Talent is foundational to our strategy and a key priority for the Board. Last year saw the launch of the company’s new people brand, “Be,” allowing us to attract and retain top talent. Three signature elements will continue to guide us: (1) growing great leaders through programs that encourage associates to be curious, courageous, and connected; (2) investing in associates by offering competitive and compelling compensation and benefits, including resources focused on associates’ physical, mental, and financial well-being; and (3) providing access to opportunity by focusing on accelerating non-management associates to management positions and early managers to more senior roles.

As a Board, we also remain focused on our own quality and effectiveness. In the past year, we discussed strategic priorities and emerging areas impacting the company, coordinated activities and events around our meetings to allow directors to meet and engage with associates across our operations and key disciplines, and enhanced our own evaluation practices. Regular refreshment also remains a key priority. Eric Hippeau, who has served on our Board since 2016 and previously served on the board of Starwood, has reached our mandatory retirement age and is not standing for reelection this year. Eric helped guide the Board through the Starwood integration, and more recently he was instrumental in the creation of our Technology and Information Security Oversight Committee and a champion of the company’s technology transformation efforts. We will miss Eric’s perspective and expertise. The Board is reducing its size to 12 with Eric’s departure, but we remain committed to identifying strong and independent prospective Board members who value Marriott’s culture and core values and add to the breadth of our backgrounds, experiences, perspectives, and skills in areas critical to the company’s strategic priorities.

 

 

Our Growing Forward strategy is the road map for how we plan to lead the industry and be the first choice for associates, guests, and owners and franchisees. Our three Paths to Win guide how we set our priorities and measure our progress across the Company, how we advance our proven, asset-light business model, and how we strengthen our competitive advantage.

Talent is foundational to our company strategy and a key priority of the Board. Fulfilling Marriott’s purpose of connecting people through the power of travel is only possible because of the hard work and dedication of the hundreds of thousands of associates who wear the Marriott name badge around the world. Each associate plays an important role in creating memorable experiences for our guests that encourage them to come back again and again. In 2023, our associate engagement scores exceeded the “Best Employer” external benchmark, and we were recognized as a top 10 company on the Fortune 100 Best Companies to Work For®, Great Place to Work®, a list we have been on for 26 consecutive years.

Three signature elements guide our people strategy:

 

Voting Matters and the Recommendations of the Board of Directors (the “Board”)

The following table provides summary information about each director nominee.

  Financial Expert

See “Corporate Governance” for more information.

 

2023 was a terrific year. We saw continued strong momentum in our business around the world, thanks to solid demand for travel and our diverse portfolio of more than 30 brands, which led to excellent financial and operating performance. All of our regions experienced significant RevPAR improvement during the year, net income increased by 31% over 2022, and Adjusted EBITDA increased by 21% over 2022.⁽¹⁾ We returned over $4.5 billion to stockholders through dividends and share repurchases during the year. Development activity was also strong as we signed a record 891 organic management, franchise and license agreements in 2023, representing approximately 164,000 rooms, and achieved strong net rooms growth of 4.7%. By year-end, our worldwide system consisted of nearly 8,800 properties with more than 1,597,000 rooms in 139 countries and territories. Our people are foundational to our strategy. Our associate engagement scores exceeded the “Best Employer” external benchmark, and we were recognized as a top 10 company on the Fortune 100 Best Companies to Work For®, Great Place to Work® in 2023. Finally, from a customer standpoint, we exceeded our 2023 goals for guest satisfaction and for Marriott Bonvoy loyalty program member engagement and enrollments.

There is a strong correlation between our executive pay and Company performance. Our executive compensation program is designed to maintain this alignment, while also protecting the Company against inappropriate risk-taking and conflicts among the interests of the Company, its stockholders, and its executives. With these goals in mind, the Board and its Human Resources and Compensation Committee have implemented an executive compensation program that consists of the following key components:

 

The following charts show the percentage breakdown of our NEOs’ target total direct compensation among base salary, at-risk target annual incentive, and target annual equity compensation for 2023.

 

The following graph shows the historical alignment between Company performance (measured as total stockholder return (“TSR”)) and the President and CEO’s average annual Realizable Pay (as defined below) over 3-year rolling periods.

 

Consistent with our commitment to executive compensation best practices, the Company maintained the following NEO compensation practices for 2023:

The 12 current directors listed below are standing for election at the 2024 Annual Meeting. If elected, each director will hold office for a one-year term expiring at the 2025 annual meeting of stockholders and until his or her successor is elected and qualified.

You can find information on the director nominees in the “Nominees to our Board of Directors” section of this proxy statement.

Each of the director nominees is currently a director of the Company and has been elected to hold office until the 2024 Annual Meeting and until his or her successor is elected and qualified. Each of the director nominees has consented to being named in this proxy statement and to serve if elected. However, if before proxies are voted at the Annual Meeting any of the nominees should become unable to serve or will not serve as a director, the Board may designate a substitute nominee or reduce the size of the Board. If the Board designates a substitute nominee, the persons named as proxies will vote “FOR” that substitute nominee.

Eric Hippeau, who has served on the Board since 2016, and prior to that time served on the board of Starwood Hotels & Resorts Worldwide, has attained the age of 72 and therefore was not nominated for re-election as a director, consistent with the retirement policy in the Company’s Governance Principles. As a result, his term on the Board will end at the Annual Meeting. Mr. Hippeau helped guide the Board through the Starwood integration, was a founding member of our Technology and Information Security Oversight Committee, and has been an important contributor to the Human Resources and Compensation Committee. The Board thanks him for his significant contributions and distinguished service.

With Mr. Hippeau’s impending departure, the Board has reduced its size from 13 to 12, effective as of the expiration of Mr. Hippeau’s term at the 2024 Annual Meeting.

The Company’s Bylaws prescribe the voting standard for election of directors as a majority of the votes cast in an uncontested election, such as this one, where the number of nominees does not exceed the number of directors to be elected. Under this standard, a nominee must receive more “FOR” votes than “AGAINST” votes in order to be elected as a director. Under the Company’s Governance Principles, if a nominee who already serves as a director is not elected, that nominee shall tender his or her resignation to the Board. The Nominating and Corporate Governance Committee will then recommend to the Board whether to accept or reject the resignation, or whether other action should be taken. Within 90 days of the certification of election results, the Board will determine whether to accept or reject the resignation and will publicly disclose its decision promptly thereafter.

In a contested election, where the number of nominees exceeds the number of directors to be elected (which is not the case at the Annual Meeting), the directors will be elected by a plurality of the shares present in person or by proxy and entitled to vote on the election of directors.

The Audit Committee of the Board has appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2024. Ernst & Young LLP, a registered public accounting firm, has served as the Company’s independent registered public accounting firm since May 3, 2002. Ernst & Young LLP will examine and report to stockholders on the consolidated financial statements and the effectiveness of internal control over financial reporting of the Company and its consolidated subsidiaries.

We expect that representatives of Ernst & Young LLP will attend the Annual Meeting, have an opportunity to make a statement if they so desire, and be available to respond to appropriate questions. You can find information on pre-approval of independent auditor fees and Ernst & Young LLP’s fiscal year 2023 and 2022 fees in the “Audit Committee Report and Independent Auditor Fees” section of this proxy statement. Although the Audit Committee has discretionary authority to appoint the independent auditor, the Board is seeking

stockholder ratification of the appointment of the independent auditor as a matter of good corporate governance. If stockholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will take that into consideration when determining whether to continue the firm’s engagement. Even if stockholders ratify the appointment of Ernst & Young LLP, the Audit Committee, in its discretion, may select a different auditor at any time during the year if it determines doing so to be in the best interests of the Company and its stockholders.

We are asking stockholders to approve a non-binding advisory resolution on the compensation of our NEOs, as disclosed in this proxy statement.

Although the resolution, commonly referred to as a “say-on-pay” resolution, is non-binding, the Board and Human Resources and Compensation Committee value your opinions and will consider the outcome of the vote when making future compensation decisions. After consideration of the vote of stockholders at the 2023 annual meeting of stockholders and consistent with the Board’s recommendation, the Board’s current policy is to hold an advisory vote on executive compensation on an annual basis, and accordingly, after the Annual Meeting, the next advisory vote on the compensation of our NEOs is expected to occur at our 2025 annual meeting of stockholders.

We urge you to read the Compensation Discussion and Analysis (“CD&A”) section of this proxy statement, which describes in detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of our NEOs.

The Board believes that our current executive compensation program achieves an appropriate balance of long- and short-term performance incentives, reinforces the link between executive pay and the Company’s long-term performance and stock value, and thereby aligns the interests of our NEOs with those of our stockholders.

In accordance with Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the Annual Meeting:

RESOLVED, that the stockholders of Marriott International, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s Named Executive Officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s 2024 Annual Meeting of Stockholders.

Trillium ESG Global Equity Fund (the “proponent”), whose address and stockholdings will be provided by us upon written or oral request, has advised the Company that it plans to present the following proposal at the Annual Meeting. If the proposal is properly presented at the Annual Meeting by or on behalf of the proponent, the Board unanimously recommends a vote “AGAINST” the following stockholder resolution. We have included the proponent’s proposal in this proxy statement pursuant to SEC rules, and the Board’s response to it follows. The proposal contains assertions about the Company or other statements that we believe are incorrect. We have not attempted to refute all inaccuracies.

Civil Rights Audit

Resolved: Shareholders urge the board of directors to oversee a third-party audit (within a reasonable time and cost) which assesses and produces recommendations for improving the civil rights impact of its policies, practices, products, and services. Input from stakeholders, including civil rights organizations, employees, and customers, should be considered in determining the specific matters to be assessed. A report on the audit, prepared at reasonable cost and omitting confidential/proprietary information, should be published on the company's website.

In 2020, Marriott published a statement affirming, “We believe racism should be eradicated” and states on its website that ''Diversity and inclusion is fundamental to our core values and strategic business goals.”¹ Though Marriott has initiatives to address discrimination, its current actions may be insufficient to address controversies involving the company.

Marriott is connected to allegations of employment discrimination. In September 2022, the Department of Labor found that a resort operated by Marriott in Tennessee discriminated against 250 Black, Asian, and female job applicants for housekeeping roles during 2018-2020.² Marriott agreed to pay $630,732 in back wages and to offer jobs to 49 affected people without admitting nor denying wrongdoing. In September 2023, Marriott was ordered to pay $20 million in damages to an employee after a jury found that reasonable disability accommodations were not made.³

The alleged culture of discrimination may also affect customers. In July 2022, a Marriott patron received an invoice with an anti-Asian slur after a stay in Pennsylvania. The patron claimed that Marriott distanced itself from the incident because it occurred at a franchise and suggested the slur was a “clerical error.”⁴ Current company reporting is not clear on how Marriott addresses controversies around alleged discrimination involving employees or customers.

Marriott's association with the alleged predatory lending of the Marriott Employees' Federal Credit Union (MEFCU) also raises concerns. While MEFCU operates as a separate entity, its products, available through Marriott's human resources offices, have been flagged for unusually high fees compared to peer institutions. Workers allegedly use “Mini Loans,” which have an effective rate of 46 percent inclusive of the application fee and 18 percent interest rate, to afford basic living expenses when Marriott's fluctuating hours result in insufficient income.⁵ After a class action lawsuit was filed against MEFCU in 2018, the case was settled in 2020 with MEFCU denying wrongdoing.⁶ We believe that the combination of unstable schedules and providing access to high-interest loans likely perpetuates the cycle of poverty and racial inequality.

A civil rights audit would help Marriott identify, prioritize, remedy and avoid adverse impacts on marginalized communities and assist the company in effective resource allocation, while giving shareholders assurance that Marriott has adequate controls to address controversies that present risks.

As a hospitality company with a portfolio that spans the globe, we strive to understand, respect, and welcome all. To accomplish this, we work to create a safe, fair, and inclusive workplace for our associates and a safe, secure, and hospitable environment for our guests.

We utilize a variety of tools, resources, and initiatives to educate leaders and associates on diversity and inclusion, treating individuals with dignity and respect, and instilling a sense of belonging. For example, our “Respect for All: Putting People First Since 1927” initiative is a platform promoting a culture of inclusion that leverages resources, training, best practices, and content related to diversity and inclusion, including a focus on understanding customer cultures and guest needs with the goal of enabling associates to provide exceptional customer service to all. We also aim to cultivate a sense of belonging within our workforce through our executive-sponsored, associate-led Asian & Pacific Islander, Black, Hispanic, LGBTQ+ ONE, Women’s, and Young Professionals Associate Resource Groups (ARGs). ARGs, which are open to all, engage our associates, enhance our culture, and support recruitment, retention, and diversity and inclusion efforts. These initiatives and more are described in greater detail in our annual Serve 360 Report.

Likewise, our commitment to welcoming all guests includes engaging with diverse groups, creating inclusive guest experiences, and supporting key diversity and inclusion initiatives. Recent efforts include Marriott’s award winning LoveTravels campaign, which represents our platform to engage diverse and socially driven consumers over our shared values and reinforce our commitment to diversity, inclusion, and social impact, as well as our continuing work with the disability community to explore ways to welcome and improve the stay experience for guests with disabilities.

In 2003, we were the first in our industry, and one of the first companies in the country, to establish a Board of Directors-led committee focused on advancing inclusive opportunity. Today, the ISIC oversees the Company’s strategy, efforts, and commitments related to its people-first culture, associate well-being and inclusion, and other sustainability and social impact matters. At the management level, our Serve 360 Executive Leadership Council, comprised of senior leaders representing each discipline and global division, and our Serve 360 Advisory Council, comprised of continent operations, human resources, and division leaders, guide our efforts to make progress toward company goals, including our efforts to empower through opportunity and welcome all and advance human rights. We publish details about our oversight and governance approach in our annual Serve 360 Report and in our governance documents and other disclosures throughout the year.

To maintain and further our culture of inclusion and welcoming all, we implement policies, procedures, and programs to help guide our day-to-day business conduct and promote a culture of fair treatment. These policies include:

We maintain robust structures to engage and respond when issues arise, and we provide several avenues to encourage associates to ask questions, raise concerns, speak up, and otherwise report violations of these policies or other workplace concerns, including through our Business Integrity Line or by contacting our Internal Audit or Law departments.

Our Human Rights Policy Statement, adopted in 2006 and most recently updated in 2017, acknowledges and reflects the principles contained in the United Nations Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights. The policy describes our goal to provide a safe and healthy working environment for all associates, as it relates to harassment and discrimination prevention, child labor, freedom of association, and human trafficking and forced labor. Among other important human rights initiatives, we require human trafficking awareness training for all on-property associates at both managed and franchised hotels. As of year-end 2023, more than 1.2 million associates had completed the training since it was launched in 2016. We also donated the training to PACT (previously ECPAT-USA), with support from the American Hotel and Lodging Association Foundation, to make it available to the entire hospitality industry at no cost. Between 2020, when we initially donated the training, through year-end 2023, the training has been completed more than 1.6 million times by hotel workers outside of Marriott.

The Company actively addresses the core concerns of the proposal through the policies, practices, and protocols outlined above as well as numerous other programs and initiatives. We maintain and enhance our culture of welcoming all through dedicated teams, active executive and Board oversight, robust structures to engage and respond when concerns arise, and regular reviews and updates to relevant policies and training materials. Commissioning a broad, open-ended third-party audit and publishing the requested report would be a long and costly process that would divert resources away from doing the actual work to pursue these important programs and initiatives. For all these reasons, we do not believe a third-party audit would be a prudent use of corporate resources or provide a meaningful benefit to the Company or stockholders.

Myra K. Young (the “proponent”), whose address and stockholdings will be provided by us upon written or oral request, has advised the Company that she plans to present the following proposal at the Annual Meeting. If the proposal is properly presented at the Annual Meeting by or on behalf of the proponent, the Board unanimously recommends a vote “AGAINST” the following stockholder resolution. We have included the proponent’s proposal in this proxy statement pursuant to SEC rules, and the Board’s response to it follows. The proposal contains assertions about the Company or other statements that we believe are incorrect. We have not attempted to refute all inaccuracies.

 

Item 5 – Racial and Gender Pay Gap Report

Resolved: Myra K. Young of CorpGov.net and other shareholders request Marriott International, Inc. (“Company” or “Marriott”) report on median pay gaps across race and gender, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy, and legal compliance information.

Racial/gender pay gaps are defined as the difference between non-minority and minority/male and female median earnings expressed as a percentage of non-minority/male earnings (Wikipedia/OECD, respectively).

Supporting Statement: An annual report adequate for investors to assess performance could, with board discretion, integrate base, bonus, and equity compensation to calculate:

Whereas: Pay inequities persist across race and gender. They pose substantial risks to companies and society. Black workers’ median annual earnings represent 77 percent of white wages. The median income for women working full time is 84 percent of that of men. Intersecting race, Black women earn 76 percent and Latina women 63 percent.¹ At the current rate, women will not reach pay equity until 2059, Black women in 2130, and Latina women in 2224.²

Citigroup estimates closing minority and gender wage gaps 20 years ago could have generated 12 trillion dollars in additional national income. PwC estimates closing the gender pay gap could boost the economies of Organization for Economic Cooperation and Development (OECD) countries by $2 trillion annually.³ Actively managing pay equity is linked to superior stock performance and return on equity.⁴

Best practice pay equity reporting consists of two parts:

Marriott reports only statistically adjusted pay gaps but ignores unadjusted gaps, which address the structural bias women, and underrepresented minorities face regarding job opportunities and pay, particularly when men hold most higher-paying jobs. While we are glad, Marriott now reports adjusted pay gaps, median pay shows, quite literally, how Marriott assigns value to employees through roles they inhabit and pay they receive. Median pay gap reporting also provides a digestible and comparable data point to determine progress over time.

Racial and gender-unadjusted median pay gaps are accepted as the valid way of measuring pay inequity by the United States Census Bureau, Department of Labor, Organization for Economic Cooperation and Development, and International Labor Organization. The United Kingdom and Ireland mandate disclosure of median gender pay gaps.

It is also worth considering that Marriott reported a CEO pay ratio of 477 to 1.

Pay Equity Affirms Human Rights and Increases Long-Term Shareholder Value

Vote FOR Racial and Gender Pay Gap Report – Proposal 5

This proposal is substantially similar to the proposal the proponent submitted last year. The Board has considered the proposal, as well as the results from last year’s vote, where more than 75% of the shares voted were against the proposal, and recommends that stockholders again vote against it for the following reasons:

Pay equity is foundational to our compensation structures and practices. In the U.S., the vast majority of our jobs are hourly paid positions, which are generally compensated based on fixed or defined pay rates based on tenure. This highly structured compensation framework helps to prevent the exercise of managerial discretion in setting pay rates and means that our U.S. hourly paid employees generally are paid the same rate as others with the same job and tenure in their geographic location. Similarly, for our non-hourly management employees, there are well-established pay bands for all roles, and pay equity is evaluated at the time of an initial job offer and throughout the employment life cycle. Globally, during the application process, we prohibit inquiries into salary history and ban the use of compensation history when establishing starting pay for new hires.

We also have robust and proactive policies and procedures in place that are designed to identify, minimize, and rectify unintended pay gaps. We conduct a detailed statistical analysis with third parties at least annually to review gender and racial pay equity in the U.S. Additional reviews of pay and processes throughout the year are designed to support us in making adjustments due to market conditions and providing consistency to associates. Through these pay and policy adjustments, we correct for unintended pay differences, and where appropriate, adjust for market competitiveness as part of our annual and ongoing reviews. In 2023, as in 2022, pay adjustments for unintended pay differences were de minimis. We also continue to review our processes and analyses outside of the U.S. to review and analyze our equitable pay and practices more broadly.

The results are self-evident: as we reported in our 2023 Serve 360 report, a review of U.S. associates’ compensation conducted in 2023 showed that when adjusted for factors such as role, tenure, and location, U.S. associates who identified as female earn approximately 99% of what male associates earn, and U.S. associates who identified as members of a racial or ethnic minority earn approximately 99% of what non-minority associates earn.

We are proud of our compensation policies and practices and our proven ability to attract, retain, and develop a diverse and engaged workforce. As noted above, to help investors and other stakeholders assess our pay equity performance, last year we reported pay equity ratios by gender and race for U.S. employees, adjusted for factors such as experience, tenure, job function, level and scope of responsibilities, and geography. We plan to continue this reporting annually. In addition, our Annual Report on Form 10-K and annual Serve 360 Report provide detailed information about our workforce, commitment to investing in associates, and human capital strategy – including pay equity practices and policies, the representation of women in global executive and managerial roles and people

of color in U.S. executive roles, and our EEO-1 form. Combined, this information demonstrates the Company’s performance in both paying women and racial and ethnic minority employees fairly for the roles they fill and providing access to managerial and executive opportunities.

The Board does not believe that the proposal’s additional requested reporting of unadjusted median pay gaps across race and gender globally is a practical or useful supplement to the existing reporting that we already provide annually. Unadjusted pay gap metrics compare the average pay of men and employees who do not identify as minorities to the average pay of women and employees who identify as minorities, without adjusting for any relevant factors, including factors that we believe are crucial to analyzing pay equity, such as role, tenure, and location. Given the global nature of our workforce and the dramatic differences in market-based pay by geography, we do not find unadjusted statistics to be a helpful metric to analyze pay equity nor do we believe unadjusted statistics reflect meaningful information about our compensation policies and practices or the advancement of women and minorities in our workforce. Given the information we already publish, our existing policies and procedures, and the administrative burden of collecting and comparing the pay data requested by the proposal, which would involve data from dozens of countries and territories and corresponding nationalities and currencies, the Board believes that the additional report requested by the proposal is unnecessary, would be a costly diversion of corporate resources, and is not in the best interests of our stockholders. We also disagree with the proposal’s assertion that reporting unadjusted median pay gaps is a best practice – according to a recent third-party report from Teneo, only 7% of U.S. S&P 500 companies report such information.

Pay equity is just one part of our larger set of practices designed to support, develop, and retain a diverse and engaged workforce. Our long history of service, innovation, and growth is built on a commitment to put people first. We invest in our associates, with a focus on leadership development, recognition, compensation, career opportunity, and skills training. We are focused on providing our associates with the tools, resources, and support they need to thrive – both personally and professionally. We have comprehensive compensation and benefits offerings, and we regularly evaluate these programs for competitiveness against the external talent market.

The Board separated the roles of Chairman and CEO in 2012 and has maintained a Lead Independent Director since 2013. The Board reviews its leadership structure as part of its succession planning process. It believes that separate Chairman and CEO roles, together with an experienced and engaged Lead Independent Director and independent committee oversight of key functions, provides robust oversight and independent leadership on the Board while maximizing the Company’s unique advantages.

Separate Board Chairman and CEO. The Board has chosen to separate the roles of Chairman of the Board and CEO for more than ten years. This structure allows the Chairman to focus on leading the Board in its oversight and governance responsibilities and the CEO to focus on setting and executing our strategic plans and initiatives and leading the operations of the Company.

David S. Marriott has served as the Chairman of the Board since May 2022. The Board believes that Mr. Marriott’s significant experience as a senior operations and sales executive of the Company, and his deep understanding of Marriott’s history and culture, bring an important perspective to Board-level conversations and decision-making and make him well qualified to lead the Board in its oversight responsibilities. Mr. Marriott stepped down as an employee of the Company in April 2021 in connection with joining the Board to focus on the Board’s oversight and governance responsibilities. As Chairman, he provides leadership to the Board by, among other things, working with the President and CEO, the Lead Independent Director, and the Secretary to set Board calendars, develop agendas for Board meetings, facilitate the appropriate flow of information to Board members and the effective functioning of the Board and its committees, promote Board succession planning and the orientation of new directors, and support senior management succession planning. Mr. Marriott also serves as a key conduit between management, the Board, and the Marriott family, who have a significant ownership stake in the Company and a demonstrated commitment to its long-term success.

The Board believes that the continued involvement of Marriott family members in responsible positions of the Company makes a significant contribution to the long-term value of our corporate name and identity, reinforces the culture and core values that are the bedrock of our success, and promotes associate engagement and retention. Thus, in addition to his role as Chairman, the Board has assigned Mr. Marriott additional responsibilities, which include promoting the Company’s business, brands, culture, values and goodwill. He serves as an ambassador to the Company’s associates, owners and franchisees, and the communities in which we operate, participates in internal Company events and represents the Company at external events, as requested by the President and CEO, senior executive leadership team or the Board. In doing so, Mr. Marriott continues the Marriott family’s stewardship of the culture and core values that have empowered associates, taken care of guests, created opportunities for hotel owners and franchisees, and fueled the Company for more than 96 years. In 2023, Mr. Marriott traveled almost 200,000 miles around the world to visit hotels and meet associates, speak with business councils, meet with owners, franchisees and customers, and represent the Company at a variety of external and internal conferences and events. Given the Marriott family’s iconic status in the hospitality industry and deep historical perspective on the Company and its mission, combined with Mr. Marriott’s extensive prior experience in a variety of senior roles at the Company, the Board believes Mr. Marriott is uniquely qualified to serve in this role and that his service provides a competitive advantage to the Company. The Board considered that these additional responsibilities, combined with Mr. Marriott’s responsibilities as Chairman, require significant time commitments and has established a chairman retainer fee reflective of those commitments.

Tony Capuano has served as Chief Executive Officer and a director of the Company since February 2021 and was additionally appointed President of the Company in February 2023. As President and CEO, Mr. Capuano leads the global operations of the Company and is responsible for the overall management and functioning of the Company. He is responsible for setting and overseeing the execution of the Company’s business strategies, developing and implementing the Company’s purpose and strategy, cultivating and advancing the Company’s culture and values, and driving the Company’s short- and long-term performance. Mr. Capuano oversees the senior executive leadership team and is also responsible for executive development and succession planning. Mr. Capuano reports to the Board, and the Board reviews his performance annually.

Strong Lead Independent Director. Since 2013, the Board has maintained the position of Lead Independent Director. The Lead Independent Director’s responsibilities include presiding at regular executive sessions of the independent directors as well as meetings of the Board at which the Chairman is not present, coordinating the activities of the independent directors, having the authority to convene meetings of the independent directors, and serving as a liaison between the Chairman, the President and CEO and the independent directors. The Lead Independent Director also reviews and approves, in consultation with both the Chairman and the President and CEO, Board meeting agendas and schedules, coordinates the evaluation of Board and committee performance, coordinates the assessment and evaluation of Board candidates, organizes and leads the Board’s annual evaluation of the President and CEO, makes recommendations for changes to the Company’s governance practices, and participates in direct engagement with major stockholders. The Lead Independent Director is a standing member of the Board’s Executive Committee. The Board believes that the role of the Lead Independent Director provides strong Board leadership and appropriate independent oversight. The independent directors of the Board appoint the Lead

Independent Director annually. Since 2022, the independent directors have selected Mr. Frederick A. “Fritz” Henderson to serve as the Lead Independent Director. Mr. Henderson has served on the Board since 2013 and served as our Audit Committee chair from May 2014 to May 2022, and he has extensive experience serving in a variety of other public company board leadership roles.

Independent Committee Oversight. Our Audit, Human Resources and Compensation, Nominating and Corporate Governance, and Technology and Information Security Oversight committees are composed solely of independent directors. Consequently, the independent directors directly oversee such critical items as the Company’s financial statements, executive compensation, the selection and evaluation of directors, the development and implementation of our corporate governance programs, and technology, information security and privacy.

Chairman Emeritus. J.W. Marriott, Jr., our former Executive Chairman and Chairman of the Board, holds the title of Chairman Emeritus. As Chairman Emeritus, Mr. Marriott may attend certain Board meetings or functions, but he is not a nominee for election and is not considered a member of the Board or a “director” as that term is used in our Amended and Restated Bylaws. He may not vote on any business coming before the Board, and he is not counted as a member of the Board for the purpose of determining a quorum or for any other purpose. He does not receive a salary in his capacity as Chairman Emeritus or compensation for attendance at Board meetings, although he may be reimbursed for reasonable expenses incurred to attend such meetings or functions or other business expenses incurred in connection with his role as Chairman Emeritus.

Director Emeritus. William J. Shaw, a former director and Vice Chairman of the Company, holds the title of Director Emeritus, but does not vote at or attend Board meetings and is not a nominee for election.

The Company does not maintain a formal diversity policy for Board membership, however, the Board believes that the directors, considered as a group, should provide a mix of backgrounds, experience, knowledge, and abilities. Thus, as part of its annual review of board composition, the Nominating and Corporate Governance Committee considers and discusses the extent to which the Board as a whole includes a mix of members that represent a diversity of background and experience, which the committee defines broadly to include, among other things, differences in backgrounds, qualifications, experiences, viewpoints, geographic locations, education, skills and expertise, professional and industry experience, and personal characteristics (including age, gender and race/ ethnicity). The Board believes the current director nominees embody a diverse range of viewpoints, backgrounds and skills, including with respect to age, tenure, gender, and race/ethnicity.

Director Nominees

 

Likewise, the Board believes that committee leadership and membership should reflect the diversity of the Board. When considering and reviewing committee assignments the Nominating and Corporate Governance Committee discusses the extent to which the regularly-meeting committees include a mix of members that represent a diversity of backgrounds and experience. Currently, four of our five regularly-meeting standing committees are chaired by women and/or people of color.

The Board believes that having a mix of directors with complementary qualifications, expertise, and experience is essential to meeting its oversight responsibility. The skills matrix below summarizes some of the skills and expertise of the nominees that we believe benefit our current business and strategy. We continue to evaluate the matrix against our needs and strategy so that it can serve as an effective tool for identifying director nominees who collectively have the complementary experience, knowledge, and abilities relevant to service on the Board.

 

The Nominating and Corporate Governance Committee will consider candidates for Board membership suggested by its members, other Board members, management, and stockholders. As a stockholder, you may recommend any person for consideration as a nominee for director by writing to the Nominating and Corporate Governance Committee of the Board of Directors, c/o Marriott International, Inc., Department 52/862, 7750 Wisconsin Avenue, Bethesda, Maryland 20814. Recommendations must include the name and address of the stockholder making the recommendation, a representation that the stockholder is a holder of record of Class A common stock, biographical information about the individual recommended, and any other information the stockholder believes would be helpful to the Nominating and Corporate Governance Committee in evaluating the individual recommended.

In addition, as described above, when evaluating director candidates, the Nominating and Corporate Governance Committee considers and discusses the extent to which a prospective nominee helps the Board achieve a mix of members that represent a diversity of background and experience. The Nominating and Corporate Governance Committee makes a recommendation to the full Board as to any persons it believes should be nominated by the Board, and the Board determines the nominees after considering the recommendation and report of the Nominating and Corporate Governance Committee. The procedures for considering candidates recommended by a stockholder for Board membership are consistent with the procedures for candidates recommended by members of the Nominating and Corporate Governance Committee, other members of the Board, or management. When seeking new director candidates, the Nominating and Corporate Governance Committee endeavors to include diverse candidates, including women and racial or ethnic minorities, in any search process and directs any search firm that it engages to include women and minority candidates in any pool of candidates that the firm compiles. During 2023, the Nominating and Corporate Governance Committee used the services of Russell Reynolds Associates, a third-party executive search firm, for this purpose.

Each of the following director nominees presently serves on our Board and their term of office will expire at the Annual Meeting. The age shown below for each director nominee is as of May 10, 2024, the date of the Annual Meeting. Each director nominee has been nominated to serve until the 2025 annual meeting and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. Set forth below is each director nominee’s biography as well as the qualifications and experiences each director nominee brings to our Board, in addition to the general qualifications discussed above.

The Board met four times in fiscal year 2023. The Company encourages all directors to attend the annual meeting of stockholders. All 13 directors nominated for election in 2023 attended the Company’s 2023 annual meeting. During fiscal year 2023, no current director or director nominee attended fewer than 75% of the total number of meetings of the Board and committees on which such director served.

The Board has adopted Governance Principles that provide a framework for our governance processes. The portion of our Governance Principles addressing director independence appears below, and the full text of the Governance Principles can be found in the Investor Relations section of the Company’s website (www.Marriott.com/Investor) by clicking on “Governance” and then “Documents & Charters.” You also may request a copy from the Company’s Secretary. Our Governance Principles establish the limit on the number of public company board memberships for the Company’s directors at two, including the Company’s Board, for directors who are chief executive officers of public companies, and four for other directors. Additionally, our Governance Principles provide that members of our Audit Committee should not serve on more than three audit committees of public companies, including the Company’s Audit Committee.

Our Securities Trading Policy prohibits Marriott associates, officers, and directors from engaging in hedging or derivative transactions with respect to our equity securities, all directors and executive officers (as designated in accordance with Rule 16a-1(f) under the Securities Exchange Act of 1934) from holding our equity securities in a margin account, and all independent directors and executive officers (as designated in accordance with Rule 16a-1(f) under the Securities Exchange Act of 1934) from pledging our equity securities as collateral for a loan. Directors who are not determined to be independent but do not serve as executive officers are prohibited from pledging our equity securities as collateral for a loan without the prior approval of the Lead Independent Director. The Lead Independent Director may approve or deny the request in his or her sole discretion, and may consider a variety of factors in evaluating a request, including, without limitation, the size of the pledge relative to the individual’s other holdings, both direct and indirect, and Marriott’s shares outstanding; the nature and size of the associated transaction and the risk of foreclosure, including the financial capacity to repay the loan; protections against the appearance of insider trading, including prohibitions on sales during trading black-outs; and the ability to timely report transactions on Form 4. No such requests for approval were made in 2023.

Our Governance Principles include the following standards for director independence:

5. Independence of Directors. At least two-thirds of the directors shall be independent, provided that having fewer independent directors due to the departure, addition or change in independent status of one or more directors is permissible temporarily, so long as the two-thirds requirement is again satisfied by the later of the next annual meeting of stockholders or nine months. To be considered “independent” under the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), the Board must determine that a director has no relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director of Marriott. The Board has established the guidelines set forth below to assist it in determining director independence. For the purpose of this section 5, references to “Marriott” include any of Marriott’s consolidated subsidiaries.

a. A director is not independent if: (i) the director is, or has been within the preceding three years, employed by Marriott; (ii) the director or a family member is a current partner of Marriott’s independent auditor, or was a partner or employee of Marriott’s independent auditor and worked on the audit of Marriott at any time during the preceding three years; (iii) a family member of the director is, or has been within the preceding three years, employed by Marriott as an executive officer; (iv) the director or a family member is part of an interlocking directorate in which the director or family member is employed as an executive officer of another company where at any time during the preceding three years a present executive officer of Marriott at the same time serves or served on the compensation committee of that other company; (v) the director has accepted, or a family member has accepted, during any 12-month period within the preceding three years, more than $120,000 in compensation from Marriott, other than compensation for Board or Board committee service, compensation paid to a family member who is an employee (other than an executive officer) of Marriott, benefits under a tax-qualified retirement plan, or non-discretionary compensation; (vi) the director or a family member is an executive officer of a charitable organization to which Marriott made discretionary charitable contributions in the current or any of the last three fiscal years that exceed five percent of that organization’s consolidated gross revenues for that year, or $200,000, whichever is more; or (vii) the director or a family member is a partner in, or a controlling stockholder or executive officer of, any organization to

which Marriott made, or from which Marriott received, payments for property or services in the current or any of the last three fiscal years that exceed five percent of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than payments arising solely from investments in Marriott securities or payments under non-discretionary charitable contribution matching programs.

b. The following commercial or charitable relationships are not relationships that would impair a Marriott director’s independence: (i) service as an executive officer of another company which is indebted to Marriott, or to which Marriott is indebted, where the total amount of either company’s indebtedness to the other is less than two percent of the total consolidated assets of the other company; and (ii) service by a Marriott director or a family member solely as a non-employee director or trustee of another entity or charitable organization that does business with, or receives charitable contributions from, Marriott. The Board annually reviews each director’s independence and makes an affirmative determination regarding the independence of each director.

c. For relationships not covered by the guidelines in paragraph (b) above, the determination of whether the relationship would interfere with the exercise of independent judgment in carrying out the responsibilities of a director of Marriott, and therefore whether the director would be independent, shall be made by the directors who satisfy the independence guidelines set forth in this section 5.

The Board undertook its annual review of director independence in February 2024. As provided in the Governance Principles, the purpose of this review is to determine whether any relationships or transactions are inconsistent with a determination that the director or nominee is independent. During the February 2024 review, the Board recognized the former employment of Mr. J.W. Marriott, Jr. and Mr. David Marriott, Mrs. Deborah Harrison’s role as Global Cultural Ambassador Emeritus, and the family relationships of Mr. J.W. Marriott, Jr., Mr. David Marriott, and Mrs. Harrison discussed elsewhere in this proxy statement.

Based on the standards set forth in the Governance Principles, the Board affirmatively determined that Ms. Goren, Mr. Henderson, Mr. Hippeau, Ms. Hobart, Ms. Lee, Mr. Lewis, Ms. McCarthy, Mr. Reid, Mr. Rozanski and Ambassador Schwab are each independent of the Company and its management. In making this determination, the Board found that none of these directors had a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director of Marriott. In addition, the Board had previously determined that George Muñoz, who served on the Board until May 2023, was independent.

Mr. Anthony Capuano, Mrs. Deborah Harrison, and Mr. David Marriott are considered not independent as a result of their current or former employment with the Company and/or family relationships.

The Board has six standing committees: Audit, Human Resources and Compensation, Nominating and Corporate Governance, Inclusion and Social Impact, Technology and Information Security Oversight, and Executive. The Board has determined that all members of the Audit Committee, Human Resources and Compensation Committee and Nominating and Corporate Governance Committee are independent under the applicable rules and regulations of the Nasdaq Listing Standards, including the standards applicable to compensation committee members, and the SEC, that all members of the Audit Committee meet the Nasdaq listing standard of financial sophistication, and that Ms. Goren, Mr. Henderson, and Mr. Lewis are audit committee financial experts as defined in SEC rules. The Board has adopted a written charter for each committee, and those charters are available on the Investor Relations section of our website (www.Marriott.com/Investor) by clicking on “Governance” and then “Documents & Charters.” You also may request copies of the committee charters from the Company's Secretary.

The table below indicates the current members of the applicable Board committee, the primary responsibilities of such committee, and the number of meetings held in 2023.

The Board also maintains an Executive Committee that is chaired by Mr. Marriott and on which Mr. Capuano, Mr. Henderson and Ms. Lee serve as members. The Executive Committee’s responsibilities include exercising the powers of the Board when it is not in session, subject to specific restrictions as to powers retained by the full Board. The Executive Committee did not meet in 2023.

Company policy requires that the independent directors meet in executive session without management present at least twice a year. In 2023, the independent directors and non-employee directors met four times without management present and the independent directors met privately four times. The Lead Independent Director presides at the meetings of the independent directors.

The Nominating and Corporate Governance Committee oversees the design and implementation of our annual Board and committee evaluation process and reviews the process annually. The process includes the following components:

The evaluation process is an important determinant for Board tenure, and both the Board and the Nominating and Corporate Governance Committee consider the results of the process as part of the nomination and selection process for both the Board and its committees and to assess whether changes to the Board’s composition or practices are appropriate.

The Board also reviews the President and CEO’s performance annually. The Lead Independent Director organizes and leads the evaluation in collaboration with the chair of the Human Resources and Compensation Committee and the Chairman of the Board.

All new directors participate in our director orientation program. This orientation program includes a thorough review of background material, meetings with board members and senior management, and Company education sessions. The orientation allows new directors to become familiar with our industry and our business and strategic plans; significant financial matters; core values, including ethics, compliance programs and corporate governance practices; and other key policies and practices.

We also facilitate and encourage the participation of all Board members in continuing education programs, at the Company’s expense, that are relevant to the business and affairs of the Company and the fulfillment of the directors’ responsibilities as members of our Board and its committees. In 2023, in addition to presentations and discussions at our Board meetings and regular ongoing contact with management, our continuing education efforts included the following:

The Board is responsible for overseeing the Company’s processes for assessing and managing risk. The Board considers our risk profile when reviewing our annual business plan and incorporates risk assessment into its decisions impacting the Company. Risks are identified and managed in connection with the Company’s robust enterprise risk management process, and in performing its oversight responsibilities, the Board reviews with management the most significant enterprise risks that have been identified by both the Board and management, including strategic, operational, financial, external/regulatory, industry, and reputation risks, as well as management’s process and resources needed for addressing and mitigating the short- and long-term potential effects of such risks. The Board continuously evaluates its approach in addressing top risks as circumstances evolve, and the Company’s risk oversight processes and disclosure controls and procedures are designed to appropriately escalate key risks to the Board as well as to analyze potential risks for disclosure.

We value the insights and perspectives of our stockholders and have extensive engagement with the investment community throughout the year, including as follows:

The feedback received from our stockholder engagement is regularly summarized and shared with our Board to help inform our decision-making, enhance our corporate disclosures, and shape our future practices. In total, during fiscal year 2023, we spoke with investors from more than 400 institutions in individual and group meetings and at conferences. These investors represent a majority of our institutional investor base.

Stockholders and others interested in communicating with the Lead Independent Director, the Chair of the Nominating and Corporate Governance Committee, the Audit Committee, or the non-employee directors may do so by email to business.ethics@marriott.com or by writing to the Business Ethics Department, Department 52/924.09, 7750 Wisconsin Avenue, Bethesda, Maryland 20814. Communications are forwarded to the appropriate directors for their review, except that the Board has instructed the Company not to forward solicitations, bulk mail or communications that do not address Company-related issues. The Company reports to the directors on the status of outstanding concerns addressed to the non-employee directors, the Lead Independent Director, the Chair of the Nominating and Corporate Governance Committee, or the Audit Committee on a regular basis. The non-employee directors, the Lead Independent Director, the Chair of the Nominating and Corporate Governance Committee, and the Audit Committee may direct special procedures, including the retention of outside advisors or counsel, for any concern addressed to them.

The Company has long maintained and enforced a Code of Ethics that applies to all Marriott associates, including our President and CEO, Chief Financial Officer, and Principal Accounting Officer, and to each member of the Board. The Code of Ethics is encompassed in our Business Conduct Guide, which is available in the Investor Relations section of our website (www.Marriott.com/investor) by clicking on “Governance” and then “Documents & Charters.” We intend to post on that website any future changes or amendments to our Code of Ethics, and any waiver of our Code of Ethics that applies to any of our executive officers or a member of our Board, within four business days following the date of the amendment or waiver.

The Audit Committee reviews the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements, the reporting process, and maintaining an effective system of internal control over financial reporting. The Company’s independent auditor is engaged to audit and express opinions on the conformity of the Company’s financial statements to U.S. generally accepted accounting principles and the effectiveness of the Company’s internal control over financial reporting.

In this context, the Audit Committee has reviewed and discussed the audited financial statements together with the results of management’s assessment of internal control over financial reporting with management and the Company’s independent auditor. The Audit Committee also discussed with the independent auditor those matters required to be discussed by the independent auditor with the Audit Committee under applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee has received the written disclosures along with the annual communication of independence, including direct discussion with the independent auditor regarding the independent auditor’s independence, in accordance with the applicable requirements of the PCAOB.

Relying on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board approved, the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC.

Members of the Audit Committee:

 

Isabella D. Goren (Chair)

Frederick A. Henderson

Aylwin B. Lewis

Margaret M. McCarthy

Grant F. Reid

The Audit Committee’s Pre-Approval of Independent Auditor Fees and Services Policy provides for pre-approval of all audit, audit-related, tax and other permissible non-audit services provided by our independent auditor on an annual basis and additional services as needed. The policy also requires additional approval of any engagements that were previously approved but are anticipated to exceed pre-approved fee levels. The policy permits the Audit Committee Chair to pre-approve independent auditor services with estimated fees up to $100,000 (provided that the Audit Committee Chair reports to the full Audit Committee at the next meeting on any pre-approval determinations).

The following table presents fees for professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements for 2023 and 2022 and fees billed for audit-related services, tax services and all other services rendered by our independent registered public accounting firm for 2023 and 2022. The Audit Committee approved all of the fees presented in the table below.

Marriott is consistently recognized as a global hospitality leader. The Company believes that building a culture of strong and consistent leadership is essential to long-term success in the hospitality industry. In fact, Marriott’s long history of service, innovation, and growth is built on our core value of putting people first and our talent strategy is foundational to the Company’s success. Each of the NEOs is a long-standing member of our senior management team, averaging 25 years of hospitality experience with the Company, and, in 2023, made significant contributions to achieving the Company’s financial and business priorities, while driving strategic Company expansion.

Our Company’s culture is reflected in, and reinforced by, the design and implementation of the Company’s executive compensation program, which emphasizes the following principles:

The Human Resources and Compensation Committee (the “Committee”), which is composed solely of independent members of the Board, assists the Board in fulfilling its responsibilities relating to the Company’s compensation and human resources policies and practices, including matters related to executive development, director and executive compensation and benefits, management succession planning, and talent development and retention. As part of its responsibilities, the Committee oversees the Company’s executive compensation programs, which are designed to enable the Company to attract, retain and motivate executives capable of establishing and implementing business plans in the best interests of the stockholders. The Committee, on behalf of and, in certain instances, subject to the approval of the Board, reviews and approves compensation programs for certain senior officers. In this context, the Committee reviewed and discussed with management the Company’s CD&A required by Item 402(b) of SEC Regulation S-K. Following the reviews and discussions referred to above, the Committee recommended to the Board that the CD&A be incorporated by reference in the Company’s Annual Report on Form 10-K and included in this proxy statement.

Members of the Human Resources and Compensation Committee:

 

Aylwin B. Lewis (Chair)

Eric Hippeau

Lauren R. Hobart

Horacio D. Rozanski

Susan C. Schwab

This section discusses the Company’s executive compensation program for the following NEOs for 2023:

Compensation for 2023 reflects outstanding financial and operating performance for the year. Key compensation decisions for 2023 are highlighted below and discussed in more detail in the sections that follow.

In February 2023, the Committee was presented with market data on base salary levels at the 50th percentile for each position and recommended increases ranging from 4.0% to 7.7% for each of the NEOs. The Company’s independent compensation consultant, Pearl Meyer (the “Compensation Consultant”), reviewed and supported the recommendations. After careful discussion and consideration of the external market data, internal pay equity, tenure and individual performance, the recommended salaries for the NEOs were approved by the Committee and, with respect to Mr. Capuano, by the independent and non-employee directors.

To promote growth and profitability, the Company’s annual cash incentive program is based on actual performance measured against pre-established financial and business operational targets. The annual cash incentive design rewards executives for achieving annual Company performance objectives that support long-term financial and operational success.

As reflected in the following table, target awards under the annual cash incentive program were 200% of salary for Mr. Capuano, and 100% for each of Ms. Oberg, Mr. Brown, Mr. Breland and Ms. Reiss. In setting the target awards, the Committee reviewed market data for each position and determined that the incentive amounts payable upon achievement of target performance levels would result in total cash compensation (base salary plus annual incentive) that would be at or near the 50th percentile of a broad-based and select group of companies described in the discussion of Market Data below.

The annual cash incentive program performance factors are intended to establish high standards consistent with the Company’s quality goals, which are designed to be achievable, but not certain to be met. The Company believes that these factors are critical to achieving success within the hospitality and service industry.

Awards under the 2023 Annual Incentive Plan were subject to achieving a threshold Adjusted EBITDA level; no awards could be earned unless the Company’s Adjusted EBITDA for the year equaled or exceeded $3.65 billion. Once this threshold was met, each NEO’s award was calculated based on the achievement of Company Adjusted EBITDA (weighted 60%) and both a quantitative and qualitative evaluation of goals aligned with Marriott’s strategic growth metrics centered on our three key paths to win: Best Brands and Channels, Most Valuable Customer Base, and Be in More Places, with our people as the foundation of our strategy (weighted 40%). These financial, operational and strategic goals are described more fully below.

The above performance targets were determined in early 2023 during a time of uncertainty for the industry and global economy. Nevertheless, the Adjusted EBITDA performance targets were set at levels that would require significant year-over-year growth, approximately 8% and approximately 19% to achieve target and maximum performance, respectively.

Marriott’s growth metrics are intended to measure progress against key Company-wide quantitative and qualitative business objectives for all NEOs. All of the goals in this component emphasize near-term and long-term actions critical to our continued success.

Like Adjusted EBITDA, the below growth metrics were determined in early 2023 during a time of uncertainty for the industry and global economy and were set at levels that would require year-over-year growth to achieve a target payout and would require significant effort from each NEO to drive the success of the business. In aggregate, the Committee determined to weight the growth metrics at 40% of the overall annual incentive plan given how critical they are to the Company’s success.

In determining the growth metrics component payout level following year-end, the Committee considered the financial performance of the Company and took a holistic view of the Company’s achievement of the business objectives described above, as well as other accomplishments in the key areas as described in the table below, with no specific weightings applied to any objective or accomplishments.

The table below outlines the performance achieved and the aggregate actual payout approved by the Committee as a percentage of target under the 2023 Annual Incentive Plan.

The Company annually grants equity compensation awards to the NEOs. The 2023 annual awards were granted pursuant to the Marriott International, Inc. Stock and Cash Incentive Plan, but awards granted after May 2023 are made pursuant to the 2023 Marriott International, Inc. Stock and Cash Incentive Plan (“2023 Stock Plan”), which became effective in May 2023 (collectively, the “Stock Plans”). Such awards are designed to link NEO pay to long-term Company performance and to align the interests of NEOs with those of our stockholders. In setting target award values, the Committee considered its review of external market data, individual performance, and internal pay equity considerations for each position, and determined that aggregate target award values for the NEOs as a group should generally result in total direct compensation (base salary plus target annual incentive plus target equity awards) that would be at or near the 50th percentile of a broad-based and select group of companies described in the discussion of “Market Data” below, with variation above or below the 50th percentile by individual to reflect strategic impact, internal pay equity, tenure, and individual performance. The target values of the awards granted to the NEOs in 2023 are set forth in the following table (amounts shown in the Summary Compensation Table reflect actual grant date fair value as determined in accordance with accounting guidance):

Consistent with 2022, the NEOs’ annual stock awards for 2023 were granted in a mix of SARs, RSUs and PSUs for the President and CEO and the other NEOs as illustrated below:

 

The key features of the 2023 awards were as follows:

Supplemental stock awards are infrequent and are only considered in recognition of special performance, promotions, or assumption of additional responsibilities, to retain key talent, or as a sign-on employment inducement. The Committee did not make any supplemental stock awards to any NEO in 2023.

Both 2021 PSU plans had a performance peer group consisting of: Accor SA, Carnival Corporation & Plc, Choice Hotels International, Inc., Hilton Worldwide Holdings Inc., Hyatt Hotels Corporation, InterContinental Hotels Group PLC, Norwegian Cruise Line Holdings Ltd., Royal Caribbean Group, Wyndham Hotels & Resorts, Inc., Apple Hospitality REIT, Inc., Host Hotels & Resorts, Inc., Park Hotels & Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Las Vegas Sands Corp., MGM Resorts International, Wynn Resorts, Limited, Booking Holdings Inc., and Expedia Group, Inc.

 

The Company’s practice is to grant annual stock awards each year on the second trading day following the Company’s annual earnings conference call for the prior fiscal year. This timing is designed to minimize the possibility that the Company could grant stock awards prior to the release of material, non-public information that may result in an increase or decrease in its stock price, even though the dollar value of the equity awards is established in early February. Supplemental stock awards may be granted throughout the year, but not during Company-imposed trading black-out periods and not close in time prior to or after the release of material non-public information.

Executives derive value from their SARs based on the appreciation in the value of the underlying shares of Company stock. For purposes of measuring this appreciation, the Company sets the exercise or base price as the average of the high and low quoted prices of the Company stock on the date the awards are granted. This average price valuation is common practice and offers no inherent pricing advantage to the executive or the Company.

The Company generally offers limited perquisites to its NEOs, as follows:

The value of these benefits is included in the NEOs’ wages for tax purposes to the extent required by law, and the Company does not provide tax gross-ups to the NEOs with respect to any of these benefits.

NEOs may participate in the same Company-wide benefit programs offered to all eligible U.S. associates. Some programs are paid for solely by the enrollees (including executives), such as 401(k) plan elective deferrals, vision coverage, long-term and short-term disability, group life and accidental death and dismemberment insurance, and health care and dependent care spending accounts. Other benefit programs are paid for or subsidized by the Company for all enrollees, such as the 401(k) plan Company match, group medical and dental coverage, $50,000 Company-paid life insurance, business travel accident insurance and tuition reimbursement. NEOs are also eligible to participate in the Marriott International, Inc. Employee Stock Purchase Plan, which allows all eligible employees to purchase shares of the Company’s Class A common stock at a discount from the market price.

In addition to a tax-qualified 401(k) plan, the Company offers the NEOs and other senior management the opportunity to supplement their retirement and other tax-deferred savings under the Marriott International, Inc. Executive Deferred Compensation Plan (“EDC”). The Company believes that offering this plan to executives is critical to achieve the objectives of attracting and retaining talent, particularly because the Company does not offer a defined benefit pension plan. The EDC, including each NEO’s benefits under the EDC and the Company’s 2023 contributions to the EDC, is described below in the “Nonqualified Deferred Compensation for Fiscal Year 2023” section.

The Company provides limited, “double trigger” change in control benefits under the Stock Plans and the EDC upon an NEO’s qualifying termination of employment in connection with a change in control of the Company, as described below in the “Potential Payments Upon Termination or Change in Control” section. The Committee believes that, with these carefully structured benefits, the NEOs are better able to perform their duties with respect to any potential proposed corporate transaction without the influence of or distraction by concerns about their employment or financial status. In addition, the Committee believes that stockholder interests are protected and enhanced by providing greater certainty regarding executive pay obligations in the context of planning and negotiating any potential corporate transactions.

The Company does not provide tax gross-ups on these benefits and limits the benefits under the Stock Plans to avoid adverse tax consequences to the Company. Specifically, the Stock Plans include a cut-back provision, so that the benefit will not be provided to the extent it would result in the loss of a tax deduction by the Company or imposition of excise taxes under the “golden parachute” excess parachute payment provisions of the Internal Revenue Code. The discussion of Potential Payments Upon Termination or Change in Control below includes a table that reflects the year-end intrinsic value of unvested stock awards and cash incentive payments that each current NEO employed as of year-end would receive if subject to an involuntary termination of employment in connection with a change in control.

At the Company’s 2023 annual meeting, stockholders once again expressed substantial support for the compensation of our 2022 NEO compensation with approximately 96% of the votes cast for approval of the “say-on-pay” advisory vote. Given this level of support, the Committee did not make any changes to the structure of the Company’s executive compensation program as a result of this vote.

As described elsewhere in this proxy statement, the Company values the perspectives of its stockholders and regularly engages with the investment community on a variety of topics including the Company’s business, strategies, financial results and other topics suggested by stockholders. These meetings, which include individual meetings, group meetings and participation at conferences, provide valuable feedback from stockholders on an ongoing basis.

The Company reinforces its performance-based and long-term philosophy through its stock ownership policy which requires that, within five years of becoming an NEO, each NEO own Company stock with a total value equal to a multiple of three to six times his or her individual salary grade midpoint. The Company counts common stock owned outright and shares held within the Company’s qualified 401(k) plan in determining each NEO’s ownership level, but does not count unearned PSUs, unvested RSUs or outstanding SARs (regardless of whether vested or unvested). Each NEO has already met this requirement or is on track to meet it within the five-year timeline for compliance. NEOs are required to retain 50% of the net after-tax shares under equity awards granted after becoming an NEO until they satisfy the required stock ownership levels.

 

We have adopted a number of related policies that further reflect alignment with long-term stockholder value.

Clawback and forfeiture provisions have been a longstanding feature of Marriott’s executive compensation programs. Our Stock Plans and the NEOs’ award agreements contain provisions that allow the Company to limit or eliminate the ability of any executive to exercise options and SARs or to receive a distribution of Company stock under PSUs, RSUs or other stock awards if the executive violates applicable covenants or otherwise engages in serious misconduct, including criminal or tortious conduct or other acts or omissions that are actually or potentially injurious to the Company’s operations, financial condition or business reputation. In addition, our equity awards provide for continued vesting upon a qualifying retirement such that these forfeiture provisions continue to apply, post-termination, through the originally applicable vesting schedule. These recoupment and forfeiture provisions apply beyond the context of a financial restatement, and apply to both time- and performance-based awards.

In addition to these features of our compensation programs, the compensation clawback provisions of the Sarbanes-Oxley Act of 2002 apply to the President and CEO and Chief Financial Officer and we have adopted a clawback policy intended to comply with Rule 10D-1 of the Securities Exchange Act of 1934. Our clawback policy provides that we will, in the event of an accounting restatement of the Company’s financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws, recoup incentive-based compensation received by a covered executive to the extent such incentive-based compensation exceeds what the covered executive would have received had it been calculated based upon the restated results.

The Committee selected and retained the Compensation Consultant to assist the Committee in establishing and implementing the Company’s executive and director compensation strategy. The Compensation Consultant reports to and is instructed in its duties by the Committee and carries out its responsibilities in coordination with the Human Resources Department. Other than having provided the

Company with executive compensation data from a survey, which the Committee pre-approved, the Compensation Consultant performs no other services for the Company. Based on materials presented by management and the Compensation Consultant and the factors set forth in Exchange Act Rule 10C-1, the Committee determined that the Compensation Consultant is independent and that the Compensation Consultant’s engagement did not raise any conflicts of interest.

In designing and determining 2023 NEO pay, the Committee considered recommendations from the Company’s Executive Vice President and Chief Human Resources Officer, from Mr. Capuano with regard to the compensation of the NEOs other than himself, and from the Company’s Chairman of the Board, David Marriott, as well as the advice and recommendations of the Compensation Consultant. The Committee also obtained input and approval of the independent and non-employee directors regarding the compensation for Mr. Capuano.

In its determinations, the Committee does not set rigid, categorical guidelines or formulae to determine the levels of compensation for the NEOs. Rather, it relies upon its collective judgment as applied to the challenges confronting the Company as well as subjective factors such as leadership ability, individual performance, retention needs, and future potential as part of the Company’s management development and succession planning process.

The Committee carefully reviews numerous factors when setting NEO total pay opportunity, allocating total pay opportunity among base salary, annual incentives and annual stock awards, and determining final pay outcomes based on performance. The Committee considers the NEOs’ job responsibilities, tenure and experience, and Company and individual performance against internal targets as well as performance of competitors, competitive recruiting and retention pressures, internal pay equity and succession and development plans.

The Committee also reviews the total pay opportunity for executives at the 50th percentile of several broad, revenue-based surveys as well as a custom survey of companies specifically selected by the Committee. This review of total pay opportunity is designed as a market check to align the potential range of total direct compensation outcomes with our long-term performance expectations and actual results. The Committee believes, based on the advice of the Compensation Consultant, that the similarly-sized companies participating in the revenue-based surveys and the companies selected for the custom survey represent the broad pool of executive talent both within and outside of the lodging industry for which the Company competes. To avoid over-emphasizing the results of one or more surveys, the Company considers the results of the revenue-based surveys as well as those of the custom survey, in terms of total pay and each component of pay. The Committee also regularly reviews historical financial, business and total stockholder return results for lodging companies as well as a selected group of comparator companies prior to determining final pay amounts. This process for identifying relevant market data is used consistently for all senior executives of the Company, including the NEOs.

In general, the revenue-based surveys used as a market reference for NEO pay include companies with annual revenue similar to that of the Company. For 2023, the surveys were the Executive Compensation and Benchmarking Survey (provided by the Compensation Consultant), the Radford Global Database, the WTW CDB Executive Compensation Database, the Equilar Top 25 Survey, and the Fred Cook Survey of Long-Term Incentives. The Committee did not consider the individual companies in the revenue-based surveys when making compensation decisions.

There are no other U.S. publicly-traded lodging companies similar to our size. Therefore, in consultation with the Compensation Consultant, the Committee selected appropriate comparator group companies from a broad universe of companies that compete with Marriott for executive talent, are of similar size in annual revenue or have a similar focus on marketing, e-commerce, consumers and brand image even if they do not compete directly in the lodging business. The Committee annually reviews the comparator group for potential changes (e.g., due to mergers and acquisition activity or changes in company size and business mix) but does not generally anticipate making significant changes every year, to allow for consistency and comparability of market data from year-to-year. The comparator group companies reviewed for 2023 are shown below along with select financial and non-financial metrics the Committee considered and Marriott’s percentile ranking on each of these metrics. During 2023, the Committee made no changes to the peer group. The financial information reflects fiscal year-end data available as of March 1, 2024.