ExlService Holdings (EXLS)

Base Salary

Base salary is a fixed element of employees’ annual cash compensation, the payment of which is not tied to our performance. We provide the opportunity for each of our named executive officers and other executive officers to earn a competitive annual base salary. We provide this opportunity to attract and retain an appropriate caliber of talent for the position and to provide a base wage that is not subject to our performance risk. We review base salaries for our named executive officers annually in the first half of each year, and increases are based on our performance and the executives’ individual performance. Base salary determinations reflect the individual’s experience, knowledge, skill set and the market value of that skill set. In setting base salaries for 2008, our Compensation Committee considered the following factors:

Our founder executive officers entered into new employment agreements prior to our initial public offering in 2006 to more closely align the terms of such agreements with those of executives holding equivalent roles at other public companies, including periodic compensation adjustments and annual equity awards. At the time of the negotiation of the employment agreements with Messrs. Talwar and Kapoor in 2006, our Compensation Committee did not make any changes to their salary levels but increased the base pay for each of our founder executive officers to $420,000 effective January 2007. In 2008, our founder executive officers did not receive an increase in base pay although their respective employment agreements were amended and restated in December 2008 in large part to update responsibilities, perquisite entitlements and to take into account tax code section 409A.

Mr. de Villa joined us in March 2008. Mr. de Villa’s base salary was determined through an arm’s-length negotiation during the hiring process and based upon his level of responsibility and our assessment of Mr. de Villa’s experience, skills and knowledge and our general compensation guidelines.

In 2008, as a component of our focus on cost management and to promote retention of senior executives, we elected to provide an equity award of restricted stock to certain of our executive officers and other senior employees instead of any increases in base pay with a standard vesting schedule with 10% vesting on the first anniversary of the date of grant and an additional 20%, 30% and 40% vesting on each successive anniversary of that date. The amount of the equity award was determined based on the founder executive officer’s evaluation of the executive officer’s individual performance and was prorated based on the period of time in 2007 that the

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executive officer was employed by us. The founder executive officers made recommendations for the other named executives and our Compensation Committee reviewed similar considerations for such named executives.

With regard to Mr. Appel’s performance, our Compensation Committee gave particular weight to Mr. Appel’s role in strengthening the finance organization, leadership in achieving compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and other individual contributions. In April 2008, our Compensation Committee awarded Mr. Appel 1,100 shares of restricted stock.

With regard to Mr. Shashank’s performance, our Compensation Committee gave particular weight to Mr. Shashank’s role in enhancing our compliance programs, improving productivity and controlling cost within the legal organization and enabling us to meet certain key business objectives for 2008. In April 2008, our Compensation Committee awarded Mr. Shashank 1,000 shares of restricted stock.

With regard to Mr. Nacha’s performance, our Compensation Committee gave particular weight to Mr. Nacha’s role in strengthening the sales and marketing department, enhancing the pipeline of prospective clients and other individual contributions. In April 2008, our Compensation Committee awarded Mr. Nacha 250 shares of restricted stock.

The following table sets forth the base salary earned during 2008 by each of our named executive officers.

Base Salary

Base salary is a fixed element of employees’ annual cash compensation, the payment of which is not tied to our performance. We provide the opportunity for each of our named executive officers and other executive officers to earn a competitive annual base salary. We provide this opportunity to attract and retain an appropriate caliber of talent for the position and to provide a base wage that is not subject to our performance risk. We review base salaries for our named executive officers annually in the first half of each year and increases are

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based on our performance and individual performance. Base salary determinations reflect the individual’s experience, knowledge, skill set and the market value of that skill set. In setting base salaries for 2007, our Compensation Committee considered the following factors:

Our founder executive officers entered into new employment agreements prior to our initial public offering in 2006 to more closely align the terms of such agreements with those of executives holding equivalent roles at other public companies, including periodic compensation adjustments and annual equity awards. At the time of the negotiation of the employment agreements with Messrs. Talwar and Kapoor in 2006, our Compensation Committee did not make any changes to the salary levels and increased the base pay for each of our founder executive officers to $420,000 effective January 2007. In increasing the base pay of our founder executive officers, our Compensation Committee applied the principles described above under “Our Compensation Committee’s Processes.”

The founder executive officers made recommendations for the other named executives and our Compensation Committee reviewed similar considerations for such named executives.

Mr. Appel joined us in February 2007. Mr. Appel’s base salary was determined through an arm’s-length negotiation during the hiring process and based upon his level of responsibility and our assessment of Mr. Appel’s experience, skills and knowledge and our general compensation guidelines.

With regard to Mr. Shashank’s performance, our Compensation Committee gave particular weight to Mr. Shashank’s role in enhancing our compliance programs, improving productivity and controlling cost within the legal department and enabling us to meet our objectives for 2007. Our Compensation Committee also reviewed data from other companies and adjusted Mr. Shashank’s compensation in light of such data. Our Compensation Committee increased Mr. Shashank’s annual salary by 6% effective April 2007.

With regard to Mr. Bagai’s performance, our Compensation Committee gave particular weight to his leadership of our BPO operations and the superior business and financial performance of the BPO service line and enabling us to meet our objectives for 2007. In light of a significant upward adjustment to Mr. Bagai’s fixed compensation in October 2006, our Compensation Committee did not adjust Mr. Bagai’s fixed compensation during 2007. As is customary in India, where Mr. Bagai is based, Mr. Bagai’s base salary comprises a portion of his fixed compensation, which includes amounts such as payments for house rent and certain travel expenses.

With regard to Mr. Kini’s performance, our Compensation Committee gave particular weight to his leadership of our risk advisory business. Our Compensation Committee also reviewed data from other companies and adjusted Mr. Kini’s compensation in light of such data. Our Compensation Committee increased Mr. Kini’s annual salary by 33.3% effective April 1, 2007.

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The following table sets forth the base salary earned during 2007 by each of our named executive officers.

Base Salary

Base salary is a fixed element of employees’ annual cash compensation, the payment of which is not tied to our performance. We provide the opportunity for each of our named executive officers and other executive officers to earn a competitive annual base salary. We provide this opportunity to attract and retain an appropriate caliber of talent for the position and to provide a base wage that is not subject to our performance risk. We

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review base salaries for our named executive officers annually in the first half of each year and increases are based on our performance and individual performance. Base salary determinations reflect the individual’s experience, knowledge, skill set and the market value of that skill set. In setting base salaries for 2007, our Compensation Committee considered the following factors:

Our founder executive officers entered into new employment agreements prior to our initial public offering in 2006 to more closely align the terms of such agreements with those of executives holding equivalent roles at other public companies, including periodic compensation adjustments and annual equity awards. At the time of the negotiation of the employment agreements with Messrs. Talwar and Kapoor in 2006, our Compensation Committee did not make any changes to the salary levels and increased the base pay for each of our founder executive officers to $420,000 effective January 2007. In increasing the base pay of our founder executive officers, our Compensation Committee applied the principles described above under “Our Compensation Committee’s Processes.”

The founder executive officers made recommendations for the other named executives and our Compensation Committee reviewed similar considerations for such named executives.

Mr. Appel joined us in February 2007. Mr. Appel’s base salary was determined through an arm’s-length negotiation during the hiring process and based upon his level of responsibility and our assessment of Mr. Appel’s experience, skills and knowledge and our general compensation guidelines.

With regard to Mr. Shashank’s performance, our Compensation Committee gave particular weight to Mr. Shashank’s role in enhancing our compliance programs, improving productivity and controlling cost within the legal department and enabling us to meet our objectives for 2007. Our Compensation Committee also reviewed data from other companies and adjusted Mr. Shashank’s compensation in light of such data. Our Compensation Committee increased Mr. Shashank’s annual salary by 6% effective April 2007.

With regard to Mr. Bagai’s performance, our Compensation Committee gave particular weight to his leadership of our BPO operations and the superior business and financial performance of the BPO service line and enabling us to meet our objectives for 2007. In light of a significant upward adjustment to Mr. Bagai’s fixed compensation in October 2006, our Compensation Committee did not adjust Mr. Bagai’s fixed compensation during 2007. As is customary in India, where Mr. Bagai is based, Mr. Bagai’s base salary comprises a portion of his fixed compensation, which includes amounts such as payments for house rent and certain travel expenses.

With regard to Mr. Kini’s performance, our Compensation Committee gave particular weight to his leadership of our risk advisory business. Our Compensation Committee also reviewed data from other companies and adjusted Mr. Kini’s compensation in light of such data. Our Compensation Committee increased Mr. Kini’s annual salary by 33.3% effective April 1, 2007.

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The following table sets forth the base salary earned during 2007 by each of our named executive officers.

Base Salary

Base salary is a fixed element of employees’ annual cash compensation, the payment of which is not tied to our performance. We provide the opportunity for each of our named executive officers and other executive officers to earn a competitive annual base salary. We provide this opportunity to attract and retain an appropriate caliber of talent for the position and to provide a base wage that is not subject to our performance risk. We review base salaries for our named executive officers annually in the first half of each year and increases are based on our performance and individual performance. Base salary determinations reflect the employee’s long-term performance, skill set and the market value of that skill set. In setting base salaries for 2006, our Compensation Committee considered the following factors:

Each of Mr. Talwar’s and Mr. Kapoor’s base salary of $400,000 until September 30, 2006 had been established in his November 2002 employment agreement at the time of the transaction that resulted in EXL Inc.

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becoming our wholly owned subsidiary. Our founder executive officers entered into new employment agreements prior to our initial public offering to more closely align the terms of such agreements with those of executives holding equivalent roles at other public companies, including periodic compensation adjustments and annual equity awards. At the time of the negotiation of the employment agreements with Messrs. Talwar and Kapoor, our Compensation Committee applied the principles described above under “Our Compensation Committee’s Processes” and did not make any changes to the salary levels given market data available at the time.

The founder executive officers made recommendations for the other named executives and our Compensation Committee reviewed similar considerations for such named executives.

With regard to Mr. Shashank’s performance, our Compensation Committee gave particular weight to his leadership of our initial public offering process and the Inductis Acquisition, enhancing our compliance programs and improving productivity within the legal department. Our Compensation Committee also reviewed data from other companies and adjusted Mr. Shashank’s compensation in light of such data. Our Compensation Committee increased Mr. Shashank’s annual salary by 5 percent effective April 2006 and again by 11.1 percent effective October 2006.

With regard to Mr. Kini’s performance, our Compensation Committee gave particular weight to his leadership of our risk advisory business. Our Compensation Committee also reviewed data from other companies and adjusted Mr. Kini’s compensation in light of such data. Our Compensation Committee increased Mr. Kini’s annual salary by 15.4 percent effective April 1, 2006.

With regard to Mr. Bagai’s performance, our Compensation Committee gave particular weight to his leadership of our research and analytics business until June 2006 and of our BPO operations thereafter, as well as his expanded role with us as our Head of BPO Operations in India. Our Compensation Committee also reviewed data from other companies and adjusted Mr. Bagai’s compensation in light of such data. As is customary in India, where Mr. Bagai is based, Mr. Bagai’s base salary comprises a portion of his fixed compensation, which includes amounts such as payments for house rent. Our Compensation Committee increased Mr. Bagai’s fixed compensation by 5.6 percent effective April 1, 2006 and again by 26.7 percent effective October 2006.

The following table sets forth the base salary earned during 2006 by each of our named executive officers.