The Board’s policy is to encourage and expect that all directors should attend the annual shareholder meeting.each Annual Meeting of Shareholders. All directors attended the 2016 shareholder meeting.2019 Annual Meeting. The independent directors generally meet in executive session as part of each regularly scheduled Board meeting. Ed Rust, who was Caterpillar’sThe Board’s independent Presiding Director, in 2016,David L. Calhoun, presided over the Board’s executive sessions in 2016.2019.

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TableBOARDEVOLUTIONSINCE2015

DIVERSITYOFSKILLSANDEXPERTISE

BOARD EVOLUTION SINCE 2011

DIVERSITY OF SKILLS AND EXPERTISE

Our independent Board nominees offer a diverse range of skills and experience in relevant areas.

SUMMARY OF INDIVIDUAL DIRECTOR SKILLS, CORE COMPETENCIES AND ATTRIBUTES

Caterpillar Board Tenure (Years)

3

9

14

22

20

5

17

11

3

9

3

11 years Average Tenure

Board of Directors Experience (other Boards)

•

•

•

•

•

•

•

•

•

•

•

100%

Audit Committee Financial Expert

•

•

•

100% of Audit Committee Members

CEO / Leadership

•

•

•

•

•

•

•

•

•

•

•

100%

Business Development and Strategy

•

•

•

•

•

•

•

•

•

•

91%

Government / Regulatory Affairs

•

•

•

•

•

•

•

•

•

82%

Customer and Product Support Services

•

•

•

•

•

•

•

•

•

82%

Finance & Accounting

•

•

•

•

•

•

•

•

•

82%

Risk Management

•

•

•

•

•

•

•

•

•

•

91%

Technology

•

•

•

•

•

•

•

•

73%

Global Experience

•

•

•

•

•

•

•

•

•

•

91%

Manufacturing / Logistics

•

•

•

•

•

45%

Gender and Diversity

•

•

•

•

•

45%

Age

51

62

58

72

72

63

69

65

62

65

68

64 years Average Age

GLOBAL EXPERIENCE 2020 PROXY STATEMENT    11

As shown by the yellow highlighted areas in the map below, our independent directors have international experience that aligns with Caterpillar’s global presence.Back to Contents

2017 Proxy Statement

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Table of ContentsDIRECTORCONTINUOUSEDUCATIONANDDEVELOPMENT

The Board has nominatedCompany places a high importance on the following individuals to stand for election for a one-year term expiring at the annual meetingcontinuous development of shareholders in 2018.

The number of persons comprising the Caterpillar Board of Directors is currently established as thirteen. If any of the Board’s nominees should become unavailable to serve as a Director prior to the Annual Meeting, the size of the Board and number of Board nominees will be reduced accordingly.

DIRECTOR CANDIDATE BIOGRAPHIES AND QUALIFICATIONS

its Board. Directors have beenopportunities for ongoing education and development through participation in meetings, subscriptions to relevant publications and attendance at activities and professional development training offered by associations such as the National Association of Corporate Directors and Lead Director Network. Directors receive specialized presentations from experts in the Company’s various businesses in the course of their current positions forservice. Since the past five years unless otherwise noted. Information is aslast annual shareholder meeting, these presentations have included updates on digital strategy, customer support, the operations of April 1, 2017.

DAVID L. CALHOUN Senior Managing Director and Head of Private Equity Portfolio Operations of The Blackstone Group L.P. (private equity firm)			Other current directorships (2)		Age59
			●Nielsen Holdings PLC ●The Boeing Company
			Other directorships within the last five years		Director Since2011
			●Medtronic, Inc
			Caterpillar Committee		Independent Chairman of the Board
			●Compensation
		Key Qualifications and Skills:
			Mr. Calhoun was previously Executive Chair of Nielsen Holdings N.V. (marketing and media information) (2014-2015). Prior to his position at Blackstone, Mr. Calhoun served as Chairman of the Executive Board and Chief Executive Officer of The Nielsen Company B.V. (2006-2013). The Board believes that Mr. Calhoun provides valuable insight and perspective into general strategic and business matters, stemming from his extensive executive and management experience with Blackstone, Nielsen and GE. Mr. Calhoun also has significant manufacturing and high-technology industry expertise as evidenced by his leadership of GE’s aircraft engines and transportation businesses.

DANIEL M. DICKINSON Managing Partner of HCI Equity Partners (private equity firm)			Other current directorships (0)		Age55
			●None
			Other directorships within the last five years		Director Since2006
			●Mistras Group, Inc. ●Progressive Waste Solutions Ltd.
			Caterpillar Committee		Independent
			●Audit
		Key Qualifications and Skills:
			The Board believes that Mr. Dickinson’s experience in mergers and acquisitions, private equity business and role as an investment banker provides important insights for evaluating investment opportunities. His significant financial experience, both in the U.S. and internationally, contributes to the Board’s understanding and ability to analyze complex issues. His experience as a former director of large, publicly-traded multinational corporations enables him to provide meaningful input and guidance to the Board and the Company.

JUAN GALLARDO Former CEO of Organización CULTIBA, S.A.B. de C.V. (beverage industry)			Other current directorships (3)		Age69
			●Grupo Aeroportuario del Pacifico, S.A.B. de C.V. ●Grupo Financiero Santander Mexico, S.A.B. de C.V. ●Organización CULTIBA, S.A.B. de C.V.
			Other directorships within the last five years		Director Since1998
			●Lafarge SA
			Caterpillar Committee		Independent
			●Public Policy and Governance
		Key Qualifications and Skills:
			Mr. Gallardo retired as the CEO of Organización CULTIBA, S.A.B. de C.V. in 2016. Mr. Gallardo resides in Mexico where Caterpillar has a presence. The Board believes that Mr. Gallardo’s international business experience, particularly in Latin America and South America, is important for the Company’s understanding of these markets. His extensive background in trade-related issues also contributes to the Board’s expertise. In addition, his experience as a chief executive officer and director of large, publicly-traded multinational corporations enables him to provide meaningful input and guidance to the Board and the Company.

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Tablecertain Energy and Transportation businesses, cybersecurity, lean manufacturing, connected assets and the Cat® dealer network. These opportunities allow directors to be well informed and to expand their knowledge of Contents

JESSE J. GREENE, JR. Instructor at Columbia Business School			Other current directorships (0)		Age72
			●None
			Other directorships within the last five years		Director Since2011
			●None
			Caterpillar Committee		Independent
			●Compensation
		Key Qualifications and Skills:
			Mr. Greene is currently an instructor at Columbia Business School in New York City where he teaches corporate governance, risk management and other business topics at the graduate and executive education levels. He was formerly Vice President of Financial Management and Chief Financial Risk Officer of International Business Machines Corporation (computer and office equipment). The Board believes that Mr. Greene’s risk management and information technology experience provides a unique skill set to the Board. His experience as a chief financial risk officer and executive of a large, publicly-traded multinational corporation enables him to provide meaningful input and guidance to the Board and the Company.

JON M. HUNTSMAN, JR. Former United States Ambassador to China (2009- 2011) and former Governor of Utah (2005-2009)			Other current directorships (3)		Age57
			●Chevron Corporation ●Ford Motor Company ●Hilton Worldwide Holdings Inc.
			Other directorships within the last five years		Director Since2012
			●Huntsman Corporation
			Caterpillar Committee		Independent
			●Public Policy and Governance
		Key Qualifications and Skills:
			Caterpillar has a significant manufacturing presence and dealer network in China. The Board believes that Mr. Huntsman’s extensive knowledge of Asia and international affairs, operational experience gained as governor of Utah and experience as a director of other large, publicly-traded multinational corporations enables him to provide meaningful input and guidance to the Board and the Company.

DENNIS A. MUILENBURG Chairman, President and CEO of The Boeing Company (aircraft and defense)			Other current directorships (1)		Age53
			●The Boeing Company
			Other directorships within the last five years		Director Since2011
			●None
			Caterpillar Committee		Independent
			●Audit
		Key Qualifications and Skills:
			Prior to his current position, Mr. Muilenburg was Vice Chairman, President and Chief Operating Officer of The Boeing Company (2013-2015). Prior to that, he was Executive Vice President of The Boeing Company and President and Chief Executive Officer of Boeing Defense, Space & Security (2009-2013). The Board believes that Mr. Muilenburg provides valuable insight to the Board on strategic and business matters, stemming from his experience with large-scale product development programs and his worldwide supply chain and manufacturing expertise.

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Table of Contents

WILLIAM A. OSBORN Former Chairman and CEO of Northern Trust Corporation and The Northern Trust Company (financial services)			Other current directorships (2)		Age69
			●Abbott Laboratories ●General Dynamics Corporation
			Other directorships within the last five years		Director Since2000
			●Tribune Company
			Caterpillar Committee		Independent
			●Audit, Chair
		Key Qualifications and Skills:
			The Board believes that Mr. Osborn’s financial expertise and experience is valuable to the Board. In addition, his experience as a chief executive officer and director of other large, publicly-traded corporations enables him to provide meaningful input and guidance to the Board and the Company.

DEBRA L. REED Chairman of the Board and CEO of Sempra Energy (energy infrastructure and utilities)			Other current directorships (2)		Age60
			●Halliburton Company ●Sempra Energy
			Other directorships within the last five years		Director Since2015
			●None
			Caterpillar Committee		Independent
			●Compensation
		Key Qualifications and Skills:
			The power, oil and gas industries are key end-user markets for Caterpillar products. The Board believes that Ms. Reed’s background provides valuable insights into trends in these industries. In addition, her experience as a chief executive officer and director of other large, publicly-traded corporations enables her to provide meaningful input and guidance to the Board and the Company.

EDWARD B. RUST, JR. Former Chairman and CEO of State Farm Mutual Automobile Insurance Company (insurance)			Other current directorships (2)		Age66
			●Helmerich & Payne, Inc. ●S&P Global Inc.
			Other directorships within the last five years		Director Since2003
			●None
			Caterpillar Committee		Independent
			●Public Policy and Governance, Chair
		Key Qualifications and Skills:
			Mr. Rust retired as Chairman in 2017 and as Chief Executive Officer in 2016 of State Farm Mutual Automobile Insurance Company. The Board believes that Mr. Rust’s financial and business experience is valuable to the Board. His role as a past Chairman of the U.S. Chamber of Commerce, chief executive officer of a major national corporation and experience as a director of large, publicly-traded multinational corporations enables him to provide meaningful input and guidance to the Board and the Company. In addition, his extensive involvement in education improvement compliments the Company’s culture of social responsibility.

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SUSAN C. SCHWAB Professor at the University of Maryland School of Public Policy and a Strategic Advisor for Mayer Brown LLP (global law firm)			Other current directorships (3)		Age62
			●FedEx Corporation ●Marriott International, Inc. ●The Boeing Company
			Other directorships within the last five years		Director Since2009
			●None
			Caterpillar Committee		Independent
			●Public Policy and Governance
		Key Qualifications and Skills:
			Prior to her current positions, Ambassador Schwab held various positions including United States Trade Representative (member of the President’s cabinet) and Deputy United States Trade Representative. The Board believes that Ambassador Schwab brings extensive knowledge, insight and experience on international trade issues to the Board. Her educational experience and role as the U.S. Trade Representative provide important insights for the Company’s global business model and long-standing support of open trade. In addition, her experience as a director of large, publicly-traded multinational corporations enables her to provide meaningful input and guidance to the Board and the Company.

JIM UMPLEBY CEO of Caterpillar Inc.			Other current directorships (0)		Age59
			●None
			Other directorships within the last five years		Director SinceJanuary 2017
			●None
			Caterpillar Committee		Management
			●None
		Key Qualifications and Skills:
			Prior to his current position, Mr. Umpleby served as a Group President of Caterpillar Inc. 2013 to 2016) and before that served as a Vice President of Caterpillar Inc. (2010 to 2013). The Board believes that Mr. Umpleby’s extensive experience and knowledge of the Company, gained in a wide range of Caterpillar leadership positions in engineering, manufacturing, marketing, sales and services enables him to provide meaningful input and guidance to the Board and the Company.

MILES D. WHITE Chairman and CEO of Abbott Laboratories (pharmaceuticals and biotechnology)			Other current directorships (2)		Age62
			●Abbott Laboratories ●McDonald’s Corporation
			Other directorships within the last five years		Director Since2011
			●None
			Caterpillar Committee		Independent
			●Compensation, Chair
		Key Qualifications and Skills:
			The Board believes that Mr. White’s experience as the chief executive officer of a large, complex multinational company provides important insight to the Board. His skills include knowledge of cross-border operations, strategy and business development, risk assessment, finance, leadership development and succession planning, and corporate governance matters. In addition to his role as an executive officer, his experience as a director of other large, publicly-traded multinational corporations enables him to provide meaningful input and guidance to the Board and the Company.

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Table of Contents

RAYFORD WILKINS, JR. Former Chief Executive Officer of Diversified Businesses at AT&T (telecommunications)			Other current directorships (2)		Age65
			●Morgan Stanley ●Valero Energy Corporation
			Other directorships within the last five years		Director SinceApril 2017
			●América Móvil, S.A.B. de C.V.
			Caterpillar Committee		Independent
			●Audit
		Key Qualifications and Skills:
			The Board believes that Mr. Wilkins’ expertise and oversight experience in the information technology area is valuable to the Board. In addition, his experience as an executive officer and director of other large, publicly-traded corporations enables him to provide meaningful input and guidance to the Board and the Company. Mr. Wilkins was brought to the attention of the Board through a professional search firm.

DIRECTOR COMPENSATION

Compensation for non-employee directors for 2016 was comprised of the following components:

trends and issues relevant to their role. Directors are required to own Caterpillar common stock equal to five times their annual cash retainer. Directors have a five-year period from the date of their electionalso given development and education opportunities through speaking or appointment to meet the target ownership guidelines.

Directors may defer 50 percent or more of their annual cash retainer and stipend into an interest-bearing account or an account representing phantom shares of Caterpillar stock.

Directors that joined the Board prior to 2008 also participate in a Charitable Award Program, under which a donation of up to $500,000 will be made by the Company, in the director’s name, to charitable organizations selected by the director and $500,000 to the Caterpillar Foundation. Directors derive no financial benefit from the program.

¹ As of December 30, 2016, the number of vested and non-vested options (NQs), RSUs and Phantom Shares held by each individual serving as a non-employee director during 2016 was: Mr. Calhoun: 12,197 (which consists of 1,672 RSUs and 10,525 Phantom Shares); Mr. Dickinson: 26,101 (which consists of 1,672 RSUs and 24,429 Phantom Shares); Mr. Gallardo: 34,400 (which consists of 5,833 SARs, 1,672 RSUs and 26,895 Phantom Shares); Mr. Greene: 1,672 RSUs; Mr. Huntsman: 1,672 RSUs; Mr. Muilenburg: 1,672 RSUs; Mr. Osborn: 2,036 (which consists of 1,672

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Table of Contents

RSUs and 364 Phantom Shares); Ms. Reed: 4,897 (which consists of 1,672 RSUs and 3,225 Phantom Shares); Mr. Rust: 34,083 (which consists of 1,672 RSUs and 32,411 Phantom Shares); Ms. Schwab: 11,091 (which consists of 1,672 RSUs and 9,419 Phantom Shares); and Mr. White: 7,802 (which consists of 1,672 RSUs and 6,130 Phantom Shares). Mr. Calhoun, Mr. Dickinson, Mr. Gallardo, Ms. Reed, Mr. Rust, Ms. Schwab and Mr. White deferred 100 percent of their 2016 retainer fee into phantom stock in the Directors’ Deferred Compensation Plan.

² All Other Compensation represents amounts paid in connectionmeeting directly with the Caterpillar Foundation’s Directors’ Charitable Award Program and the Caterpillar Political Action Committee Charitable Matching Program (CATPAC’s PACMATCH program) and administrative fees associated with the Directors’ Charitable Award Program. All outside directors are eligible to participate in the Caterpillar Foundation Matching Gift Program and eligible directors may participate in the CATPAC’s PACMATCH program annually. The Caterpillar Foundation will match contributions to eligible two year or four year colleges or universities, arts and cultural institutions and public policy or environmental organizations, up to a maximum of $2,000 per eligible organization per calendar year. As part of CATPAC’s PACMATCH program, Caterpillar Inc. will contribute to two charities on behalf of eligible members of the Board of Directors. The annual CATPAC’s PACMATCH contribution limit is $5,000 so the match, per person, would not exceed $5,000. The amounts listed represent the matching contributions as follows: Mr. Dickinson $2,250, Mr. Greene $2,000, Ms. Reed $2,100, Mr. Rust $13,500, Ms. Schwab $15,000management and Mr. White $8,000. For directors eligibleother employees, Company dealers and customers to participate in the Directors’ Charitable Award Program, the amounts represented include the insurance premium and administrative fees. The premium and administrative fees are as follows: Mr. Dickinson $30,446, Mr. Gallardo $13,051, Mr. Osborn $13,051 and Mr. Rust $9,333.

BOARD ELECTION AND LEADERSHIP STRUCTURE

Directors are elected at each annual meeting to serve for a one-year term. In uncontested elections, directors are elected by a majority of the votes cast for such director. If an incumbent director does not receive a greater number of “for” votes than “against” votes, then such director must tender his or her resignation to the Board. In contested elections, directors are elected by a plurality vote. Directors must retire at the end of the calendar year in which they reach the age of 72.

On January 1, 2017, Jim Umpleby, formerly Group President with responsibility for Energy & Transportation, succeeded Douglas R. Oberhelman as Chief Executive Officer and was appointed as a member of our Board of Directors. In planning for the succession of Mr. Oberhelman, the Public Policy and Governance Committee (PPGC) and the Board carefully reviewed the Board’s leadership structure and determined that it would be appropriate to separate the roles of the Chairman and Chief Executive Officer and to appoint an independent Chairman. Accordingly, on April 1, 2017 David L. Calhoun became our independent Chairman.

The Board has no fixed policy on whether or not to have a non-executive chairman. The Board believes this determination should be made based onbetter understand the Company’s best interests in light of the circumstances at the timeoperations and experience. The PPGC and the Board believe that this leadership structure is the most appropriate one for the Company at this time, as it allows Mr. Umpleby to focus on the day-to-day management of the business and on executing our strategic priorities, while allowing Mr. Calhoun to focus on leading the Board, providing its advice and counsel to Mr. Umpleby, and facilitating the Board’s independent oversight of management.

The Board believes it is important to maintain flexibilityalso through attending industry trade shows such as to the Board’s leadership structure. The Board will continue to regularly review its leadership structure and exercise its discretion in recommending an appropriate and effective framework on a case-by-case basis, taking into consideration the needs of the Board and the Company at such time.CONEXPO.

DUTIES AND RESPONSIBILITIES OF CHAIRMAN

CORPORATE GOVERNANCE GUIDELINES AND CODE OF CONDUCT

Our Board has adopted Guidelines on Corporate Governance Issues (Corporate Governance Guidelines), which are available on our website at www.caterpillar.com/governance. The guidelines reflect the Board’s commitment to oversee the effectiveness of policy and decision-making both at the Board and management level, with a view to enhancing shareholder

2017 Proxy Statement

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Table of ContentsBOARD’SROLEINRISKOVERSIGHT

value over the long-term. Caterpillar’s code of conduct is called Our Values in Action. Integrity, Excellence, Teamwork, Commitment and Sustainability are the core values identified in the code and are the foundation for Caterpillar’s corporate existence. Our Values in Action apply to all members of theBoard and to management and employees worldwide. These values embody the high ethical standards that Caterpillar has upheld since its formation in 1925. Our Values in Action is available on our website at www.caterpillar.com/code.

BOARD EVALUATION PROCESS

The Board conducts an annual self-evaluation to determine whether the Board and its committees are functioning effectively. In 2016, the Presiding Director contacted each Board member to solicit their feedback. The Public Policy & Governance Committee also developed a discussion outlinethat was circulated to the Board members in advance of their year-end meeting. The Presiding Director then led a discussion during the Board’s private session. Each of the committees of the Board followed a similar process.

BOARD COMMITTEES

The Board has three standing committees: Audit; Compensation; and Public Policy and Governance. Each committee meets periodically throughout the year, reports its actions and recommendations to the Board, receives reports from management, annually evaluates its performance and has the authority to retain outside advisors at its discretion. The current primary responsibilities of each committee are summarized below and set forth in more detail ineach committee’s written charter, which can be found on Caterpillar’s website at www.caterpillar.com/governance. All committee members are independent under Company, NYSE and SEC standards applicable to Board and committee service, and the Board has determined that each member of the Audit Committee is an “audit committee financial expert” as defined under SEC rules.

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Table of Contents

BOARD’S ROLE IN RISK OVERSIGHT

The Board has oversight for risk management with a focus on the most significant risks facing the Company, including strategic, operational, financial and legal compliance risks. The Board’s risk oversight process builds upon management’s risk assessment and mitigation processes, which include an enterprise risk management program, regular internal management disclosure and compliance committee meetings, a code of business conduct that applies to all employees, executives and directors, quality standards and processes, an ethics and compliance officeandprogram and comprehensive internal audit processes. The Board’s risk oversight role also includes the selection and oversight of the independent auditors. The Board implements its risk oversight function both as a full Board and through delegation to Board committees, which meet regularly and report back to the full Board. The Board has delegated the oversight of specific risks to Board committees that align with their functional responsibilities.

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TableThe Audit Committee (AC) assists the Board in overseeing the enterprise risk management program and evaluates and monitors risks related to the Company’s financial reporting requirements, system of Contents

DIRECTOR NOMINATIONS AND EVALUATIONS

internal controls, the internal audit program, the independent auditor, the compliance program, and the information security program. The AC assesses cybersecurity and information technology risks and the controls implemented to monitor and mitigate these risks. The Chief Information Officer attends all bimonthly AC meetings and provides cybersecurity updates to the AC and Board. The Compensation and Human Resources Committee (CHRC) monitors and assesses risks associated with the Company’s employment and compensation policies and practices. The Public Policy and Governance Committee (PPGC) oversees various governance matters and risks related to public policy and environmental, health and safety matters affecting the Company.

DIRECTORNOMINATIONSANDEVALUATIONS

PROCESS FOR NOMINATING AND EVALUATING DIRECTORS

The PPGC solicits and receives recommendations for potential director candidates from shareholders, management, directors and other sources. In its assessment of each potential candidate, the PPGC considers each candidate’s professional experience, integrity, honesty, judgment, independence, accountability, willingness to express independent thought, understanding of the Company’s business and other factors that the PPGC determines are pertinent in light of the current needs of the Board. Candidates must have successful leadership experience and stature in their primary fields, with a background that demonstrates an understanding of business affairs as well as the complexities of a large, publicly-held company. In addition, candidates must have a demonstrated an ability to think strategically and make decisions with a forward-looking focus and the ability to assimilate relevant information on a broad range of complex topics. In evaluating director candidates, the PPGC also considers key skills and experience related to the Company’s strategy for long-term profitable growth, which identifies services, expanded offerings and operational excellence as primary focus areas. Moreover, candidates must have the ability to devote the time necessary to meet a director’s responsibilities and serve on no more than four public company boards in addition to Caterpillar.

The Board values diversity of talents, skills, abilities and experiences and believes that Board diversity of all types enhances the Company’s Board.performance of the Board and provides significant benefits to the Company. Accordingly, the PPGC takes into account the diversity of the Board in selecting new director candidates.

DIRECTOR RECRUITMENT PROCESS 2020 PROXY STATEMENT    12

Back to Contents

DIRECTORRECRUITMENTPROCESS

CANDIDATE RECOMMENDATIONS	Candidate Recommendations	PPGC	PPGC	BOARDOFDIRECTORS	Board of Directors		Shareholders	SHAREHOLDERS
	from Shareholders, Management, Directors, & Other Sources and other sources		Discusses &Reviews Qualifications & expertise and Expertise Enterprise Strategy Board needs Regulatory requirements Cognitive diversity Needs Diversity Interviews RecommendsNominees		Discusses PPGC Recommendations Analyzes Independence Selects Nominees		Vote on Nominees at Annual Meeting

The following table summarizes certain key characteristics of the Company’s businesses and the associated qualifications, skills and experience that the PPGC believes should be represented on the Board.