DEF 14A of Vulcan Materials CO
Filed Mar 25, 2024 · FY20230001140361-24-015024
VOTING MATTERS
| Deferred Compensation Plan | 57 | | Option Exercises and Stock Vested | 58 | | Retirement Benefits | 59 | | Payments Upon Termination or Change of Control | 60 | | CEO Pay Ratio | 65 | | Pay Versus Performance | 67 | | Director Compensation | 71 | | Director Summary Compensation Table | 72 | | Annual Meeting and Voting Information | 73 | | General Information | 79 | | Shareholder Proposals and Nominations for 2025 | 79 | | Forward-Looking Statements | 80 | | ANNEX A: Reconciliation of Non-GAAP Financial Measures | 81 |
COMPENSATION HIGHLIGHTS
| 1. | SOSARs means Stock-Only Stock Appreciation Rights. Restricted Stock refers to Restricted Stock Units (RSUs). Performance Shares refers to Performance Share Units (PSUs). See page 46 for more details. |
Election of Directors
Election of Directors Our constituent documents provide that our Board shall be divided into three classes, with the term of office of one class expiring each year and the number of directors in each class being as nearly equal as possible. At the Annual Meeting, four individuals will be elected to serve for three-year terms expiring in 2027, or until their successors have been duly elected and qualified. Our Board, upon the recommendation of the Governance Committee, has nominated Thomas A. Fanning, J. Thomas Hill, Cynthia L. Hostetler, and Richard T. O’Brien as directors to serve three-year terms expiring in 2027. In accordance with the bylaws of the company, our Board of Directors is required to be composed of not fewer than nine nor more than thirteen directors.
Board Composition and Director Qualifications
Board Composition and Director Qualifications Directors are responsible for reviewing and approving corporate strategy and overseeing the management of the company to assure that the long-term interests of the shareholders are being served. The Board believes that it needs a diverse skill set among its members to be able to respond to the needs of management and the company. The Governance Committee and full Board annually review the overall composition of the Board in order to ensure that Board members have the appropriate mix of skills and experience to best serve the company and its shareholders. The Governance Committee and the Board use a director skills matrix in conducting this review. The Governance Committee is also responsible for evaluating each director’s individual performance and contributions to the Board, as well as each director’s qualifications, skills, independence and competence, prior to recommending an existing director to the Board for re-nomination. In accordance with our Corporate Governance Guidelines, the Board is committed to actively seeking out diverse candidates to include in the pool from which nominees for the Board are selected, and it considers race, ethnicity, gender, age, education and professional experiences in evaluating candidates for the Board. The following pages list the four directors nominated for re-election at the 2024 Annual Meeting and the eight directors with continuing terms that expire in subsequent years, as well as biographical information for all directors.
Board Composition and Director Qualifications
| Your Board of Directors recommends a vote “FOR” the election of Thomas A. Fanning, J. Thomas Hill, Cynthia L. Hostetler, and Richard T. O’Brien as directors for three-year terms expiring in 2027. |
Board Composition and Director Qualifications
| Vulcan Materials Company | 5 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
DIRECTOR COMPETENCIES
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 6 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | Thomas A. Fanning | | | | | Age: 67 | Director Since: 2015 | Committees: Executive; Audit; Compensation | | Career Highlights Retired; Former Chairman of the Board, President and Chief Executive Officer of Southern Company, Atlanta, Georgia (one of the largest energy companies in the U.S. and a leading U.S. producer of energy) from 2010 to 2023. | | | | | Skills and Qualifications • Mr. Fanning is the former Chairman, President and Chief Executive Officer of Southern Company. He worked for Southern Company for more than 40 years and held 15 different positions in 8 different business units, including numerous officer positions with a variety of Southern Company subsidiaries in the areas of finance, strategy, international business development and technology. Mr. Fanning also previously served as Chief Financial Officer of Southern Company, where he was responsible for the accounting, finance, tax, investor relations, treasury and risk management functions. • As Co-chairman of both the Electricity Subsector Coordinating Council and Tri-Sector Coordinating Council, Mr. Fanning plays a leading role in national efforts to prevent and respond to cyber and physical terrorism for the U.S. electric system. As Chairman of the Cybersecurity & Infrastructure Security Agency’s Advisory Committee and Chair of the Institute of Nuclear Power Operations, Mr. Fanning has particular expertise with respect to energy policy, the economy, cybersecurity and national security. • He holds undergraduate and master’s degrees from the Georgia Institute of Technology and has completed several executive education programs. • As the former CEO of a large public utility, Mr. Fanning provides our Board with valuable business, leadership and management skills. His prior service as CFO of Southern Company and Chairman of the Federal Reserve Bank of Atlanta makes him well qualified to serve on our Audit Committee. Additionally, he brings to our Board a deep understanding of key issues facing an industrial company, including governmental and regulatory issues, and safety, health and environmental matters. Under Mr. Fanning’s leadership, Southern Company decreased its greenhouse gas emissions by 52% from 2007 to 2020 and set a goal to achieve net zero greenhouse gas emissions by 2050. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 7 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | J. Thomas Hill | | | | | Age: 65 | Director Since: 2014 | Committees: Executive | | Career Highlights Chairman of the Board of the company since January 2016 and Chief Executive Officer since July 2014. | | | | | Other Public Company Directorships • Regions Financial Corporation | | | | | Skills and Qualifications • Mr. Hill is Chairman and Chief Executive Officer of the company. He has been with the company for over 30 years, serving in a variety of operations and general management assignments of increasing responsibility. He was elected Chairman effective January 2016 and President and Chief Executive Officer in July 2014. He served as President through September 2023. He previously served as Executive Vice President and Chief Operating Officer from January 2014 until July 2014, and Senior Vice President—South Region from December 2011 to December 2013. He has also served as President of the company’s former Florida Rock Division and its Southwest Division. • Mr. Hill has served in leadership positions in a number of industry trade groups, including the Texas Concrete and Aggregates Association, the Florida Concrete and Products Association and the National Stone, Sand and Gravel Association. In addition, he has previously served on the boards of the U.S. Chamber of Commerce and the United Way of Central Alabama. • He is a graduate of the University of Pittsburgh and the Wharton School of Business, Executive Management Program. • Mr. Hill has over 30 years’ experience in the aggregates industry, including extensive experience with the company in operations and management over a wide variety of geographic regions. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 8 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | Cynthia L. Hostetler | | | | | Age: 61 | Director Since: 2014 | Committees: Finance; Governance | | Career Highlights Trustee of Invesco Funds, Atlanta, Georgia (international mutual funds) since 2017; Director of Textainer Group Holdings Limited (lessor of intermodal containers) from 2021 to 2024; Director of Genesee & Wyoming Railroad Inc. (freight rail provider) from 2018 to 2020; Trustee of Aberdeen International Funds, New York, New York (international mutual funds) from 2013 to 2017; Director of Artio Global Funds, New York, New York (international mutual funds) from 2010 to 2013; Director of Edgen Group Inc., Baton Rouge, Louisiana (energy infrastructure) from 2012 to 2014; Head of Investment Funds, Overseas Private Investment Corporation, Washington, D.C. (international investment funds) from 2001 to 2009; President, First Manhattan Bancorporation, New York, New York (financial services) from 1990 to 2006. | | | | | Other Public Company Directorships • Resideo Technologies, Inc. • TriLinc Global Impact Fund, LLC | | | | | Skills and Qualifications • Ms. Hostetler is the former Head of Investment Funds at the Overseas Private Investment Corporation, and a former president of a regional bank and bank holding company. • She began her career as a corporate lawyer with Simpson Thacher & Bartlett in New York. • She serves on the board of the Investment Company Institute, the leading registered funds professional organization, as well as the Independent Directors Council, the professional group for independent directors of mutual funds. • Ms. Hostetler earned her bachelor’s degree from Southern Methodist University and holds a Juris Doctor from the University of Virginia School of Law. • Ms. Hostetler brings to our Board significant financial, investment and audit committee experience, and has developed risk assessment skills through her bank, private equity and mutual fund leadership. She is an experienced public and investment company board member, having served on a number of public and private company boards, with committee chair positions that include audit, nominating and governance and investment management. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 9 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | Richard T. O’Brien | | | | | Age: 70 | Director Since: 2008 | Committees: Executive; Audit; Safety, Health and Environmental Affairs | | Career Highlights Independent consultant since October 2015; Former President and Chief Executive Officer of Boart Longyear Limited, Salt Lake City, Utah (an international provider of drilling services, drilling equipment and performance tooling for mining and drilling companies) from 2013 to 2015; Chief Executive Officer of Newmont Mining Corporation, Greenwood Village, Colorado (an international gold production company) from 2007 to February 2013. | | | | | Other Public Company Directorships • Xcel Energy Inc. | | | | | Skills and Qualifications • Mr. O’Brien became a director of Ma’aden (a Saudi Arabian mining company) in December 2017 and is a member of its executive committee. Mr. O’Brien previously served as a director of Pretium Resources Inc. from 2019 to 2022, Newmont Mining Corporation from 2007 to 2013 and Inergy L.P. from 2006 to 2012. • His work includes extensive experience with New York Stock Exchange (NYSE)-listed companies in finance and accounting, operations and strategic business planning. • Mr. O’Brien earned his bachelor’s degree in economics from the University of Chicago and holds a Juris Doctor from the Lewis and Clark Law School. • Having served as CFO of four different public companies and as an “audit committee financial expert,” Mr. O’Brien provides the Board with considerable experience and acumen in financial reporting and accounting matters. • As a result of his tenure as CEO and CFO of Newmont Mining, Mr. O’Brien brings to the Board significant experience and knowledge of the mining and extraction industry. This gives him insight into the risks facing the company, particularly with respect to safety, health and environmental issues, and provides him with the tools to effectively assist in overseeing those risks. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 10 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | Lydia H. Kennard | | | | | Age: 69 | Director Since: 2022 | Committees: Audit; Safety, Health and Environmental Affairs | | Career Highlights President and Chief Executive Officer of KDG Construction Consulting and Quality Engineering Solutions, Glendale, California (a leading provider of construction management services for public infrastructure projects) since 2007; founding principal of KDG Aviation (an operator and developer of general aviation facilities) since 2007. | | | | | Other Public Company Directorships • Prologis, Inc. • Freeport-McMoRan, Inc. • AECOM | | | | | Skills and Qualifications • Ms. Kennard serves in a dual capacity as President and Chief Executive Officer of KDG Construction Consulting and Quality Engineering Solutions. KDG Construction Consulting provides program and construction management services to public and institutional clients throughout California and the Western United States. Since 2007, she has also served as a founding principal of KDG Aviation, an operator and developer of general aviation facilities. • From August 1999 through November 2003 and again from October 2005 through February 2007, Ms. Kennard served as the Chief Executive Officer of Los Angeles World Airports (LAWA), the nation’s second largest airport system, which includes Los Angeles International (LAX). During her tenure, she managed approximately 3,000 employees and annual budget of nearly $1 billion. • She served as a Trustee of the University of Southern California from 2005 until her election as a Life Trustee of the University in June 2020. • She holds a juris doctor degree from Harvard Law School, a master’s degree in City Planning from the Massachusetts Institute of Technology, and a bachelor’s degree in Urban Planning and Management from Stanford University. • Ms. Kennard’s career has spanned corporate law, real estate development, and urban planning, and her experience as a successful CEO in the infrastructure construction management space and her diverse perspective add valuable insights to the Board. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 11 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | Kathleen L. Quirk | | | | | Age: 60 | Director Since: 2017 | Committees: Executive; Audit; Finance | | Career Highlights President and Director of the Board of Freeport-McMoRan Inc., Phoenix, Arizona (a leading international mining company and the world’s largest publicly traded copper producer) since 2021; Executive Vice President and Chief Financial Officer from 2007 to 2021. | | | | | Other Public Company Directorships • Freeport-McMoRan, Inc. | | | | | Skills and Qualifications • Ms. Quirk is President of Freeport-McMoran, Inc., a leading international mining company. She has over 30 years of experience in the Freeport organization and is a senior member of the Company’s executive team. Ms. Quirk has been instrumental in Freeport’s strategic planning and has responsibility for a broad range of corporate functions. Prior to being named President in 2021, Ms. Quirk served as Freeport’s Chief Financial Officer since 2003. • She received her bachelor’s degree in accounting from Louisiana State University. • Ms. Quirk’s strong finance and accounting background, including her status as an “audit committee financial expert,” makes her well qualified to serve as the Chair of our Audit Committee and a member of our Finance Committee. She also brings to our Board extensive experience in working with debt and equity markets along with a deep knowledge of tax, investor relations, corporate development and treasury management. • With over 30 years’ experience in the mining industry, Ms. Quirk has a keen understanding of the operational, governmental and regulatory issues facing our industry. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 12 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | David P. Steiner | | | | | Age: 63 | Director Since: 2017 | Committees: Executive; Finance; Governance | | Career Highlights Retired; Former President and Chief Executive Officer of Waste Management, Inc., Houston, Texas (a leading provider of integrated waste management services in North America) from March 2004 to November 2016. | | | | | Other Public Company Directorships • FedEx Corporation | | | | | Skills and Qualifications • Prior to being named Chief Executive Officer of Waste Management, Inc., Mr. Steiner served in various capacities with Waste Management, including as Executive Vice President and Chief Financial Officer from 2003 to 2004, and as Senior Vice President, General Counsel and Corporate Secretary from 2001 to 2003. • He serves on the board of directors of FedEx Corporation, and formerly served on the boards of TE Connectivity Ltd. (previously known as Tyco Electronics, Ltd.) and Waste Management, Inc. • Mr. Steiner earned his bachelor’s degree in accounting from Louisiana State University and holds a Juris Doctor from the University of California, Los Angeles, School of Law. • Mr. Steiner brings to our Board valuable insight into business, leadership and management issues facing large industrial companies. His experience as CEO of Waste Management, Inc. and as chair of the governance, safety and public policy committee of FedEx Corporation makes him well qualified to serve on our Governance and Finance Committees. • Additionally, he brings to our Board a keen understanding of issues involving trucking and logistics management, a key component of our business. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 13 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | Lee J. Styslinger, III | | | | | Age: 63 | Director Since: 2013 | Committees: Compensation; Governance | | Career Highlights Co-Chairman of Altec, Inc., Birmingham, Alabama (a holding company for businesses that design, manufacture and market equipment for the electric and telecommunications industries globally) since 2021; Chairman from 2011 to 2021 and Chief Executive Officer from 1997 to 2021. | | | | | Other Public Company Directorships • Regions Financial Corporation | | | | | Skills and Qualifications • Mr. Styslinger serves as Co-Chairman of Altec, which has products and services in over 100 countries, and has over 20 years’ experience leading companies engaged in the heavy equipment industry. Prior to serving as Co-Chairman of Altec, Mr. Styslinger served as President from 1994 to 1997, President and Chief Executive Officer from 1997 to 2011, and Chairman and Chief Executive Officer from 2011 to 2021. • He serves on the boards of many educational, civic and leadership organizations, including the Harvard Business School and the National Association of Manufacturers. He was appointed to the President’s Export Council, advising the President of the United States on international trade policy from 2006 to 2008. In 2017, Mr. Styslinger served on the President’s Manufacturing Council, and he currently serves on the President’s Advisory Committee for Trade Policy and Negotiations. • He received his Bachelor of Arts from Northwestern University and a Master of Business Administration from Harvard University. • Mr. Styslinger brings to our Board a wealth of management and business experience running a large company in today’s global market. Additionally, his expertise in the heavy equipment industry greatly benefits Vulcan, which is a major purchaser of heavy machinery and equipment. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 14 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | Melissa H. Anderson | | | | | Age: 59 | Director Since: 2019 | Committees: Compensation; Safety, Health and Environmental Affairs | | Career Highlights Senior Vice President, Chief People Officer of Albemarle Corporation, Charlotte, North Carolina (a leader in the global specialty chemicals industry) since 2021; Executive Vice President and Chief Human Resources Officer of Duke Energy Corporation, Charlotte, North Carolina (one of the largest energy holding companies in the U.S.) from 2015 to 2020; Senior Vice President of Human Resources of Domtar Corporation, Fort Mill, South Carolina (a leading provider of fiber-based paper and personal care products) from 2010 to 2015; Senior Vice President of Human Resources and Government Relations of The Pantry Inc., Sanford, North Carolina (a leading independently operated convenience store chain) from 2006 to 2010; Vice President of Human Resources of Global Financing of IBM Corp., Armonk, New York (a multinational information technology company) from 2003 to 2006. | | | | | Skills and Qualifications • Ms. Anderson is Senior Vice President, Chief People Officer of Albemarle Corporation and has worked as the top human resources executive for four publicly traded companies over the past 15 years. • She serves on the boards of several charitable and industry-focused organizations, including the HR Policy Association. She is also a member of the Center for Executive Succession at the University of South Carolina’s Darla Moore School of Business. • She received a Bachelor of Science in industrial relations from the University of North Carolina at Chapel Hill and a Master of Science in industrial and labor relations from Cornell University. • Ms. Anderson has led large cultural and talent transformations across multiple industries and brings deep expertise in succession planning, executive development and executive compensation to the Board. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 15 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | O. B. Grayson Hall, Jr. | | | | | Age: 66 | Director Since: 2014 | Committees: Executive; Finance; Governance | | Career Highlights Retired; Former Executive Chairman of Regions Financial Corporation, Birmingham, Alabama (one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, mortgage and insurance products and services) and Regions Bank from July 2018 to December 2018; Chairman and Chief Executive Officer from December 2017 to July 2018; Chairman, President and Chief Executive Officer from 2013 to 2017; President and Chief Executive Officer from 2010 to 2013. | | | | | Other Public Company Directorships • Alabama Power Company | | | | | Skills and Qualifications • Mr. Hall is the former Chairman and Chief Executive Officer of Regions Financial Corporation. Since he joined Regions in 1980, he served in roles of increasing responsibility, including operations, technology and commercial banking. • He is a former Class A Director of the Federal Reserve Bank of Atlanta, and he is active in many civic and leadership organizations, including the Economic Development Partnership of Alabama and the Birmingham Business Alliance. • He graduated from the University of the South with a bachelor’s degree in economics. He also received a Master of Business Administration from the University of Alabama and is a graduate of the Stonier Graduate School of Banking, University of Pennsylvania. • Mr. Hall brings extensive management and business experience to our Board as well as a deep understanding of complex issues facing public companies. He further provides our Board with valuable experience in banking, finance and capital markets. In addition, as the former Chief Executive Officer of Regions, he has a substantial background in issues related to cybersecurity. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 16 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | James T. Prokopanko | | | | | Age: 70 | Director Since: 2009 | Committees: Compensation; Governance | | Career Highlights Retired; Former President and Chief Executive Officer of The Mosaic Company, Plymouth, Minnesota (a leading producer and marketer of concentrated phosphate and potash crop nutrients for the global agriculture industry) from January 2007 to August 2015; Senior Advisor from August 2015 until his retirement in January 2016. | | | | | Other Public Company Directorships • Regions Financial Corporation • Xcel Energy Inc. | | | | | Skills and Qualifications • Mr. Prokopanko joined The Mosaic Company in 2006 and served in various capacities, including as President and Chief Executive Officer, and Executive Vice President and Chief Operating Officer. Prior to joining Mosaic, he was with Cargill, Inc., where he served in a wide range of leadership positions, including as Corporate Vice President of Cargill Procurement, a leader of Cargill’s Ag Producer Services Platform and Vice President of the North America crops inputs business. • Mr. Prokopanko has a bachelor’s degree in computer science from the University of Manitoba and a Master of Business Administration from the University of Western Ontario. • His experience serving as the principal interface between management and the board at a NYSE-listed company facilitates our Board’s performance of its oversight function. • Mr. Prokopanko’s executive management experience provides our Board with valuable insight into business, leadership and management issues. Additionally, he brings to our Board considerable knowledge of issues facing a company engaged in extraction. | | | |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 17 | 2024 PROXY STATEMENT |
DIRECTOR COMPETENCIES
| | George Willis | | | | | Age: 59 | Director Since: 2020 | Committees: Compensation; Safety, Health and Environmental Affairs | | Career Highlights Retired; Former President, U.S. Operations of UPS, Atlanta, Georgia (a global leader in logistics, distribution, transportation and freight services) from 2018 to 2020; President, West Region from 2015 to 2018; President, UK, Ireland and Nordics District from 2013 to 2015. | | | | | Skills and Qualifications • Mr. Willis is the former President, U.S. Operations of UPS, with more than 35 years’ experience in logistics and operations, including in managing a diverse transportation product portfolio in a range of domestic and international markets. • He served on UPS’s Management Committee, which is responsible for long-term strategy and operating plans for the company’s worldwide operations. • Mr. Willis has a long history of board membership and community involvement. He currently serves on the Board of Directors of JM Huber Corporation and is a member of the Executive Leadership Council. Previously, he served on the Board of Directors of Atlas Air Worldwide and the Board of Trustees for the National Urban League. • He holds a bachelor’s degree in business administration and management from Trinity College and completed the Columbia Executive Education Program and the Yale CEO College Program. • Mr. Willis’ veteran leadership in logistics and operations, as well as his advocacy for diversity and inclusion, provides our Board with invaluable insight on matters critical to our business. | | | |
DIRECTOR COMPETENCIES
| | Your Board of Directors recommends a vote “FOR” the election of Thomas A. Fanning, J. Thomas Hill, Cynthia L. Hostetler, and Richard T. O’Brien as directors. |
DIRECTOR COMPETENCIES
| Vulcan Materials Company | 18 | 2024 PROXY STATEMENT |
Advisory Vote on Compensation of Our Named Executive Officers (Say on Pay)
Advisory Vote on Compensation of Our Named Executive Officers (Say on Pay) In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation paid to our named executive officers (NEOs) as disclosed in the Section entitled “Compensation Discussion and Analysis,” and in the compensation tables and narrative discussion contained in this proxy statement. While this vote is advisory and not binding on the company, it provides information to our Compensation Committee regarding investor sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will consider when determining executive compensation in the future. At our 2023 Annual Meeting of Shareholders, our shareholders once again indicated a preference that the advisory vote on the compensation for our NEOs occur on an annual basis. Subsequently, our Board determined to continue its policy for annual “Say on Pay” advisory votes. At our 2023 Annual Meeting of Shareholders, our shareholders voted over 97% in favor of our “Say on Pay” proposal. We believe this demonstrated strong support for our compensation program and policies. We have continued to analyze and make changes to our compensation program, considering new compensation trends and best practices, which led us to add our annual average growth rate of Aggregates cash gross profit per ton (versus a pre-determined target) as an additional metric, together with Total Shareholder Return, for determining payouts for PSUs, beginning with PSUs granted in 2019. We also participated in dialogues regarding our executive compensation program with many of our largest shareholders through our corporate governance shareholder engagement program. Please read the “Compensation Discussion and Analysis” Section on pages 35 to 52 for an in-depth look at our compensation program and how it was applied to the performance of our NEOs in 2023. Based on the foregoing, the Board recommends a vote FOR the following resolution: “RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this proxy statement.” As an advisory vote, this proposal is not binding on the company. However, our Board and Compensation Committee will consider the outcome of the advisory vote when making future compensation decisions.
Compensation Committee
| • | interpreting and administering the Executive Incentive Plan (EIP), the Management Incentive Plan (MIP), the 2006 Omnibus Long-Term Incentive Plan (2006 Plan) and the 2016 Omnibus Long-Term Incentive Plan (2016 Plan); and |
Finance Committee
| • | reviewing the company’s actual year-to-date financial performance, estimated full year financial performance and projected long-term financial performance; |
Board of Directors
Board of Directors Although the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board assist the Board in fulfilling its oversight responsibilities in certain areas of risk. In particular, our Audit Committee focuses on financial risk, including internal controls and cybersecurity risks. Our Audit Committee also assists the Board in fulfilling its duties and oversight responsibilities relating to the company’s compliance and ethics programs. In addition, our Safety, Health and Environmental Affairs Committee assists the Board in fulfilling its responsibilities with respect to monitoring operational risks and compliance with safety, health and environmental laws and regulations and works closely with the company’s legal and regulatory groups. Our Compensation Committee also assists the Board in fulfilling its oversight responsibilities to create long-term value for the company, while discouraging behavior that leads to excessive risk taking. Finally, our Finance Committee assists the Board in managing risk relating to investment of the company’s pension fund assets and debt/leverage risks. The Board is kept informed of its committees’ risk oversight and other activities through reports of the committees’ chairs to the Board. These reports are presented at Board meetings and include discussions of committee agenda topics. The Board also considers specific risk topics, including risks associated with our strategic plan, our capital structure, our development activities and other current risk topics and recommends responsive actions taking into account the immediacy of the risk assessed. We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing the company and that our Board structure supports this approach. To further illustrate our approach, the Board devotes significant time and attention to the oversight of cybersecurity and information security risks, and benefits from the technical expertise of certain of its members, namely Messrs. Fanning and Hall. In particular, the Audit Committee oversees management’s actions to identify and assess material issues related to cybersecurity and information security risks, including actions to mitigate such risks; annually reviews and approves our information security management policy and program; and receives regular updates from management on our information security management program and cyber risk profile. The company’s management risk committee is also focused on these matters. The company’s management and the Board and Board Committees also engage outside advisors where appropriate to assist in the identification, oversight, evaluation and management of the risks facing the company. These outside advisors include but are not limited to the company’s independent registered public accounting firm, external legal counsel and insurance providers, and the independent compensation consultant retained by the Compensation Committee. This collaboration between the Board, the Audit Committee and members of management ensures broad oversight of the evolving nature of cybersecurity and information security risks.
Equity Compensation Plans
Equity Compensation Plans The table below sets forth information regarding the number of shares of our common stock authorized for issuance under our equity compensation plans as of December 31, 2023.
EQUITY COMPENSATION PLAN INFORMATION
EQUITY COMPENSATION PLAN INFORMATION
EQUITY COMPENSATION PLAN INFORMATION
| Plan Category | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (A) | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights (B) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) (C) | | Equity compensation plans approved by security holders(1): | | | | | 2006 Omnibus Long-Term Incentive Plan(2) | | | | | Stock-Only Stock Appreciation Rights | 102,598 | $83.13 | | | Deferred Stock Units for Non-employee Directors | 41,396 | | | | Total 2006 Omnibus Long-Term Incentive Plan | 143,994 | | 0(2) | | 2016 Omnibus Long-Term Incentive Plan | | | | | Stock-Only Stock Appreciation Rights | 430,859 | $146.55 | | | Performance Share Units | 332,528 | | | | Restricted Stock Units | 246,928 | | | | Deferred Stock Units for Non-employee Directors | 36,726 | | | | Restricted Stock Units for Non-employee Directors | 30,290 | | | | Total 2016 Omnibus Long-Term Incentive Plan | 1,077,331 | | 4,895,307 | | Equity compensation plans not approved by security holders | NONE | | NONE | | Total of All Plans | 1,221,325 | | 4,895,307 |
EQUITY COMPENSATION PLAN INFORMATION
| 1. | All of the company’s equity compensation plans have been approved by the shareholders of the company. Column (A) sets forth the number of shares of common stock issuable upon the exercise of options, warrants or rights outstanding under the 2006 Plan and the 2016 Plan. The weighted-average exercise price of outstanding stock options is shown in Column (B). The remaining number of shares that may be issued under the equity compensation plans are shown in Column (C). |
EQUITY COMPENSATION PLAN INFORMATION
| 2. | Future grants will not be made under this plan. The plan will be used only for the administration and payment of grants that were outstanding when the 2016 Plan was approved. |
EQUITY COMPENSATION PLAN INFORMATION
| Vulcan Materials Company | 34 | 2024 PROXY STATEMENT |
Compensation Principles
| OUR THREE COMPENSATION PRINCIPLES | | | Link a significant portion of compensation to performance. We believe that compensation levels should reflect performance—both Vulcan’s performance and the NEO’s performance. This is accomplished by: • Motivating, recognizing and rewarding individual excellence • Paying short-term cash incentives based upon company financial performance and individual performance • Linking long-term incentives to company stock performance through the use of Performance Share Units (PSUs), Restricted Stock Units (RSUs) and Stock-Only Stock Appreciation Rights (SOSARs) | Maintain competitive compensation levels. We strive to offer programs and levels of compensation that are competitive with those offered by industrial companies of similar size, value and complexity in order to attract, retain and reward our NEOs. | | | Align management’s interests with those of shareholders. Our program encourages NEO retention and motivates our NEOs to increase long-term shareholder value by granting long-term equity-based awards each year and tying short-term cash incentives to the achievement of economic profit targets closely aligned with the creation of shareholder value. |
Compensation Principles
Our NEOs are primarily rewarded through performance-based cash and equity incentive awards, with only a small portion of their overall compensation awarded in the form of base salary. This serves to both encourage and recognize strong company performance and stock price growth, further driving shareholder value. Long-term equity incentives are awarded through a combination of PSUs, RSUs and SOSARs in order to tie executive compensation more closely to company performance. The diagrams below depict each element of target compensation expressed as a percentage of total target direct compensation for our Chief Executive Officer and other NEOs, expressed as an average, for 2023.
Compensation Principles
| 1. | SOSARs means Stock-Only Stock Appreciation Rights. Restricted Stock refers to Restricted Stock Units (RSUs). Performance Shares refers to Performance Share Units (PSUs). |
Compensation Practices
| | WHAT WE DO | | WHAT WE DON’T DO | | • Tie pay to performance by ensuring that a significant portion of NEO compensation is variable and performance-based • Apply a market based approach for determining target compensation • Utilize PSUs as a substantial portion of long-term incentive awards • Apply “Double-Trigger” change of control vesting requirement for long-term incentive awards • Require substantial share ownership under our stock ownership guidelines • Prohibit transactions by our directors and officers intended to hedge or offset the market value of Vulcan stock owned by them • Subject cash and equity-based incentive compensation to a clawback policy • Consider feedback provided by our shareholders related to executive compensation matters | | • Provide employment contracts for our executives • Permit repricing of stock options or SOSARs without shareholder approval • Allow pledging by our directors and officers of Vulcan shares as collateral for loans or any other purpose • Provide excessive change of control benefits. Our Change of Control Agreements do not provide for: – “Single-trigger” vesting of long-term incentive awards; – Inclusion of long-term incentive value in the calculation of cash severance; or – Excise tax gross-ups | |
ELEMENTS OF COMPENSATION
| • | Short-term performance-based cash incentive |
ELEMENTS OF COMPENSATION
| • | Long-term equity incentives |
ELEMENTS OF COMPENSATION
| • | Change of control agreements |
Base Salary
| • | Competitive pay levels for similarly-situated executives set forth in compensation surveys and within our peer group |
Base Salary
| | To further our goal of aligning the executives’ interests with those of our shareholders, we generally reward superior performance through our short-term cash incentive program and long-term equity-based incentives rather than through base salary. |
Short-Term Performance-Based Incentive
Short-Term Performance-Based Incentive Our short-term cash incentive program is designed to motivate our executives, including the NEOs, and reward them with cash payments for achieving quantifiable, pre-established business results and individual performance goals. We pay short-term incentives to all of our NEOs under the shareholder-approved Executive Incentive Plan (EIP). In order for the NEOs to be eligible to receive a cash bonus, the company must attain a minimum performance threshold for the year, as established by the Compensation Committee. The minimum performance threshold is only used to determine each NEO’s eligibility for a short-term cash bonus payment. If the Compensation Committee determines that either of the minimum performance thresholds are met, our NEOs may receive a short-term cash bonus. In 2023, company performance exceeded each of these established minimum thresholds. At the beginning of the plan year, the Compensation Committee determined the target bonus as well as the maximum bonus payable for each NEO. After considering 2023 company and individual performance, the Compensation Committee exercised downward discretion from the maximum bonus amount to determine each NEO’s short-term incentive.
Safety Performance
Safety Performance The Compensation Committee also considered the company’s safety performance when determining actual bonuses payable to our NEOs. In 2022, the company changed the short-term safety bonus metrics to reflect both outcome (MSHA/OSHA combined incident injury rate) and performance (fatality prevention) metrics. The safety bonus metrics may increase or decrease each NEO’s bonus multiple by up to 20 points. A bonus multiple point is equal to 1% of the NEO’s target bonus. For 2023, the company experienced an MSHA/OSHA combined incident injury rate (excluding incidents that occurred on a public roadway where the company’s driver was not at fault) of 1.29 for every 200,000 employee hours worked. Based on the company’s MSHA/OSHA injury rate experience for the year (excluding incidents that occurred on a public roadway where the company’s driver was not at fault), facilities having completed 100% of their quarterly fatality risk assessments, and facilities having completed 100% of the executive reviews related to serious or potentially serious incidents, each NEO received an increase of 7.5 points to the performance bonus multiple used to calculate his or her bonus for 2023. The table below shows the target bonus, the maximum bonus payable under the EIP, and the short-term incentive paid to each NEO based on 2023 company and individual performance.
Safety Performance
| Name | Base Salary | “Target Bonus” as a Percentage of Base Salary | Target Bonus Amount | Maximum Bonus(1) | Cash Bonus Paid Based on 2023 Performance | | Tom Hill | $1,235,000 | 160% | $1,976,000 | $4,940,000 | $4,038,900 | | Tom Baker | $800,000 | 100% | $800,000 | $2,000,000 | $1,635,200 | | Stan Bass | $695,000 | 100% | $695,000 | $1,737,500 | $1,420,600 | | Mary Andrews Carlisle | $600,000 | 95% | $570,000 | $1,425,000 | $1,165,100 | | Ronnie Pruitt | $700,000 | 100% | $700,000 | $1,750,000 | $1,144,600 |
Safety Performance
| 1. | Under the EIP, bonus payments may be up to 4 times each NEO’s target amount (but not to exceed $7 million). However, the amounts in this column equal 2.5 times the NEO’s target bonus, which is the maximum allowed by the Compensation Committee. |
Long-Term Equity Incentives
Long-Term Equity Incentives Our long-term equity incentive compensation program rewards the NEOs based on the future performance of the company by motivating the creation of shareholder value. The goals of the long-term incentive program are to:
Long-Term Equity Incentives
| • | Ensure NEOs’ financial interests are aligned with our shareholders’ interests |
Long-Term Equity Incentives
| • | Motivate decision-making that improves financial performance over the long-term |
Long-Term Equity Incentives
| • | Recognize and reward superior financial performance of the company |
Long-Term Equity Incentives
| • | Provide a retention element to our compensation program |
Long-Term Equity Incentives
| • | Promote compliance with the stock ownership guidelines for executives |
Long-Term Equity Incentives
Based principally on data and analysis from its independent compensation consultant, the Compensation Committee establishes a target long-term equity incentive opportunity, expressed as a percentage of each NEO’s base salary, to be used when granting long-term equity awards.
Long-Term Equity Incentives
| Vulcan Materials Company | 44 | 2024 PROXY STATEMENT |
Long-Term Equity Incentives
Our 2016 Plan, approved by our shareholders at our 2016 Annual Meeting of Shareholders, provides for the grant of multiple types of awards, including those listed below, that the Compensation Committee may use, at its discretion, for granting long-term incentives:
Long-Term Equity Incentives
| • | stock options |
Long-Term Equity Incentives
| • | SOSARs |
Long-Term Equity Incentives
| • | PSUs |
Long-Term Equity Incentives
| • | RSUs |
Long-Term Equity Incentives
In recent years, the Compensation Committee has used a combination of PSUs, RSUs and SOSARs for annual equity incentive grants to our NEOs.
2023 Long-Term Incentive Grants
2023 Long-Term Incentive Grants Annually at its February meeting, the Compensation Committee grants long-term incentive awards. All such equity-based awards are valued on the date of the grant. Typically, equity-based incentive grants are only made annually unless a hire or promotion occurs during the year. The Compensation Committee generally grants a combination of equity-based awards that produce an award value (Target LTI) on the date of the grant that approximates the 50th percentile level of awards made to similarly-situated executives determined by our competitive market analysis. However, the Compensation Committee may make adjustments each year to the number of units granted based on its assessment of each executive’s performance, experience and responsibilities, as well as internal equity considerations. In 2023, the Compensation Committee approved annual long-term incentive grants to the NEOs in the form of PSUs (60% of Target LTI value), RSUs (20% of Target LTI value) and SOSARs (20% of Target LTI value). The table below shows the target long-term incentive amount of each NEO:
2023 Long-Term Incentive Grants
| Name | Base Salary | “Target LTI” as a Percentage of Base Salary | Target LTI Amount | | Tom Hill | $1,235,000 | 635% | $7,842,250 | | Tom Baker | $800,000 | 310% | $2,480,000 | | Stan Bass | $695,000 | 250% | $1,737,500 | | Mary Andrews Carlisle | $600,000 | 260% | $1,560,000 | | Ronnie Pruitt | $700,000 | 290% | $2,030,000 |
2023 Long-Term Incentive Grants
A summary of all long-term incentive (LTI) grants made to NEOs in 2023 is as follows:
2023 Long-Term Incentive Grants
| | 2023 Annual Grants | | | | | Name | SOSARs | PSUs | RSUs | Total LTI Grants | | Tom Hill | 21,670 | 26,820 | 8,940 | 57,430 | | Tom Baker | 6,240 | 7,720 | 13,970* | 27,930 | | Stan Bass | 4,800 | 5,940 | 1,980 | 12,720 | | Mary Andrews Carlisle | 4,310 | 5,330 | 1,780 | 11,420 | | Ronnie Pruitt | 2,680 | 3,320 | 9,660* | 15,660 |
2023 Long-Term Incentive Grants
| * During 2023, Mr. Baker was granted a special retention equity award of 11,400 RSUs, and Mr. Pruitt was granted a special retention equity award of 8,550 RSUs. |
2023 Long-Term Incentive Grants
These awards are also reflected in the Summary Compensation Table on page 53 and the Grants of Plan-Based Awards table on page 55.
2023 Long-Term Incentive Grants
| Vulcan Materials Company | 45 | 2024 PROXY STATEMENT |
Performance Share Units
Performance Share Units PSUs, which comprised 60% of each NEO’s target LTI award in 2023, provide an opportunity for our executives to earn Vulcan stock if performance goals established by the Compensation Committee are met over a three-year performance period. For PSUs granted in 2023, performance will be measured 50% based on the company’s total shareholder return (TSR) percentile rank relative to the TSR of the S&P 500, and 50% based on the company’s growth rate of Aggregates Cash Gross Profit per ton(3), each averaged over the three-year period ending December 31, 2025. The Compensation Committee chose the S&P 500 as the comparison group for relative TSR performance because it is a broad and market index representative of investors’ alternative capital investment opportunities. Vulcan is also a member of the S&P 500. The Compensation Committee believes that our annual average growth rate of Aggregates Cash Gross Profit per ton adds balance to our PSU program by including an internal financial measure in combination with our historical use of relative TSR. The Committee views our Aggregates Cash Gross Profit per ton as an important measure of our long-term financial performance that further aligns our compensation program with company performance. The following table shows the payout percentage of 2023 PSUs that may vest over the three-year period based on potential levels of performance:
PERFORMANCE SHARE UNIT PAYMENT TABLE(1)
PERFORMANCE SHARE UNIT PAYMENT TABLE(1)
PERFORMANCE SHARE UNIT PAYMENT TABLE(1)
| Three-Year Average TSR Percentile Rank Relative to S&P 500 Index) | % of PSUs Payable(2) | + | Average Annual Growth Rate Aggregates Cash Gross Profit(3) Per Ton | % of PSUs Payable(2) | | 75th or greater (Maximum) | 100 | | 9.5% or greater (Maximum) | 100 | | 50th (Target) | 50 | | 4.5% (Target) | 50 | | 25th (Threshold) | 12.5 | | 0.5% (Threshold) | 12.5 | | Less than 25th | 0 | | Less than 0.5% | 0 |
PERFORMANCE SHARE UNIT PAYMENT TABLE(1)
| 1. | If the company’s three-year average TSR relative to the S&P 500 Index is at the 50th percentile, one half of the full award is paid. If the company’s three-year average annual growth rate of Aggregates Cash Gross Profit per ton is 4.5%, the remaining one half of the full award is paid. The payout is adjusted incrementally for performance above and below target and can range from 0% to 200%. |
PERFORMANCE SHARE UNIT PAYMENT TABLE(1)
| 2. | Payouts are interpolated for returns between threshold and target, and target and maximum. Payment is made in the form of Vulcan common stock. |
PERFORMANCE SHARE UNIT PAYMENT TABLE(1)
| 3. | Aggregates Cash Gross Profit per ton is a non-GAAP financial measure. See Annex A for a reconciliation of non- GAAP financial measures to our results reported under GAAP. |
Restricted Stock Units
Restricted Stock Units RSUs, which comprised 20% of each NEO’s target LTI award in 2023, provide value through long-term stock price performance, thus aligning the interests of our executives with those of our shareholders. RSUs vest on the third anniversary of the grant date and are then paid in the form of Vulcan common stock.
Payments of Prior Grants
Payments of Prior Grants In February 2023, all of the NEOs (other than Mr. Pruitt, who was not employed by the Company in 2020) received payment for PSUs that were granted in 2020, which vested on December 31, 2022, based on our results relative to the established performance criteria. These PSUs were paid out at 121.7% of the original grant amount. One-half of the PSU payment percentage of 121.7% was based on TSR performance of our common stock relative to the TSR performance of the companies that comprise the S&P 500 Index during the three-year performance period, and one-half of the PSU payment percentage was based on the company’s growth rate of Aggregates Cash Gross Profit per ton during the three-year performance period.
Payment Calculation for PSUs Granted in 2020 and Paid February 10, 2023
Payment Calculation for PSUs Granted in 2020 and Paid February 10, 2023
Payment Calculation for PSUs Granted in 2020 and Paid February 10, 2023
| Name | Units Granted in 2020 | Percentage Payable | Units Payable | | Tom Hill | 24,700 | 121.7% | 30,060 | | Tom Baker | 6,700 | 121.7% | 8,154 | | Stan Bass | 5,800 | 121.7% | 7,059 | | Mary Andrews Carlisle | 510 | 121.7% | 621 | | Ronnie Pruitt(1) | 0 | — | 0 |
Payment Calculation for PSUs Granted in 2020 and Paid February 10, 2023
| 1. | Mr. Pruitt joined Vulcan in August 2021 and therefore did not receive PSUs in 2020. |
Change of Control Agreements
Change of Control Agreements Vulcan has entered into Change of Control Employment Agreements (COC Agreements) with each of the NEOs. Each of the COC Agreements covers a term of three years and will be automatically extended annually for subsequent three-year terms unless Vulcan gives prior notice of non-extension. In the event of a change of control, the COC Agreements entitle the executives to continue employment with Vulcan for two years following the change of control, during which time period the executive will continue to hold a position and duties, and receive compensation and benefits, commensurate with the practices in effect during the four-month period prior to the change of control. Severance benefits under each COC Agreement will be payable following a qualifying termination (termination by the executive for good reason or by Vulcan without cause) that occurs within two years following (or prior to, but in connection with) a change of control. A change of control is defined to include: (a) the acquisition of 30% or more of the outstanding Vulcan stock or voting power by an individual, entity or group; (b) a change in the majority of the board of directors of Vulcan that is not endorsed by the
Change of Control Agreements
| Vulcan Materials Company | 47 | 2024 PROXY STATEMENT |
Change of Control Agreements
incumbent board of directors; (c) consummation of a reorganization, merger, consolidation or similar corporate transaction that results in a new group holding at least 50% of the beneficial ownership of the outstanding Vulcan stock or voting power; and (d) approval by Vulcan shareholders of a complete liquidation or dissolution of the company. The COC Agreements provide for a payment of three times the sum of base salary and average bonus upon a change of control. We entered into the COC Agreements with our NEOs to provide for retention and continuity in order to minimize disruptions during a pending or anticipated change of control. For a detailed description of these change of control benefits, refer to “Change of Control Agreements and Related Cash Severance Benefits” on page 61.
COMPENSATION DECISION APPROACH
| COMPENSATION COMMITTEE | COMPOSED ENTIRELY OF INDEPENDENT DIRECTORS | | The Compensation Committee administers our executive compensation program in accordance with our Compensation Committee Charter. The current charter is available at www.vulcanmaterials.com. On our website, select “Investor Relations,” then “Governance.” From there, you can visit our “Committee Composition” page, which lists the composition of our board committees and provides links to their respective charters. | | | In accordance with our Compensation Committee Charter, the Compensation Committee: • Annually reviews and approves corporate goals and objectives relevant to the CEO’s compensation • Reviews the CEO’s performance and independent compensation consultant’s recommendations and, accordingly, determines the CEO’s compensation • Presents the CEO’s overall compensation package to the entire Board of Directors for ratification • Reviews and sets base salary and short- and long-term incentives for other NEOs • Monitors market practices and reviews and approves any modifications to the company’s executive compensation program • Interprets and administers the Executive Incentive Plan, Management Incentive Plan, 2006 Omnibus Long-Term Incentive Plan and 2016 Omnibus Long-Term Incentive Plan | |
COMPENSATION DECISION APPROACH
| INDEPENDENT COMPENSATION CONSULTANT | MERIDIAN COMPENSATION PARTNERS, LLC (MERIDIAN) | | Meridian is engaged by and reports to the Compensation Committee and occasionally meets with management to discuss compensation initiatives and issues. Meridian does not provide any other services to the company. The Compensation Committee determined that Meridian’s work as the Compensation Committee’s compensation consultant did not present any conflicts of interest in 2023. | | | In 2023, Meridian: • Provided the Compensation Committee with observations and recommendations on compensation and benefits for our CEO and other NEOs • Advised and assisted the Compensation Committee in a review of our peer group for 2023 compensation decisions • Conducted a benchmarking market study and analysis of executive compensation practices to ensure that our compensation program is reasonable and competitive • Had representatives attend all four meetings of the Compensation Committee in 2023 | |
Benchmarking Compensation and Peer Group Development
Benchmarking Compensation and Peer Group Development On an annual basis, the Compensation Committee reviews a benchmarking analysis of total compensation for our CEO and other NEOs relative to market data. Our compensation consultant develops market data appropriate for a company of our size using a combination of peer group data and market surveys. The market data, in combination with consideration of each NEO’s experience, responsibilities and performance, assist the Compensation Committee in making informed, market-based decisions regarding our executive pay program. The Compensation Committee generally targets each element of compensation for our NEOs at the 50th percentile of the market as determined by the benchmarking analysis, subject to individual variation based on the Compensation Committee’s assessment of each executive’s performance, experience and responsibilities as well as internal equity considerations.
Peer Group
Peer Group The Compensation Committee considered several factors in selecting our peer group, including industry (with a focus on construction, materials and mining), revenue size, market capitalization and operating margins. At the end of 2023, our revenues ranked near the median of the peer group and our market capitalization was above the 75th percentile. Our peer group for 2023 consisted of the following 25 companies:
Peer Group
| • | Air Products and Chemicals, Inc. |
Peer Group
| • | Albemarle Corporation |
Peer Group
| • | Allison Transmission Holdings, Inc. |
Peer Group
| • | Ball Corporation |
Peer Group
| • | Cabot Corporation |
Peer Group
| • | Celanese Corporation |
Peer Group
| • | CF Industries Holdings, Inc. |
Peer Group
| • | Dover Corporation |
Peer Group
| • | Eagle Materials Inc. |
Peer Group
| • | Eastman Chemical Company |
Peer Group
| • | Ecolab Inc. |
Peer Group
| • | FMC Corporation |
Peer Group
| • | Fortune Brands Home & Security, Inc. |
Peer Group
| • | Lennox International Inc. |
Peer Group
| • | Martin Marietta Materials, Inc. |
Peer Group
| • | Masco Corporation |
Peer Group
| • | Minerals Technologies Inc. |
Peer Group
| • | NewMarket Corporation |
Peer Group
| • | Newmont Corporation |
Peer Group
| • | Owens Corning |
Peer Group
| • | Packaging Corporation of America |
Peer Group
| • | Summit Materials, Inc. |
Peer Group
| • | The Mosaic Company |
Peer Group
| • | The Timken Company |
Peer Group
| • | Westlake Chemical Corporation |
Peer Group
| Vulcan Materials Company | 49 | 2024 PROXY STATEMENT |
What Counts Toward the Guidelines
| • | RSU grants |
What Does Not Count Toward the Guidelines
| • | Unvested PSUs |
RISK, ACCOUNTING AND TAX CONSIDERATIONS
Based on the foregoing features of our compensation program, the Compensation Committee has concluded that risks arising from compensation policies and practices for employees of the company and its affiliates are not reasonably likely to have a material adverse effect on the company as a whole. In administering the compensation program for NEOs, the Compensation Committee considers the consequences under applicable tax law and financial accounting standards in our analysis of total compensation and the mix of compensation elements, base salary, bonus and long-term incentives. In that regard, Section 162(m) of the Code generally prohibits public companies from taking a tax deduction for compensation that is paid to any one of certain employees (generally, our Chief Executive Officer and other NEOs, excluding our Chief Financial Officer in the case of tax years commencing before 2018) in excess of $1,000,000. For tax years prior to January 1, 2018, Section 162(m) allowed us to deduct certain qualified performance-based compensation. Historically, we therefore intended that bonus payments under the EIP and grants of long-term incentives under our 2016 Plan would qualify as qualified performance-based compensation; however, we have always maintained the flexibility to grant awards that may not be tax-deductible. Section 162(m) was amended in December 2017, and for taxable years beginning January 1, 2018, the qualified performance-based compensation deduction is no longer available, except in limited situations that are eligible for transition relief. We are therefore not currently eligible to take a deduction under Section 162(m) for qualified performance-based compensation except in limited grandfathered situations, for which we may not qualify. The Compensation Committee maintains (and has maintained) the discretion to modify compensation that was initially intended to be exempt from Section 162(m), to the extent permitted by applicable law and the relevant governing documents, if it determines that such modifications are consistent with the company’s business needs.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth, for the three most recently completed fiscal years, information concerning the compensation of our NEOs for the fiscal year ended December 31, 2023:
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | Change in Pension Value & Nonqualified Deferred Compensation Earnings(3) ($) | All other Compensation(4) ($) | Total ($) | | J. Thomas Hill Chairman and Chief Executive Officer | 2023 | 1,235,000 | — | 6,274,449 | 1,568,691 | 4,038,900 | (72,005) | 485,718 | 13,530,753 | | | 2022 | 1,235,000 | — | 5,429,583 | 1,356,768 | 2,598,400 | (1,009,604) | 471,392 | 10,081,539 | | | 2021 | 1,229,167 | — | 5,194,408 | 1,294,312 | 2,620,900 | (354,681) | 436,008 | 10,420,114 | | Thompson S. Baker, II Chief Operating Officer | 2023 | 752,000 | — | 3,805,727 | 451,714 | 1,635,200 | — | 169,147 | 6,813,788 | | | 2022 | 724,167 | — | 1,612,197 | 399,762 | 957,300 | — | 150,639 | 3,844,065 | | | 2021 | 701,500 | — | 1,315,040 | 328,797 | 997,400 | — | 155,662 | 3,498,399 | | Stanley G. Bass Chief Strategy Officer | 2023 | 695,000 | — | 1,389,643 | 347,472 | 1,420,600 | 11,948 | 150,681 | 4,015,344 | | | 2022 | 691,167 | — | 1,315,701 | 327,078 | 822,500 | (467,288) | 155,720 | 2,844,878 | | | 2021 | 668,667 | — | 1,167,098 | 287,045 | 987,700 | (108,639) | 173,738 | 3,175,609 | | Mary Andrews Carlisle(5) Senior Vice President and Chief Financial Officer | 2023 | 591,667 | — | 1,247,521 | 312,001 | 1,165,100 | 6,793 | 96,553 | 3,419,635 | | | 2022 | 507,844 | — | 889,488 | 218,052 | 548,400 | (68,624) | 59,975 | 2,155,135 | | Ronnie A. Pruitt(6) Chief Operating Officer | 2023 | 609,500 | — | 2,277,471 | 194,005 | 1,144,600 | — | 117,167 | 4,342,743 |
SUMMARY COMPENSATION TABLE
| 1. | Pursuant to the rules of the SEC, we have provided a grant date fair value for Stock Awards and Option Awards in accordance with the provisions of FASB ASC Topic 718. For Option Awards (including SOSARs), the fair value is estimated as of the date of grant using the Black-Scholes option pricing model, which requires the use of certain assumptions, including the risk-free interest rate, dividend yield, volatility and expected term. The risk-free interest rate is based on the yield at the date of grant of a U.S. Treasury security with a maturity period equal to or approximating the option’s expected term. The dividend yield assumption is based on our historical dividend payouts adjusted for current expectations of future dividend payouts. The volatility assumption is based on the historical volatility, and expectations regarding future volatility, of our common stock over a period equal to the option’s expected term. The expected term of options granted is based on historical experience and expectations about future exercises and represents the period of time that options granted are expected to be outstanding. For Performance Share Units, the fair value is estimated on the date of grant using a Monte Carlo simulation model. For the highest performance level, the maximum number of shares payable and the estimated grant date value are 53,640 shares ($9,411,674) for Mr. Hill; 15,440 shares ($2,709,102) for Mr. Baker; 11,880 shares ($2,084,465) for Mr. Bass; 10,660 shares ($1,870,404) for Ms. Carlisle; and 6,640 shares ($1,165,054) for Mr. Pruitt. We do not believe that the fair values estimated on the grant date, either by the Black-Scholes model or any other model, are necessarily indicative of the values that might eventually be realized by an executive. |
SUMMARY COMPENSATION TABLE
| 2. | The Executive Incentive Plan (EIP) payments were made on March 13, 2024, for the previous year’s performance. See discussion of the EIP under the heading “Compensation Discussion and Analysis” above. |
SUMMARY COMPENSATION TABLE
| Vulcan Materials Company | 53 | 2024 PROXY STATEMENT |
SUMMARY COMPENSATION TABLE
| 3. | Includes only the amount of change in pension value because the company does not provide any above market earnings on deferred compensation balances. The year over year change in pension value was attributable to two primary factors, which were: (i) aging (one year closer to retirement) and (ii) change in actuarial assumptions (change in interest rate from 5.07% to 4.86%, and mortality table to Pri-2012 Private retirement plan Mortality White Collar Table, adjusted to 2006 base rates, with generational improvements projected using Scale MP-2021). |
SUMMARY COMPENSATION TABLE
| Name | AGING (one year closer to retirement) ($) | Change in Assumptions ($) | Total Change ($) | | Tom Hill | (124,534) | 52,529 | (72,005) | | Tom Baker(a) | — | — | — | | Stan Bass | (21,651) | 33,599 | 11,948 | | Mary Andrews Carlisle | 2,981 | 3,812 | 6,793 | | Ronnie Pruitt(a) | — | — | — |
SUMMARY COMPENSATION TABLE
| a. | Messrs. Baker and Pruitt were hired after 2007 and are not eligible to participate in the company’s defined benefit plan. |
SUMMARY COMPENSATION TABLE
| 4. | Includes qualified defined contribution plan contributions, company-paid life insurance premiums, reimbursement of qualified expenses incurred while using personal vehicles for company business, relocation expenses, commuting expenses and personal use of company aircraft, as set forth in the following table. |
SUMMARY COMPENSATION TABLE
Breakout detail of all other compensation shown in table below:
SUMMARY COMPENSATION TABLE
| Name | Non-Qualified Plan Contributions ($) | Qualified 401(K) Contributions ($) | Company Paid Life Insurance Premiums ($) | Reimbursed Expenses of Personal Vehicle Use ($) | Relocation ($) | Personal Use of Company Aircraft ($) | Total ($) | | Tom Hill | 316,731 | 28,950 | 912 | 6,975 | 0 | 132,150 | 485,718 | | Tom Baker | 124,895 | 28,950 | 912 | 0 | 0 | 14,390 | 169,147 | | Stan Bass | 112,466 | 28,950 | 912 | 6,880 | 0 | 1,473 | 150,681 | | Mary Andrews Carlisle | 60,049 | 28,950 | 912 | 6,642 | 0 | 0 | 96,553 | | Ronnie Pruitt | 58,891 | 28,950 | 912 | 1,984 | 8,100 | 18,330 | 117,167 |
SUMMARY COMPENSATION TABLE
| 5. | Ms. Carlisle was not a named executive officer for the fiscal year ended December 31, 2021. |
SUMMARY COMPENSATION TABLE
| 6. | Mr. Pruitt was not a named executive officer for the fiscal years ended December 31, 2022 and December 31, 2021. |
SUMMARY COMPENSATION TABLE
| Vulcan Materials Company | 54 | 2024 PROXY STATEMENT |
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS The following table sets forth the grants of plan-based awards in 2023 to our NEOs:
GRANTS OF PLAN-BASED AWARDS
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards (# of Shares) | | | All other Stock Awards: Number of Shares of Stock or Units (#) | All other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards(1) ($/Sh) | Grant Date Fair Value of Stock and Option Awards(2) ($) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Tom Hill | 2/21/2023 | 0 | 1,976,000 | 4,940,000 | 0 | 26,820 | 53,640 | 8,940 | 21,670 | 180.52 | 7,843,140 | | Tom Baker | 2/21/2023 | 0 | 800,000 | 2,000,000 | 0 | 7,720 | 15,440 | 13,970 | 6,240 | 180.52 | 4,257,441 | | Stan Bass | 2/21/2023 | 0 | 695,000 | 1,737,500 | 0 | 5,940 | 11,880 | 1,980 | 4,800 | 180.52 | 1,737,115 | | Mary Andrews Carlisle | 2/21/2023 | 0 | 570,000 | 1,425,000 | 0 | 5,330 | 10,660 | 1,780 | 4,310 | 180.52 | 1,559,522 | | Ronnie Pruitt | 2/21/2023 | 0 | 700,000 | 1,750,000 | 0 | 3,320 | 6,640 | 9,660 | 2,680 | 180.52 | 2,471,476 |
GRANTS OF PLAN-BASED AWARDS
| 1. | Exercise price was determined using the closing price of our common stock on the grant date as required under the 2016 Plan. |
GRANTS OF PLAN-BASED AWARDS
| 2. | Amount represents the grant date fair values calculated in accordance with FASB ASC Topic 718. The grant date fair value of $175.46 for the PSUs granted on February 21, 2023 was calculated using a Monte Carlo simulation model. The grant date fair value of $175.46 for the RSUs granted on February 21, 2023 reflects the base price of the award. The grant date fair value of $72.39 for the SOSARs granted on February 21, 2023 was calculated using a Black-Scholes option pricing model. Fair value was calculated on the number of units granted. |
GRANTS OF PLAN-BASED AWARDS
| Vulcan Materials Company | 55 | 2024 PROXY STATEMENT |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END Certain information concerning unexercised options and stock awards that have not vested for each of the NEOs outstanding as of December 31, 2023, is set forth in the table below:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock That have not Vested(11) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or other Rights that have not Vested(12) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights that have not Vested(11) ($) | | Tom Hill | 2/12/2015 | 30,800 | 0 | | 79.41 | 2/12/2025 | | | | | | | 2/12/2016 | 32,100 | 0 | | 92.02 | 2/12/2026 | | | | | | | 2/10/2017 | 23,900 | 0 | | 122.60 | 2/10/2027 | | | | | | | 2/23/2018 | 27,200 | 0 | | 121.69 | 2/23/2028 | | | | | | | 2/19/2019 | 26,100 | 0 | | 113.16 | 2/19/2029 | | | | | | | 2/21/2020 | 27,000 | 0 | | 133.95 | 2/21/2030 | | | | | | | 2/19/2021 | 16,534(1) | 8,266 | | 164.38 | 2/19/2031 | 7,900(7) | 1,793,379 | 42,826(4) | 9,721,930 | | | 2/18/2022 | 7,467(2) | 14,933 | | 185.31 | 2/18/2032 | 7,300(8) | 1,657,173 | 22,000(5) | 4,994,220 | | | 2/21/2023 | 0(3) | 21,670 | | 180.52 | 2/21/2033 | 8,940(9) | 2,029,469 | 26,820(6) | 6,088,408 | | Tom Baker | 3/13/2017 | 5,500 | 0 | | 119.59 | 3/13/2027 | | | | | | | 2/23/2018 | 6,600 | 0 | | 121.69 | 2/23/2028 | | | | | | | 2/19/2019 | 6,500 | 0 | | 113.16 | 2/19/2029 | | | | | | | 2/21/2020 | 7,400 | 0 | | 133.95 | 2/21/2030 | | | | | | | 2/19/2021 | 4,200(1) | 2,100 | | 164.38 | 2/19/2031 | 2,000(7) | 454,020 | 10,842(4) | 2,461,242 | | | 2/18/2022 | 2,200(2) | 4,400 | | 185.31 | 2/18/2032 | 2,200(8) | 499,422 | 6,500(5) | 1,475,565 | | | 2/21/2023 | 0(3) | 6,240 | | 180.52 | 2/21/2033 | 2,570(9) | 583,416 | 7,720(6) | 1,752,517 | | | 2/21/2023 | | | | 180.52 | 2/21/2033 | 11,400(10) | 2,587,914 | | | | Stan Bass | 2/21/2020 | 6,400 | 0 | | 133.95 | 2/21/2030 | | | | | | | 2/19/2021 | 3,667(1) | 1,833 | | 164.38 | 2/19/2031 | 1,800(7) | 408,618 | 9,578(4) | 2,174,302 | | | 2/18/2022 | 1,800(2) | 3,600 | | 185.31 | 2/18/2032 | 1,800(8) | 408,618 | 5,300(5) | 1,203,153 | | | 2/21/2023 | 0(3) | 4,800 | | 180.52 | 2/21/2033 | 1,980(9) | 449,479 | 5,940(6) | 1,348,439 | | Mary Andrews Carlisle | 2/21/2020 | 0(13) | 0 | | 133.95 | 2/21/2030 | | | | | | | 2/19/2021 | 0(1) (13) | 0 | | 164.38 | 2/19/2031 | 420(7) | 95,344 | 759(4) | 172,301 | | | 2/18/2022 | 1,200(2) | 2,400 | | 185.31 | 2/18/2032 | 1,200(8) | 272,412 | 3,600(5) | 817,236 | | | 2/21/2023 | 0(3) | 4,310 | | 180.52 | 2/21/2033 | 1,780(9) | 404,078 | 5,330(6) | 1,209,963 | | Ronnie Pruitt | 2/21/2020 | 0(13) | 0 | | 133.95 | 2/21/2030 | | | | | | | 2/19/2021 | 0(1) (13) | 0 | | 164.38 | 2/19/2031 | 0(14) | 0 | 11,565(4) | 2,625,371 | | | 2/18/2022 | 1,000(2) | 2,000 | | 185.31 | 2/18/2032 | 1,000(8) | 227,010 | 2,900(5) | 658,329 | | | 2/21/2023 | 0(3) | 2,680 | | 180.52 | 2/21/2033 | 9,660(9) | 2,192,917 | 3,320(6) | 753,673 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Options in footnote 1, 2 and 3 vest at a rate of 33.3% per year in years 1 – 3.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 1. | Options (SOSARs) with vesting dates 2/19/2022, 2/19/2023, 2/19/2024. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 2. | Options (SOSARs) with vesting dates 2/18/2023, 2/18/2024, 2/18/2025. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 3. | Options (SOSARs) with vesting dates 2/21/2024, 2/21/2025, 2/21/2026. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
PSUs in footnote 4, 5 and 6 cliff vest 100% after a three-year performance period.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 4. | PSUs with vesting date of 12/31/2023. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Vulcan Materials Company | 56 | 2024 PROXY STATEMENT |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 5. | PSUs with vesting date of 12/31/2024. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 6. | PSUs with vesting date of 12/31/2025. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 7. | RSUs cliff vest 100% after a three-year period, with a vesting date of 2/19/2024. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 8. | RSUs cliff vest 100% after a three-year period, with a vesting date of 2/18/2025. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 9. | RSUs cliff vest 100% after a three-year period, with a vesting date of 2/21/2026. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 10. | RSUs cliff vest 100% on 12/15/2025. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 11. | Based on closing price of our common stock on the NYSE on 12/29/2023, $227.01. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 12. | Vested PSUs adjusted for company performance through 12/31/2023. Unvested PSUs reported at target. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 13. | Ms. Carlisle and Mr. Pruitt did not receive SOSARs until February 2022. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 14. | Mr. Pruitt did not receive RSUs until February 2022. |
DEFERRED COMPENSATION PLAN
| Nonqualified Deferred Compensation Plan | | | | | | | Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End(1) ($) | | Tom Hill | 0 | 0 | 2,630,472 | 0 | 11,801,933 | | Tom Baker | 0 | 0 | 0 | 0 | 0 | | Stan Bass | 1,583,025 | 0 | 2,970,463 | 0 | 14,522,111 | | Mary Andrews Carlisle | 0 | 0 | 4,674 | 0 | 32,251 | | Ronnie Pruitt | 0 | 0 | 0 | 0 | 0 |
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED Certain information concerning each exercise of stock options and each vesting of stock during the fiscal year ended December 31, 2023, for each of the NEOs on an aggregate basis is set forth in the table below:
OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | | Tom Hill | 19,500 | 2,578,360 | 38,260 | 7,044,069 | | Tom Baker | 0 | 0 | 10,354 | 1,906,368 | | Stan Bass | 5,900 | 635,666 | 8,959 | 1,649,538 | | Mary Andrews Carlisle | 0 | 0 | 1,131 | 207,006 | | Ronnie Pruitt | 0 | 0 | 0 | 0 |
OPTION EXERCISES AND STOCK VESTED
| 1. | Represents the payment of PSUs and RSUs. |
OPTION EXERCISES AND STOCK VESTED
| 2. | For PSUs, calculated by multiplying the number of units vested by the closing price of our common stock on February 9, 2023, as approved by the Compensation Committee. For RSUs, calculated by multiplying the number of units vested by the closing price of our common stock on the vest date. |
OPTION EXERCISES AND STOCK VESTED
| Vulcan Materials Company | 58 | 2024 PROXY STATEMENT |
Pension Plan
Pension Plan The Pension Plan provides benefits under a funded noncontributory defined benefit plan and covers most salaried employees, including all executive officers, hired prior to July 15, 2007. In 2013, the Pension Plan was amended to freeze service accruals effective December 31, 2013 and earnings accruals effective December 31, 2015. The normal retirement date is defined in the Pension Plan as a participant’s 65th birthday. The amount of a participant’s benefit is based on earnings, service and the age at which a participant commences receiving a benefit. Eligible earnings under the Pension Plan, or “Final Average Earnings,” is the average of a participant’s highest 36 consecutive months of earnings prior to December 31, 2015, and includes base monthly salary and cash bonus. Under Section 415 of the Code, the maximum annual benefit allowable under the Pension Plan for a participant retiring at age 65 in 2023 is $265,000. The Pension Plan formula provides a monthly benefit equal to 0.9% of Final Average Earnings per year of service accrued prior to age 45, plus 1.2% of Final Average Earnings per year of service accrued after age 44, plus 0.5% of Final Average Earnings in excess of 50% of the Social Security Wage Base applied to all years of service. A vested participant may commence receiving early retirement benefits under the Pension Plan as early as age 55. The amount of early retirement reduction depends on the age of a participant when active employment ceases. If active employment ceases after age 55 and retirement income commences at age 62, or later, the monthly benefit is not reduced. However, if the benefit commences prior to age 62, the monthly benefit is reduced at a rate of 7% per year for commencement between ages 55 and 62. If active employment ceases prior to age 55, the monthly benefit is actuarially reduced for commencement between ages 55 and 65.
Pension Plan
| Vulcan Materials Company | 59 | 2024 PROXY STATEMENT |
Pension Plan
The normal form of retirement benefit under the Pension Plan for an unmarried participant is a single life annuity, which is a monthly payment for life. The normal form of retirement benefit under the Pension Plan for a married participant is a 75% joint and survivor annuity, which is a monthly payment for the life of the participant, and thereafter 75% of that amount to the surviving spouse payable for his or her lifetime. The Pension Plan also permits the participant to elect, with spousal consent, other annuity options and a lump sum payment for benefits accrued prior to 2002. The optional forms of payment are subject to actuarial adjustment.
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL This Section describes and estimates payments that could be made to the NEOs under different termination and change of control (COC) events. The estimated payments would be made under the terms of the compensation and benefits programs or the COC Agreements with the NEOs. The amount of the potential payments is calculated as if the different events occurred as of December 31, 2023 and assumes that the price of the company’s common stock is the closing market price as of December 29, 2023 (the last trading day of the fiscal year).
Termination Pay and Benefits Programs
Termination Pay and Benefits Programs The following chart describes the treatment of different compensation and benefit elements in connection with the aforementioned employment termination events for NEOs:
Termination Pay and Benefits Programs
| Program | Retirement/ Retirement Eligible | Involuntary Termination Not for Cause | Resignation | Death or Disability | Involuntary Termination for Cause | | Retirement: • Pension Plan • Nonqualified Plan | Participant may commence benefit payment | Participant may commence benefit payment or will be considered Terminated Vested(1) depending on age | Participant may commence benefit payment or will be considered Terminated Vested(1) depending on age | In death, spouse may commence survivor benefit on or after the date that the Participant would have attained age 55 | Participant may commence benefit payment or will be Terminated Vested(1) depending on age | | Executive Deferred Compensation Plan | Payment made in accordance with deferral election | Payout made the year following the year of termination in a lump sum | Payout made the year following the year of termination in a lump sum | Payout made the year following the year of death or termination in a lump sum | Payout made the year following the year of termination in a lump sum | | EIP | Eligible to receive prorated payment | No payment | No payment | Eligible to receive prorated payment | No payment | | Stock Options/ SOSARs | Full term to exercise vested options; if 62 or older, non-vested options continue to vest; if age 55 - 61, a pro-rata share of options becomes non-forfeitable and continues to vest; noncompetition agreement may be required | Non-vested options forfeited; 30 days to exercise vested options | Non-vested options forfeited; 30 days to exercise vested options | Vesting accelerated; in death, estate has one year to exercise; in disability, have full remaining term to exercise | Forfeit all, vested and non-vested | | PSUs | If age 62 or older, award becomes non-forfeitable; if age 55 – 61, a pro-rata share of the award becomes non-forfeitable; noncompetition agreement may be required | Non-vested units are forfeited | Non-vested units are forfeited | Award non-forfeitable; in death, vesting is accelerated | Forfeit all, vested but not released and non-vested | | RSUs | If age 62 or older, vesting is accelerated; if age 55-61, pro-rata vesting; noncompetition agreement may be required | Non-vested units are forfeited | Non-vested units are forfeited | Vesting is accelerated | Forfeit all, vested but not released and non-vested | | 401(k) Plan | May take distribution or defer until age 72 | May take distribution or defer until age 72 | May take distribution or defer until age 72 | Beneficiary may take distribution or defer until age 72 | May take distribution or defer until age 72 | | Nonqualified Plan (Defined Contribution) | Payment made 7 months after termination date | Payment made 7 months after termination date | Payment made 7 months after termination date | Payment made to beneficiary within 90 days of Participant’s death | Payment made 7 months after termination date | | Severance Benefits | None | None | None | None | None | | Health Benefits | May continue to age 65 if eligibility rules are met. If not met, eligible for coverage extension under COBRA | May continue to age 65 if eligibility rules are met. If not met, eligible for coverage extension under COBRA | May continue to age 65 if eligibility rules are met. If not met, eligible for coverage extension under COBRA | 3 months dependent extension, then COBRA; if eligibility rules are met may continue up to age 65 | May continue to age 65 if eligibility rules are met. If not met, eligible for coverage extension under COBRA |
Termination Pay and Benefits Programs
| 1. | “Terminated Vested” means the participant is no longer employed with the company but continues to have a vested interest in the applicable plan. |
Retirement and Pension Benefits
Retirement and Pension Benefits The monthly amounts that would have become payable to our NEOs if the termination event occurred as of December 31, 2023, under the Pension Plan, the Nonqualified Plan and the Defined Contribution Plan are itemized in the chart below. The amounts shown in the chart are monthly benefit amounts (other than with respect to the accrued benefits payable upon a COC, which would be paid in a lump sum) whereas the pension values shown in the Summary Compensation and Retirement Benefits Tables are present values of all the monthly values anticipated to be paid over the lifetimes of our NEOs and their spouses in the event of their death while actively employed. These plans are described in the notes following the Retirement Benefits Table. Messrs. Hill and Bass were retirement eligible on December 31, 2023. The benefits below were determined using the same assumptions used to compute benefit values in the Retirement Benefits Table with three exceptions. First, the benefit payments were assumed to
Retirement and Pension Benefits
| Vulcan Materials Company | 63 | 2024 PROXY STATEMENT |
Retirement and Pension Benefits
commence as soon as possible following December 31, 2023, instead of at normal retirement. Second, approximate early retirement reductions were applied. Finally, the benefits were not adjusted to reflect optional forms of payment. All benefits are the amounts that would be paid monthly over the NEO’s life, except for the value of COC-enhanced benefits which would be paid in a lump sum.
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median of the annual total compensation of our employees and the annual total compensation of Tom Hill, our Chairman and CEO (our “CEO”). The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. For 2023, our last completed fiscal year:
CEO PAY RATIO
| • | The median of the annual total compensation of all employees of the company (other than our CEO) was $99,874; and |
CEO PAY RATIO
| • | The annual total compensation of our CEO was $13,554,021. |
CEO PAY RATIO
| Vulcan Materials Company | 65 | 2024 PROXY STATEMENT |
CEO PAY RATIO
Based on this information, for 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees (other than our CEO) was 136 to 1. To identify our median employee and to determine the annual total compensation of the median employee and our CEO, we used the following methodology and material assumptions, adjustments and estimates:
CEO PAY RATIO
| 1. | We determined that, as of November 1, 2023, our employee population consisted of approximately 12,006 individuals working at the company and its consolidated subsidiaries, with 95.2% of these individuals located in the United States and 4.8% located in Canada, Mexico and Honduras. |
CEO PAY RATIO
| 2. | As permitted under SEC rules, we adjusted the employee population to exclude approximately 576 non-U.S. employees (or less than 5% of our employee population), all of whom are located in Canada, Mexico and Honduras. After excluding the foregoing non-U.S. employees, our adjusted employee population on November 1, 2023 was 11,430. |
CEO PAY RATIO
| 3. | To identify the “median employee” from our adjusted employee population, we reviewed the amount of compensation reported to the Internal Revenue Service on Form W-2, box 1 for 2023 (as reflected in our payroll records) for each of our employees. |
CEO PAY RATIO
In accordance with SEC rules, we determined the median employee’s 2023 total annual compensation by taking the sum of the following items:
CEO PAY RATIO
| 1. | $77,652, which represents the amount of the median employee’s compensation for fiscal 2023 that would have been reported in the Summary Compensation Table in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K if the employee had been a Named Executive Officer for fiscal year 2023. |
CEO PAY RATIO
| 2. | $22,222, which represents the estimated aggregate value of the employee’s compensation under company sponsored non-discriminatory benefit plans. |
CEO PAY RATIO
In accordance with SEC rules, we determined our CEO’s 2023 total annual compensation by taking the sum of the following items:
CEO PAY RATIO
| 1. | $13,530,753, which represents the amount reported for our CEO in the “Total” column of our 2023 Summary Compensation Table included on page 53 of this proxy statement. |
CEO PAY RATIO
| 2. | $23,268, which represents the estimated aggregate value of our CEO’s compensation under company sponsored non-discriminatory benefit plans. |
CEO PAY RATIO
| Vulcan Materials Company | 66 | 2024 PROXY STATEMENT |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Act, and Item 402(v) of Regulation S-K (“Item 402(v)”), we are providing the following information about the relationship between executive compensation actually paid and certain company financial performance metrics. For further information concerning our pay-for-performance philosophy and how we align executive compensation with company financial performance, refer to “Compensation Discussion and Analysis.”
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On: | | Net Earnings Attributable to Vulcan (in millions)(7) | Adjusted EBITDA (in millions)(8) | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | | | | 2023 | $13,530,753 | $30,449,512 | $4,647,878 | $8,123,894 | $157.05 | $113.75 | $933.2 | $2,011.3 | | 2022 | $10,081,539 | $9,719,655 | $2,851,513 | $2,420,972 | $125.10 | $115.31 | $575.6 | $1,625.6 | | 2021 | $10,420,114 | $20,186,426 | $3,084,236 | $4,984,584 | $146.95 | $142.32 | $670.8 | $1,451.3 | | 2020 | $9,883,031 | $10,092,437 | $2,876,167 | $3,010,807 | $104.13 | $117.46 | $584.5 | $1,323.5 |
PAY VERSUS PERFORMANCE
| 1. | The dollar amounts reported in this column are the amounts of total compensation reported for Mr. Hill (our Chief Executive Officer and principal executive officer (“PEO”)) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Summary Compensation Table.” |
PAY VERSUS PERFORMANCE
| 2. | The dollar amounts reported in this column represent the amount of “compensation actually paid” to Mr. Hill, as computed in accordance with Item 402(v). The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Hill during the applicable year. In accordance with the requirements of Item 402(v) (including subsequent SEC interpretive guidance), the following adjustments were made to Mr. Hill’s total compensation for each year to determine the compensation actually paid: |
PAY VERSUS PERFORMANCE
| Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards(a) | Equity Award Adjustments(b) | Reported Change in the Actuarial Present Value of Pension Benefits(c) | Compensation Actually Paid to PEO | | 2023 | $13,530,753 | $(7,843,140) | $24,689,894 | $72,005 | $30,449,512 | | 2022 | $10,081,539 | $(6,786,351) | $5,414,863 | $1,009,604 | $9,719,655 | | 2021 | $10,420,114 | $(6,488,720) | $15,900,351 | $354,681 | $20,186,426 | | 2020 | $9,883,031 | $(5,511,525) | $6,289,416 | $(568,485) | $10,092,437 |
PAY VERSUS PERFORMANCE
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
PAY VERSUS PERFORMANCE
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; and (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
PAY VERSUS PERFORMANCE
| Year | Year End Fair Value of Equity Awards | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Total Equity Award Adjustments | | 2023 | $14,152,129 | $2,449,719 | — | $8,088,046 | — | $24,689,894 | | 2022 | $7,189,506 | $(3,913,574) | — | $2,138,931 | — | $5,414,863 | | 2021 | $9,191,895 | $314,887 | — | $6,393,569 | — | $15,900,351 | | 2020 | $6,030,598 | $(839,148) | — | $1,097,966 | — | $6,289,416 |
PAY VERSUS PERFORMANCE
| (c) The amounts included in this column are the amounts reported in “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for each applicable year. |
PAY VERSUS PERFORMANCE
| Vulcan Materials Company | 67 | 2024 PROXY STATEMENT |
PAY VERSUS PERFORMANCE
| 3. | The dollar amounts reported in this column represent the average of the amounts reported for the company’s NEOs as a group (excluding Mr. Hill) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Hill) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Mary Andrews Carlisle, Tom Baker, Stan Bass and Ronnie Pruitt; (ii) for 2022, Mary Andrews Carlisle, Tom Baker, Stan Bass, Denson Franklin and Suzanne Wood; (iii) for 2021 and 2020, Suzanne Wood, Tom Baker, Stan Bass and Denson Franklin. |
PAY VERSUS PERFORMANCE
| 4. | The dollar amounts reported in this column represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Hill), as computed in accordance with Item 402(v). The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Hill) during the applicable year. In accordance with the requirements of Item 402(v) (including subsequent SEC interpretive guidance), the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Hill) for each year to determine the compensation actually paid, using the same methodology described in footnote 2 above: |
PAY VERSUS PERFORMANCE
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments(a) | Average Reported Change in the Actuarial Present Value of Pension Benefits | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $4,647,878 | $(2,506,389) | $5,987,090 | $(4,685) | $8,123,894 | | 2022 | $2,851,513 | $(1,534,520) | $996,797 | $107,182 | $2,420,972 | | 2021 | $3,084,236 | $(1,410,634) | $3,283,822 | $27,160 | $4,984,584 | | 2020 | $2,876,167 | $(1,282,316) | $1,510,935 | $(93,979) | $3,010,807 |
PAY VERSUS PERFORMANCE
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
PAY VERSUS PERFORMANCE
| Year | Average Year End Fair Value of Equity Awards | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Total Average Equity Award Adjustments | | 2023 | $4,055,683 | $554,178 | — | $1,377,229 | — | $5,987,090 | | 2022 | $1,538,909 | $(850,994) | — | $308,882 | — | $996,797 | | 2021 | $1,997,988 | $429,843 | — | $855,991 | — | $3,283,822 | | 2020 | $1,403,289 | $(174,261) | — | $281,907 | — | $1,510,935 |
PAY VERSUS PERFORMANCE
| 5. | TSR is calculated by taking the difference between the ending value of the investment, which includes reinvestment of dividends, less the value at the beginning of the measurement period divided by the value at the beginning of the measurement period. |
PAY VERSUS PERFORMANCE
| 6. | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the peer group selected by the Compensation Committee for purposes of benchmarking compensation, which included the following 25 companies for 2023: Air Products and Chemicals, Inc.; Albemarle Corporation; Allison Transmission Holdings, Inc.; Ball Corporation; Cabot Corporation; Celanese Corporation; CF Industries Holdings, Inc.; Dover Corporation; Eagle Materials Inc.; Eastman Chemical Company; Ecolab Inc.; FMC Corporation; Fortune Brands Home & Security, Inc.; Lennox International Inc.; Martin Marietta Materials, Inc.; Masco Corporation; Minerals Technologies Inc.; NewMarket Corporation; Newmont Mining Corporation; Owens Corning; Packaging Corporation of America; Summit Materials, Inc.; The Mosaic Company; The Timken Company; and Westlake Chemical Corporation. For 2023, Albemarle Corporation and FMC Corporation were added to our peer group and Armstrong World Industries, Inc. and Cleveland-Cliffs, Inc. were removed from the peer group for pre-established revenue comparability reasons. U.S. Concrete, Inc. and W.R. Grace & Co. were removed from our peer group for 2023 due to their recent acquisitions. |
PAY VERSUS PERFORMANCE
| 7. | The dollar amounts reported represent the net earnings attributable to Vulcan reflected in the company’s audited consolidated financial statements for the applicable year. |
PAY VERSUS PERFORMANCE
| 8. | Adjusted EBITDA, a non-GAAP financial measure, is Earnings Before Interest, Taxes, Depreciation and Amortization adjusted for certain items to provide a more consistent comparison of earnings performance from period to period. We provide a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure in Annex A to this proxy statement. While the company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the company’s compensation programs, the company has determined that Adjusted EBITDA is the financial performance measure that, in the company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the company to link compensation actually paid to the company’s NEOs, for the most recently completed fiscal year, to company performance. |
PAY VERSUS PERFORMANCE
| Vulcan Materials Company | 68 | 2024 PROXY STATEMENT |
Analysis of the Information Presented in the Pay versus Performance Table
Analysis of the Information Presented in the Pay versus Performance Table As described in more detail in the section “Compensation Discussion and Analysis,” the company’s executive compensation program reflects a pay-for-performance philosophy. While the company utilizes several performance measures to align executive compensation with company performance, all of those company measures are not presented in the Pay versus Performance table. Moreover, the company generally seeks to incentivize long-term performance and therefore does not specifically align the company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v)) for a particular year. In accordance with Item 402(v), the company is providing the following graphs to show the relationships between information presented in the Pay versus Performance table.
Analysis of the Information Presented in the Pay versus Performance Table
| Vulcan Materials Company | 69 | 2024 PROXY STATEMENT |
Analysis of the Information Presented in the Pay versus Performance Table
| Vulcan Materials Company | 70 | 2024 PROXY STATEMENT |
Director Compensation
Director Compensation In May 2023, 820 RSUs were granted to each non-employee director pursuant to the 2016 Plan, which was approved by our shareholders in 2016. The RSUs vest on the first anniversary of the grant date and are settled in shares of the company’s common stock. Prior to the issuance of shares of common stock in settlement of the RSUs, the non-employee directors have no right to vote the shares underlying the RSUs. Dividend equivalents are credited quarterly when dividends are paid on our stock and distributed in shares of common stock when the shares underlying the RSUs are issued to the director. Directors may elect to defer receipt of the shares issuable upon settlement of the RSUs.
DIRECTOR SUMMARY COMPENSATION TABLE
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation(2) ($) | Total ($) | | Melissa H. Anderson | 115,000 | 160,212 | 0 | 0 | 0 | 5,304 | 280,515 | | Thomas A. Fanning | 135,000 | 160,212 | 0 | 0 | 0 | 18,490 | 313,702 | | O. B. Grayson Hall, Jr. | 165,000 | 160,212 | 0 | 0 | 0 | 17,516 | 342,728 | | Cynthia L. Hostetler | 115,000 | 160,212 | 0 | 0 | 0 | 18,490 | 293,702 | | Lydia H. Kennard | 115,000 | 160,212 | 0 | 0 | 0 | 1,060 | 276,272 | | Richard T. O’Brien | 115,000 | 160,212 | 0 | 0 | 0 | 36,228 | 311,440 | | James T. Prokopanko | 115,000 | 160,212 | 0 | 0 | 0 | 37,194 | 312,406 | | Kathleen L. Quirk | 140,000 | 160,212 | 0 | 0 | 0 | 10,834 | 311,046 | | David P. Steiner | 130,000 | 160,212 | 0 | 0 | 0 | 12,942 | 303,154 | | Lee J. Styslinger, III | 130,000 | 160,212 | 0 | 0 | 0 | 25,358 | 315,570 | | George Willis | 115,000 | 160,212 | 0 | 0 | 0 | 1,836 | 277,048 |