◆ LETTER FROM COMMITTEE CHAIR
Rooted in our values of safety, integrity, excellence, community and stewardship, and driven by
our World-Class vision, our employees demonstrated exceptional commitment in 2020, following strict COVID-19 protocols to keep their coworkers, communities and family members safe, while continuing essential
business operations with minimal disruption. While keeping employees safe and healthy has been the Companys priority since before the onset of the COVID-19 pandemic, we also made progress on a variety of other important employee-related
initiatives in 2020. Importantly, we also formalized our efforts to increase diversity in our workplace with the formation of our Inclusion and Engagement Steering Committee, comprised of employees with diverse race, gender, background, experience
and other factors. We believe this will also drive us to be better and attract the best talent available.
One of this Committees most important
responsibilities is ensuring that our employees and management team are incentivized and rewarded when they achieve excellent performance. We are also focused on the appropriate development of our management team by providing opportunities to learn,
expand their skill sets, and have opportunities available to them. We pride ourselves on saying that our employees come to Martin Marietta not for a job, but for a career. These objectives are an important part of maintaining a company that is
sustainable, resilient and capable of delivering long-term growth.
Sustainability
Sustainability is part of our core strategy and Martin Marietta has a long track record of building solid foundations, caring about our employees, our communities and
the environment, while responsibly growing our company. One of our commitments to our shareholders and other stakeholders is to improve each year on these metrics. In addition, we have endeavored to tell our story better each year, informing our
shareholders and other stakeholders about our efforts, costs, risks, goals, and the relationship between our goals and management compensation. In 2020 we advanced this objective by providing enhanced disclosure regarding our carbon footprint and
other environmental matters, including setting our goals for reduction by 2030.
Executive Compensation in 2020
The Committee believes that our executive compensation programs should evolve and be adjusted over time to support the achievement of our business goals, to reflect our
challenges, and to promote near- and long-term shareholder value. During 2020, the Committee reviewed and evaluated market trends and best practices in designing and implementing elements of our compensation program. The Committee continues to
believe that the goals for our executive compensation programs are to attract talented managers and incentivize and reward achievements that create value for our shareholders.
Our annual incentives are based on the achievement of various performance metrics, including overall financial
performance, shareholder returns, safety performance, sustainability, environmental and regulatory compliance results, management of working capital, and organic and
inorganic growth. In addition, after the start of the COVID-19 pandemic and as further described below, the Committee created a Resilience Scorecard to align our executive and employee teams with maintaining our health and safety. We
view this Resilience Scorecard as a tool we can use to assess whether the Companys long-term success is durable and sustainable.
Our long-term incentives are
designed to align executives with shareholder interests and to tie incentives with long-term goals. To ensure our plans achieve these goals, we conduct an annual assessment of compensation practices, which are more fully described below.
We believe that our executive incentive plans are highly motivational and create alignment with our performance and the shareholders experience. For 2020, as
described above, our excellent industry-leading financial performance yielded an award of 190% of target for the annual incentive and an achievement of 200.8% under the Performance Share Units against the targets set for the 2018-2020 performance
period. This is a shareholder aligned outcome.
In closing, the Committee believes that we have a very robust business model that yields attractive increases in
shareholder value and positions us well for the future. Our executive compensation program helps drive those goals, and rewards our management and employees when they are achieved. We appreciate your support and welcome your feedback on our
executive compensation programs and look forward to ongoing dialogue.
Sincerely,
John J. Koraleski, Chair
Management Development and
Compensation Committee
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MARTIN MARIETTA 39 |