lease rate increases across the industry.

In light of these industry conditions, our performance was outstanding. We maintained an industry-leading fleet utilization of 98% or higher throughout the year, reflective of the diversity of our quality fleet and the breadth of our customer relationships. Our international railcar leasing business maintained higher fleet utilization than expected throughout the year, while our American Steamship subsidiary significantly increased its profitability by carrying more tonnage and operating its fleet more efficiently. Lastly, our aircraft spare engine leasing joint ventures with Rolls-Royce produced another year of excellent financial results. In addition, our strong balance sheet continues to offer us flexibility to pursue any secondary market acquisition opportunities that may arise. We believe that we are well prepared to capitalize on the inherent cyclicality in our markets and well positioned to achieve our twin objectives of growth and return over the long term.

Our compensation plans are directly linked to our financial and operating performance and creation of long-term shareholder value. Approximately 81% of our Chief Executive Officer’s compensation and approximately 63% of our other named executive officers’ compensation is performance-based and not guaranteed. We encourage

you to read the Compensation Discussion and Analysis starting on page 26 for more details regarding our performance and the alignment of our executive compensation with our performance and long-term shareholder value.

We ask that our shareholders ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for 2018. Below is summary information

about Ernst & Young LLP’s fees for services provided in 2017 and 2016.

The Board of Directors provides oversight, strategic direction, and counsel to management regarding the business, affairs, and long-term interests of GATX and our shareholders. Its responsibilities include the following:

GATX has a long-standing commitment to strong corporate governance and ethical standards. Demonstrating this commitment, the Board has adopted the GATX Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Code of Ethics for

Senior Company Officers, as well as charters for each of the Board’s committees. These documents constitute the foundation of our corporate governance structure and are available on our website (www.gatx.com) in the Investor Relations section under “Corporate Governance”.

The Board and its committees meet throughout the year on an established schedule and hold special meetings from time to time as appropriate. Following each meeting, the Board’s independent directors meet in executive sessions without the Chairman and Chief Executive Officer or other members of management present. The Lead Director serves as Chair of the executive sessions of the Board.

The Board met six times during 2017, and each director attended at least 75% of the meetings of the Board and the committees on which he or she served during the year. We encourage all directors to attend the 2018 Annual Meeting of Shareholders, and in 2017, all directors then serving on the Board attended the annual meeting.

The Board has adopted the GATX Director Independence Standard set forth in Exhibit A to this Proxy Statement to evaluate the independence of directors and director nominees and to ensure compliance with the independence standards required by the New York Stock Exchange (“NYSE”) for listed companies. In accordance with this standard, and considering all relevant facts and circumstances, the Board has made an affirmative

determination that none of the following directors has a material relationship with GATX other than in his or her capacity as a member of the Board and that all of the following directors are independent: Diane M. Aigotti, Anne L. Arvia, Ernst A. Häberli, James B. Ream, Robert J. Ritchie, David S. Sutherland, Casey J. Sylla, Stephen R. Wilson, and Paul G. Yovovich.

The Board believes that having our Chief Executive Officer serve as Chairman of the Board is in the best interests of our shareholders because the Chief Executive Officer’s extensive knowledge of our business and strategy provides the Board with a clear understanding of the issues facing the Company and promotes effective Board decision-making, alignment on corporate strategy, and effective execution of that strategy by management.

The Board believes it is important to select the most qualified and appropriate director to serve as Chairman, whether that individual is an outside director or a member of executive management. Currently, Brian A. Kenney, our Chief Executive Officer, serves as Chairman. The Board believes that Mr. Kenney is the most appropriate individual to serve as Chairman because of his extensive knowledge of our business and strategy, as well as his demonstrated skill and commitment to performing effectively as Chairman of the Board. Having the Chief Executive Officer serve as Chairman provides the Board with a clear understanding of issues facing GATX, which, in turn, promotes effective Board decision-making, alignment on corporate strategy, and accountability of management.

Our Board is structured to promote independence whether or not its Chairman is a member of executive management. The entire Board, with the exception of Mr. Kenney, consists of independent directors, and the Audit, Compensation, and Governance Committees also are composed entirely of independent directors. The independent directors on the Board meet after each Board meeting in executive sessions that are not attended by Mr. Kenney or other members of management.

In addition, under our Corporate Governance Guidelines, the independent directors serving on the Board annually designate an independent Lead Director to provide leadership to the non-management members of the

Board and to work with the Chairman and Chief Executive Officer and the other Board members to provide effective and independent oversight of our management and affairs. Currently, James B. Ream serves as Lead Director. The Board’s independent directors have adopted the Lead Director Guidelines, which establish the powers and duties of the Lead Director, including the following:

The Board has three standing committees: the Audit Committee, the Compensation Committee, and the Governance Committee. Each committee is composed of directors determined by the Board to be independent in accordance with the listing standards of the NYSE. Mr. Ream serves as Lead Director and, while he does not serve as a member of any particular Board committee, he

has a standing invitation as Lead Director to attend the meetings of all Board committees.

The principal responsibilities of each of these committees are described generally below and in detail in their respective committee charters, which are available on our website (www.gatx.com) in the Investor Relations section under “Corporate Governance”.

The Board has determined that each member of the Audit Committee has accounting or related financial management expertise and is “financially literate”, as that term is used in the listing standards of the NYSE. In addition, the Board has determined that each member of the Audit Committee is an “audit committee financial expert”, as that term is defined by the rules of the US Securities and Exchange Commission (“SEC”). All members of the Audit Committee satisfy the NYSE’s independence standards applicable to audit committee members.

The Audit Committee’s functions include the appointment, retention, compensation, and oversight of our independent registered public accounting firm. The Audit Committee also reviews any related party transactions and assists the Board in oversight of:

The Audit Committee maintains free and open communication, and meets separately at each regularly scheduled committee meeting, with our independent registered public accounting firm, our internal auditor, and management.

The Compensation Committee’s functions include:

Pay Governance LLC (“Pay Governance”) served as the Compensation Committee’s independent compensation consultant during 2017. In addition to providing advice on various aspects of GATX’s compensation plans, programs, and policies, Pay Governance also advises the Compensation Committee periodically on current trends and best practices and reviews the agendas and supporting materials with management and the Compensation Committee Chair in advance of each committee meeting. A Pay Governance representative attends all Compensation Committee meetings, including executive sessions at which management is not present, and meets independently with the Compensation Committee as appropriate. In addition, Pay Governance provides specific recommendations for the Chief Executive Officer’s compensation and advice on the recommendations made by the Chief Executive Officer with respect to the compensation of other executives.

The Governance Committee’s functions include:

The Board conducts an evaluation of its performance and effectiveness on an annual basis. The purpose of the evaluation is to obtain the directors’ feedback on the Board’s performance and identify ways to enhance its effectiveness. As part of the evaluation, each director receives a written questionnaire developed by the Governance Committee to solicit input on the Board’s performance, effectiveness, composition, priorities, and culture. Using the questionnaire as a guide, the Governance Committee Chair conducts personal interviews with all directors to obtain their feedback and

discuss any other issues or concerns they may have. The Governance Committee Chair compiles the collective views and comments of the directors and then reports the results of the evaluation to the full Board.

Each of the Board’s committees conducts its own evaluation using the same process as the Board evaluation. The Chair of each committee conducts personal interviews with the other committee members and, after compiling the results, presents a report to the committee and the full Board.

Each year, the Governance Committee Chair conducts a personal interview with each Board member to gather in-depth perspectives and candid insight about Board performance and effectiveness. The Chair of each committee follows the same process to obtain feedback from committee members on the committee’s performance and effectiveness.

The Board, led by the Governance Committee, regularly evaluates its own composition and succession plans in light of the Company’s evolving business and strategic needs. The focus of this process is to ensure that the Board is composed of directors who possess a wide variety of relevant skills, professional experience, and backgrounds, bring diverse viewpoints and perspectives, and effectively represent the long-term interests of shareholders. While the Board does not have a formal policy on diversity, the Board values diversity in viewpoints, professional experiences, education, skills, and other individual qualities and attributes that contribute to an active, effective Board. The Board believes that new ideas and perspectives are critical to a forward-looking

and strategic Board, as are the extensive experience and deep understanding of our business and industry that long-serving directors possess. Accordingly, in its board refreshment and succession planning process, the Board considers both the benefits of continuity and fresh perspectives that new directors can bring.

In considering potential director candidates, the Governance Committee and Board take into account, among other factors, the needs of the Board and the Company in light of the overall composition of the Board with a view to achieving a balance of the skills, experience, and attributes that would be beneficial to the Board’s oversight role. For more information, see Director Criteria and Nomination Process on page 15.

The Board regularly reviews long-term and emergency succession plans for the Chief Executive Officer and for other senior management positions. In assessing possible Chief Executive Officer candidates, the Board identifies the key skills, experience, and attributes it believes are

required to be an effective Chief Executive Officer in light of the Company’s business strategies, opportunities, and challenges. In addition, the Board ensures that directors have substantial opportunities over the course of the year to engage with possible succession candidates.

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In addition to prohibiting our directors, officers, and employees from trading in GATX stock while in possession of material non-public information, our Insider Trading Policy also prohibits certain transactions in GATX stock that may create the potential for the interests of a director, officer, or employee to diverge from the interests of GATX and its shareholders. In particular, our policy

prohibits directors, officers, and employees from engaging in hedging transactions, short sales, and transactions in publicly traded options involving GATX stock. The policy also prohibits directors, officers, and employees from holding GATX stock in a margin account or pledging GATX stock as collateral for a loan.

We recognize that transactions with related parties present a heightened risk of real or perceived conflicts of interest and, therefore, may raise questions as to whether those transactions are consistent with the best interests of GATX and its shareholders. Accordingly, we have a formal, written policy that requires all related party transactions to be reviewed and approved by the Audit Committee. A “related party transaction” means any transaction (or series of transactions) valued at over $120,000 in which GATX is a participant and in which any “related party” has or will have a direct or indirect material interest. Our policy defines a “related party” to include all of our directors and executive officers, holders of more than 5% of our voting stock, and the immediate family members of those persons.

Under our policy, the Audit Committee will approve a related party transaction only if it determines that the transaction is in, or not inconsistent with, the best

interests of GATX and our shareholders, including, for example, situations where:

Upon completion of its review, the Audit Committee will approve or disapprove the related party transaction. In approving any related party transaction, the Audit Committee also will make a determination that the transaction does not constitute a conflict of interest under our Code of Business Conduct and Ethics.

As required by our By-Laws, we indemnify our directors and officers to the fullest extent permitted by the New York Business Corporation Law. In addition, we have entered into indemnification agreements with each member of the Board that contractually obligate us to provide this indemnification to our directors.

As permitted by the New York Business Corporation Law and our By-Laws, we maintain insurance policies that provide liability protection to our directors and officers for claims for which they may not be indemnified by the Company. These insurance policies also provide reimbursement to GATX for indemnification payments we make on behalf of our directors and officers, subject to the conditions and exclusions specified in the policies.

We believe that understanding issues of importance to our shareholders is critical for us to address their interests in a meaningful and effective way. It is also a tenet of good corporate governance. In that light, we engage with our shareholders on a regular basis to discuss a range of topics, including our performance, strategy, executive compensation, and corporate governance. Dialogue and engagement with our shareholders helps us understand how they view us, set goals and expectations for our performance, and identify emerging issues that may affect our strategies, corporate governance, compensation practices, or other aspects of our operations.

Our outreach program includes investor road shows, analyst meetings, and investor conferences. We also provide investors with access to our executive officers in an effort to provide a full perspective on business operations, market conditions, and our long-term strategy. We communicate with shareholders through various media, including our annual report and SEC

filings, proxy statement, news releases, and our website. We hold conference calls for our quarterly earnings releases and other major corporate events which are open to all. These calls are available in real time and as archived webcasts on our website.

In addition, over the last eighteen months, our investor relations staff contacted our largest shareholders to offer them the opportunity meet with members of our Board and senior management. For those shareholders who expressed an interest in meeting, we offered to arrange meetings with our Lead Director, the Chairs of our Compensation and Governance Committees, and our senior management team to discuss corporate governance, business strategy, and other topics of interest to them. Over the last 18 months, members of our Board or senior management have met with five of our largest shareholders, who collectively own more than 50% of our outstanding shares.

GATX’s vision is to be recognized as the finest railcar leasing company in the world by our customers, shareholders, employees, and the communities in which we operate. Consistent with that vision, we are

committed to operating at the highest levels of safety and ethics, and in compliance with environmental, health, and safety (“EHS”) rules, regulations, and standards applicable to our business.

GATX was the first U.S. railcar leasing company to achieve certification as a Responsible Care^® Partner, as certified by the American Chemistry Council (“ACC”) and the Chemical Industry Association of Canada. The Responsible Care^® Partnership program is a voluntary initiative developed by the global chemical industry to drive continuous improvement and achieve excellence in environmental, health and safety, and security performance. As a Responsible Care^® partner, we are required to meet technical and management standards for:

Using the Responsible Care^® framework, we have established an EHS management system that strives for continuous improvement. We continually measure our performance and set goals for improvement in many key metrics such as safety incident rate, community involvement and support, environmental emissions, workers’ compensation, waste generation, and energy consumption. Our management team takes an active role in developing and communicating our annual EHS goals across the organization and monitoring the Company’s efforts to achieve those goals.

We take our commitment to the Responsible Care^® framework very seriously, and as part of our participation, our facilities are audited on a periodic basis by nationally-accredited, independent auditors to ensure compliance with program standards. Our commitment to our EHS program is supported by the results we have achieved. Highlights of our work in 2017 include:

Our repair and maintenance facilities maintain an ongoing relationship with first responders in the communities where we operate to coordinate response plans in the event of an EHS incident involving our railcars or our facilities. In addition, we offer a TankTrainer^® Program

that provides hands-on training in the proper use and handling of railcars for customers, railroads, and first responders. Since 1993, our TankTrainer^® has conducted more than 250 mobile training events for nearly 22,000 emergency responders and customers.

We are committed to environmental sustainability and take a leadership position in voluntary environmental initiatives by working proactively with governments, environmental groups, academia, and industry. In order to minimize the environmental impact of our operations, we invest in programs targeted to make our operations more efficient and reduce our impact on the environment.

Our American Steamship Company (“ASC”) subsidiary continues to work on developing new ballast water treatment systems for use in our vessels that operate on the Great Lakes. Ballast water discharges in the Great Lakes from vessels sailing internationally have

introduced non-native aquatic species which pose a threat to the marine ecosystem of the Great Lakes. While our vessels sail exclusively within the Great Lakes, ballast water discharges from our vessels can potentially contribute to the spread of these invasive species. For the last several years, ASC has partnered with experts in the public and private sector to develop and test new technology to achieve higher levels of purity in ballast water with the goal of eliminating these invasive species from the ballast water of Great Lakes vessels.

Truth, honesty, and treating all people with respect and dignity reflects our culture and the kind of workplace we are committed to maintaining: One in which our employees can reach their highest potential. We encourage diversity and inclusiveness in our workforce, and our policies and programs are designed to provide fair treatment of all employees. We believe that our investments in training, diversity, benefit programs, and education helps us to attract and retain a talented workforce. In addition, we offer our employees competitive compensation and a full array of health, welfare, and retirement benefits.

We also encourage our employees to volunteer in their communities, and we offer opportunities for them to tutor, mentor, build playgrounds, paint schools, work at food banks and shelters, and participate in food, clothing, and

toy collection drives. Key highlights of our employee engagement and volunteer efforts in 2017 included:

GATX shareholders and other interested parties may, at any time, communicate directly with the Board, any of our directors individually (including the Lead Director), or our non-management directors as a group through the office of our Corporate Secretary as follows:

Our Corporate Secretary will review communications received by any of these methods and forward the communication promptly to the Board, individual directors, the Lead Director, or the non-management directors as a group, as appropriate, depending on the subject matter and facts and circumstances described in the communication.

Communications that are not related to the duties and responsibilities of the Board, are patently frivolous, or are otherwise considered to be improper for submission to the intended recipient(s), will not be forwarded.

Each year, the Board nominates a slate of director candidates for election at the Annual Meeting of Shareholders. The Board has delegated the process for screening potential director candidates to the Governance Committee with input from the Chairman and Chief Executive Officer and the Lead Director. When the Governance Committee determines that it is desirable to add a director or fill a vacancy on the Board, it will identify one or more individuals qualified to become directors and recommend them to the Board. In identifying qualified individuals, the Governance Committee generally retains a search firm for this purpose. To be considered for membership on the Board, a candidate must meet the following minimum criteria:

Diversity is a factor considered when identifying prospective nominees for our Board, although the Governance Committee does not have a formal diversity policy. Nominees are selected so that the Board represents a diversity of viewpoints, professional experiences, education, skills, and other individual qualities and attributes that contribute to an active, effective Board.

The Governance Committee is responsible for recommending to the full Board a slate of director nominees who collectively have the complementary experience, qualifications, skills, and attributes to guide the Company and function effectively as a Board. We believe that each of the nominees satisfies the criteria for membership set forth above and has key skills and attributes that are important to an effective board. Each of

the nominees, other than Mr. Kenney, is also independent of the Company and management. See Board Independence on page 5.

Listed below are certain key experiences, qualifications, and skills of our director nominees that the Governance Committee believes are relevant and important in light of GATX’s business and structure.

The Board also will consider any candidates who may be recommended by shareholders. The Board conducts such inquiry into each candidate’s background, qualifications, and independence as it believes is necessary or appropriate under the circumstances and regardless of whether the candidate was recommended by shareholders or by others. Any recommendations of director candidates by shareholders should be submitted to the Governance Committee, c/o the Corporate Secretary, GATX Corporation, 222 West Adams Street,

Chicago, Illinois 60606. The recommendation must be received not more than 120 and not less than 90 days prior to the first anniversary of the preceding year’s annual meeting and must include all information required by the proxy rules, applicable law, and our By-Laws. If a shareholder submits a director candidate in accordance with the requirements specified in our By-Laws, the Governance Committee will consider such director candidate using the same standards it applies to evaluate other director candidates.

Our Board is currently composed of ten directors, all of whom are standing for re-election for a term of one year, to serve until the 2019 Annual Meeting of Shareholders or until their successors are elected and qualified. All director nominees have consented to serve on the Board, if elected. At the time of the Annual Meeting, if any director nominee is unable or declines to serve, the proxies may be voted for any other person who may be

nominated by the Board to fill the vacancy, or the size of the Board may be reduced accordingly.

Please see below for information on the background of each of the ten director nominees, as well as each individual’s specific experience, qualifications, and skills that led the Board to conclude that such individual should serve on the Board in light of the Company’s business and leadership structure.

The Board of Directors recommends that you vote FOR each director nominee named below.

Each director’s phantom stock account is credited with additional units representing dividends declared on GATX common stock based on the date such dividend is paid.

At the expiration of each director’s service on the Board, settlement of phantom stock units is made in shares of common stock equal to the number of units of phantom

stock then credited to his or her account. Any fractional units are paid in cash. Directors may elect to receive their payouts in a lump sum or up to ten annual installments in accordance with the terms, and subject to the limitations, set forth in the Directors’ Phantom Stock Plan.

We offer a Directors’ Voluntary Deferred Fee Plan in which non-employee directors may defer receipt of the cash portion of their retainer in the form of either cash or phantom stock units. If the deferral is in cash, the deferred amount accrues interest at a rate equal to the 20-year US government bond rate. If the deferral is in

units of phantom stock, the units are credited to an account for each participating director along with dividends and are settled, following expiration of the director’s service on the Board, in accordance with his or her election/distribution form on file. Five directors participated in the Deferred Fee Plan in 2017.

The stock ownership goal for non-employee directors is 5.0 times the annual cash retainer. New directors have five years following election to the Board to achieve this ownership goal.

We are seeking your approval, on a non-binding advisory basis, of the compensation of our named executive officers as described in the Compensation Discussion and Analysis beginning on page 26. We believe that we have designed compensation programs that pay for performance and align compensation with the long-term interests of our shareholders. In deciding how you vote on this proposal, we encourage you to read the Compensation Discussion and Analysis for a full description of our executive compensation philosophy and programs, the decisions our Compensation Committee has made under those programs, and the factors it considers in making those decisions.

The North American railcar leasing market experienced its third year of a downturn in 2017. Large numbers of idle existing railcars, combined with the overbuilding of new railcars, caused a continued oversupply situation in the market. Despite relatively stable underlying demand and modest improvement in railcar loadings, this oversupply of railcars tempered lease rate increases across the industry. In light of these industry conditions, our performance was outstanding. We maintained an industry-leading fleet utilization of 98% or higher throughout the year, reflective of the diversity of our quality fleet and the breadth of our customer relationships. Our international railcar leasing business maintained higher fleet utilization than expected throughout the year, while our American Steamship subsidiary significantly increased its profitability by carrying more tonnage and operating its fleet more efficiently. Lastly, our aircraft spare engine leasing joint ventures with Rolls-Royce produced another year of excellent financial results.

Key accomplishments in 2017 included:

We value the feedback provided by our shareholders, who approved our executive compensation program at the 2017 Annual Meeting of Shareholders by a vote of 97.3% in favor. We have discussions with many of our shareholders on an ongoing basis regarding various topics, including executive compensation, and we take into account the views of shareholders regarding the design and effectiveness of our executive compensation program.

Shareholders are being asked to approve the following resolution at the Annual Meeting:

“RESOLVED, that the shareholders of GATX Corporation (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, and the Executive Compensation Tables, together with the narrative discussion related thereto.”

The Board of Directors recommends that you vote FOR adoption of the advisory resolution to approve the compensation of our named executive officers as disclosed in this Proxy Statement.

Brian A. Kenney

Chairman, President and Chief Executive Officer

Robert C. Lyons

Executive Vice President and Chief Financial Officer

James F. Earl

Executive Vice President and President, Rail International

Thomas A. Ellman

Executive Vice President and President, Rail North America

Deborah A. Golden

Executive Vice President, General Counsel and Corporate Secretary

This Compensation Discussion and Analysis makes reference to financial data derived from our financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) and certain other financial data prepared using non-GAAP

components. For a reconciliation of these non-GAAP components to the most comparable GAAP components, see Exhibit B to this Proxy Statement.

GATX is the leading global railcar lessor, owning and leasing railcars in North America, Europe, and Asia. Most of our railcar leases are full-service leases under which we provide maintenance, engineering, administrative, and a variety of other value-added services. We operate an extensive network of railcar maintenance facilities in the United States, Canada, and Europe dedicated to performing timely, efficient, and high quality maintenance for our railcar leasing customers. In addition, we operate the largest fleet of US-flagged vessels on the Great Lakes and invest with Rolls-Royce plc, a leading manufacturer of commercial aircraft jet engines, in a group of joint ventures that lease aircraft spare engines.

Railcar leasing is our core business, accounting for approximately 85% of our 2017 revenue. Our rail customers operate in cyclical markets, such as the petroleum, chemical, fertilizer, food/agricultural, transportation, and construction industries. Combined with changing macroeconomic conditions and swings in railcar supply, this results in significant volatility in utilization and lease rates for railcars over time. At the

same time, railcars have very long useful lives of 20-45 years. Thus, we have to proactively manage our business with a long-term view, which includes buying, leasing, maintaining, and selling railcars into constantly changing business conditions over decades.

We believe that the key to generating long-term shareholder value involves optimizing asset growth and asset return by emphasizing each at the appropriate point in the railcar business cycle. For example, in stronger railcar markets, we focus on increasing lease rates and lengthening lease term to lock-in attractive lease revenue as long as possible. At the same time, we de-emphasize new railcar investment due to the high railcar prices usually present in such a market. Conversely, in weaker markets, when railcar prices tend to be lower, we seek to increase railcar investment on favorable terms. We also aggressively reduce lease rates to maintain asset utilization and shorten lease terms to position us to capture value when lease rates improve. The following chart illustrates our approach to managing leases through these cycles over the past decade.

The cyclicality of our industry is also illustrated by the backlog of orders at the railcar manufacturers. Rising backlogs tend to represent a strengthening market while falling backlogs tend to represent a weakening market. While we invest in railcars at all points in the business cycle, we strive to achieve lower railcar cost by trying to

place large new railcar orders and acquire existing fleets in weaker markets when asset prices tend to be lower. The following chart illustrates this cyclicality and our efforts to focus on the lower points in the business cycle for large railcar investments.

Our Compensation Committee is responsible for the oversight of our executive compensation program, including approval of our Chief Executive Officer’s compensation and establishing the performance goals used to determine the compensation of our executive officers. Our executive compensation program is based on the following principles:

The Compensation Committee expects our executive team to create long-term shareholder value by growing

capital employed while also earning an attractive return on that capital. The inherent cyclicality of the railcar leasing business is an important consideration in how we structure our executive compensation programs to appropriately incentivize management to achieve the financial goals that will positively impact the Company’s performance over the long-term.

Due to the cyclicality of our business, management must strategically shift the emphasis we place on each of these dual objectives (i.e., growth in capital employed and financial returns) to adapt to changes in market conditions. Our compensation programs reflect this cyclicality by appropriately rewarding management to emphasize current financial returns over growth in capital employed during stronger markets, and conversely, to emphasize growth in capital employed over current financial returns in weaker markets. In this way, the Compensation Committee believes that our plans have been designed to reward executives for achieving those goals that will maximize long-term shareholder value.

The overarching goal of our compensation philosophy and incentive plan design is to incentivize management by aligning their interests with those of our shareholders. In 2017, approximately 81% of total direct compensation for our Chief Executive Officer, and approximately 63% for our other NEOs, was performance-based and not

guaranteed. The light and dark blue colors in the charts below denote performance-based compensation. The following graphs provide a snapshot of the elements of pay for our NEOs and explain why each element is provided:

With weak market conditions continuing as we entered 2017, we established the following performance objectives, among others:

The North American railcar leasing market experienced its third year of a downturn in 2017. Large numbers of idle existing railcars, combined with the overbuilding of new railcars, caused a continued oversupply situation in the market. Despite relatively stable underlying demand and

modest improvement in railcar loadings, this oversupply of railcars tempered lease rate increases across the industry. In light of these industry conditions, our performance was outstanding:

Our unique position as an independent, publicly traded railcar lessor means that there are no directly comparable peers against which we can assess pay and performance. Over the last few years, our Compensation Committee has considered multiple approaches to identifying a relevant peer group but has found all of them to lack appropriate comparability. For example, the companies in our General Industry Classification Standard (GICS) code have significantly different business models, customer bases, and asset composition, and they lack GATX’s focus on very

long-lived assets. Our competitors in the railcar leasing

industry are typically very small parts of much larger diversified companies, which may or may not be publicly traded, making comparisons extremely difficult. However, we compete for executive talent against these much larger organizations. Lacking a clear group of peers for comparison, our Compensation Committee has chosen to use multiple data points to assess our executive compensation, including:

In addition to the unavailability of relevant peer pay data, lack of a peer group makes it difficult to compare GATX’s relative total shareholder return (“TSR”) to the TSR of other companies in our industry because there are no other independent, publicly traded railcar leasing companies that we believe would provide a useful basis for comparison. This is the primary reason why our Compensation Committee does not use relative TSR as a performance measure in our annual and long-term incentive plans. Instead, the Compensation Committee has chosen to use performance measures that reflect our financial performance and the cyclical nature of our business.

In setting the performance measures for our annual and long-term plans, our Compensation Committee sets goals intended to align executive compensation with the appropriate achievement of our dual goals of growth and return at various points in the business cycle. Reflecting this focus, our Compensation Committee uses net income, return on equity, and investment volume as the performance measures in all of our annual and long-term incentive plans. The Compensation Committee sets the performance goals for each of these measures with the intent of focusing management on achieving results that will have the biggest impact on our financial performance and long-term shareholder value in light of where we are in the business cycle. The following graphs show our compensation plan goals for our NEOs in 2017, and our actual achievement against such goals, for each of net income, return on equity, and investment volume.

When the Compensation Committee set the target for our annual incentive plan at the beginning of 2017, we believed that weakness in the railcar leasing market would continue, but the impact and duration of the downturn remained unclear. Despite this uncertainty, our Compensation Committee desired to set an ambitious net income target for our NEOs that would be appropriately rigorous and challenging notwithstanding difficult market conditions. The Committee set the 2017 net income target at $218.3 million, which was the same as our 2016 net income target and higher than budgeted net income for 2017 ($174.8 million). Therefore, in order for our NEOs to receive a 100% payout under our annual incentive plan, 2017 actual net income would need to exceed

budgeted net income by 25%. The Compensation Committee took this step to address the high degree of uncertainty in the market regarding the downturn and ensure that our NEOs would receive a 100% payout only if GATX outperformed expectations and achieved excellent financial performance despite uncertain and challenging market conditions. Based on the 2017 plan design, our net income achievement of 84.8% of target resulted in a payout to our NEOs at 81.6% of their target awards. 2017 and 2016 actual net income performance shown in the chart above reflects certain adjustments during the year.¹ See Annual Incentive Awards on page 36 for more details about our annual incentive plan and how this payout was determined.

Under the terms of our 2015-2017 performance share program, our actual average return on equity results fell short of target while our cumulative investment volume matched target, which resulted in our executives earning 83.8% of their target performance shares. However, the actual value of the payouts depends upon the market price of our common stock on the vesting date, which may be higher or lower than the grant price. See 2017-2019 Performance Share Measures and Goal Setting on

page 38 for a description of our performance share program. The return on equity and investment volume measures are weighted equally in calculating our Performance Share Plan results. Our Compensation Committee believes that these two measures strike an appropriate balance between achieving a meaningful return for our shareholders while holding to a disciplined investment strategy through business cycles.

We continue to maintain a strong pay and performance linkage through all points in the business cycle, as illustrated in the following charts, which show our Chief Executive Officer’s compensation measured against our financial performance for the years 2008-2017. As we

continue to manage through weak market conditions in the railcar leasing industry, our Compensation Committee expects management to emphasize disciplined growth and investment over short-term financial returns.

The chart below compares the changes in shareholder return and our Chief Executive Officer’s compensation over the past ten years, which have been representative of the cyclical nature of the railcar leasing market. During this time frame, our Chief Executive Officer’s compensation remained relatively flat, with year-to-year

volatility in line with our annual financial performance as highlighted above. Since 2008, total direct compensation for our Chief Executive Officer has increased by 19%, a compound annual growth rate of approximately 2.0%, while TSR increased 166%, a compound annual growth rate of approximately 13.0%.

At our 2017 Annual Meeting of Shareholders, approximately 97.3% of shareholder votes were cast in favor of an advisory resolution approving the compensation of our NEOs as disclosed in our 2017 proxy statement (the “say-on-pay” resolution). The Compensation Committee believes that the overwhelming

shareholder vote in favor of the say-on-pay resolution was an affirmation of shareholders’ support of our approach to executive compensation and, therefore, did not make any changes to its executive compensation plans or programs as a result of the vote.

We regularly review and refine our executive compensation program to ensure that it continues to reflect practices and policies that are aligned with our pay-for-performance philosophy. We believe that our

practices and policies set forth below are in line with current best practices for aligning executive and shareholder interests and sound corporate governance practices.

In 2017, our executive compensation program consisted of three elements: Base salary, annual incentive, and long-term equity compensation. We also provide various

retirement and benefit programs, which are generally available to all employees. Further details on each element of compensation are discussed below.

Base salary constitutes approximately 19% of total targeted compensation for our Chief Executive Officer (approximately 37% for our other NEOs), which is consistent with our philosophy that a majority of executive compensation should be performance-based.

In establishing salary levels, we typically consider market pay levels, the specific responsibilities and experience of each NEO, and his or her individual performance. Base salaries may be adjusted during the Compensation Committee’s annual review for:

None of our NEOs received an increase in base salary in 2017.

In 2018, Messrs. Kenney, Lyons, and Ellman and Ms. Golden received the Company’s standard general increase of 2.5% to their base salaries. Mr. Ellman received an additional 6% increase to recognize his performance, consistent with market levels. Mr. Earl, who retired from GATX effective March 1, 2018, did not receive an increase to base salary for 2018.

Target incentive opportunities for NEOs are expressed as a percentage of base salary and are intended to be competitive with the market. Please see The Determination of Market Competitive Pay on page 42 for a description of how we determine competitive pay levels. For 2018, target incentive opportunities for our NEOs

remained unchanged from 2017 levels. Mr. Kenney’s target incentive opportunity is 100% of his base salary. The target annual incentive opportunities for our other NEOs are 70% of base salary for Messrs. Lyons, Earl, and Ellman, and 60% of base salary for Ms. Golden.

Our NEOs earn their annual incentive awards under our Cash Incentive Compensation Plan (the “CICP”) based on achievement of pre-established financial performance goals. The CICP is designed to arrive at a maximum possible incentive award, which then may be reduced by the Compensation Committee based on such other metrics as it may determine appropriate. This design was intended to meet the requirements for tax deductibility of our annual incentive, while providing the Compensation Committee the flexibility to adjust performance metrics as necessary to meet our strategic business needs.

Under the CICP, a maximum bonus of 0.75% of “Total Gross Income Less Total Ownership Costs” (as such term is defined in the CICP) is earned. However, as previously mentioned, the Compensation Committee does not expect to pay the full amount. Rather, it has historically measured performance against targeted net income and determined bonuses based on achievement

against a net income goal established from a financial plan which is reviewed by the full Board. The Compensation Committee has chosen net income as the goal because it provides executives with a strong incentive to increase our profitability.

The performance metrics and payout levels are established at the beginning of each year by the Compensation Committee with input from the independent consultant and management. The level of financial performance required for the maximum payout is established based on the Compensation Committee’s assessment of the level of performance that shareholders would likely consider superior in view of general economic conditions and the economic outlook for GATX and its industry in particular. This process is essentially reversed to establish the threshold or minimum performance level, defined as the level of financial performance below which no incentive is payable.

2017 Annual Incentive Plan Design. When the Compensation Committee set the target for our annual incentive plan at the beginning of 2017, we believed that weakness in the railcar leasing market would continue, but the impact and duration of the downturn remained unclear. Despite this uncertainty, our Compensation Committee desired to set an ambitious net income target for our NEOs that would be appropriately rigorous and challenging notwithstanding difficult market conditions. The Committee set the 2017 net income target at $218.3 million, which was the same as our 2016 net income target and higher than budgeted net income for 2017 ($174.8 million). Therefore, in

order for our NEOs to receive a 100% payout under our annual incentive plan, 2017 actual net income would need to exceed budgeted net income by 25%. The Compensation Committee took this step to address the high degree of uncertainty in the market regarding the downturn and ensure that our NEOs would receive a 100% payout only if GATX outperformed expectations and achieved excellent financial performance despite uncertain and challenging market conditions.

The goals and payout levels under the 2017 annual incentive plan design are shown in the following table:

2017 Annual Incentive Plan Payouts. Net income, excluding tax adjustments and other items, for 2017, was $185.0 million¹, which was 84.8% of the target level of

performance. Based on the targets illustrated above, this level of performance resulted in incentive payouts to our NEOs of 81.6% of their target award levels.

We set target long-term incentive opportunities for our NEOs to be competitive with the market. The value of the regular, annual long-term incentive awards to each NEO is divided equally between non-qualified stock options (“NQSOs”) and performance shares. We chose this combination of grant types because it focuses executive attention on total shareholder return and on specific financial goals, both of which are essential to our long-term success. The grant date for regular long-term incentive awards is the date of the Compensation

Committee’s first meeting of each calendar year. We grant NQSOs to NEOs at the same time we grant them to other employees. NQSOs vest ratably over a three-year period and expire seven years after the grant date. We have no program, plan, or practice to time NQSO grants to NEOs or any other employees in coordination with the release of material non-public information. We generally make off-cycle grants (if any) to newly hired employees on the last trading date of the month following the hire date and Compensation Committee approval of the award.

Non-Qualified Stock Options. NQSOs are granted to align the interests of our NEOs and other employees with our shareholders. NQSOs are granted at a price equal to fair market value of our common stock (the average of the high and low trading prices on the date of grant) as approved by the Compensation Committee. Because TSR is comprised of stock price appreciation and dividends, dividend equivalents are attached to NQSOs. We believe that rewarding both components of

shareholder return better aligns management and shareholder interests. Dividend equivalents accrue until vesting and are paid in cash thereafter until the NQSO is exercised or expires. Because the value of dividend equivalents is fully factored into the determination of grant size, the number of NQSOs granted is correspondingly smaller than it would be if dividend equivalents were not attached because the value of each NQSO is higher.

Performance Shares. Performance shares are designed to focus attention on, and to reward the achievement of, our long-term financial and strategic objectives. The Compensation Committee establishes the goals for which the performance shares may be earned at the beginning of a three-year performance period rather than annually. At the end of the performance period, a percentage ranging from 0% to 200% of the number of performance shares initially awarded will be earned based on the extent to which the three-year goals are achieved. The value of each earned performance share equals the price of one share of our common stock at the end of the performance period, with payment of earned performance shares made in the form of GATX common stock.

Our target setting process, conducted at the beginning of each three-year performance period, combines goals related to growth and return to reflect the cyclical nature

of our business. Our targets are designed to incentivize behavior which enhances long-term shareholder value at all points in the business cycle.

In addition to the Total Gross Income Less Total Ownership Costs threshold goal specified in the GATX Amended and Restated 2012 Incentive Award Plan, the number of performance shares that will be earned in 2019 will also be subject to two equally weighted measures:

The Compensation Committee set ambitious targets of 10.5% for return on equity and $2.5 billion for cumulative

investment volume for the 2017-2019 performance period, both of which are significantly higher than the Company’s budgeted return on equity (8.9%) and cumulative investment volume ($1.98 billion) for the three-year performance period. Therefore, in order for our NEOs to achieve a 100% payout for the 2017-2019 performance period, our return on equity would need to exceed the budgeted level by 18% and cumulative investment volume would need to exceed budget by 26%. The Committee believes that achievement of these rigorous targets would represent excellent financial performance by GATX in light of continuing weak market conditions in the railcar leasing business.

As stated above, we establish our growth and return objectives depending on where we are in the business cycle. When the market is stronger and asset prices are high, we emphasize earning a higher return over making investments to grow capital employed. When the market is weaker and asset prices are reduced, we emphasize making prudent investments at attractive prices over attempting to earn an unrealistically high short-term return. We believe that a single-minded focus on achieving growth over return, or vice versa, at the wrong points in the cycle is likely to impair shareholder value over the longer term.

The return on equity and cumulative investment targets for the 2017-2019 performance period were set in the first quarter of 2017 amidst weakness in the North American railcar leasing market. Consistent with our objective of striking an appropriate balance between our growth and return objectives in light of challenging market conditions, the Compensation Committee set a lower target for average return on equity for the 2017-2019 performance

period (10.5%) than for the prior three-year performance period (12.0% for 2016-2018). However, the 10.5% target is 18% higher than the Company’s budgeted net income of 8.9% for the 2017-2019 performance period, and the Compensation Committee believes that achievement of a 10.5% return on equity for the three-year performance period would represent excellent financial achievement by GATX in challenging market conditions. While the return on equity target was set lower than the prior performance period, the Compensation Committee increased the cumulative investment volume target for the 2017-2019 performance period to $2.50 billion, which is significantly higher than the target for the prior three-year performance period ($2.15 billion for 2016-2018) and is 26% higher than our budgeted cumulative investment volume for the 2017-2019 performance period. This increase in the cumulative investment volume target is consistent with our goal to pursue a disciplined investment strategy by investing more in weaker markets at attractive prices and less in stronger markets when asset prices are at or near their peak.

In granting performance shares for the 2017-2019 performance period, we determined the number of shares awarded by dividing the value of the performance share award by the average of the closing prices of our common stock on the four Fridays immediately preceding the

Compensation Committee meeting at which the grant was awarded. To determine the number of NQSOs awarded, we used the same average closing price multiplied by 31%, which represents the value of the NQSO award based on the Black-Scholes valuation methodology.

The performance shares granted in 2015 vested at the end of 2017. Each target award was based 50% on a three-year average return on equity goal and 50% on a

three-year cumulative investment volume goal.¹ The goals and payout levels under the 2015-2017 Performance Share Plan are indicated in the following table:

As shown in the charts on page 32, the three-year average return on equity for the period was 14.2% versus a goal of 15.2%, and the cumulative investment volume for the period was $1.93 billion, which matched the goal of $1.93 billion. Based on these results, performance share payouts were 83.8% of target. Performance share award values at vesting were 102.7% of target award values based on average fair market value of GATX stock

price on January 25, 2018. Messrs. Kenney, Lyons, and Earl and Ms. Golden elected to receive their performance share payouts in the form of cash. Mr. Ellman received his performance share payout in the form of shares. For details regarding the 2015-2017 performance share payments to the NEOs, please see the Option Exercises and Stock Vested Table on page 48.

We sponsor a standard array of retirement, health, and welfare benefits. Our retirement programs include 401(k) and defined benefit pension programs, as well as a supplemental plan intended solely to restore pension benefits limited by law to the level specified by formula in the qualified pension plan applicable to all salaried employees. The pension and 401(k) programs are intended to supplement employees’ personal retirement savings and social security benefits. Health and welfare

benefits include medical, dental, vision, life, and disability insurance. These programs provide protection against catastrophic loss and encourage health maintenance. NEOs participate in the same programs, and on the same basis, as other salaried employees. No retirement, savings, medical, disability, or other insurance program or arrangement exists which provides benefits to our NEOs in excess of those provided to other salaried employees generally. No perquisites were paid to our NEOs in 2017.

We have entered into agreements with our NEOs that provide certain benefits if employment is terminated following a change of control (“COC”). This protection is provided for competitive reasons and to ensure the stability, continuity, and impartiality of our executives in a COC situation. The level of protection provided is intended to be similar to that provided by similarly sized organizations.

The COC agreements are “double-trigger” agreements, meaning that benefits are payable only if a COC occurs and an executive’s employment is terminated or

constructively terminated. For a description of the key terms of these agreements, please see Potential Payments upon Termination or Change of Control on page 49. Since 2009, we have not entered into any new COC agreements that provide excise tax gross-up benefits, and we do not intend to offer this feature in the future. We do, however, have older agreements entered into in 2009 or earlier that have excise tax gross-up benefits. In the event that we amend such agreements for any reason in the future, we will eliminate such excise tax gross-ups.

The vesting of equity awards upon a COC is determined under the GATX Amended and Restated 2012 Incentive Award Plan and related grant agreements. These terms apply to all employees who receive long-term incentive

awards. In addition, all grant agreements require both a COC event and an executive’s actual or constructive termination before vesting is accelerated.

On March 1, 2018, James F. Earl, former Executive Vice President of the Company and President, Rail International, retired from GATX after more than 30 years of service. In October 2017, to facilitate an orderly transition in connection with his retirement, we entered into an agreement with Mr. Earl pursuant to which we will make the following separation payments to him in exchange for certain waivers, releases, and non-competition, non-solicitation, and confidentiality covenants for our benefit: (a) within 60 days of his retirement, a lump sum payment of $621,300 and a

$36,000 contribution to his health reimbursement account; (b) on February 28, 2019, a lump sum payment of $745,000; (c) in February 2019, when the Company’s annual incentive awards are paid for 2018, a payment equal to the spread between $434,910 and the pro rata incentive award actually earned by Mr. Earl for 2018; and (d) provided Mr. Earl elects coverage under the Company’s pre-65 retiree health plan, a subsidy for the first 12 months of such coverage totaling $14,000, which will be provided in 12 monthly installments.

The Compensation Committee, with input from the independent compensation consultant, regularly reviews:

Our human resources staff and the Chief Executive Officer also provide input to the Compensation Committee regarding base salary increases, target level annual incentives, long-term incentive awards, and the

goals applicable to earning such compensation. After reviewing these recommendations, the Compensation Committee determines and approves the compensation of each NEO as well as the performance goals. Our Chief Executive Officer, however, does not participate in, nor is he present during, any discussions of his own compensation. Such discussions occur during the Compensation Committee’s executive sessions. The Compensation Committee also reviews its pay decisions regarding our Chief Executive Officer with the other independent directors on the Board.

We have structured our compensation programs to provide total direct compensation opportunities comparable to the median range of opportunities provided by companies of similar revenue size to GATX (which we refer to as “competitive” or “market” pay levels throughout this Compensation Discussion and Analysis).

Because we have no direct peers in the railcar leasing business for which relevant compensation data is available, gathering information on competitive pay levels with precision for our particular industry is not possible. Instead, the Compensation Committee, with assistance from our human resources staff and the independent compensation consultant, regularly reviews information on pay for executives as reported in national compensation surveys published by Aon Hewitt and Towers Watson for organizations of similar revenue as ours.

These surveys include general, non-company specific compensation information, on an aggregate basis, for approximately 170 public companies with annual revenues between $1-3 billion. We use these surveys to better understand current compensation practices at other companies of similar revenue size and as a data point to assist us in meeting our goal of having the various elements of compensation be market-competitive.

While these surveys are a starting point for our compensation review process, actual compensation decisions with respect to specific individuals are influenced by a variety of factors in addition to the surveys, including experience, tenure, skills, unique responsibilities, individual performance, and our specific talent requirements.

To underscore the importance of stock ownership, we have established mandatory stock ownership and stock retention policies for our NEOs and other members of senior management. These policies require that each executive must retain shares of GATX stock having a value equal to 50% of the after-tax profits realized from GATX equity awards until the executive owns GATX shares equal in value to a multiple of salary based on his or her position. The multiple is 5.0 times salary for the

Chief Executive Officer and 2.5 times salary for other NEOs.

As of January 31, 2018, all of our NEOs had exceeded their respective stock ownership requirements, having achieved the following approximate percentages of their respective requirements: Mr. Kenney (373%), Mr. Lyons (389%), Mr. Earl (493%), Mr. Ellman (312%), and Ms. Golden (298%).

We have a policy which provides for the recovery of all or part of any bonus or other compensation paid to an executive officer that was based upon the achievement of financial results that were subsequently restated. In the event of a material restatement of our financial results, the Board, or a committee designated by the Board, will review the facts and circumstances that led to the restatement and will take such action as it deems necessary or appropriate.

The Board will consider whether any executive officer received excess compensation because the original financial

statements were incorrectly presented. In addition, the Board will consider the accountability of any executive officer whose acts or omissions were responsible in whole or in part for the events that led to the restatement and whether such acts or omissions constituted misconduct.

Under such policy, the Board may also, depending upon the facts and circumstances, take disciplinary action, up to and including termination of employment, or decide to pursue other available remedies, including, but not limited to, canceling stock-based awards.

Section 162(m) of the Internal Revenue Code generally places a $1 million limit on the amount of compensation a company can deduct in any one year for certain executive officers. While our Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Committee also looks at

other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by GATX for tax purposes.

The 2017 annual incentive and performance share award opportunities granted to our executive officers were designed in a manner intended to be exempt from the deduction limitation of Section 162(m) as in effect at the time of grant because they are paid based on the achievement of pre-determined performance goals established by our Compensation Committee pursuant to our shareholder-approved equity incentive plan.

Base salary is not subject to performance goals and, therefore, is not exempt from Section 162(m) and will not be deductible to the extent the $1 million limit of Section 162(m) is exceeded.

The Tax Cuts and Jobs Act of 2017 repealed the exemption from Section 162(m)’s deduction limit for performance-based compensation, effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible unless it

qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.

Despite our Compensation Committee’s efforts to structure our annual incentive awards and performance share awards to NEOs in a manner intended to be exempt from Section 162(m) and, therefore, not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, including the uncertain scope of the transition relief under the legislation repealing Section 162(m)’s exemption from the deduction limit, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) will, in fact, do so. Further, our Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with GATX’s business needs.

The independent compensation consultant, Pay Governance, has been retained by, and reports directly to, the Compensation Committee and does not have any other consulting engagements with management or GATX. The Compensation Committee has assessed the independence of Pay Governance and its employees working on GATX matters pursuant to applicable SEC rules and NYSE listing standards and determined that no conflict of interest or independence concerns exist.

With respect to Chief Executive Officer compensation, Pay Governance provides an independent recommendation to

the Compensation Committee in the form of a range of possible outcomes, for the committee’s consideration. In developing its recommendation, Pay Governance relies on its understanding of GATX’s business and compensation programs and its own independent research and analysis. Pay Governance does not meet with our Chief Executive Officer with respect to his compensation. In addition to advising on Chief Executive Officer compensation, Pay Governance reviews the Chief Executive Officer’s recommendations on compensation of his direct reports.

The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee

recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our Annual Report on Form 10-K.

David S. Sutherland (Chair)

Ernst A. Häberli

Casey J. Sylla

Stephen R. Wilson

Paul G. Yovovich