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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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Filed by the Registrant

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Filed by a Party other than the Registrant

CHECK THE APPROPRIATE BOX:
☐		Preliminary Proxy Statement
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☑		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Under Rule 14a-12

Legg Mason

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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20182019

NOTICE OF ANNUAL MEETING

AND PROXY STATEMENT

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100 International Drive
Baltimore, Maryland 21202

Dear Fellow Legg Mason Stockholder: Thank you for your continued support of Legg Mason. We greatly value the trust you place in us to oversee your interests in Legg Mason. You are cordially invited to attend our Annual Meeting of Stockholders. We will hold the meeting at Legg Mason’s headquarters located at 100 International Drive, 4thFloor, Conference Center, Baltimore, Maryland at 10:00 a.m. on Tuesday, July 31, 2018.30, 2019. The attached Notice of Annual Meeting and Proxy Statement describe the business that we will conduct at the meeting and provide information about Legg Mason. We are pleased to once again this year furnish proxy materials to our stockholders via the Internet. The e-proxy process expedites stockholders’ receipt of proxy materials while lowering the costs and reducing the environmental impact of our Annual Meeting of Stockholders. On or about June 20, 2018,2019, we will mail to our stockholders a Notice of Internet Availability of Proxy Materials (“Notice”). The Notice contains instructions on how to access our Proxy Statement, Annual Report and other soliciting materials and how to vote. The Notice also contains instructions on how you can request a paper copy of the Proxy Statement and Annual Report. Your vote is important and we encourage you to vote promptly.Whether or not you are able to attend the meeting in person, please follow the instructions contained in the Notice on how to vote via the Internet or via the toll-free telephone number, or request a paper proxy card to complete, sign and return by mail so that your shares can be voted. We hope that you will attend the meeting, and we look forward to seeing you there. Sincerely, Joseph A. Sullivan Chairman and Chief Executive Officer June 20, 20182019

2	LEGG MASON     20182019 Proxy Statement

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NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS

	Logistics
	Date and Time Tuesday, July 31, 201830, 2019 10:00 a.m. Local Time
	Location Legg Mason Headquarters 100 International Drive 4th Floor Conference Center, Baltimore, Maryland
	Who Can Vote Stockholders of record at the close of business on May 24, 201829, 2019, will be entitled to notice of and to vote at the Annual Meeting.
	On or about June 20, 2018,2019, we will mail to our stockholders a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access our Proxy Statement and our Annual Report online.Copies of our proxy materials, the Proxy Statement and Annual Report are available to you atwww.leggmason.comunder the “About–Investor Relations” section.

To the Stockholders of LEGG MASON, INC.:

We will hold the Annual Meeting of Stockholders of Legg Mason, Inc., a Maryland corporation, to consider and vote upon:

			Board Recommendation
1	The election of 109 directors named in the Proxy Statement for a one year term.			FOR each director nominee
2	An advisory vote to approve the compensation of Legg Mason’s named executive officers.			FOR
3	Ratification of the appointment of PricewaterhouseCoopers LLP as Legg Mason’s independent registered public accounting firm for the fiscal year ending March 31, 2019.2020.			FOR
4	Consideration of a shareholder proposal to remove supermajority voting provisions from our charter and bylaws.			NO RECOMMENDATION

Stockholders will also consider any other matter that may properly come before the meeting or any adjournment thereof.

Your vote is important and we encourage you to vote promptly whether or not you plan to attend the Annual Meeting. If you hold shares in your name as a holder of record, you may vote your shares in one of four ways:

	Internet www.voteproxy.com You will need your Notice or proxy card to vote your shares this way.			Telephone 1.800.PROXIES (1-800-776-9437) You will need your Notice or proxy card to vote your shares this way.
	Mail Request a paper proxy card in accordance with the instructions contained in the Notice and then complete, sign and date the proxy card and return it so that it is received by 11:59 p.m., Eastern Time, on July 30, 2018.29, 2019.			In person You may vote in person at the meeting. Submitting a proxy will not prevent a stockholder from attending the Annual Meeting.

If you hold your shares through a securities broker or nominee (in “street name”), you may vote your shares by proxy in the manner described in the Notice provided to you by that broker or nominee.

June 20, 20182019

By order of the Board of Directors,

Thomas C. Merchant
General Counsel and Secretary

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TABLE OF CONTENTS

05		Executive Summary
10		Information About the 20182019 Annual Meeting
13		Proposal 1 Election of Directors
13		Majority Voting Standard for Election of Directors
13		Independent Directors
14		Director Nominees
19		Corporate Governance Overview
2120		Fiscal Year 20182019 Stockholder Engagement
2322		Board Committees
2625		Director Nomination Process
2826		Board Role in Risk Oversight
2827		Relationship of Compensation and Risk
2928		Compensation Consultant to the Compensation Committee
3028		Compensation of Directors
3129		Director Compensation Table
3230		Security Ownership of Management and Principal Stockholders
3432		Executive Compensation
3432		Compensation Discussion and Analysis
5652		Compensation Committee Report
5753		Summary Compensation Table
5955		Grants of Plan-Based Awards
60		Employment-Related Agreements
6156		Outstanding Equity Awards at March 31, 20182019
6358		Option Exercises and Stock Vested Table
6459		Non-Qualified Deferred Compensation
6561		Potential Payments on Termination or a Change of Control or Retirement
6864		Estimated Post-Termination Payments Table
7067		CEO Pay Ratio
7168		Certain Relationships and Related Transactions
7269		Proposal 2 Advisory Vote to Approve the Compensation of Legg Mason’s Named Executive Officers
7570		Proposal 3 Ratification of the Appointment of Legg Mason’s Independent Registered Public Accounting Firm
7670		Fees Paid to the Independent Registered Public Accounting Firm
7671		Pre-Approval of the Independent Registered Public Accounting Firm Services
7772		Audit Committee Report
7974		Proposal 4 Consideration of a Shareholder Proposal to Remove Supermajority Voting Provisions from our Charter and Bylaws
76		Stockholder Proposals for 20192020 Annual Meeting
7976		Section 16(a) Beneficial Ownership Reporting Compliance
8077		Other Matters
8178		Annex A Supplemental Non-GAAP Financial Information

4	LEGG MASON     20182019 Proxy Statement

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EXECUTIVE SUMMARY

This proxy summary highlights information contained elsewhere in our Proxy Statement. The summary does not contain all the information that you should consider, and we encourage you to read the entire Proxy Statement carefully.

Proposal 1 Election of 109 Director nominees
	The Board recommends a voteFOReach Director nominee.
		See pages 13-3113-29 for further information.

			Committees
Director		Years of Tenure	AC	CC	FC	N&CGC	RC
Robert E. Angelica (71)(72)Independent Former Chairman and Chief Executive Officer of AT&T Investment Management Corporation		11
Carol Anthony (“John”) Davidson (62)(63)Independent Former Controller and Chief Accounting Officer of Tyco International, Ltd.		4
Edward P. Garden (58)Independent Chief Investment Officer and Founding Partner of Trian Fund Management, L.P.		0
Michelle J. Goldberg (49)(50)Independent Partner at Ignition Partners		1
Barry W. Huff (74)Stephen C. Hooley (56)Independent(New Director Nominee) Former Vice Chairman, Office of thePresident and Chief Executive Officer at Deloitteof DST Systems, Inc.		9	0
John V. Murphy (68)(69)Lead Independent Director Former Chief Executive Officer of Oppenheimer Funds, Inc.		5
Nelson Peltz (76)Independent Chief Executive Officer and Founding Partner of Trian Fund Management, L.P.		0
Alison A. Quirk (56)(57)Independent Former GlobalChief Human Resources Executive& Citizenship Officer at State Street Corporation		1
W. Allen Reed (71)Independent Former Chief Executive Officer of GM Asset Management Corporation		12
Margaret Milner Richardson (75)Independent Former U.S. Commissioner of Internal Revenue		15
Kurt L. Schmoke (68)Independent President of the University of Baltimore		16
Joseph A. Sullivan (60)(61) Chairman, President and Chief Executive Officer of Legg Mason		5

		Chairman	AC	Audit Committee
		Member	CC	Compensation Committee
			FC	Finance Committee
			N&CGC	Nominating & Corporate Governance Committee
			RC	Risk Committee

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Executive Summary

Director Nominees

(Left to Right)

Michelle Goldberg
John Davidson
Robert Angelica
John Murphy
Joseph Sullivan
Margaret Milner Richardson
Barry Huff
Allen Reed
Alison Quirk
Kurt Schmoke

Board Snapshot

Board Skills and Experiences

On a regular basis, the Board of Directors (the “Board”) reviews the desired qualifications, attributes, skills and experience that it believes are appropriate to oversee management and the company’s strategy. Current experiences brought by the Director nominees include:

	Senior Management 109			Risk Management 5			Technology 2  3
	Investing 7  9			Public Company Governance 5  7			Human Resources 3
	Financial Services 8			Audit/Tax Accounting 5  3			Global 4  5

Board Independence		Board Tenure		Board Diversity
90%		7.5 years		50%
Independent All directors are independent except the CEO Independent: 9 Not Independent: 1		Average Tenure 2 new directors have joined our Board during the past 12 months 0-5 years: 5 6-10 years: 1 >10 years: 4		Diverse Director Nominees Women 3 Ethnic Minorities 2

Board Independence		Board Tenure		Board Diversity
89%		3 years		33%
Independent All director nominees are independent except the CEO Independent: 8 Not Independent: 1		Average Tenure 2 new directors have joined our Board during the past month and one nominee, if elected, will be a new director 0-5 years: 6  6-10 years: 2  >10 years: 1		Diverse Director Nominees Women 2 Ethnic Minorities 1

6	LEGG MASON     20182019 Proxy Statement

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Executive Summary

Fiscal Year 20182019 Stockholder Engagement

Since 2014, Legg Mason has conducted a mid-fiscal year stockholder engagement program. The purpose of the program is to gain insights about the preferences and viewpoints of our largest stockholders on various corporate governance topics generally and our practices and outcomes specifically. In addition, we utilize this program to share certain of our compensation and corporate governance developments of interest to stockholders. We use this process to seek stockholder feedback or support for actions that management and the Board may be considering. Our lead independent director, who also serves as Chairman of the Compensation Committee, is available to participate in our outreach discussions.

In addition to conversationsoutreach to our largest investors during proxy season, with seven of our largestwe contactedsixteen investors we reached out midway through the fiscal year, towho heldten investorsholding nearly46%49% of our shares outstanding((as measured at September 30, 2017)2018). SevenFive of those investors, holding over 34%approximately 30% of our shares outstanding, responded to our outreach. Of the sevenfive firms, fivethree investors let us know that they did not feel a conversation was necessary at the time.

Our lead independent director, who also serves as Chairman of the Compensation Committee, participated in our outreach discussions with two investors who held approximately 11% of our shares outstanding.

Corporate Governance and Diversity & Inclusion Highlights

Our thoughtful corporate governance practices demonstrate the Board’s commitment to enabling an effective structure to support the successful execution of Legg Mason’s strategy:strategy. Legg Mason also is committed to diversity and inclusion as a strategic business imperative.

NEW Proxy Access Bylaw, enabling stockholders to propose directors for election

NEW Bylaw amendment, enabling stockholders to amend the company’s Bylaws

Annual election of directors

Majority voting standard for election of directors in uncontested elections with director resignation policy

Frequent meetings of independent directors in executive session

Annual self-evaluations of the Board and its committees

Annual stockholder engagement around key issues

Robust stock ownership guidelines for directors and officers

SustainabilityCorporate Social Responsibility Report available on our website

Company Code of Conduct to promote awareness of legal and ethical issues

Diverse board of directors – 30% female and 20% African American in fiscal year 2019

Executive Diversity Council focused on an inclusive culture

Ten Employee Resource Groups open to all employees

Equality-based practices and benefits for employees, garnering public recognition for Legg Mason in fiscal year 2019

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Executive Summary

Proposal 2 An advisory vote to approve the compensation of Legg Mason’s named executive officers.
	The Board recommends a voteFORthis Proposal.
		See pages 72-74page 69 for further information.

Fiscal Year 20182019 Pay is Well Aligned with Performance, Reflecting ImprovedChallenged Financial Performance in a ChallengingDisrupted Industry Environment and Strategic Repositioning of Legg Mason for Further GrowthDespite Consistent Execution Against Key Value Drivers

See pages 35-5533-52

●	The Compensation Committee concluded that Legg Mason’s financial performance was improveddeclined from fiscal year 2017 despite continuing trends driving2018 amidst continued disruption in the asset management business.industry, although performance improved in the fourth quarter.
●	The Compensation Committee also recognized strong individual performance by executive management and the progress of the strategic repositioning ofconsistent execution on Legg Mason for further growth.Mason’s corporate strategy to expand client choice.
●	Total CEO compensation up 19%down 14% from fiscal year 2017, following 20% reduction in fiscal year 2016 and no increase in fiscal year 2017
●	CEO paid below median of reported peer group pay,2018, with variable pay constituting over 95%94% of his total direct compensation of $10,500,000$9,000,000 for fiscal year 20182019
●	CEO’s annual incentive award was paid 60% in equity and 40% in cash, as in prior yearsyear
●	Equity awards allocated equally among performance share units, which vest based on relative TSR and relative organic growth rate of long-term assets under management over a three year period, and restricted stock units

Metrics Link Pay to Strategic Goals and Performance

●	Absolute performance metrics included: net revenues, earnings per share and global distribution unit gross sales, net new long-term advisory fee revenue, adjusted EBITDA and operating margin, as adjusted
●	Relative performance metrics included: organic growth rate of long-term assets under management, net income growth and one year total stockholder return

Sound Compensation Practices

●	Pay practices aligned with stockholder interests, with significant variable component for named executive officer pay
●	Metrics reviewed annually for rigor and relevance, reflecting drivers meaningful for creating value for stockholders of an asset management company
●	Compensation Committee continually assesses performance relative to Legg Mason’s goals and competitors’ performance

8	LEGG MASON     20182019 Proxy Statement

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Executive Summary

Executive Compensation Practices

Below we highlight certain executive compensation practices we employ to align executive compensation with stockholder interests. Also listed below are certain compensation practices we do not employ because we do not believe they would serve our stockholders’ long-term interests.

What We Do	What We Don’t Do
Pay for Performance   Total  Linkage to Stockholder Return MetricPerformance   Executive Stock Ownership Guidelines   Equity Award Retention Policy   Vesting Period on Equity Awards   Clawback Policy   Review Tally Sheets   Stockholder Engagement   Prohibit Hedging or Pledging	No Severance Agreements   No Repricings   No Income Tax Gross-ups   No Excise Tax Gross-ups   No Established Program of Executive Perquisites

Proposal 3 Ratification of the appointment of PricewaterhouseCoopersPricewaterhouse Coopers LLP as Legg Mason’s independent registered public accounting firm for the fiscal year ending March 31, 2019.2020.
	The Board recommends a voteFORthis Proposal.
		See pages 75-7670-71 for further information.

The Audit Committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending March 31, 2019.2020. As a matter of good corporate governance, we ask that our stockholders ratify this appointment of PricewaterhouseCoopers LLP. In fiscal year 2018,2019, we paid PricewaterhouseCoopers LLP total fees of $9,664,000.$10,560,000.

Proposal 4 Consideration of a shareholder proposal to remove supermajority voting provisions from our Charter and Bylaws.
	The Board makes no recommendation on this Proposal.
		See pages 74-75 for further information.

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INFORMATION ABOUT THE 20182019 ANNUAL MEETING

When and where is our 20182019 Annual Meeting of Stockholders?

We will hold the meeting at Legg Mason’s headquarters located at 100 International Drive, 4^thFloor, Conference Center, Baltimore, Maryland at 10:00 a.m. on Tuesday, July 31, 2018.30, 2019.

Who is soliciting proxies and who pays the expenses of this proxy solicitation?

The Board of Directors of Legg Mason, Inc. is soliciting proxies from our stockholders. We are soliciting proxies by mail and MacKenzie Partners, our proxy solicitors, and our officers, directors and other employees may also solicit proxies by telephone or any other means of communication. We will bear the cost of soliciting proxies, including a fee of $17,500 plus expenses paid to MacKenzie Partners for its services. We may reimburse brokers, banks, custodians, nominees and other fiduciaries for their reasonable out-of-pocket expenses in forwarding the Notice of Internet Availability of Proxy Materials (“Notice”) and other proxy materials to their principals.

How are we distributing our proxy materials?

In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), instead of mailing a printed copy of our proxy materials to each stockholder of record or beneficial owner, we are furnishing proxy materials, which include our Proxy Statement, to our stockholders over the Internet. If you have received the Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will contain instructions on how to access and review all of the important information contained in the proxy materials. The Notice also provides instructions on how to submit your proxy over the Internet or by telephone. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions in the Notice for requesting the materials.

It is expected that the Notice will be available to stockholders on or about June 20, 2018,2019, and that our proxy materials will be accessible beginning on that date.

Who is entitled to vote at our 20182019 Annual Meeting of Stockholders?

To be entitled to notice of and to vote at the meeting, you must have been a stockholder of record at the close of business on May 24, 2018.29, 2019. As of the close of business on that date, we had outstanding and entitled to vote 85,459,84386,602,519 shares of our common stock, $.10 par value, each of which is entitled to one vote.

How do I vote?

If you hold shares in your name as a holder of record, you may vote your shares in one of four ways:

By Internet		Go towww.voteproxy.comand follow the instructions. You will need your Notice or proxy card to vote your shares this way.
By telephone		Call 1.800.PROXIES (1-800-776-9437) and follow the voice prompts. You will need your Notice or proxy card to vote your shares this way.
By mail		Request a paper proxy card in accordance with the instructions contained in the Notice and then complete, sign and date the proxy card and return it so that it is received by 11:59 p.m., Eastern Time, on July 30, 2018.29, 2019.
In person		You may vote in person at the meeting. Submitting a proxy in advance will not prevent a stockholder from attending and voting at the annual meeting.Annual Meeting.

If you hold your shares through a securities broker or nominee (in “street name”), you may vote your shares by proxy in the manner described in the Notice provided to you by your broker or other nominee.

10	LEGG MASON     20182019 Proxy Statement

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Information About the 20182019 Annual Meeting

What is the difference between holding shares as a holder of record and as a beneficial owner of shares held in street name?

If your shares are registered directly in your name with our transfer agent, American Stock Transfer, you are considered a holder of record of those shares.

If your shares are held in an account at a bank, brokerage firm or other similar organization, then you are a beneficial owner of shares held in street name.

What is a broker non-vote?

If you hold your shares in street name and do not provide voting instructions to your broker or other nominee, a “broker non-vote” will occur with respect to the proposals for which specific authorization is required under New York Stock Exchange (“NYSE”) rules. For the 20182019 Annual Meeting of Stockholders, your broker or other nominee will only have discretionary voting authority for the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm.

What do I need to bring to attend the 20182019 Annual Meeting of Stockholders?

Anyone wishing to gain admission to the 20182019 Annual Meeting of Stockholders must provide a form of government-issued photo identification. For beneficial owners of shares held in street name, you or your representative must provide an account statement, voting instruction form or legal proxy as proof of your ownership of shares as of the close of business on May 24, 2018.29, 2019. Any stockholder representative must also present satisfactory documentation evidencing his or her authority with respect to the shares.

Can I change my vote after I have voted?

If you grant a proxy, you may revoke it at any time before we exercise it. You may revoke a previously granted proxy through any of the following measures:

	By Internet		Go towww.voteproxy.comand vote again. Only your last proxy submitted prior to the meeting will be counted.
	By telephone		Call 1.800.PROXIES (1-800-776-9437) and follow the voice prompts to vote again. Only your last proxy submitted prior to the meeting will be counted.
	By mail		Sign and return a new proxy card dated as of a later date.
	In person		Submit a written ballot in person at the meeting.

How will my shares be voted if I do not give specific voting instructions?

Proxies that are signed and returned but do not contain voting instructions will be voted as follows:

●	FOR the election of all director nominees listed in Proposal 1. (Proposal 1).
●	FOR the advisory vote on the compensation paid to our named executive officers (Proposal 2).
●	FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending March 31, 20192020 (Proposal 3).
●	No vote will be made in connection with the consideration of a shareholder proposal to remove supermajority voting provisions from our charter and bylaws (Proposal 4).

If you hold shares as a holder of record, your shares will not be voted unless you provide a proxy. If you hold shares in street name and do not provide instructions regarding how your shares are to be voted, your bank, broker or other nominee may vote on routine matters only. The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending March 31, 20192020 (Proposal 3) is considered a routine matter.

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Information About the 20182019 Annual Meeting

What is the quorum requirement for our Annual Meeting of Stockholders?

We must have a quorum present at the annual meetingAnnual Meeting in order for any business to be conducted. For a quorum to be present, at least 50% of all shares outstanding and entitled to vote must be present at the annual meetingAnnual Meeting in person or represented by proxy. Abstentions and broker non-votes will be counted as present for purposes of determining the presence or absence of a quorum for the transaction of business.

What vote is required for each proposal?

If a quorum is present at the meeting, the voting requirements set forth below will apply:

●	Directors are elected if they receive a majority of the total votes cast for and affirmatively withheld by the stockholders who are present in person or represented by proxy at the meeting (i.e., if votes for a nominee exceed votes withheld from the nominee). Abstentions and broker non-votes will not affect the election of directors. If an incumbent nominee is not elected by the requisite majority vote, our Corporate Governance Principles require that he or she tender a resignation to the Board of Directors and that the Board of Directors disclose its decision whether to accept the resignation within 90 days. For additional information regarding the procedures that will apply if a director nominee is not elected by the requisite vote, please see “Corporate Governance–Majority Voting Standard for Election of Directors” on page 13.
●	The advisory vote to approve the compensation of our named executive officers requires the affirmative vote of a majority of the total votes cast on this proposal. Abstentions and broker non-votes are not considered votes cast and will not affect the outcome of this proposal. The vote on this proposal is advisory only and not binding on Legg Mason.
●	The vote to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending March 31, 20192020 requires the affirmative vote of a majority of the total votes cast on this proposal. Abstentions and broker non-votes are not considered votes cast and will not affect the outcome of this proposal. We do not expect to receive broker non-votes on this proposal because the record holders of shares held in street name will have discretionary authority to vote uninstructed shares on this proposal.
●	The shareholder proposal to consider the removal of supermajority voting from our charter and bylaws requires the affirmative vote of a majority of the total votes cast at the 2019 Annual Meeting of Stockholders. Abstentions are not considered votes cast and will not affect the outcome of this proposal. Our Nominating & Corporate Governance Committee and Board will consider the voting results on this proposal in their future deliberations regarding the appropriate voting standards within our articles of incorporation, as amended, and our amended and restated bylaws.

Who counts the votes cast?

Representatives of American Stock Transfer will tabulate the votes cast at our 20182019 Annual Meeting of Stockholders and will act as the independent inspector of election.

What is householding?

Some banks, brokers and other nominees engage in the practice of “householding” our proxy statements and annual reports. This means that only one copy of our proxy statement and annual report to stockholders may be sent to multiple stockholders in your household unless you request otherwise. Please contact your bank, broker or other nominee if you wish to receive individual copies of our proxy materials in the future.

12	LEGG MASON     20182019 Proxy Statement

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PROPOSAL 1 ELECTION OF DIRECTORS

Our Board of Directors currently consists of 1012 directors, which number may be increased or decreased by the Board of Directors. AtThe Board of Directors has determined to temporarily reduce the 2018number of directors and at the 2019 Annual Meeting of Stockholders, 10nine directors are to be elected for one-year terms to hold office until the 20192020 Annual Meeting of Stockholders and until their successors have been elected and qualified, or until their earlier death, resignation or removal. All nominees are current Legg Mason directors who were elected by stockholders, except for Michelle J. GoldbergNelson Peltz and Alison A. Quirk,Edward P. Garden, each of whom joined the Board of Directors effective November 28, 2017.May 20, 2019 and Stephen C. Hooley, who is first nominated for election at the Annual Meeting. Current directors Ms. Richardson and Messrs. Huff, Reed and Schmoke are not nominated to stand for re-election at the 2019 Annual Meeting of Stockholders. Ms. Richardson and Mr. Huff have reached the age of 75, which, pursuant to our Corporate Governance Principles, is the age at which an individual will not be nominated for election as a director (absent a waiver). Messrs. Reed and Schmoke are not nominated for re-election at their request. We have been fortunate to have benefited from the expertise and perspective of Ms. Richardson and Messrs. Huff, Reed and Schmoke. We have greatly valued and thank them for their outstanding contributions to our success.

Our Board of Directors has agreed to return the size of the Board of Directors to 12 directors and the Nominating & Corporate Governance Committee is currently in the process of identifying and evaluating candidates to be nominated for appointment by the Board of Directors following the Annual Meeting. One of these three additional candidates will be nominated by Trian Partners pursuant to an arrangement between Legg Mason and Trian Partners, subject to Board approval. Once the three director nominees recommended by the Nominating & Corporate Governance Committee are identified, they will be presented for approval and appointment by the Board of Directors, each to hold office until the 2020 Annual Meeting of Stockholders and until their successors have been elected and qualified, or until their earlier death, resignation or removal.

The Board of Directors recommends stockholders vote “FOR” the election of each of the 10nine nominees. If all 10nine nominees are elected, our Board of Directors will consist of 10nine directors, nineeight of whom, representing 90%89% of the Board, will be “independent” as defined in NYSE listing standards. The Board of Directors has no reason to believe that any nominee will be unable to serve. If any nominee is not able to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless the Board of Directors chooses to reduce the number of directors serving on the Board of Directors.

The Board of Directors recommends a vote “FOR” the election of each nominated director.

Majority Voting Standard for Election of Directors

Directors are elected by the vote of a majority of the total votes cast for and affirmatively withheld by the stockholders present in person or represented by proxy at the meeting. Accordingly, a nominee will not be elected unless he or she receives more “FOR” votes than “WITHHELD” votes. Under Maryland law, any incumbent director not so elected would continue in office as a “holdover” director until removed or replaced. As a result, our Corporate Governance Principles also provide that any director who fails to obtain the required vote in an uncontested election must submit his or her resignation to the Board. The Board must decide whether to accept or decline the resignation, taking into consideration the recommendation of the Nominating & Corporate Governance Committee after consideration of all relevant factors, within 90 days after the vote has been certified.

Independent Directors

The Board of Directors has made determinations as to the independence of each of our current non-employee directors and concluded that all of our current non-employee directors qualify as independent directors under the NYSE listing standards. No director is considered independent unless the Board of Directors has determined that he or she has no material relationship with Legg Mason. As part of its determination, the Board considered the transactions and relationships described below under “Compensation Committee Interlocks and Insider Participation” and “Certain Relationships and Related Transactions” and applied our Policy Regarding Director Independence Determinations as adopted by the Board, which includes categorical standards to assist the Board of Directors in making independence determinations and specifies the types of relationships that are deemed not material and, therefore, not considered each year. A copy of the Policy Regarding Director Independence Determinations is available on our corporate website atwww.leggmason.comunder the ““About—Investor Relations—Governance—Corporate Governance”Governance” section.

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Proposal 1 Election of Directors

Director Nominees

Robert E. AngelicaIndependent	Director Since2007	Age7172
Background Robert E. Angelica,has been a director of Legg Mason since February 2007 and is currently engaged in private investment activities. From 1999 through December 2006, Mr. Angelica served as the Chairman and Chief Executive Officer of AT&T Investment Management Corporation (“ATTIMCO”), an asset management subsidiary of AT&T Inc. Qualifications Mr. Angelica’s qualifications to continue to serve on our Board include his extensive financial industry knowledge and substantial leadership experience gained while serving as the Chairman and Chief Executive Officer of ATTIMCO, which was responsible for the investment and administration of more than $80 billion of employee benefit plan assets for AT&T Inc. and certain third parties. Mr. Angelica’s diverse experience includes the development of asset allocation policies and strategies, risk management, selection of external investment managers and trustees, in-house asset management, regulatory compliance and accounting and financial reporting. He was awarded the Chartered Financial Analyst designation. Our Board has determined that Mr. Angelica qualifies as an “audit committee financial expert” under the rules and regulations of the SEC.	Committees Audit Finance Risk (Chair)

Carol Anthony (“John”) DavidsonIndependent	Director Since2014	Age6263
Background Carol Anthony (“John”) Davidson,has been a director of Legg Mason since May 2014, and is currently engaged in private investment activities. From January 2004 to September 2012, Mr. Davidson served as the Senior Vice President, Controller and Chief Accounting Officer of Tyco International Ltd. (“Tyco”). Mr. Davidson has served as a director of TE Connectivity Ltd. since March 2016 and a director of Allergan Plc since May 2018. Mr. Davidson previously served as a director of DaVita HealthCare Partners, Inc. from December 2010 to March 2018 and as a director of Pentair Plc from October 2012 to April 2018. From 2013 to 2018, Mr. Davidson also servesserved on the Board of Governors of the Financial Industry Regulatory Authority (“FINRA”). From and from 2011 to 2015, Mr. Davidson served as a member of the Board of Trustees of the Financial Accounting Foundation, which oversees financial accounting and reporting standard setting processes for the United States. Qualifications Mr. Davidson’s qualifications to continue to serve on our Board include his more than 30 years of leadership experience across multiple industries, including his leadership roles at Tyco, six years at Dell Inc., where he held various leadership roles, including vice president, audit, risk and compliance, and vice president, corporate controller and 16 years at Eastman Kodak Company in a variety of accounting and financial leadership roles. In addition, Mr. Davidson, a certified public accountant, has a strong track record of implementing governance and controls processes. Our Board has determined that Mr. Davidson qualifies as an “audit committee financial expert” under the rules and regulations of the SEC.	Committees Audit Finance Risk

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Proposal 1 Election of Directors

Edward P. GardenIndependent	Director Since2019	Age58
Background Edward P. Gardenhas been a director of Legg Mason since May 2019 and has been Chief Investment Officer and Founding Partner of Trian Fund Management, L.P. (“Trian”), a multi-billion dollar asset management firm specializing in helping companies to optimize operational performance, since 2005. Mr. Garden currently serves as a director of General Electric Company, an industrial company, and served as a director of The Bank of New York Mellon Corporation from December 2014 to June 2019, where he chaired its Human Resources and Compensation Committee, as a director of Family Dollar Stores, Inc., a discount retailer, from September 2011 until its acquisition by Dollar Tree, Inc. in July 2015, as a director of The Wendy’s Company, a restaurant chain, from December 2004 to December 2015, and as a director of Pentair plc, an industrial manufacturing company, from May 2016 to April 2018. Previously he served as Vice Chairman and a director of Triarc Companies, Inc. from December 2004 through June 2007 and Executive Vice President from August 2003 until December 2004. Prior to joining Triarc, Mr. Garden was a managing director of Credit Suisse First Boston, where he served as a senior investment banker and a managing director at BT Alex Brown, where he was co-head of Equity Capital Markets. Mr. Garden graduated from Harvard College with a B.A. in Economics. Qualifications Mr. Garden’s qualifications to continue to serve on our Board include his over 25 years of experience advising, financing, operating and investing in companies. Mr. Garden has worked with management teams and boards of directors to implement growth initiatives as well as operational, strategic and corporate governance improvements. Mr. Garden has strong operating experience, a network of relationships with institutional investors and investment banking/capital markets experience that can be utilized for the benefit of Legg Mason.	Committees Compensation Nominating & Corporate Governance

Michelle J. GoldbergIndependent	Director Since2017	Age4950
Background Michelle J. Goldberg,has been a director of Legg Mason since November 2017 and has been a Partner at Ignition Partners, an early stage, technology venture capital firm, and a Venture Partner at SoGal Ventures, investing in the next generation’s lifestyle and health, since May 2000. Before joining Ignition, Ms. Goldberg was a consultant in financial institutions and technology and an investment banker in middle market mergers and acquisitions. Ms. Goldberg joined the board of Taubman Centers, Inc. on May 29, 2019. Ms. Goldberg has a B.A. in Asian Studies from Columbia College and an M.A. in East Asian Studies from Harvard University. Qualifications Ms. Goldberg’s qualifications to continue to serve on our Board include her advisory and investment experience across multiple industries, including eCommerce and digital media, internet analytics and mobile and enterprise software and her experience as a consultant in financial institutions and technology and an investment banker in middle market mergers and acquisitions. In addition, Ms. Goldberg has served on a number of company boards, including the board of Plum Creek Timber until its merger with Weyerhaeuser, and multiple portfolio company boards over the past two decades.	Committees Audit Risk

Barry W. HuffIndependent	Director Since2009	Age74
Background Barry W. Huff,has been a director of Legg Mason since June 2009 and is currently engaged in private consulting. After his retirement in May 2008 from Deloitte & Touche USA LLP (“Deloitte”), an accounting firm, until March 2009, Mr. Huff provided consulting services to Deloitte. From 1995 to May 2008, Mr. Huff served as Vice Chairman, Office of the Chief Executive Officer at Deloitte. Qualifications Mr. Huff’s qualifications to continue to serve on our Board include his substantial accounting and auditing experience and expertise. Mr. Huff served as Deloitte’s National Managing Director for their Accounting & Auditing Practice in the United States and Chairman of its Global Accounting & Auditing Committee. Mr. Huff’s experience includes oversight and advisory services provided to numerous Deloitte clients in the United States and globally in various industries, including financial services, manufacturing and regulatory, and supervision of risk management activities related to Deloitte’s Accounting & Auditing Practice. Our Board has determined that Mr. Huff, a certified public accountant, qualifies as an “audit committee financial expert” under the rules and regulations of the SEC.	Committees Audit (Chair) Finance Risk

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Proposal 1 Election of Directors

Stephen C. Hooley	Nominee for Director	Age56
Background Stephen C. Hooleywas the Chairman, President and Chief Executive Officer of DST Systems, Inc., a provider of information processing software and services to the mutual fund, insurance, retirement and health care industries, from July 2014 through April 2018, President and Chief Executive Officer from September 2012 to July 2014 and served as the President and Chief Operating Officer from July 2009 through September 2012. Prior to joining DST Systems, Inc., Mr. Hooley served as President and Chief Executive Officer of Boston Financial Data Services, Inc., a joint venture between DST Systems, Inc. and State Street Corporation and held a variety of executive roles at State Street Corporation. Mr. Hooley began his career at Texas Instruments. Mr. Hooley currently serves as a director of Stericycle, Inc., a compliance company that specializes in collecting and disposing regulated substances and providing services for recalled and expired goods, and served as a director of DST Systems, Inc. from September 2012 through April 2018. He served as a director of Boston Financial Data Services, Inc. from 2009 through 2013. Qualifications Mr. Hooley’s qualifications to serve on our Board include his extensive understanding of the financial services industry and over 25 years of experience in a variety of leadership roles at financial services companies and firms that provide advice and services to the financial services industry. In addition, Mr. Hooley has experience as a director of both public and private companies, including membership on both the audit and compensation committees of a publicly-traded company.

John V. MurphyLead Independent Director	Director Since2013	Age6869
Background John V. Murphy, has been a director of Legg Mason since June 2013 and has served as our Lead Independent Director since October 2014. Mr. Murphy is currently engaged in private investment activities. Mr. Murphy was employed by Korn/Ferry International, an executive search firm as a Managing Director for the Asset Management and Wealth Management section of the Global Financial Market, from 2010 to 2012. From 2000 to 2009, Mr. Murphy was employed in various senior positions with OppenheimerFunds Inc., an asset management firm, including Chairman, President and Chief Executive Officer. He also served as a director of over 60 mutual funds in the OppenheimerFunds complex. Prior to joining OppenheimerFunds, he spent eight years with MassMutual Financial Group, OppenheimerFunds’ parent company, in a variety of senior roles. Before that, he was a founding principal of Liberty Financial Companies Inc., an investment management firm. He began his career at Arthur Andersen & Co. in 1972 as an accountant. Qualifications Mr. Murphy’s qualifications to continue to serve on our Board include the knowledge, leadership and experience gained in over 30 years of experience working in the investment management business and as a Chairman, President and Chief Executive Officer of a large, complex asset management organization. In addition, he gained extensive industry and leadership experience by serving as Chairman and as a member of the Executive Committee and the Board of Governors of the Investment Company Institute.	Committees Compensation (Chair) Finance Nominating & Corporate Governance

16	LEGG MASON     2019 Proxy Statement

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Proposal 1 Election of Directors

Nelson PeltzIndependent	Director Since2019	Age76
Background Nelson Peltzhas been a director of Legg Mason since May 2019 and previously served as a director of Legg Mason from October 2009 until December 2014. Mr. Peltz has served as the Chief Executive Officer and a Founding Partner of Trian, a multi-billion dollar asset management firm specializing in helping companies to optimize operational performance, since 2005. Mr. Peltz has served as director of The Wendy’s Company (“Wendy’s”), the world’s third largest quick-service hamburger company, since April 1993 and as its non-executive Chairman since June 2007. Mr. Peltz has also served as a director of as a director of Sysco Corporation (“Sysco”), the largest North American distributor of food and related products, since August 2015, The Procter and Gamble Company, a global consumer products company, since March 2018, and The Madison Square Garden Company (“Madison Square Garden”), a sports, entertainment and media company, since September 2015. Mr. Peltz previously served on the board of directors of Mondelēz International, Inc. (“Mondelēz”), a global snacking company from January 2014 to March 2018, MSG Networks, Inc.(“MSG Networks”), a sports media company, from December 2014 to September 2015, Ingersoll-Rand plc (“Ingersoll-Rand”), an Irish global diversified industrial company, from August 2012 to June 2014, H. J. Heinz Company (“Heinz”), a global packaged food manufacturer from September 2006 until June 2013. In addition to founding Trian, Mr. Peltz has served in senior management positions at various companies. From 1993 to 2007, he served as the Chairman and Chief Executive Officer of Triarc Companies, Inc. (now known as The Wendy’s Company), which, during that period, owned Arby’s Restaurant Group, Inc. and acquired Snapple Beverage Group, as well as other consumer and industrial businesses. Mr. Peltz was also Chairman & Chief Executive Officer of Triangle Industries, Inc., a Fortune 100 industrial company and the parent of American National Can Company, from 1983 until December 1988, when it was acquired by Pechiney, S.A. Qualifications Mr. Peltz has more than 40 years of business and investment experience, has served as the chairman and chief executive officer of public companies for over 20 years and has extensive public company board experience--currently serving on the boards of Sysco, Wendy’s and Madison Square Garden and previously serving on the boards of Mondelēz, Heinz, Ingersoll-Rand, MSG Networks and Legg Mason. Throughout his professional career, he has developed extensive experience working with management teams and boards, as well as in acquiring, investing in and building companies and implementing operational improvements at the companies with which he has been involved. Mr. Peltz was also recognized by the National Association of Corporate Directors in 2010, 2011 and 2012 as among the most influential people in the global corporate governance arena. As a result, Mr. Peltz has developed strong operating experience and strategic planning skills, valuable leadership and corporate governance experience and strong relationships with institutional investors, investment banking/capital markets advisors and others that we believe will benefit Legg Mason and its Board.	Committees Finance Nominating & Corporate Governance

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Proposal 1 Election of Directors

Alison A. QuirkIndependent	Director Since2017	Age5657
Background Alison A. Quirk,has been a director of Legg Mason since November 2017 and is currently engaged in private consulting. From September 2002 until March 2017, Ms. Quirk was a member of the Management Committee and executive vice president of Global Human Resources at State Street Corporation. Ms. Quirk joined State Street Corporation in September 2002 as senior vice president, Deutsche Global Services Integration Team, and subsequently held various senior human resources roles. Ms. Quirk has a B.A. from the University of New Hampshire. Qualifications Ms. Quirk’s qualifications to continue to serve on our Board include her experience in human relations,resources, marketing and communications focused roles at various financial services firms. In addition, her prior board experience includes serving on the board of Boston Financial Data Services, a joint venture between State Street Corporation and DST Systems.	Committees Compensation Nominating & Corporate Governance

16	LEGG MASON     2018 Proxy Statement

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W. Allen ReedIndependent	Director Since2006	Age71
Background W. Allen Reed,has been a director of Legg Mason since April 2006 and served as our independent Chairman from September 2012 through July 2013. From January 2006 to March 2006, Mr. Reed served as Chairman of the Board of General Motors Asset Management Corporation (“GMAMC”), the investment management subsidiary of General Motors Corporation, where he served as Vice President until March 2006. He also served as Chairman of the Board and Chief Executive Officer of General Motors Trust Bank, N.A. until March 2006; as Chief Executive Officer and President of GMAMC and General Motors Investment Management Corporation until December 2005; and as Chairman of the Board and Chief Executive Officer of General Motors Trust Company until March 2006. Mr. Reed served as Senior Advisor to Aetos Capital from 2006 to 2011, as a director of Temple-Inland Industries from 2000 to February 2012 and as a director of General Motors Acceptance Corp from September 1994 to March 2006. Mr. Reed has also served as a director of numerous mutual funds in the Morgan Stanley mutual funds complex since 2006, and as Chairman of the Investment Committee of the Auburn University Foundation Fund from 2012 to 2014. Qualifications Mr. Reed’s qualifications to continue to serve on our Board include his extensive financial and leadership experience serving as a financial officer at Delta Airlines, Hughes Electronics and General Motors, including serving as the Chairman, President and Chief Executive Officer of GMAMC, Chairman and Chief Executive Officer of the General Motors Trust Bank, and Vice President of General Motors Corporation. Mr. Reed’s experience includes running the largest corporate defined benefit fund in the United States at General Motors Corporation. He currently holds the Chartered Financial Analyst designation.	Committees Compensation Finance (Chair) Nominating & Corporate Governance

Margaret Milner RichardsonIndependent	Director Since2003	Age75
Background Margaret Milner Richardson,has been a director of Legg Mason since November 2003. She is currently engaged in private consulting and investment activities. Ms. Richardson served as a director of Jackson Hewitt Tax Service Inc. from June 2004 through August 2011. Qualifications Ms. Richardson’s qualifications to continue to serve on our Board include her financial, risk management and leadership experience gained through her service as a partner of Ernst & Young LLP, where she served as the National Director of IRS Practice and Procedure and as an advisor to the Foreign Investment Advisory Council in Russia and her tenure as U.S. Commissioner of Internal Revenue. She has been an attorney for more than 40 years and practiced tax law with Sutherland, Asbill and Brennan in Washington, D.C., where she represented a number of financial services organizations. Ms. Richardson was a member of the Internal Revenue Service Commissioner’s Advisory Group and chaired the group for a year.	Committees Audit Compensation

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Kurt L. SchmokeIndependent	Director Since2002	Age68
Background Kurt L. Schmoke,has been a director of Legg Mason since January 2002. Since July 2014, Mr. Schmoke has served as President of the University of Baltimore. Mr. Schmoke served as Vice President and General Counsel of Howard University from July 2012 until July 2014. Mr. Schmoke was Dean of the School of Law at Howard University from January 2003 to July 2012. He has been a director of The McGraw-Hill Companies, Inc. (now S&P Global Inc.) since 2003. Qualifications Mr. Schmoke’s qualifications to continue to serve on our Board include his substantial education, legal, government regulation and public policy experience. Mr. Schmoke gained his experience serving as the Dean of the Law School at Howard University, partner at the law firm of Wilmer Cutler & Pickering, Mayor of Baltimore, the State’s Attorney for Baltimore, a member of the Council on Foreign Relations and a member of President Jimmy Carter’s domestic policy staff.	Committees Compensation Nominating & Corporate Governance (Chair)

Joseph A. Sullivan	Director Since2013	Age6061
Background Joseph A. Sullivan,has been a director of Legg Mason since February 2013 and has served as our Chairman since October 2014. Mr. Sullivan was elected President, Chief Executive Officer and a member of the Board in February 2013. Before being appointed as President and Chief Executive Officer, Mr. Sullivan served as Interim Chief Executive Officer of Legg Mason from October 1, 2012 to February 11, 2013. Prior to that, Mr. Sullivan oversaw the global distribution operations of Legg Mason. He was elected Senior Executive Vice President of Legg Mason in September 2008 and until January 2011 was responsible for overseeing administrative functions as Chief Administrative Officer. From December 2005 to September 2008, he was responsible for overseeing the fixed income capital markets operations of Stifel Nicolaus, a broker-dealer. From 1993 to December 2005, he oversaw the fixed income capital markets operations of Legg Mason Wood Walker, the company’s broker-dealer subsidiary that was sold in December 2005. Qualifications Mr. Sullivan’s qualifications to continue to serve on our Board include a combination of his management skills and professional experience. Mr. Sullivan has more than 30 years of industry experience, including serving as Chief Executive Officer, Head of Global Distribution and Chief Administrative Officer of Legg Mason and senior roles at a number of other firms. Mr. Sullivan served on the board of directors of Stifel Financial Corp. from December 2005 to September 2008.	Committees Finance

18	LEGG MASON     20182019 Proxy Statement

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Proposal 1 Election of Directors

Corporate Governance Overview

Board Meetings and Attendance

During the fiscal year ended March 31, 2018,2019, our Board of Directors met 1124 times and each of our current directors attended at least 75% of the aggregate of (i) the total number of meetings of the Board of Directors held during the period he or she served as a director and (ii) the total number of meetings of each committee on which he or she served during the period.

While we have no formal policy on the matter, directors are generally expected to attend our annual meetingAnnual Meeting of stockholders. All of our directors who were directors at the time of our 20172018 Annual Meeting of Stockholders attended the meeting, other than Mr. Tianqiao Chen, who served on our Board of Directors until October 12, 2017.meeting.

Corporate Governance Principles

Upon the recommendation of the Nominating & Corporate Governance Committee, our Board of Directors has adopted Corporate Governance Principles. These Corporate Governance Principles address, among other things, the following key corporate governance topics: director qualification standards; director responsibilities; director access to management and, as necessary and appropriate, independent advisors; director compensation; director orientation and continuing education; management succession; and our policy regarding annual performance evaluations of our Board of Directors. A copy of these Corporate Governance Principles is available on our corporate website atwww.leggmason.comunder the“About—Investor Relations—Governance—Corporate Governance”section. We will provide a copy of the Corporate Governance Principles, without charge, to any stockholder who provides a written request for a copy. Requests for copies should be addressed to the Corporate Secretary, Legg Mason, Inc., 100 International Drive, Baltimore, Maryland 21202.

Board Leadership Structure

Our Board of Directors is responsible for determining its leadership structure, which it assesses from time to time. Our Chairman, Joseph A. Sullivan, is also our President and Chief Executive Officer. Our Board of Directors believes that Legg Mason and its stockholders are best served by maintaining the flexibility to have any person serve as Chairman of the Board based on what is in the best interests of Legg Mason and its stockholders at a given point in time. As a result, our Board of Directors does not support placing restrictions on who may serve as Chairman and future facts and circumstances may warrant a different leadership structure to best serve Legg Mason and its stockholders. Our Board of Directors has determined that the current leadership structure is appropriate to provide a consistent and unified focal point of leadership for Legg Mason and facilitate frequent and effective communication between our Board of Directors and management.

To facilitate coordination with the independent directors and to ensure the exercise of independent judgment by our Board of Directors, our Board of Directors appointed John V. Murphy to serve as the Lead Independent Director. Mr. Murphy is also the Chair of the Compensation Committee.

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The Lead Independent Director’s duties include:

●	presiding at meetings of our Board of Directors in the absence of or at the request of the Chairman of the Board, or in any situation in which the Chairman of the Board may be perceived to have a conflict;
●	coordinating the flow of information to and among independent directors;
●	reviewing and approving all Board meeting agendas;
●	soliciting from other independent directors comments or suggestions related to Board operations, including the flow of information to directors, the setting of meeting agendas and the establishment of the schedule of Board meetings and communicating those suggestions to the Chairman;
●	serving as the liaison between the independent directors and the Chairman and as the representative of the independent directors in communications with the Chairman of the Board and management outside of regular Board meetings;
●	leading, with the assistance of the Nominating & Corporate Governance Committee, our Board’s annual evaluation process;
●	serving as liaison and providing direction to advisers and consultants retained by the independent directors; and
●	assisting the Chairman of the Board in integrating into the Board newly elected independent directors.

The Lead Independent Director also has the authority to call additional meetings of the independent directors and is available for consultation or direct communication with major stockholders. Each of these responsibilities is set out in Legg Mason’s Corporate Governance Principles.

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Our Corporate Governance Principles provide that at least three-quarters of the Board members should qualify as independent directors at any time. Other than Mr. Sullivan, all of our current directors are independent, as determined in accordance with NYSE listing standards.

Executive Sessions

Executive sessions of our non-employee directors are held in conjunction with each regular Board of Directors meeting and may be held at other times as circumstances warrant. Our Lead Independent Director chairs these executive sessions. John V. Murphy currently serves as our Lead Independent Director.

Annual Board of Directors Evaluations

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Fiscal Year 20182019 Stockholder Engagement

Since 2014, Legg Mason has conducted a mid-fiscal year stockholder engagement program. The purpose of the program is to gain insights about the preferences and viewpoints of our largest stockholders on various corporate governance topics generally and our practices and outcomes specifically. In addition, we utilize this program to share certain of our compensation and corporate governance developments of interest to stockholders. We use this process to seek stockholder feedback or support for actions that management and the Board may be considering. For example, we have discussed proxy access, board skills and diversity and capital allocation topics. Our lead independent director, who also serves as Chairman of the Compensation Committee, is available to participate in our outreach discussions.

In addition to conversationsoutreach to our largest investors during proxy season, with seven of our largestwe contactedsixteen investors we reached out midway through the fiscal year, towho held approximatelyten investorsholding nearly46%49% of our shares outstanding(as measured at September 30, 2017)2018). SevenFive of those investors, holding over 34%approximately 30% of our shares outstanding, responded to our outreach. Of the sevenfive firms, fivethree investors let us know that they did not feel a conversation was necessary at the time. We believe the low rate of participation in mid-year engagement was due, in part, to robust agendas and engagement in the recent past.

Our lead independent director, who also serves as ChairmanResponsive to investors’ interest in learning more about company strategy, we offered an update on the continuing evolution of the Compensation Committee, participated in our outreach discussions with two investors who held approximately 11% of our shares outstanding.

This year, we talked with stockholders about Legg Mason’s strategicstrategy in fiscal year 2019. We also included a discussion of recent developments around Legg Mason’s board composition and gender diversity and inclusion initiatives. As always, we solicited investors’ views onsought feedback about our disclosures, specifically this year with respect to Audit Committee disclosures in the proxy access and stockholders’ rights to amend bylaws.statement. We also soughtwelcomed feedback from stockholders as the Compensation Committee reviewed the components ofon Legg Mason’s executive equity incentive awardscompensation practices and the performance metrics for the performance share units thatmetrics.

In addition to engagement with stockholders, we award to executives.routinely participate in conversations with organizations such as The CERES Investor Network, which includes over 160 institutional investors. This year, our conversation with CERES centered around ESG topics.

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Communications

All interested parties who wish to communicate with our Board of Directors, the Chairman of the Board, the Lead Independent Director or our non-employee directors as a group may do so by addressing their written correspondence to the director or directors, c/o Corporate Secretary, Legg Mason, Inc., 100 International Drive, Baltimore, Maryland 21202. Our Corporate Secretary will forward all correspondence received from stockholders or other interested parties to the director or directors to whom it is addressed.

The Audit Committee has developed procedures for the receipt, retention and treatment of complaints received by Legg Mason regarding accounting, internal accounting controls, or auditing matters. Any such complaints or concerns should be sent by mail to the Chairman of the Audit Committee, c/o Legg Mason, Inc., 100 International Drive, Baltimore, Maryland 21202.

Code of Conduct

Upon the recommendation of the Nominating & Corporate Governance Committee, our Board of Directors has adopted a corporate Code of Conduct that applies to all directors, officers and employees of Legg Mason and its subsidiaries. The Code of Conduct addresses the following important topics, among others:

A copy of the Code of Conduct is available on our corporate website atwww.leggmason.comunder the“About—Investor Relations—Governance—Corporate Governance”section. We intend to satisfy any disclosure requirement regarding any amendment to, or waiver of, our Code of Conduct by posting the information on our corporate website.

Legg Mason maintains an employee reporting hotline where employees can anonymously submit a complaint or concern regarding compliance with applicable laws, rules, regulations or the Code of Conduct as well as accounting, auditing, ethical or other concerns.

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Board Committees

Our Board of Directors has an Audit Committee, a Compensation Committee, a Finance Committee, a Nominating & Corporate Governance Committee and a Risk Committee. Below is a summary of our committee structure and membership information:

Director(1)		Audit Committee		Compensation Committee		Finance Committee		Nominating & Corporate Governance Committee		Risk Committee
Robert E. Angelica
Carol Anthony (“John”) Davidson
Ed Garden(1)
Michelle J. Goldberg(2)
Barry W. Huff
John V. Murphy
Nelson Peltz(1)
Alison A. Quirk(2)
W. Allen Reed
Margaret Milner Richardson
Kurt L. Schmoke
Joseph A. Sullivan

Chairman

Member

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Director Nomination Process

Director Nominations for Inclusion in Legg Mason’s Proxy Materials (Proxy Access)

A shareholder or(or a group of up to 20 shareholdersshareholders) who has owned at least 3% or more of our outstanding common stockshares continuously for at least three years and has complied with the other requirements in our Bylaws may nominate and include in Legg Mason’s proxy materials director nominees notconstituting up to exceed the greater of two directors or 20% of the numberour Board. Notice of directors then in office.a proxy access nomination for consideration at our 2020 Annual Meeting must be received no later than February 21, 2020 and no earlier than January 22, 2020.

Other Director Nominations

In addition to our proxy access Bylaw that addresses the inclusion of stockholdershareholder nominees in our proxy statement, the Nominating & Corporate Governance Committee will consider all qualified candidates for seats on our Board of Directors identified by members of the committee, by other members of the Board of Directors, by our management and by our stockholders.shareholders. From time to time, the Nominating & Corporate Governance Committee may direct management to engage third-party firms that specialize in identifying director candidates to assist with its search. During fiscal year 2018,2019, the Nominating & Corporate Governance Committee retained one firm to identify potential candidates for our Board of Directors.

OurThe Board of Directors has set minimum qualification requirements for director nominees in our Corporate Governance Principles. Director nominees are required to possess a broad range of skills, expertise, industry or other knowledge and business or other experience that will be useful to the company. The Nominating & Corporate Governance Committee will review each candidate’s biographical information and determine whether the candidate meets these minimum qualification requirements. In addition, according to our Corporate Governance Principles, our Board of Directors generally will not nominate for election to our Board of Directors any Director who has reached the age of 75 before the regular meeting of the Board at which nominations for election as directors are made for the next annual meeting of stockholders. However, the Board has the discretion to take into account specific facts and circumstances and to nominate such a Director for election to the Board.

OurThe Board of Directors seeks diversity of perspectives, backgrounds and experiences among its members. When considering prospects for possible recommendation to ourthe Board, of Directors, increasing diversity of backgrounds and experiences is a factor considered by the Nominating & Corporate Governance Committee. The Nominating & Corporate Governance Committee reviews available information regarding each potential candidate, including character, experience, qualifications, attributes, skills, gender, race and ethnicity.

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After the Nominating & Corporate Governance Committee has determined that a candidate meets the minimum qualification requirements, the committee will determine whether to nominate the candidate to our Board of Directors. In making this determination, the Nominating & Corporate Governance Committee will consider a number of factors, including:

Our Amended and Restated Bylaws provide written procedures by which stockholders may recommend nominees to our Board of Directors. The Nominating & Corporate Governance Committee will consider nominees recommended by our stockholders under the same procedure used for considering nominees recommended by other directors or management.

Stockholders who would like to propose a director candidate for election to our Board of Directors at the 20192020 Annual Meeting of Stockholders must deliver written notice to our Corporate Secretary between January 14, 201922, 2020 and February 13, 2019,21, 2020, assuming our 20192020 Annual Meeting is held within 30 days of the anniversary of the 20182019 Annual Meeting. Notice from a stockholder nominating a director must include the following:

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We may require that a proposed director nominee furnish other information to enable the Nominating & Corporate Governance Committee to determine the nominee’s eligibility to serve. The Nominating & Corporate Governance Committee will consider a nomination as it deems appropriate in its discretion. However, a nomination that does not comply with the requirements discussed above may not be considered. During fiscal year 2018, the Nominating & Corporate Governance Committee retained one firm to conduct background checks of candidates under consideration.

Address to Submit Nominations

Any proxy access proposals or other director nominations should be addressed to the Corporate Secretary, Legg Mason, Inc., 100 International Drive, Baltimore, Maryland 21202.

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Board Role in Risk Oversight

	The Boardis primarily responsible for the oversight of Legg Mason’s risk management activities. The Risk, Compensation, Finance, Audit and Nominating & Corporate Governance Committees assist the Board in fulfilling this important role.
	The committees of the Board of Directorswork together to help ensure that all committees have received all information necessary to permit them to fulfill their duties and responsibilities with respect to the activities of those committees that relate to the oversight of the management of risks.
	The Audit Committeemonitors our system of disclosure controls and procedures and internal controls over financial reporting, reviews contingent financial liabilities and oversees our employee reporting hotline.		The Compensation Committeeoversees the relationship between risk and executive compensation.	The Finance Committeereviews potential risks related to significant transactions under consideration by Legg Mason.
	The Risk Committeeoversees Legg Mason’s enterprise risk management activities.	The Nominating & Corporate Governance Committeeis focused on overseeing risks related to succession and other corporate governance matters.
	The responsibility for day-to-day management of risk lies with our management. Management has an enterprise risk management program that is overseen by our Chief Risk Officer. The Risk Committee, among other things, reviews and discusses with management reports from our Chief Risk Officer and other members of management regarding the company’s risk management activities, including management’s assessment of our major risk exposures and the steps taken to monitor and manage those exposures and the risk management activities of each of our significant asset management subsidiaries.

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Proposal 1 Election of Directors

Relationship of Compensation and Risk

We conduct the majority of our business through our asset managers which are individual businesses. Each asset manager generally focuses on a portion of the asset management industry in terms of the types of assets managed (primarily alternatives, equity or fixed income), the types of products and services offered, the investment styles utilized, the distribution channels used, and the types and geographic locations of its clients. Each of our primarysignificant asset managers is generally operated as a separate entity that typically markets its products and services under its own brand name. Certain distribution functions are often provided by the parent company and other affiliates. Consistent with this approach, we have revenue sharing arrangements in place with fivefour of our asset managers and/or certain of their key officers. Pursuant to these revenue sharing arrangements, a specified percentage of the asset manager’s revenues, net of certain third party distribution expenses, is required to be distributed to the parent company and the balance of the revenues (or net revenues) is retained to pay operating expenses, including salaries and bonuses, but excluding certain expenses such as amortization of acquired intangible assets and income taxes. Specific compensation allocations are determined by the asset manager’s management, subject to corporate management approval in certain cases. Our asset managers and other business units that do not operate under revenue sharing arrangements utilize a variety of discretionary or formulaic incentive compensation determinations. In addition, the management teams of fivefour of our affiliates hold significant equity interests in the applicable company, which helps to align the interests of the management of those fivefour affiliates with the interests of our shareholders.stockholders. In addition, the asset management industry in which we operate tends to be a long-term business, as investment performance over

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Proposal 1 Election of Directors

multi-year periods is a critical competitive element of the business. Also, as is typical in the asset management business, and unlike other financial services companies, we are not exposed to the short-term risks arising from proprietary trading because we do not engage in proprietary trading.

The executive officer compensation program is structured in a manner intended to mitigate against providing incentives for inappropriate risk taking. The executive officers’ salaries are fixed in amount. Incentive compensation is linked to overall corporate performance and a substantial portion of compensation is in the form of long-term equity awards that further align executives’ interests with those of Legg Mason’s stockholders. The value of equity awards is tied to Legg Mason’s stock price. These awards do not encourage excessive or inappropriate risk taking given that the awards are subject to long-term vesting schedules to help ensure that executives have significant value tied to long-term stock price performance. As part of fiscal year 20182019 incentive compensation, we awarded performance share units that will result in payout only based on relative performance over a three year period ending March 31, 2021.2022. We believe our incentive award program, coupled with our stock ownership guidelines and anti-hedging and pledging policies for executives, create important linkages between the financial interests of our executives and the long-term performance of Legg Mason and help to protect against any incentive to disregard risks in return for potential short-term gains. Moreover, the Compensation Committee considers several performance metrics in establishing the executive compensation poolprogram each year, so no one metric creates an undue reward that might encourage excessive risk taking. TheIn years when the Committee establishes an executive compensation incentive pool, the aggregate amount is also subject to adjustment in the discretion of the Compensation Committee based on the performance metrics and qualitative factors established by the Committee for use as a basis for revising the pool amount.amount available for incentives.

To further ensure the alignment of compensation with long-term performance, we have adopted a policy for the clawback of incentive compensation from named executive officers in the event a named executive officer’s acts or omissions contribute to a need for a restatement of our financial results or if a named executive officer is terminated for cause. Additional information on our executive officer compensation practices is discussed below under “Executive Compensation—Compensation Discussion and Analysis.”

We have considered the risks created by our compensation policies and practices, including mitigating factors, and, based on this review, do not believe that our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the company. This conclusion is supported by the work of a committee consisting of representatives from our finance, human resources, legal and enterprise risk management departments, which evaluates whether our compensation policies and practices are reasonably likely to have a material adverse effect on Legg Mason.

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Proposal 1 Election of Directors

Compensation Consultant to the Compensation Committee

For fiscal year 2018,2019, the Compensation Committee retained Semler Brossy Consulting Group, LLC, an independent executive compensation consulting firm, to provide compensation consulting services. As directed by the Compensation Committee, Semler Brossy provides counsel on compensation-related issues and executive officer compensation and non-employee director compensation, and guidance on best practices and market and regulatory developments. Semler Brossy did not provide additional consulting or other services to management or Legg Mason subsidiaries during fiscal year 2018.

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Proposal 1 Election of Directors2019.

Compensation of Directors

Directors who are Legg Mason employees do not receive compensation for their services as directors. The Compensation Committee annually reviews and recommends to our Board of Directors the compensation of our non-employee directors. As part of this review, the Compensation Committee consults with its compensation consultant to determine the reasonableness and adequacy of our non-employee director compensation. The following table outlines the regular compensation that is paid to our non-employee directors:

We also reimburse each of our non-executive directors for their travel expenses incurred in connection with attendance at Board and Committee meetings. Following a review in February 2019 of the compensation of our non-employee directors, the Board, based on a recommendation of the Compensation Committee, has determined thatdid not change the fees for non-employee directors will remain unchanged for fiscal year 2019.2020.

Restricted stock units granted under the Legg Mason, Inc. Non-Employee Director Equity Plan are payable on a one-for-one basis in shares of common stock within 60 days of the date on which the recipient stops serving as a director of Legg Mason. The number of restricted stock units credited to a director will be increased to reflect all dividends paid on common stock based on the market price of a share of common stock on the dividend payment date. The restricted stock units and shares of common stock are not subject to vesting. The plan covers an aggregate of 625,000 shares of common stock.

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Proposal 1 Election of Directors

Director Compensation Table

The following table provides information about the compensation earned by our non-employee directors during fiscal year 2018.2019.

As of March 31, 2018,2019, four of our non-employee directors held the following restricted stock units:

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The following table sets forth information regarding the ownership of Legg Mason common stock as of May 24, 201829, 2019 by each of our directors, each individual named in the Summary Compensation Table, all of our executive officers and directors as a group, and each person who, to the best of our knowledge, beneficially owned more than five percent of the outstanding common stock.

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Security Ownership of Management and Principal Stockholders

Also includes for the individuals listed below, the following number of deferred but vested restricted stock units:

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Compensation Discussion and Analysis

Executive Summary

Fiscal Year 20182019 Pay is Well Aligned with Performance, Reflecting ImprovedChallenged Financial Performance in a ChallengingDisrupted Industry Environment and Strategic RepositioningDespite Consistent Execution Against Key Drivers of Legg Mason for Further GrowthValue Creation

See pages 35-5533-52

●	The Compensation Committee concluded that Legg Mason’s financial performance was improveddeclined from fiscal year 2017 despite continuing trends driving2018 amidst continued disruption in the asset management business. industry, although performance improved in the fourth quarter.
●	The Compensation Committee also recognized strong individual performance by executive management and the progress of the strategic repositioning ofconsistent execution on Legg Mason for further growth. Mason’s corporate strategy to expand client choice.
●	Total CEO compensation up 19%down 14% from fiscal year 2017, following 20% reduction in fiscal year 2016 and no increase in fiscal year 2017 ●CEO paid below median of reported peer group pay,2018, with variable pay constituting over 95%94% of his total direct compensation of $10,500,000$9,000,000 for fiscal year 2018 2019
●	CEO’s annual incentive award was paid 60% in equity and 40% in cash, as in prior years year
●	Equity awards allocated equally among performance share units, which vest based on relative TSR and relative organic growth rate of long-term assets under management over a three year period, and restricted stock units

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Legg Mason’s Approach to Asset Management

Legg Mason is a global asset management firm that operates through nine independent investment management subsidiaries, which we refer to as our investment affiliates. Acting through our investment affiliates, we provide investment management and related products and services to institutional and individual clients, company-sponsored mutual funds and other investment vehicles. We offer these products and services directly and through various financial intermediaries.

Our corporate structure combines our nine investment affiliates, each with diverse perspectives and specialized expertise across asset classes and strategies, with a centralized global distribution and shared services platform. We deliver our investment capabilities through varied products and vehicles and via multiple points of access.

Legg Mason’s structure is both thoughtful and intentional. In an integrated client experience, weWe help investors globally achieve better financial outcomes by expanding choice across investment strategies, vehicles and investor access through independent investment managers with diverse expertise in equity, fixed income, alternative and liquidity investments. This has led to our strong long-term performance across our products, with 85%84% of strategy assets under management (AUM) outperforming their target benchmarks over the last ten years. And our global distribution platform sells U.S. and international mutual funds and other commingled vehicles, retail separately managed account programs, and sub-advisory accounts for insurance companies and similar clients, effectively delivering our affiliates’ investment capabilities to our customers.

Legg Mason’s Response to Industry Trends
Consistent Execution of Corporate Strategy
Powerful forces continue to drive significant change in the investment management industry. In addition to the globalization of markets, massive shifts in demographics, shifting regulation within and across jurisdictions and the relentless push from innovation and technology, we continue to see in some sectors of the industry a trend of investors moving more of their assets to indexed or passive investment strategies.

We have reacted decisively to these trends, by outlining a clearconsistently executed on our corporate strategy to succeed in a changing environment.expand client choice, positioning us for future growth. We have articulated and executed on a strategy to provide global investors with a more diversified set of choices of investment strategies, products, vehicles beyond traditional mutual funds and choices for access to those strategies, products and vehicles. In fiscal year 2018,2019, across five investment affiliates, we launched 4122 new products in the U.S., none of which is a traditional mutual fund, diversifying theand 11 new products globally, continuing to diversify our product set by vehicle and investment type. U.S.Product launches included 20 Collective Investment Trusts, 17 Separately Managed Accounts (SMAs) and 4 Exchange-Traded Funds (ETFs) - many positioned in high growth-potential categories including smart beta and multi-asset class investment segments.. Key milestones included launching Legg Mason’sachieving over $1 billion of ETF AUM, plus a number of “firsts” – Western Asset Management Company’s launch of its first active ETFsETF through Legg Mason; the launch of our first international fixed maturity product under a client-led initiative; and expanding the numberintroduction of investment affiliate entering the SMA business.We also expanded our Alternative Distribution Strategies division and invested in technology to provide clients with access to investment choices when and where they want them.Australia’s first actively managed fixed income ETF.

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We have positioned ourselves well by taking actions that will both allowdiversifying our business, which makes us to compete for assets with passive strategies, as well as offer products where there is generally no passive alternative.more resilient in the face of continued disruption in our industry. Legg Mason continues to launch products which we expect will compete for assets with passive strategies, and products other than traditional mutual funds. We offer a diverse set of alternative investment strategies, which generally do not have passive substitutes. And, while we look to grow our AUM organically across all of our investment affiliates and investment strategies, a little more than half of our existing assets under management are in our fixed income products, where assets have not been migrating from active to passive strategies at nearly the rate of equity allocations.

While we are focused on continuing to execute against our strategy, we are pleased with our performance in fiscal year 2018 in a challenging environment and with the strategic repositioning of Legg Mason for further growth.

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Fiscal Year 20182019 Performance Results
Performance for the year included (dollars in billions)¹:

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Relationship between Company Performance and Executive Compensation
Our performance assessment framework and executive compensation program are designed to link pay and performance.

Executive Compensation Program Design
The only fixed component of compensation is base salary, which ranges from 5-16%6-17% of total direct compensation for our named executive officers (not including one executive who was on an extended personal leave in fiscal year 2018 and whose compensation was 100% salary).officers.

Annual performance drives the payment of annual incentive compensation, which is divided into a current cash payment, an award of restricted stock units that vest over a four year period, and an award of performance share units that vest at the end of a three year period. Long-term performance as reflected in relative total stockholder return plus relative organic growth rate of long-term AUM drives the ultimate payout of the performance share units.

Performance Assessment
The Compensation Committee of our Board of Directors (the “Committee”) uses a comprehensive process to continually assess performance, which includes frequent dialogue with management about financial performance relative to our goals and relative to the performance of competitors, and assessments of corporate and individual executive accomplishments.

The Committee, in consultation with its independent compensation consultant, considers our pay-for-performance alignment when making executive compensation decisions. This consideration includes reviewing the relationship of Legg Mason performance and executive pay levels as compared to that of competitors.

Engagement and Responsiveness to Stockholders
As described earlier in this proxy statement, Legg Mason regularly engages with key stockholders on governance and executive compensation issues. These conversations are in addition to investor conferences and outreach managed by our Investor Relations team and our engagement with stockholders after we file our proxy statements. During the last fiscal year, inIn addition to conversationsoutreach to our largest investors during proxy season, with seven of our largestwe contactedsixteen investors we reached out midway through the fiscal year, to ten investors holding nearly 46%who held approximately49% of our shares outstanding(as measured at September 30, 2017. Seven2018). Five of those investors, holding over 34%approximately 30% of our shares outstanding, responded to our outreach. Our lead independent director, who also serves as Chairman ofOf the Compensation Committee, participated in discussions with two investors who held approximately 11% of our shares outstanding. The other five firms, three investors let us know that they did not feel a conversation was necessary at the time. We discussed board composition, diversity and inclusion topics, and audit committee and compensation disclosure topics with two investors. We believe the low rate of participation in mid-year engagement was due, in part, to robust agendas and engagement in the recent past.

This year, among other topics, we sought feedback from stockholders as the Compensation Committee reviewed the components of Legg Mason’s executive equity incentive awards and the performance metrics for the performance share units that we award to executives. Over the years, our discussions with investors affirmed the support we have historically received on our stockholders’ advisory vote on named executive officer compensation, and none of our investors have advocated that we make significant changes to our compensation program. Nevertheless, based on feedback from stockholders, we continue to identify additional opportunities to strengthen our disclosure and further highlight our pay-for-performance framework.

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Executive Compensation Practices
Below we highlight certain executive compensation practices we employ to align executive compensation with stockholder interests. Also listed below are certain compensation practices we do not employ because we do not believe they would serve our stockholders’ long-term interests.

What We Do	What We Don’t Do
Pay for Performance.We tie annual pay to objective absolute and relative performance metrics with a focus on top line growth, bottom line growth and long term value, including our fiscal year 20182019 global distribution unit gross sales, net long-term AUM flows, net revenues (total gross revenues less distribution expenses), earnings per share, adjusted EBITDA, global distribution unit earnings contribution, relative organic growth rate of long-term AUM, relative net income growth and relative one year total stockholder return. We tie performance share unit vesting and payout to relative total stockholder return and relative organic growth rate of long-term AUM over a three year period. A significant portion of our executives’ potential compensation, ranging from approximately 84-95%83-94% depending on the named executive officer, (but not including one executive who was on an extended personal leave in fiscal year 2018), is not guaranteed but is tied to financial and stockholder performance. The Committee and its independent compensation consultant evaluate the alignment of pay and performance relative to our peer group, prior to the Committee making executive compensation determinations. TotalLinkage to Stockholder Return Metric.Performance.Linking executive compensation to stockholder performance is important, so relative total stockholder return is considered in determining annual incentive awards and performance share unit vesting and payouts. Relative organic growth rate of long-term AUM is a second metric we use for determining performance share unit vesting and payouts. Further, restricted stock units are annually awarded based on performance prior to the award, and the realized value of those awards to the executives is ultimately based on share price performance during the vesting period after the award is made. Executive Stock Ownership Guidelines.Executives are expected to own shares inof Legg Mason common stock with a value equal to at least two to eight times base salary, depending on position. Equity Award Retention Policy.Executives are required to retain 50% of the net after-tax shares received from all equity awards until they have reached the ownership levels set out in the stock ownership guidelines. Vesting Period on Equity Awards.Restricted stock units granted under the annual incentive plan (and stock option awards granted in prior years) have four year ratable vesting periods. Clawback Policy.We can recover incentive compensation awarded to a named executive officer where the officer’s fraud or willful misconduct led to a material restatement of financial results or if the executive is terminated for cause. Review Tally Sheets.We review tally sheets which provide a comprehensive view of an executive’s historical compensation and equity holdings for each of our executive officers prior to making annual executive compensation decisions. Stockholder Engagement.We engage with our top stockholders outside of proxy season to gain insights about their views on helpful disclosures and executive compensation generally, and our practices and outcomes specifically, and to share information that we think might be of interest to stockholders about our compensation and governance practices and policies. Prohibit Hedging or Pledging.We prohibit our executive officers or directors and their related accounts from engaging in pledging or transactions that have the effect of hedging the market value of Legg Mason securities.securities without board approval.	No Severance Agreements.We do not provide our named executive officers with employment agreements that provide severance payments, medical or insurance benefits or any other perquisites in the event the executive is terminated or resigns. Severance decisions are made when an executive’s employment ends. No Repricings.Our stock incentive plans and NYSE Listing Standards prohibit us from repricing options without stockholder approval. No Income Tax Gross-ups.We do not provide income tax gross-ups for personal benefits other than relocation and other broad-based benefits. No Excise Tax Gross-ups.We do not provide excise tax gross-ups for change in control benefits. No Established Program of Executive Perquisites.We have no established program of perquisites to provide personal benefits to our executive officers.

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Executive Compensation Program Objectives

Overall
Our named executive officer compensation programs are designed to attract, incent, retain and reward the management talent that we need to maintain and strengthen our position in the asset management business and to achieve our business objectives.

Variable Pay
A significant portion - approximately 84-95%83-94% depending on the named executive officer - of the total direct compensation delivered to our named executive officers is variable, (not including one executive who was on an extended personal leave in fiscal year 2018), which directly ties their pay to their individual performance and to the performance of our company.

RestrictedCash Stock UnitsBonus

Performance Share Units

CashRestricted BonusStock Units

Pay For Performance
Linking compensation to performance is a fundamental value underlying our named executive officer compensation practices. The annual incentives (including the value of annual equity awards) paid to each of our named executive officers vary with performance, including our annual financial results. In addition, a portion of those equity awards is paid in the form of performance share units. The performance share units vest, and the number of shares payable at vesting is determined, based on Legg Mason’s relative total stockholder return and relative organic growth rate of long-term AUM over the three year period after the awards are made.

The total fiscal year 20182019 compensation paid to our Chief Executive Officer reflects our financial results, andwhile recognizing the progress of the strategic repositioningconsistent execution of Legg Mason, as well asMason’s corporate strategy, and also reflects the comparison to the compensation amounts paid by and financial results of peer companies in the asset management industry. The fiscal year 20182019 compensation paid to our CEO was up 19%down 14% as compared to fiscal year 2017 compensation, following a 20% reduction in2018 compensation. The Committee compared the fiscal year 2016 and no increase in fiscal year 2017. The fiscal year 20182019 total compensation (salary plus incentive award) paid to our CEO ranked below the median when compared to the total compensation paid to chief executive officers or heads of asset management businesses at the sixeleven asset management competitors which had publicly reported compensation data by the time the Committee made executive compensation determinations at the end of our fiscal year, out of the group of eighttwelve other public company peers the Committee used for CEO compensation comparisons.

The Committee, in consultation with its independent compensation consultant, Semler Brossy Consulting Group, LLC, considers the relationship and alignment between executive compensation for our named executive officers and our corporate performance in reaching executive compensation decisions. This assessment involves consideration of the alignment of Legg Mason’s proposed executive compensation with its corporate performance as compared to that of competitor asset management companies. In addition, Semler Brossy conducts pay for performance analyses, at the request of the Committee, that are used as one input for executive compensation decisions.

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Determining Executive Compensation

The Compensation Committee’s Timeline

The Compensation Committee has a well-defined annual process, which includes a review every quarter of corporate and peers’ performance.

Each year under the Legg Mason, Inc. Executive Incentive Compensation Plan, the Committee establishes a fiscal year plan bonus pool for Legg Mason executive officers that equals 10% of Legg Mason’s adjusted operating income for that fiscal year. “Adjusted operating income” equals Legg Mason’s operating income as calculated under generally accepted accounting principles, excluding:

Early in the fiscal year the Committee establishes maximum percentages of the bonus pool under the plan that may be allocated to each executive. Once the plan bonus pool maximums have been established, theThe Committee uses a compensation program to determine actual named executive officer compensation amounts. Under that program, a target bonus pool and participants in the pool are established early in the fiscal year, along with performance metrics and the qualitative strategic factors that the Committee will use in connection with making compensation decisions at the end of the year. In establishing the target bonus pool, the Committee typically starts with peer median pay for each executive position, and then adjusts that aggregate amount based on other factors such as prior year compensation and Semler Brossy’s expectations for industry compensation changes. For fiscal year 2019, the Committee established a fiscal year plan bonus pool for Legg Mason executive officers consistent with its practice in prior years. As is customary in the asset management industry, the Committee does not assign a weighting or scoring value to any performance metric or qualitative factor, and instead exercises its judgment in considering the metrics and factors to allow flexibility to consider market factors and other specific facts and circumstances that arise during the course of the fiscal year.

In prior years, the The Committee has finalizedfinalizes determinations of executive compensation for a fiscal year end in the first quarter of the following fiscal year. Inyear (although, in fiscal year 2018, however, the Committee acted at fiscal year end.end in response to the enactment of The Tax Cuts and Jobs Act (“2017(the “2017 Tax Act”), which was signed into law on December 22, 2017 and effective for taxable years beginning after December 31, 2017, among other changes eliminated the exception for performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code”), so all performance and non performance-based compensation paid to a covered employee that is greater than $1 million per year will be non-deductible. The 2017 Tax Act became effective for Legg Mason as of April 1, 2018. As a result, the Committee acted at the end of fiscal year 2018 to determine compensation for executive officers in order to preserve maximum deductibility of executive compensation for taxable year 2018 while the exception for performance-based compensation was still effective for Legg Mason. We estimate that the Committee’s action at fiscal year-end will result in a reported benefit to Legg Mason’s stockholders of approximately $2 million through preservation of approximately $7.9 million of tax deductions. Although the Committee finalized its determinations several weeks earlier than it has in the past, the Committee followed the processes it has employed in recent years.2018).

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Factors in The Compensation Committee’s Decision Making Process
The Compensation Committee’s decision making process involves a rigorous assessment of the factors described below, which are not weighted formulaically but rather are considered together to result in fully informed decisions about our executives’ compensation.

Compensation Decision Factors

In the asset management industry, executive pay typically is not determined on the basis of formulas and weighted metrics, because the business is highly dependent on the performance of markets, over which our management team has no control. The dynamics of markets and other external factors that impact our business during the course of the year make initial weightings less relevant to what management should focus on during the year to deliver maximum stockholder value. Further, our business is based on investment performance. That performance must be viewed over a long period of time. Even though we do not use formulas or assign specific weights to metrics, the Compensation Committee uses a rigorous performance assessment framework to set the overall bonus pool and determine individual bonuses. The Committee uses a performance assessment framework along with comparison to median peer group pay as the basis for pay decisions for Legg Mason executives. The Committee uses market data and performance metrics to establish pools for incentive awards, and applies its judgment to make compensation decisions for the named executive officers after conducting an in-depth review of performance, evaluating peer group pay and prior years’ actual total direct compensation and assessing qualitative factors relating to strategic operating priorities, rather than relying solely on formulaic results to calculate annual incentive award payouts. The Committee evaluates the CEO’s recommendations for other executive officers’ pay, taking into account peer group data and the CEO’s views on actual performance against the company’s plan as well as his views on individual performance. The Committee believes this process is an effective way to assess the quality of the performance and leadership demonstrated by the CEO and the senior management team.

The Compensation Committee reviews a performance assessment scorecard detailing actual results versus plan for both absolute and relative metrics that are linked to our strategy. The set of metrics includes metrics that reflect the actions of our management team and employees, such as net revenues, but also metrics that are heavily influenced by factors outside the management team’s control but are heavily correlated to the returns experienced by our stockholders, such as one-year total stockholder return. The Committee also defines strategic goals, linked to our operating priorities, at the beginning of the year, and thoroughly assesses accomplishments against those goals when making end of year compensation decisions. The Committee believes that evaluating performance against a combination of metrics and strategic goals most effectively drives the behavior for the long term results that we want our executive team to strive for and produce, as well as tightly links pay outcomes to performance.

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Elements of Compensation
We use a combination of components of compensation, measures and time horizons to foster and reward both short- and long-term performance.

The following chart summarizes the relevant performance measures and time frames used for our variable pay elements.

	○			Component and Incentive Time Horizon	Role	How It’s Set/Links to Performance
				Base Salary CEO: 5%6% of pay	●To provide a stable, reliable monthly income	●Reviewed periodically in light of performance factors, market practices and advice of the Committee’s independent consultant ●Set at levels that should comprise a low percentage of total compensation
○
	○			Annual Incentive Compensation	CEO’s incentive award was paid 60% in equity and 40% in cash, whereas incentive awards for other named executive officers were paid 50% in equity and 50% in cash.
				Cash CEO: 38% of pay	●To reward the achievement of annual financial and qualitative performance goals and individual performance ●Links compensation to performance since award amounts are determined at fiscal year end based on projected year end results	●Variable and primarily based on our corporate performance and the responsibilities, individual performance and contributions of the recipient for the fiscal year ●Key metrics for fiscal year 20182019 include: global distribution unit gross sales, net long-term AUM flows, net revenues (total gross revenues less distribution expenses), earnings per share, global distribution unit earnings contribution, net new long-term advisory fee revenue, adjusted EBITDA, operating margin, as adjusted, relative organic growth rate of long-term AUM, relative net income growth, and relative one year total stockholder return* ●Links compensation to performance since award amounts are determined at fiscal year end based on projected year end results
				Restricted Stock Units CEO: 29%28% of pay	●To increase alignment with stockholders by providing significant stock ownership ●Retains executive officersTo retain executives through multi-year vesting	●Variable and primarily based on our corporate performance, measured by key metrics identified above, and the responsibilities, individual performance and contributions of the recipient during the fiscal year ●Aligns executive interests with those of stockholders as potential value of awards increases or decreases with stock price ●Awards typically vest over four year period
				Performance Share Units CEO: 29%28% of pay	●To reward achievement of longer-term financial goals relative to peers ●To retain executives through three year vesting period ●To align with the stockholder experience	●Payout range is 0-150% of target number of shares ●Payout based on two performance metrics (relative total stockholder return and relative organic growth rate of long-term AUM) ●Realized value attributable to three year performance achievement
○
	○			Other Compensation	●To allow executive officers to participate in other employee benefit plans ●To provide opportunity for deferring income taxes on a portion of annual income	●U.S.-based named executive officers may participate in all other Legg Mason compensation and benefit programs on the same terms as other employees, such as health and welfare benefit plans, Profit Sharing and 401(k) Plan and Employee Stock Purchase Plan ●U.S.-based named executive officers may elect to participate in non-qualified deferred compensation plans available to select employees based on responsibilities and compensation levels
	○

*      Adjusted EBITDA and operating margin, as adjusted, are non-GAAP financial measures. Please see Annex A for a reconciliation of each of these measures to the respective most nearly comparable GAAP measure.

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The graphs below reflect the actual mix of compensation for fiscal year 2018.2019.

Actual CEO Compensation Mix		Actual NEO Compensation Mix

Assessing Competitive Practice

Semler Brossy assists the Committee by reviewing comparative market data on compensation practices and programs based on an analysis of competitors. Because our March 31 fiscal year-end date is later than that of many competitors, we typically are able to review up-to-date information about market practices and compensation awards for the previously completed calendar year. (For fiscal year 2018, the Committee had publicly reported data available for six of the eight public company peers, due to the Committee making executive compensation determinations at fiscal year end in order to preserve maximum deductibility of performance-based compensation for taxable year 2018. The Committee also noted compensation data available for the heads of four other asset management firms.) The Committee and Semler Brossy use a group of eight relevant competitors to compare our compensation programs and practices with those of our competitors and the compensation levels of our named executive officers to the compensation levels of comparable officers of companies in the group. For our CEO, and CFO, the Committee and Semler Brossy use a group of eightnine public company peers, and the asset management businesses within three other public companies, as the primary comparisons. The companies in the group are:

Management also retains McLagan Partners, a compensation specialist affiliate of Aon Hewitt that focuses on the financial services industry, to provide compensation information about other asset management competitors including competitors that are not publicly traded, or are subsidiaries of larger institutions, that generally do not make compensation information about their executive officers publicly available. The Committee uses the analysis from McLagan as an added check on the reasonableness of the proposed compensation for the CEO and to compare proposed executive compensation levels for the named executive officers other than the CEO and CFO with the compensation paid by a group of competitors. Peer compensation levels and performance are also reviewed when both establishing the target incentive pool and allocating

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incentive awards to individuals. The Committee reviews a group of competitors which includes companies that are not publicly traded because insufficient data is available from public company peers for our named executive officer positions other than the CEO and CFO.CEO. The additional competitor firms in the McLagan analysis are:

Fiscal Year 2018 Compensation Decisions

Determination of Fiscal Year 2018 Base Salaries
At the beginning of fiscal year 2018 when the Committee determined salaries, the Committee did not change the base salaries of any of the named executive officers.

Determination of Fiscal Year 2018 Bonus Pool
For fiscal year 2018, the Committee designated Legg Mason’s nine executive officers as participants in the bonus pool. Beginning in the last quarter of fiscal year 2017, the Committee considered the performance metrics and strategic qualitative factors to be used in connection with making compensation decisions for fiscal year 2018. The Committee considered whether the existing metrics adequately linked to corporate strategy and drove appropriate incentives and whether any other metrics would be appropriate to add. The Committee determined that measures should be added only if they provide new information and can be influenced by Legg Mason’s executive officers. They also considered the perspective of stockholders in assessing company performance. For fiscal year 2018 the Committee retained the metrics it had established for fiscal 2017, confirming its belief that, for an asset management company like Legg Mason, the metrics below are the most meaningful drivers of behavior that creates stockholder value. The Committee substituted “Adjusted EBITDA” for “Bank EBITDA” in fiscal year 2018, in accordance with the liquidity measure we currently publicly disclose. We previously disclosed Bank EBITDA that conformed to calculations required by our debt covenants and adjusted for certain items that required cash settlement that are not part of the current definition of Adjusted EBITDA.

In fiscal year 2018, the Committee also evaluated the components of executive equity incentive awards and the performance metrics for the performance share units that we award to executives. Over the course of several meetings, the Committee considered input from management and the Committee’s independent consultant, evaluated several metrics, discussed the selection of two relative metrics for performance share units and considered whether an absolute metric was appropriate. The Committee reviewed the companies included in the peer group used for performance measurement and considered whether that group should be changed. The Committee selected relative total stockholder return and added relative organic growth rate of long-term AUM as the metrics for vesting of performance share units. In adding relative organic growth rate of long-term AUM, the Committee noted that Legg Mason’s senior management views that measure as an important driver for the company’s long-term strategy and success. The Committee believes that the two measures balance financial performance with stockholder returns. The Committee also determined not to award stock options for fiscal year 2018, and to increase the percentage of restricted stock units and performance share units awarded to executive officers to 25% for each type of award to balance retention and performance incentives.

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Fiscal Year 2019 Compensation Decisions