Knife River Corp DEF 14A, filed Mar 29, 2024

Knife River Corp (KNF)

DEF 14A 2024-03-29 For: 2024-05-14

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Added on June 12, 2026

About this DEF 14A

Knife River Corp filed this DEF 14A on March 29, 2024.

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Items of Business	1.	Election of two Class I directors;
	2.	Advisory vote to approve the frequency of future advisory votes to approve the compensation paid to the company’s named executive officers;
	3.	Advisory vote to approve the compensation paid to the company’s named executive officers;
	4.	Ratification of the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2024; and
	5.	Transaction of any other business that may properly come before the annual meeting or any adjournment(s) thereof.

Record Date	The board has set the close of business on March 15, 2024, as the record date for the determination of stockholders who will be entitled to notice of, and to vote at, the annual meeting and any adjournment(s) thereof.

Meeting Attendance	All stockholders, as of the record date of March 15, 2024, are cordially invited to attend the annual meeting. Whether or not you plan to attend the annual meeting online, please vote your shares as instructed in the Notice of Availability of Proxy Materials (Notice), over the Internet, or by telephone after your receipt of hard copies of the proxy materials, as promptly as possible. You may also request a paper Proxy Card, which will include a postage-paid envelope, to submit your vote by mail, as described in the Notice. You may also vote your shares online and submit your questions during the annual meeting. Instructions on how to vote while participating at the annual meeting live via the Internet are posted at www.virtualshareholdermeeting.com/KNF2024 and can be found in the Proxy Statement in the section entitled “Information About the Annual Meeting - How to Attend and Vote at the Annual Meeting.” Stockholders of record who attend the annual meeting online may withdraw their proxy and vote online at the annual meeting if they so desire.

Proxy Materials	This Proxy Statement will first be sent to stockholders requesting written materials on or about March 29, 2024. The Notice will also be sent to certain stockholders on or about March 29, 2024. The Notice contains basic information about the annual meeting and instructions on how to view the company’s proxy materials and vote online.


TABLE OF CONTENTS


	PROXY STATEMENT SUMMARY		EXECUTIVE COMPENSATION (continued)
	Annual Meeting Information	1	Compensation Governance	77
	Company Overview	3	Compensation Committee Report	79
	Business Performance Highlights	3	Compensation Policies and Practices as They Relate
	Corporate Governance Practices	5	to Risk Management	80
	Compensation Highlights	6	Executive Compensation Tables	81
	Sustainability Highlights	8	Summary Compensation Table	81
	BOARD OF DIRECTORS		Grants of Plan-Based Awards	83
	Item 1. Election of Directors	15	Outstanding Equity Awards at Fiscal Year-End	86
	Director Nominees	17	Option Exercises and Stock Vested	87
	Board Evaluations and Process for Selecting Directors	23	Pension Benefits	87
	Board Skills and Diversity Matrix	24	Nonqualified Deferred Compensation	89
	CORPORATE GOVERNANCE		Potential Payments upon Termination or
	Director Independence	27	Change of Control	91
	Oversight of Sustainability	27	Pay Versus Performance	95
	Stockholder Engagement	29	AUDIT MATTERS
	Stockholder Communications with the Board	30	Item 4. Ratification of the Appointment of
	Board Leadership Structure	30	Deloitte & Touche LLP as the Company’s Independent
	Board’s Role in Risk Oversight	30	Registered Public Accounting Firm for 2024	99
	Board Meetings and Committees	32	Annual Evaluation and Selection of Deloitte &
	Additional Governance Features	35	Touche LLP	99
	Corporate Governance Materials	38	Audit Fees and Non-Audit Fees	100
	Related Person Transaction Disclosure	38	Policy on Audit Committee Pre-Approval of Audit
	COMPENSATION OF NON-EMPLOYEE DIRECTORS		and Permissible Non-Audit Services	100
	Director Compensation	44	Audit Committee Report	101
	SECURITY OWNERSHIP		INFORMATION ABOUT THE ANNUAL MEETING
	Security Ownership Table	46	Who Can Vote	102
	Hedging Policy	46	Notice and Access	102
	Greater than 5% Beneficial Owners	47	How to Vote	102
	EXECUTIVE COMPENSATION		How to Attend and Vote at the Annual Meeting	103
	Item 2. Advisory Vote to Approve the Frequency of Future		Technical Difficulties	104
	Advisory Votes to Approve the Compensation Paid to		Revoking Your Proxy or Changing Your Vote	104
	the Company’s Named Executive Officers	48	Discretionary Voting Authority	104
	Item 3. Advisory Vote to Approve the Compensation Paid		Voting Standards	105
	to the Company’s Named Executive Officers	49	Proxy Solicitation	106
	Information Concerning Executive Officers	50	Householding of Proxy Materials	106
	Compensation Discussion and Analysis	51	Knife River Corporation 401(k) Plan	106
	Special Note Regarding the Separation	51	Why Hold a Virtual Annual Meeting	106
	Executive Summary	52	Tabulation of Votes	106
	202 3 Compensation Framework	57	Annual Meeting Results	106
	202 3 Compensation for Our Named		Stockholder Proposals, Director Nominations, and
	Executive Officers	62	Other Items of Business for 2025 Annual Meeting	107
	Other Benefits	76	APPENDIX	110


The company’s executive compensation is based on providing market competitive compensation opportunities to attract top talent focused on achievement of short and long-term business results. Our compensation program is structured to align compensation with the company’s financial performance as a substantial portion of our executive compensation is directly linked to performance incentive awards.
■			Over 80% of our chief executive officer’s target compensation and approximately 69% of our other named executive officers’ target compensation is at risk.
■			100% of our named executive officers’ annual incentive is performance-based and tied to performance against pre-established, specific, measurable goals. For 2023, due to the Separation, time-based restricted stock units represented 100% of our named executive officers’ long-term incentive and require the executive to remain employed with the company through the vesting period. For 2024, 100% of our named executive officers’ annual incentive and 65% of their long-term incentive are performance-based and tied to performance against pre-established, specific, measurable goals which are further described in the 2024 Annual and Long-Term Incentive Preview section of this Proxy Statement.


What We Do


þ			At-Risk Compensation - The majority of the executive compensation program is at-risk, with incentive components tied to market industry practices to ensure the financial success of the company.
þ			Independent Compensation Committee - All members of the compensation committee meet the independence standards under the NYSE listing standards and the SEC rules.
þ			Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate executive compensation plans and practices.
þ			Competitive Compensation - Executive compensation reflects executive performance, experience, relative value compared to other positions within the company, relationship to competitive market value compensation, corporate and business segment economic environment, and the actual performance of the overall company and the business segments against pre-established goals. As discussed in the 2024 annual and long-term incentive preview section in the CD&A, the compensation committee awarded performance shares and time-based restricted stock units in February 2024 and intends to continue such practice going forward.
þ			Annual Cash Incentive - Payment of annual cash incentive awards is based on overall pre-established annual company performance measured in terms of Adjusted EBITDA, and for certain executives, other strategic objectives.
þ			Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based compensation.
þ			Annual Compensation Risk Analysis - Risks related to our compensation programs are regularly analyzed through an annual compensation risk assessment.
þ			Stock Ownership and Retention Requirements - Executive officers are required to own, within five years of appointment or promotion, company common stock equal to a multiple of their base salary. Our CEO is required to own stock equal to six times his base salary, and the other named executive officers are required to own stock equal to two or three times their base salary. Net share awards must also be held until share ownership requirements are met.
þ			Clawback Policy - If the company’s audited financial statements are restated due to any material noncompliance with the financial reporting requirements under the securities laws, the company is required to pursue recoupment of certain “erroneously awarded” compensation paid to our executive officers.

What We Do Not Do


ý			Stock Options - The company does not use stock options as a form of incentive compensation.
ý			Employment Agreements - Executives do not have employment agreements entitling them to specific payments upon termination or a change of control of the company.
ý			Perquisites - Executives do not receive perquisites that materially differ from those available to employees in general.
ý			Hedge Stock - Executives are not allowed to hedge company securities.
ý			Pledge Stock - Executives are not allowed to pledge company securities in margin accounts or as collateral for loans.
ý			No Dividends or Dividend Equivalents on Unvested Shares - We do not provide for payment of dividends or dividend equivalents on unvested share awards.
ý			Tax Gross-Ups - Executives do not receive tax gross-ups on their compensation.


Board of Directors
The board of directors is ultimately responsible for oversight responsibility with respect to environmental, health, safety, and other social sustainability matters applicable to the company.
↓
Audit Committee of the Board						Compensation Committee of the Board
The audit committee assists the board in fulfilling its oversight responsibilities with respect to environmental, social, and other sustainability matters, including climate change risks and opportunities, health, safety, and other social sustainability matters.						The compensation committee assists the board in fulfilling its oversight responsibilities with respect to human capital management, including employee recruitment and retention matters, wellness, gender pay equity, diversity, and inclusion.
↓
Management Policy Committee
The management policy committee is comprised of senior company officers. The committee meets monthly, or more frequently as warranted, and is responsible for the management of risks and pursuit of opportunities related to environmental and social sustainability matters, including climate change, health, safety, and other social sustainability matters.
↓
Executive Sustainability Committee
The executive sustainability committee is comprised of corporate and operating segment senior executives and supports execution of the company’s environmental and sustainability strategy and establishes, maintains, and enhances the processes, procedures, and controls for the company’s environmental and sustainability disclosures.


			www.kniferiver.com


PO Box 5568 Bismarck, ND 58506-5568 Street Address: 1150 West Century Avenue Bismarck, ND 58506 (701) 530-1400


Sincerely,

Brian R. Gray
President and Chief Executive Officer


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD May 14, 2024



			Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on May 14, 2024. The 2024 Notice of Annual Meeting and Proxy Statement and 2023 Annual Report to Stockholders are available at www.knfproxy.com.


Knife River has provided construction materials and contracting services since 1992, growing from its first aggregates operation in California to being the fourth-largest sand and gravel producer in the country, with locations in 14 states. On June 1, 2023, Knife River completed the Separation from its former parent company, MDU Resources, to be a standalone publicly traded company on the New York Stock Exchange (NYSE), under the ticker symbol KNF.


Knife River is a leading aggregates-led construction materials and contracting services provider in the U.S. The company manages its business with a long-term view toward sustainable operations, focusing on how economic, environmental, and social impacts help the company support a strong and sustainable national infrastructure. We integrate sustainability efforts into our business strategy because these efforts directly affect long-term business viability and profitability. Our focus on sustainability helps ensure we are a good corporate citizen while creating opportunities to increase revenues and profitability, create a competitive advantage, and attract a skilled and diverse workforce. Highlights of our enhanced efforts and achievements in the past year are set forth below. For the company’s complete outline of environmental, governance and social responsibilities, see our Sustainability Report. The information provided in the Sustainability Report is not part of this Proxy Statement and is not incorporated by reference as part of this Proxy Statement.


Reporting Frameworks
We report environmental, social, governance, and sustainability (ESG/sustainability) metrics relevant and important to our operations using frameworks developed by the Sustainability Accounting Standards Board (SASB) and we continue to incorporate guidance from the Task Force on Climate-Related Financial Disclosures (TCFD) into our reporting.


			■Environment Award. Environmental stewardship is one of Knife River’s core values. Each year, our Environment Award recognizes individuals or teams of employees for projects and activities that advance Knife River’s sustainability efforts and/or progress in reducing and minimizing environmental impacts.


■Diversity, Equity, and Inclusion. Knife River is a people-first company and that means all people. We have implemented the philosophy that we are One Team: Stronger Together. Our “One Team” statement: “We treat each other with respect and professionalism. We embrace the diverse backgrounds and viewpoints of our team members. And we continue learning from each other to keep improving. We are one team and we are stronger together.” We provide several training programs in this area, including:


■Knife River Training Center. While labor challenges continue to impact many construction companies, Knife River is actively engaged in attracting, training and retaining the next generation of construction-industry employees. In February 2022, the company completed a state-of-the-art training center on a 230-acre tract of property in the Pacific Northwest, featuring an 80,000 square-foot heated indoor arena for training on trucks and heavy equipment and an attached 16,000 square-foot classroom and conference room facility. The center is used company-wide to enhance the skills of current employees and to recruit and teach skills to new employees through both classroom education and hands-on experience. It also is used by Knife River’s customers and industry peers, who send employees to the center to take courses on heavy equipment, truck driving, leadership development, facilitator training, safety training and more.


By order of the Board of Directors,

Karl A. Liepitz
Secretary


			■The Knife River training center received the 2022 Risk Management Excellence Award presented by Liberty Mutual Insurance Company. The award recognizes outstanding employee health and safety achievement related to an industry-leading, state-of-the-art training center leading to better training and lowering risks to the employees and general public. Liberty Mutual Insurance Company has granted this award less than 20 times in their 100-year history.


Class I terms expire at the 2024 annual meeting:
German Carmona Alvarez
Thomas Everist(1)
Class II terms expire at the 2025 annual meeting:
Patricia L. Moss
William J. Sandbrook
Class III terms expire at the 2026 annual meeting:

Karen B. Fagg
Brian R. Gray
(1)			The company’s corporate governance guidelines provide that directors are not eligible to be nominated or appointed to the board if they are 74 years of age or older at the time of the election or appointment, subject to certain exceptions. In accordance with the corporate governance guidelines, Mr. Everist was not renominated to stand for re-election to the board. Mr. Everist had an over 40-year career in the construction materials and mining industry and brought deep industry expertise to the board. The board thanks him for his distinguished service on the board and wishes him all the best. Assuming Mr. Hill is elected at the annual meeting, he will replace Mr. Everist as a Class I director.


			The board of directors recommends that the stockholders vote “FOR” the election of each nominee.


		Karen B. Fagg Age 70	Independent Director Since 2023 Chair of the Board Nominating and Governance Committee
		Key Contributions to the Board: Through her management experience and knowledge in the fields of engineering, environment, and energy resource development, including four years as director of the Montana Department of Natural Resources and Conservation and over eight years as president, chief executive officer, and chair of her own engineering and environmental services company, as well as her service on a number of Montana state and community boards, Ms. Fagg contributes experience in responsible natural resource development with an informed perspective of the construction, engineering, and energy industries.
Professional Highlights
•	Vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm, from April 2008 until her retirement in December 2011.
•	President of HKM Engineering, Inc., Billings, Montana, an engineering and environmental services firm, from April 1995 to June 2000, and chair, chief executive officer, and majority owner from June 2000 through March 2008. HKM Engineering, Inc. merged with DOWL LLC in April 2008.
•	Employed with MSE, Inc., Butte, Montana, an energy research and development company, from 1976 through 1988, and vice president of operations and corporate development director from 1993 to April 1995.
•	Director of the Montana Department of Natural Resources and Conservation, the state agency charged with promoting stewardship of Montana’s water, soil, energy, and rangeland resources; and administering several grant and loan programs from 1989 through 1992.
Other Experience
•	Former director of publicly traded MDU Resources, an energy delivery and construction services business, from 2005 until the Separation Date.
•	Director and member of the quality committee of the Intermountain Health Peaks Region Board, a health care provider, since January 2023.
•	Director and finance committee chair of the Montana State Fund, the state’s largest workers’ compensation insurance company, from March 2021 to present; Director of SCL Health Montana Regional Board from January 2020 to present, including a term as chair; and member of Carroll College Board of Trustees from 2005 through 2010, and from August 2019 through June 2022.
•	Former member of several regional, state, and community boards, including director of St. Vincent’s Healthcare from October 2003 to October 2009 and January 2016 through January 2020, including a term as chair; director of the Billings Catholic Schools Board from December 2011 through December 2018, including a term as chair; the First Interstate BancSystem Foundation from June 2013 to 2016; the Montana Justice Foundation from 2013 to 2015; Montana Board of Investments from 2002 through 2006; Montana State University’s Advanced Technology Park from 2001 to 2005; and Deaconess Billings Clinic Health System from 1994 to 2002.


		Brian R. Gray Age 53	Director Since 2023 President and Chief Executive Officer
		Key Contributions to the Board: Serving as president and chief executive officer of Knife River Corporation since 2023, Mr. Gray is the only officer of the company that serves on our board. With over 30 years of experience at the company, he brings industry experience to the board, as well as extensive knowledge of our company and its business operations. He contributes valuable insight into management’s views and perspectives and the day-to-day operations of the company.
Professional Highlights
•	President of the company since January 1, 2023 and chief executive officer of the company since March 1, 2023, where he was instrumental in leading development of the company’s EDGE strategy.
•	President of the company’s Northwest segment from January 2012 to December 2022, where he led the acquisition of eight companies and was instrumental in the development of the Knife River Training Center and corporate-wide safety, training, and sustainability programs; influential in the development of the company’s coaching clinic, “Life at Knife” recruiting effort and coaching approach to team development, along with the company’s core values of People, Safety, Quality, and Environment.
Other Experience
•	Member of the board of directors of the National Ready Mixed Concrete Association, an industry association, since March 2022, including a three-year term from March 2018 to March 2021; member of the executive committee for one-year terms from 2020 to 2021, 2022 to 2023, and a new term for 2024 to 2025.
•	Member of the board of directors of Oregon State University’s Construction Education Foundation from 2012 to present; president for a one-year term in 2022; and vice president for a one-year term in 2020. Mr. Gray was inducted as a member of the academy of distinguished engineers and was the recipient of the Oregon Stater Award in 2022, which recognizes alumni who have a profound impact on the engineering profession.
•	Member of the board of directors of the Associated General Contractors Oregon-Columbia chapter, an industry association, from 2007 to present; president from 2017 to 2018; first vice president from 2016 to 2017; second vice president from 2015 to 2016; and secretary from 2014 to 2015.


OUTCOMES OF STOCKHOLDER ENGAGEMENT
			•Expanded disclosure of financial metrics for our business to help stockholders understand key business drivers
			•2024 executive compensation tied to executing the company’s EDGE strategy
			•Updated reporting segments to increase transparency into operations and business performance
			•Stockholder feedback regularly shared with our board of directors
			•Published first stand alone Sustainability Report including the company’s Scope 1 and Scope 2 emissions for 2022 and 2023


Nominating and Governance Committee			Met Two Times in 2023 Following the Separation


Audit Committee			Met Four Times in 2023 Following the Separation


Compensation Committee			Met Three Times in 2023 Following the Separation


Ownership Threshold:			3% of outstanding shares of our common stock
Nominating Group Size:			Up to 20 stockholders may combine to reach the 3% ownership threshold
Holding Period:			Continuously for three years
Number of Nominees:			The greater of two nominees or 20% of our board


Corporate Governance Materials		Website
•	Bylaws	investors.kniferiver.com/governance/governance-documents/
•	Corporate Governance Guidelines	investors.kniferiver.com/governance/governance-documents/
•	Board Committee Charters for the Audit, Compensation and Nominating and Governance Committees	investors.kniferiver.com/governance/governance-documents/
•	Leading With Integrity Guide	kniferiver.com/integrity/


		Effective June 1, 2023
Annual Base Cash Retainer		$110,000
Annual Additional Cash Retainers:
Non-Executive Chair		125,000
Audit Committee Chair		20,000
Compensation Committee Chair		15,000
Nominating and Governance Committee Chair		15,000
Annual Stock Grant(1) - Directors (other than Non-Executive Chair)		150,000
Annual Stock Grant(2) - Non-Executive Chair		175,000

(1)	The annual stock grant is a grant of shares of company common stock equal in value to $150,000.
(2)	The annual stock grant is a grant of shares of company common stock equal in value to $175,000.


Name		Fees Earned or Paid in Cash ($)	Stock Awards ($)(1)	All Other Compensation ($)(2)	Total ($)
German Carmona Alvarez		72,917	150,000	60	222,977
Thomas Everist		72,917	150,000	60	222,977
Karen B. Fagg		137,083	164,583	60	301,726
Patricia L. Moss		75,833	150,000	60	225,893
William J. Sandbrook		64,167	87,500	60	151,727

(1)	Directors receive an annual award of company common stock with a value of $150,000, except the non-executive chair who receives an award of company common stock with a value of $175,000, under the Knife River Corporation Long-Term Performance-Based Incentive Plan. Directors serving less than a full year receive a prorated stock award based on the number of months served, provided that for 2023 directors that served on the board of MDU Resources prior to the Separation received an award inclusive of their service on the MDU Resources board in accordance with the Separation related agreements. All stock awards are measured in accordance with generally accepted accounting principles for stock-based compensation in Accounting Standards Codification Topic 718. The grant date fair value is based on the closing price of our common stock on the grant date of November 15, 2023, which was $57.57 per share. The amount paid in cash for fractional shares is included in the amount reported in the stock awards column to this table.
(2)	Includes group life insurance premiums paid on behalf of the director as applicable. Amounts for life insurance premiums reflect prorated amounts for directors serving less than a full year based on the number of months served.


Name		Shares of Common Stock Beneficially Owned (#)			Percent of Class (%)




German Carmona Alvarez			2,809		*
Nancy K. Christenson			34,053	(1)	*
Thomas Everist			169,391		*
Karen B. Fagg			26,064		*
Brian R. Gray			8,312	(1)	*
Trevor J. Hastings			16,727	(1)	*
Thomas W. Hill			22,914	(2)	*
Karl A. Liepitz			10,332	(1)	*
Patricia L. Moss			25,658		*
Nathan W. Ring			7,749	(1)	*
William J. Sandbrook			1,519		*
All directors, director nominees, and executive officers as a group (13 in number)			337,519	(1)	0.6
* Less than one percent of the class. Percent of class is calculated based on 56,609,704 outstanding shares as of February 29, 2024.
(1)	Includes full shares allocated to the officer’s account in our 401(k) retirement plan.
(2)	Shares represent ownership in a third-party investment fund that is invested in company stock.


The board of directors recommends that an advisory vote on compensation paid to our named executive officers be held every year.


The board of directors recommends a vote “FOR” the approval, on a non-binding advisory basis, of the compensation of the company’s named executive officers, as disclosed in this Proxy Statement.


Brian R. Gray			President and Chief Executive Officer (CEO)
Nathan W. Ring			Vice President and Chief Financial Officer (CFO)
Trevor J. Hastings			Vice President and Chief Operating Officer (COO)
Karl A. Liepitz			Vice President, Chief Legal Officer and Secretary (CLO)
Nancy K. Christenson			Vice President of Administration


August 2022 MDU Resources Compensation Committee Meeting						•Set 2023 salary grade structure
November 2022 MDU Resources Compensation Committee Meeting						•Approve 2023 executive base salaries and incentive targets for COO (for his role as CEO of WBI Energy) and CLO (for his role as VP and General Counsel)
February 2023 MDU Resources Compensation Committee Meeting						•Approve annual incentive performance measures for 2023 Plan Year •Approve long-term restricted stock grants for 2023-2025 •Approve revised 2023 base salary and incentive target for CEO effective March 1, 2023
March 2023 MDU Resources Compensation Committee Meeting						•Approve offer letters for Knife River executives subject to occurrence of Separation
May 2023 MDU Resources Compensation Committee Meeting						•Approve conversion of outstanding long-term performance grants for 2021-2023 and 2022-2024 to time-based awards
July 2023 MDU Resources Compensation Committee Meeting						•Approve 2023 annual incentive results for COO and CLO for period prior to Separation
July 2023 Knife River Compensation Committee Meeting						•Approve 2023 annual incentive performance measures, targets and payout opportunities •Affirm previous approval by MDU Resources Compensation Committee of 2023 Long-Term Incentive grants •Approve 2023 additional long-term incentive grants for CEO, COO, CFO and VP of Administration following Separation
February 2024 Knife River Compensation Committee Meeting						•Approve annual and long-term incentive payouts for 2023 Plan Year


(2)			Prior to the Separation, the MDU Resources Compensation Committee approved a target annual incentive award based on a percentage of the executive’s base salary. Upon the effectiveness of the Separation, the annual cash incentive targets for the CEO, CFO, COO and vice president of administration were adjusted pursuant to the offer letters that such named executive officers entered into with us to account for the Separation and their new roles as executive officers of Knife River, while the CLO’s annual cash incentive target remained the same following the Separation. Payouts for the CEO, CFO and vice president of administration were based solely on Knife River performance and strategic measures because such individuals were in positions at Knife River for all of 2023. In contrast, because the COO served as the president and chief executive officer of WBI Energy, Inc., an MDU Resources subsidiary, and the CLO served as the vice president, general counsel and secretary of MDU Resources, from January 1, 2023 until May 31, 2023, the MDU Resources Compensation Committee certified the results and determined their payouts for the period of time during 2023 until the Separation was completed based on certain MDU Resources financial and strategic performance goals that were approved by the MDU Resources Compensation Committee. After the Separation, the compensation committee completed a thorough review of the annual cash incentive award program and approved the Knife River annual incentive performance measures applicable to each named executive officer as well as the threshold, target and maximum award opportunity levels. No changes were made to the annual cash incentive awards as a percentage of base salary following the Separation. For more information, please see “2023 Compensation for Our Named Executive Officers-2023 Base Salary and Incentive Targets.”
(3)			The MDU Resources Compensation Committee did not award performance shares for the 2023-2025 performance period in February 2023 due in part to, according to MDU Resources, the then-pending Separation. MDU Resources reported that the MDU Resources Compensation Committee awarded only time-based restricted stock units in February 2023 due to MDU Resources’ significant strategic initiatives underway at the time and as a means of retention for executive officers of both entities during the pending Separation process. Similarly, and as discussed in more detail in “2023 Compensation for Our Named Executive Long-Term Incentives,” the compensation committee granted time-vesting restricted stock units in July 2023 as contemplated by the offer letters that the named executive officers entered into with us in connection with the Separation. As discussed in the “2024 Annual and Long-Term Incentive Preview” section, the compensation committee awarded performance shares and time-vesting restricted stock units in February 2024 and intends to continue such practice going forward.


2023 Compensation Benchmarking Peer Group Companies
Allegion plc	Gibraltar Industries, Inc.	Sterling Infrastructure, Inc.
Arcosa, Inc.	Granite Construction Incorporated	Summit Materials, Inc.
Armstrong World Industries, Inc.	Martin Marietta Materials, Inc.	The AZEK Company Inc.
Construction Partners, Inc.	Masonite International Corporation	Vulcan Materials Company
Dycom Industries, Inc.	Minerals Technologies Inc.
Eagle Materials Inc.	Simpson Manufacturing Co., Inc.
All companies shown above are the companies used for benchmarking compensation analysis of the CEO; all companies shown, except Construction Partners, Inc. are the companies used for compensation analysis for the CFO; and the companies shown in bold are the companies used for compensation analysis for the CLO.