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SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
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Martin Marietta Materials, Inc. (Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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April 16, 2020 |
Dear Fellow Shareholder:
| On behalf of the Martin Marietta Board of Directors and executive officers, you are cordially invited to attend Martin Marietta’s 2020 Annual Meeting of Shareholders. I am providing some of the highlights of our key actions and important decisions in 2019, as well as information about our financial performance. Please review this Proxy Statement and the 2019 Annual Report for more information about these topics.
As we issue this Proxy Statement, COVID-19 continues to create challenges and hardships, both nationally and globally. While we remain open for business and ready to meet our communities’ product and service needs, we are also committed to safeguarding the health, safety and well-being of all who our business touches. The Company’s executive leadership and Board of Directors have been closely monitoring developments related to COVID-19 and its potential impacts to our employees, customers, supply chains, and others, and proactively taking actions to responsibly prepare so that our people, facilities and business remain safe.
Continued to Deliver Strong Financial Results 2019 was another outstanding year of achievement at Martin Marietta. We delivered top-line revenue growth and translated that growth into record profitability. We outperformed our peers, the S&P 500 and the S&P 500 Materials indices over the 1-, 5- and 10-year periods ended December 31, 2019. Our shareholders saw a total return of 64% over the 1-year period. We increased our quarterly dividend 15% in August 2019, following a 9% increase in August 2018, and have returned $1.6 billion to shareholders from dividends and share repurchases since announcing a 20 million share repurchase authorization in February 2015.
Shareholder Engagement, Enhanced Corporate Governance and Refreshed Board Membership We remained engaged with shareholders and other key stakeholders during 2019. In response to valuable feedback from shareholders, we enhanced our disclosure regarding our activities, risks and opportunities regarding sustainability and other environmental, social and governance issues. Our investor outreach in 2019 extended to 82 meetings with 189 investor groups, and conversations with most of our top 30 shareholders. We visited with our shareholders across the United States and Canada, the United Kingdom, Sweden, Belgium, the Netherlands, and France. |
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Over the past four years, we have added six new independent directors. Most recently, Thomas H. Pike joined the Board in July 2019 and Dorothy M. Ables joined our Board in November 2018. In addition, we are nominating David C. Wajsgras to serve on our Board. We are committed to recruiting experienced directors who offer diverse perspectives, professional expertise, and unique skills that align with our long-term corporate strategy and business needs.
We are deeply grateful to Stephen P. Zelnak, Jr., who will retire from the Board at the 2020 Annual Meeting. Steve has served on our Board since November 1993, including as Chairman, and has made valuable contributions to both the Board and the Company from his previous service as CEO of Martin Marietta. Steve has been an important, thoughtful and knowledgeable voice. We will miss him.
World-Class Safety Performance
In 2019, we continued our impressive safety performance. Through the hard work and focus of our employees, safety awareness has been elevated across the Company. Our employees know world-class safety performance is possible; and, importantly, 2019’s results demonstrate this goal is attainable. Our company-wide Lost Time Incident Rate (LTIR) was 0.20, a world-class LTIR for the third year in a row.
Sustainability
We annually issue our Sustainability Report to share our story, and to provide information that we believe is responsive to requests from our shareholders and other stakeholders, on the efforts and advancements we are making in these important areas. Since our first report in 2015, we have enhanced our reporting with more comprehensive descriptions of our outstanding safety and regulatory programs and performance, targeted and intentional support of education and health, and strong community involvement. In our latest Sustainability Report, to be issued in April 2020, we have included additional disclosure about our activities, accomplishments and opportunities associated with key sustainability matters, including those related to the environment. This includes new disclosures of our direct greenhouse gas emissions across all our business lines, as well as our emissions reductions targets for 2030. Our activities reflect that these matters continue to be part of our core approach and strategy that brings value to our shareholders and other stakeholders.
Your Vote Matters
I urge you to cast your vote promptly—even if you plan to attend the Annual Meeting. We encourage you to vote so that your shares will be represented at the meeting.
Thank you for your investment in Martin Marietta. We look forward to continuing to deliver strong and responsible performance, innovation, and growth to our customers, our shareholders and our other stakeholders.
Sincerely,
C. Howard Nye
Chairman of the Board, President and Chief Executive Officer
Table of Contents
MARTIN MARIETTA MATERIALS, INC.
2710 Wycliff Road, Raleigh, North Carolina 27607
Notice of Annual Meeting of Shareholders
To Be Held May 14, 2020
To Our Shareholders:
The Annual Meeting of Shareholders of Martin Marietta Materials, Inc. will be held on Thursday, May 14, 2020 at 11:30 a.m. EDT at our principal office located at 2710 Wycliff Road, Raleigh, North Carolina. At the meeting, the holders of our outstanding common stock will act on the following matters:
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Election as Directors the ten (10) nominees named in the attached proxy statement, each to serve for a one-year term until 2021, and until their successors are duly elected and qualified; | |
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2 |
Ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors for 2020; | |
| 3 | Advisory vote to approve the compensation of our named executive officers; and | |
| 4 | Any other business that may properly come before the meeting. |
All holders of record of Martin Marietta common stock (NYSE: MLM) at the close of business on March 6, 2020 are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements of the meeting.
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The Board of Directors unanimously recommends that you vote FOR proposals 1, 2, and 3. |
This notice and the accompanying proxy statement are being first mailed to shareholders on or about April 16, 2020. We have enclosed our 2019 Annual Report to Shareholders. The report is not part of the proxy soliciting materials for the Annual Meeting.
Whether or not you expect to attend the meeting, we hope you will date and sign the enclosed proxy card and mail it promptly in the enclosed stamped envelope. Submitting your proxy now will not prevent you from voting your shares at the meeting, as your proxy is revocable at your option.
Sincerely,
Roselyn R. Bar
Executive Vice President, General Counsel and Secretary
Raleigh, North Carolina
April 16, 2020
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL SHAREHOLDER MEETING TO BE HELD ON MAY 14, 2020:
Martin Marietta’s proxy statement, form of proxy card and 2019 Annual Report to Shareholders are also available at ir.martinmarietta.com/reports-filings.
Table of Contents
Table of Contents
This Proxy Summary highlights information about Martin Marietta Materials, Inc. (Martin Marietta or the Company) that can be found elsewhere in this proxy statement. It does not contain all of the information you should consider in voting your shares. We encourage you to read the entire proxy statement for more detailed information on each topic prior to casting your vote. This proxy statement, the proxy card, and the notice of meeting are being sent commencing on approximately April 16, 2020 to shareholders of record on March 6, 2020.
2020 Annual Meeting of Shareholders
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Meeting Date: |
May 14, 2020 |
Place: |
2710 Wycliff Road, Raleigh, NC | |||||
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11:30 am ET
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Record Date:
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March 6, 2020
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Your vote is important. You may vote in person at the 2020 Annual Meeting of Shareholders (Annual Meeting) or submit a proxy over the internet. If you have received a paper copy of the proxy card (or if you request a paper copy of the materials), you may submit a proxy by telephone or by mail.
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Via the Internet
www.voteproxy.com |
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In Person
Attend the Annual Meeting and vote by ballot. | |||||
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By Telephone
1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from outside the United States. |
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By Mail
Sign, date and mail your proxy card in the envelope provided. | |||||
If you submit your proxy by telephone or over the internet, you do not need to return your proxy card by mail.
| PROPOSALS AND VOTING RECOMMENDATIONS
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| Proposal | Description | Board Voting Recommendation | Page | |||||
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Election of ten director nominees
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17
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Ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors
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31
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3
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Advisory vote on the Company’s named executive officer compensation
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68
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FOR EACH DIRECTOR NOMINEE
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2020 PROXY STATEMENT
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1
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Table of Contents
2020 BUSINESS HIGHLIGHTS
Shareholders Benefit from Martin Marietta’s Record 2019 Performance
The past year was one of improved financial performance, disciplined capital allocation and continued emphasis on safety, health and our other tenets of sustainability. We continued to see the full-year benefits from our 2018 acquisition and quick-paced integration of Bluegrass Materials Company (Bluegrass), strengthening our foundation for long-term financial success. Our record 2019 financial performance is a continuation of the growth in total revenues, gross profit, adjusted EBITDA and earnings diluted per share (EPS) since 2011. These trends, along with our record safety results, validate both our strategic plan and our ability to logically and successfully execute against that plan. Disciplined execution against our capital allocation priorities was also reflected in 2019 as we continued our share repurchase program and meaningfully increased our dividend again.
These are highlights of our financial performance in 2019:
| ✓ | Record consolidated revenues of $4.7 billion, a 12% year-on-year increase, driven by double-digit aggregates and cement shipment growth and steady pricing gains across the Building Materials business, with net earnings attributable to Martin Marietta of $612 million |
| ✓ | Achieved 8th consecutive year of revenue, gross profit, adjusted EBITDA and EPS growth |
| ✓ | Record-setting results yielded a 64 percent Total Shareholder Return (TSR), more than double the S&P 500 |
| ✓ | $50 million contributed to the Company’s ~100% funded qualified pension plan |
| ✓ | Repurchased 416,000 shares for $98.2 million ($236.04 per share); 13.7 million shares remaining on our February 2015 authorization |
| ✓ | Our Board of Directors (Board) approved a 15% dividend increase ($2.20 per share on an annualized basis) in August, one of the largest increases in Company history |
| ✓ | Maintained our investment grade credit rating, exiting the year at 2.2x debt-to-EBITDA leverage ratio, within our target ratio of 2.0x – 2.5x |
* Please see Appendix B for a reconciliation of non-GAAP measures to GAAP measures.
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2020 PROXY STATEMENT
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Our Commitment to our Guardian Angel Safety Culture
| ✓ | World-class LTIR for the 3rd consecutive year |
| ✓ | Safety performance sets the foundation for long-term financial strength and successful strategic plan (SOAR) execution |
| ✓ | We outperformed our peers in 2019, and also outperformed the S&P 500 and S&P 500 Materials on TSR |
| ✓ | Our short- and long-term performance, reflected in our TSR over the 1-, 5- and 10-year periods ended December 31, 2019, show the strength of our strategic plan. |
| ✓ | Our shareholders received a total return of 64% over the 1-year period. |
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2020 PROXY STATEMENT
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Corporate Governance Highlights:
Creating Sustainable Long-Term Shareholder Value
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Recent Updates
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• Directors elected annually to serve one-year terms
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• Elimination of excise tax gross-up, walk-right and value of perquisites in the severance calculation in Employment Protection Agreements
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• Elimination of single-trigger vesting in equity award agreements for grants beginning in 2019
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• Adoption of Stock Ownership Guidelines
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• Adoption of Hedging and Pledging Policy
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• Adoption of Clawback Policy
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• Our shareholders have the ability to nominate director candidates and have those nominees included in our proxy statement, subject to meeting the requirements in our Bylaws, a shareholder right known as proxy access
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Board of Directors
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• Lead Independent Director who is a former public company CEO |
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• 10 current Directors; 9 or 90% are independent |
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• Key committee Chairs are independent, consisting of independent Chairs of the Audit Committee, Management Development and Compensation Committee, and Nominating and Corporate Governance Committee |
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• Executive sessions of non-management Directors at each regularly-scheduled meeting |
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• All Directors attended 100% of all Board and committee meetings during their term of service in 2019 |
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• 90% of our Board has experience on other public company boards and 60% are current or former public company CEOs |
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• Code of Ethical Business Conduct and ethics program reports to a Board Committee |
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• Annual Board and individual performance evaluations are conducted, including Director peer review |
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• Risk oversight by full Board and Committees |
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• Chair/CEO is the only Board member who is currently also management |
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• Only one member of our 10-member Board of Directors standing for reelection is currently or formerly management of the Company |
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Shareholder Interest
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• Majority voting standard for uncontested Director elections |
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• No shareholder rights plan |
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• Annual advisory vote to ratify independent auditor |
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• Annual advisory vote to approve executive compensation |
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• Longstanding active shareholder engagement |
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• We publish annually a Sustainability Report that discusses our commitment to our shareholders, employees and the communities that we serve. • We also created a new position to better focus on these important issues • Our Board committees review the Company’s accomplishments with regard to sustainability |
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• No shares with enhanced voting rights |
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Board Composition
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| We seek to include a diverse group of Directors on our Board to provide different perspectives to the Board’s oversight responsibilities. Our Board nominees demonstrate diversity in the form of experience, geography, gender, ethnicity, age and tenure. We were recognized in 2019, 2017 and 2015 at the Women’s Forum of New York at its Biennial Breakfast of Corporate Champions for our Board diversity. We were also recognized by 2020 Women on Boards as a Winning ‘W’ Company for eight consecutive years for championing board diversity. |
| 30% | Women represent 30% of our Board nominees |
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| 40% | 40% of our Board nominees bring diversity in gender or ethnicity |
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| <7 years
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The average tenure of our Board nominees is less than 7 years |
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Our Board refreshment has resulted in a decrease of the Board’s average tenure, with a greater mix of Directors with long-term knowledge of the Company, its strategy, opportunities and challenges and those with new perspectives
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DIRECTOR NOMINEES
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Board Attendance
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In 2019, during their terms of service, all directors attended 100% of the total Board and committee meetings to which they were assigned. All directors then in office attended the May 2019 Annual Meeting, and all directors expect to attend the 2020 Annual Meeting.
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2020 PROXY STATEMENT
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5
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Table of Contents
Proactively Engaging and Responding to Shareholders
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CORPORATE GOVERNANCE HIGHLIGHTS
✓ Directors elected for 1-year terms
✓ Eliminated gross-up, walk-right on Change of Control
✓ Eliminated single-trigger vesting for equity awards beginning in 2019
✓ Established robust stock ownership guidelines for officers and directors
✓ Implemented hedging and pledging policy
✓ Adopted clawback policy
✓ Implemented majority voting standard
✓ Eliminated shareholder rights plan
✓ Adopted proxy access
✓ Added 6 new Board members since 2016 (assuming the election of Mr. Wajsgras)
✓ Published Annual Sustainability Report | |||
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2020 PROXY STATEMENT
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Table of Contents
Our Commitment to Excellence, Safety, Corporate Governance, Shareholder Engagement and Sustainability Is Integral to Our Strategic Plan
| Sources: (1) Company materials, Wall Street Research, IHS Markit, S&P Global and U.S. State Ratings and Outlooks. (2) Based on top 10 revenue generating states based on 2019 Building Materials product revenues by state of destination. (3) Management calculation based on aggregates consumption per capita multiplied by estimated state population. Based on latest information available as of December 31, 2019. |
Over the last decade, Martin Marietta has been a disciplined and well-run heavy construction materials company
| ➤ | Grew total revenues by 3.0x (11% compounded annual growth rate (CAGR)) and Adjusted EBITDA by 3.4x (13% CAGR) over this period |
| ➤ | Completed creative asset swap in Colorado, and acquisitions of Texas Industries, Inc. (Texas aggregates, strategic cement) and Bluegrass Materials (strong margins, significantly below mid-cycle demand states) |
| ➤ | After maintaining dividends through the financial crisis, consistently increased dividends through the decade |
| ➤ | Maintained a strong investment grade rating, with a leverage ratio now within target range of 2.0x to 2.5x |
| ➤ | Delivered superior shareholder value (2010-2019 TSR CAGR of 14%) |
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2020 PROXY STATEMENT
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Table of Contents
Our Compensation Approach
A substantial portion of compensation paid to our named executive officers (NEOs) is variable and performance-based. We use the 50th percentile of our peer group as a reference point when determining target compensation, but target pay is set based on a variety of factors and actual pay realized by our NEOs is dependent on our financial, operational and other related performance. Based on our record levels of performance in 2019, variable compensation payable under both our short-term and long-term incentive plans exceeded the target amounts established for each NEO, which is consistent with our pay-for-performance philosophy. All compensation paid to our CEO and other NEOs in 2019 was performance-based other than base salary: approximately 87% of our CEO’s compensation was performance-based and 74% of our other NEOs’ compensation was performance based.*
| * | Based on grant date value of Performance Share Units (PSUs) and Restricted Stock Units (RSUs). |
Will any other matters be presented at the Annual Meeting?
At the time this proxy statement was filed with the Securities and Exchange Commission (SEC), the Board of Directors was not aware that any matters not referred to herein would be presented for action at the Annual Meeting. If any other matters properly come before the meeting, it is intended that the persons named in the enclosed proxy will vote the shares represented by proxies on such matters in accordance with the recommendation of the Board, or, if no recommendation is given, in their own discretion. It is also intended that discretionary authority will be exercised with respect to the vote on any matters incident to the conduct of the meeting.
What are the Board’s recommendations?
Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board. The Board’s recommendation, as well as a description of each proposal, is set forth in this proxy statement. The Board recommends a vote:
| • | FOR the election of each of the Director Nominees; |
| • | FOR the ratification of the selection of PricewaterhouseCoopers LLP as independent auditors; and |
| • | FOR the approval, on a non-binding advisory basis, of the compensation of our NEOs as described in this proxy statement. |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein are generally identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on the beliefs and assumptions of our management and on currently available information. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our annual report on Form 10-K for the fiscal year ended December 31, 2019. We undertake no responsibility to publicly update or revise any forward-looking statement other than as required by law.
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Table of Contents
◆ The Board of Directors
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The Board of Directors ◆
The following sets forth certain information for each nominee for election regarding age, gender, diversity, tenure and skills that are important to the Board of Directors.
| Demographics and Background
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69 |
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Gender |
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| Ethnic Diversity |
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Tenure |
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18 |
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| Qualifications and Experience
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Why is this important to Martin Marietta? |
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Corporate Governance/Legal
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• | • | • | • | • | • | • | • | • | • | Ensures background and knowledge necessary to provide effective oversight and governance |
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Current or Former CEO of Public Company
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• | • | • | • | • | Strong leadership skills and critical experience with demands and challenges with managing a large public organization |
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Financial or Accounting
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• | • | • | • | • | • | • | • | • | Enables in-depth analysis of our financial statements, capital structure, financial transactions, and financial reporting process |
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Government Relations/ Regulatory/ Sustainability
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• | • | • | • | • | • | • | • | • | • | Critical for understanding complex regulatory and governmental environment that impacts our business and our strategic goals relating to sustainability |
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Logistics/ Operations
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• | • | • | • | • | • | Necessary in overseeing a sustainable company that relies heavily on logistics |
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Other Public Boards
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• | • | • | • | • | • | • | • | Adds perspective important to shareholders and public company governance |
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| Risk Management |
• | • | • | • | • | • | • | • | • | • |
Facilitates understanding of the risks facing the Company and appropriate process and procedures for managing them
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| Strategy/M&A |
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Supports setting of long-term corporate vision, disciplined strategic development and integration to facilitate company’s growth
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| Technology |
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Important to facilitate business objectives and security of Company’s proprietary and confidential data
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The Board has implemented a number of processes to assist it in refreshing the Board in an appropriate manner that helps create shareholder value.
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2020 PROXY STATEMENT
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Table of Contents
◆ The Board of Directors
Board Refreshment Elements
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Review of Board Candidates |
The Board seeks a diverse group of candidates who, at a minimum, possess the background, skills, expertise and time to make a significant contribution to the Board, the Company and its shareholders. The Corporate Governance Guidelines list criteria against which candidates may be judged. In addition, the Nominating and Corporate Governance Committee considers, among other things:
• input from the Board’s self-assessment process to prioritize areas of expertise that were identified;
• investor feedback and perceptions;
• the candidates’ skills and competencies to ensure they are aligned with the Company’s future strategic challenges and opportunities; and
• the needs of the Board in light of recent and anticipated Board vacancies.
During the process of identifying and selecting director nominees, the Nominating and Corporate Governance Committee screens and recommends candidates for nomination by the full Board. The Bylaws provide that the size of the Board may range from 9 to 11 members.
Director candidates also may be identified by shareholders and will be evaluated under the same criteria applied to other director nominees and considered by the Nominating and Corporate Governance Committee. Information on the process and requirements for shareholder nominees may be found in our Bylaws on the Corporation’s website at ir.martinmarietta.com/corporate-governance.
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Board Assignments |
In February, the Nominating and Corporate Governance Committee reviews the membership, tenure, leadership and commitments of each of the Committees and considers possible changes given the qualifications and skill sets of members on the Board or a desire for committee rotation or refreshment. The Nominating and Corporate Governance Committee also takes into consideration the membership requirements and responsibilities set forth in each of the respective Committee charters and the Corporate Governance Guidelines as well as any upcoming vacancies on the Board due to our mandatory retirement age. The Nominating and Corporate Governance Committee recommends to the Board any proposed changes to Committee assignments and leadership to be made effective at the next Annual Meeting of Shareholders. The Nominating and Corporate Governance Committee also reviews the operation of the Board generally.
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Refreshment |
The Board has added six new directors in the past four years. Mr. Zelnak will retire at the 2020 Annual Meeting, with Mr. Wajsgras being nominated to succeed him and further refreshing the Board. At the same time, obtaining a detailed understanding of the Corporation’s business takes time. We believe that implementing term limitations may prevent the Board from taking advantage of insight that longer tenure brings.
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Annual Performance Assessment |
The Board conducts a self-assessment of its performance and effectiveness as well as that of its Committees on an annual basis. The self-assessment helps the Nominating and Corporate Governance Committee track progress in certain areas targeted for improvement from year-to-year and to identify ways to enhance the Board’s and its Committees’ effectiveness. For 2019, each director completed a written questionnaire. The questions were open-ended to solicit candid feedback. The collective ratings and comments are compiled and summarized and then discussed by the Nominating and Corporate Governance Committee and the full Board.
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Onboarding and Continuing Education |
New directors are provided with an orientation about the Company, including our business operations, strategy and governance. Directors also are provided continuing education by subject matter experts and/or continuing education programs sponsored by educational and other institutions to assist them in staying abreast of developments in corporate governance and critical issues relating to the operation of public company boards. Members of our senior management regularly review with the Board the operating plan of each of our business segments and the Company as a whole. The Board also conducts periodic visits to our facilities as part of its regularly scheduled Board meetings.
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Tenure Guidelines
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Mandatory Retirement Age
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Directors must retire at the annual meeting following his or her 75th birthday.
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| Employment Change |
Directors must report to the Chairman of the Board and Chairman of the Nominating and Corporate Governance Committee regarding any significant change in principal employment or responsibilities to assure he/she can commit the appropriate time to Board service.
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2020 PROXY STATEMENT
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Table of Contents
The Board of Directors ◆
BOARD, COMMITTEE AND INDIVIDUAL
DIRECTOR EVALUATIONS
Below is a summary of our current Committee structure and membership information.
| Director | Independent Director |
Audit Committee |
Ethics, Environment, Health Committee |
Executive Committee |
Finance Committee |
Management and Compensation |
Nominating Governance | ||||||||||||||||||||||||||||
| Dorothy M. Ables Financial Expert |
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Sue W. Cole |
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| Smith W. Davis |
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Chair |
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| John J. Koraleski Financial Expert |
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Chair |
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| C. Howard Nye* |
Chair | ||||||||||||||||||||||||||||||||||
| Laree E. Perez Financial Expert |
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Chair
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| Thomas H. Pike |
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| Michael J. Quillen Lead Independent Director |
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| Donald W. Slager |
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Chair | ||||||||||||||||||||||||||||||||
| Stephen P. Zelnak, Jr. |
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Chair |
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| Number of Meetings |
7 |
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2 |
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0 |
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4 |
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4 |
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5 | |||||||||||||||||||||||
| * | Mr. Nye is the only member of management who sits on the Board. |
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2020 PROXY STATEMENT
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13
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Table of Contents
The Board of Directors ◆ Board Committees
The primary responsibilities, membership and meeting information for our other standing Committees are summarized below.
|
AUDIT COMMITTEE | ||||
|
Current Members: Laree E. Perez (Chair) Dorothy M. Ables John J. Koraleski |
Meetings in 2019: 7 |
Average Attendance in 2019: 100% | ||
|
Primary Responsibilities:
• Reviews our significant accounting principles, policies and practices in reporting our financial results under generally accepted accounting principles.
• Reviews our annual audited financial statements and related disclosures.
• Reviews management letters or internal control reports, and reviews our system of internal control over financial reporting.
• Appoints, retains and oversees the work of the independent auditors.
• Reviews the effectiveness of the independent audit effort.
• Pre-approves audit and permissible non-audit services provided by the independent registered public accounting firm.
• Reviews our interim financial results for each fiscal quarter.
• Reviews the qualifications and the plan and scope of work of the corporate internal audit function.
• Reviews and discusses the reports of our internal audit group.
• Reviews and discusses management’s assessment of the effectiveness of Martin Marietta’s system of internal control over financial reporting.
• Discusses Martin Marietta’s earnings press releases, as well as financial information and earnings guidance provided to analysts, investors and rating agencies.
• Discusses matters related to risk assessment and risk management and how the process is handled by management.
• Reviews and oversees related party transactions.
• Reviews complaints regarding accounting, internal controls or auditing matters.
• Considers allegations of possible financial fraud or other financial improprieties.
• Reviews annually the adequacy of the Committee charter and recommends proposed changes to the Board.
• Prepares the annual Audit Committee Report to be included in the proxy statement.
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Other Governance Matters: All members of the Audit Committee, including the Chair, are audit committee financial experts under applicable SEC regulations.
The Chair of the Audit Committee is an independent Director.
The Chair of the Audit Committee has experience serving as a Chair and member of other public company audit committees.
All members satisfy the audit committee experience and independence standards required by the New York Stock Exchange (NYSE). | ||||
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2020 PROXY STATEMENT
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Table of Contents
Board Committees ◆ The Board of Directors
| ||||
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Current Members: Smith W. Davis (Chair) Sue W. Cole Laree E. Perez Stephen P. Zelnak, Jr. |
Meetings in 2019: 2 |
Average Attendance in 2019: 100% | ||
|
Primary Responsibilities:
• Monitors compliance with our Code of Ethical Business Conduct and reviews all matters presented to it by the Corporate Ethics Officer concerning the ethical practices of Martin Marietta and its Directors, officers, and employees, including conflicts or potential conflicts of interest between Martin Marietta and any of its Directors, officers, and employees.
• Reviews and discusses our sustainability efforts, goals and risks, and our annual Sustainability Report.
• Reviews and monitors the adequacy of our policies and procedures and organizational structure for ensuring compliance with environmental laws and regulations.
• Reviews matters relating to our health and safety programs and performance.
• Reviews annually the adequacy of the Committee charter and recommends proposed changes to the Board. | ||||
| ||||
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Current Members: Stephen P. Zelnak, Jr. (Chair) Michael J. Quillen Donald W. Slager |
Meetings in 2019: 4 |
Average Attendance in 2019: 100% | ||
|
Primary Responsibilities: • Provides general oversight relating to the management of our financial affairs.
• Reviews and approves establishment of lines of credit or other short-term borrowing arrangements and investing excess working capital funds on a short-term basis.
• Reviews and makes recommendations to the Board concerning changes to capital structure, including the incurrence of long-term debt, issuance of equity securities, share repurchases, and the payment of dividends, as well as capital expenditures.
• Approves our charitable contributions budget.
• Reviews annually the adequacy of the Committee charter and recommends proposed changes to the Board. | ||||
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2020 PROXY STATEMENT
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15
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Table of Contents
The Board of Directors ◆ Board Committees
|
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE | ||||
|
Current Members: John J. Koraleski (Chair) Thomas H. Pike Michael J. Quillen |
Meetings in 2019: 4 |
Average Attendance in 2019: 100% | ||
|
Primary Responsibilities:
• Establishes an overall strategy with respect to compensation for officers and management to enable Martin Marietta to attract and retain qualified employees.
• Reviews and oversees executive succession and management development plans.
• Reviews and approves management’s assessment of the performance of executive officers, and reviews and approves the salary, incentive compensation, and other compensation of such officers.
• Approves and administers our equity and other plans relating to compensation of Martin Marietta’s directors and executive officers.
• Reviews and discusses the Compensation Discussion and Analysis and produces a compensation committee report as required by the SEC to be included in this proxy statement.
• Provides oversight of our Benefit Plan Committee, which administers Martin Marietta’s defined benefit and contribution plans.
• Reviews and approves the goals and objectives for the CEO’s compensation, evaluates the CEO’s performance in light of those goals and objectives, and determines and approves the CEO’s compensation.
• Makes recommendations to the Board on changes in the compensation of non-employee directors.
• Reviews annually the adequacy of the Committee charter and recommends proposed changes to the Board.
• Has the authority, in its sole discretion, to retain, pay, and terminate any consulting firm, if any, used to assist in evaluating director, CEO, or senior executive compensation.
| ||||
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Other Governance Matters: All members are non-employee, independent Directors, as required by the rules of the NYSE, the Martin Marietta Guidelines for Director’s Independence, applicable rules of the SEC, and the Committee’s charter. | ||||
| ||||
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Current Members: Donald W. Slager (Chair) Sue W. Cole Smith W. Davis |
Meetings in 2019: 5 |
Average Attendance in 2019: 100% | ||
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Primary Responsibilities:
• Develops criteria for nominating and appointing directors, including Board size and composition, corporate governance policies, and individual director expertise, attributes and skills.
• Recommends to the Board the individuals to be nominated as directors.
• Recommends to the Board the appointees to be selected for service on the Board Committees.
• Oversees an annual review of the performance of the Board and each Committee.
• Reviews annually the adequacy of the Committee charter and recommends proposed changes to the Board.
• Oversees the development and implementation of a set of corporate governance principles applicable to Martin Marietta.
| ||||
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Other Governance Matters: All members are non-employee, independent Directors, as required by the rules of the NYSE.
Upon recommendation of this Committee, the Board of Directors has adopted a set of Corporate Governance Guidelines for Martin Marietta. The Guidelines are posted and available for public viewing on our website at https://ir.martinmarietta.com/corporate-governance. A copy may also be obtained upon request from Martin Marietta’s Corporate Secretary.
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16
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2020 PROXY STATEMENT
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Table of Contents
Election of Directors
The following sets forth the age, experience, key attributes and other biographical information for each nominee for election as a director for a one-year term until 2021.
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◆DOROTHY M. ABLES
Director Since: 2018
Age: 62
Committees:
|
Ms. Ables joined the Martin Marietta Board in November 2018. Ms. Ables held a number of executive positions with Spectra Energy and predecessor companies, including serving from 2008 to 2017 as the Chief Administrative Officer of Spectra Energy Corp., a North American energy infrastructure company, where she was responsible for human resources, information technology, support services, community relations and audit services. Prior to that, she served as Vice President of Audit Services and Chief Ethics and Compliance Officer for Spectra Energy, Vice President and Chief Compliance Officer for Duke Energy Corporation, an American electric power holding company, and Senior Vice President and Chief Financial Officer for Duke Energy Gas Transmission. Spectra Energy was a Fortune 500 Company and one of North America’s leading pipeline and midstream companies prior to its acquisition by Enbridge Inc. in 2017. Ms. Ables started her career in the audit department of Peat, Marwick, Mitchell & Co.
Ms. Ables serves as an Independent Director of Cabot Oil & Gas Corporation, an independent oil and gas company, where she is Chair of the audit committee and a member of the compensation committee. She served as a Director of Spectra Energy Partners, an affiliate of Spectra Energy Corp., from 2013 to 2017. Ms. Ables attended the University of Texas at Austin where she earned a Bachelor of Business Administration degree in Accounting. |
Key attributes, experience and skills:
• More than 8 years of C-Suite experience
• Financial expertise acquired through serving as CFO of Duke Energy Gas Transmission and as Vice President of Audit Services and Chief Compliance Officer of Spectra Energy Corp. and Duke Energy Corporation
• Valuable business leadership in human resources, information technology, community relations, finance and financial statements
• Strong leadership skills and familiarity with Texas, an important state for the Company |
|
◆SUE W. COLE
Director Since: 2002
Age: 69
Committees:
|
Ms. Cole is the managing partner of SAGE Leadership & Strategy, LLC, an advisory firm for businesses, organizations and individuals relating to strategy, governance and leadership development. Ms. Cole was previously a principal of Granville Capital Inc., a registered investment advisory firm, from 2006 to 2011, and before that she was the Regional CEO, Mid-Atlantic Region, of U.S. Trust Company, N.A., where she was responsible for the overall strategic direction, growth, and leadership of its North Carolina, Philadelphia and Washington, D.C. offices. Ms. Cole previously held various positions in the U.S. Trust Company, N.A. and its predecessors. Ms. Cole serves as Chair of the compensation committee of Biscuitville, Inc., where she was previously Chairman of the Board. Ms. Cole has previously served on the public-company board of UNIFI, Inc. She has also been active in community and charitable organizations, including previously serving as Chairman of the North Carolina Chamber of Commerce, on the investment committee of the University of North Carolina at Greensboro and as a member on the North Carolina Economic Development Board. Ms. Cole attended the University of North Carolina at Greensboro where she earned a Bachelor of Science degree in Business Administration and a Masters in Business Administration in Finance. |
Key attributes, experience and skills:
• Valuable experience in executive compensation, corporate governance, human resources, finance and financial statements, and customer service
• Chief executive officer of several financial services businesses as well as several non-profit organizations
• Strong leadership skills and familiarity with North Carolina, an important state for the Company |
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2020 PROXY STATEMENT
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17
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Table of Contents
Proposal 1: Election of Directors ◆ Director Nominees
|
◆SMITH W. DAVIS
Director Since: 2018
Age: 72
Committees:
Chair |
Mr. Davis is a shareholder at Greenberg Traurig, LLP, an international law firm, where he focuses his practice on both legal reform (litigation-related policy matters) across a broad range of industries and issues related to natural gas pipelines. His work with respect to pipelines has centered on multiemployer pension policy and environmental issues. Previously, Mr. Davis served as senior partner at Akin Gump Strauss Hauer & Feld LLP, an international law firm focused on lobbying, where he provided counsel on a wide variety of legislative and regulatory matters, including those before a variety of congressional committees. Mr. Davis joined Akin Gump in 1979, and his practice included advising on legal matters relating to environmental issues, financial institutions, mergers and acquisitions, and pension reform. Mr. Davis also served on Akin Gump’s compensation and management committees. Prior to joining Akin Gump, Mr. Davis served as a counsel to the House Judiciary Committee. Mr. Davis attended Yale University where he received a Bachelors of Arts degree, magna cum laude, and Yale Law School where he received his Juris Doctor degree. |
Key attributes, experience and skills:
• Extensive experience in legal, compliance, and corporate governance
• Strong leadership skills and expertise in governmental and regulatory issues, safety, health and environmental matters, mergers and acquisitions, executive compensation, financial affairs, and risk assessment
• Brings additional perspective to the Board on diversity and corporate citizenship |
|
◆JOHN J. KORALESKI
Director Since: 2016
Age: 69
Committees:
Chair |
Mr. Koraleski joined the Martin Marietta Board in 2016. Mr. Koraleski served from February 2015 through his retirement in September 2015 as executive Chairman of the Board of the Union Pacific Corporation (UP), which through its subsidiaries operates North America’s premier railroad franchise, covering 23 states across the western two-thirds of the United States. Prior to that, he was named President and Chief Executive Officer of the UP in March 2012, elected as a Director of the UP in July 2012 and appointed Chairman of the Board in 2014. Since joining the Union Pacific (Railroad) in 1972, Mr. Koraleski held a number of executive positions in the UP and the Railroad, including, Executive Vice President – Marketing and Sales from 1999 to 2012, Executive Vice President – Finance and Information Technology, Chief Financial Officer and Controller. Mr. Koraleski served as the Chairman of The Bridges Investment Fund, Inc., a general equity fund whose primary investment objective is to seek long-term capital appreciation, from 2005 through March 2012 and is a past Chairman of the Association of American Railroads. Mr. Koraleski earned a Bachelor’s and Master’s degree in business administration from the University of Nebraska at Omaha. |
Key attributes, experience and skills:
• Experience with the demands and challenges associated with managing a large publicly-traded organization from his experience as Chairman and CEO of Union Pacific
• Extensive knowledge of financial system management, public company accounting, disclosure requirements and financial markets
• Valuable expertise in talent management, compensation, governance and succession planning
• Understanding of complex logistic operations, safety and rail operations
• Broad strategic analysis and experience with acquisitions, integration, marketing and information technologies |
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2020 PROXY STATEMENT
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Table of Contents
Director Nominees ◆ Proposal 1: Election of Directors
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◆C. HOWARD NYE
Director Since: 2010
Age: 57
Chairman of the Board
Committees:
Chair |
Mr. Nye has served as Chairman of the Board since 2014, as President of Martin Marietta since 2006 and as Chief Executive Officer and a Director since 2010. Mr. Nye previously served as Chief Operating Officer from 2006 to 2009. Prior to joining Martin Marietta in 2006, Mr. Nye spent nearly 13 years in a series of increasingly responsible positions with Hanson PLC, an international building materials company, including as Executive Vice President of its North American building materials business. Mr. Nye received a Bachelor’s degree from Duke University and a Juris Doctor degree from Wake Forest University. In addition to his educational, professional, executive and related roles, Mr. Nye is a past Chairman of the Board of the National Stone, Sand & Gravel Association (NSSGA); he presently serves as Chairman of the North Carolina Chamber and as Vice Chairman of the American Road & Transportation Builders Association (ARTBA). Mr. Nye is also a member of the Board of Directors of the United States Chamber of Commerce, the world’s largest business organization. Since 2018, Mr. Nye has been a member of the Board of Directors of General Dynamics Corporation (NYSE: GD), a global aerospace and defense company. From 2015 to 2018, Mr. Nye was also an independent director for Cree, Inc. (NASDAQ: CREE), an American manufacturer and marketer of lighting-class lighting products. In 2019, Forbes magazine recognized Mr. Nye as one of America’s Most Innovative Leaders; he was previously recognized by both Aggregates Manager and Pit & Quarry magazines, as Aggman of the Year and a Hall of Fame inductee, respectively. Mr. Nye has also served on numerous other state, local and/or philanthropic organizations including the North Carolina Business Council of Management and Development, Inc., Co-Chair of the NC FIRST Commission (evaluating North Carolina’s current and future transportation investment needs), and as a gubernatorial appointee to the North Carolina Mining Commission. He has also served on the Alumni Boards at Duke University and Wake Forest University School of Law. |
Key attributes, experience and skills:
• Extensive knowledge of the construction aggregates industry
• Extensive leadership, business, operating, marketing, mergers and acquisitions, legal, customer-relations, and safety and environmental experience
• Understands the competitive nature of the business and has strong management skills, broad executive experience, and corporate governance expertise
• Broad strategic vision for the future growth of Martin Marietta |
|
◆LAREE E. PEREZ
Director Since: 2004
Age: 66
Committees:
Chair |
Ms. Perez is an investment consultant with DeRoy & Devereaux, an independent investment adviser, where she has provided client consulting services since 2015. She was previously Owner and Managing Partner of The Medallion Company, LLC, a consulting firm, from 2003 to 2015. Ms. Perez was previously a Director of GenOn Energy, Inc., one of the largest power producers in the United States, from 2002 to 2012, and served as the Chairman of the audit committee of GenOn Energy, Inc. from 2002 to 2007 and a member of its audit and risk and finance oversight committees from 2008 to 2012. Previously, she was Vice President of Loomis, Sayles & Company, L.P. and co-founder, President and Chief Executive Officer of Medallion Investment Company, Inc. In addition to civic and charitable organizations, Ms. Perez served as Vice Chairman of the Board of Regents at Baylor University and previously served on the Board of Trustees of New Mexico State University, where she was also Chairman of the Board. Ms. Perez earned a Bachelor’s degree from Baylor University in Finance and Economics. |
Key attributes, experience and skills:
• Significant business, financial and private investment experience
• Significant expertise with respect to financial statements, corporate finance, accounting and capital markets, mergers and acquisitions, and strategic analysis
• Insight into auditing best practices
• Familiarity with the southwestern United States |
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2020 PROXY STATEMENT
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19
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Table of Contents
Proposal 1: Election of Directors ◆ Director Nominees
|
◆THOMAS H. PIKE
Director Since: 2019
Age: 60
Committees:
|
Mr. Pike joined the Martin Marietta Board in July 2019. Mr. Pike served as Chief Executive Officer and a member of the Board of Directors of Quintiles Transnational Holdings, Inc. (Quintiles) from April 2012 until its merger with IMS Health in December 2016 to create IQVIA (NYSE:IQV). Before its merger with IMS, Quintiles had a network of more than 35,000 employees conducting business in approximately 100 countries. Mr. Pike led Quintiles through a successful public offering and helped it grow into a Fortune 500 company. Under Mr. Pike’s leadership, Quintiles was named one of the world’s Most Ethical Companies in 2016. Prior to Quintiles, Mr. Pike spent 22 years at Accenture (NYSE: ACN), a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations, until December 2009. At Accenture, Mr. Pike’s roles included serving as Chief Risk Officer and Managing Director of the North America Health and Products business areas. He previously served as the global Chief Operating Officer for Accenture’s Resources operating group and had also served as Accenture’s Chief Strategy Officer. Since leaving Accenture in December 2009 and until joining Quintiles in April 2012, Mr. Pike was involved with a number of start-ups in the technology and healthcare sectors. Early in his career Mr. Pike was a consultant with McKinsey & Company. Mr. Pike earned his Bachelor’s degree in accounting from the University of Delaware. |
Key attributes, experience and skills:
• More than 14 years of C-Suite experience
• Broad strategic and financial experience
• Extensive experience in mergers and acquisitions, integration, and strategic development and analysis
• Significant mentorship, business and operating experience in a public company
• Valuable knowledge of financial system management, public company accounting, disclosure requirements and financial markets |
|
◆MICHAEL J. QUILLEN
Director Since: 2008
Age: 71
Lead Independent Director
Committees:
|
Mr. Quillen was the founder and served as Chief Executive Officer of Alpha Natural Resources, Inc. (NYSE: ANR), a leading eastern United States coal supplier, since its formation in 2004 until its merger with Foundation Coal Holdings, Inc. in July 2009, and served as President and Chairman of ANR from 2006 to 2009, and non-Executive Chairman until May 2012. Mr. Quillen held senior executive positions in the coal industry throughout his career at Pittston/Pittston Coal Sales Corp., AMVEST Corporation, NERCO Coal Corporation, Addington, Inc. and Mid-Vol Leasing, Inc. He has also served as Chairman (Rector) of the Board of Visitors of Virginia Polytechnic Institute and State University from July 2012 to June 2018. He was Chairman of the audit and finance committee of Virginia Polytechnic Institute and State University from July 2010 to June 2012. He also served on the Virginia Port Authority from 2003 to 2012 and as Chairman from July 2011 to December 2012. Mr. Quillen attended Virginia Polytechnic Institute and State University, earning both Bachelor’s and Master’s degrees in Civil Engineering. |
Key attributes, experience and skills:
• Valuable business, leadership, management, financial, and mergers and acquisitions experience
• Extensive experience related to mining companies, governmental and regulatory issues, safety, health and environmental matters
• Tremendous insight and expertise with respect to strategic analysis, the natural resources industry, and energy
• Wealth of knowledge related to transportation |
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20
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2020 PROXY STATEMENT
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|
Table of Contents
Director Nominees ◆ Proposal 1: Election of Directors
|
◆DONALD W. SLAGER
Director Since: 2016
Age: 58
Committees:
Chair |
Mr. Slager serves as President and Chief Executive Officer of Republic Services, Inc. (Republic), a service provider in the non-hazardous solid waste industry, holding this position since January 2011. Prior to this, he served as President and Chief Operating Officer of Republic from December 2008 until his promotion to CEO. Prior to that, Mr. Slager served in the same capacity for Allied Waste Industries, Inc. (Allied Waste), from 2005 to 2008, prior to its merger with Republic. Mr. Slager was Executive Vice President and Chief Operating Officer of Allied Waste between 2003 and 2004. Prior to that, Mr. Slager held varying positions of increasing responsibility with Allied Waste. Mr. Slager also has served as a Director of Republic since 2010. Mr. Slager previously served as an independent Director of UTi Worldwide Inc. (UTi) from 2009 to January 2016, where he served as Chairman of the nominating and corporate governance committee and as a member of both the compensation and risk committees. UTi, a former NYSE listed company, was an international, non-asset-based supply chain services and solutions company providing air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services until it was acquired by DSV A/S, a third-party logistics services provider, in January 2016. Mr. Slager has completed the Northwestern University Kellogg School Advanced Executive Program and holds a certificate from the Stanford University Board Consortium Development Program. |
Key attributes, experience and skills:
• More than 15 years of C-Suite experience
• More than 28 years of general management experience in a complex, capital intensive and logistics business
• Extensive experience in mergers and acquisitions, integration, and strategic development and analysis
• Valuable experience from his membership on two publicly-traded board of directors |
|
◆DAVID C. WAJSGRAS
Director Since: N/A
Age: 60
|
Mr. Wajsgras served as Raytheon Company (NYSE: RTN) vice president and president of the Intelligence, lnformation and Services (IIS) business from March 2015 to April 2020. Raytheon is a major U.S. defense contractor and industrial corporation. IIS provides a full range of technical and professional services to intelligence, defense, federal and commercial customers worldwide. The business specializes in global Intelligence, Surveillance and Reconnaissance; navigation; Department of Defense space and weather solutions; cybersecurity; analytics; training; logistics; mission support; engineering; automation and sustainment solutions; and international and domestic Air Traffic Management systems. Prior to this role, he was senior vice president and chief financial officer (CFO) of Raytheon from March 2006 to March 2015. Before joining Raytheon, Mr. Wajsgras was executive vice president and CFO of Lear Corporation, an American automotive manufacturing company. Prior to joining Lear, Mr. Wajsgras was corporate controller for Engelhard Corporation, a former American Fortune 500 company that supplied catalysts. He also held numerous financial management positions with Honeywell International, Inc., an American multinational conglomerate company. Mr. Wajsgras served as the chair of the board for Raytheon Australia and was on the board for Forcepoint. He serves on the Center for a New American Security Advisory Board; the Intelligence and National Security Alliance Board of Directors; and is a member of the Massachusetts Cybersecurity Strategy Council. In 2019, Washington Exec named Mr. Wajsgras to its top 25 list of executives and recognized him as its Intelligence Industry Executive of the Year. Mr. Wajsgras has appeared on Executive Mosaic’s annual Wash 100 list of influential leaders in the government contracting arena for the last five years. He was named Federal Computer Week’s prestigious Industry Eagle Award winner in 2018 for his pivotal role in the U.S. government Information Technology community. In 2012, Mr. Wajsgras was named one of the Wall Street Journal’s 25 Best CFOs among the larger companies in the Standard & Poor’s 500 Index. Mr. Wajsgras earned his Bachelor’s degree in accounting from the University of Maryland. He has a Masters in Business Administration from American University. |
Key attributes, experience and skills:
• Extensive financial and operating experience
• Knowledge of corporate finance, strategic planning and risk management processes
• Experience as a public company CFO, as well as expansive knowledge of accounting principles and practices, auditing, internal control over financial reporting, and risk management processes
• Expertise in cybersecurity products and services |
|
|
The Board Unanimously Recommends a Vote “FOR” All Nominees for Election to the Board of Directors on this Proposal 1 |
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2020 PROXY STATEMENT
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21
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Table of Contents
Proposal 1: Election of Directors ◆ Director Compensation
|
22
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2020 PROXY STATEMENT
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Table of Contents
Director Compensation ◆ Proposal 1: Election of Directors
Director Compensation Table
The table below summarizes the compensation paid by Martin Marietta to each person who served as a non-employee Director during the fiscal year ended December 31, 2019.
| Name1 (a) |
Fees Paid in Cash ($)2 (b) |
Stock ($)3 (c) |
Change in Pension Earnings ($)4 (f) |
All Other ($)5 (g) |
Total ($) (h) |
|||||||||
| Dorothy M. Ables |
125,000 |
|
130,164 |
|
64 |
2,481 |
|
257,709 |
| |||||
| Sue W. Cole |
123,750 |
|
130,164 |
|
25,429 |
53,947 |
|
333,290 |
| |||||
| Smith W. Davis |
126,000 |
|
130,164 |
|
141 |
4,625 |
|
260,930 |
| |||||
| John J. Koraleski |
138,125 |
|
130,164 |
|
416 |
6,765 |
|
275,470 |
| |||||
| Laree E. Perez |
145,000 |
|
130,164 |
|
12,194 |
30,049 |
|
317,407 |
| |||||
| Thomas H. Pike |
60,000 |
|
130,044 |
|
5 |
636 |
|
190,685 |
| |||||
| Michael J. Quillen |
155,064 |
|
130,164 |
|
12,135 |
34,821 |
|
332,184 |
| |||||
| Dennis L. Rediker6 |
33,250 |
|
0 |
|
6,576 |
9,497 |
|
49,323 |
| |||||
| Donald W. Slager |
131,250 |
|
130,164 |
|
362 |
4,217 |
|
265,993 |
| |||||
| Stephen P. Zelnak, Jr. |
135,000 |
|
130,164 |
|
9,733 |
32,024 |
|
306,921 |
| |||||
| 1 | Mr. Nye, who is the Chief Executive Officer of Martin Marietta and a member of the Board of Directors, is not included in this table because he is not compensated separately for his service as a Director. The compensation received by Mr. Nye as an employee of Martin Marietta is shown in the Summary Compensation Table on page 57. |
| 2 | The amounts in column (b) reflect fees earned in 2019. Some of these fees were deferred pursuant to the Common Stock Purchase Plan for Directors in the form of common stock units. The number of units of common stock credited in 2019 to each of the Directors under the Common Stock Purchase Plan for Directors and the grant date fair value for these awards determined in accordance with FASB ASC Topic 718, are as follows: Ms. Ables, 0; Ms. Cole, 554 units and $124,165 value, respectively; Mr. Davis, 560 units and $126,691 value, respectively; Mr. Koraleski, 611 units and $138,626 value, respectively; Ms. Perez, 0; Mr. Pike, 0; Mr. Quillen, 694 units and $155,510 value, respectively; Mr. Rediker, 36 units and $6,761 value, respectively; Mr. Slager, 0; and Mr. Zelnak, 301 units and $67,864 value, respectively. The number of units credited to each of the Directors as of December 31, 2019, including units accumulated under the plan for all years of service as a Director, is as follows: Ms. Ables, 0; Ms. Cole, 15,716; Mr. Davis, 1,023; Mr. Koraleski, 1,235; Ms. Perez, 5,258; Mr. Pike, 0; Mr. Quillen, 7,048; Mr. Slager, 0; and Mr. Zelnak, 6,831. Mr. Pike joined the Board in July 2019 and his fees were prorated. |
| 3 | Each Director who was serving immediately following the 2019 Annual Meeting of Shareholder received 600 RSUs in May 2019. Mr. Pike received 578 RSUs upon joining the Board in July 2019. The amounts in column (c) reflect the grant date fair value for these awards determined in accordance with FASB ASC Topic 718. The RSUs fully vested upon award and will be distributed to the Director upon retirement, except Ms. Perez and Mr. Quillen each received a distribution of 300 unrestricted shares of common stock and deferred the distribution of 300 RSUs until retirement. As of December 31, 2019, each Director held RSUs in the amounts as follows: Ms. Ables, 1,344; Ms. Cole, 10,153; Mr. Davis, 1,209; Mr. Koraleski, 2,148; Ms. Perez, 9,329; Mr. Pike, 578; Mr. Quillen, 9,329; Mr. Slager, 2,187; and Mr. Zelnak, 8,774. As of December 31, 2019, none of the Directors held options for common stock. Mr. Rediker’s RSUs were distributed upon his retirement. |
| 4 | The amounts in column (f) reflect interest paid on fees deferred in cash under the Common Stock Purchase Plan for Directors. |
| 5 | The amounts in column (g) reflect for each Director the dollar value of dividend equivalents paid in 2019 on common stock units held under the plan. The Directors did not receive perquisites or other personal benefits in 2019. |
| 6 | Mr. Rediker retired at the 2019 Annual Meeting of Shareholders in accordance with the Bylaws that provide for retirement following the Director’s 75th birthday. |
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Beneficial Owners and Management
How much stock do Martin Marietta’s Directors and executive officers own?
The following table sets forth information as of March 6, 2020 with respect to the shares of common stock that are beneficially owned by the Directors, the Director nominee, the Chief Executive Officer, the Chief Financial Officer, and the three other named executive officers who are listed in the Summary Compensation Table on page 57 of this proxy statement, individually, and by all Directors and executive officers of Martin Marietta as a group. The address of each beneficial owner below is Martin Marietta’s principal executive office.
| Name of Beneficial Owner |
Amount and Nature of Beneficial Ownership1 |
Deferred and Restricted Units5 |
Total | ||||||||||||
| Dorothy M. Ables |
1,344 | 2 |
|
— |
|
|
1,344 |
| |||||||
| Roselyn R. Bar |
56,074 | 3 |
|
8,464 |
|
|
64,538 |
| |||||||
| Sue W. Cole |
31,882 | 2,4 |
|
— |
|
|
31,882 |
| |||||||
| Smith W. Davis |
2,373 | 2 |
|
— |
|
|
2,373 |
| |||||||
| Daniel L. Grant |
16,161 | 3 |
|
4,132 |
|
|
20,293 |
| |||||||
| John J. Koraleski |
8,440 | 2 |
|
— |
|
|
8,440 |
| |||||||
| Craig M. LaTorre |
499 | 3 |
|
9,112 |
|
|
9,611 |
| |||||||
| James A. J. Nickolas |
2,841 | 3 |
|
9,160 |
|
|
12,001 |
| |||||||
| C. Howard Nye |
134,308 | 3 |
|
43,509 |
|
|
177,817 |
| |||||||
| Laree E. Perez |
14,587 | 2 |
|
— |
|
|
14,587 |
| |||||||
| Thomas H. Pike |
578 | 2 |
|
— |
|
|
578 |
| |||||||
| Michael J. Quillen |
19,972 | 2 |
|
— |
|
|
19,972 |
| |||||||
| Donald W. Slager |
2,187 | 2 |
|
— |
|
|
2,187 |
| |||||||
| David C. Wajsgras |
|
— |
|
— |
|
|
— |
| |||||||
| Stephen P. Zelnak, Jr. |
23,030 | 2 |
|
— |
|
|
23,030 |
| |||||||
| All Directors and executive officers as a group |
316,128 | 3,4 | 87,902 | 404,030 | |||||||||||
| 1 | As to the shares reported, unless indicated otherwise, (i) beneficial ownership is direct, and (ii) the person indicated has sole voting and investment power. None of the Directors or named executive officers individually own in excess of one percent of the shares of common stock outstanding. All Directors and executive officers as a group own 0.0058% of the shares of common stock outstanding as of March 6, 2020. None of the shares reported are pledged as security. |
| 2 | Amounts reported include (1) compensation paid on an annual basis that Directors have received in common stock units that are deferred pursuant to the Amended and Restated Martin Marietta Materials, Inc. Common Stock Purchase Plan for Directors and (2) RSUs that each Director received in 2019 as part of their compensation. The Directors do not have voting or investment power for their respective common stock units and RSUs. The number of common stock units credited to each of the Directors pursuant to the Common Stock Purchase Plan as of March 6, 2020 is as follows: Ms. Ables, 0; Ms. Cole, 15,848; Mr. Davis, 1,164; Mr. Koraleski, 1,392; Ms. Perez, 5,258; Mr. Pike, 0; Mr. Quillen, 7,214; Mr. Slager, 0; and Mr. Zelnak, 6,906. |
| 3 | The number of shares owned for each of Mr. Nye, Ms. Bar, Mr. LaTorre, Mr. Grant, Mr. Nickolas and all Directors and executive officers as a group assumes that options held by each of them covering shares of common stock in the amounts indicated, which are currently exercisable within 60 days of March 6, 2020, have been exercised: Mr. Nye, 10,000; Ms. Bar, 8,517; Mr. Grant, 1,892; Mr. LaTorre, 0; Mr. Nickolas, 0; and all Directors and executive officers as a group, 20,409. |
| 4 | Includes an approximation of the number of shares in an IRA account. |
| 5 | The amounts reported include common stock units credited to each of the NEOs in connection with (i) their deferral of a portion of their cash bonus under the Martin Marietta Materials, Inc. Incentive Stock Plan, and (ii) RSUs (not including any performance-based share units (PSUs) granted under the Stock Plan that are subject to forfeiture in accordance with the terms of the plan and are scheduled to vest within 60 days of March 6, 2020), each in the following amounts: Mr. Nye, 19,727 and 23,782, respectively; Ms. Bar, 3,534 and 4,930, respectively; Mr. Nickolas, 1,375 and 7,785, respectively; Mr. Grant, 1,432 and 2,700, respectively; Mr. LaTorre, 507 and 8,605, respectively; and all Directors and executive officers as a group, 17,247 and 54,491, respectively. There are no voting rights associated with the stock units or RSUs. |
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Section 16(a) Beneficial Ownership Reporting Compliance ◆ Security Ownership of Certain Beneficial Owners and Management
Who are the largest owners of Martin Marietta’s stock?
The following table sets forth information with respect to the shares of common stock which are held by persons known to Martin Marietta to be the beneficial owners of more than 5% of such stock as of March 6, 2020. To the best of Martin Marietta’s knowledge, based on filings with the Securities and Exchange Commission as noted below, no person beneficially owned more than 5% of any class of Martin Marietta’s outstanding voting securities at the close of business on March 6, 2020, except for those shown below.
| Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Percent of Class | ||
| The Vanguard Group1 100 Vanguard Boulevard V26 Malvern, PA 19355 |
6,898,654 | 11.03% | ||
| BlackRock, Inc.2 55 East 52nd Street New York, NY 10055
|
4,105,223
|
6.6%
| ||
| 1 | As reported in Schedule 13G/A reporting beneficial ownership as of December 31, 2019 filed with the Securities and Exchange Commission on February 12, 2020, indicating sole power to vote 93,240 shares, shared power to vote 16,298 shares, sole power to dispose of 6,794,063 shares, and shared power to dispose of 104,591 shares. |
| 2 | As reported in Schedule 13G/A reporting beneficial ownership as of December 31, 2019 filed with the Securities and Exchange Commission on February 5, 2020, indicating sole power to vote 3,626,476 shares and sole power to dispose of 4,105,223 shares. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires Directors and officers of Martin Marietta and persons who own more than 10% of the common stock to file with the SEC initial reports of ownership and reports in changes in ownership of the common stock. Directors, officers and more than 10% shareholders are required by SEC regulations to furnish to Martin Marietta copies of all Section 16(a) reports filed. Based solely on its review of copies of reports furnished to Martin Marietta, the Company believes that during fiscal year 2019, such filing requirements were timely satisfied except for 6 quarterly dividend reinvestments in 2017 and 2018 that should have been previously reported on two Form 5s were inadvertently reported late by John P. Mohr, Senior Vice President and Chief Information Officer. Such reinvestments related to approximately 3.9 shares in the aggregate.
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Table of Contents
Corporate Governance Philosophy ◆ Corporate Governance Matters
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2020 PROXY STATEMENT
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Table of Contents
Corporate Governance Matters ◆ Corporate Governance Philosophy
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Table of Contents
Corporate Governance Philosophy ◆ Corporate Governance Matters
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2020 PROXY STATEMENT
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Table of Contents
Corporate Governance Matters ◆ Corporate Governance Philosophy
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Independent Auditors
(Item 2 on Proxy Card)
The Audit Committee has appointed PricewaterhouseCoopers LLP (PwC), an independent registered public accounting firm, to audit the consolidated financial statements of Martin Marietta and the effectiveness of Martin Marietta’s internal control over financial reporting for the 2020 fiscal year and the Board of Directors recommends that the shareholders ratify this appointment. The ratification of the appointment of PwC is being submitted to the shareholders because the Board of Directors believes this to be good corporate practice. Should the shareholders fail to ratify this appointment, the Audit Committee will review the matter and determine, in its sole discretion, whether PwC or another independent registered public accounting firm should be retained.
PwC served as Martin Marietta’s independent auditors for 2019 and audited the consolidated financial statements of Martin Marietta for the year ended December 31, 2019 and the effectiveness of Martin Marietta’s internal control over financial reporting as of December 31, 2019. In connection with the audit of Martin Marietta’s 2019 consolidated financial statements, Martin Marietta entered into an engagement letter with PwC that sets forth the terms by which PwC would perform audit services for Martin Marietta.
The Audit Committee is solely responsible for retaining or terminating Martin Marietta’s independent auditors. Representatives of PwC are expected to attend the Annual Meeting, will have the opportunity to make a statement if they so desire, and will be available to respond to questions from shareholders.
|
The Board Unanimously Recommends a Vote “FOR” on this Proposal 2 |
The following table summarizes the aggregate fees billed for professional services rendered to Martin Marietta by PwC in 2019 and 2018.
| 2019 |
2018 |
|||||||
| Audit Fees1 |
$ |
2,819,000 |
|
$ |
2,883,000 |
| ||
| Audit-Related Fees2 |
|
100,000 |
|
|
100,000 |
| ||
| Tax Fees3 |
|
— |
|
|
22,000 |
| ||
| All Other Fees4 |
|
3,000 |
|
|
3,000 |
| ||
| TOTAL |
$ |
2,922,000 |
|
$ |
3,008,000 |
| ||
| Percentage of Audit & Audit-Related Fees to Total Fees |
|
99.9 |
% |
|
99.2 |
% | ||
| 1 | Services in connection with the annual consolidated financial statement audit, the annual internal controls audit, and reviews of the consolidated financial statements included in the quarterly reports. |
| 2 | Services in connection with audit-related services, including agreed-upon procedures reports and subsidiary audits. |
| 3 | Services in connection with tax advice related to transfer pricing matters. |
| 4 | Other fees include license fees for technical accounting software. |
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The Audit Committee operates under a written charter adopted by the Board of Directors, which is reassessed at least annually for adequacy by the Audit Committee. The Directors who serve on the Audit Committee have no financial or personal ties to Martin Marietta (other than Director compensation and equity ownership as described in this proxy statement) and are all “independent” for purposes of the SEC’s regulations, the NYSE listing standards, and the Guidelines for Director’s Independence adopted by the Board of Directors. The Board of Directors has determined that none of the Audit Committee members has a relationship with Martin Marietta that may interfere with the Director’s independence from Martin Marietta and its management. Copies of the Audit Committee’s charter and Martin Marietta’s Guidelines for Director’s Independence can be viewed on Martin Marietta’s website at https://ir.martinmarietta.com/corporate-governance.
The Board of Directors has charged the Audit Committee with a number of responsibilities, including review of the adequacy of Martin Marietta’s financial reporting, accounting systems, and internal controls. Martin Marietta’s independent auditors and the vice president of the internal audit function report directly and are ultimately accountable to the Audit Committee.
In the discharge of its responsibilities, the Audit Committee has reviewed and discussed with management and the independent auditors Martin Marietta’s audited consolidated financial statements for fiscal year 2019. In addition, the Committee has discussed with the independent auditors matters such as the quality (in addition to acceptability), clarity, consistency, and completeness of Martin Marietta’s financial reporting, as required by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board.
The Audit Committee has received from the independent auditors written disclosures and a letter concerning the independent auditors’ independence from Martin Marietta, as required by the Public Company Accounting Oversight Board (PCAOB) in Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent auditors the independent auditors’ independence. These disclosures have been reviewed by the Committee and discussed with the independent auditors.
Based on these reviews and discussions, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in Martin Marietta’s 2019 Annual Report on Form 10-K for filing with the Securities and Exchange Commission.
February 20, 2020
AUDIT COMMITTEE
Laree E. Perez, Chair
Dorothy M. Ables
John J. Koraleski
|
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Compensation Committee Report
The Management Development and Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis beginning on page 34 of this Proxy Statement. Based on this review and discussion, the Management Development and Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Martin Marietta’s 2019 Annual Report on Form 10-K and this Proxy Statement.
February 19, 2020
MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE
John J. Koraleski, Chair
Thomas H. Pike
Michael J. Quillen
Compensation Committee Interlocks and Insider
Participation in Compensation Decisions
The members of Martin Marietta’s Management Development and Compensation Committee are Directors Koraleski, Pike, and Quillen, none of whom has ever been an officer or employee of Martin Marietta or any of its subsidiaries, or had any relationship requiring disclosure by Martin Marietta under Item 404 of Regulation S-K of the SEC. There are no executive officer-Director interlocks where an executive of Martin Marietta serves on the compensation committee of another corporation that has an executive officer serving on Martin Marietta’s Board of Directors.
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Table of Contents
Executive Summary ◆ Compensation Discussion and Analysis
Shareholder Engagement and Feedback on 2019 Say On Pay
We regularly engage with our shareholders to understand the topics that matter most to them as they relate to executive compensation. We view a continuing, constructive dialogue with our long-term shareholders as critically important to ensuring that we remain aligned with their interests. We regularly talk to long-term shareholders and appreciate the opportunity to gain further insight and understanding into their views. Typically, we speak with our top 25 shareholders, representing 70% of our outstanding shares, at least annually. In 2019 our investor relations outreach extended to 82 meetings with 189 investment groups in the United States, Canada, the United Kingdom, Sweden, Belgium, the Netherlands, and France.
| Avenues of engagement | Discussion highlights | |||
|
|
We hold in-person meetings with investor groups across the globe |
› Financial and operating performance of the Company | ||
|
|
We conduct quarterly conference calls with analysts |
› Executive compensation, pay-for-performance | ||
|
|
We engage with investors continually through meetings, calls and emails |
› Safety, environment and sustainability | ||
|
|
We report investor feedback to the Committee and the Board to assist in aligning pay and performance |
› Ongoing company strategy | ||
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Compensation Discussion and Analysis ◆ Our 2019 Performance
Building on prior year success, 2019 proved to be another year of outstanding performance. As we marked our 25th year as a public company, we also achieved our eighth consecutive year of growth for revenues, adjusted gross profit, adjusted EBITDA and adjusted earnings per diluted share (after adjusting for one-time earnings per diluted share benefit in 2017, resulting from the Tax Cuts and Jobs Act of 2017). With continued focus on operational excellence and world-class safety, the Company delivered excellent results in 2019, and increased shareholder value.
|
|
Net Earnings attributable to Martin Marietta of $612 million and Adjusted EBITDA* of $1.255 BILLION, an increase of 15%
|
|
TOTAL SHAREHOLDER RETURN of 64%, more than double the S&P 500 | |||
|
|
Continuous commitment to SUSTAINABILITY, which is included in our strategy and compensation decisions
|
|
Third consecutive year of WORLD-CLASS SAFETY performance
|
| * | See Appendix B for reconciliation to reported net earnings attributable to Martin Marietta. Adjusted EBITDA is a metric used for executive performance targets. |
Our five-year strategic planning process, or Strategic Operating Analysis and Review (SOAR), supplemented by our annual plan, has guided us since 2010 as we have grown the business in an intentional, contemplative, and disciplined manner. Our performance since 2010 reflects the power of our SOAR process:
|
2019 Highlights
|
Disciplined Capital Allocation
| |||||||
| ✓ |
Record consolidated revenues of $4.7 billion, a 12% year-over-year increase, driven by double-digit aggregates and cement shipment growth and steady pricing gains across our Building Materials business
|
✓ |
$50 million contributed to the Company’s nearly 100% funded qualified pension plan | |||||
|
✓ |
Achieved 8th consecutive year of revenue, gross profit, adjusted EBITDA and adjusted earnings per diluted share growth |
✓ |
Repurchased 416,000 shares for $98.2 million ($236.04 per share); 13.7 million shares remaining on our February 2015 authorization
| |||||
| ✓ |
Record-setting results yielded a 64 percent TSR, more than double the S&P 500 |
✓ |
Board approved a 15% quarterly dividend increase ($2.20/share on an annualized basis) in August, one of the largest increases in Company history
| |||||
| ✓ |
Maintained our investment grade credit rating, exiting the year with a 2.2x leverage ratio, within our target ratio of 2.0x – 2.5x
| |||||||
As a result of our commitment to SOAR, 2019 was a year of significant growth for Martin Marietta. Record consolidated total revenues of $4.7 billion, reflecting a 12% increase over the prior year, was driven by the double-digit aggregates and cement shipment growth and industry-leading pricing gains. For the eighth-consecutive year, the Company achieved annual revenue, gross profit, adjusted EBITDA and adjusted EPS growth.
| * | Adjusted EBITDA is one of the metrics used for executive performance targets and is shown here for an understanding of this metric as compared to other measures of the Company’s performance. See Appendix B for reconciliation to net earnings attributable to Martin Marietta. |
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Our 2019 Performance ◆ Compensation Discussion and Analysis
Martin Marietta’s ability to consistently translate revenue growth into increased profitability has also given us the ability to protect our balance sheet in order to make prudent acquisitions and capital investments in our business, while achieving a debt-to-EBITDA leverage ratio of 2.2x at year-end. As a result, we have been able to position our business as an aggregates leader in 90% of the geographies in which we operate and align our product offerings to leverage strategic cement and targeted downstream opportunities. This led to our significant outperformance of our peers in 2019, during which time we delivered a 64 percent total shareholder return.
Safety, Environment and Sustainability
Sustainability Reporting
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Compensation Discussion and Analysis ◆ Safety, Environment and Sustainability
|
| ||||||
|
|
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Safety, Environment and Sustainability ◆ Compensation Discussion and Analysis
Safety Performance
For Martin Marietta, safety performance sets our foundation for long-term financial strength and successful SOAR execution. Simply said, a safe operation is a profitable one. All awards are meaningful, but it is particularly satisfying when we are recognized for achievement against our core values.
Employee Well-being
| Also new in 2019, Martin Marietta developed and implemented an Employer Brand, ONE, supported by a strong Employee Value Proposition. This initiative is designed to build a more compelling connection with current and potential employees, increase the visibility |
|
and attractiveness of Martin Marietta as an employer of choice to strengthen our talent pipeline, and increase employee talent pipeline, and increase employee engagement, morale and retention. | ||||||
|
In May 2019, Martin Marietta was named to the Denver Post’s list of Top Workplaces. The company appeared at #21 in the annual ranking’s Large Company category. Six months later, Martin Marietta was selected for inclusion on The Dallas Morning News’ Top 100 Places to Work list, a ranking that highlights the best employers in the 10 counties surrounding Dallas-Fort Worth. Martin Marietta claimed the #25 spot in the |
news outlet’s Large Company category. Both rankings were determined solely by extensive employee surveys focused on various elements of workplace culture. In addition, Zippia hand-curated a list of the best companies to work for headquartered in and around Raleigh, North Carolina using data on salaries, company financial health, and employee diversity, and Martin Marietta earned the #2 spot out of 100 entrants. |
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Compensation Discussion and Analysis ◆ Safety, Environment and Sustainability
Community Relations
Environmental Stewardship
Ethical Business Conduct
Components of Executive Compensation – Performance-Related Compensation
Each NEO is eligible for a mix of fixed and variable components of compensation. A substantial portion of our CEO’s and other executive officers’ compensation is at risk and will vary depending upon our performance. All of the opportunities to achieve long-term equity incentives (LTI) granted to our CEO and other executive officers in 2019 were performance-related consisting of performance share unit awards (PSUs) that comprised 55% of the long-term equity awards and performance-related restricted stock unit awards (RSUs) that comprised 45% of the awards. The following charts summarize the various forms of compensation and demonstrate that in 2019 87% of the CEO’s compensation and approximately 80% of other NEO compensation is variable and tied to company performance.
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Table of Contents
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 common stock of Martin Marietta during the vesting period are only paid to award holders if and when an award 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
|
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Table of Contents
Compensation Discussion and Analysis ◆ 2019 Chairman, President and CEO Compensation
2019 Chairman, President and CEO Compensation
| * | We consider base salary and annual incentives as short-term pay and PSUs and RSUs as long-term pay. We do not include retirement or other compensation components in the chart. |
Determination of CEO Compensation
At each February Committee meeting, without the CEO present, the Committee reviews and evaluates CEO performance, and determines achievement levels for the prior year. At this meeting, the Committee also discusses an evaluation of the CEO’s performance, competitive compensation data, and salary and annual incentive pay recommendations with the independent members of the Board. In addition, the Committee reviews and discusses an award of RSUs and the target PSU grant size for the CEO at that meeting, which is also discussed with the independent members of the Board.
2019 Named Executive Officers’ Compensation – Our Compensation Strategy
Our executive compensation program is specifically designed to:
| • | Attract and retain top-caliber, knowledgeable and experienced senior executives. |
| • | Motivate our executives to achieve superior results and build long-term value for shareholders. |
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Table of Contents
2019 Named Executive Officers’ Compensation – Our Compensation Strategy ◆ Compensation Discussion and Analysis
| • | Reward performance that meets or exceeds established goals consistent with our strategic aims and upholding integrity. |
| • | Align individual objectives with the Company’s objectives without fostering excessive or inappropriate risk-taking. |
| • | Encourage an ownership mentality and align the long-term financial interests of our executives with those of our shareholders. |
| • | Be market competitive with our peers with whom we compete for talent. |
| • | Provide reward systems that are measurable and easily understood by our managers and shareholders. |
| • | Reinforce the succession planning process undertaken on a company-wide basis by building bench strength and by identifying and retaining senior leadership, both capable of achieving the Company’s long-term growth, profitability and other objectives. |
In 2019, our executive compensation structure consisted of three primary components: base salary, annual incentives, and long-term incentives. Within the long-term incentive component, we utilized a balanced portfolio of PSUs and performance-based RSUs.
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Compensation Discussion and Analysis ◆ 2019 Named Executive Officers’ Compensation – Our Compensation Strategy
The following table summarizes the key elements of our 2019 executive compensation program:
|
Element
|
Primary Purpose
|
Key Characteristics
| ||
|
Base Salary
|
To compensate the executive fairly and competitively for the responsibility level of the position.
|
Fixed compensation that is reviewed annually.
| ||
|
Annual Performance- Based Incentive Awards
|
To motivate and reward organizational and individual achievement of annual, Company and individual objectives.
|
Variable compensation component; based on pre-established Company and individual performance goals.
| ||
|
Incentive Stock Plan
|
To ensure executives invest certain levels of their annual incentive compensation into Martin Marietta stock units.
|
To promote sustainable performance results, a portion of each NEO’s annual cash incentive compensation (35% for the CEO and 20% for the other NEOs) is automatically converted into common stock units. NEOs may elect to convert up to 50% of their annual cash incentive compensation into common stock units.
| ||
|
Long-Term Incentive Awards
|
To align executives with shareholder interests, to reinforce long-term value creation, and to provide a balanced portfolio of long-term incentive opportunities.
|
Variable compensation component. Reviewed and granted annually. Program splits long-term incentives for NEOs at 55% PSUs and 45% RSUs.
| ||
|
Performance Share Units (PSUs)
|
To motivate executives by tying incentives to our multi-year financial goals and relative TSR reinforcing the link between our executive officers and our shareholders.
|
Grants based on three-year adjusted EBITDA and Sales Growth goals, with a modifier based on TSR performance relative to peers.
| ||
|
Performance-Based Restricted Stock Units
|
To motivate the appropriate behaviors delivering superior long-term total shareholder return.
|
Stock price growth. Awards are subject to achievement of one-year adjusted EBITDA goals.
| ||
|
Health/Welfare Plan and Retirement Benefits
|
To provide competitive benefits promoting employee health and productivity and support financial security.
|
Fixed compensation component.
| ||
|
Perquisites and Other Benefits
|
To provide limited business-related benefits, where appropriate, and to assist in attracting and retaining executive officers.
|
Fixed compensation component.
| ||
|
Change-in-Control Protection
|
To provide continuity of management and bridge future employment if terminated following a change in control.
|
Fixed compensation component; only paid in the event the executive’s employment is terminated other than for “cause” or for “good reason”, in either case, in connection with a change in control.
| ||
|
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Table of Contents
Considerations Regarding 2019 Compensation ◆ Compensation Discussion and Analysis
Considerations Regarding 2019 Compensation
The following chart summarizes the target compensation in our 2019 executive compensation program:
|
Pay Component
|
Summary
|
|||
| Base Salary |
• At the February 2019 meeting, the Committee reviewed competitive market data and individual performance evaluations. Increases were effective March 1, 2019 for all NEOs.
|
|||
|
Target Annual Cash Incentives |
• Our CEO’s target incentive for 2019 was 130% of base earnings. For other NEOs’ target incentives for 2019 were 70% to 80% of base earnings. • Our shareholders in 2016 approved a new Executive Cash Incentive Plan that fixed the bonus amounts based on certain objective criteria and allowed the Committee to reduce the award based on enumerated factors in the plan. • Our CEO is required to invest a minimum of 35% of his annual cash bonus into stock units, which are required to be held generally for a period of three years. • Other NEOs are required to invest a minimum of 20% of their annual cash bonus into stock units, which are held generally for a period of three years.
|
|||
|
Long-Term Incentives |
• Our LTI structure consists of PSUs and performance-based RSUs. • The LTI awards for NEOs in 2019 were weighted 55% PSUs and 45% RSUs. The LTI grant size is based on competitive market data. • PSU awards in 2019 are earned based on achievement of performance levels, with 33% based on three-year cumulative Sales Growth and 67% based on three-year cumulative adjusted EBITDA performance. The Company’s relative TSR ranking compared to the S&P 500 provides a modifier to the award up to 20%. • RSU awards to NEOs in 2019 are subject to the achievement of one-year adjusted EBITDA performance.
|
|||
|
Total Compensation |
The Committee uses the size-adjusted 50th percentile of our Compensation Peer Group as a guide in setting the target for the total compensation opportunity, but considers a variety of factors in setting compensation, including the short-term and longer-term performance and leadership characteristics of the executive, and may vary materially. Overall, the Committee believes targeted compensation should be more heavily weighted on variable “at-risk” compensation and longer-term components. |
The Committee approved the following actual compensation items in February 2019:
The Committee determines base salaries for the NEOs and other executives based on a number of factors, including but not limited to, market data, individual performance, the Company’s performance, internal pay equity, the advice of the Committee’s independent compensation consultant, management recommendations (except for the CEO), and, for the CEO, the Committee’s assessment of Mr. Nye’s performance. Based on these factors, the Committee approved the following increases in base salary.
| • | Mr. Nye: 4.5% increase, based on his excellent achievements during his CEO tenure, and specifically his performance in 2019. |
| • | Other NEOs: approximately 3.3% to 7.4% increases, based on a review of competitive market data and individual performance evaluations; Mr. LaTorre received an 18.8% increase in connection with his promotion to Senior Vice President. |
| NEO
|
2019 Base Salary
|
2018 Base Salary
| ||||||||
|
C. Howard Nye
|
$1,150,000
|
$1,100,000
| ||||||||
|
James A. J. Nickolas
|
$ 525,000
|
$ 488,800
| ||||||||
|
Roselyn R. Bar
|
$ 570,000
|
$ 542,500
| ||||||||
|
Craig M. LaTorre*
|
$ 475,000
|
$ 400,000
| ||||||||
|
Daniel L. Grant
|
$ 396,500
|
$ 384,000
| ||||||||
| * | NEO base salaries were increased effective March 1, 2019 with the exception of Mr. LaTorre whose base salary was effective as of April 1, 2019. |
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Table of Contents
Table of Contents
2019 Annual Cash Incentive Goals and Results ◆ Compensation Discussion and Analysis
2019 Actual Incentive Cash Earned
In 2019, the Committee determined that Company and individual performance warranted the annual incentive payments in the chart below based on a review of financial metrics and other important achievements. The Committee reviews the NEOs’ performance based on continuous improvement from the preceding year. As described above, the Committee considered the following financial metrics in making this determination:
| • | Pre-Tax Earnings (profitability) as against prior year and current year plan |
| • | EBITDA (profitability) as against prior year and current year plan |
| • | DSO (cash flow) as against prior year and current year plan |
The table below summarizes the targets for 2019, individual achievements and annual incentive award earned by each NEO:
| NEO
|
2019 Performance Metrics
|
Target Annual Incentive Bonus (% of Salary)
|
2019 Target Annual Incentive*
|
2019 Actual Annual Incentive
| |||||||||||||||
|
C. Howard Nye |
• Continue to drive a world-class safety culture through leadership alignment on safety initiatives
• Generate long-term value for shareholders through strategic growth and profitability
• Effective development of succession plans and professional development of top leaders
|
|
130% |
$ |
1,484,167 |
|
$ |
2,900,000 |
| ||||||||||
|
James A. J. Nickolas |
• Continue to develop the finance team
• Effective development and oversight of financial filings, audits and accounting
• Simplify and standardize financial processes and reporting methods to improve accuracy and knowledge sharing and to enable informed and timely business decisions
|
75% |
$ |
389,225 |
|
$ |
661,683 |
| |||||||||||
|
Roselyn R. Bar |
• Effective management of the legal department, including appropriate handling for securities law compliance, annual and periodic reporting, and robust case assessment
• Provide oversight of ethics program as Chief Ethics Officer
• Continue to improve of processes and management of Corporate Secretary function
|
80% |
$ |
452,333 |
|
$ |
836,817 |
| |||||||||||
|
Craig M. LaTorre |
• Define and develop the safety strategy and gain business alignment on long-term safety initiatives
• Develop and implement key Human Resources priorities, which include talent acquisition, employee development, performance management and succession planning
|
70% |
$ |
319,375 |
|
$ |
523,812 |
| |||||||||||
|
Daniel L. Grant |
• Continue to lead strategic merger and acquisition and asset disposition projects and initiatives that align with our business objectives
• Development of Strategy and Development personnel
• Continue progress on world-class organization initiative
|
70% |
$ |
276,092 |
|
$ |
441,747 |
| |||||||||||
| * | Based on actual base salary earnings in 2019. |
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2020 PROXY STATEMENT
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47
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Table of Contents
Compensation Discussion and Analysis ◆ 2019 Annual Cash Incentive Goals and Results
|
48
|
2020 PROXY STATEMENT
|
|
Table of Contents
PSU Awards (55% of LTI Award) ◆ Compensation Discussion and Analysis
|
|
2020 PROXY STATEMENT
|
49
|
Table of Contents
Compensation Discussion and Analysis ◆ 2019-2021 Performance Goals
The following table provides a summary of the long-term incentives that each of the NEOs received in 2019.
| NEO |
RSUs (3 year annual (# of shares) |
PSUs – Target (3 year cliff vesting subject to achievement of performance measures) (# of shares) | ||||||||
|
C. Howard Nye
|
|
11,318
|
|
|
13,175
|
| ||||
|
James A. J. Nickolas
|
|
2,261
|
|
|
2,632
|
| ||||
|
Roselyn R. Bar
|
|
2,455
|
|
|
2,857
|
| ||||
|
Craig M. LaTorre
|
|
2,188
|
|
|
1,042
|
| ||||
|
Daniel L. Grant
|
|
1,269
|
|
|
1,477
|
| ||||
In setting performance goals for the three-year PSUs awarded in 2019, the Committee considered various factors in choosing the metrics and establishing the goals, including:
| • | The metrics reflect drivers of our performance and we believe are important to our investors. |
| • | The goals are consistent with our business plan and positive over prior year. |
| • | We have a history of setting challenging target and maximum goals. |
In addition, we have looked at the alignment of our payouts with the Company’s performance, including TSR, and found that pay and performance are aligned.
2019 Performance Goals and Metrics
| Relative TSR (Modifier +/- 20%)* | EBITDA (67%)*** | Sales Growth (33%) | ||||||||||||||||
| TSR Percentile |
Payout Factor |
EBITDA Achievement |
Payout Factor** |
Sales Growth Achievement |
Payout Factor** | |||||||||||||
|
³ 75th |
+20% (Maximum) |
Plan + ³ $.36B |
200% (Maximum) |
Plan + ³ 4.5% |
200% (Maximum) | |||||||||||||
|
50th |
0% adjustment (Target) |
Plan EBITDA |
100% (Target) |
Plan Growth |
100% (Target) | |||||||||||||
|
£ 25th |
-20% (Threshold) |
Plan - $.36B |
50% (Threshold) |
Plan - 1.5% |
50% (Threshold) | |||||||||||||
| Plan - < $.36B |
0% |
Plan - < 1.5% |
0% | |||||||||||||||
| * rTSR is calculated as (i) the average of our closing stock price over the final 20 trading days of the measurement period, minus the average of our closing stock price over the first 20 trading days of the measurement period, plus the value of reinvested dividends divided by (ii) the average of our closing stock price over the first 20 trading days of the measurement period, and is measured against each of the companies in the S&P 500 index (excluding any Companies acquired during the measurement period. ** Threshold and maximum are a percentage of the target. *** EBITDA is calculated from Martin Marietta’s audited financial statements in the same manner as set forth in the reconciliations as provided in Appendix B, with the exception that adjustments are taken for certain nonrecurring items in accordance with the award agreements. | ||||||||||||||||||
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|
Table of Contents
2017-2019 PSU Award Payouts ◆ Compensation Discussion and Analysis
| Measure
|
Performance Target
|
Performance Result
|
Weighting
|
Weighted Payout Factor
| |||||||||||||
| EBITDA
|
|
$ 2.85B
|
|
|
$ 3.43B
|
|
|
67
|
%
|
134%
| |||||||
| Sales Growth
|
|
4.5
|
%
|
|
17.7
|
%
|
|
33
|
%
|
66%
| |||||||
| Relative TSR
|
|
50th percentile
|
|
|
41st percentile
|
|
|
+/-20
|
%
|
93% of total award
| |||||||
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 | ||||||||||
| NEO
|
Target Units Granted
|
Payout (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. |
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51
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Table of Contents
Compensation Discussion and Analysis ◆ Compensation Decision Process
The following companies comprised our Compensation Peer Group for 2019 base salary and long-term incentive pay decisions:
| Albemarle Corporation |
Louisiana-Pacific Corporation |
Owens Corning |
Vulcan Materials Company | |||
| Eagle Materials, Inc. |
Masco Corporation |
Stanley Black & Decker, Inc. |
Westlake Chemical Corporation | |||
| FMC Corporation |
The Mosaic Company |
Summit Materials, Inc. |
Weyerhauser | |||
| Fortune Brands Home & Security |
Nucor Corporation |
USG Corp. |
||||
|
|
|
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|
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Table of Contents
Compensation Decision Process ◆ Compensation Discussion and Analysis
|
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2020 PROXY STATEMENT
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53
|
Table of Contents
Compensation Discussion and Analysis ◆ Stock Ownership Requirements
|
54
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2020 PROXY STATEMENT
|
|
Table of Contents
Our Use of Independent Compensation Consultants ◆ Compensation Discussion and Analysis
|
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2020 PROXY STATEMENT
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55
|
Table of Contents
Compensation Discussion and Analysis ◆ Potential Payments upon Termination or Change of Control
|
56
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2020 PROXY STATEMENT
|
|
Table of Contents
Executive Officer Compensation
The following tables show annual and long-term compensation, for services in all capacities to Martin Marietta, earned by the Chief Executive Officer, the Chief Financial Officer, and the three other most highly compensated executive officers in 2019, which we refer to collectively in this section of this proxy statement as the “named executive officers” or “NEOs.” These tables and the accompanying narratives should be read in conjunction with the Compensation Discussion and Analysis section of this proxy statement, which provides a detailed overview of the methods used by Martin Marietta to compensate its officers, including the named executive officers.
The table below summarizes the total compensation paid to or earned by each of the named executive officers for the fiscal years set forth below. Martin Marietta has not entered into any employment agreements with any of the named executive officers.
SUMMARY COMPENSATION TABLE
| Name and Principal Position (a) |
Year (b) |
Salary ($)1 (c) |
Bonus ($) (d) |
Stock Awards ($)2 (e) |
Option (f) |
Non-Equity Compensation (g) |
Change in ($)5 (h) |
All Other (i) |
Total ($) (j) | ||||||||||||||||||||||||||||||||||||
|
C. Howard Nye Chairman, President and CEO |
|
2019 |
|
|
1,141,667 |
|
|
|
|
|
6,294,708 |
|
|
|
|
|
1,450,000 |
|
|
3,073,183 |
|
|
238,800 |
|
|
12,198,358 |
| ||||||||||||||||||
| 2018 | 1,090,833 |
|
|
|
5,046,900 |
|
|
|
1,050,000 | 1,235,634 | 110,091 | 8,533,458 | |||||||||||||||||||||||||||||||||
| 2017 | 1,039,167 |
|
|
|
5,431,412 |
|
|
|
1,000,000 | 1,414,782 | 103,804 | 8,989,165 | |||||||||||||||||||||||||||||||||
|
James A. J. Nickolas Senior Vice President and CFO |
|
2019 |
|
|
518,967 |
|
|
|
|
|
1,100,171 |
|
|
|
|
|
529,346 |
|
|
240,591 |
|
|
32,587 |
|
|
2,421,662 |
| ||||||||||||||||||
| 2018 | 485,667 |
|
|
|
899,577 |
|
|
|
451,670 | 91,960 | 84,393 | 2,013,267 | |||||||||||||||||||||||||||||||||
| 2017 | 172,936 |
|
|
|
1,320,232 |
|
|
|
162,127 | 25,995 | 8,534 | 1,689,824 | |||||||||||||||||||||||||||||||||
|
Roselyn R. Bar Executive Vice President, General Counsel and Corporate Secretary |
|
2019 |
|
|
565,417 |
|
|
|
|
|
1,301,753 |
|
|
|
|
|
585,772 |
|
|
2,153,409 |
|
|
79,931 |
|
|
4,686,282 |
| ||||||||||||||||||
| 2018 | 537,783 |
|
|
|
1,073,594 |
|
|
|
496,912 | 940,466 | 52,958 | 3,101,713 | |||||||||||||||||||||||||||||||||
| 2017 | 511,383 |
|
|
|
1,433,583 |
|
|
|
475,586 | 1,039,249 | 52,062 | 3,511,863 | |||||||||||||||||||||||||||||||||
|
Craig M. LaTorre7 Senior Vice President, Chief Human Resources Officer |
|
2019 |
|
|
456,250 |
|
|
736,506 |
|
419,050 |
|
142,339 |
|
|
21,305 |
|
|
1,775,450 |
| ||||||||||||||||||||||||||
|
Daniel L. Grant Senior Vice President, Strategy & Development |
|
2019 |
|
|
394,417 |
|
|
|
|
|
631,506 |
|
|
|
|
|
353,398 |
|
|
317,458 |
|
|
56,555 |
|
|
1,753,334 |
| ||||||||||||||||||
| 2018 | 380,383 |
|
|
|
527,756 |
|
|
|
308,871 | 163,952 | 41,967 | 1,422,929 | |||||||||||||||||||||||||||||||||
| 2017 | 360,433 |
|
|
|
947,503 |
|
|
|
255,457 | 193,221 | 38,825 | 1,795,439 | |||||||||||||||||||||||||||||||||
| 1 | The amounts in column (c) reflect the base salary actually paid. |
| 2 | No amounts that qualify as bonuses were payable during the last three years. The amounts in column (e) reflect the aggregate grant date fair value of awards made in the year reported, determined in accordance with FASB ASC Topic 718 (without any assumption for early forfeiture), of awards of RSUs and awards of PSUs, which are described in more detail on pages 48 to 50 under the heading “2019 Long-Term Incentive Compensation.” The amounts included in the table reflects the value of the units granted, which are subject to forfeiture if the executive does not remain in the employment of Martin Marietta for the requisite time period (generally three years) or if Martin Marietta does not achieve the performance criteria, where applicable. The amounts reported include the amounts of cash bonuses deferred in common stock units by each named executive officer pursuant to Martin Marietta’s Incentive Stock Plan, which is discussed in further detail on page 48 under the heading “Annual Incentive Feature: Performance-Based Stock Purchase Plan”. The amount in column (e) includes PSUs based on the target level of performance. Assuming the maximum payout under the PSUs granted in 2019, whose payout will be determined in February 2022 based on the Company’s performance in 2019-2021, the amounts reported above for 2019 would be as follows: |
Mr. Nye, $6,404,631; Mr. Nickolas, $1,279,468; Ms. Bar, $1,388,845; Mr. LaTorre, $506,537; and Mr. Grant, $717,999. Assumptions used in the calculation of these amounts are included in Note A to Martin Marietta’s audited financial statements for the fiscal year ended December 31, 2019,
|
|
2020 PROXY STATEMENT
|
57
|
Table of Contents
Executive Compensation ◆ Summary Compensation Table
included in Martin Marietta’s Annual Report on Form 10-K filed with the SEC on February 21, 2020. The amounts of cash bonus deferred in 2019 for each named executive officer are included in column (e) as follows: Mr. Nye, $1,450,000; Mr. Nickolas, $132,337; Ms. Bar, $251,045; Mr. LaTorre, $104,762; and Mr. Grant, $88,349.
| 3 | The Company does not issue SARs and has not granted any options since 2015. The Stock Plan prohibits share recycling for options or SARs. |
| 4 | The amounts in column (g) for 2019 reflect the cash paid to the named individuals earned in 2019 and paid in 2020 under annual incentive arrangements discussed in further detail on pages 46 to 48 under the heading “2019 Annual Cash Incentive Goals and Results” and not deferred pursuant to Martin Marietta’s Incentive Stock Plan, which is discussed in further detail on page 48 under the heading “Annual Incentive Feature: Performance-Based Stock Purchase Plan.” |
| 5 | The amounts in column (h) reflect the aggregate increase in the actuarial present value of the named executive officer’s accumulated benefits during 2019, 2018 and 2017, respectively, under all defined benefit retirement plans established by Martin Marietta determined using interest rate and mortality rate assumptions consistent with those used in Martin Marietta’s financial statements and include amounts which the named executive officer may not currently be entitled to receive because such amounts are not vested. |
| 6 | The amount shown in column (i) for 2019 reflects for each named executive officer: matching contributions allocated by Martin Marietta to each of the named executive officers pursuant to the Savings and Investment Plan, which is more fully described on page 62 under the heading “Retirement and Other Benefits” in the following amounts: Mr. Nye, $9,800; Mr. Nickolas, $9,800; Ms. Bar, $9,800; Mr. LaTorre, $6,661; and Mr. Grant, $8,437; the value attributable to life insurance benefits provided to the named executive officers, which is more fully described on page 62 under the heading “Retirement and Other Benefits” in the following amounts: Mr. Nye, $10,062; Mr. Nickolas, $2,240; Ms. Bar, $6,308; Mr. LaTorre, $1,739; and Mr. Grant, $14,254; the value attributable to personal use of leased automobiles provided by Martin Marietta in the following amounts: Mr. Nye, $11,389; Mr. Nickolas, $13,905; Ms. Bar, $15,476; Mr. LaTorre, $12,905; and Mr. Grant, $6,442; dividend equivalents on RSUs in the following amounts: Mr. Nye, $205,422; Mr. Nickolas, $6,643; Ms. Bar, $48,347; Mr. LaTorre, $0; and Mr. Grant, $27,422. These values are included as compensation on the W-2 of named executive officers who receive such benefits. Each such named executive officer is responsible for paying income tax on such amount. The amounts in column (i) also reflect the dollar value of dividend equivalents on units credited under the equity awards as computed for financial statement reporting purposes for each fiscal year ended December 31, 2019, 2018 and 2017 in accordance with FASB ASC Topic 718. |
| 7 | Mr. LaTorre was not a named executive officer for purposes of the Summary Compensation Table in 2017 and 2018. |
|
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Table of Contents
Grants of Plan-Based Awards ◆ Executive Compensation
The table below shows each grant of an award made to a named executive officer in the fiscal year ended December 31, 2019. This includes equity awards made to the named executive officers under the Stock Plan and the Incentive Stock Plan.
GRANTS OF PLAN-BASED AWARDS TABLE
|
Estimated Future Payouts Under Non-Equity Incentive |
Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other Stock Awards: Number of Shares of Stock or Units (#) |
Grant Date Fair Value of Stock and Option Awards4 |
|||||||||||||||||||||||||
| Name | Grant Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) | |||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (l) | |||||||||||||||||||
|
C. Howard Nye |
|
2/19/20 |
1 |
|
742,084 |
|
|
3,750,000 |
|
3,586 |
18,122 |
|
927,591 |
| ||||||||||||||
| 2/20/19 | 2 | 5,270 | 13,175 | 31,620 | 2,668,596 | |||||||||||||||||||||||
| 2/20/19 | 3 | 11,318 | 2,176,112 | |||||||||||||||||||||||||
| James A. J. Nickolas |
2/19/20 | 1 | 311,380 | 6,000,000 | 377 | 7,249 | 97,519 | |||||||||||||||||||||
| 2/20/19 | 2 | 1,053 | 2,632 | 6,317 | 533,112 | |||||||||||||||||||||||
| 2/20/19 | 3 | 2,261 | 434,722 | |||||||||||||||||||||||||
| Roselyn R. Bar |
2/19/20 | 1 | 316,634 | 5,250,000 | 656 | 10,873 | 169,688 | |||||||||||||||||||||
| 2/20/19 | 2 | 1,143 | 2,857 | 6,857 | 578,685 | |||||||||||||||||||||||
| 2/20/19 | 3 | 2,455 | 472,023 | |||||||||||||||||||||||||
| Craig M. LaTorre |
2/19/20 | 1 | 255,500 | 6,000,000 | 309 | 7,249 | 79,929 | |||||||||||||||||||||
| 2/20/19 | 2 | 417 | 1,042 | 2,501 | 211,057 | |||||||||||||||||||||||
| 2/20/19 | 3 | 2,188 | 420,687 | |||||||||||||||||||||||||
| Daniel L. Grant |
2/19/20 | 1 | 220,874 | 6,000,000 | 267 | 7,249 | 69,065 | |||||||||||||||||||||
| 2/20/19 | 2 | 591 | 1,477 | 3,545 | 299,166 | |||||||||||||||||||||||
| 2/20/19 | 3 | 1,269 | 243,991 | |||||||||||||||||||||||||
| 1 | The amounts shown in this row reflect the annual bonus that could have been earned in 2019, payable in 2020, pursuant to the Executive Cash Incentive Plan. For each named executive officer, the amounts shown in columns (d) and (e) reflect the portion of the annual bonus that would have been paid in cash if, respectively, target and maximum performance was achieved for the year (i.e., after reduction for the total portion that would be deferred pursuant to the Incentive Stock Plan pursuant to both mandatory and voluntary deferrals). The amounts shown in columns (g) and (h) reflect the portion of the annual bonus that would have been deferred pursuant to the Incentive Stock Plan if, respectively, target and maximum performance was achieved for the year, inclusive of the 20% discount. Participants in the Incentive Stock Plan for 2019 were approved on May 9, 2019. These awards are discussed under the heading “Annual Incentive Feature: Performance-Based Stock Purchase Plan” on page 48. The actual amounts paid are reflected in the Summary Compensation Table on page 57. |
| 2 | The amounts shown in columns (f), (g) and (h) reflect the threshold, target and maximum, respectively, levels of PSUs payable if the performance measurements are satisfied in the period 2019-2021. These awards are discussed under the heading “2019 Long-Term Incentive Compensation” on pages 48 to 50. |
| 3 | The amounts shown in column (i) reflect the number of RSUs granted in 2019 to each of the named executive officers pursuant to the Stock Plan. These awards are discussed under the heading “2019 Long-Term Incentive Compensation” on pages 48 to 50. These awards are also included in column (e) of the Summary Compensation Table on page 57. |
| 4 | The amounts shown in column (l) reflect the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718. No options to purchase shares of Martin Marietta’s common stock were granted in 2019. |
|
|
2020 PROXY STATEMENT
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59
|
Table of Contents
Executive Compensation ◆ Grants of Plan-Based Awards
Outstanding Equity Awards at Fiscal Year-End
The table below shows for each of the named executive officers information with respect to the unexercised stock options (columns (b), (c), (e), and (f)), stock unit awards (columns (g) and (h)) that have not vested, and equity incentive plan awards (columns (i) and (j)) outstanding on December 31, 2019.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
|
OPTION AWARDS |
STOCK AWARDS |
|||||||||||||||||||
| Name | Number
of (#) |
Number
of (#) |
Option ($) |
Option Expiration Date |
Number (#) |
Market Value of Shares or Units of Stock That Have Not Vested1 ($) |
Equity Not Vested |
Equity Other ($) |
||||||||||||
| (a)
|
(b)
|
(c)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||
|
C. Howard Nye |
10,000 |
0 |
69.12 |
|
5/24/2020 |
|
3,2512 5,6923 11,3184 5,8935 6,8276 |
909,110 1,591,711 3,164,966 1,647,919 |
11,3557 9,9408 13,1759 |
|
3,175,312 2,779,622 3,684,257 |
| ||||||||
|
James A. J. Nickolas |
4,04710 1,1203 2,2614 7356 |
1,131,703 313,197 632,266 205,535 |
1,9568 2,6329 |
|
546,976 736,012 |
| ||||||||||||||
|
Roselyn R. Bar |
4,513 4,004 |
0 0 |
69.12 108.24 |
|
5/24/2020 5/23/2023 |
|
9352 1,2263 2,4554 9355 1,3856 |
261,463 342,839 686,516 261,463 387,301 |
3,2677 2,1408 2,8579 |
|
913,584 598,430 798,931 |
| ||||||||
|
Craig M. LaTorre |
5,89211 2,1884 |
1,647,639 611,852 |
1,0429 |
|
291,385 |
| ||||||||||||||
|
Daniel L. Grant |
816 1,076 |
0 0 |
121.00 154.58 |
|
5/22/2024 5/21/2025 |
|
6322 6423 1,2174 5025 5036 |
176,732 179,529 340,322 140,379 140,659 |
2,2107 1,1208 1,4779 |
|
618,004 313,197 413,028 |
| ||||||||
| 1 | Based on the closing price of our common stock as of December 31, 2019 ($279.64). |
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Outstanding Equity Awards at Fiscal Year-End ◆ Executive Compensation
| 2 | RSU restrictions lapsed on March 28, 2020. |
| 3 | RSU restrictions lapse ratably in installments on February 22, 2020 and February 22, 2021. |
| 4 | RSU restrictions lapse ratable in installments on February 20, 2020, February 20, 2021 and February 20, 2022. |
| 5 | Incentive Stock Plan units restrictions lapse on December 1, 2020. |
| 6 | Incentive Stock Plan units restrictions lapse on December 1, 2021. |
| 7 | The amount for these outstanding awards of PSUs are presented at the target performance levels. The awards generally vested at December 31, 2019. |
| 8 | The amount for these outstanding awards of PSUs are presented at the target performance levels. The awards generally vest at December 31, 2020. |
| 9 | The amount for these outstanding awards of PSUs are presented at the target performance levels. The awards generally vest at December 31, 2021. |
| 10 | RSUs fully vest on August 21, 2022 subject to continued employment. If Mr. Nickolas’ employment terminates prior to August 21, 2022 as a result of his voluntary termination or the Company’s termination of Mr. Nickolas for cause, all outstanding RSUs expire and he is required to return to the Company the value of any vested shares of common stock that vested in connection with this award. |
| 11 | RSUs vest as follows subject to continued employment on the dates of vesting: 1,964 units vest on August 23, 2021; 1,964 units vest on August 23, 2022; and 1,964 units vest on August 23, 2023. |
Option Exercises and Stock Vested
The table below shows on an aggregated basis for each of the named executive officers information on (1) the exercise of options for the purchase of Martin Marietta’s common stock and (2) the vesting of stock, including RSUs, PSUs and Incentive Stock Plan units, during the last completed fiscal year. There are no awards of stock appreciation rights for Martin Marietta’s common stock or other similar instruments.
OPTION EXERCISES AND STOCK VESTED TABLE
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||
| Name (a) |
Number of Shares (#) (b) |
Value Realized ($) (c) |
Number
of (#) (d) |
Value Realized ($) (e) |
||||||||||||
| C. Howard Nye |
|
49,703 |
|
6,651,783 |
|
|
58,809 |
|
13,538,636 |
| ||||||
| James A. J. Nickolas |
|
0 |
|
0 |
|
|
1,644 |
|
409,440 |
| ||||||
| Roselyn R. Bar |
|
3,528 |
|
391,733 |
|
|
19,434 |
|
4,652,801 |
| ||||||
| Craig M. LaTorre |
|
0 |
|
0 |
|
|
0 |
|
0 |
| ||||||
| Daniel L. Grant |
|
0 |
|
0 |
|
|
13,691 |
|
3,331,811 |
| ||||||
| 1 | The amounts in column (e) include the value of RSUs and PSUs at the time of vesting and the appreciation of both mandatory and voluntary contributions under the Incentive Stock Plan. |
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Executive Compensation ◆ Option Exercises and Stock Vested
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Pension Benefits ◆ Executive Compensation
The table below shows the present value of accumulated benefits payable to each of the named executive officers, including the number of years of service credited to each such named executive officer, under our Pension Plan and SERP, determined using interest rate and mortality rate assumptions consistent with those used in Martin Marietta’s financial statements.
PENSION BENEFITS TABLE
| Name (a)
|
Plan Name (b)
|
Numbers of Years Credited Service (#) (c)
|
Present Value of Accumulated Benefit ($)1 (d)
|
Payments During Last Fiscal Year ($) (e)
| |||||||||||||
|
C. Howard Nye |
Pension Plan SERP
|
|
13.417 13.417
|
|
|
624,446 8,264,290
|
|
||||||||||
|
James A. J. Nickolas |
Pension Plan SERP
|
|
2.417 2.417
|
|
|
85,515 273,031
|
|
||||||||||
|
Roselyn R. Bar |
Pension Plan SERP
|
|
25.5 25.5
|
|
|
1,491,045 5,771,902
|
|
||||||||||
|
Craig M. LaTorre |
Pension Plan SERP
|
|
1.500 1.500
|
|
|
61,296 108,486
|
|
||||||||||
|
Daniel L. Grant |
Pension Plan SERP
|
|
6.333 6.333
|
|
|
325,153 686,042
|
|
||||||||||
| 1 | Amounts in column (d) reflect the valuation method and use the assumptions that are included in Notes A and K to Martin Marietta’s audited financial statements for the fiscal year ended December 31, 2019, included in Martin Marietta’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2020. |
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Potential Payments Upon Termination or Change of Control ◆ Executive Compensation
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Executive Compensation ◆ Potential Payments Upon Termination or Change of Control
Value of Payments Upon Termination. The following table shows the potential incremental value of payments to each of our named executive officers upon termination, including in the event of a Change of Control of Martin Marietta, assuming a December 31, 2019 termination date and, where applicable, using the NYSE closing price of our common stock of $279.64 on December 31, 2019 (the last trading day of 2019).
POTENTIAL INCREMENTAL VALUE OF PAYMENTS UPON TERMINATION
OR CHANGE OF CONTROL AT DECEMBER 31, 2019
|
Name
|
Benefit or Payment1
|
Retirement ($)
|
Involuntary
|
Disability ($)
|
Death ($)
|
Change- of- Control
| |||||||||||||||||||||
|
Cash Severance2 |
11,700,000 | ||||||||||||||||||||||||||
| Unvested RSUs3 | 5,665,786 | — | 5,665,786 | 5,665,786 | 5,665,786 | ||||||||||||||||||||||
| Unexercisable Options | |||||||||||||||||||||||||||
| Unvested Incentive Stock Plan Units4 | 1,182,021 | 576,330 | 1,182,021 | 1,182,021 | 1,182,021 | ||||||||||||||||||||||
| C. Howard Nye | PSUs5 | 6,463,879 | 6,463,879 | 6,463,879 | 6,463,879 | ||||||||||||||||||||||
| Retirement Plans6 | 1,573,228 | — | 11,927,671 | ||||||||||||||||||||||||
| Health and Welfare Benefits7
|
78,027 | ||||||||||||||||||||||||||
|
Cash Severance2 |
3,268,764 | ||||||||||||||||||||||||||
| Unvested RSUs3 | 2,077,166 | — | 2,077,166 | 2,077,166 | 2,077,166 | ||||||||||||||||||||||
| Unexercisable Options | — | ||||||||||||||||||||||||||
| Unvested Incentive Stock Plan Units4 | 92,617 | 27,240 | 92,617 | — | |||||||||||||||||||||||
| James A. J. Nickolas | PSUs5 | 1,282,988 | 1,282,988 | 1,282,988 | 1,282,988 | ||||||||||||||||||||||
| Retirement Plans6 | 1,666,690 | — | 1,945,812 | ||||||||||||||||||||||||
| Health and Welfare Benefits7
|
75,977 | ||||||||||||||||||||||||||
|
Cash Severance2 |
3,839,622 | ||||||||||||||||||||||||||
| Unvested RSUs3 | 1,290,818 | — | 1,290,818 | 1,290,818 | 1,290,818 | ||||||||||||||||||||||
| Unexercisable Options | — | ||||||||||||||||||||||||||
| Unvested Incentive Stock Plan Units4 | 277,274 | 117,881 | 277,274 | 277,274 | 277,274 | ||||||||||||||||||||||
| Roselyn R. Bar | PSUs5 | 1,397,361 | 1,397,361 | 1,397,361 | 1,397,361 | ||||||||||||||||||||||
| Retirement Plans6 | — | — | 4,697,590 | ||||||||||||||||||||||||
| Health and Welfare Benefits7
|
49,959 | ||||||||||||||||||||||||||
|
Cash Severance2 |
2,347,767 | ||||||||||||||||||||||||||
| Unvested RSUs3 | 705,252 | — | 705,252 | 705,252 | 705,252 | ||||||||||||||||||||||
| Unexercisable Options | — | ||||||||||||||||||||||||||
| Unvested Incentive Stock Plan Units4 | 118,668 | 54,394 | 118,668 | 118,668 | 118,668 | ||||||||||||||||||||||
| Daniel L. Grant | PSUs5 | 726,225 | 726,225 | 726,225 | 726,225 | ||||||||||||||||||||||
| Retirement Plans6 | 18,951 | — | 999,496 | ||||||||||||||||||||||||
| Health and Welfare Benefits7
|
33,183 | ||||||||||||||||||||||||||
|
Cash Severance2 |
1,425,000 | ||||||||||||||||||||||||||
| Unvested RSUs3 | 2,259,491 | — | 2,259,491 | 2,259,491 | 2,259,491 | ||||||||||||||||||||||
| Unexercisable Options | — | ||||||||||||||||||||||||||
| Unvested Incentive Stock Plan Units4 | — | — | |||||||||||||||||||||||||
| Craig M. LaTorre | PSUs5 | 291,385 | 291,385 | 291,385 | 291,385 | ||||||||||||||||||||||
| Retirement Plans6 | 802,785 | — | 945,816 | ||||||||||||||||||||||||
| Health and Welfare Benefits7
|
78,092 | ||||||||||||||||||||||||||
| 1 | The table does not include information with respect to plans or arrangements that are available generally to all salaried employees and that do not discriminate in favor of executive officers. The table reflects the incremental value over the amounts to which the named executive officer would have been entitled on a voluntary resignation on December 31, 2019. |
| 2 | Assumes all earned base salary has been paid. |
| 3 | Reflects the estimated lump-sum intrinsic value of all unvested RSUs. |
| 4 | Reflects the difference between the value of the unvested Incentive Stock Plan share units at year-end and the amount of cash invested by the executive officer in the share units. |
| 5 | Reflects the estimated lump-sum intrinsic value of all unvested PSUs. |
| 6 | The table does not include information related to the form and amount of payments or benefits that are not enhanced or accelerated in connection with any termination that would be provided by Martin Marietta’s retirement plans, which is disclosed in the Pension Benefits Table and the accompanying narrative on page 63. Change of Control values include the incremental value of the benefit (including three times Martin Marietta’s match to the defined contribution plan) payable upon a qualifying termination of employment following a Change of Control. |
| 7 | Reflects the estimated incremental lump-sum present value of all future premiums that would be paid on behalf of the named executive officer under Martin Marietta’s health and welfare plans, including long-term disability and life insurance plans. |
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Securities Authorized for Issuance
Under Equity Compensation Plans
The following table shows information as of December 31, 2019 regarding Martin Marietta’s compensation plans that allow Martin Marietta to issue its equity securities. Martin Marietta’s equity compensation plans consist of the Amended and Restated Martin Marietta Materials, Inc. Common Stock Purchase Plan for Directors (the Directors’ Plan), the Stock Plan, the Martin Marietta Materials, Inc. Amended and Restated Stock-Based Award Plan (the Stock-Based Award Plan), under which the Incentive Stock Plan was adopted, the Martin Marietta Materials, Inc. Amended Omnibus Securities Award Plan (the Omnibus Securities Award Plan), and the Martin Marietta Materials, Inc. Shareholder Value Achievement Plan (the Achievement Plan). Martin Marietta’s shareholders have approved all of these plans. Martin Marietta has not entered into any individual compensation arrangements that would allow it to issue its equity securities to employees or non-employees in exchange for goods or services.
EQUITY COMPENSATION PLAN INFORMATION
| Plan Category
|
Number of securities options, warrants, (a)
|
Weighted-average (b)3
|
Number of securities for future issuance reflected in column (c)
| ||||||||||||
| Equity compensation plans approved by shareholders |
403,076 | 1 | $ | 132.12 | 1,090,688 | 4 | |||||||||
| Equity compensation plans not approved by shareholders |
3,508 | 2 | $ | 47.22 | 0 | 5 | |||||||||
| TOTAL |
406,584 | $ | 129.10 | 1,090,688 | |||||||||||
| 1 | Includes 55,332 stock options that have a weighted-average exercise price of $112.84; 308,160 restricted stock units that have a $0 exercise price; and 39,584 stock units granted in accordance with the Incentive Stock Plan that are credited to participants at an average weighted cost of $159.07. The restricted stock units and stock units granted in accordance with the Incentive Stock Plan represent Martin Marietta’s obligation to issue shares in the future subject to certain conditions in accordance with the Stock-Based Award Plan. |
| 2 | Represents stock options granted to legacy Texas Industries, Inc. (“TXI”) employees and employees hired after July 1, 2014. |
| 3 | The weighted-average exercise price does not take into account the restricted stock units and stock units for which there is no exercise price. |
| 4 | Includes shares of Martin Marietta’s common stock available for issuance (other than those reported in column (a)) under Martin Marietta’s equity compensation plans as of December 31, 2019 in the following amounts: Directors’ Plan (140,727 shares), Stock-Based Award Plan (741,986 shares), and Achievement Plan (207,975 shares). Also excludes Texas Industries Inc. stock-based award plans (1,893,311 shares). The Directors’ Plan provides that nonemployee directors may elect to receive all or a portion of their fees in the form of common stock. Under the Achievement Plan, awards can be granted to key senior employees based on certain common stock performance over a long-term period. No awards have been granted under this plan since 2000. |
| 5 | There are 1,893,311 shares of Martin Marietta’s common stock available for issuance to legacy TXI employees. These shares will be used to settle currently outstanding awards but no further awards will be granted for these shares, as indicated by management in connection with the approval by shareholders of the Stock-Based Award Plan on May 19, 2017. |
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Securities Authorized for Issuance Under Equity Compensation Plans ◆ Description of the Deferred Compensation Plan
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◆ Annual Meeting and Voting Information
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NON-GAAP MEASURES
Non-GAAP financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing our financial condition and operating results, and are often requested by investors. These measures are not in accordance with, or a substitute for, GAAP and may be different from or inconsistent with non-GAAP financial measures used by other companies. Adjusted EBITDA is an indicator used by the Company and investors to evaluate the Company’s operating performance period to period.
EBITDA is a widely accepted financial indicator of a company’s ability to service and/or incur indebtedness. EBITDA is not defined by GAAP and, as such, should not be construed as an alternative to earnings from operations, net earnings or operating cash flow. Consolidated adjusted EBITDA excludes the impact of selling acquired inventory after its markup to fair value as part of acquisition accounting; acquisition-related expenses, net; and asset and portfolio rationalization charge.
The following presents a reconciliation of net earnings attributable to Martin Marietta to consolidated adjusted EBITDA for the years ended December 31, 2019, 2018, and 2010.
Consolidated adjusted EBITDA for year ended December 31:
|
(dollars in millions)
|
2019
|
2018
|
2010
|
|||||||||||||
|
Net Earnings Attributable to Martin Marietta |
$ | 611.9 | $ | 470.0 | $ | 97.0 | ||||||||||
|
Add back (deduct): |
||||||||||||||||
|
Interest expense |
128.9 | 137.1 | 68.5 | |||||||||||||
|
Income tax expense (benefit) for controlling interests |
136.3 | 105.6 | 29.3 | |||||||||||||
|
Depreciation, depletion and amortization expense and earnings/loss from nonconsolidated equity affiliates |
377.4 | 328.4 | 182.3 | |||||||||||||
|
Impact of selling acquired inventory after markup to fair value |
— | 18.7 | — | |||||||||||||
|
Acquisition-related expenses, net |
— | 13.5 | — | |||||||||||||
|
Asset and portfolio rationalization charges |
— | 18.8 | — | |||||||||||||
|
|
|
|
|
|
|
|||||||||||
| Consolidated Adjusted EBITDA |
$ | 1,254.5 | $ | 1,092.1 | $ | 377.1 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
|
Consolidated Total Revenues |
$ | 4,739.1 | $ | 4,244.3 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Adjusted EBITDA Margin |
26.5 | % | 25.7 | % | ||||||||||||
|
|
|
|
|
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Appendix B ◆ Non-GAAP Measures
The leverage ratio is our consolidated debt to consolidated EBITDA for the trailing twelve months as defined by the Company’s credit agreement. The following is the calculation of the leverage ratio as of December 31, 2019:
| (dollars in millions) |
||||||||
| Net Earnings Attributable to Martin Marietta |
$ | 611.9 |
|
|
| |||
| Add back: |
|
|
|
|
|
| ||
| Interest expense |
129.3 |
|
|
| ||||
| Income tax expense |
136.3 |
|
|
| ||||
| Depreciation, depletion and amortization expense and nonconsolidated equity affiliate adjustment |
383.4 |
|
|
| ||||
| Stock-based compensation expense |
34.1 |
|
|
| ||||
| Deduct: |
|
|
|
|
|
| ||
| Interest income |
(0.4 | ) | ||||||
|
|
|
|||||||
| Consolidated EBITDA, as defined by the Company’s Credit Agreement |
$ | 1,294.6 | ||||||
|
|
|
|||||||
| Consolidated debt, as defined and including debt for which the Company is a co-borrower, at December 31, 2019 |
$ | 2,793.8 | ||||||
|
|
|
|||||||
| Consolidated debt-to-consolidated EBITDA, as defined by the Company’s Credit Agreement, at December 31, 2019 for trailing-twelve month EBITDA |
2.2x | |||||||
|
|
|
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MARTIN ANNUAL MARIETTA MEETING OF SHAREHOLDERS MATERIALS, OF INC. May 14, 2020 PROXY VOTING INSTRUCTIONS INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EST the day before the meeting. COMPANY NUMBER MAIL—Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON—You may vote your shares in person by attending ACCOUNT NUMBER the Annual Meeting. GO GREEN—e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The proxy statement, form of proxy card and 2019 Annual Report to Shareholders are available for review on the Internet at http://ir.martinmarietta.com/reports-filings Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 00033333333333300000 YOU DO NOT NEED TO MARK ANY BOXES 6 IF YOU WISH TO VOTE IN ACCORDANCE WITH THE 051420 BOARD OF DIRECTORS’ RECOMMENDATIONS. THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE “FOR” ITEMS 1 , 2 AND 3. x PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE This proxy is solicited by the Board of Directors of Martin Marietta Materials, Inc. 1. Election of Directors: FOR AGAINST ABSTAIN and when properly executed will be voted as specified herein and, unless Dorothy M. Ables otherwise directed, will be voted FOR the election of all nominees as Directors, FOR the ratification of the selection of PricewaterhouseCoopers as independent Sue W. Cole auditors, and FOR the approval, by a non-binding advisory vote, of the compensation of our named executive officers. The Board of Directors recommends voting FOR each item. Smith W. Davis Receipt of Notice of Annual Meeting of Shareholders and accompanying Proxy John J. Koraleski Statement is hereby acknowledged. C. Howard Nye Laree E. Perez Thomas H. Pike Michael J. Quillen Donald W. Slager David C. Wajsgras JOHN SMITH 2. Ratification of appointment of PricewaterhouseCoopers as independent 1234 MAIN STREET auditors. APT. 203 3. Approval, by a non-binding advisory vote, of the compensation of Martin NEW YORK, NY 10038 Marietta Materials, Inc.’s named executive officers. 4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting, or any adjournments thereof. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. Signature of Shareholder Date: Signature of Shareholder Date: Note: title Please as such sign .exactly If the signer as your is a name corporation, or names please appear sign on full this corporate Proxy. When name shares by duly are authorized held jointly, officer, each giving holder full should title as sign such. When If signer signing is a as partnership, executor, please administrator, sign in attorney, partnership trustee name or by guardian, authorized please person give full .
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ANNUAL MEETING OF SHAREHOLDERS OF MARTIN MARIETTA MATERIALS, INC. May 14, 2020 GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The proxy statement, form of proxy card and 2019 Annual Report to Shareholders are available for review on the Internet at http://ir.martinmarietta.com/reports-filings Please sign, date and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 00033333333333300000 YOU DO NOT NEED TO MARK ANY BOXES 6 IF YOU WISH TO VOTE IN ACCORDANCE WITH THE 051420 BOARD OF DIRECTORS’ RECOMMENDATIONS. THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE “FOR” ITEMS 1, 2 AND 3. x PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE This and proxy when is properly solicited executed by the Board will of be Directors voted as of specified Martin Marietta herein Materials, and, unless Inc. 1. Election of Directors: FOR AGAINST ABSTAIN otherwise directed, will be voted FOR the election of all nominees as Directors, Dorothy M. Ables FOR the ratification of the selection of PricewaterhouseCoopers as independent Sue W. Cole auditors, and FOR the approval, by a non-binding advisory vote, of the compensation of our named executive officers. The Board of Directors recommends voting FOR each item. Smith W. Davis Receipt of Notice of Annual Meeting of Shareholders and accompanying Proxy Statement is hereby acknowledged. John J. Koraleski C. Howard Nye Laree E. Perez Thomas H. Pike Michael J. Quillen Donald W. Slager David C. Wajsgras 2. Ratification of appointment of PricewaterhouseCoopers as independent auditors. 3. Approval, by a non-binding advisory vote, of the compensation of Martin Marietta Materials, Inc.’s named executive officers. 4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting, or any adjournments thereof. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. Signature of Shareholder Date: Signature of Shareholder Date: Note: title Please as such sign.exactly If the signer as your is a name corporation, or names please appear sign on full this corporate Proxy. When name shares by duly are authorized held jointly, officer, each giving holder full should title as sign such. When If signer signing is a as partnership, executor, please administrator, sign in attorney, partnership trustee name or by guardian, authorized please person give full.
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MARTIN MARIETTA MATERIALS, INC. Proxy solicited by the Board of Directors for the Annual Meeting to be held May 14, 2020 The undersigned hereby appoints C. Howard Nye and James A. J. Nickolas, and each or either of them, proxies, with full power of substitution, with the powers the undersigned would possess if personally present, to vote, as designated below, all shares of the common stock of the undersigned in Martin Marietta Materials, Inc. at the Annual Meeting of Shareholders to be held on May 14, 2020, and at any adjournment thereof. (Continued and to be signed on the reverse side) 1.1 14475