Page 55 - Proxy Statement - 2020

2017-2019 PSU Award Payouts / Compensation Discussion and Analysis

2017-2019 PSU Award Payouts

PSUs that were granted in 2017 vested on December 31, 2019, above targeted level for each metric. EBITDA (weighted 67%)
because the applicable performance criteria were satisfied. These was $3.43 billion compared to our pre-established target of
PSUs were certified and paid out in February 2020. The PSU $2.85 billion and generated a 134% payout factor and Sales
payouts for the three-year performance period ended Growth (weighted 33%) was 17.7% compared to our
December 31, 2019 were calculated by comparing actual pre-established target of 4.5% and generated a 66% payout
corporate performance for each metric for the period January 1, factor. The rTSR modifier, which provides for an adjustment up
2017 through December 31, 2019, against a table of payment or down of up to 20%, resulted in a 93% adjustment as our TSR
levels from 0% to 200% (with the 100% payout level being over the three year measurement period was at the 41 st
considered target) established at the beginning of the percentile of S&P 500 companies over the same period. The
performance period. awards are calculated pursuant to the provisions provided in the
award agreements. The Committee cannot make any
For the three-year performance period ended December 31, adjustments to the final payout factor beyond the adjustments
2019, actual results were 186% of target. The results were specified in the award agreements.

Performance Performance Weighted
Measure Target Result Weighting Payout Factor
EBITDA $ 2.85B $ 3.43B 67% 134%
Sales Growth 4.5% 17.7% 33% 66%
st
Relative TSR 50 percentile 41 percentile +/-20% 93% of total award
th
Based on a weighted payout factor of 186%, the following table shows the payouts under the 2017-2019 PSU made in February 2020.
Payment Calculation for PSUs Granted in 2017
Certified on February 20, 2020
Target Units Granted Payout
NEO in 2017 (shares) (shares)
C. Howard Nye 11,355 21,112
James A. J. Nickolas*
Roselyn R. Bar 3,267 6,075
Craig M. LaTorre*
Daniel L. Grant 2,210 4,109

* Mr. Nickolas commenced employment with the Company in August 2017. Mr. LaTorre commenced employment in July 2018.

Ongoing Corporate Governance • We pay for performance, with approximately 87% of our
CEO’s total target pay opportunity being performance-
Policies
based “at-risk” compensation.
We endeavor to maintain good corporate governance standards • We cap PSU payments at target if three-year TSR is
relating to our executive compensation policies and practices, negative, regardless of our ranking.
including the following that were in effect during 2019 that
• We limit perquisites and other benefits.
directly impacted compensation:
• The Committee is comprised solely of independent Directors Compensation Decision Process
who regularly schedule and meet in executive sessions
without management present. Role of Management and the Committee
The Committee is responsible for carrying out the philosophy and
• The Committee’s independent compensation consultant is
objectives of the Board of Directors related to executive
retained directly by the Committee.
compensation in addition to its responsibilities of overseeing the
• The Committee conducts an annual review and approval of development and succession of executive management of Martin
our compensation strategy, including a review of our Marietta. The Committee has the authority to determine
compensation-related risk profile, to ensure that our compensation and benefits for Martin Marietta’s executive officers.
compensation-related risks are not reasonably likely to have The Committee members are each non-employee, independent
a material adverse effect on the Company. Board members pursuant to the NYSE rules, and the Committee

2020 PROXY STATEMENT 51