Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(c) As previously announced and reported on Form 8-K, Michael F. Roman, executive vice president and chief operating officer, has been appointed by the Board of Directors to become 3M Companys chief executive officer, effective July 1, 2018, succeeding Inge G. Thulin. In connection with this appointment, the Compensation Committee of the Board of Directors has determined Mr. Romans compensation and benefit arragements. The following describes the key terms of his compensation and benefit arrangements when he assumes the chief executive officer position in July:
Cash
Mr. Romans annual target cash compensation will be $3,120,000 composed of an annual base salary of $1,200,000 paid in accordance with the Companys payroll practices, as in effect from time to time, plus target annual incentive compensation of $1,920,000. For 2018, both amounts will be prorated from July 1. Mr. Romans actual annual incentive compensation will be determined by the Board of Directors (or a duly authorized committee thereof) and may be more or less than this target amount depending on a variety of factors, including Mr. Romans individual performance and the performance of the Company. The amount of Mr. Romans target cash compensation will be reviewed at least once a year and may be adjusted at the discretion of the Board of Directors.
Long-Term Incentives
The Board of Directors (or a duly authorized committee thereof) will determine the target value of Mr. Romans annual long-term incentive grants each year based on market data from 3Ms benchmarking groups and his individual performance. These grants generally will be made in the form of stock options and performance shares. Regardless of an awards target value, the actual value that ultimately may be realized will depend on a number of factors, including satisfaction of the vesting terms and 3Ms stock price at the time of exercise or settlement. The actual form of each award, the number of shares of 3M stock covered, the exercise or purchase price of the underlying shares, the vesting requirements, and the other terms and conditions of each award will be determined by the Board of Directors (or a duly authorized committee thereof), in its discretion.
Benefits and Perquisites
Mr. Roman will be eligible to participate in the same retirement and welfare benefit plans, and receive financial planning assistance, to the extent that the Company makes such benefits available to its other similarly situated executives and, in each case, in accordance with the terms of the plans and policies as in effect from time to time. He will be expected to use 3Ms corporate aircraft for all business and personal travel, as described in, and subject to, 3Ms Policy on Use of Company Aircraft, as amended from time to time. 3M also will provide an appropriate vehicle and driver for Mr. Romans business travel in the Twin Cities metropolitan area (including commuting to and from the Companys offices), and pay all expenses of operating this vehicle. 3M will provide video security monitoring for both of Mr. Romans personal residences. 3M will not provide tax gross-up payments with respect to any of Mr. Romans benefits, perquisites or other compensatory payments.
(e) Mr. Romans compensation and benefit arrangements when he assumes the chief executive officer position on July 1, 2018, are described in (c) above, and are incorporated by reference hereunder. Mr. Romans current compensation and benefit arrangements as executive vice president and chief operating officer are described in the 2018 proxy statement of the Company.
As previously announced
and reported on Form 8-K, Inge G. Thulin has been appointed by the Board of Directors to become executive chairman of the Board of Directors, effective July 1, 2018. In connection with this appointment, Mr. Thulins current compensation and benefit arrangements as the chief executive officer (as described in the 2018 proxy statement of the Company) will be changed. The following describes the key terms of his compensation and benefit arrangements when he assumes the executive chairman position in July:
Cash
Mr. Thulins annual target cash compensation will be $2,500,000 composed of an annual base salary of $1,000,000 paid in accordance with the Companys payroll practices, as in effect from time to time, plus target annual incentive compensation of $1,500,000. For 2018, both amounts will be prorated from July 1. Mr. Thulins actual annual incentive compensation will be determined by the Board of Directors (or a duly authorized committee thereof) and may be more or less than this target amount depending on a variety of factors, including Mr. Thulins individual performance and the performance of the Company. The amount of Mr. Thulins target cash compensation will be reviewed at least once a year and may be adjusted at the discretion of the Board of Directors.
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Long-Term Incentives
The Board of Directors (or a duly authorized committee thereof) will determine the target value of Mr. Thulins annual long-term incentive grants each year based on market data from 3Ms benchmarking groups and his individual performance. These grants generally will be made in the form of stock options and performance shares. Regardless of an awards target value, the actual value that ultimately may be realized will depend on a number of factors, including satisfaction of the vesting terms and 3Ms stock price at the time of exercise or settlement. The actual form of each award, the number of shares of 3M stock covered, the exercise or purchase price of the underlying shares, the vesting requirements, and the other terms and conditions of each award will be determined by the Board of Directors (or a duly authorized committee thereof), in its discretion.
Benefits and Perquisites
Mr. Thulin will be eligible to participate in the same retirement and welfare benefit plans, and receive financial planning assistance, to the extent that the Company makes such benefits available to its other similarly situated executives and, in each case, in accordance with the terms of the plans and policies as in effect from time to time. For his safety, security and convenience, he will be permitted to use 3Ms corporate aircraft for all business and personal travel, as described in, and subject to, 3Ms Policy on Use of Company Aircraft, as amended from time to time. 3M will not provide tax gross-up payments with respect to any of Mr. Thulins benefits, perquisites or other compensatory payments.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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3M COMPANY
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By:
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/s/ Gregg M. Larson
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Gregg M. Larson,
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Vice President, Deputy General Counsel and Secretary
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Dated: May 24, 2018
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