3M CO MMM

Removed from 2025

• Throughout this CD&A and elsewhere in this Proxy Statement, we refer to this group of individuals as the “Named Executive Officers” or “NEOs.” The titles shown below reflect the position of each Named Executive Officer as of March 1, 2025.
• Brown(1)Chairman of the Board and Chief Executive OfficerMichael F.
• Roman(2)Executive Advisor to the Board and Former Executive Chairman of the BoardAnurag Maheshwari(3)Executive Vice President and Chief Financial OfficerWendy A.
• Bauer(4)Group President, Transportation and ElectronicsPeter D.
• Gibbons Group President, Enterprise Supply ChainChristian T.
• Reinseth(5)Corporate Controller and Chief Accounting OfficerMonish Patolawala (6)Former President and Chief Financial Officer
• (1)Mr. Brown was appointed Chief Executive Officer, effective May 1, 2024.
• As announced on February 10, 2025, the Board appointed Mr. Brown, who also is a member of the Board, to serve as Chairman of the Board effective March 1, 2025.
• Unless otherwise noted, all references to our “Chief Executive Officer” or “CEO” in this CD&A refer to Mr. Brown.
• (2)Mr. Roman served as 3M’s Chairman of the Board from May 2019 through February 2025 and as 3M’s Chief Executive Officer from July 2018 through April 2024.
• As announced on February 10, 2025, Mr. Roman resigned from the Board, effective March 1, 2025, but agreed to continue to serve as Executive Advisor to the Board until his retirement from 3M on May 1, 2025.
• (3)Mr. Maheshwari was appointed Executive Vice President and Chief Financial Officer, effective September 1, 2024.
• (4)Ms. Bauer was appointed Group President, Transportation and Electronics, effective June 17, 2024.
• (5)Ms. Reinseth temporarily assumed the responsibilities of the Company's principal financial officer as Interim Chief Financial Officer for the period from August 1, 2024 through August 31, 2024.
• Ms. Reinseth has otherwise served as the Company’s Senior Vice President, Corporate Controller and Chief Accounting Officer, since April 1, 2019.
• Under SEC rules, any individual serving in the role of the principal financial officer at any time during the relevant year must be included as an NEO.
• Due to the interim nature of her role, Ms. Reinseth’s compensation elements are not included broadly in this CD&A.
• See “Ms. Reinseth’s compensation” on page 81 for more details.
• (6)Mr. Patolawala terminated employment with the Company, effective July 31, 2024.
• CD&A highlights Paying for performance60Annual incentive722024 compensation decisions — What we pay and why62Long-term incentives77CEO succession63Other arrangements80Compensation policies and practices64Consistent and shareholder-aligned framework to assess performance metric adjustments822024 say-on-pay results, shareholder engagement, and responsive actions65Changes to our performance share award design for 202586
• 583M Company
• We continue to act with urgency as we support our mission to innovate, reimagine what is possible, and deliver value to our shareholders and the broader communities that we serve.
• Some of our noteworthy accomplishments from January 1, 2024, through December 31, 2024, are summarized below.
• Drivingperformance•Delivered strong 2024 financial results including double-digit Adjusted Earnings Per Share* Growth and robust Free Cash Flow* generation•Created value for investors by driving 2024 total shareholder return of over 46 percent, which outperformed the S&P 500 Industrials (up 17 percent) for the same period•Advanced progress on research and development effectiveness and efficiency by increasing visibility of the new product pipeline and accelerating the launch of more new products•Focused on enhancing operational excellence by implementing a consistent operating equipment efficiency metric and improving supplier and logistics provider performance•Drove Free Cash Flow of $4.3 billion* (as calculated for compensation purposes), while investing in research and development and capital expenditures to position 3M for the future•Returned $3.8 billion to shareholders in 2024 via dividends and share repurchasesSpin-Off ofthe HealthCare business•On April 1, 2024, we completed the planned spin-off of our Health Care business, formally launching Solventum Corporation (NYSE: SOLV) as an independent, public company (referred to as the “Spin-Off”)•The separation better positions both 3M and Solventum to pursue their respective growth strategies, while tailoring their capital allocation plans around distinct strategic priorities, as well as industry- and market-specific dynamics•3M received approximately $7.7 billion in cash, which when combined with our business’ strong and reliable cash generation have further strengthened our balance sheet.
• In addition, the 19.9 percent equity stake 3M retained in Solventum will provide additional future liquidityReducedrisk anduncertainty•Reduced risk and uncertainty by proactively and effectively managing litigation•Our settlement agreement with U.S.-based Public Water Suppliers, which provides funding for the treatment of drinking water for eligible Public Water Suppliers in communities across the country, received widespread support and participation.
• It was granted final approval by the Court on March 29, 2024•Our settlement of the Combat Arms Earplugs litigation, which was structured to achieve the Company’s goals of finality and certainty on acceptable terms, received strong support from all parties and the Court.
• The current claimant participation level in the settlement exceeds 99 percent•Remain on track to exit all PFAS manufacturing by the end of 2025
• As explained in Appendix A, all non-GAAP financial measures presented in this CD&A are used for compensation purposes and include the adjustment of certain special items that the Committee believes are outside the control of management and are not reflective of ongoing operations.
• 2025 Proxy Statement59
• Annual Incentive Plan payouts: Our strong financial performance in 2024 resulted in Annual Incentive Plan (AIP) payouts of 128.6 percent of target (before any adjustment for individual performance) for the Named Executive Officers whose payout was calculated based on the Company’s overall performance.
• The payout reflects performance above the target goal on all three performance metrics: Local Currency Sales, Operating Income, and Operating Cash Flow.
• After reviewing the Company’s performance against the pre-established sustainability metrics, the Committee determined that the Company’s overall performance against the goals was in line with expectations and did not warrant the exercise of the Sustainability Modifier despite meeting or exceeding seven of the eight goals.
• The Committee deemed this above-target payout to be appropriately aligned with the shareholder experience, where our 2024 total shareholder return was 46.1 percent.
• See “Annual incentive” beginning on page 72 for more information concerning the calculation of the 2024 AIP payout for each Named Executive Officer, including the threshold, target, and maximum goals and attainments used to calculate the payouts for the Named Executive Officers who are paid, in part, based on the performance of a business group.
• Based on the financial results achieved during 2022-2024, the Named Executive Officers who held 2022 performance share awards (Mr. Roman, Mr. Gibbons, Mr. Goralski, and Ms. Reinseth) received 48.7 percent of the target number of shares subject to their awards.
• The Committee concluded that the below-target payout on these awards was aligned with the mixed financial results and (0.6) percent annualized total shareholder return delivered over the three-year performance period.
• Impact of Solventum spin-off on 2024 incentive plans
• At the start of 2024, the completion of the Spin-Off was anticipated to occur in the first quarter of the year, but due to the pending regulatory approvals and other complexities, the exact timing remained uncertain.
• To ensure the continuity of our executive compensation program, in February 2024, the Committee approved the 2024 performance targets for the AIP and the 2024, 2025, and 2026 performance targets to be used for the 2024 performance share awards, in each case, based on the internal financial and operating forecasts for the Company as a whole, including the Health Care business.
• The Committee planned to recast the performance goals after the Spin-Off was completed, to appropriately reflect the Company’s continuing operations.
• Following the successful completion of the Spin-Off in April 2024, the Committee, in consultation with its independent compensation consultant, recast the performance targets as follows:
• 2024 AIP performance targets: The recast targets reflected the original internal financial and operating forecasts for the full pre-Spin-Off company (including the Health Care business) for the first quarter of 2024 and the original internal financial and operating forecasts for the continuing operations of the Company for the remaining three quarters of 2024 (excluding the Health Care business), adjusted for certain one-time non-recurring items related to the Spin-Off (e.g., stranded costs, perimeter items, working capital adjustments and transition service agreements) that were not included in the original financial and operating forecasts given the inherent uncertainty in the timing and completion of the Spin-Off.
• The Committee determined that the chosen approach appropriately held the management team accountable for the performance of the Health Care business during the first quarter of 2024 prior to the Spin-Off, while maintaining the original financial targets for 3M’s continuing operations for all of 2024.
• 603M Company
• Performance share award targets for 2024: Due to the relative nature of the annual targets of the outstanding performance share awards, which are set as a percentage growth relative to the prior year’s actual results for all three annual performance periods of the three-year performance plan, the Committee determined that it was neither practical nor feasible to recast the performance targets based on the quarterly performance projections for the Company’s structure prior to and following the Spin-Off in fiscal year 2024.
• Instead, the Committee recast the performance targets to reflect solely continuing operations of the Company (excluding the Health Care business) for the full year, based on the long-term financial objectives that informed the Company’s original 2024 internal operating plans and that served as the basis for the guidance we provided our shareholders, to ensure a rigorous and transparent measurement of achieved results.
• To facilitate year-over-year comparison of achieved results relative to fiscal 2023 actuals on a continuing operations basis, excluding the Health Care business, the Committee also updated fiscal 2023 benchmarks for Adjusted EPS and Free Cash Flow under the in-flight performance share awards to exclude contributions of the Health Care business.
• The Committee believes recasting the targets was essential to reflect 3M’s new structure and aligned with market practice to maintain the rigor and effectiveness of our incentive programs.
• The overall design and specific performance metrics selection for the 2024 incentive plans remained unchanged.
• No adjustments were applied to the performance share plan for the previously completed 2022 and 2023 performance years.
• 2025 Proxy Statement61
• The table below shows how the 2024 target Total Direct Compensation of the Named Executive Officers was apportioned among base salary, annual incentives, performance share awards, stock options, and restricted stock units (RSUs), summarizes the rationale for providing and key characteristics of each such element, and lists the performance metrics, weightings, and modifiers used for annual and long-term incentives granted in 2024 (excluding special grants).
• 623M Company
• The percentages shown for the Other NEOs also do not reflect items provided to Mr. Roman, Mr. Patolawala (whose employment ended in 2024), or Ms. Reinseth.
• If Mr. Roman, Mr. Patolawala, and Ms. Reinseth had been included, the percentages shown would have been as follows: Base Salary — 18%; AIP — 16%; PSAs — 30%; Stock Options — 6%; and RSUs — 30%.
• Ms. Reinseth received 100 percent of her target grant value in the form of RSUs.
• CEO succession
• On March 8, 2024, the Board appointed Mr. Brown Chief Executive Officer, effective May 1, 2024.
• Mr. Brown succeeded Mr. Roman, who was appointed to the role of Executive Chairman of the Board of Directors, also effective May 1, 2024.
• Mr. Roman’s role as Executive Chairman included, but was not limited to, prioritizing and focusing on strategy and risk as it related to the Solventum Spin-Off and ongoing litigation, facilitating a smooth transition of CEO duties to and supporting Mr. Brown as he worked to advance 3M, as well as the responsibilities of chairing the Board of Directors.
• Effective March 1, 2025, Mr. Roman retired from his role as Executive Chairman, and as a director, and the Board appointed Mr. Brown, 3M’s Chief Executive Officer, to also serve as Chairman of the Board.
• To facilitate a smooth transition of the Chair role, Mr. Roman agreed to serve as Executive Advisor to the Board until he retires from 3M on May 1, 2025.
• Mr. Brown’s annual target cash compensation for 2024 includes a base salary of $1,800,000 and a target annual incentive opportunity of $3,150,000 (175% of base salary), in each case, prorated for 2024.
• The Committee also set his annual long-term incentive compensation opportunity at $13,000,000.
• For 2024, this amount was prorated based on Mr. Brown’s May 1 start date with 50 percent ($4,333,333) of the prorated target value granted in the form of a performance share award and the other 50 percent ($4,333,333) granted in the form of stock options.
• See “Long-term incentives” beginning on page 77 for additional information about the terms of these awards.
• Mr. Brown’s target Total Direct Compensation of $17,950,000 was 109% of the median of the most recently available data for the peer group approved by the Committee for 2024.
• The Committee felt this level of compensation was appropriate in light of Mr. Brown’s unique qualifications and proven executive track record of successfully leading a large-cap public technology company for over 10 years.
• As an inducement to join 3M, the Committee also approved for Mr. Brown a cash hiring bonus of $3,000,000, a one-time performance share award with a grant date target value of $2,500,000, and a one-time restricted stock unit award with a grant date target value of $2,500,000 vesting in equal installments on each of the first three anniversaries of the grant date, subject to his continued employment.
• The performance period, goals, and vesting terms for the performance share award are the same as those of the annual grants made to the Company’s other executive officers in 2024.
• For additional information about the terms of such awards, see “2024 performance share awards” beginning on page 77.
• The Committee determined that the inducement incentives were reasonable and consistent with market practice and comparators for new CEO compensation.
• To encourage long-term performance and ensure alignment with shareholder interests, the Committee structured 50 percent of the inducement equity incentives to be issued in the form of performance-based awards that deliver value only if the Company achieves preestablished performance milestones.
• Both the pro-rated annual equity awards and the one-time inducement equity awards required Mr. Brown’s execution of a protective covenant agreement.
• See “One-time actions for recently hired Named Executive Officers” beginning on page 80 for more detail.
• 2025 Proxy Statement63
• Upon Mr. Brown’s appointment as Chief Executive Officer, Mr. Roman transitioned to the role of Executive Chairman, effective May 1, 2024.
• In connection with this transition, the Committee approved a reduction of Mr. Roman’s annual base salary to $1,000,000 and his target annual incentive compensation opportunity to $1,750,000.
• As Mr. Roman served as Chairman and Chief Executive Officer for the first part of the year, his target annual incentive compensation opportunity for 2024 reflects a proration of each target amount for the applicable portion of the year he worked in each role.
• Mr. Roman’s annual equity incentives were approved in April 2024, at the same time the Committee approved annual equity awards for all other eligible employees, reflecting his role as Chairman and Chief Executive Officer for the first part of the year and the significant duties and responsibilities Mr. Roman would continue to have in his role as Executive Chairman, as described above.