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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x                      Filed by a Party other than the Registrant  ¨

Check the appropriate box:

AOL Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Notice of 2015 Annual Meeting

of Stockholders and Proxy Statement

May 27, 2015

9:00 a.m., Eastern Time

Hyatt Regency Greenwich

Old Greenwich, Connecticut

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April 16, 2015

Dear Fellow Stockholders:

Please join us for AOL Inc.’s Annual Meeting of Stockholders on May 27, 2015, at 9:00 a.m. (Eastern Time) at the Hyatt Regency Greenwich, 1800 East Putnam Avenue, Old Greenwich, Connecticut 06870. We are pleased to be utilizing the Securities and Exchange Commission rule allowing companies to furnish proxy materials to their stockholders over the internet. We believe that the e-proxy process will expedite our stockholders’ receipt of proxy materials, lower the costs of distribution and reduce the environmental impact of our Annual Meeting.

In accordance with this rule, we are sending stockholders of record at the close of business on April 2, 2015 a Notice of Internet Availability of Proxy Materials. The Notice contains instructions on how to access our Proxy Statement and Annual Report and vote online. If you would like to receive a printed copy of our proxy materials instead of downloading a printable version from the internet, please follow the instructions for requesting such materials included in the Notice as well as in the attached Proxy Statement.

Attached to this letter are a Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the Annual Meeting. We also will report on matters of current interest to our stockholders.

Your vote is important. Whether you own a few shares or many, and whether or not you plan to attend the Annual Meeting in person, it is important that your shares be represented and voted at the Annual Meeting.

Thank you for your continued support of AOL Inc.

Sincerely,

Tim Armstrong

Chairman and Chief Executive Officer

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PROXY VOTING METHODS

If at the close of business on April 2, 2015 you were a stockholder of record, you may vote your shares by proxy over the internet, by telephone or by mail. If at the close of business on April 2, 2015 you held shares through a bank, broker or other nominee, you may vote by submitting voting instructions to your bank, broker or nominee. In these cases, you may vote directly over the internet or by telephone or you may vote by mail by submitting a voting instruction form. We encourage you to vote over the internet or by telephone, both of which you may do 24 hours a day, 7 days a week. In addition, if at the close of business on April 2, 2015 you were a stockholder of record or held shares through a bank, broker or other nominee, you may vote in person at our Annual Meeting of Stockholders to be held on May 27, 2015 (the “Annual Meeting”). You may revoke your proxy and change your vote at the time and in the manner described on page 4 of the Proxy Statement.

If you hold your shares directly in your name in our stock records maintained by our transfer agent, Computershare Trust Company N.A., proxies submitted via the internet or by telephone must be received by 11:59 p.m., Eastern Time, on Tuesday, May 26, 2015.

If you hold shares through a bank, broker or other nominee, voting instructions submitted over the internet or by telephone as described above must be received by 11:59 p.m., Eastern Time, on Tuesday, May 26, 2015.

Proxies or voting instructions submitted by mail must be returned in the envelope provided to you with your paper proxy card or voting instruction form, and received not later than 9:00 a.m. Eastern Time, on Wednesday, May 27, 2015.

You may vote by proxy:

BY INTERNET

BY TELEPHONE

BY MAIL

YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.

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AOL INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

By Order of the Board of Directors,

Julie Jacobs

Executive Vice President, General Counsel and Corporate Secretary

This Notice of Annual Meeting and Proxy Statement

are being distributed to stockholders beginning on or about April 16, 2015.

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AOL INC.

770 Broadway

New York, New York 10003

Telephone: (212) 652-6400

PROXY STATEMENT

Annual Meeting of Stockholders

May 27, 2015

9:00 a.m. (Eastern Time)

GENERAL INFORMATION

There are four proposals scheduled to be voted on at the Annual Meeting:

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Under our by-laws, any other proposal requires the affirmative vote of a majority of the voting power of the shares of common stock of the Company present in person or represented by proxy at the Annual Meeting and voting thereon.

With respect to the election of directors, neither an abstention nor a broker non-vote will count as a vote cast “for” or “against” a director nominee. Therefore, abstentions and broker non-votes will have no direct effect on the outcome of the election of directors.

With respect to each of the other proposals to be voted on at the Annual Meeting, neither an abstention nor a broker non-vote will count as voting with respect to the proposal. Therefore, abstentions and broker non-votes will have no direct effect on the outcome of the proposal.

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If you sign and submit your proxy card without specifying how you would like your shares voted, your shares will be voted in accordance with the Board’s recommendations specified below under “How does the Board recommend that I vote?” and in accordance with the discretion of the persons named on the proxy card (the “proxyholders”) with respect to any other matters that may be voted upon at the Annual Meeting or at any adjournments or postponements of the Annual Meeting.

If your shares are held in street name, your bank, broker or other nominee should give you instructions for voting your shares. In these cases, you may vote via the internet, by telephone or by mail by submitting a voting instruction form. Internet and telephone voting facilities will close at 11:59 p.m. (Eastern Time) on May 26, 2015 for the voting of shares held by stockholders of record and for the voting of shares held in street name. Mailed proxy cards or voting instruction forms must be returned in the envelope provided to you with your proxy card or voting instruction form, and received by 9:00 a.m. (Eastern Time) on May 27, 2015.

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You may obtain directions to the Annual Meeting by contacting our Corporate Secretary via email at corporatesecretary@teamaol.com, via phone at (212) 652-6450, via fax at (703) 466-9813 or via mail to AOL Inc., 770 Broadway, New York, New York 10003.

Even if you plan to attend the Annual Meeting, we encourage you to vote in advance via internet, telephone or mail so that your vote will be counted even if you later decide not to attend the Annual Meeting.

If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your voting instructions in person at the Annual Meeting if you obtain a signed proxy from the record holder (bank, broker or other nominee) giving you the right to vote the shares. Only the latest validly executed proxy that you submit will be counted.

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In addition, we may establish additional or different rules and regulations for admission into and the conduct of the Annual Meeting.

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NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 27, 2015.

The Proxy Statement and Annual Report are available at http://corp.aol.com/proxymaterials.

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The Board, upon recommendation of the Nominating and Governance Committee of the Board (the “Nominating and Governance Committee”), unanimously nominated the nine director nominees listed below for election to the Board at the Annual Meeting. Each of the nine nominees currently serves as a member of the Board and was last elected by the stockholders at the 2014 Annual Meeting of Stockholders.

Directors elected at the Annual Meeting will be elected to hold office until the 2016 Annual Meeting of Stockholders and until their successors are duly elected and qualified. Unless otherwise instructed, the proxyholders intend to vote the proxies held by them for the election of the nine director nominees named below. The proxies cannot be voted for more than nine candidates for director. If any of the nine director nominees is unable or unwilling to be a candidate for election by the time of the Annual Meeting (a contingency which the Board does not expect to occur), the proxyholders may vote for a substitute nominee chosen by the present Board to fill the vacancy. In the alternative, the proxyholders may vote just for the remaining nominees, leaving a vacancy that may be filled at a later date by the Board. Alternatively, the Board may reduce the size of the Board. Set forth below are the principal occupations, business experience, qualifications, directorships and certain other information for each of the nine director nominees.

Nominees for Election as Directors

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BOARD OF DIRECTORS INFORMATION

Committees of the Board and Meetings

There are currently four standing committees of the Board: the Audit and Finance Committee, the Compensation and Leadership Committee, the Nominating and Governance Committee and the Executive Committee (each, a “Committee”). Currently, as discussed in more detail below, each Committee is comprised entirely of independent directors, consistent with the definition of “independent” under the NYSE listing standards applicable to boards of directors generally and board committees in particular. Each Committee is authorized to retain its own outside counsel and other advisors as it deems necessary or advisable.

The Board has adopted written charters for each of its standing Committees, copies of which are posted on our website at www.corp.aol.com/corpgov. A stockholder also may request a copy of these materials in print, without charge, by contacting our Corporate Secretary at AOL Inc., 770 Broadway, New York, New York 10003. Each of the Audit and Finance Committee, the Compensation and Leadership Committee, the Nominating and Governance Committee and the Executive Committee reviews its charter on an annual basis. Each Committee makes recommendations, as appropriate, to management or the full Board as a result of its charter review.

The following table summarizes the current membership of the Board and each of its standing Committees, as well as the number of times the Board and each Committee met during 2014.

Each current director attended 75% or more of the total number of meetings of the Board and of the Committees on which each such director served during 2014. In addition to the four standing Committees, the Board may approve, and has from time to time approved, the creation of special committees to act on behalf of the Board.

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Audit and Finance Committee

The Audit and Finance Committee of the Board (the “Audit and Finance Committee”), among other things:

All members of the Audit and Finance Committee are “independent,” consistent with the NYSE listing standards applicable to boards of directors in general and audit committees in particular and SEC rules regarding audit committees. In addition, the Board has determined that each of the members of the Audit and Finance Committee is financially literate and that Mr. Johnston has sufficient accounting and related financial management expertise to satisfy the criteria to be an “audit committee financial expert” under the rules and regulations of the SEC.

In accordance with the Audit and Finance Committee charter, no Audit and Finance Committee member may simultaneously serve on more than two other public company audit committees unless the Board specifically determines that it would not impair the ability of an existing or prospective member to serve effectively on the Audit and Finance Committee. None of the current members currently serves on more than two other public company audit committees.

Compensation and Leadership Committee

The Compensation and Leadership Committee of the Board (the “Compensation Committee”), among other things:

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All members of the Compensation Committee are “independent,” consistent with the NYSE listing standards applicable to boards of directors in general and compensation committees in particular. In addition, all members of the Compensation Committee qualify as “non-employee directors” (within the meaning of Rule 16b-3 of the Exchange Act and as “outside directors” (within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”)).

Delegation of Authority with Respect to Equity Grants

Pursuant to its charter, unless otherwise prohibited by law, our certificate of incorporation or our by-laws, the Compensation Committee may delegate its responsibilities to subcommittees or individuals. The Compensation Committee has delegated limited authority to individuals serving as our chief executive officer, chief financial officer, chief legal officer and chief human resources officer to make certain equity grants outside of the annual equity grant process to non-executive management employees who are newly hired or who are otherwise selected by the CEO to receive a grant other than employees with the title of Executive Vice President or higher, any other Section 16 officer or any employee whose annual total target compensation has a value of $3 million or greater.

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Compensation Consultant

The Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the Compensation Committee has engaged Compensation Advisory Partners LLC (“CAP”) as its independent compensation consultant to provide it with objective and expert analyses, advice and information with respect to executive compensation. All executive compensation services provided by CAP were conducted under the direction or authority of the Compensation Committee. After considering the following six factors with respect to CAP, our Compensation Committee has concluded that CAP is independent and that no conflict of interest exists with CAP: (i) the provision of other services to us by CAP; (ii) the amount of fees received from us by CAP, as a percentage of the total revenue of CAP; (iii) the policies and procedures of CAP that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the CAP consultant with a member of the Compensation Committee; (v) any of our stock owned by the CAP consultants; and (vi) any business or personal relationship of the CAP consultant or CAP with any of our executive officers.

In addition to CAP, members of our Human Resources, Legal and Finance Departments support the Compensation Committee in its work.

For additional information on the Compensation Committee’s activities, its use of outside advisors and its consideration and determination of executive compensation, see “Executive Compensation—Compensation Discussion and Analysis” beginning on page 32 of this Proxy Statement.

Compensation Programs and Risk Management

Management engaged the executive compensation firm Exequity LLP (“Exequity”) to assist us in conducting a detailed review and analysis of risk associated with the employee compensation plans administered by the Company in 2014, including (i) base pay, (ii) cash-based incentive plans, (iii) sales incentive plans and (iv) equity plans.

Key characteristics of our compensation plans and programs, such as the structure of annual and long-term incentives, the combination and number of metrics used in such programs, the positions eligible to participate, the use and availability of discretion (including the ability of program administrators to limit award payouts), individual target and maximum awards and the timing of payouts were analyzed based on the level of risk associated with the plans and programs.

The assessment also identified and evaluated characteristics of the plans and programs that mitigate risk associated with compensation, including the processes for calculating payouts under incentive compensation programs (such as third-party verification or determination of performance achieved), approval processes (including the ability of program administrators to limit award payouts), maximum payouts, use of a combination of long-term and short-term incentive programs with different time horizons for measuring performance, share ownership and equity retention policies for senior executives, the mix of cash bonuses and long-term equity incentive compensation, the existence of claw-back and anti-pledging policies, and multi-year vesting schedules for equity awards.

Based on this detailed review and analysis, management and the Compensation Committee determined that there are no risks arising from the Company’s compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

Nominating and Governance Committee

The Nominating and Governance Committee, among other things:

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All of the members of the Nominating and Governance Committee are “independent” as defined by the NYSE listing standards.

Executive Committee

The Executive Committee of the Board (the “Executive Committee”), consisting of the Lead Independent Director (as described below) and the Chairs of the Audit and Finance Committee, the Nominating and Governance Committee and the Compensation Committee, provides flexibility to act promptly between regularly scheduled meetings of the Board. During these intervals, the Board has granted to the Executive Committee all the powers of the Board in the management of the business and affairs of the Company, including the ability to review and approve all of the Company’s proposed transactions in which the dollar amount for any such proposed transaction equals or exceeds $10 million and is no greater than $100 million, except (i) as limited by the Company’s Amended and Restated Certificate of Incorporation or Amended and Restated By-laws, the rules of the NYSE or applicable law or regulation and (ii) with respect to matters that are specifically reserved for another committee of the Board. The Executive Committee also oversees the CEO succession planning process, including an emergency succession plan.

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GOVERNANCE OF YOUR COMPANY

Our Standards of Business Conduct, our Code of Ethics for Our Senior Executive and Senior Financial Officers, our Corporate Governance Policy, our Committee charters and other corporate governance information are available on our website at www.corp.aol.com/corpgov. Any stockholder also may request them in print, without charge, by contacting our Corporate Secretary at AOL Inc., 770 Broadway, New York, New York 10003.

Standards of Business Conduct

Our Standards of Business Conduct apply to our employees and members of the Board. The Standards of Business Conduct establish policies pertaining to, among other things, employee conduct in the workplace, electronic communications and information security, accuracy of books, records and financial statements, securities trading, confidentiality, conflicts of interest, fairness in business practices, the Foreign Corrupt Practices Act, the UK Bribery Act, antitrust laws and political activities and solicitations.

Our Chief Compliance Officer oversees adherence to the Standards of Business Conduct in addition to overseeing our compliance function throughout our business. Our Chief Compliance Officer also assists in the communication of the Standards of Business Conduct and oversees employee education regarding its requirements, including compliance training. All employees worldwide participate in annual business conduct training.

We maintain an employee help line, called the SBC Help Line. The SBC Help Line and the Whistleblower Procedures discussed below are the Company’s primary mechanisms for receiving and acting on business conduct and ethical complaints. Through the SBC Help Line, employees can report integrity concerns or seek guidance on business conduct matters. In some countries, local and regional differences in culture and law limit the scope and types of reports we may accept through our SBC Help Line. We provide alternative reporting direction for employees in these countries. The SBC Help Line has a toll-free number for U.S.-based employees, and provides toll-free international numbers for employees based in some countries outside the United States. Employees may also report integrity concerns via an online form, mail, or email. If an employee alleges a complaint, our Chief Compliance Officer receives the report and then coordinates with internal and outside resources, as appropriate, to investigate reported concerns. The Chief Compliance Officer regularly reports to the Audit and Finance Committee inquiries and complaints we receive through the SBC Help Line and any resulting investigations and corrective actions.

Code of Ethics for Our Senior Executive and Senior Financial Officers

Our Code of Ethics for Our Senior Executive and Senior Financial Officers (the “Code of Ethics”) applies to certain senior management of the Company, including individuals in the role of CEO, Chief Financial Officer (“CFO”), Controller and the senior-most tax executive (and others performing similar senior executive functions at the Company from time to time in the future). Among other things, the Code of Ethics mandates that the designated officers engage in and promote honest and ethical conduct, avoid conflicts of interest and disclose any material transaction or relationship that reasonably could be expected to give rise to a conflict, protect the confidentiality of non-public information about the Company, take all reasonable measures to achieve responsible use of the Company’s assets and resources, comply with all applicable governmental rules and regulations and promptly report any possible violation of the Code of Ethics. Additionally, the Code of Ethics requires that these individuals promote full, fair, accurate, timely and understandable disclosure in the Company’s publicly filed reports and other public communications and sets forth standards for accounting practices and

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records. We hold individuals to whom the Code of Ethics applies accountable for adherence to the Code of Ethics. Our Chief Compliance Officer oversees and assists in the communication of the Code of Ethics.

We intend to disclose any amendments to or waivers of provisions of the Standards of Business Conduct or Code of Ethics granted to directors or executive officers by posting such information on our website.

Whistleblower Procedures

With respect to complaints and concerns regarding accounting, internal accounting controls and auditing, and in response to Section 301 of the Sarbanes-Oxley Act of 2002, the Audit and Finance Committee has established additional procedures, referred to as Whistleblower Procedures. Under these procedures, as under our standard SBC Help Line procedures, persons, including employees of the Company, may submit, without fear of retaliation, and, where the law permits, anonymously, an allegation of questionable accounting, internal accounting controls or auditing matters to the Company through the SBC Help Line options described above. Employees may also report these types of complaints and concerns to the Company’s Controller. The Chief Compliance Officer’s regular reports to the Audit and Finance Committee include these complaints and concerns, and if the Chief Compliance Officer and/or Company management determine that an allegation is both credible and material to the Company’s financial reporting, financial condition or internal controls, they will inform the Audit and Finance Committee promptly and they will assist in determining the manner in which such material allegation is to be investigated.

Corporate Governance Policy

Our commitment to good corporate governance is reflected in our Corporate Governance Policy, which describes the Board’s views on a wide range of governance topics. The Corporate Governance Policy is reviewed no less than annually by the Nominating and Governance Committee and, to the extent deemed appropriate in light of emerging practices, revised accordingly, upon recommendation to and approval by the Board.

Significant Governance Practices

Board Composition and Director Nomination Process

Our director recruitment process involves, among other steps: developing criteria for selecting members of the Board; identifying potential candidates; reviewing the potential candidates against the relevant criteria; interviewing the potential candidates; and exchanging relevant information between us and the potential candidates. We have retained an outside executive search firm to assist in the process of identifying and recruiting individuals to serve on our Board.

The Nominating and Governance Committee evaluates director candidates in accordance with the director membership criteria described in our Corporate Governance Policy. The Nominating and Governance Committee evaluates a candidate’s qualifications to serve as a member of our Board based on the skills and characteristics of individual directors as well as the composition of our Board as a whole. With regard to the criteria for our Board members, we believe that each director should possess integrity, judgment, acumen, familiarity with our business, independence of thought and the ability to work collegially, as well as the time and ability to make a constructive contribution to the Board. In addition, we endeavor to provide that the Board has the appropriate overall mix of professional skills and background, industry experience, financial expertise (including expertise that would qualify a director as a “financial expert” as that term is defined under the rules and regulations of

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the SEC), age, diversity and geographic background to fulfill the roles of the Board and its committees. In particular, we seek skilled persons in the areas of finance, accounting, technology, marketing and general executive management, as well as those who are experienced in the areas of advertising, media and government. Finally, we seek to have a substantial majority of the Board members who are independent under the NYSE listing standards, and have a majority of the Board members possess prior experience working closely with, or serving on, the board of a public company.

At least annually, in connection with the board self-evaluation and director nomination processes, the Board evaluates its composition to assess the skills and experience that are currently represented on the Board, as well as those that the Board will find valuable in the future, given the Company’s current position and strategic plans. This evaluation enables the Board to update the Board membership criteria as the Company’s needs evolve over time and to assess the effectiveness of efforts at pursuing diversity. In connection with the nominations of each of the current Board members for election as directors at the Annual Meeting, the Board considered the biographical information and director qualifications set forth with respect to each Board member under “Item 1—Election of Directors—Nominees for Election as Directors.”

The Nominating and Governance Committee considers and reviews all candidates in the same manner regardless of the source of the recommendation. The Nominating and Governance Committee has established procedures for stockholders of the Company to recommend director candidates. Stockholders who wish to recommend director candidates for the Nominating and Governance Committee’s consideration should send their recommendation to our Corporate Secretary at AOL Inc., 770 Broadway, New York, New York 10003 and should include:

In addition, our amended and restated by-laws provide that any stockholder of record entitled to vote for the election of directors at the applicable meeting of stockholders may nominate persons for election to our Board, if such stockholder complies with the applicable advance notice procedures in the Company’s by-laws, which are discussed on page 79 of this Proxy Statement.

Annual Meeting of Stockholders

We encourage all of our directors to attend each annual meeting of stockholders. All nine of the directors who were members of our Board at the time of our 2014 Annual Meeting of Stockholders attended that meeting.

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Director Independence and Independence Determinations

Under NYSE rules, a director is not independent unless the Board makes an affirmative determination to such effect. In order to determine that a director is independent, the Board must affirmatively determine that the director has no material relationship with the Company, and the director must satisfy the standards and objective tests set forth under NYSE rules.

In making this determination, the Board considers all relevant facts and circumstances, including commercial, charitable and familial relationships that exist between the director and the Company, or between entities with which the director is affiliated and the Company. In the event a director has a relationship with the Company that is relevant to his or her independence, the Board determines in its judgment whether such relationship is material. During its independence review, the Board considered that Mr. Armstrong, our Chairman and CEO, serves on the Board of Trustees of The Paley Center for Media, a non-profit institution, where Ms. Mitchell served as President and CEO until May 2014 and then as Executive Vice Chair until December 2014. The Board determined that this relationship does not impair Ms. Mitchell’s independence because Mr. Armstrong does not serve on the Executive Compensation Committee of The Paley Center for Media’s Board of Trustees or otherwise determine or influence Ms. Mitchell’s compensation. The Board also considered that the Company made charitable contributions to The Paley Center for Media in each of 2012, 2013 and 2014, but in each year the amounts involved did not exceed the greater of $1 million or 2% of The Paley Center for Media’s consolidated gross revenues. The Board determined that the Company’s charitable contributions to The Paley Center for Media do not impair Ms. Mitchell’s independence. Ms. Mitchell is no longer an officer or employee of The Paley Center for Media.

Our Corporate Governance Policy requires that a substantial majority of the members of the Board and that all the members of the Audit and Finance Committee, the Compensation Committee and the Nominating and Governance Committee be independent under the NYSE regulations. The Board has determined that each of the following director nominees is independent: Ms. Burton, Ms. Lepore and Ms. Mitchell, and Messrs. Dalzell, Ibargüen, Johnston, Reynolds and Stengel. Mr. Armstrong, our CEO, is not independent.

Board Leadership Structure

The Board has determined that combining the CEO and Chairman positions is currently the appropriate leadership structure for the Company. The Board believes that combining the CEO and Chairman roles fosters clear accountability, effective decision-making and alignment on corporate strategy between the Board and the senior management of the Company. Nevertheless, the Board believes that “one-size” does not fit all, and that the decision of whether to combine or separate the positions of CEO and Chairman depends upon each company’s particular circumstances at a given point in time. Accordingly, the Board intends to carefully consider from time to time, including during its annual self-evaluation, whether the CEO and Chairman positions should be combined or separated based on what the Board believes is best for the Company and its stockholders at that time.

The Board has a Lead Independent Director who is elected by the independent members of the Board. Currently, the Lead Independent Director is Mr. Reynolds. As set forth in the Company’s Corporate Governance Policy, the responsibilities of the Lead Independent Director include:

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As part of its evaluation of the Board’s leadership structure, the Board considered the fact that it has appointed a Lead Independent Director with responsibilities that are substantially similar to many of the functions typically fulfilled by a board chairman, including presiding at executive sessions of independent directors and convening such sessions when necessary and appropriate, serving as the liaison between the CEO and the independent directors, approving the agenda for Board meetings and being available for communication with the Company’s stockholders. The Board believes that the Lead Independent Director position balances the need for effective and independent oversight of management with the significant benefits of strong, unified leadership. In addition, the Board has noted that all of the members of the Board other than Mr. Armstrong are independent, and that all of the members of each of the committees of the Board are independent, within the meaning of “independent” under NYSE listing standards.

The Board has also considered that the combined role of CEO and Chairman promotes unified leadership and direction for the Company as it continues to execute its strategy to improve the Company’s growth trajectory and create meaningful stockholder value. Additionally, the Board believes that the current structure promotes effective decision-making by seeing that the Board’s agenda responds to the Company’s strategic opportunities and challenges and that the Board receives the information it needs to fulfill its responsibilities. The Board also considered that the combined role of CEO and Chairman allows one person to speak on behalf of the Company to its customers, employees and stockholders, and minimizes inefficiencies that might arise under a different structure as the Board and management respond to developments affecting the Company. The Board believes that its existing structure is in the best interest of the Company and our stockholders, as it allows for a balance of authority between the CEO and Chairman and the independent directors and provides an environment in which the independent directors, under the leadership of the Lead Independent Director, are fully informed, have significant input into the content of Board meeting agendas and are able to provide objective and thoughtful oversight of management.

Executive Sessions of Non-Employee and Independent Directors

In 2014, the independent directors on the Board met in executive sessions six times, without any employee directors or management present. Executive sessions of the non-employee directors and independent directors are led by the Lead Independent Director and facilitate candid discussion of the independent directors’ viewpoints regarding the performance of management and the strategic direction of the Company.

Board and Committee Evaluations

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evaluations cover a wide range of topics, including, but not limited to, the fulfillment of the Board and Committee responsibilities identified in the Corporate Governance Policy and Committee charters, which are posted on our website at www.corp.aol.com/corpgov.

Communications with the Board of Directors

Stockholders and other interested parties who wish to communicate with our Board or a particular member of our Board (including the Lead Independent Director) or with the non-management or independent directors as a group, may do so by addressing such communications to our Corporate Secretary, AOL Inc., 770 Broadway, New York, New York 10003 or corporatesecretary@teamaol.com, who will forward such communications to the appropriate party. Such communications may be made confidentially or anonymously. All communications that relate to matters that are within the scope of the responsibilities of the Board and its Committees will be forwarded to the Chairman (or Lead Independent Director, as the case may be). Communications that relate to matters that are within the responsibility of one of the Committees will also be forwarded to the Chair of the appropriate Committee. Communications that relate to ordinary business matters that are not within the scope of the Board’s responsibilities, such as customer complaints, will be sent to the appropriate contact person within the Company. Solicitations, junk mail and obviously frivolous or inappropriate communications will not be forwarded, but will be made available to any director who wishes to review them.

Oversight of Risk Management

The Board has overall responsibility for risk oversight with a focus on the most significant risks facing the Company. The Board carries out its risk oversight responsibilities primarily through the Audit and Finance Committee, which is responsible for oversight of the Company’s risk management policies and procedures. The Company is exposed to a number of risks including financial risks, strategic and operational risks and risks relating to regulatory and legal compliance. The Audit and Finance Committee discusses with management the Company’s major risk exposures and the steps management has taken to monitor and control such exposures, including the guidelines and policies to govern the process by which risk assessment and risk management are undertaken. The CFO is responsible for the Company’s risk management function and works closely with the Company’s senior management to identify risks material to the Company. The CFO reports regularly to the CEO and the Audit and Finance Committee regarding the Company’s risk management policies and procedures. In that regard, the CFO meets with the Audit and Finance Committee regularly to discuss the risks facing the Company, highlighting any new risks that may have arisen since they last met. The Audit and Finance Committee also reports to the Board on a regular basis to apprise Board members of its discussions with the CFO regarding the Company’s risk management efforts. The CEO or CFO report directly to the Board at least annually to apprise it of the Company’s risk management efforts.

In addition, the Compensation Committee discusses with management the Company’s major risks associated with the Company’s compensation plans and programs as described on page 15 of this Proxy Statement.

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Audit-Related Matters

Report of the Audit and Finance Committee

In accordance with its charter, the Audit and Finance Committee assists the Board in fulfilling responsibilities in a number of areas. These responsibilities include, among others: (i) overseeing the quality and integrity of our financial statements and accounting practices; (ii) selecting an independent registered public accounting firm (taking into account the vote on ratification by the stockholders); (iii) pre-approving all services to be provided to us by our independent registered public accounting firm; (iv) reviewing and discussing matters required to be discussed under Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) and amended from time to time, and such other matters pertaining to the annual financial audit as the Committee may deem appropriate; (v) reviewing the independence of our independent registered public accounting firm; (vi) overseeing our internal audit function; (vii) meeting with our independent registered public accounting firm and appropriate financial and accounting personnel regarding our internal controls and other matters; and (viii) overseeing all of our compliance, internal controls and risk management policies. To assist it in fulfilling its oversight and other duties, the Audit and Finance Committee regularly meets separately with the internal auditor, the independent registered public accounting firm and management.

Independent Registered Public Accounting Firm and Internal Audit Matters

The Audit and Finance Committee discussed with the Company’s independent registered public accounting firm its plan for the audit of the Company’s annual consolidated financial statements as of and for the year ended December 31, 2014 (the “2014 Annual Financial Statements”), as well as reviews of the Company’s quarterly financial statements (the “2014 Quarterly Financial Statements” and together with the 2014 Annual Financial Statements, the “2014 Financial Statements”). The Audit and Finance Committee met with the independent registered public accounting firm, with and without management present, to discuss the results of its audits and quarterly reviews of the 2014 Financial Statements, as well as its evaluations of the Company’s internal control over financial reporting and the overall quality of the Company’s accounting principles. The Audit and Finance Committee has also appointed Ernst & Young as the Company’s independent registered public accounting firm for 2015.

The Audit and Finance Committee has reviewed and approved the annual internal audit plan for 2015 and has met with the head of the internal audit group, with and without management present, to review and discuss internal audit matters.

Financial Statements as of and for the year ended December 31, 2014

The Company’s management is responsible for the Company’s financial statements and the reporting process, including its systems of internal and disclosure controls (including internal control over financial reporting). The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of the consolidated financial statements with U.S. generally accepted accounting principles (“GAAP”). The independent registered public accounting firm also expresses an opinion on the Company’s internal control over financial reporting.

In this context, the Audit and Finance Committee has met and held discussions with management and the independent registered public accounting firm with respect to the 2014 Financial Statements. Management represented to the Audit and Finance Committee that the Company’s consolidated financial statements were prepared in accordance with U.S. GAAP.

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In connection with its review of the Company’s year-end financial statements, the Audit and Finance Committee has reviewed and discussed with management and the independent registered public accounting firm the consolidated financial statements, management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the independent registered public accounting firm’s evaluation of the effectiveness of the Company’s internal control over financial reporting. The Audit and Finance Committee also discussed with the independent registered public accounting firm the matters required to be discussed by applicable PCAOB rules, including the quality and acceptability of the Company’s accounting policies, financial reporting processes and controls. The Audit and Finance Committee also received the written disclosures and the letter from the independent registered public accounting firm required by the PCAOB regarding the independent registered public accounting firm’s communications with the Audit and Finance Committee concerning independence, and the Audit and Finance Committee discussed with Ernst & Young its independence from the Company and its management. The Audit and Finance Committee further considered whether the provision by the independent registered public accounting firm of any non-audit services described elsewhere in this Proxy Statement is compatible with maintaining auditor independence and determined that the provision of those services does not impair the independent registered public accounting firm’s independence.

In performing its functions, the Audit and Finance Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company’s management, internal audit group and independent registered public accounting firm, which, in their reports, express opinions on the conformity of the Company’s annual financial statements with U.S. GAAP and the effectiveness of the Company’s internal control over financial reporting.

In reliance on the reviews and discussions referred to in this Report and in light of its role and responsibilities, the Audit and Finance Committee recommended to the Board, and the Board approved, that the audited financial statements of the Company be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “2014 Form 10-K”) filed with the SEC.

Submitted by the Audit and Finance Committee of the Company’s Board of Directors:

Hugh Johnston (Chair)

Alberto Ibargüen

Dawn Lepore

Policy Regarding Pre-Approval of Services Provided by the Independent Auditors

The Audit and Finance Committee has established a policy (the “Pre-Approval Policy”) requiring its pre-approval of all audit services and permissible non-audit services provided by the independent registered public accounting firm, along with the associated fees for those services. The Pre-Approval Policy provides for the annual pre-approval of specific types of services pursuant to policies and procedures adopted by the Audit and Finance Committee and gives detailed guidance to management as to the specific services that are eligible for such annual pre-approval.

The Pre-Approval Policy requires the specific pre-approval of all other permitted services. In evaluating any pre-approval, the Audit and Finance Committee considers whether the provision of a non-audit service is consistent with the SEC’s rules on registered public accounting firm independence, including whether provision of the service: (i) would create a mutual or conflicting interest between the independent registered public accounting firm and the Company; (ii) would place the independent registered public accounting firm in the position of auditing its own work; (iii) would result in the independent registered public accounting firm acting in the role of management or as an employee of the Company; or (iv) would place the independent registered public accounting firm in a position of

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being an advocate for the Company. Additionally, the Audit and Finance Committee considers whether the independent registered public accounting firm is best positioned and qualified to provide the most effective and efficient service, based on factors such as the independent registered public accounting firm’s familiarity with the Company’s business, personnel, culture, accounting systems or risk profile and whether provision of the service by the independent registered public accounting firm would enhance the Company’s ability to manage or control risk or improve audit quality or would otherwise be beneficial to the Company. The Audit and Finance Committee also considers the relative level of fees for audit and non-audit services in deciding whether to pre-approve such services. The Audit and Finance Committee has delegated to its Chair the authority to address certain requests for pre-approval of services between meetings of the Audit and Finance Committee, and the Chair must report any pre-approval decisions to the Audit and Finance Committee at its next regular meeting. The Pre-Approval Policy is designed to provide that there is no delegation by the Audit and Finance Committee of authority or responsibility for pre-approval decisions to management of the Company. The Audit and Finance Committee monitors compliance by management with the Pre-Approval Policy by requiring the CFO, pursuant to the Pre-Approval Policy, to report to the Audit and Finance Committee on a regular basis regarding the pre-approved services rendered by the independent registered public accounting firm. Management has also implemented internal procedures to promote compliance with the Pre-Approval Policy.

Audit and Non-Audit Fees

In connection with the audit of the 2014 Annual Financial Statements and review of the 2014 Quarterly Financial Statements the Company entered into an agreement with Ernst & Young that sets forth the terms under which Ernst & Young performed audit and review services for the Company.

The following table presents the aggregate fees billed for professional services rendered by Ernst & Young for the audit and review of our financial statements for 2014 and 2013 and the aggregate fees for other services rendered by Ernst & Young billed in those periods (in thousands):

The Audit and Finance Committee considered whether providing the non-audit services shown in this table was compatible with maintaining Ernst & Young’s independence and concluded that it was compatible.

The Audit and Finance Committee has selected Ernst & Young to serve as our independent registered public accounting firm for 2015. The Audit and Finance Committee evaluates the performance of the Company’s independent registered public accounting firm, including the senior

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audit engagement team, each year and determines whether to reengage the current independent auditors or consider other audit firms. In doing so, the Audit and Finance Committee considers the quality and efficiency of the services provided by the auditors, the auditors’ global capabilities, and the auditors’ technical expertise, tenure as the Company’s independent auditors and knowledge of the Company’s global operations and industry. In this Item 2, we are asking stockholders to ratify the selection of Ernst & Young to serve as our independent registered public accounting firm for 2015. Although ratification is not required by our by-laws or otherwise, the Board is submitting the selection of Ernst & Young to our stockholders for ratification as a matter of good corporate governance. If the selection is not ratified, the Audit and Finance Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, the Audit and Finance Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.

Representatives of Ernst & Young are expected to be present at the Annual Meeting and to answer appropriate questions. They also will have the opportunity to make a statement if they desire to do so.

The shares represented by your proxy will be voted for the ratification of the selection of Ernst & Young unless you specify otherwise. Ernst & Young has served as the independent registered public accounting firm of the Company since the complete legal and structural separation of the Company from Time Warner Inc. (“Time Warner”) in December 2009, following which we became an independent, publicly-traded company.

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Section 14A of the Exchange Act, which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that, not less frequently than once every three years, we provide stockholders with an advisory vote to approve the Company’s executive compensation as disclosed herein. Accordingly, in this Item 3, stockholders are being asked to approve the following advisory resolution:

RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis and the related compensation tables and narrative discussion in the Proxy Statement for the Annual Meeting.

The Company believes that it is appropriate to seek the views of stockholders on the design and effectiveness of the Company’s executive compensation program. The Company’s goal for its executive compensation program is to attract, motivate and retain a talented, entrepreneurial and creative team of executives who will provide leadership for the Company’s success in dynamic and competitive markets. The Company seeks to accomplish this goal in a way that rewards performance and is aligned with its stockholders’ long-term interests. The Company believes that its executive compensation program, which emphasizes long-term equity awards, satisfies this goal and is strongly aligned with the long-term interests of its stockholders. Stockholders are encouraged to read the Compensation Discussion and Analysis, compensation tables and narrative discussion in this Proxy Statement beginning on page 32 of this Proxy Statement, which discuss in detail how our compensation policies and procedures implement our compensation philosophy and how our 2014 performance relates to our 2014 compensation decisions.

As an advisory vote, this proposal is not binding upon the Board or the Company. Our Board and its Compensation Committee will not be required to change our compensation programs as a result of the outcome of the vote. However, the Board and the Compensation Committee value the opinions expressed by stockholders in their vote on this proposal and will review and consider the outcome of the vote when making future decisions on executive compensation.

Taking into account the advisory vote of stockholders regarding the frequency of advisory votes to approve executive compensation at our 2011 Annual Meeting, the Board’s current policy is to include a resolution regarding approval of the Company’s executive compensation annually until the next advisory vote on frequency occurs. Accordingly, unless the Board modifies its policy on the frequency of future votes, the next advisory vote to approve our executive compensation will occur at the 2016 Annual Meeting.

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General

The Company currently maintains the AOL Inc. Annual Incentive Plan For Executive Officers (the “Executive AIP”). The Executive AIP was most recently approved by the Company’s stockholders on April 29, 2010. On February 25, 2015, the Compensation Committee amended and restated the Executive AIP for purposes of regulatory compliance and to make certain administrative changes. This amendment and restatement did not affect the maximum award that may be paid under the Executive AIP or how bonuses for participants in the Executive AIP are determined. The complete text of the Executive AIP, as amended and restated, is attached as Annex A to this Proxy Statement. Capitalized terms used in this Item 4 shall have the same meanings set forth in the Executive AIP unless otherwise indicated.

Purpose.    The purpose of the Executive AIP is to provide for the payment of annual bonuses to certain executive officers of the Company that are designed in a manner intended to allow for qualification as “performance-based compensation” under Section 162(m) of the Code.

Under Code Section 162(m) and interpretive guidance issued by the Internal Revenue Service, as currently in effect, the amount of compensation earned by the Chief Executive Officer and the three other most highly paid executive officers of the Company (not including the chief financial officer) in the year for which a deduction is claimed by the Company is limited to $1 million per individual, except that compensation that qualifies as “performance-based” within the meaning of Code Section 162(m) is excluded for purposes of calculating the amount of compensation subject to the $1 million limitation. The affected executive officers will be referred to as “Covered Officers”. Without a plan or similar arrangement such as the Executive AIP, an annual cash incentive bonus paid to a Covered Officer could not qualify as “performance-based compensation”. In order for payments under a plan such as the Executive AIP to qualify as “performance-based compensation,” stockholders must approve the material terms of the performance goal as set forth under that plan every five years if the compensation committee has the ability to change the targets under a performance goal. As previously noted, the Executive AIP, including the material terms of its performance goal, was last approved by the Company’s stockholders in 2010. For purposes of Code Section 162(m), the material terms of the performance goal under the Executive AIP, as amended and restated, include the employees eligible to receive compensation under the plan, a description of the business criteria on which the performance goal is based, and the maximum amount of compensation that can be paid to an employee under the performance goal. With respect to awards under the Executive AIP, as amended and restated, each of these issues is discussed below, and stockholder approval of the amended and restated Executive AIP will constitute re-approval of the material terms of the performance goal under the Executive AIP for purposes of the approval requirements of Code Section 162(m). However, nothing in this proposal precludes the Company from paying amounts that do not qualify for tax deductibility under Code Section 162(m), nor is there any guarantee that awards under the Executive AIP intended to qualify for tax deductibility under Code Section 162(m) will ultimately be viewed as so qualifying by the Internal Revenue Service.

Proposal.    Stockholders are being asked only to approve the amended and restated Executive AIP for purposes of re-approval of the material terms of the performance goal under the Executive AIP as described above. These terms are the same in all material respects as those that the stockholders approved in 2010.

If for any reason our stockholders do not approve the amended and restated Executive AIP, there will be no impact on the existing terms of the Executive AIP. The Executive AIP will continue to remain

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in existence and awards may continue to be made under the Executive AIP. The only impact on the Company will be that some or all of the value of certain bonuses paid under the Executive AIP that are based on the achievement of one or more performance goals will no longer be deductible as a result of the limitations imposed under Code Section 162(m).

Summary of the Executive AIP

Administration.    The Compensation Committee administers the Executive AIP and has final authority to construe and interpret it. The Compensation Committee annually selects the executive officers of the Company and its affiliates who are eligible to receive an award thereunder. The Executive AIP sets forth the conditions under which a participant in the Executive AIP may be entitled to receive a bonus and the maximum amount of that bonus. However, the Compensation Committee retains authority to reduce or eliminate the amount of a bonus. For every year that the Executive AIP has been in effect, the Compensation Committee has established a more detailed set of objective performance goals and lower bonus opportunities for participants than are set forth in the Executive AIP.

Participation.    Executive officers of the Company are eligible to be designated as participants in the Executive AIP. The number of persons eligible to participate in the Executive AIP is approximately six.

Performance Goal.    Under the Executive AIP, the performance goal is “adjusted net income.” The Compensation Committee may pay awards to participants under the Executive AIP if the Company has positive adjusted net income. For purposes of the Executive AIP, “adjusted net income” means income (loss) from continuing operations as defined under GAAP, excluding the following: (a) noncash impairments of goodwill, intangible and fixed assets and investments; (b) gains and losses on sales of operating assets and investments; (c) external expensed costs related to mergers, acquisitions, investments or dispositions, as well as contingent consideration related to such transactions; (d) amounts related to securities litigation and government investigations; (e) restructuring charges or reductions in restructuring charges greater than $3 million; (f) reserves larger than $3 million established in connection with litigation, tax audits and similar governmental proceedings; (g) recoveries greater than $3 million in litigation and similar proceedings; (h) gains or losses recognized from the forgiveness of debt; (i) the impact of current year changes to accounting standards and tax laws; (j) gains or losses related to the recognition of cumulative currency translation adjustments and (k) the impact of taxes on the items described in (a) through (j).

Performance Period.    The performance period under the Executive AIP is the Company’s fiscal year, which is the calendar year.

Award Payments.    The award earned in any calendar year by any participant under the Executive AIP in the event of the achievement of the “adjusted net income” performance goal is the lesser of four percent (4%) of the Company’s adjusted net income or $4,000,000. This amount is also the maximum annual award amount that may be earned by any participant under the Executive AIP. Both the performance goal and the maximum payout in the event of the achievement of the performance goal are set forth in the Executive AIP. The Compensation Committee does not have the authority to amend these terms without obtaining approval of the Company’s stockholders. However, based on its authority to exercise “negative discretion” to reduce the amount of the award from the maximum annual award (assuming that the “adjusted net income” goal is achieved), the Compensation Committee may specify a lesser award opportunity for a participant in any calendar year.

The Company’s achievement of the performance goal under Code Section 162(m) does not assure that the maximum award will be payable to an executive officer because the Compensation Committee retains “negative discretion” to reduce the award based upon the assessment of an

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individual’s performance and the attainment of other Company performance objectives. The Compensation Committee may use any objectives and guidelines it deems appropriate in exercising “negative discretion”, which may include, but is not limited to, the objectives and guidelines set forth in the Company-wide annual bonus plan, which is called the AOL Inc. Annual Bonus Plan (the “ABP”). For example, for the Company’s 2014 fiscal year, the Compensation Committee selected four financial metrics to determine the Company performance portion of the participants’ award opportunity: (1) adjusted OIBDA (operating income before depreciation and amortization); (2) free cash flow (cash provided by continuing operations, less capital expenditures, product development costs and principal payments on capital leases); (3) revenues net of TAC (traffic acquisition costs); and (4) adjusted earnings per share. Awards under the Executive AIP may be paid in the form of cash, RSUs or restricted stock granted under the AOL Inc. 2010 Stock Incentive Plan or any combination of the foregoing as determined by the Compensation Committee in its sole discretion.

Awards earned will be paid on or before March 15 of the year following the year with respect to which they were earned upon certification in writing by the Compensation Committee of the achievement of the performance goal, the application of any negative discretion, and the amount of the bonus to be paid to each participant in the Executive AIP.

Recoupment of Awards.    Compensation paid under the terms of the Executive AIP is subject to the terms of our Executive Compensation Recovery Policy, as may be amended from time to time.

Amendments.    The Compensation Committee may at any time amend, suspend or terminate the Executive AIP, but no modification or amendment will be effective unless it complies with all applicable laws and applicable requirements for exemption (to the extent necessary) under Code Section 162(m) and the regulations promulgated thereunder.

Vote Required for Approval

Approval of the Executive AIP, as amended and restated, requires an affirmative vote of a majority of the votes represented in person or by proxy at the Annual Meeting and voting thereon.

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The following table summarizes information as of December 31, 2014, about the Company’s outstanding equity compensation awards and shares of common stock reserved for future issuance under the Company’s equity compensation plans.

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis explains (1) the elements of our compensation programs applicable to our Named Executive Officers (each an “NEO”) for 2014, (2) our executive compensation philosophy, process and policies, (3) the compensation of our NEOs during 2014, and (4) other compensation policies and information.

The following individuals were our NEOs for 2014:

OUR EXECUTIVE COMPENSATION PHILOSOPHY, PROCESS AND POLICIES

Our Compensation Goals and Principles

The goals of our executive compensation program are to attract and retain talented executives and to reward executives in a manner that aligns compensation with short-term and long-term goals of the Company and creates enduring stockholder value. In 2014, the following principles guided us in determining the compensation of our NEOs:

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Impact of 2014 “Say-on-Pay” Advisory Vote

At the 2014 Annual Meeting of Stockholders in May 2014, our stockholders approved on an advisory basis a resolution regarding the Company’s executive compensation practices (the “say-on-pay proposal”) by more than 99% of the votes cast. The Compensation Committee and Board of Directors believe that this outcome showed strong stockholder support for the Company’s current executive compensation practices and the decisions taken by the Compensation Committee during 2013. As a result, the Company largely continued these executive compensation practices in 2014. We expect to hold the next vote on the frequency of advisory votes to approve executive compensation at our 2017 annual meeting.

Roles and Responsibilities in Determining Executive Compensation

Role of Compensation Committee

The Compensation Committee determines the compensation of our NEOs, which includes reviewing and approving employment agreements and annual compensation relating to the CEO and certain senior executives, including the NEOs. The Compensation Committee also reviews and approves corporate, segment and individual compensation goals and metrics relevant to such executives, and evaluates performance in light of such goals and objectives. Finally the Compensation Committee exercises oversight over the disclosures regarding executive compensation.

Role of Management

Our CEO, assisted by input from members of our Human Resources, Finance and Legal departments, regularly reviews the Company’s executive compensation practices with the Compensation Committee. Our CEO, with the assistance of the Human Resources department, annually reviews the performance and compensation of the other NEOs and makes recommendations to the Compensation Committee as described in greater detail below. Our Human Resources department staff provides information to the Compensation Committee on peer group practices and on survey data.

Role of Compensation Consultants

The Compensation Committee has selected Compensation Advisory Partners (“CAP”) as its independent executive compensation advisor pursuant to the Compensation Committee charter. CAP works with the members of the Compensation Committee and management to provide strategic guidance to the Compensation Committee regarding executive compensation.

We also have retained the executive compensation firm Exequity LLP (“Exequity”) to provide guidance to our management on executive compensation matters. Specific services provided by Exequity include, but are not limited to, the identification of relevant peer group companies, a review of our executive compensation practices, views of non-employee director compensation, as well as modeling of potential equity pool designs. Exequity additionally conducts and/or validates external benchmarking analyses relative to peer companies selected and approved by management and the Compensation Committee. Exequity does not provide advice to the Compensation Committee regarding the amount or form of executive compensation.

Performance Review Process

We determine base salary levels, annual cash bonuses and equity grants, if any, through an annual review of all employees, including the NEOs, which we use to measure performance over the

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course of the performance year against pre-set financial, operational and individual goals. This process assists us in confirming that each NEO’s compensation is tied to our overall financial and operating performance, the performance of our business segments, individual achievement, the execution of our strategic initiatives and the demonstration of our values.

Our CEO, in consultation with our Human Resources department, conducted the 2014 performance assessment of each of the other NEOs, and shared the relevant compensation recommendations with the Compensation Committee. In connection with Mr. Armstrong’s performance assessment, Mr. Armstrong prepared a written self-assessment, and met with each of the Chairman of the Compensation Committee and the Lead Independent director to discuss his performance. The Board of Directors then conducted an independent performance assessment of Mr. Armstrong in executive session. The Board then discussed their assessment of Mr. Armstrong’s performance with Mr. Armstrong.

Use of Compensation Surveys and Other Comparative Data

In connection with our annual executive compensation planning process, both management and the Compensation Committee review compensation surveys of public and private internet and technology companies and other multinational companies included in the Radford Global Technology Survey (“Radford Survey”). We also use publicly available data relating to our Industry Peer Group as defined below. In the course of applying this information, management and the Compensation Committee reviewed median and 75^th percentile total direct compensation data from both the Radford Survey and the Industry Peer Group and calibrated each NEO’s 2014 target total compensation opportunities such that they were generally positioned between these two benchmarks— and that actual compensation would be closer to 75^th percentile peer benchmarks if the Company, segment and individual performance were strong and actual pay would be below peer median benchmarks when Company, segment and individual performance were not strong.

The Compensation Committee annually reviews the composition of the Industry Peer Group and makes modifications warranted by our continually evolving business. Our Industry Peer Group reflects the companies with which we compete based on the scope of our operations, as measured by revenue. The list of companies included in the Industry Peer Group for which the Compensation Committee reviewed compensation data in 2014 is set forth below. Revenues in 2013 for the 2014 Industry Peer Group ranged from $1.529 billion to $77.849 billion, with median 2013 revenues of approximately $4.511 billion, as compared to the Company’s 2013 revenues of approximately $2.320 billion. In December 2014 we revised our peer group to remove Google Inc. and Microsoft Corporation and we believe these modifications better reflect companies of comparable size.

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Elements of our Executive Compensation Program

The elements of our executive compensation program are set forth in the table below. The annual compensation of our NEOs consists of three principal components: short-term fixed cash compensation, short-term incentive cash compensation and long-term equity-related incentive compensation.

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Our Compensation Policies and Practices

The below table describes the Company’s compensation policies and practices that help to advance the Compensation Committee’s compensation philosophy.

Our current best practices and policies include the following:

We do not allow the following practices:

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2014 COMPENSATION OF OUR NEOs

Base Salary

In setting and reviewing base salaries, we consider the nature and scope of each executive’s responsibilities, the executive’s prior compensation and performance in his or her job, the pay levels of our similarly situated executives and published market data (including both the Radford Survey and the publicly available data for our Industry Peer Group).

In connection with outstanding performance, promotions and new employment agreements, our CEO and Compensation Committee may increase base salary levels during the year to align compensation with comparative peer levels. During 2014, Ms. Jacobs received a 3.8% salary increase as of May 1, 2014 in connection with the entry into a new employment agreement with the Company. This increase recognized Ms. Jacobs’ continued strong performance and her role as an integral member of the executive team and placed Ms. Jacobs’ total target compensation level closer to the median of our Industry Peer Group. The Compensation Committee and Mr. Pence, who joined in April 2014, agreed upon a base salary that was based on an arms’ length negotiation, a review of comparative peer base salary levels from data in our Industry Peer Group and the salary he was receiving at the time of hire. Mr. Pence’s base salary was positioned between the median and 75^th percentile of our Industry Peer Group.

Short-Term Incentive Compensation – Performance-Based Cash Awards

We provide annual performance-based cash awards to our NEOs under our Executive AIP and the ABP. Only certain of our NEOs participate in the Executive AIP, which is intended to allow our annual bonuses to those NEOs to be designated in a manner intended to qualify as performance-based compensation under Code Section 162(m). For 2014, Mr. Armstrong, Ms. Jacobs and Mr. Lord participated in the Executive AIP.

Once the sole performance measure under the Executive AIP in 2014 is met (i.e., the achievement of a threshold level of positive “Adjusted Net Income”), a participating NEO’s cash bonus is then determined based on the guidelines and criteria of the ABP, subject to a cap that is equal to the lesser of 4.0% of our “Adjusted Net Income” or $4 million. “Adjusted Net Income” for this purpose is defined as income from continuing operations as defined under U.S. GAAP, excluding special items and transactions not indicative of our core operating performance. We had Adjusted Net Income for purposes of the Executive AIP of approximately $144.8 million in 2014.

Target Incentive Levels

Payouts under the ABP are based on the level of achievement against annual performance goals based on a target incentive level. Payouts may not exceed 200% of a participant’s target incentive level. The table below shows the target incentive level for each of our NEOs as of December 31, 2014.

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These targets were established to position target total cash opportunities for our NEOs in-between the median and 75th percentile benchmarks relative to our Industry Peer Group and the Radford Global Technology Survey and promote the Company’s emphasis on pay-for-performance.

Annual Bonus Plan (ABP)

The ABP is critical for rewarding outstanding Company performance, individual performance and behaviors that contribute to the achievement of corporate financial and strategic objectives. Our NEOs’ performance criteria are based on individual performance, overall Company financial metrics, and in the case of Mr. Lord, who leads a business segment, segment criteria. Pursuant to the terms of the ABP, the Compensation Committee retains discretion to increase or reduce cash incentive payments under the ABP. The following charts reflect the performance components assessed in determining our NEOs’ cash incentive payment under the ABP and the relative weighting (expressed as a percentage of the executive’s target incentive).

The Compensation Committee chose the 70% Company performance versus 30% individual performance weighting for the CEO and Corporate EVPs because it emphasizes the importance of the Company’s overall financial performance for executives with a Company-wide responsibility and reinforces individual accountability for the achievement of an executive’s goals for the year. The Compensation Committee chose the 20% Company performance versus 50% business segment and 30% individual performance weighting for Mr. Lord because it believes that emphasizing business segment performance is critical in driving operational focus and business segment accountability.

2014 ABP Performance Metrics and Payouts

Company Performance Component

With respect to the Company performance component (“Company Performance Component”) under the ABP for 2014, the Compensation Committee selected the financial metrics listed below to assess performance.¹

Adjusted OIBDA — the Company’s operating income before depreciation and amortization excluding the impact of restructuring costs, non-cash equity-based compensation, gains and losses on all disposals of assets, non-cash asset impairments and write-offs and special items.

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Free Cash Flow — cash provided by continuing operations, less capital expenditures, product development costs and principal payments on capital leases.

Revenue Net of TAC — the Company’s revenue for fiscal year 2014, minus traffic acquisition costs for the same period, as reported in the Company’s trending schedules for the period ending December 31, 2014.

Adjusted Earnings Per Share (EPS) — net income attributable to the Company excluding the impact of restructuring costs, gains and losses on all disposals of assets, non-cash asset impairments and write-offs and special items (e.g., interest expense on a revolving credit facility) divided by diluted weighted average common shares outstanding normalized for the impact of any stock splits, reverse stock splits or other such transactions executed by the Company that materially change the number of shares outstanding. Income tax expense for purposes of Adjusted EPS under the ABP is calculated based on an assumed Company’s marginal tax rate.

At the beginning of the 2014 ABP plan year, our CEO and CFAO proposed the annual goals to the Compensation Committee—both Company financial metrics and relative weightings and, with respect to executive officers (and other senior management), individual performance goals—which were then reviewed by the Compensation Committee. Upon the recommendation of our CEO and CFAO, the Compensation Committee approved funding levels and targets for each of the metrics that correlated to the Company’s strategic and operating plan. In general, each of the four metrics operates independently.

As set forth in the table below, the Company achieved 115% performance against the Company Performance Component under the ABP for each of the NEOs.

Though the Company achieved 115% against the Company Performance Component in 2014, the Compensation Committee, after discussions with our CEO and CFAO, exercised its discretion to reduce the payouts to reflect a funding level of 105% achievement against the Company Component.

The Compensation Committee reduced the payouts for the following reasons:

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Segment Performance Component

For Mr. Lord, 50% of his ABP award was based on the performance of the Platforms segment measured against previously approved financial and operational criteria for his business segment. For Mr. Lord the criteria included Platforms Revenue, Platforms Revenue Net of TAC and Platforms Adjusted OIBDA. Mr. Lord achieved 89% against his targets with respect to the Platforms segment component of the ABP; however, the Compensation Committee funded Mr. Lord’s Segment Performance Component at 85%. The reduced payout for the Segment Performance Component reflects the Compensation Committee’s overall assessment of the financial and operational performance of Mr. Lord’s business segment, including the development and launch of new products.

Individual Performance Component

The individual performance metrics of the ABP are based on the NEO’s individual performance rating in his or her annual review. Below are the individual achievements the Compensation Committee considered for each NEO for 2014 in evaluating individual performance for purposes of the ABP.

Tim Armstrong

Karen Dykstra

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Julie Jacobs

Robert Lord

William Pence

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The Compensation Committee awarded the following incentive bonus amounts to NEOs for 2014:

Sign–On Cash Payments

In connection with entering into an employment agreement with Mr. Pence effective as of April 3, 2014, the Compensation Committee approved a sign-on cash payment award in the amount of $500,000. If Mr. Pence resigns without good reason or is terminated for cause within the first year of his employment, Mr. Pence is required to repay the entire after-tax amount of the sign-on cash payment. If Mr. Pence resigns without good reason or is terminated for cause during the second year of his employment, Mr. Pence is required to repay 50% of the after-tax amount of the sign-on bonus. The sign-on cash payment was intended to compensate Mr. Pence for the annual cash bonus and equity that he forfeited as a result of leaving his prior job during 2014.

Long-Term Incentive Compensation

When determining the amounts for all of the 2014 equity awards to NEOs, the Compensation Committee reviewed peer data and set the total grant date fair values of equity awards for NEOs such that the total compensation opportunities for our NEOs were between the median and 75^th percentile benchmarks relative to data for our Industry Peer Group and the Radford Survey. The Compensation Committee also considered the contributions made by each NEO during the year, their prospects for successful contributions going forward, and the amounts of awards previously granted. The Compensation Committee does not consider the amount of outstanding stock options and other stock awards, including restricted stock units and performance stock units, currently held by an NEO when making annual awards because such awards represent compensation attributable to prior years. Finally, the Company does not coordinate equity grants around the release of favorable or unfavorable Company information and does not backdate stock options or grant options retroactively. In considering equity awards for our executives, the Compensation Committee focuses on ensuring that a significant portion of our NEOs’ equity awards are at risk and are tied to specific performance criteria. See “Agreements with Named Executive Officers — Narrative to the 2014 Summary Compensation Table and the Grants of Plan-Based Awards in 2014 Table” beginning on page 53 of this Proxy Statement.

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Equity Awards Granted in 2014

Stock Options

Time-Based Stock Options

During 2014, in connection with the annual equity grants, which are based on performance and benchmarking, Mr. Armstrong received 67,011 stock options, Ms. Dykstra received 26,304 stock options, Ms. Jacobs received 21,043 stock options and Mr. Lord received 16,835 stock options. Additionally, Ms. Jacobs received 31,904 stock options in connection with entering into a new employment agreement in May 2014 and Mr. Pence received 44,665 stock options in connection with entering into an employment agreement upon joining the Company in April 2014.

Time-based stock options granted to Mr. Armstrong during 2014 in connection with our annual performance review vest over a four-year period. Time-based stock options granted to our other NEOs during 2014 in connection with our annual performance review and in connection with entering into employment agreements, vest over a three-year period, which is closely aligned with the vesting practices of our peers. In accordance with the SIP, the exercise price of the options that were awarded is the closing price of our common stock on the date of grant. Time-based stock options granted to our NEOs include termination provisions that the Compensation Committee believes will encourage option holders to remain employed with us on a long-term basis. For further details on the equity grants, including target award levels, made to the NEOs in 2014, see the “Grants of Plan-Based Awards in 2014” table below and the description of these awards under the “Potential Payments Upon a Termination of Employment or Change in Control for 2014” beginning on page 62 of this Proxy Statement.

Performance-Based Stock Options

The Company did not award Performance-based stock options in 2014. However, in 2014, our CEO earned the second half of the performance-based stock option granted to him in 2012. Under the terms of the award, the remaining 50% of the award vested on June 15, 2014 (the second anniversary of its grant date) since the performance goals were achieved prior to this date. Specifically our CEO remained employed through June 15, 2014 and our stock price exceeded $35.23 for twenty consecutive days, which was 30% above the average closing price of our common stock for the 20 days prior to the grant date in 2012.

Restricted Stock Units Granted In 2014

We also award restricted stock units, known as RSUs, representing the full value shares of our common stock at the time of grant. During 2014, in connection with the annual equity grants, which are based on performance and benchmarking, Ms. Dykstra received 9,336 RSUs, Ms. Jacobs received 7,468 RSUs and Mr. Lord received 5,975 RSUs. Additionally, Ms. Jacobs received 11,484 RSUs in connection with entering into a new employment agreement in May 2014 and Mr. Pence received 16,078 RSUs in connection with entering into an employment agreement upon joining the Company in April 2014. RSUs granted to our NEOs in 2014 vest over a three-year period, which is aligned with vesting practices of our peers.

Performance Stock Units

The Compensation Committee also awards the following types of equity awards: (i) performance units with vesting based on the Company’s total shareholder return as compared to the total shareholder return of companies in the Morgan Stanley High Technology Index measured over a three-year period of time (“TSR PSUs”), (ii) performance units with vesting based on revenue goals that align with the Company’s revenue goals measured over a three-year period of time (“Rev PSUs”) and (iii) performance units with vesting based on segment performance goals (“SPSUs”).

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TSR PSUs Granted In 2014

During 2014, in connection with the annual equity grants, which are based on performance and benchmarking, Mr. Armstrong received 26,140 TSR PSUs, Ms. Dykstra received 9,336 TSR PSUs, Ms. Jacobs received 7,468 TSR PSUs and Mr. Lord received 5,975 TSR PSUs. Additionally, Ms. Jacobs received 11,484 TSR PSUs in connection with entering into a new employment agreement in May 2014 and Mr. Pence received 16,078 TSR PSUs in connection with entering into an employment agreement upon joining the Company in April 2014.

NEOs who received TSR PSU awards in 2014 were granted a target number of shares under each TSR PSU award. The value of each NEO’s target award was set based on reference to competitive market values and internal equity considerations as further described under the section “Use of Compensation Surveys and Other Comparative Data” above. Subject to the NEO’s continuous employment through the vesting date, actual TSR PSUs earned could be anywhere from 0 to 200% of the target number of shares. The TSR PSUs have a three-year performance period. At the end of the performance period, awards are earned based on the Company’s relative TSR compared to the companies in the Morgan Stanley High Technology Index as further explained below. The Compensation Committee determined that the Morgan Stanley High Technology Index continued to be an appropriate relative benchmark in 2014 since it includes several of the companies against which the Company typically evaluates its stock price performance. In addition, the Compensation Committee believes that TSR relative to a high technology peer index is an appropriate performance metric for this component of the long-term incentive program because it rewards executives for the achievement of one of the Company’s key strategic operating long-term performance measures—return to our stockholders relative to returns for comparable alternate investments. Additionally, the Compensation Committee believes that the performance range shown below results in payouts that are commensurate with demonstrated performance, including a significant reduction in the actual payouts relative to target payouts (including the risk of a zero payout) if the Company’s TSR is below the median peer standard, and potential increases in payouts relative to target payouts if Company’s TSR exceeds the median peer standard. The Compensation Committee determined that the TSR PSUs would serve as an effective performance-based balance to the time-vested RSUs and time-vested stock options that make up the remainder of the NEOs’ (other than the CEO) long-term incentive portfolios.

The three-year performance period for the TSR PSUs granted in 2014 will end on December 31, 2016, and between zero and 200% of the target TSR PSU’s will be earned and will vest based on the following payout scale:

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In order to determine the number of TSR PSUs earned at the end of the three-year performance period, we will calculate the Company’s TSR and compare it to the TSR of companies in the Morgan Stanley High Technology Index. For purposes of the calculation, “TSR” is equal to the appreciation in the stock price of a company from the beginning of the performance period to the end of the performance period, plus dividends deemed reinvested in company stock on a cumulative basis. The effect of taxes resulting from the payment of dividends or the deemed sale or exchange of underlying shares are not to be taken into consideration. The stock prices at the beginning and end of the performance period will be determined using the trailing average stock price over the 30 days prior to the beginning and end of the performance period, as applicable.

TSR PSUs Earned In 2014

Based on total share return performance during the performance period for the TSR PSUs granted to Mr. Armstrong and Ms. Dykstra in 2012, the Compensation Committee determined that the performance requirements under the TSR PSU were met at 200% of target, and Mr. Armstrong earned 76,952 shares equal to 200% of target and Ms. Dykstra earned 32,974 shares equal to 200% of target. Our relative TSR ranked second against the TSR of the companies in our peer index during the three-year performance period.

Revenue PSUs Granted In 2014

During 2014, in connection with his annual performance review, Mr. Armstrong received an award of 26,140 Revenue PSUs (“Rev PSUs”). These awards are earned based solely on achievement of two equally weighted performance goals related to the Company’s revenue, as more fully set forth in the tables below. The Compensation Committee chose these two revenue-related goals based on the larger strategic and financial goals of the Company. The Compensation Committee recognized that growing advertising revenue in the long-term was imperative to the success of the Company while requiring a balance against the ongoing revenue maintenance goals. As with the TSR PSUs, Mr. Armstrong was granted a target level of Rev PSUs that may be earned following the end of a three-year performance measurement period. The Rev PSUs may be earned based on the following payout scale following the end of the three-year performance measurement period. The minimum performance thresholds for both goals must be achieved in order for any Rev PSUs to be earned.

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Revenue PSUs Forfeited During 2014

Based on the revenue performance during the three-year performance period, the Compensation Committee determined that the performance requirements were not met for the Revenue PSUs granted to Mr. Armstrong in 2012 and, thus, Mr. Armstrong forfeited these Rev PSUs. The number of actual performance shares earned pursuant to the Rev PSU could have been anywhere from 0 to 200% of the target amount of shares based on achievement of revenue goals that align with the Company’s revenue goals over the period beginning January 1, 2012 and ending December 31, 2014, and subject to the Compensation Committee’s certification of performance and Mr. Armstrong’s continuous employment through the vesting date. In order for any Rev PSUs to have been earned, the minimum performance thresholds for both goals had to be achieved. This meant that advertising revenues net of TAC as a percentage of total cumulative consolidated AOL revenue during the performance period had to meet a threshold level of 60% and the 2014 total consolidated Company revenue as a percentage of the 2011 total consolidated Company revenue had to meet a threshold level of 100%.

SPSUs

During 2014, the Compensation Committee awarded 11,203 SPSUs to Mr. Lord. Subject to Mr. Lord’s continuous employment through the vesting date, actual SPSUs earned could have been from 0 to 300% of the target number of shares and could have been settled in shares or cash. In order for Mr. Lord’s SPSUs to have been earned for the 2014 performance period, the following minimum performance requirements had to be achieved: (i) the Company had to achieve positive Adjusted Net Income for 2014 and (ii) the business segment that Mr. Lord leads had to achieve at least 100% of its performance targets under the ABP. Although the Company achieved positive Adjusted Net Income in 2014, since Mr. Lord’s Segment Performance Component under the ABP was not funded at 100%, he did not earn any shares under the SPSU award.

The target awards were set with reference to competitive market values and internal equity considerations as further described under the section “Use of Compensation Surveys and Other Comparative Data” above. In general, if SPSUs are earned, half vest following the Compensation Committee’s certification of performance on the date the Compensation Committee determines performance and the remainder vest on the first anniversary of such date, provided the executive remains employed with the Company.

OTHER COMPENSATION POLICIES AND PRACTICES

Termination Payments and Benefits

All of our NEOs are parties to employment agreements with the Company that provide for termination payments and benefits in the event of an involuntary termination of employment without “cause” or resignation for “good reason” (each as defined in the employment agreements with our NEOs) or due to the NEO’s death or disability. The severance payment amounts and other post-termination provisions of the employment agreements generally reflect the Company’s negotiations with each NEO, our belief that the terms are appropriate under the circumstances based on the significance of the executive officer’s position with us, our ability to attract and retain talent as a result of executive management changes and the amount of time it would take the executive to locate another position. None of our NEOs is entitled to receive a gross-up payment for any payments following a change in control that may constitute “parachute payments,” as defined in Section 280G or 4999 of the Code.

We believe that the provisions in the employment agreements with our NEOs governing termination and severance arrangements in various circumstances are consistent with our

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compensation objectives to attract, motivate and retain highly talented executive officers in a competitive environment and are generally consistent with arrangements being offered by other companies in the technology industry to similarly situated executives.

We have not generally considered an NEO’s right to receive payments and benefits upon an involuntary termination of employment as a factor in annual compensation decisions. We do not view post-termination benefits as a factor in overall compensation setting due to the fact that a termination without cause or another triggering event may never occur during the applicable NEO’s term of employment. For a discussion of the termination and severance packages for our NEOs, see “Potential Payments Upon a Termination of Employment or Change in Control for 2014” beginning on page 62 of this Proxy Statement.

Retirement and Benefit Programs

The Company maintains the AOL Savings Plan, a defined contribution 401(k) retirement plan in which the U.S.-based employees of the Company and its affiliates are generally eligible to participate. The Company does not maintain a non-qualified deferred compensation plan for its employees or a defined benefit pension plan. Our NEOs also are eligible to participate in health and welfare programs that are generally available to all our employees in the United States.

Perquisites and Personal Benefits

Except as reflected in the “All Other Compensation” column in the 2014 Summary Compensation Table, we do not generally provide perquisites or personal benefits to our NEOs that are not available to all of our employees.

Code Section 162(m) Considerations

Code Section 162(m) generally limits our ability to deduct compensation over $1 million to certain of our executives unless the compensation qualifies as “performance-based compensation,” as defined in Code Section 162(m). In structuring the compensation programs that apply to those executives, we considered the requirements and consequences of Code Section 162(m). In this regard, we adopted the Executive AIP, which is intended to provide for the payment of performance-based annual cash bonuses to certain of our executives. Although we have taken into account the potential application of Code Section 162(m) on incentive compensation awards and other compensation decisions, we may approve, in our sole discretion, compensation in excess of $1 million for certain of our executives that does not qualify as “performance-based compensation” for purposes of Code Section 162(m) in order to maintain flexibility to provide competitive levels of compensation for our executive officers.

Clawback Policy

The Company has adopted an Executive Compensation Recovery Policy pursuant to which, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the United States securities laws as a result of the intentional misconduct by an officer of the Company having a title of Executive Vice President or higher, the Board (or a committee thereof) may require such officer to reimburse the Company for any bonus or other incentive-based or equity-based compensation, and any profits realized from the sale of the Company’s securities, that was paid to such officer during the 12-month period following the first public issuance or filing with the SEC of the financial document of the Company in which the material noncompliance was contained. The independent directors of the Company will determine whether material noncompliance with a financial reporting requirement is the result of intentional misconduct of the officer.

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Executive Stock Ownership Policy

We maintain stock ownership guidelines for our senior executives. These guidelines specify the following, as may be applicable to our NEOs:

Each executive officer has five years from the date they become subject to the guidelines to meet the applicable threshold. For this purpose, ownership of Company common stock includes only shares that the executive owns outright and unvested RSUs. Executives are required to hold Company shares (including vested RSUs) until guidelines are met. Thereafter, Company shares may be disposed of as long as remaining ownership equals or exceeds thresholds.

As of April 2, 2015, each of the NEOs had met or was on track to meet the ownership requirements within the required timeline.

Restrictions on Hedging and Pledging Arrangements for Named Executive Officers

Under our Insider Trading Policy our employees, directors and officers, including our NEOs, bear the economic risk as well as the benefits of owning Company common stock. In this regard, no director, employee, or officer, including NEOs, may (i) enter into options, warrants, puts and calls or similar instruments with respect to the Company’s securities, (ii) enter into hedging arrangements (other than those pre-approved by the Company as a result of a merger or other acquisition transaction), or (iii) sell such securities “short”. Additionally, our employees, directors and officers, including our NEOs, may not pledge Company common stock as collateral for a loan, without first obtaining pre-clearance from our General Counsel.

Compensation Committee Report

The Compensation Committee has discussed and reviewed the foregoing Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC.

Submitted by the Compensation Committee of the Company’s Board of Directors:

James Stengel (Chair)

Richard Dalzell

Compensation Committee Interlocks and Insider Participation

None of the directors who served on the Compensation Committee in 2014 was during 2014 or previously an officer or employee of the Company or of any of its subsidiaries, and none of the directors who served on the Compensation Committee in 2014 is, or since the beginning of 2014 was, a participant in a related person transaction that requires disclosure under SEC rules. During 2014, none of the Company’s executive officers served on the board of directors, the compensation committee or any similar committee of another entity (not including entities exempt from tax under Section 501(c)(3) of the Code) that has one or more of its executive officers serving on our Board or Compensation Committee.

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Tabular Executive Compensation Disclosure

2014 SUMMARY COMPENSATION TABLE

The following table presents information concerning total compensation paid to each of the NEOs for his or her service to us for the fiscal years ended December 31, 2014, December 31, 2013 and December 31, 2012, to the extent he or she was a NEO during such year or such information has been previously included in the Company’s filings with the SEC. For additional information regarding salary, incentive compensation and other components of the NEOs’ total compensation, see “Compensation Discussion and Analysis” on page 32 of this Proxy Statement.

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GRANTS OF PLAN-BASED AWARDS IN 2014

The following table presents information with respect to each award of plan-based compensation to each NEO in 2014. The material terms of our annual and long-term incentive programs are described in the Compensation Discussion and Analysis beginning on page 32 of this Proxy Statement. There can be no assurance that the Grant Date Fair Value of stock and option awards will ever be realized.

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NARRATIVE TO THE 2014 SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-

BASED AWARDS IN 2014 TABLE

The grants of options to purchase Company common stock and the awards of RSUs and PSUs (including SPSUs) were made under the AOL Inc. 2010 Stock Incentive Plan. Unless otherwise provided in his or her employment agreement, the options were granted and RSUs and PSUs were awarded to the NEOs on the following terms and conditions:

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Agreements with Named Executive Officers

Consistent with our goal of attracting and retaining executives in a competitive environment, we have entered into employment agreements with each of our NEOs. The employment agreements with the NEOs and the total grant date fair value for the equity grants made to NEOs in 2014 are described below.

Agreements with Mr. Armstrong

General. On March 29, 2012, the Company negotiated and the Compensation Committee approved, in consultation with CAP, an employment agreement with Mr. Armstrong, effective as of March 29, 2012 (the “Armstrong Agreement”). The Armstrong Agreement provides for Mr. Armstrong to serve as the Company’s CEO through March 28, 2016. If, at the end of the term, Mr. Armstrong’s employment has not been terminated previously and Mr. Armstrong and the Company have not agreed to an extension or renewal of the Agreement or to the terms of a new employment agreement, Mr. Armstrong’s employment term shall continue on a month-to-month basis subject to termination by either party on 30 days’ written notice. The Armstrong Agreement provides for a base salary of $1,000,000 and target annual bonus opportunity equal to 200% of base salary, earned in accordance with the Executive AIP, and not guaranteed. For a further discussion of the terms of the 2012 Armstrong Agreement, see page 66 of this Proxy Statement.

In connection with the annual 2014 Company equity grant and based on performance and benchmarking, on January 21, 2014, the Compensation Committee approved an equity award to Mr. Armstrong valued at $3,500,000 with one-third in each of stock options, Rev PSUs and TSR PSUs (67,011 stock options, target 26,140 Rev PSUs and target 26,140 TSR PSUs) each granted on February 14, 2014. Mr. Armstrong received the 2014 equity grant in February at the same time other executives received their annual 2014 equity grants. The shares subject to the option vest over a four-year period with one-fourth having vested on February 14, 2015 and the remainder thereafter vesting in equal monthly installments for the remaining 36 months. The per share exercise price for the option award is the closing price of the common stock on the grant date. Performance shares earned pursuant to the TSR PSUs could be anywhere from 0 to 200% of the target amount of shares based on the relative TSR of the Company as compared to the TSR of each of the companies in the Company’s peer index over the period beginning January 1, 2014 and ending December 31, 2016, and subject to the Compensation Committee’s certification of performance and Mr. Armstrong’s continuous employment through the vesting date. The number of actual performance shares earned pursuant to the Rev PSU could be anywhere from 0 to 200% of the target amount of shares based on achievement of revenue goals that align with the Company’s revenue goals over the period beginning January 1, 2014 and ending December 31, 2016, and subject to the Compensation Committee’s certification of performance and Mr. Armstrong’s continuous employment through the vesting date. In approving the 2014 equity awards to Mr. Armstrong, the Compensation Committee reviewed peer group and salary survey data and consulted with its independent compensation consultant. The actual number of shares subject to each type of award was determined in a manner as described in the equity descriptions above.

Agreements with Ms. Dykstra

Ms. Dykstra’s employment relationship is governed by an employment agreement with the Company entered into on September 19, 2012 and amended on November 7, 2013. Ms. Dykstra’s employment term is from September 19, 2012 to September 18, 2016, and then continues on a month-to-month basis until either party provides the other party with 30 days’ written notice of termination. The initial term of employment for Ms. Dykstra was set at four years to reflect our standard practice. The Compensation Committee consulted with CAP to approve the total target compensation for Ms. Dykstra.

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Ms. Dykstra’s base salary is $750,000 and her annual target bonus opportunity is 125% of her base salary. Ms. Dykstra’s agreement provides that to the extent a newly hired officer of the Company holding the title of Executive Vice President of the company receives equity with more favorable vesting terms than Ms. Dykstra’s initial equity grant terms, or a current executive officer receives new equity with more favorable vesting terms than Ms. Dykstra’s initial equity grant terms, then Ms. Dykstra’s initial equity grants shall be amended to provide the same such vesting terms, unless in the case of the newly hired executive, the differing equity terms are in order to compensate for equity incentives from a previous employer that will be forfeited. The Agreement otherwise substantially conforms to the material terms established by the Company with respect to all of its executive officers. On September 18, 2012, the Compensation Committee approved the material terms of the proposed compensation and the terms of the Dykstra Agreement.

In connection with the annual 2014 Company equity grant and based on performance and benchmarking, on January 21, 2014, the Compensation Committee approved an equity award to Ms. Dykstra valued at $1,250,000 with one-third in each of stock options, RSUs and TSR PSUs (26,304 stock options, 9,336 RSUs and target 9,336 TSR PSUs), each granted on February 14, 2014. The actual number of shares subject to each type of award was determined in a manner as described in the equity descriptions above. The shares subject to the option vest over a three-year period with one-third having vested on February 14, 2015 and the remainder thereafter vesting in equal monthly installments for the remaining 24 months. The per share exercise price for the option award is the closing price of the common stock on the grant date. The RSUs vest over three years with one-third having vested on February 14, 2015, and the remaining two-thirds vesting in two equal installments on February 14, 2016 and February 14, 2017. Performance shares earned pursuant to the TSR PSUs could be anywhere from 0 to 200% of the target amount of shares based on the relative TSR of the Company as compared to the TSR of each of the companies in the Company’s peer index over the period beginning January 1, 2014 and ending December 31, 2016, and subject to the Compensation Committee’s certification of performance and Ms. Dykstra’s continuous employment through the vesting date.

Agreements with Ms. Jacobs

On May 6, 2014, the Company entered into a new employment agreement (the “Jacobs Agreement”) with Ms. Jacobs in connection with her continued service in the role of Executive Vice President, General Counsel and Corporate Secretary of the Company dated as of May 1, 2014. Ms. Jacobs’ employment term is from May 1, 2014 to April 30, 2018, and then continues on a month-to-month basis until either party provides the other party with 30 days’ written notice of termination. The term for Ms. Jacobs was set at four years to reflect our standard practice. Pursuant to the terms of the Jacobs Agreement, Ms. Jacobs’ base salary was increased from $650,000 to $675,000 and her annual target bonus opportunity remained at 100% of base salary.

In connection with the Jacobs Agreement, the Compensation Committee approved an equity award to Ms. Jacobs that was granted on the next regularly scheduled grant date, valued at $1,250,000 with one-third in each of stock options, RSUs and TSR PSUs (31,904 stock options, 11,484 RSUs and target 11,484 TSR PSUs), each granted on May 30, 2014. The actual number of shares subject to each type of award was determined in a manner as described in the equity descriptions above. The shares subject to the option vest over a three-year period with one-third vesting on May 1, 2015 and the remainder thereafter vesting in equal monthly installments for the remaining 24 months. The per share exercise price for the option award is the closing price of the common stock on the grant date. The RSUs vest over three years with one-third vesting on May 1 2015, and the remaining two-thirds vesting in two equal installments on May 1, 2016 and May 1, 2017. Performance shares earned pursuant to the TSR PSUs could be anywhere from 0 to 200% of the target amount of shares based on the relative TSR of the Company as compared to the TSR of each of the companies in the Company’s peer index over the period beginning January 1, 2014 and ending

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December 31, 2016, and subject to the Compensation Committee’s certification of performance and Ms. Jacobs’ continuous employment through the vesting date. In approving the Jacobs Agreement, and the related equity awards, the Compensation Committee reviewed peer group and salary survey data and consulted with its independent compensation consultant.

In connection with the annual 2014 Company equity grant and based on performance and benchmarking, on January 21, 2014, the Compensation Committee approved an equity award to Ms. Jacobs valued at $1,000,000 with one-third in each of stock options, RSUs and TSR PSUs (21,043 stock options, 7,468 RSUs and target 7,468 TSR PSUs), each granted on February 14, 2014. The actual number of shares subject to each type of award was determined in a manner as described in the equity descriptions above. The shares subject to the option vest over a three-year period with one-third having vested on February 14, 2015 and the remainder thereafter vesting in equal monthly installments for the remaining 24 months. The per share exercise price for the option award is the closing price of the common stock on the grant date. The RSUs vest over three years with one-third having vested on February 14, 2015, and the remaining two-thirds vesting in two equal installments on February 14, 2016 and February 14, 2017. Performance shares earned pursuant to the TSR PSUs could be anywhere from 0 to 200% of the target amount of shares based on the relative TSR of the Company as compared to the TSR of each of the companies in the Company’s peer index over the period beginning January 1, 2014 and ending December 31, 2016, and subject to the Compensation Committee’s certification of performance and Ms. Jacobs’ continuous employment through the vesting date.

Agreements with Mr. Lord

The Company and Mr. Lord are parties to an employment agreement dated July 18, 2013 (the “Lord Agreement”). Mr. Lord’s employment term is from August 1, 2013 to July 31, 2017, and then continues on a month-to-month basis until either party provides the other party with 30 days’ written notice of termination. The initial term for Mr. Lord was set at four years to reflect our standard practice. The Lord Agreement provides for an annual base salary of $750,000 and a target annual bonus opportunity of 100% of base salary. The Lord Agreement substantially conforms to the material terms established by the Company with respect to its executive officers. On June 28, 2013, the Compensation Committee approved the material terms of the proposed compensation and the terms of the Lord Agreement.

In connection with the annual 2014 Company equity grant and based on performance and benchmarking, on January 21, 2014 the Compensation Committee approved an equity award to Mr. Lord valued at $800,000 with one-third in each of stock options, RSUs and TSR PSUs (16,835 stock options, 5,975 RSUs and target 5,975 TSR PSUs), each granted on February 14, 2014. The actual number of shares subject to each type of award was determined in a manner as described in the equity descriptions above. The shares subject to the option vest over a three-year period with one-third having vested on February 14, 2015 and the remainder thereafter vesting in equal monthly installments for the remaining 24 months. The per share exercise price for the option award is the closing price of the common stock on the grant date. The RSUs vest over three years with one-third having vested on February 14, 2015, and the remaining two-thirds vesting in two equal installments on February 14, 2016 and February 14, 2017. Performance shares earned pursuant to the TSR PSUs could be anywhere from 0 to 200% of the target amount of shares based on the relative TSR of the Company as compared to the TSR of each of the companies in the Company’s peer index over the period beginning January 1, 2014 and ending December 31, 2016, and subject to the Compensation Committee’s certification of performance and Mr. Lord’s continuous employment through the vesting date.

Additionally, on March 27, 2014 the Compensation Committee approved an allocation of SPSUs to Mr. Lord with a target value of $500,000 (11,203 SPSUs based on the Company’s stock price on the allocation date). Actual performance shares earned pursuant to the SPSU could be anywhere from 0 to 300% of the target number of SPSUs awarded based on the achievement of threshold performance

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requirements over the period beginning January 1, 2014 and ending December 31, 2014, and subject to the Compensation Committee’s certification of performance (such date of certification, the “Determination Date”). SPSUs may be settled in shares or cash at the Compensation Committee’s discretion. The amount of SPSUs earned, if any, vest in two equal installments following the Determination Date and on the first anniversary of such vesting date, subject to Mr. Lord’s continued employment through the applicable vesting date. Since threshold performance requirements with respect to Mr. Lord’s 2014 SPSU award were not met, Mr. Lord did not earn any shares under the SPSU award.

In connection with the expansion of Mr. Lord’s role to President, AOL Inc. on January 28, 2015, the Compensation Committee approved a first amendment to Mr. Lord’s employment agreement. Pursuant to this amendment, dated February 9, 2015, Mr. Lord’s base salary was increased from $750,000 to $800,000 and his annual target bonus opportunity was increased from 100% to 125% of his base salary. In approving the amendments to the Lord Employment Agreement the Compensation Committee reviewed peer group and salary survey data and consulted with its independent compensation consultant.

Agreements with Mr. Pence

On April 3, 2014, the Company entered into an employment agreement (the “Pence Agreement”) with Mr. Pence when he commenced employment as Executive Vice President and Chief Technology Officer effective April 30, 2014.

Mr. Pence’s employment term is from April 30, 2014 to April 29, 2018, and then continues on a month-to-month basis until either party provides the other party with 30 days’ written notice of termination. The initial term for Mr. Pence was set at four years to reflect our standard practice. The Pence Agreement provides for an annual base salary of $600,000 and a target annual bonus opportunity of 100% of base salary. As a hiring incentive, the Compensation Committee approved a cash sign-on payment equal to $500,000. If Mr. Pence resigns without good reason or is terminated for cause within the first year of his employment, Mr. Pence is required to repay the entire after-tax amount of the sign-on bonus. If Mr. Pence resigns without good reason or is terminated for cause during the second year of his employment, Mr. Pence is required to repay 50% of the after-tax amount of the sign-on bonus. The Pence Agreement substantially conforms to the material terms established by the Company with respect to its executive officers.

On March 21, 2014, the Compensation Committee approved the material terms of the proposed compensation and the terms of the Pence Agreement. In connection with entering into the Pence Agreement, the Compensation Committee approved an equity award valued at $1,750,000, with one-third in each of stock options, RSUs and TSR PSUs (44,665 stock options, 16,078 RSUs and target 16,078 TSR PSUs), each granted on May 30, 2014. The actual number of shares subject to each type of award was determined in a manner as described in the equity descriptions above. The shares subject to the option vest over a three-year period with one-third vesting on May 30, 2015 and the remainder thereafter vesting in equal monthly installments for the remaining 24 months. The per share exercise price for the option award is the closing price of the common stock on the grant date. The RSUs vest over three years with one-third vesting on May 30, 2015, and the remaining two-thirds vesting in two equal installments on May 30, 2016 and May 30, 2017. Performance shares earned pursuant to the TSR PSUs could be anywhere from 0 to 200% of the target amount of shares based on the relative TSR of the Company as compared to the TSR of each of the companies in the Company’s peer index over the period beginning January 1, 2014 and ending December 31, 2016, and subject to the Compensation Committee’s certification of performance and Mr. Pence’s continuous employment through the vesting date. In approving Mr. Pence’s agreement and the awards, the Compensation Committee reviewed peer group and salary survey data and consulted with its independent compensation consultant.

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OUTSTANDING EQUITY AWARDS AT 2014 FISCAL YEAR-END

The market or payout value of shares, units or other rights was calculated using the NYSE closing price of $46.17 per share of our common stock on December 31, 2014.