UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

COMMERCIAL METALS COMPANY

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

NOTICE OF ANNUAL MEETING

OF STOCKHOLDERS

To Be Held On January 9, 2019

We again are taking advantage of the rules of the Securities and Exchange Commission that allow issuers to provide electronic access to proxy materials over the Internet instead of mailing printed copies of those materials to each stockholder. We believe that furnishing these materials electronically allows us to more efficiently provide our stockholders with our proxy materials while reducing costs and reducing the impact of the Annual Meeting on the environment. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice Regarding the Availability of Proxy Materials you previously received. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials electronically, unless you elect otherwise.

You are invited to attend the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please vote your shares either of the following ways:

By Telephone

By Internet

By Mail

In Person

Call the toll-free number provided on the proxy card

Follow online instructions on the proxy card

Return the proxy card by mail

Attend the Annual Meeting with your ID

Instructions as described in the Notice Regarding the Availability of Proxy Materials you previously received. Proxies forwarded by or for banks, brokers, trusts or other nominees should be returned as requested by them. The prompt return of proxies will save the expense involved in further communication.

By Order of the Board of Directors,

PAUL K. KIRKPATRICK

Corporate Secretary

Irving, Texas

November 26, 2018

Table of Contents

To Be Held On January 9, 2019

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Commercial Metals Company (“we,” “CMC” or “the Company”) for use at the annual meeting of our stockholders to be held on Wednesday, January 9, 2019 at 10:00 a.m., Central Standard Time, in the Rhapsody Room at the Omni Mandalay Hotel at Las Colinas at 221 East Las Colinas Boulevard, Irving, Texas 75039 (the “Annual Meeting”), and at any and all postponements or adjournments of the Annual Meeting. The approximate date on which this proxy statement and accompanying proxy card are first being made available to stockholders is November 26, 2018.

In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing proxy materials to our stockholders on the Internet. You will not receive a printed copy of the proxy materials, unless you specifically request a printed copy. Instead, on or about November 26, 2018, we mailed to our stockholders a Notice Regarding the Availability of Proxy Materials containing instructions on how to access our proxy materials and annual report on the Internet. The Notice Regarding the Availability of Proxy Materials will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Notice Regarding the Availability of Proxy Materials also instructs you as to how you may submit your proxy on the Internet.

Shares represented by each proxy, if properly executed and returned to us prior to the Annual Meeting in accordance with the instructions in the accompanying proxy card and the Notice Regarding the Availability of Proxy Materials, will be voted as directed, but if not otherwise specified, will be voted as follows:

A stockholder executing a proxy may revoke it at any time before it is voted by giving written notice to the Corporate Secretary of the Company, by subsequently executing and delivering a new proxy or by voting in person at the Annual Meeting.

Stockholders of record can simplify their voting and reduce our cost by voting their shares via telephone or the Internet. The telephone and Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to vote their shares and to confirm that their instructions have been properly recorded. If a stockholder’s shares are held in the name of a bank, broker, trust or other nominee, the availability of telephone and Internet voting will depend upon the voting processes of the bank, broker, trust or other nominee. Accordingly, stockholders should follow the voting instructions on the form they receive from their bank, broker, trust or other nominee.

Stockholders who elect to vote via telephone or the Internet may incur telecommunications and Internet access charges and other costs for which they are solely responsible. The telephone and Internet voting facilities for stockholders of record will close at 11:59 p.m., Eastern Standard Time, on the evening before the Annual Meeting. Instructions for voting via telephone or the Internet are contained in the Notice Regarding the Availability of Proxy Materials you received.

Commercial Metals Company    2018 Proxy Statement    1

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

Only stockholders of record on November 19, 2018 are entitled to notice of and to attend and/or vote at the Annual Meeting or any adjournments of the Annual Meeting. A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination at our principal executive offices located at 6565 North MacArthur Boulevard, Suite 800, Irving, Texas 75039 for a period of ten days prior to the Annual Meeting. The list of stockholders will also be available for inspection at the Annual Meeting and may be inspected by any stockholder for any purpose germane to the Annual Meeting. Proof of ownership of Commercial Metals Company common stock, as well as a form of government-issued photo identification, must be presented in order to be admitted to the Annual Meeting. If your shares are held in the name of a broker, trust, bank or other nominee, you must bring proof of ownership with you to the meeting. A recent account statement, letter or proxy from your broker, trust, bank or other nominee will suffice.

Commercial Metals Company    2018 Proxy Statement    2

Commercial Metals Company    2018 Proxy Statement    3

PROXY STATEMENT SUMMARY

Commercial Metals Company    2018 Proxy Statement    4

PROXY STATEMENT SUMMARY

In addition, during the past 24 months, we accomplished a number of critical strategic objectives that have reshaped CMC for the future. First, as we announced in June 2017, we made the decision to exit our International Marketing and Distribution segment, selling CMC Cometals for $170.9 million and selling or shutting down the remaining operations in the U.S., Asia and Australia. Second, we completed the construction, startup and commissioning of our new steel micro mill in Durant, Oklahoma, becoming the first U.S. long products steel manufacturer to produce hot spooled rebar. Finally, we completed the acquisition of substantially all of the U.S. rebar manufacturing and fabrication assets of Gerdau, S.A., consisting of 33 fabrication facilities and four steel mini mills (the “Acquisition”). This $600 million strategic acquisition increased CMC’s global melt capacity by 60% to 7.2 million tons and dramatically expanded the geographic footprint of CMC’s rebar fabrication operations in the U.S.

While we believe these strategic transactions have positioned CMC for future success in our core steel making operations, we incurred significant costs and expenses during fiscal year 2018 in achieving these successes that negatively impacted our fiscal 2018 net income, including (1) a $13.1 million non-cash impairment charge in connection with the sale of a business in our International Marketing and Distribution segment, (2) $26.8 million of expenses related to the Acquisition, (3) $10.5 million of mill operational start-up costs (net of $3.0 million of incentives) and (4) $5.8 million in interest expense related to debt issued to finance the Acquisition.

The following table highlights additional information about our achievements during fiscal 2018:

 

2018 Net Earnings   $138.5M   $1.17 per diluted share						199%				Financial Results •  CMC achieved one year, and annualized three year and five year TSR of 16.9%, 14.1% and 10.7%, respectively. •  In fiscal 2018, we increased revenue by 21% to $4.6 billion from $3.8 billion in fiscal 2017. •  In fiscal 2018, we generated net earnings of $138.5 million, or $1.17 per diluted share, compared to net earnings of $46.3 million, or $0.39 per diluted share, in fiscal year 2017, representing a 199% increase.
2018 Net Sales   $4.6B						21%				Strategic Objectives •  We completed the exit of our International Marketing and Distribution segment, allowing us to reallocate capital to our core manufacturing operations in the U.S. and Poland, and improve our financial profile. •  We completed the construction, start-up and commissioning of our new steel micro mill in Durant, Oklahoma, becoming the first U.S. long products steel manufacturer to produce hot spooled rebar. •  On November 5, 2018, we closed the acquisition of certain U.S. rebar manufacturing and downstream fabrication assets of Gerdau, S.A. To fund the purchase price, we issued $350.0 million of senior unsecured notes due in 2026. •  We had record levels of shipments of steel products from our operations in the U.S. and Poland. •  We achieved the lowest safety incident rate in our Company’s history. •  We opened a new downstream separation facility in Lexington, South Carolina, which allows us to maximize the recovery of nonferrous metals and reduce residual waste streams. •  We began constructing our second spooler to produce hot spooled rebar at our Mesa, AZ micro mill, and we expect to start producing hot spooled rebar during our fourth fiscal quarter of 2019.

Commercial Metals Company    2018 Proxy Statement    5

PROXY STATEMENT SUMMARY

Commercial Metals Company    2018 Proxy Statement    6

PROXY STATEMENT SUMMARY

Commercial Metals Company    2018 Proxy Statement    7

PROXY STATEMENT SUMMARY

Commercial Metals Company    2018 Proxy Statement    8

PROXY STATEMENT SUMMARY

Commercial Metals Company    2018 Proxy Statement    9

Commercial Metals Company    2018 Proxy Statement    10

INFORMATION ABOUT THE MEETING AND VOTING

Management of the Company is not aware of any matters other than those described in this proxy statement that may be presented for action at the Annual Meeting. If you vote by proxy and any other matters are properly presented at the Annual Meeting for consideration, the proxy holders will have discretion to vote for you on those matters.

Voting by Mail.    You can vote by mail by requesting a printed copy of our proxy materials and by signing, dating and returning the proxy card you will then receive in the postage-paid envelope provided.

Voting via the Internet.    You can vote your shares via the Internet by following the instructions provided on the Notice Regarding the Availability of Proxy Materials. The Internet voting procedures are designed to authenticate your identity and to allow you to vote your shares and confirm that your voting instructions have been properly recorded. Voting by Internet authorizes the named proxies to vote your shares in the same manner as if you had submitted a validly executed proxy card.

Voting by Telephone.    You can vote your shares by telephone by following the instructions provided on the Notice Regarding the Availability of Proxy Materials. The telephone voting procedures are designed to authenticate your identity and to allow you to vote your shares and confirm that your voting instructions have been properly recorded. Voting by telephone authorizes the named proxies to vote your shares in the same manner as if you had submitted a validly executed proxy card.

Commercial Metals Company    2018 Proxy Statement    11

INFORMATION ABOUT THE MEETING AND VOTING

In contrast, if you purchased your shares through a bank, broker, trust or other nominee, the bank, broker, trust or other nominee will be the “stockholder of record” of those shares. Generally, when this occurs, the bank, broker, trust or other nominee will automatically put your shares into “street name,” which means that the bank, broker, trust or other nominee will hold your shares in its name or another nominee’s name and not in your name, but will keep records showing you as the real or “beneficial owner.” If you hold shares beneficially in street name, this proxy statement and any accompanying documents have been forwarded to you by your bank, broker, trust or other holder of record.

Under NYSE rules, if you hold your shares through a bank, broker, trust or other nominee and your bank, broker, trust or other nominee delivers this proxy statement to you, but you do not give instructions to the bank, broker, trust or other nominee, the bank, broker, trust or other nominee will have the discretion to vote on the ratification of the appointment of Deloitte & Touche LLP.

Pursuant to our Corporate Governance Guidelines, in an uncontested election of directors, any nominee for director who has a greater number of votes “against” his or her election than votes “for” such election

Commercial Metals Company    2018 Proxy Statement    12

INFORMATION ABOUT THE MEETING AND VOTING

(a “Majority Against Vote”) is required to promptly tender his or her resignation following certification of the stockholder vote. Such resignation will be effective only upon the acceptance thereof by the Board, and such director will continue in office until such resignation is accepted. The Nominating and Corporate Governance Committee shall promptly consider the tendered resignation and a range of possible responses based on the circumstances, if known, that led to the election results and recommend to the Board whether to accept or reject the resignation offer or whether other action should be taken with respect thereto. The Board of Directors will act upon such recommendation(s) within 120 days following certification of the stockholder vote and shall promptly disclose its decision regarding whether to accept the director’s resignation offer.

Any director who tenders a resignation pursuant to our Corporate Governance Guidelines shall not participate in either the Nominating and Corporate Governance Committee’s deliberations or recommendation or the Board’s deliberations, in each case regarding whether to accept the resignation offer or take other action. If directors who have tendered resignations constitute a majority of the directors then in office, then, with respect to each tendered resignation, all directors, other than the director who tendered the particular resignation under consideration, may participate in the deliberations and action regarding whether to accept or reject the tendered resignation or to take other action with respect thereto.

Commercial Metals Company    2018 Proxy Statement    13

INFORMATION ABOUT THE MEETING AND VOTING

Commercial Metals Company    2018 Proxy Statement    14

On the basis of filings with the SEC and other information, we believe that based on 117,630,606 shares of our common stock issued and outstanding as of November 19, 2018, the following persons beneficially owned more than five percent (5%) of our outstanding common stock:

Commercial Metals Company    2018 Proxy Statement    15

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information known to us about the beneficial ownership of our common stock as of November 19, 2018 by each director and nominee for director, our CEO, our Chief Financial Officer (“CFO”), the other executive officers included in the Summary Compensation Table, and all current directors and executive officers as a group based on 117,630,606 shares of our common stock issued and outstanding as of November 19, 2018. Unless stated otherwise in the notes to the table, each person named below has sole authority to vote and dispose of the shares listed.

Commercial Metals Company    2018 Proxy Statement    16

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires directors, executive officers and beneficial owners of more than ten percent (10%) of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and any of our other equity securities. Based solely upon our review of the copies of such forms received by us or written representations that no other forms were required from reporting persons, we believe that all such reports were submitted on a timely basis during the fiscal year ended August 31, 2018.

Commercial Metals Company    2018 Proxy Statement    17

Information about our Board and the Nominees

Our restated certificate of incorporation divides our Board into three classes. The Board currently consists of 9 directors with three directors in each of Classes I, II and III.

The term of office of the Class III directors expires at the Annual Meeting. There are three Class III nominees standing for election at the Annual Meeting. The term of the Class III directors elected at the Annual Meeting ends at the 2022 annual meeting of stockholders. The term of the Class I directors ends at the 2020 annual meeting of stockholders, and the term of the Class II directors ends at the 2021 annual meeting of stockholders.

Proxies cannot be voted for the election of more than three persons to our Board at the Annual Meeting.

Each nominee named in this proxy statement has consented to being named in this proxy statement and to serve if elected. If any nominee is unable to serve or for good cause will not serve, the shares represented by the proxies will be voted for the person, if any, designated by our Board to replace such nominee. However, CMC has no reason to believe that any nominee will be unavailable. All of the director nominees, as well as the continuing directors, plan to attend this year’s Annual Meeting. The following table sets forth information about the nominees and the continuing directors.

Summary of Changes to our Board in Fiscal 2018

On September 1, 2017, Barbara R. Smith assumed the role of CMC’s President and Chief Executive Officer and became a member of the Board. On January 10, 2018, Joseph Alvarado retired as the Chairman of the Board, and effective January 11, 2018, Ms. Smith assumed the role of Chairman of the Board. In November 2017, Mr. Anthony A. Massaro notified the Board that he would not stand for reelection to the Board at the 2018 annual meeting of stockholders. Effective January 10, 2018, Robert L. Guido retired from his position on the Board.

Commercial Metals Company    2018 Proxy Statement    18

PROPOSAL 1 — ELECTION OF DIRECTORS

Director Nominees

Class III – Term to Expire in 2022

Commercial Metals Company    2018 Proxy Statement    19

PROPOSAL 1 — ELECTION OF DIRECTORS

Commercial Metals Company    2018 Proxy Statement    20

PROPOSAL 1 — ELECTION OF DIRECTORS

Directors Continuing in Office

Class I – Term to Expire in 2020

Commercial Metals Company    2018 Proxy Statement    21

PROPOSAL 1 — ELECTION OF DIRECTORS

Class II – Term to Expire in 2021

Commercial Metals Company    2018 Proxy Statement    22

PROPOSAL 1 — ELECTION OF DIRECTORS

There is no family relationship between any of the directors, executive officers, or any nominee for director.

Vote Required

Directors are elected by majority vote, and cumulative voting is not permitted.

Our Board recommends a vote FOR the election of the nominees for director named above: Rhys J. Best, Richard B. Kelson and Charles L. Szews.

Commercial Metals Company    2018 Proxy Statement    23

Corporate Governance Practices.    Because corporate governance practices evolve over time, our Board reviews and approves our Corporate Governance Guidelines, committee charters and other governance policies at least once a year and updates them as necessary and appropriate. Our Board is guided by our Corporate Governance Guidelines, which addresses director responsibilities, director access to management, director orientation and continuing education, director retirement and the annual performance evaluations of the Board and its committees. The Corporate Governance Guidelines also directs that the Nominating and Corporate Governance Committee consider the periodic rotation of committee members and committee chairs as a means of introducing fresh perspectives and broadening and diversifying the views and experience represented on the committees of our Board.

Director Independence.    Our Board has determined, after considering all of the relevant facts and circumstances, that Mses. Avril and Raiss and Messrs. Best, Kelson, Mills, Smith, Szews and Winkler are independent, as “independent” is defined by the listing standards of the NYSE, because they have no direct or indirect material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us) that would cause the independence requirements of the NYSE listing standards not to be satisfied.

Board Leadership Structure.    Our Board has concluded that combining the roles of CEO and Chairman of the Board is the most effective leadership structure for CMC at the present time as it promotes unified leadership and direction for CMC, allowing for a single, clear focus for management to execute CMC’s strategy and business plans. The combination of the Chairman and CEO roles is balanced by the appointment of a Lead Director, as well as the majority of our Board being comprised of independent directors. Effective January 11, 2018, Ms. Smith assumed the role of Chairman of the Board. As discussed further below, the Lead Director is responsible for providing leadership to our Board when circumstances arise in which the joint role of the Chairman and CEO may be, or may be perceived to be, in conflict. The Lead Director also presides over those Board sessions that are attended only by independent directors. Our Board believes that having a Lead Director as part of its leadership structure promotes greater management accountability and ensures that directors have an independent contact on matters of concern to them.

Lead Director.    When considered appropriate, our corporate governance guidelines permit the designation of a Lead Director by the majority vote of independent directors. The independent directors designated Mr. Kelson as Lead Director to serve until the Annual Meeting, at which time Mr. Winkler will become Lead Director to serve a four year term. The responsibilities of the Lead Director include:

Commercial Metals Company    2018 Proxy Statement    24

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

The Lead Director is also available to receive direct communications from stockholders through Board approved procedures and may periodically, as directed by our Board, be asked to speak for CMC or perform other responsibilities.

Board’s Role in Risk Oversight.    Management is principally responsible for defining, identifying and assessing the various risks facing CMC, formulating enterprise risk management policies and procedures and managing our risk exposures on a day-to-day basis. Our Risk Committee, comprised of the members of our executive leadership team, directs this process. The Board is responsible for overseeing our risk management processes.

Enterprise risks are identified and prioritized by the Risk Committee, and each risk is assigned by the Board to a Board committee or the full Board for oversight, depending on the nature of the risk. The Risk Committee provides an annual risk assessment, with periodic updates as appropriate, to the Board or the applicable Board committee, and the Board or Board committee, as the case may be, assesses the risks and reviews options for risk mitigation presented by the Risk Committee, which includes determining a response strategy and monitoring progress on those strategies. The following shows the allocation of risk oversight among the Board and its committees:

Full Board

Significant strategic and business risks are monitored by the full Board

As part of our risk assessment process, the Board or an applicable Board committee also receives presentations throughout the year from management regarding specific potential risks and trends as necessary. Annually, the Finance Committee and the full Board reviews the Company’s strategic business plans, which includes evaluating the competitive, technological, economic and other risks associated with these plans. We believe that the practices described above facilitate effective Board oversight of our significant risks.

Corporate Governance Guidelines and Code of Ethics.    Our Board has adopted Corporate Governance Guidelines, which reflect the principles by which we operate. When appropriate, the Nominating and Corporate Governance Committee and our Board review and revise our Corporate Governance Guidelines in response to regulatory requirements and evolving leading practices for similarly situated companies. We have also adopted a Code of Conduct and Business Ethics (the “Code of Conduct”), which applies to all of our directors, officers and employees. In addition, we have adopted a separate Financial Code of Ethics, which is applicable to our CEO, CFO, Corporate Controller, any person who may function as a Chief Accounting Officer or persons performing similar functions. We intend to post any amendments to or waivers from our Financial Code of Ethics and our Code of Conduct on our website to the extent applicable to our CEO, CFO, Corporate Controller, any person who may

Commercial Metals Company    2018 Proxy Statement    25

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

function as a Chief Accounting Officer or persons performing similar functions. Our Corporate Governance Guidelines, the Code of Conduct, the Financial Code of Ethics and other information are available at our website, www.cmc.com under the Corporate Governance section, and such information is available in print to any stockholder, without charge, upon request to Commercial Metals Company, 6565 North MacArthur Blvd., Suite 800, Irving, Texas 75039, Attention: Corporate Secretary, or by calling (214) 689-4300.

Annual Board Evaluations.    Each year, the Nominating and Corporate Governance Committee and the Lead Director lead the Board through two evaluations: a Board self-evaluation and committee self-evaluations, which include an evaluation of our Lead Director and committee chairpersons. Through this process, directors provide feedback, assess performance, and identify areas where improvement can be made. We believe this approach supports the Board’s effectiveness and continuous improvement.

Management Succession Planning.    Our Board plays an integral oversight role in talent development by recognizing the importance of succession planning for the CEO and other key employees at CMC. Our executive leadership team, led by our Vice President of Human Resources, annually presents to the Board a review of executive and senior management, including a discussion of those employees who are considered to be potential successors to executive and senior level positions with regard to their readiness and development opportunities. In addition, our Nominating and Corporate Governance Committee annually reviews and adopts an emergency succession plan for the CEO.

Communications by Stockholders and Other Interested Parties.    Stockholders and other interested parties may communicate with the Lead Director or any of the non-employee and independent directors by submitting a letter addressed to their individual attention or to the attention of non-employee directors c/o Corporate Secretary at P.O. Box 1046, Dallas, Texas 75221.

Meetings of Our Board.    In fiscal year 2018, the entire Board met seven times, six of which were regularly scheduled meetings. Other than Mr. Alvarado, Mr. Guido and Mr. Massaro, each of whom retired from our Board effective at the 2018 annual meeting of stockholders, all directors attended at least seventy-five percent (75%) or more of the meetings of our Board and of the committees on which they served. We expect all directors and nominees to attend the Annual Meeting. All directors attended the 2018 annual meeting of stockholders.

Executive Sessions.    As required by the NYSE listing standards, non-employee and independent directors regularly schedule executive sessions of our Board and its committees in which they meet without the presence of employee directors or management. The presiding director at such executive sessions is the Lead Director. In fiscal year 2018, the non-employee directors, which include all members of our Board other than Ms. Smith, held six non-employee director sessions in connection with Board meetings and no stand-alone meetings.

Sustainability and Corporate Responsibility.    CMC is committed to operating sustainably and being a good corporate citizen for the benefit of our investors, customers, employees and the communities in which we live and work. We believe operating CMC in a responsible, sustainable way is simply the right thing to do. We also believe it contributes to the success of our business.

We pursue sustainability through four focus areas, which are aligned with our current operations and growth strategy:

Commercial Metals Company    2018 Proxy Statement    26

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

CMC’s business is inherently sustainable. As a vertically integrated organization, we purchase and process scrap metal, melt the recycled metal into new steel in our state-of-the-art electric arc furnaces, roll the new steel into finished products in our rolling mills, and fabricate the finished products into lengths to be used in products that support manufacturing and builds buildings and infrastructure in the regions we participate in. Our operations encompass the entire life cycle of steel from initial production to use to recycling to reuse.

CMC plans to issue its third bi-annual Sustainability Report in 2019. Our most recent Sustainability Report is available on our website at www.cmc.com. The following are some highlights from our most recent Sustainability Report and 2018 developments:

Commercial Metals Company    2018 Proxy Statement    27

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

Identifying Emerging Sustainability Issues.    By identifying and proactively addressing sustainability risks and opportunities, CMC protects and creates value for its stockholders, employees, customers and society as a whole. For information regarding the role of CMC’s Risk Management Committee in identifying and assessing emerging sustainability issues, please see page 25 of this proxy statement. We also identify emerging sustainability issues through our membership and active participation in several industry association committees focused on topics of safety, health and environmental stewardship.

Board Committees

We have four standing board committees (collectively, the “Committees”): Audit, Compensation, Nominating and Corporate Governance and Finance, the principal responsibilities of which are described below. All committee charters are available at our website, www.cmc.com.

Significant Committee Functions

Commercial Metals Company    2018 Proxy Statement    28

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

Commercial Metals Company    2018 Proxy Statement    29

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

Director Nomination Process

The Nominating and Corporate Governance Committee is responsible for identifying and evaluating nominees for directors. The Board, after considering the recommendation of the Nominating and Corporate Governance Committee, proposes a slate of nominees to the stockholders for election to the Board. For information on how to submit a candidate for consideration, please see “2020 Annual Meeting and Stockholder Proposals.”

Director Qualifications and Attributes

Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of stockholders. Director candidates must also have an inquisitive and objective perspective, practical wisdom and mature judgment. In addition to considering these qualifications, the Nominating and Corporate Governance Committee will consider such relevant factors as it deems appropriate, including the current composition of our Board, the evaluations of other prospective nominees, and the need for any required expertise on our Board or one of its Committees. Dedication of sufficient time, energy and attention to ensure diligent and effective performance of their duties is expected of directors. Directors may not serve on the board of directors of more than five other publicly traded companies. Directors should be committed to serve on our Board for an extended period of time, if elected by stockholders.

Board Diversity

When evaluating candidates, the Nominating and Corporate Governance Committee also considers factors that promote and advance diversity among the members of our Board. Although the Nominating and Corporate Governance Committee does not have a formal diversity policy, the Nominating and Corporate Governance Committee considers a number of factors regarding diversity of personal and professional backgrounds (both domestic and international), national origins, specialized skills and acumen, racial and gender diversity, and breadth of experience in industry, manufacturing, financing transactions and business combinations.

Commercial Metals Company    2018 Proxy Statement    30

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

Our Board currently includes three women and one African American. We were recognized by the National Diversity Council in 2018 as a “Top 25 Company for Diversity in Texas”. This award recognizes organizations for women and minority representation in executive leadership and on boards of directors. Texas Diversity Magazine selected Ms. Smith as a recipient of the 2018 Dallas Power 50 Award, which recognizes women in executive leadership roles that have demonstrated significant contributions to the business growth and strategic direction of their respective organizations and have proven records of innovation and accomplishments in their area of expertise. Also in 2018, Mr. Kirkpatrick was selected as a “Top 50 General Counsel” by the Texas Diversity Council.

Executive Officer Diversity

Although we do not have a formal policy concerning diversity of executive officers, the Board seeks to ensure that a diversity of experiences, backgrounds and viewpoints are represented in our management. Currently, we have two women (Barbara Smith, Chairman, President and CEO, and Mary Lindsey, Senior Vice President and CFO) in executive leadership roles, which is over 40% of our executive leadership team.

Compensation Committee Report

The Compensation Committee of our Board has reviewed and discussed the following section of this proxy statement entitled “Compensation Discussion and Analysis” with management. Based on this review and discussion, the Compensation Committee has recommended to our Board that this Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into CMC’s Annual Report on Form 10-K for the fiscal year ended August 31, 2018.

Sarah E. Raiss (Chairman)

Rhys J. Best

J. David Smith

Joseph C. Winkler

Commercial Metals Company    2018 Proxy Statement    31

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

In order to compete effectively in the steel and metal products industry, it is critical that we attract and retain leaders who can best position CMC to deliver financial and operational results for the benefit of our stockholders. Our executive compensation program, which is administered by the Compensation Committee of our Board (the “Committee”), is critical in achieving this objective.

Our Fiscal Year 2018 Performance (vs FY2017)

In fiscal 2018, we delivered exceptional financial and operational results for our stockholders, increasing net sales by 21% and net income by 199% year-over-year. We also generated one year, and annualized three year and five year TSR of 16.9%, 14.1% and 10.7%, respectively.

In addition, during the past 24 months, we accomplished a number of critical strategic objectives that have reshaped CMC for the future. First, as we announced in June 2017, we made the decision to exit our International Marketing and Distribution segment, selling CMC Cometals for $170.9 million and selling or shutting down the remaining operations in the U.S., Asia and Australia. Second, we completed the construction, startup and commissioning of our new steel micro mill in Durant, Oklahoma, becoming the first U.S. long products steel manufacturer to produce hot spooled rebar. Finally, we completed the acquisition of substantially all of the U.S. rebar manufacturing and fabrication assets of Gerdau, S.A., consisting of 33 fabrication facilities and four steel mini mills. This $600 million strategic acquisition increased CMC’s global melt capacity by 60% to 7.2 million tons and dramatically expanded the geographic footprint of CMC’s rebar fabrication operations in the U.S.

While we believe these strategic transactions have positioned CMC for future success in our core steel making operations, we incurred significant costs and expenses during fiscal year 2018 in achieving these successes that negatively impacted our fiscal 2018 net income, including (1) a $13.1 million non-cash impairment charge in connection with the sale of a business in our International Marketing and Distribution segment, (2) $26.8 million of expenses related to the Acquisition, (3) $10.5 million of mill operational start-up costs (net of $3.0 million of incentives) and (4) $5.8 million in interest expense related to debt issued to finance the Acquisition.

Commercial Metals Company    2018 Proxy Statement    32

COMPENSATION DISCUSSION AND ANALYSIS

The following table highlights additional information about our achievements during fiscal 2018:

2018 Net Earnings   $138.5M   $1.17 per diluted share						199%				Financial Results •  CMC achieved one year, and annualized three year and five year TSR of 16.9%, 14.1% and 10.7%, respectively. •  In fiscal 2018, we increased revenue by 21% to $4.6 billion from $3.8 billion in fiscal 2017. •  In fiscal 2018, we generated net earnings of $138.5 million, or $1.17 per diluted share, compared to net earnings of $46.3 million, or $0.39 per diluted share, in fiscal year 2017, representing a 199% increase.
2018 Net Sales   $4.6B						21%				Strategic Objectives •  We completed the exit of our International Marketing and Distribution segment, allowing us to reallocate capital to our core manufacturing operations in the U.S. and Poland, and improve our financial profile. •  We completed the construction, start-up and commissioning of our new steel micro mill in Durant, Oklahoma, becoming the first U.S. long products steel manufacturer to produce hot spooled rebar. •  On November 5, 2018, we closed the acquisition of certain U.S. rebar manufacturing and downstream fabrication assets of Gerdau, S.A. To fund the purchase price, we issued $350.0 million of senior unsecured notes due in 2026. •  We had record levels of shipments of steel products from our operations in the U.S. and Poland. •  We achieved the lowest safety incident rate in our Company’s history. •  We opened a new downstream separation facility in Lexington, South Carolina, which allows us to maximize the recovery of nonferrous metals and reduce residual waste streams. •  We began constructing our second spooler to produce hot spooled rebar at our Mesa, AZ micro mill, and we expect to start producing hot spooled rebar during our fourth fiscal quarter of 2019.

Pay-for-Performance Philosophy.    The Committee designs compensation programs to align the actions of our NEOs with the long-term interests of our stockholders based on the fundamental philosophy to pay for performance. As illustrated below, for fiscal year 2018 approximately 87% of the targeted annual compensation for the CEO and, on average, 74% of the targeted annual compensation for the other NEOs was variable or “at risk” and tied to CMC’s performance:

Commercial Metals Company    2018 Proxy Statement    33

COMPENSATION DISCUSSION AND ANALYSIS

During fiscal 2018, the Committee established financial performance goals that were challenging and reflected CMC’s fiscal 2018 operating plan, economic and market conditions, and forecasts at the time the performance goals were set in October 2017. The Committee increased the fiscal 2018 Net Earnings financial goals by 6%, 11% and 33% at the business plan, target and maximum levels, respectively, and the fiscal 2018 ROIC financial goals by 14%, 22% and 43% at the business plan, target and maximum levels, respectively.

In determining the bonus opportunities under CMC’s Annual Cash Incentive Bonus (as defined on page 42), the Committee reduced the bonus opportunity pool for achieving business plan financials, as it did in fiscal 2016 and 2017, in recognition that the fiscal year 2018 financial goals continued to be below CMC’s fiscal 2015 and prior years’ performance due to industry and market conditions, projected general economic conditions and CMC’s forecasted performance levels. This reduction was achieved by reducing the bonus opportunity pool by 20% when overall Company financial targets for fiscal 2018 were met. The Committee further determined that the bonus opportunity pool would be returned to 100% of target when a stretch financial goal was met. The fiscal 2018 performance goals were based entirely on overall Company financial performance versus a mix of financial and operational goals as was the case in fiscal 2017.

During fiscal 2018 and, in the case of our long-term incentive awards, during the 2016-2018 performance period, payouts under our Annual Cash Incentive Bonus and long-term incentive awards were as follows:

Corporate Governance Highlights Regarding Executive Compensation.    The Committee, with the assistance of its independent compensation consultant, engages in an ongoing review of CMC’s executive compensation program to evaluate whether the program supports CMC’s compensation philosophy and serves the long-term interests of our stockholders. The following lists the highlights of CMC’s corporate governance framework, which the Committee believes reinforces our pay-for-performance philosophy:

Commercial Metals Company    2018 Proxy Statement    34

COMPENSATION DISCUSSION AND ANALYSIS

Addressing the 2018 Say-on-Pay Vote. At our 2018 annual meeting of stockholders, of the votes cast on our advisory vote on executive compensation (commonly referred to as the “say-on-pay vote”), 44.6% of the votes cast were in favor and 55.4% of the votes cast were against. This was a significant departure from our 2016 and 2017 annual meetings of stockholders where more than 94% of the stockholders voted in favor of our executive compensation programs, even though the core philosophy and design of our executive compensation programs remained materially consistent across all three years.

The most recent say-on-pay vote was disappointing. In response to the lower than expected 2018 say-on-pay vote, the Compensation Committee and management evaluated our executive compensation program with input

Commercial Metals Company    2018 Proxy Statement    35

COMPENSATION DISCUSSION AND ANALYSIS

from the Board’s independent compensation consultant. As part of this evaluation, management reached out to stockholders representing approximately 67.5% of our outstanding common stock regarding their views of our executive compensation program.

Management received feedback from stockholders representing approximately 51.5% of our outstanding common stock. These stockholders generally represented our largest stockholders and included some who voted in favor of our say-on-pay proposal in 2018 and some who voted against the say-on-pay proposal. The outreach occurred in the form of conference calls enabling stockholders to offer their perspective and ask questions directly to the Company representatives participating on the calls. Attendees for some or all of the meetings were Ms. Raiss, Chairman of the Compensation Committee, Ms. Lindsey and Mr. Kirkpatrick. Each call was interactive and constructive. The feedback from these calls was presented to the Board and the Compensation Committee for their consideration.

During this engagement process, our largest stockholders generally expressed support for our executive compensation program. In fact, several stockholders emphasized that their vote against our 2018 say-on-pay proposal was primarily due to one-time events related to our fiscal 2017 CEO transition, rather than a general disagreement with the core philosophy and design of our executive compensation programs. At the same time, a few stockholders suggested certain changes to our executive compensation programs. The chart below summarizes the key points we heard in our meetings with stockholders and the Compensation Committee’s responses to the concerns raised. Due to the timing of the vote and the investor outreach, the changes that we reference below will become effective for our fiscal year 2019 compensation plans.

In addition to the changes to our executive compensation programs made in response to recommendations received during our stockholder engagement process, we also have adopted the following changes to our executive compensation program:

The Compensation Committee will continue to consider the outcome of our future say-on-pay votes when making future compensation decisions for the NEOs.

Fiscal 2018 Management Role Changes. During fiscal year 2018, CMC appointed Barbara R. Smith to the role of Chairman, President and CEO. In connection with Ms. Smith’s appointment, her base salary was adjusted to a market-competitive level for a CEO, which resulted in an 18.8% increase over the base salary in her role as COO in 2017. This resulted in a base pay level that was 8% below the peer median, and when combined with her annual

Commercial Metals Company    2018 Proxy Statement    36

COMPENSATION DISCUSSION AND ANALYSIS

and long-term incentive opportunities, resulted in a target total compensation that was 14% below the peer median. The Company also promoted Tracy L. Porter to Executive Vice President and COO, and Mary A. Lindsey to Senior Vice President and CFO. In connection with their promotions, each received a base salary increase, representing 8% for Mr. Porter, and 12.4% for Ms. Lindsey, based on peer data and internal pay equity. In addition, Messes. Smith and Lindsey received supplemental fiscal year 2018 equity awards in the form of RSUs and PSUs in an amount equal to the difference between their existing long-term incentive target and the new target associated with their respective promotions. In addition, in connection with his promotion in April 2018, Mr. Porter received a supplemental fiscal year 2018 equity award in the form of RSUs to compensate him for his increased responsibilities. The Committee decided to issue this additional grant entirely in RSUs, rather than a combination of PSUs and RSUs, because the promotion occurred late in fiscal 2018.

Executive Compensation Participants

CMC’s executive compensation program applies to senior executives and senior managers; however, per the SEC executive compensation disclosure rules, this CD&A focuses on the compensation paid or awarded to the five NEOs included in the Fiscal Year 2018 Summary Compensation Table on page 50.

For fiscal year 2018, the NEOs were:

Compensation Objectives and Principles

The Committee oversees the compensation and benefit programs of our executives. The Committee is responsible for establishing an executive compensation program that supports the successful recruitment, development and retention of the executive talent and leadership required to achieve our business objectives. The Committee is made up entirely of independent directors.

The Committee believes that it is in the best interests of stockholders for us to establish and maintain a competitive executive compensation program. For fiscal year 2018, our base salary philosophy consisted of maintaining competitive base salaries which were targeted at approximately the 50^th percentile of competitive market data, as discussed below. A significant portion of potential executive compensation is based upon our financial performance, which we believe aligns executive performance goals with those of our stockholders. We will pay higher compensation when financial goals are exceeded than when such goals are not met, taking into consideration individual ability to influence results and overall economic and market conditions.

The Committee has approved an executive compensation program that it believes:

Within the objectives listed above, the Committee generally believes that it is in the interests of CMC and its stockholders that the “variable” compensation performance metrics should be:

Commercial Metals Company    2018 Proxy Statement    37

COMPENSATION DISCUSSION AND ANALYSIS

In addition, the Committee believes that from time to time a portion of our executive compensation program will consist of discretionary compensation. Discretionary compensation allows the Committee (i) to evaluate and reward executive performance in areas not measured under the terms of our incentive programs, such as safety, leadership, succession planning and execution of Company initiatives, (ii) to perform a qualitative assessment of the business and competitive conditions in which we operate and (iii) to consider issues of internal pay equity and external market review. The Committee did not award any discretionary cash bonuses in fiscal 2018.

Determination of Total Compensation

Independent Compensation Advisor

The Committee engages an independent compensation consultant to assist it in an ongoing review of CMC’s executive compensation program. The review includes an analysis of market compensation practices and developments, external regulatory requirements, the competitive market for executive talent, the evolving culture and demands of the business, our compensation philosophy, including the features of our compensation program and the extent to which they support the execution of our business and talent needs.

Since July 2012, the Committee has engaged Korn Ferry on an annual basis to consult on executive compensation matters and reviews their engagement and performance annually. All work performed by the independent compensation consultant with regard to our executive compensation program is tasked and overseen directly by the Committee. At the direction of the Committee, our management provides information and analyses to the Committee. As discussed further below, CMC participates in and purchases various compensation surveys and studies that management and the Committee use to analyze executive compensation. The Committee believes that utilizing information from multiple compensation surveys supports an objective and well-rounded view of executive compensation practices.

Korn Ferry does not provide any other material services to CMC. The Committee has assessed the independence of Korn Ferry pursuant to the NYSE rules, and the Committee concluded that Korn Ferry’s work for the Committee did not raise any conflicts of interest.

Role of Management and CEO in Compensation Decisions

We believe in aligning executive and stockholder interests through an executive compensation program designed with input from management in an ongoing dialogue with the Committee and, as appropriate, the Committee’s independent compensation advisor regarding internal, external, cultural, business and motivational challenges and opportunities facing us and our executives. To that end, the executive team analyzes, with assistance from the Committee’s compensation advisor, trends and recommends improvements to the compensation programs. Specifically, during fiscal 2018, Ms. Smith reviewed with the Committee her recommendations (without any recommendation as to her own compensation) regarding base salary adjustments, annual bonus and long-term incentive awards for the NEOs. In addition, during fiscal year 2018, CMC’s Vice President Human Resources, CMC’s General Counsel and Corporate Secretary and CMC’s Director of Total Rewards also periodically attended Committee meetings at the invitation of the Committee. While the Committee receives management’s input with respect to executive compensation, all decisions regarding compensation for the NEOs are made by the Committee. The Committee also meets regularly in executive session (without the attendance of any member of management).

Competitiveness of Our Compensation Program

Our executive compensation program is designed so that base pay and total short- and long-term compensation is competitive with market practices. Market practices, or benchmarks, are based on peer group data and compensation survey data.

Annually, with the assistance of Korn Ferry, the Committee reviews the compensation peer group for continued appropriateness, considering the comparability of the peer companies in terms of industry focus, size, scope and

Commercial Metals Company    2018 Proxy Statement    38

COMPENSATION DISCUSSION AND ANALYSIS

complexity of operations. The Committee believes that the compensation peer group strongly reflects CMC’s core business segments, operating model and market for talent.

For fiscal year 2018, the compensation peer group consisted of the companies noted below. The fiscal year 2018 peer group consisted of the same peer group as was used for fiscal year 2017 compensation decisions, except that WestRock Company was removed after a sizable increase in its market capitalization following an acquisition.

As noted above, the Committee also uses compensation survey data in its evaluation of executive pay for the NEOs. Survey data provides insight into positions that may not generally be reported in proxy statements and information about the compensation of executives of non-public companies. To assist the Committee in evaluating fiscal year 2018 compensation levels, the Committee reviewed information from the following surveys: 2017 Equilar Top 25; 2017 US Mercer Executive and 2017 Willis Towers Watson CDB Executive Reports. For purposes of this CD&A, the compensation peer group data and compensation survey data are collectively referred to as “Peer Data.”

Compensation Mix: Components and Objectives of Short- and Long-Term Compensation

In accordance with our overall compensation philosophy and program, executives are provided with a mix of base salary, short-term incentives, long-term incentives and employee benefits. Our compensation philosophy places a significant portion of the potential compensation for each NEO “at risk” such that compensation will vary based on performance of CMC. “Variable” compensation is a component of compensation for most of our employees, but a higher proportion of our NEOs’ compensation is at risk than that of our general employee population. The following table describes the material elements of compensation and the objectives of each material element:

Commercial Metals Company    2018 Proxy Statement    39

COMPENSATION DISCUSSION AND ANALYSIS

Commercial Metals Company    2018 Proxy Statement    40

COMPENSATION DISCUSSION AND ANALYSIS

Base Salary

We pay an annual base salary to each of our NEOs in order to provide them with a fixed rate of cash compensation that is “non-variable” during the fiscal year. For fiscal year 2018, our base pay target continued to be the 50^th percentile of Peer Data, which supports our ability to attract and retain key executive talent. While the Committee generally targets base salary at the 50^th percentile of the Peer Data, actual base salary may be above or below the 50^th percentile based on the Committee’s review of the underlying scope of an NEO’s responsibilities, individual performance and experience, tenure in the executive’s current position or with CMC, internal pay equity and retention concerns. The Committee strives to maintain base salaries at levels that will attract top talent, while linking a significant portion of an executive’s total compensation opportunity to our success.

For fiscal year 2018, the annual base salaries for CMC’s NEOs were increased as follows:

Annual Cash Incentive Bonus

The purpose of the Commercial Metals Company 2013 Cash Incentive Plan (the “2013 Cash Plan”) is to advance the interests of CMC and our stockholders by:

In accordance with the terms of the 2013 Cash Plan, the Committee establishes appropriate performance periods, designates those executives eligible to participate, sets the level of potential awards and determines the financial targets or other performance measures which, if attained, result in payment of awards (the “performance goals”). Management may periodically make recommendations as to these matters, but the Committee makes all decisions with respect to the implementation of the 2013 Cash Plan. In establishing performance goals, the

Commercial Metals Company    2018 Proxy Statement    41

COMPENSATION DISCUSSION AND ANALYSIS

Committee reviews industry and market conditions, the alignment of the goals with our strategy, projected general economic conditions, and both our past and forecasted performance levels.

In determining the fiscal 2018 bonus opportunities under CMC’s Annual Cash Incentive Bonus (as defined below), the Committee reduced the bonus opportunity pool for achieving fiscal year 2018 business plan financials in recognition that the financial goals continued to be below CMC’s historical performance due to industry and market conditions, projected general economic conditions and CMC’s forecasted performance levels. This reduction was achieved by reducing the bonus opportunity pool by 20% when overall Company financial targets for fiscal 2018 were met. The Committee further determined that the bonus pool would be returned to 100% of target when a stretch financial goal was met.

The performance period for the annual bonus (the “Annual Cash Incentive Bonus”) is our fiscal year. The fiscal year 2018 Annual Cash Incentive Bonus was designed to focus our executives on short-term return as described below. We believe that these performance goals help focus the executives on effectively utilizing our assets, maximizing operational efficiencies and seeking profitable growth opportunities. In addition, under the fiscal year 2018 Annual Cash Incentive Bonus program, no bonus would be paid for the NEOs in the event CMC failed to achieve or exceed a 1% ROIC performance goal.

The table below sets forth each NEO’s fiscal year 2018 threshold, target and maximum bonus opportunities, expressed as a percentage of Incentive Base Pay.

2018 Annual Cash Incentive Bonus Opportunity

Expressed as a Percentage of Incentive Base Pay for Fiscal Year 2018⁽¹⁾

During fiscal 2018, the Committee established financial performance goals that were challenging and reflected CMC’s fiscal 2018 operating plan, economic and market conditions, and forecasts at the time the performance goals were set in October 2017. The Compensation Committee increased the fiscal 2018 Net Earnings financial goals by 6%, 11% and 33% at the business plan, target and maximum levels, respectively, and the fiscal 2018 ROIC financial goals by 14%, 22% and 43% at the business plan, target and maximum levels, respectively.

In approving the performance goals, the Committee decided to exclude the impact of fluctuations in CMC’s effective tax rate and, instead, the performance targets as well as the measurement of performance against those targets was based on the statutory tax rate applicable to CMC. In addition, Net Earnings (as defined below) and ROIC goals were adjusted to exclude (1) a $13.1 million non-cash impairment charge in connection with a sale of a business, (2) $26.8 million of expenses related to the Acquisition and (3) $5.8 million in interest expense related to debt issued to finance the Acquisition. These amounts were excluded from the calculation because they were one-time events related to the achievement of strategic operating goals of the Company that arose after the financial performance goals were set.

Commercial Metals Company    2018 Proxy Statement    42

COMPENSATION DISCUSSION AND ANALYSIS

The following table sets forth the fiscal year 2018 financial performance goals applicable to each NEO. Payouts for performance in between performance levels are determined using straight line interpolation.

2018 Annual Cash Incentive Bonus Performance Goals

Based on CMC’s financial performance, each as described above, the NEOs received a payout of, on average, 199% of their respective target award opportunities; accordingly, Mses. Smith and Lindsey and Messrs. Porter, Kirkpatrick, and Lawrence and received Annual Cash Incentive Bonuses of approximately $2,375,000, $1,000,000, $1,266,416, $600,000 and $331,880, respectively. Payouts over 100% were driven by strong results in CMC’s financial performance objectives. The Annual Cash Incentive Bonus received by each of the NEOs is included in the “Non-Equity Performance Incentive Plan Compensation” column in the Fiscal Year 2018 Summary Compensation Table.

Long-Term Incentive Program

Through our long-term incentive program, we provide senior executives, including participating NEOs, the opportunity for equity awards contingent on the attainment of multi-year performance goals. Acting in concert, the Annual Cash Incentive Bonus, the Additional Cash Bonus and the long-term incentive programs provide balanced cash incentives and equity incentives that we believe reward executive focus on delivering both financial results and long-term growth. The target long-term incentive awards are designed to achieve, when combined with base salary and the target Annual Cash Incentive Bonus, total compensation at approximately the 50^th percentile of Peer Data and, when achieving maximum performance, to reach total compensation at the upper quartile of Peer Data.

Fiscal Year 2018 – Fiscal Year 2020 Long-Term Incentive Program

In fiscal year 2018, the Committee approved the 2018 – 2020 long-term incentive program with the long-term incentive awards to be delivered one-half in the form of time-vested RSUs and one-half in the form of PSUs. In connection with the promotions of Mses. Smith and Lindsey, the Committee approved a supplemental grant equal to the difference between their existing long-term incentive target and the new target associated with their respective promotions, delivered in the same form as the 2018 – 2020 long-term incentive grants. In connection with Mr. Porter’s mid-year promotion, the Committee approved a supplemental grant of RSUs. These supplemental promotion-based grants to Mses. Smith and Lindsey and Mr. Porter are referred to herein as the “Supplemental Promotion Grants.”

The fiscal year 2018 RSU awards vest ratably over a three-year period and will be settled in shares of CMC common stock. The fiscal year 2018 PSU awards vest at the end of a three-year performance period, which runs from September 1, 2017 to August 31, 2020, and will be settled in shares of Company common stock.

The Committee, with input from management and Korn Ferry, selected Net Earnings before interest (including accounts receivable securitization program expenses), taxes, depreciation, amortization and the impairment of

Commercial Metals Company    2018 Proxy Statement    43

COMPENSATION DISCUSSION AND ANALYSIS

depreciable and other intangible assets such as goodwill (“EBITDA”), return on invested capital (“ROIC”) and relative total stockholder return (“TSR”) as the performance measures for the vesting of the PSUs. The Committee, with input from management and Korn Ferry, selected EBITDA and ROIC as absolute performance measures intended to reflect CMC’s profitable growth and selected TSR as a relative measure of CMC’s performance against the TSR peer group. The Committee believes that such metrics are aligned with CMC’s long-term business plan and long-term stockholders’ interests.

The PSU awards are measured over the performance period with 75% of the award vesting based on the achievement of EBITDA over the three-year performance period and positive ROIC during the same period. In each year of the performance period, an EBITDA goal is set by the Committee based on the business plan as approved by our Board and performance is measured on a cumulative basis as compared to the target levels set by the Committee for each of the three years in the performance period. If a positive ROIC is not attained over the three-year performance period, then under the terms of the award agreements, none of the PSU awards subject to the EBITDA metric will vest, regardless of the EBITDA performance achieved. The payout formula is intended to encourage strong, focused performance with each performance level representing what the Committee deemed to be stretch, but attainable performance goals given the economic and market conditions at the time the goals were set. The EBITDA target for fiscal year 2018 was $271.8 million, and CMC achieved $379.4 million of EBITDA in fiscal 2018. The following table sets forth the vesting percentage and payout levels for the portion of the PSU awards that vest based on fiscal year 2018 – 2020 EBITDA performance.

2018 – 2020 EBITDA Performance vs. Target