3M CO

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Corporate governance dashboard

Director nominees, board diversity of skills and experience

Thomas “Tony” K. BrownRetired Group Vice President,Global Purchasing,Ford Motor CompanySkillsAge 68 Tenure 2013Committee A

William M. BrownFormer Chairman of the Board and Chief Executive Officer,L3Harris Technologies, andChief Executive Officer of 3M Company (effective May 1, 2024)SkillsAge 61 Tenure New nominee

Audrey ChoiRetired Chief Sustainability Officer and ChiefMarketing Officer,Morgan StanleySkillsAge 56 Tenure 2023Committee N&G STS

Anne H. Chow*Retired Chief Executive Officer,AT&T BusinessSkillsAge 57 Tenure 2023Committee C&T STS

David B. DillonRetired Chairman of the Boardand Chief Executive Officer,The Kroger Co.SkillsAge 72 Tenure 2015Committee N&G

James R. Fitterling*Lead Independent DirectorChair of the Board and Chief Executive Officer, Dow Inc.SkillsAge 62 Tenure 2021Committee

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Amy E. HoodExecutive Vice Presidentand Chief Financial Officer, Microsoft CorporationSkillsAge 52 Tenure 2017Committee C&T STS

Suzan KereerePresident, Global Markets, PayPal, Inc. SkillsAge 58 Tenure 2022Committee A C&T

Gregory R. PageRetired Chairman of the Board and Chief Executive Officer, CargillSkillsAge 72 Tenure 2016Committee C&T

Pedro J. PizarroPresident and Chief Executive Officer and Director, Edison InternationalSkillsAge 58 Tenure 2023Committee A N&G

Thomas W. SweetRetired Chief Financial Officer,Dell TechnologiesSkillsAge 64 Tenure 2023Committee A N&G

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Qualifications and attributes, and demographic information, for the 12 director nominees that are standing for election at the Annual Meeting are summarized below.

Corporate governance highlights

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Board refreshment

We regularly add directors to infuse new ideas and fresh perspectives into the boardroom. Mr. William M. Brown, who was appointed by the 3M Board as Chief Executive Officer of 3M effective May 1, 2024, is standing for election to the 3M Board for the first time. In addition, six out of the eleven other director nominees standing for this year’s election have joined our board within the past five years, and five of these six nominees have diverse traits, such as gender, racial, or ethnic diversity. In recruiting directors, we focus on how the experience and skill set of each individual complements those of their fellow directors to create a balanced board with diverse viewpoints and backgrounds, deep expertise, and strong leadership experience.

Shareholder outreach and engagement

Shareholder engagement is fundamental to our commitment to good governance and essential to maintaining our strong corporate governance practices. We engage regularly with our global investors to share updates on our strategic, financial, and operating performance and to understand valuable shareholder perspectives on governance and sustainability issues about which they care most. We aim to seek a collaborative and mutually beneficial approach to issues of importance to investors that affect our business. Shareholder feedback is shared with the appropriate Board committees or the full Board to ensure our governance policies reflect priorities that are important to our shareholders.

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3M’s sustainability highlights

In 2023, 3M continued to make progress toward our environmental goals, including helping to enhance the quality of water we return to the environment after use in our facilities. We are taking action to install state-of-the-art technologies and improve processes at many of our facilities globally, which is helping us to reduce our overall water use and positively impact water quality in 3M communities. Since announcing our carbon neutrality goal in 2019, we’ve seen a 43.2 percent reduction in scope 1 and 2 emissions. Since 2002, we’ve seen an overall 80.1 percent reduction, while our total revenues more than doubled. Since 2021, we’ve achieved a 69.8 million-pound reduction in the use of virgin fossil-based plastic in our packaging and products toward our goal of 125 million pounds by 2025. We’ve incorporated recycled and bio-based materials and reduced plastic use in products and packaging such as tapes and dispensers, sponges, packaging, workspace solutions, insulation, optical films, floor pads, sorbents, and more.

We advance meaningful actions toward a more equitable future for our global employee base, including training, development, and recruitment efforts focused on underrepresented populations as we continue our efforts to build a diverse workforce around the world. We recognize that different countries and cultures have different definitions of diversity. 3M aims to reflect the diversity of our customers, suppliers, and community partners. We foster an inclusive culture that supports and appreciates differences and provides fair and equal opportunities for everyone. We recognize the importance of equal access to science, technology, engineering, and mathematics (STEM) education and careers.

To advance our social justice and impact agenda, we created a holistic cross-functional team to support our goals and commitments to progress equity in our workplaces, business practices, and communities globally. We also support our values with an internal CEO Inclusion Council, chaired by CEO Mike Roman, to advance diversity, equity, and inclusion initiatives. In 2023, we defined our environmental justice ambition to “deliver on our company promise by leveraging our expertise and capabilities alongside community leaders to help solve some of the most pressing environmental justice challenges facing our 3M communities.” We made steady progress throughout 2023, working to weave a focus on environmental justice into key business processes and policies, as well as to define environmental justice principles. We acted on those principles by increasing site engagement with the local community at three prioritized locations. Using a proven methodology of “listen, understand, act,” we held listening sessions to understand the community’s needs, then identified opportunities to share insights and collaborate with local businesses and officials to make meaningful impact.

In 2023 we prepared for the spin-off of our Health Care business and the emergence of two world-class public companies poised for growth. In this transformational moment, the foundation we build going forward will be critically important. For the future of 3M, for the future of our planet, and for future generations, we must continually reimagine what’s possible.

As we build on our global capabilities and diverse technologies, we have clear commitments and bold ambitions to shape a sustainable future within our Strategic Sustainability Framework and its three organizing pillars: Science for Circular, Science for Climate, and Science for Community.

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Executive compensation

We are building momentum and a foundation for future growth

In 2023, we focused on building momentum and improved operational performance to position 3M for a bright future. Our team executed our strategic priorities, while we delivered for customers, exceeded earnings and cash flow expectations, and exited the year stronger, leaner, and more focused. We managed dynamic external environments as we prioritized investments in attractive markets, applying our material science expertise to meet customer needs across our core and new platforms, including automotive electrification, climate technology, and industrial automation. We also made significant progress simplifying our supply chain, restructuring our organization, advancing the spin-off of our Health Care business, and reducing risk and uncertainty by proactively and effectively managing litigation. We have clear strategic priorities to capitalize on our strong cash flow generation as we work to unlock value for customers and shareholders, both today and into the future.

We are preparing to spin off our Health Care business to create two world-class public companies

The spin-off of the Health Care business is on track to be completed on April 1, 2024. As a standalone health care business with a diverse portfolio of trusted brands, the spin-off Health Care business called Solventum Corporation (“Solventum”) will be better positioned to deliver industry-leading innovation for millions of patients worldwide. As we began building out the executive team for Solventum, we appointed Bryan Hanson as CEO of the Health Care Business Group in September 2023. With his unique qualifications and proven executive track record of successfully leading, growing and transforming global medical device businesses, we are confident Mr. Hanson is the right leader for the new company to ensure its success for customers, patients, and shareholders.

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Compensation program supports our talent and value creation strategy

To enable our progress and continued momentum, we are deliberately prioritizing our talent and compensation strategy to encourage the contributions of a high-caliber executive leadership team. In 2023, we set the target compensation levels for the majority of our executive officers at or near the peer group median. To align pay outcomes with the long-term interests of our shareholders, over 91 percent of our CEO’s target pay and on average 84 percent of other NEOs’ target opportunities were provided in the form of at-risk variable incentives that deliver value only if we achieve pre-set performance goals or increase or decrease in value consistent with 3M’s total shareholder return or, in the case of stock options, the value of 3M’s common stock. Only in select circumstances did compensation packages reflect expanded pay benchmarks and did we utilize special incentives to support our ability to attract and retain individual skillsets and incentivize critical contributions during a pivotal transformation period. Our short- and long-term performance metrics reflect our growth drivers and were further refined for 2024 to incorporate shareholder feedback and to enhance focus on cash flow, a key driver of value for 3M, and comprehensive sustainability priorities that are important for our future.

Executive compensation program aligned with shareholders

Our total shareholder return for the year reflected significant external uncertainties, including rapid declines in consumer-facing markets such as electronics and consumer retail, slowing growth in China, and mixed demand across industrial markets. Consistent with our shareholder experience, the realizable compensation in 2023 for our CEO was 66 percent of target pay, underscoring the overall alignment of pay outcomes with outcomes for our shareholders. Three-year average realizable compensation for our CEO was 51 percent of target, consistent with longer-term shareholder returns.

•The short-term incentive program paid out at 104.0 percent of target for our CEO and between 85.5 percent and 124.8 percent of target for our other Named Executive Officers. These payouts reflected particularly strong performance on Free Cash Flow Conversion driven by our actions to streamline our supply chains and our ongoing focus on working capital management, especially inventory, and above target performance on Operating Income, which was partially offset by below-target performance on Local Currency Sales; and

•The long-term performance shares for the 2021-2023 performance period were earned at 83.8 percent of target, which represented 59.7 percent of the initial target grant value after considering the change in market value of 3M’s common stock over the performance period and accounting for the dividend equivalents associated with earned performance shares.

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.

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Recent business accomplishments

Below are a few noteworthy accomplishments from January 1, 2023, through March 1, 2024.

* See Appendix A to this Proxy Statement for a reconciliation of these “non-GAAP” financial measures to the most directly comparable financial measures as determined in accordance with generally accepted accounting principles in the United States (GAAP). As explained in Appendix A, all non-GAAP financial measures presented in the “Compensation Discussion and Analysis” section are used for compensation purposes and include the adjustment of certain special items that the Compensation and Talent Committee believes are outside the control of management and are not reflective of ongoing operations. The non-GAAP financial measures used herein may not be comparable to similarly titled measures used by other companies and the adjusted amounts used for compensation purposes may differ from the adjusted amounts used by the Company elsewhere or included in the Company’s Form 10-K.

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Elements of 2023 target total direct compensation

The table below shows how the 2023 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 2023.

(1)Percentages shown reflect the apportionment (or, in the case of the percentages shown for the Other NEOs, the average apportionment) of the components of target total direct compensation that are expected to be recurring. Such amounts do not reflect special items such as hiring bonuses, one-time make-whole and inducement awards granted in connection with the commencement of employment, or special grants.

(2)In determining the level of achievement of the performance goals established under the AIP and the performance share awards for any given period, the costs, sales and impact on assets and liabilities from acquisitions are excluded in the year that the acquisition is completed. The Compensation and Talent Committee also makes other adjustments from time to time for special items that it believes are unrelated to the operational performance of the Company for the relevant measurement period (e.g., changes in tax laws or accounting principles, asset write-downs, the impact of restructurings, divestitures, or asset sales, unusual tax transactions, litigation or claim judgments and settlements, and other special items described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual/quarterly report to shareholders for the applicable period). These adjustments can have either a positive or negative impact on award payouts.

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(3)For the Company’s CEO, the Compensation and Talent Committee chose to deliver 50 percent of the target grant value of his 2023 annual long-term incentive awards in the form of performance shares and the remaining 50 percent in the form of stock options. Each of the Company’s other executives was given an opportunity to indicate a preference to receive 50 percent of the target grant value of their annual long-term incentive awards in the form of RSUs, stock options, or an equal split of both stock options and RSUs. Regardless of an executive’s indicated preference, the remaining 50 percent of the target grant value of his or her 2023 annual long-term incentive awards was delivered in the form of performance shares. The percentages shown reflect the apportionment of stock options and RSUs based on the Named Executive Officers’ 2023 elections (other than our CEO, who was not offered an opportunity to make an election).

Say-on-pay results

3M has a history of strong say-on-pay results. In 2023, approximately 88 percent of the votes cast on our say-on-pay proposal approved the compensation of our named executive officers as disclosed in last year’s Proxy Statement. Based on this level of support and the generally positive feedback received from shareholders during our 2023 investor outreach and engagement efforts, we did not make significant changes to our executive compensation program in 2023. As it has in past years, the Compensation and Talent Committee will consider the results of this year’s say-on-pay proposal, as well as feedback from our shareholders, when making future executive compensation decisions.

For information concerning our investor outreach efforts, see “Shareholder outreach and engagement” on page 11.

Recent noteworthy compensation program actions

Since January 1, 2023, the Board and the Compensation and Talent Committee took the following noteworthy actions:

•Appointed Bryan C. Hanson as Group President and Chief Executive Officer, Health Care and approved his initial compensation arrangements. For more information, see “Section V: 2023 compensation decisions and performance highlights — Bryan C. Hanson — Compensation Decisions” on page 98.

•Amended the 3M Executive Severance Plan to provide for pro rata vesting of inducement restricted stock unit awards based on whole years of completed service.

•Significantly expanded the population of employees subject to our clawback policy with approximately 350 employees at the Vice President level and above now subject to recoupment based on the issuance of noncompliant financial reports, significant misconduct, or a significant risk-management failure. Made other revisions in line with new regulatory guidance implemented by the NYSE, including the expanded definition of an accounting restatement to cover so-called “little r” restatements. For more information, see “Clawback policy and other remedial actions” on page 102.

•Effective for the 2024 annual incentive compensation program offered to eligible employees, updated the metrics and weightings with the intent of enhancing focus on cash flow growth, a key driver of value for 3M. For more information, see “2024 changes to our annual incentive compensation program” on page 87.

•Approved various actions related to the Company’s U.S. retirement plans, including a future pension “freeze” for non-union employees, effective December 31, 2028, and a supplemental three percent annual Company retirement contribution to the 401(k) plan accounts of eligible employees impacted by the future pension plan freeze, effective January 1, 2029.

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