Page 45 - Proxy Statement - 2020

Pay Decisions and Compensation Governance Practices / Compensation Discussion and Analysis

Pay Decisions and Compensation Governance Practices

WHAT WE DO

Pay for performance. Tie pay to performance by ensuring that a significant portion of NEO compensation is performance-
based and at-risk.
Median compensation targets. We generally aim to align all compensation elements for our executives with the median of
our peer group companies.
PSUs are a substantial portion of LTI. PSU grants, tied to our achievement of specified performance measures, comprised
approximately 55% of the total value of annual long-term incentive grants made to our NEOs in 2019. Performance-based RSUs
comprised the remaining 45%.
Independent compensation consultant. The Committee retains an independent compensation consultant.
Robust share ownership requirements. We have robust stock ownership guidelines of 7 times base salary for the CEO, 5
times base salary for our other NEOs, and 5 times annual retainer for Directors. We also have an equity retention requirement of
50% of net shares paid as incentive compensation until ownership guidelines are met.
Clawback policy. We have a compensation recovery (clawback) policy that requires officers to forfeit certain cash-based
incentive compensation and/or equity-based incentive compensation if the company restates its financial statements due to the
officer’s misconduct.

Regular engagement with shareholders. We engage with shareholders to hear their views on compensation and other issues.
Annual elections. We no longer have a classified Board of Directors and all of our Directors stand for election each year.

WHAT WE DON’T DO
No employment contracts. None of our NEOs or other executive officers have employment contracts that guarantee
continued employment.
No dividends on unvested awards. Our 2019 RSU and PSU awards require three years to fully vest and dividends paid on
shares of commonstock of MartinMarietta duringthe vestingperiodare onlypaidtoaward holders if andwhenanaward vests.
No pledging of shares. Our directors and executive officers are not permitted to pledge Martin Marietta shares as collateral
for loans or any other purpose.
No hedging. We prohibit directors and executive officers from engaging in short sales of Martin Marietta stock or similar
transactions intended to hedge or offset the market value of Martin Marietta stock owned by them.
No 280G gross-ups. We do not provide Section 280G excise tax gross-ups.
Minimal executive perquisites. We do not provide NEOs with country club reimbursements, personal use of the Company
aircraft unrelated to business travel, or other excessive perks.

A number of key 2019 compensation-related decisions resulted from our achievements, which are discussed more fully below. The
Committee believes that our executive compensation program continues to reflect a strong pay-for-performance philosophy and is well
aligned with the interests of shareholders

2020 PROXY STATEMENT 41