If I were designing it, I would make Materia modify existing stats by a percentage.
- Tier 1 Materia increases stats by 5%
- Tier 2 Materia increases stats by 10%
- Tier 3 Materia increases stats by 15%
- Tier 4 Materia increases stats by 20%
So if you had a stat of 100, and you somehow managed to get a piece of equipment with (5) Tier 4 Materia your final stat would be:
100 + 20 + 20 + 20 + 20 + 20 = 200.
But I don't think the Development Team is going to go that route.