Page 66 - Martin Marietta - 2024 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS / 2023 ANNUAL CASH INCENTIVE GOALS AND RESULTS

2023 Annual Cash Incentive Goals and Results
NEOs and other executives are eligible to earn annual incentive compensation under our Executive Cash Incentive Plan
based on the achievement of identified and formula-defined performance metrics and goals. Individual NEO targets (as a
percent of base salary) are approved by the Committee at the beginning of the year based on a review of competitive
market data, the advice of the Committee’s independent compensation consultant, and internal pay equity.

The Committee awards actual annual cash incentive compensation based on achievement against corporate performance
objectives and individualized targeted goals. In light of shareholder feedback and a lower than usual Say On Pay approval
in early 2023, a formula was adopted for annual cash incentive awards for all NEOs wherein 80% of the target incentive is
based on achievement of financial goals and 20% is based on achievement of identified safety and sustainability metrics.
After the formulaic award percentage is determined, an assessment of individual performance is conducted by the
Committee to allow for a potential positive or negative adjustment of 20% for each executive.

The maximum incentive compensation for executives based on the annual cash incentive plan formula, with the 20%
assessment factor, is 250% of target. When the incentive payout percentage is calculated, the minimum amount for the
payout will be 50% of target if the Company successfully pays an unreduced dividend in the year and records positive Net
Earnings Attributable to Martin Marietta. The plan will payout at a minimum of 100% of target if the criteria for the 50%
minimum payout level are met and the Company’s one-year operating margin ranks in the top three of six direct publicly
traded peers (CRH plc, Eagle Materials, Inc., Heidelberg Materials, Holcim Ltd., Summit Materials, Inc., and Vulcan
Materials Company).

The Committee determines the adjustment to annual cash incentive compensation for each executive based on the
achievement of individualized target goals tied to each executive’s specific areas of responsibility and the then-current and
longer-term goals of the Company. The Committee also reviews and considers management’s furtherance of its strategic
plan, including a primary objective of value-enhancing growth, and the advancement of the Mission, Vision, and Values of
the Company to unify management with the same objectives. The Committee conducts a comparative review of the
individual contributions of each of the executive officers towards achieving these goals. The Committee also considers
qualitative measures of performance for the executive officers, such as adherence to and implementation of Martin
Marietta’s Code of Ethical Business Conduct, customer satisfaction, and product quality.

Ultimately, the incentive payments determined through the annual cash incentive compensation formula support Martin
Marietta’s longstanding compensation philosophy of encouraging superior performance and rewarding the achievement
of Martin Marietta’s annual goals. We set challenging, but attainable targets, approved by the Board, and designed to
continue to drive shareholder value and exceptional corporate stewardship.

2023 Actual Incentive Cash Earned

For 2023, the Committee determined in February 2024 that the achievement of the goals included in the Company’s
annual cash incentive compensation formula warranted the payment of annual incentives to executive officers. In 2023, all
of the company’s executive officers participated in the plan. The annual incentive compensation level paid for 2023 for the
NEOs other than Mr. Nye ranged from 240% to 250% of target. The annual incentive compensation level paid for 2023
for Mr. Nye was 240% of target. These amounts were consistent with the formula short term incentive plan adopted by
the Committee.

60 2024 PROXY STATEMENT