Page 64 - Martin Marietta - 2021 Proxy Statement

COMPENSATION DECISION PROCESS / COMPENSATION DISCUSSION AND ANALYSIS

Role of the Independent Compensation Consultant
The Committee retained Pay Governance, an independent compensation consultant, in accordance with the Committee’s
charter, in April 2020. Prior to April 2020, Mercer served as the Committee’s independent compensation consultant.

The consultant reports directly to the Committee. The Committee retains sole authority to hire or terminate the consultant,
approve its compensation, determine the nature and scope of services, and evaluate performance. The compensation
consultant attends Committee meetings, either in person or by telephone, as requested, and communicates with the
Committee Chair between meetings. The Committee makes all final decisions.

The compensation consultant’s specific roles include, but are not limited to, the following:
• Advise the Committee on executive compensation trends and regulatory developments and other factors affecting
executive officer compensation, as well as any other areas of concern or risk.
• Provide a total compensation assessment for executives compared to peer companies and recommendations for
executive pay.

• Serve as a resource to the Committee Chair for meeting agendas and supporting materials in advance of each meeting.
• Review and comment on proxy disclosure items, including this CD&A.
• Advise the Committee on management’s pay recommendations.

Based on these activities, the compensation consultant makes recommendations regarding, and proposes adjustments to,
our executive officer compensation program as it deems appropriate. While the consultant works closely with the
appropriate members of our executive management team in performing these activities, the consultant reports directly to
and is retained by the Committee on all executive compensation matters, and speaks to the Committee and the Chair of
the Committee on a regular basis without management present.

Role of Peer Companies and Competitive Market Data
The Committee considered peer groups for two elements of the executive compensation program in 2020: the
Compensation Peer Group, consisting of 15 companies that the Committee believes compete with us for talent, and the
TSR Peer Group, consisting of the S&P 500, which the Committee believes compete with us for investors and is used to
assess the achievement of rTSR measured for the PSU awards.

Annually, the Committee studies competitive total compensation market data provided by its independent compensation
consultant. To assess competitive pay levels, the Committee reviews and approves the composition of our Compensation
Peer Group. The following peer group criteria are considered:

• Company size (approximately 0.4 times to 2.5 times Martin Marietta’s annual revenues);
• Company market cap;
• Companies in similar industries based on Global Industry Classification Standard (GICS) code classifications;
• Direct competitors for business and management talent that are publicly-traded in the United States;
• Companies covered by the investment analysts that track Martin Marietta; and

• Companies that include Martin Marietta in their compensation peer group.
The following companies comprised our Compensation Peer Group for 2020 base salary and long-term incentive pay
decisions:

Albemarle Corporation Louisiana-Pacific Corporation Stanley Black & Decker, Inc. Vulcan Materials Company
Eagle Materials Inc. Masco Corporation Summit Materials, Inc. Westlake Chemical Corporation
FMC Corporation Nucor Corporation The Mosaic Company Weyerhaeuser Company
Fortune Brands Home & Security, Inc. Owens Corning USG Corporation

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