RPM 2020 Proxy Statement

EXECUTIVE COMPENSATION (CONTINUED) Willis Towers Watson reviewed proxy statement data for each of our compensation peer group companies and summarized the data as a reference point for the Compensation Committee. Willis Towers Watson also reviewed published survey data from the 2019 Willis Towers Watson General Industry Executive Compensation Survey Report to determine competitive pay levels for the executives for the following elements of compensation: base salary, actual total cash compensation (the sum of salary and actual bonuses received), long-term incentives, and actual total direct compensation (the sum of base salary, actual annual bonuses and long-term incentives). Based on its analysis and findings, Willis Towers Watson concluded that our Chief Executive Officer’s actual total direct compensation was competitive with the market median and that, overall, our named executive officers’ salaries and total cash compensation are generally at or below the market median, and that their long-term incentives and total direct compensation are generally at or above the market median. RPM CEO RPM Other Named Executive Officers Market Median Other Named Executive Officers Market Median CEO Base Salary Annual Incentives Long-Term Incentives 12% 12% 76% 67% 14% 18% 55% 24% 21% 46% 33% 21% Specifically with regard to our Chief Executive Officer, Willis Towers Watson found that compared to similarly sized general industry companies, his base salary was 10% below the market median, and that his actual total cash compensation was 23% below the market median. Long-term incentives for our Chief Executive Officer were 19% above the market median. Overall, our Chief Executive Officer’s actual total direct compensation was 6% above the market median. Willis Towers Watson considers long-term incentives and actual total direct compensation to be competitive with the market if such amounts are within 20% of the market median. As detailed in the pie charts above, Willis Towers Watson also evaluated the targeted pay mix of our Chief Executive Officer and other executives, and determined that our compensation was weighted more toward long-term incentives than is typical in the market. Elements of Compensation Our named executive officer compensation program for fiscal 2020 included three main elements: • Base salary; • Annual cash incentive compensation; and • Performance-based equity incentives, including restricted stock and stock appreciation rights. Pay Mix We use these particular elements of compensation because we believe that they provide a balanced mix of fixed compensation and at-risk compensation that produces short- term and long-term performance incentives and rewards. With this balanced portfolio, we provide the executive with a competitive base salary while motivating the executive to focus on the business metrics that will produce a high level of performance for the Company and provide the executive with additional compensation through short- and long-term incentives. The mix of compensation for our named executive officers is weighted toward at-risk pay (consisting of cash and equity compensation). Maintaining this pay mix is intended to result in a pay-for-performance orientation, which aligns to our compensation philosophy of paying total direct compensation that is competitive with peer group levels based on relative company performance. 28