Page 53 - Martin Marietta - 2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS / DETERMINATION OF CEO COMPENSATION

Determination of CEO Compensation
At each February Committee meeting, without the CEO present, the Committee reviews and evaluates CEO performance,
and determines achievement levels for the prior year. At this meeting, the Committee also discusses an evaluation of the
CEO’s performance, competitive compensation data, and salary and annual incentive pay recommendations with the
independent members of the Board. In addition, the Committee reviews and discusses an award of RSUs and the target
PSU grant size for the CEO at that meeting, which is also discussed with the independent members of the Board. The
Committee’s independent compensation consultant provides the Committee with comparative compensation, background
materials and analysis, and its recommendation in connection with these determinations.

CEO Target Opportunity Mix*
Elements of Fixed vs. Short-Term vs. Cash vs.
Compensation Variable Long-Term Equity

• Base Salary 13% • Fixed 13% • Short-Term 38% • Cash 25%
• Annual Incentive 25% • Variable 87% • Long-Term 62% • Equity 75%
• Long-Term Incentive 62%

* We consider base salary and annual incentives as short-term pay and PSUs and RSUs as long-term pay. We do not include retirement or other
compensation components in the chart.
2020 Chairman, President and CEO Compensation

Base Salary Perquisites
For 2020, Mr. Nye’s base salary was set at $1,225,000 Mr. Nye received limited executive perquisites. We provide
(effective March 1, 2020). company-leased cars to the NEOs for their use.
Additionally, we pay for the insurance, maintenance and
2020 Annual Incentive fuel for such vehicles. The value of personal mileage is
Mr. Nye’s target annual incentive amount for 2020 was charged to the NEO as imputed income. We make the
$1,697,500 (140% of salary received for the year). His company-owned aircraft available to the CEO and other
actual annual incentive for 2020 was $3,300,000, or senior executives for business travel only. We do not
194% of target. provide other perquisites, such as country club
memberships, to the NEOs. The Committee reviews our
2020-2022 Long-Term Incentives policies and determines whether and to what extent
In 2020, Mr. Nye’s target LTI award was 490% of base perquisites should be modified or continued.
salary. He was granted an LTI award of approximately
$6.0 million, which was allocated 55%, or $3.3 million, in 2020 Target Pay Mix
PSUs and 45%, or $2.7 million, in performance-based We believe that most of the compensation opportunities
RSUs. RSUs will vest pro rata over three years if the to our CEO should be variable and the variable elements
performance measure is satisfied, while the vesting of of the compensation package should tie to the Company’s
PSUs will be based upon our results relative to the three- long-term success and the achievement of sustainable
year performance goals that were established in the long-term total return to our shareholders. A significant
beginning of 2020. portion of our CEO’s target compensation is variable and
in the form of LTI, and more than half of total target pay
Benefit and Retirement Plans is in the form of equity incentives.
Mr. Nye is eligible for benefit and retirement programs
similar to other employees. None of our executives
received additional years of service credits or other forms
of formula enhancements under our benefit or retirement
plans. Our pension formula is based on years of service
and pension eligible compensation, which is a similar
formula offered by other companies with defined benefit
plans. Mr. Nye is not eligible for retiree health benefits.

48 2021 PROXY STATEMENT