Page 58 - Proxy Statement - 2020

Compensation Discussion and Analysis / Stock Ownership Requirements

Covered persons who are employees are expected to meet these adversely impacted our financial position or reputation, then the
requirements within five years of the later of becoming a Board shall take such action as it deems in the best interest of
covered person and the date of adoption of the policy. Until the Corporation and necessary to remedy the misconduct and
such time as such covered person has met these requirements, prevent its recurrence. Among other actions, the Board may
he or she is expected to retain 50% of any shares of common seek to recover or require reimbursement of any amount
stock received upon vesting of RSUs, deferred stock unit awards, awarded to the officer in the form of an annual incentive bonus
PSUs, the exercise of stock options, and other similar equity or LTI award. There were no events requiring Board
awards, net of amounts withheld to pay taxes and the exercise consideration of a clawback action during 2019.
price of stock options until the applicable Guideline level is met.
Our Use of Independent
Stock ownership does not include vested or unvested stock
options, unvested PSUs and vested or unvested stock Compensation Consultants
appreciation rights.
The independent compensation consultant provides important
information about market practices, the types and amounts of
All of the Company’s executive officers and members of the
compensation offered to executives generally and the role of
Board of Directors are in compliance with the Stock Ownership
corporate governance considerations in making compensation
Guidelines.
decisions. The Committee’s charter authorizes it to retain
outside advisors that it believes are appropriate to assist in
We also require a holding period of annual cash incentive
evaluating executive compensation.
compensation converted to Martin Marietta share equivalents as
described below, with vesting generally in three years. There is
For 2019, the Committee continued to retain Mercer as an
no additional holding period beyond the vesting date, however a
independent compensation consultant. In connection with its
significant portion of the executive compensation program is in
retention of Mercer, the Committee considered the following
the form of equity awards that vest over three years generally.
factors in assessing Mercer’s independence:
Our CEO must invest a minimum of 35% of each year’s cash • The provision of services provided by Mercer to Martin
bonus award in common stock units of Martin Marietta. Marietta in addition to compensation advisory services.
Executive officers must invest a minimum of 20% of their annual
• The compensation paid to Mercer is less than 1% of
bonus. Stock is purchased at a 20% discount to the price on the
Mercer’s revenues.
grant date to account for the additional risk of taking a common
stock unit payment in lieu of a risk-free cash payment. In 2019, • Mercer has business ethics and insider trading and stock
Mr. Nye deferred the maximum of 50% of his cash bonus in ownership policies, which are designed to avoid conflicts of
common stock units. interest.
• Mercer employees supporting the engagement do not own
Anti-Hedging and Pledging Policy Martin Marietta securities.
• Mercer employees supporting the engagement have no
Our policies prohibit hedging and pledging of Martin Marietta
business or personal relationships with members of the
stock by all directors and executive officers. Under our policies,
Compensation Committee or with any Martin Marietta
directors and executive officers may not engage in any hedging
executive officer.
or monetization transactions, such as puts, calls, options, other
derivative securities, prepaid variable forward contracts, equity At its February 2019 meeting, the Committee renewed the
swaps, collars, exchange funds and short sales with respect to engagement of Mercer. At that time, Mercer confirmed the
Company stock, the purpose of which is to hedge or offset any continuing validity of each of the factors described above.
decrease in the market value of such stock. This policy also
prohibits directors and executive officers from purchasing The nature and scope of Mercer’s engagement was determined
Company stock on margin, borrowing against Company stock by the Committee and not limited in any way by management.
on margin, or pledging Company stock as collateral for any loan. Mercer was paid $141,978 for its compensation advisory
services in 2019. During 2019, Mercer and its Marsh &
Clawback Policy McLennan affiliates were also retained by management to
provide services unrelated to executive compensation, including
We also have a clawback policy. If the Board determines that an property/casualty insurance brokerage services and
officer’s intentional misconduct, gross negligence or failure to administration of a risk management information system. The
report such acts by another person was a contributing factor in aggregate fees paid for those other services for 2019 were
requiring us to restate any of our financial statements or $355,230. These represent less than .003% of Marsh &
constituted fraud, bribery or another illegal act (or contributed McLennan’s global revenue. The Committee and the Board did
to another person’s fraud, bribery or other illegal act) which not review or approve the other services provided to us by

54 2020 PROXY STATEMENT