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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.            )
 
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[   ]   Soliciting Material Pursuant to §240.14a-12

  Kimberly-Clark Corporation  
  (Name of Registrant as Specified In Its Charter)  
 
       
 
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Proxy Statement

For 2022 Annual Meeting of Stockholders

 


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March 7, 2022

Michael D. Hsu

Chairman of the Board and
Chief Executive Officer

FELLOW STOCKHOLDERS:

It is my pleasure to invite you to the Annual Meeting of Stockholders of Kimberly-Clark Corporation. The meeting will be held virtually on Wednesday, April 27, 2022, at 9:00 a.m. Central Time.

At the Annual Meeting, stockholders will be asked to elect thirteen directors for a one-year term, ratify the selection of Kimberly-Clark’s independent auditor, and approve the compensation for our named executive officers. These matters are fully described in the accompanying Notice of Annual Meeting and proxy statement.

Your vote is important. Regardless of whether you plan to attend the meeting, I urge you to vote your shares as soon as possible. You may vote using the proxy form by completing, signing, and dating it, then returning it by mail. Also, most of our stockholders can submit their vote by telephone or through the Internet. If telephone or Internet voting is available to you, instructions will be included on your proxy form. Additional information about voting your shares is included in the proxy statement.

Sincerely,


2022 Proxy Statement

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Notice of Annual Meeting of Stockholders

TO BE HELD

April 27, 2022

VIA

live webcast at https://meetnow. global/MJW2GVW

The Annual Meeting of Stockholders of Kimberly-Clark Corporation will be held virtually on Wednesday, April 27, 2022, at 9:00 a.m. Central Time for the following purposes:

1. To elect as directors the thirteen nominees named in the accompanying proxy statement;
   
2. To ratify the selection of Deloitte & Touche LLP as our independent auditor for 2022; and
   
3. To approve the compensation for our named executive officers in an advisory vote.

Due to the public health impact of the ongoing COVID-19 pandemic and to support the health and well-being of our employees, stockholders, and our community, the 2022 Annual Meeting will be virtual and will be held entirely online via live webcast at https://meetnow.global/MJW2GVW. There will not be an option to attend the meeting in person. Please see “Attending the Virtual Annual Meeting” for more information.

Stockholders also will take action upon any other business that may properly come before the meeting.

Stockholders of record at the close of business on February 28, 2022 are entitled to notice of and to vote at the meeting or any adjournments. It is important that your shares be represented at the meeting. I urge you to vote promptly by using the Internet or telephone or by signing, dating and returning your proxy form in the envelope provided.

The accompanying proxy statement also is being used to solicit voting instructions for shares of Kimberly-Clark common stock that are held by the trustees of our employee benefit and share purchase plans for the benefit of the participants in the plans. It is important that participants in the plans indicate their preferences by using the Internet or telephone or by signing, dating and returning the voting instruction card, which is enclosed with the proxy statement, in the envelope provided.

To attend the meeting, please register by following the instructions on page 94.

By Order of the Board of Directors. March 7, 2022

Alison M. Rhoten, Vice President, Deputy
General Counsel, Global Corporate Affairs
and Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on April 27, 2022:The Proxy Statement and proxy card, as well as our Annual Report on Form 10-K for the year ended December 31, 2021, are available at https://www.kimberly-clark.com/investors.

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4 Proxy Summary
   
9 Corporate Governance
9 Board Leadership Structure
10 Director Independence
10 Board Meetings
10 Board Committees
15 Compensation Committee Interlocks and Insider Participation
15 Stockholder Rights
16 Communicating With Directors; Stockholder Engagement Policy
16 Stockholder Engagement
16 Our Approach to Sustainability
21 Other Corporate Governance Policies and Practices
   
24 Proposal 1. Election of Directors
24 Process for Director Elections
24 Process and Criteria for Nominating Directors
25 Committee Review of Attributes of Current Directors
25 Diversity of Directors
26 The Nominees
33 Director Compensation
34 2021 Outside Director Compensation
   
37 Proposal 2. Ratification of Auditor
38 Principal Accounting Firm Fees
38 Audit Committee Approval of Audit and Non-Audit Services
39 Audit Committee Report
   
40 Proposal 3. Advisory Vote to Approve Named Executive Officer Compensation
   
41 Compensation Discussion and Analysis
41 2021 Compensation Highlights
44 Executive Compensation Objectives and Policies
45 Components of Our Executive Compensation Program
45 Setting Annual Compensation
48 Executive Compensation for 2021
56 Benefits and Other Compensation
57 Executive Compensation for 2022
60 Additional Information About Our Compensation Practices
63 Management Development and Compensation Committee Report
64 Analysis of Compensation-Related Risks
   
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65 Compensation Tables
65 Summary Compensation
69 Grants of Plan-Based Awards
70 Discussion of Summary Compensation and Plan-Based Awards Tables
71 Outstanding Equity Awards
74 Option Exercises and Stock Vested
75 Pension Benefits
77 Nonqualified Deferred Compensation
79 Potential Payments on Termination or Change of Control
85 Equity Compensation Plan Information
   
86 Other Information
86 Security Ownership Information
88 Transactions with Related Persons
89 CEO Pay Ratio Disclosure
90 Stockholders Sharing the Same Household
90 Stockholder Proposals for Inclusion in Next Year’s Proxy Statement
90 Stockholder Director Nominees for Inclusion in Next Year’s Proxy Statement
90 Stockholder Director Nominees Not Included in Next Year’s Proxy Statement
91 Other Stockholder Proposals Not Included in Next Year’s Proxy Statement
   
92 General Information about our Annual Meeting
92 How We Provide Proxy Materials
92 Who May Vote
92 How To Vote
93 How to Revoke or Change Your Vote
93 Votes Required
93 How Abstentions will be Counted
93 Effect of Not Instructing Your Broker
93 Direct Stock Purchase and Dividend Reinvestment Plan
94 Employee Benefit Plans
94 Attending the Virtual Annual Meeting
94 Costs of Solicitation
   
95 Other Matters to be Presented at the Annual Meeting

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Proxy Summary

This section contains only selected information. Stockholders should review the entire Proxy Statement before casting their votes.

Matters for Stockholder Voting

Proposal       Description       Board voting
recommendation
1 Election of directors   Election of 13 directors to serve for a one-year term   FOR all nominees
2 Ratification of auditor   Approval of the Audit Committee’s selection of Deloitte & Touche LLP as Kimberly-Clark’s independent auditor for 2022   FOR
3 Say-on-pay   Advisory approval of our named executive officers’ compensation   FOR

Company Overview

Kimberly-Clark (NYSE: KMB) and its trusted brands are an indispensable part of life for people in more than 175 countries. We are headquartered in Dallas, Texas with approximately 46,000 employees worldwide and operations in 34 countries. Fueled by ingenuity, creativity, and an understanding of people’s most essential needs, we create products that help individuals experience more of what’s important to them.

Our portfolio of brands includes Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Andrex, Pull-Ups, GoodNites, Neve, Plenitud, Viva, Softex, Sweety and WypAll.

In 2021, we generated approximately 50 percent of our net sales in North America and approximately 50 percent in international markets. We have three reportable business segments - Personal Care, Consumer Tissue and K-C Professional – as shown below with 2021 net sales for each segment.

Personal Care   Consumer Tissue   K-C Professional (KCP)

   Diapers

   Training/Youth/Swim Pants

   Baby Wipes

   Feminine Care

   Incontinence Care

 

   Bathroom Tissue

   Facial Tissue

   Paper Towels

 

   Facial Tissue, Bathroom Tissue and Paper Towels for away-from-home use

   Wipers

   PPE and Safety Products

   

Refreshed Corporate Purpose

Inspired by how our team has performed in a very challenging environment, and as part of our broader transformation efforts, we launched a refreshed corporate purpose in 2021. Our new purpose – “Better Care for a Better World” – will help redefine and reinforce what care can mean for Kimberly-Clark. We feel fortunate to have the privilege to serve customers and consumers, build communities and careers and work to improve the lives of billions of people around the world. We believe the new purpose will also serve to refresh our employee value proposition and we are developing new ways of working centered on the purpose, with a focus on retention and recruitment.

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Proxy Summary

Corporate Governance

Board Succession Planning. The Board has demonstrated its commitment to refreshing the composition of the Board through the execution of a thoughtful and active long-term succession plan. In accordance with this plan, the Board has added nine new independent directors since 2015, including the new independent director nominated for election at the 2022 Annual Meeting of stockholders. Sylvia Burwell has global executive leadership experience managing large and complex organizations across the public and private sectors and currently serves as the President of American University. She will provide a diversity of background and viewpoint from her academic background and deep government experience as we execute our growth agenda.

In addition, in September 2021, our Board welcomed Deirdre Mahlan and Jaime Ramirez as directors. Ms. Mahlan has extensive experience in senior finance and general management roles, most recently from her nearly 20-year career at Diageo plc, where she rose to President of Diageo North America in 2015 after serving as the company’s Chief Financial Officer from 2010. Mr. Ramirez brings valuable international perspective from his leadership roles overseeing growth in emerging markets and currently serves as Executive Vice President and President, Global Tools and Storage for Stanley Black & Decker. Ms. Mahlan and Mr. Ramirez bring valuable expertise and perspective that further enhance the composition of our Board and will enable the continued successful oversight of our efforts to drive shareholder value.

Ian Read is not standing for re-election. Mr. Read will continue to serve as a director until the Annual Meeting. We would like to thank Mr. Read for his many years of service and substantial contributions to the Board, Kimberly-Clark and our stockholders.

DIRECTOR NOMINEE EXPERIENCE IN PRIORITY AREAS INDEPENDENT DIRECTOR NOMINEE TENURE
   

   
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Proxy Summary

Governance Highlights. The Corporate Governance section beginning on page 9 describes our strong governance framework, which includes:

Our Corporate Governance Profile
Independent Lead Director Stockholders have right to call special meetings – required ownership threshold lowered to 15% in 2021
Independent Board committees Proxy access rights
Annual Board and committee evaluations Stockholder engagement policy and outreach program
Annually elected directors Anti-Hedging and Pledging Policy
Independent directors meet without management present Stock Ownership Guidelines for Directors and Executive Officers
Board and management succession planning Outside Director Equity Awards Not Paid Out Until Retirement
Robust oversight of strategy and risk Majority Voting in Director Elections

Executive Compensation

Our compensation program for executive officers is designed to emphasize performance-based compensation in alignment with our business strategy.

Program Highlights
A substantial majority of pay is performance-based and a majority is tied to our stock price performance
A substantial majority of long-term equity compensation is subject to specified financial targets over three-year performance period
Annual cash incentive plan includes performance goals based on achieving inclusion and diversity targets
Strong share ownership guidelines
Equity awards with anti-hedging and anti-pledging provisions
Robust clawback structure
No tax gross-ups
Double-trigger change-in-control policy

2021 Performance and Compensation Highlights

The Management Development and Compensation Committee of our Board concluded that Kimberly-Clark’s management delivered financial performance in 2021 that was below target from an overall perspective, as reflected in the financial metrics of our annual incentive program.

            Adjusted EPS, a non GAAP financial measure, is adjusted earnings per share. For details on how this measure is adjusted, see “Compensation Discussion and Analysis – Executive Compensation for 2021, 2021 Performance Goals, Performance Assessments and Payouts.”
Performance Measures 2021 Results 2021 Target      
Net sales $19.4 billion  $20.1 billion   
Adjusted EPS $6.18 $7.89  
       
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Proxy Summary

Based on this performance, the Committee approved annual cash incentives for 2021 below the target amount, including an annual incentive payout for our Chief Executive Officer (CEO) of 62 percent.

     

The chart at left shows the Total Shareholder Return for Kimberly-Clark, our Executive Compensation Peer Group (taken as a whole) and the S&P 500 for the previous five years, which reflects the value returned to our stockholders.

Sustainability

Sustainability is at the center of our company and by 2030 we aspire to advance the well-being of one billion people through social programs and reduce our environmental footprint by half. We focus on the areas where we can make the biggest difference - climate, forests, water and plastics.

Each year, Kimberly-Clark publishes a Global Sustainability Report outlining our key strategies, initiatives and results in greater detail. Our report includes an addendum of material organized and presented in accordance with the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) Standards, and can be found on our website at www.kimberly-clark.com/esg. We continue to monitor best practices on reporting frameworks and in 2021 published a Task Force on Climate-related Financial Disclosures (TCFD)-aligned disclosure to enhance visibility to our climate risks and opportunities. Within our disclosure, we cover TCFD’s four core areas: governance, strategy, risk management, and metrics and targets.

As part of our commitment to building a diverse workforce, we have adopted the practice of disclosing our annual EEO-1 data on the Sustainability section of our website after our submission of the corresponding report to the U.S. Equal Employment Opportunity Commission.

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Proxy Summary

Our Board Nominees

We believe our director nominees collectively possess the necessary experience and attributes to effectively guide our company and reflect the diversity of our global consumers.

Name   Occupation   Independent   Committee
Memberships*
  Other Public
Company Boards
Michael D. Hsu
Age: 57
Director Since: 2017
  Chairman of the Board and CEO
Kimberly-Clark Corporation  
      E   1
Sylvia M. Burwell
Age: 56
New Director Nominee
  President
American University  
        0
John W. Culver
Age: 61
Director Since: 2020
  Group President, North America and
Chief Operating Officer
Starbucks Corporation
    A   1
Robert W. Decherd
Age: 70
Director Since: 1996
  Chairman, President and CEO
DallasNews Corporation  
    NCG (Chair), E   1
Mae C. Jemison, M.D.
Age: 65
Director Since: 2002
  President
The Jemison Group  
    MDC, NCG   0
S. Todd Maclin
Age: 65
Director Since: 2019
  Retired Chairman, Chase Commercial
and Consumer Banking
JPMorgan Chase & Co.
    A   1
Deirdre A. Mahlan
Age: 59
Director Since: September 2021
  Retired President, Diageo North America
Diageo plc
    A   1
Sherilyn S. McCoy
Age: 63
Director Since: 2018
  Former CEO
Avon Products, Inc.  
    MDC (Chair), E   3
Christa S. Quarles
Age: 48
Director Since: 2016
  CEO
Corel Corporation  
    MDC, NCG   1
Jaime A. Ramirez
Age: 55
Director Since: September 2021
  EVP and President,
Global Tools & Storage
Stanley Black & Decker
    A   0
Dunia A. Shive
Age: 61
Director Since: 2019
  Former CEO and President
Belo Corp.  
    A (Chair), E   3
Mark T. Smucker
Age: 52
Director Since: 2019
  President and CEO
The J.M. Smucker Company  
    A   1
Michael D. White
Age: 70
Director Since: 2015
  Former Chairman, President and CEO
DIRECTV  
    E (Chair)   2
   
* A = Audit Committee; MDC = Management Development and Compensation Committee; NCG = Nominating and Corporate Governance Committee; E = Executive Committee. 

Ian Read, who will not stand for re-election to the Board of Directors when his term expires at this year’s Annual Meeting, currently serves as a member of the Management Development and Compensation Committee and the Nominating and Corporate Governance Committee.

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Corporate Governance

Our governance structure and processes are based on a number of important governance documents including our Code of Conduct, Certificate of Incorporation, Corporate By-Laws, Corporate Governance Policies and our Board Committee Charters. These documents, which are available in the Investors section of our website at www.kimberly-clark.com, guide the Board and our management in the execution of their responsibilities.

Kimberly-Clark believes that there is a direct connection between good corporate governance and long-term, sustained business success, and we believe it is important to uphold sound governance practices. As such, the Board reviews its governance practices and documents on an ongoing basis, considering changing regulatory requirements, governance trends and issues raised by our stockholders. After careful evaluation, we may periodically make changes to maintain or enhance current governance practices and promote stockholder value.


Board Leadership Structure

The Board has established a leadership structure that allocates responsibilities between our Chairman of the Board and CEO and our Lead Director. The Board believes that this allocation provides for dynamic Board leadership while maintaining strong independence and oversight.

Consistent with this leadership structure, at least once a quarter our Lead Director, who is an independent director, chairs executive sessions of our non-management directors. Members of our senior management team do not attend these sessions.

Chairman and CEO Positions

The Board’s current view is that a combined Chairman and CEO position, coupled with a predominantly independent board and a proactive, independent Lead Director, promotes candid discourse and responsible corporate governance. Mr. Hsu serves as Chairman of the Board and CEO. The Board believes Mr. Hsu has demonstrated the leadership and vision necessary to lead the Board and Kimberly-Clark. Accordingly, Mr. Hsu serves in this combined role at the pleasure of the Board without an employment contract. As Mr. Hsu is not an independent director, the Board continues to believe it is appropriate for the independent directors to elect an Independent Lead Director.

Lead Director

Mr. White has served as Independent Lead Director since April 2020. Our Corporate Governance Policies outline the significant role and responsibilities of the Lead Director, which include:

Chairing the Executive Committee
   
Chairing executive sessions at which non-management directors meet outside management’s presence, and providing feedback from such sessions to the CEO
   
Coordinating the activities of the Independent Directors
   
Providing input on and approving the agendas and schedules for Board meetings
   
Leading (with the Chairman of the Nominating and Corporate Governance Committee) the annual Board evaluation


 

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Corporate Governance Board Committees

 

Leading (with the Chairman of the Management Development and Compensation Committee) the Board’s review and discussion of the CEO’s performance
   
Providing feedback to individual directors following their individual evaluations
   
Speaking on behalf of the Board and chairing Board meetings when the Chairman of the Board is unable to do so
   
Acting as a direct conduit to the Board for stockholders, employees and others according to the Board’s policies


Director Independence

 

Our By-Laws provide that a majority of our directors must be independent (“Independent Directors”). We believe our independent board helps ensure good corporate governance and strong internal controls.

Our Corporate Governance Policies, as adopted by the Board, provide independence standards consistent with the rules and regulations of the SEC and the listing standards of the New York Stock Exchange (“NYSE”). Our independence standards can be found in Section 7 of our Corporate Governance Policies.

The Board has determined that all directors and nominees, except for Michael D. Hsu, are Independent Directors and meet the independence standards in our Corporate Governance Policies. In addition, the Board previously reviewed the independence of former director Abelardo E. Bru, who did not stand for re-election at our 2021 Annual Meeting, and found that Mr. Bru was also independent.

The NYSE listing standards and our own Corporate Governance Policies establish certain levels at which transactions are considered to have the potential to affect a director’s independence. Under our Corporate Governance Policies, certain relationships were considered immaterial and therefore were not considered by the Board in determining independence.


Board Meetings

 

The Board of Directors met six times in 2021. All of the directors attended in excess of 75 percent of the total number of meetings of the Board and the committees on which they served.

All of our directors are encouraged to attend our annual meeting of stockholders. All of our directors attended the 2021 Annual Meeting.


Board Committees

 

The standing committees of the Board include the Audit Committee, Management Development and Compensation Committee, Nominating and Corporate Governance Committee, and Executive Committee. In compliance with applicable NYSE corporate governance listing standards, the Board has adopted charters for all Committees except the Executive Committee.

Our Committee charters are available in the Investors section of our website at www.kimberly-clark.com.

As set forth in our Corporate Governance Policies, the Audit, Management Development and Compensation, and Nominating and Corporate Governance Committees all have the authority to retain independent advisors and consultants, with all costs paid by Kimberly-Clark.


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Corporate Governance Board Committees

Audit Committee

Chair: Dunia A. Shive

Other members: John W. Culver, S. Todd Maclin, Deirdre A. Mahlan, Jaime A. Ramirez and Mark T. Smucker

The Board has determined that each of Messrs. Maclin and Smucker and Mmes. Mahlan and Shive is an “audit committee financial expert” under SEC rules and regulations. In addition, all Audit Committee members satisfy the NYSE’s financial literacy requirements and qualify as Independent Directors under the rules of the SEC and the NYSE, as well as under our Corporate Governance Policies. See “Corporate Governance - Director Independence” for additional information on Independent Directors.

No member of the Audit Committee serves on the audit committees of more than three public companies and under our Audit Committee Charter, no Committee member is permitted to do so.

During 2021 the Committee met nine times.

The Committee’s principal functions, as specified in its charter, include:

Overseeing:
   
  the quality and integrity of our financial statements
     
  our compliance programs
     
  the independence, qualification and performance of our independent auditor
     
  the performance of our internal auditor
     
Selecting and engaging our independent auditor, subject to stockholder ratification
   
Pre-approving all audit and non-audit services that our independent auditor provides
   
Reviewing the scope of audits and audit findings, including any comments or recommendations of our independent auditor
   
Establishing policies for our internal audit programs
   
Overseeing the company’s risk management program (including risks related to data privacy, cybersecurity, business continuity, IT operational resilience and regulatory matters) and receiving periodic reports from management on risk assessments, the risk management process, and issues related to the risks of managing our business

Committee Report

For additional information about the Audit Committee’s oversight activities in 2021, see “Proposal 2. Ratification of Auditor - Audit Committee Report.”


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Corporate Governance Board Committees

Management Development and Compensation Committee

Chair: Sherilyn S. McCoy

Other members: Mae C. Jemison, M.D., Christa S. Quarles and Ian C. Read

Each member of this Committee is an Independent Director under the rules of the SEC and the NYSE, as well as under our Corporate Governance Policies. The Committee met four times in 2021.

The Committee’s principal functions, as specified in its charter, include:

Establishing and administering the policies governing annual compensation and long-term compensation, including stock option awards, restricted stock awards and restricted share unit awards, such that the policies are designed to align compensation with our overall business strategy and performance
   
Setting, after an evaluation of his overall performance, the compensation level of the CEO
   
Approving, in consultation with the CEO, compensation levels and performance targets for the senior executive team
   
Overseeing:
   
  leadership development for senior management and future senior management candidates
     
  a periodic review of our long-term and emergency succession planning for the CEO and other key officer positions, in conjunction with our Board
     
  key organizational effectiveness and engagement policies
     
Reviewing inclusion and diversity programs and related metrics
   
Annually reviewing our compensation policies and practices for the purpose of mitigating risks arising from these policies and practices that could reasonably have a material adverse effect

Roles of the Committee and the CEO in Compensation Decisions

Each year, the Committee reviews and sets the compensation of the officers that are elected by the Board (our “elected officers”), including our CEO and our other executive officers. The Committee’s charter does not permit the Committee to delegate to anyone the authority to establish any compensation policies or programs for elected officers, including our executive officers. With respect to officers that have been appointed to their position (our “non-elected officers”), our CEO has the authority to establish compensation programs and to approve equity grants. However, only the Committee may make grants to elected officers, including our executive officers.

Our CEO makes a recommendation to the Committee each year on the appropriate target annual compensation for each of the other executive officers. The Committee makes the final determination of the target annual compensation for each executive officer, including our CEO. While our CEO and Chief Human Resources Officer typically attend Committee meetings, none of the other executive officers is present during the portion of the Committee’s meetings when compensation for executive officers is set. In addition, our CEO is not present during the portion of the Committee’s meetings when his compensation is set.

For additional information on the Committee’s processes and procedures for determining executive compensation, and for a detailed discussion of our compensation policies, see “Compensation Discussion and Analysis.”


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Corporate Governance Board Committees

Use of Compensation Consultants

The Committee’s charter authorizes it to retain advisors, including compensation consultants, to assist it in its work.The Committee believes that compensation consultants can provide important market information and perspectives that can help it determine compensation programs that best meet the objectives of our compensation policies. In selecting a consultant, the Committee evaluates the independence of the firm as a whole and of the individual advisors who will be working with the Committee.

Independent Committee Consultant. In 2021, the Committee retained Semler Brossy Consulting Group as its independent executive compensation consultant. According to the Committee’s written policy, the independent Committee consultant provides services solely to the Committee and not to Kimberly-Clark. Semler Brossy has no other business relationship with Kimberly-Clark and receives no payments from us other than fees for services to the Committee. Semler Brossy reports directly to the Committee, and the Committee may replace it or hire additional consultants at any time. A representative of Semler Brossy attends Committee meetings and communicates with the Chairman of the Committee between meetings from time to time.

The scope of Semler Brossy’s engagement in 2021 included:

Conducting a review of the competitive market data (including base salary, annual incentive targets and long-term incentive targets) for our executive officers, including our CEO
   
Reviewing and commenting, as requested by the Committee, on recommendations by management and Mercer Human Resource Consulting (“Mercer”) concerning executive compensation programs, including program changes and redesign, special awards, change-of-control provisions, our executive compensation peer group, any executive contract provisions, promotions, retirement and related items
   
Reviewing and commenting on the Committee’s report for the proxy statement
   
Attending Committee meetings
   
Periodically consulting with the Chairman of the Committee

During 2021, at the request of the Committee, a representative of Semler Brossy attended four Committee meetings.

Kimberly-Clark Consultant. To assist management and the Committee in assessing our compensation programs and determining appropriate, competitive compensation for our executive officers, Kimberly-Clark annually engages an outside compensation consultant. In 2021, it retained Mercer for this purpose. Mercer has provided consulting services to Kimberly-Clark on a wide variety of human resources and compensation matters, both at the officer and non-officer levels. During 2021, Mercer provided advice and counsel on various matters relating to executive and director remuneration, including the following services:

Assessing our executive compensation peer group and recommending changes as necessary
   
Assessing compensation levels within our peer group for executive officer positions and other selected positions
   
Reviewing historic and projected performance for peer group companies under the metrics we use in our annual and long-term incentive plans
   
Assisting in incentive plan design and modifications, as requested
   
Providing market research on various issues as requested by management
   
Preparing for and participating in Committee meetings, as requested
   
Reviewing the Compensation Discussion and Analysis section of the proxy statement and other disclosures, as requested
   
Consulting with management on compensation matters


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Corporate Governance Board Committees

Committee Assessment of Consultant Conflicts of Interest. The Committee has reviewed whether the work provided by Semler Brossy and Mercer represents any conflict of interest. Factors considered by the Committee include: (1) other services provided to Kimberly-Clark by the consultant; (2) what percentage of the consultant’s total revenue is made up of fees from Kimberly-Clark; (3) policies or procedures of the consultant that are designed to prevent a conflict of interest; (4) any business or personal relationships between individual consultants involved in the engagement and Committee members; (5) any shares of Kimberly-Clark stock owned by individual consultants involved in the engagement; and (6) any business or personal relationships between our executive officers and the consulting firm or the individual consultants involved in the engagement. Based on its review, the Committee does not believe that any of the compensation consultants that performed services in 2021 has a conflict of interest with respect to the work performed for Kimberly-Clark or the Committee.

Committee Report

The Committee has reviewed the “Compensation Discussion and Analysis” section of this proxy statement and has recommended that it be included in this proxy statement. The Committee’s report is located at “Compensation Discussion and Analysis — Management Development and Compensation Committee Report.”

Nominating and Corporate Governance Committee

Chair: Robert W. Decherd

Other Members: Mae C. Jemison, M.D., Christa S. Quarles and Ian C. Read

Each member of this Committee is an Independent Director under the rules of the SEC and the NYSE, as well as under our Corporate Governance Policies. The Committee met five times in 2021.

The Committee’s principal functions, as specified in its charter, include the following:

Maintaining and reviewing a Board succession plan
   
Overseeing the process for Board nominations
   
Advising the Board on:
   
  Board organization, membership, function, performance and compensation
     
  committee structure and membership
     
  policies and positions regarding significant stockholder relations issues
     
Overseeing corporate governance matters, including developing and recommending to the Board changes to our Corporate Governance Policies
   
Reviewing director independence standards and making recommendations to the Board with respect to the determination of director independence
   
Monitoring and recommending improvements to the Board’s practices and procedures
   
Reviewing stockholder proposals and considering how to respond to them
   
Overseeing matters relating to Kimberly-Clark’s corporate social responsibility and sustainability activities and providing input to management on these programs and their effectiveness
   
Overseeing the Corporation’s public policy activities, including political contributions and lobbying activities

The Committee, in accordance with its charter and our Certificate of Incorporation, has established criteria and processes for director nominations, including those proposed by stockholders. Those criteria and processes are described in “Proposal 1. Election of Directors - Process and Criteria for Nominating Directors,” “Other Information - Stockholder Director Nominees for Inclusion in Next Year’s Proxy Statement” and “Other Information - Stockholder Director Nominees Not Included in Next Year’s Proxy Statement.”


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Corporate Governance Stockholder Rights

Executive Committee

Chair: Michael D. White (Lead Independent Director)

Other Members: Robert W. Decherd, Michael D. Hsu, Sherilyn S. McCoy and Dunia A. Shive

The Committee met two times in 2021.

The Committee’s principal function is to exercise, when necessary between Board meetings, the Board’s powers to direct our business and affairs.


Compensation Committee Interlocks and Insider Participation

 

None of the members of the Management Development and Compensation Committee is a current or former officer or employee of Kimberly-Clark. No interlocking relationship exists between the members of our Board of Directors or the Management Development and Compensation Committee and the board of directors or compensation committee of any other company.


Stockholder Rights

 

Proxy Access By-Law. Eligible stockholders may nominate candidates for election to the Board under our “proxy access” By-Law. Proxy access candidates will be included in our proxy materials. The proxy access By-Law permits a stockholder, or a group of up to 20 stockholders, owning three percent or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials directors constituting up to two individuals or 20 percent of the Board (whichever is greater).

Stockholders who wish to nominate directors under our proxy access By-Law should follow the instructions under “Other Information - Stockholder Director Nominees for Inclusion in Next Year’s Proxy Statement.”

Special Stockholder Meetings. Our Certificate of Incorporation allows the holders of 15 percent or more of our issued and outstanding shares of capital stock to request that a special meeting of stockholders be called, subject to procedures and other requirements set forth in our By-Laws.

Board Policy on Stockholder Rights Plans. We do not have a “poison pill” or stockholder rights plan. If we were to adopt a stockholder rights plan, the Board would seek prior stockholder approval of the plan unless, due to timing constraints or other reasons, a majority of Independent Directors of the Board determines that it would be in the best interests of stockholders to adopt a plan before obtaining stockholder approval. If a stockholder rights plan is adopted without prior stockholder approval, the plan must either be ratified by stockholders or must expire, without being renewed or replaced, within one year. The Nominating and Corporate Governance Committee reviews this policy statement periodically and reports to the Board on any recommendations it may have concerning the policy.

Simple Majority Voting Provisions. Our Certificate of Incorporation does not include supermajority voting provisions.


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Corporate Governance Our Approach to Sustainability

Communicating with Directors; Stockholder Engagement Policy

 

The Board has established a process by which stockholders and other interested parties may communicate with the Board, including the Lead Director. That process can be found in the Investors section of our website at www.kimberly-clark.com.

Under our stockholder engagement policy, set forth in our Corporate Governance Policies, stockholders who wish to meet directly with members of our Board may send a meeting request to our Lead Director who will consider the request in consultation with the Corporate Secretary. Requests should include information about the requesting party (including the number of shares held), the reason for requesting the meeting and the topics to be discussed.


Stockholder Engagement

 

In 2021, we continued our focus on regularly engaging with investors to understand their perspectives on a variety of topics. This process helps ensure that management and the Board understand and consider the issues that matter most to our stockholders and enables us to address them effectively. We reached out to stockholders representing approximately 50 percent of our common stock and engaged with stockholders representing approximately 17 percent of our common stock. We discussed many key topics, including our response to managing through the continuing COVID-19 pandemic and our refreshed corporate purpose, our approach to director refreshment, our commitment to inclusion and diversity, our corporate governance practices, including the recent reduction of our special meeting ownership threshold from 25 percent to 15 percent, significant enhancements to our corporate social responsibility and sustainability disclosures and our executive compensation program.

Investors continued to express broad support for our governance structures and executive compensation program and shared their views on matters related to shareholder rights and our independent, well-qualified Board. Further, investors highlighted the importance of continuing our ongoing engagement with them on corporate responsibility and sustainability initiatives. Our corporate governance profile, executive compensation programs, and sustainability initiatives reflect the input of stockholders from our outreach efforts.


Our Approach to Sustainability

 

Everything we do at Kimberly-Clark is connected to our ambition and purpose to provide better care for a better world. Our teams are working to provide the best experiences for our consumers, customers and the communities where we work and live. We are committed to doing our part to work to safeguard natural systems, tackle inequality, and lift up people around the world.

In 2020, we refined our Sustainability strategy to look further ahead to 2030 and sharpen our focus on areas where we believe we can make the greatest difference. We challenged ourselves to reset our ambition level to drive action that we believe is proportionate to the challenges and opportunities that lie ahead. Our new ambition is to improve the lives and well-being of one billion people in underserved and vulnerable communities globally, with the smallest environmental footprint.


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Corporate Governance Our Approach to Sustainability
         
Strategic Focus    Our 2030 Aspiration    2030 Goal

 

Social Impact
  Provide product innovation and social and community program investments that increase access to sanitation, help children thrive and empower women and girls.   Advance the well-being of 1 billion people in vulnerable and underserved communities.

 

Plastics
Footprint
  Deliver solutions that incorporate more renewable materials and materials that can be regenerated after use.   Reduce plastics footprint by 50%.

 

Forests
Footprint
  Address the climate and biodiversity crises by reducing reliance on fiber from natural forests.   Reduce Natural Forest Fiber footprint by 50%.

 

Carbon
Footprint
  Increase energy efficiency while seeking lower carbon solutions.   Reduce absolute greenhouse gas (GHG) emissions (Scopes 1 and 2) by 50% over 2015 base year. Reduce value chain emissions (Scope 3) by 20%.*

 

Water
Footprint
  Reduce water use at sites in watersheds under stress while supporting community-based water programs.   Reduce water footprint in water-stressed areas by 50%.
   
* Reduction target is focused on emissions from the Greenhouse Gas Protocol’s Scope 3 Category 1 (Purchased Goods and Services) and Category 12 (End of Life Treatment of Sold Products).

Board Oversight and Governance. Our Board has established and approved the framework for our sustainability-related policies and procedures, including environmental stewardship, energy and climate, fiber sourcing, waste and water management, product safety, charitable contributions, human rights, labor, and inclusion and diversity in employment. As part of their oversight roles, the Board and the Nominating and Corporate Governance Committee receive regular reports from management on these topics, our goals and our progress toward achieving them.

Our Board oversees risk management, including risks related to environmental issues, including climate-related risks and opportunities, and social issues. The Board is focused on our long-term business strategy, including fostering sustainability-driven innovations, and incorporates our sustainability risks and opportunities into its overall strategic decision-making. Sustainability risk areas for our company include shifting customer and consumer preferences toward sustainable products, increasing regulation and mandates related to single-use plastics and climate emissions, supply chain risks related to water security and deforestation and the cost of the commodities and natural resources required to make and market our products.


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Corporate Governance Our Approach to Sustainability

Recent Results. In 2021, we published our progress one year into our Sustainability 2030 program, which included significant progress against our goals in 2020. Highlights include:

Celebrated five years of the “Toilets Change Lives” program, which has improved access to sanitation for nearly 4 million people in need
   
Expanded Huggies’ “No Baby Unhugged” initiative into Latin America, growing its potential global impact by nearly 2 million babies and young children across 16 countries
   
Combated stigmas and period poverty with menstrual hygiene education and donations of 12 million period products to those in need
   
Achieved absolute GHG reduction of 32.1 percent in Scope 1 and 2 emissions and 3 percent reduction in Scope 3 emissions from our 2015 base year
   
Reduced use of fiber from natural forest landscapes by 19 percent (vs. 2011 baseline) and our water use at our facilities in high-stress regions by 32.5 percent (vs. 2015 baseline)
   
Launched new waste-reduction initiatives that helped us divert 96 percent of our manufacturing waste

Progress toward our climate goals accelerated over the past several years through a combination of energy conservation, alternative/renewable energy projects and manufacturing footprint optimization. In 2020, despite the project resource restrictions associated with the COVID-19 pandemic, we were able to deliver Scope 1 & 2 GHG emissions reductions of over 200,000 MTCO2e. This result was primarily driven by larger alternative and renewable energy project executions that represented just over 60 percent of the reduction. The largest single contributor to the reduction came from our Chester, Pennsylvania facility and the startup of a new combined heat and power (CHP) cogeneration plant that enabled the transition away from coal-based fuel to 100 percent natural gas consumption. This reduced the facility’s GHG emission by 40 percent (vs a 2018 baseline).

In summer of 2020, we announced new climate targets, which have been validated with the Science-Based Targets Initiative. These include a 50 percent reduction in Scope 1 + 2 GHG emissions and 20 percent reduction in Scope 3 greenhouse gas emissions from Purchased Goods and Services and End of Life Treatment of Sold Products categories by 2030 (vs a 2015 base year).

Sustainability Reporting. Each year, Kimberly-Clark publishes a Global Sustainability Report outlining our key strategies, initiatives and results in greater detail. Our report includes an addendum of material organized and presented in accordance with the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) Standards, and can be found on our website at www.kimberly-clark.com/esg. We continue to monitor best practices on reporting frameworks and in 2021 published a Task Force on Climate-related Financial Disclosures (TCFD)-aligned disclosure to enhance visibility to our climate risks and opportunities. Within our disclosure, we cover TCFD’s four core areas: governance, strategy, risk management, and metrics and targets.

Stakeholder Engagement and Recognition. In setting our sustainability priorities and implementing our programs, we are supported by an independent Sustainability Advisory Board with external thought leaders who provide guidance on key governance, social and environmental issues. We also routinely engage our stockholders on the topic of sustainability through our governance engagement program and regular investor meetings. In these meetings, we often discuss sustainability topics and priorities relevant to our business.

External partnerships also play an important role in our sustainability programs. For example, we are a signatory to the U.K. and U.S. Plastics Pacts and we serve as members of the steering committee for Ocean Conservancy’s Trash Free Seas Alliance. In addition, we have strong relationships with World Wildlife Fund (WWF) and the Forest Stewardship Council® (FSC®), with many of our tissue products around the world proudly displaying the FSC marks.


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Our sustainability program continues to receive strong recognition from our external stakeholders. Most recent rankings include:

CDP (formerly Carbon Disclosure Project) 2021 “A-” ranking for Climate Change, and “B” in Water Security and Forests
   
FTSE4Good Index Series - 18th consecutive year - for excellence in environmental, social, and governance
   
EcoVadis Gold 2021 Sustainability Rating, score of 66 (92nd percentile)
   
Rating of “AA” in MSCI Global Sustainability Index
   
Forbes JUST Capital 2022 Top 100, Best Employers List and Best Employers for Diversity
   
US Environmental Protection Agency’s SmartWay Excellence Award 2021 (8th consecutive year) for freight supply chain energy and environmental performance

Recent Events Related to COVID-19

Throughout the COVID-19 pandemic, our priority has been the safety of our employees and consumers. We have continued to take extra precautions globally at our office, mill and distribution center operations, which were developed in line with guidance from global health authorities, including remote work and flexible arrangements, as well as social distancing, thermal scanning and partitions in our facilities. As we faced these challenging moments, we remained focused on living our values, guided by our value of caring – for our people, our consumers, and importantly, for those most in need.

The macro business environment experienced unprecedented volatility in 2021 related to the continuing effect the global COVID-19 pandemic has had on supply and demand dynamics. The pandemic has caused significant input cost inflation and worldwide supply chain disruption, and we are incredibly proud of the great teamwork exhibited by our approximately 46,000 employees around the world who are doing their best to provide a steady supply of product. Throughout this difficult environment, we have continued to invest in our brands and capabilities, and we believe we made good progress in 2021 executing our strategies for long-term success.

Inclusion and Diversity

By leading with inclusion, we plan to deliver on our purpose of Better Care for a Better World as we work to become a global organization that looks and thinks like the people who use (and have yet to use) our essential products.

Our Board of Directors and Leadership. Our Board remains committed to multiple dimensions of diversity. We believe that having a Board that is representative of our customer, consumer, employee and stockholder base is an important element of our leadership and gives us a competitive advantage. In 2021,

Women and people of color comprised 36 percent and 23 percent of our employee leadership population at the director-level and above, respectively.
   
Women and people of color comprised 46 percent and 31 percent of our Board nominees, respectively. Women chair 50 percent of our Board committees.
   
Women and people of color comprised 25 percent and 50 percent, respectively, of the Executive Leadership Team roles reporting to our CEO.


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Corporate Governance Our Approach to Sustainability

Our Strategy and Engagement. In 2021, we continued to deliver on our global inclusion and diversity strategy through a four-pillar approach focused on the following key elements:

Create Community: Develop a Kimberly-Clark community whose deepened understanding and daily actions drive inclusion, embrace diversity, and empower authenticity.
   
Leverage Leadership: Raise the standard, expecting our leaders to act as cultural enablers who build diverse, high-performing teams and infuse inclusion into decision-making and the workplace experience.
   
Empower Employees: Empower talent to thrive, and embrace hiring, promotion, and development practices that reflect our diverse consumer base.
   
Accelerate Action: Integrate inclusion and diversity into everything we do, using our strength to combat inequities for our people, our consumers, and our communities around the world – to make lives better today and tomorrow.

Our business success is tied to cultivating workplaces, communities, and experiences where inclusion and diversity are evident and thriving. Building on our momentum of 2020, we held our second annual Global Inclusion Week in 2021, engaging over 59 countries over 5 days to activate a culture of inclusion & diversity.

Aligned with our value of Growing Our People, we introduced our Activating Inclusive Leadership initiative geared towards enhancing inclusion and diversity capabilities within our Global Team Leader population. To date, approximately 70 percent of all Kimberly-Clark leaders have completed this requisite training where they reflect on and learn how to lead with conscious inclusion, with the objective of infusing it into how we work, enabling better business decisions and empowering employees to build an inclusive culture. We believe inclusion is a strategic capability we must build from the inside out. By embedding inclusion into our ways of working, we will co-create and innovate in new ways while seeking to ensure that everyone is treated with dignity, recognized for their abilities, and valued for who they are.

Our Workforce and Transparency. As part of our commitment to building a diverse workforce, we have expanded our focus from women in senior leadership roles to now include a focus on women in all management roles globally. Similarly, we applied the same expanded focus to now include people of color in all management roles in the United States. This remains a prioritized element of our strategic business plan and our annual incentive plan for our leadership, as described further in “Compensation Discussion and Analysis.” We continue to provide transparent updates on our progress, disclosing our results in our Sustainability Report and included below.

It is our practice to disclose our annual EEO-1 data on the Sustainability section of our website after our submission of the corresponding report to the U.S. Equal Employment Opportunity Commission.

Full-time Employee
Diversity
  2010  2011  2012  2013  2014  2015  2016  2017  2018  2019  2020  2021
Women  29.9%  30.1%  31.0%  35.6%  31.8%  32.8%  31.8%  30.5%  30.0%   30.9%  31.1%  30.8%
Women in management  27.3%  28.6%  29.3%   30.3%  31.1%  32.0%  33.0%  33.8%  33.4%  34.2%  35.0%  36.8%
People of Color (U.S.)  18.0%  18.0%  19.0%  19.0%  18.0%  19.0%  19.0%  19.0%  19.0%  21.0%  21.1%  21.8%
People of Color in management (U.S.)  10.9%  11.3%  11.7%  13.7%  12.2%  12.7%  13.2%  13.9%  16.0%  17.9%  18.9%  19.6%


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Corporate Governance Other Corporate Governance Policies and Practices

Other Corporate Governance Policies and Practices

 

Corporate Governance Policies. The Board of Directors has adopted Corporate Governance Policies which guide Kimberly-Clark and the Board on matters of corporate governance, including: director responsibilities, Board committees and their charters, director independence, director compensation, performance assessments of the Board and individual directors, Board succession planning, confidentiality and conflicts of interest, director commitments, director orientation and education, director access to management, Board access to outside financial, business and legal advisors, management development and succession planning, and Board interaction with stockholders. Our Corporate Governance Policies provide for retirement at age 72. The Board monitors emerging issues and amends these policies from time to time as rules and regulations change and governance practices develop. To see the policies, go to the Investors section of our website at www.kimberly-clark.com.

Board and Committee Evaluations. The Board conducts annual self-evaluations to determine whether it and its committees are functioning effectively and whether its governing documents continue to remain appropriate. Each Board member is periodically evaluated on an individual basis. The process is designed and overseen by our Lead Director and our Nominating and Corporate Governance Committee, and the results of the evaluations are discussed by the full Board.

Each committee annually reviews its own performance and assesses the adequacy of its charter, and reports the results and any recommendations to the Board. The Nominating and Corporate Governance Committee oversees and reports annually to the Board its assessment of each committee’s performance evaluation process.

Board Succession Planning. Our Nominating and Corporate Governance Committee maintains and reviews a succession plan for the Board, as described in “Proposal 1. Election of Directors-Process and Criteria for Nominating Directors.”

Code of Conduct. Kimberly-Clark has a Code of Conduct that applies to all of our directors, executive officers and employees, including our CEO, Chief Financial Officer and Vice President and Controller. It is available in the Investors section of our website at www.kimberly-clark.com. Any amendments to or waivers of our Code of Conduct applicable to our CEO, Chief Financial Officer or Vice President and Controller will also be posted at that location. It is our policy that any waiver of our Code of Conduct for executive officers or directors may be made only by our Board or a committee of our Board.

Board and Management Roles in Risk Oversight. The Board is responsible for providing risk oversight with respect to our operations. In connection with this oversight, the Board particularly focuses on our strategic and operational risks, as well as related risk mitigation. In addition, the Board reviews and oversees management’s response to key risks facing Kimberly-Clark.

The Board’s committees review particular risk areas to assist the Board in its overall risk oversight of Kimberly-Clark:

The Audit Committee oversees our risk management program, with a particular focus on our internal controls, compliance programs, financial statement integrity and fraud risks, data privacy, cybersecurity, business continuity, IT operational resilience and regulatory matters, and related risk mitigation. In connection with this oversight, the Audit Committee receives regular reports from management on risk assessments, the risk management process, and issues related to the risks of managing our business. The Audit Committee also receives an annual enterprise risk management update, which describes our key financial, strategic, operational and compliance risks.
   
The Management Development and Compensation Committee reviews the risk profile of our compensation policies and practices. This process includes a review of an assessment of our compensation programs, as described in “Compensation Discussion and Analysis — Analysis of Compensation-Related Risks.”
   
The Nominating and Corporate Governance Committee monitors risks relating to governance matters and recommends appropriate actions in response to those risks. In addition, it provides oversight of our corporate social responsibility programs and sustainability activities and receives regular updates on the effectiveness of these programs.


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Corporate Governance Other Corporate Governance Policies and Practices

Complementing the Board’s overall risk oversight, our senior executive team identifies and monitors key enterprise-wide and business unit risks, providing the basis for the Board’s risk review and oversight process. We have a Global Risk Oversight Committee, consisting of management members from core business units and from our finance, treasury, global risk management, legal, internal audit, human resources and supply chain functions. This committee identifies significant risks for review and updates our policies for risk management in areas such as hedging, foreign currency and country risks, product liability, property and casualty risks, data privacy and cybersecurity risks, and supplier and customer risks. The Board believes the allocation of risk management responsibilities described above supplements the Board’s leadership structure by allocating risk areas to an appropriate committee for oversight, allows for an orderly escalation of issues as necessary, and helps the Board satisfy its risk oversight responsibilities.

Information Security. Given the importance of information security and privacy to our stakeholders, the Audit Committee receives regular quarterly reports from our Chief Information Officer and our Chief Information Security Officer covering our program for managing information security risks, including data privacy and data protection risks. We internally follow the National Institute of Standards and Technology cybersecurity framework (NIST CSF) to assess the maturity of our cybersecurity programs. Our robust information security training program for employees includes:

Information security concepts included in our mandatory onboarding Code of Conduct training for all employees
   
Annual information security awareness training for all office workers with a focus on timely, risk-based topics that align to corporate initiatives
   
Monthly phishing drills with global participation
   
An annual Cyber Security Awareness Month (CSAM) event consisting of educational opportunities and activities for all employees, including internal and external speakers and presentations
   
Table-top exercises with senior leaders covering ransomware and third-party threats

We maintain an information security insurance policy that provides coverage for security breaches.

Whistleblower Procedures. The Audit Committee has established procedures for receiving, recording and addressing any complaints we receive regarding accounting, internal accounting controls or auditing matters, and for the confidential and anonymous submission, by our employees or others, of any concerns about our accounting or auditing practices. We also maintain a toll-free Code of Conduct telephone helpline and a website, each allowing our employees and others to voice their concerns anonymously.

Chief Ethics and Compliance Officer. Our Vice President and Chief Ethics and Compliance Officer oversees our compliance programs. His duties include: regularly updating the Audit Committee on the effectiveness of our compliance programs, providing periodic reports to the Board, and working closely with our various compliance functions to promote coordination and sharing of best practices across these functions.

Management Succession Planning. In conjunction with the Board, the Management Development and Compensation Committee is responsible for periodically reviewing the long-term management development plans and succession plans for the CEO and other key officers, as well as the emergency succession plan for the CEO and other key officers if any of these officers unexpectedly becomes unable to perform his or her duties.

Disclosure Committee. We have established a Disclosure Committee to assist in fulfilling our obligations to maintain disclosure controls and procedures and to coordinate and oversee the process of preparing our periodic securities filings with the SEC. This committee is composed of members of management and is chaired by our Vice President and Controller.


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Corporate Governance Other Corporate Governance Policies and Practices

No Executive Loans. We do not extend loans to our executive officers or directors, and, therefore, do not have any such loans outstanding.

Charitable Contributions. The Nominating and Corporate Governance Committee has adopted guidelines for the review and approval of charitable contributions by Kimberly-Clark (or any foundation under the common control of Kimberly-Clark) to organizations or entities with which a director or an executive officer may be affiliated. We will disclose in the Investors section of our website at www.kimberly-clark.com any contributions made by us to a tax-exempt organization under the following circumstances:

An Independent Director serves as an executive officer of the tax-exempt organization; and
   
If within the preceding three years, contributions in any single year from Kimberly-Clark to the organization exceeded the greater of $1 million or 2 percent of the tax-exempt organization’s consolidated gross revenues.


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Proposal 1.
Election of Directors

As of the date of this proxy statement, the Board of Directors consists of thirteen members. Each director’s term will expire at this year’s Annual Meeting.

Ian C. Read is not standing for re-election. Mr. Read will continue to serve as a director until the Annual Meeting. We would like to thank Mr. Read for his many years of service and substantial contributions to the Board, Kimberly-Clark and our stockholders.

All of the nominees are currently serving as directors except for Sylvia Burwell, who was nominated for election to the Board on February 9, 2022.

All the nominees standing for election at the Annual Meeting are being nominated to serve until the 2023 Annual Meeting of Stockholders and until their successors have been duly elected and qualified. All nominees have advised us that they will serve if elected; however, should any nominee become unable to serve, proxies may be voted for another person designated by the Board.

Given the independent status of the nominees, if all nominees are elected at the Annual Meeting, twelve of the thirteen directors on our Board will be Independent Directors.


Process for
Director
Elections

 

Our Certificate of Incorporation provides that all of our directors must be elected annually. Our By-Laws provide that, in uncontested elections, directors must be elected by a majority of votes cast rather than by a plurality. If any incumbent director does not receive a majority of votes, he or she is required to tender his or her resignation for consideration by the Board.


Process and
Criteria for
Nominating
Directors

 

The Board of Directors is responsible for approving candidates for Board membership. The Board has adopted a Board succession planning policy which formalizes its commitment to refreshing and maintaining a group of directors with diverse perspectives and capabilities. The Board believes that adding fresh perspectives is critical, but also values the institutional knowledge and experience of long-serving directors. The Board is committed to balancing these factors through our succession plan, retirement policy and director evaluation process.

Under our succession planning policy, the Nominating and Corporate Governance Committee maintains and reviews a Board succession plan, taking into account current composition and qualifications, Kimberly-Clark’s current and expected needs, director tenure, the effectiveness of the Board and any planned or unplanned vacancies. In consultation with the Chairman of the Board and the Lead Director, the Committee screens and recruits director candidates and recommends to the Board any new appointments and nominees for election as directors at our annual meeting of stockholders. It also recommends nominees to fill any vacancies. As provided in our Certificate of Incorporation, the Board of Directors has the authority to determine the size of the Board and appoint directors between annual meetings of stockholders.

The Committee may receive recommendations for Board candidates from various sources, including our directors, management and stockholders. The Nominating and Corporate Governance Committee periodically retains a search firm to assist it in identifying and recruiting director


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Proposal 1. Election of Directors Diversity of Directors

candidates meeting the criteria specified by the Committee. The Committee utilized a search firm in connection with the nominations of Mmes. Burwell and Mahlan and Mr. Ramirez. In addition, as described in “Corporate Governance - Stockholder Rights,” our By-Laws provide for proxy access stockholder nominations of director candidates. Stockholders who wish to nominate directors under our proxy access By-Law should follow the instructions under “Other Information - Stockholder Director Nominees for Inclusion in Next Year’s Proxy Statement.” Stockholders who wish to nominate directors who are not intended to be included in the company’s proxy materials should follow the instructions under “Other Information - Stockholder Director Nominees Not Included in Next Year’s Proxy Statement.”

The Committee believes that the criteria for director nominees should foster effective corporate governance, support our strategies and businesses and ensure that our directors, as a group, both have an overall mix of the attributes needed for an effective Board and reflect diversity of background and viewpoint. The criteria should also support the successful recruitment of qualified candidates.

Qualified candidates for director are those who, in the judgment of the Committee, possess a sufficient mix of the experience attributes listed below to ensure effective service on the Board. In addition, all nominees must possess high standards for ethical behavior, good interpersonal skills and a proactive and solution-oriented leadership style.

EXPERIENCE ATTRIBUTES

       
Leadership experience as a chief or senior executive officer       Marketing, e-commerce and digital experience      
Industry experience   Compensation, governance and public company board experience  
International experience   Diversity of background or viewpoint  
Financial expertise      
       


Committee
Review of
Attributes
of Current
Directors

 

The Nominating and Corporate Governance Committee has reviewed the background of each of our director nominees in light of the experience attributes described above. The Committee has determined that each nominee possesses a sufficient mix of the experience attributes and that the nominees collectively possess the necessary experience to effectively guide our company.

For details about each nominee’s specific experience attributes, see “The Nominees” below.


Diversity of
Directors

 

As noted above, the Nominating and Corporate Governance Committee believes that diversity of backgrounds and viewpoints is a key attribute to include in the boardroom. As a result, the Committee seeks to have a diverse Board that is representative of our customer, consumer, employee and stockholder base, including gender and ethnic/racial diversity. While the Committee carefully considers this diversity when identifying potential director candidates, the Committee has not established a formal policy regarding diversity. Our Board currently includes individuals of differing ages, races and genders. In particular, 46% of our director nominees are female and 31% of our director nominees are ethnically diverse.


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Proposal 1. Election of Directors The Nominees
     
The Nominees    
     

New Nominee
Age 56

 

Sylvia M. Burwell

President, American University

Ms. Burwell has served as the President of American University, a private research university located in Washington, D.C., since 2017. Prior to joining American University, she served as the 22nd U.S. Secretary of Health and Human Services from 2014 to 2017. In this role, she managed a $1 trillion department with oversight for the National Institutes of Health, Centers for Disease Control and Prevention, Food and Drug Administration, and the Medicaid and Medicare programs. She served as the Director of the White House Office of Management and Budget from 2013 to 2014. Prior to her service in Washington, Ms. Burwell was President of Walmart’s charitable foundation focused on ending hunger, and also held senior roles at the Bill and Melinda Gates Foundation, leading a program focused on combating world poverty through agricultural development, financial services for the poor, and global libraries. She serves on the Board of GuideWell Mutual Holding Corporation, a privately held mutual insurance company.

Other public company boards served on since 2017: None.

Experience attributes: Ms. Burwell satisfies the financial literacy requirements of the NYSE, has leadership experience as a senior executive officer, has international experience, and provides diversity of background and viewpoint from her academic background and deep government experience.

     

Director since 2020
Age 61

 

John W. Culver

Group President, North America and Chief Operating Officer, Starbucks Corporation

Mr. Culver joined Starbucks Corporation in 2002 and has served as Group President, North America and Chief Operating Officer since July 2021. Prior to that, he served in a number of leadership roles, including Group President, International, Channel Development and Global Coffee & Tea from 2018 to July 2021, Group President, International and Channels from 2017 to 2018; Group President, Starbucks Global Retail from 2016 to 2017; Group President, China, Asia Pacific, Channel Development and Emerging Brands from 2013 to 2016; President, Starbucks Coffee China and Asia Pacific from 2011 to 2013; and President, Starbucks Coffee International from 2009 to 2011. Mr. Culver serves as a director of The Mission Continues.

Other public company boards served on since 2017: Columbia Sportswear Company (since January 2021).

Experience attributes: Mr. Culver satisfies the financial literacy requirements of the NYSE, has leadership experience as a senior executive, has knowledge about our industries, has international experience and experience with branded consumer goods, and has marketing experience.

     
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Proposal 1. Election of Directors The Nominees
     

Director since 1996
Age 70

 

Robert W. Decherd

Chairman, President and Chief Executive Officer, DallasNews Corporation

Mr. Decherd was elected Chairman, President and Chief Executive Officer of DallasNews Corporation (f/k/a A. H. Belo Corporation), a newspaper publishing and Internet company, in 2018. He previously served as Chairman, President and Chief Executive Officer of DallasNews Corporation from 2008 to 2013 and served as Vice Chairman of the Board from 2013 to 2016. Mr. Decherd was Chief Executive Officer of Belo Corp., a broadcasting and newspaper publishing company, from 1987 to 2008, when the company split its newspaper and television businesses into two publicly-held entities. Mr. Decherd is presently Chairman of Parks for Downtown Dallas, a civic organization. He has previously served as a member of the Advisory Council of the Harvard University Center for Ethics and the Board of Visitors of the Columbia Graduate School of Journalism.

Other public company boards served on since 2017: DallasNews Corporation.

Experience attributes: Mr. Decherd satisfies the financial literacy requirements of the NYSE, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, and has marketing, compensation, governance and public company board experience.

     

Director since 2017
Age 57

 

Michael D. Hsu

Chairman of the Board and Chief Executive Officer

Mr. Hsu has served as Chairman of the Board since January 2020 and as Chief Executive Officer since January 2019. Prior to that, he served as President and Chief Operating Officer since 2017, where he was responsible for the day-to-day operations of our business units, along with our global innovation, marketing and supply chain functions. He served as Group President, K-C North America from 2013 to 2016, where he was responsible for our consumer business in North America, as well as leading the development of new business strategies for global nonwovens. From 2012 to 2013, his title was Group President, North America Consumer Products. Prior to joining Kimberly-Clark, Mr. Hsu served as Executive Vice President and Chief Commercial Officer of Kraft Foods, Inc., from January 2012 to July 2012, as President of Sales, Customer Marketing and Logistics from 2010 to 2012 and as President of its grocery business unit from 2008 to 2010. Prior to that, Mr. Hsu served as President and Chief Operating Officer, Foodservice at H. J. Heinz Company.

Other public company boards served on since 2017: Texas Instruments Incorporated (since April 2020).

Experience attributes: Mr. Hsu satisfies the financial literacy requirements of the NYSE, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, has knowledge about our industries, has international experience and experience with branded consumer packaged goods, and has marketing experience.

     
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Proposal 1. Election of Directors The Nominees
     

Director since 2002
Age 65

 

Mae C. Jemison, M.D.

President, The Jemison Group, Inc.

Dr. Jemison is founder and President of The Jemison Group, Inc., a science, technology and innovation consulting company, and is also the Principal for the 100 Year Starship Project, an initiative started through competitive seed funding from DARPA that promotes science, technological and human systems breakthroughs and innovations by seeking to ensure that the capability required for human space travel to another star exists within 100 years. Dr. Jemison founded the Dorothy Jemison Foundation for Excellence and developed The Earth We Share international science camp and STEM programs. She was president and founder of BioSentient medical devices company from 2000 to 2012. Dr. Jemison was professor of Environmental Studies at Dartmouth College from 1995 to 2002 and is currently an adjunct professor at Dartmouth’s medical school. From 1987 to 1993 she served as a National Aeronautics and Space Administration (NASA) astronaut. Dr. Jemison is a member of the National Academy of Medicine and is on its governance council. She serves on the National Board of Professional Teaching Standards and the NASA Innovative Advanced Concepts External Advisory Council. She was founding chair of the State of Texas Product Development and Small Business Incubator Board and was a member of the National Advisory Council for Biomedical Imaging and Bioengineering.

Other public company boards served on since 2017: Valspar Corporation (through June 2017).

Experience attributes: Dr. Jemison satisfies the financial literacy requirements of the NYSE, has international experience and leadership experience of entrepreneurial start-up enterprises and non-profit organizations, provides diversity of background and viewpoint, and has compensation, governance and public company board experience.

     

Director since 2019
Age 65

 

S. Todd Maclin

Retired Chairman, Chase Commercial and Consumer Banking, JPMorgan Chase & Co.

Mr. Maclin retired in 2016 from a 37-year career at JPMorgan Chase & Co., and its predecessor banks, where he rose to Chairman, Chase Commercial and Consumer Banking in 2013, while also serving on the company’s Operating Committee. Prior to that, he held a variety of leadership roles, including Regional Executive for Texas and the Southwest U.S., and Global Executive for Energy Investment Banking. Mr. Maclin serves as a director of The University of Texas Development Board, as a member of the Advisory Council for McCombs Graduate School of Business, on the Executive Committee of The University of Texas Chancellor’s Council, on the Board of Visitors of UT Southwestern Health System, on the Steering Committee for the O’Donnell Brain Institute for UT Southwestern, and on the Board of Southwestern Medical Foundation and is a member of its Investment Committee. Mr. Maclin is a lifetime member of The University of Texas Ex-Students’ Alumni Association (Texas Exes). He has served on the Texas Exes’ Board of Directors, as its Interim Co-Executive Director during 2017, and served as President of Texas Exes for the term of June 2019-2020. He is also a lifetime member of the UT President’s Associates. In 2017, Mr. Maclin was inducted into the UT McCombs Texas Business Hall of Fame. Mr. Maclin also serves on the Board of Directors of RRH Corporation, the parent company of Hunt Consolidated, Inc.; and as Advisory Director of Susser Banc Holdings, Inc. (formerly BancAffiliated, Inc.).

Other public company boards served on since 2017: Trinity Industries, Inc. (since September 2020).

Experience attributes: Mr. Maclin has been determined by our Board to qualify as an “audit committee financial expert” under the SEC’s rules and regulations and has a banking and finance background, has leadership experience as a senior executive, and provides diversity of background and viewpoint.

     
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Proposal 1. Election of Directors The Nominees
     

Director since September 2021
Age 59

 

Deirdre A. Mahlan

Former President, Diageo North America, Diageo plc

Ms. Mahlan had a 19-year career at Diageo plc, a leading beverage alcohol company, where she rose to President of Diageo North America and oversaw Diageo’s U.S. and Canadian spirits and beer businesses from 2015 to June 2020. From 2010 to 2015, she served as Chief Financial Officer of Diageo plc. Prior to that, she served in a number of leadership roles, including Deputy Financial Officer and Head of Tax and Treasury. Ms. Mahlan began her career at PricewaterhouseCoopers, where she gained experience in audit across multiple diversified global companies. She serves as a non-executive director of Experian plc. Ms. Mahlan is a certified public accountant.

Other public company boards served on since 2017: The Duckhorn Portfolio, Inc. (since March 2021).

Experience attributes: Ms. Mahlan has been determined by our Board to qualify as an “audit committee financial expert” under the SEC’s rules and regulations and has an accounting and finance background, has leadership experience as a senior executive, has experience with branded consumer goods, provides diversity of background and viewpoint, and has marketing and public company board experience.

     

Director since 2018
Age 63

 

Sherilyn S. McCoy

Former Chief Executive Officer, Avon Products, Inc.

Ms. McCoy served as Chief Executive Officer and Director of Avon Products, Inc., a personal care products company, from 2012 to 2018. Prior to joining Avon, Ms. McCoy had a 30-year career at Johnson & Johnson, where she rose to Vice Chairman in 2011. Most recently at Johnson & Johnson, Ms. McCoy oversaw Pharmaceutical, Consumer, Corporate Office of Science & Technology, and Information Technology divisions. Prior to that, she served in a number of leadership roles, including Worldwide Chairman, Pharmaceuticals Group from 2009 to 2011; Worldwide Chairman, Surgical Care Group from 2008 to 2009; and Company Group Chairman and Worldwide Franchise Chairman of Ethicon, Inc., a subsidiary of Johnson & Johnson, from 2005 to 2008. Earlier in her career, Ms. McCoy was Global President of the Baby and Wound Care franchise; Vice President, Marketing for a variety of global brands; and Vice President, Research & Development for the Personal Products Worldwide Division.

Other public company boards served on since 2017: AstraZeneca PLC (since October 2017), Avon Products, Inc. (through February 2018), Certara, Inc. (through November 2021), NovoCure Limited (since May 2018) and Stryker Corporation (since May 2018).

Experience attributes: Ms. McCoy satisfies the financial literacy requirements of the NYSE, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, has knowledge about our industries, has international experience and experience with branded consumer packaged goods, and has marketing, compensation, governance and public company board experience.

     
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Proposal 1. Election of Directors The Nominees
     

Director since 2016
Age 48

 

Christa S. Quarles

Chief Executive Officer, Corel Corporation

Ms. Quarles has served as Chief Executive Officer and Director of Corel Corporation, a portfolio software company, since September 2020. Prior to joining Corel, Ms. Quarles served as Chief Executive Officer of OpenTable, Inc., a provider of online restaurant reservations, from November 2015 to 2018. Ms. Quarles served as the Chief Financial Officer of OpenTable from May 2015 to November 2015, when she was appointed Chief Executive Officer. Prior to joining OpenTable, Ms. Quarles served as Chief Business Officer of Nextdoor, Inc. from 2014 to May 2015. From 2010 to 2014, Ms. Quarles held positions of increasing responsibility with The Walt Disney Company, including Senior Vice President, General Manager Mobile and Social Games; General Manager, Disney Mobile Games; and Chief Financial Officer and Head of Business Operations, Mobile and Social Games. Prior to that, she was Chief Financial Officer of Playdom Inc., which was acquired by The Walt Disney Company in 2010.

Other public company boards served on since 2017: Affirm Holdings, Inc. (since January 2021).

Experience attributes: Ms. Quarles satisfies the financial literacy requirements of the NYSE and has a background in finance, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, and has marketing, digital marketing and e-commerce experience.

     

Director since
September 2021
Age 55

 

Jaime A. Ramirez

Executive Vice President and President, Global Tools & Storage, Stanley Black & Decker, Inc.

Mr. Ramirez has served as Executive Vice President and President, Global Tools & Storage of Stanley Black & Decker, Inc., a leading industrial and consumer products company, since July 2020. Prior to that, he served as Senior Vice President and Chief Operating Officer, Tools & Storage, from 2019 to 2020 and Senior Vice President and President, Global Emerging Markets, from 2012 to 2019. Prior to that, he served in a number of leadership roles since joining the company in 1991, including President, Construction and DIY, Latin America and President, Latin America Group.

Other public company boards served on since 2017: None.

Experience attributes: Mr. Ramirez satisfies the financial literacy requirements of the NYSE, has leadership experience as a senior executive, has international experience and experience with branded consumer goods, and has marketing, digital marketing and e-commerce experience.

     
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Proposal 1. Election of Directors The Nominees
     

Director since 2019
Age 61

 

Dunia A. Shive

Former President and Chief Executive Officer, Belo Corp.

Ms. Shive served as Senior Vice President of TEGNA Inc., formerly Gannett Co., Inc., a broadcast and digital media company, from 2013 to 2017. She previously served as President and Chief Executive Officer of Belo Corp. from 2008 to 2013, which was acquired by Gannett in 2013. She joined Belo Corp. in 1993 and served as Chief Financial Officer and various other leadership positions prior to her election as President and Chief Executive Officer. She serves as a Trustee of Parks for Downtown Dallas.

Other public company boards served on since 2017: DallasNews Corporation (since September 2021), Dr Pepper Snapple Group, Inc. (through July 2018), Main Street Capital Corporation (since March 2020) and Trinity Industries, Inc.

Experience attributes: Ms. Shive has been determined by our Board to qualify as an “audit committee financial expert” under the SEC’s rules and regulations and has an accounting and finance background, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, and has marketing, compensation, governance and public company board experience.

     

Director since 2019
Age 52

 

 

Mark T. Smucker

President and Chief Executive Officer, The J.M. Smucker Company

Mr. Smucker has served as President and Chief Executive Officer of The J.M. Smucker Company, a manufacturer and marketer of food and beverage products, since 2016. Prior to that time, he served as its President and President, Consumer and Natural Foods, from 2015 to 2016; President, U.S. Retail Coffee, from 2011 to 2015; President, Special Markets, from 2008 to 2011; Vice President, International, from 2007 to 2008; and Vice President, International and Managing Director, Canada, from 2006 to 2007.

Other public company boards served on since 2017: The J.M. Smucker Company.

Experience attributes: Mr. Smucker has been determined by our Board to qualify as an “audit committee financial expert” under the SEC’s rules and regulations, has leadership experience as a chief executive officer, has knowledge about our industries, has experience with branded consumer packaged goods, and has marketing, compensation, governance and public company board experience.

     
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Proposal 1. Election of Directors The Nominees
     

Director since 2015
Age 70

 

Michael D. White

Former Chairman of the Board, President and Chief Executive Officer of DIRECTV

Mr. White served as Chairman of the Board, President and Chief Executive Officer of DIRECTV, a leading provider of digital television entertainment services, from 2010 to 2015. From 2003 until 2009, Mr. White was Chief Executive Officer of PepsiCo International and Vice Chairman, PepsiCo, Inc. after holding positions of increasing importance with PepsiCo since 1990. Mr. White is a member of the Boston College Board of Trustees and is Vice Chairman of The Partnership to End Addiction.

Other public company boards served on since 2017: Bank of America Corporation and Whirlpool Corporation.

Experience attributes: Mr. White satisfies the financial literacy requirements of the NYSE, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, has international experience, and has marketing, digital marketing, e-commerce, compensation, governance and public company board experience.

     
The Board of Directors unanimously recommends a vote FOR the election of each of the thirteen nominees for director.
 
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Proposal 1. Election of Directors Director Compensation

Director
Compensation

 

Directors who are not officers or employees of Kimberly-Clark or any of our subsidiaries, affiliates or equity companies are “Outside Directors” for compensation purposes and are compensated for their services under our 2021 Outside Directors’ Compensation Plan. All Independent Directors currently on our Board are Outside Directors and are compensated under this Plan.

Our objectives for Outside Director Compensation are:

to remain competitive with the median compensation paid to outside directors of comparable companies
   
to keep pace with changes in practices in director compensation
   
to attract qualified candidates for Board service
   
to reinforce our practice of encouraging stock ownership by our directors

In 2020, the Nominating and Corporate Governance Committee assessed our Outside Director compensation against the median non-management director compensation for our peers. Based on this review, the Committee recommended no change to Outside Director compensation for 2021, and the Board agreed with the Committee’s recommendation.

The table below shows how we structured Outside Director compensation in 2021:

Board Members      

Cash retainer: $100,000 annually, paid in four quarterly payments at the beginning of each quarter.

Restricted share units: Annual grant with a value of $180,000, awarded and valued on the first business day of the year

Committee Chairs   Additional annual grant of restricted share units with a value of $20,000, awarded and valued on the first business day of the year
Lead Director   Additional annual grant of restricted share units with a value of $30,000, awarded and valued on the first business day of the year
Stockholder
Alignment
  Restricted share units are not paid out until retirement or other termination of Board service

New Outside Directors receive the full quarterly amount of the annual retainer for the quarter in which they join the Board. Their annual grant of restricted share units is pro-rated based on the date when they joined.

We also reimburse Outside Directors for expenses incurred in attending Board or committee meetings.

Restricted share units are not shares of our common stock. Rather, restricted share units represent the right to receive a pre-determined number of shares of our common stock within 90 days following a “restricted period” that begins on the date of grant and expires on the date the Outside Director retires from or otherwise terminates service on the Board. In this way, they align the director’s interests with the interests of our stockholders. Outside Directors may not dispose of the units or use them in a pledge or similar transaction. Outside Directors also receive additional restricted share units equivalent in value to the dividends that would have been paid to them if the restricted share units granted to them were shares of our common stock.


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Proposal 1. Election of Directors 2021 Outside Director Compensation

2021 Outside
Director
Compensation

 

The following table shows the compensation paid to each Outside Director for his or her service in 2021.

Name(1)      Fees Earned or
Paid in Cash($)
     Stock
Awards
($)(2)(3)(4)
     All Other
Compensation
($)(5)
     Total($)(6)
Abelardo E. Bru   50,000   200,000   5,000   255,000
John W. Culver   100,000   180,000   10,000   290,000
Robert W. Decherd   100,000   200,000   10,000   310,000
Mae C. Jemison, M.D.   100,000   180,000   10,000   290,000
S. Todd Maclin   100,000   180,000     280,000
Deirdre A. Mahlan   50,000   60,000     110,000
Sherilyn S. McCoy   100,000   180,000     280,000
Christa S. Quarles   100,000   180,000   5,000   285,000
Jaime A. Ramirez   50,000   60,000     110,000
Ian C. Read   100,000   180,000   2,000   282,000
Dunia A. Shive   100,000   200,000     300,000
Mark T. Smucker   100,000   180,000     280,000
Michael D. White   100,000   210,000     310,000
   
(1) Mr. Bru served as a director until his retirement on April 29, 2021 and received fees for two quarters. Ms. Mahlan and Mr. Ramirez joined the Board on September 15, 2021 and received a pro-rated stock award as well as fees for two quarters.
(2) Amounts shown reflect the grant date fair value of those grants, determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 — Stock Compensation (“ASC Topic 718”) for restricted share unit awards granted pursuant to our 2011 Outside Directors’ Compensation Plan (grants before April 29, 2021) and 2021 Outside Directors’ Compensation Plan (grants after April 29, 2021). See Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 2021 for the assumptions used in valuing these restricted share units.
(3) Restricted share unit awards were granted to the Outside Directors on January 4, 2021, except for Ms. Mahlan and Mr. Ramirez who joined the Board and received a grant on September 15, 2021. The number of restricted share units granted is set forth below:
   
Name   Restricted Share Unit Grants in 2021(#)
Abelardo E. Bru   1,499
John W. Culver   1,349
Robert W. Decherd   1,499
Mae C. Jemison, M.D.   1,349
S. Todd Maclin   1,349
Deirdre A. Mahlan   438
Sherilyn S. McCoy   1,349
Christa S. Quarles   1,349
Jaime A. Ramirez   438
Ian C. Read   1,349
Dunia A. Shive   1,499
Mark T. Smucker   1,349
Michael D. White   1,574


 

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Proposal 1. Election of Directors 2021 Outside Director Compensation
   
(4) As of December 31, 2021, Outside Directors had the following stock awards outstanding:
   
  Name                           Restricted Stock(#)            Restricted Share Units(#)
  Abelardo E. Bru    
  John W. Culver     1,803
  Robert W. Decherd   3,000   53,066
  Mae C. Jemison, M.D.     49,026
  S. Todd Maclin     3,805
  Deirdre A. Mahlan     438
  Sherilyn S. McCoy     5,109
  Christa S. Quarles     8,950
  Jaime A. Ramirez     438
  Ian C. Read     35,907
  Dunia A. Shive     3,958
  Mark T. Smucker     3,265
  Michael D. White     11,070
   
(5) Reflects charitable matching gifts paid in 2021 under the Kimberly-Clark Foundation’s Matching Gifts Program to a charity designated by the director. This program is available to all our employees and directors. Under the program, the Kimberly-Clark Foundation matches employees’ and directors’ financial contributions to qualified educational and charitable organizations in the United States on a dollar-for-dollar basis, up to $10,000 per person per calendar year. Amounts paid in 2021 in connection with certain matching gifts for Messrs. Bru, Culver and Read and Mmes. Jemison and Quarles reflect donations made in 2020. Not included in this column is the value of retirement gifts to Mr. Bru, which had a value of less than $1,000. In addition, we made a charitable contribution of $50,000 in honor of Mr. Bru. This contribution was made directly by Kimberly-Clark to a charitable organization selected by Kimberly-Clark and was not made in the name or at the direction of Mr. Bru. Mr. Bru did not receive any personal benefit from the contribution and accordingly, the amount of the contribution has been excluded from the Director Compensation table.
(6) During 2021, Outside Directors received credit for cash dividends on restricted stock held by them. These dividends are credited to interest bearing accounts maintained by us on behalf of those Outside Directors with restricted stock. Earnings on those accounts are not included in the Outside Director Compensation Table because the earnings were not above market or preferential. Also in 2021, Outside Directors received additional restricted share units with a value equal to the cash dividends paid during the year on our common stock on the restricted share units held by them. Because we factor the value of the right to receive dividends into the grant date fair value of the restricted stock and restricted share units awards, the dividends and dividend equivalents received by Outside Directors are not included in the Outside Director Compensation table. The dividends and other amounts credited on restricted stock and additional restricted share units credited in 2021 were as follows:
   
  Name   Dividends Credited on
Restricted Stock($)
  Number of Restricted Share
Units Credited in 2021(#)
  Grant Date Fair Value of
Restricted Share Units
Credited($)
  Abelardo E. Bru     661.54   90,017
  John W. Culver     48.20   6,498
  Robert W. Decherd   13,470   1,722.04   231,773
  Mae C. Jemison, M.D.     1,591.25   214,169
  S. Todd Maclin     113.61   15,301
  Deirdre Mahlan      
  Sherilyn S. McCoy     156.22   21,036
  Christa S. Quarles     281.72   37,927
  Jaime Ramirez      
  Ian C. Read     1,162.56   156,474
  Dunia A. Shive     117.44   15,819
  Mark T. Smucker     95.98   12,929
  Michael D. White     349.22   47,013


 

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Proposal 1. Election of Directors 2021 Outside Director Compensation

Other than the cash retainer, grants of restricted share units and the other compensation previously described, no Outside Director received any compensation or perquisites from Kimberly-Clark for services as a director in 2021.

A director who is not an Outside Director does not receive any compensation for services as a member of the Board or any committee, but is reimbursed for expenses incurred as a result of the services.

In 2021, the Nominating and Corporate Governance Committee, with the assistance of Mercer, revisited the Corporation’s Outside Director compensation to assess whether it still met our objectives for Outside Director compensation as described above. In its assessment, the Committee compared aggregate Outside Director cash and equity compensation to the median compensation of the outside directors of our peer group, as well as the structure of our compensation programs of our peer group. For information regarding our peer group, see “Compensation Discussion and Analysis” below. Based on this review, the Committee determined that the aggregate compensation for our Outside Directors would be below the median of our peer group in 2022. The Committee then recommended to the Board, and the Board approved, changes to our Outside Directors aggregate compensation to more closely align with the median aggregate compensation of our peer group.

Accordingly, beginning in 2022:

The annual cash retainer is increased from $100,000 to $105,000, and
   
The value of the annual grant of restricted share units is increased from $180,000 to $185,000.

There was no change to the amount of the additional annual grant of restricted share units paid to committee chairs or to the Lead Director.


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Proposal 2.
Ratification of Auditor

The Audit Committee of the Board of Directors is directly responsible for the appointment, compensation, retention and oversight of our independent auditor. The Audit Committee is also responsible for overseeing the negotiation of the audit fees associated with retaining our independent auditor. To assure continuing auditor independence, the Audit Committee periodically considers whether a different audit firm should perform our independent audit work. Also, in connection with the mandated rotation of the independent auditor’s lead engagement partner, the Audit Committee and its chairman are directly involved in the selection of the new lead engagement partner.

For 2022, the Audit Committee has selected Deloitte & Touche LLP (along with its member firms and affiliates, “Deloitte”) as the independent registered public accounting firm to audit our financial statements. In engaging Deloitte for 2022, the Audit Committee utilized a review and selection process that included the following:

a review of management’s assessment of the services Deloitte provided in 2021 and a comparison of this assessment to prior years’ reviews
   
discussions, in executive session, with the Chief Financial Officer and the Vice President and Controller regarding their viewpoints on the selection of the 2022 independent auditor and on Deloitte’s performance
   
discussions, in executive session, with representatives of Deloitte about their possible engagement
   
Audit Committee discussions, in executive session, about the selection of the 2022 independent auditor
   
a review and approval of Deloitte’s proposed estimated fees for 2022
   
a review and assessment of Deloitte’s independence
   
the Audit Committee’s consideration of the fact that Deloitte has served as our independent auditor since 1928, including its understanding of our global business, accounting policies and practices, and internal control over financial reporting, and its conclusion that its term of service does not impact Deloitte’s independence

The Audit Committee and the Board believe that the continued retention of Deloitte to serve as our independent auditor is in the best interests of Kimberly-Clark and its stockholders, and they recommend that stockholders ratify this selection. If the stockholders do not ratify the selection of Deloitte, the Audit Committee will consider the selection of another independent auditor.

Representatives of Deloitte are expected to be present at the Annual Meeting with the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.


The Board of Directors unanimously recommends a vote FOR ratification of Deloitte’s selection as Kimberly-Clark’s auditor for 2022.
    
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Proposal 2. Ratification of Auditor Audit Committee Approval of Audit and Non-Audit Services

Principal Accounting Firm Fees

 

Our aggregate fees to Deloitte (excluding value added taxes) with respect to the fiscal years ended December 31, 2021 and 2020, were as follows (dollars in millions):

    2021($)   2020($)
Audit Fees(1)   10.9    11.1 
Audit-Related Fees(2)   0.3    0.6 
Tax Fees(3)   2.1    2.6 
All Other Fees        
   
(1) These amounts represent fees billed or expected to be billed for professional services rendered by Deloitte for the audit of Kimberly-Clark’s annual financial statements for the fiscal years ended December 31, 2021 and 2020, reviews of the financial statements included in Kimberly-Clark’s Forms 10-Q, and other services that are normally provided by the independent registered public accounting firm in connection with statutory or regulatory filings or engagements for each of those fiscal years. These amounts also include fees for an audit of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002.
   
(2) These amounts represent aggregate fees billed or expected to be billed by Deloitte for assurance and related services reasonably related to the performance of the audit or review of our financial statements, that are not included in the audit fees listed above. These services include engagements related to employee benefit plans, comfort letters, attest services, consents, assistance with and review of SEC filings, due diligence and accounting consultation in connection with acquisitions and dispositions, and other matters.
   
(3) These amounts represent Deloitte’s aggregate fees for tax compliance, tax advice and tax planning for 2021 and 2020. Approximately $0.1 million was for tax compliance/preparation fees in each of 2021 and 2020.


Audit Committee Approval of Audit and Non-Audit Services

 

The Audit Committee has a policy for pre-approval of all audit and permissible non-audit services provided by Deloitte. Each year, the Audit Committee approves the terms on which Deloitte is engaged for the ensuing year. At least quarterly, the Audit Committee reviews and, if appropriate, pre-approves non-audit services to be performed by Deloitte, reviews a report summarizing year-to-date approved non-audit services provided by Deloitte, and reviews an updated projection of the year’s estimated non-audit service fees. To ensure prompt handling of unexpected matters, the Audit Committee has delegated to the Chair of the Audit Committee the authority to amend or modify the list of audit and non-audit services and fees between meetings, as long as the additional or amended services do not affect Deloitte’s independence under applicable rules. The Audit Committee then reviews the Chair’s approval decisions each quarter.

All Deloitte services and fees in 2021 and 2020 were pre-approved by the Audit Committee or the Audit Committee Chair.


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Proposal 2. Ratification of Auditor Audit Committee Approval of Audit and Non-Audit Services

Audit Committee Report

In accordance with its charter adopted by the Board, the Audit Committee assists the Board in overseeing the quality and integrity of Kimberly-Clark’s accounting, auditing and financial reporting practices.

In discharging its oversight responsibility for the audit process, the Audit Committee obtained from the independent registered public accounting firm (the “auditor”) a formal written statement describing all relationships between the auditor and Kimberly-Clark that might bear on the auditor’s independence, as required by Public Company Accounting Oversight Board (“PCAOB”) Rule 3526, Communication with Audit Committees Concerning Independence, discussed with the auditor any relationships that may impact the auditor’s objectivity and independence and satisfied itself as to the auditor’s independence. The Audit Committee also discussed with management, the internal auditors, and the auditor, the quality and adequacy of Kimberly-Clark’s internal controls and the internal audit function’s organization, responsibilities, budget and staffing. The Audit Committee reviewed with both the auditor and the internal auditors their audit plans, audit scope and identification of audit risks.

The Audit Committee discussed with the auditor the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. Also, with and without management present, it discussed and reviewed the results of the auditor’s examination of our financial statements and our internal control over financial reporting. The Committee also discussed the results of internal audit examinations.

Management is responsible for preparing Kimberly-Clark’s financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and for establishing and maintaining Kimberly-Clark’s internal control over financial reporting. The auditor has the responsibility for performing an independent audit of Kimberly-Clark’s financial statements and internal control over financial reporting, and expressing opinions on the conformity of Kimberly-Clark’s financial statements with GAAP and the effectiveness of internal control over financial reporting. The Audit Committee discussed and reviewed Kimberly-Clark’s audited financial statements as of and for the fiscal year ended December 31, 2021, with management and the auditor. The Audit Committee also reviewed management’s assessment of the effectiveness of internal controls as of December 31, 2021, and discussed the auditor’s examination of the effectiveness of Kimberly-Clark’s internal control over financial reporting.

Based on the above-mentioned reviews and discussions with management and the auditor, the Audit Committee recommended to the Board that Kimberly-Clark’s audited financial statements be included in Kimberly-Clark’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, for filing with the SEC. The Audit Committee also has selected and recommended to stockholders for ratification the reappointment of Deloitte as the independent registered public accounting firm for 2022.

  AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
   
  Dunia A. Shive, Chair
John W. Culver
S. Todd Maclin
Deirdre Mahlan
Jaime Ramirez
Mark T. Smucker


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Proposal 3. Advisory Vote
to Approve Named Executive
Officer Compensation

In the Compensation Discussion and Analysis that follows, we describe in detail our executive compensation program, including its objectives, policies and components. As discussed in that section, our executive compensation program seeks to align the compensation of our executives with our strategic objectives. To this end, the Management Development and Compensation Committee (the “Committee”) has adopted executive compensation policies that are designed to achieve the following objectives:

Pay-for-Performance. Support a performance-oriented environment that rewards achievement of our financial and non-financial goals.
   
Focus on Long-Term Success. Reward executives for long-term strategic management and stockholder value enhancement.
   
Stockholder Alignment. Align the financial interests of our executives with those of our stockholders.
   
Quality of Talent. Attract and retain executives whose abilities are considered essential to our long-term success.

For a more detailed discussion of how our executive compensation program reflects these objectives and policies, including information about the fiscal year 2021 compensation of our named executive officers, see “Compensation Discussion and Analysis,” below.

We are asking our stockholders to support our executive compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our executive compensation on an annual basis. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our executives and the objectives, policies and practices described in this proxy statement. Accordingly, we will ask our stockholders to vote on the following resolution at the Annual Meeting:

RESOLVED, that the compensation paid to the Corporation’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved by the Corporation’s stockholders on an advisory basis.

The say-on-pay vote is advisory and is therefore not binding on Kimberly-Clark, the Committee or our Board. Nonetheless, the Committee and our Board value the opinions of our stockholders. Therefore, to the extent there is any significant vote against the executive compensation as disclosed in this proxy statement, the Committee and our Board will consider our stockholders’ concerns and will evaluate whether any actions are necessary to address those concerns.


The Board of Directors unanimously recommends a vote FOR the approval of named executive officer compensation, as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules.
   
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Compensation Discussion
and Analysis

This Compensation Discussion and Analysis is intended to provide investors with an understanding of our compensation policies and decisions regarding 2021 compensation for our named executive officers.

For 2021, our named executive officers are:

Named Executive Officer   Title
Michael D. Hsu   Chief Executive Officer
Maria G. Henry   Senior Vice President and Chief Financial Officer
Russell Torres*   Group President, K-C North America
Jeffrey Melucci   Chief Business Development and Legal Officer
Gonzalo Uribe   President, K-C Latin America
   
* Mr. Torres served as our President, K-C Professional until April 2021, when he was appointed Group President, K-C North America.

In addition, we provide compensation information regarding Kimberly Underhill who served as our Group President, K-C North America until April 2021 when she assumed a transitional role until she departed the company on September 1, 2021. References in the following discussion to our “named executive officers” do not include Ms. Underhill unless we specify otherwise. We discuss Ms. Underhill’s compensation separately under “Executive Compensation for 2021 - Compensation of Former Named Executive Officer” below.


2021 Compensation Highlights

 

As measured under our annual incentive program, we delivered the results below in net sales and adjusted earnings per share (EPS).

Performance Measure*   2021 Results   2021 Target
Net sales   $19.4 billion   $20.1 billion
Adjusted EPS   $6.18   $7.89
   
* See “2021 Performance Goals, Performance Assessments and Payouts” for additional information on how we use these measures to promote our pay-for-performance culture.

Based on 2021 performance, the Management Development and Compensation Committee of our Board (the “Committee”) concluded that:

management did not deliver its financial targets for 2021,
   
we faced significant headwinds related to the COVID-19 pandemic, including input cost inflation, supply chain disruption and a reversal in consumer tissue volumes from record growth in 2020 as consumers and retailers in North America continued to reduce home and retail inventory, and
   
management nevertheless prudently managed our business through extreme market conditions and continued to make good progress executing strategies for our long-term success, including:
   
  focusing on targeted growth initiatives and product innovations, including the Softex Indonesia integration, and continuing to enhance our commercial capabilities for long-term success,
     
  emphasizing market share improvement in our priority markets, including in our personal care business,


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Compensation Discussion and Analysis 2021 Compensation Highlights
     
  leveraging cost and financial discipline to fund growth and improve margins, taking multiple pricing actions, generating significant cost savings, managing discretionary spending and completing the 2018 Global Restructuring Program, and
     
  allocating capital in stockholder-friendly ways, returning approximately $1.9 billion to stockholders through dividends and share repurchases.

Accordingly, the Committee approved annual cash incentives for 2021 below the target amount, including an incentive payout for the CEO at 62 percent of his target payment amount.

Performance-Based Compensation

Pay-for-performance is a key objective of our compensation programs. Consistent with that objective, performance-based compensation constituted a significant portion of our named executive officers’ direct annual compensation targets for 2021. Also, to further align the financial interests of our executives with those of our stockholders, a majority of our executives’ target direct annual compensation for 2021 was equity based.

COMPOSITION OF TARGET DIRECT COMPENSATION

          
   Chairman and CEO     
         
  Named Executive Officers    
         
           
             
  Chairman and CEO    Named Executive Officers  
     
         
   
         

Committee Consideration of 2021 Stockholder Advisory Vote

At our 2021 Annual Meeting, our executive compensation program received the support of approximately 94 percent of shares represented at the meeting. The Committee has considered the results of this vote and views this outcome as evidence of stockholder support of its executive compensation decisions and policies. Accordingly, the Committee has not made any substantial changes to its executive compensation policies for 2022. The Committee will continue to review the annual stockholder votes on our executive compensation program and determine whether to make any changes in light of the results.


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Compensation Discussion and Analysis 2021 Compensation Highlights

CEO Target Direct Compensation and Realizable Direct Compensation

The following chart compares our CEO’s target direct annual compensation and realizable direct compensation over the last three years. Realizable direct compensation reflects the actual compensation received for base salary and annual cash incentive plus the value of the long-term equity incentives granted in that year, determined as follows:

For unexercised stock options, the amount by which our 2021 year-end stock price ($142.92) exceeds the exercise price, if any, multiplied by the number of options granted (that is, the “in-the-money” value of the options at year-end) and for exercised stock options, the actual value realized upon exercise, and
   
For performance-based restricted share units, intrinsic value is the number of units that were paid out based on actual performance (for the grant made in 2019) or are expected to be paid out based on projected performance (for the grants made in 2020 and 2021), multiplied by our 2021 year-end stock price.

Key factors causing realizable direct compensation to differ from target direct annual compensation over these three years are:

Actual performance that resulted in annual cash incentives to be paid out at 132 percent of target (2019), 158 percent of target (2020) and 62 percent of target (2021).
   
Actual performance that resulted in the number of shares to be issued as a result of performance-based restricted share unit payouts of 130 percent of target (2019 award) and projected payouts of 50 percent of target (2020 award) and 80 percent of target (2021 award), and
   
Changes in our stock price over the last three years that significantly impacted the intrinsic value of stock options and the dollar value of performance-based restricted share units granted in each year. Our stock prices on the dates stock options were granted to our CEO were $125.47 (2019), $138.96 (2020) and $132.63 (2021).

The Committee believes that this chart demonstrates that our CEO’s realizable direct compensation varies from his target direct annual compensation based on our performance and stock price consistent with our pay-for-performance philosophy.


CEO TARGET DIRECT COMPENSATION AND REALIZABLE DIRECT COMPENSATION

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Compensation Discussion and Analysis Executive Compensation Objectives and Policies

Executive Compensation Objectives and Policies

 

The Committee establishes and administers our policies governing the compensation of our elected officers, including our named executive officers. The Committee reviews our compensation philosophy annually and determines whether it supports our business objectives and is consistent with the Committee’s charter.

The Committee has adopted executive compensation policies that are designed to achieve the following objectives:

Objective       Description       Related Policies
Pay-for-Performance   Support a performance-oriented environment that rewards achievement of our financial and non- financial goals.   The majority of our named executive officers’ pay varies with the levels at which annual and long-term performance goals are achieved. The Committee chooses performance goals that align with our strategies for sustained growth and profitability.
Focus on Long-Term Success   Reward executives for long-term strategic management and stockholder value enhancement.   The largest single component of our named executive officers’ annual target compensation is in the form of performance-based restricted share units. The number of shares actually received on payout of these units depends on our performance over a three-year period.
Stockholder Alignment   Align the financial interests of our executives with those of our stockholders.   Equity-based awards make up the largest part of our named executive officers’ annual target compensation. As part of this, our named executive officers receive stock options, which vest over time and have value only if our stock value rises after the option grants are made. We also have other policies that link our executives’ interests with those of our stockholders, including target stock ownership guidelines.
Quality of Talent   Attract and retain highly skilled executives whose abilities are considered essential to our long-term success as a global company operating our personal care, consumer tissue and K-C professional businesses.   The Committee reviews peer group data to ensure our executive compensation program remains competitive so we can continue to attract and retain this talent.

These compensation objectives and policies seek to align the compensation of our elected officers, including our named executive officers, with our strategic objectives to:

grow our portfolio of brands through innovation, category development and commercial execution
   
leverage our cost and financial discipline to fund growth and improve margins
   
allocate capital in value-creating ways


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Compensation Discussion and Analysis Setting Annual Compensation

Components of Our Executive Compensation Program

 

The table below gives an overview of the compensation components used in our program and matches each with one or more of the objectives described above.

Component      Objectives      Purpose
Base salary   Quality of talent  

Provide annual cash income based on:

  level of responsibility, experience and performance

  comparison to market pay information

Annual cash
incentive
  Pay-for-performance  

Motivate and reward achievement of the following annual performance goals:

  corporate key financial goals

  other corporate financial and strategic performance goals

  performance of the business unit or staff function of the individual

Long-term
equity
incentive
  Stockholder alignment

Focus on long-term success

Pay-for-performance

Quality of talent
 

Provide an incentive to deliver stockholder value and to achieve our long-term objectives, through awards of:

  performance-based restricted share units

  stock options

Time-vested restricted share units may be granted from time to time for recruiting, retention or other purposes

Retirement
benefits
  Quality of talent   Provide competitive retirement plan benefits through 401(k) plan and other defined contribution plans
Perquisites   Quality of talent   Provide minimal additional benefits
Post-
termination
compensation 
(severance
and change of
control)
  Quality of talent  

Encourage attraction and retention of executives critical to our long-term success and competitiveness:

  Severance Pay Plan, which provides eligible employees, including executives, payments and benefits in the event of certain involuntary terminations

  Executive Severance Program, which provides eligible employees, including executives, payments in the event of a qualified separation of service following a change of control


Setting Annual Compensation

 

This section describes how the Committee thinks about annual compensation and the processes that it followed in setting 2021 target annual compensation for our named executive officers.

Focus on Direct Annual Compensation

In setting 2021 compensation for our executive officers, including our CEO, the Committee focused on direct annual compensation, which consists of annual cash compensation (base salary and annual cash incentive) and long-term equity incentive compensation (performance-based restricted share units and stock options). The Committee considered annual cash and long-term equity incentive compensation both separately and as a package to help ensure that our executive compensation objectives are met.


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Compensation Discussion and Analysis Setting Annual Compensation

Executive Compensation Peer Group

To ensure that our executive compensation programs are reasonable and competitive in the marketplace, the Committee compares our programs to those at other companies. In 2021, the Committee used the following peer group that contains consumer goods and business-to-business companies of a similar size against whom we compete for talent:

2021 Executive Compensation Peer Group

  3M

  Campbell Soup

  Clorox

  Coca-Cola

  Colgate-Palmolive

  Conagra Brands

  General Mills

 

  Hershey

  Honeywell International

  Johnson & Johnson

  J.M. Smucker

  Kellogg

  Kraft Heinz

 

  Mondelēz International

  Newell Brands

  Nike

  PepsiCo

  Procter & Gamble

  V.F. Corp.

In developing the peer group, the Committee does not consider individual company compensation practices, and no company has been included or excluded because it is known to pay above-average or below-average compensation. The Committee (working with the Committee’s retained independent compensation consultant, Semler Brossy, and the company’s retained consultant, Mercer), reviews the peer group annually to ensure that it continues to serve as an appropriate comparison for our compensation program.

For purposes of setting executive compensation for 2021, the Committee did not make any changes to the peer group used in 2020. Likewise, in setting compensation for 2022, the Committee did not make any changes to the peer group.

Process for Setting Direct Annual Compensation Targets

In setting the direct annual compensation of our executive officers, the Committee evaluates both market data provided by the compensation consultants and information on the performance of each executive officer for prior years.

To remain competitive in the marketplace for executive talent, the target levels for the executive officers’ total direct compensation are typically set near the peer group median. To reinforce a pay-for-performance culture, targets for individual executive officers may be set above or below the median depending on the individual’s performance in prior years and experience in the position. The Committee believes that setting targets as described above and providing incentive compensation opportunities that will enable executives to earn above-target compensation if they deliver above-target performance on their performance goals are consistent with the objectives of our compensation policies. In particular, the Committee believes that this approach enables us to attract and retain skilled and talented executives to guide and lead our businesses and supports a pay-for-performance culture. At times, the Committee may award long-term equity incentive compensation to key individuals to address retention concerns.

When setting annual compensation for our executive officers, the Committee considers each compensation component (base salary, annual cash incentive and long-term equity incentive), but its decision regarding a particular component does not necessarily impact its decision about other components.


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Compensation Discussion and Analysis Setting Annual Compensation

In setting compensation for executive officers that join us from other companies, the Committee evaluates market data for the position to be filled. The Committee recognizes that in order to successfully recruit a candidate to leave his or her current position and to join Kimberly-Clark, the candidate’s compensation package may have to exceed his or her current compensation, resulting in a package above the median of our peer group.

CEO Direct Annual Compensation

The Committee determines the CEO’s direct annual compensation in the same manner as the direct annual compensation of the other named executive officers. Consistent with past practices, the Committee reviewed the pay relationship of Mr. Hsu to the other named executive officers in 2021.

Direct Annual Compensation Targets for 2021

Consistent with its focus on direct annual compensation, the Committee approved 2021 direct annual compensation targets for each of our named executive officers. The Committee believes that these target amounts, which formed the basis for the Committee’s compensation decisions for 2021, were appropriate and consistent with our executive compensation objectives:

Name   2021 Direct Annual Compensation Target($)
Michael D. Hsu   12,712,500
Maria G. Henry   5,150,000
Russell Torres   4,200,000
Jeffrey Melucci   3,433,800
Gonzalo Uribe   1,862,500

The Committee set Mr. Torres’ target upon his promotion to Group President, K-C North America in April 2021. His actual payout for his cash incentive was prorated based on time in each role as discussed below under “2021 Targets.”

These 2021 direct annual compensation target amounts differ from the amounts set forth in the Summary Compensation Table in the following ways:

Base salaries are adjusted on April 1 of each year, while the Summary Compensation Table includes salaries for the calendar year. See “Executive Compensation for 2021 – Base Salary.”
   
Annual cash incentive compensation is included at the target level, while the Summary Compensation Table reflects the actual amount earned for 2021.
   
As described below under “Long-Term Equity Incentive Compensation – 2021 Stock Option Awards,” for compensation purposes the Committee values stock options differently than the way they are required to be reflected in the Summary Compensation Table.
   
Annual target amounts do not count off-cycle awards such as the October 2021 retention restricted share unit awards to Mr. Torres and Mr. Uribe reported in the Summary Compensation Table.
   
In setting direct annual compensation targets, the Committee does not include increases in pension or deferred compensation earnings or other compensation, while those amounts are required to be included in the Summary Compensation Table.


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Compensation Discussion and Analysis Executive Compensation for 2021

Executive Compensation for 2021 Base Salary

 

To help achieve the objectives discussed above, our executive compensation program for 2021 consists of fixed and performance-based components, as well as short-term and long-term components.

Base Salary

To attract and retain high caliber executives, we pay our executives an annual fixed salary that the Committee considers competitive in the marketplace.

Salary ranges and individual salaries for executive officers are reviewed annually, and salary adjustments generally are effective on April 1 of each year. In determining individual salaries, the Committee considers the salary levels for similar positions at our peer group companies, as well as the executive’s performance, leadership and experience in his or her position. This performance evaluation is based on how the executive performs during the year against results-based objectives established at the beginning of the year and considers their demonstration of executive leadership characteristics. From time to time, if warranted, executives and other employees may receive additional salary increases because of promotions, changes in duties and responsibilities, retention concerns or market conditions.

The Committee approved the following base salaries for our named executive officers:

Name    2021 Base Salary($)
Michael D. Hsu   1,375,000
Maria G. Henry   875,000
Russell Torres   800,000
Jeffrey Melucci   775,000
Gonzalo Uribe   550,000

The Committee increased Mr. Hsu’s and Ms. Henry’s base salaries from 2020 based on peer company data by 5.8 percent and 5.4 percent, respectively. The base salary of each of the other officers was established for 2021 upon a promotion or role expansion based on peer company data for the new role, specifically, Mr. Torres’ promotion to Group President, K-C North America, the expansion Mr. Melucci’s role to include Chief Business Development Officer, and Mr. Uribe’s promotion to President, K-C Latin America (and subsequent July relocation to the U.S.).

Annual Cash Incentive Program

Consistent with our pay-for-performance compensation objective, our executive compensation program includes an annual cash incentive program to motivate and reward executives in achieving annual performance objectives.

2021 Targets

The target payment amount for annual cash incentives is a percentage of the executive’s base salary. The Committee determines this target payment amount as described above under “Setting Annual Compensation – Process for Setting Direct Annual Compensation Targets.” The range of possible payouts is expressed as a percentage of the target payment amount. The Committee sets this range based on competitive factors.


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Compensation Discussion and Analysis Executive Compensation for 2021

TARGET PAYMENT AMOUNTS AND RANGE OF POSSIBLE PAYOUTS
FOR 2021 ANNUAL CASH INCENTIVE PROGRAM

    Target Payment Amount   Possible Payout
Michael D. Hsu   170% of base salary   0% - 200% of target payment amount
Maria G. Henry   100% of base salary   0% - 200% of target payment amount
Russell Torres*   94% of base salary   0% - 200% of target payment amount
Jeffrey Melucci   85% of base salary   0% - 200% of target payment amount
Gonzalo Uribe   75% of base salary   0% - 200% of target payment amount
   
* Upon his promotion to Group President, K-C North America in April 2021, Mr. Torres’ target payment amount was increased from 75% to 100% of base salary and his 2021 payout amount was prorated between the two target amounts such that the annualized target payout amount was 94% of base salary.

2021 Performance Goals, Performance Assessments and Payouts

Payment amounts under the annual cash incentive program are dependent on performance measured against corporate goals and business unit or staff function goals established by the Committee at the beginning of each year. These performance goals, which are communicated to our executives at the beginning of each year, are derived from our financial and strategic goals.

As shown in the table below, the Committee established goals for three different performance elements for 2021. It then weighted the three elements for each executive (note that the business unit or staff function performance goals did not apply to our CEO because his responsibilities are company-wide). As it does each year, the Committee chose weightings that are intended to strike an appropriate balance between aligning each executive’s individual objectives with our overall corporate objectives and holding the executive accountable for performance in the executive’s particular area of responsibility.

ANNUAL CASH INCENTIVE PROGRAM 2021 PERFORMANCE GOALS AND WEIGHTS


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Compensation Discussion and Analysis Executive Compensation for 2021

Below we describe the three elements of performance, explain how performance was assessed for each element, and show the payouts that were determined in each case.

n ELEMENT 1: CORPORATE KEY FINANCIAL GOALS

For 2021, the Committee chose the following as the corporate key financial goals for the annual cash incentive program:

2021 Goal   Explanation   Reason for Use as a
Performance Measure
Net sales   Net sales for 2021   A key indicator of our overall growth
Adjusted EPS   A non-GAAP financial measure that consists of diluted net income per share that is then adjusted to eliminate the effect of items or events that the Committee determines in its discretion should be excluded for compensation purposes(1)   A key indicator of our overall performance
   
(1) In 2021 the following adjustment was made to diluted net income per share to determine adjusted EPS, consistent with our Form 10-K results:
   
Diluted Net Income Per Share  $5.35 
Add- Charges related to 2018 Global Restructuring Program  $0.83 
Rounding  $ 
Adjusted EPS (Form 10-K results)  $6.18 

For more information regarding these adjustments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual Report on Form 10-K.

Because Element 1 represents key company-wide goals, it produces the same payout percentage for each named executive officer based on how Kimberly-Clark performed against the net sales and adjusted EPS goals established in February of each year. For 2021, the Committee set these goals and the corresponding initial payout percentages at the following levels:

Measure
(each weighted 50%)
   Range of Performance Levels
    Threshold     Target     Maximum
Net sales (billions)   $18.6   $20.1   $21.7
Adjusted EPS   $7.30   $7.89   $8.49
Initial Payout Percentage   0%   100%   200%

Actual results. For 2021, our net sales result was $19.4 billion and our adjusted EPS result was $6.18. Based on these results, the 2021 payout percentage for achieving the corporate key financial goals was 27 percent of each named executive officer’s target payment amount.

n ELEMENT 2: ADDITIONAL CORPORATE FINANCIAL AND STRATEGIC PERFORMANCE GOALS

At the beginning of 2021, the Committee also established additional corporate financial and non-financial strategic performance goals that are intended to challenge our executives to exceed our long-term objectives. At the end of the year, it determined a payout percentage based on its assessment of the degree to which these goals are achieved.


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The Committee does not use a formula to assess the performance of these goals but instead takes a holistic approach and considers performance of all the goals collectively. Although it does review each goal separately, the key consideration for the Committee is how it views Kimberly-Clark’s performance for the year in all of these categories, taken as a whole.

The chart below shows the 2021 goals and how the Committee assessed Kimberly-Clark’s performance against each one:

Additional Corporate Financial and Strategic Performance Goals for 2021 Final Result
    Below
Goal
At
Goal
Above
Goal
Brand equity and market performance

   Increasing market share in select markets.

    X
Diversity and inclusion

   Making progress on goals for women in senior roles globally and ethnic minorities in senior roles in the United States.

    X

Actual payout percentage. After taking into account performance on all of these goals, the Committee determined that the payout percentage for achieving these other financial and strategic goals should be 142 percent of target.

n ELEMENT 3: BUSINESS UNIT OR STAFF FUNCTION PERFORMANCE GOALS

In addition to the performance goals established by the Committee, our CEO establishes individual business unit or staff function performance goals that are intended to challenge the executives to exceed the objectives for that unit or function. These objectives include strategic performance goals for the business units and staff functions, as well as financial goals for the business units.

Following the end of the year, the executives’ performance is analyzed to determine whether performance for the goals was above target, on target or below target. Our CEO then provides the Committee with an assessment of each individual business unit’s or staff function’s performance against the objectives for that unit or function.

Actual payout percentages. Based on the assessed performance of the relevant business unit or staff function against its pre-established performance goals, and taking into account the CEO’s recommendations, the Committee determined the following payout percentages for business unit or staff function performance for our named executive officers:

Name        2021 Business Unit/Staff Function Payout Percentage
Michael D. Hsu   N/A       
Maria G. Henry   121%  
Russell Torres*   59%  
Jeffrey Melucci   145%  
Gonzalo Uribe   78%  
* In light of Mr. Torres’ April 2021 promotion from President, K-C Professional to Group President, K-C North America, his business unit payout percentage was prorated based on his time each role.


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Compensation Discussion and Analysis Executive Compensation for 2021

Annual Cash Incentive Payouts for 2021

The following table shows the payout opportunities and the actual payouts of annual cash incentives for 2021 for each of our named executive officers. Payouts were based on the payout percentages for each element, weighted for each executive as shown on page 49.

    Annual
Incentive Target
  Annual Incentive
Maximum
  2021 Annual
Incentive Payout
 
Name   % of Base
Salary
      Amount($)   % of
Target
      Amount($)   % of
Target
      Amount($)  
Michael D. Hsu   170%   2,337,500   200%   4,675,000   62%   1,439,886  
Maria G. Henry   100%   875,000   200%   1,750,000   66%   579,121  
Russell Torres   94%   750,000   200%   1,500,000   61%   447,849  
Jeffrey Melucci   85%   658,750   200%   1,317,500   73%   478,814  
Gonzalo Uribe   75%   356,605   200%   713,209   74%   263,868  

Summary of Annual Cash Incentive Payouts: 2017 through 2021

Generally, the Committee seeks to set the minimum, target and maximum levels such that the relative difficulty of achieving the target level is consistent from year to year. From 2017 through 2021, the average total payout percentage (including business unit or staff function performance) for the executives that were designated as named executive officers in (and were serving as such at the end of) those years ranged from 58 percent to 145 percent of target. The Committee believes that these payouts are consistent with how Kimberly-Clark performed during these years and reflect the pay-for-performance objectives of our executive compensation.

PAYOUTS FOR CORPORATE GOALS AND AVERAGE TOTAL

PAYOUT PERCENTAGES FOR DESIGNATED NAMED EXECUTIVE OFFICERS

    2021   2020   2019   2018   2017   Average
Payout for Corporate Goals
Combination of corporate key financial goals and additional corporate financial and strategic performance goals
  62%   158%   132%   49%   77%   96%
Average Total Payout Percentages (including business unit or staff function performance) for executives designated as named executive officers for year shown   67%   145%   136%   58%   75%   96%

Long-Term Equity Incentive Compensation

The Committee awards long-term equity incentive grants to executive officers as part of their overall compensation package. These awards are consistent with the Committee’s objectives of aligning our senior leaders’ interests with the financial interests of our stockholders, focusing on our long-term success, supporting our performance-oriented environment and offering competitive compensation packages.

Information regarding long-term equity incentive awards granted to our named executive officers can be found under “Summary Compensation,” “Grants of Plan-Based Awards,” and “Discussion of Summary Compensation and Plan-Based Awards Tables.”


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2021 Grants

In determining the 2021 long-term equity incentive award amounts for our named executive officers, the Committee considered the following factors, among others: the specific responsibilities and performance of the executive, our business performance, retention needs, our stock price performance and other market factors. The Committee did not consider the amount of outstanding equity awards currently held by a named executive officer when making the 2021 annual awards because such amounts represent compensation attributable to prior years.

To determine target values, the Committee considered individual performance and the other factors listed above, as applicable. Target grant values were approved in February 2021 and were divided into two types:

Performance-based restricted share units (75 percent of the target grant value). For valuation purposes, each unit is assigned the same value as one share of our common stock on the date of grant.
Stock options (25 percent of the target grant value). For valuation purposes, one option has the same value as 10 percent of the price of one share of our common stock on the date of grant of the stock option.

The Committee believes this allocation between performance-based restricted share units and stock options supports the pay-for-performance and stockholder alignment objectives of its executive compensation program.

In addition to their annual long-term incentive awards, the Committee granted time-vested restricted share awards to Mr. Torres and Mr. Uribe in October 2021, in the case of Mr. Torres, in connection with his promotion to Group President, K-C North America, and in the case of Mr. Uribe, upon his relocation to the U.S. following his November 2020 promotion to President, K-C Latin America.

Performance Goals and Potential Payouts for
2021 - 2023 Performance-Based Restricted Share Units

For the performance-based restricted share unit awards granted in 2021, the actual number of shares to be received by our named executive officers can range from zero to 200 percent of the target levels established by the Committee for each executive, depending on the degree to which the performance objectives for these awards are met over a three-year period.

The performance objectives for the performance-based restricted share unit awards granted in 2021 are based on average annual organic sales growth and modified free cash flow (MFCF) for the period January 1, 2021 through December 31, 2023.

Performance
Objective
      Explanation       Reason for Use as a Performance Measure
Organic sales growth   Sales growth generated from within the company and excluding the impact of currency changes, business exits and acquisition/ divestiture activity.  

   A key indicator of our overall growth.

   Encompasses streams of revenues that are a direct result of existing operations.

   Excludes the impact of currency changes, which are difficult to predict, and outside of management’s control.

Modified free cash flow (MFCF)  

A non-GAAP financial measure consisting of cash produced through operations, minus outlays of cash for capital spending in property, plant and equipment, and deferred software.

Free cash flow may be modified for externally disclosed unusual items and/or material unscheduled business events.

  MFCF is tied to value creation and supports longer-term strategies and investor expectations.


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Compensation Discussion and Analysis Executive Compensation for 2021

The actual number of shares our named executive officers will receive will range from zero to 200 percent of the target levels established by the Committee for each executive, depending on the degree to which the performance objectives are met. Due to the economic uncertainty caused by the COVID-19 pandemic, the Committee waited until April 2021 to set the performance objective levels.

2021 - 2023 PERFORMANCE-BASED RESTRICTED SHARE UNITS:
POTENTIAL PAYOUTS AT VARYING PERFORMANCE LEVELS

Goals (Each weighted 50%)   Performance Levels  
Average organic net sales growth       0.0%       2.0%       4.0%  
Modified free cash flow (millions)   $4,800   $6,000   $7,200  
Potential Payout (as a percentage of target)   0%   100%   200%  

Payout of 2018 - 2020 Performance-Based Restricted Share Units

In February 2021, the Committee evaluated the results of the three-year performance period for the performance-based restricted share units that were granted in 2018. The performance objectives for these 2018 awards were based on average annual adjusted net sales growth and average adjusted return on invested capital (ROIC) for the period January 1, 2018 through December 31, 2020, each weighted equally.

Goals (Each weighted 50%)   Performance Levels  
Average annual adjusted net sales growth*       (0.63)%       2.02%       4.67%       1.47%  
Average adjusted ROIC**   24.11%   25.61%   27.11%   25.92%  
Potential Payout (as a percentage of target)   0%   100%   200%   Actual  
   
* Adjusted net sales growth is a non-GAAP financial measure. For purposes of calculating adjusted net sales growth, the Committee excluded the impact of charges and sales from exited business related to our 2018 Global Restructuring Program and the operational impact of the Softex Indonesia acquisition on our fourth quarter 2020 results.
** Adjusted ROIC, a non-GAAP financial measure, is a measure of the return we earn on the capital invested in our businesses. It is calculated using our reported financial results, adjusted for the same items that we use in determining adjusted EPS, as further described below. The formula we use to calculate adjusted ROIC can be found under the Investors section of our website at www.kimberly-clark.com.
  For purposes of calculating average adjusted ROIC, the Committee excluded from the calculation of operating profit and invested capital the impacts of charges related to (1) our 2018 Global Restructuring Program, (2) gain on the sale of property associated with a former manufacturing facility, (3) costs related to our acquisition of Softex Indonesia, (4) Brazilian tax credits in connection with a favorable tax ruling and (5) the operational impact of the Softex Indonesia acquisition on our fourth quarter 2020 results.


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Compensation Discussion and Analysis Executive Compensation for 2021

Based on this review, the Committee determined that we exceeded our performance goal for adjusted ROIC but did not achieve our performance goal for adjusted net sales growth. As a result, the payout percentage for the share units was 100 percent of target. The following table includes information about the opportunities and payouts (including reinvested dividends) regarding these grants to our named executive officers:

    Share Amount   2018 - 2020 Performance-Based
Restricted Share Unit Award (Paid in
February 2021)
 
Name       Target       Maximum       % of
Target
      Amount of
Shares(#)
      Value of Shares on
Date Received($)
 
Michael D. Hsu   35,429   70,858   100%   35,429   4,546,604  
Maria G. Henry   23,868   47,736   100%   23,868   3,062,980  
Russell Torres*            
Jeffrey Melucci   11,562   23,124   100%   11,562   1,483,751  
Gonzalo Uribe   1,524   3,048   100%   1,524   206,502  
   
* Mr. Torres joined Kimberly-Clark after these grants were made.

The Committee believes that these payouts further highlight the link between pay and performance established by our compensation program, which seeks to align actual compensation paid to our named executive officers with our long-term performance.

The shares underlying these performance-based restricted share unit awards were distributed to our named executive officers in February 2021 and are included in the table below entitled “Option Exercises and Stock Vested in 2021.”

Vesting Levels of Outstanding Performance-Based Restricted Share Unit Awards

As of February 9, 2022, the performance-based restricted share units granted in 2021 and 2020 were on pace to vest at the following levels: 80 percent for the 2021 award and 50 percent for the 2020 award.

The Committee has determined that the 2019 award vested at 130 percent. Payouts under these awards will be reflected in 2022 compensation.

2021 Stock Option Awards

As noted above, 25 percent of the annual long-term equity incentive grants to executive officers in 2021 consisted of stock options. Stock option grants vest in three annual installments of 30 percent, 30 percent and 40 percent, beginning on the first anniversary of the grant date. The Committee believes that stock options help further align our executives’ interest with those of our stockholders and encourage executives to remain with the company through the multi-year vesting schedule.

For purposes of determining the number of options to be granted, stock options were valued on the basis that one option has the same value as 10 percent of the price of one share of our common stock on the date of grant. Information regarding stock options granted to our named executive officers can be found under “Summary Compensation,” “Grants of Plan-Based Awards,” and “Discussion of Summary Compensation and Plan-Based Awards Tables.”


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Compensation Discussion and Analysis Benefits and Other Compensation

Compensation of Former Named Executive Officer

On April 14, 2021, Ms. Underhill’s role changed from Group President, K-C North America to a transitional role and she served in this role until she left the company on September 1, 2021. Prior to her departure, Ms. Underhill received a base salary of $830,000. She received a prorated payout for 2021 under our annual cash incentive program based upon (1) an individual target of 100 percent of her base salary and (2) a payout equal to 100 percent of her target. In February 2021, Ms. Underhill received a grant of 16,364 performance-based restricted share units and in April 2021 she received a grant of 52,778 stock options.

In addition to the compensation described above, Ms. Underhill received severance pay under the Severance Pay Plan and accelerated vesting of outstanding equity awards under the terms of our 2021 Equity Participation Plan (the “2021 Plan”) and the predecessor 2011 Equity Participation Plan (the “2011 Plan” and collectively with the 2021 Plan, the “Equity Plans”), described below under “Potential Payments on Termination or Change of Control - Severance Benefits - Departure of Former Named Executive Officer.”


Benefits and Other Compensation

 

Retirement Benefits

Our named executive officers receive contributions from us under the Kimberly-Clark Corporation 401(k) and Profit Sharing Plan (the “401(k) Profit Sharing Plan”) and the Kimberly-Clark Corporation Supplemental Retirement 401(k) and Profit Sharing Plan (the “Supplemental 401(k) Plan”) and some executive officers participate in our frozen defined benefit pension plans depending on their hire date. These plans are consistent with those maintained by our peer group companies and are therefore necessary to remain competitive with them for recruiting and retaining executive talent. The Committee believes that these retirement benefits are important parts of our compensation program. For more information, see “Nonqualified Deferred Compensation – Overview of 401(k) Profit Sharing Plan and Supplemental 401(k) Plan” and “Pension Benefits.”

Other Compensation

We provide only limited perquisites to our executive officers, consistent with our focus on more direct, performance-sensitive compensation. Also, the Committee has eliminated tax reimbursement and related gross-ups for perquisites (including personal use of corporate aircraft), except for certain relocation benefits, further underscoring our focus on direct compensation.

Perquisites include personal financial planning services under our Executive Financial Counseling Program, an executive health screening program where executives may receive comprehensive physical examinations from an independent health care provider, and permitted personal use of corporate aircraft consistent with our policy. The personal financial planning program is designed to provide executives with access to knowledgeable financial advisors that understand our compensation and benefit plans and can assist our executives in efficiently and effectively managing their financial and tax planning issues. The executive health screening program provides executives with additional services that help maintain their overall health.

Our CEO may use our corporate aircraft for limited personal travel consistent with our executive security program, and security services are provided for our CEO at all times, including at his offices, other company locations and his residences. The Board considers these security arrangements to be appropriate and reasonable in light of the security risks identified in an independent security assessment. In addition, if a corporate aircraft is already scheduled for business purposes and can accommodate additional passengers, executive officers and their guests may, under certain circumstances, join flights for personal travel. The incremental cost to us of providing security services at Mr. Hsu’s residences and personal travel for Mr. Hsu and his guests on our corporate aircraft is included in “All Other Compensation” in the Summary Compensation Table.


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Compensation Discussion and Analysis Executive Compensation for 2022

Post-Termination Benefits

We maintain two severance programs that cover our executive officers: the Severance Pay Plan and the Executive Severance Program. An executive officer may not receive severance payments under more than one severance program. Benefits under these programs are payable only if the executive’s employment terminates under the conditions specified in the applicable program. We believe that our severance programs are consistent with those maintained by our peer group companies and that they are therefore important for attracting and retaining executives who are critical to our long-term success and competitiveness. For more information about these severance programs and their terms, see “Potential Payments on Termination or Change of Control – Severance Benefits.”

Severance Pay Plan

Our Severance Pay Plan provides severance benefits to most of our U.S. hourly and salaried employees, including our named executive officers, who are involuntarily terminated under the circumstances described in the plan. The objective of this plan is to facilitate the employee’s transition to his or her next position, and it is not intended to serve as a reward for the employee’s past service.

Executive Severance Program

Our Executive Severance Program provides severance benefits to eligible employees, including our named executive officers, in the event of a qualified termination of employment (as defined in the participant agreements) in connection with a change of control. For an eligible employee to receive a payment under this program, two things must occur: there must be a change of control of Kimberly-Clark, and the employee must have been involuntarily terminated without cause or have resigned for good reason (as defined in the participant agreements) within two years of the change of control (often referred to as a “double trigger”). Each of our named executive officers has entered into an agreement under the program that expires on December 31, 2023.


Executive Compensation for 2022

 

2022 Base Salary

In February 2022, the Committee approved the following base salaries for our named executive officers, effective April 1, 2022:

Name   2022 Base Salary($)
Michael D. Hsu   1,430,000
Maria G. Henry   920,000
Russell Torres   830,000
Jeffrey Melucci   815,000
Gonzalo Uribe   575,000

The increases, which range from 3.8 to 5.2 percent, are consistent with the annual merit increases provided to all employees.


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Compensation Discussion and Analysis Executive Compensation for 2022

2022 Annual Cash Incentive Targets

The Committee also established objectives for 2022 annual cash incentives, which will be payable in 2023. The target payment amounts and range of possible payouts for 2022 are as follows:

    Target Payment Amount   Possible Payout
Michael D. Hsu   175% of base salary   0% - 200% of target payment amount
Maria G. Henry   100% of base salary   0% - 200% of target payment amount
Russell Torres   100% of base salary   0% - 200% of target payment amount
Jeffrey Melucci   85% of base salary   0% - 200% of target payment amount
Gonzalo Uribe   75% of base salary   0% - 200% of target payment amount

The Committee increased Mr. Hsu’s target by 5 percent to ensure market competitiveness.

As discussed in “2021 Performance Goals, Performance Assessments and Payouts” above, the Committee sets the appropriate split among the different elements of performance that make up our performance goals. The following are the 2022 performance goals and relative weights for our named executive officers:

ANNUAL CASH INCENTIVE PROGRAM 2022 PERFORMANCE GOALS AND WEIGHTS

The corporate key financial goals for 2022 are designed to encourage a continued focus on executing our long-term strategic objectives and include achieving net sales and adjusted EPS goals.

The Committee also established other corporate financial and non-financial goals for 2022. These goals, intended to further align compensation with achieving our strategic objectives, include:

Focusing on market share improvement in global markets
   
Diversity and inclusion

In addition, goals have been established for each named executive officer, other than our CEO, relating to his or her business unit or specific staff function.


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2022 Long-Term Equity Compensation Incentive Awards

In February 2022, the Committee approved long-term incentive compensation awards for the named executive officers consisting of awards of performance-based restricted share units with a value equal to 75 percent of the target grant value for long-term equity incentive compensation, with the balance of the value to be granted in stock options. The performance objectives for the performance-based restricted share unit awards granted in 2022 are based on modified free cash flow and average annual organic sales growth for the period January 1, 2022 through December 31, 2024.

The actual number of shares our named executive officers will receive will range from zero to 200 percent of the target levels established by the Committee for each executive, depending on the degree to which the performance objectives are met. Due to the continuing economic uncertainty caused by the COVID-19 pandemic, the Committee will not set the performance objective levels for the awards until April 2022.

PERFORMANCE-BASED RESTRICTED SHARE UNITS GRANTED IN 2022

Name       Value of Target Amount of Shares($)       Value of Maximum Amount of Shares($)
Michael D. Hsu   7,500,000   15,000,000
Maria G. Henry   2,700,000   5,400,000
Russell Torres   2,100,000   4,200,000
Jeffrey Melucci   1,575,000   3,150,000
Gonzalo Uribe   675,000   1,350,000

In February 2022, the Committee also approved the dollar amount of stock options to be granted to our named executive officers in April 2022, along with our annual stock option grants to other employees. The number of options they will receive will be based on the assumed value of our stock options on the date of grant.

Name       Value of Stock Options to be Granted($)
Michael D. Hsu   2,500,000
Maria G. Henry   900,000
Russell Torres   700,000
Jeffrey Melucci   525,000
Gonzalo Uribe   225,000

The Committee also granted time-vested restricted share awards to Mr. Torres and Mr. Melucci for retention purposes and to drive future performance on key strategic initiatives including, in the case of Mr. Torres, elevating our core KCNA businesses, and in the case of Mr. Melucci, leading our disciplined acquisition/development program. Each award had a grant date value of $1,000,000.


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Compensation Discussion and Analysis Additional Information about Our Compensation Practices

Additional Information about Our Compensation Practices

 

As a matter of sound governance, we follow certain practices with respect to our compensation program. We regularly review and evaluate our compensation practices in light of regulatory developments, market standards and other considerations.

Use of Independent Compensation Consultant

As previously discussed, the Committee engaged Semler Brossy Consulting Group as its independent consultant to assist it in determining the appropriate executive officer compensation in 2021 under our compensation policies described above. Consistent with the Committee’s policy in which its independent consultant may provide services only to the Committee, Semler Brossy had no other business relationship with Kimberly-Clark and received no payments from us other than fees and expenses for services to the Committee. See “Corporate Governance - Management Development and Compensation Committee” for information about the use of compensation consultants.

Adjustment of Financial Measures for Annual and Long-Term Equity Incentives

Financial measures for the annual and long-term equity incentive programs are developed based on expectations about our planned activities and reasonable assumptions about the performance of our key business drivers for the applicable period. From time to time, however, discrete items or events may arise that were not contemplated by these plans or assumptions. These could include accounting and tax law changes, tax credits or charges from items not within the ordinary course of our business operations, charges relating to currency exchange rate changes, restructuring and write-off charges, significant acquisitions or dispositions, and significant gains or losses from litigation settlements.

Under the Committee’s exception guidelines regarding our annual and long-term equity incentive program measures, the Committee has adjusted in the past, and may adjust in the future, the calculation of financial measures for these incentive programs to eliminate the effect of the types of items or events described above. In making these adjustments, the Committee’s policy is to seek to neutralize the impact of the unexpected or unplanned items or events, whether positive or negative, in order to provide consistent and equitable incentive payments that the Committee believes are reflective of our performance. In considering whether to make a particular adjustment under its guidelines, the Committee will review whether the item or event was one for which management was responsible and accountable, treatment of similar items in prior periods, the extent of the item’s or event’s impact on the financial measure, and the item’s or event’s characteristics relative to normal and customary business practices. Generally, the Committee will apply an adjustment to all compensation that is subject to that financial measure.

Pricing and Timing of Stock Option Grants and Timing of Performance-Based Equity Grants

Our policies and the terms of the 2021 Plan require stock options to be granted at no less than the closing price of our common stock on the date of grant. Stock option grants to our elected officers, including our executive officers, are generally made annually at a meeting of the Committee that is scheduled at least one year in advance, and the grants are effective on the date of this meeting. However, if the meeting occurs during the period beginning on the first day of the final month of a calendar quarter and ending on the date of our earnings release, the stock option grants will not be effective until the first business day following the earnings release. Our executives are not permitted to choose the grant date for their individual stock option grants.


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The CEO has been delegated the authority to approve equity grants, including stock options, to employees who are not elected officers of Kimberly-Clark. These grants include scheduled annual grants and recruiting and special employee recognition and retention grants. The CEO is not permitted to make any grants to any of our elected officers, including our executive officers.

Annual stock option grants to non-elected officers are effective on the same date as the annual stock option grants to our elected officers. Recruiting, special recognition and retention stock-based awards are made on pre-determined dates following our quarterly earnings releases. In April 2021, our CEO authorized an aggregate of 1.02 million options, performance-based restricted share units and time-vested restricted share units to employees who are not elected officers. In 2021, our CEO also authorized an aggregate of 123,749 shares underlying recruiting and retention grants, consisting of options, performance-based restricted share units and time-vested restricted share units.

With respect to grants of performance-based restricted share units to executive officers, the Committee’s current practice is to approve the dollar value of the grants at its February meeting and the grants are effective on the last business day of February. We believe this practice is consistent with award practices at other large public companies. Our executives are not permitted to choose the grant date for their individual restricted stock or restricted share unit awards.

Compensation Clawback Policy

Under our clawback policy, the Committee may cancel outstanding awards of cash bonus or other incentive-based or equity-based compensation or seek recoupment of previous awards provided to an executive officer or other designated officer if:

we are required to make a material restatement of our financial statements, whether or not the result of misconduct, or
the executive officer engaged in fraud, gross negligence or willful misconduct, or committed a significant violation of our Code of Conduct, company policy, law or regulation that has or might reasonably be expected to cause significant reputational or financial harm to the company.

The clawback policy is in addition to any recovery rights provided under applicable law. The Committee continues to monitor regulatory developments and intends to further review and revise the policy, if necessary, to comply with any final regulations issued for the purpose of implementing the requirements of the Dodd-Frank Act.

Stock Ownership Guidelines

We strongly believe that the financial interests of our executives should be aligned with those of our stockholders. Accordingly, the Committee has established stock ownership guidelines for our elected officers, including our named executive officers.

TARGET STOCK OWNERSHIP AMOUNTS

Position       Ownership Level
Chief Executive Officer   Six times annual base salary
     
Other named executive officers   Three times annual base salary


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Compensation Discussion and Analysis Additional Information about Our Compensation Practices

Failure to attain these targeted stock ownership levels within five years from date of hire for, or appointment to, an eligible position can result in the reduction of part or all of the executive’s annual cash incentive (with a corresponding grant of time-vested restricted share units or restricted stock in that amount), or a reduction in future long-term equity incentive awards, either of which may continue until the ownership guideline is achieved. In determining whether our stock ownership guidelines have been met, any time-vested restricted share units held are counted as owned, but performance-based restricted share units are excluded until they vest. Executive officer stock ownership levels were reviewed in 2021 for compliance with these guidelines. Based on our stock price as of the compliance date for this review, each of our named executive officers has met the applicable specified ownership level or is still within five years from date of hire or most recent promotion.

Insider Trading Policy; Anti-Hedging and Pledging Policy

We require all executive officers to pre-clear transactions involving our common stock (and other securities related to our common stock) with our Legal Department.

Our insider trading policy prohibits any director, executive officer or any other officer or employee subject to its terms from entering into short sales or derivative transactions to hedge their economic exposure to our common stock. In addition, these directors, officers and employees are prohibited from pledging our stock, including through holding our stock in margin accounts.

Corporate Tax Deduction for Executive Compensation

While an exception exists for certain arrangements in place as of November 2, 2017, only the first $1 million in compensation paid to our named executive officers generally is deductible. Although tax deductibility of compensation is advantageous, the primary objective of our compensation programs is meeting the compensation objectives set forth above.


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Management Development and Compensation Committee Report

In accordance with its written charter adopted by the Board, the Management Development and Compensation Committee has oversight of compensation policies designed to align elected officers’ compensation with our overall business strategy, values and management initiatives. In discharging its oversight responsibility, the Committee has retained an independent compensation consultant to advise the Committee regarding market and general compensation trends.

The Committee has reviewed and discussed the Compensation Discussion and Analysis with our management, which has the responsibility for preparing the Compensation Discussion and Analysis. Based upon this review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2021.

  MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
  Sherilyn S. McCoy, Chairman
Mae C. Jemison, M.D.
Christa S. Quarles
Ian C. Read


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Compensation Discussion and Analysis Analysis of Compensation-Related Risks

Analysis of Compensation-Related Risks

 

The Committee, with the assistance of its independent consultant and Kimberly-Clark’s compensation consultant, has reviewed an assessment of our compensation programs for our employees, including our executive officers, to analyze the risks arising from our compensation systems.

Based on this assessment, the Committee believes that the design of our compensation programs, including our executive compensation program, does not encourage our executives or employees to take excessive risks and that the risks arising from these programs are not reasonably likely to have a material adverse effect on Kimberly-Clark.

Several factors contributed to the Committee’s conclusion, including:

The Committee believes Kimberly-Clark maintains a values-driven, ethics-based culture supported by a strong tone at the top.
The performance targets for annual cash incentive programs are selected to ensure that they are reasonably attainable in a manner consistent with our strategic objectives without encouraging executives or employees to take inappropriate risks.
An analysis by Kimberly-Clark’s consultant indicated that our compensation programs are consistent with those of our peer group.
The Committee believes the allocation among the components of direct annual compensation provides an appropriate balance between annual and long-term incentives and between fixed and performance-based compensation.
Annual cash incentives and long-term performance-based restricted share unit awards under our executive compensation program are capped at 200 percent of the target award, and all other material non-executive cash incentive programs are capped at reasonable levels, which the Committee believes protects against disproportionately large incentives.
The Committee believes the performance measures and the multi-year vesting features of the long-term equity incentive compensation component encourage participants to seek sustainable growth and value creation.
The Committee believes inclusion of share-based compensation through the long-term equity incentive compensation component encourages appropriate decision-making that is aligned with the long-term interests of stockholders.
Our stock ownership guidelines further align the interests of management and stockholders.


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Compensation Tables

Summary Compensation

The following table contains information concerning compensation awarded to, earned by, or paid to our named executive officers in the last three years. Additional information regarding the items reflected in each column appears below the table and on page 70.

SUMMARY COMPENSATION TABLE

Name and
Principal Position
  Year    Salary($)    Bonus($)(1)    Stock
Awards($)
   Option
Awards($)
   Non-Equity
Incentive Plan
Compensation($)
   Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings($)
   All Other
Compensation($)
   Total
($)
 
Michael D. Hsu
Chairman of the Board and Chief Executive Officer
  2021   1,356,250     6,976,205   1,742,254   1,439,886   —    494,567   12,009,162  
  2020   1,287,500     5,999,975   2,295,620   3,383,739   —    498,486   13,465,320  
  2019   1,250,000     6,000,038   1,726,634   2,723,646   —    327,802   12,028,120  
Maria G. Henry
Senior Vice President and Chief Financial Officer
  2021   863,750     2,635,491   658,184   579,121   —    149,263   4,885,809  
  2020   827,500     2,549,940   975,646   1,235,396   —    182,403   5,770,885  
  2019   820,000     3,205,556   690,648   1,142,306   —    153,752   6,012,262  
Russell Torres(2)
Group President,
K-C North America
  2021   785,417     2,925,069   503,322   447,849   —    157,683   4,819,340  
                                     
  2020   610,795   400,000   4,225,079   659,995   450,688   —    82,204   6,428,761  
Jeffrey Melucci
Chief Business
Development and
Legal Officer
  2021   775,000     1,500,049   387,169   478,814   —    127,498   3,268,530  
  2020   700,000     1,349,945   516,509   984,455   —    135,049   3,685,958  
  2019   640,000     1,199,961   528,778   1,064,749   —    109,424   3,068,516  
Gonzalo Uribe(2)
President, K-C Latin America
  2021   471,414     1,675,067   174,220   263,868     203,076   2,787,645  
                                     
Kimberly K. Underhill
Former Group
President,
K-C North America
  2021   556,477     2,099,992   542,030   553,333     3,433,209   7,185,041  
  2020   827,500     1,950,008   746,077   1,310,600   132,326   175,733   5,142,244  
                                     
  2019   815,000     1,837,502   528,778   1,064,749   137,981   139,674   4,523,684  

 

(1) Mr. Torres received a cash signing bonus in 2020 as an incentive to join the company and to compensate him for compensation forfeited at his prior employer.
(2) Mr. Torres was not a named executive officer in 2019 and Mr. Uribe was not a named executive officer in 2019 or 2020. Therefore, no compensation information for these years appears in this table for these officers.

Salary. The amounts in this column represent base salary earned during the year.

Stock Awards and Option Awards. The amounts in these columns reflect the dollar value of restricted share unit awards and stock options, respectively, granted under our stockholder-approved Equity Plans.

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Compensation Tables

The restricted share unit awards either vest over time or are based on the achievement of performance-based standards.

The amounts for each year represent the grant date fair value of the awards, computed in accordance with ASC Topic 718. See Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 2021 for the assumptions we used in valuing and expensing these restricted share units and stock option awards in accordance with ASC Topic 718.

For awards that are subject to performance conditions, the value is based on the probable outcome of the conditions at grant date. This value, as well as the value of the awards at the grant date assuming the highest level of performance conditions will be achieved and using the grant date stock price, is set forth below:

Name   Year   Stock Awards at
Grant Date Value($)
  Stock Awards at Highest Level
of Performance Conditions($)
Michael D. Hsu   2021       6,976,205       13,952,410
    2020   5,999,975   11,999,950
    2019   6,000,038   12,000,076
Maria G. Henry   2021   2,635,491   5,270,982
    2020   2,549,940   5,099,880
    2019   2,400,039   4,800,078
Russell Torres   2021   1,925,018   3,850,036
    2020   1,725,049   3,450,098
Jeffrey Melucci   2021   1,500,049   3,000,098
    2020   1,349,945   2,699,890
    2019   1,199,961   2,399,922
Gonzalo Uribe   2021   675,016   1,350,032
Kimberly K. Underhill   2021   2,099,992   4,199,984
    2020   1,950,008   3,900,016
    2019   1,837,502   3,675,004

Non-Equity Incentive Plan Compensation. The amounts in this column are the annual cash incentive payments described in “Compensation Discussion and Analysis.” These amounts were earned during the years indicated and were paid to our named executive officers in February of the following year.

Change In Pension Value and Nonqualified Deferred Compensation Earnings. The amounts in this column reflect the aggregate change during the year in actuarial present value of accumulated benefits under all defined benefit and actuarial plans (including supplemental pension plans). With respect to the supplemental pension plans, amounts have been calculated to reflect an approximate 30-year Treasury bond rate to determine the amount of the earlier retirement age lump sum benefit in a manner consistent with our financial statements. We describe the assumptions we used in determining the amounts and provide additional information about these plans in “Pension Benefits.”

Each of our named executive officers participates in the Supplemental 401(k) Plan, a non-qualified defined contribution plan. Earnings on this plan are not included in the Summary Compensation Table because the earnings were not above-market or preferential. See “Nonqualified Deferred Compensation” for a discussion of this plan and each named executive officer’s earnings under this plan in 2021.


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All Other Compensation. All other compensation consists of the following:

Name   Year   Perquisites($)(1)   Defined
Contribution Plan
Amounts($)(2)
  Tax
Gross-Ups($)(3)
  Severance
Payments ($)(4)
  Total($)(5)
Michael D. Hsu   2021       195,948       298,619                   494,567
    2020   153,527   344,959       498,486
    2019   120,990   206,812       327,802
Maria G. Henry   2021   17,017   132,246       149,263
    2020   13,000   169,403       182,403
    2019   3,750   150,002       153,752
Russell Torres   2021   50,251   77,882   29,550     157,683
    2020   19,685   52,528   9,991     82,204
Jeffrey Melucci   2021   16,652   110,846       127,498
    2020   8,302   126,747       135,049
    2019   7,631   101,793       109,424
Gonzalo Uribe   2021   148,792   17,325   36,959     203,076
Kimberly K. Underhill   2021   13,000   100,209     3,320,000   3,433,209
    2020   13,000   162,733       175,733
    2019   1,700   137,974       139,674

 

(1) Perquisites. For a description of the perquisites we provide executive officers, and the reasons why, see “Compensation Discussion and Analysis – Benefits and Other Compensation – Other Compensation.” Perquisites for our named executive officers in 2021 included the following:

 

Name   Executive
Financial
Counseling
Program($)
  Personal
Use of
Corporate
Aircraft($)
  Security
Services($)
  Executive
Health
Screening
Program($)
  Relocation
Expenses($)(a)
  Total($)
Michael D. Hsu         100,265       95,683                   195,948
Maria G. Henry   13,000       4,017     17,017
Russell Torres   13,000         37,251   50,251
Jeffrey Melucci   13,000       3,652     16,652
Gonzalo Uribe   13,000         135,792   148,792
Kimberly K. Underhill   13,000           13,000

 

(a) Amounts shown reflect expenses related to relocation assistance paid in 2021 (1) in the case of Mr. Torres, in connection with his joining the company in 2020 and (2) in the case of Mr. Uribe, upon his promotion to President, K-C Latin America in 2020. Mr. Torres and Mr. Uribe participated in our relocation program, a broad-based program in which all salaried employees are eligible to participate.


 

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(2) Defined Contribution Plan Amounts. Matching contributions were made under the 401(k) Profit Sharing Plan and accrued under the Supplemental 401(k) Plan in 2021, 2020 and 2019 for all named executive officers, as applicable. A profit-sharing contribution was also made under the 401(k) Profit Sharing Plan and the Supplemental 401(k) Plan in early 2022, 2021 and 2020 with respect to our performance in 2021, 2020 and 2019, respectively, for the named executive officers as follows:

 

  Name   Performance Year   Profit Sharing Contribution($)
  Michael D. Hsu   2021       109,020
      2020   184,513
      2019   79,398
  Maria G. Henry   2021   48,280
      2020   90,611
      2019   56,748
  Russell Torres   2021   28,430
      2020   28,097
  Jeffrey Melucci   2021   40,467
      2020   67,795
      2019   41,330
  Gonzalo Uribe   2021   6,325
  Kimberly K. Underhill   2021   25,526
      2020   87,043
      2019   55,400

 

  See “Nonqualified Deferred Compensation” for a discussion of these plans. The profit sharing contribution varies depending on our performance for the applicable year, contributing to fluctuations from year to year in the amounts in the All Other Compensation column.
(3) Tax Gross Ups. The amounts shown for Mr. Torres and Mr. Uribe reflect tax reimbursement for moving and related expenses incurred for a relocation (1) in the case of Mr. Torres, upon his joining the company and (2) in the case of Mr. Uribe, upon his promotion to President, K-C Latin America.
(4) Severance Payments. For additional information, see “Potential Payments on Termination or Change of Control - Severance Benefits - Departure of Former Named Executive Officer.”
(5) Certain Dividends. Dividend equivalents on unvested performance-based and time-vested restricted share units are accumulated and will be paid in additional shares after the restricted share units vest, based on the actual number of shares that vest. See “Outstanding Equity Awards” for information on these reinvested dividend equivalents.


 

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Grants of Plan-Based Awards

The following table sets forth plan-based awards granted to our named executive officers during 2021 on a grant-by-grant basis.

GRANTS OF PLAN-BASED AWARDS IN 2021

            Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1)
  Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
               
Name   Grant Type   Grant
Date
      Threshold
($)
  Target
($)
  Maximum
($)
  Threshold
(#)
  Target
(#)
  Maximum
(#)
  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)(3)
  All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(4)
  Exercise
or Base
Price of
Option
Awards
($/Sh)
  Grant
Date Fair
Value of
Stock
and
Option
Awards
($)(5)
Michael D. Hsu       Annual cash incentive award                 2,337,500       4,675,000                                                        
    Performance-based RSU   2/28/2021                 52,599   105,198               6,976,205
    Time-vested stock option   4/29/2021                               169,645   132.63   1,742,254
Maria G. Henry   Annual cash incentive award         875,000   1,750,000                            
    Performance-based RSU   2/28/2021                 19,871   39,742               2,635,491
    Time-vested stock option   4/29/2021                               64,088   132.63   658,184
Russell Torres   Annual cash incentive award         750,000   1,500,000                            
    Performance-based RSU   2/28/2021                 13,442   26,884               1,725,012
    Performance-based RSU   4/29/2021                 1,696   3,392               200,006
    Time-vested stock option   4/29/2021                               49,009   132.63   503,322
    Time-vested RSU   10/29/2021                           7,723           1,000,051
Jeffrey Melucci   Annual cash incentive award           658,800   1,317,600                            
    Performance-based RSU   2/28/2021                   11,689   23,378               1,500,049
    Time-vested stock option   4/29/2021                               37,699   132.63   387,169
Gonzalo Uribe   Annual cash incentive award         356,605   713,210                            
    Performance-based RSU   2/28/2021                   5,260   10,520               675,016
    Time-vested stock option   4/29/2021                               16,964   132.63   174,220
    Time-vested RSU   10/29/2021                           7,723           1,000,051
Kimberly K. Underhill   Annual cash incentive award         830,000   1,660,000                            
    Performance-based RSU   2/28/2021                 16,364   32,728               2,099,992
    Time-vested stock option   4/29/2021                               52,778   132.63   542,030

 

(1) Represents the potential annual performance-based incentive cash payments each named executive officer could earn in 2021. These awards were granted under our Management Achievement Award Program, our annual cash incentive program for executive officers. Actual amounts earned in 2021 were based on the 2021 objectives established by the Management Development and Compensation Committee at its February 10, 2021 meeting. See “Compensation Discussion and Analysis – Executive Compensation for 2021 – Annual Cash Incentive Program.” At the time of the grant, the incentive payment could range from the threshold amount to the maximum amount depending on the

 

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  extent to which the 2021 objectives were met. The actual amounts paid in 2022 based on the 2021 objectives are set forth in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.”
(2) Performance-based restricted share units granted under the 2021 Plan to our named executive officers on February 28, 2021, except for an additional grant to Mr. Torres upon his promotion to Group President, K-C North America, which occurred on April 29, 2021. The number of performance-based restricted share units granted in 2021 that will ultimately vest on the third anniversary of the grant date could range from the threshold number to the maximum number depending on the extent to which the average annual organic sales growth and average modified free cash flow performance objectives for those awards are met. See “Compensation Discussion and Analysis – Long-Term Equity Incentive Compensation – 2021 Grants.”
(3) Time-vested restricted share units granted under the 2021 Plan to Mr. Torres and Mr. Uribe on October 29, 2021.
(4) Time-vested stock options granted under the 2021 Plan to our named executive officers on April 29, 2021.
(5) Grant date fair value is determined in accordance with ASC Topic 718 and, for performance-based restricted share units, is the value at grant date based on the probable outcome of the performance condition and is consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date, excluding the effect of estimated forfeitures. See Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 2021 for the assumptions used in valuing and expensing these restricted share units and stock option awards in accordance with ASC Topic 718.

Discussion of Summary Compensation and Plan-Based Awards Tables

Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and the Grants of Plan-Based Awards in 2021 table was paid or awarded, are described under “Compensation Discussion and Analysis.”

Other than the executive severance programs described below, none of our named executive officers has an employment agreement with us. See “Potential Payments on Termination or Change of Control.”

Executive officers may receive long-term equity incentive awards of stock options, restricted stock or restricted share units, or a combination of stock options, restricted stock and restricted share units under the 2021 Plan, which was approved by stockholders in 2021. Awards prior to April 2021 were made under the 2011 Plan, which was approved by stockholders in 2011. The Equity Plans provide the Committee with discretion to require performance-based standards to be met before awards vest. The Committee awarded time-vested restricted share units to Mr. Torres and Mr. Uribe in October 2021 for retention purposes which vest on the third anniversary of the date of grant. In 2021, each named executive officer received grants of stock options and performance-based restricted share units under the 2021 Plan.

For grants of stock options, the Equity Plans provide that the option price per share shall be no less than the closing price per share of our common stock at the grant date. The term of any option is no more than ten years from the grant date. Options granted in 2021 become exercisable in three annual installments of 30 percent, 30 percent and 40 percent, beginning on the first anniversary of the grant date; however, all of the options become exercisable for the earlier of three years or the remaining term of the options upon death or total and permanent disability, and for the earlier of five years or the remaining term of the options, upon retirement of the officer. In addition, options generally become exercisable upon a termination of employment following a change of control, and certain options granted to our named executive officers are subject to our Executive Severance Program. See “Potential Payments on Termination or Change of Control.” The officers may transfer the options to family members or certain entities in which family members have interests.

Performance-based restricted share unit awards granted in 2021 vest three years following the grant date in a range from zero to 200 percent of the target levels. Awards that vest, if any, are based on our average annual organic sales growth and average modified free cash flow performance during the three years. As of February 9, 2022, the performance-based restricted share units granted in 2021 and 2020 were on pace to vest at the following levels: 80 percent for the 2021 award and 50 percent for the 2020 award. The Committee has determined that the 2019 award vested at 130 percent.

Dividend equivalents on unvested performance-based restricted share units equal to cash dividends on our common stock are accumulated and will be paid in additional shares after the performance-based restricted share units vest, based on the actual number of shares that vest, if any.


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Outstanding Equity Awards

The following table sets forth information concerning outstanding equity awards for our named executive officers as of December 31, 2021. Option awards were granted for ten-year terms, ending on the option expiration date set forth in the table. Stock awards were granted as indicated in the footnotes to the table.

OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2021(1)

        Option Awards(2)   Stock Awards
Name   Grant
Date
  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
  Option
Exercise
Price
($)(3)
  Option
Expiration
Date
  Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(4)
  Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($)(5)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have
Not Vested
(#)(6)
  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have
Not Vested
($)(5)
Michael D. Hsu                                                                        
    4/29/2021     169,645   132.63   4/29/2031                
    2/26/2021                           53,944   7,709,676
    4/29/2020   43,177   100,749   138.96   4/29/2030                
    2/28/2020                           48,376   6,913,898
    5/1/2019   76,512   51,009   125.47   5/1/2029                
    2/28/2019                           112,044   16,013,328
    5/9/2018   92,179     103.06   5/9/2028                
    4/25/2017   67,761     132.82   4/25/2027                
    5/3/2016   52,525     126.13   5/3/2026                
    4/29/2015   54,191     110.72   4/29/2025                
    4/30/2014   46,508     107.51   4/30/2024                
    5/1/2013   41,698     98.92   5/1/2023                
Maria G. Henry                                    
    4/29/2021     64,088   132.63   4/29/2031                
    2/26/2021                           20,379   2,912,567
    4/29/2020   18,350   42,819   138.96   4/29/2030                
    2/28/2020                           20,559   2,938,292
    5/1/2019   30,604   20,404   125.47   5/1/2029                
    2/28/2019                           44,818   6,405,389
    2/28/2019                   7,003   1,000,869        
    5/9/2018   62,100     103.06   5/9/2028                
    4/25/2017   53,644     132.82   4/25/2027                
    5/3/2016   47,570     126.13   5/3/2026                
    4/29/2015   49,675     110.72   4/29/2025                

 

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        Option Awards(2)   Stock Awards
Name   Grant
Date
  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
  Option
Exercise
Price
($)(3)
  Option
Expiration
Date
  Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(4)
  Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($)(5)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have
Not Vested
(#)(6)
  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have
Not Vested
($)(5)
Russell Torres                                                                        
    10/29/2021                   7,723   1,103,771        
    4/29/2021     49,009   132.63   4/29/2031                
    4/29/2021                           1,725   246,537
    2/26/2021                           13,786   1,970,295
    4/29/2020   12,413   28,966   138.96   4/29/2030                
    4/29/2020                           13,023   1,861,247
    4/29/2020                   12,583   1,798,362        
Jeffrey Melucci                                    
    4/29/2021     37,699   132.63   4/29/2031                
    2/26/2021                           11,988   1,713,325
    4/29/2020   9,714   22,669   138.96   4/29/2030                
    2/28/2020                           10,884   1,555,541
    5/1/2019   15,302   10,202   125.47   5/1/2029                
    2/28/2018                           22,408   3,202,551
    4/25/2017   5,271     132.82   4/25/2027                
Gonzalo Uribe                                    
    10/29/2021                   7,723   1,103,771        
    4/29/2021     16,964   132.63   4/29/2031                
    2/26/2021                           5,394   770,910
    4/29/2020   1,079   2,519   138.96   4/29/2030                
    2/28/2020                           1,132   161,785
    5/1/2019   1,817   1,212   125.47   5/1/2029                
    5/1/2019                   1,034   147,779        
    2/28/2019                           2,458   351,297
    5/9/2018   3,687     103.06   5/9/2028                
    4/25/2017