[MASCO LETTERHEAD LOGO]

                                                                  April 22, 2002

Dear Stockholders:

     I am pleased to invite you to attend the Annual Meeting of Stockholders of
Masco Corporation on Wednesday, May 15, 2002 at our corporate headquarters in
Taylor, Michigan. Information regarding the meeting schedule is contained on the
following pages.

     At our meeting, the stockholders will be requested to vote upon a number of
matters more fully described in the attached Notice and Proxy Statement. We also
expect to provide a report on our Company's operations and respond to questions
from our stockholders.

     Mr. Joseph L. Hudson, Jr. and Mr. John A. Morgan will be retiring from our
Board next month and will not be standing for re-election at this year's Annual
Stockholders Meeting. We wish to express our deep appreciation to Messrs. Hudson
and Morgan for their dedication and many contributions during their years of
service as Directors of the Company.

     On behalf of our Board of Directors, we appreciate your support of Masco
Corporation and look forward to seeing you on May 15.

                                          Sincerely,

                                          [/s/ Richard A. Manoogian]
                                          Richard A. Manoogian
                                          Chairman of the Board and
                                          Chief Executive Officer



                                  SCHEDULE 14A

          PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 (AMENDMENT NO.  )

     Filed by the registrant [X]

     Filed by a party other than the registrant [ ]

     Check the appropriate box:

     [ ] Preliminary proxy statement.       [ ] Confidential, for use of the
                                                Commission only (as permitted by
                                                Rule 14a-6(e)(2)).

     [X] Definitive proxy statement.

     [ ] Definitive additional materials.

     [ ] Soliciting material pursuant to Section 240.14a-12

                               MASCO CORPORATION
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                (Name of Registrant as Specified in Its Charter)

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    (Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

     [X] No fee required.

     [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
         0-11.

     (1) Title of each class of securities to which transaction applies:

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     (2) Aggregate number of securities to which transaction applies:

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     (3) Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
         filing fee is calculated and state how it was determined):

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     (4) Proposed maximum aggregate value of transaction:

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     (5) Total fee paid:

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     [ ] Fee paid previously with preliminary materials.
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     [ ] Check box if any part of the fee is offset as provided by Exchange Act
         Rule 0-11(a)(2) and identify the filing for which the offsetting fee
         was paid previously. Identify the previous filing by registration
         statement number, or the form or schedule and the date of its filing.

     (1) Amount Previously Paid:

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     (2) Form, Schedule or Registration Statement No.:

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     (3) Filing Party:

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     (4) Date Filed:

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                               MASCO CORPORATION
                             ---------------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS


       
  DATE:   MAY 15, 2002
  TIME:   10:00 A.M.
  PLACE:  MASCO CORPORATION
          21001 VAN BORN ROAD
          TAYLOR, MICHIGAN 48180


     The purposes of the Annual Meeting are:

          1. To elect two Class II Directors;

          2. To consider and act upon a proposal to approve the 2002 Annual
     Incentive Compensation Plan;

          3. To ratify the selection of PricewaterhouseCoopers LLP as
     independent auditors for the Company for the year 2002; and

          4. To transact such other business as may properly come before the
     Meeting.

     Stockholders of record at the close of business on March 29, 2002 are
entitled to vote at the Meeting or any adjournment thereof.

     Your attention is called to the accompanying Proxy Statement and Proxy.
Whether or not you plan to attend the Meeting, you can be sure your shares are
represented at the Meeting by promptly voting and submitting your Proxy by
telephone, by Internet, or by completing, signing, dating and returning your
Proxy card in the enclosed postage prepaid envelope. Prior to being voted, the
Proxy may be withdrawn in the manner specified in the Proxy Statement.

                                          By Order of the Board of Directors

                                          [/s/ Eugene A. Gorgaro, Jr.]
                                          EUGENE A. GARGARO, JR.
                                          Secretary

April 22, 2002


                                PROXY STATEMENT

                       ANNUAL MEETING OF STOCKHOLDERS OF
                               MASCO CORPORATION

                                  May 15, 2002

                              GENERAL INFORMATION

     The solicitation of the enclosed Proxy is made by the Board of Directors of
Masco Corporation (the "Company") for use at the Annual Meeting of Stockholders
of the Company to be held at its offices at 21001 Van Born Road, Taylor,
Michigan 48180, on Wednesday, May 15, 2002 at 10:00 A.M., and at any
adjournment. This Proxy Statement and the enclosed Proxy are being mailed or
given to stockholders on or about April 22, 2002.

     The expense of this solicitation will be borne by the Company. Solicitation
will be by mail, and executive officers and other employees of the Company may
solicit Proxies, without additional compensation, personally and by telephone
and other means of communication. In addition, the Company has retained Morrow &
Co., Inc. to assist in the solicitation of Proxies for a fee of $9,000, plus
expenses. The Company will also reimburse brokers and other persons holding
Company Common Stock in their names or in the names of their nominees for their
reasonable expenses in forwarding Proxies and Proxy materials to beneficial
owners.

     Stockholders of record at the close of business on March 29, 2002 are
entitled to vote at the Meeting. On that date, there were 460,230,473 shares of
Company Common Stock, $1 par value, outstanding and entitled to vote and 16,666
shares of Series B Participating Preferred Stock outstanding and entitled to
vote. Holders of Company Common Stock and Series B Participating Preferred Stock
vote on the matters set forth in this Proxy Statement together as a single
class. Each share of outstanding Company Common Stock entitles the holder to one
vote and each share of the Series B Participating Preferred Stock entitles the
holder to 1,000 votes. The Meeting will be held if a quorum, consisting of a
majority of the aggregate voting power of the outstanding shares of Company
Common Stock and the Series B Participating Preferred Stock, is represented in
person or by proxy. Broker non-votes and abstentions will be counted toward the
establishment of a quorum. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a proposal because the nominee
has not been instructed by the beneficial owner how to vote on the proposal and
does not have discretionary voting power to vote on the proposal.

     Stockholders can ensure that their shares are voted at the Meeting by
submitting proxy instructions by telephone, by Internet, or by completing,
signing, dating and returning the enclosed Proxy card in the envelope provided.
Submitting instructions by any of these methods will not affect the right to
attend the Meeting and vote. The telephone and Internet voting procedures are
designed to authenticate stockholders' identities, to allow stockholders to give
their voting instructions and to confirm that stockholders' instructions have
been recorded properly. Specific instructions for stockholders of record who
wish to use the telephone or Internet voting procedures are included with the
enclosed Proxy card. A stockholder who gives a Proxy may revoke it at any time
before it is exercised by voting in person at the Meeting, by delivering a
subsequent Proxy, or by notifying the Company in writing of such revocation
(Attention: Eugene A. Gargaro, Jr., Secretary, at 21001 Van Born Road, Taylor,
Michigan 48180).


                             ELECTION OF DIRECTORS

     The Board of Directors is divided into three classes. The term of office of
the Class II Directors, consisting of Joseph L. Hudson, Jr., Verne G. Istock,
Raymond F. Kennedy and John A. Morgan, expires at this Meeting.

     Messrs. Hudson and Morgan have each decided to retire from the Board of
Directors upon the expiration of their current terms. The Board of Directors
wishes to express its deep appreciation to Messrs. Hudson and Morgan for their
guidance and dedication during their many years of service as Directors of the
Company.

     As a result of the retirement of Messrs. Hudson and Morgan, the Board of
Directors is reducing the size of the Board from ten to eight Directors. The
Board proposes the re-election of Verne G. Istock and Raymond F. Kennedy as
Class II Directors.

     The Class I, Class II and Class III Directors will serve for terms expiring
at the Annual Meeting of Stockholders in 2004, 2005 and 2003, respectively, or
until their respective successors are elected and qualified. The Board of
Directors expects that the persons named as proxies in the Proxy will vote the
shares represented by each Proxy for the election as Directors of the above
nominees unless a contrary direction is indicated. If prior to the Meeting
either nominee is unable or unwilling to serve as a Director, which the Board of
Directors does not expect, the persons named as proxies will vote for such
alternate nominee, if any, as may be recommended by the Board of Directors.
Directors are elected by a plurality of the votes cast. Abstentions and broker
non-votes, if any, will not be treated as votes cast, and therefore will not
affect the election.

     Information concerning the nominees and continuing Directors is set forth
below.



NAME, PRINCIPAL OCCUPATION                                 AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR                   DIRECTORSHIPS AND OTHER INFORMATION
-----------------------------------                   -----------------------------------
                                        
                       CLASS I (TERM TO EXPIRE AT THE ANNUAL MEETING IN 2004)

Peter A. Dow...........................    Mr. Dow, 68, initially joined Campbell-Ewald Company in
  Private investor; Retired Vice           1958 and returned in 1979 to serve as Executive Vice
  Chairman, Chief Operating Officer and    President and Director of General Accounts. In 1982 he
  Chairman of the Executive Committee      became President, Chief Operating Officer and Chairman of
  of Campbell-Ewald, an advertising and    the Executive Committee, and then served as Vice Chairman
  marketing communications company.        from 1993 until his retirement in 1995. He was named
  Director since 2001.                     Director of Advertising for the Chrysler-Plymouth Division
                                           of Chrysler Corporation in 1968. Subsequently, he became
                                           responsible for advertising and merchandising for Chrysler
                                           Corporation and all of its divisions, and in 1978 he was
                                           named Director of Marketing for Chrysler Corporation. Mr.
                                           Dow is currently a director of The Stroh Companies, Inc.
                                           and Technobrands, Inc. (formerly Comtrad Industries,
                                           Inc.). Mr. Dow is also Trustee Emeritus of The
                                           Lawrenceville School, a trustee of the Alice Kales
                                           Hartwick Foundation and a member of the Board of Directors
                                           of the Detroit Institute of Arts.


                                        2




NAME, PRINCIPAL OCCUPATION                                 AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR                   DIRECTORSHIPS AND OTHER INFORMATION
-----------------------------------                   -----------------------------------
                                        
Anthony F. Earley, Jr. ................    Mr. Earley, 52, has served as Chairman of the Board and
  Chairman of the Board, Chief             Chief Executive Officer of DTE Energy Company and its
  Executive Officer and President and      subsidiary, The Detroit Edison Company, since 1998 and as
  Chief Operating Officer, DTE Energy      President and Chief Operating Officer of both companies
  Company, a diversified energy            since 1994. From 1989 to 1994, he served as President and
  company. Director since 2001.            Chief Operating Officer of Long Island Lighting Company,
                                           an electric and gas utility in New York. Prior to 1989,
                                           Mr. Earley held several other positions with Long Island
                                           Lighting, including Executive Vice President and General
                                           Counsel. He is a director of DTE Energy Company, Comerica
                                           Incorporated, Mutual of America Capital Management Co. and
                                           Plug Power, Inc. He serves on the advisory council for the
                                           College of Engineering at the University of Notre Dame,
                                           the advisory council on electricity for the U.S.
                                           Department of Energy, the board of trustees of the Detroit
                                           Zoological Society, and the executive board of Cornerstone
                                           Schools. Mr. Earley is also a director of Detroit
                                           Renaissance, New Detroit and United Way Community
                                           Services.

Wayne B. Lyon..........................    Mr. Lyon, 69, has served as Chairman of LifeStyle
  Chairman of LifeStyle Furnishings        Furnishings International Ltd. since its formation in 1996
  International Ltd., a manufacturer       and also served as its President and Chief Executive
  and marketer of residential              Officer until early 2000. Previously, he served the
  furniture. Director since 1988.          Company as a Group Vice President beginning in 1972, was
                                           named Executive Vice President and Chief Operating Officer
                                           in 1974 and served as President and Chief Operating
                                           Officer from 1985 until 1996. Mr. Lyon is also a director
                                           of Comerica Incorporated, Furnishings International Inc.
                                           and Emco Limited. He is a trustee of Cranbrook Educational
                                           Community.

                CLASS II (NOMINEES FOR TERM TO EXPIRE AT THE ANNUAL MEETING IN 2005)

Verne G. Istock........................    Mr. Istock, 61, joined NBD Bank in 1963 and served as Vice
  Retired Chairman/President of Bank       Chairman and director of NBD Bank and its parent, NBD
  One Corporation. Director since 1997.    Bancorp, from 1985 until he was named Chairman and Chief
                                           Executive Officer in 1994. Upon the merger of NBD and
                                           First Chicago Corporation in December 1995, he was named
                                           President and Chief Executive Officer of First Chicago NBD
                                           Corporation and was elected Chairman in May 1996. Upon the
                                           merger of First Chicago NBD Corporation and Banc One
                                           Corporation in October 1998, he was named Chairman of the
                                           Board of Bank One Corporation, where he served in various
                                           executive positions until his retirement in September
                                           2000. Mr. Istock is a director of Kelly Services, Inc.,
                                           the Chicago Council on Foreign Relations, and The Economic
                                           Club of Chicago, and is a member of The Commercial Club of
                                           Chicago. He is a past director of The Federal Reserve Bank
                                           of Chicago, Detroit Renaissance, the Greater Downtown
                                           Partnership in Detroit, The Economic Club of Detroit, the
                                           Illinois Business Roundtable, the Michigan Business
                                           Roundtable, Financial Services Roundtable and the
                                           International Monetary Conference. He is Past President
                                           and a lifetime director of the University of Michigan
                                           Alumni Association.


                                        3




NAME, PRINCIPAL OCCUPATION                                 AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR                   DIRECTORSHIPS AND OTHER INFORMATION
-----------------------------------                   -----------------------------------
                                        
Raymond F. Kennedy.....................    Mr. Kennedy, 59, was elected President and Chief Operating
  President and Chief Operating Officer    Officer of the Company in August 1996. He joined the
  of the Company. Director since 1998.     Company in 1978 as President of Delta Faucet Company and
                                           served as a Group President from 1983 to 1989 when he was
                                           promoted to President -- Building Products. In 1995 he
                                           became the Company's Executive Vice President. Previously,
                                           Mr. Kennedy held a number of positions at AMF, Inc.,
                                           including Presidencies of Skamper Corp. and AMF's Wheel
                                           Goods Division. He serves as a director of Emco Limited,
                                           Flint Ink Corporation, the University of Notre Dame
                                           Library Council, City of Hope National Medical Center and
                                           the Home Building Industry Foundation Advisory Board.

                      CLASS III (TERM TO EXPIRE AT THE ANNUAL MEETING IN 2003)
Thomas G. Denomme......................    Mr. Denomme, 62, served as Vice Chairman and Chief
  Retired Vice Chairman and Chief          Administrative Officer of Chrysler Corporation from 1994
  Administrative Officer of Chrysler       until he retired in December 1997 and had been a director
  Corporation. Director since 1998.        of Chrysler Corporation since 1993. He joined Chrysler
                                           Corporation in 1980 and was elected Vice
                                           President -- Corporate Strategic Planning in 1981,
                                           Executive Vice President -- Corporate Staff Group in 1991,
                                           and Executive Vice President and Chief Administrative
                                           Officer in 1993. Previously, he held a number of positions
                                           at Ford Motor Company, including Director, Marketing
                                           Policy and Strategy Office and Director, Sales Operations
                                           Planning. He is a past Chairman of the Board of Trustees
                                           of the University of Detroit-Mercy. Mr. Denomme is also a
                                           director of William Beaumont Hospital, the Michigan
                                           Thanksgiving Parade Foundation and Operation Outreach,
                                           USA, a children's literacy program.

Richard A. Manoogian...................    Mr. Manoogian, 65, joined the Company in 1958, was elected
  Chairman of the Board and Chief          Vice President and a Director in 1964 and President in
  Executive Officer of the Company.        1968 and has served as Chairman and Chief Executive
  Director since 1964.                     Officer since 1985. He is a director of Bank One
                                           Corporation, Ford Motor Company, Metaldyne Corporation,
                                           MSX International, Inc., Detroit Renaissance, The American
                                           Business Conference, and the Armenian General Benevolent
                                           Union, Chairman of the Detroit Institute of Arts Board of
                                           Directors and a trustee of the Archives of American Art
                                           (Smithsonian Institute), College for Creative Studies, The
                                           Fine Arts Committee of the State Department, Trustees
                                           Council of the National Gallery of Art, Detroit Investment
                                           Fund and the Henry Ford Museum and Greenfield Village.

Mary Ann Van Lokeren...................    Ms. Van Lokeren, 54, joined Krey Distributing Company as
  Chairman and Chief Executive Officer     Secretary in 1978 and has served Krey Distributing Company
  of Krey Distributing Company, a          in her present positions since 1987. She also serves as a
  beverage distribution firm. Director     director of Commerce Bancshares, Inc. and Laclede Gas
  since 1997.                              Company. Ms. Van Lokeren is also a director of the St.
                                           Louis Symphony, and a member of the Executive Committee of
                                           the Washington University Board of Trustees, and serves as
                                           a Commissioner of the St. Louis Art Museum. Ms. Van
                                           Lokeren received the Washington University 1996
                                           Distinguished Alumni Award and was named 1994 Woman of the
                                           Year by the St. Louis Variety Club. Ms. Van Lokeren is
                                           also the recipient of the 2000 John H. Poelker Award in
                                           recognition of her charitable activities in St. Louis.


     The Board of Directors held six meetings during 2001. The Audit Committee
of the Board of Directors, consisting of Messrs. Denomme, Dow, Hudson and
Istock, held four meetings during 2001. Each Audit Committee member is
independent, as defined in the New York Stock Exchange listing standards. The
Board

                                        4


of Directors adopted a written charter for the Audit Committee in February 2000.
In accordance with its charter, the Audit Committee reviews and acts on or
reports to the Board with respect to various auditing and accounting matters,
including the selection and fees of the Company's independent auditors, the
scope of the engagement and the review of the audit procedures, the Company's
internal audit program and results, the nature of services to be performed by
the independent auditors and the Company's accounting practices. The
Organization and Compensation Committee of the Board of Directors, consisting of
Ms. Van Lokeren and Messrs. Dow, Istock and Morgan, held six meetings during
2001. This Committee establishes and monitors executive compensation,
administers and determines awards and options granted under the Company's
restricted stock incentive and stock option plans and reviews the corporate
organizational structure and executive succession planning. The Nominating
Committee of the Board of Directors, consisting of Messrs. Hudson, Istock, Lyon
and Morgan, was established to identify and consider candidates to serve as
Directors of the Company. The Nominating Committee held two meetings during
2001. The Nominating Committee will consider candidates as nominees for election
as Directors of the Company submitted by stockholders. Any stockholder who
wishes to have the Committee consider a candidate should submit the name of the
candidate, along with any biographical or other relevant information the
stockholder wishes the Committee to consider, to the Secretary of the Company at
the address appearing on the first page of this Proxy Statement.

COMPENSATION OF DIRECTORS

     Under the 1997 Non-Employee Directors Stock Plan (the "Directors Stock
Plan"), one-half of the cash compensation formerly paid to non-employee
Directors was replaced with an annual vesting of shares of restricted stock.
Pursuant to the Directors Stock Plan, each non-employee Director received an
award of Company Common Stock to vest over a five-year period in 20 percent
annual installments. The value of the stock awards was based on the market price
of Company Common Stock on the date of grant and the value equaled five years of
the replaced cash compensation. Accordingly, each non-employee Director has
received an award valued at $25,000 per year for each of five years (with
proration for their partial first years of service). For 2001, non-employee
Directors each received a cash fee of $25,000 and $1,000 for each Board of
Directors meeting attended (and committee meeting attended if not held on a date
on which the entire Board met). Beginning in 2002, the Chairman of the Audit
Committee and the Chairman of the Organization and Compensation Committee will
each receive an additional $5,000 per year for chairing such committees.

     The Directors Stock Plan also provides for the grant to each non-employee
Director on the date of each annual meeting of stockholders of a non-qualified
option to purchase 8,000 shares of Company Common Stock at the then current
market price. These options become exercisable in 20 percent installments on the
first five anniversaries of the grant date. Each option has a ten-year term from
the date of grant, except that options may generally be exercised for only a
limited period of time following termination of service as a non-employee
Director for any reason other than death or permanent and total disability. The
Directors Stock Plan also provides that a participant is generally restricted
from engaging in certain competitive activities for one year following
termination of the participant's term as a Director, and that, upon termination
of a participant's term as a Director, or upon breach of the noncompete
agreement, the Company may require the participant to pay back to the Company
the net gain realized upon the exercise of any installment of an option that
became exercisable within two years prior to termination.

     Pursuant to the Masco Corporation 1991 Long Term Stock Incentive Plan, in
May 2000 each non-employee Director was granted a non-qualified option to
purchase 32,000 shares of Company Common Stock for $20.94 per share, the market
price on the date of grant. These options become exercisable in 20 percent
installments on the first five anniversaries of the grant date, and have a
ten-year term from the date of grant. The options include a noncompete agreement
and a payback provision similar to the provisions described in the preceding
paragraph. In May 2001, similar option grants were made to Messrs. Dow and
Earley for $22.12 per share, the market price on the date of grant.

     In recognition of their contribution to the Company, the Board approved the
continued vesting of stock awards and stock options for Messrs. Hudson and
Morgan as if they had continued their service as Directors. In addition, the
Board determined to grant to such individuals an annual cash payment of $50,000
through 2004, in return for which they have agreed to provide consulting
services. Similar arrangements have been made by the Company from time to time
for other retiring Directors.

                                        5


                        SECURITY OWNERSHIP OF MANAGEMENT
                         AND CERTAIN BENEFICIAL OWNERS

     Set forth below is information concerning beneficial ownership of Company
Common Stock as of March 15, 2002 by (i) each of the nominees and Directors,
(ii) each of the named executive officers, (iii) all current Directors and
executive officers of the Company as a group, and (iv) all persons known by the
Company to be the beneficial owners of five percent or more of the combined
voting power of Company Common Stock and Series B Participating Preferred Stock.
No Director or executive officer owns any shares of Series B Participating
Preferred Stock. Except as indicated below, each person exercises sole voting
and investment power with respect to the shares listed.



                                                               SHARES OF      PERCENTAGE OF
                                                              COMMON STOCK    VOTING POWER
                                                              BENEFICIALLY    BENEFICIALLY
                            NAME                                OWNED(1)          OWNED
                            ----                              ------------    -------------
                                                                        
Thomas G. Denomme...........................................       36,100            *
Peter A. Dow(2).............................................       25,770            *
Anthony F. Earley, Jr.......................................        6,370            *
Joseph L. Hudson, Jr........................................       31,375            *
Verne G. Istock.............................................       30,900            *
Raymond F. Kennedy..........................................    2,174,392            *
John R. Leekley.............................................      563,800            *
Wayne B. Lyon(3)............................................      165,893            *
Richard A. Manoogian(3).....................................   11,431,721          2.4
John A. Morgan..............................................       32,540            *
Richard G. Mosteller........................................      359,643            *
Robert B. Rosowski..........................................      305,533            *
Mary Ann Van Lokeren........................................       30,400            *
All 17 current Directors and nominees and executive officers
  of the Company as a group (excluding subsidiary,
  divisional and group executives)(2)(3)....................   16,268,794          3.5
FMR Corp.(4)
  82 Devonshire Street
  Boston, Massachusetts 02109...............................   38,184,436          8.0
Montag & Caldwell, Inc.(5)
  3455 Peachtree Road NE
  Suite 1200
  Atlanta, Georgia 30326-3248...............................   25,809,988          5.4


---------------

 * Less than one percent

(1) Includes unvested restricted stock award shares held under the Company's
    stock incentive plans (864 for Mr. Denomme; 4,520 for each of Messrs. Dow
    and Earley; 840,358 shares for Mr. Kennedy; 121,953 shares for Mr. Leekley;
    13,124 shares for Mr. Lyon; 1,221,848 for Mr. Manoogian; 96,183 shares for
    Mr. Mosteller; 48,206 shares for Mr. Rosowski; and 2,559,449 shares for all
    current Directors and executive officers of the Company as a group) and
    shares which may be acquired before May 15, 2002 upon exercise of stock
    options issued under the Company's stock option plans (16,000 for Mr.
    Denomme; 22,400 for each of Messrs. Hudson, Istock, Lyon and Morgan and Ms.
    Van Lokeren; 463,819 shares for Mr. Kennedy; 109,600 shares for Mr. Leekley;
    1,618,253 shares for Mr. Manoogian; 69,315 shares for Mr. Mosteller; 122,800
    shares for Mr. Rosowski; and 3,031,018 shares for all current Directors and
    executive officers of the Company as a group). Holders have sole voting but
    no investment power over unvested restricted shares and exercise neither
    voting nor investment power over unexercised option shares.

                                        6


(2) Includes 400 shares owned by Mr. Dow's wife, as to which he disclaims
    beneficial ownership.

(3) Shares owned by Mr. Manoogian and by all current Directors and executive
    officers of the Company as a group include in each case an aggregate of
    3,809,100 shares owned by charitable foundations for which Mr. Manoogian
    serves as a director and 3,000 shares held by trusts for which he serves as
    a trustee. Shares owned by Mr. Lyon and by all Directors and executive
    officers of the Company as a group include in each case 26,802 shares owned
    by a charitable foundation for which Mr. Lyon serves as a director. Shares
    owned by all current Directors and executive officers of the Company as a
    group include 24,820 shares held by trusts for which an executive officer
    serves as a trustee. The directors of the foundations and the trustees share
    voting and investment power with respect to shares owned by the foundations
    and trusts, but Messrs. Manoogian and Lyon and the executive officer who
    serves as a trustee for certain trusts each disclaim beneficial ownership of
    such shares.

(4) Based on a Schedule 13G dated February 14, 2002 and filed with the
    Securities and Exchange Commission ("SEC") by FMR Corp. and certain of its
    affiliates, at December 31, 2001, an aggregate of 36,784,743 shares of
    Company Common Stock were owned by Fidelity Management & Research Company,
    Fidelity Management Trust Company and Strategic Advisors, Inc., subsidiaries
    of FMR Corp. which provide investment advisory services to investment
    companies, investment management services to institutional accounts and
    investment advisory services to individuals. FMR Corp., through control of
    the subsidiaries, had sole investment power over all of these shares and
    sole voting power over 3,942,442 shares of Company Common Stock, but no
    voting power over the balance of the shares held by various investors. In
    addition, an affiliate of FMR Corp. had sole voting and investment power
    over 1,399,693 shares of Company Common Stock, which are included in the
    table as beneficially owned by FMR Corp.

(5) Based on a Schedule 13G dated January 15, 2002 and filed with the SEC, at
    December 31, 2001, Montag & Caldwell, Inc. owned 25,809,988 shares of
    Company Common Stock. It had sole investment but no voting power over these
    shares.

     Mr. Manoogian may be deemed a controlling person of the Company by reason
of his significant ownership of Company Common Stock and his positions as a
Director and an executive officer of the Company.

                                        7


                             AUDIT COMMITTEE REPORT

     The Audit Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the Company's financial reporting process,
system of internal control, and process for monitoring compliance with laws,
regulations and the Company's Legal and Ethical Standards Compliance Program.
Management has the primary responsibility for the financial statements and the
reporting process, including the Company's system of internal control. In
discharging its oversight responsibility as to the audit process, the Audit
Committee reviewed and discussed with management the audited financial
statements of the Company as of and for the year ended December 31, 2001,
including a discussion of the quality and the acceptability of the Company's
financial reporting and controls, as well as the selection, application and
disclosure of critical accounting policies.

     The Audit Committee obtained from the Company's independent auditors,
PricewaterhouseCoopers LLP, the written disclosures and the letter required by
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," and discussed with the auditors any relationships that may
impact their objectivity and independence and satisfied itself as to the
auditors' independence. The Audit Committee considered and determined that such
auditors' provision of non-audit services to the Company is compatible with
maintaining the auditors' independence. The Committee reviewed various matters
with the auditors, who are responsible for expressing an opinion on the
Company's financial statements as of and for the year ended December 31, 2001
based on their audit. The Committee met with the auditors, with and without
management present, and discussed the matters required to be discussed by
Statement on Auditing Standards No. 61 as amended, "Communication with Audit
Committees", including their judgment as to the quality and the acceptability of
the Company's financial reporting and such other matters as are required to be
discussed with the Committee under generally accepted auditing standards.

     Based on the above-mentioned reviews and discussions with management and
the independent auditors, the Audit Committee recommended to the Board of
Directors that the Company's financial statements as of and for the year ended
December 31, 2001 be included in its Annual Report on Form 10-K for the year
ended December 31, 2001 for filing with the Securities and Exchange Commission.
The Audit Committee also recommended the reappointment, subject to stockholder
approval, of PricewaterhouseCoopers LLP as the Company's independent auditors,
and the Board of Directors concurred in such recommendation.

                                          Thomas G. Denomme, Chairman
                                          Peter A. Dow
                                          Joseph L. Hudson, Jr.
                                          Verne G. Istock

                                        8


               ORGANIZATION AND COMPENSATION COMMITTEE REPORT ON
                             EXECUTIVE COMPENSATION

     The Organization and Compensation Committee's strategies and practices have
increasingly linked a significant portion of compensation to Company
performance. The Committee believes that this strategy more closely aligns
officers' interests with the long-term interests of stockholders, while
maintaining the Company's ability to attract, retain and motivate the highest
quality executive management team.

CURRENT COMPENSATION PRACTICES

     Cash compensation of executive officers has been directly impacted by
Company performance. Base salaries of executive officers for 2001, including Mr.
Manoogian, remained frozen at the level of salaries for 2000, except in the case
of one executive who was promoted. Similarly, bonuses paid for 2001 were
generally frozen at 2000 levels, and bonuses for 2000 were already reduced from
amounts paid for 1999. From 1996 through 1999, Mr. Manoogian received at his
request a salary of $1 per year to demonstrate his commitment to enhance
stockholder value.

     Historically, an officer's annual bonus opportunity has generally been up
to fifty percent of base salary. In early 2002 the Committee developed a
replacement bonus program that is directly tied to Company performance because
it links officers' annual cash bonuses to earnings per share targets. The bonus
opportunity (as a percentage of salary) increases as earnings per share targets
increase. Outstanding Company performance should result in higher bonuses than
have been awarded in the past, while conversely, less than satisfactory Company
performance should result in lower bonuses than have been paid in the past. The
Committee believes that, by placing more compensation at risk, this new program
will further focus management's efforts on Company performance.

     Company Common Stock is a major part of annual and long-term compensation
for key employees because of its inherent alignment with the interests of
stockholders. The Committee's long-term philosophy is reflected in the fact that
full realization of the value of stock incentives is generally subject to a
long-term vesting schedule.

     Recent annual stock compensation has also been directly impacted by Company
performance. Executive officers (including Mr. Manoogian), group executives and
key corporate and operating employees received restricted stock awards in 2001
under the Company's annual long-term incentive compensation program based
principally on the Company's 2000 operating results. In light of the Company's
performance in 2000, these awards were less than the full potential opportunity.
These awards generally vest in ten percent annual installments over a period of
ten years from the date of grant. The terms of these awards are more fully
described below.

     In May 2001 the Committee granted to Messrs. Manoogian and Kennedy
restricted stock awards of 700,000 and 300,000 shares, respectively, and stock
options of 2,000,000 shares and 1,000,000 shares, respectively. These awards and
options were granted in recognition of such individuals' performance and long-
term service to the Company, and took into account compensation levels of other
industry executives. In the case of Mr. Manoogian, this grant also reflected his
continuing to serve as the Company's Chairman and Chief Executive Officer past
his reaching age 65 in July 2001 and foregoing at this time certain retirement
benefits that otherwise would have been available to him. The exercise price of
the options is the market price on the date of grant. The terms of these awards
and options are more fully described below.

     In 2000 the Company implemented an Executive Stock Purchase Program (the
"Program"). This voluntary Program was made available to key members of the
Company's management. Approximately 300 employees participated in the Program
and invested approximately $156 million in Company Common Stock. This Program
represents a major financial commitment on the part of its participants, thus
further aligning the interests of the Company's key management with the
interests of stockholders. The Committee did not implement any new compensation
programs in 2001.

     In order to formalize the Board's policy of encouraging stock ownership by
officers and to require executives to remain at risk by maintaining a
substantial interest in Company Common Stock, the Board has
                                        9


established stock ownership guidelines for officers. The guidelines require the
Chief Executive Officer to own stock with a value of at least five times base
pay; the President to own stock with a value of at least four times base pay;
Senior Vice Presidents to own stock with a value of at least three times base
pay; and all other officers to own stock with a value of at least two times base
pay. Officers are required to achieve the share ownership (including restricted
stock awards) necessary to meet the guidelines within three years of becoming
subject to the guidelines.

GENERAL COMPENSATION INFORMATION

     Compensation arrangements for executive officers generally consist of a
blend of base salary, annual bonus and long-term incentives utilizing Company
Common Stock. The Committee uses a variety of resources, including published
compensation surveys, as it considers information concerning current
compensation practices and trends within the Company's industries and geographic
area. In addition, the Committee reviews compensation policies and practices of
corporations in other industries which are similar to the Company in terms of
revenues and market value, because the Committee believes that the Company
competes with such companies for executive talent. Although the Committee
reviews such information for general guidance, it does not specifically target
compensation of the executive officers to compensation levels at other
companies.

     Annual cash compensation consists of salary and bonus. Base salaries for
executive officers historically have been adjusted annually if warranted by
Company performance. This has been done by establishing ranges for increases for
executive officers that reflect inflation, promotions and merit and that are
similar to the ranges established for other corporate office employees. The
ranges reflect changes observed in general compensation levels of salaried
employees, and in particular, within the geographic area of the Company's
corporate office and within the Company's industries. Historically, the
Company's performance for the particular year and the Company's prospects have
been more significant factors in determining year-end bonuses than in
determining salary ranges. As noted above, beginning in 2002, the Company is
changing its approach to annual cash bonuses and is implementing a program in
which bonus levels will correspond to earnings per share targets. Salary and
bonus determinations may vary, however, for a variety of subjective factors such
as an individual's contribution to the performance of the Company and its
affiliates in addition to the other considerations referred to above.

     Restricted stock awards and stock options granted under the Masco
Corporation 1991 Long Term Stock Incentive Plan (the "1991 Plan") are generally
used as part of the Company's long-term incentive arrangements, which focus the
recipient on long-term enhancement in stockholder value and help retain key
employees. Factors reviewed by the Committee in determining whether to grant
options and awards are generally similar to the factors considered in
determining salaries and bonuses described above. The Committee believes that
the level of restricted stock awards and stock option grants must be sufficient
in size and potential value to provide a strong incentive and to reinforce the
individual's commitment to the Company. The history of restricted stock awards
and stock option grants previously granted to an executive is also a factor in
determining new awards and grants. In general, the potential opportunity for
executives for annual restricted stock awards under the Company's restricted
stock award program, which is contingent upon the Company's performance during
the preceding year, ranges from thirty percent of base salary for corporate
executives and division operating executives to ten percent of base salary. In
addition, supplemental restricted stock awards and stock options are granted
periodically.

     The Company has historically purchased shares of Company Common Stock in
the open market sufficient to provide for all restricted stock awards so that
the cost related to these awards as they vest is fixed, as well as to avoid any
common share dilution resulting from these awards. This expense is generally
amortized over the vesting period of the awards. Because the Company's tax
deduction is based on the fair market value of the stock at the time the
restrictions lapse, the after-tax cost of this program can be very favorable to
the Company as a result of any future appreciation of Company Common Stock. The
Company believes that the extended vesting of stock awards with the opportunity
for substantial stock price appreciation promotes retention, and also spreads
compensation expense over a longer term, which generally has resulted in a
significant reduction in the Company's after-tax cost of this stock-related
compensation.
                                        10


     Restricted stock awards granted under the 1991 Plan generally vest in ten
percent annual installments over a period of ten years from the date of grant.
In general, vesting is contingent on a continuing employment relationship with
the Company. The 1991 Plan provides, however, that shares continue to vest upon
retirement on or after normal retirement age, and that all shares vest
immediately upon death, permanent and total disability or the occurrence of
certain events constituting a change in control of the Company. It is the
Company's current practice to include a noncompete agreement for a one-year
period following termination of employment in all restricted stock awards
granted under the 1991 Plan.

     Original stock option grants made under the 1991 Plan prior to February
2000 have generally vested in installments beginning in the third year and
extending through the eighth year after grant and, unless otherwise provided,
may be exercised until the earlier of ten years from the date of grant or, as to
the number of shares then exercisable, the termination of the employment
relationship of the participant. Beginning February 2000, option grants under
the 1991 Plan generally vest in five annual installments. In general, these
options include a noncompete clause and a provision stating that upon
termination of employment, except in certain circumstances (including normal
retirement, death or disability), the recipient may be required to pay back to
the Company the net gain realized upon the exercise of any installment of the
option that became exercisable within two years prior to the termination. Stock
option grants generally do not have a financial reporting expense associated
with them since they are granted at fair market value, and in fact, when
exercised, raise additional equity for the Company. The difference between the
exercise price and fair market value of the Company Common Stock on the date of
exercise is deductible by the Company for federal income tax purposes and
thereby provides tax savings to the Company. The Committee permits Company
Common Stock to be used in payment of federal, state and local withholding tax
obligations attributable to the exercise of stock options. The 1991 Plan also
permits the Committee to accept the surrender of an exercisable stock option and
to authorize payment by the Company of an amount equal to the difference between
the option exercise price of the stock and its then fair market value.

     Recipients of stock options are eligible to receive restoration options. A
restoration option is granted when a participant exercises a stock option and
pays the exercise price by delivering shares of Company Common Stock. The
restoration option is equal to the number of shares delivered by the participant
and does not increase the number of shares covered by the original stock option.
The exercise price is 100 percent of the fair market value of Company Common
Stock on the date the restoration option is granted so that the participant
benefits only from subsequent increases in the Company's stock price.
Restoration options were granted in 2001 to certain officers in connection with
such individuals' exercise of original stock options. The 1991 Plan also
provides that, upon the occurrence of certain events constituting a change in
control of the Company, all stock options previously granted immediately become
fully exercisable and all restricted stock awards immediately vest. Generally,
if a participant incurs an excise tax under Section 4999 of the Internal Revenue
Code of 1986 (the "Code") in connection with a payment or distribution following
such a change in control, the 1991 Plan provides that the participant will
receive additional payments to make him or her whole for such excise tax.

     In addition to the stock-based programs noted above, most Company salaried
employees participate in defined contribution profit-sharing retirement plans,
which further link compensation to Company performance. Discretionary
contributions are made into these plans based on the Company's performance.
Historically, aggregate annual contributions and accruals for the profit-sharing
plan in which executive officers participate have ranged from four percent to
seven percent of participants' base salary. See footnote (3) to the "Summary
Compensation Table."

     Beginning in 1994, Section 162(m) of the Code limits deductibility of
annual compensation in excess of $1 million paid to the Company's chief
executive officer and to each of the other four highest paid executive officers
unless this compensation qualifies as "performance-based." In 1997, the Board
approved, and the stockholders adopted, amendments to the 1991 Plan so that
stock options granted under the 1991 Plan will continue to result in
compensation fully deductible by the Company under Section 162(m). In addition,
the Committee approved, and stockholders adopted, the 1997 Annual Incentive
Compensation Plan to continue the Committee's practice of structuring
determinations for cash bonuses to make them performance-based and therefore tax
deductible. The 1997 Plan expired and has been replaced, subject to stockholder
approval,
                                        11


with the 2002 Annual Incentive Compensation Plan. In order for stock options and
cash bonuses to qualify as deductible under Section 162(m), Mr. Morgan has not
participated in any Committee decisions relating to the granting of options and
cash bonuses to the named executive officers. The Committee continues to believe
that it is in the Company's interest to retain flexibility in its compensation
programs, and although compensation will in some circumstances exceed the
limitation of Section 162(m), the Committee believes that the tax deduction lost
on account of any such excess compensation will not be material for the
foreseeable future.

                                          Peter A. Dow, Chairman
                                          Verne G. Istock
                                          John A. Morgan
                                          Mary Ann Van Lokeren

                                        12


                       COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY COMPENSATION TABLE

     The following table summarizes the annual and long-term compensation of the
Company's chief executive officer and the other four highest paid executive
officers (collectively, the "named executive officers") for 2001, 2000 and 1999.



                                                                      LONG-TERM
                                                                 COMPENSATION AWARDS
                                                               ------------------------
                                     ANNUAL COMPENSATION(1)    RESTRICTED    SECURITIES
                                     -----------------------      STOCK      UNDERLYING      ALL OTHER
NAME AND PRINCIPAL POSITION   YEAR     SALARY       BONUS       AWARDS(2)     OPTIONS     COMPENSATION(3)
---------------------------   ----   ----------   ----------   -----------   ----------   ---------------
                                                                        
Richard A. Manoogian(4).....  2001   $1,200,000   $  576,000   $16,709,000   2,000,000       $ 84,000
  Chairman of the             2000    1,200,000      576,000     6,338,000     340,000         84,000
  Board and Chief             1999            1    2,000,000       261,000   1,716,381(5)     158,000
  Executive Officer
Raymond F. Kennedy..........  2001   $1,100,000   $  528,000   $ 7,249,000   1,000,000       $ 77,000
  President and Chief         2000    1,050,000      528,000     3,923,000     240,000         74,000
  Operating Officer           1999      975,000      600,000       178,000     110,763(5)     150,000
Richard G. Mosteller........  2001   $  675,000   $  270,000   $   102,000     135,102(5)    $ 47,000
  Vice President and          2000      658,000      270,000       871,000     144,000         46,000
  Senior Financial            1999      628,000      320,000       124,000      34,344(5)     123,000
  Advisor
John R. Leekley.............  2001   $  665,000   $  266,000   $   101,000           0       $ 47,000
  Senior Vice President       2000      647,000      266,000     1,253,000     144,000         45,000
  and General Counsel         1999      614,000      314,000       113,000           0        101,000
Robert B. Rosowski..........  2001   $  380,000   $  152,000   $    57,000           0       $ 27,000
  Vice President              2000      370,000      152,000       414,000      82,000         26,000
  and Treasurer               1999      350,000      180,000        63,000           0         54,000


---------------

(1) Salary information is disclosed in the table on a calendar year basis.
    Regular annual salary levels were not increased in 2001. The changes in
    salary from 2000 to 2001 reported in the table reflect increases implemented
    in July 2000 that were effective for only part of 2000 but all of 2001.
    Officers may receive certain perquisites and personal benefits, the dollar
    amounts of which are below current Securities and Exchange Commission
    thresholds for reporting requirements.

(2) This column sets forth the dollar value, as of the date of grant, of
    restricted stock awarded under the Company's 1991 Long Term Stock Incentive
    Plan (the "1991 Plan"). Vesting of all shares is generally contingent on a
    continuing employment relationship with or normal retirement from the
    Company. The following number of shares were awarded to the named executive
    officers in February 2001 as part of the Company's annual long-term
    incentive compensation based on Company performance during the prior year:
    Mr. Manoogian -- 7,830 shares; Mr. Kennedy -- 7,170 shares; Mr.
    Mosteller -- 4,400 shares; Mr. Leekley -- 4,340 shares; and Mr.
    Rosowski -- 2,480 shares. In addition, Messrs. Manoogian and Kennedy were
    awarded 700,000 and 300,000 shares, respectively, of restricted stock in May
    2001. The restricted stock awards made to the named executive officers
    generally vest over a period of ten years from the date of grant with ten
    percent of each award vesting annually and with vesting contingent on a
    continuing employment relationship with or normal retirement from the
    Company. As of December 31, 2001, the aggregate number and market value of
    unvested restricted shares of Company Common Stock held by each of the named
    executive officers under all vesting arrangements were: Mr. Manoogian --
    1,256,280 shares valued at $30,779,000; Mr. Kennedy -- 860,002 shares valued
    at $21,070,000; Mr. Mosteller -- 103,917 shares valued at $2,546,000; Mr.
    Leekley -- 131,732 shares valued at $3,227,000; and Mr. Rosowski -- 52,070
    shares valued at $1,276,000. Recipients of restricted stock awards have the
    right to receive dividends on unvested shares.

(3) This column sets forth Company contributions and allocations under the
    Company's defined contribution retirement plans for the accounts of each of
    the named executive officers and in the case of 1999 includes
                                        13


    cash payments made pursuant to certain tandem rights associated with the
    annual vesting of certain restricted stock awards granted in 1989.

(4) Mr. Manoogian's salary for 1999 was $1, a rate which had been in effect
    since January 1996 when Mr. Manoogian requested that his annual salary be
    reduced. See "Organization and Compensation Committee Report on Executive
    Compensation."

(5) These options are restoration options granted upon the exercise of
    previously held stock options. As described in more detail under
    "Organization and Compensation Committee Report on Executive Compensation,"
    a restoration option does not increase the number of shares covered by the
    original option or extend the term of the original option.

OPTION GRANT TABLE

     The following table sets forth information concerning options granted to
the named executive officers in 2001. In accordance with Securities and Exchange
Commission regulations, the Black-Scholes option pricing model was used to
estimate the grant date present value of the options set forth in this table.
Actual gains, if any, on stock option exercises and Company Common Stock
holdings will depend on overall market conditions and the future performance of
the Company and its Common Stock. There can be no assurance that the amounts
reflected in this table will be realized.



                                               INDIVIDUAL GRANTS(1)
                                 ------------------------------------------------
                                 NUMBER OF    % OF TOTAL
                                 SECURITIES     OPTIONS
                                 UNDERLYING   GRANTED TO                            GRANT DATE
                                  OPTIONS      EMPLOYEES    EXERCISE   EXPIRATION     PRESENT
NAME                              GRANTED       IN 2001      PRICE        DATE       VALUE(2)
----                             ----------   -----------   --------   ----------   -----------
                                                                     
Richard A. Manoogian...........  2,000,000        49%        $22.12     5/16/11     $16,280,000
Raymond F. Kennedy.............  1,000,000        24%        $22.12     5/16/11     $ 8,140,000
Richard G. Mosteller...........     69,880       1.7%        $23.44     5/21/07     $   383,000
                                    24,266        .6%        $23.44     2/16/10     $   133,000
                                    40,956       1.0%        $23.44     5/22/06     $   224,000
John R. Leekley................          0
Robert B. Rosowski.............          0


---------------

(1) For a description of additional terms of Messrs. Manoogian's and Kennedy's
    options, see "Organization and Compensation Committee Report on Executive
    Compensation." Mr. Mosteller's options are restoration options. Restoration
    options are equal to the number of shares delivered to exercise prior
    options. The exercise price of restoration options is equal to the market
    value of Company Common Stock on the date the original options were
    exercised. As described in more detail under "Organization and Compensation
    Committee Report on Executive Compensation," a restoration option does not
    increase the number of shares covered by the original option or extend the
    term of the original option.

(2) The following assumptions were made in calculating the grant date present
    value of Messrs. Manoogian's and Kennedy's options: volatility of 34.41%,
    dividend yield of 2.14%, risk free rate of return of 5.45% based on a U.S.
    Treasury Strip with a maturity date equal to the expected term of the
    options and an expected option life of seven years. The following
    assumptions were made in calculating the grant date present value of Mr.
    Mosteller's options: volatility of 33.96%, dividend yield of 2.14%, risk
    free rate of return of 3.67% based on a U.S. Treasury Strip with a maturity
    date equal to the expected term of the options and an expected option life
    of three years.

OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE

     The following table sets forth information concerning each exercise of
stock options during 2001 by each named executive officer and the value at
December 31, 2001 of unexercised options held by such individuals under the
Company's stock option plans. At December 31, 2001, when the closing price of
Company Common Stock was $24.50 per share, the value of unexercised options
reflects any increase in market value of Company

                                        14


Common Stock from the date of grant (from February, 1992 to May, 2001, with
grant date market prices ranging from $14.125 to $30.04). The value actually
realized upon future option exercises by the named executive officers will
depend on the value of Company Common Stock at the time of exercise.

    AGGREGATED OPTION EXERCISES IN 2001, AND DECEMBER 31, 2001 OPTION VALUES



                                                         NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                         UNDERLYING OPTIONS AT        IN-THE-MONEY OPTIONS AT
                             SHARES                        DECEMBER 31, 2001             DECEMBER 31, 2001
                            ACQUIRED       VALUE      ---------------------------   ---------------------------
NAME                       ON EXERCISE    REALIZED    UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE   EXERCISABLE
----                       -----------   ----------   -------------   -----------   -------------   -----------
                                                                                  
Richard A. Manoogian.....          0     $        0     3,772,000      2,406,253     $14,602,000    $4,343,000
Raymond F. Kennedy.......          0     $        0     1,782,000        415,819     $ 7,197,000    $1,753,000
Richard G. Mosteller.....    172,800     $  918,000       518,302         40,515     $ 2,380,000    $        0
John R. Leekley..........     85,000     $1,073,000       373,200        230,800     $ 2,152,000    $1,462,000
Robert B. Rosowski.......          0     $        0       175,600        106,400     $ 1,037,000    $  703,000


PENSION PLANS

     The executive officers participate in pension plans maintained by the
Company for certain of its salaried employees. The following table shows
estimated annual retirement benefits payable for life at age 65 for various
levels of compensation and service under these plans.

                               PENSION PLAN TABLE



                                  YEARS OF SERVICE(1)
---------------------------------------------------------------------------------------
REMUNERATION(2)             5         10         15         20         25         30
---------------          -------   --------   --------   --------   --------   --------
                                                             
$  200,000.............  $11,290   $ 22,580   $ 33,870   $ 45,161   $ 56,451   $ 67,741
   400,000.............   22,580     45,161     67,741     90,321    112,902    135,482
   600,000.............   33,870     67,741    101,611    135,482    169,352    203,223
   800,000.............   45,160     90,321    135,482    180,643    225,803    270,964
 1,000,000.............   56,451    112,902    169,352    225,803    282,254    338,705
 1,200,000.............   67,741    135,482    203,223    270,964    338,705    406,446


---------------

(1) The plans provide for credit for employment with any of the Company, its
    subsidiaries or certain Company affiliates and their subsidiaries. Vesting
    occurs after five full years of employment. The benefit amounts set forth in
    the table above have been converted from the plans' calculated five-year
    certain and life benefit and are not subject to reduction for social
    security benefits or for other offsets, except to the extent that pension or
    equivalent benefits are payable under an affiliate's plan. The table does
    not depict Code limitations on tax-qualified plans because one of the
    Company's plans is a non-qualified plan established to restore for certain
    salaried employees (including the named executive officers) benefits that
    are otherwise limited by the Code. For each year of credited service prior
    to July 1, 1971 there is an additional annual benefit equal to 0.2 percent
    of final average earnings in excess of $9,000. Approximate years of credited
    service for the named executive officers participating in the plan are:
    Messrs. Manoogian, Mosteller and Rosowski -- 30 (the maximum credited
    service); Mr. Kennedy -- 24; and Mr. Leekley -- 26.

(2) For purposes of determining benefits payable, remuneration in general is
    equal to the average of the highest five consecutive January 1 annual base
    salary rates paid by the Company prior to retirement.

     Under the Company's Supplemental Executive Retirement Plan, certain
officers and other key executives of the Company may receive retirement benefits
in addition to those provided under the Company's other retirement plans. Each
participant is to receive annually upon retirement on or after age 65, an amount
which, when combined with benefits from the Company's other retirement plans
(and, for most participants, any retirement benefits payable by reason of
employment by prior employers) equals up to 60 percent of the average of the
participant's highest three years' cash compensation received from the Company
(base salary
                                        15


and regular year-end cash bonus or equivalent estimates where cash compensation
has been reduced by agreement with the Company). A disability benefit is payable
to a participant who has been employed at least two years and becomes disabled.
Participants who terminate from the Company with more than five years' service
before age 65 become entitled to receive a benefit adjusted by an
age-and-service vesting schedule that provides for no more than 50 percent
vesting upon attainment of age 50 and 100 percent vesting no earlier than age
60. Such vested benefit is not payable until age 65 and is subject to offset for
amounts earned from prior or future employers. A surviving spouse will receive
reduced benefits upon the participant's death. A participant and his or her
surviving spouse may also receive supplemental medical benefits. The plan is
unfunded, except that accelerated payment on a present value basis is mandatory
following a change in control of the Company. The named executive officers
participate in this plan, and each is eligible for a 60 percent benefit at age
65.

                                        16


                               PERFORMANCE GRAPH

     Set forth below is a line graph comparing the cumulative total stockholder
return on Company Common Stock with the cumulative total return of the Standard
& Poor's 500 Composite Stock Price Index ("S&P 500 Index") and the Standard &
Poor's Building Materials Index ("S&P Building Materials Index") for the period
from January 1, 1997 through December 31, 2001, when the closing price of
Company Common Stock was $24.50 per share (on April 12, 2002 the closing price
was $28.62 per share). The graph assumes investments of $100 on December 31,
1996 in Company Common Stock, the S&P 500 Index and the S&P Building Materials
Index and the reinvestment of dividends.

                           [MASCO PERFORMANCE GRAPH]

     The table below sets forth the value, as of December 31 of each of the
years indicated, of a $100 investment made on December 31, 1996 in each of
Company Common Stock, the S&P 500 Index and the S&P Building Materials Index,
and the reinvestment of dividends.



----------------------------------------------------------------------------------------------------------------
                                       1996         1997         1998         1999         2000         2001
----------------------------------------------------------------------------------------------------------------
                                                                                  
 Masco Corporation                   $100.00      $143.01      $164.05      $147.36      $152.02      $148.10
 S&P 500 Index                        100.00       133.10       170.82       206.50       187.85       165.59
 S&P Building Materials Index         100.00       116.29       129.27       103.91       110.90       111.57


               ORGANIZATION AND COMPENSATION COMMITTEE INTERLOCKS
                           AND INSIDER PARTICIPATION

     The Organization and Compensation Committee of the Board of Directors
currently consists of Peter A. Dow, Verne G. Istock, John A. Morgan and Mary Ann
Van Lokeren. From time to time Morgan Lewis Githens & Ahn, Inc., of which Mr.
Morgan is Managing Director, performs investment banking and other related
services for the Company and has been engaged to provide investment banking and
financial advisory services for Furnishings International Inc. ("FII") in
connection with the transactions described in "Certain Relationships and Related
Transactions." Fees for Morgan Lewis Githens & Ahn, Inc.'s services to the
Company in 2000 and 2001, including services in connection with significant
acquisitions, divestitures and financings, have not been finalized as a number
of these transactions have not been completed. The Company anticipates that
these fees may aggregate several million dollars for the two-year period. Fees
paid by FII to Morgan Lewis Githens & Ahn, Inc. for investment banking and
financial advisory services in connection with the liquidation of FII described
under "Certain Relationships and Related Transactions" were approximately $1.4
million.

     The Company has committed to invest up to $50 million (of which
approximately $31 million has been invested) in a private equity fund, Long
Point Capital Fund, LP (the "Fund"), whose investment activities are

                                        17


managed by the Fund's sole general partner, Long Point Capital Partners, LLC
("Long Point"). The objective of the Fund is to make leveraged acquisitions or
investments in the United States. Mr. Morgan is one of the principals of Long
Point, and Mr. Morgan and Mr. Manoogian (who has no personal financial interest
in the Fund) serve on an investment committee that advises on possible
investments by the Fund. Both Long Point and the Fund are investors in Metaldyne
Corporation (described in "Certain Relationships and Related Transactions"). As
one of its investments, in March 2002 the Fund also participated in the
acquisition of a textile business from FII as described in "Certain
Relationships and Related Transactions."

     Long Point is entitled to receive an annual fee equal to two percent of the
aggregate commitments of all investors to the Fund during a specified commitment
period and thereafter is entitled to receive an annual fee equal to two percent
of the Fund's invested capital. In 2001, the Company's portion of the management
fees for the Fund approximated $789,000, and the Company was also obligated to
pay $150,000 to Long Point for Fund management services in the previous year.
Long Point will generally be entitled to a twenty percent "carried interest" on
the profits on investments by the Fund. In addition, the Company has invested $3
million in Long Point, which will entitle the Company to a percentage of this
carried interest earned by Long Point. In addition to the potential capital
appreciation from the Company's investment in the Fund and the Company's share
in the carried interest on the Fund's profits, the Company expects to receive
additional benefits from this investment because of its right of first refusal
with respect to any investments identified by the Fund in the home improvement,
building products and related services industries. The Company believes that the
terms of its investment in the Fund are comparable to or better than the terms
applicable to investments in other equivalent funds. Long Point reimbursed the
Company approximately $77,000 for aviation costs incurred in 2001.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

METALDYNE CORPORATION (FORMERLY MASCOTECH, INC.)

     In November 2000, the Company reduced its common equity ownership in
Metaldyne Corporation (formerly MascoTech, Inc.) ("Metaldyne"), through a
recapitalization merger with an affiliate of Heartland Industrial Partners, L.P.
The Company currently holds approximately 6% of the common equity of Metaldyne,
and the Company has also invested approximately $39 million in Heartland
Industrial Partners, L.P. The Company, Richard Manoogian (who owns approximately
1.9% of Metaldyne common stock), a charitable foundation for which Mr. Manoogian
serves as a director and officer (which owns approximately 1.5% of such stock),
and certain other shareholders (including Heartland Industrial Partners, Long
Point Capital Partners, LLC and the Long Point Capital Fund, LP,) who in the
aggregate own approximately 90% of Metaldyne common stock, are parties to a
Shareholders Agreement regarding their ownership of such stock. The Shareholders
Agreement governs the election of directors, the transferability of stock,
access to information and registration rights, among other things. Mr. Manoogian
remains a director of Metaldyne.

     In connection with the 2000 recapitalization of Metaldyne, Metaldyne's
option to issue subordinated debentures to the Company was reduced from $200
million to $100 million and the option term was extended to October 2003,
pursuant to a Subordinated Loan Agreement. In connection therewith, Metaldyne
agreed to pay an annual commitment fee to the Company of $125,000.

     Subsequent to the recapitalization, the services historically provided by
the Company to Metaldyne and its subsidiaries since 1984 under a Corporate
Services Agreement have been substantially curtailed and the agreement will
terminate on December 31, 2002. In addition, sales of products and services and
other transactions occur from time to time between the Company and Metaldyne.
During 2001, such purchases and charges payable by the Company to Metaldyne
aggregated approximately $7 million, and purchases and charges payable by
Metaldyne to the Company aggregated approximately $1 million.

     The Company and Metaldyne are also parties to a Corporate Opportunities
Agreement which materially restricts the ability of either party to acquire or
otherwise invest in a business if the other party has an investment in such
business, except that the Company is not restricted from investing in any
company engaged

                                        18


in home improvement, building products or related services businesses. The
agreement will terminate on June 30, 2003. Under a 1984 Assumption and
Indemnification Agreement, Metaldyne assumed and agreed to indemnify the Company
against all of the liabilities and obligations of the businesses then
transferred to Metaldyne by the Company, including claims resulting from
circumstances that existed prior to the transfer, but excluding specified
liabilities. The Company agreed to indemnify a subsidiary of Metaldyne against
certain liabilities of businesses acquired by that subsidiary from the Company
in 1990.

FURNISHINGS INTERNATIONAL INC.

     In August 1996, the Company sold its Home Furnishings Group to Furnishings
International Inc. ("FII"), a corporation owned by a group of investors,
including 399 Venture Partners, Inc. (an affiliate of Citicorp), the Company,
certain affiliates of Travelers Group, Inc., and certain members of FII's
management, including Wayne B. Lyon, a Director of the Company and the Company's
former President. The Home Furnishings Group manufactured and sold residential
furniture and designed, marketed and sold decorative home furnishing fabrics.
Total proceeds to the Company from the sale of the Home Furnishings Group were
approximately $1,050 million, consisting of approximately $708 million in cash,
12% pay-in-kind junior debt securities and equity securities. In March 2001, 399
Venture Partners, Inc. and the Company each loaned FII $10 million and received
pay-in-kind notes due 2008 with an interest rate of prime plus one percent. For
2001, the Company recorded $29.8 million of interest from the pay-in-kind notes
and from a previous loan of $20 million bearing interest at the rate of prime
plus one percent.

     The U.S. furniture industry was adversely affected by the ongoing economic
weakness in its markets in 2001, by the bankruptcies of a number of major
retailers and by import competition. In the third quarter of 2001, management of
FII advised the Company that it was pursuing the disposition of all of its
business and that the expected consideration from the sale of such businesses
would not be sufficient to pay amounts due to the Company in accordance with the
terms of the junior debt securities. Accordingly, the Company reevaluated the
carrying value of its securities of FII and, in the third quarter of 2001,
recorded a $460 million pre-tax, non-cash charge (a major portion of which was
accrued interest on the pay-in-kind notes) to write down this investment to its
estimated fair value of approximately $133 million, which represented the
approximate fair value of the consideration ultimately expected to be received
from FII for the repayment of the indebtedness. Because the debt securities that
the Company holds are subordinate to all other debt of FII, the net proceeds
from the disposition of FII businesses and other assets, after repaying their
bank debt of approximately $250 million at December 31, 2001, and satisfying
retained liabilities, will determine the amount available to the Company. Upon
completion of the dispositions, actual proceeds to the Company may differ from
the Company's estimates, and may result in an adjustment to income or expense at
that time. Management of FII expects the disposition process to be substantially
complete by the end of 2002; however, due to various factors, the disposition
process may continue beyond the end of 2002.

     As part of the disposition process, in March 2002, FII sold a textile
business for approximately $23.5 million plus contingent consideration to the
management of such business and the Long Point Capital Fund, LP. FII retained an
11% equity interest. The price was determined through arms-length negotiations
and approved by the disinterested directors of FII.

     To facilitate the liquidation of FII, the Company has guaranteed certain
financial and severance arrangements for certain key employees of FII in order
to retain their services during the liquidation. In addition, FII has reacquired
the equity interest in FII that was held by certain members of FII's management
group, consistent with FII's past practices and in certain cases at the
insistence of the purchasers of FII's businesses. If FII continues this
practice, equity interests held by others in the FII management group, including
Wayne Lyon, could be reacquired. In January 2002, the Company entered into a $30
million subordinated revolving credit arrangement with FII with interest at the
prime rate to assist FII with its temporary cash requirements incident to this
liquidation process. Such arrangement is secured by a lien on certain assets. As
of April 18, 2002, no amount was outstanding under this credit arrangement.

     For 2001, the Company charged FII approximately $709,700 for direct costs
and management services provided by the Company to FII.

                                        19


OTHER RELATED PARTY TRANSACTIONS

     During the third quarter of 2000, approximately 300 of the Company's key
employees, including executive officers, purchased from the Company 8.4 million
shares of Company Common Stock for cash totaling $156 million under an Executive
Stock Purchase Program. The key employees were given the opportunity to purchase
a number of shares determined by a formula based upon each employee's salary
level and other factors. The stock was purchased at $18.50 per share, the
approximate market price of Company Common Stock at the time of purchase.
Participants in the Program financed their entire purchase with five-year full
recourse personal loans, at a rate of 9.2%, the market rate at the time, from a
bank syndicate. Each participant is fully responsible at all times for repaying
the bank loan when it becomes due and is personally responsible for 100 percent
of any loss in the market value of the purchased stock. The Company has
guaranteed repayment of the loans only in the event of a default by the
participant. As a further inducement for continued employment beyond the end of
this five-year Program, each participant received, as part of the Program, a
restricted stock grant vesting over a ten-year period. Pursuant to the terms of
the Program, all participants are subject to a one-year post-employment
noncompetition agreement with the Company's businesses that employ them.
Following is a list of the executive officers who invested in the Program,
together with the amounts of their investments and the number of shares
purchased: Dr. Lillian Bauder -- $2.7 million (145,945 shares); Daniel
Foley -- $1.5 million (81,081 shares); Eugene Gargaro, Jr. -- $2.7 million
(145,945 shares); Raymond Kennedy -- $16 million (864,864 shares); John
Leekley -- $4.7 million (254,054 shares); Richard Manoogian -- $26 million
(1,405,405 shares); and Robert Rosowski -- $1.3 million (72,972 shares).

     During 2001, the Company purchased and sold securities through First Union
Securities. These transactions, which were effected on what the Company believes
are customary terms, resulted in brokerage commissions to the firm of
approximately $1.8 million. Richard A. Manoogian, Jr., the son of Richard A.
Manoogian, is employed at that firm and received a portion of such commissions
as compensation from the firm.

        PROPOSAL TO APPROVE THE 2002 ANNUAL INCENTIVE COMPENSATION PLAN

     The Organization and Compensation Committee of the Board of Directors has
adopted and is presenting for stockholder approval the Masco Corporation 2002
Annual Incentive Compensation Plan (the "2002 Incentive Plan"), in order to
continue the tax deductibility of annual cash bonuses paid to selected executive
officers. Stockholder approval of the 2002 Incentive Plan is required by Section
162(m) of the Code. In general, Section 162(m) disallows deductions for
compensation in excess of $1 million paid to any of the five most highly
compensated executives of a public corporation, unless the compensation is based
on performance criteria. The 2002 Incentive Plan replaces the 1997 Annual
Incentive Compensation Plan which has expired. The following summary is
qualified in its entirety by reference to the full text of the 2002 Incentive
Plan, which is attached to this Proxy Statement as Annex A.

     Under the 2002 Incentive Plan, during the first quarter of each year the
Organization and Compensation Committee of the Board of Directors will establish
in writing for that year one or more performance criteria, consisting of net
income, earnings per common share, cash flow, revenues, return on assets or
total shareholder return. The Organization and Compensation Committee will
designate the participants and grant each such participant a performance
incentive award. Eligibility under the plan is limited to the executive officers
of the Company. After the Company's financial results for the year have been
determined, the Committee will certify the attainment of the performance
criteria and will calculate the possible payout of awards. The Organization and
Compensation Committee may reduce or eliminate (but not increase) for any reason
the amount that would otherwise be payable to a participant. In no event may an
award exceed $10 million.

     If approved by stockholders, the 2002 Incentive Plan will be effective
beginning January 1, 2002 for a period of five years unless sooner terminated by
the Organization and Compensation Committee, and will be used generally to grant
annual cash bonuses to the Company's five most highly compensated executive
officers. For 2002, the Committee has established performance criteria based on
the Company's earnings per common share. Depending on the level of the Company's
earnings per common share for 2002, a performance award unit could result in a
possible payout ranging from 0% to 100% of a participant's base salary.
                                        20


Performance awards have been granted under the 2002 Incentive Plan subject to
stockholder approval. Mr. Manoogian was granted eight units, Mr. Kennedy was
granted six units, and Messrs. Leekley and Rosowski were each granted one unit.
Timothy Wadhams, who was elected Vice President and Chief Financial Officer in
October 2001, was granted one unit. If the 2002 Incentive Plan is not approved,
the conditional awards will be canceled, no further awards will be made under
the plan and the Committee will consider other alternatives.

     The approval of the 2002 Incentive Plan requires the vote of a majority of
the votes cast by shares entitled to vote thereon. Abstentions and broker
non-votes are not counted as votes cast, and therefore do not affect the
approval of the proposal.

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 2002 ANNUAL
INCENTIVE COMPENSATION PLAN.

                          RATIFICATION OF SELECTION OF
                              INDEPENDENT AUDITORS

     Upon the recommendation of the Audit Committee, the Board of Directors has
selected the independent public accounting firm of PricewaterhouseCoopers to
audit the Company's financial statements for the year 2002, and believes it
appropriate to submit its selection for ratification by stockholders.

     PricewaterhouseCoopers has acted as the Company's independent certified
public accounting firm for over 40 years. It has performed services of an
accounting and auditing nature and, from time to time, has provided other
consulting services for the Company. Representatives of PricewaterhouseCoopers
are expected to be present at the Meeting, will have the opportunity to make a
statement and are expected to be available to respond to appropriate questions.
If the selection is not ratified, the Board will consider selecting another
public accounting firm as the Company's independent auditors.

     The affirmative vote of a majority of the votes cast by shares entitled to
vote thereon is required for the ratification of the selection of independent
auditors. Abstentions and broker non-votes are not counted as votes cast, and
therefore do not affect the ratification of the selection of auditors.

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS FOR THE COMPANY
FOR THE YEAR 2002.

                        PRICEWATERHOUSECOOPERS LLP FEES

AUDIT FEES

     Aggregate fees for professional services rendered by PricewaterhouseCoopers
LLP ("PricewaterhouseCoopers") in connection with its audit of the Company's
consolidated financial statements as of and for the year ended December 31, 2001
and its limited reviews of the Company's unaudited condensed consolidated
interim financial statements were $4.4 million.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

     During the year ended December 31, 2001, PricewaterhouseCoopers rendered no
professional services to the Company in connection with the design and
implementation of financial information systems.

                                        21


ALL OTHER FEES

     In addition to the fees described above, aggregate fees of $3.8 million
were billed by PricewaterhouseCoopers for the year ended December 31, 2001,
primarily for the following professional services (in millions):


                                                            
Audit-related services(a)...................................   $2.9
Income tax compliance and related tax services..............   $0.9


---------------
(a) Audit-related services include fees for accounting consultations, issuance
    of consents and comfort letters, audits of the Company's retirement and
    other employee benefit plans, due diligence related to business combinations
    and predisposition reviews and closing statement audits for certain
    businesses divested by the Company.

            SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and Directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, Directors and greater than ten
percent stockholders are required by regulations of the Securities and Exchange
Commission to furnish the Company copies of all Section 16(a) forms they file.

     Based solely on the Company's review of copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
are required for those persons, the Company believes that its Directors,
officers and greater than ten percent beneficial owners met all applicable
filing requirements during the last fiscal year.

              STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING

     Stockholders who intend to present a proposal for inclusion in the
Company's proxy statement and proxy relating to the 2003 Annual Meeting must
provide written notice of such intent to the Secretary of the Company at its
address stated in the Notice of Annual Meeting of Stockholders by December 23,
2002. Management's proxies will have the right to exercise discretionary voting
authority on any matter with respect to which the Company has not received
notice in writing by December 23, 2002.

     If a stockholder intends to bring a matter before next year's meeting,
other than by timely submitting a proposal to be included in the proxy
statement, timely notice must be given in accordance with the Company's bylaws.
The bylaws provide that, to be timely, notice must be received by the Company's
Corporate Secretary at 21001 Van Born Road, Taylor, Michigan 48180 no earlier
than January 15, 2003 and no later than February 14, 2003. For each matter a
stockholder intends to bring before the meeting, the notice must include a brief
description of the business to be brought before the meeting; the text of the
proposal or business (including the text of any resolutions proposed for
consideration); the reasons for conducting the business at the meeting and any
material interest the stockholder may have in such business; the stockholder's
name and address as it appears in the records of the Company; the number of
shares of Company Common Stock and Series B Participating Preferred Stock owned
by the stockholder; and a representation as to whether the stockholder is a part
of a group that intends to deliver a proxy statement or form of proxy to holders
of at least the percentage of the aggregate voting power of the outstanding
Company Common Stock and Series B Participating Preferred Stock required to
approve or adopt such proposal or if the stockholder intends to otherwise
solicit proxies from stockholders in support of the proposal.

                 DELIVERY OF PROXY MATERIALS AND ANNUAL REPORTS

     The Securities and Exchange Commission recently adopted amendments to its
proxy rules which permit companies and intermediaries, such as brokers and
banks, to satisfy delivery requirements for proxy statements

                                        22


with respect to two or more stockholders sharing the same address by delivering
a single proxy statement to those stockholders. This method of delivery, often
referred to as householding, should reduce the amount of duplicate information
that stockholders receive and lower printing and mailing costs for companies.

     The Company is not householding proxy materials for its stockholders of
record in connection with the Meeting. However, the Company has been notified
that certain intermediaries will household proxy materials. If a stockholder
holds shares of Company Common Stock through a broker or bank that has
determined to household proxy materials, only one Annual Report and Proxy
Statement will be delivered to multiple stockholders sharing an address unless
stockholders notify their broker or bank to the contrary. The Company will
deliver a separate copy of the Annual Report and Proxy Statement for the 2002
Annual Meeting to any stockholder who did not receive an individual copy and who
requests a copy by contacting the Company by calling (313) 274-7400 and asking
for Investor Relations or by writing Investor Relations, Masco Corporation,
21001 Van Born Road, Taylor, Michigan 48180. Stockholders may also contact their
bank or broker to make a similar request.

     Stockholders may request delivery of a single copy of annual reports or
proxy statements from their bank or broker if such stockholder shares the same
address as another Company stockholder and their bank or broker has determined
to household proxy materials.

                                 OTHER MATTERS

     The Board of Directors knows of no other matters to be voted upon at the
Meeting. If any other matters properly come before the Meeting, it is the
intention of the proxies named in the enclosed Proxy to vote the shares
represented thereby with respect to such matters in accordance with their best
judgment.

                                          By Order of the Board of Directors

                                          [/s/ Eugene A. Gargaro, Jr.]
                                          EUGENE A. GARGARO, JR.
                                          Secretary

Taylor, Michigan
April 22, 2002

                                        23


                                                                         ANNEX A

                               MASCO CORPORATION
                    2002 ANNUAL INCENTIVE COMPENSATION PLAN

     SECTION 1.  Purpose

     The purpose of the Masco Corporation 2002 Annual Incentive Compensation
Plan (the "Plan") is to provide selected executive officers of Masco Corporation
(the "Company") with incentive compensation based upon the achievement of
established annual performance goals.

     SECTION 2.  Eligibility

     The individuals eligible to participate in the Plan (the "Participants")
are the executive officers of the Company.

     SECTION 3.  Performance Period

     Each Performance Period for purposes of the Plan shall have a duration of
one calendar year, commencing January 1 and ending December 31.

     SECTION 4.  Administration

     The Organization and Compensation Committee of the Board of Directors of
the Company (the "Committee") shall have the full power and authority to
administer and interpret the Plan and to establish rules for its administration.

     SECTION 5.  Performance Goals

     On or before the 90th day of each Performance Period, the Committee shall
establish in writing one or more performance criteria for the Performance Period
and the weighting of the performance criteria if more than one. The performance
criteria shall consist of one or more of the following: net income, earnings per
common share, cash flow, revenues, return on assets or total shareholder return.

     SECTION 6.  Awards

     On or before the 90th day of each Performance Period, the Committee shall
establish in writing a performance incentive award for such Participants as
shall be designated by the Committee and in such amounts as the Committee shall
determine, subject to the limitations of the Plan. No award to any Participant
shall be greater than $10 million. The Committee shall have the power and
authority to reduce or eliminate for any reason the amount of the award that
would otherwise be payable to a Participant based on the performance criteria.

     SECTION 7.  Certification and Payment

     As soon as practicable after release of the Company's financial results for
the Performance Period, the Committee will certify the Company's attainment of
the criteria established for such Performance Period pursuant to Section 5, will
calculate the possible payment of an award for each Participant and will certify
the amount of the award to each Participant for such Performance Period.
Payments of the awards shall be made in cash. To the extent net income is used
alone or as a component of another performance criterion, it shall mean net
income as reported to stockholders, but before losses resulting from
discontinued operations, extraordinary losses (in accordance with generally
accepted accounting principles, as currently in effect), the cumulative effect
of changes in accounting principles and other unusual, non-recurring items of
loss that are separately identified and quantified in the Company's audited
financial statements.

                                       A-1


     SECTION 8.  Amendment

     The Committee shall have the right to suspend or terminate this Plan at any
time and may amend or modify the Plan at any time.

     SECTION 9.  Adoption and Duration

     The Plan was approved by the Committee on February 13, 2002, subject to the
approval of the stockholders of the Company at the 2002 Annual Meeting of
Stockholders. The effective date of the Plan shall be January 1, 2002 and the
Plan shall remain in effect for a period of five years.

                                       A-2


                               MASCO CORPORATION
                         ANNUAL MEETING OF STOCKHOLDERS
                        AT MASCO CORPORATE HEADQUARTERS
                              21001 VAN BORN ROAD
                             TAYLOR, MICHIGAN 48180

                                     [MAP]

FROM DOWNTOWN DETROIT (EAST)
- Take I-94 west to the Pelham Road exit.
- Turn right onto Pelham Road and travel to Van Born Road.
- Turn left onto Van Born Road and proceed to the corporate headquarters.

FROM METRO AIRPORT (WEST)
- Take I-94 east to the Pelham Road exit.
- Turn left onto Pelham and travel to Van Born Road.
- Turn left onto Van Born Road and proceed to the corporate headquarters.
FROM SOUTHFIELD/BIRMINGHAM (NORTH)
- Take the Southfield Freeway to the Outer Drive/ Van Born Road exit.
- Stay on the service drive and proceed to Van Born Road.
- Bear right onto Van Born Road and travel to the corporate headquarters.

FROM TOLEDO (SOUTH)
- Take I-75 north to the Telegraph Road north exit.
- Proceed on Telegraph Road north to Van Born Road.
- Turn right on Van Born Road and proceed to the corporate headquarters.

MASCO CORPORATION       VOTE BY TELEPHONE OR INTERNET 24 HOURS A DAY,
                            7 DAYS A WEEK UNTIL 5 P.M. ON MAY 14, 2002



              TELEPHONE                                        INTERNET
            1-866-564-2331              OR           https://www.proxyvotenow.com/mas     OR              MAIL

Use any touch-tone telephone to vote                 Use the Internet to vote your Proxy.       Mark, sign and date your Proxy Card
your Proxy. Have your Proxy Card in                  Have your Proxy Card in hand when          and return it in the postage-paid
hand when you call. You will be                      you access the website. You will be        envelope we have provided.
prompted  to  enter  your  control                   prompted  to  enter  your  control
number, located in the box below, and                number, located in the box below, to
then follow the simple directions.                   create an electronic ballot.

Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned the Proxy Card.

If you have submitted your Proxy by telephone or the Internet there is no need
for you to mail back your Proxy Card.

If you have chosen to view the Proxy Statement and Annual Report over the
Internet instead of receiving paper copies in the mail, you can access the Proxy
Statement and 2001 Annual Report electronically at the Company's website,
www.masco.com.



                                                                                                     CONTROL NUMBER FOR
                                                                                                TELEPHONE OR INTERNET VOTING
1-866-564-2331
CALL TOLL-FREE TO VOTE

                            - DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET -

-----------------------------------------------------------------------------------------------------------------------------------

/ / IF VOTING BY MAIL, PLEASE               /X/
    SIGN, DATE AND RETURN THIS      VOTES MUST BE INDICATED
    PROXY CARD PROMPTLY IN THE      (X) IN BLACK OR BLUE INK.
    ENCLOSED ENVELOPE.


 (1) Election of Directors                                                              (4) In the proxies' discretion upon
                                                                                            such other business as may
   FOR both nominees  / /    WITHHOLD AUTHORITY to vote      / /   (*)EXCEPTIONS   / /      properly come before the meeting.
   listed below              for both nominees listed below
                                                                                        The shares represented by this Proxy
                                                                                        will be voted in accordance with the
                                                                                        specifications above. IF
Class II Directors to hold office until the Annual Meeting of Stockholders in           SPECIFICATIONS ARE NOT MADE, THE
2005 or until their respective successors are elected and qualified.                    PROXY WILL BE VOTED FOR THE ELECTION
                                                                                        OF BOTH NOMINEES, FOR APPROVAL OF THE
Nominees: VERNE G. ISTOCK AND RAYMOND F. KENNEDY.                                       2002 ANNUAL INCENTIVE COMPENSATION
                                                                                        PLAN, FOR RATIFICATION OF INDEPENDENT
                                                                                        AUDITORS AND IN THE PROXIES'
                                                                                        DISCRETION ON ANY OTHER MATTER THAT
                                                                                        MAY PROPERLY COME BEFORE THE MEETING.

                                                                                           Mark here if you wish to access the
                                                                                           Annual Report and Proxy Statement     / /
(*)INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR EITHER INDIVIDUAL NOMINEE,              electronically in the future instead
MARK THE "EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME.                   of by mail.

                                                                                           To change your address, please mark
                                                         FOR   AGAINST  ABSTAIN            this box.                             / /
(2) Proposal to approve the 2002 Annual Incentive        / /     / /       / /
    Compensation Plan.                                                                     To include any comments, please mark
                                                                                           this box.                             / /
(3) Ratification of the selection of
    PricewaterhouseCoopers LLP as independent auditors   / /     / /       / /
    for the Company for the year 2002.


                                                                                        S C A N   L I N E

                                                                                Please sign exactly as name appears at left.
                                                                                Executors, administrators, trustees, et al. should
                                                                                so indicate when signing. If the signature is for a
                                                                                corporation, please sign the full corporate name by
                                                                                an authorized officer. If the signature is for a
                                                                                partnership or a limited liability company, please
                                                                                sign the full partnership or limited liability
                                                                                company name by an authorized person. If shares are
                                                                                registered in more than one name, all holders must
                                                                                sign.


                                                        Date             Share Owner sign here           Co-Owner sign here
                                                        |-----------|--------------------------------| |---------------------------|
                                                        |           |                                | |                           |
                                                        |-----------|--------------------------------| |---------------------------|


                                      4000




IF YOU HAVE CHOSEN TO VIEW THE PROXY STATEMENT AND ANNUAL REPORT OVER THE
INTERNET INSTEAD OF RECEIVING PAPER COPIES IN THE MAIL, YOU CAN ACCESS THE PROXY
STATEMENT AND 2001 ANNUAL REPORT ELECTRONICALLY AT THE COMPANY'S WEBSITE,
WWW.MASCO.COM.


        PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15, 2002
                                MASCO CORPORATION

               PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

         The undersigned, hereby revoking any Proxy heretofore given, appoints
RICHARD A. MANOOGIAN and EUGENE A. GARGARO, JR. and each of them attorneys and
proxies for the undersigned, each with full power of substitution, to vote the
shares of Company Common Stock and Series B Participating Preferred Stock
registered in the name of the undersigned to the same extent the undersigned
would be entitled to vote if then personally present at the Annual Meeting of
Stockholders of Masco Corporation to be held at the offices of the Company at
21001 Van Born Road, Taylor, Michigan 48180, on Wednesday, May 15, 2002, at
10:00 a.m. and at any adjournment thereof.

         The undersigned hereby acknowledges receipt of the accompanying Notice
of Annual Meeting of Stockholders and Proxy Statement.



                     (Continued and to be signed and dated on the reverse side.)

                 MASCO CORPORATION
                 P.O. BOX 11261
                 NEW YORK, N.Y. 10203-0261