MAS Masco Corp

Dear Stockholder:

You are cordially invited to attend Masco Corporation’s Annual Meeting of Stockholders at 9:30 a.m. on Friday, May 12, 2017 at our corporate office in Taylor, Michigan. The following pages contain information regarding the meeting schedule and the matters proposed for your consideration and vote. Following our formal meeting, we expect to provide a review of our operations and respond to your questions.

Our Annual Meeting agenda again includes an advisory “say-on-pay” vote to approve the compensation paid to our named executive officers. We believe that our continued efforts to enhance our pay-for-performance practices resulted in 98% of the votes cast last year in favor of the compensation paid to our named executive officers. In 2016, we also continued our robust stockholder engagement program by reaching out to our largest stockholders in both the spring and in the fall to discuss a broad range of executive compensation and governance topics.

We urge you to carefully consider the information in the proxy statement regarding the proposals to be presented at our Annual Meeting. Your vote on these proposals is important, regardless of whether or not you are able to attend the Annual Meeting. Voting instructions can be found on the enclosed proxy card. Please submit your vote today by internet, telephone or mail.

On behalf of our entire Board of Directors, we thank you for your continued support of Masco Corporation, and we look forward to seeing you on May 12.

		Sincerely,   J. Michael Losh   Chairman of the Board		Keith J. Allman   President and Chief Executive Officer

THIS PROXY STATEMENT AND THE ENCLOSED PROXY CARD ARE BEING MAILED OR

OTHERWISE MADE AVAILABLE TO STOCKHOLDERS ON OR ABOUT MARCH 31, 2017.

MASCO CORPORATION

Notice of Annual Meeting of Stockholders

		Stockholders of record at the close of business on March 17, 2017 are entitled to vote at the Annual Meeting or any adjournment or postponement of the meeting. Whether or not you plan to attend the Annual Meeting, you can ensure that your shares are represented at the meeting by promptly voting by internet or by telephone, or by completing, signing, dating and returning your proxy card in the enclosed postage prepaid envelope. Instructions for each of these methods and the control number that you will need are provided on the proxy card. You may withdraw your proxy before it is exercised by following the directions in the proxy statement. Alternatively, you may vote in person at the meeting.   By Order of the Board of Directors,   Kenneth G. Cole Vice President, General Counsel and Secretary

DIRECTOR NOMINEES

The Class II Director Nominees for our Board of Directors are:

Keith J. Allman		J. Michael Losh		Christopher A. O’Herlihy
DIRECTOR SINCE: 2014		DIRECTOR SINCE: 2003		DIRECTOR SINCE: 2013
POSITION: Our President and Chief Executive Officer		POSITION: Retired Chief Financial Officer and Executive Vice President of General Motors Corporation		POSITION: Vice Chairman of Illinois Tool Works
INDEPENDENT: No		INDEPENDENT: Yes		INDEPENDENT: Yes
COMMITTEES: None		COMMITTEES: Corporate Governance and Nominating (Chair); Organization and Compensation		COMMITTEES: Audit; Organization and Compensation

If elected, each would serve for a three-year term concluding at our 2020 Annual Meeting.

BOARD REFRESHMENT

We have had significant Board refreshment over the past five years. Five new independent directors have joined our Board since December 2012, bringing fresh and diverse perspectives, which, combined with our directors who have experience with us, provides a desirable balance of deep, historical understanding of our Company and new perspectives.

2016 FINANCIAL PERFORMANCE

We delivered strong financial results again in 2016. Our reported sales for the full year increased 3% to $7.4 billion, and we increased our operating profit margin to 14.3%. We have maintained our positive momentum in 2016 across most of our business segments, and as a global leader in the design, manufacture and distribution of branded home improvement and building products, our longstanding commitment to innovation continues to be a key factor in our success.

In addition to delivering sales and profit growth, in 2016 we returned capital to our stockholders by repurchasing nearly 15 million shares of stock and increasing our annual dividend by approximately 5%. Finally, we continued the execution of our strategy to position us for future growth by focusing on leveraging opportunities across our businesses, driving the full potential of our core businesses and actively managing our portfolio.

2016 EXECUTIVE COMPENSATION

Based on our strong financial performance in 2016, we exceeded the target goals for our annual and long-term performance-based compensation programs.

2016 Annual Performance Program

Under our annual performance program, we grant restricted stock and pay cash bonuses to our executive officers if we meet our performance goals for operating profit and working capital as a percent of sales. The following tables reflect our 2016 target goals, our performance relative to our target goals and the compensation we paid to our executive officers under our 2016 annual performance program:

2014-2016 Long Term Performance Program

Under our Long Term Cash Incentive Program (“LTCIP”), our executive officers earn a cash award if we meet a return on invested capital performance goal for a three-year period. The following tables reflect our target goal for the 2014-2016 LTCIP performance period, our performance relative to our target goal and the compensation we paid to our executive officers who participated in the 2014-2016 LTCIP:

STOCKHOLDER OUTREACH

In determining our executive compensation and corporate governance practices, our Board believes it is important to consider feedback from our stockholders. In 2016, we continued our robust stockholder engagement program through which we encourage certain of our stockholders to engage in dialogue with us twice per year. During the year, we reached out to stockholders holding over 40% of our outstanding shares, and discussed with certain of these stockholders an overview of our business strategies, board composition and refreshment, the Political Contributions Policy we adopted in 2016 and our annual and long-term performance compensation programs. We received positive feedback from the stockholders with whom we spoke regarding the structure of our compensation programs and practices, which was reflective of the strong support we have received for our say-on-pay proposal over the past four years. We provide reports on the feedback we receive to our Organization and Compensation Committee (“Compensation Committee”) and Corporate Governance and Nominating Committee (“Governance Committee”).

OUR COMPENSATION PRACTICES

During 2016, our Compensation Committee continued to review our compensation programs and practices to ensure our interests and the objectives for our compensation programs are aligned. At our 2016 Annual Meeting, 98% of the votes cast on our say-on-pay proposal approved the compensation we paid to our executive officers. Although the say-on-pay vote is advisory and non-binding, our Compensation Committee believes this approval percentage indicates strong support for our continued efforts to enhance our pay-for-performance practices, and our Compensation Committee concluded that our stockholders endorse our current executive compensation programs and practices.

Our compensation practices include:

Our compensation practices do not include:

Table of Contents

Corporate Governance

This section of our proxy statement provides information on the qualifications and experience of our director nominees and incumbent directors, the structure of our Board and our Board committees, and other important corporate governance matters.

DIRECTOR AND DIRECTOR NOMINEES

Our Board is divided into three classes. Following the election of the Class II directors nominated at this Annual Meeting, the terms of office of our Class I, Class II and Class III directors will expire at the Annual Meeting of Stockholders in 2019, 2020 and 2018, respectively, or when their respective successors are elected and qualified.

In addition to meeting the criteria that are described below under “Board Composition and Membership,” each of our director nominees and each continuing director brings a strong and unique background and set of skills to our Board. As a result, our Board as a whole possesses competence and experience in a wide variety of areas.

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DIRECTOR NOMINEES FOR CLASS II (Term Expiring at the Annual Meeting in 2020)

Keith J. Allman		J. Michael Losh
AGE: 54		AGE: 70
DIRECTOR SINCE: 2014		DIRECTOR SINCE: 2003
POSITION:   Our President and Chief Executive Officer, since February 2014		POSITION:   Retired Chief Financial Officer and Executive Vice President of General Motors Corporation, a global automotive company
RELEVANT SKILLS AND EXPERIENCE:   Mr. Allman brings to our Board strong business leadership skills, hands-on operational experience with our businesses and valuable insight into our culture. He played an integral role in developing our strategies to strengthen our brands and improve our execution, which has helped to provide the foundation for the current direction of our Company. His key leadership positions within our Company have given him deep knowledge of all aspects of our business, and he also possesses a significant understanding of, and experience with, complex operations as well as company-specific customer expertise.		RELEVANT SKILLS AND EXPERIENCE:   Mr. Losh has strong leadership skills gained through significant executive leadership positions and through his service on boards of other publicly held companies in various industries. His current activities provide him with valuable exposure to developments in board oversight responsibilities, corporate governance, risk management, accounting and financial reporting, which enhances his service to us as Chairman of our Board. In addition, Mr. Losh has experience with and understands complex international financial transactions. He possesses substantial finance and accounting expertise gained through his experience as Chief Financial Officer of large organizations and through his service on other boards and audit committees.
BUSINESS EXPERIENCE:   • Masco Corporation:   • Group President (2011-2014)   • President, Delta Faucet (2007-2011)   • Executive Vice President, Builder Cabinet Group (2004-2007)   • Served in various management positions of increasing responsibility at Merillat Industries (1998-2003)   • Director of Oshkosh Corporation		BUSINESS EXPERIENCE:   • Director of Prologis, Aon plc, and H.B. Fuller Company   • During the past five years, served as a director of CareFusion Corporation and TRW Automotive Holdings Corp.   • Interim Chief Financial Officer of Cardinal Health, Inc. (2004-2005)   • Served for 36 years in various capacities at General Motors Corporation until his retirement in 2000

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Christopher A. O’Herlihy
AGE: 53
DIRECTOR SINCE: 2013
POSITION:   Vice Chairman of Illinois Tool Works Inc., a global diversified industrial manufacturer of specialized industrial equipment, consumables, and related service businesses, since 2015
RELEVANT SKILLS AND EXPERIENCE:   Mr. O’Herlihy joined Illinois Tool Works Inc. in 1989. In his more than 25 years with Illinois Tool Works, he has held several executive positions through which he has acquired extensive knowledge and experience in all aspects of business, including business strategy, operations, acquisitions, emerging markets, financial performance and structure, legal matters, and human resources/talent management. His current responsibilities include developing and executing the overall corporate growth strategy. He brings to our Board strategic insight and understanding of complex business and manufacturing operations, as well as a valuable perspective of international business operations, gained through his experience with a multi-billion dollar diversified global organization.
BUSINESS EXPERIENCE:   • Illinois Tool Works Inc.:   • Executive Vice President, with worldwide responsibility for Illinois Tool Works’ Food Equipment Group (2010-2015)   • Group President - Food Equipment Group Worldwide (2010)   • Group President - Food Equipment Group International (2009-2010)   • For more than 25 years, served in various positions of increasing responsibility, including as Group President of the Polymers and Fluids Group

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CLASS III DIRECTORS (Term Expiring at the Annual Meeting in 2018)

Mark R. Alexander		Richard A. Manoogian
AGE: 52		AGE: 80
DIRECTOR SINCE: 2014		DIRECTOR SINCE: 1964
POSITION:		POSITION:
• Senior Vice President of Campbell Soup Company, a manufacturer and marketer of branded convenience products, since 2010   • President of Americas Simple Meals and Beverages, Campbell Soup Company, since 2015		Chairman Emeritus, since 2012
RELEVANT SKILLS AND EXPERIENCE:		RELEVANT SKILLS AND EXPERIENCE:
As President of Campbell Soup Company’s largest division, Mr. Alexander brings to our Board strong leadership skills and experience in developing and executing business growth strategies. His current business responsibilities include investing in brand-building, innovation and expanded distribution, which correspond to areas of focus at our business operations. His extensive international experience with consumer branded products and his background in marketing and customer relations also provide our Board with expertise and insight as we leverage our consumer brands in the global market.		Mr. Manoogian was instrumental in the dramatic growth of Masco to one of the largest manufacturers of brand-name products for home improvement and new home construction in North America. His experience in navigating our Company through various phases of its transformation and diversification provides our Board with unique and extensive knowledge of our Company’s history and strategies. As a long-term leader at Masco, Mr. Manoogian possesses firsthand knowledge of our operations as well as a deep understanding of the home improvement and new home construction industries.
BUSINESS EXPERIENCE:		BUSINESS EXPERIENCE:
• Campbell Soup Company:   • President of Campbell North America (2012-2015), Campbell International (2010-2012) and Asia Pacific (2006-2009)   • Chief Customer Officer and President - North America Baking & Snacking (2009-2010)   • Served in various marketing, sales and management roles in the United States, Canada, Europe and Asia since 1989   • Chairman of the Board of Governors of GS1 U.S., a not-for-profit information standards organization		• Our Chairman of the Board (1985-2012)   • Masco Corporation:   • Executive Chairman (2007-2009)   • Chief Executive Officer (1985-2007)   • Elected as President in 1968, and as Vice President in 1964   • Director of Ford Motor Company (2001-2014)

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John C. Plant		Mary Ann Van Lokeren
AGE: 63		AGE: 69
DIRECTOR SINCE: 2012		DIRECTOR SINCE: 1997
POSITION:		POSITION:
Retired Chairman of the Board and Chief Executive Officer of TRW Automotive Holdings Corp., a diversified automotive supplier		Retired Chairman and Chief Executive Officer of Krey Distributing Company, a beverage distribution firm
RELEVANT SKILLS AND EXPERIENCE:		RELEVANT SKILLS AND EXPERIENCE:
Based on his leadership positions with multi-billion dollar diversified global companies, Mr. Plant brings to our Board strategic insight and understanding of complex operations as well as a valuable perspective of international business. He understands how to manage a company through economic cycles and major transactions. He also has a strong background in finance and extensive knowledge and experience in all aspects of business, including operations, business development matters, financial performance and structure, legal matters and human resources.		Ms. Van Lokeren’s nearly 20 years of experience as the Chairman and CEO of a large and successful distribution company gives her valuable insight into many facets of company leadership and management, including personnel, marketing, customer relationships and overall business strategy. She also brings to our Board an understanding of product distribution and logistics. Her current and past service as a director of other public companies and non-profit organizations gives her a broad perspective on issues of corporate governance, executive compensation, board oversight and risk management.
BUSINESS EXPERIENCE:		BUSINESS EXPERIENCE:
• Director of Arconic Inc. (formerly Alcoa, Inc.), Jabil Circuit, Inc. and Gates Corporation, a privately held corporation   • TRW Automotive Holdings Corp.:   • Chairman of the Board (2011-2015)   • President and Chief Executive Officer and Director (2003-2015)   • Co-member of the Chief Executive Office of TRW Inc. and the President and Chief Executive Officer of the automotive business of TRW Inc. (2001-2003)   • Director of the Automotive Safety Council		• Chairman and Chief Executive Officer of Krey Distributing Company (1987-2006), and served as its Secretary upon joining Krey in 1978   • Director of Spire Inc.

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CLASS I DIRECTORS (Term Expiring at the Annual Meeting in 2019)

Donald R. Parfet		Lisa A. Payne
AGE: 64		AGE: 58
DIRECTOR SINCE: 2012		DIRECTOR SINCE: 2006
POSITION:   • Managing Director, Apjohn Group, LLC, a business development company, since 2000   • General Partner, Apjohn Ventures Fund, Limited Partnership, a venture capital fund, since 2003		POSITION:   • Chairman of the Board of Soave Enterprises, LLC, a privately held diversified management and investment company (through March 2017)   • President of Soave Real Estate Group (through March 2017)
RELEVANT SKILLS AND EXPERIENCE:   As an executive with responsibilities for numerous global businesses, Mr. Parfet brings extensive financial and operating experience to our Board, including financial and corporate staff management responsibilities and senior operational responsibilities for multiple global business units. His experience in business development and venture capital firms provides our Board with a valued perspective on growth and strategy. He is also experienced in leading strategic planning, risk assessment, human resource planning and financial planning and control. His global operating experience, strong financial background and proven leadership capabilities are especially important to our Board’s consideration of product and geographic expansion and business development opportunities.		RELEVANT SKILLS AND EXPERIENCE:   Ms. Payne possesses extensive financial, accounting and corporate finance expertise gained through her experience as Chief Financial Officer of Taubman Centers and as an investment banker. Her financial focus and proficiency helped guide Taubman Centers through the economic recession and increase shareholder value. She brings to our Board an understanding of growth strategy. In addition, Ms. Payne’s extensive experience in real estate investment, development and acquisition gives her an informed and thorough understanding of macroeconomic factors that may impact our business.
BUSINESS EXPERIENCE:   • Lead Director of Kelly Services, Inc. and Rockwell Automation, Inc., Director of Sierra Oncology, Inc.   • Senior Vice President, Pharmacia Corporation, a pharmaceutical company, from which he retired in 2000   • Served as a senior corporate officer of Pharmacia & Upjohn and The Upjohn Company, predecessors of Pharmacia Corporation   • Director and trustee of a number of charitable and civic organizations		BUSINESS EXPERIENCE:   • Director of J.C. Penney Company, Inc. and Rockwell Automation, Inc.   • Taubman Centers, Inc.:   • Vice Chairman (2005-2016)   • Chief Financial Officer (2005-2015)   • Executive Vice President and Chief Financial and Administrative Officer (1997-2005)   • During the past five years, served as director of Taubman Centers, Inc.   • Investment banker, Goldman, Sachs & Co. (1987-1997)

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Reginald M. Turner
AGE: 57
DIRECTOR SINCE: 2015
POSITION:
Attorney and Member, Clark Hill PLC, a Detroit, Michigan-based law firm, since April 2000, and currently serves on its Executive Committee
RELEVANT SKILLS AND EXPERIENCE:
As an accomplished litigator and legal advisor with expertise in labor and employment law and government relations, Mr. Turner brings to our Board substantial insight in these areas. His background, coupled with his service as a director of a financial institution and a member of its enterprise risk committee, make him a valuable asset to our Board in the areas of risk management and finance. Mr. Turner has numerous and varied experiences in business, civic and charitable leadership roles, and his skills and insight benefit our Board as it considers issues of risk management, corporate governance and legal risk.
BUSINESS EXPERIENCE:
•  Director of Comerica Incorporated since 2005   •  Past President of the National Bar Association and past President of the State Bar of Michigan   •  Active in public service and with civic and charitable organizations, serving in leadership positions with the Detroit Public Safety Foundation and the Community Foundation for Southeast Michigan   •  Past chair of the United Way for Southeastern Michigan; Mr. Turner continues to serve on its executive committee

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BOARD OF DIRECTORS

Our Board of Directors is committed to maintaining our high standards of ethical business conduct and corporate governance principles and practices.

Leadership Structure of our Board of Directors

Mr. J. Michael Losh was appointed as Chairman of our Board on May 4, 2015. At that time, Mr. Losh also became the Chair of our Corporate Governance and Nominating Committee. Mr. Losh has served on our Board since 2003, including as the Chair of our Audit Committee from 2008-2015.

Responsibilities of our Chairman of the Board

As an independent Chairman of our Board, Mr. Losh has a strong working relationship with the other directors. His responsibilities include:

Separation of our Chairman of the Board and CEO Roles

Our Board believes that its leadership structure is in the best interests of the Company and our stockholders at this time; however, our Board has no policy with respect to the separation of the roles of CEO and Chairman and believes that this matter should be discussed and determined by the Board from time to time, based on all of the then-current facts and circumstances. If the roles of Chairman and CEO are combined in the future, the role of Lead Director could become part of our Board leadership structure.

Communications with our Chairman of the Board

If you are interested in contacting the Chairman of our Board, you may send your communication in care of our Secretary to the address specified in “Communications with Our Board of Directors” below.

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Director Independence

Our Corporate Governance Guidelines require that a majority of our directors qualify as “independent” under the requirements of applicable law and the New York Stock Exchange’s listing standards.

Director Independence Standards

For a director to be considered independent, our Board must determine that the director does not have any direct or indirect material relationship with us. Our Board has adopted standards to assist it in making a determination of independence for directors. These standards are posted on our website at www.masco.com.

Assessment of our Directors’ Independence

Our Board has determined that eight of our ten current directors, including all of our non-employee directors other than Mr. Manoogian, are independent. As an employee, Mr. Allman, our President and Chief Executive Officer, is not an independent director. Our independent directors are Messrs. Alexander, Losh, O’Herlihy, Parfet, Plant and Turner, Ms. Payne and Ms. Van Lokeren.

In making its independence determinations, our Board reviewed all transactions, relationships and arrangements for the last three fiscal years involving each non-employee director and the Company. In evaluating Mr. O’Herlihy’s independence, our Board considered our purchases of goods from Illinois Tool Works Inc. and its subsidiaries. The aggregate amount of these purchases was approximately $0.8 million in 2016. Illinois Tool Works has reported revenue of $13.6 billion in 2016. Our Board does not believe that Mr. O’Herlihy has a material interest in these transactions.

Our Board also determined that we did not make any discretionary charitable contributions exceeding the greater of $1 million or 2% of the revenues of any charitable organization in which any of our directors was actively involved in the day-to-day operations.

Committee Member Independence Assessment

Our Board has determined that each member of our Audit Committee, Compensation Committee and Governance Committee qualifies as independent.

Board Refreshment

Our Governance Committee periodically assesses the composition of our Board by reviewing the skills and expertise currently represented on our Board. The Governance Committee also reviews current director tenure, including whether any vacancies are expected on our Board due to retirement or otherwise. In 2016, our Board engaged in a planning exercise to provide input to our Governance Committee on our committee structure and composition and anticipated skills and expertise that would be valuable to our Board in the future.

Director Refreshment

Five new independent directors have joined our Board since December 2012, bringing fresh and diverse perspectives. These directors have particular strength in the areas of executive management, financial expertise, global operations, business strategy, brand management, risk management, labor and employment law and government relations. We believe the addition of these new directors, combined with our directors who have experience with us, provides a desirable balance of deep, historical understanding of our Company and new perspectives, resulting in strong guidance and oversight to our executive management team.

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Chairman and Committee Refreshment

In May 2015, our Board appointed Mr. Losh as our new independent Board Chairman. Mr. Losh has been a member of our Board since 2003, and served as our Audit Committee Chair from 2008 to 2015, stepping down from that position when he was appointed as Chair of our Governance Committee. Additionally, in May 2015, new Chairs were appointed to our Audit and Compensation Committees.

Board Membership and Composition

Board Membership

Our Governance Committee believes that directors should possess exemplary personal and professional reputations, reflecting high ethical standards and values. The expertise and experience of directors should provide a source of advice and guidance to our management. A director’s judgment should demonstrate an inquisitive and independent perspective with acute intelligence and practical wisdom. Directors should be free of any significant business relationships which would result in a potential conflict in judgment between our interests and the interests of those with whom we do business. Each director should be committed to serving on our Board for an extended period of time and to devoting sufficient time to carry out the director’s duties and responsibilities in an effective manner for the benefit of our stockholders. Our Governance Committee also considers additional criteria adopted by our Board for director nominees and the independence, financial literacy and financial expertise standards required by applicable law and by the New York Stock Exchange.

Board Composition

Neither our Board nor our Governance Committee has adopted a formal Board diversity policy. However, as part of its assessment of Board composition and evaluation of potential director candidates, our Governance Committee considers whether our directors hold diverse viewpoints, professional experiences, education and other skills and attributes that are necessary to enhance Board effectiveness. In addition, our Governance Committee believes that it is desirable for Board members to possess diverse characteristics of race, national and regional origin, ethnicity, gender and age, and considers such factors in its evaluation of candidates for Board membership.

Director Candidate Recommendation

The Governance Committee uses a number of sources to identify and evaluate director nominees. It is the Governance Committee’s policy to consider director candidates recommended by stockholders. All Board candidates, including those recommended by stockholders, are evaluated against the criteria described above. Stockholders wishing to have the Governance Committee consider a candidate should submit the candidate’s name and pertinent background information to our Secretary at the address stated below in “Communications with our Board of Directors.” Stockholders who wish to nominate director candidates for election to our Board should follow the procedures set forth in our Certificate of Incorporation and Bylaws. For a summary of these procedures, see “2018 Annual Meeting of Stockholders” below.

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Risk Oversight

Our Board oversees our risk management practices, both directly and through its Committees. Our Board exercises its risk oversight through an annual review and discussion of a comprehensive analysis prepared by management on material risks facing us and related mitigating activities; updates regarding these risks are presented at each subsequent Board meeting. Our President and Chief Executive Officer, as the head of our management team and a member of our Board, assists our Board in its risk oversight function and leads those discussions.

Key risk oversight responsibilities of our Board, Audit Committee and Compensation Committee are as follows:

Board Meetings and Attendance

Board Meetings

Our Board held five meetings in 2016, one of which focused primarily on reviewing our long-term strategic plan with management.

Meeting Attendance

Each director attended at least 75% of our Board meetings and applicable committee meetings that were held in 2016 while such person served as a director. It is our policy to encourage directors to attend our Annual Meeting of Stockholders, and all of our directors except Mr. Alexander attended our 2016 Annual Meeting.

Executive Sessions

Our non-employee directors frequently meet in executive session without management, and the independent directors meet separately at least once per year. Mr.  Losh, as our Chairman of the Board, presides over these executive sessions.

Communications with our Board of Directors

If you are interested in contacting our Chairman of our Board, an individual director, our Board as a group, our independent directors as a group, or a specific Board committee, you may send a communication, specifying the individual or group you wish to contact, in care of: Kenneth G. Cole, Secretary, Masco Corporation, 21001 Van Born Road, Taylor, MI 48180. We are relocating our corporate offices, and beginning on July 1, 2017, please send communications to P.O. Box 510987, Livonia, MI 48151.

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COMMITTEES OF OUR BOARD OF DIRECTORS

The standing committees of our Board are the Audit Committee, the Compensation Committee and the Governance Committee. These committees function pursuant to written charters adopted by our Board. The committee charters, as well as our Corporate Governance Guidelines and our Code of Business Ethics, are posted on our website at www.masco.com and are available to you in print from our website or upon request.

Audit Committee
5 meetings in 2016
All members are independent and financially literate
Ms. Payne and Messrs. Alexander, O’Herlihy, Parfet and Plant qualify as “audit committee financial experts” as defined in Item 407(d)(5)(ii) of Regulation S-K

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Organization and Compensation Committee
7 meetings in 2016
All members are independent

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Corporate Governance and Nominating Committee
3 meetings in 2016
All members are independent

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DIRECTOR COMPENSATION PROGRAM

Our non-employee directors receive the following compensation for service on our Board:

Annual Equity Retainer (row a): The restricted stock is granted under our Non-Employee Directors Equity Program.

Annual Governance Committee Chair Cash Retainer (row b): The Governance Committee Chair retainer is not paid if the director who chairs that committee also serves as the Chairman of our Board. Currently Mr. Losh serves as both our Chairman of the Board and Governance Committee Chair so he does not receive the Governance Committee Chair retainer.

Meeting Fee (row c): Our Board may approve the payment of meeting fees to directors serving on three or more standing committees or serving as members of a special committee constituted by our Board. No such fees were paid for 2016.

Other Compensation

Our non-employee directors may also receive the following benefits, which are available to all of our employees:

In addition, if space is available, a director’s spouse is permitted to accompany a director who travels on Company aircraft to attend Board or committee meetings.

Annual Review of our Director Compensation Program

Our Governance Committee reviews our director compensation program annually, including reviewing an analysis of the competitiveness of the program, and recommends any changes to our Board. In 2016, upon the recommendation of our Governance Committee, our Board made the following changes to our director compensation program:

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DIRECTOR COMPENSATION TABLE

The following table reflects 2016 compensation paid to our directors, other than Mr. Allman, who is also a Company employee and receives no additional compensation for his services as a director.

2016 Director Compensation

Restricted Stock Awards (column a): In May 2016, we granted 4,100 shares of restricted stock to each non-employee director, except for Mr. Archer, whose service as a director ended on May 9, 2016. The amounts reported in this column reflect the aggregate grant date fair value of the shares, calculated in accordance with accounting guidance. Directors only realize the value of restricted stock awards over time because the vesting of awards occurs pro rata over three years, and one-half of these shares must be retained until completion of their service on our Board.

All Other Compensation (column b): The amounts reported in this column reflect our contributions in 2016 to eligible tax-exempt organizations under our matching gifts program, as described above, for which directors receive no direct financial benefit. The matching contributions were attributable to director charitable contributions made in 2016 and 2015.

Unvested Restricted Stock and Stock Options Outstanding: The following table reports the aggregate number of shares of unvested restricted stock, and the aggregate number of stock options outstanding, held on December 31, 2016 by each director who was serving on that date. Our Board ceased granting stock options to non-employee directors in 2010; however, a portion of the stock options granted before then remains outstanding. The stock options outstanding for Mr. Manoogian were granted while he was a Company employee.

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RELATED PERSON TRANSACTIONS

Our Board of Directors has adopted a Related Person Transaction Policy that requires our Board or a committee of independent directors to approve or ratify any transaction involving us in which any director, director nominee, executive officer, 5% beneficial owner or any of his or her immediate family members has a direct or indirect material interest.

Related Persons Transaction Policy

Our policy covers:

Our policy excludes transactions determined by our Board not to involve a material interest of the related person, such as:

Assessing Related Person Transactions

Our policy requires directors, director nominees and executive officers to provide prompt written notice to our Secretary of any related transaction so it can be reviewed by our Governance Committee. If the Governance Committee determines that the related person has a direct or indirect material interest in the transaction, it will consider all relevant information to assess whether the transaction is in, or not inconsistent with, our best interests and the best interests of our stockholders. The Governance Committee annually reviews previously-approved ongoing related transactions to determine whether the transactions should continue.

Related Persons Transactions for 2016

There have been no transactions since January 1, 2016 required to be described in this proxy statement that were not subject to review, approval or ratification in accordance with this policy.

On-Going Related Person Transactions

Our Governance Committee previously approved the on-going related transaction described below.

Transactions with Mr. Richard A. Manoogian

In accordance with the terms of our 2009 agreement with Mr. Manoogian, who transitioned to Chairman Emeritus in 2012, we provide him with office space, an administrative assistant and reasonable equipment and supplies for his personal use, which together have an aggregate annual value of approximately $270,000. We charge Mr. Manoogian the full cost for additional office space and related equipment and supplies used by his personal and charitable foundation staff and for a driver and the incremental cost for his use of our aircraft (with prior approval from our CEO), all of which aggregated approximately $246,000 for 2016.

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Proposal 1: Election of Class II Directors

The term of office of our Class II Directors, who are Keith J. Allman, J. Michael Losh and Christopher A. O’Herlihy, expires at this meeting.

Our Board proposes the re-election of Messrs. Allman, Losh and O’Herlihy to serve as Class II Directors. The term of the Class II Directors elected at this Annual Meeting will expire at the Annual Meeting of Stockholders in 2020, or when their respective successors are elected and qualified.

Our Board expects that the persons named as proxy holders on the proxy card will vote the shares represented by each proxy for the election of each director nominee unless a contrary direction is given. If, prior to the meeting, a nominee is unable or unwilling to serve as a director, which our Board does not expect, the proxy holders may vote for an alternate nominee recommended by our Board, or our Board may reduce its size.

Information regarding each of our director nominees can be found above in “Director Nominees for Class II.”

Our Board recommends a vote FOR the election to our Board of Directors of each of the following Class II Director nominees:

The affirmative vote of a majority of the votes cast by shares entitled to vote is required for the election of directors. Abstentions and broker non-votes are not counted as votes cast, and therefore do not affect the outcome of the election.

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HOW OUR 2016 FINANCIAL PERFORMANCE IMPACTED OUR EXECUTIVE OFFICERS’ COMPENSATION

We delivered strong financial results in 2016. Our sales for the full year increased 3% to $7.4 billion, and we increased our operating profit margin to 14.3%. Based on our strong financial performance in 2016, we exceeded the target goals for our performance-based compensation programs, which include:

The following tables reflect our target goals for our 2016 annual performance program and our 2014-2016 LTCIP and our performance relative to those goals:

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Based on this performance, we paid the following compensation to our current executive officers under our 2016 annual performance program and 2014-2016 LTCIP:

OTHER PERFORMANCE COMPENSATION WE PAID IN 2016

We grant stock options annually to our executive officers to align their long-term interests with those of our stockholders by reinforcing the goal of long-term share price appreciation. In 2016, our Compensation Committee awarded the following stock options to our executive officers, which vest ratably over five years:

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OUR EXECUTIVE OFFICERS’ PERFORMANCE-BASED TARGET COMPENSATION

Our target compensation mix for our CEO and our other executive officers reflects our emphasis on long-term, performance-based compensation that incentivizes our executive officers to make strategic decisions that will strengthen our business and create long-term value for our stockholders. In 2016, 86% of our CEO’s target compensation and 73% of our other executive officers’ target compensation was performance-based, as shown in the graphs below.

OUR COMPENSATION PROGRAM HIGHLIGHTS

Our compensation practices include:

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Our compensation practices do not include:

STOCKHOLDER ENGAGEMENT

At our 2016 Annual Meeting, 98% of the votes cast on our say-on-pay proposal approved the compensation we paid to our executive officers. Although the say-on-pay vote is advisory and non-binding, our Compensation Committee believes this approval percentage indicates strong support for our continued efforts to enhance our pay-for-performance practices, and our Compensation Committee concluded that our stockholders endorse our current executive compensation programs and policies.

In 2016, we continued our robust stockholder engagement program through which we encourage certain of our stockholders to engage in dialogue with us twice per year. During the year, we reached out to stockholders holding over 40% of our outstanding shares. We received positive feedback from the stockholders with whom we spoke regarding the structure of our compensation programs and practices, which was reflective of the strong support we received for our say-on-pay proposal over the past four years. We provide reports on the feedback we receive to our Compensation Committee and Governance Committee.

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COMPENSATION DECISIONS IN 2016

Our 2016 Financial Performance

We delivered strong financial results again in 2016. Our reported sales for the full year increased 3% to $7.4 billion, and we increased our operating profit margin to 14.3%. We have maintained our positive momentum in 2016 across most of our business segments, and as a global leader in the design, manufacture and distribution of branded home improvement and building products, our longstanding commitment to innovation continues to be a key factor in our success.

In addition to delivering sales and profit growth, in 2016 we returned capital to our stockholders by repurchasing nearly 15 million shares of stock and increasing our annual dividend by approximately 5%. Finally, we continued the execution of our strategy to position us for future growth by focusing on leveraging opportunities across our businesses, driving the full potential of our core businesses and actively managing our portfolio.

How We Performed Against our Performance Compensation Goals

Our 2016 annual performance program was based on operating profit and working capital as a percent of sales metrics. We exceeded the target goals for this program and achieved a performance percentage of 141%. As a result, consistent with our commitment to pay-for-performance, our executive officers earned restricted stock awards and cash bonuses based on this achievement (see “Our 2016 Annual Performance Program” below).

Our LTCIP for the three-year period from 2014 to 2016 was based on a return on invested capital (“ROIC”) metric, and we significantly improved our ROIC over the three-year period. Our adjusted ROIC in 2014, 2015 and 2016 was 10.6%, 11.6%, and 14.0%, respectively, for an average adjusted ROIC of 12.1%. This level of performance exceeded the target goal for this program, and we achieved a performance percentage of 132% (see “Our Long Term Cash Incentive Program” below).

Our 2016 Annual Performance Program

Program Opportunities

We provide annual performance-based restricted stock and cash bonus opportunities to our executive officers to emphasize achievement of rigorous annual performance goals, provide incentive to achieve our critical business objectives, and align our executive officers’ interests with those of our stockholders.

Our Compensation Committee establishes the restricted stock and cash bonus opportunities available to each executive officer as a percent of the officer’s annual base salary. An executive officer can earn up to the maximum opportunity as both a restricted stock award and a cash bonus payment. Our executive officers had the following opportunities in 2016 under our annual performance program:

Performance Metrics

Our Compensation Committee selected operating profit and working capital as a percent of sales metrics for our annual 2016 performance program because it believed that improvement in these metrics would continue to drive stockholder value. These metrics are easily derived from our audited financial statements, which our Compensation

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Committee believes provides transparency both for our stockholders (as requested from stockholders when we sought feedback) and our executive officers. Our Compensation Committee gave a 75% weighting to the operating profit metric and a 25% weighting to the working capital as a percent of sales metric.

Program Targets and Achievement

In setting our performance targets, our Compensation Committee reviews our operating forecast for the year, taking into account general economic and industry conditions. In establishing the 2016 performance targets, it was expected there would be an improvement in the overall economy, that consumer spending for both large and small home improvement projects and housing starts would increase in 2016 and that there would be improved performance from all of our businesses. Our Compensation Committee also expected that we would continue to incur incremental expenses related to growth investments and the launch of new programs with our retail and dealer customers.

Based on our strong financial performance in 2016, we achieved 147% of our operating profit target and 120% of our working capital as a percent of sales target. After weighting the operating profit metric at 75% and the working capital as a percent of sales metric at 25%, our actual performance percentage for the 2016 annual performance program was 141% of target:

To determine achievement of our operating profit performance target, we adjusted our 2016 reported operating profit from continuing operations of $1,053 million by $16 million for rationalization charges and other items. Our operating profit for purposes of the annual performance program was $1,069 million.

To determine achievement of our working capital as a percent of sales performance target, we define working capital as a percent of sales as the quarter-end averages of our reported accounts receivable and inventories, less accounts payable, divided by our reported sales for the year. For 2016, our working capital as a percent of sales was 12.6%.

Compensation Paid Under the 2016 Program

We calculated the actual cash bonuses to be paid and restricted stock award values to be granted to our executive officers under the 2016 annual performance program by multiplying the target opportunities for each executive officer by the 141% performance percentage and multiplying that result by each executive officer’s base salary, as follows:

Performance Metric Threshold (40% Payout) Target (100% Payout) Maximum (200% Payout) Percentage Attained Weighting Performance Percentage Operating Profit (in millions) $897 $1,069 $1,010 $1,135 147% × 75% = 111% Working Capital as a Percent of Sales 13.1% 12.6% 12.7% 12.2% 120% × 25% = 30% Performance Percentage 141%

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Value of Restricted Stock Award (column a): The number of shares of restricted stock granted is determined by dividing the value of the restricted stock award by the closing price of our common stock on the grant date and rounding to the nearest ten shares. The amount reflected in this column is the value of the shares of restricted stock received. Our executive officers do not realize the value of restricted stock awards until those awards vest over the five-year vesting period following the grant date.

Our Long Term Cash Incentive Program

Program Opportunities

We have a LTCIP that provides a meaningful incentive for our executive officers to achieve long-term growth and profitability. A performance award in cash is earned under the LTCIP if we achieve a performance goal over a three-year period.

Our Compensation Committee establishes the LTCIP opportunity available to each executive officer as a percent of the executive officer’s annual base salary at the beginning of each LTCIP three-year performance period. Messrs. O’Reagan and Kastner were not executive officers in 2014 at the time the 2014-2016 LTCIP was established, and therefore did not participate in the 2014-2016 LTCIP.

Messrs. Allman, Sznewajs and Cole had the following LTCIP opportunities under the 2014-2016 LTCIP:

Performance Metric

Our Compensation Committee chose the ROIC performance metric because ROIC reinforces our executive officers’ focus on capital efficiency and consistent return on capital. Additionally, our stockholders have told us that ROIC is a measure of importance to them in their assessment of our long-term stockholder value.

Program Targets and Achievement

Our Compensation Committee established the following ROIC goals and corresponding payout percentages for the 2014-2016, 2015-2017 and 2016-2018 LTCIP performance periods. These performance goals are consistent with our long-range business plan and require a high level of performance to achieve:

Our Compensation Committee establishes performance goals at the beginning of each three-year period. After the spin off of TopBuild Corp., our Compensation Committee determined it was appropriate to adjust the ROIC goals for the 2014-2016 and 2015-2017 performance periods to reflect the change in our business as a result of the spin off. Although our Compensation Committee determined to keep the 2016-2018 performance period goals the same as the prior three-year performance period, our Compensation Committee believes we will need to continue to produce strong operating profit growth to achieve a high level of return on invested capital. The use of ROIC for our LTCIP in conjunction with operating profit growth goals in our annual performance program helps ensure our executive officers are encouraged to make new, profitable investments to achieve these goals.

From 2014 to 2016, we substantially improved our ROIC through our improved operating performance, cost reductions, restructuring activities, product innovations, new product introductions and market share gains. As a

Performance Metric Threshold (40% Payout) Target (100% Payout) Maximum (200% Payout) Performance Percentage Return on Invested Capital 7.5% 12.1% 10.5% 15.5% 132%

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result, we achieved adjusted ROIC of 14.0% in 2016. Under the LTCIP, we use the average annual ROIC performance over a three-year period to determine the award amount. Our average adjusted ROIC was 12.1% for the 2014-2016 performance period, resulting in a performance percentage of 132%.

Under the LTCIP, we define ROIC as after-tax operating income from continuing operations adjusted to exclude the effect of special charges and certain other non-recurring income and expenses, divided by adjusted invested capital. Adjusted invested capital includes shareholders’ equity, which we adjust to add back the cumulative after-tax impact of goodwill and intangible asset impairment charges and to exclude the impact of certain non-operating income and expenses and the effects of special charges, plus short-term and long-term debt minus cash. Our Compensation Committee believes that these adjustments are important to reflect our actual investment at the time we invested in our current businesses. Following is our ROIC in 2014, 2015, and 2016 taking these adjustments into account:

Compensation Paid Under the 2014-2016 Program

The following table reflects the cash awards paid to Messrs. Allman, Sznewajs and Cole under the 2014-2016 LTCIP. We calculated the award amount by multiplying the target opportunity for each executive officer by 132%, the performance percentage achieved, and multiplying the result by each executive officer’s base salary in 2014.

Base Salary in 2014 (column a): Messrs. Allman and Sznewajs received salary increases in February 2014. Their 2014-2016 LTCIP cash award is based on their base salary after their February 2014 salary increase. Mr. Cole’s 2014-2016 LTCIP cash award is based on his salary at the start of the three-year performance period.

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Stock Options Granted in 2016

We grant stock options annually to our executive officers. The value of the stock option grants approximates the target opportunity for each executive officer with respect to our annual performance program. Our Compensation Committee believes that stock options are an important component of our executive compensation program because they align our executive officers’ long-term interests with those of our stockholders by reinforcing the goal of long-term share price appreciation. In 2016, our Compensation Committee awarded the following stock options to our executive officers, which vest ratably over five years:

Value of Stock Options Awarded (column a): The value of stock options awarded is the aggregate grant date fair value of stock options, calculated in accordance with accounting guidance.

Other Components of our Executive Compensation Program

Base Salary

We pay our executive officers a base salary to provide each of them with a minimum, base level of cash compensation. During 2016, our Compensation Committee engaged its independent compensation consultant, Semler Brossy Consulting Group, LLC (“Semler Brossy”), to perform a comprehensive analysis of CEO pay levels within our peer group, as well as for similarly situated companies outside of that group. Based on this analysis and our Board’s assessment of Mr. Allman’s performance, our Compensation Committee determined that Mr. Allman’s salary of $1,100,000 should be increased 5% to $1,155,000.

Our Compensation Committee also approved a 3% increase in 2016 for Mr. Sznewajs, our Vice President, Chief Financial Officer, adjusting his salary from $644,000 to $663,300, and for Mr. Cole, our Vice President, General Counsel and Secretary, adjusting his salary from $415,000 to $427,500. The Committee approved an 8% market increase in 2016 for Mr. O’Reagan, our Group President, Global Plumbing, adjusting his salary from $463,500 to $500,000 and a 10% market increase for Mr. Kastner, our Vice President, Masco Operating System, adjusting his salary from $350,000 to $385,000 and increasing his target incentive percentages from 50% to 55%. In determining the appropriate compensation adjustments for our executive officers, our Compensation Committee conducts a review with our CEO of the performance and contributions of our executive officers in the prior year; considers market survey data in published executive compensation surveys for companies with annual revenues similar to ours and significant changes in the scope and complexity of the executive officer’s role; and receives input from Semler Brossy.

Perquisites and Other Compensation

We offer a limited number of perquisites to our executive officers, as follows:

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Retirement Programs

We maintain the following defined contribution retirement plans for all of our employees, including our executive officers:

Our executive officers may also be entitled to receive benefits under the following frozen defined benefit plans:

In 2010, we froze accruals in all of these plans, as well as in all of our other defined benefit plans offered to our U.S. employees. Consequently, the pension benefits ultimately payable to all executive officers are essentially fixed, although Mr. Sznewajs’s vesting in the frozen accrued SERP benefit has continued. Mr. Sznewajs will not be fully vested in his frozen SERP benefit unless he continues to be employed with us until he is age 55, or we have a change in control (see “Payments Upon a Change in Control” below).

OUR EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS

We Provide Long-Term Equity Incentives

We believe that having a significant ownership interest in our stock is critical to aligning the interests of our executive officers with the long-term interests of our stockholders. Accordingly, restricted stock awards and stock options are an important component of our executive officers’ compensation. Our equity awards are priced based on the closing price on the date of grant, unless the grant date occurs within seven days prior to the release of our financial results. In that event, the grant is effective at the end of the second trading day after the release of the results and priced based on the closing price of our common stock on that date. Our equity awards vest in 20% installments over five years. Five-year vesting defers the executives’ realization of the full benefit of equity-based compensation for a substantial period of time and is longer than typical market practice. The value our executive officers ultimately realize from equity awards depends on the long-term performance of our common stock. Further, equity awards do not vest immediately upon retirement. Instead, following retirement, equity awards generally continue to vest in accordance with the remaining vesting period. Our executive officers understand that our performance will continue to impact them financially even after they retire, thereby reinforcing their focus on the long-term enhancement of stockholder value.

We Have a Long-Term Performance Program

Through our stockholder engagement we have learned that our stockholders strongly support a performance compensation program that measures performance over several years. Based on this feedback, we implemented our LTCIP, which measures performance over a three-year period. For the 2014-2016 performance period we measured performance based on ROIC. As a result, a significant portion of our executive officers’ compensation opportunity is based on the achievement of a long-term performance goal.

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We Can Clawback Incentive Compensation

If we restate our financial statements, other than as a result of changes to accounting rules or regulations, our Compensation Committee may recover from our executives incentive compensation that was paid or granted in the three-year period prior to the restatement, regardless of whether misconduct caused the restatement.

We Require Minimum Levels of Stock Ownership by our Executives

We require minimum stock ownership for our executive officers to further reinforce the alignment of their long-term financial interests with the interests of our stockholders. This requirement ensures that our executive officers maintain a substantial investment in our common stock and that a meaningful amount of each executive officer’s personal net worth is invested in our Company. Our executive officers are required to achieve the stock ownership necessary to meet the stock ownership requirements within three years of becoming subject to them.

Our Compensation Committee reviews our executive officers’ ownership of our common stock annually to ensure compliance with our stock ownership guidelines. Our executive officers’ direct stock holdings and unvested restricted stock awards are counted toward satisfaction of the guidelines. As of December 31, 2016, when the closing price of our common stock was $31.62, each of our executive officers met the stock ownership requirement.

We Adopted Double-Trigger Change of Control Provisions for our Equity Awards

The terms of our equity awards granted after 2012 provide that the awards will vest only if there is both a change in control of our Company and the recipient of the award is terminated from employment at the time of the change in control or within two years after the change in control, or terminates employment for good reason (for example, if his or her job duties have been significantly diminished) (“double-trigger” vesting), or if the recipient’s awards are not replaced with comparable awards by the acquiring company.

Our Compensation Committee Conducts an Annual Compensation Risk Evaluation

Our Compensation Committee annually conducts a risk assessment of our compensation programs, including our executive compensation programs, focusing on the components of our compensation programs and analyzing whether those components present undue risk to us. In 2016, our Compensation Committee reviewed its risk assessment process to assure it reflects current best practices. As a result of this review, our Compensation Committee incorporated in its risk assessment consideration of our material business risks and their potential impact on our compensation programs. The Compensation Committee has concluded that our programs do not encourage excessive risk taking. While the total compensation program is designed to balance short- and long-term rewards, the largest portion of the compensation opportunity for our executive officers is through equity- and cash-based long-term incentives. Executive officers are also required to own a substantial amount of our stock to further encourage a long-term perspective. Our annual cash bonus and stock award programs and our LTCIP have established maximum payout opportunities in line with competitive practice.

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The Structure of our Compensation Programs Encourages Executive Retention and Protects Us

We believe several features of our compensation programs, including the terms and conditions of our equity plan, improve our retention of our executive officers and also reduce the potential that executive officers might engage in post-termination conduct that would be harmful to us. Our executive officers generally forfeit unvested awards of restricted stock and stock options when their employment terminates prior to retirement. Executive officers may exercise vested options for a limited period of time following termination. The terms of our awards prohibit our executive officers from competing with us for one year after termination. If an executive officer violates this restriction, we can recover the gain the executive officer realized from awards that vested within two years prior to termination.

We Prohibit Excise Tax Gross-Up Payments

Our Board has adopted a policy prohibiting excise tax gross-up payments, except for such payments committed to in equity awards and frozen SERP agreements entered into prior to 2012. Specifically, equity awards made in 2012 and thereafter will no longer be included for purposes of determining future excise tax gross-up payments. With the exception of tax equalization gross-up payments made to employees in connection with reimbursement of relocation or foreign expatriate expenses incurred at our request, we do not provide other tax gross-up payments.

We Prohibit Hedging and Pledging

Our anti-hedging and anti-pledging policy prohibits our executive officers and our directors from engaging in any hedging transactions (including transactions involving options, puts, calls, prepaid variable forward contracts, equity swaps, collars and exchange funds or other derivatives) that are designed to hedge or speculate on any change in the market value of our equity or debt securities. Additionally, our executive officers and directors are prohibited from making any future purchases of our securities on margin or from pledging our securities as collateral for a loan, unless the arrangement is preapproved by our Governance Committee for any executive or by our Board for any director.

We Do Not Have Contractual Termination Arrangements

Our executive officers do not have employment contracts and are “at-will” employees who may be terminated at our discretion. We believe this preserves greater flexibility in our employment arrangements with our executive officers. Our executive officers also do not have change in control or severance contracts, although we have, from time to time, entered into severance arrangements with departing executive officers. For further discussion regarding change in control, see “Payments Upon Change In Control” below.

OUR ANNUAL COMPENSATION REVIEW PROCESS

We review and make decisions regarding the amount of eligible annual performance-based restricted stock awards, cash bonus payments and stock option grants in the first quarter of the year. We believe that determining these elements of compensation together at the beginning of the year gives us a better foundation for establishing our performance criteria and opportunity levels for the current year. This practice also better enables our Compensation Committee to determine our executive officers’ appropriate compensation mix and to align compensation with ongoing talent review and development in conjunction with our annual management talent review and development process.

Annual Management Talent Review and Development Process

Our annual management talent review and development process is used by our Compensation Committee and our CEO in making compensation decisions and for succession planning purposes. As part of this process, our CEO provides our Compensation Committee with an assessment of each executive who reports to him. The assessment includes an evaluation of each executive’s performance, development, progress

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and plans and potential for advancement, and considers market demand for the executive’s skill set. Our Compensation Committee also receives information, analyses and recommendations from our Vice President, Chief Human Resource Officer. While our Compensation Committee gives significant weight to the evaluations by our CEO, the final determination of compensation to be paid to our executive officers, including our CEO, rests solely with our Compensation Committee.

Compensation Data Considered by our Compensation Committee

Tally Sheets

Our Compensation Committee reviews a tally sheet that summarizes the various components of total compensation for our executive officers and other members of management. The tally sheet includes base salary, annual performance-based restricted stock and cash bonus, LTCIP awards, stock options, dividends on unvested shares of restricted stock, and our costs for the foregoing and for perquisites and other benefits, including the annual costs under retirement plans. The tally sheet allows our Compensation Committee to compare an executive officer’s compensation with the compensation of our other executive officers as part of its consideration of internal and external pay equity. Amounts actually realized by an executive officer from prior equity grants are not necessarily a factor in establishing current compensation, although the current value of outstanding equity awards may be considered by our Compensation Committee when assessing pay equity.

Market Data

Our Compensation Committee also reviews compensation for each of our executive officers with compensation information disclosed in the proxy statements of our peer group and with AonHewitt’s and Willis Towers Watson’s published compensation surveys for companies with annual revenues between $5 and $10 billion. When we achieve targeted levels of performance, our executive compensation program seeks to provide total target compensation (base salary, target annual bonus and the target value of long-term incentives) at approximately the median compensation level provided to executives in comparable positions at these companies. While our Compensation Committee generally targets total compensation for each executive officer at the median, it considers other factors, such as performance, the officer’s roles and responsibilities and the length of time the officer has served in the current position. Our Compensation Committee also reviews actual compensation paid as reported in published surveys and by our peer group to help inform individual pay decisions. We believe understanding market data allows us to attract and retain the talent we need while enabling us to manage our compensation expense.

The following table shows how our current executive officers’ target compensation and actual compensation in 2016 compared to market data published in 2016. Actual compensation is defined as the sum of base salary, actual cash bonuses paid under our annual program and under our LTCIP, and the grant date fair value of restricted stock awards and stock options.

Pay-for-Performance Alignment

Finally, our Compensation Committee reviews the overall pay-for-performance alignment of our CEO’s compensation compared to our peer group over one-year and three-year periods. During 2016, our Compensation Committee

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reviewed data showing that our total stockholder return was at the 85^th percentile of our peers and the 78^th percentile of the S&P 500 for the three-year period ended December 31, 2015. While our CEO’s target compensation approximated the median of our peer group during this three-year period, our CEO’s realizable compensation was at the 34^th percentile of our peer group. We define realizable compensation as the sum of salary, actual cash bonus, the target value of long-term cash incentives, and the value of restricted stock awards and stock options based on our stock price. The Compensation Committee believes there is good alignment between compensation paid to our CEO and our performance.

Our Peer Group

Given the many and diverse businesses in which we operate, composition of an appropriate peer group is challenging, as historically there have been few companies providing a mix of products similar to ours. Our Compensation Committee periodically considers the composition of our peer group and revised our peer group in 2016 by removing Jarden Corporation, SPX Corporation and Tyco International plc and adding Pentair plc and Fortive Corp. Our Compensation Committee believes that our current peer group listed below reflects the companies with whom we compete for executive talent and that have a range of annual revenues and business and operational characteristics similar to ours.

Retention of Discretion by our Compensation Committee

Our approach to executive compensation emphasizes corporate rather than individual performance, echoing our operating strategy that encourages collaboration and cooperation among our businesses and corporate functions. We believe that the effectiveness of our executive compensation programs requires not only objective, formula-based arrangements, but also the exercise of discretion and sound business judgment by our Compensation Committee. Accordingly, our Compensation Committee retains discretion to adjust the mix of cash and equity compensation, adjust the mix of restricted stock and stock options awarded, and offer different forms of equity-based compensation. With this discretion, our Compensation Committee is best able to reward the individual contributions of each executive officer and to respond to an executive’s expanding responsibilities, market practices and our changing business needs.

In addition to granting performance-based restricted stock based on prior year performance, our Compensation Committee also has the discretion to award shares of time-based restricted stock to our executive officers, other than our CEO, if it determines that an executive officer has made outstanding individual contributions during the prior year. The total value of these awards cannot exceed 20% of the combined annual base salaries of the executive officers (excluding the salary of our CEO). No discretionary awards were made in 2016.

Outside Compensation Consultant

Our Compensation Committee has engaged Semler Brossy as its compensation consultant. Semler Brossy was chosen by our Compensation Committee based on its deep experience in the area of executive compensation and its creative and proactive approach in analyzing executive compensation practices and programs. During 2016, Semler Brossy attended Compensation Committee meetings, met with our Compensation Committee in executive sessions without our executive officers or other members of

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management, met individually with our Compensation Committee members and our Compensation Committee Chair, and advised our Compensation Committee on its overall implementation of our compensation objectives, on the Company’s peer group, on director compensation practices and on the compensation for our executive officers. After considering the factors promulgated by the SEC for assessing the independence of its advisers, our Compensation Committee has determined that the work of Semler Brossy has not raised any conflict of interest.

TAX TREATMENT

Section 162(m) of the Internal Revenue Code limits deductibility of annual compensation in excess of $1 million paid to our executive officers, unless this compensation qualifies as “performance-based.” Our stockholder-approved plan permits our Compensation Committee to grant cash and equity awards intended to qualify under Section 162(m) so that they may be deductible. Our Compensation Committee, however, believes it is in our interest to retain flexibility in our compensation programs. Consequently, in some circumstances, we have paid and intend to continue to pay compensation that may not qualify as deductible under Section 162(m).

CONCLUSION

We recognize the importance of attracting and retaining executive officers who can effectively lead our business, and in motivating them to maximize our corporate performance and create long-term value for our stockholders. We believe in rewarding our executive officers to a significant degree based on our performance. We continue to thoughtfully and thoroughly analyze our compensation practices and programs and to regularly reach out to a significant number of our stockholders to understand their perspectives regarding our compensation programs. We believe our compensation practices and programs strongly align our executive officers’ interests with the long-term interests of stockholders, reward our executive officers based on our performance and incentivize them to focus on our critical business objectives.

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Compensation Committee Report

The Organization and Compensation Committee, which is responsible for overseeing the Company’s executive compensation programs, has reviewed and discussed the Compensation Discussion and Analysis with management. Based on our review and discussion, the Organization and Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Masco’s proxy statement.

Donald R. Parfet, Chair

J. Michael Losh

Christopher A. O’Herlihy

Lisa A. Payne

Mary Ann Van Lokeren

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Proposal 2: Advisory Vote to Approve the Compensation of Our Named Executive Officers

We are seeking your advisory vote approving the compensation paid to our named executive officers (whom we refer to as “executive officers” in this Proposal 2). We believe the structure of our executive compensation programs promotes the long-term interests of our stockholders by attracting and retaining talented executives and motivating them to achieve our critical business objectives and to create long-term value for our stockholders.

At our 2016 Annual Meeting, we submitted a non-binding advisory proposal to our stockholders to approve the compensation paid to our executive officers (a “say-on-pay proposal”). Approximately 98% of the votes cast on our say-on-pay proposal approved the compensation paid to our executive officers. We believe that this strong approval resulted from our continued focus on pay-for-performance.

We delivered strong financial results in 2016, and in doing so, we exceeded the target goals for our performance-based compensation programs.

Our executive officers’ potential performance-based compensation represents a significant percentage of total annual target compensation. In 2016, the percentage of total target compensation (base salary, target annual cash bonus and restricted stock award and the target value of long-term incentives) that was performance-based was 86% for our CEO and 73% for our other executive officers.

We believe that having a significant ownership interest in our stock is critical to aligning the interests of our executive officers with the long-term interests of our stockholders. Accordingly, equity grants in the form of restricted stock awards and stock options are an important component of compensation for our executive officers.

Our Board recommends a vote FOR the following resolution providing an advisory approval of the compensation paid to our named executive officers:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the related materials disclosed in this proxy statement, is hereby approved.

Although the vote on this proposal is advisory and non-binding, our Compensation Committee and our Board will review and consider the result of the vote when making future determinations regarding our executive compensation programs. The affirmative vote of a majority of the votes cast by shares entitled to vote thereon is required for the approval of the foregoing resolution. Abstentions and broker non-votes are not counted as votes cast, and therefore do not affect the approval of the resolution.

Depending on the results of Proposal 3, we will hold the next advisory vote on compensation of our named executive officers in 2018, 2019 or 2020.

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Proposal 3: Advisory Vote on Frequency of Advisory Votes on Executive Compensation

We are also seeking your input with respect to the frequency of future stockholder advisory votes on compensation paid to our named executive officers. In particular, we are asking whether the advisory vote that is the subject of Proposal 2 should occur every 1, 2 or 3 years.

Our Board believes at this time that an annual advisory vote on the compensation of our named executive officers is appropriate. An annual advisory vote will allow us to continue to obtain information on stockholders’ views of the compensation of our named executive officers on a current and consistent basis. We also believe that an annual advisory vote will provide our Compensation Committee and our Board with more direct input from stockholders on our executive compensation policies, practices and procedures.

When voting on this Proposal you will have the option to choose whether to approve holding future advisory votes on the compensation of our named executive officers every 1, 2 or 3 years, or to abstain entirely from voting on the matter. If a frequency (1, 2 or 3 years) receives a majority of the votes cast by shares entitled to vote thereon, it will be deemed to be the frequency of the advisory vote on the compensation of our named executive officers recommended by stockholders. Abstentions and broker non-votes are not counted as votes cast, and therefore do not affect the selection of frequency on the outcome.

The vote on this proposal is advisory and is not binding; however, our Board will carefully consider the voting results when deciding when to call for the next advisory vote on executive compensation.

For the reasons discussed above, our Board recommends a vote for the selection of “1 YEAR” as the frequency with which stockholders will vote on executive compensation.

We will hold the next advisory vote on the frequency of advisory votes on executive compensation of our named executive officers in 2023.

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Compensation of Executive Officers

SUMMARY COMPENSATION TABLE

The following table reports compensation earned during the years indicated by Mr. Allman, our principal executive officer, Mr. Sznewajs, our principal financial officer, and Messrs. O’Reagan, Cole and Kastner, our three other most highly compensated executive officers in 2016. We refer to the individuals listed in the table collectively as our “executive officers.”

Year (column a): Information is included in the table only for those years in which the individual has served as an executive officer and was named in our Summary Compensation Table.

Salary (column b): Salary includes amounts voluntarily deferred by each executive officer as salary reductions under our 401(k) Savings Plan.

Stock Awards (column c): Based on SEC rules, this column reports the estimated fair value of the restricted stock award opportunity for the applicable performance year even though the restricted stock award is not granted until the following year. Although the SEC rules require the estimated fair value to be based on the probable outcome of the performance or service award at the grant date, this column reflects the actual awards for the 2016, 2015 and 2014 performance year, as applicable, since the grant date for the award occurred when the award was actually determined in early 2017, 2016 and 2015, respectively. The threshold, target and maximum dollar values applicable to 2016 performance are reported in the 2016 Grants of Plan Based Awards Table below. Our executive officers do not realize the value of restricted stock awards until those awards vest over the five-year vesting period following the grant date.

Option Awards (column d): This column reports the aggregate grant date fair value of stock options, calculated in accordance with accounting guidance. In determining the fair market value of stock options, we used the same assumptions that can be found in the notes to our financial statements included in our Annual Report on Form 10-K for the corresponding year. These amounts do not correspond to the actual value the executive officer will realize, which will depend on overall market conditions, the future performance of our common stock and the timing of exercise of the option.

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Non-Equity Plan Incentive Compensation (column e): The amounts reported in this column are based on the achievement of our performance targets, which are described in the Compensation Discussion and Analysis above, and include the annual performance-based cash bonuses that were earned for the year indicated and the performance-based payments under our LTCIP that were earned for the three-year period ending in the year indicated, as follows:

Change in Pension Value & Nonqualified Deferred Compensation Earnings (column f): This column reports changes in the sum of year-end pension values, which reflect actuarial factors and variations in interest rates used to calculate present values. Increases in pension values do not represent increased benefit accruals since benefits in our domestic defined benefit plans were frozen effective January 1, 2010. These values were obtained by comparing the present value of accumulated benefits for December 31 of the year indicated (shown for 2016 in the “2016 Pension Plan Table”) to the comparable amount for the prior year. We calculated the pension values for each of 2016, 2015 and 2014 using the same assumptions that can be found in the notes to our financial statements included in our Annual Report on Form 10-K for the corresponding years. The executive officers did not have any above-market earnings under any of the plans in which they participate. The 2016 Summary Compensation Table shows no increases for 2015, since all values decreased due to the effect of rising interest rate assumptions used in the calculations.

All Other Compensation (column g): We provided our executive officers with the following other benefits in 2016:

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GRANTS OF PLAN-BASED AWARDS

The following table provides information about:

Our Compensation Discussion and Analysis above describes our annual performance-based cash bonus and stock award opportunities, performance targets, grants of stock options and our LTCIP.