MDU Resources (MDU) DEF 14A Definitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

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the Securities Exchange Act of 1934

(Amendment No.         )

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MDU Resources Group, Inc.

(Name of Registrant as Specified In Its Charter)

____________________________________________________________

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March 26, 2021

Fellow Stockholders:

I invite you to join me, along with our Board of Directors and members of our senior management team, for our annual meeting at 11 a.m. May 11, 2021. We intend to hold this meeting in person at 909 Airport Road in Bismarck, North Dakota. Please contact us or check our website at www.mdu.com/proxymaterials for updates and additional information about joining our meeting.

At the meeting, we will hear the results of stockholder voting on the items outlined in this Proxy Statement, including election of our Board of Directors, the advisory vote to approve the compensation paid to our named executive officers, and ratification of our independent auditors. I encourage you to follow the instructions on your proxy card to vote your shares in advance of the meeting.

Also during the meeting, I look forward to providing you with an overview of our outstanding 2020 financial results and the operational excellence we achieved despite the challenges our country faced during the year. In these unprecedented times, our employees continue to demonstrate their dedication to providing the essential products and services that are necessary for Building a Strong America.®

I will provide details during the meeting as well about what we expect this year and beyond as we grow each of our lines of business.

I look forward to seeing you May 11 if it is safe for us to gather in person.

We appreciate your continued investment in MDU Resources and remain committed to providing you with the long-term returns you expect.

Sincerely,

David L. Goodin

President and Chief Executive Officer

MDU Resources Group, Inc. Proxy Statement

Proxy Statement

1200 West Century Avenue

Mailing Address:
P.O. Box 5650
Bismarck, North Dakota 58506-5650
(701) 530-1000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 11, 2021

March 26, 2021

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MDU Resources Group, Inc. will be held at 909 Airport Road, Bismarck, North Dakota 58504, on Tuesday, May 11, 2021, at 11:00 a.m., Central Daylight Saving Time, for the following purposes:

Items of Business	1.	Election of directors;
	2.	Advisory vote to approve the compensation paid to the company’s named executive officers;
	3.	Ratification of the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2021; and
	4.	Transaction of any other business that may properly come before the meeting or any adjournment(s) thereof.
Record Date	The board of directors has set the close of business on March 12, 2021, as the record date for the determination of stockholders who will be entitled to notice of, and to vote at, the meeting and any adjournment(s) thereof.
Meeting Attendance	All stockholders as of the record date of March 12, 2021, are cordially invited to attend the annual meeting. You must request an admission ticket to attend. If you are a stockholder of record and plan to attend the meeting, please contact MDU Resources Group, Inc. by email at CorporateSecretary@mduresources.com or by telephone at 701-530-1010 to request an admission ticket. A ticket will be sent to you by mail. If your shares are held beneficially in the name of a bank, broker, or other holder of record, and you plan to attend the annual meeting, you will need to submit a written request for an admission ticket by mail to: Investor Relations, MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506 or by email at CorporateSecretary@mduresources.com. The request must include proof of stock ownership as of March 12, 2021, such as a bank or brokerage firm account statement or a legal proxy from the bank, broker, or other holder of record confirming ownership. A ticket will be sent to you by mail. Requests for admission tickets must be received no later than May 4, 2021. You must present your admission ticket and state-issued photo identification, such as a driver’s license, to gain admittance to the meeting. We are actively monitoring the public health and travel safety concerns relating to the coronavirus (COVID-19). You are encouraged to vote in advance of the meeting using one of the voting methods set forth on page 69. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will announce additional or alternative arrangements for the meeting on our company website at www.mdu.com/proxymaterials. For additional information, see Public Health Concerns on page 72.
Proxy Materials	Notice of Availability of Proxy Materials will be first sent to stockholders on or about March 26, 2021. The Notice contains basic information about the annual meeting and instructions on how to view our proxy materials and vote electronically on the Internet. Stockholders who do not receive the Notice will receive a paper copy of our proxy materials, which will be sent on or about April 1, 2021.

By order of the Board of Directors,

Karl A. Liepitz

Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 11, 2021.
The 2021 Notice of Annual Meeting and Proxy Statement and 2020 Annual Report to Stockholders
are available at www.mdu.com/proxymaterials.

MDU Resources Group, Inc. Proxy Statement

Proxy Statement

TABLE OF CONTENTS
		Page		Page
	PROXY STATEMENT SUMMARY	1	EXECUTIVE COMPENSATION (continued)
	BOARD OF DIRECTORS		Executive Compensation Tables	54
	Item 1. Election of Directors	11	Summary Compensation Table	54
	Director Nominees	12	Grants of Plan-Based Awards	55
	Board Evaluations and Process for Selecting Directors	17	Outstanding Equity Awards at Fiscal Year-End	57
	CORPORATE GOVERNANCE		Option Exercises and Stock Vested	58
	Director Independence	20	Pension Benefits	58
	Sustainability and Social Responsibility	20	Nonqualified Deferred Compensation	60
	Stockholder Engagement	22	Potential Payments upon Termination or
	Board Leadership Structure	22	Change of Control	61
	Board’s Role in Risk Oversight	22	CEO Pay Ratio Disclosure	65
	Board Meetings and Committees	23	AUDIT MATTERS
	Stockholder Communications with the Board	27	Item 3. Ratification of the Appointment of
	Additional Governance Features	27	Deloitte & Touche LLP as the Company’s Independent
	Corporate Governance Materials	29	Registered Public Accounting Firm for 2021	66
	Related Person Transaction Disclosure	29	Annual Evaluation and Selection of Deloitte &
	COMPENSATION OF NON-EMPLOYEE DIRECTORS		Touche LLP	66
	Director Compensation	30	Audit Fees and Non-Audit Fees	67
	SECURITY OWNERSHIP		Policy on Audit Committee Pre-Approval of Audit
	Security Ownership Table	33	and Permissible Non-Audit Services	67
	Hedging Policy	33	Audit Committee Report	68
	Greater than 5% Beneficial Owners	34	INFORMATION ABOUT THE ANNUAL MEETING
	Delinquent Section 16(a) Reports	34	Who Can Vote	69
	EXECUTIVE COMPENSATION		Notice and Access	69
	Item 2. Advisory Vote to Approve the Compensation Paid		How to Vote	69
	to the Company’s Named Executive Officers	35	Revoking Your Proxy or Changing Your Vote	69
	Information Concerning Executive Officers	36	Discretionary Voting Authority	70
	Compensation Discussion and Analysis	37	Voting Standards	70
	Executive Summary	37	Proxy Solicitation	70
	2020 Compensation Framework	41	Electronic Delivery of Proxy Statement	71
	2020 Compensation for Our Named		Householding of Proxy Materials	71
	Executive Officers	44	MDU Resources Group, Inc. 401(k) Plan	71
	Other Benefits	51	Annual Meeting Admission and Guidelines	71
	Compensation Governance	52	Conduct of the Meeting	72
	Compensation Committee Report	53	Stockholder Proposals, Director Nominations, and
			Other Items of Business for 2022	72

MDU Resources Group, Inc. Proxy Statement

Proxy Statement

PROXY STATEMENT SUMMARY

To assist you in reviewing the company’s 2020 performance and voting your shares, we call your attention to key elements of our 2021 Proxy Statement. The following is only a summary and does not contain all the information you should consider. You should read the entire Proxy Statement carefully before voting. For more information about these topics, please review the full Proxy Statement and our 2020 Annual Report to Stockholders.

Meeting Information	Summary of Stockholder Voting Matters
Time and Date	Voting Matters		Board Vote Recommendation	See Page
11:00 a.m. Central Daylight Saving Time Tuesday, May 11, 2021	Item 1.	Election of Directors	FOR Each Nominee	11
	Item 2.	Advisory Vote to Approve the Compensation Paid to the Company’s Named Executive Officers	FOR	35
Place	Item 3.	Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for 2021	FOR	66
MDU Service Center 909 Airport Road Bismarck, ND 58504

Who Can Vote
If you held shares of MDU Resources common stock at the close of business on March 12, 2021, you are entitled to vote at the annual meeting. You are encouraged to vote in advance of the meeting using one of the following voting methods.
How to Vote
Registered Stockholders
If your shares are held directly with our stock registrar, you can vote any one of four ways:
:	By Internet:	Go to the website shown on the Notice or Proxy Card, if you received one, and follow the instructions.
)	By Telephone:	Call the telephone number shown on the Notice or Proxy Card, if you received one, and follow the instructions given by the voice prompts.
		Voting via the Internet or by telephone authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated, and returned the Proxy Card by mail. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May 10, 2021.
*	By Mail:	If you received a paper copy of the Proxy Statement, Annual Report, and Proxy Card, mark, sign, date, and return the Proxy Card in the postage-paid envelope provided.
	In Person:	Attend the annual meeting, or send a personal representative with an appropriate proxy, to vote by ballot at the meeting.
Beneficial Stockholders
If you held shares beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding shares “in street name”), you will receive voting instructions from said bank, broker, or other holder of record. If you wish to vote in person at the meeting, you must obtain a legal proxy from your bank, broker, or other holder of record of your shares and present it at the meeting.

MDU Resources Group, Inc. Proxy Statement 1

Proxy Statement

Director Nominees

The board recommends a vote FOR the election of each of the following nominees for director. Eight directors stand for re-election; one new nominee stands for election. Additional information about each director’s background and experience can be found beginning on page 12.

Name	Age	Director Since	Primary Occupation	Board Committees
Thomas Everist	71	1995	President and chair of The Everist Company, an investment and land development company, formerly engaged in aggregate, concrete, and asphalt production	• Compensation • Nominating and Governance
Karen B. Fagg	67	2005	Former vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm	• Compensation • Environmental and Sustainability (Chair)
David L. Goodin	59	2013	President and chief executive officer, MDU Resources Group, Inc.	Executive officer
Dennis W. Johnson	71	2001	Chair, president, and chief executive officer of TMI Group Incorporated, manufacturers of casework and architectural woodwork	Chair of the board
Patricia L. Moss	67	2003	Former president and chief executive officer of Cascade Bancorp, a financial holding company, subsequently merged into First Interstate Bank	• Compensation • Environmental and Sustainability
Dale S. Rosenthal	64	Nominee	Former senior executive, including strategic director, division president of Clark Financial Group, and chief financial officer of Clark Construction Group, a building and civil construction firm
Edward A. Ryan	67	2018	Former executive vice president and general counsel of Marriott International	• Audit • Nominating and Governance (Chair)
David M. Sparby	66	2018	Former senior vice president and group president, revenue, of Xcel Energy and president and chief executive officer of its subsidiary, NSP-Minnesota	• Audit (Chair) • Nominating and Governance
Chenxi Wang	50	2019	Founder and managing general partner of Rain Capital Fund, L.P., a cybersecurity-focused venture fund	• Audit • Environmental and Sustainability

2 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Corporate Governance Practices
MDU Resources Group, Inc. is committed to strong corporate governance practices. The following highlights our corporate governance practices and policies. See the sections entitled “Corporate Governance” and “Executive Compensation” for more information on the following:
ü	Annual Election of All Directors	ü	Standing Committees Consist Entirely of Independent Directors
ü	Majority Voting for Directors	ü	Active Investor Outreach Program
ü	No Shareholder Rights Plan	ü	One Class of Stock
ü	Succession Planning and Implementation Process	ü	Stock Ownership Requirements for Directors and Executive Officers
ü	Separate Board Chair and CEO	ü	Anti-Hedging and Anti-Pledging Policies for Directors and Executive Officers
ü	Executive Sessions of Independent Directors at Every Regularly Scheduled Board Meeting	ü	No Related Party Transactions by Our Directors or Executive Officers
ü	Annual Board and Committee Self-Evaluations	ü	Compensation Recovery/Clawback Policy
ü	Risk Oversight by Full Board and Committees	ü	Annual Advisory Approval on Executive Compensation
ü	All Directors are Independent Other Than Our CEO	ü	Mandatory Retirement for Directors at Age 76
ü	Proxy Access for Stockholders	ü	Directors May Not Serve on More Than Three Public Boards Including the Company’s Board

Governance Highlights
We are committed to strong corporate governance aligned with stockholder interests. The board, through its nominating and governance committee, regularly monitors leading practices in governance and adopts measures that it determines are in the best interests of the company and its stockholders.
■	Four new independent directors have been appointed or nominated for election to the board since 2018, two of whom are women including one who is ethnically diverse.
■	The environmental and sustainability committee was established in 2019 as a standing committee of the board of directors to oversee environmental, workplace health, safety, human capital, and other social sustainability matters that fundamentally affect the company’s business and long-term viability.
■	The company released its enhanced Sustainability Report in May 2020, which can be found at www.mdu.com/sustainability. The information on our website is not part of this Proxy Statement and is not incorporated by reference as part of this Proxy Statement.
■	Membership of all committees of the board of directors consists entirely of independent directors.
■	An emergency succession plan was adopted in 2020 for the temporary appointment of an acting chair of the board of directors or an acting executive officer in the event of an unplanned and extended absence.

MDU Resources Group, Inc. Proxy Statement 3

Proxy Statement

Business Performance Highlights
Throughout 2020, all our business segments performed well despite challenges presented by the COVID-19 pandemic. Our overall performance in 2020 was consistent with our long-term strategy as we focused on growing our regulated energy delivery and construction materials and services business segments. In addition to our 2020 financial performance highlighted on the next page, our significant accomplishments include:
■	As providers of essential services, our businesses continued operations in a safe manner during the COVID-19 pandemic and continued to grow its overall workforce. Our 2020 peak employment of 15,668 reached during the third quarter exceeded our 2019 peak employment of 15,022.
■	Invested capital expenditures of $648.3 million into our businesses.
■	The electric segment plans to retire three aging coal-fired electric generation units at two locations within the next two years and construct a new simple-cycle natural gas combustion turbine. The retirement of the 44-megawatt Lewis & Clark Station in Sidney, Montana is expected in early 2021, and the Heskett units 1 and 2, which combine for 100 megawatts, will be retired in early 2022. Subject to regulatory approval, a new 88-megawatt simple-cycle peaking unit at the Heskett Station will be constructed in 2023.
■	The construction materials and contracting segment acquired the assets of Oldcastle Infrastructure Spokane, the Washington-based prestressed-construction business previously owned by Oldcastle Infrastructure, as well as the assets, including nearly 100 million tons of aggregate reserves, of McMurry Ready-Mix Co., an aggregate and concrete supplier based in Casper, Wyoming.
■	The construction materials and contracting segment continued development of new aggregate reserves near Burnett, Texas. The quarry, which began production in December 2020, contains an estimated 40-year supply of high quality aggregates enabling the segment to supply a significant portion of the aggregate materials used for its local construction activity and production of ready-mixed concrete and asphalt products, along with third-party sales in its Texas market.
■	The pipeline segment in 2020 transported record natural gas volumes for the fourth consecutive year. The segment completed construction of Phase II of the Line Section 22 Project near Billings, Montana in September 2020. The project provides additional design capacity of 22.5 MMcf per day. This segment experienced increased customer demand for its natural gas storage services ending 2020 with a storage balance over 9 Bcf higher than 2019.
■	The pipeline segment continued construction plans for its North Bakken Expansion Project which includes new pipeline, compression, and ancillary facilities to transport natural gas from core Bakken production areas near Tioga, North Dakota, to a new connection with Northern Border Pipeline in McKenzie County, North Dakota. This project, as designed, would provide 250 million cubic feet per day of incremental natural gas transportation capacity with estimated completion in 2021, pending regulatory and environmental permits.
■	The pipeline segment divested its Baker and Bowdoin natural gas gathering assets in 2020, exiting the gathering business.
■	The construction services segment was ranked as number 11 of the list of top specialty contractors in the nation, up from number 12 in 2019, by Engineering News Record based on annual revenues.
■	The construction services segment provided repair services for utility properties damaged by storms and wildfires.
■	The construction services segment acquired PerLectric, Inc., an electrical construction company in Fairfax, Virginia, in February 2020.

Performance from Continuing Operations
		2016	2017	2018	2019	2020
Electric Distribution
	Retail Sales (million kWh)	3,258.5	3,306.5	3,354.4	3,314.3	3,204.5
	Customers	142,948	142,901	143,022	143,346	143,782
Natural Gas Distribution
	Retail Sales (MMdk)	99.3	112.6	112.6	123.7	114.5
	Transportation (MMdk)	147.6	144.5	149.5	166.1	160.0
	Customers	922,408	938,867	957,727	977,468	997,146
Pipeline Transportation (MMdk)		285.3	312.5	351.5	429.7	438.6
Construction Materials and Contracting Revenues (millions)		$1,874.3	$1,812.5	$1,925.9	$2,190.7	$2,178.0
Construction Services Revenues (millions)		$1,073.3	$1,367.6	$1,371.5	$1,849.3	$2,095.7

4 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

2020 Financial Performance Highlights
■	Despite challenges from the COVID-19 pandemic and associated weakness in the United States economy, the company exceeded the financial targets set at the beginning of last year. Strong year-over-year performance from operations at both our regulated energy delivery and construction materials and services segments resulted in an earnings increase of 16.3% in 2020 to $390.2 million, or $1.95 per share, compared to 2019 earnings of $335.5 million, or $1.69 per share, including discontinued operations.
■	Our return on invested capital was 8.8%.
■	The chart below shows our progress over the last six years since our divestiture of oil and natural gas exploration assets and our interests in a diesel refinery and natural gas processing plant.

* MDU Resources Group, Inc. reported 2017 earnings from continuing operations of $1.45 per share which included a non-recurring benefit of 20 cents per share attributable to the federal Tax Cuts and Jobs Act that was signed into law on December 22, 2017.

■ Returned $167 million to stockholders through dividends:

¨ Increased annual dividend for 30th straight year to 84 cents per share paid during 2020;

¨ Paid uninterrupted dividends for 83 straight years; and

¨ Member of the elite S&P High-Yield Dividend Aristocrat Index which recognizes companies within the S&P Composite 1500 Index that have followed a managed dividend policy of consistently increasing dividends annually for at least 20 years.

■ Maintained BBB+ stable credit rating from Standard & Poor’s and Fitch rating agencies.1

■ Operating income from continuing operations increased from $481.2 million in 2019 to $544.9 million in 2020.

■ Earnings per common share before discontinued operations has grown 16.7% compounded annually since 2015.

30 Years	Dividends Paid	83 Years
of Consecutive	$785 Million	of Uninterrupted
Dividend Increases	Over the Last 5 Years	Dividend Payments

1 A securities rating is not a recommendation to buy, sell, or hold securities, and it may be revised or withdrawn at any time by the rating agency.

MDU Resources Group, Inc. Proxy Statement 5

Proxy Statement

Compensation Highlights
The company’s executive compensation is based on providing market competitive compensation opportunities to attract top talent focused on achievement of short and long-term business results. Our compensation program is structured to align compensation with the company’s financial performance as a substantial portion of our executive compensation is directly linked to performance incentive awards.
■	Over 78% of our chief executive officer’s target compensation and over 66% of our other named executive officers’ target compensation is performance based.
■	100% of our chief executive officer’s annual and long-term incentive compensation is tied to performance against pre-established, specific, measurable financial goals.
■	We require our executive officers to own a significant amount of company stock based upon a multiple of their base salary.

2020 Named Executive Officer Target Pay Mix

At the 2020 Annual Meeting, the company’s advisory vote

to approve executive compensation received support from

over 95%of the common stock represented at the

meeting and entitled to vote on the matter.

6 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Key Features of Our Executive Compensation Program

What We Do
þ	Pay for Performance - Annual and long-term award incentives tied to performance measures set by the compensation committee comprise the largest portion of executive compensation.
þ	Independent Compensation Committee - All members of the compensation committee meet the independence standards under the New York Stock Exchange listing standards and the Securities and Exchange Commission rules.
þ	Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate executive compensation plans and practices.
þ	Competitive Compensation - Executive compensation reflects executive performance, experience, relative value compared to other positions within the company, relationship to competitive market value compensation, business segment economic environment, and the actual performance of the overall company and the business segments.
þ	Annual Cash Incentive - Payment of annual cash incentive awards are based on business segment and overall company performance against pre-established annual financial measures.
þ	Long-Term Equity Incentive - Long-term incentive awards may be earned at the end of a three-year period based on achieving pre-established measures and are paid through shares of common stock which encourages stock ownership and helps retain management talent.
þ	Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based compensation.
þ	Mix of Financial Goals - Use of a mixture of financial goals to measure performance prevents overemphasis on a single metric.
þ	Annual Compensation Risk Analysis - Risks related to our compensation programs are regularly analyzed through an annual compensation risk assessment.
þ	Stock Ownership and Retention Requirements - Executive officers are required to own, within five years of appointment or promotion, company common stock equal to a multiple of their base salary. Our president and chief executive officer is required to own stock equal to four times his base salary, and the other named executive officers are required to own stock equal to three times their base salary. The executive officers also must retain at least 50% of the net after-tax shares of stock vested through the long-term incentive plan for the earlier of two years or until termination of employment. Net performance shares must also be held until share ownership requirements are met.
þ	Clawback Policy - If the company’s audited financial statements are restated due to any material noncompliance with the financial reporting requirements under the securities laws, the compensation committee may, or shall if required, demand repayment of some or all incentives paid to our executive officers within the last three years.
What We Do Not Do
ý	Stock Options - The company does not use stock options as a form of incentive compensation.
ý	Employment Agreements - Executives do not have employment agreements entitling them to specific payments upon termination or a change of control of the company.
ý	Perquisites - Executives do not receive perquisites that materially differ from those available to employees in general.
ý	Hedge Stock - Executives are not allowed to hedge company securities.
ý	Pledge Stock-Executives are not allowed to pledge company securities in margin accounts or as collateral for loans.
ý	No Dividends or Dividend Equivalents on Unvested Shares - We do not provide for payment of dividends or dividend equivalents on unvested share awards.
ý	Tax Gross-Ups- Executives do not receive tax gross-ups on their compensation.
ý	No Pandemic Adjustments - We made no changes or adjustments to the 2020 annual incentive or outstanding long-term incentive plan measures despite the pandemic.

MDU Resources Group, Inc. Proxy Statement 7

Proxy Statement

Corporate Responsibility, Environmental, and Sustainability Highlights
MDU Resources Group, Inc. is Building a Strong America® by providing essential products and services to our customers with a long-term view toward sustainable operations. To ensure we can continue to provide these products and services in the communities where we do business, we recognize we must preserve the trust our communities place in us to be a good corporate citizen. We remain committed to pursuing responsible corporate environmental and sustainability practices and to maintaining the health and safety of the public and our employees. In 2019, the board of directors established the environmental and sustainability committee as a standing committee of the board. The committee meets quarterly in conjunction with the regular meetings of the board. The committee oversees and provides recommendations to management and the board regarding environmental, workplace health, safety, human capital, and other social sustainability matters that fundamentally affect the company’s business interests and long-term viability. To better serve our investors and other stakeholders, in 2019 we began reporting environmental, social, governance, and sustainability (ESG/sustainability) metrics relevant and important to our operations in frameworks that provide our stakeholders more uniform and transparent data and information, allowing for comparison with our peers and other companies operating in our industries. For our electric and natural gas distribution segments, as well as our pipeline segment, we report ESG/sustainability metrics using the reporting templates developed by the Edison Electric Institute and the American Gas Association. For our other business segments, we report ESG/sustainability information under the frameworks developed by the Sustainability Accounting Standards Board for our applicable industries. The use of the metrics developed by these organizations provides for ESG/sustainability reporting tailored to our industries. The reports, along with our enhanced Sustainability Report released in May 2020, can be found at www.mdu.com/sustainability. The information on our website is not part of this Proxy Statement and is not incorporated by reference as part of this Proxy Statement. These are some highlights of our recent efforts regarding sustainability:
■	As our renewable generation resource capacity has increased, we have reduced the carbon dioxide (CO2) emission intensity of our coal-fired electric generation resource fleet by approximately 28% since 2005. We expect it to continue to decline with the planned retirements of the Lewis & Clark Station and Heskett Units 1 and 2 coal generation facilities.
■	Renewable resources comprised approximately 27% of our current electric generation resource nameplate capacity in 2020.

■ Approximately 29.7% of the electricity delivered to our customers from company-owned generation in 2020 was from renewable resources.

■ We invested approximately $168 million in environmental emission control equipment and other environmental improvements at our coal-fired electric generation plants since 2005. The investments have resulted in substantial reductions in mercury, sulfur dioxide, nitrogen oxide, and filterable particulate emissions from our coal-fired electric generation resources.

¨ 47% reduction in SO2 emissions since 2005.

¨ 60% reduction in NOx emissions since 2005.

■ Montana-Dakota Utilities Co. produces renewable natural gas (RNG) from the Billings Regional Landfill in Montana. The project came online at the end of 2010 and has produced approximately 1.36 million dekatherm of RNG through year-end 2020. The RNG is supplied to the vehicle fuel market generating renewable identification numbers (RINS) and low carbon fuel standard (LCFS) credits in California and Oregon. In 2020, the Billings Landfill Plant produced approximately 1.53 million RINs and 1,547 LCFS credits.

8 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

■ Our utility companies continue to receive high scores in customer satisfaction. Intermountain Gas Company ranked first, Cascade Natural Gas Corporation second, and Montana-Dakota Utilities Co. fourth among West Region mid-sized natural gas utilities in the 2020 J.D. Power Gas Utility Residential Customer Satisfaction Study.SM

■ Although our utility companies have made substantial investments in their facilities, retail prices remain low providing value to customers. Since 2016, our utility companies’ residential electric retail prices increased an average of 0.3% annually and residential natural gas prices decreased an average of 1.0% annually. In comparison, the consumer price index (CPI) increased an average of 1.9% annually over the same period.

■ WBI Energy’s estimated $260 million investment in the North Bakken Expansion Project will provide needed pipeline capacity to transport increasing levels of associated natural gas from processing plants in the Williston Basin to markets in the Midwest. The addition of processing and transportation capacity will assist in reducing associated natural gas flaring in the Williston Basin to meet natural gas capture targets established by the State of North Dakota.

■ Knife River Corporation continues construction of a fully immersive training center near Albany, Oregon, to teach construction skills and promote workforce development at Knife River as well as other companies, including minority and women-owned contractors. The center will feature an 80,000 square-foot indoor arena, a 16,000 square-foot classroom building, and a number of large outdoor training arenas. Instructors will provide hands-on training on construction equipment as well as classroom training and leadership development. The indoor training arena is expected to be complete in spring 2021, and the classroom/conference room building is expected to be complete in fall 2021.

■ Knife River Corporation produces and places warm-mix asphalt in applications where warm-mix asphalt is allowed. Warm-mix asphalt is produced at cooler temperatures than traditional hot-mix asphalt methods, which reduces the amount of fuel needed in the production process and thereby reduces emissions and fumes.

■ In certain of its markets, Knife River Corporation is offering concrete that incorporates carbon dioxide. Once injected, the carbon dioxide mineralizes and becomes permanently embedded in the concrete. Beyond embedding carbon dioxide in concrete, an additional goal of this process is to decrease the amount of cement required in Knife River Corporation’s production of concrete. This would correspondingly reduce the amount of carbon dioxide released from suppliers’ production of cement.

■ Knife River Corporation continued its practice of recycling and reusing building materials. This conserves natural resources, uses less energy, alleviates waste disposal problems in local landfills, and ultimately costs less for the consumer.

■ Knife River Corporation has invested in Blue Planet Systems Corporation to pursue the use of synthetic aggregates in ready-mix concrete. Blue Planet is testing methods of creating synthetic limestone, using carbon dioxide captured from existing sources. The synthetic limestone could then be used as a component of concrete. In addition to sequestering carbon dioxide through this process, the use of synthetic limestone would prolong the life of natural aggregate sources.

■ Our employee safety DART (Days Away, Restricted or Transferred) rate of 0.95% was well below comparable industry averages. The company experienced no employee fatalities in 2020.

MDU Resources Group, Inc. Proxy Statement 9

Proxy Statement

■ In 2020, the company refreshed its Leading With Integrity Guide which is its code of conduct and ethics. The refreshed code helps guide employees on our corporate culture and expectations on legal and ethical compliance.

■ The company and the MDU Resources Foundation contributed over $3 million to charitable organizations in 2020. Contributions by the Foundation of over $2.5 million included $500,000 dedicated to charities providing relief to COVID-19 impacts.

■ We encourage and support community volunteerism by our employees. The MDU Resources Foundation contributes a $750 grant to an eligible nonprofit organization after an employee or group of employees volunteer a minimum of 25 hours to the organization during non-company hours during a calendar year. Eligible organizations are local 501(c) nonprofit organizations providing services in categories of civic and community activities, culture and arts, education, environment, and health and human services. In 2020, the foundation granted $77,000 under this program, matching over 7,200 employee volunteer hours.

■ We encourage support of educational institutions by all employees. The MDU Resources Foundation matches contributions to educational institutions by employees up to $750.

29.7% of 2020 Electricity Generated From Renewable Resources Over $3 Million Contributed to Charities 28% Reduction in CO2 Intensity in Our Electric Generation Fleet Since 2005

10 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

BOARD OF DIRECTORS

ITEM 1. ELECTION OF DIRECTORS

The board currently consists of ten directors. The board size will be fixed at nine directors effective as of the 2021 annual meeting. All of the nominees are current directors of MDU Resources with the exception of Dale Rosenthal. All of the nominees are standing for election to the board at the 2021 annual meeting to hold office until the 2022 annual meeting and until their successors are duly elected and qualified. Two directors, Mark A. Hellerstein and John K. Wilson, will not stand for reelection, and their terms will expire at the company’s 2021 annual meeting.

The board has affirmatively determined all the director nominees, other than David L. Goodin, our president and chief executive officer, are independent in accordance with New York Stock Exchange (NYSE) rules, our governance guidelines, and our bylaws.

Our bylaws provide for a majority voting standard for the election of directors. See “Additional Information - Majority Voting” below for further detail.

Each of the director nominees has consented to be named in this proxy statement and to serve as a director, if elected. We do not know of any reason why any nominee would be unable or unwilling to serve as a director, if elected. If a nominee becomes unable to serve or will not serve, proxies may be voted for the election of such other person nominated by the board as a substitute or the board may choose to reduce the number of directors.

Information about each director nominee’s share ownership is presented under “Security Ownership.”

The shares represented by the proxies received will be voted for the election of each of the nine nominees named below unless you indicate in the proxy that your vote should be cast against any or all the director nominees or that you abstain from voting. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified or until the earliest of his or her resignation, retirement, or death.

The nine nominees for election to the board at the 2021 annual meeting, all proposed by the board upon recommendation of the nominating and governance committee, are listed below with brief biographies. The nominees’ ages are current as of December 31, 2020.

The board of directors recommends that the stockholders

vote FOR the election of each nominee.

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Proxy Statement

Director Nominees

		Thomas Everist Age 71	Independent Director Since 1995 Compensation Committee Nominating and Governance Committee	Other Current Public Boards: --Raven Industries, Inc.
		Key Contributions to the Board: With a 44-year career in the construction materials and mining industry, Mr. Everist brings critical knowledge of the construction materials and contracting industry to the board. Mr. Everist also contributes strong business leadership and management capabilities and insights through his role as president and chair of his companies for over 33 years. His service on the board of another public company further enhances his contributions to the board.
Career Highlights
•	President and chair of The Everist Company, Sioux Falls, South Dakota, an investment and land development company, since April 2002. Prior to January 2017, The Everist Company was engaged in aggregate, concrete, and asphalt production.
•	Managing member of South Maryland Creek Ranch, LLC, a land development company, since June 2006; president of SMCR, Inc., an investment company, since June 2006; and managing member of MCR Builders, LLC, which provides residential building services to South Maryland Creek Ranch, LLC, since November 2014.
•	Director and chair of the board of Everist Health, Inc., Ann Arbor, Michigan, which provides solutions for personalized medicines, since 2002, and chief executive officer from August 2012 to December 2012.
•	President and chair of L.G. Everist, Inc., Sioux Falls, South Dakota, an aggregate production company, from 1987 to April 2002.
Other Leadership Experience
•	Director of publicly traded Raven Industries, Inc., Sioux Falls, South Dakota, a general manufacturer of electronics, flow controls, and engineered films, since 1996, and chair from April 2009 to May 2017.
•	Director and compensation committee chair of Bell, Inc., Sioux Falls, South Dakota, a manufacturer of folding cartons and packages, since April 2011.
•	Director and audit committee chair of Showplace Wood Products, Inc., Sioux Falls, South Dakota, a custom cabinets manufacturer, since January 2000.
•	Director of Angiologix Inc., Mountain View, California, a medical diagnostic device company, from July 2010 through October 2011 when it was acquired by Everist Genomics, Inc.
•	Member of the South Dakota Investment Council, the state agency responsible for investing state funds, from July 2001 to June 2006.

		Karen B. Fagg Age 67	Independent Director Since 2005 Compensation Committee Environmental and Sustainability Committee
		Key Contributions to the Board: Through her management experience and knowledge in the fields of engineering, environment, and energy resource development, including four years as director of the Montana Department of Natural Resources and Conservation and over eight years as president, chief executive officer, and chair of her own engineering and environmental services company, as well as her service on a number of Montana state and community boards, Ms. Fagg contributes experience in responsible natural resource development with an informed perspective of the construction, engineering, and energy industries.
Career Highlights
•	Vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm, from April 2008 until her retirement in December 2011.
•	President of HKM Engineering, Inc., Billings, Montana, an engineering and environmental services firm, from April 1995 to June 2000, and chair, chief executive officer, and majority owner from June 2000 through March 2008. HKM Engineering, Inc. merged with DOWL LLC in April 2008.
•	Employed with MSE, Inc., Butte, Montana, an energy research and development company, from 1976 through 1988, and vice president of operations and corporate development director from 1993 to April 1995.
•	Director of the Montana Department of Natural Resources and Conservation, Helena, Montana, the state agency charged with promoting stewardship of Montana’s water, soil, energy, and rangeland resources; regulating oil and gas exploration and production; and administering several grant and loan programs, for a four-year term from 1989 through 1992.
Other Leadership Experience
•	Chair of SCL Health Montana Regional Board from January 2020 to present; and member of Carroll College Board of Trustees from 2005 through 2010 and August 2019 to present.
•	Former member of several regional, state, and community boards, including director of St. Vincent’s Healthcare from October 2003 to October 2009 and January 2016 through December 2019, including a term as chair; director of the Billings Catholic Schools Board from December 2011 through December 2018, including a term as chair; the First Interstate BancSystem Foundation from June 2013 to 2016; the Montana Justice Foundation from 2013 into 2015; Montana Board of Investments from 2002 through 2006; Montana State University’s Advanced Technology Park from 2001 to 2005; and Deaconess Billings Clinic Health System from 1994 to 2002.

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Proxy Statement

		David L. Goodin Age 59	Director Since 2013 President and Chief Executive Officer
		Key Contributions to the Board: Serving as president and chief executive officer of MDU Resources Group, Inc. since 2013, Mr. Goodin is the only officer of the company that serves on our board. With 30 years of operating and leadership positions with our utility operations and eight years in his current position, he brings utility industry experience to the board as well as extensive knowledge of our company and its business operations. He contributes valuable insight into management’s views and perspectives and the day-to-day operations of the company.
Career Highlights
•	President and chief executive officer and a director of the company since January 4, 2013.
•	Prior to January 4, 2013, served as chief executive officer and president of Intermountain Gas Company, Cascade Natural Gas Corporation, Montana-Dakota Utilities Co., and Great Plains Natural Gas Co.
•	Began his career in 1983 at Montana-Dakota Utilities Co. as a division electrical engineer and served in positions of increasing responsibility until 2007 when he was named president of Cascade Natural Gas Corporation; positions included division electric superintendent, electric systems manager, vice president-operations, and executive vice president-operations and acquisitions.
Other Leadership Experience
•	Member of the U.S. Bancorp Western North Dakota Advisory Board since January 2013.
•	Director of Sanford Bismarck, an integrated health system dedicated to the work of health and healing, and Sanford Living Center, since January 2011.
•	Board member of the BSC Innovations Foundation, an extension of Bismarck State College providing curriculum to Saudi Arabia industries, since August 1, 2018.
•	Former board member of numerous industry associations, including the American Gas Association, the Edison Electric Institute, the North Central Electric Association, the Midwest ENERGY Association, and the North Dakota Lignite Energy Council.

		Dennis W. JohnsonAge 71	Independent Director Since 2001 Chair of the Board
		Key Contributions to the Board: With over 46 years of experience in business management, manufacturing, and finance, holding positions as chair, president, and chief executive officer of TMI Group Incorporated for 39 years, as well as his prior service as a director of the Federal Reserve Bank of Minneapolis, Mr. Johnson brings operational, management, strategic planning, specialty contracting, and financial knowledge and insight to the board. Mr. Johnson also contributes significant knowledge of local, state, and regional issues involving North Dakota, the state where we are headquartered and have significant operations, resulting from his service on several state and local organizations.
Career Highlights
•	Chair of the board of the company effective May 8, 2019; and vice chair of the board from February 15, 2018 to May 8, 2019.
•	Chair, president, and chief executive officer of TMI Group Incorporated as well as its two wholly owned subsidiary companies, TMI Corporation and TMI Transport Corporation, manufacturers of casework and architectural woodwork in Dickinson, North Dakota; employed since 1974 and serving as president or chief executive officer since 1982.
Other Leadership Experience
•	Member of the Bank of North Dakota Advisory Board of Directors since August 2017.
•	President of the Dickinson City Commission from July 2000 through October 2015.
•	Director of the Federal Reserve Bank of Minneapolis from 1993 through 1998.
•	Served on numerous industry, state, and community boards, including the North Dakota Workforce Development Council (chair); the Decorative Laminate Products Association; the North Dakota Technology Corporation; and the business advisory council of the Steffes Corporation, a metal manufacturing and engineering firm.
•	Served on North Dakota Governor Sinner’s Education Action Commission; the North Dakota Job Service Advisory Council; the North Dakota State University President’s Advisory Council; North Dakota Governor Schafer’s Transition Team; and chaired North Dakota Governor Hoeven’s Transition Team.

MDU Resources Group, Inc. Proxy Statement 13

Proxy Statement

		Patricia L. Moss Age 67	Independent Director Since 2003 Compensation Committee Environmental and Sustainability Committee	Other Current Public Boards: --First Interstate BancSystem, Inc. --Aquila Group of Funds
		Key Contributions to the Board: With substantial experience in the finance and banking industry, including service on the boards of public banking and investment companies, Ms. Moss contributes broad knowledge of finance, business development, human resources, and compliance oversight, as well as public company governance, to the board. Through her business experience and knowledge of the Pacific Northwest, Ms. Moss also provides insight on state, local, and regional economic and political issues where a significant portion of our operations and the largest number of our employees are located.
Career Highlights
•	President and chief executive officer of Cascade Bancorp, a financial holding company, Bend, Oregon, from 1998 to January 3, 2012; chief executive officer of Cascade Bancorp’s principal subsidiary, Bank of the Cascades, from 1998 to January 3, 2012, serving also as president from 1998 to 2003; and chief operating officer, chief financial officer and secretary of Cascade Bancorp from 1987 to 1998.
Other Leadership Experience
•	Member of the Oregon Investment Council, which oversees the investment and allocation of all state of Oregon trust funds, since December 2018.
•	Director of First Interstate BancSystem, Inc., since May 30, 2017.
•	Director of Cascade Bancorp and Bank of the Cascades from 1993, and vice chair from January 3, 2012 until May 30, 2017 when Cascade Bancorp merged into First Interstate BancSystem, Inc., and became First Interstate Bank.
•	Chair of the Bank of the Cascades Foundation Inc. from 2014 to July 31, 2018; co-chair of the Oregon Growth Board, a state board created to improve access to capital and create private-public partnerships, from May 2012 through December 2018; and a member of the Board of Trustees for the Aquila Group of Funds, whose core business is mutual fund management and provision of investment strategies to fund shareholders, from January 2002 to May 2005 (one fund) and from June 2015 to present (currently three funds).
•	Former director of the Oregon Investment Fund Advisory Council, a state-sponsored program to encourage the growth of small businesses in Oregon; the Oregon Business Council, with a mission to mobilize business leaders to contribute to Oregon’s quality of life and economic prosperity; the North Pacific Group, Inc., a wholesale distributor of building materials, industrial, and hardwood products; and Clear Choice Health Plans Inc., a multi-state insurance company.

		Dale S. Rosenthal Age 64	Independent Director Nominee
		Key Contributions to the Board: With 22 years of experience with an integrated construction company, serving in senior executive positions as strategic director, division president, and chief financial officer, Ms. Rosenthal contributes expertise in construction, alternative energy, real estate and infrastructure development, risk management, and corporate strategy. Ms. Rosenthal also brings public board experience with a regulated public utility company.
Career Highlights
•	Strategic director of Clark Construction Group, LLC, a vertically integrated construction company headquartered in Bethesda, Maryland, from January 2017 to December 2017; division president of Clark Financial Services Group, leveraging Clark’s core turnkey construction expertise into alternative energy development, from April 2008 to December 2016; chief financial officer and senior vice president of Clark Construction Group, LLC, from April 2000 to April 2008; and established a Clark subsidiary, Global Technologies Group, which developed and built data centers for early internet service providers. Ms. Rosenthal joined Clark Construction in 1996.
��	Led financing teams for several tax-credit financed housing developers and was instrumental in identifying new sources of funding and innovative tax structures for complex transactions.
Other Leadership Experience
•	Director of Washington Gas Light Company, formerly publicly traded and now a subsidiary of AltaGas Ltd., since October 2014, and chair of the audit committee since July 2018. Washington Gas is a regulated public utility company that sells and delivers natural gas in the District of Columbia and surrounding metropolitan areas.
•	Board advisor of Langan Engineering & Environmental Services, a provider of an integrated mix of engineering and environmental consulting services in support of land development projects, corporate real estate portfolios, and the oil and gas industry, since March 2020.
•	Member, Board of Trustees of Cornell University since June 2017, serving on the finance and building and properties committees.

14 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

		Edward A. Ryan Age 67	Independent Director Since 2018 Audit Committee Nominating and Governance Committee
		Key Contributions to the Board: As a former executive vice president and general counsel for a large public company with international operations, Mr. Ryan contributes expertise to the board in the areas of corporate governance, acquisitions, risk management, legal, compliance, and labor relations. Mr. Ryan also brings senior leadership, transactional, and public company experience.
Career Highlights
•	Advisor to the chief executive officer and president of Marriott International from December 2017 to December 31, 2018.
•	Executive vice president and general counsel of Marriott International from December 2006 to December 2017; senior vice president and associate general counsel from 1999 to November 2006; and assumed responsibility for all corporate transactions and corporate governance in 2005. Mr. Ryan joined Marriott International as assistant general counsel in May 1996.
•	Private law practice from 1979 to 1996.
Other Leadership Experience
•	Chair of Goodwill of Greater Washington, D.C., a non-profit organization whose mission is to transform lives and communities through education and employment, effective January 1, 2020, where he has served as a director since January 2015, including a term as vice chair from January 2019 through December 2019 and chair of the finance committee from January 2018 through December 2019.

		David M. Sparby Age 66	Independent Director Since 2018 Audit Committee Nominating and Governance Committee
		Key Contributions to the Board: With over 32 years of public utility management and leadership experience with a large public utility company, including positions as senior vice president and as chief financial officer, Mr. Sparby provides a broad understanding of the public utility and natural gas pipeline industries, including renewable energy expertise. His lengthy senior leadership experience with a public company also contributes to the board.
Career Highlights
•	Senior vice president and group president, revenue, of Xcel Energy and president and chief executive officer of its subsidiary, NSP-Minnesota, from May 2013 until his retirement in December 2014; senior vice president and group president, from September 2011 to May 2013; chief financial officer from March 2009 to September 2011; and president and chief executive officer of NSP-Minnesota from 2008 to March 2009. He joined Xcel Energy, or its predecessor Northern States Power Company, as an attorney in 1982 and held positions of increasing responsibility.
•	Attorney with the State of Minnesota, Office of Attorney General, from 1980 to 1982, during which period his responsibilities included representation of the Department of Public Service and the Minnesota Public Utilities Commission.
Other Leadership Experience
•	Board of Trustees of Mitchell Hamline School of Law from July 2011 to July 2020.
•	Board of Trustees of the College of St. Scholastica since July 2012, including service as chair effective September 2020.

MDU Resources Group, Inc. Proxy Statement 15

Proxy Statement

		Chenxi Wang Age 50	Independent Director Since 2019 Audit Committee Environmental and Sustainability Committee
		Key Contributions to the Board: Having significant technology and cybersecurity expertise through her management and leadership positions with several organizations, Ms. Wang contributes knowledge to the board on technology and cybersecurity issues. As the founder and managing general partner of a cybersecurity-focused venture fund, Ms. Wang also provides knowledge regarding capital markets and business development.
Career Highlights
•	Founder and managing general partner of Rain Capital Fund, L.P., a cybersecurity-focused venture fund aiming to fund early-stage, transformative technology innovations in the security market with a goal of supporting women and minority entrepreneurs, since December 2017.
•	Chief strategy officer at Twistlock, an automated and scalable cloud native cybersecurity platform, from August 2015 to February 2017.
•	Vice president, cloud security & strategy of CipherCloud, a cloud security software company, from January 2015 to August 2015.
•	Vice president of strategy of Intel Security, a company focused on developing proactive, proven security solutions and services that protect systems, networks, and mobile devices, from April 2013 to January 2015.
•	Principal analyst and vice president of research at Forrester Research, a market research company that provides advice on existing and potential impact of technology, from January 2007 to April 2013.
•	Assistant research professor and associate professor of computer engineering at Carnegie Mellon University from September 2001 through August 2007.
Other Leadership Experience
•	Technical Board of Advisors of Secure Code Warriors, a Sydney-based cybersecurity company, since June 2019.
•	Board of directors of OWASP Global Foundation, a nonprofit global community that drives visibility and evolution in the safety and security of the world’s software, from January 2018 to December 2019, including a term as vice chair.
•	Recipient of the 2019 Investor in Women Award by Women Tech Founders Foundation, an organization dedicated to advancing women in the tech industry.
•	Board of advisors of Keyp GmbH, a Munich-based software company with a mission to provide enterprises convenient access to the digital identity ecosystem, from December 2017 to August 2019.

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Proxy Statement

Additional Information - Majority Voting

A majority of votes cast is required to elect a director in an uncontested election. A majority of votes cast means the number of votes cast “for” a director’s election must exceed the number of votes cast “against” the director’s election. “Abstentions” and “broker non-votes” do not count as votes cast “for” or “against” the director’s election. In a contested election, which is an election in which the number of nominees for director exceeds the number of directors to be elected and which we do not anticipate, directors will be elected by a plurality of the votes cast.

Unless you specify otherwise when you submit your proxy, the proxies will vote your shares of common stock “for” all directors nominated by the board of directors. If a nominee becomes unavailable for any reason or if a vacancy should occur before the election, which we do not anticipate, the proxies will vote your shares in their discretion for another person nominated by the board.

Our policy on majority voting for directors contained in our corporate governance guidelines requires any proposed nominee for re-election as a director to tender to the board, prior to nomination, his or her irrevocable resignation from the board that will be effective, in an uncontested election of directors only, upon:

•receipt of a greater number of votes “against” than votes “for” election at our annual meeting of stockholders; and

•acceptance of such resignation by the board of directors.

Following certification of the stockholder vote, the nominating and governance committee will promptly recommend to the board whether or not to accept the tendered resignation. The board will act on the nominating and governance committee’s recommendation no later than 90 days following the date of the annual meeting.

Brokers may not vote your shares on the election of directors if you have not given your broker specific instructions on how to vote. Please be sure to give specific voting instructions to your broker so your vote can be counted.

Board Evaluations and Process for Selecting Directors

Our corporate governance guidelines require that the board, in coordination with the nominating and governance committee, annually reviews and evaluates the performance and functioning of the board and its committees. During 2020, each director completed an anonymous written questionnaire with the opportunity to provide comments. In addition, committee members completed a separate written questionnaire directed to the operation of the respective committees. The chair of the nominating and governance committee then conducted individual interviews with each director. The results of the written questionnaires were aggregated and provided to the board and each committee, and the chair of the nominating and governance committee summarized and shared input from the individual interviews in an executive session of the board.

As part of the annual board evaluation process, the nominating and governance committee evaluates our directors considering the current needs of the board and the company. In addition, during the year, the committee discusses board succession and reviews potential candidates. Although the committee may also retain a third party to assist in identifying potential nominees, none were retained in 2020.

Our governance guidelines provide that directors are not eligible to be nominated or appointed to the board if they are 76 years or older at the time of the election or appointment. Term limits on directors’ service have not been instituted.

Director Qualifications, Skills, and Experience

Director nominees are chosen to serve on the board based on their qualifications, skills, and experience, as discussed in their biographies, and how those characteristics supplement the resources and talent on the board and serve the current needs of the board and the company.

In making its nominations, the nominating and governance committee also assesses each director nominee by a number of key characteristics, including character, success in a chosen field of endeavor, background in publicly traded companies, independence, and willingness to commit the time needed to satisfy the requirements of board and committee membership. Although the committee has no formal policy regarding diversity, in recommending director nominees the committee considers diversity in gender, ethnic background, geographic area of residence, skills, and professional experience.

MDU Resources Group, Inc. Proxy Statement 17

Proxy Statement

The following shows core specialized competencies and other characteristics of the director nominees.

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Proxy Statement

Board Composition and Refreshment

The nominating and governance committee is committed to ensuring that the board reflects a diversity of experience, skills, and backgrounds to serve the company’s governance and strategic needs. Each of the nominees has been nominated for election to the board of directors upon recommendation by the nominating and governance committee and each has decided to stand for election.

In evaluating the needs of the board and the company, the nominating and governance committee focuses on identifying board candidates that will add gender and ethnic diversity along with relevant industry and leadership experience to the board as well as a background and core competencies in the fields of technology, cybersecurity, and public company governance. Potential director nominees were brought to the attention of the nominating and governance committee by board members, management, organizations, and database searches.

The nominating and governance committee continues to identify individuals as potential board of director candidates, particularly individuals with industry experience to support the company’s strategy to grow its two business platforms of regulated energy delivery and construction materials and services. The nominating and governance committee identified and recommended Dale Rosenthal for nomination to the board in 2021 based on her financial expertise and relevant experience in the construction and public utility industries as well as her addition to the board’s gender and geographic diversity.

By tenure, if the nominees are elected, the board will be comprised of four directors who have served from 0-4 years, one director who has served from 5-10 years, and four directors who have served over 11 years. The nominating and governance committee believes this mix of director tenures provides a balance of experience and institutional knowledge with fresh perspectives.

MDU Resources Group, Inc. Proxy Statement 19

Proxy Statement

CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS

Director Independence

The board of directors has adopted guidelines on director independence that are included in our corporate governance guidelines. Our guidelines require that a substantial majority of the board consists of independent directors. In general, the guidelines require that an independent director must have no material relationship with the company directly or indirectly, except as a director. The board determines independence on the basis of the standards specified by the NYSE, the additional standards referenced in our corporate governance guidelines, and other facts and circumstances the board considers relevant. Based on its review, the board has determined that all directors, except for our chief executive officer Mr. Goodin, have no material relationship with the company and are independent.

In determining director independence, the board of directors reviewed and considered information about any transactions, relationships, and arrangements between the non-employee directors and their immediate family members and affiliated entities on the one hand, and the company and its affiliates on the other, and in particular the following transactions, relationships, and arrangements:

•Charitable contributions by the company and the MDU Resources Foundation (Foundation) to nonprofit organizations where a director or immediate family member served as an officer or director of the organization. The company and the Foundation made charitable contributions to five such nonprofit organizations that collectively totaled $20,500. None of the contributions made to any of the nonprofit entities exceeded 2% of the relevant entity’s consolidated gross revenues.

•Business relationships with entities with which a director or director nominee is affiliated. Mr. Wilson is a member of the board of directors of HDR, Inc., an architectural, engineering, environmental, and consulting firm. The company paid HDR, Inc. or its affiliates approximately $1,161,000 in 2020 for services which were provided in the ordinary course of business and on substantially the same terms prevailing for comparable services from other consulting firms. Mr. Wilson had no role in securing or promoting HDR, Inc. services and the relationship did not affect his independence under our corporate governance guidelines or the NYSE listing standards.

The board has also determined that all members of the audit, compensation, and nominating and governance committees of the board are independent in accordance with our guidelines and applicable NYSE and Securities Exchange Act of 1934 rules.

Sustainability and Social Responsibility

We view corporate responsibility as critical to our sustainability. While we are always focused on delivering strong financial performance, we are committed to doing so in a responsible manner that recognizes and respects the interests of all our stakeholders.

In recognition of its social responsibility and sustainability commitments, the board of directors in May 2019 formed the environmental and sustainability committee as a standing committee of the board with particular focus on our environmental, workplace health, safety, human capital, and other social sustainability programs and performance. Our environmental and sustainability committee is discussed further on page 26.

Also in 2019, we began reporting environmental, social, governance, and sustainability (ESG/sustainability) metrics relevant and important to our operations in frameworks that provide our stakeholders more uniform and transparent data and information, allowing for comparison with our peers and other companies operating in our industries. For our electric and natural gas distribution segments, as well as our pipeline segment, we report ESG/sustainability metrics using the reporting templates developed by the Edison Electric Institute and the American Gas Association. For our other business segments, we report ESG/sustainability information under the frameworks developed by the Sustainability Accounting Standards Board for our applicable industries. The use of the metrics developed by these organizations provides for ESG/sustainability reporting tailored to our industries. The reports, along with our enhanced Sustainability Report released in May 2020, can be found at www.mdu.com/sustainability. The information on our website is not part of this Proxy Statement and is not incorporated by reference as part of this Proxy Statement.

The company believes in a corporate social responsibility and its fundamental commitment to its stakeholders: customers, employees, suppliers, communities, and stockholders. With the company’s origin and rich history in providing electric and natural gas utility service to rural communities in the Dakotas, Montana, and Wyoming, our utility companies have long operated under the motto, “In the Community to Serve®.” With the addition of our construction businesses to our legacy of regulated energy delivery businesses, we define our purpose as “Building a Strong America®” in recognition of our mission to deliver value to our stakeholders. In 2007, the company adopted its Leading With Integrity Guide, which sets out our commitments to stakeholders:

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Proxy Statement

•    Commitment to Integrity. We will conduct business legally and ethically with our best skills and judgment.

•    Commitment to Shareholders. We will act in the best interests of our corporation and protect its assets.

•    Commitment to Employees. We will work together to provide a safe and positive workplace.

•    Commitment to Customers, Suppliers, and Competitors. We will compete in business only by lawful and ethical means.

•    Commitment to Communities. We will be a responsible and valued corporate citizen.

Further detail on our commitments to our stakeholders can be found at www.mdu.com/commitmenttointegrity.

Human Capital Management

At the core of Building a Strong America® is building a strong team of employees with a focus on safety and a commitment to diversity and inclusion. While the number of our employees fluctuates throughout the year due to the seasonality and the number and size of construction projects, our team included 12,994 employees at December 31, 2020 located in 40 states plus Washington D.C.

The company is committed to safety and health in the workplace and subscribes to the principle that all injuries can be prevented. To facilitate a strong safety culture and ensure safe work environments, the company established its Safety Leadership Council to identify and adopt best practices in the prevention of occupationally induced injuries and illness as well as monitoring the effectiveness of the company's safety and environmental health programs. The company has policies and training that support safety in the workplace including training on safety matters through classroom and toolbox meetings on job sites. The company utilizes safety compliance in the evaluation of employees, which includes management. Accident and safety statistical information is gathered for each of the business segments and regularly reported to management and the board of directors.

In response to COVID-19, the company established a task force to monitor developments related to the pandemic and implemented procedures to protect employees by adopting recommended practices from the CDC and is following directives of each state and local jurisdiction in which the company operates.

Each job is important and part of a coordinated team effort to accomplish the organization's objectives. Employees are hired having the skills, abilities, and motivation to achieve the results needed for their jobs. The company provides opportunities for advancement through job mobility, succession planning, and promotions both within and between business segments.

The company uses a variety of recruiting sources depending on the position, market, and job requirements. All open positions are posted on the company's website at jobs.mdu.com. In markets where labor availability is tight, the company uses telecommuting, guaranteed hours, flexible schedules, and work arrangements to fill open positions. To attract and retain employees, the company offers:

•Competitive salaries and wages based on the labor markets in which it operates;

•Employee growth through training in the form of technical, professional, and leadership programs. The company also provides formal and informal mentoring and job shadowing programs to assist employees in their job and career goals;

•Incentive compensation opportunities based on the company's performance; and

•Comprehensive benefits including vacation, sick leave, health and wellness programs, retirement plans, and discount programs.

The company is committed to an inclusive environment that respects the differences and embraces the strengths of its diverse employees. Each business segment has an appointed diversity officer who serves as a conduit for diversity-related issues by providing a voice to all employees. The company has three strategic goals related to diversity:

•Increase productivity and profitability through the creation of a work environment which values all perspectives and methods of accomplishing work;

•Enhance collaboration efforts through cooperation and sharing of best practices to create new ways of meeting employee, customer, and stockholder needs; and

•Maintain a culture of integrity, respect, and safety by ensuring employees understand these essential values which are part of the company's vision statement.

The company provides training and has policies which speak to diversity and inclusion. Training for employees on diversity and inclusion topics include equal employment opportunity, workplace harassment, respect, and unconscious bias.

MDU Resources Group, Inc. Proxy Statement 21

Proxy Statement

Community Support

In 2020, the company and the MDU Resources Foundation contributed over $3 million to charitable organizations. Contributions by the Foundation of over $2.5 million included $500,000 dedicated to charities providing relief to COVID-19 impacts. Foundation contributions also included scholarship programs for educational institutions, scholarships for employee family members, and employee match contributions of up to $750 to educational institutions and organizations to which our employees donated over 7,200 hours of service. Since its inception in 1983, the Foundation has contributed more than $38 million toward community support for worthwhile causes in categories of education, civic and community activities, culture and arts, environmental stewardship, and health and human services.

Stockholder Engagement

The company has an active stockholder outreach program. We believe in providing transparent and timely information to our investors. Each year we routinely engage directly or indirectly with our stockholders, including our largest institutional stockholders. Management regularly attends and presents at investor and financial conferences and holds one-on-one meetings with investors and also interacts directly with investors and analysts during our quarterly earnings conference calls. During 2020, notwithstanding meeting and travel restrictions due to COVID-19, the company held meetings, conference calls, and webcasts with a diverse mix of stockholders, including meetings or telephone conferences with six of the institutional investors included in our year-end largest 30 stockholders. In our meetings or conferences, we discussed a variety of topics, including company strategy and our capital expenditure forecast; operational and financial updates; environmental, social, and corporate governance issues; sustainability; impact of COVID-19; and, previously announced strategic initiatives. Feedback from engagements is shared by management with the board and its committees. The company also held telephone conferences with a proxy advisory firm to discuss corporate governance, executive compensation practices, and other topics.

Board Leadership Structure

The board separated the positions of chair of the board and chief executive officer in 2006, and our bylaws and corporate governance guidelines currently require that our chair be independent. The board believes this structure provides balance and is currently in the best interest of the company and its stockholders. Separating these positions allows the chief executive officer to focus on the full-time job of running our business, while allowing the chair to lead the board in its fundamental role of providing advice to and independent oversight of management. The chair meets and confers regularly between board meetings with the chief executive officer and consults with the chief executive officer regarding the board meeting agendas, the quality and flow of information provided to the board, and the effectiveness of the board meeting process. The board believes this split structure recognizes the time, effort, and energy the chief executive officer is required to devote to the position in the current business environment as well as the commitment required to serve as the chair, particularly as the board’s oversight responsibilities continue to grow and demand more time and attention. The fundamental role of the board of directors is to provide oversight of the management of the company in good faith and in the best interests of the company and its stockholders. Having an independent chair is a means to ensure the chief executive officer is accountable for managing the company in close alignment with the interests of stockholders including with respect to risk management as discussed below. An independent chair is in a position to encourage frank and lively discussions including during regularly scheduled executive sessions consisting of only independent directors and to assure that the company has adequately assessed all appropriate business risks before adopting its final business plans and strategies. The board believes that having separate positions and having an independent outside director serve as chair is the appropriate leadership structure for the company at this time and demonstrates our commitment to good corporate governance.

Board’s Role in Risk Oversight

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks, strategic risks, operational risks, environmental and regulatory risks, competitive risks, climate and weather conditions, pension plan obligations, cyberattacks or acts of terrorism, and third party liabilities. Management is responsible for identifying material risks, implementing appropriate risk management and mitigation strategies, and providing information regarding material risks and risk management and mitigation to the board. The board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate for identifying, assessing, and managing risk.

The board believes establishing the right “tone at the top” and full and open communication between management and the board of directors are essential for effective risk management and oversight. Our chair meets regularly with our chief executive officer to discuss strategy and risks facing the company. The chair of the board and chairs of each of the board’s standing committees meet quarterly with our chief executive officer, chief financial officer, and general counsel to discuss risks and presentations to the board regarding risks. Senior management attends the quarterly board meetings and is available to address questions or concerns raised by the board on risk management-related and any other matters. Each quarter, the board of directors and its applicable committees receive presentations from senior management on enterprise risk management issues and strategic matters involving our operations. Senior management annually

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presents an assessment to the board of critical enterprise risks that threaten the company’s strategy and business model, including risks inherent in the key assumptions underlying the company’s business strategy for value creation. Periodically, the board receives presentations from external experts on matters of strategic importance to the board. At least annually, the board holds strategic planning sessions with senior management to discuss strategies, key challenges, and risks and opportunities for the company.

The company has also developed a robust compliance program to promote a culture of compliance, consistent with the right “tone at the top,” to mitigate risk. The program includes training and adherence to our code of conduct and legal compliance guide. We further mitigate risk through our internal audit and legal departments.

While the board is ultimately responsible for risk oversight at our company, our standing board committees assist the board in fulfilling its oversight responsibilities in certain areas of risk.

•The audit committee assists the board in fulfilling its oversight responsibilities with respect to risk management in a general manner and specifically in the areas of financial reporting, internal controls, cybersecurity, and compliance with legal and regulatory requirements, and, in accordance with NYSE requirements, discusses with the board policies with respect to risk assessment and risk management and their adequacy and effectiveness. The audit committee receives regular reports on the company’s compliance program, including reports received through our anonymous reporting hotline. It also receives reports and regularly meets with the company’s external and internal auditors. During its quarterly meetings in 2020, the audit committee received presentations or reports from management on cybersecurity and the company’s mitigation of cybersecurity risks as well as assessment and mitigation reports on other compliance and risk-related topics. The entire board was present for the presentations and had access to the reports. This opens the opportunity for discussions about areas where the company may have material risk exposure, steps taken to manage such exposure, and the company’s risk tolerance in relation to company strategy. The audit committee reports regularly to the board of directors on the company’s management of risks in the audit committee’s areas of responsibility.

•The compensation committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs.

•The nominating and governance committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, board membership and structure, succession planning for our directors and executive officers, and corporate governance.

•The environmental and sustainability committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks related to environmental matters, labor and human relations matters, physical and other workplace hazards, employee and public safety, and other social sustainability matters.

Board Meetings and Committees

During 2020, the board of directors held four regular meetings and three special meetings. Each director attended at least 75% of the combined total meetings of the board and the committees on which the director served during 2020. Directors are encouraged to attend our annual meeting of stockholders. All directors participated in person or by teleconference at our 2020 Annual Meeting of Stockholders.

The board has standing audit, compensation, nominating and governance, and environmental and sustainability committees which meet at least quarterly. The table below provides current committee membership.

Name	Audit Committee	Compensation Committee	Nominating and Governance Committee	Environmental and Sustainability Committee
Thomas Everist		●	●
Karen B. Fagg		●		C
Mark A. Hellerstein	●			●
Patricia L. Moss		●		●
Edward A. Ryan	●		C
David M. Sparby	C		●
Chenxi Wang	●			●
John K. Wilson		C	●
C - Chair
● - Member

MDU Resources Group, Inc. Proxy Statement 23

Proxy Statement

Below is a description of each standing committee of the board. The board has affirmatively determined that each of these standing committees consists entirely of independent directors pursuant to rules established by the NYSE, rules promulgated under the Securities and Exchange Commission (SEC), and the director independence standards established by the board. The board has also determined that each member of the audit committee and the compensation committee is independent under the criteria established by the NYSE and the SEC for audit committee and compensation committee members, as applicable.

Nominating and Governance Committee Met Four Times in 2020

The nominating and governance committee met four times during 2020. The current committee members are Edward A. Ryan, chair, Thomas Everist, David M. Sparby, and John K. Wilson.

The nominating and governance committee is governed by a written charter and provides recommendations to the board with respect to:

•board organization, membership, and function;

•committee structure and membership;

•succession planning for our executive management and directors; and

•our corporate governance guidelines.

The nominating and governance committee assists the board in overseeing the management of risks in the committee’s areas of responsibility.

The committee identifies individuals qualified to become directors and recommends to the board the director nominees for the next annual meeting of stockholders. The committee also identifies and recommends to the board individuals qualified to become our principal officers and the nominees for membership on each board committee. The committee oversees the evaluation of the board and management.

In identifying nominees for director, the committee consults with board members, management, consultants, organizational representatives, and other individuals likely to possess an understanding of our business and knowledge concerning suitable director candidates.

In evaluating director candidates, the committee, in accordance with our corporate governance guidelines, considers an individual’s:

•background, character, and experience, including experience relative to our company’s lines of business;

•skills and experience which complement the skills and experience of current board members;

•success in the individual’s chosen field of endeavor;

•skill in the areas of accounting and financial management, banking, business management, human resources, marketing, operations, public affairs, law, technology, risk management, governance, and operations abroad;

•background in publicly traded companies, including service on other public company boards of directors;

•geographic area of residence;

•business and professional experience, skills, gender, and ethnic background, as appropriate in light of the current composition and needs of the board;

•independence, including any affiliation or relationship with other groups, organizations, or entities; and

•compliance with applicable law and applicable corporate governance, code of conduct and ethics, conflict of interest, corporate opportunities, confidentiality, stock ownership and trading policies, and other policies and guidelines of the company.

In addition, our bylaws contain requirements that a person must meet to qualify for service as a director.

The nominating and governance committee assesses these considerations annually in connection with the nomination of directors for election at the annual meeting of stockholders. The committee seeks a collective background of board members to provide a portfolio of experience and knowledge that serves the company’s governance and strategic needs and best perpetrates our long-term success. Directors should have demonstrated experience and knowledge that is relevant to the board’s oversight role of the company’s business. The

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nominating and governance committee also considers the board’s diversity in recommending nominees, including diversity of experience, expertise, ethnicity, gender, and geography. The composition of the current board and the board nominees reflects diversity in business and professional experience, skills, ethnicity, gender, and geography.

Audit Committee Met Ten Times in 2020

The audit committee is a separately-designated committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 and is governed by a written charter.

The audit committee met ten times during 2020. The current audit committee members are David M. Sparby, chair, Mark A. Hellerstein, Edward A. Ryan, and Chenxi Wang. The board of directors determined that Messrs. Sparby and Hellerstein are “audit committee financial experts” as defined by SEC rules, and all audit committee members are financially literate within the meaning of the listing standards of the NYSE. All members also meet the independence standard for audit committee members under our director independence guidelines, the NYSE listing standards, and SEC rules.

The audit committee assists the board of directors in fulfilling its oversight responsibilities to the stockholders and serves as a communication link among the board, management, the independent registered public accounting firm, and the internal auditors. The committee reviews and discusses with management and the independent auditors, before filing with the SEC, the annual audited financial statements and quarterly financial statements. The audit committee also:

•assists the board’s oversight of:

◦the integrity of our financial statements and system of internal controls;

◦the company’s compliance with legal and regulatory requirements and the code of conduct;

◦discussions with management regarding the company’s earnings releases and guidance;

◦the independent registered public accounting firm’s qualifications and independence;

◦the appointment, compensation, retention, and oversight of the work of the independent registered public accounting firm;

◦the performance of our internal audit function and independent registered public accounting firm;

◦management of risk in the audit committee’s areas of responsibility, including cybersecurity, financial reporting, legal and regulatory compliance, and internal controls; and

•arranges for the preparation of and approves the report that SEC rules require we include in our annual proxy statement. See the section entitled “Audit Committee Report” for further information.

Compensation Committee Met Six Times in 2020

During 2020, the compensation committee met six times. The compensation committee consists entirely of independent directors within the meaning of the company’s corporate governance guidelines and the NYSE listing standards and who meet the definitions of non-employee directors for purposes of Rule 16-b under the Exchange Act. Current members of the compensation committee are John K. Wilson, chair, Thomas Everist, Karen B. Fagg, and Patricia L. Moss.

The compensation committee is governed by a written charter and assists the board of directors in fulfilling its responsibilities relating to the company’s compensation policies and programs. It has direct responsibility for determining compensation for our Section 16 officers and for overseeing the company’s management of compensation risk in its areas of responsibility. The compensation committee also reviews and recommends any changes to director compensation policies to the board of directors. The authority and responsibility of the compensation committee is outlined in the compensation committee’s charter.

The compensation committee uses analysis and recommendations from outside consultants, the chief executive officer, and the human resources department in making its compensation decisions. The chief executive officer, the vice president-human resources, and the general counsel regularly attend compensation committee meetings. The committee meets in executive session as needed. The processes and procedures for consideration and determination of compensation of the Section 16 officers as well as the role of our executive officers are discussed in the “Compensation Discussion and Analysis.”

The compensation committee has sole authority to retain compensation consultants, legal counsel, or other advisers to assist in consideration of the compensation of the chief executive officer, the other Section 16 officers, and the board of directors. The committee is

MDU Resources Group, Inc. Proxy Statement 25

Proxy Statement

directly responsible for the appointment, compensation, and oversight of the work of such advisers. In 2020, the compensation committee retained a compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), to conduct a review of the company’s executive compensation program. Prior to retaining an adviser, the compensation committee considered relevant factors to ensure the adviser’s independence from management. Annually the compensation committee conducts a potential conflicts of interest assessment raised by the work of any compensation consultant and how such conflicts, if any, should be addressed. The compensation committee requested and received information from Meridian to assist in its potential conflicts of interest assessment. Based on its review and analysis, the compensation committee determined in 2020 that Meridian was independent from management. Meridian does not provide any services for the company other than consultation services to the compensation committee on executive and director compensation. Meridian reports directly to the compensation committee and not to management. Meridian participated in executive sessions with the compensation committee without members of management present.

The board of directors determines compensation for our non-employee directors based upon recommendations from the compensation committee. In 2020, the compensation committee retained Meridian to conduct an analysis of the company’s compensation for non-employee directors.

Environmental and Sustainability Committee Met Four Times in 2020

The environmental and sustainability committee was formed by the board of directors in May 2019 and met four times during 2020. The committee is governed by a written charter and consists entirely of independent directors within the meaning of the company’s corporate governance guidelines and the listing standards of the NYSE. The current members of the committee are Karen B. Fagg, chair, Mark A. Hellerstein, Patricia L. Moss, and Chenxi Wang.

The environmental and sustainability committee oversees and provides recommendations to the board with respect to the company’s policies, strategies, public policy positions, programs, and performance related to environmental, workplace health, safety, human capital, and other social sustainability matters. The environmental and sustainability committee:

•reviews significant risks regarding environmental and social sustainability matters that fundamentally affect the company’s business interests and long-term viability;

•reviews the company’s environmental and social sustainability strategies, policies, processes, programs, and performance;

•reviews recent and emerging environmental and social sustainability matters;

•reviews labor and human relations issues related to the company’s operations;

•reviews any fatality, serious injury, or illness involving an employee, customer, contractor, or third-party occurring in connection with the company’s operations;

•reviews any material noncompliance by the company with environmental, health, and safety laws and regulations;

•reviews the company’s efforts to advance progress on sustainable development;

•reviews methods to communicate the company’s environmental and social sustainability values and performance;

•considers and advises the compensation committee on the company’s performance with respect to incentive compensation metrics relating to environmental and social sustainability matters;

•reports to, advises, and makes recommendations to the board on environmental and social sustainability matters affecting the company;

•reviews the company’s environmental and social sustainability disclosures;

•reviews stockholder proposals related to environmental and social sustainability matters; and

•reviews significant legislative, regulatory, political, and social issues and trends that may affect the company’s environmental, sustainability, health, and safety management processes and systems.

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Proxy Statement

Stockholder Communications with the Board

Stockholders and other interested parties who wish to contact the board of directors or any individual director, including our non-employee chair or non-employee directors as a group, should address a communication in care of the secretary at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650. The secretary will forward all communications.

Additional Governance Features

Board and Committee Evaluations

Our corporate governance guidelines provide that the board of directors, in coordination with the nominating and governance committee, will annually review and evaluate the performance and functioning of the board and its committees. The self-evaluations are intended to facilitate a candid assessment and discussion by the board and each committee of its effectiveness as a group in fulfilling its responsibilities, its performance as measured against the corporate governance guidelines, and areas for improvement. The board and committee members are provided with a questionnaire to facilitate discussion with follow-up interviews by the chair of the nominating and governance committee. The results of the evaluations are reviewed and discussed in executive sessions of the committees and the board of directors.

Executive Sessions of the Independent Directors

The non-employee directors meet in executive session at each regularly scheduled quarterly board of directors meeting. The chair of the board presides at the executive session of the non-employee directors.

Director Resignation Upon Change of Job Responsibility

Our corporate governance guidelines require a director to tender his or her resignation after a material change in job responsibility. In 2020, no directors submitted resignations under this requirement.

Majority Voting in Uncontested Director Elections

Our corporate governance guidelines require that in uncontested elections (those where the number of nominees does not exceed the number of directors to be elected), director nominees must receive the affirmative vote of a majority of the votes cast to be elected to our board of directors. Contested director elections (those where the number of director nominees exceeds the number of directors to be elected) are governed by a plurality of the vote of shares present in person or represented by proxy at the meeting.

The board has adopted a director resignation policy for incumbent directors in uncontested elections. Any proposed nominee for re-election as a director shall, before he or she is nominated to serve on the board, tender to the board his or her irrevocable resignation that will be effective, in an uncontested election of directors only, upon (i) such nominee’s receipt of a greater number of votes “against” election than votes “for” election at our annual meeting of stockholders; and (ii) acceptance of such resignation by the board of directors.

Director Overboarding Policy

Our bylaws and corporate governance guidelines state that a director may not serve on more than two other public company boards. Currently, all of our directors are in compliance of this policy.

Board Refreshment

Recognizing the importance of board composition and refreshment for effective oversight, the nominating and governance committee annually considers the composition and needs of the board of directors, reviews potential candidates, and recommends to the board nominees for appointment or election. The nominating and governance committee and the board are committed to identifying individuals with diverse backgrounds whose skills and experiences will enable them to make meaningful contributions to shaping the company’s business strategy and priorities. As part of its consideration of director succession, the nominating and governance committee from time to time reviews, including when considering potential candidates, the appropriate skills and characteristics required of board members. The board considers diversity of skills, expertise, race, ethnicity, gender, age, education, geography, cultural background, and professional experiences in evaluating board candidates for expected contributions to an effective board. Independent directors may not serve on the board beyond the next annual meeting of stockholders after attaining the age of 76. Given the breadth of our businesses, we believe the mandatory retirement age allows us to benefit from experienced directors, with industry expertise, company institutional knowledge and historical perspective, stability, and comfort with challenging company management, while maintaining our ability to refresh the board through the addition of new members. Mr. Sparby and Mr. Ryan joined the board in 2018, and Ms. Wang was elected as a director in 2019. In 2020, the nominating and governance committee considered potential director candidates for board refreshment who would provide construction industry experience as well as added diversity to the board. The nominating and governance committee subsequently recommended, and the board of directors approved, the nomination of Ms. Rosenthal for election to the board of directors at the 2021 annual meeting.

MDU Resources Group, Inc. Proxy Statement 27

Proxy Statement

Our corporate governance guidelines include our policy on consideration of director candidates recommended to us. We will consider candidates that our stockholders recommend in the same manner we consider other nominees. Stockholders who wish to recommend a director candidate may submit recommendations, along with the information set forth in the guidelines, to the nominating and governance committee chair in care of the secretary at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650.

Stockholders who wish to nominate persons for election to our board at an annual meeting of stockholders must follow the applicable procedures set forth in Section 2.08 or 2.10 of our bylaws. Our bylaws are available on our website. See “Stockholder Proposals, Director Nominations, and Other Items of Business for 2022 Annual Meeting” in the section entitled “Information about the Annual Meeting” for further details.

Prohibitions on Hedging/Pledging Company Stock

The director compensation policy prohibits directors from hedging their ownership of common stock, pledging company stock as collateral for a loan, or holding company stock in an account that is subject to a margin call.

Code of Conduct

We have a code of conduct and ethics, which we refer to as the Leading With Integrity Guide. It applies to all directors, officers, and employees. The Leading With Integrity Guide defines our values, our culture, and our commitments to stakeholders while setting expectations of employee conduct for legal and ethical compliance. In 2020, the company undertook a refreshment of the Leading With Integrity Guide to improve its readability and reflect updated policies and practices relating to environmental sustainability and diversity matters.

We intend to satisfy our disclosure obligations regarding amendments to, or waivers of, any provision of the code of conduct that applies to our principal executive officer, principal financial officer, and principal accounting officer, and that relates to any element of the code of ethics definition in Regulation S-K, Item 406(b), and waivers of the code of conduct for our directors or executive officers, as required by NYSE listing standards, by posting such information on our website.

Proxy Access

Our bylaws allow stockholders to nominate directors for inclusion in our proxy statement subject to the following parameters:

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

We believe these proxy access parameters reflect a well designed and balanced approach to proxy access that mitigates the risk of abuse and protects the interests of all of our stockholders. Stockholders who wish to nominate directors for inclusion in our Proxy Statement in accordance with proxy access must follow the procedures in Section 2.10 of our bylaws. See “Stockholder Proposals, Director Nominations, and Other Items of Business for 2022 Annual Meeting.”

One Class of Stock

Our common stock is the only class of shares outstanding.

No Shareholder Rights Plan

We do not have a “poison pill” and have no intention of adopting one at this time.

Annual Say-on-Pay Advisory Vote

Stockholders annually vote on the company’s named executive officer compensation.

Cybersecurity Oversight

The audit committee reviewed reports and received presentations at each of its regular quarterly meetings in 2020 concerning cybersecurity-related issues including information security, technology risks, and risk mitigation programs. All members of the board of directors received copies of reports and were present during the presentations. In 2014, the board established a Cyber Risk Oversight Committee (CYROC) consisting of the company’s chief information officer and chief financial officer as well as financial and information technology leaders from the company’s business segments. The CYROC provides management and the audit committee with analyses, appraisals, recommendations,

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Proxy Statement

and pertinent information concerning cyber defense of the company’s electronic information and information technology systems. The company has implemented an information security training and compliance program to facilitate initial and continuing education for employees who have contact or potential contact with the company’s data. External reviews are conducted to assess company information security programs and practices, including incident management, service continuity, and information security compliance programs. The company has not had an indication of a material security breach and has not incurred any expenses, penalties, or settlements arising from a material information security breach. The company maintains a cyber liability insurance policy providing insurance coverage within the policy limits for liability losses and business interruption events arising from an information security breach. The audit committee receives periodic briefings concerning cybersecurity, information security, technology risks, and risk mitigation programs.

Corporate Governance Materials

Stockholders can see our bylaws, corporate governance guidelines, board committee charters, and Leading With Integrity Guide on our website.

Corporate Governance Materials		Website
•	Bylaws	www.mdu.com/governance
•	Corporate Governance Guidelines	www.mdu.com/governance
•	Board Committee Charters for the Audit, Compensation, Nominating and Governance, and Environmental and Sustainability Committees	www.mdu.com/governance
•	Leading With Integrity Guide	www.mdu.com/commitmenttointegrity

Related Person Transaction Disclosure

The board of directors’ policy for the review of related person transactions is contained in our corporate governance guidelines. The policy requires the audit committee to review any transaction, arrangement or relationship, or series thereof:

•in which the company was or will be a participant;

•the amount involved exceeds $120,000; and

•a related person had or will have a direct or indirect material interest.

The purpose of this review is to determine whether this transaction is in the best interests of the company.

Related persons are directors, director nominees, executive officers, holders of 5% or more of our voting stock, and their immediate family members. Related persons are required promptly to report to our general counsel all proposed or existing related person transactions in which they are involved.

If our general counsel determines that the transaction is required to be disclosed under the SEC rules, the general counsel furnishes the information to the chair of the audit committee. After its review, the committee makes a determination or a recommendation to the board and officers of the company with respect to the related person transaction. Upon receipt of the committee’s recommendation, the board of directors or officers, as the case may be, take such action as they deem appropriate in light of their responsibilities under applicable laws and regulations.

We had no related person transactions in 2020.

MDU Resources Group, Inc. Proxy Statement 29

Proxy Statement

COMPENSATION OF NON-EMPLOYEE DIRECTORS

Director Compensation for 2020

MDU Resources’ non-employee directors are compensated for their service according to the MDU Resources Group Inc. Director Compensation Policy. Only one company employee, David L. Goodin, the company’s president and chief executive officer, serves as a director. Mr. Goodin receives no additional compensation for his service on the board. Director compensation is reviewed annually by the compensation committee. The committee’s independent consultant provided an analysis of the company’s director compensation for 2020. The analysis included research on market trends in director compensation as well as a review of director compensation practices of our peer group companies. Although the analysis indicated the company’s aggregate annual cash and equity compensation for the company’s non-employee directors was below that of the company’s peer group, the compensation committee nonetheless recommended and the board concurred that the annual compensation for non-employee directors would remain at the levels set in 2019:

Base Cash Retainer		$85,000
Additional Cash Retainers:
Non-Executive Chair		95,000
Audit Committee Chair		20,000
Compensation Committee Chair		15,000
Nominating and Governance Committee Chair		15,000
Environmental and Sustainability Committee Chair		15,000
Annual Stock Grant1 - Directors (other than Non-Executive Chair)		125,000
Annual Stock Grant2 - Non-Executive Chair		150,000
1	The annual stock grant is a grant of shares of company common stock equal in value to $125,000.
2	The annual stock grant is a grant of shares of company common stock equal in value to $150,000.

There are no meeting fees paid to directors.

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The following table outlines the compensation paid to our non-employee directors for 2020.

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)1	All Other Compensation ($)2	Total ($)
Thomas Everist	85,000	125,000	5,083	215,083
Karen B. Fagg	100,000	125,000	3,683	228,683
Mark A. Hellerstein	85,000	125,000	3,683	213,683
Dennis W. Johnson	180,000	150,000	3,683	333,683
Patricia L. Moss	85,000	125,000	2,083	212,083
Edward A. Ryan3	100,000	125,000	3,683	228,683
David M. Sparby	105,000	125,000	5,083	235,083
Chenxi Wang	85,000	125,000	1,283	211,283
John K. Wilson	100,000	125,000	2,083	227,083

1Directors receive an annual payment of $125,000 in company common stock, except the non-executive chair who receives $150,000 in company common stock, under the MDU Resources Group, Inc. Non-Employee Director Long-Term Incentive Compensation Plan. Directors serving less than a full year receive a prorated stock payment based on the number of months served. All stock payments are measured in accordance with Financial Accounting Standards Board (FASB) generally accepted accounting principles for stock-based compensation in FASB Accounting Standards Codification Topic 718. The grant date fair value is based on the purchase price of our common stock on the grant date of November 17, 2020, which was $25.40 per share. The amount paid in cash for fractional shares is included in the amount reported in the stock awards column to this table. 

2     Includes group life insurance premiums and charitable donations made on behalf of the director as applicable. Amounts for life insurance premiums reflect prorated amounts for directors serving less than a full year based on the number of months served.    

3    Mr. Ryan elected to receive shares of our common stock in lieu of $50,000 of his fees earned in cash. He received a total of 2,184 shares of company common stock which was purchased during 2020 on March 31, June 30, September 30, and December 31 at market prices of $21.34, $22.30, $22.40, and $25.97, respectively.

Other Compensation

In addition to liability insurance, we maintain group life insurance in the amount of $100,000 on each non-employee director for the benefit of their beneficiaries during the time they serve on the board. The annual cost per director is $82.80. Directors who contribute to the company’s Good Government Fund may designate, dependent on the amount of their contribution, up to four charities to receive donations from the company to match the director’s contributions to the Good Government Fund. Directors are reimbursed for all reasonable travel expenses, including spousal expenses in connection with attendance at meetings of the board and its committees. Perquisites, if any, were below the disclosure threshold in 2020.

Deferral of Compensation

Directors may defer all or any portion of the annual cash retainer and any other cash compensation paid for service as a director pursuant to the Deferred Compensation Plan for Directors. Deferred amounts are held as phantom stock with dividend accruals and are paid out in cash over a five-year period after the director leaves the board.

Post-Retirement

Our post-retirement income plan for directors was terminated in May 2001 for current and future directors. The net present value of each director’s benefit was calculated and converted into phantom stock. Payment is deferred pursuant to the Deferred Compensation Plan for Directors and will be made in cash over a five-year period after the director’s retirement from the board.

MDU Resources Group, Inc. Proxy Statement 31

Proxy Statement

Stock Ownership Policy

Our director stock ownership policy contained in our corporate governance guidelines requires each director to beneficially own our common stock equal in value to five times the director’s annual cash base retainer. Shares acquired through purchases on the open market and received through our Non-Employee Director Long-Term Incentive Compensation Plan are considered in ownership calculations as well as other beneficial ownership of our common stock by a spouse or other immediate family member residing in the director’s household. A director is allowed five years commencing January 1 of the year following the year of the director’s initial election to the board to meet the requirements. The level of common stock ownership is monitored with an annual report made to the compensation committee of the board. All directors are in compliance with the stock ownership policy or are within the first five years of their election to the board. For further details on our director’s stock ownership, see the section entitled “Security Ownership.”

32 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

SECURITY OWNERSHIP

Security Ownership Table

The table below sets forth the number of shares of our common stock that each director, each named executive officer, and all directors and executive officers as a group owned beneficially as of February 28, 2021. Unless otherwise indicated, each person has sole investment and voting power (or share such power with his or her spouse) of the shares noted.

Name1		Shares of Common Stock Beneficially Owned			Percent of Class
David C. Barney			93,820	2,3	*
Thomas Everist			870,899		*
Karen B. Fagg			83,100		*
David L. Goodin			426,344	2	*
Mark A. Hellerstein			33,207		*
Dennis W. Johnson			112,679	4	*
Nicole A. Kivisto			101,241	2,5	*
Patricia L. Moss			85,535		*
Edward A. Ryan			25,581		*
David M. Sparby			25,728		*
Jeffrey S. Thiede			105,047	2	*
Jason L. Vollmer			45,900	2	*
Chenxi Wang			7,778		*
John K. Wilson			138,808		*
All directors and executive officers as a group (18 in number)			2,265,237	2,6	1.13	%
*	Less than one percent of the class. Percent of class is calculated based on 200,522,277 outstanding shares as of February 28, 2021.
1	The table includes the ownership of all current directors, named executive officers, and other executive officers of the company without naming them.
2	Includes full shares allocated to the officer’s account in our 401(k) retirement plan.
3	The total includes 687 shares owned by Mr. Barney’s spouse.
4	Mr. Johnson disclaims all beneficial ownership of the 163 shares owned by his spouse.
5	The total includes 531 shares owned by Ms. Kivisto’s spouse.
6	Includes shares owned by a director’s or executive’s spouse regardless of whether the director or executive claims beneficial ownership.

Hedging Policy

The company’s Director Compensation Policy and its Executive Compensation Policy prohibit our directors and executives from hedging their ownership of company stock. The Director Compensation Policy applies to all directors who are not full-time employees of the company. The Executive Compensation Policy applies to the executives of the company designated as an officer for purposes of Section 16 of the Securities Exchange Act of 1934 as well as all other executives of the company and its subsidiaries who participate in its Long-Term Performance-Based Incentive Plan and its Executive Incentive Compensation Plan. Under the policies, directors and executives are prohibited from engaging in transactions that allow them to own stock technically but without the full benefits and risks of such ownership, including, but not limited to, zero-cost collars, equity swaps, straddles, prepaid variable forward contracts, security futures contracts, exchange funds, forward sale contracts, and other financial transactions that allow the director or executive to benefit from the devaluation of the company’s stock.

The company policies also prohibit directors, executives, and related persons from holding company stock in a margin account, with certain exceptions, or pledging company securities as collateral for a loan. Company common stock may be held in a margin brokerage account only if the stock is explicitly excluded from any margin, pledge, or security provisions of the customer agreement. Company common stock may

MDU Resources Group, Inc. Proxy Statement 33

Proxy Statement

be held in a cash account, which is a brokerage account that does not allow any extension of credit on securities. “Related person” means an executive officer’s or director’s spouse, minor child, and any person (other than a tenant or domestic employee) sharing the household of a director or executive officer as well as any entities over which a director or executive officer exercises control.

Greater Than 5% Beneficial Owners

Based solely on filings with the SEC, the table below shows information regarding the beneficial ownership of more than 5% of the outstanding shares of our common stock.

Title of Class		Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percent of Class
Common Stock		The Vanguard Group	20,724,538	1	10.34	%
		100 Vanguard Blvd.
		Malvern, PA 19355
Common Stock		BlackRock, Inc.	17,069,272	2	8.50	%
		55 East 52nd Street
		New York, NY 10055
Common Stock		State Street Corporation	13,699,907	3	6.83	%
		State Street Financial Center
		One Lincoln Street
		Boston, MA 02111
1	Based solely on the Schedule 13G, Amendment No. 9, filed on February 10, 2021, The Vanguard Group reported sole dispositive power with respect to 20,407,235 shares, shared dispositive power with respect to 317,303 shares, and shared voting power with respect to 134,536 shares as the parent holding company or control person of Vanguard Asset Management, Limited; Vanguard Fiduciary Trust Company; Vanguard Global Advisors, LLC; Vanguard Group (Ireland) Limited; Vanguard Investments Australia Ltd; Vanguard Investments Canada Inc.; Vanguard Investments Hong Kong Limited; and Vanguard Investments UK, Limited.
2	Based solely on the Schedule 13G, Amendment No. 12, filed on January 29, 2021, BlackRock, Inc. reported sole voting power with respect to 16,370,416 shares and sole dispositive power with respect to 17,069,272 shares as the parent holding company or control person of BlackRock Life Limited; BlackRock Advisors, LLC; BlackRock (Netherlands) B.V.; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock Financial Management, Inc.; BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock Investment Management (Australia) Limited; BlackRock Advisors (UK) Limited; BlackRock Fund Advisors; and BlackRock Fund Managers Ltd.
3	Based solely on the Schedule 13G, filed on February 9, 2021, State Street Corporation reported shared voting power with respect to 13,228,547 shares and shared dispositive power with respect to 13,699,907 shares as the parent holding company or control person of SSGA Funds Management, Inc.; State Street Global Advisors Limited (UK); State Street Global Advisors, Australia Limited; State Street Global Advisors GmbH; and State Street Global Advisors Trust Company.

Delinquent Section 16(a) Reports

Section 16 of the Securities Exchange Act of 1934, as amended, requires officers, directors, and holders of more than 10% of our common stock to file reports of their trading in our equity securities with the SEC. Based solely on a review of Forms 3, 4, and 5, and any amendments to these forms furnished to us during and with respect to 2020, or written representations that no Forms 5 were required, all such reports were timely filed, except for one Form 4 for Stephanie Barth in May 2020 relating to a purchase of shares of common stock.

34 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

EXECUTIVE COMPENSATION

ITEM 2. ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS

In accordance with Section 14A of the Securities Exchange Act of 1934 and Rule 14a-21(a), we are asking our stockholders to approve, in an advisory vote, the compensation of our named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K. As discussed in the Compensation Discussion and Analysis, the compensation committee and board of directors believe the current executive compensation program directly links compensation of the named executive officers to our financial performance and aligns the interests of the named executive officers with those of our stockholders. The compensation committee and board of directors also believe the executive compensation program provides the named executive officers with a balanced compensation package that includes an appropriate base salary along with competitive annual and long-term incentive compensation targets. These incentive programs are designed to reward the named executive officers on both an annual and long-term basis if they attain specified goals.

Our overall compensation program and philosophy for 2020 was built on a foundation of these guiding principles:

•we pay for performance, with over 66% of our 2020 total target direct compensation for the named executive officers in the form of performance-based incentive compensation;

•we review competitive compensation data for the named executive officers, to the extent available, and incorporate internal equity in the final determination of target compensation levels;

•we align executive compensation and performance by using annual performance incentives based on criteria that are important to stockholder value, including earnings, earnings per share, and earnings before interest, taxes, depreciation, and amortization (EBITDA); and

•we align executive compensation and performance by using long-term performance incentives based on total stockholder return relative to our peer group and financial measures important to company growth.

We are asking our stockholders to indicate their approval of our named executive officer compensation as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, the executive compensation tables, and narrative discussion. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers for 2020. Accordingly, the following resolution is submitted for stockholder vote at the 2021 annual meeting:

“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion of this Proxy Statement, is hereby approved.”

As this is an advisory vote, the results will not be binding on the company, the board of directors, or the compensation committee and will not require us to take any action. The final decision on the compensation of the named executive officers remains with the compensation committee and the board of directors, although the board and compensation committee will consider the outcome of this vote when making future compensation decisions. We intend to hold this advisory vote every year until at least the next stockholder advisory vote on the frequency of this vote.

The board of directors recommends a vote “for” the approval, on a non-binding

advisory basis, of the compensation of the company’s named executive officers,

as disclosed in this Proxy Statement.

Approval of the compensation of the named executive officers requires the affirmative vote of a majority of the common stock present in person or represented by proxy at the meeting and entitled to vote on the proposal. Abstentions will count as votes against this proposal. Broker non-vote shares are not entitled to vote on this proposal and, therefore, are not counted in the vote.

MDU Resources Group, Inc. Proxy Statement 35

Proxy Statement

INFORMATION CONCERNING EXECUTIVE OFFICERS

Information concerning the executive officers, including their ages as of December 31, 2020, present corporate positions, and business experience during the past five years, is as follows:

Name	Age	Present Corporate Position and Business Experience
David L. Goodin	59	Mr. Goodin was elected president and chief executive officer of the company and a director effective January 4, 2013. For more information about Mr. Goodin, see the section entitled “Item 1. Election of Directors.”
David C. Barney	65	Mr. Barney was elected president and chief executive officer of Knife River Corporation effective April 30, 2013, and president effective January 1, 2012.
Trevor J. Hastings	47	Mr. Hastings was elected president and chief executive officer of WBI Holdings, Inc. effective October 16, 2017. Prior to that, he was vice president-business development and operations support of Knife River Corporation effective January 11, 2012.
Anne M. Jones	57	Ms. Jones was elected vice president-human resources effective January 1, 2016. Prior to that, she was vice president-human resources, customer service, and safety at Montana-Dakota Utilities Co., Great Plains Natural Gas Co., Cascade Natural Gas Corporation, and Intermountain Gas Company effective July 1, 2013, and director of human resources for Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. effective June 2008.
Nicole A. Kivisto	47	Ms. Kivisto was elected president and chief executive officer of Montana-Dakota Utilities Co., Cascade Natural Gas Corporation, and Intermountain Gas Company effective January 9, 2015. Prior to that, she was vice president of operations for Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. effective January 3, 2014, and vice president, controller and chief accounting officer for the company effective February 17, 2010.
Karl A. Liepitz	42	Mr. Liepitz was elected vice president, general counsel and secretary effective February 6, 2021. Prior to that, he was assistant general counsel and assistant secretary effective January 1, 2017, and senior attorney and assistant secretary effective January 9, 2016. He held legal positions of increasing responsibility with the company since August 2003.
Margaret (Peggy) A. Link	54	Ms. Link was elected vice president and chief information officer effective December 1, 2017. Prior to that, she was chief information officer effective January 1, 2016, assistant vice president-technology and cybersecurity officer effective January 1, 2015, and director shared IT services effective June 2, 2009.
Jeffrey S. Thiede	58	Mr. Thiede was elected president and chief executive officer of MDU Construction Services Group, Inc. effective April 30, 2013, and president effective January 1, 2012.
Jason L. Vollmer	43	Mr. Vollmer was named vice president and chief financial officer effective November 23, 2020. Prior to that, he was vice president, chief financial officer and treasurer effective September 30, 2017, vice president, chief accounting officer and treasurer effective March 19, 2016, treasurer and director of cash and risk management effective November 29, 2014, and manager of treasury services and risk management effective June 30, 2014.

36 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Discussion and Analysis describes how our named executive officers were compensated for 2020 and how their 2020 compensation aligns with our pay-for-performance philosophy. It also describes the oversight of the compensation committee and the rationale and processes used to determine the 2020 compensation of our named executive officers including the objectives and specific elements of our compensation program.

The Compensation Discussion and Analysis contains statements regarding corporate performance targets and goals. The targets and goals are disclosed in the limited context of our compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Our Named Executive Officers for 2020 were:

David L. Goodin	President and Chief Executive Officer (CEO)
Jason L. Vollmer	Vice President and Chief Financial Officer (CFO)
David C. Barney	President and Chief Executive Officer - Construction Materials and Contracting Segment
Jeffrey S. Thiede	President and Chief Executive Officer - Construction Services Segment
Nicole A. Kivisto	President and Chief Executive Officer - Electric and Natural Gas Distribution Segments

Executive Summary

Pay for Performance

The compensation committee is responsible for designing and approving our executive compensation program and setting compensation opportunities for our named executive officers. Our compensation program is directly linked to our business strategy to ensure officers are focused on elements that drive our business strategy and create stockholder value. To ensure management’s interests are aligned with those of our stockholders and the performance of the company, the significant majority of the CEO’s and the other named executive officers’ compensation is dependent on the achievement of company performance targets. The charts below show the target pay mix for the CEO and average target pay mix of the other named executive officers, including base salary and the annual and long-term incentives.

MDU Resources Group, Inc. Proxy Statement 37

Proxy Statement

Annual Base Salary

We provide our executive officers with base salary at a sufficient level to attract and retain executives with the knowledge, skills, and abilities necessary to successfully execute their job responsibilities. Consistent with our compensation philosophy of linking pay to performance, our executives receive a relatively smaller percentage of their overall target compensation in the form of base salary. In establishing base salaries, the compensation committee considers each executive’s individual performance, the scope and complexities of their responsibilities, internal equity, and whether the base salary is competitive as measured against the base salaries of similarly situated executives in our peer group and market compensation data.

Annual Cash Incentive Awards

Annual cash incentive awards for our executive officers are linked to performance by rewarding achievement of financial goals and ensuring our executive officers are focused and accountable for our growth and profitability. The design of the annual cash incentive award opportunities for 2020 was the same as the design used in 2019. Each executive is assigned a target annual incentive award based on a percentage of the executive’s base salary. The actual annual cash incentive realized is determined by multiplying the target award by the payout percentage associated with the achievement of the executive’s performance measures.

Eighty percent of the annual cash incentive award for our business segment executives was based on specific business segment financial performance measures selected by the compensation committee. The other 20% of the business segment executives’ annual incentive award was based on the achievement of overall company earnings per share (EPS). These measures incentivize our business segment executives to focus on the success and performance of their business segment while keeping the overall success of the company in mind.

The annual cash incentive award for corporate executives (including our CEO and CFO) was based on the achievement of the performance measures for each business segment executive and weighted by each business segment’s invested capital relative to the company’s total invested capital. Each corporate executive’s target award is multiplied by the sum of the weighted achievement percentage for each business segment executive to derive the corporate executive’s realized annual award. This incentivizes the corporate executives to assist the business segments in their success while still emphasizing overall company performance. See the “Annual Incentives” section within this Compensation Discussion and Analysis for further details on our company’s annual cash incentive program.

The following chart shows the percentage payout of the annual incentive target realized by our CEO compared to earnings per share from continuing operations for the last five years. The chart demonstrates the alignment between our financial performance and realized annual cash incentive compensation.

38 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Long-Term Equity-Based Incentive Awards

Our compensation committee and the board approved grants of long-term incentives to our executives in the form of performance shares which vest into company stock plus dividend equivalents at the end of a three-year performance period upon achievement of established performance measures. From 2018 through 2020, the compensation committee used earnings from continuing operations and earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations growth as long-term performance measures in addition to total stockholder return (TSR) relative to our peer group to align pay and long-term performance goals.

Long-Term Performance Measures for the 2018 through 2020 Performance Period
TSR Ranking	Earnings Growth	EBITDA Growth
50th Percentile	16.9%	10.3%
	Compound Annual Growth Rate	Compound Annual Growth Rate
Target Ranking = 50th Percentile	Target Growth = 6.5%	Target Growth = 6.5%
Weighting = 50%	Weighting = 25%	Weighting = 25%

With the majority of our executive officer’s compensation dependent on the achievement of robust performance measures set by the compensation committee, we believe there is substantial alignment between executive pay and the company’s performance. See the “Long-Term Incentives” section within this Compensation Discussion and Analysis for further details on the company’s long-term incentive program.

Stockholder Advisory Vote (“Say on Pay”)

At our 2020 Annual Meeting of Stockholders, 95.1% of the votes cast on the “Say on Pay” proposal approved the compensation of our named executive officers. The compensation committee viewed the 2020 vote as an expression of the stockholders’ general satisfaction with the company’s executive compensation programs. The compensation committee reviewed and considered the 2020 vote on “Say on Pay” in setting compensation for 2021 by continuing to link performance-based annual and long-term incentives to company financial performance and stockholder value.

MDU Resources Group, Inc. Proxy Statement 39

Proxy Statement

Compensation Practices

Our practices and policies ensure alignment between the interests of our stockholders and our executives as well as effective compensation governance.

What We Do
þ	Pay for Performance - Annual and long-term award incentives tied to performance measures set by the compensation committee comprise the largest portion of executive compensation.
þ	Independent Compensation Committee - All members of the compensation committee meet the independence standards under the New York Stock Exchange listing standards and the Securities and Exchange Commission rules.
þ	Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate executive compensation plans and practices.
þ	Competitive Compensation - Executive compensation reflects executive performance, experience, relative value compared to other positions within the company, relationship to competitive market value compensation, business segment economic environment, and the actual performance of the overall company and the business segments.
þ	Annual Cash Incentive - Payment of annual cash incentive awards are based on business segment and overall company performance against pre-established annual financial measures.
þ	Long-Term Equity Incentive - Long-term incentive awards may be earned at the end of a three-year period based on achieving pre-established measures and are paid through shares of common stock which encourages stock ownership and helps retain management talent.
þ	Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based compensation.
þ	Mix of Financial Goals - Use of a mixture of financial goals to measure performance prevents overemphasis on a single metric.
þ	Annual Compensation Risk Analysis - Risks related to our compensation programs are regularly analyzed through an annual compensation risk assessment.
þ	Stock Ownership and Retention Requirements - Executive officers are required to own, within five years of appointment or promotion, company common stock equal to a multiple of their base salary. Our president and chief executive officer is required to own stock equal to four times his base salary, and the other named executive officers are required to own stock equal to three times their base salary. The executive officers also must retain at least 50% of the net after-tax shares of stock vested through the long-term incentive plan for the earlier of two years or until termination of employment. Net performance shares must also be held until share ownership requirements are met.
þ	Clawback Policy - If the company’s audited financial statements are restated due to any material noncompliance with the financial reporting requirements under the securities laws, the compensation committee may, or shall if required, demand repayment of some or all incentives paid to our executive officers within the last three years.
What We Do Not Do
ý	Stock Options - The company does not use stock options as a form of incentive compensation.
ý	Employment Agreements - Executives do not have employment agreements entitling them to specific payments upon termination or a change of control of the company.
ý	Perquisites - Executives do not receive perquisites that materially differ from those available to employees in general.
ý	Hedge Stock - Executives are not allowed to hedge company securities.
ý	Pledge Stock-Executives are not allowed to pledge company securities in margin accounts or as collateral for loans.
ý	No Dividends or Dividend Equivalents on Unvested Shares - We do not provide for payment of dividends or dividend equivalents on unvested share awards.
ý	Tax Gross-Ups- Executives do not receive tax gross-ups on their compensation.
ý	No Pandemic Adjustments - We made no changes or adjustments to the 2020 annual incentive or outstanding long-term incentive plan measures despite the pandemic.

40 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

2020 Compensation Framework

Objectives of our Compensation Program

We have a written executive compensation policy for our executive officers, including all the named executive officers. Our policy’s stated objectives are to:

•recruit, motivate, reward, and retain high performing executive talent required to create superior shareholder value;

•reward executives for short-term performance as well as for growth in enterprise value over the long-term;

•ensure effective utilization and development of talent by working in concert with other management processes - for example, performance appraisal, succession planning, and management development;

•help ensure that compensation programs do not encourage or reward excessive or imprudent risk taking; and

•provide a competitive package relative to industry-specific and general industry comparisons and internal equity, as appropriate.

Compensation Decision Process for 2020

For 2020, the compensation committee made recommendations to the board of directors regarding compensation of all executive officers, and the board of directors then approved the recommendations. The CEO’s role in the process includes the assessment of executive officer performance and recommending base salaries for the executive officers other than himself. The CEO attended all compensation committee meetings but was not present during discussions of his compensation. At its meetings in November 2019 and February 2020, the compensation committee established and approved base salaries and performance measures for the annual and long-term incentive compensation for 2020. It also certified the achievement of performance measures for 2019 associated with annual and long-term incentive compensation that was paid or vested in 2020.

The compensation committee hires an independent consulting firm to assess and recommend competitive pay levels, including base salaries and incentive compensation, associated with executive officer positions. In August 2019, the human resources department prepared an analysis of and provided recommendations for the 2020 executive compensation structure which was reviewed by the compensation committee’s independent consultant, Meridian Compensation Partners, LLC.

Compensation Policies and Practices as They Relate to Risk Management

The human resources department conducts an annual risk assessment of our compensation programs. Senior management and our management policy committee reviewed the risk assessment for 2020 and concluded our compensation policies and practices do not create risks which could have a material adverse effect on the company. After review and discussion of the assessment with senior management, the compensation committee concurred with management’s assessment.

In assessing the risks arising from our compensation policies and practices, the human resources department identified the following practices designed to prevent excessive risk taking:

•Business management and governance practices:

◦risk management is a specific performance competency included in the annual performance assessment of executives;

◦board oversight on capital expenditure and operating plans;

◦board approval on business acquisitions above a specific dollar amount or on any transaction involving the exchange of company common stock;

◦employee integrity training programs and anonymous reporting systems;

◦quarterly risk assessment reports at audit committee meetings; and

◦prohibitions on holding company stock in an account that is subject to a margin call, pledging company stock as collateral for a loan, and hedging of company stock by executive officers and directors.

•Executive compensation practices:

◦active compensation committee review of executive compensation;

◦initial determination of a position’s salary grade to be at or near the 50th percentile of base salaries paid to similar positions at peer group companies and/or relevant industry companies;

MDU Resources Group, Inc. Proxy Statement 41

Proxy Statement

◦consideration of peer group and/or relevant industry practices to establish appropriate target compensation;

◦a balanced compensation mix of fixed salary as well as annual and long-term incentives tied primarily to the company’s financial and stock performance;

◦use of interpolation for annual and long-term incentive awards to avoid payout cliffs;

◦negative discretion to adjust any annual incentive award payment downward;

◦use of caps on annual incentive awards (maximum of 200% of target for regulated segments based on weighted maximum targets of 200% for earnings per share weighted 20% and 200% for business unit earnings weighted 80%; and 240% of target for construction materials and services segments based on weighted maximum targets of 200% for earnings per share weighted 20% and 250% for business unit EBITDA weighted 80%) and long-term incentive stock grant awards (maximum of 200% of target);

◦ability to clawback incentive payments in the event of a financial restatement;

◦use of performance shares and restricted stock units, rather than stock options or stock appreciation rights, as an equity component of incentive compensation;

◦use of performance shares for long-term incentive awards with relative total stockholder return, EBITDA growth, and earnings growth performance measures;

◦use of three-year performance periods for performance shares and restricted stock units to discourage short-term risk-taking;

◦substantive incentive goals measured primarily by earnings, EBITDA, earnings per share criteria, and compound earnings and EBITDA growth, which encourage balanced performance and are important to stockholders;

◦use of financial performance metrics that are readily monitored and reviewed;

◦regular review of companies in the peer group to ensure appropriateness and industry match;

◦stock ownership requirements for the board and for executives participating in the MDU Resources Long-Term Performance-Based Incentive Plan;

◦mandatory holding periods of net after-tax company stock awards to executives until stock ownership requirements are achieved; and

◦use of independent consultants to assist in establishing pay targets and compensation structure.

Components of Compensation

Our executive compensation program is designed to promote sustained long-term profitability and create stockholder value. The components of our executive officer’s compensation are selected to drive financial and operational results as well as align the executive officer’s interests with those of our stockholders. Pay components and performance measures are considered by the compensation committee as fundamental financial measures of successful company performance and long-term value creation. The components of our 2020 executive compensation included:

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Proxy Statement

Component	Payments	Purpose	How Determined	How it Links to Performance
Base Salary	Assured	Provides sufficient, regularly paid income to attract and retain executives with the knowledge, skills, and abilities necessary to successfully execute their job responsibilities and reflects the individual role, responsibilities, performance, and experience of each named executive officer and the importance of the role to the company.	Based on recommendation from the CEO for executives other than himself and analysis of peer company and industry compensation information. Base salary for the CEO is determined after consideration of input from the independent compensation consultant.	Base salary is a means to attract and retain talented executives capable of driving success and performance.
Annual Cash Incentive	Performance Based At Risk	Provides an opportunity to earn annual incentive compensation to ensure focus on annual financial and operating results and to be competitive from a total renumeration standpoint.	Annual cash incentives are calculated as a percentage of base salary with payout based on the achievement of performance measures established in advance by the compensation committee.	Annual incentive performance measures are tied to the achievement of financial goals aimed to drive the success of the company and the individual business segments.
Performance Shares	Performance Based At Risk	Provides an opportunity to earn long-term compensation to ensure focus on long-term value creation and the company’s strategic objectives and to be competitive from a total renumeration standpoint.	Performance share award opportunities are recommended by the CEO for executives other than himself and approved by the compensation committee. Performance share opportunities for the CEO are determined by the compensation committee with input from the independent compensation consultant. Vesting of the awards is based on the company’s achievement of financial measures established by the compensation committee as well as total stockholder return in comparison to the company’s peer group over a three-year performance period.	Fosters ownership in company stock and aligns the executive’s interests with those of stockholders in increasing long-term stockholder value.

Allocation of Total Target Compensation for 2020

Total target compensation consists of base salary plus target annual and long-term incentive compensation. Performance-based incentive compensation, which consists of annual cash incentive and three-year performance share award opportunities, comprises the largest portion of our named executive officers’ total target compensation because:

•performance shares align the interests of the named executive officers with those of stockholders by making a significant portion of their target compensation contingent upon results beneficial to stockholders;

•our named executive officers are in positions of authority to drive, and therefore bear high levels of responsibility for, our corporate performance;

•variable compensation helps ensure focus on the goals that are aligned with overall company strategy; and

•incentive compensation is more variable than base salary and dependent upon company performance and the satisfaction of performance objectives.

The compensation committee generally allocates a higher percentage of total target compensation to the target long-term incentive than to the target annual incentive for our higher level executives because they are in a better position to influence long-term performance. The long-term incentive awards, if earned by achieving established measures, are paid in company common stock. These awards, combined with our stock retention requirements and our stock ownership policy, promote ownership of our stock by the executive officers. As a result, the compensation committee believes the executive officers, as stockholders, will be motivated to deliver long-term value to all stockholders.

MDU Resources Group, Inc. Proxy Statement 43

Proxy Statement

Peer Group

The compensation committee evaluates the company’s compensation plan and its performance relative to a group of peer companies in determining overall compensation and the vesting of long-term incentive compensation. The peer group is reviewed annually to assess ongoing relevance and credibility. The companies included in our 2020 peer group remained the same as the 2019 peer group which were evaluated and recommended by the independent compensation consultant, Meridian Compensation Partners, LLC. In evaluating potential peer companies, the compensation consultant considered companies in the construction and engineering, construction materials, and utility industries. They also sought a group of companies where MDU Resources would rank close to the 50th percentile in terms of revenues and market capitalization. In addition, the consultant considered companies currently listed as peer companies for MDU Resources by proxy advisory firms. The 2020 peer group recommended by the consultant includes eleven companies in regulated energy delivery businesses and ten companies in the construction materials or construction services businesses. At the time of analysis, MDU Resources ranked at the 54th percentile in terms of revenue and at the 41st percentile in terms of market capitalization in comparison to the selected peer group companies. The 2020 peer group reflects MDU Resources’ size, mix of current businesses, and complexity and consequently provides an appropriate group for comparative purposes.

The peer group companies are shown below:

2020 Peer Companies
Regulated Energy Delivery	Construction Materials and Services
Alliant Energy Corporation	Dycom Industries, Inc.
Ameren Corporation	EMCOR Group, Inc.
Atmos Energy Corporation	Granite Construction Incorporated
Black Hills Corporation	Jacobs Engineering Group Inc.
CMS Energy Corporation	KBR, Inc.
Evergy, Inc.	Martin Marietta Materials, Inc.
NiSource Inc.	MasTec, Inc.
Pinnacle West Capital Corporation	Quanta Services, Inc.
Portland General Electric Company	Summit Materials, Inc.
Southwest Gas Holdings, Inc.	Vulcan Materials Company
WEC Energy Group, Inc.

2020 Compensation for Our Named Executive Officers

2020 Base Salary and Incentive Targets

At its November 2019 meeting, the compensation committee approved 2020 base salaries as well as the annual and long-term incentive compensation targets for the named executive officers. Mr. Goodin was not present during the portion of the meeting where the compensation committee discussed and approved the president and CEO base salary for 2020. At its February 2020 meeting, the compensation committee approved the annual and long-term incentive performance measures for our named executive officers. In determining base salaries, target cash annual incentives, target long-term incentives, and target total direct compensation for our named executive officers, the compensation committee received and considered company and individual performance, market and peer data, responsibilities, experience, tenure in position, internal equity, and input and recommendations from the CEO, human resources department, and the independent compensation consultant. The following information relates to each named executive officer’s 2020 base salary, target annual cash incentive, target long-term incentive, and target total direct compensation:

44 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

David L. Goodin	2020 ($)	Compensation Component as a % of Base Salary
Base Salary	960,000
Target Annual Cash Incentive Opportunity	1,200,000	125	%
Target Long-Term Incentive Opportunity	2,400,000	250	%
Target Total Direct Compensation	4,560,000
The compensation committee considered information provided in the 2019 compensation study showing Mr. Goodin's base salary, total cash compensation, and long-term incentives were below market levels and increased Mr. Goodin’s base salary by 11.6%. Mr. Goodin’s 2020 annual incentive target increased from 100% to 125% of his base salary. The compensation committee, based on recommendations from its compensation consultant, Meridian Compensation Partners, LLC, set Mr. Goodin’s long-term incentive target at $2,400,000, which is the same as 2019 and represents 250% of his base salary.

Jason L. Vollmer	2020 ($)	Compensation Component as a % of Base Salary
Base Salary	440,000
Target Annual Cash Incentive Opportunity	330,000	75	%
Target Long-Term Incentive Opportunity	528,000	120	%
Target Total Direct Compensation	1,298,000
Mr. Vollmer received a 10.0% increase in his base salary in 2020. The compensation committee considered information provided in the 2019 compensation study showing Mr. Vollmer’s base salary was below market based on peer group and compensation survey data. The compensation committee maintained Mr. Vollmer’s target annual and long-term incentive opportunities at 75% and 120% of base salary, respectively.

David C. Barney	2020 ($)	Compensation Component as a % of Base Salary
Base Salary	487,000
Target Annual Cash Incentive Opportunity	365,250	75	%
Target Long-Term Incentive Opportunity	585,000	120	%
Target Total Direct Compensation	1,437,250
Mr. Barney received a 3.9% increase in base salary for 2020. The compensation committee maintained Mr. Barney’s target annual and long-term incentive opportunities at 75% of his base salary and $585,000, respectively.

Jeffrey S. Thiede	2020 ($)	Compensation Component as a % of Base Salary
Base Salary	487,000
Target Annual Cash Incentive Opportunity	365,250	75	%
Target Long-Term Incentive Opportunity	585,000	120	%
Target Total Direct Compensation	1,437,250
Mr. Thiede received a 3.9% increase in his base salary for 2020. The compensation committee maintained Mr. Thiede’s target annual and long-term incentive opportunities at 75% of base salary and $585,000, respectively.

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Proxy Statement

Nicole A. Kivisto	2020 ($)	Compensation Component as a % of Base Salary
Base Salary	487,000
Target Annual Cash Incentive Opportunity	365,250	75	%
Target Long-Term Incentive Opportunity	585,000	120	%
Target Total Direct Compensation	1,437,250
Ms. Kivisto received a base salary increase of 7.0% for 2020. The compensation committee maintained her target annual and long-term incentive opportunities at 75% of her base salary and $585,000, respectively.

Annual Incentives

Annual incentive awards are received by business segment executives through the achievement of financial performance measures specific to each business segment plus a performance measure tied to overall company earnings per share. For corporate executives, annual incentive awards are determined as the sum of the weighted percentage award payouts for each business segment with the weighting based upon the business segment’s invested capital relative to the company’s total invested capital. Through this, our business segment executives are incentivized to primarily focus on the success and performance of their business segment while keeping the overall financial success of the company in mind, whereas our corporate executives are incentivized to assist in the success and performance of all lines of business.

The compensation committee selected objective financial performance measures to ensure that compensation to the executives reflects the success of their respective business segments and the company. The annual incentive performance measures for each business segment president include a corporate earnings per share performance measure representing 20% of the target award opportunity and a business segment financial performance measure representing 80% of the target award opportunity. In February 2020, the compensation committee set performance targets that it believed were rigorous based on the company’s capital and business plans, prior year results, and anticipated future market conditions. To incentivize executives to make decisions that have long-term positive impact, even at the expense of short-term results, and to prevent one-time gains and losses from having an undue impact on incentive payments, the compensation committee designed its annual incentive measures to allow for adjustments for certain unplanned events that impact our performance targets but are not indicative of underlying business performance. The following annual incentive performance measures for 2020 were adopted by the compensation committee for the business segment presidents (exclusive of the MDU Resources Group, Inc. corporate executive officers) at its February 2020 meeting:

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Proxy Statement

Measure	Applies to	Purpose	Measurement	Target	Weight	How Target was Selected
MDU Resources Diluted Adjusted Earnings per Share (EPS)	All Business Segment Presidents	EPS is a generally accepted accounting principle (GAAP) measurement and is a key driver of stockholder return. This is the basis on which we provide annual performance expectations and consistent with how we report results to the financial community. This goal applies to the presidents of all business segments to engage them as members of the company’s management policy committee in the overall success of the company.	GAAP EPS (diluted) before discontinued operations plus earnings/losses from any operations discontinued after December 31, 2019, and adjustments approved by the compensation committee to remove: - the effect on earnings at the company level of intersegment earnings eliminations; - the negative effect on earnings from asset sales/dispositions/retirements; - the effect on earnings from withdrawal liabilities relating to multiemployer pension plans; - the effect on earnings from transaction costs incurred for acquisitions and mergers; and - the effect on earnings from unanticipated changes and interpretations of tax law.	$1.76	20%	Target reflects 2020 financial goal to achieve an estimated return on invested capital of 8.1%. The 2020 target is 31 cents more than the 2019 target and 7 cents more than 2019 actual EPS before discontinued operations (diluted).
Business Segment Earnings	Electric and Natural Gas Distribution Segments President	Provides a measure of financial performance and an incentive to drive business results. Regulated entities are valued based on earnings potential and rate base.	GAAP business segment earnings before discontinued operations plus earnings/losses from any operations discontinued after December 31, 2019, and adjustments approved by the compensation committee to remove: - the negative effect on earnings from asset sales/dispositions/retirements; - the effect on earnings from transaction costs incurred for acquisitions or mergers; and - the effect on earnings from unanticipated changes and interpretations of tax law.	$99.0 million	80%	Target reflects the 2020 financial goal for the business segment to achieve an estimated return on invested capital of 5.0%. The 2020 target is 5.0% above 2019 actual results reflecting continued investment in its infrastructure and regulatory recovery from completed and pending rate cases.
	Pipeline Segment President			$31.1 million	80%	Target reflects the 2020 financial goal of the business segment to achieve an estimated return on invested capital of 7.8%. The 2020 target is 5.0% above the 2019 actual results and reflects the business segment’s continued execution of pipeline expansion projects.
Business Segment Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)	Construction Materials and Contracting Segment President	Provides a measure of financial performance common to the industries in which these segments operate. Focusing on EBITDA encourages growth by excluding the impact of decisions regarding interest, taxes, depreciation, and amortization made during the acquisition process.	EBITDA from continuing operations adjusted plus EBITDA from any operations discontinued after December 31, 2019, and adjustments approved by the compensation committee to remove: - the negative effect on EBITDA from asset sales/dispositions/retirements; - the effect on EBITDA from withdrawal liabilities relating to multiemployer pension plans; and - the effect on EBITDA from transaction costs incurred for acquisitions or mergers.	$270.1 million	80%	Target reflects the 2020 financial goal of the business segment to achieve an estimated return on invested capital of 10.7% and is 4.3% above the actual 2019 EBITDA results. The increase reflects acquisitions completed in 2019 and backlog at 2019 year-end.
	Construction Services Segment President			$150.9 million	80%	Target reflects the 2020 financial goal of the business segment to achieve an estimated return on invested capital of 20.4% and is 3.8% above the actual 2019 EBITDA results reflecting backlog at 2019 year-end and anticipated organic and acquisition growth.

MDU Resources Group, Inc. Proxy Statement 47

Proxy Statement

Actual performance results are compared to target performance measures to arrive at a percent of target achieved. The percent of target achieved is translated into a payout percentage of the target award opportunity. Achievement of 100% of the target performance measure results in a payout of 100% of the target award opportunity. Achievement of an established threshold is required to receive partial payment of the target award opportunity. Results achieved below the established threshold result in no payout. The threshold and maximum performance as well as the associated payout opportunity are depicted in the following chart:

Measure	Weighting		Threshold				Maximum
			% of Target		Payout %		% of Target		Payout %
MDU Resources Diluted Adjusted EPS	20	%	85	%	25	%	115	%	200	%
Electric and Natural Gas Distribution Earnings	80	%	90	%	50	%	110	%	200	%
Pipeline Earnings	80	%	85	%	25	%	115	%	200	%
Construction Materials and Contracting EBITDA	80	%	75	%	25	%	115	%	250	%
Construction Services EBITDA	80	%	65	%	25	%	115	%	250	%

Results achieved between payout levels are calculated using linear interpolation.

2020 Annual Incentive Results

The 2020 performance measure results, percent of target achieved based on those results, and the associated payout percentages reflect the company’s excellent 2020 financial performance and are presented below:

Business Segment	Performance Measure	Result	Percent of  Performance  Measure  Achieved		Percent of Award Opportunity Payout		Weight		Weighted Award  Opportunity  Payout %
All Business Segments	Earnings per Share	$1.95	110.8	%	172.0	%	20	%	34.4	%
Electric and Natural Gas Distribution	Earnings	$99.7 million	100.7	%	106.5	%	80	%	85.2	%
Pipeline	Earnings	$37.0 million	119.1	%	200.0	%	80	%	160.0	%
Construction Materials and Contracting	EBITDA	$305.9 million	113.2	%	232.4	%	80	%	185.9	%
Construction Services	EBITDA	$173.3 million	114.9	%	248.6	%	80	%	198.9	%

For our corporate named executive officers, namely Messrs. Goodin and Vollmer, the payout of the annual cash incentives is based on the achievement of performance measures at the business segments weighted by each business segment’s average invested capital relative to the company’s total invested capital. The compensation committee believes this approach provides alignment between our corporate executives and business segment performance. Messrs. Goodin’s and Vollmer’s 2020 annual cash incentives were earned at 151.5% of the target award opportunity based on the following proportional weighted sum of the annual business segment payouts:

Business Segment	Column A Business Segment Award Payout		Column B Percentage of  Average Invested Capital		Column A x Column B
Electric and Natural Gas Distribution	119.6	%	57.3	%	68.5	%
Pipeline	194.4	%	8.9	%	17.3	%
Construction Materials and Contracting	194.4	%	25.0	%	48.6	%
Construction Services	194.4	%	8.8	%	17.1	%
Total Payout Percentage					151.5	%
For purposes of calculating the incentive awards for Messrs. Goodin and Vollmer, the award payouts associated with the construction materials and contracting and construction services segments’ EBITDA performance measures were limited to 200% which resulted in a weighted payout of 194.4% versus 232.4% and 248.6% for the construction materials and contracting and construction services business segment presidents, respectively.

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Proxy Statement

Based on the achievement of the performance targets, the named executive officers received the following 2020 annual incentive compensation:

Name	Target Annual Incentive ($)	Annual Incentive Earned
		Payout as a % of Target (%)	Amount ($)
David L. Goodin	1,200,000	151.5	1,818,000
Jason L. Vollmer	330,000	151.5	499,950
David C. Barney	365,250	220.3	804,646
Jeffrey S. Thiede	365,250	233.3	852,128
Nicole A. Kivisto	365,250	119.6	436,839

Long-Term Incentives

All our named executive officers participated in the 2020 long-term incentive plan which aligns long-term compensation with the achievement of pre-determined financial goals. Long-term incentive compensation comprised 52.6% of the CEO’s 2020 total target direct compensation and 40.7% of the average of the other named executive officer’s target total direct compensation. Stock earned under long-term incentive compensation is subject to our stock retention requirements. If the executive’s employment is terminated during the performance period for cause at any time, or for any reason before the executive has reached age 55 and completed ten years of service, all performance shares and related dividend equivalents are forfeited.

Grant of 2020-2022 Long-Term Performance Share Awards

For 2020, the compensation committee approved performance share awards which may vest at the end of a three-year period between 0% and 200% based on the achievement of three performance measures:

•Total stockholder return relative to that of the peer group companies was selected as the measure for 50% of the award vesting to align the award with the company's performance relative to our peers;

•Compound annual growth rate in EBITDA from continuing operations was selected as the measure for 25% of the award vesting to encourage strategic growth and focuses on controllable costs; and

•Compound annual growth rate in earnings from continuing operations was selected as the measure for 25% of the award vesting to encourage quality earnings and continued growth of the company.

For the awards made in 2020, earnings used to calculate EBITDA growth may be adjusted, as such adjustments are approved by the compensation committee, to remove:

•the effect on earnings from leases/impairments on asset sales/dispositions/retirements;

•the effect on earnings from withdrawal liabilities relating to multiemployer pension plans; and

•the effect on earnings from costs incurred for acquisitions or mergers.

Earnings used to calculate earnings growth from continuing operations for the 2020 awards may be adjusted, as approved by the compensation committee, to remove the effects on earnings as noted above for the calculation of EBITDA growth plus any effect on earnings from unanticipated tax law changes.

Vesting of shares and associated dividend equivalents is predicated on achievement of an established threshold associated with each performance measure. To safeguard the confidentiality of our long-term outlook on projected performance outcomes, we do not disclose actual performance targets until the performance period is completed. Achievement at the threshold level of the performance measure results in vesting of 20% of the associated portion of the performance share award. Actual results of the performance measure achieved below the threshold lead to zero vesting of the associated portion of the performance share award. Maximum performance measure levels have also been established for each performance measure and result in vesting of 200% of the associated portion of the performance share award. Thresholds and maximum payouts as a percentage of target performance for the 2020 measures are:

MDU Resources Group, Inc. Proxy Statement 49

Proxy Statement

The Company’s Peer TSR Percentile Rank	The Company’s Earnings and EBITDA Growth Rate as a Percentage of Target		Vesting Percentage  of Award Target
75th or higher	153.8% or higher		200	%
50th	Target		100	%
25th	46.2	%	20	%
Less than 25th	less than 46.2%		0	%

Vesting for percentile ranks falling between the intervals is interpolated.

On February 13, 2020, for the 2020-2022 performance period, the compensation committee determined the target number of performance shares for each named executive officer by dividing a selected target long-term award amount by the average of the closing prices of our stock from January 1 through January 22, 2020, which was $29.20 per share. Based on this price, the compensation committee awarded the following target performance share opportunities to the named executive officers:

Name	Base Salary ($)	Target Long-Term Performance Share Incentive % of Base Salary (%)	Long-Term  Performance Share Incentive Target ($)	Performance Share Opportunities (#)
David L. Goodin	960,000	250	2,400,000	82,191
Jason L. Vollmer	440,000	120	528,000	18,082
David C. Barney	487,000	120	585,000	20,034
Jeffrey S. Thiede	487,000	120	585,000	20,034
Nicole A. Kivisto	487,000	120	585,000	20,034

Vesting of 2018-2020 Performance Share Awards

For the 2018-2020 performance period, the long-term incentive program consisted solely of performance shares. The performance criteria used for vesting of the 2018-2020 performance share awards was:

•50% based on total stockholder return as a percentile of the total stockholder return for our peer companies over the three-year performance period;

•25% based on EBITDA growth over the three-year performance period; and

•25% based on earnings growth over the three-year performance period.

Performance Criteria	Result		Vesting %		Weighting		Weighted Payout
Relative TSR Percentile Ranking	50th		100	%	50	%	50	%
EBITDA Growth	10.3	%	200	%	25	%	50	%
Earnings Growth	16.9	%	200	%	25	%	50	%
Total Weighted Payout							150	%

The named executive officers received the following long-term compensation for the 2018-2020 performance period:

Name	Target Performance Shares (#)	Performance Shares Vested (#)	Dividend Equivalents ($)
David L. Goodin	78,460	117,690	287,752
Jason L. Vollmer	15,987	23,980	58,631
David C. Barney	20,784	31,176	76,225
Jeffrey S. Thiede	20,784	31,176	76,225
Nicole A. Kivisto	19,642	29,463	72,037

50 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Stock Retention Requirement

The named executive officers must retain 50% of the net after-tax shares vested pursuant to the long-term incentive awards for the earlier of two years from the date the vested shares are issued or the executive’s termination of employment. The executive officer is also required to retain all vested share awards net of taxes if the executive has not met the stock ownership requirements under the company’s stock ownership policy for executives.

Other Benefits

The company provides post-employment benefit plans and programs in which our named executive officers may be participants. We believe it is important to provide post-employment benefits which approximate retirement benefits paid by other employers to executives in similar positions. The compensation committee periodically reviews the benefits provided to maintain a market-based benefits package. Our named executive officers participated in the following plans during 2020 which are described below:

Plans	David L. Goodin	Jason L. Vollmer	David C. Barney	Jeffrey S. Thiede	Nicole A. Kivisto
401(k) Retirement Plan	Yes	Yes	Yes	Yes	Yes
Pension Plans	Yes	Yes	No	No	Yes
Supplemental Income Security Plan	Yes	No	Yes	No	Yes
Nonqualified Defined Contribution Plan	No	Yes	Yes	Yes	No

401(k) Retirement Plan

The named executive officers as well as all employees working a minimum of 1,000 hours per year are eligible to participate in the 401(k) plan and defer annual income up to the IRS limit. The company provides a match up to 3% depending on the employee’s elected deferral rate. Contributions and the company match are invested in various funds based on the employee’s election including company common stock.

In 2010, the company began offering increased company contributions to our 401(k) plan in lieu of pension plan contributions. For non-bargaining unit employees hired after 2006 or employees who were not previously participants in the pension plan, the added retirement contribution is 5% of plan eligible compensation. For non-bargaining unit employees hired prior to 2006 who were participants in the pension plan, the added retirement contributions are based on the employee’s age as of December 31, 2009. The retirement contribution is 11.5% for Mr. Goodin, 9.0% for Ms. Kivisto, 7.0% for Mr. Vollmer, and 5.0% for Messrs. Barney and Thiede. These amounts may be reduced in accordance with the provisions of the 401(k) plan to ensure compliance with IRS limits.

Pension Plans

Effective in 2006, the defined benefit pension plans were closed to new non-bargaining unit employees and as of December 31, 2009, the defined benefit plans were frozen. For further details regarding the company’s pension plans, please refer to the section entitled “Pension Benefits for 2020.”

Supplemental Income Security Plan

We offered certain key managers and executives benefits under a nonqualified retirement plan referred to as the Supplemental Income Security Plan (SISP). The SISP provides participants with additional retirement income and death benefits payable for 15 years. Effective February 11, 2016, the SISP was amended to exclude new participants to the plan and freeze current benefit levels for existing participants. For further details regarding the company’s SISP, please refer to the section entitled “Pension Benefits for 2020.” Named executive officers participating in the SISP are Messrs. Goodin and Barney and Ms. Kivisto.

MDU Resources Group, Inc. Proxy Statement 51

Proxy Statement

The following table reflects our named executive officers’ SISP benefits as of December 31, 2020:

Name	SISP Benefits
	Annual Death Benefit ($)	Annual Retirement Benefit ($)
David L. Goodin	552,960	276,480
Jason L. Vollmer	n/a	n/a
David C. Barney	262,464	131,232
Jeffrey S. Thiede	n/a	n/a
Nicole A. Kivisto	157,728	78,864

Nonqualified Defined Contribution Plan

The company adopted the Nonqualified Defined Contribution Plan (NQDCP) effective January 1, 2012, to provide retirement and deferred compensation for a select group of management and other highly compensated employees. The compensation committee, upon recommendation from the CEO, annually determines which employees will participate in the NQDCP and the amount of contributions for each participant. After satisfying a vesting requirement for each contribution, distributions will be made in accordance with the terms of the plan. For further details regarding the company’s NQDCP, please refer to the section entitled “Nonqualified Deferred Compensation for 2020.”

For 2020, the compensation committee selected and approved contributions of $44,000 to Mr. Vollmer, $150,000 to Mr. Barney, and $100,000 to Mr. Thiede. The contributions awarded to Messrs. Vollmer, Barney, and Thiede represent 10.0%, 30.8%, and 20.5% of their base salaries, respectively.

Employment and Severance Agreements

We currently do not have employment or severance agreements with our executives entitling them to specific payments upon termination of employment or a change of control of the company. The compensation committee generally considers providing severance benefits on a case-by-case basis. Any post-employment or change of control benefits available to our executives are addressed within our incentive and retirement plans. Please refer to the section entitled “Potential Payments upon Termination or Change of Control.”

Compensation Governance

Impact of Tax and Accounting Treatment

The compensation committee may consider the impact of tax or accounting treatment in determining compensation. The compensation committee did not make any adjustments to the 2020 compensation program to address the impact of tax or accounting treatment. The compensation committee may also consider the accounting and cash flow implications of various forms of executive compensation. We expense salaries and annual incentive compensation as earned. For our equity awards, we record the accounting expense in accordance with Financial Accounting Standards Board 718, which is generally expensed over the vesting period.

Stock Ownership Requirements

Executives participating in our Long-Term Performance-Based Incentive Plan are required within five years of appointment or promotion into an executive level to beneficially own our common stock equal to a multiple of their base salary as outlined in the stock ownership policy. Stock owned through our 401(k) plan or by a spouse is considered in ownership calculations. The level of stock ownership compared to the ownership requirement is determined based on the closing sale price of our stock on the last trading day of the year and base salary at December 31 of the same year. The table shows the named executive officers’ holdings as a multiple of their base salary.

Name	Ownership Policy Multiple of Base Salary Within 5 Years	Actual Holdings as a Multiple of Base Salary1	Ownership Requirement Must Be Met By:
David L. Goodin	4X	9.6	01/01/2018
Jason L. Vollmer	3X	1.8	01/01/2023
David C. Barney	3X	3.8	01/01/2019
Jeffrey S. Thiede	3X	4.1	01/01/2019
Nicole A. Kivisto	3X	4.4	01/01/2020
1 Includes performance stock awards earned net of taxes for the 2018-2020 performance period.

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Proxy Statement

Deferral of Annual Incentive Compensation

We provide executives the opportunity to defer receipt of earned annual incentives. If an executive chooses to defer all or part of an annual incentive, we credit the deferral with interest at a rate determined by the compensation committee. For 2020, the interest rate for deferrals was 4.14% based on an average of the Treasury High Quality Market Corporate Bond Yield Curve for the last business day of each month for the twelve-month period from October 2018 to September 2019. The compensation committee’s reasons for using this interest rate recognize incentive deferrals are a low-cost source of capital for the company and are unsecured obligations and, therefore, carry an associated level of risk to the executives.

Clawback

Our Long-Term Performance-Based Incentive Plan and Executive Incentive Compensation Plan include provisions commonly referred to as a clawback policy. The compensation committee may, or shall if required, take action to recover incentive-based compensation from specific executives in the event the company is required to restate its financial statements due to material noncompliance with any financial reporting requirements under the securities laws.

Policy Regarding Hedging Stock Ownership

Our executive compensation policy prohibits executive officers, which includes our named executive officers, from hedging their ownership of company common stock. Executives may not enter into transactions that allow the executive to benefit from devaluation of our stock or otherwise own stock technically but without the full benefits and risks of such ownership. See the section entitled “Security Ownership” for our policy on margin accounts and pledging of our stock.

COMPENSATION COMMITTEE REPORT

The compensation committee is primarily responsible for reviewing, approving, and overseeing the company’s compensation plans and practices and works with management and the committee’s independent compensation consultant to develop the company executive compensation programs. The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Regulation S-K, Item 402(b), with management. Based on the review and discussions referred to in the preceding sentence, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in our Proxy Statement on Schedule 14A.

John K. Wilson, Chair

Thomas Everist

Karen B. Fagg

Patricia L. Moss

MDU Resources Group, Inc. Proxy Statement 53

Proxy Statement

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for 2020

Name and Principal Position (a)	Year (b)	Salary ($) (c)	Stock Awards ($) (e)1	Non-Equity Incentive Plan Compensation ($) (g)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)2	All Other Compensation ($) (i)3	Total ($) (j)
David L. Goodin	2020	960,000	2,974,497	1,818,000	484,134	186,779	6,423,410
President and CEO	2019	860,000	3,029,392	1,403,520	735,366	116,077	6,144,355
	2018	824,460	2,433,437	807,971	16,503	72,884	4,155,255
Jason L. Vollmer	2020	440,000	654,388	499,950	6,880	105,928	1,707,146
Vice President and CFO	2019	400,000	605,877	489,600	8,455	86,049	1,589,981
	2018	350,000	495,840	222,950	—	69,589	1,138,379
David C. Barney	2020	487,000	725,030	804,646	86,980	220,062	2,323,718
President and CEO of	2019	468,500	738,389	843,300	174,117	201,771	2,426,077
Knife River Corporation	2018	455,000	958,410	384,589	—	251,255	2,049,254
Jeffrey S. Thiede	2020	487,000	725,030	852,128	—	170,362	2,234,520
President and CEO of	2019	468,500	738,389	843,300	—	151,751	2,201,940
MDU Construction	2018	455,000	958,410	437,141	—	140,925	1,991,476
Services Group, Inc.
Nicole A. Kivisto	2020	487,000	725,030	436,839	184,058	73,374	1,906,301
President and CEO of	2019	455,000	738,389	480,139	243,761	54,763	1,972,052
Montana-Dakota Utilities Co.,	2018	430,000	609,197	225,277	210	42,302	1,306,986
Cascade Natural Gas Corporation,
and Intermountain Gas Company

1Amounts in this column represent the aggregate grant date fair value of performance share award opportunities at target calculated in accordance with Financial Accounting Standards Board (FASB) generally accepted accounting principles for stock-based compensation in FASB Accounting Standards Codification Topic 718. This column was prepared assuming none of the awards were or will be forfeited. The amounts were calculated as described in Note 13 of our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020. For 2020, the aggregate grant date fair value of outstanding performance share award opportunities assuming the highest level of payout would be as follows:

Name	Aggregate grant date fair value at highest payout ($)
David L. Goodin	5,948,994
Jason L. Vollmer	1,308,775
David C. Barney	1,450,061
Jeffrey S. Thiede	1,450,061
Nicole A. Kivisto	1,450,061

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Proxy Statement

2Amounts shown for 2020 represent the change in the actuarial present value for the named executive officers’ accumulated benefits under the pension plan, SISP, and Excess SISP, collectively referred to as the “accumulated pension change,” plus above-market earnings on deferred annual incentives as of December 31, 2020.

Name	Accumulated Pension Change ($)	Above Market Earnings ($)
David L. Goodin	435,581	48,553
Jason L. Vollmer	6,880	—
David C. Barney	86,980	—
Jeffrey S. Thiede	—	—
Nicole A. Kivisto	181,795	2,263

3All Other Compensation is comprised of:    

Name		401(k) Plan ($)a	Nonqualified Defined Contribution Plan ($)	Life Insurance  Premium ($)	Matching Charitable Contributions ($)	Dividend Equivalents ($)b	Total ($)
David L. Goodin		41,325	—	774	3,600	141,080	186,779
Jason L. Vollmer		28,500	44,000	681	3,600	29,147	105,928
David C. Barney		22,800	150,000	754	1,200	45,308	220,062
Jeffrey S. Thiede		22,800	100,000	754	1,500	45,308	170,362
Nicole A. Kivisto		34,200	—	754	3,600	34,820	73,374
a	Represents company contributions to the 401(k) plan, which includes matching contributions and retirement contributions associated with the freeze of the pension plans at December 31, 2009.
b	Represents accrued dividend equivalents for 2020 on the 2020-2022, 2019-2021, and 2018-2020 performance share awards associated with financial performance measures and restricted stock units awarded to Mr. Barney and Mr. Thiede in 2018. The 2020-2022 and 2019-2021 performance share awards are presented at target, and the 2018-2020 performance share awards are presented based on the actual achievement of the performance measure.

Grants of Plan-Based Awards in 2020

				Estimated Future Payouts Under Non-Equity Incentive Plan Awards			Estimated Future Payouts Under Equity Incentive Plan Awards			Grant Date Fair Value of Stock and Option Awards ($) (l)
Name (a)		Grant Date (b)		Threshold ($) (c)	Target ($) (d)	Maximum ($) (e)	Threshold (#) (f)	Target (#) (g)	Maximum (#) (h)
David L. Goodin		2/13/2020	1	435,000	1,200,000	2,400,000
		2/13/2020	2				16,438	82,191	164,382	2,974,497
Jason L. Vollmer		2/13/2020	1	119,625	330,000	660,000
		2/13/2020	2				3,616	18,082	36,164	654,388
David C. Barney		2/13/2020	1	91,313	365,250	876,600
		2/13/2020	2				4,006	20,034	40,068	725,030
Jeffrey S. Thiede		2/13/2020	1	91,313	365,250	876,600
		2/13/2020	2				4,006	20,034	40,068	725,030
Nicole A. Kivisto		2/13/2020	1	164,363	365,250	730,500
		2/13/2020	2				4,006	20,034	40,068	725,030
1	Annual incentive for 2020 granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan.
2	Performance shares for the 2020-2022 performance period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan.

MDU Resources Group, Inc. Proxy Statement 55

Proxy Statement

Narrative Discussion Relating to the Summary Compensation Table
and Grants of Plan-Based Awards Table

Annual Incentive

The compensation committee recommended the 2020 annual incentive award opportunities for our named executive officers and the board approved these opportunities at its meeting on February 13, 2020. The award opportunities at threshold, target, and maximum are reflected in columns (c), (d), and (e), respectively, of the Grants of Plan-Based Awards Table. The actual amount paid with respect to 2020 performance is reflected in column (g) of the Summary Compensation Table.

As described in the “Annual Incentives” section of the “Compensation Discussion and Analysis,” payment of annual award opportunities is dependent upon achievement of performance measures; actual payout may range from 0% to 200% of the target except for the construction materials and contracting and construction services segments which may range from 0% to 240%.

All our named executive officers were awarded their annual incentive opportunities pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan. Under the Executive Incentive Compensation Plan, executives who retire during the year at or after age 65 remain eligible to receive a prorated award, but executives who terminate employment for other reasons are not eligible for an award. The compensation committee generally does not modify the performance measures; however, if in years of unusually adverse or favorable external conditions or other unforeseen significant factors beyond the control of management, the compensation committee may modify the performance measures. No performance measures were modified in determining 2020 annual incentives. The compensation committee has full discretion to determine the extent to which goals have been achieved, the payment level, and whether to adjust payment of awards downward based upon individual performance. For further discussion of the specific 2020 incentive plan performance measures and results, see the “Annual Incentives” section in the “Compensation Discussion and Analysis.”

Long-Term Incentive

The compensation committee recommended long-term incentive award opportunities for the named executive officers in the form of performance shares, and the board approved the award opportunities at its meeting on February 13, 2020. The long-term incentive opportunities are presented as the number of performance shares at threshold, target, and maximum in columns (f), (g), and (h) of the Grants of Plan-Based Awards Table. The value of the long-term performance-based incentive opportunities is based on the aggregate grant date fair value and is reflected in column (e) of the Summary Compensation Table and column (l) of the Grant of Plan-Based Awards Table.

Depending on the achievement of the performance measures associated with our 2020-2022 performance period, executives will receive from 0% to 200% of the target awards in February 2023. We also will pay dividend equivalents in cash on the number of shares actually vested for the performance period. The dividend equivalents will be paid in 2023 if and to the extent they vest and at the same time as the performance share awards are settled.

Nonqualified Defined Contribution Plan

The CEO recommends participants and contribution amounts to the Nonqualified Defined Contribution Plan which are approved by the compensation committee of the board of directors. The purpose of the plan is to recognize outstanding performance coupled with enhanced retention as the Nonqualified Defined Contribution Plan requires a vesting period. The amount shown in column (i) - All Other Compensation of the Summary Compensation Table includes contributions of $44,000 to Mr. Vollmer, $150,000 to Mr. Barney, and$100,000 to Mr. Thiede. For further information, see the section entitled “Nonqualified Deferred Compensation for 2020.”

Salary and Bonus in Proportion to Total Compensation

The following table shows the proportion of salary and bonus to total compensation as presented in the Summary Compensation Table. No bonuses were paid to the executive officers in 2020.

Name	Salary ($)		Bonus ($)		Total Compensation ($)		Salary and Bonus as a % of Total Compensation
David L. Goodin		960,000		—		6,423,410		14.9	%
Jason L. Vollmer		440,000		—		1,707,146		25.8	%
David C. Barney		487,000		—		2,323,718		21.0	%
Jeffrey S. Thiede		487,000		—		2,234,520		21.8	%
Nicole A. Kivisto		487,000		—		1,906,301		25.5	%

56 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Outstanding Equity Awards at Fiscal Year-End 2020

	Stock Awards
Name (a)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)1	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)2
David L. Goodin	337,917	8,900,734
Jason L. Vollmer	69,817	1,838,980
David C. Barney	97,104	2,557,719
Jeffrey S. Thiede	97,104	2,557,719
Nicole A. Kivisto	83,401	2,196,782

1    Below is a breakdown by year of the outstanding performance share plan awards:

		2018 Award	2019 Award	2020 Award	Total
Name	Performance Period End	12/31/2020	12/31/2021	12/31/2022
David L. Goodin		156,920	98,806	82,191	337,917
Jason L. Vollmer		31,974	19,761	18,082	69,817
David C. Barney		52,987	24,083	20,034	97,104
Jeffrey S. Thiede		52,987	24,083	20,034	97,104
Nicole A. Kivisto		39,284	24,083	20,034	83,401

Shares for the 2018 award are shown at the maximum level (200%) based on results for the 2018-2020 performance period above target. The number of shares under the 2018 award also includes 11,419 time-vesting restricted stock units granted to Messrs. Barney and Thiede.

Shares for the 2019 award are shown at the target level (100%) based on results for the first two years of the 2019-2021 performance period between threshold and target.

Shares for the 2020 award are shown at the target level (100%) based on results for the first year of the 2020-2022 performance period between threshold and target.

2    Value based on the number of performance shares and restricted stock units reflected in column (i) multiplied by $26.34, the year-end per share closing stock price for 2020.

While for purposes of the Outstanding Equity Awards at Fiscal Year-End 2020 Table, the number of shares and value shown for the 2018-2020 performance period is at 200% of target, the actual results for the performance period certified by the compensation committee and settled on February 11, 2021, was 150% of target. For further information, see the “Long-Term Incentives” section of the “Compensation Discussion and Analysis.”

MDU Resources Group, Inc. Proxy Statement 57

Proxy Statement

Option Exercises and Stock Vested During 2020

		Stock Awards
Name (a)		Number of Shares Acquired on Vesting (#) (d)1	Value Realized on Vesting ($) (e)2
David L. Goodin		14,234	484,170
Jason L. Vollmer		899	30,580
David C. Barney		3,067	104,324
Jeffrey S. Thiede		3,144	106,943
Nicole A. Kivisto		2,714	92,317
1	Reflects performance shares for the 2017-2019 performance period ended December 31, 2019, which were settled February 13, 2020.
2	Reflects the value of vested performance shares based on the closing stock price of $31.63 per share on February 13, 2020, and the dividend equivalents paid on the vested shares.

Pension Benefits for 2020

Name (a)		Plan Name (b)	Number of Years Credited Service (#) (c)1	Present Value of  Accumulated Benefit ($) (d)
David L. Goodin		Pension	26	1,433,114
		Basic SISP 2	10	3,209,181
		Excess SISP 3	26	44,583
Jason L. Vollmer		Pension	4	36,192
		Basic SISP 3	n/a	—
		Excess SISP 3	n/a	—
David C. Barney		Pension 3	n/a	—
		Basic SISP 2	10	1,710,384
		Excess SISP 3	n/a	—
Jeffrey S. Thiede		Pension 3	n/a	—
		Basic SISP 3	n/a	—
		Excess SISP 3	n/a	—
Nicole A. Kivisto		Pension	14	345,211
		Basic SISP 2	10	726,043
		Excess SISP 3	n/a	—
1	Years of credited service related to the pension plan reflects the years of participation in the plan as of December 31, 2009, when the pension plan was frozen. Years of credited service related to the Basic SISP reflects the years toward full vesting of the benefit which is 10 years. Years of credited service related to Excess SISP reflects the same number of credited years of services as the pension plan.
2	The present value of accumulated benefits for the Basic SISP assumes the named executive officer would be fully vested in the benefit on the benefit commencement date; therefore, no reduction was made to reflect actual vesting levels.
3	Messrs. Barney and Thiede are not eligible to participate in the pension plans. Messrs. Vollmer and Thiede do not participate in the SISP. Mr. Goodin is the only named executive officer eligible to participate in the Excess SISP.

58 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

The amounts shown for the pension plan, Basic SISP, and Excess SISP represent the actuarial present values of the executives’ accumulated benefits accrued as of December 31, 2020, calculated using:

•a 1.95% discount rate for the Basic SISP and Excess SISP;

•a 2.25% discount rate for the pension plan;

•the Society of Actuaries Pri-2012 Total Dataset Mortality with Scale MP-2020 (post commencement only); and

•no recognition of pre-retirement mortality.

The actuary assumed a retirement age of 60 for the pension, Basic SISP, and Excess SISP benefits and assumed retirement benefits commence at age 60 for the pension and Excess SISP and age 65 for Basic SISP benefits.

Pension Plan

The MDU Resources Group, Inc. Pension Plan for Non-Bargaining Unit Employees (pension plan) applies to employees hired before 2006 and was amended to cease benefit accruals as of December 31, 2009. The benefits under the pension plan are based on a participant’s average annual salary over the 60 consecutive month period where the participant received the highest annual salary between 1999 and 2009. Benefits are paid as straight life annuities for single participants and as actuarially reduced annuities with a survivor benefit for married participants unless they choose otherwise.

Supplemental Income Security Plan

The Supplemental Income Security Plan (SISP), a nonqualified defined benefit retirement plan, is offered to select key managers and executives. SISP benefits are determined by reference to levels defined within the plan. Our compensation committee, after receiving recommendations from our CEO, determined each participant’s level within the plan. On February 11, 2016, the SISP was amended to exclude new participants to the plan and freeze current benefit levels for existing participants.

Basic SISP Benefits

Basic SISP is a supplemental retirement benefit intended to augment the retirement income provided under the pension plans. SISP benefits are payable to the participant or their beneficiary for a period of 15 years. The Basic SISP benefits are subject to a vesting schedule where participants are 100% vested after ten years of participation in the plan.

Participants can elect to receive the Basic SISP as:

•monthly retirement benefits only;

•monthly death benefits paid to a beneficiary only; or

•a combination of retirement and death benefits, where each benefit is reduced proportionately.

Regardless of the election, if the participant dies before the SISP retirement benefit commences, only the SISP death benefit is provided.

Excess SISP Benefits

Excess SISP is an additional retirement benefit relating to Internal Revenue Code limitations on retirement benefits provided under the pension plans. Excess SISP benefits are equal to the difference between the monthly retirement benefits that would have been payable to the participant under the pension plans absent the limitations under the Internal Revenue Code and the actual benefits payable to the participant under the pension plans. Participants are only eligible for the Excess SISP benefits if the participant is fully vested under the pension plan, their employment terminates prior to age 65, and benefits under the pension plan are reduced due to limitations under the Internal Revenue Code on plan compensation.

In 2009, the SISP was amended to limit eligibility for the Excess SISP benefit. Mr. Goodin is the only named executive officer eligible for the Excess SISP benefit and must remain employed with the company until age 60 in order to receive the benefit. Benefits generally commence six months after the participant’s employment terminates and continue to age 65 or until the death of the participant, if prior to age 65.

Both Basic and Excess SISP benefits are forfeited if the participant’s employment is terminated for cause.

MDU Resources Group, Inc. Proxy Statement 59

Proxy Statement

Nonqualified Deferred Compensation for 2020

Deferred Annual Incentive Compensation

Executives participating in the annual incentive compensation plans may elect to defer up to 100% of their annual incentive awards. Deferred amounts accrue interest at a rate determined by the compensation committee. The interest rate in effect for 2020 was 4.14% based on an average of the Treasury High Quality Market Corporate Bond Yield Curve for the last business day of each month for the twelve month period from October 2018 to September 2019. The deferred amount will be paid in accordance with the participant’s election, following termination of employment or beginning in the fifth year following the year the award was earned. The amounts are paid in accordance with the participant’s election in either a lump sum or in monthly installments not to exceed 120 months. In the event of a change of control, all amounts deferred would immediately become payable. For purposes of deferred annual incentive compensation, a change of control is defined as:

•an acquisition during a 12-month period of 30% or more of the total voting power of our stock;

•an acquisition of our stock that, together with stock already held by the acquirer, constitutes more than 50% of the total fair market value or total voting power of our stock;

•replacement of a majority of the members of our board of directors during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of our board of directors; or

•acquisition of our assets having a gross fair market value at least equal to 40% of the gross fair market value of all of our assets.

Nonqualified Defined Contribution Plan

The company adopted the Nonqualified Defined Contribution Plan, effective January 1, 2012, to provide deferred compensation for a select group of employees. The compensation committee approves the amount of employer contributions under the Nonqualified Defined Contribution Plan and the obligations under the plan constitute an unsecured promise of the company to make such payments. The company credits contributions to plan accounts which capture the hypothetical investment experience based on the participant’s elections. Contributions made prior to 2017 vest four years after each contribution in accordance with the terms of the plan. Contributions made in and after 2017 vest rateably over a three-year period. Amounts shown as aggregate earnings in the table below for Messrs. Vollmer, Barney, and Thiede reflect the change in investment value at market rates for the hypothetical investments selected by the participants. Participants may elect to receive their vested contributions and investment earnings either in a lump sum upon separation from service with the company or in annual installments over a period of years upon the latter of (i) separation from service and (ii) age 65. Plan benefits become fully vested if the participant dies while actively employed. Benefits are forfeited if the participant’s employment is terminated for cause.

The table below includes individual contributions from deferrals of annual incentive compensation and company contributions under the Nonqualified Defined Contribution Plan:

Name (a)		Executive Contributions in Last FY ($) (b)	Registrant Contributions in Last FY ($) (c)	Aggregate Earnings in Last FY ($) (d)	Aggregate Withdrawals/ Distributions ($) (e)	Aggregate Balance at Last FYE ($) (f)
David L. Goodin		701,760	—	108,834	—	2,795,829	1
Jason L. Vollmer		—	44,000	26,331	—	194,007	2
David C. Barney		—	150,000	96,016	—	790,996	3
Jeffrey S. Thiede		—	100,000	132,359	—	1,116,799	4
Nicole A. Kivisto		120,035	—	5,073	—	143,587	5
1	Mr. Goodin deferred 50% of his 2019 annual incentive compensation which was $1,403,520 as reported in the Summary Compensation Table for 2019.
2	Mr. Vollmer received $44,000 under the Nonqualified Defined Contribution Plan for 2020. Mr. Vollmer’s balance also includes contributions of $40,000, $35,000, and $22,550 for 2019, 2018, and 2017, respectively. Each of these amounts are reported in column (i) of the Summary Compensation Table for its respective year, where applicable.
3	Mr. Barney received $150,000 under the Nonqualified Defined Contribution Plan for 2020. Mr. Barney’s balance also includes contributions of $150,000 for each of 2019, 2018, and 2017. Each of these amounts are reported in column (i) of the Summary Compensation Table for its respective year.
4	Mr. Thiede received $100,000 under the Nonqualified Defined Contribution Plan for 2020. Mr. Thiede’s balance also includes contributions of $100,000 for each of 2019, 2018, 2017, and 2016, $150,000 for 2015, $75,000 for 2014, and $33,000 for 2013. Each of these amounts was reported in column (i) of the Summary Compensation Table in the Proxy Statement for its respective year, where applicable.
5	Ms. Kivisto deferred 25% of her 2019 annual incentive compensation which was $480,139 as reported in the Summary Compensation Table for 2019.

60 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Potential Payments upon Termination or Change of Control

The Potential Payments upon Termination or Change of Control Table shows the payments and benefits our named executive officers would receive in connection with a variety of employment termination scenarios or upon a change of control. The scenarios include:

•Voluntary Termination;

•Not for Cause Termination;

•Death;

•Disability;

•Change of Control with Termination; and

•Change of Control without Termination.

For the named executive officers, the information assumes the terminations or the change of control occurred on December 31, 2020.

The table excludes compensation and benefits our named executive officers would earn during their employment with us whether or not a termination or change of control event had occurred. The tables also do not include benefits under plans or arrangements generally available to all salaried employees and that do not discriminate in favor of the named executive officers, such as benefits under our qualified defined benefit pension plan (for employees hired before 2006), accrued vacation pay, continuation of health care benefits, and life insurance benefits. The tables also do not include Nonqualified Defined Contribution Plan or deferred annual compensation amounts which are shown and explained in the “Nonqualified Deferred Compensation for 2020” Table.

Compensation

None of our named executive officers have employment or severance agreements entitling them to their base salary, some multiple of base salary or severance upon termination or change of control. Our compensation committee generally considers providing severance benefits on a case-by-case basis. Because severance payments are discretionary, no amounts are presented in the tables.

All our named executive officers were granted their 2020 annual incentive award under the Executive Incentive Compensation Plan (EICP) which has no change of control provision in regards to annual incentive compensation other than for deferred compensation. The EICP requires participants to remain employed with the company through the service year to be eligible for a payout unless otherwise determined by the compensation committee for executive officers or employment termination after age 65. As all our scenarios assume a termination or change in control event on December 31st, the named executive officers would be considered employed for the entire performance period; therefore, no amounts are shown for annual incentives in the tables for our named executive officers, as they would be eligible to receive their annual incentive award based on the level that performance measures were achieved for the performance period regardless of termination or change of control occurring on December 31, 2020.

All named executive officers received their performance share awards under the Long-Term Performance-Based Incentive Plan (LTIP). Upon a change of control (with or without termination), performance share awards would be deemed fully earned and vest at their target levels for the named executive officers. For this purpose, the term “change of control” is defined in the LTIP as:

•the acquisition by an individual, entity, or group of 20% or more of our outstanding common stock;

•a majority of our board of directors whose election or nomination was not approved by a majority of the incumbent board members;

•consummation of a merger or similar transaction or sale of all or substantially all of our assets, unless our stockholders immediately prior to the transaction beneficially own more than 60% of the outstanding common stock and voting power of the resulting corporation in substantially the same proportions as before the merger, no person owns 20% or more of the resulting corporation’s outstanding common stock or voting power except for any such ownership that existed before the merger and at least a majority of the board of the resulting corporation is comprised of our directors; or

•stockholder approval of our liquidation or dissolution.

MDU Resources Group, Inc. Proxy Statement 61

Proxy Statement

For termination scenarios other than a change of control, our award agreements provide that performance share awards are forfeited if the participant’s employment terminates before the participant has reached age 55 and completed 10 years of service. If a participant’s employment is terminated other than for cause after reaching age 55 and completing 10 years of service, performance shares are prorated as follows:

•termination of employment during the first year of the performance period = shares are forfeited;

•termination of employment during the second year of the performance period = performance shares earned are prorated based on the number of months employed during the performance period; and

•termination of employment during the third year of the performance period = full amount of any performance shares earned are received.

Under the termination scenarios, Messrs. Goodin, Barney, and Thiede would receive performance shares as they have each reached age 55 and have 10 or more years of service. The number of performance shares received would be based on the following:

•2018-2020 performance shares would vest based on the achievement of the performance measure for the period ended December 31, 2020, which was 150%;

•2019-2021 performance shares would be prorated at 24 out of 36 months (2/3) of the performance period and vest based on the actual achievement of the performance measure for the period ended December 31, 2021. For purposes of the Potential Payments upon Termination or Change of Control Table, the performance achievement for the performance period is shown at target; and

•2020-2022 performance shares would be forfeited.

For purposes of calculating the performance share value shown in the Potential Payments upon Termination or Change of Control Table, the number of vesting shares was multiplied by the average of the high and low stock price for the last market day of the year, which was December 31, 2020. Dividend equivalents based on the number of vesting shares are also included in the amounts presented.

Neither Ms. Kivisto nor Mr. Vollmer have reached age 55; therefore, they are not eligible for vesting of performance shares in the event of their termination.

Messrs. Barney and Thiede were granted 11,419 restricted stock units in February 2018. The restricted stock units and dividend equivalents vested on December 31, 2020, after Messrs. Barney and Thiede met the conditions for vesting by being continuously employed by the company through the vesting date. In the case of a change of control (with or without termination) occurring on December 31, 2020, the restricted stock units plus dividend equivalents would have vested pursuant to their normal terms.

Benefits and Perquisites

Supplemental Income Security Plan

As described in the “Pension Benefits for 2020” section, the Basic SISP provides a benefit of payments for 15 years commencing at the latter of retirement or age 65. Of the named executive officers, only Messrs. Goodin, Barney, and Ms. Kivisto participate in the Basic SISP benefits and are 100% vested in their benefit.

Under all scenarios except death and change of control without termination, the payment represents the present value of the vested Basic SISP benefit as of December 31, 2020, using the monthly retirement benefit shown in the table below and a discount rate of 1.95%. In the event of death, Messrs. Goodin, Barney, and Ms. Kivisto’s beneficiaries would receive monthly death benefit payments for 15 years. The Potential Payments upon Termination or Change of Control Table shows the present value calculations of the monthly death benefit using the 1.95% discount rate.

	Monthly SISP Retirement Payment ($)	Monthly SISP Death Payment ($)
David L. Goodin	23,040	46,080
David C. Barney	10,936	21,872
Nicole A. Kivisto	6,572	13,144

Because the plan requires a participant to be no longer actively employed by the company in order to be eligible for payments, we do not show benefits for the change of control without termination scenario.

62 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Disability

We provide disability benefits to some of our salaried employees equal to 60% of their base salary, subject to a salary limit of $200,000 for officers and $100,000 for other salaried employees. For all eligible employees, disability payments continue until age 65 if disability occurs at or before age 60 and for five years if disability occurs between the ages of 60 and 65. Disability benefits are reduced for amounts paid as retirement benefits. The disability payments in the Potential Payments upon Termination or Change of Control Table reflect the present value of the disability benefits attributable to the additional $100,000 of base salary recognized for executives under our disability program, subject to the 60% limitation, after reduction for amounts that would be paid as retirement benefits. For Messrs. Goodin and Vollmer and Ms. Kivisto, who participate in the pension plan, the amount represents the present value of the disability benefit after reduction for retirement benefits using a discount rate of 2.25%. Because Mr. Goodin’s retirement benefit is greater than the disability benefit, the amount shown is zero. For Messrs. Barney and Thiede, who do not participate in the pension plan, the amount represents the present value of the disability benefit without reduction for retirement benefits using the discount rate of 1.95%, which is considered a reasonable rate for purposes of the calculation.

MDU Resources Group, Inc. Proxy Statement 63

Proxy Statement

Potential Payments upon Termination or Change of Control Table

Executive Benefits and Payments upon Termination or Change of Control			Voluntary Termination ($)	Not for Cause Termination ($)	Death ($)	Disability ($)	Change of Control (With Termination) ($)	Change of Control  (Without Termination) ($)
David L. Goodin
	Compensation:
		Performance Shares	4,103,672	4,103,672	4,103,672	4,103,672	6,608,842	6,608,842
	Benefits and Perquisites:
		Basic SISP	3,212,382	3,212,382	—	3,212,382	3,212,382	—
		SISP Death Benefits	—	—	7,198,103	—	—	—
		Disability Benefits	—	—	—	—	—	—
	Total		7,316,054	7,316,054	11,301,775	7,316,054	9,821,224	6,608,842
Jason L. Vollmer
	Compensation:
		Performance Shares	—	—	—	—	1,088,165	1,088,165
	Benefits and Perquisites:
		Disability Benefits	—	—	—	995,310	—	—
	Total		—	—	—	995,310	1,088,165	1,088,165
David C. Barney
	Compensation:
		Performance Shares	956,112	956,112	956,112	956,112	1,607,038	1,607,038
		Restricted Stock Units	—	—	326,127	326,127	326,127	326,127
	Benefits and Perquisites:
		Basic SISP	1,708,300	1,708,300	—	1,708,300	1,708,300	—
		SISP Death Benefits	—	—	3,416,600	—	—	—
		Disability Benefits	—	—	—	286,082	—	—
	Total		2,664,412	2,664,412	4,698,839	3,276,621	3,641,465	1,933,165
Jeffrey S. Thiede
	Compensation:
		Performance Shares	970,335	970,335	970,335	970,335	1,616,520	1,616,520
		Restricted Stock Units	—	—	326,127	326,127	326,127	326,127
	Benefits and Perquisites:
		Disability Benefits	—	—	—	344,478	—	—
	Total		970,335	970,335	1,296,462	1,640,940	1,942,647	1,942,647
Nicole A. Kivisto
	Compensation:
		Performance Shares	—	—	—	—	1,514,878	1,514,878
	Benefits and Perquisites:
		Basic SISP	727,629	727,629	—	727,629	727,629	—
		SISP Death Benefits	—	—	2,053,209	—	—	—
		Disability Benefits	—	—	—	740,094	—	—
	Total		727,629	727,629	2,053,209	1,467,723	2,242,507	1,514,878

64 MDU Resources Group, Inc. Proxy Statement

Proxy Statement

CEO Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing information regarding the relationship of the annual total compensation of David L. Goodin, our president and chief executive officer, to the annual total compensation of our median employee.

Our employee workforce fluctuates during the year largely depending on the seasonality, number, and size of construction project activity conducted by our businesses. Approximately 55% of our employee workforce is employed under union bargained labor contracts which define compensation and benefits for participants which may include payments made by the company associated with employee participation in union benefit and pension plans.

We identified the median employee by examining the 2020 taxable wage information for all individuals on the company’s payroll records as of December 31, 2020, excluding Mr. Goodin. All of the company’s employees are located in the United States. We made no adjustments to annualize compensation for individuals employed for only part of the year. We selected taxable wages as reported to the Internal Revenue Service on Form W-2 for 2020 to identify the median employee as it includes substantially all of the compensation for our median employee and provided a reasonably efficient and cost-effective manner for the identification of the median employee. Our median employee works for a subsidiary of our construction materials and contracting segment with compensation consisting of wages, bonus, company 401(k) matching and profit sharing contributions.

Once identified, we categorized the median employee’s compensation to correspond to the compensation components as reported in the Summary Compensation Table. For 2020, the total annual compensation of Mr. Goodin as reported in the Summary Compensation Table included in this Proxy Statement was $6,423,410, and the total annual compensation of our median employee was $94,463. Based on this information, the 2020 ratio of annual total compensation of Mr. Goodin to the median employee was 68 to 1.

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Proxy Statement

AUDIT MATTERS

ITEM 3: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021

The audit committee at its February 2021 meeting appointed Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2021. The board of directors concurred with the audit committee’s decision. Deloitte & Touche LLP has served as our independent registered public accounting firm since fiscal year 2002.

Although your ratification vote will not affect the appointment or retention of Deloitte & Touche LLP for 2021, the audit committee will consider your vote in determining its appointment of our independent registered public accounting firm for the next fiscal year. The audit committee, in appointing our independent registered public accounting firm, reserves the right, in its sole discretion, to change an appointment at any time during a fiscal year if it determines that such a change would be in our best interests.

A representative of Deloitte & Touche LLP will be present at the annual meeting and will be available to respond to appropriate questions. We do not anticipate that the representative will make a prepared statement at the annual meeting; however, he or she will be free to do so if he or she chooses.

The board of directors recommends a vote “for” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2021.

Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2021 requires the affirmative vote of a majority of our common stock present in person or represented by proxy at the annual meeting and entitled to vote on the proposal. Abstentions will count as votes against this proposal.

Annual Evaluation and Selection of Deloitte & Touche LLP

The audit committee annually evaluates the performance of its independent registered public accounting firm, including the senior audit engagement team, and determines whether to re-engage the current independent accounting firm or consider other firms. Factors considered by the audit committee in deciding whether to retain the current independent accounting firm include:

•    Deloitte & Touche LLP’s capabilities considering the complexity of our business and the resulting demands placed on Deloitte & Touche LLP in terms of technical expertise and knowledge of our industry and business;

•    the quality and candor of Deloitte & Touche LLP’s communications with the audit committee and management;

•    Deloitte & Touche LLP’s independence;

•    the quality and efficiency of the services provided by Deloitte & Touche LLP, including input from management on Deloitte & Touche LLP’s performance and how effectively Deloitte & Touche LLP demonstrated its independent judgment, objectivity, and professional skepticism;

•    external data on audit quality and performance, including recent Public Company Accounting Oversight Board reports on Deloitte & Touche LLP and its peer firms; and

•    the appropriateness of Deloitte & Touche LLP’s fees, tenure as our independent auditor, including the benefits of a longer tenure, and the controls and processes in place that help ensure Deloitte & Touche LLP’s continued independence.

Based on this evaluation, the audit committee and the board believe that retaining Deloitte & Touche LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2021, is in the best interests of our company and its stockholders.

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In accordance with rules applicable to mandatory partner rotation, Deloitte & Touche LLP’s lead engagement partner for our audit is scheduled to change in 2022. The audit committee oversees the process for, and ultimately approves, the selection of the lead engagement partner.

Audit Fees and Non-Audit Fees

The following table summarizes the aggregate fees that our independent registered public accounting firm, Deloitte & Touche LLP, billed or is expected to bill us for professional services rendered for 2019 and 2020:

		2019			2020
Audit Fees 1	$	2,919,950		$	2,798,015
Audit-Related Fees		—			—
Tax Fees		—			—
All Other Fees 2		5,000			—
Total Fees3	$	2,924,950		$	2,798,015
Ratio of Tax and All Other Fees to Audit and Audit-Related Fees		0.2	%		0.0	%

1Audit fees for 2019 and 2020 consisted of fees for the annual audit of our consolidated financial statements and internal control over financial reporting, statutory and regulatory audits, reviews of quarterly financial statements, comfort letters in connection with securities offerings, and other filings with the SEC.

2All other fees relate to training.

3Total fees reported above include out-of-pocket expenses related to the services provided of $310,000 for 2019 and $85,000 for 2020.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm

The audit committee pre-approved all services Deloitte & Touche LLP performed in 2020 in accordance with the pre-approval policy and procedures the audit committee adopted in 2003. This policy is designed to achieve the continued independence of Deloitte & Touche LLP and to assist in our compliance with Sections 201 and 202 of the Sarbanes-Oxley Act of 2002 and related rules of the SEC.

The policy defines the permitted services in each of the audit, audit-related, tax, and all other services categories, as well as prohibited services. The pre-approval policy requires management to submit annually for approval to the audit committee a service plan describing the scope of work and anticipated cost associated with each category of service. At each regular audit committee meeting, management reports on services performed by Deloitte & Touche LLP and the fees paid or accrued through the end of the quarter preceding the meeting. Management may submit requests for additional permitted services before the next scheduled audit committee meeting to the designated member of the audit committee, currently David M. Sparby, for approval. The designated member updates the audit committee at the next regularly scheduled meeting regarding any services approved during the interim period. At each regular audit committee meeting, management may submit to the audit committee for approval a supplement to the service plan containing any request for additional permitted services.

In addition, prior to approving any request for audit-related, tax, or all other services of more than $50,000, Deloitte & Touche LLP will provide a statement setting forth the reasons why rendering of the proposed services does not compromise Deloitte & Touche LLP’s independence. This description and statement by Deloitte & Touche LLP may be incorporated into the service plan or included as an exhibit thereto or may be delivered in a separate written statement.

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Proxy Statement

AUDIT COMMITTEE REPORT

The audit committee assists the board in fulfilling its oversight responsibilities and serves as a communication link among the board, management, the independent auditors, and the internal auditors. The audit committee (a) assists the board’s oversight of (i) the integrity of the company’s financial reporting process and system of internal controls, (ii) the company’s compliance with legal and regulatory requirements and the code of conduct, (iii) the independent auditors’ qualifications and independence, (iv) the performance of the company’s internal audit function and independent auditors, and (v) the company’s management of risks in the audit committee’s areas of responsibility; (b) arranges for the preparation of and approves the report that SEC rules require be included in the company’s annual proxy statement; and (c) is also responsible for the appointment, compensation, retention, and oversight of the independent auditors including pre-approval of all audit and non-audit services by the independent auditors. The audit committee acts under a written charter which it reviews at least annually and a copy of which is available on our website.

Management has primary responsibility for the company’s financial statements and the reporting process, including the systems of internal control over financial reporting. The independent auditors are responsible for performing an independent audit of the company’s consolidated financial statements, issuing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, and assessing the effectiveness of the company’s internal controls over financial reporting. The audit committee oversees the company’s financial reporting process and internal controls on behalf of the board.

In performing its oversight responsibilities in connection with our financial statements for the year ended December 31, 2020, the audit committee:

•reviewed and discussed the audited financial statements with management;

•discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC;

•received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the audit committee concerning independence and discussed with the independent auditors their independence; and

•reviewed and pre-approved the services provided by the independent auditors other than their audit services and considered whether the provision of such other services by our independent auditors is compatible with maintaining their independence.

Based on the review and discussions referred to above, the audit committee recommended to the board of directors, and the board of directors has approved, that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC. The audit committee has appointed Deloitte & Touche LLP as the company’s independent auditors for 2021. Stockholder ratification of this appointment is included as Item 3 in these proxy materials.

David M. Sparby, Chair

Mark A. Hellerstein

Edward A. Ryan

Chenxi Wang

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INFORMATION ABOUT THE ANNUAL MEETING

Who Can Vote?	Stockholders of record at the close of business on March 12, 2021, are entitled to vote each share they owned on that date on each matter presented at the meeting and any adjournment(s) thereof. As of March 12, 2021, we had 201,194,537 shares of common stock outstanding entitled to one vote per share.
Distribution of Our Proxy Materials Using Notice and Access	We distributed proxy materials to certain of our stockholders via the Internet under the SEC’s “Notice and Access” rules to reduce our costs and decrease the environmental impact of our proxy materials. Using this method of distribution, on or about March 26, 2021, we mailed a Notice Regarding the Availability of Proxy Materials (Notice) that contains basic information about our 2021 annual meeting and instructions on how to view all proxy materials, and vote electronically, on the Internet. If you received the Notice and prefer to receive a paper copy of the proxy materials, follow the instructions in the Notice for making this request and the materials will be sent promptly to you via the preferred method. Stockholders who do not receive the Notice will receive a paper copy of our proxy materials which will be sent on or about April 1, 2021.
How to Vote	You are encouraged to vote in advance of the meeting using one of the following voting methods, even if you are planning to attend the 2021 Annual Meeting of Stockholders.
	Registered Stockholders: Stockholders of record who hold their shares directly with our stock registrar can vote any one of four ways:
	:		By Internet: Go to the website shown on the Notice or Proxy Card, if you received one, and follow the instructions.
	)		By Telephone: Call the telephone number shown on the Notice or Proxy Card, if you received one, and follow the instructions given by the voice prompts.
			Voting via the Internet or by telephone authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated, and returned the Proxy Card by mail. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May 10, 2021.
	*		By Mail: If you received a paper copy of the Proxy Statement, Annual Report, and Proxy Card, mark, sign, date, and return the Proxy Card in the postage-paid envelope provided.
			In Person: Attend the annual meeting, or send a personal representative with an appropriate proxy, to vote by ballot at the meeting.
	Beneficial Stockholders: Stockholders whose shares are held beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding shares “in street name”), will receive voting instructions from said bank, broker, or other holder of record. If you wish to vote in person at the meeting, you must obtain a legal proxy from your bank, broker, or other holder of record of your shares and present it at the meeting.
	See discussion below regarding the MDU Resources Group, Inc. 401(k) Plan for voting instructions for shares held under our 401(k) plan.
Revoking Your Proxy or Changing Your Vote	You may change your vote at any time before the proxy is exercised.
	Registered Stockholders:
	•	If you voted by mail: you may revoke your proxy by executing and delivering a timely and valid later dated proxy, by voting by ballot at the meeting, or by giving written notice of revocation to the corporate secretary.
	•	If you voted via the Internet or by telephone: you may change your vote with a timely and valid later Internet or telephone vote, as the case may be, or by voting by ballot at the meeting.
	•	Attendance at the meeting will not have the effect of revoking a proxy unless (1) you give proper written notice of revocation to the corporate secretary before the proxy is exercised, or (2) you vote by ballot at the meeting.
	Beneficial Stockholders: Follow the specific directions provided by your bank, broker, or other holder of record to change or revoke any voting instructions you have already provided. Alternatively, you may vote your shares by ballot at the meeting if you obtain a legal proxy from your bank, broker, or other holder of record and present it at the meeting.

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Proxy Statement

Discretionary Voting Authority	If you complete and submit your proxy voting instructions, the individuals named as proxies will follow your instructions. If you are a stockholder of record and you submit proxy voting instructions but do not direct how to vote on each item, the individuals named as proxies will vote as the board recommends on each proposal. The individuals named as proxies will vote on any other matters properly presented at the annual meeting in accordance with their discretion. Our bylaws set forth requirements for advance notice of any nominations or agenda items to be brought up for voting at the annual meeting, and we have not received timely notice of any such matters, other than the items from the board of directors described in this Proxy Statement.
Voting Standards	A majority of outstanding shares of stock entitled to vote must be present in person or represented by proxy to hold the meeting. Abstentions and broker non-votes are counted for purposes of determining whether a quorum is present at the annual meeting.
	If you are a beneficial holder and do not provide specific voting instruction to your broker, the organization that holds your shares will not be authorized to vote your shares, which would result in broker non-votes, on proposals other than the ratification of the selection of our independent registered public accounting firm for 2021.
	The following chart describes the proposals to be considered at the annual meeting, the vote required to elect directors and to adopt each other proposal, and the manner in which votes will be counted:

Item No.	Proposal	Voting Options	Vote Required to Adopt the Proposal	Effect of Abstentions	Effect of “Broker Non-Votes”
1	Election of Directors	For, against, or abstain on each nominee	A nominee for director will be elected if the votes cast for such nominee exceed the votes cast against such nominee.	No effect	No effect
2	Advisory Vote to Approve the Compensation Paid to the Company’s Named Executive Officers	For, against, or abstain	The affirmative vote of a majority of the shares of common stock represented at the annual meeting and entitled to vote thereon	Same effect as votes against	No effect
3	Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for 2021	For, against, or abstain	The affirmative vote of a majority of the shares of common stock represented at the annual meeting and entitled to vote thereon	Same effect as votes against	Brokers have discretion to vote

Proxy Solicitation The board of directors is furnishing proxy materials to solicit proxies for use at the Annual Meeting of Stockholders on May 11, 2021, and any adjournment(s) thereof. Proxies are solicited principally by mail, but directors, officers, and employees of MDU Resources Group, Inc. or its subsidiaries may solicit proxies personally, by telephone, or by electronic media, without compensation other than their regular compensation. Okapi Partners, LLC, additionally will solicit proxies for approximately $8,500 plus out-of-pocket expenses. We will pay the cost of soliciting proxies and will reimburse brokers and others for forwarding proxy materials to stockholders.

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Electronic Delivery of Proxy Statement and Annual Report Documents	For stockholders receiving proxy materials by mail, you can elect to receive an email in the future that will provide electronic links to these documents. Opting to receive your proxy materials online will save the company the cost of producing and mailing documents to your home or business and will also give you an electronic link to the proxy voting site.
	•	Registered Stockholders: If you vote on the Internet, simply follow the prompts for enrolling in the electronic proxy delivery service. You may also enroll in the electronic proxy delivery service at any time in the future by going directly to http://enroll.icsdelivery.com/mdu to request electronic delivery. You may revoke an electronic delivery election at this site at any time.
	•	Beneficial Stockholders: If you hold your shares in a brokerage account, you may also have the opportunity to receive copies of the proxy materials electronically. You may enroll in the electronic proxy delivery service at any time by going directly to http://enroll.icsdelivery.com/mdu to request electronic delivery. You may also revoke an electronic delivery election at this site at any time. In addition, you may also check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability of this service or contact your bank or broker to request electronic delivery.
Householding of Proxy Materials	In accordance with a Notice sent to eligible stockholders who share a single address, we are sending only one Annual Report to Stockholders and one Proxy Statement to that address unless we received instructions to the contrary from any stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a stockholder of record wishes to receive a separate Annual Report to Stockholders and Proxy Statement in the future, he or she may contact the Office of the Treasurer at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650, Telephone Number: (701) 530-1000. Eligible stockholders of record who receive multiple copies of our Annual Report to Stockholders and Proxy Statement can request householding by contacting us in the same manner. Stockholders who own shares through a bank, broker, or other nominee can request householding by contacting the nominee.
	We will promptly deliver, upon written or oral request, a separate copy of the Annual Report to Stockholders and Proxy Statement to a stockholder at a shared address to which a single copy of the document was delivered.
MDU Resources Group, Inc. 401(k) Plan	This Proxy Statement is being used to solicit voting instructions from participants in the MDU Resources Group, Inc. 401(k) Plan with respect to shares of our common stock that are held by the trustee of the plan for the benefit of plan participants. If you are a plan participant and also own other shares as a registered stockholder or beneficial owner, you will separately receive a Notice or proxy materials to vote those other shares you hold outside of the MDU Resources Group, Inc. 401(k) Plan. If you are a plan participant, you must instruct the plan trustee to vote your shares by utilizing one of the methods described on the voting instruction form that you receive in connection with shares held in the plan. If you do not give voting instructions, the trustee generally will vote the shares allocated to your personal account in accordance with the recommendations of the board of directors. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May 6, 2021.
Annual Meeting Admission and Guidelines	Admission: All stockholders as of the record date of March 12, 2021, are cordially invited to attend the annual meeting. You must request an admission ticket to attend. If you are a stockholder of record and plan to attend the meeting, please contact MDU Resources by email at CorporateSecretary@mduresources.com or by telephone at 701-530-1010 to request an admission ticket. A ticket will be sent to you by mail. If your shares are held beneficially in the name of a bank, broker, or other holder of record, and you plan to attend the annual meeting, you will need to submit a written request for an admission ticket by mail to: Investor Relations, MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506 or email at CorporateSecretary@mduresources.com. The request must include proof of stock ownership as of March 12, 2021, such as a bank or brokerage firm account statement or a legal proxy from the bank, broker, or other holder of record confirming ownership. A ticket will be sent to you by mail. Requests for admission tickets must be received no later than May 4, 2021. You must present your admission ticket and state-issued photo identification, such as a driver’s license, to gain admittance to the meeting. Guidelines: The use of cameras or sound recording equipment is prohibited except by the media or those employed by the company to provide a record of the proceedings. The use of cell phones and other personal communication devices is also prohibited during the meeting. All devices must be turned off or muted. No firearms or weapons, banners, packages, or signs will be allowed in the meeting room. MDU Resources Group, Inc. reserves the right to inspect all items, including handbags and briefcases, that enter the meeting room.

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Annual Meeting Admission and Guidelines (continued)

Public Health Concerns: We are actively monitoring the public health and travel safety concerns relating to COVID-19 and the advisories or mandates that federal, state, and local governments and related agencies may issue. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will announce additional or alternative arrangements for the meeting, which may include a change in venue or holding the meeting solely by means of remote communication. Please monitor our company website at www.mdu.com/proxymaterials for updated information including meeting protocols. If you are planning to attend our meeting, please check our website the week of the meeting for updates on the meeting and public health safety protocols that may be required. As always, we encourage you to vote your shares prior to the annual meeting.

Conduct of the Meeting

Neither the board of directors nor management intends to bring before the meeting any business other than the matters referred to in the Notice of Annual Meeting and this Proxy Statement. We have not been informed that any other matter will be presented at the meeting by others. However, if any other matters are properly brought before the annual meeting, or any adjournment(s) thereof, your proxies include discretionary authority for the persons named in the proxy to vote or act on such matters in their discretion.

Stockholder Proposals, Director Nominations, and Other Items of Business for 2022 Annual Meeting	Stockholder Proposals for Inclusion in Next Year’s Proxy Statement: To be included in the proxy materials for our 2022 annual meeting, a stockholder proposal must be received by the corporate secretary no later than November 26, 2021, unless the date of the 2022 annual meeting is more than 30 days before or after May 11, 2022, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials. The proposal must also comply with all applicable requirements of Rule 14a-8 under the Securities Exchange Act of 1934.
	Director Nominations From Stockholders for Inclusion in Next Year’s Proxy Statement: If a stockholder or group of stockholders wishes to nominate one or more director candidates to be included in our proxy statement for the 2022 annual meeting through our proxy access bylaw provision, we must receive proper written notice of the nomination not later than 120 days or earlier than 150 days before the anniversary date that the definitive proxy statement was first released to stockholders in connection with the annual meeting, or between October 27, 2021 and November 26, 2021. In the event that the 2022 annual meeting is more than 30 days before or after May 11, 2022, the notice must be delivered no earlier than the 150th day prior to such meeting and no later than the 120th day prior to such meeting or the 10th day following the date on which public announcement of the meeting date is first made. In addition, the nomination must otherwise comply with the requirements in our bylaws. The requirements of such notice can be found in our bylaws, a copy of which is on our website, at www.mdu.com/governance.
	Director Nominations and Other Stockholder Proposals Raised From the Floor at the 2022 Annual Meeting of Stockholders: Under our bylaws, if a stockholder intends to nominate a person as a director, or present other items of business at an annual meeting, the stockholder must provide written notice of the director nomination or stockholder proposal within 90 to 120 days prior to the anniversary of the most recent annual meeting. Notice of director nominations or stockholder proposals for our 2022 annual meeting must be received between January 11, 2022 and February 10, 2022, and meet all the requirements and contain all the information, including the completed questionnaire for director nominations, provided by our bylaws. The requirements for such notice can be found in our bylaws, a copy of which is on our website, at www.mdu.com/governance.

We will make available to our stockholders to whom we furnish this Proxy Statement a copy of our Annual Report on Form 10-K, excluding exhibits, for the year ended December 31, 2020, which is required to be filed with the SEC. You may obtain a copy, without charge, upon written or oral request to the Office of the Treasurer of MDU Resources Group, Inc., 1200 West Century Avenue, Mailing Address: P.O. Box 5650, Bismarck, North Dakota 58506-5650, Telephone Number: (701) 530-1000. You may also access our Annual Report on Form 10-K through our website at www.mdu.com.

By order of the Board of Directors,

Karl A. Liepitz

Secretary

March 26, 2021

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