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Section 1: DEF 14A (DEF 14A)

Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
Marathon Petroleum Corporation

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Notice of 2020 Annual Meeting of Shareholders
403305067_mlogo600pxwidtha02.jpg
 
Dear Shareholder,
 
 
Date:
Time:
Place:
Wednesday, April 29, 2020
10 a.m. EDT
The Auditorium of Marathon Petroleum Corporation
539 South Main Street
Findlay, Ohio 45840
 
You are invited to participate in Marathon Petroleum Corporation’s 2020 Annual Meeting of Shareholders.
 
 
 
 
Voting Matters
Board Recommendation
 
 
 
 
 
Proposal 1:
FOR
 
 
 
To approve an amendment to the Certificate of Incorporation to phase out the classified Board of Directors
 
 
 
 
 
 
 
 
 
 
 
þ
Your vote is important.
 
Ø See page 4
 
 
 
Proposal 2:
FOR each
director nominee for Class III
 
 
To elect the four director nominees for Class III named in the Proxy Statement
 
Whether or not you plan to attend the Annual Meeting, please vote as soon as possible using one of the following methods:
 
 
 
Ø See page 5
 
 
 
Proposal 3:
FOR
 
 
To ratify the appointment of our independent auditor for 2020
 
 
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Internet
 
 
 
Follow the instructions in the Notice.
 
Ø See page 26
 
 
 
Proposal 4:
FOR
 
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Telephone
 
To approve, on an advisory basis, our named executive officer compensation
 
 
Call the toll-free number on your proxy card or voting instruction form.
 
 
 
 
Ø See page 67
 
 
 
 
Proposals 5-6:
FOR Proposal 5, and AGAINST Proposal 6
 
403305067_mailicon.jpg
Mail
 
If properly presented at the meeting, on two shareholder proposals
 
Return your completed and signed proxy card or voting instruction form in the provided envelope.
 
 
 
 
Ø See page 68
 
 
 
 
 
 
 
 
 
 
We will also transact any other business that may properly come before the meeting or any adjournment or postponement thereof.
 
Please see “FAQs About Voting and the Annual Meeting” for more information.
 
 
 
 
 
 
Shareholders of record at the close of business on Monday, March 2, 2020 (the “Record Date”) are entitled to vote at the Annual Meeting. See “FAQs About Voting and the Annual Meeting” for more information.
 
 
 
 
 
 
 
Important Notice Regarding the Internet Availability of Proxy Materials: The Proxy Statement and the Marathon Petroleum Corporation Annual Report are available at www.proxyvote.com.
 
 
 
 
 
We thank you for your continued support and look forward to seeing you at the Annual Meeting.
 
 
 
 
 
 
 
 
By order of the Board of Directors,
 
 
 
 
 
 
 
403305067_mbensonsignaturea02.jpg
 
 
 
 
 
 
 
 
Molly R. Benson
Vice President, Chief Securities, Governance & Compliance Officer
and Corporate Secretary
 
 
 
 
 
 
 
 
 
 
The proxy materials, including the Proxy Statement, the Marathon Petroleum Corporation Annual Report
and the proxy card, or the Notice Regarding the Availability of Proxy Materials, are being distributed on or about 
March 16, 2020 to all shareholders entitled to vote.
 









Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ü
 
 
ü
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ü
 
 
 
 
 
 
 
 
 
 
 
 
ü
 
 
û
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ü
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 









Proxy Statement
We are providing this Proxy Statement and related materials because our Board of Directors is soliciting your proxy to vote shares at the 2020 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on Wednesday, April 29, 2020, beginning at 10 a.m. EDT at the Auditorium of Marathon Petroleum Corporation, 539 South Main Street, Findlay, Ohio 45840, and at any adjournment or postponement of the meeting. This Proxy Statement and the enclosed proxy card are being first made available to shareholders on or about March 16, 2020. All shareholders are invited to attend the Annual Meeting.
 
 
 
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
 
 
This Proxy Statement and our 2019 Annual Report are also available at www.proxyvote.com.
 
 
 
 
References throughout this Proxy Statement to “the Company,” “MPC,” “we” or “our” refer to Marathon Petroleum Corporation. References to “MPLX” refer to MPLX LP, a publicly traded master limited partnership we control through our ownership of approximately 63% of its outstanding common units and our ownership of its general partner. References to “Andeavor” refer to Andeavor LLC (formerly Andeavor), which we acquired effective October 1, 2018 (the “Andeavor Merger”). References to “ANDX” refer to Andeavor Logistics LP, which MPLX acquired effective July 30, 2019 (the “ANDX Merger”).
Gary R. Heminger, who has served as our Chief Executive Officer (“CEO”) since we became a public company in 2011, and as the Chairman of the Board since 2016, has announced his plans to retire as an officer and director of MPC concurrent with the conclusion of the Annual Meeting on April 29, 2020. The Board has formed a special committee to oversee the search for our new CEO.
Our principal executive offices are located at 539 South Main Street, Findlay, OH 45840, and our telephone number is (419) 422-2121. We maintain a website at www.marathonpetroleum.com. The information on our website is not a part of this Proxy Statement.



 
 
2020 Proxy Statement
1
 
 



Corporate Governance
Key Corporate Governance Practices
The Board of Directors believes that our commitment to high ethical standards and strong corporate governance benefits all our stakeholders, including our shareholders, employees, business partners, customers, communities, the government and others who have a stake in how we operate. Our key corporate governance practices include:
 
 
 
 
 
 
 
 
Shareholder right to call a special meeting of shareholders
 
Annual Board and committee self-evaluations
 
 
 
Risk oversight by the full Board and its committees
 
 
 
 
 
 
 
 
Substantial majority of independent directors
 
 
 
 
 
 
Extensive voluntary disclosures in the areas of corporate responsibility and sustainability
 
 
 
Proxy access shareholder right to submit director nominations for inclusion in our proxy statement
 
 
 
 
 
 
 
Extensive voluntary disclosures on our political spending
 
 
 
 
 
 
 
 
Majority voting standard for uncontested director elections
 
 
 
 
Robust shareholder engagement program
 
 
Strong Lead Director role reinforces effective independent leadership on the Board
 
Meaningful stock ownership guidelines for executive officers
 
 
 
 
 
 
 
 
 
Independent directors meet regularly in executive session
 
Prohibition on hedging and pledging our stock
 
 
 
 
 
 
 
 
Recoupment/Clawback policy
 
 
Three fully independent standing Board committees
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recent Governance Enhancements
We believe good governance is critical to achieving long-term shareholder value. We approach governance in a strategic and thoughtful manner, taking into consideration multiple perspectives, including those of our Board, our Corporate Governance and Nominating Committee, our shareholders, experts and other stakeholders, to align on what makes the most sense for our Company. We continuously look for ways to enhance our corporate governance and increase value to our shareholders. Recent governance enhancements include:
 
 
 
 
 
 
u
 
2020
 
 
 
 
 
 
 
 
Submitting to our shareholders, for consideration at the 2020 Annual Meeting, an amendment to our Certificate of Incorporation providing for annual elections for all directors
 
 
 
 
 
 
u
 
2019
 
 
 
 
 
 
 
 
Amended our Corporate Governance Principles to require, commencing in 2020, individual director evaluations for directors whose terms expire at the next annual meeting
 
 
 
 
 
 
u
 
2018
 
 
 
 
 
 
 
 
Amended our Bylaws to give shareholders owning at least 25% of our common stock the right to call a special meeting of shareholders
 
 
 
 
 
 
 
 
Amended our Corporate Governance Principles to expressly affirm the Board’s commitment to actively seek diverse candidates for Board service
 
 
 
 
 
 
 
 
Amended our Bylaws to eliminate the 80% supermajority requirement for Bylaw amendments, so that the
approval threshold for Bylaw amendments is now a majority of outstanding shares
 
 
 
 
 
 
u
 
2016
 
 
 
 
 
 
 
 
Amended our Bylaws to provide proxy access for shareholders
 
 
 
 
 

 
 
2
Marathon Petroleum Corporation
 
 


CORPORATE GOVERNANCE

Governance Framework
Our Corporate Governance Principles, our Bylaws and the charters of our Board committees together implement the governance principles we believe are best for our shareholders and provide the framework for our governance processes. They address, among other things, the primary roles, responsibilities and oversight functions of the Board and its committees, director independence, committee composition, the lead director role, the process for director selection and director qualifications, Board, committee and individual director evaluations, director indemnification and shareholder rights, including the right to call a special meeting, shareholders’ right to proxy access, director compensation and director retirement and resignation.
Our Code of Business Conduct, which applies to all of our directors, officers and employees, defines our expectations for ethical decision-making, accountability and responsibility. Our Code of Ethics for Senior Financial Officers, which is specifically applicable to our CEO, Chief Financial Officer, Controller, Treasurer and other leaders performing similar roles, affirms the principle that the honesty, integrity and sound judgment of our senior executives with responsibility for preparation and certification of our financial statements are essential to the proper functioning and success of our Company. Printed copies of these documents are available upon request to our Corporate Secretary. We would post on our website any amendments to, or waivers from, either of these codes requiring disclosure under applicable rules within four business days following any such amendment or waiver.
Our Whistleblowing as to Accounting Matters Policy establishes procedures for the receipt, retention and treatment of complaints we receive regarding accounting, internal accounting controls or auditing matters and provides for the confidential, anonymous submission of concerns by our employees or others regarding questionable accounting or auditing matters.
Our Conflicts of Interest Policy provides guidance on recognizing and resolving real or apparent conflicts of interest. This policy acknowledges that business decisions on behalf of the Company must be made through the exercise of independent judgment in the Company’s best interest and not influenced by the personal interests of decision-makers.
 
 
 
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Find more online
 
 
 
 
 
 
 
 
The following are available on our website at www.marathonpetroleum.com/Investors/Corporate-Governance/
 
 
 
 
 
 
 
 
 
Corporate Governance Principles
 
Code of Ethics for Senior Financial Officers
 
 
Bylaws
 
Whistleblowing as to Accounting Matters Policy
 
 
Board Committee Charters
 
Conflicts of Interest Policy
 
 
Code of Business Conduct
 
 
 
 
 
 
 
 
 
 
 


 
 
2020 Proxy Statement
3
 
 


PROPOSAL 1. AMEND CERTIFICATE OF INCORPORATION

Proposal 1. Amend the Company’s Restated Certificate of Incorporation to Phase Out the Classified Board of Directors
 
 
 
 
 
 
 
 
Our Restated Certificate of Incorporation provides for a staggered Board divided into three classes of directors, with each class elected for a three-year term. We are asking our shareholders to approve an amendment to the Restated Certificate of Incorporation to phase out the classified Board so that the Board is fully declassified by the 2022 annual meeting.
 
ü
The Board recommends a vote FOR this proposal.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Following discussion with certain of our investors, the Board has agreed, and believes it is advisable and in the best interests of the Company and its shareholders, to amend our Restated Certificate of Incorporation to phase out the classified Board so that the Board is fully declassified by the 2022 annual meeting of shareholders (the “Declassification Amendment”). The Board recommends that shareholders approve the Declassification Amendment, which is attached to this Proxy Statement as Appendix I.
The proposed Declassification Amendment will amend Article Six of our Restated Certificate of Incorporation to provide that our classified Board structure will be phased out beginning at the Annual Meeting such that from and after the 2022 annual meeting of shareholders, all directors will be up for election and will serve for a term of one year and until such directors’ successors are duly elected and qualified or until such directors’ earlier death, resignation or removal. Pursuant to the Declassification Amendment, the phase-out of the classified Board commences with the Annual Meeting at which the Class III directors will be up for election and each such director will be elected for a one-year term. At the 2021 annual meeting of shareholders, the Class I and Class III directors will be up for election, and each such director will be elected for a one-year term. Finally, at the 2022 annual meeting of shareholders, all classes of directors will be up for election, and each director elected at the 2022 annual meeting of shareholders (and at all annual meetings thereafter) will be elected for a one-year term and until his or her successor is duly elected and qualified or until such director’s earlier death, resignation or removal.
The Declassification Amendment also provides that directors elected to fill any vacancy on the Board, or to fill newly created director positions resulting from an increase in the number of directors, before the 2022 annual meeting of shareholders would serve the remainder of the term for the class to which they are elected.
Under Delaware law, directors of companies that have a classified board may be removed only for cause, unless the certificate of incorporation provides otherwise, and directors of companies that do not have a classified board may be removed with or without cause. Article Six of our Restated Certificate of Incorporation provides that a director may be removed from office only with cause and upon the approval of holders of 80% of the voting power of the then outstanding shares of stock entitled to vote in the election of directors. The Declassification Amendment will amend such provision to provide that, beginning with the 2022 annual meeting of shareholders (that is, when our Board is no longer classified) a director may be removed from office with or without cause and upon the approval of a majority of the voting power of the outstanding shares of stock entitled to vote in the election of directors.
This description of the proposed Declassification Amendment is only a summary of the proposed amendments to our Restated Certificate of Incorporation and is qualified in its entirety by reference to, and should be read in conjunction with, the full text of Article Six of our Restated Certificate of Incorporation, as proposed to be amended, a copy of which is attached to this Proxy Statement as Appendix I.
The affirmative vote of the holders of at least 80% of the outstanding shares of our common stock entitled to vote is required to approve this proposal.
If our shareholders approve the proposed Declassification Amendment, we intend to file a Certificate of Amendment setting forth the Declassification Amendment (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware during the Annual Meeting, after the certification of the vote on this Proposal 1 and prior to the closing of the polls on Proposal 2 regarding the election of directors. The Declassification Amendment will become effective upon the filing and effectiveness of the Certificate of Amendment. In that case, each of the Class III directors who are nominated for election at the Annual Meeting would stand for election under Proposal 2 for a one-year term expiring at the 2021 annual meeting. At the 2021 annual meeting, each of the Class III and Class I directors who are nominated for election would be elected for a one-year term. At the 2022 annual meeting and at

 
 
4
Marathon Petroleum Corporation
 
 


PROPOSAL 2. ELECTION OF DIRECTORS

annual meetings after 2022, all nominees for director would be elected for a one-year term. This would result in the entire Board being elected annually for one-year terms beginning at the 2022 annual meeting of shareholders.
If our shareholders do not approve this proposed amendment to the Restated Certificate of Incorporation, our Board will remain classified, and the Class III directors will stand for election under Proposal 2 for a three-year term.
The Declassification Amendment does not change the present number of directors or the Board’s authority to change that number and to fill any vacancies or newly created directorships.
The Board also intends to approve conforming amendments to our Bylaws, contingent upon shareholder approval of the Declassification Amendment.
Proposal 2. Election of Directors
The Board of Directors, which oversees the management of our business and affairs, currently is divided into three classes of directors, with one class being elected each year for a three-year term. The Board has set the current number of directors at twelve, with four directors in each class. Our shareholders elect one class each year for a three-year term. The members of Class III are due to stand for election at the 2020 Annual Meeting.
As previously announced, Mr. Heminger plans to retire as a director and officer of MPC concurrent with the conclusion of the 2020 Annual Meeting, and is thus not standing for reelection to the Board as a Class III director. The Board has nominated Ms. Tomasky, currently a member of Class I, as a nominee for Class III.
Proposal 1 requests that our shareholders approve an amendment to our Restated Certificate of Incorporation to phase out the classified Board so that the Board is fully declassified by the 2022 annual meeting of shareholders. If Proposal 1 is approved, we intend to file the amendment to our Restated Certificate of Incorporation with the Secretary of State of the State of Delaware during the Annual Meeting, after the certification of the vote on Proposal 1 and prior to the closing of the polls on this Proposal 2. The Declassification Amendment will become effective upon such filing and effectiveness. In that case, each Class III director nominee will stand for election under this Proposal 2 for a one-year term expiring at the 2021 annual meeting of shareholders. If Proposal 1 is not approved, our Board will remain classified, and each Class III director nominee will stand for election under this Proposal 2 for a three-year term expiring at the 2023 annual meeting of shareholders.
 
 
 
 
 
 
 
 
 
 
The Board, acting upon the recommendation of the Corporate Governance and Nominating Committee, has nominated the following individuals as Class III directors for election to the Board:
 
ü
The Board recommends a vote FOR each director nominee.
 
 
 
 
 
 
 
 
 
Steven A. Davis
John P. Surma
 
 
 
 
J. Michael Stice
Susan Tomasky
 
 
 
 
 
 
 
 
 
 
 
Our Board recommends that shareholders vote FOR the election to the Board of each Class III director nominee. We expect each nominee will be able to serve if elected.

A director vacancy may be filled by a majority vote of the remaining directors. Any director elected in this manner would hold office until expiration of the term of office of the class to which he or she has been elected.






 
 
2020 Proxy Statement
5
 
 


PROPOSAL 2. ELECTION OF DIRECTORS

Director Nominees for Class III
Steven A. Davis
Former Chairman and CEO, Bob Evans Farms, Inc.
 
 
 
 
 
 
 
 
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Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience as former CEO
Operations experience
 
Industry expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
Chairman and CEO and member of the board of directors of Bob Evans Farms, Inc., a foodservice and consumer products company (2006-2014)
 
 
Independent Director
Age: 61
Director since: 2013
MPC Board Committees:
Compensation and Organization Development
Corporate Governance
and Nominating
 
President of Long John Silver’s and A&W All-American Food Restaurants (2002-2006)
 
Held senior executive and operational positions at Yum! Brands’ Pizza Hut division and Kraft General Foods
 
 
 
Current Public Company Directorships: Legacy Acquisition Corp. (since 2017); PPG Industries, Inc. (since 2019)
 
 
Past Public Company Directorships: Sonic Corp. (2016-2018); Walgreens Boots Alliance, Inc. (2009-2015)
 
 
Education: Bachelor of Science in Business Administration, University of Wisconsin at Milwaukee; Master of Business Administration, University of Chicago
 
 
Other Professional Experience and Community Involvement: 
 
 
Member, Board of Directors, Albertsons Companies, Inc. (since 2015)
 
 
Member, International Board of Directors for the Juvenile Diabetes Research Foundation
J. Michael Stice
Dean of the Mewbourne College of Earth & Energy, The University of Oklahoma
 
 
 
 
 
 
 
403305067_jmikestice112018m.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience as former CEO
Operations experience
 
Industry expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
Dean, Mewbourne College of Earth & Energy at The University of Oklahoma (since 2015)
 
CEO (2009-2014) and member of the board of directors (2012-2015) of Access Midstream Partners L.P., a gathering and processing master limited partnership
Independent Director
Age: 60
Director since: 2017
MPC Board Committees:
Audit
Corporate Governance
and Nominating
 
 
Nearly 30 years’ service in positions of increasing responsibility at ConocoPhillips and its predecessor companies, including as President of ConocoPhillips Qatar (2003-2008)
 
 
 
Current Public Company Directorships: U.S. Silica Holdings, Inc. (since 2013); Spartan Energy Acquisition Corp. (since 2018); MPLX GP LLC (since 2018)
 
 
Past Public Company Directorships: Access Midstream Partners GP, L.L.C. (2012-2015); MarkWest Energy GP L.L.C. (2015); SandRidge Energy, Inc. (2015-2016); Williams Partners GP LLC (2015)
 
 
 
Education: Bachelor of Science in Chemical Engineering, The University of Oklahoma; Master of Science in Business, Stanford University; Doctor of Education in Organizational Leadership, The George Washington University
 
 
 
 



 
 
6
Marathon Petroleum Corporation
 
 


PROPOSAL 2. ELECTION OF DIRECTORS

John P. Surma
Retired Chairman and CEO, United States Steel Corporation
 
 
 
 
 
 
 
 
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Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience as former CEO
Operations experience
 
Financial expertise
Government/regulatory experience
 
Industry expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
CEO (2004-2013) and Executive Chairman (2006-2013) of United States Steel Corporation; President and Chief Operating Officer (2003-2004); Vice Chairman and CFO (2002-2003)
Independent Director
Age: 65
Director since: 2011
MPC Board Committees:
Audit
Corporate Governance
and Nominating (Chair)
 
 
Executive roles at Marathon Oil Corporation (1997-2001), including President, Speedway SuperAmerica LLC and President, Marathon Ashland Petroleum
 
 
 
Price Waterhouse LLP (1976-1997), admitted to the partnership in 1987
 
Current Public Company Directorships: Concho Resources Inc.* (since 2014); Trane Technologies plc (formerly Ingersoll-Rand plc) (since 2013); MPLX GP LLC (since 2012); Public Service Enterprise Group Inc. (since 2019)
 
 
 
Past Public Company Directorships: United States Steel Corporation (2001-2013)
 
Education: Bachelor of Science in Accounting, Pennsylvania State University
 
Other Professional Experience and Community Involvement: 
 
 
Appointed by President Barack Obama to the President’s Advisory Committee for Trade Policy and Negotiations (2010-2014), served as Vice Chairman
 
 
 
 
 
Former Chair, board of the Federal Reserve Bank of Cleveland
* Mr. Surma is presently serving his last term on the Concho Resources Inc. board and will not stand for reelection in 2020.
 
Executive Staff Assistant to the Federal Reserve Board’s Vice Chairman, as part of the President’s Executive Exchange Program in Washington, D.C. (1983)
 
 
 
Member, board of the University of Pittsburgh Medical Center; former Chairman, board of the National Safety Council
Susan Tomasky
Retired President of AEP Transmission, a business division of American Electric Power Co.
 
 
 
 
 
 
403305067_susantomasky11201.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience
Government/regulatory experience
 
Financial expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
President of AEP Transmission, a division of American Electric Power Co., Inc. (2008-2011)
 
Various executive officer positions at American Electric Power Co., including Executive Vice President and General Counsel (1998-2001), Executive Vice President of Finance and CFO (2001-2006), and Executive Vice President of Shared Services (2006-2008)
Independent Director
Age: 66
Director since: 2018
MPC Board Committees:
Audit (Chair)
Sustainability
 
 
 
 
Former Partner in the Energy Group at Hogan & Hartson (now Hogan Lovells), a law firm
 
General Counsel, Federal Energy Regulatory Commission (1993-1997)
 
Current Public Company Directorships: Public Service Enterprise Group Inc. (since 2012)
 
Past Public Company Directorships: Summit Midstream Partners GP, LLC (2012-2018); Andeavor (2011-2018), including service as Lead Director (2014-2018)
 
 
Education: Bachelor of Liberal Arts, University of Kentucky; Juris Doctor, The George Washington University Law School
 
 
 
 
Other Professional Experience and Community Involvement: 
 
 
Member, Board of Trustees, Kenyon College
 
 
Former Director, board of the Federal Reserve Bank of Cleveland
 
 
Advisory Board member, Fidelity Equity and High Income Mutual Fund Board of Trustees

 
 
2020 Proxy Statement
7
 
 


PROPOSAL 2. ELECTION OF DIRECTORS

Continuing Class I Directors—Current Terms Expire in 2021
Abdulaziz F. Alkhayyal
Retired Senior Vice President, Industrial Relations, Saudi Aramco
 
 
 
 
 
 
 
 
403305067_abdulazizfalkhayy.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience
Operations experience
 
Industry expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
Senior Vice President of Industrial Relations (2007-2014), Senior Vice President of Refining, Marketing and International (2001-2007), Senior Vice President, International Operations (2000-2001) of Saudi Arabian Oil Company (Saudi Aramco)
 
 
Independent Director
Age: 66
Director since: 2016
MPC Board Committees:
Audit
Compensation and Organization Development
Sustainability (Chair)
 
 
 
Thirty-three year career at Saudi Aramco beginning in various field positions and progressing through management roles of increasing responsibility
 
 
 
Current Public Company Directorships: Halliburton Company (since 2014)
 
Past Public Company Directorships: None
 
Education: Bachelor of Science in Mechanical Engineering, University of California, Irvine; Master of Business Administration, University of California, Irvine; Advanced Management Program, University of Pennsylvania
 
 
 
Other Professional Experience and Community Involvement: 
 
Member, Board of Directors, Saudi Electricity Company (since 2018)
 
 
Member, Board of Directors, National Gas & Industrialization Company (since 2019)
 
 
Member, Board of Directors for the International Youth Foundation
Jonathan Z. Cohen
Chairman and CEO, Hepco Capital Management, LLC
 
 
 
 
 
 
403305067_jonathanzcohen59263.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience as former CEO
Risk management experience
 
Industry expertise
Director of other public companies
 
 
 
 
 
 
Career Highlights:
 
 
 
Chairman and CEO of Hepco Capital Management, a private family investment firm (since 2016)
 
 
 
Chairman of the Board (since 2018) and CEO (2017-2018), Falcon Minerals Corporation, a mineral rights acquisition and management company; Founder and CEO of its predecessor, Osprey Energy Acquisition Corp. (2016-2018); Co-Executive Chairman of Osprey Technology Acquisition Corp. (since 2019)
Independent Director
Age: 49
Director since: 2019

 
 
 
 
 
President (2003-2016) and CEO (2004-2016), Resource America, Inc., an asset management company
 
 
 
Co-founder and various executive roles at Atlas Pipeline Partners, LP and Atlas Energy, Inc.
 
Current Public Company Directorships: Falcon Minerals Corporation (since 2017); Atlas Energy Group, LLC (since 2012); Titan Energy, LLC (since 2016)
 
 
 
 
Past Public Company Directorships: Energen Corporation (2018)
 
Education: Bachelor of Arts, University of Pennsylvania; Juris Doctor, American University School of Law
 
 
Other Professional Experience and Community Involvement: 
 
Co-founder, Castine Capital Management, LLC
 
Chairman, Executive Committee, Lincoln Center Theater
 
Trustee, East Harlem School; Trustee, Arete Foundation; Trustee, American School of Classical Studies in Athens, Greece
 
 

 
 
8
Marathon Petroleum Corporation
 
 


PROPOSAL 2. ELECTION OF DIRECTORS

James E. Rohr
Retired Chairman and CEO, The PNC Financial Services Group, Inc.
 
 
 
 
 
 
 
 
403305067_jameserohr42015mpa06.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience as former CEO
Risk management experience
 
Financial expertise
Director of other public companies
 
 
 
 
 
 
Career Highlights:
 
 
 
Chairman and CEO (2000-2013) and Executive Chairman (2013-2014) of The PNC Financial Services Group, Inc.
 
 
 
Over 40 years at The PNC Financial Services Group, Inc. in various roles of increasing responsibility; oversaw PNC’s expansion into new markets and led PNC to record growth
Lead Independent Director
Age: 71
Director since: 2013
MPC Board Committees:
Audit
Compensation and Organization Development (Chair)
 
 
 
Current Public Company Directorships: Allegheny Technologies Incorporated (since 1996)
 
Past Public Company Directorships: General Electric Company (2013-2018); BlackRock, Inc. (1999-2014); The PNC Financial Services Group, Inc. (1990-2014); EQT Corporation (1996-2019), including service as Chairman (2018-2019)
 
 
 
Education: Bachelor of Arts, University of Notre Dame; Master of Business Administration, The Ohio State University
 
 
Other Professional Experience and Community Involvement: 
 
Member, Board of Directors, ECHO Realty, L.P.
 
Member, Board of Directors, The Heinz Endowments
 
Chairman, Board of Trustees, Carnegie Mellon University
 
 
Member, Board of Trustees, University of Notre Dame


 
 
2020 Proxy Statement
9
 
 


PROPOSAL 2. ELECTION OF DIRECTORS

Continuing Class II Directors—Current Terms Expire in 2022
Evan Bayh
Senior Advisor, Apollo Global Management
 
 
 
 
 
 
403305067_evanbayh42015mpcb.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience in government
Government/regulatory experience
 
Financial expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
Senior Advisor, Apollo Global Management, a private equity firm (since 2011)
 
U.S. Senator (1999-2011); served on a number of committees, including Banking, Housing and Urban Affairs; Armed Services; Energy and Natural Resources; Select Committee on Intelligence; Small Business and Entrepreneurship; Special Committee on Aging; chaired the International Trade and Finance Subcommittee
Independent Director
Age: 64
Director since: 2011
MPC Board Committees:
Audit
Corporate Governance and Nominating


 
 
 
 
 
 
Governor of the State of Indiana (1989-1997); Secretary of State (1986-1989)
 
Senior Advisor and Of Counsel, Cozen O’Connor Public Strategies, a law firm (2018-2019)
 
Partner, McGuireWoods LLP, a global diversified law firm (2011-2018)
 
Current Public Company Directorships: Berry Global Group, Inc. (since 2011); Fifth Third Bancorp (since 2011); RLJ Lodging Trust (since 2011)
 
 
Past Public Company Directorships: None
 
Education: Bachelor of Science in Business Economics, Indiana University; Juris Doctor, University of Virginia
 
Charles E. Bunch
Retired Chairman and CEO, PPG Industries
 
 
 
 
 
 
403305067_charlesebunchchuck720.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience as former CEO
Operations experience
 
Financial expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
Chairman and CEO (2005-2015) and Executive Chairman (2015-2016) of PPG Industries, Inc. a global supplier of paints and coatings
 
 
Independent Director
Age: 70
Director since: 2015
MPC Board Committees:
Compensation and Organization Development
Corporate Governance and Nominating
 
President, Chief Operating Officer and board member of PPG Industries (2002-2005)
 
Thirty-six year career at PPG Industries, serving in various roles in finance and planning, marketing and general management in the United States and Europe, including as Senior Vice President of Strategic Planning and Corporate Services and Executive Vice President, Coatings
 
 
 
 
 
Current Public Company Directorships: ConocoPhillips (since 2014); Mondelez International, Inc. (since 2016); The PNC Financial Services Group, Inc. (since 2007)
 
 
Past Public Company Directorships: H.J. Heinz Company (2003-2013); PPG Industries, Inc. (2002-2016)
 
 
Education: Bachelor of Science in International Affairs, Georgetown University; Master of Business Administration, Harvard University Graduate School of Business Administration
 
 
 
Other Professional Experience and Community Involvement:
 
 
Former Chairman, board of the Federal Reserve Bank of Cleveland



 
 
10
Marathon Petroleum Corporation
 
 


PROPOSAL 2. ELECTION OF DIRECTORS

Edward G. Galante
Retired Senior Vice President and Member of the Management Committee, Exxon Mobil Corporation
 
 
 
 
 
 
403305067_edwardggalante112.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience
Operations experience
 
Industry expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
Senior Vice President and Management Committee member of Exxon Mobil Corporation (2001-2006)
 
 
Independent Director
Age: 69
Director since: 2018
MPC Board Committees:
Compensation and Organization Development
Sustainability
 
More than 30 years at Exxon Mobil Corporation in roles of increasing responsibility, including Executive Vice President of ExxonMobil Chemical Company (1999-2001)
 
 
 
Current Public Company Directorships: Celanese Corporation (since 2013), Lead Director (since 2016); Clean Harbors, Inc. (since 2010); Linde PLC (since 2018)
 
 
Past Public Company Directorships: Andeavor (2016-2018); Praxair, Inc. (2007-2018); Foster Wheeler AG (2008-2014)
 
 
Education: Bachelor of Science in Civil Engineering, Northeastern University
 
Other Professional Experience and Community Involvement: 
 
Member, Board of Directors, United Way Foundation of Metropolitan Dallas
 
 
Vice Chairman, Board of Trustees, Northeastern University
Kim K.W. Rucker
Former Executive Vice President, General Counsel and Secretary, Andeavor
 
 
 
 
 
 
403305067_kimkwrucker112018.jpg
 
Key Qualifications and Experience
 
 
 
 
 
 
Senior leadership experience
Government/regulatory experience
 
Industry expertise
Director of other public companies
 
Risk management experience
 
 
 
 
 
 
 
 
Career Highlights:
 
 
 
Executive Vice President, General Counsel and Secretary of Andeavor (2016-2018); Executive Vice President and General Counsel of Tesoro Logistics GP, LLC (2016-2018)
 
 
Independent Director
Age: 53
Director since: 2018
MPC Board Committees:
Sustainability


 
Executive Vice President, Corporate & Legal Affairs, General Counsel and Corporate Secretary of Kraft Foods Group, Inc., a grocery manufacturing and processing company (2012-2015)
 
 
 
 
 
Senior Vice President, General Counsel and Chief Compliance Officer (2008-2012) and Corporate Secretary (2009-2012) of Avon Products, Inc.
 
 
 
Senior Vice President, Corporate Secretary and Chief Governance Officer of Energy Future Holdings Corp. (formerly TXU Corp.) (2004-2008)
 
 
 
Former Partner in the Corporate & Securities group at Sidley Austin LLP, a law firm
 
Current Public Company Directorships: Celanese Corporation (since 2018); Lennox International Inc. (since 2015)
 
 
Past Public Company Directorships: None
 
 
Education: Bachelor of Arts in Economics, University of Iowa; Juris Doctor, Harvard Law School; Master in Public Policy, John F. Kennedy School of Government at Harvard University
 
 
 
 
Other Professional Experience and Community Involvement: 
 
 
Member, Board of Trustees, Johns Hopkins Medicine
 
 
Member, Board of Directors, Haven for Hope


 
 
2020 Proxy Statement
11
 
 


CORPORATE GOVERNANCE

Board Composition and Director Selection
Our Corporate Governance Principles set forth the processes for director selection and the establishment of director qualifications. The Board has delegated the director recruitment process to the Corporate Governance and Nominating Committee with input from our Chairman/CEO and Lead Director.
The Board believes that it, as a whole, should possess a combination of skills, professional experience, and diversity of backgrounds and viewpoints necessary to oversee our business and ensure an effective mix of perspectives. Accordingly, the Board and the Corporate Governance and Nominating Committee consider the qualifications of directors and director candidates individually and in the broader context of the Board’s overall composition and our current and future needs. The Corporate Governance and Nominating Committee also develops and maintains a long-term plan for Board composition that takes into consideration the current strengths, skills and experience of members of the Board, our director retirement policy and our strategic direction.
Director Candidates
The Corporate Governance and Nominating Committee assesses candidates for membership on the Board. The Committee may work with a third-party professional search firm to assist with identifying and evaluating director candidates and their credentials. The Committee has the authority to retain and terminate any such firm, including the authority to approve the firm’s fees and other retention terms.
The Committee may also consider candidates recommended by shareholders. Shareholder candidates will be evaluated in accordance with the criteria for director selection described herein. See “Proxy Access” below for more information on the proxy access provision of our Bylaws and “FAQs About Voting and the Annual Meeting” for instructions on how shareholders may submit director nominations for our 2021 annual meeting in accordance with our Bylaws.
Mr. Galante and Mses. Rucker and Tomasky were appointed to the Board effective October 1, 2018, pursuant to the terms of the merger agreement whereby we acquired Andeavor. Mr. Cohen was appointed to the Board effective December 16, 2019, pursuant to an agreement with Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc. dated December 15, 2019.
Director Independence
No director is deemed to be independent unless the Board affirmatively determines that the director meets the independence standards in our Corporate Governance Principles, has no material relationship with us other than as a director and satisfies the independence requirements of the New York Stock Exchange (“NYSE”) and applicable Securities and Exchange Commission (“SEC”) rules. The Board determines director independence at least annually, considering all relevant facts and circumstances including, without limitation:
Transactions between the director and us directly, immediate family members of the director or organizations with which the director is affiliated, including those further discussed under “Related Party Transactions” below;
Any service by the director on the board of a company with which we conduct business;
The frequency and dollar amounts associated with any such transactions; and
Whether any such transactions are at arm’s length in the ordinary course of business and on terms and conditions similar to those with unrelated parties.
403305067_directorindependencea06.jpg
 
The Board has affirmatively determined that the following directors are independent:
 
 
Abdulaziz F. Alkhayyal
 
Steven A. Davis
 
J. Michael Stice
 
 
Evan Bayh
 
Edward G. Galante
 
John P. Surma
 
 
Charles E. Bunch
 
James E. Rohr
 
Susan Tomasky
 
 
Jonathan Z. Cohen
 
Kim K.W. Rucker
 
 
 
 
 
 
 
 
 
 
 
Mr. Heminger, who currently serves as our Chairman and CEO, and Mr. Goff, who served as our Executive Vice Chairman during 2019, were not considered to be independent.
 
 
 
11 independent directors
 
 
 
 
 
 
 
 
 

 
 
12
Marathon Petroleum Corporation
 
 


CORPORATE GOVERNANCE

Director Skills and Experience
In evaluating director candidates and recommending incumbent directors for renomination, the Corporate Governance and Nominating Committee considers a variety of factors, including each nominee’s independence, personal and professional accomplishments, integrity and judgment, record of public service and ability to devote sufficient time to our affairs. In addition to these fundamental requirements, our directors represent a diverse range of critical skills, experience and perspectives that contribute to sound governance and effective oversight of our operations, risks and long-term strategy. The most important of these are:
Senior Leadership Experience
We believe directors with experience in significant leadership positions bring the qualifications and skills to oversee and develop our strategy to drive long-term value. They also possess strong abilities to motivate and retain individual leaders and to identify and develop leadership qualities in others.
 
403305067_skillsleadershipa01.jpg
 
 
 
Financial Expertise
Financial and audit expertise, particularly knowledge of finance and financial reporting processes, is critical to understanding and evaluating our capital structure and overseeing the preparation of our financial statements and internal control over financial reporting.
 
403305067_skillsfinanciala01.jpg
 
 
 
Industry Expertise 
Directors with leadership and operational experience in the energy industry, particularly in the areas of petroleum refining, logistics operations and retail sales, bring practical understanding of our business and effective oversight in implementing our strategy.
 
403305067_skillsindustry.jpg
 
 
 
Risk Management Experience 
Directors with experience managing risk bring skills critical to the Board’s oversight of our risk assessment and risk management programs.
 
403305067_skillsriskmgmta01.jpg
 
 
 
Operations Experience 
Directors with operations experience bring a practical understanding of developing, implementing and addressing our business strategy and development plan.
 
403305067_skillsoperations.jpg
 
 
 
Government/Regulatory Experience 
As we operate in a heavily regulated industry that is directly affected by governmental requirements, directors with experience in governmental affairs, regulation and policy bring knowledge helpful to navigating these complex issues.
 
403305067_skillsgovta01.jpg
 
 
 
Corporate Governance and Public Company Board Service 
Directors who have served on other public company boards have experience overseeing and providing insight and guidance to management and bring knowledge critical to the governance of our organization.
 
403305067_skillsgovernance.jpg
Specific information about the key qualifications and experience of each director can be found beginning on
page 6 under “Proposal 2. Election of Directors.”

 
 
2020 Proxy Statement
13
 
 


CORPORATE GOVERNANCE

Board Diversity
 
403305067_boarddiversitya02.jpg
The Board is committed to diversity, as it believes that having a variety of perspectives contributes to more effective oversight and decision-making. Our Corporate Governance Principles emphasize the importance of diversity of director backgrounds and experiences. The Board amended our Corporate Governance Principles in January 2018 to expressly affirm its commitment to actively seek in its director selection efforts women candidates and candidates of diverse ethnic and racial backgrounds who possess the skills and characteristics identified within our Corporate Governance Principles.
 
 
 
 
 
 
 
 
Proxy Access
Proxy access refers to the right of shareholders meeting certain ownership criteria to nominate director candidates for inclusion in the Company’s proxy materials for its annual meeting. Our Board amended our Bylaws in February 2016 to provide proxy access to our shareholders. This decision followed a careful evaluation of shareholder views, evolving practices, relevant academic research, the potential impact on the Company and proxy access frameworks adopted by other companies. Following are the key terms of our proxy access Bylaw provision:
 
 
 
 
 
u
 
u
 
u
 
 
 
 
 
Any shareholder, or group of up to
 
May nominate and include in our proxy
 
Provided that the shareholder(s) and
20 shareholders, maintaining
 
materials director nominees constituting
 
nominee(s) satisfy the requirements
continuous ownership of at least 3%
 
up to the greater of 2 nominees or
 
specified in our Bylaws
of our outstanding common stock for
 
20% (rounded down) of the number of
 
 
at least 3 years
 
directors serving on the Board
 
 
 
 
 
 
 
Board Refreshment
The Board is committed to board refreshment to strike a balance between retaining directors with deep knowledge of the Company and adding directors with a fresh perspective. Underpinning this commitment to board refreshment, our Corporate Governance Principles implement a mandatory retirement age for directors. Directors may not stand for reelection once they reach age 72.
The Board has undergone significant refreshment, with 5 of our 12 current directors joining the Board since 2017. These new directors were deliberately selected for their deeply relevant skill sets and their ability to guide our strategy, provide effective oversight and effectively represent our shareholders’ interests.
Majority Voting for Directors
Our Bylaws include a majority vote standard for director elections, which requires that a nominee for director in an uncontested election receive a majority of votes cast at a stockholder meeting in order to be elected to the Board. Any director nominee who does not receive a majority of the votes cast is required to submit an irrevocable resignation to the Corporate Governance and Nominating Committee, which will make a recommendation to the Board as to whether to accept or reject the resignation or take other action. The Board will, within 90 days following certification of the election results, publicly disclose its decision regarding the resignation and, if such resignation is rejected, the rationale behind the decision.

 
 
14
Marathon Petroleum Corporation
 
 


CORPORATE GOVERNANCE

How the Board Conducts Its Business
Board Leadership Structure
Our Corporate Governance Principles provide the Board with the flexibility to exercise its business judgment on behalf of shareholders and choose the optimal leadership for the Board depending upon the Company’s particular needs and circumstances at a given time. The independent members of the Board elect the Chairman and, as part of this election, review whether to combine or separate the positions of Chairman and CEO. When the Board has elected the CEO as Chairman, the independent directors have also elected a Lead Director from among themselves.
Throughout our history as a public company, the Board has selected the leadership structure it determined was best at the time. From 2011, when we became a public company, to 2016, the Board was led by an independent Chairman, because the Board determined that was the best leadership structure given the Company’s circumstances at that time. More recently, from 2016 and until the conclusion of the Annual Meeting, our current CEO, Mr. Heminger, has served as Chairman. The Board believes Mr. Heminger has been in the best position during this time to lead the Board due to his unique and in-depth knowledge of the history and growth of our Company, coupled with his industry expertise in key areas of strategic importance to our business. These adjustments to leadership structure over time demonstrate the Board’s thoughtful approach in evaluating and implementing the best leadership structure for the Board depending upon the Company’s circumstances at a given time.
 
 
 
Role of the Lead Director
 
 
The Lead Director is an independent director, elected by the independent members of the Board. Mr. Rohr has served as the Board’s Lead Director since 2018.
 
 
The Lead Director has the following key authorities and responsibilities:
 
 
Serving as the principal liaison between the Chairman/CEO and the independent directors.
 
 
Consulting with the Chairman/CEO on and approving meeting agendas, schedules and information sent to the Board.
 
 
 
The authority to call meetings of the independent directors.
 
 
Presiding over all meetings of the Board in the Chairman/CEO’s absence, including executive sessions.
 
 
Providing leadership to the Board in any situation where the Chairman and CEO roles may be perceived to be in conflict.
 
 
Directly communicating with significant shareholders, as appropriate.
 
 
Board Meetings and Attendance
 
 
The Board met 14 times in 2019. Average director attendance at all Board and committee meetings in 2019 was 97%. Each of our directors attended at least 75% of the meetings of the Board and committees on which he or she served in 2019.
 
2019 Board and Committee Meeting Attendance
 
403305067_meetingattendancea01.jpg
 
 
Our Corporate Governance Principles provide that the non-employee directors of the Board will hold regular executive sessions presided over by the Lead Director. The non-employee directors held 11 executive sessions in 2019.
 
 
 
All directors are expected to attend the Annual Meeting. All members of the Board attended the Annual Meeting of Shareholders held on April 24, 2019.
 


 
 
2020 Proxy Statement
15
 
 


CORPORATE GOVERNANCE

Board Committees
The Board has four standing committees, to which it has delegated certain of its functions and oversight responsibilities.
Audit Committee
 
 
 
Members:
Susan Tomasky, Chair*
Abdulaziz F. Alkhayyal
Evan Bayh
James E. Rohr
J. Michael Stice
John P. Surma*
Meetings in 2019: 7

Primary Responsibilities:
Appoints, compensates and oversees the performance of the independent auditor, including approval of all services to be performed by the auditor.
Reviews with management, the independent auditor and our internal auditors the integrity of our disclosure controls and procedures, annual and quarterly financial statements and internal controls over financial reporting.
Oversees the internal audit function, including its structure and budget, and the performance and compensation of the chief audit executive.
Reviews with management significant corporate risk exposures and risk mitigation efforts.
 
Reviews and assesses the effectiveness of our information technology controls relating to business continuity, data privacy and cybersecurity.
 
Monitors our compliance with legal and regulatory requirements, our Code of Business Conduct, Code of Ethics for Senior Financial Officers and Whistleblowing as to Accounting Matters Policy.
* Audit Committee Financial Expert
Has authority to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company, and to retain independent legal, accounting, or other advisors or consultants.
 
 
 
Compensation and Organization Development Committee
 
 
 
Members:
James E. Rohr, Chair
Abdulaziz F. Alkhayyal
Charles E. Bunch
Steven A. Davis
Edward G. Galante
Meetings in 2019: 5

Primary Responsibilities:
Sets compensation for the CEO, incorporating relevant goals and objectives, and evaluates the CEO’s performance.
Sets compensation for our other senior officers and reviews the succession plan for senior management.
Oversees our executive compensation policies, plans, programs and practices.
Certifies achievement of performance levels under our incentive compensation plans.
Please see “Executive Compensation Discussion and Analysis” for additional information about the Compensation and Organization Development Committee.
 
 
 
Corporate Governance and Nominating Committee
 
 
Members:
John P. Surma, Chair
Evan Bayh
Charles E. Bunch
Steven A. Davis
J. Michael Stice
Meetings in 2019: 4


Primary Responsibilities:
Selects and recommends director candidates to the Board to be submitted for election at annual meetings and to fill any vacancies on the Board.
Recommends committee assignments to the Board.
Monitors our corporate governance practices and recommends to the Board appropriate corporate governance policies and procedures for our Company.
Reviews and recommends to the Board compensation for our non-employee directors.
Reviews political contributions, lobbying expenditures and payments to certain trade associations.
Oversees the evaluation of the Board.
 
 
 

 
 
16
Marathon Petroleum Corporation
 
 


CORPORATE GOVERNANCE

Sustainability Committee
 
 
 
Members:
Abdulaziz F. Alkhayyal, Chair
Edward G. Galante
Gregory J. Goff*
Gary R. Heminger
Kim K.W. Rucker
Susan Tomasky
Meetings in 2019: 3
Primary Responsibilities:
Oversees our health, environmental, safety and security policies, plans, programs and practices, and reviews our performance and public reporting on these matters.
Reviews our Perspectives on Climate-Related Scenarios report and our Sustainability Report.
Oversees management’s efforts on contingency planning and emergency response activities.
Monitors our engagement with stakeholders on health, environmental, safety and security matters.
* Retired from the Board effective December 16, 2019.
 
 
 
The Board has determined that each member of the Audit, Compensation and Organization Development and Corporate Governance and Nominating Committees meets the applicable SEC and NYSE independence requirements. The Board has determined that each member of the Audit Committee is financially literate. No member of the Audit Committee serves on the audit committees of more than three public companies, including ours. As Chairman, Mr. Heminger attends, but does not vote in, Audit, Compensation and Organization Development, and Corporate Governance and Nominating Committee meetings. He does not attend Board or committee executive sessions of non-management directors.
In addition to these four standing committees, the Board maintains an Executive Committee, which meets as necessary to address matters that arise between meetings of the Board and may exercise the powers and authority of the Board subject to specific limitations consistent with our Bylaws and applicable law. For 2019, this committee was comprised of the Chairman/CEO and the independent Lead Director. Effective with the conclusion of the Annual Meeting, this committee will be comprised of the CEO, the Chairman (or the independent Lead Director if the role of Chairman is held by the CEO) and the Chair of each of the Board’s four standing committees.
In 2019, the Board formed three special committees:
The Speedway Transaction Committee, formed to oversee the announced separation of our Speedway business, is chaired by Mr. Surma and met four times in 2019.
The Midstream Review Committee, formed to evaluate strategies to enhance shareholder value through a review of our Midstream business, is chaired by Mr. Stice and met four times in 2019.
The CEO Search Committee, formed to lead the search for our new CEO, is chaired by Mr. Galante and met two times in 2019.
Effective with the conclusion of the Annual Meeting, Mr. Bayh will transition from service as a member of the Audit Committee to service as a member of the Sustainability Committee.
 
 
403305067_findmoreonlinegray.jpg
 
 
 
 
Find more online
 
 
 
 
 
 
Each of the Board’s four standing committees operates under a written charter adopted by the Board. These charters can be found on the “Corporate Governance” page of our website at www.marathonpetroleum.com/About/Board-of-Directors/. Each charter requires the applicable committee to annually assess and report to the Board on the adequacy of its charter.
 
 
 
 
 

 
 
2020 Proxy Statement
17
 
 


CORPORATE GOVERNANCE

Board Evaluations
Our Corporate Governance Principles provide for a robust annual Board, committee and individual director evaluation process.
 
 
 
 
 
 
1.
 
Written Evaluations and Analysis
 
 
 
 
 
 
Each director completes a detailed survey designed to assess the effectiveness of both the Board as a whole and the committees on which he or she serves. The survey seeks feedback on, among other things, Board and committee composition and organization, the frequency and content of Board and committee meetings, the quality of management presentations to the Board and its committees, the Board’s relationship to senior management and the performance of the Board and its committees in light of the responsibilities of each body as established in our Corporate Governance Principles and the respective committee charters.
 
 
 
 
 
 
 
 
Each director reviews the Corporate Governance Principles and the charter of each committee on which he or she serves, and offers comments and revision suggestions as deemed appropriate.
 
 
 
 
 
 
2.
 
Review and Discussion
 
 
 
 
 
 
Summary reports of survey results are compiled and provided to all directors.
 
 
 
 
 
 
 
 
Our Chairman/CEO and Lead Director lead a discussion of survey results with all of the directors as a group.
 
 
 
 
 
 
 
 
Each committee Chair leads a discussion of committee results at a committee meeting.
 
 
 
 
 
 
3.
 
Individual Evaluations
 
 
 
 
 
 
We recently amended our Corporate Governance Principles to provide for, commencing in 2020, an enhanced process that will involve the Chairman (or Lead Director, if appointed) and the Chair of the Corporate Governance and Nominating Committee meeting with each director whose term expires at the next annual meeting to discuss his or her individual performance.
 
 
 
 
 
Our Corporate Governance and Nominating Committee believes this process, which combines the opportunity for each director to individually reflect on Board and committee effectiveness with a collaborative discussion on performance, as well as a review of each individual director prior to his or her nomination for reelection, provides a meaningful assessment tool and a forum for discussing areas for improvement.
Communicating with the Board
All interested parties, including shareholders, may communicate directly with the Board, the Chairs of the Board’s standing committees and the independent directors, including our independent Lead Director.
 
Mail
 
Communications may be sent by regular mail to our principal executive offices, to the attention of the Corporate Secretary, Marathon Petroleum Corporation, 539 South Main Street, Findlay, OH 45840.
 
 
 
 
 
Email
 
Independent Directors (individually or as a group): [email protected]
 
 
 
 
Audit Committee Chair: [email protected]
 
 
 
 
Compensation and Organization Development Committee Chair: [email protected]
 
 
 
 
Corporate Governance and Nominating Committee Chair: [email protected]
 
 
 
 
Sustainability Committee Chair: [email protected]
 
 
 
Our Corporate Secretary will forward to the directors all communications that, in her judgment, are appropriate for consideration by directors. Examples of communications that would not be considered appropriate include commercial solicitations and matters not relevant to the Company’s affairs.

 
 
18
Marathon Petroleum Corporation
 
 


CORPORATE GOVERNANCE

Board Oversight
Oversight of Risk Management
Among the Board’s most important functions is overseeing risk management. Our risk management framework fosters close interaction among the Board, its committees and our senior management.
 
 
 
Board of Directors
 
 
403305067_riskoversightarrow1a01.jpg
 
The Board, which has the ultimate responsibility for, and is actively engaged in, overseeing the Company’s risk:
 
Reviews strategic risks annually at a designated strategy meeting and on an ongoing basis throughout the year.
 
Delegates responsibility for managing certain types of risk to its committees, which report regularly to the Board on activities in their individual areas of oversight.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Audit Committee
 
Compensation and Organization Development Committee
 
 
Corporate Governance and Nominating Committee
 
Sustainability Committee
 
 
 
 
Oversees risks associated with financial and accounting matters, as well as those related to financial reporting.
Monitors compliance with regulatory requirements and internal control systems.
Oversees our enterprise risk management process.
Oversees business continuity, data privacy and cybersecurity risks.
 
Oversees risks associated with our compensation programs, plans and policies to ensure they do not encourage excessive risk-taking.
Oversees our management succession planning process, as well as risks associated with talent management and human capital management.
 
 
Oversees the management of risks associated with corporate governance matters, including director independence, Board composition and succession and Board effectiveness.
Reviews political contributions and lobbying expenditures.
Oversees engagement with our shareholders.
 
Oversees risks associated with sustainability and climate change policy.
Reviews and assesses the effectiveness of health, environment, safety and security (“HES&S”) programs, performance metrics and audits.
Reviews management’s report on contingency planning and emergency response activities.
Monitors stakeholder concerns related to HES&S matters.
 
 
 
 
 
 

Management
 
 
 
Our senior management has day-to-day responsibility for:
 
Identifying and assessing the major risks to our Company through our enterprise risk management process.
 
Implementing effective risk mitigation plans, processes and controls.
 
 
Management meets routinely on these matters and regularly reports to the Board and its committees throughout the year.
 
 
 
 
Our senior management team has developed a strong enterprise risk management (“ERM”) process for identifying, assessing and managing risk. This process is sponsored by our Chairman/CEO and our Executive Vice President and Chief Financial Officer, led by our enterprise risk manager, and supported by officers and senior managers responsible for working across the business to manage enterprise level risks and identify emerging risks. These leaders meet routinely and provide regular updates to our Board and its committees throughout the year. Our mature company practices—developed through our ERM process, managed by our senior leaders and overseen by our Board—promote effective decision-making on business, environmental, social, political and reputational matters.

 
 
2020 Proxy Statement
19
 
 


CORPORATE GOVERNANCE

Executive Succession Planning
The Board believes that thoughtful succession planning is critical to creating long-term shareholder value. The Compensation and Organization Development Committee oversees the executive succession planning process to ensure the identification and development of future leaders, to avoid the adverse effects caused by vacancies in key leadership positions and to facilitate the execution of our long-term strategy. The Compensation and Organization Development Committee believes its succession process provides the lead time necessary to train, develop or recruit executives capable of filling key roles, including our named executive officers, within the Company when the need arises. The Compensation and Organization Development Committee typically meets with the full Board at least annually to discuss succession of our leadership. During these meetings the Compensation and Organization Development Committee:
 
 
 
 
 
 
1.
 
Identifies key roles (based on business impact and retention risk).
 
 
 
 
 
2.
 
Assesses likely and possible successors for these roles, including their ability to reinforce our high-performing culture and promote our values including: Safety & Environmental Stewardship, Integrity, Respect, Inclusion and Collaboration.
 
 
 
 
 
3.
 
Evaluates the readiness of succession candidates, including training and development needs.
 
 
 
 
In October 2019, the Board formed a special committee, chaired by Mr. Galante, to lead our search for the best qualified individual to assume the role of our CEO upon Mr. Heminger’s planned retirement at the conclusion of the Annual Meeting.
Corporate Responsibility and Sustainability
We believe that doing the right thing is the right way to conduct our business. Our commitment to corporate responsibility means being accountable for our actions to a broad range of stakeholders: our shareholders, employees, business partners, customers, communities, the government and others who have a stake in how we operate. We believe that promoting sustainable social, environmental and economic benefits wherever we operate creates long-term value for our Company, its shareholders and the communities where we work and live.
Our Core Values
Our core values are vital to our financial performance and to our corporate image and reputation. Under the Board’s guidance and supervision, we pursue the highest standards of corporate responsibility by embedding these core values into our corporate responsibility policies, practices and programs.
Safety & Environmental Stewardship
403305067_cv1evironmental.jpg
Protecting our people and the world we all share has been and remains a priority to MPC. We aim for an accident-free, incident-free workplace to ensure everyone goes home safely, every day. We are committed to safe and environmentally responsible operations to protect the health and safety of our employees, contractors and communities.
Integrity
403305067_cv1integrity.jpg
Integrity at MPC is more than the business conduct policies and procedures we follow. We set high expectations for ourselves and build trust in each other, with business partners, shareholders and the communities where we work and live. We say what we’re going to do – and then do it.
Respect
403305067_cv1respect.jpg
Respect is built upon the principle that every one of us is valuable and contributes toward achieving our vision. We treat everyone professionally, with courtesy, honesty and trust. We consider how other people’s ideas can improve what we do, and we encourage everyone to openly share their perspectives, ideas and concerns.
Inclusion
403305067_cv1inclusion.jpg
We value diversity in culture, background, perspective and experiences. We strive to provide our employees with a collaborative, supportive and inclusive work environment where they can maximize their full potential for personal and business success. This happens when our employees, contractors and other stakeholders feel valued themselves, and value others for who they are.
Collaboration
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We are a company of driven, accomplished professionals who are more than the sum of their training and experience. We actively partner with our communities, governments and business partners to find and create shared values, making a positive difference together. We foster constructive, solution-oriented dialogues; we genuinely listen to one another and seek out perspectives different from our own.

 
 
20
Marathon Petroleum Corporation
 
 


CORPORATE GOVERNANCE

Sustainability and Climate Scenarios Reporting
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The Sustainability Committee is committed to being transparent about how we pursue our business objectives and manage the risks inherent to energy-sector companies such as ours. The Committee oversees our health, environmental, safety and security policies, practices and programs, and reviews our performance and public reporting on these matters. Since 2011, we have published an annual Sustainability Report (previously the Citizenship Report), highlighting our commitment to our values, our communities and environmental stewardship. This report has been developed in accordance with the International Petroleum Industry Environmental Conservation Association (IPIECA) Sustainability Reporting Guidance.
 
We also publish an annual Perspectives on Climate-Related Scenarios report, which provides a detailed look at the Board’s risk management oversight, climate-related scenario analyses, asset optimization and portfolio management, and concludes we are well positioned to remain successful into the future. We have modeled this report on the disclosures recommended by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures and continue to enhance it each year based upon those recommendations.
MPC’s 2030 Greenhouse Gas Emissions Intensity Goal
Our commitment to environmental performance is long-standing, and we have been a leader in reducing greenhouse gas (GHG) emissions intensity. Our GHG emissions charts, which are available on our website, show the significant progress we have made on GHG emissions intensity over the past five years.
Demonstrating our continuing leadership in this area, we announced in early March that we have established a companywide goal of reducing our GHG emissions per barrel of oil equivalent (BOE) processed to 30% below 2014 levels by 2030. Our GHG emissions intensity reductions encompass Scope 1, defined as direct emissions from our operations—such as refineries, trucks, compressors and other equipment—as well as Scope 2, which are indirect emissions resulting from the electricity and steam we purchase to support our business activities. We will measure these GHG emissions reductions per BOE because we use a variety of feedstocks, including crude oil, natural gas and renewable feedstocks, such as soybean oil. BOE, a unit of measure defined by the U.S. federal government, allows these different throughputs to be measured on a common basis.
Our 2030 goal builds upon the business strategy we highlight in our Perspectives on Climate-Related Scenarios report, which has lowered our GHG emissions intensity by approximately 20% over the past five years. Additional focus areas to achieve the 2030 goal include expanding our energy efficiency program, reducing methane emissions and increasing our use of renewable energy. We are committed to reassessing this goal as achievements toward GHG emissions intensity reductions are realized.
To further promote the responsible, long-term growth of our business, the Compensation and Organization Development Committee has determined to link achievement of our GHG reduction goal to our executive compensation program. Our 2020 Annual Cash Bonus program includes a new Sustainability metric that combines a new GHG Intensity metric that measures our progress toward our GHG emissions intensity reduction goal together with a number of existing safety- and environmental-related metrics. See the Executive Summary in our “Executive Compensation Discussion and Analysis” below for further information about this new metric.
 
 
 
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Find more online
 
 
 
 
 
 
 
 
The “Corporate Citizenship” page of our website, at www.marathonpetroleum.com/Responsibility/Corporate-Citizenship/ offers a more comprehensive look at our corporate responsibility and sustainability policies, practices and procedures, as well as key disclosures including our:
 
 
Sustainability Report
 
Our GHG emissions charts
 
 
Perspectives on Climate-Related Scenarios report
 
 
 
 
 
 
 
 
 
 

 
 
2020 Proxy Statement
21
 
 


CORPORATE GOVERNANCE

Political Engagement and Disclosure
We view our participation in the public policy process as essential to promoting our shareholders’ best interests. Because our industry is heavily regulated by federal, state and local governments, public policy developments can significantly affect our ability to meet the need for reliable, affordable transportation fuels and other petroleum products. Our political engagement efforts focus on maintaining a strong refining and marketing industry in the United States to meet the energy needs of consumers and protecting the value of our shareholders’ investments.
The Corporate Governance and Nominating Committee is committed to ensuring our exercise of political speech and involvement in the public policy process remains aligned with our shareholders’ interests. The Committee oversees and reviews our political contributions, lobbying expenditures and payments to trade associations that engage in lobbying activities.
 
 
 
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Find more online
 
 
 
 
 
 
 
The “Political Engagement and Disclosure” page of our website, at www.marathonpetroleum.com/Responsibility/Political-Engagement-and-Disclosure/ includes a more comprehensive description of the roles of the Corporate Governance and Nominating Committee and various organizations within the Company in overseeing and promoting compliance with our political activity policy.
 
 
 
 
 
 
 
This page includes a number of voluntary disclosures of interest to our shareholders and other stakeholders, including:
 
 
A statement of philosophy and purpose that includes several embedded links, including to public sources of information
 
 
A link to the Office of the Clerk of the U.S. House of Representatives database where our quarterly federal lobbying reports can be obtained via a search of “Marathon Petroleum”
 
 
The states for which we have registered as a lobbyist employer or principal
 
 
Itemized lists of corporate political contributions in an interactive map format
 
 
Itemized lists of employee political action committee (PAC) contributions in an interactive map format
 
 
A list of trade associations to which MPC or its subsidiaries paid annual dues in excess of $50,000 for 2019
 
 
 
 
 
 
 

 
 
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Marathon Petroleum Corporation
 
 


CORPORATE GOVERNANCE

Director Compensation
The Board of Directors determines annual cash and equity retainers and other compensation for non-employee directors. Directors who are also our employees receive no compensation for their service on the Board.
Annual Retainers
Our non-employee directors received the following retainers for their service on the Board in 2019.
Role
Cash
Retainer
($)
Equity
Retainer
($)
Lead Director Retainer
($)
Committee Chair Retainer
($)
Total
($)
Lead Director
150,000

 
175,000

 
30,000

 

 
355,000

 
Audit Committee Chair
150,000

 
175,000

 

 
25,000

 
350,000

 
Compensation and Organization Development Committee Chair
150,000

 
175,000

 

 
20,000

 
345,000

 
Corporate Governance and Nominating Committee Chair
150,000

 
175,000

 

 
15,000

 
340,000

 
Sustainability Committee Chair
150,000

 
175,000

 

 
10,000

 
335,000

 
All Other Directors
150,000

 
175,000

 

 

 
325,000

 
The Cash Retainer is paid in equal installments on a quarterly basis. Non-employee directors may elect to defer up to 100% of their annual cash compensation into an unfunded account. This deferred cash account may be invested in certain notional investment options offered under the Marathon Petroleum Corporation Deferred Compensation Plan for Non-Employee Directors, which options generally mirror the investment options offered to employees under the Marathon Petroleum Thrift Plan. Directors who defer cash compensation receive that cash in a lump sum following departure from the Board.
The Equity Retainer is granted in equal installments on a quarterly basis. The aggregate equity retainer for 2019 was comprised of 90% MPC restricted stock units (“RSUs”) (valued at $157,500) and 10% MPLX phantom units (valued at $17,500). Directors receive MPC dividend equivalents in the form of additional MPC RSUs and MPLX distribution equivalents in the form of additional MPLX phantom units. The MPC RSUs and MPLX phantom units, including those received as dividend and distribution equivalents, are deferred, payable in MPC common stock and MPLX common units only upon a director’s departure from the Board.
Special Committee Service
In 2019, the Board formed three special committees to: (i) oversee the announced separation of the Speedway business, (ii) evaluate strategies to enhance shareholder value through a review of our Midstream business, and (iii) lead the search for our new CEO. Each independent director served as a member of at least one special committee and received a special cash retainer of $25,000 in early 2020.
MPLX GP LLC Board Service
Messrs. Stice and Surma also serve on the board of MPLX GP LLC (“MPLX GP”), a wholly owned subsidiary of MPC and the general partner of MPLX. Each received an annual cash retainer (in the amount of $90,000) and a deferred equity award of MPLX phantom units (valued at $110,000) in additional compensation for this service in 2019. The annual cash retainer and deferred equity award are reflected in the “Fees Earned or Paid in Cash” and the “Stock Awards” columns, respectively, of the “2019 Director Compensation Table” below.
Matching Gifts Program
Under our matching gifts program, non-employee directors may elect to have us match up to $10,000 of their contributions to certain tax-exempt educational institutions each year. The annual limit is applied based on the date of the director’s gift to the institution. Due to processing delays, the actual amount paid out on behalf of a director may exceed $10,000 in a given year.

 
 
2020 Proxy Statement
23
 
 


CORPORATE GOVERNANCE

2019 Director Compensation Table
The following table shows compensation earned by or paid to our non-employee directors during 2019.
Name
Fees Earned or Paid in Cash
($)
Stock
Awards
($)
All Other Compensation
($)
Total
($)
Abdulaziz F. Alkhayyal
185,000

 
175,000

 

 
360,000

 
Evan Bayh
175,000

 
175,000

 

 
350,000

 
Charles E. Bunch
175,000

 
175,000

 
10,000

 
360,000

 
Jonathan Z. Cohen
31,522

 
7,609

 

 
39,131

 
Steven A. Davis
175,000

 
175,000

 
6,250

 
356,250

 
Edward G. Galante
175,000

 
175,000

 
10,000

 
360,000

 
James E. Rohr
225,000

 
175,000

 
10,000

 
410,000

 
Kim K.W. Rucker
175,000

 
175,000

 

 
350,000

 
J. Michael Stice
265,000

 
285,000

 
10,000

 
560,000

*
John P. Surma
280,000

 
285,000

 
20,000

 
585,000

*
Susan Tomasky
200,000

 
175,000

 
10,000

 
385,000

 
*
The totals for Messrs. Stice and Surma include compensation for service on the MPLX GP board, as detailed below under “Fees Earned or Paid in Cash” and “Stock Awards.”
Fees Earned or Paid in Cash reflect (i) cash retainers earned for Board service in 2019, (ii) a special committee retainer of $25,000 for each director’s service on one or more Board special committees, and (iii) for each of Messrs. Stice and Surma, a $90,000 cash retainer for service to the MPLX GP board in 2019.
Stock Awards reflect the aggregate grant date fair value of MPC RSUs and MPLX phantom units, calculated in accordance with financial accounting standards. Non-employee directors generally received grants each quarter of MPC RSUs and MPLX phantom units valued at $39,375 and $4,375, respectively, based on the closing prices of MPC common stock and MPLX common units on each respective grant date. Mr. Cohen joined the Board effective December 16, 2019; his prorated award was comprised of MPC RSUs and MPLX phantom units valued at $6,848 and $761, respectively, based on the closing prices of MPC common stock and MPLX common units on the December 20, 2019 grant date. The amounts shown for each of Messrs. Stice and Surma also include $110,000 in MPLX phantom units (made in four quarterly grants, with grant date fair values of $27,500 per quarter based upon the closing prices of MPLX common units on the respective grant dates) for MPLX GP board service during 2019.
The following table shows the aggregate MPC RSUs and MPLX phantom units outstanding for each non-employee director as of December 31, 2019.
 
Earned for MPC Board Service
Earned for MPLX GP Board Service
Name
MPC RSUs
MPLX Phantom Units
MPLX Phantom Units
Abdulaziz F. Alkhayyal
8,087

 
1,731
 

 
Evan Bayh
36,776

 
3,579
 

 
Charles E. Bunch
12,010

 
2,366
 

 
Jonathan Z. Cohen
111

 
29
 

 
Steven A. Davis
19,976

 
3,221
 

 
Edward G. Galante
3,165

 
720
 

 
James E. Rohr
19,976

 
3,221
 

 
Kim K.W. Rucker
3,165

 
720
 

 
J. Michael Stice
7,077

 
1,540
 
5,726

 
John P. Surma
36,776

 
3,579
 
19,192

 
Susan Tomasky
3,165

 
720
 

 
All Other Compensation reflects contributions made to educational institutions under our matching gifts program, as described above. This program is subject to an annual limit of $10,000; however, the actual amount paid out on behalf of a director may exceed $10,000 in a given year due to end-of-year processing delays.

 
 
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Marathon Petroleum Corporation
 
 




Audit Matters
Auditor Fees and Services
Auditor Independence
Our Audit Committee has considered whether PricewaterhouseCoopers LLP is independent for purposes of providing external audit services to the Company and has determined that it is.
Auditor Fees
Aggregate fees for professional services rendered for the Company by PricewaterhouseCoopers LLP for the years ended December 31, 2019 and 2018 were ($ in thousands):
 
2019
2018
Audit
10,933

 
11,623

 
Audit-Related

 
705

 
Tax
933

 
1,430

 
All Other
225

 
5

 
Total
12,091

 
13,763

 
Audit Fees for the years ended December 31, 2019 and 2018 were for professional services rendered for the audit of consolidated financial statements and internal controls over financial reporting; the performance of subsidiary, statutory and regulatory audits; the issuance of comfort letters; the provision of consents; and the review of documents filed with the SEC.
Audit-Related Fees for the year ended December 31, 2018 were for professional services rendered for an assessment of our information system implementation in 2018 and events not associated with the current-year audit.
Tax Fees for the years ended December 31, 2019 and December 31, 2018 were for professional services rendered for income tax compliance and consultation services, and to assist management in estimating MPLX income and deduction allocations to MPC. Tax Fees for the year ended December 31, 2018 also included professional services rendered for the preparation of IRS Schedule K-1 tax forms for ANDX unitholders.
All Other Fees for the year ended December 31, 2019 were for non-auditory advisory services and an accounting research and disclosure checklist software license. All Other Fees for the year ended December 31, 2018 were for an accounting research and disclosure checklist software license.
MPLX, a consolidated subsidiary of MPC, separately pays its own fees, which totaled $8.5 million for the year ended December 31, 2019, and $4.8 million for the year ended December 31, 2018.
Pre-Approval of Audit Services
Our Pre-Approval of Audit, Audit-Related, Tax and Permissible Non-Audit Services Policy sets forth the procedure for the Audit Committee to pre-approve all audit, audit-related, tax and permissible non-audit services, other than as provided under a de minimis exception. Our Chief Financial Officer annually presents the Audit Committee with a forecasted budget of audit, audit-related, tax and permissible non-audit services, and updates the Committee throughout the year as needed. The Audit Committee may pre-approve any services to be performed by our independent auditor up to 12 months in advance and may pre-approve services by specific categories pursuant to the forecasted budget.
For unbudgeted items, the Audit Committee has delegated pre-approval authority of up to $500,000 to the Committee’s Chair; such items are reported to the full Audit Committee at its next scheduled meeting.
In 2019 and 2018, our Audit Committee pre-approved all audit, audit-related, tax and permissible non-audit services pursuant to this policy and did not use the de minimis exception.

 
 
2020 Proxy Statement
25
 
 


PROPOSAL 3. RATIFY INDEPENDENT AUDITOR

Certain Hiring Guidelines
We have established Guidelines for Hiring of Employees or Former Employees of the Independent Auditor that ensure our compliance with applicable law and NYSE listing standards.
 
 
 
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Find more online
 
 
 
 
 
 
 
The following are available on the “Corporate Governance” page of our website, at www.marathonpetroleum.com/Investors/Corporate-Governance/:
 
 
Pre-Approval of Audit, Audit-Related, Tax and Permissible Non-Audit Services Policy
 
 
Guidelines for Hiring of Employees or Former Employees of the Independent Auditor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Audit Committee Report
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Audit Committee has reviewed and discussed with management MPC’s audited financial statements and its report on internal control over financial reporting for 2019. The Audit Committee discussed with the independent auditors, PricewaterhouseCoopers LLP, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence. Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements and the report on internal control over financial reporting for Marathon Petroleum Corporation be included in MPC’s Annual Report on
Form 10-K for the year ended December 31, 2019, for filing with the SEC.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Audit Committee 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Susan Tomasky, Chair
 
Evan Bayh
 
J. Michael Stice
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Abdulaziz F. Alkhayyal
 
James E. Rohr
 
John P. Surma
 
 
 
 
 
 
 
 
 
 
 
Proposal 3. Ratify the Independent Auditor for 2020
 
 
 
 
 
 
 
 
The Audit Committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2020. We are submitting this appointment to our shareholders for ratification.
 
ü
The Board recommends a vote FOR this proposal.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Our Audit Committee is responsible for appointing, replacing, compensating and overseeing the work of the independent auditor. The Audit Committee has appointed PricewaterhouseCoopers LLP, an independent registered public accounting firm, as our independent auditor to audit the Company’s books and accounts for the year ending December 31, 2020. As a matter of good corporate governance, the Board has directed that this appointment be submitted to our shareholders for ratification. If our shareholders do not ratify this appointment, our Audit Committee will reconsider whether to retain PricewaterhouseCoopers LLP. Even if the appointment is ratified, our Audit Committee may, in its discretion, direct the appointment of a different independent auditor at any time during the year if it determines such change would be in our best interests or in the best interests of our shareholders.
We expect representatives of PricewaterhouseCoopers LLP to be present at our Annual Meeting, with an opportunity to make a statement if they desire to do so, and to be available to respond to appropriate questions from our shareholders.


 
 
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Marathon Petroleum Corporation
 
 




Executive Compensation Discussion and Analysis
In this Executive Compensation Discussion and Analysis (“CD&A”), we provide an overview of our compensation philosophy and objectives, and explain how and why the Compensation and Organization Development Committee made its 2019 compensation decisions for our named executive officers (our “NEOs”). We recommend that this section be read together with the tables and related disclosures in the “Executive Compensation Tables” section of this Proxy Statement.
 
 
 
 
 
Executive Summary
 
Executive Compensation Tables
How We Set Executive Compensation
 
2019 Summary Compensation Table
Executive Compensation Program
 
2019 Grants of Plan-Based Awards
Base Salary
 
Outstanding Equity Awards at 2019 Fiscal Year-End
Annual Cash Bonus Program
 
Option Exercises and Stock Vested in 2019
Long-Term Incentive Compensation Program
 
Post-Employment Benefits for 2019
Other Benefits
 
2019 Nonqualified Deferred Compensation
Compensation Governance
 
Potential Payments Upon Termination or Change in Control
Compensation and Organization Development Committee Report
 
 
 
CEO Pay Ratio
 
 
 
 
 
Executive Summary
Named Executive Officers for 2019
This CD&A focuses on the compensation for our NEOs, which for 2019 included our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), former CFO, and our three other most highly compensated executive officers serving at the end of 2019. Our NEOs for 2019 were:
Name
Title as of December 31, 2019
Gary R. Heminger
Chairman and Chief Executive Officer
Donald C. Templin
Executive Vice President and Chief Financial Officer (effective July 1, 2019); previously served as President, Refining, Marketing and Supply
Gregory J. Goff
Former Executive Vice Chairman (retired effective December 31, 2019)
Michael J. Hennigan
President and Chief Executive Officer, MPLX (effective November 1, 2019); previously served as President, MPLX
Timothy T. Griffith
President, Speedway LLC (effective July 1, 2019); previously served as Senior Vice President and Chief Financial Officer
Anthony R. Kenney
Former Executive Vice President, Speedway LLC (effective July 1, 2019; retired effective January 3, 2020); previously served as President, Speedway LLC

 
 
2020 Proxy Statement
27
 
 


EXECUTIVE COMPENSATION

Shareholder-Friendly Executive Compensation Practices
Our executive compensation program includes many shareholder-friendly features that align with contemporary governance practices, promote our pay-for-performance philosophy and mitigate risk to our shareholders. See “Compensation Governance” below for additional information about our compensation governance practices.
We Do:
 
ü
Cap annual cash bonus and performance unit payouts
 
ü
Limit business perquisites
ü
Grant a substantial portion of our long-term incentive awards based on relative total shareholder return
 
ü
Maintain significant stock ownership guidelines for NEOs
ü
Maintain “double trigger” change-in-control payout provisions for all long-term incentive awards
 
ü
Impose clawback provisions on both long-term incentive and short-term incentive awards
ü
Conduct an annual shareholder Say-on-Pay vote on NEO compensation
 
ü
Have an independent compensation consultant, retained directly by the Compensation and Organization Development Committee
ü
Require NEOs to hold all shares received under our incentive compensation plan for a minimum of one year after vesting
 
 
 
 
 
 
 
We Don’t:
 
 
û
 
 
û
 
Guarantee minimum bonus payments to any of our executive officers
 
Allow the repricing of stock options without shareholder approval
û
 
 
û
 
Pay dividends or dividend equivalents on unvested equity
 
Provide excise tax gross-up provisions with regard to any change in control of MPC
û
 
 
û
 
Grant stock options below fair market value as of the grant date
 
Allow the hedging or pledging of MPC common stock by our directors, officers or certain employees
 
 
 
 
 
2019 Company Performance Highlights
We achieved operational and commercial excellence in 2019, unlocking value for our shareholders through superior execution, innovation, strong financial discipline and a strong commitment to sustainability, all underpinned by our high-performing culture. Following are just a few of our performance highlights for 2019:
EARNINGS
 
OPERATIONS
 
DIVIDEND INCREASE
 
SHAREHOLDER VALUE
$2.6 billion
 
$5.6 billion
 
9.4%
 
$3.3 billion
Full-year earnings for 2019
 
Total income from operations for 2019
 
Announced an increase in our quarterly dividend,
to $0.58 per share, in January 2020
 
Amount of capital returned in 2019, including
$2.0 billion in share repurchases
 
 
 
 
 
 
 
SYNERGIES
 
INTEGRATION
 
SUSTAINABILITY
 
SUPERIOR EXECUTION
$1.1 billion
 
More than 700
 
Recognized
 
96%
Recurring and non-recurring synergies realized from the combination with Andeavor, well over first-year target of $600 million
 
Retail store conversions since Andeavor strategic combination in
October 2018
 
Earned the U.S. Environmental Protection Agency’s ENERGY STAR Partner of the Year award,
for the second year
in a row
 
System utilization at our
16 refineries during 2019

 
 
28
Marathon Petroleum Corporation
 
 


EXECUTIVE COMPENSATION

Pay for Performance
The Compensation and Organization Development Committee believes our executive compensation programs create a strong link between our NEOs’ compensation and our performance relative to our peers. The following tables show our one-year, three-year and five-year total shareholder return (“TSR”), which in each case was at or above the median TSR of the performance unit peer group. We calculated TSR for purposes of these graphs using the same methodology and peer group that we use for our 2019 MPC performance unit awards. See “Executive Compensation Program—Long-Term Incentive Compensation Program” for more information on this methodology, and the narrative under the “Outstanding Equity Awards at 2019 Fiscal Year-End” table for a description of the peer group.