MASCO CORP DE

Program Opportunities

Our Compensation Committee believes a long-term incentive program provides a meaningful incentive for our executive officers to achieve long-term growth and profitability. Under our LTIP, PRSUs are granted to our executive officers at the beginning of each three-year performance period. This grant of PRSUs entitles our executive officers to receive shares of our stock if at least the threshold performance goals over the three-year period are achieved. If the threshold goals are not achieved, our executive officers do not earn a payout. If the maximum goals are met or exceeded, the payout percentage is capped at 200% of the target opportunity.

Our Compensation Committee establishes the LTIP opportunity available to each executive officer as a percent of the executive officer’s annual base salary at the beginning of each three-year performance period. Our executive officers who participated in our 2021-2023 LTIP had the following target opportunities:

Performance Metrics

Our Compensation Committee selected a cumulative EPS metric with a weighting of 60% and a three-year average ROIC metric with a weighting of 40% for our LTIP program for the 2021-2023 LTIP performance period. Our Compensation Committee believes that a combination of EPS and ROIC reinforces our executive officers’ focus on earnings, capital efficiency and consistent return on capital and further encourages our executive officers to make new, profitable investments. In 2023, our Compensation Committee added a relative total shareholder return metric, measured against companies in the S&P 500 Consumer Durables Index, to our LTIP program for the three-year periods beginning in 2023.

Program Targets and Achievement

Our Compensation Committee established the following EPS and ROIC goals and corresponding payout percentages for the 2021-2023 LTIP performance period. These performance goals were consistent with our long-range business plan and required a high level of performance to achieve. For the three-year performance period of 2021-2023, we achieved 100% of our cumulative EPS goal and 0% of our ROIC goal, resulting in an overall performance percentage of 60%.

To calculate achievement of our cumulative earnings per share performance target, we adjusted our income from continuing operations to exclude theafter-tax effect of special and othernon-recurring income and expenses and divided by adjusted average diluted common shares outstanding. Average diluted common shares outstanding for 2022 and 2023 was increased to reflect the minimum number of common shares outstanding permitted under the LTIP during the performance period.

Under our 2021-2023 LTIP, we define ROIC asafter-tax operating profit from continuing operations adjusted to exclude the effect of special and othernon-recurring income and expenses, divided by adjusted invested capital. Adjusted invested capital includes shareholders’ equity, which we adjust to exclude theafter-tax impact of certain special and othernon-recurring income and expenses, plus short-term and long-term debt minus cash.

Compensation Paid Under our 2021-2023 LTIP

The following table reflects the PRSUs granted to our eligible executive officers at the beginning of the 2021-2023 three-year performance period, and the amount of stock earned by those executive officers at the end of the three-year period under our 2021-2023 LTIP. We calculated the number of shares earned by multiplying the number of PRSUs granted to each executive officer at the beginning of the three-year performance period by 60%, which was the performance percentage achieved. The value of the stock earned is based upon the number of shares issued on February 16, 2024, at the closing stock price of our common stock. Based on SEC rules, this component of each executives’ compensation was reflected in our 2021 Summary Compensation Table, the year in which the PRSUs were granted under our 2021-2023 LTIP, assuming the target award would be earned at the end of the three-year period.

PRSUs Granted Under the 2023-2025 LTIP

The following table reflects the PRSUs granted to our eligible executive officers under the 2023-2025 LTIP. The amounts reflected in the PRSU Grant column are the number of PRSUs granted on February 24, 2023, which we calculated using the the closing price of our stock on the grant date ($52.48) and rounded to the nearest ten shares, assuming the target award would be earned at the end of the three-year performance period. The actual number of shares of stock awarded, if any, will be determined after the three-year performance period concludes on December 31, 2025. If the threshold goals are not achieved, our executive officers do not earn a payout. If the maximum goals are met or exceeded, the payout percentage is capped at 200% of the target opportunity.