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Proxy Statement
For 20202021 Annual Meeting of Stockholders
Preliminary Proxy Statement — Subject to Completion
March 6, 2020[●], 2021
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,Thursday, April 29, 2020,2021, at 9:00 a.m. at our World Headquarters, which is located at 351 Phelps Drive, Irving, Texas.Central Time.
At the Annual Meeting, stockholders will be asked to elect eleven directors for a one-year term, ratify the selection of Kimberly-Clark’s independent auditor, approve the compensation for our named executive officers, approve the 2021 Equity Participation Plan, approve the 2021 Outside Directors’ Compensation Plan, approve an amendment to the Corporation’s Certificate of Incorporation to reduce the ownership threshold required for stockholders to call a special meeting, and vote on a stockholder proposal. 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,
Notice of
Annual Meeting
of Stockholders
TO BE HELD
April 29, 20202021
ATVIAWorld Headquarterslive webcast at351 Phelps Drive,www.meetingcenter.Irving, Texasio/277152589
The Annual Meeting of Stockholders of Kimberly-Clark Corporation will be held at our World Headquarters, which is located at 351 Phelps Drive, Irving, Texas,virtually on Wednesday,Thursday, April 29, 2020, at 9:00 a.m. Central Time for the following purposes:
1. | To elect as directors the eleven nominees named in the accompanying proxy statement; |
2. | To ratify the selection of Deloitte & Touche LLP as our independent auditor for |
3. | To approve the compensation for our named executive officers in an advisory vote; |
4. | To approve the 2021 Equity Participation Plan; |
5. | To approve the 2021 Outside Directors’ Compensation Plan; |
6. | To approve an amendment to the Corporation’s Certificate of Incorporation to reduce the ownership threshold required for stockholders to call a special meeting from the current 25 percent to 15 percent; and |
7. | To vote on a stockholder proposal that may be presented at the meeting. |
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 2021 Annual Meeting will be virtual and will be held entirely online via live webcast at ww.meetingcenter.io/277152589 (password: KMB2021).There will not be an option to attend the meeting in person. Please see “Attending the Virtual Annual Meeting; Preregistration” 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 March 2, 20201, 2021 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.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 business reply envelope provided.
To attend in person,the meeting, please register by following the instructions on page 9.11.
By Order of the Board of Directors. | March |
Important Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to be Held on April 29, 2020
2021:The Proxy Statement and proxy card, as well as our Annual Report on
Form 10-K for the year ended December 31, 2019,2020, are available at
http://www.kimberly-clark.com/investors.
2021 Proxy Statement | 1 |
2 |
2021 Proxy Statement | 3 |
2021 Proxy Statement |
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 11 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 | FOR | ||
3 | Say-on-pay | Advisory approval of our named executive officers’ compensation | FOR | ||
4 | 2021 Equity Participation Plan | Approve 2021 Equity Participation Plan | FOR | ||
5 | 2021 Outside Directors’ Compensation Plan | Approve 2021 Outside Directors’ Compensation Plan | FOR | ||
6 | Reduce special meeting ownership threshold | Approve amendment to our Certificate of Incorporation to reduce the ownership threshold required for stockholders to call a special meeting from 25 to 15 percent | FOR | ||
7 | Stockholder proposal on written consent | Proposal to permit stockholders to act by written consent | AGAINST |
20192020 Performance and Compensation Highlights
The Management Development and Compensation Committee of our Board concluded that Kimberly-Clark’s management delivered financial performance in 20192020 that was above target from an overall perspective, as reflected in the financial metrics of our annual incentive program.
Performance Measures | 2019 Results | 2019 Target | Adjusted EPS is adjusted earnings per share and Adjusted OPROS is adjusted operating profit return on sales. For details on how these measures are adjusted, see “Compensation Discussion and Analysis - Executive Compensation for 2019, 2019 Performance Goals, Performance Assessments and Payouts.” | ||||
Net sales | $18.45 billion | $18.13 billion | |||||
Adjusted EPS | $6.89 | $6.61 | |||||
Adjusted OPROS improvement | +78 bps | +60 bps | |||||
Performance Measures | 2020 Results | 2020 Target | ||
Net sales | $19.07 billion | $18.62 billion | ||
Adjusted EPS | $7.73 | $7.23 |
5 |
Proxy Summary |
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. |
Corporate Governance
Board Succession Planning.In recent years the Board has demonstrated its commitment to refreshing the composition of the Board through the execution of a long-term succession plan by adding sixseven new independent directors.
Recently Added Independent Directors | ||||
John W. Culver | Group President of International, Channel Development and Global Coffee & Tea Starbucks | 2020 | ||
S.Todd Maclin | Retired Chairman, Chase Commercial and Consumer Banking JPMorgan Chase | 2019 | ||
Dunia A. Shive | Former Chief Executive Officer Belo Corp. | 2019 | ||
Mark T. Smucker | President and CEO J.M. Smucker | 2019 | ||
Sherilyn S. McCoy | Former Chief Executive Officer Avon Products | 2018 | ||
Christa S. Quarles | Chief Executive Officer | 2016 | ||
Michael D. White | Former Chairman, President and Chief Executive Officer DIRECTV | 2015 |
6 | 2021 Proxy Statement |
Proxy Summary |
DIRECTOR NOMINEE EXPERIENCE IN PRIORITY AREAS | GENDER DIVERSITY | |
ETHNIC DIVERSITY | ||
Governance Highlights.The Corporate Governance section beginning on page 1012 describes our governance framework, which includes:
Our Corporate Governance Profile | |
Independent Lead Director | Stockholders Have Right to Call Special Meetings |
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 |
In 2019, our Management Development and Compensation Committee enhanced our compensation clawback policy to address situations involving significant financial or reputational harm. For details, see “Compensation Discussion and Analysis - Additional Information about Our Compensation Practices - Compensation Clawback Policy.”
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 Main Occupation | Independent | ||||
Nancy J. Karch and Marc J. Shapiro will not stand for re-election to the Board of Directors when their terms expire at this year’s Annual Meeting. Ms. Karch currently serves as Chair of the Nominating and Corporate Governance Committee and a member of the Executive Committee and Mr. Shapiro currently serves as a member of the Management Development and Compensation Committee and the Nominating and Corporate Governance Committee.
Information About OurAnnual Meeting
Election of Directors.A director nominee will be elected if he or she receives a majority of the votes cast at the meeting in person or by proxy. If any nominee does not receive a majority of the votes cast, then that nominee will be subject to the Board’s policy regarding resignations by directors who do not receive a majority of “for” votes.
Election of Directors.Abstentions will have no impact on the outcome of the vote. They will not be counted for the purpose of determining the number of votes cast or as votes “for” or “against” a nominee.
Other Proposals.Abstentions will be counted:
Routine Matters.If your shares are held through a broker and you do not instruct the broker on how to vote your shares, your broker may choose to leave your shares unvoted or to vote your shares on routine matters. “Proposal 2. Ratification of Auditor” is the only routine matter on the agenda at this year’s Annual Meeting.
Preregistration.In order to attend the Annual Meeting, you must preregister by emailing stockholders@kcc.com by 5:00 p.m. Central Time on April 24, 2020 to confirm that you or your proxy holder or representative plan to attend. If you hold your shares in street name, your preregistration email must include proof of ownership as of the record date. Acceptable forms of proof of ownership include your Notice of Internet Availability of Proxy Materials, your proxy card or voting instruction form if you received one, or an account or brokerage statement showing share ownership as of the record date. If your proxy holder or representative will attend, your preregistration email must also include the name of the proxy holder or representative and a valid proxy authorizing the proxy holder or representative to act on your behalf.
Kimberly-Clark will bear all costs of this proxy solicitation, including the cost of preparing, printing and delivering materials, the cost of the proxy solicitation and the expenses of brokers, fiduciaries and other nominees who forward proxy materials to stockholders. In addition to mail and electronic means, our employees may solicit proxies by telephone or otherwise. We have retained D. F. King & Co., Inc. to aid in the solicitation at a cost of approximately $20,000 plus reimbursement of out-of-pocket expenses.
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.
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 Chief Executive Officer PositionsThe 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 DirectorMr. Read has served as Independent Lead Director since 2017. Our Corporate Governance Policies outline the significant role and responsibilities of the Lead Director, which include:
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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 directors John F. Bergstrom and James M. Jenness, who did not stand for re-election at our 2019 Annual Meeting, and found that Mr. Bergstrom and Mr. Jenness were also independent. Thomas J. Falk, who served as our Executive Chairman throughout 2019, was not independent. In making these determinations, the Board considered the following:
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. The transactions listed above all fall below these levels. Under our Corporate Governance Policies, certain relationships were considered immaterial and therefore were not considered by the Board in determining independence.
The Board of Directors met seven times in 2019. All of the directors attended in excess of75 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 2019 Annual Meeting.
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.
Audit Committee
Abelardo E. Bru will not stand for re-election to the Board of Directors when his term expires at this year’s Annual Meeting. Mr. Bru currently serves as a member of the Management Development and Compensation Committee.
8 | 2021 Proxy Statement |
Information About Our
Annual Meeting
► | FOR the election of directors named in this proxy statement |
► | FOR ratification of the selection of our independent auditor |
► | FOR approval of the compensation of our named executive officers |
► | FOR approval of the 2021 Equity Participation Plan |
2021 Proxy Statement | 9 |
Information About Our Annual Meeting Effect of Not Instructing Your Broker |
► | FOR approval of the 2021 Outside Directors’ Compensation Plan |
► | FOR approval of the amendment to the Corporation’s Certificate of Incorporation to reduce the ownership threshold required for stockholders to call a special meeting from the current 25 percent to 15 percent |
► | AGAINST the stockholder proposal requesting stockholders be permitted to act by written consent |
► | Mail a revised proxy form to the Corporate Secretary of Kimberly-Clark (the form must be received before the meeting starts). Use the following address: 351 Phelps Drive, Irving, TX 75038 |
► | Use the Internet voting website |
► | Use the telephone voting procedures |
► | Attend the virtual meeting and vote in person |
Election of Directors.A director nominee will be elected if he or she receives a majority of the votes cast at the meeting in person or by proxy. If any nominee does not receive a majority of the votes cast, then that nominee will be subject to the Board’s policy regarding resignations by directors who do not receive a majority of “for” votes.
Election of Directors.Abstentions will have no impact on the outcome of the vote. They will not be counted for the purpose of determining the number of votes cast or as votes “for” or “against” a nominee.
Other Proposals.Abstentions will be counted:
► | as present in determining whether we have a quorum |
► | in determining the total number of shares entitled to vote on a proposal |
► | as votes against a proposal |
Routine Matters.If your shares are held through a broker and you do not instruct the broker on how to vote your shares, your broker may choose to leave your shares unvoted or to vote your shares on routine matters. “Proposal 2. Ratification of Auditor” is the only routine matter on the agenda at this year’s Annual Meeting.
10 | 2021 Proxy Statement |
Information About Our Annual Meeting Costs of Solicitation |
If you participate in our Direct Stock Purchase and Dividend Reinvestment Plan, you will receive a proxy form that represents the number of full shares in your plan account plus any other shares registered in your name. There are no special instructions for voting shares held in the plan; simply use the normal voting methods described in this proxy statement.
We are also sending or otherwise making this proxy statement and voting materials available to participants who hold Kimberly-Clark stock through any of our employee benefit and stock purchase plans. The trustee of each plan will vote whole shares of stock attributable to each participant’s interest in the plans in accordance with the participant’s directions. If a participant gives no directions, the plan committee will direct the voting of his or her shares.
The 2021 Annual Meeting will be hosted as an audio webcast at www.meetingcenter.io/277152589. The login password is KMB2021. The meeting will begin promptly at 9:00 a.m. Central Time and online access will open 15 minutes prior to allow time to login.
To login to and attend the meeting you have two options: join as a “Stockholder” or join as a “Guest.” Joining as a “Stockholder” will enable you to vote your shares at the meeting and ask questions. To join as a “Stockholder” you will be required to have some additional information. Alternatively, you can join as a “Guest” in listen-only mode.
► | If you hold your shares through a broker, bank or other intermediary, and want to join the meeting as a “Stockholder” you must register in advance by 4:00 p.m. Central Time on April 23, 2021. To register, you must send an email to legalproxy@computershare.com and include your mailing address and an image of a legal proxy in your name from the broker, bank or other nominee that holds your shares. You may obtain a legal proxy by (1) logging into the voting site listed on the voting instruction form you received and clicking on “Vote in person at the meeting” or (2) requesting one through your bank or broker. By completing this process, you will receive an annual meeting control number from our virtual meeting provider to use when joining the meeting as a “Stockholder.” |
► | If you hold shares through our transfer agent, Computershare, you do not need to preregister. The annual meeting control number will be listed in the shaded bar on the proxy card or notice you previously received or in the email you received with your voting instructions. You can use this number to join the meeting as a “Stockholder.” |
Stockholder List. A list of record date stockholders will be available electronically at the meeting website during the annual meeting. In addition, information on how to obtain access to the stockholder list will be available during the ten days preceding the meeting at https://investor.kimberly-clark.com. To examine the list you must either hold shares through Computershare or preregister as a holder in street name (i.e., through a broker, bank or other intermediary) as described above.
Technical Assistance and Questions. Call Computershare Investor Services at (800) 730-4001 (U.S. toll-free) for technical assistance. For additional shareholder support, call Stockholder Services by telephone at (972) 281-5317 or by e-mail at stockholders@kcc.com.
Kimberly-Clark will bear all costs of this proxy solicitation, including the cost of preparing, printing and delivering materials, the cost of the proxy solicitation and the expenses of brokers, fiduciaries and other nominees who forward proxy materials to stockholders. In addition to mail and electronic means, our employees may solicit proxies by telephone or otherwise. We have retained D. F. King & Co., Inc. to aid in the solicitation at a cost of approximately $20,000 plus reimbursement of out-of-pocket expenses.
2021 Proxy Statement | 11 |
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.
The Board has established a leadership structure that allocates responsibilities between our Chairman of the Board and Chief Executive Officer (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 Chief Executive Officer 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 Chief Executive Officer |
► | 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 |
12 | 2021 Proxy Statement |
Corporate Governance Board Committees |
► | Leading (with the Chairman of the Management Development and Compensation Committee) the Board’s review and discussion of the Chief Executive Officer’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 |
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 directors Nancy J. Karch and Marc J. Shapiro, who did not stand for re-election at our 2020 Annual Meeting, and found that Ms. Karch and Mr. Shapiro were 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.
The Board of Directors met eight times in 2020 and acted two times by unanimous written consent. 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 2020 Annual Meeting.
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.
2021 Proxy Statement | 13 |
Corporate Governance Board Committees |
Audit Committee
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The Board has determined that each Audit Committee member 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 2019
The Board has determined that each of Messrs. Maclin and Smucker and Ms. 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 2020 the Committee met eight 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 2020, see “Proposal 2. Ratification of Auditor - Audit Committee Report.”
14 | 2021 Proxy Statement |
Committee ReportFor additional information about the Audit Committee’s oversight activities in 2019, see “Proposal 2.Ratification of Auditor - Audit Committee Report.”
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Chair: Sherilyn S. McCoy Other members: Abelardo E. Bru, 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 six times in 2020.
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 Chief Executive Officer | |
► | Approving, in consultation with the Chief Executive Officer, 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 | |
Roles of the Committee and the CEO in Compensation Decisions Our Chief Executive Officer 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 Chief Executive Officer. While our Chief Executive Officer 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 Chief Executive Officer is not present during the portion of the Committee’s meetings when his compensation is set. Independent Committee Consultant.In 2020, 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 2020 included: During 2020, 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 2020, 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 2020, Mercer provided advice and counsel on various matters relating to executive and director remuneration, including the following services: Consulting with management on compensation matters 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 2020 has a conflict of interest with respect to the work performed for Kimberly-Clark or the Committee. Committee Report Nominating and Corporate Governance Committee Chair: Other Members: Mae C. Jemison, M.D., 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 The Committee’s principal functions, as specified in its charter, include the following: Board organization, membership, function, performance and compensation 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.” Executive Committee Other Members: The Committee The Committee’s principal function is to exercise, when necessary between Board meetings, the Board’s powers to direct our business and affairs. 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. 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 25 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. 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. Everything we do at Kimberly-Clark is connected to our vision to lead the world in essentials for a better life. Social Impact Plastics Deliver solutions that incorporate more renewable materials that can be regenerated after use. Reduce plastics footprint by 50%. Forests Address the climate and biodiversity crises by reducing reliance on fiber from natural forests. Reduce Natural Forest Fiber footprint by 50%. Carbon Increasing energy efficiency while seeking lower carbon solutions. Reduce absolute GHG emissions (Scopes 1 and 2) by 50% over 2015 base year. Reduce value chain emissions (Scope 3) by 20%. Water Reduce water use at sites in watersheds under stress while supporting community-based water programs. Reduce water footprint in water-stressed areas by 50%. Our sustainability program is not only good for our communities and the environment, but it is also good for our business. Our 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 Recent Results.In Our In Sustainability Reporting.Each year, Kimberly-Clark publishes Stakeholder Engagement and Recognition.In setting our sustainability priorities and implementing our program, we 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 relevant to our business, our priorities and the impact to our business. Our sustainability program continues to receive strong recognition from our external stakeholders. 2019 highlights included: Living our Values in 2020 Caring for Our People.From the beginning of the COVID-19 pandemic, our priority has been the safety of our employees and consumers. We are incredibly proud of the great teamwork exhibited by our approximately 40,000 employees around the world who are doing their best to provide a steady supply of product. We have taken extra precautions globally at our office, mill and distribution center operations, which were developed in line with guidance from global health authorities, including social distancing, thermal scanning and partitions in our facilities. We have also provided employee appreciation bonuses to front-line workers and expanded certain sick leave policies to provide our employees with additional flexibility. In addition, we implemented global travel restrictions and work-from-home policies for employees who have the ability to work remotely. Caring for our Consumers.We also have taken measures to assure consumers that we are doing our best to ensure a steady supply of product, including accelerated production. Kimberly-Clark has been working closely with our retail partners and customers to restock store shelves and ensure our essential products are available to our consumers around the world. Caring for Those in Need.As the effects of the global pandemic continue to put additional stress on consumers around the world, Kimberly-Clark and its brands took action to help the most vulnerable populations receive critical support during this global crisis. Kimberly-Clark committed to donations totaling more than $8 million to assist with COVID-19 response and recovery efforts around the world. Delivering Essentials for a Better Life. Thanks to the work of our teams and our commitment to our values, we delivered a strong year of performance in 2020 despite the challenges. We grew sales 4 percent, with healthy underlying performance, and we grew net income per share by 10 percent, well above our medium-term financial objections. We also significantly increased brand investments and improved our market share positions and acquired Softex Indonesia to enhance our underlying growth prospects and help us create even more long-term shareholder value. During 2020, we returned $2.15 billion to shareholders through dividends and share repurchases, while taking actions to provide additional liquidity and flexibility throughout the year. Inclusion and Diversity Our Board of Directors and Leadership. Our Board remains committed to 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. This year, women and ethnic minorities comprise 36% and 27% of our director nominees, respectively. Women chair 50% of our Board committees and women comprise 40% of the Executive Leadership Team roles reporting to our CEO. Our Strategy and Engagement. In 2020, we advanced our global inclusion and diversity strategy by launching a four-pillar approach focused on the following key elements: Following the tragic events last spring, we also engaged in a series of events with our employees around the world, examining racism and inclusion. We held our first Global Inclusion Week, during which we held over 75 workshops, small-group discussions, leadership panel discussions and keynote addresses. Our CEO hosted a global inclusion and diversity town hall to activate our culture of inclusion. And we also launched the “She Can Connect” initiative to provide a platform where the next generation of Kimberly-Clark’s female leaders were able to connect, inspire and grow. We believe continuing to foster a culture of inclusion will contribute to the development of our people, evolve our culture and contribute to the retention and development of a strong pipeline of diverse leaders throughout the company. 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 Chief Executive Officer, Chief Financial Officer and Vice President and Controller. It is available in the Investors section of our website at The Board’s committees review particular risk areas to assist the Board in its overall risk oversight of Kimberly-Clark: 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 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 NIST CSF framework to assess the maturity of our cybersecurity programs. Our robust information security training program includes: 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 Chief Executive Officer and other key officers, as well as the emergency succession plan for the Chief Executive Officer 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. 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: Proposal 1. 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 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 For details about each nominee’s specific experience attributes, see “The Nominees” below. Director since Mr. Other public company boards served on since 2015: Director since 1996 Robert W. Decherd Chairman, President and Chief Executive Officer, A. H. Belo Corporation Mr. Decherd was elected Chairman, President and Chief Executive Officer of A. H. Belo Corporation, a newspaper publishing and Internet company, in 2018. He previously served as Chairman, President and Chief Executive Officer of A. H. Belo 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 2015: A. H. Belo Director since 2017 Michael D. Hsu Chairman of the Board and Chief Executive Officer Mr. Hsu Other public company boards served on since 2015: Director since 2002 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 currently chairs its new study on increasing representation of women in science, technology, engineering, mathematics and medicine for the National Academies. She serves on the National Board of Professional Teaching Standards. 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 2015: Scholastic Corporation (through September 2015) and Valspar Corporation (through June 2017). Director since 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 Other public company boards served on since 2015: Director since 2018 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 2015: AstraZeneca PLC (since October 2017), Avon Products, Inc. (through February 2018), Certara, Inc. (since December 2020), NovoCure Limited (since May 2018) and Stryker Corporation (since May 2018). Director since 2016 Christa S. Quarles 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, Other public company boards served on since 2015: Director since 2007 Ian C. Read Former Chairman of the Board and Chief Executive Officer, Pfizer, Inc. Mr. Read serves as Executive Chairman of Population Health Investment Co., Inc., a publicly traded blank check company formed to effect a business combination. Mr. Read previously served as Executive Chairman of Pfizer, Inc., a drug manufacturer, from January 2019 to December 2019. Prior to that, he served as Chairman of the Board and Chief Executive Officer since 2011 and President and Chief Executive Officer since 2010. Mr. Read joined Pfizer in 1978 in its financial organization. He worked in Latin America through 1995, holding positions of increasing responsibility, and was appointed President of the Pfizer International Pharmaceuticals Group, Latin America/Canada in 1996. In 2000, Mr. Read was named Executive Vice President of Europe/Canada and was named a corporate Vice President in 2001. In 2006, he was named Senior Vice President of Pfizer, as well as Group President of its Worldwide Biopharmaceutical Businesses. Other public company boards served on since 2015: DXC Technology Company (since March 2020), Pfizer, Inc. (through December 2019), Population Health Investment Co., Inc. (since November 2020) and Viatris Inc. (since November 2020). Director since 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 2015: Dr Pepper Snapple Group, Inc. (through July 2018), Main Street Capital Corporation (since March Director since 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 2015: The J.M. Smucker Director since 2015 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 Other public company boards served on since 2015: Bank of America Corporation (since June 2016), DIRECTV (through July 2015) and Whirlpool Corporation. 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 The table below shows how we structured Outside Director compensation in 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 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. 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 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 Proposal 2. 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 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. year’s estimated non-audit service fees. To ensure prompt handling of unexpected matters, the Audit Committee has delegated to the All Deloitte services and fees in 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, 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, AUDIT COMMITTEE OF THE BOARD OF DIRECTORS Note that following the approval of the Audit Committee Report, Ms. Quarles moved from the Audit Committee to the Management Development and Compensation Committee and the Nominating and Corporate Governance Committee. Proposal 3. Advisory Vote 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 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. 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. Compensation Discussion For Based on management delivered a strong financial performance in management continues to make good progress executing strategies for our long-term success, including: growing our portfolio of iconic brands, leveraging cost and financial discipline to fund growth and improve margins, and allocating capital in stockholder-friendly ways enabled by strong cash flow. 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 COMPOSITION OF TARGET DIRECT COMPENSATION Committee Consideration of At our CEO Target Direct Compensation and Realizable Direct Compensation For unexercised stock options, the amount by which our 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 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 Actual performance that resulted in the number of shares to be issued as a result of performance-based restricted share unit payouts of 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 Mr. Falk were The Committee believes that this chart demonstrates that our Chief Executive Officer’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 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: 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 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. Provide annual cash income based on: Motivate and reward achievement of the following annual performance goals: Stockholder Focus on Pay-for- Quality of talent Provide an incentive to deliver stockholder value and to achieve our long-term objectives, through awards of: Time-vested restricted share units may be granted from time to time for recruiting, retention or other purposes Encourage attraction and retention of executives critical to our long-term success and competitiveness: This section describes how the Committee thinks about annual compensation and the processes that it followed in setting Focus on Direct Annual Compensation In setting 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 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 compensation consultants retained separately by the Committee and the company), 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 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’ compensation components, including our Chief Executive Officer, are compared to the median of the peer group. To reinforce a pay-for-performance culture, targets for individual executive officers may be set above or below this median depending on the individual’s performance in prior years and experience in the position. The Committee believes that comparing target levels to the median, 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. 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 Chief Executive Officer’s direct annual compensation in the same manner as the direct annual compensation of the other named executive officers. For Consistent with past practices, the Committee reviewed the pay relationship of Mr. Hsu to the other named executive officers in Direct Annual Compensation Targets for Consistent with its focus on direct annual compensation, the Committee approved These To help achieve the objectives discussed above, our executive compensation program for 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. In general, an experienced executive who is performing at a satisfactory level will receive a base salary at or around the median of our peer group companies. However, executives may be paid above or below the median depending on their experience and performance. 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: The Committee approved a 4.0 percent increase in Mr. Hsu’s Mr. Torres and Ms. Karrmann received cash signing bonuses of $400,000 and $750,000, respectively, as an incentive to join the company and to compensate them for compensation forfeited at their prior employers. 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. TARGET PAYMENT AMOUNTS AND RANGE OF POSSIBLE PAYOUTS As shown in the table below, the Committee established goals for three different performance elements for ANNUAL CASH INCENTIVE PROGRAM 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. ⬛ELEMENT 1: CORPORATE KEY FINANCIAL GOALS For Net sales Net sales for A key indicator of our overall growth Adjusted EPS 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 For more information regarding these adjustments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Annual Report on Form 10-K. In addition to these adjustments, the Committee subtracted the amount below to exclude the impact of the operations/earnings of Softex Indonesia, which we acquired on October 1, 2020, on this full-year performance metric. Because Element 1 represents key company-wide goals, it produces the same payout percentage for each named executive ⬛ELEMENT 2: ADDITIONAL CORPORATE FINANCIAL AND STRATEGIC PERFORMANCE GOALS At the beginning of 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 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 ⬛ELEMENT 3: BUSINESS UNIT OR STAFF FUNCTION PERFORMANCE GOALS In addition to the performance goals established by the Committee, our Chief Executive Officer 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: Annual Cash Incentive Payouts for Summary of Annual Cash Incentive Payouts: PAYOUTS FOR CORPORATE GOALS AND AVERAGE TOTAL 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.” To determine target values, the Committee first compared each executive’s direct annual compensation to the median of our peer group, and then considered individual performance and the other factors listed above, as applicable. Target grant values were approved in February 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. The Committee granted time-vested restricted share awards to Mr. Torres and Ms. Karrmann as an incentive to join the company and to replace certain compensation forfeited upon leaving their former employers. In the case of Mr. Torres, the time-vested award was in addition to Performance Goals and Potential Payouts for The performance objectives for the Payout of For purposes of calculating adjusted net sales growth, the Committee excluded the impact of charges related to our 2018 Global Restructuring Program. 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) Based on this review, the Committee determined that we Mr. Torres and Ms. Karrmann 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 Vesting Levels of Outstanding Performance-Based Restricted Share Unit Awards The Committee has determined that the 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 Compensation of Former Named Executive Officer On March 1, 2020, Mr. Agarwal’s role changed from President, K-C Asia-Pacific to Chief Transformation Officer and he served in this non-executive role until he left the company on December 31, 2020. Prior to his departure, Mr. Agarwal received a base salary of $615,718. He received a payout for 2020 under our annual cash incentive program based upon (1) an individual target of 75 percent of his base salary and (2) a payout equal to 100 percent of his target. In February 2020, Mr. Agarwal received a grant of 5,145 performance-based restricted share units and in April 2020 he received a grant of 16,192 stock options. In April 2020, he also received a grant of 3,598 time-vested restricted share units; however, these units were forfeited when he departed the company. In addition to the compensation described above, Mr. Agarwal received severance pay under the Severance Pay Plan and accelerated vesting of outstanding equity awards under the terms of our 2011 Equity Participation Plan (the “2011 Plan”), described below under “Potential Payments on Termination or Change of Control - Severance Benefits - Departure of Former Named Executive Officer.” 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 Chief Executive Officer may use our corporate aircraft for limited personal travel consistent with our executive security program, and security services are provided for our Chief Executive Officer 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. Post-Termination Benefits We maintain two severance Severance Pay Plan Executive Severance In February The Committee also established objectives for As discussed in ANNUAL CASH INCENTIVE PROGRAM The corporate key financial goals for The Committee also established other corporate financial and non-financial goals for In addition, goals have been established for each named executive officer, other than our Chief Executive Officer, relating to his or her business unit or specific staff function. In February Modified free cash flow (MFCF) 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. Organic sales growth Sales growth generated from within the company and excluding the impact of currency changes, business exits and acquisition/ divestiture activity. 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 will not set the performance objective levels for the awards until April 2021. PERFORMANCE-BASED RESTRICTED SHARE UNITS GRANTED IN In February 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 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 2011 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. The Chief Executive Officer 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 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 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 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 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 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 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. 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, MANAGEMENT DEVELOPMENT AND COMPENSATION Note that following the approval of the Management Development and Compensation Committee Report, Ms. McCoy became Chair of the Committee and Christa S. Quarles joined the Committee. 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. In addition, the analysis noted that target levels for direct annual compensation are comparable to the median 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. 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 SUMMARY COMPENSATION TABLE 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 2011 Plan. 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 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: 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.” All Other Compensation.All other compensation consists of the following: Amounts shown reflect expenses related to Mr. Torres’ relocation in connection with his joining the company. Mr. Torres participated in our relocation program, a broad-based program in which all salaried employees are eligible to participate. The Company provides assistance to certain employees, including named executive officers, related to expenses incurred in connection with expatriate assignments and company-required relocations. The amount shown for Mr. Agarwal reflects the expense for benefits provided pursuant to Kimberly-Clark’s standard global mobility program as a result of his international assignment in Singapore while serving as President, K-C Asia Pacific and as Chief Transformation Officer. These benefits included cost-of-living, home leave, dependent education and other miscellaneous allowances totaling $386,724. The global mobility program facilitates the assignment of employees to positions outside their home country by minimizing any financial detriment or gain to the employee from the international assignment. Defined Contribution Plan Amounts. Matching contributions were made under the 401(k) Profit Sharing Plan and accrued under the Supplemental 401(k) Plan in 2020, 2019 Tax Gross Severance Payments. For additional information, see “Potential Payments on Termination or Change of Control -Severance Benefits - Departure of Former Named Executive Officer.” Certain The following table sets forth plan-based awards granted to our named executive officers during GRANTS OF PLAN-BASED AWARDS IN Represents the potential annual performance-based incentive cash payments each named executive officer could earn in 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 Other than the executive severance 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 2011 Plan, which was approved by stockholders in 2011. The 2011 Plan provides 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 Ms. For grants of stock options, the 2011 Plan provides 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 Performance-based restricted share unit awards granted in 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. The following table sets forth information concerning outstanding equity awards for our named executive officers as of December 31, OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, Option Exercises and Stock Vested The following table sets forth information concerning stock options exercised and stock awards vested during OPTION EXERCISES AND STOCK VESTED IN The following table sets forth information as of December 31, Employees who joined Kimberly-Clark prior to January 1, 1997 are eligible to participate in our pension plans, which provide benefits based on years of service as of December 31, 2009 and pay (annual cash compensation), integrated with social security benefits. Our pension plans are comprised of the Kimberly-Clark Pension Plan and the Supplemental Pension Plans. We stopped accruing compensation and benefit service for participants under our pension plans for most of our U.S. employees, including our named executive officers, for plan years after 2009. These changes do not affect benefits earned by participants prior to January 1, 2010. The following is an overview of these plans. The estimated actuarial present value of the retirement benefits accrued through December 31, without consideration of pre-retirement mortality. Present values for Ms. Underhill for the qualified plan are based on the PRI-2012 healthy retiree table, adjusted for white collar and generational improvements using scale The actuarial increase in While the supplemental pension plans remain unfunded, in 1994 the Board approved the establishment of a trust and authorized us to make contributions to this trust in order to provide a source of funds to assist us in meeting our liabilities under our supplemental defined benefit plans. For additional information regarding these plans, see “Compensation Discussion and Analysis Nonqualified Deferred Compensation The following table sets forth information concerning nonqualified defined contribution and deferred compensation plans for our named executive officers during Overview of 401(k) Profit Sharing Plan and Supplemental 401(k) Plan. While the Supplemental 401(k) Plan remains unfunded, in 1996 the Board amended a previously established trust and authorized us to make contributions to this trust in order to provide a source of funds to assist us in meeting our liabilities under our supplemental defined contribution plans. Potential Payments on Termination or Change of Control Our named executive officers are eligible to receive certain benefits in the event of termination of employment, including following a change of control. This section describes various termination scenarios as well as the payments and benefits payable under those scenarios. Severance Benefits Executive Severance In addition, nonqualified stock options will vest and be exercisable within the earlier of five years from the participant’s termination or the remaining term of the option. A “Qualified Termination of Employment” is a separation of service within two years following a change of control of Kimberly-Clark (as defined in the plan) either involuntarily without cause or by the participant with good reason. In addition, any involuntary separation of service without cause within one year before a change of control will also be determined to be a Qualified Termination of Employment if it is in connection with, or in anticipation of, a change of control. The current agreements with our named executive officers expire on December 31, These agreements reflect that the named executive officer is not entitled to a tax gross-up if the named executive officer incurs an excise tax due to the application of Section 280G of the Internal Revenue Code. Instead, payments and benefits payable to the named executive officer will be reduced to the extent doing so would result in the executive retaining a larger after-tax amount, taking into account the income, excise and other taxes imposed on the payments and benefits. The Board has determined the eligibility criteria for participation in the plan. Each named executive officer’s agreement under the Executive Severance Plan provides that the executive will retain in confidence any confidential information known to the executive concerning Kimberly-Clark and Kimberly-Clark’s business so long as such information is not publicly disclosed. Severance Pay Plan.Our Severance Pay Plan generally provides eligible employees (including our named executive officers) severance payments and benefits in the event of certain involuntary terminations. Under the Severance Pay Plan, a named executive officer (employed for at least one year) whose employment is involuntarily terminated would receive, subject to the Committee’s discretion to modify the applicable amounts: Two times the sum of annual base salary and the average annual incentive award for the three prior fiscal years, If the named executive officer’s employment is involuntarily terminated within the first 12 months of employment, the Severance Pay Plan provides that the named executive officer would receive three months’ base salary. Severance pay under the Severance Pay Plan will not be paid to any participant who is terminated for cause (as defined under the plan), is terminated during a period in which the participant is not actively at work for more than 25 weeks (except to the extent otherwise required by law), voluntarily quits or retires, dies or is offered a comparable position (as defined under the plan). A named executive officer must execute a full and final release of claims against us within a specified period of time following termination to receive severance benefits under our severance pay plans. Under the Severance Pay Plan, if the release has been timely executed, severance benefits are payable as a lump sum cash payment no later than 60 days following the participant’s termination date. Any current year annual incentive award that is payable under the Severance Pay Plan will be paid at the same time as it was payable under the Executive Officer Achievement Award Program, but no later than 60 days following the calendar year of the separation from service. 2011 Plan.In the event of a “Qualified Termination of Employment” (as described below) of a participant in the 2011 Plan in connection with a change of control, all of the participant’s awards not subject to performance goals would become fully vested. Any awards subject to performance goals will vest at the average performance-based restricted share unit payout for awards for the three prior fiscal years. Unless otherwise governed by another applicable plan or agreement, such as the terms of the Executive Severance Plan, options in this event would be exercisable for the lesser of three months or the remaining term of the option. If any amounts payable under the 2011 Plan result in excise tax due to the application of Section 280G of the Internal Revenue Code, the 2011 Plan provides that payments and benefits payable to the named executive officer will be reduced to the extent necessary so that no excise tax will be imposed if doing so would result in the executive retaining a larger after-tax amount, taking into account the income, excise and other taxes imposed on the payments and benefits. A “Qualified Termination of Employment” is a termination of the participant’s employment within two years following a change of control of Kimberly-Clark (as defined in the 2011 Plan), unless the termination is by reason of death or disability or unless the termination is by Kimberly-Clark for cause or by the participant without good reason. The 2011 Plan provides that, if pending a change of control, the Committee determines that Kimberly-Clark common stock will cease to exist without an adequate replacement security that preserves the economic rights and positions of the participants in the 2011 Plan (for example, as a result of the failure of the acquiring company to assume outstanding grants), then all options and stock appreciation rights will become exercisable, in a manner deemed fair and equitable by the Committee, immediately prior to the consummation of the change of control. In addition, the restrictions on all restricted stock will lapse and all restricted share units, performance awards and other stock-based awards will vest immediately prior to the consummation of the change of control and will be settled upon the change of control in cash equal to the fair market value of the restricted share units, performance awards and other stock-based awards at the time of the change of control. In the event of a termination of employment of a participant in the 2011 Plan, other than a Qualified Termination of Employment, death, total and permanent disability or retirement of the participant, the participant will forfeit all unvested restricted stock and restricted share units, and any vested stock options held by the participant will be exercisable for the lesser of three months or the remaining term of the option. Retirement, Death and Disability Benefits payable under our pension plans for eligible participants (if the participant has at least five years of vesting service) (see “Pension Benefits” for additional information), Death.In the event of death while an active employee, the following benefits are payable: 50 percent of the benefits under our pension plans for eligible participants, not reduced for early payment (if the participant has at least five years of vesting service) (see “Pension Benefits”), payable under the terms of the plans to the participant’s spouse or minor children, Disability.In the event of a separation of service due to a total and permanent disability, as defined in the applicable plan, our named executive officers are entitled to receive: Benefits payable under our pension plans for eligible participants, not reduced for early payment, if the participant has at least five years of vesting service (see “Pension Benefits” for additional information), Their account balance, if any, under the Deferred Compensation Plan, Potential Payments on Termination or Change of Control Table The termination benefits provided to our executive officers upon their voluntary termination of employment do not discriminate in scope, terms or operation in favor of our executive officers compared to the benefits offered to all salaried employees, so those benefits are not included in the table below. Of our current named executive officers, only Mr. Hsu, Ms. Underhill and Ms. The amounts presented in the table are in addition to amounts each named executive officer earned or accrued prior to termination, such as the officer’s balances under our Deferred Compensation Plan, accrued retirement benefits (including accrued pension plan benefits), previously vested benefits under our qualified and non-qualified plans, previously vested options, restricted stock and restricted share units and accrued salary and vacation. For information about these previously earned and accrued amounts, see “Summary Compensation,” “Outstanding Equity Awards,” “Option Exercises and Stock Vested,” “Pension Benefits,” and “Nonqualified Deferred Compensation.” Because Mr. POTENTIAL PAYMENTS ON TERMINATION OR CHANGE OF CONTROL TABLE Equity Compensation Plan Information The following table gives information about Kimberly-Clark’s common stock that may be issued upon the exercise of options, warrants, and rights under all of Kimberly-Clark’s equity compensation plans as of December 31, 2011 Outside Directors’ Compensation Plan Proposal 4. Approval of We are asking stockholders to approve the Kimberly-Clark Corporation 2021 Equity Participation Plan (the “2021 Plan”), which is intended to replace the 2011 Equity Participation Plan (the “2011 Plan”). The 2011 Plan provides for the issuance of long-term incentive compensation, including equity-based awards, to our employees. The 2011 Plan expires on April 20, 2021. Our Board believes that continuation of our long-term incentive compensation program beyond the expiration of the 2011 Plan is necessary because it enables us to attract, retain and motivate employees and officers, as well as align their interests with those of our stockholders. As a result, on February 11, 2021, our Board approved the 2021 Plan as a successor plan to the 2011 Plan and we are submitting it to our stockholders for approval. If the 2021 Plan is approved by our stockholders, it will become effective on April 29, 2021 upon such stockholder approval. The 2021 Plan increases the number of shares of Kimberly-Clark common stock authorized for issuance under the 2011 Plan by 2,100,000. Shares that remain available for grant under the 2011 Plan as of the effective date of the 2021 Plan will become available for issuance under the 2021 Plan. Therefore, after taking into account the shares granted under the 2011 Plan, net of forfeitures, through December 31, 2020, as well as the approximately 167,000 shares we expect to grant under the 2011 Plan between January 1, 2021 and April 20, 2021, we expect that approximately 12,086,000 shares of Kimberly-Clark common stock will be available under the 2021 Plan. In addition, once the 2021 Plan is effective, shares subject to awards under the 2011 Plan that are forfeited or otherwise not settled by issuance of Kimberly-Clark common stock will become available for issuance under the 2021 Plan. In determining the number of shares to allocate to the 2021 Plan, our Board analyzed various metrics, including the potential dilutive impact of the new share request under the 2021 Plan, the rate at which we have granted equity awards in the past and our prospective equity compensation requirements. In this regard, we believe that the dilutive effect of the new share request is moderate and in line with stockholder interests. Using data as of December 31, 2020 and assuming stockholder approval of this proposal, we calculate a dilution level of 5.65 percent by dividing the number of shares subject to existing awards or available for future grants under our plans (including the 2021 Plan and the 2021 Directors Plan) by our fully diluted shares outstanding as follows. Weighted average remaining contractual life is approximately 7.75 years for stock options with a weighted average exercise price of $123.14 as of December 31, 2020. We also monitor share usage by reviewing the number of shares subject to grant on an annual basis. This metric is referred to as a company’s “burn rate” and shows how rapidly a company is depleting its shares reserved for equity compensation. It is commonly defined as the number of shares granted under the company’s equity incentive plans in a given fiscal year divided by the weighted average common shares outstanding during that fiscal year. The average burn rate for Kimberly-Clark across the 2018, 2019 and 2020 fiscal years is 0.66 percent, based on the following: Minimum vesting provisions. Awards generally have a one-year minimum vesting provision. No discounted awards. Awards that have an exercise price cannot be granted with an exercise price less than the fair market value on the grant date (with the exception of substitute awards). No Liberal Share Recycling Provisions. For purposes of the aggregate share limit, there is no “recycling” of shares (i) tendered for payment of the option exercise price, (ii) withheld for the payment of taxes, or (iii) repurchased using the proceeds from option exercises. In addition, in the case of SARs, the full number of shares subject to the SARs are counted against the aggregate share limit regardless of the number of shares actually issued upon exercise. No repricing or exchange of stock options or stock appreciation rights. The 2021 Plan does not permit repricing of options or SARs or the exchange of underwater options or SARs for cash or other awards without stockholder approval. Double-trigger vesting. A change of control of the company does not, by itself, trigger vesting of awards (unless such awards would not be assumed or replaced following the change of control). Dividend payouts. No dividends or dividend equivalents on unvested awards will be paid until those awards are earned and vested. No dividends or dividend equivalents will be paid with respect to stock options or SARs. Administered by an independent committee. The 2021 Plan is administered by the Management Development and Compensation Committee (the “Committee”), which is comprised of independent directors, and is benchmarked against peers with the assistance of an independent compensation consultant. Forfeiture and clawback. Awards are subject to forfeiture and/or recoupment if we are required to make a material restatement of our financial statements or if the grantee engages in misconduct causing us significant reputational or financial harm, as well as may be required by applicable law or under any other recoupment policy of Kimberly-Clark or under an applicable award agreement. The 2021 Plan describes how the number of shares available for awards is reduced for exercises, settlements or vestings of awards. If any shares of common stock subject to an award under the 2021 Plan or the 2011 Plan are forfeited or expire, are converted to shares of another person in connection with a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other similar event, or if an award is settled in cash, the shares subject to such award will, to the extent of such forfeiture, conversion, expiration or cash settlement, again be available for future grants of awards. Notwithstanding the foregoing, no shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an Incentive Stock Option. The following shares will not be added to the shares of common stock authorized for grant and will not be available for future grants of awards: (i) shares tendered by a participant or withheld by us in payment of an option price; (ii) shares tendered by a participant or withheld by us to satisfy any tax withholding obligation with respect to an award; (iii) shares subject to SARs that are not issued in connection with the stock settlement of the SARs on exercise thereof; and (iv) shares purchased on the open market by us with the cash proceeds received from the exercise of options. The types of awards under the 2021 Plan include: Stock Options The 2021 Plan employs market value as a basis for rewarding performance through the use of Incentive Stock Options and stock options which are not Incentive Stock Options (“Nonqualified Stock Options”) to acquire Kimberly-Clark common stock. Incentive Stock Options may be granted only to our employees and employees of our subsidiary corporations and any parent corporation and are subject to such other limitations as required by the Code. The option price per share of each stock option will be at least equal to the fair market value per share of Kimberly-Clark common stock at the date of grant. The option period will be no more than 10 years from the date of grant. Options will generally only become exercisable (1) after at least one year has expired following the date of grant, subject to the employee’s continuous service through such period, and subject to other exercise limitations or vesting terms or periods as may be provided in the applicable award agreement, (2) if earlier, upon the employee’s termination of employment without cause or resignation with good reason following a change of control of Kimberly-Clark (a “Qualified Termination of Employment,” as defined in the 2021 Plan), or (3) as otherwise determined by the Committee. The 2021 Plan also provides the Committee with discretion to require performance-based standards to be met before option awards will vest. The option price, as well as any withholding tax, is payable in full in cash or by check at the time of exercise, or at the discretion of the Committee in shares of Kimberly-Clark common stock transferable to us and having a fair market value on the transfer date equal to the amount payable to us. If the participant terminates employment for any reason other than death, disability, retirement or a Qualified Termination of Employment (see “Effect of Change of Control” below), the then-exercisable portion of the option will generally only be exercisable for three months following such termination. The entire unexercised portion of the option is exercisable within three years from the date of death or disability of a participant, within five years of the date of retirement of a participant, or within the remaining period of the option, whichever is earlier, unless otherwise determined by the Committee. Under no circumstances, however, will an option be exercisable beyond 10 years from the date of the grant. No dividend equivalents may be granted in relation to options granted under the 2021 Plan. Stock Appreciation Rights (SARs) SARs offer recipients the right to receive payment for the difference (spread) between the exercise price of the SAR and the fair market value of Kimberly-Clark common stock at the time of redemption. The Committee may authorize payment of the spread for a SAR in the form of cash, common stock to be valued at its fair market value on the date of exercise, a combination of these, or by any other method as the Committee may determine. A SAR may be granted in addition to any other award under the 2021 Plan or in tandem with or independent of a Nonqualified Stock Option. SARs are generally subject to the same limitations and restrictions regarding exercise, transfer and forfeiture as are stock options. Restricted Shares and Restricted Share Units The 2021 Plan permits the Committee to award restricted shares or restricted share units to participants. The Committee may determine the number of restricted shares to be granted to participants and the periods during which the shares may not be transferred. During this restricted period, the restricted shares may not be sold or transferred by the participant except in the case of death. Upon expiration of the restricted period, the restricted shares will be delivered to the participant free of restrictions. A participant who is awarded restricted shares will be entitled to vote these shares and to receive dividends declared on these shares during the restricted period, but no such dividends will be paid to the participant unless and until the restricted shares vest. The Committee may also determine the number of restricted share units to be granted to participants and the periods during which the units may not be transferred. During this restricted period, the restricted share units may not be sold or transferred by the participant except in the case of death. Upon expiration of the restricted period, payment of restricted share units will be made in cash or shares of common stock as determined by the Committee. During the restricted period, a participant who is awarded restricted share units will not be entitled to vote these units. Unless otherwise determined by the Committee, (i) during this restricted period participants will be credited with dividend equivalents equal in value to the dividends declared and paid on Kimberly-Clark common stock and (ii) these dividend equivalents will be reinvested in restricted share units at the then fair market value of Kimberly-Clark common stock on the date dividends are paid. However, any such dividend equivalents will be paid to the participant only to the extent the underlying awards vest. Performance Awards The 2021 Plan permits the Committee to grant performance awards to participants. Performance awards include arrangements under which the grant, issuance, retention, vesting and/or transferability of the award are subject to performance goals and any additional conditions or terms as the Committee may designate. A performance award granted may be denominated or payable in cash, Kimberly-Clark common stock (including, without limitation, restricted shares), other securities or other awards. The performance awards denominated in shares may earn dividend equivalents; however, dividend equivalents for performance awards will accrue and will not be paid unless and until the underlying awards vest. Other Stock-Based Awards The Committee may grant other awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Kimberly-Clark common stock, as are deemed by the Committee to be consistent with the purposes of the 2021 Plan. The Committee will determine the terms and conditions of these awards. In the event that any such stock-based award carries a right to dividend equivalents, such dividend equivalents will be paid only to the extent the underlying award vests. Performance Goals participant is employed. The Committee, in its discretion, may change or modify these criteria to make equitable adjustments to the performance goals in recognition of unusual or non-recurring events affecting us or our financial statements, in response to changes in applicable laws or regulations or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or a change in accounting principles. Minimum Vesting Requirement Adjustments Re-pricings and Cash Buyouts Prohibited Amendment of the 2021 Plan; Modifications of Awards Under the 2021 Plan, the Committee may, by written notice to a participant, (i) limit the period in which an Incentive Stock Option may be exercised to a period ending at least three months following the date of such notice, (ii) limit or eliminate the number of shares subject to an Incentive Stock Option after a period ending at least three months following the date of such notice, (iii) accelerate the restricted period with respect to the restricted shares, restricted share units, performance awards and other stock-based awards granted under the 2021 Plan or accelerate the vesting of any award, (iv) subject any performance-based award or any other award subject to performance goals to any policy adopted by Kimberly-Clark relating to the recovery of the award to the extent that after payment of the award it is determined that the performance goals were not actually achieved or (v) determine whether, to what extent, and under what circumstances awards may be settled or exercised in cash, common stock, other securities or other awards, or cancelled, forfeited, or suspended, and the method by which awards may be settled, exercised, cancelled, forfeited or suspended, (vi) make other adjustments in the terms and conditions (including performance goals) applicable to awards or (vii) otherwise amend or modify any outstanding award. Further, any restricted share units, performance awards and other stock-based awards that are required to meet the requirements of Section 409A of the Code will be settled in a manner that complies with that section. Except as provided in the 2021 Plan, no amendment, suspension, or termination of the 2021 Plan or any awards under the 2021 Plan will, without the consent of the participant, adversely alter or change any of the rights or obligations under any awards or other rights previously granted to the participant, unless such change is necessary or appropriate to comply with applicable law. Effect of Change of Control The 2021 Plan provides that, if pending a change of control, the Committee determines that Kimberly-Clark common stock will cease to exist without an adequate replacement security that preserves the economic rights and positions of the participants in the 2021 Plan or if the acquiring company fails to assume outstanding grants, then all options (other than Incentive Stock Options) and SARs will become exercisable, in a manner deemed fair and equitable by the Committee, immediately prior to the consummation of the change of control. In addition, the restrictions on all restricted stock will lapse and all restricted share units, performance awards and other stock-based awards will vest immediately prior to the consummation of the change of control and will be settled upon the change of control in cash equal to the fair market value of the restricted share units, performance awards and other stock-based awards at the time of the change of control. If any amounts payable under the 2021 Plan constitute a parachute payment under Section 280G of the Code, the 2021 Plan provides that the amounts will be reduced to the extent necessary to provide the participant with the greatest aggregate net after tax receipt, as determined applying procedures established by the Committee. Non-Transferability of Awards Forfeiture and Recoupment Section 409A of the Code Tax Withholding Use of Proceeds U.S. Federal Tax Consequences Incentive Stock Options A participant who is granted an incentive stock option (“ISO”) under Section 422 of the Internal Revenue Code of 1986 (the “Code”) recognizes no income upon grant or exercise of the ISO. However, the excess of the fair market value of Kimberly-Clark shares on the date of exercise over the option price is an item includible in the optionee’s alternative minimum taxable income. If an optionee holds the common stock acquired upon exercise of the ISO for at least two years from the date of grant and at least one year following exercise (the “Statutory Holding Periods”), the IRS taxes the optionee’s gain, if any, upon a subsequent disposition of such common stock, as capital gain. If an optionee disposes of common stock acquired through the exercise of an ISO before satisfying the Statutory Holding Periods (a “Disqualifying Disposition”), the optionee may recognize both compensation income and capital gain in the year of disposition. The amount of the compensation income generally equals the excess of (1) the lesser of the amount realized on disposition or the fair market value of the common stock on the exercise date over (2) the exercise price. This income is subject to income tax, but not to income or employment tax withholding. The balance of the gain that the optionee realizes on such a disposition, if any, is long-term or short-term capital gain depending on whether the common stock has been held for more than one year following exercise of the ISO. Kimberly-Clark is not entitled to any deduction with respect to the grant or exercise of an ISO or the optionee’s subsequent disposition of the shares acquired if the optionee satisfies the Statutory Holding Periods. If these holding periods are not satisfied, we are generally entitled to a deduction in the year the optionee disposes of the common stock in an amount equal to the optionee’s compensation income. Nonqualified Stock Options A participant who is granted a stock option that is not an ISO (a Nonqualified Stock Option) recognizes no income upon grant of the option. At the time of exercise, however, the optionee recognizes compensation income equal to the difference between the exercise price and the fair market value of the Kimberly-Clark shares received on the date of exercise. This income is subject to income and employment tax withholding. Kimberly-Clark is generally entitled to an income tax deduction corresponding to the compensation income that the optionee recognizes. When an optionee disposes of common stock received upon the exercise of a Nonqualified Stock Option, the optionee will recognize capital gain or loss equal to the difference between the sales proceeds received and the optionee’s basis in the stock sold. Kimberly-Clark will not receive a deduction for any capital gain recognized by the optionee. SARs A participant who is granted a SAR recognizes no income upon grant of the SAR. At the time of exercise, however, the participant recognizes compensation income equal to any cash received and the fair market value of any Kimberly-Clark common stock received. This income is subject to income and employment tax withholding. Kimberly-Clark is generally entitled to an income tax deduction corresponding to the ordinary income that the participant recognizes. Restricted Shares Restricted shares are subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code. A participant to whom we grant restricted shares may make an election under Section 83(b) of the Code (a “Section 83(b) Election”) to have the grant taxed as compensation income at the date of receipt, resulting in the IRS taxing any future appreciation (or depreciation) in the value of the restricted shares as capital gain (or loss) upon a subsequent sale of the shares. Such an election must be made within 30 days of the date that we grant the restricted shares. However, if a participant does not make a Section 83(b) Election, then the grant will be taxed as compensation income at the full fair market value on the date that the restrictions imposed on the shares expire. Unless the participant makes a Section 83(b) Election, any dividends that we pay on common stock subject to the restrictions constitutes compensation income to the participant and compensation expense to us. Any compensation income the participant recognizes from a grant of restricted shares is subject to income and employment tax withholding. Kimberly-Clark is generally entitled to an income tax deduction for any compensation income taxed to the participant. Performance Awards and Restricted Share Units The grant of a performance award or restricted share unit does not generate taxable income to a participant or an income tax deduction to us. Any cash and the fair market value of any Kimberly-Clark common stock received as payment in respect of a performance award or restricted share unit will constitute ordinary income to the participant. The participant’s income is subject to income and employment tax withholding. Kimberly-Clark is generally entitled to an income tax deduction corresponding to the ordinary income that the participant recognizes. New Plan Benefits During 2020, 2019 and 2018, we made awards to an average of 1,200 employees per year, covering an average of approximately 1,300,000 shares per year. However, these amounts are not necessarily indicative of the number of participants or the number of shares that might be awarded in the future. Fair Market Value of the Common Stock Proposal 5. Approval of We are asking stockholders to approve the Kimberly-Clark Corporation 2021 Outside Directors Compensation Plan (the “2021 Directors Plan”), which is intended to replace the 2011 Outside Directors Compensation Plan (as amended and restated in 2016, the “2011 Directors Plan”). Currently, Kimberly-Clark has ten Outside Directors eligible to participate in the 2021 Directors Plan (after giving effect to Abelardo E. Bru’s anticipated retirement at the Annual Meeting). The 2011 Directors Plan promotes the interests of Kimberly-Clark and our stockholders by enhancing our ability to attract, motivate and retain our Outside Directors. The 2011 Directors Plan expires on April 20, 2021. We believe that continuation of our Outside Director long-term incentive compensation program beyond the expiration of the 2011 Directors Plan is necessary because it enables us to align the Outside Directors’ compensation closely with the economic interests of our stockholders by use of equity-based compensation awards. As a result, on February 11, 2021, our Board of Directors (our “Board”) approved the 2021 Directors Plan as a successor plan to the 2011 Directors Plan and we are submitting it to our stockholders for approval. If the 2021 Directors Plan is approved by our stockholders, it will become effective on April 29, 2021 upon such stockholder approval. A total of 200,000 shares will be reserved for issuance under the 2021 Directors Plan, if approved by stockholders, which represents a decrease in the shares remaining available under the 2011 Directors Plan as of December 31, 2020. We have summarized below the primary features of the 2021 Directors Plan. The summary is qualified by, and subject to, the actual provisions of the 2021 Directors Plan, a copy of which is attached as Appendix B. The 2021 Directors Plan will remain in effect until terminated by the Board in accordance with the terms of the 2021 Directors Plan (see “Amendment; Termination” below). We may not issue common stock under the 2021 Directors Plan after termination of the 2021 Directors Plan; however, all awards that are outstanding as of the date on which the Board terminates the 2021 Directors Plan will continue in effect beyond the termination date pursuant to the terms of the 2021 Directors Plan and applicable award agreement(s). The foregoing plan share limits are subject to adjustment in the case of certain capitalization events or corporate transactions, as described below. In the event there are changes in Kimberly-Clark’s common stock or Kimberly-Clark’s capitalization through a corporate transaction as described in the 2021 Directors Plan, then to the extent necessary to preserve the benefits to participants under the 2021 Directors Plan, the Committee will make appropriate adjustments to (i) the aggregate number and type or class of shares subject to the 2021 Directors Plan, (ii) the number and type or class of shares, and the award price, if applicable, of all shares subject to outstanding awards, and (iii) such other provisions of the 2021 Directors Plan and individual awards as may be necessary and equitable to carry out the foregoing purpose. The 2021 Directors Plan provides that the aggregate value of equity-based (based on the grant date fair value of equity-based awards as determined for financial reporting purposes) and cash compensation granted under the 2021 Directors Plan or otherwise during any calendar year to any individual Outside Director for service in such capacity will not exceed $1,000,000; provided that in the calendar year in which an Outside Director first joins our Board or is first designated as Chairman of the Board or Lead Director, the maximum aggregate value applicable to that Outside Director is $2,000,000. Although other types of awards may be granted under the 2021 Directors Plan, currently only restricted share units are issued. If outside director compensation practices change, the 2021 Directors Plan continues to permit the following types of awards: Stock Options The Board may grant stock options to Outside Directors under the 2021 Directors Plan. The Board may determine the number of stock options to be granted to Outside Directors and the periods during which the stock options will vest and become exercisable. To the extent that options are granted under the 2021 Directors Plan, the option price per share will be at least equal to the fair market value per share of Kimberly-Clark common stock at the date of grant. The option period will be 10 years from the date of grant. Except as otherwise authorized by the Board, payment of the option price may be made in cash, by check, or with shares of Kimberly-Clark common stock having a fair market value at the time of exercise equal to the option price. In general, no option may be exercised until one year after it has been granted, except that the 2021 Directors Plan provides that the options become exercisable in full if the Outside Director separates from service as a Director within the two year period following the date of a “change of control” of Kimberly-Clark, as defined in the 2021 Directors Plan. Under the 2021 Directors Plan, the Board, by written notice to an Outside Director, may limit the period in which an option may be exercised to a period ending at least three months following the date of the notice, and/or limit or eliminate the number of shares subject to option after a period ending at least three months following the date of the notice. Stock Appreciation Rights (SARs) The Board may grant to Outside Directors the right to convert a specified number of shares covered by stock options to cash, with such right being a “stock appreciation right” or “SAR.” SARs offer Outside Directors the right to receive a payment for the difference (spread) between the exercise price of the SAR and the fair market value of Kimberly-Clark common stock at the time of redemption. SARs are generally subject to the same limitations and restrictions regarding exercise, transfer and forfeiture as are stock options. An SAR will expire when the period of the option to which it relates expires. Restricted Shares The Board may award restricted shares to Outside Directors. The Board may determine the number of restricted shares to be granted to Outside Directors and the periods during which the shares may not be transferred. During this restricted period, the restricted shares may not be sold or transferred by the Outside Director except in the case of death. Upon expiration of the restricted period, the restricted shares will be delivered to the Outside Director free of restrictions. Outside Directors who are awarded restricted shares will be entitled to vote these shares and to receive dividends declared on these shares during the restricted period. Restricted Share Units The Board may also determine the number of restricted share units to be granted to Outside Directors and the restricted period during which the units may not be transferred (except upon death), as well as such other restrictions that will apply to the restricted share units during the restricted period. In this regard, the Board may provide (i) that the Outside Director will forfeit any restricted share units unless he or she still serves as a director of Kimberly-Clark at the end of the restricted period, (ii) that the Outside Director will become vested in restricted share units according to a schedule, or under other terms and conditions, determined by the Board, and (iii) how any restrictions will be applied, modified or accelerated in the case of the Outside Director’s death or total and permanent disability. Upon expiration of the restricted period, payment of restricted share units will be made in cash or shares of common stock as determined by the Board at the time of grant. During the restricted period, an Outside Director who is awarded restricted share units will not be entitled to vote these units but will be credited with dividend equivalents equal in value to the dividends declared and paid on Kimberly-Clark common stock which will be reinvested in restricted share units at the then fair market value of Kimberly-Clark common stock on the date dividends are paid, and these dividend equivalents in the form of additional restricted share units will not be paid unless and until the underlying awards are paid. Board has the power to promulgate rules and other guidelines in connection with the performance of its obligations, powers and duties under the 2021 Directors Plan, including its duty to administer and construe the 2021 Directors Plan and awards. Except in connection with a change in Kimberly-Clark common stock or the capitalization of Kimberly-Clark as provided in Section 7 of the 2021 Directors Plan, no option or SAR may be repriced, replaced, re-granted through cancellation, or modified without stockholder approval if the effect would be to reduce the exercise price for the shares underlying the option, and no stock option or SAR may be repurchased for cash or another award at a time when the price is equal to or less than the fair market value of the underlying shares. The Committee may take these actions, however, subject to the approval of stockholders. The Board may amend, suspend, or discontinue the 2021 Directors Plan or amend any or all awards under the 2021 Directors Plan to the extent permitted by law and the rules of any stock exchange on which Kimberly-Clark common stock is listed, provided that no action may be taken if it would result in a failure to comply with applicable provisions of the federal securities or income tax laws. However, if an amendment must be approved by the stockholders pursuant to law or the rules of any stock exchange on which Kimberly-Clark common stock is listed, any such proposed amendment will be submitted to the stockholders for approval. Except as provided in the 2021 Directors Plan or as may be necessary or appropriate to comply with applicable law, no amendment, suspension or termination of the 2021 Directors Plan will adversely alter or change any rights granted to an Outside Director without the Outside Director’s consent unless such amendment is necessary or appropriate to comply with applicable laws. Section 409A of the Code imposes certain requirements applicable to “nonqualified deferred compensation plans.” Awards under the 2021 Directors Plan are intended to be exempt from Section 409A to the maximum extent possible, provided that to the extent that any award is subject to Section 409A, such award and the 2021 Directors Plan are intended to comply with Section 409A and will be construed accordingly. The 2021 Directors Plan provides for modification or suspension of awards in the event an action or arrangement contemplated by the 2021 Directors Plan would, if undertaken, cause an Outside Director to become subject to any additional taxes or other penalties under Section 409A. The following discussion is intended only as a brief summary of the federal income tax rules relevant to stock options, SARs, restricted shares, restricted share units and cash payments under the 2021 Directors Plan. These rules are highly technical and subject to change. The following discussion is limited to the United States federal income tax laws relevant to us and to the individuals who are citizens or residents of the United States. Different or additional rules may apply to individuals who are subject to income tax in foreign jurisdictions or subject to state or local income taxes in the United States. Options An Outside Director who is granted an option recognizes no income upon grant of the option. At the time of exercise, however, the Outside Director recognizes compensation income equal to the difference between the exercise price and the fair market value of the Kimberly-Clark shares received on the date of exercise. Kimberly-Clark is generally entitled to an income tax deduction corresponding to the compensation income that the Outside Director recognizes. When an Outside Director disposes of common stock received upon the exercise of an option, the Outside Director will recognize a capital gain or loss equal to the difference between the sales proceeds received and the Outside Director’s basis in the stock sold. Kimberly-Clark will not receive a deduction for any capital gain recognized by the Outside Director. SARs An Outside Director who is granted a SAR recognizes no income upon grant of the SAR. At the time of exercise, however, the Outside Director recognizes compensation income equal to any cash received or the fair market value of any Kimberly-Clark common stock received. Kimberly-Clark is generally entitled to an income tax deduction corresponding to the ordinary income that the Outside Director recognizes. Restricted Shares Restricted shares, if issued under the 2021 Directors Plan, are subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code. An Outside Director to whom we grant restricted shares may make an election under Section 83(b) of the Code (a “Section 83(b) Election”) to have the grant taxed as compensation income at the date of receipt, resulting in the IRS taxing any future appreciation (or depreciation) in the value of the shares of common stock that we grant as capital gain (or loss) upon a subsequent sale of the shares. Such an election must be made within 30 days of the date that we grant the restricted shares. However, if an Outside Director does not make a Section 83(b) Election, then the grant will be taxed as compensation income at the full fair market value on the date that the restrictions imposed on the shares expire. Unless the Outside Director makes a Section 83(b) Election, any dividends that we pay on common stock subject to the restrictions constitutes compensation income to the Outside Director. Kimberly-Clark is generally entitled to an income tax deduction for any compensation income taxed to the Outside Director. Restricted Share Units The grant of a restricted share unit does not generate taxable income to an Outside Director or an income tax deduction to us. Any cash and the fair market value of any Kimberly-Clark common stock received as payment in respect of a restricted share unit will constitute ordinary income to the Outside Director. On any subsequent sale of the common stock, Outside Directors will realize a capital gain or loss in an amount equal to the net sale proceeds, less the Outside Director’s tax basis in the common stock. The holding period, for purposes of determining long-term or short-term capital gain or loss on the sale of the common stock, would commence on the date of distribution. Kimberly-Clark is generally entitled to an income tax deduction corresponding to the ordinary income that the Outside Director recognizes. Stock In general, an Outside Directors’ basis for common stock received under the 2021 Directors Plan will be the amount recognized as taxable compensation with respect to such common stock, and an Outside Director’s holding period for such shares will begin on the date the Outside Director recognizes taxable compensation with respect to the shares. The foregoing tax effects may be different if common stock is subject to restrictions imposed by Section 16(b) of the Exchange Act. In such case, an Outside Director who is issued common stock under the 2021 Directors Plan will recognize taxable compensation on the issued shares when the restrictions on such shares imposed by Section 16(b) of the Exchange Act lapse, unless the Outside Director makes a Section 83(b) Election to be taxed at the time of issuance of the shares. Cash In general, an Outside Director will recognize taxable compensation in the year of payment of the cash annual retainer in an amount equal to such cash payment, and in the year of payment we will be allowed a deduction for federal income tax purposes equal to the compensation recognized by that Outside Director. The amount of any award that will be granted to an Outside Director under the 2021 Directors Plan is subject to the discretion of the Board and is not fixed in the plan; therefore, the amount of future awards under the 2021 Directors Plan is not yet determinable. However, as described above under “Director Compensation,” pursuant to our current director compensation program, and subject to any changes to such program adopted by the Board, on the first business day of 2022: (i) each Outside Director who is elected (or re-elected) at our 2021 Annual Meeting will receive a restricted share unit award with a grant date value of $180,000, (ii) Outside Directors serving as Committee Chairs will receive an additional restricted share unit award with a grant date value of $20,000 and (iii) the Lead Director will receive an additional restricted share unit award with a value of $30,000. The closing quotation of Kimberly-Clark common stock on February 28, 2021 was $[●] per share. Proposal 6. Reduce Ownership Threshold Required to Call a Special Meeting of Stockholders Kimberly-Clark’s Certificate of Incorporation currently provides that a special meeting of stockholders may be called by the holders of 25 percent of our outstanding shares. After careful consideration, our Board of Directors (the “Board”) is asking stockholders to approve an amendment to the Certificate of Incorporation reducing the required ownership threshold from 25 percent to a requirement to own 15 percent, as set forth in the proposed amendment to the Certificate. In reaching this conclusion, the Board evaluated our corporate governance practices, took into account and solicited specific feedback from our stockholders regarding whether to facilitate the ability of our stockholders to act in between annual meetings on items of importance, revisited previous stockholder votes and reviewed actions taken by other companies. Based upon this evaluation, the Board believes that the proposed 15 percent threshold strikes an appropriate balance between enhancing stockholder rights and adequately protecting the long-term interests of the Corporation and its stockholders. The proposed threshold is also consistent with the proposition that special meetings should be limited to extraordinary matters and/or significant strategic concerns that require attention prior to the next annual meeting. The proposed amendment to the Certificate also sets forth appropriate requirements enabling stockholders who in the aggregate have a “net long” position of 15 percent and otherwise follow the procedures set forth in Kimberly-Clark’s governing documents to invoke the special meeting mechanism. Additionally, our 2020 investor outreach program identified that a majority of the stockholders with whom we met continued to have significant concerns regarding creating a new right for shareholders to act by written consent in lieu of a meeting and expressed a preference for Kimberly-Clark to reduce its required special meeting ownership threshold rather than adopt a new right to act by written consent. The Board strongly believes that reducing the special meeting threshold is a preferable alternative to adopting the right to act by written consent contemplated by the stockholder proposal below (Proposal 7) for the following reasons: The proposed amendment to our Certificate of Incorporation is set forth in Appendix C to this proxy statement. Approval of this proposal requires the affirmative vote of a majority of shares outstanding as of the record date. Abstentions will have the same effect as a vote against this proposal. If our stockholders approve this proposal, we will file the corresponding amendment with the State of Delaware. The Board will also implement corresponding updates to our By-Laws if this proposal is approved. For the reasons discussed above, the Board believes that approving the amendment to our Certificate of Incorporation to reduce the ownership threshold required to call a special meeting of stockholders is in the best interests of Kimberly-Clark and its stockholders at this time. Proposal Ms. Myra K. Young, 9295 Yorkship Court, Elk Grove, CA 95758, owning 50 shares of our common stock, has given notice that she or her designee intends to present for action at the Annual Meeting the resolution set forth below. The Board of Directors opposes this stockholder proposal for the reasons set forth below the proposal. Proxies solicited by management will be voted against the stockholder proposal below unless stockholders specify a contrary choice in their proxies. In accordance with applicable rules of the SEC, we have set forth Ms. Young’s proposal below: Proposal Resolved, Kimberly-Clark Corporation (“Company”) shareholders request our board of directors undertake such steps as necessary to permit written consent by shareholders entitled to cast the minimum number of votes necessary to authorize action at a meeting at which all shareholders entitled to vote were present and voting. This written consent is to be consistent with giving shareholders the fullest power to act by written consent consistent with applicable law, including the ability to initiate any topic for written consent consistent with applicable law. Supporting Statement: Shareholder rights to act by written consent and special meetings are often complimentary ways to bring urgent matters to the attention of management and shareholders outside the annual meeting cycle. Many boards and investors assume a false equivalency between rights of written consent and special meetings. However, any shareholder, regardless how many (or few) shares she owns, can seek to solicit written consents on a proposal. By contrast, calling a special meeting may require a two-step process. A shareholder who does not own the minimum shares required must first obtain the support of other shareholders. Once that meeting is called, the shareholder must distribute proxies asking shareholders to vote on the proposal to be presented at the special meeting. This two-step process can take more time and expense than the one-step process of soliciting written consents, especially at our Company, which allows only investors with 25% of outstanding shares to call a special meeting, instead of 10%, as allowed by many companies. Blackrock’s proxy voting guidelines for This proposal topic won 49.9% of the vote at our Company in 2020. The topic also won majority votes in 2020 at NetApp, OGE Energy, HP, Stanley Black & Decker and Berry Global Group. Our Company should join the hundreds of major companies that enable shareholders to act by written consent. Increase Shareholder Value Vote for Right to Act by Written Consent - Proposal Accordingly, the Board unanimously recommends a vote AGAINST this Current Governance Structure: The Board maintains robust corporate governance practices and structures which empower our stockholders, promote accountability and oversight and provide stockholders with an opportunity to express their views. These practices and procedures include the following: Ability for stockholders to call special meetings in order to act between annual meetings, with the Board having taken action to reduce the threshold for a special meeting call to 15% instead of 25%; Majority voting for amendments to our Certificate of Incorporation and By-Laws, i.e., no supermajority requirement; Majority voting standard for the election of directors with a director resignation policy; All directors stand for election annually; Majority of the directors are independent; Demonstrated commitment to Board refreshment, with seven new independent directors since 2015; Independent Lead Director with expansive duties; Diverse Board that is representative of our customer, consumer, employee and stockholder base; Proxy access for director nominations; Significant year-round stockholder engagement on corporate governance matters, including executive compensation, board composition and refreshment and corporate social responsibility and sustainability; No “poison pill” in place; and Current Governance Practices Provide Stockholders with a Meaningful Right to Act and Promote Board Accountability: Kimberly-Clark The Board believes that action by written consent Action by written consent may cause confusion and disruption, as well as promote short-termism or special-interests. For example, our Board may be denied the opportunity to consider the merits of a proposed action and to suggest alternative proposals for stockholder evaluation that may be in the best interests of our stockholders. Also, multiple stockholder groups may solicit multiple written consents simultaneously, some of which may be duplicative or contradictory, causing confusion and disruption to stockholders, the Board and management. For similar reasons, most Kimberly-Clark peer companies have opted against written consent. Companies without a non-unanimous written consent provision include 12 of Kimberly-Clark’s 19 compensation peer companies (listed on page Current Stockholder Feedback: Kimberly-Clark’s ongoing dialogue with stockholders Kimberly-Clark strongly believes in sound governance and values its relationship with all of its stockholders. For the reasons discussed above, the Board believes that stockholder action by written consent is not in the best interests of Kimberly-Clark and its The following table shows the number of shares of our common stock beneficially owned as of December 31, Each director, nominee, named executive officer and the directors, nominees and executive officers as a group, owns less than one percent of the outstanding shares of our common stock. Except as otherwise noted, the directors, nominees and named executive officers, and the directors, nominees and executive officers as a group, have sole voting and investment power with respect to the shares listed. As of the date of this proxy statement, none of the executive officers or directors has pledged any shares of our common stock. Share amounts include unvested restricted share units granted to the following named executive officers under the 2011 Plan as indicated below. Amounts representing performance-based restricted share units in the table below represent target levels for these awards. See “Compensation Tables – Outstanding Equity Awards” for additional information regarding these grants. For each director who is not an officer or employee of Kimberly-Clark, share amounts include restricted share units and shares of restricted stock granted under our Outside Directors’ Compensation Plan. These awards are restricted and may not be transferred or sold until the Outside Director retires from or otherwise terminates service on the Board. See footnote 4 to the (5) Includes shares of common stock held by the trustee of the 401(k) Profit Sharing Plan for the benefit of, and that are attributable to, the accounts in the plans of, the named executive officers. Also includes the following shares which could be acquired within 60 days of December 31, Voting and investment power with respect to 45,944 of the shares is shared with Mr. Decherd’s spouse. Includes Includes Voting and investment power with respect to Our Corporate Governance Policies provide that, within three years of joining the Board, all Outside Directors should own an amount of our common stock or share units at least equal in value to three times the annual Board cash compensation. For the purpose of these stock ownership guidelines, a director is deemed to own beneficially-owned shares, as well as restricted stock and restricted share units (whether or not any applicable restrictions have lapsed), but not stock options (whether vested or unvested). As of December 31, The address, number and percentage of shares of our common stock beneficially owned by The Vanguard Group Inc. (“Vanguard”) are based on the Schedule 13G/A filed by Vanguard with the SEC on February The address, number and percentage of shares of our common stock beneficially owned by BlackRock, Inc. (“BlackRock”) are based on the Schedule 13G/A filed by BlackRock with the SEC on The address, number and percentage of shares of our common stock beneficially owned by State Street Corporation (“State Street”) are based on the Schedule 13G filed by State Street with the SEC on February The Board’s procedures provide that: The Nominating and Corporate Governance Committee is best suited to review, approve and ratify related person transactions involving any director, nominee for director, any five percent stockholder, or any of their immediate family members or related firms, and The Audit Committee is best suited to review, approve and ratify related person transactions involving executive officers (or their immediate family members or related firms), other than any executive officer that is also a Board member. Either Committee may, in its sole discretion, refer its consideration of related person transactions to the full Board. Each director, director nominee and executive officer is required to promptly provide written notification of any material interest that he or she (or an immediate family member) has or will have in a transaction with Kimberly-Clark. Based on a review of the transaction, a determination will be made as to whether the transaction constitutes a related person transaction under the SEC’s rules. As appropriate, the Nominating and Corporate Governance Committee or the Audit Committee will then review the terms and substance of the transaction to determine whether to ratify or approve the related person transaction. In determining whether the transaction is consistent with Kimberly-Clark’s best interest, the Nominating and Corporate Governance Committee or the Audit Committee may consider any factors deemed relevant or appropriate, including: Whether the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party; Whether the transaction constitutes a conflict of interest under our Code of Conduct, the nature, size or degree of any conflict, and whether mitigation of the conflict is feasible; The impact of the transaction on a director’s independence; and Whether steps have been taken to ensure fairness to Kimberly-Clark. the total compensation of our median employee was the total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table, was the ratio of our Chief Executive Officer’s total compensation to the median employee total compensation was To identify our median employee, If you reside in the same household with another stockholder with the same last name and would like us to mail proxy-related materials to you separately in the future, or are receiving multiple copies of materials and wish to receive only one set of proxy-related materials, please contact Stockholder Services by mail at P.O. Box 619100, Dallas, Texas 75261-9100, by telephone at (972) 281-5317 or by e-mail at stockholders@kcc.com. Beneficial stockholders can request information about householding from their banks, brokers or other such holders of record. Other Matters Kimberly-Clark Corporation By Order of the Board of Directors. Kimberly-Clark Corporation This 2021 Equity Participation Plan (the “Plan”) of Kimberly-Clark Corporation (the “Corporation”) is intended to aid in attracting and retaining highly qualified personnel and to encourage those employees who materially contribute, by managerial, scientific or other innovative means, to the success of the Corporation or of an Affiliate, to acquire an ownership interest in the Corporation, thereby increasing their motivation for and interest in the Corporation’s and its Affiliates’ long-term success. The Plan, as adopted by the Board on February 11, 2021, is effective as of April 29, 2021 (the “Effective Date”), upon approval by the stockholders of the Corporation at its 2021 annual meeting of stockholders. The Plan shall serve as the successor to the Kimberly-Clark Corporation 2011 Equity Participation Plan (the “Prior Plan”), and no further awards shall be granted under the Prior Plan after the Effective Date. All awards outstanding under the Prior Plan as of the Effective Date shall remain outstanding in accordance with their terms. “Affiliate” means any domestic or foreign corporation or other entity at least fifty percent (50%) of whose shares normally entitled to vote in electing directors is owned directly or indirectly by the Corporation or other Affiliates, provided, however, that “at least twenty percent (20%)” shall replace “at least fifty percent (50%)” where there is a legitimate business criteria for using such lower percentage and where use of such lower percentage would not prevent the registration of the offering and sale of shares under the Plan on a Form S-8 Registration Statement under the Securities Act. “Average PRSU Attainment Level” has the meaning set forth in subsection 14(b) of the Plan. “Award” has the meaning set forth in Section 6 of the Plan. “Award Agreement” means any written agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium, which sets forth the terms and conditions applicable to the Award granted to the Participant. “Board” means the Board of Directors of the Corporation. “Cause” means any of the following: (i) the commission by the Participant of a felony or crime of comparable magnitude under non-U.S. law; (ii) the Participant’s dishonesty, habitual neglect or incompetence in the management of the affairs of the Corporation or an Affiliate; or (iii) the refusal or failure by the Participant to act in accordance with any lawful directive or order of the Corporation or an Affiliate, or an act or failure to act by the Participant which is in bad faith and which is detrimental to the Corporation or an Affiliate. “Change of Control” means an event deemed to have taken place if: (i) a third person, including a “group” as defined for purposes of Section 409A, acquires shares of the Corporation having thirty percent (30%) or more of the total number of votes that may be cast for the election of directors of the Corporation; or (ii) as the result of any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who were directors of the Corporation before the Transaction shall cease to constitute a majority of the Board or of the board of directors of any successor to the Corporation. Notwithstanding the foregoing, the term Change of Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Corporation. “Code” means the U.S. Internal Revenue Code of 1986 and the regulations thereunder, as amended from time to time, together with the official guidance promulgated thereunder. “Committee” means the Management Development and Compensation Committee of the Board or such other committee appointed by the Board. To the extent required to comply with the provisions of Rule 16b-3 under the Exchange Act (or any successor rule), it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a “non-employee director” within the meaning of Rule 16b-3. Additionally, each of the individuals constituting the Committee shall be an “independent director” to the extent required under the rules of any securities exchange or automated quotation system on which the Common Stock is listed, quoted or traded. Notwithstanding the foregoing, any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this provision. Furthermore, the term “Committee” shall include any delegate to the extent authority is delegated pursuant to Section 4 hereunder. “Committee Rules” means the interpretative guidelines approved by the Committee providing the foundation for administration of the Plan. “Common Stock” means the common stock, par value $1.25 per share, of the Corporation and shall include both treasury shares and authorized but unissued shares and shall also include any security of the Corporation issued in substitution, in exchange for, or in lieu of the Common Stock. “Effective Date” has the meaning set forth in Section 2 of the Plan. “Exchange Act” means the U.S. Securities Exchange Act of 1934 and the rules and regulations thereunder, as amended from time to time. “Fair Market Value” means (a) the reported closing price of the Common Stock, on the relevant date as reported on the composite list used by The Wall Street Journal for reporting stock prices, or if no such sale shall have been made on that day, on the last preceding day on which there was such a sale, or (b) if clause (a) is not applicable, the value determined by the Committee using such reasonable method of valuation that complies with Section 409A, to the extent applicable. Notwithstanding the foregoing, for U.S. and non-U.S. federal, state, and local tax reporting and withholding purposes, fair market value may be determined by the Committee in accordance with uniform and nondiscriminatory standards adopted by it from time to time, consistent with applicable law. “Grant Price” has the meaning set forth in subsection 8(b) of the Plan. “Incentive Stock Option” means an Option which is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code. “Nonqualified Stock Option” means any Option which is not an Incentive Stock Option. “Option” means a right to purchase a specified number of shares of Common Stock at a fixed Option Price equal to no less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the date the Award is granted, except in the case of Options granted as Substitute Awards. “Other Stock-Based Award” has the meaning set forth in Section 12 of the Plan. “Option Price” has the meaning set forth in subsection 7(b) of the Plan. “Participant” means an employee whom the Committee selects to participate in and receive Awards under the Plan (collectively, the “Participants”). “Performance Award” means any right granted under Section 11 of the Plan. “Performance Goal�� means the specific performance objectives as established by the Committee, which, if achieved, will result in the amount of payment, or the early payment, of the Award. The Performance Goal may consist of one or more or any combination of the following criteria: organic sales, modified free cash flow, return on invested capital, stock price, market share, sales revenue, cash flow, earnings per share, return on equity, total stockholder return, gross margin, net sales, operating profit return on sales, costs and/or such other financial, accounting or quantitative metric determined by the Committee. Without limitation, the Performance Goals may be described in terms that are related to the individual Participant, to the Corporation as a whole, or to a subsidiary, division, department, region, function or business unit of the Corporation or to an Affiliate by which the Participant is employed. The Committee, in its discretion, may change or modify these criteria. Further, the Committee shall have the authority to make equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Corporation or the financial statements of the Corporation, in response to changes in applicable laws or regulations or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or a change in accounting principles. “Prior Plan” means the Kimberly-Clark Corporation 2011 Equity Participation Plan. “PRSU” has the meaning set forth in subsection 14(b) of the Plan. “Qualified Termination of Employment” means the termination of a Participant’s employment with the Corporation and/or its Affiliates within the two (2) year period following a Change of Control either (i) by the Corporation or an Affiliate without Cause or (ii) by the Participant with Good Reason. Subject to the definition of “Termination by the Participant for Good Reason,” transfers of employment for administrative purposes among the Corporation and its Affiliates shall not be deemed a Qualified Termination of Employment. “Restricted Period” means the period of time during which the Transferability Restrictions applicable to Awards will be in force. “Restricted Share” means a share of Common Stock which may not be traded or sold, until the date the Transferability Restrictions expire. “Restricted Share Unit” means the right, as described in Section 10, to receive an amount, payable in either cash and/or shares of Common Stock, equal to the value of a specified number of shares of Common Stock. No certificates shall be issued with respect to such Restricted Share Unit and the Corporation shall maintain a bookkeeping account in the name of the Participant to which the Restricted Share Unit shall relate. “Retirement” and “Retires” means, unless otherwise set forth in an Award Agreement, the Participant’s termination of employment on or after the date the Participant has attained age 55. “Section 409A” means Section 409A of the Code. “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder, as amended from time to time. “Stock Appreciation Right or SAR” has the meaning set forth in Section 8 of the Plan. “Substitute Award” shall mean an Award granted under the Plan in connection with a corporate transaction upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity acquired by the Corporation or any of its Affiliates or with which the Corporation or any of its Affiliates combines; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right. “Termination by the Participant for Good Reason” means the Participant’s separation from service during the two year time period following the initial existence (without the Participant’s express written consent) of any one of the following conditions: A material diminution in the Participant’s base compensation; A material diminution in the Participant’s authority, duties, or responsibilities; A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Participant is required to report, including a requirement that a Participant report to a corporate officer or employee instead of reporting directly to the Board; A material diminution in the budget over which the Participant retains authority; A material change in the geographic location at which the Participant must perform the services; or Any other action or inaction that constitutes a material breach by the Corporation or an Affiliate of any agreement under which the Participant provides services. The Participant must provide notice to the Corporation of the existence of any of the above conditions within a period not to exceed 90 days of the initial existence of the condition, upon the notice of which the Corporation must be provided a period of at least 30 days during which it may remedy the condition and not be required to pay the amount. The Participant’s right to terminate the Participant’s employment for Good Reason shall not be affected by the Participant’s incapacity due to physical or mental illness. The Participant’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. “Total and Permanent Disability” means that the Participant is disabled and has received a letter from the U.S. Social Security Administration awarding disability benefits and stating that the Participant was disabled on or before the date of the Participant’s termination of employment; provided, however, if the Participant is not customarily employed within the United States, “Total and Permanent Disability” means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. “Transferability Restrictions” means the restrictions on transferability and any other restrictions or forfeiture provisions imposed on imposed on Awards of Restricted Shares or Restricted Share Units pursuant to Section 9(b) and Section 10(b) of the Plan. The Plan and all Awards granted pursuant thereto shall be administered by the Committee. The Committee, in its absolute discretion, shall have the power to interpret and construe the Plan and any Award Agreements. Any interpretation or construction of any provisions of the Plan or the Award Agreements by the Committee shall be final and conclusive upon all persons. No member of the Board or the Committee shall be liable for any action or determination made in good faith. The Committee shall have the power to promulgate Committee Rules and other guidelines in connection with the performance of its obligations, powers and duties under the Plan, including its duty to administer and construe the Plan and the Awards. The Committee may authorize persons other than its members to carry out its policies and directives subject to the limitations and guidelines set by the Committee, and may delegate its authority under the Plan. The foregoing delegation of authority shall be limited as follows: (a) with respect to persons who are subject to Section 16 of the Exchange Act, the authority to grant Awards, the selection for participation, decisions concerning the timing, pricing and amount of an Award and authority to administer Awards shall not be delegated by the Committee; (b) any delegation of authority to an officer of the Corporation to grant Awards shall be subject to the requirements of Section 157(c) of the Delaware General Corporation Law (or any successor statute); (c) officers of the Corporation to whom authority has been delegated shall not have authority to grant Awards to, or amend Awards held by officers to whom authority to grant or amend Awards has been delegated; and (d) any delegation shall satisfy all applicable requirements of Rule 16b-3 under the Exchange Act, or any successor provision. The Committee shall from time to time select the Participants from those employees whom the Committee determines to be in a position to contribute materially to the success of the Corporation and its Affiliates. Only employees (including officers and directors who are employees) of the Corporation and its Affiliates are eligible to participate in the Plan. Awards under the Plan shall be made in the form of Options, Stock Appreciation Rights, Restricted Shares, Restricted Share Units, Performance Awards, Other Stock-Based Awards, dividend equivalents or any combination thereof (“Awards”). The Committee shall determine and designate from time to time those Participants to whom Options are to be granted, the number of shares of Common Stock to be granted/awarded to each Participant and the periods the Option shall be exercisable. Such Options may be in the form of Incentive Stock Options or in the form of Nonqualified Stock Options. The Committee in its discretion at the time of grant may establish Performance Goals that may affect the grant, exercise and/or settlement of an Option. After granting an Option to a Participant, the Committee shall cause to be delivered to the Participant an Award Agreement evidencing the granting of the Option. The Award Agreement shall be in such form as the Committee shall from time to time approve. The terms and conditions of all Options granted under the Plan need not be the same, but all Options must meet the applicable terms and conditions specified in subsections 7(a) through 7(i). Period of Option. The Period of each Option shall be no more than 10 years from the date it is granted. Option Price. The Option price shall be determined by the Committee, but shall not in any instance be less than the Fair Market Value of the Common Stock at the time that the Option is granted (the “Option Price”), except in the case of Options granted as Substitute Awards. Limitations on Exercise. Except as provided in Section 13 of the Plan, the Option shall not be exercisable until at least one year has expired after the granting of the Option, during which time the Participant shall have been in the continuous employ of the Corporation or an Affiliate, and the Option shall be subject to other exercise limitations or vesting terms or periods as may be provided in an Award Agreement; provided, however, that the Option shall become exercisable immediately in the event of a Qualified Termination of Employment, without regard to the limitations in this subsection 7(c). Unless otherwise determined by the Committee or set forth in an Award Agreement, if the Participant’s employment is terminated for any reason other than death, Retirement or Total and Permanent Disability, the Option shall be exercisable only for three months following such termination and, other than in the case of a Qualified Termination of Employment, only for the number of shares of Common Stock which were exercisable on the date of such termination. In no event, however, may an Option be exercised more than 10 years after the date of its grant. Exercise after Death, Retirement, or Total and Permanent Disability. Unless otherwise determined by the Committee or set forth in an Award Agreement, if a Participant dies, becomes Totally and Permanently Disabled, or Retires without having exercised the Option in full, the remaining portion of such Option may be exercised, without regard to the limitations in subsection 7(c), as follows. If a Participant dies or becomes Totally and Permanently Disabled, the remaining portion of such Option may be exercised within (i) three years from the date of any such event or (ii) the remaining period of the Option, whichever is earlier. Upon a Participant’s death, the Option may be exercised by the person or persons to whom such Participant’s rights under the Option shall pass by will or by applicable law or, if no such person has such rights, by the executor or administrator of the Participant’s estate. If a Participant Retires, the remaining portion of such Option may be exercised within (i) five years from the date of any such event or (ii) the remaining period of the Option, whichever is earlier. No Repricings. No Option or SAR may be re-priced, replaced, re-granted through cancellation, or modified (except in connection with a change in the Common Stock or the capitalization of the Corporation as provided in Section 17 hereof) if the effect would be to reduce the Option Price or Grant Price for the shares underlying such Option or SAR. In addition, no Option or SAR may be repurchased or otherwise cancelled in exchange for cash or another Award (except in connection with a change in the Common Stock or the capitalization of the Corporation as provided in Section 17 hereof) if the Option Price or Grant Price is equal to or less than the Fair Market Value of the Common Stock at the time of such repurchase or exchange. Notwithstanding anything herein to the contrary, the Committee may take any such action set forth in this subsection 7(e) subject to the approval of the stockholders. Exercise; Notice Thereof. Options shall be exercised by delivering to the Corporation, or an agent designated by the Corporation, subject to any applicable rules or regulations adopted by the Committee, notice of the number of shares with respect to which Option rights are being exercised and by paying in full the Option Price of the shares being acquired. Exercise methods and processes for paying the Option Price shall be as determined by the Committee and may include payment in cash, a check payable to the Corporation, or in shares of Common Stock transferable to the Corporation and having a fair market value on the transfer date equal to the amount payable to the Corporation or such other methods permitted by the Committee in its sole discretion. A Participant shall have none of the rights of a stockholder with respect to shares covered by such Option until the Participant becomes the record holder of such shares. Limitations on Incentive Stock Option Grants. Tandem Grants. The Committee may from time to time designate those Participants who shall receive Awards of Stock Appreciation Rights. Subject to the terms of the Plan and any applicable Award Agreement, a SAR granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, the excess of the difference between the Fair Market Value of the Common Stock at the time the Participant’s SAR is granted and the Fair Market Value of the Common Stock on the date of exercise. Grant. A SAR may be granted in addition to any other Award under the Plan or in tandem with or independent of a Nonqualified Stock Option. Time and Method of Exercise. The Committee shall establish in the applicable Award Agreement the time or times at which a SAR may be exercised in whole or in part. Form of Payment. Payment may be made to the Participant in respect thereof in cash and/or in shares of Common Stock, or any combination thereof, as the Committee in its sole discretion, shall determine and provide in the relevant Award Agreement. If stock-settled SARs are issued and paid, the gross amount of the Award shall be counted against the Plan. Dividend Equivalents. No dividend equivalents may be granted in relation to SARs granted under the Plan. The Committee may from time to time designate those Participants who shall receive Awards of Restricted Shares. Each grant of Restricted Shares under the Plan shall be evidenced by an Award Agreement. The Award Agreement shall contain such terms and conditions, not inconsistent with the Plan, as shall be determined by the Committee and shall indicate the number of Restricted Shares awarded and the following terms and conditions of the Award. Grant of Restricted Shares. The Committee shall determine the number of shares of Common Stock subject to the Restricted Shares and the period or periods during which the Transferability Restrictions applicable to the Restricted Shares will be in force (the “Restricted Period”). The Restricted Period may be the same for all Restricted Shares granted at a particular time to any one Participant or may be different with respect to different Participants or with respect to various of the Restricted Shares granted to the same Participant, all as determined by the Committee. Transferability Restrictions. During the Restricted Period, Restricted Shares may not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, a Participant’s right, if any, to receive Common Stock upon termination of the Restricted Period may not be assigned or transferred except by will or by the laws of descent and distribution. In order to enforce the limitations imposed upon the Restricted Shares, the Committee may (i) cause a legend or legends to be placed on any such certificates, and/or (ii) issue “stop transfer” instructions as it deems necessary or appropriate. Holders of Restricted Shares limited as to sale under this subsection 9(b) shall have rights as a stockholder with respect to such shares to receive dividends in cash or other property or other distribution or rights in respect of such shares, and to vote such shares as the record owner thereof; provided, however, that dividends with respect to Restricted Shares shall not be paid to the holder of such Restricted Shares until those shares, or any portion thereof, become vested. Subject to Section 13 of the Plan, with respect to each grant of Restricted Shares, the Committee shall determine the Transferability Restrictions which will apply to the Restricted Shares for all or part of the Restricted Period. By way of illustration but not by way of limitation, the Committee may provide (i) that the Participant will not be entitled to receive any shares of Common Stock unless he or she is still employed by the Corporation or one of its Affiliates at the end of the Restricted Period, (ii) that the Participant will become vested in Restricted Shares according to a schedule determined by the Committee, or under other terms and conditions, including Performance Goals, determined by the Committee, and (iii) how any Transferability Restrictions will be applied, modified or accelerated in the case of the Participant’s death or Total and Permanent Disability. Manner of Holding and Delivering Restricted Shares. Shares of Common Stock subject to an award of Restricted Shares may be (i) held in book entry form subject to the Corporation’s instructions or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Committee, in either case until the end of the applicable Restricted Period or, if the Committee has provided for earlier termination of the Transferability Restrictions following a Participant’s death, Total and Permanent Disability or other earlier vesting of the shares of Common Stock, such earlier termination of the Transferability Restrictions. Upon termination of the Restricted Period or any earlier termination of the Transferability Restrictions, the Participant’s Restricted Shares will be delivered to the Participant free and clear of the Transferability Restrictions in such form (e.g., a stock certificate or electronic entry evidencing such shares) as determined appropriate by the Corporation. The Committee shall from time to time designate those Participants who shall receive Awards of Restricted Share Units. Each grant of Restricted Share Units under the Plan shall be evidenced by an Award Agreement. The Award Agreement shall contain such terms and conditions, not inconsistent with the Plan, as shall be determined by the Committee and shall indicate the number of Restricted Share Units awarded and the following terms and conditions of the Award. Restricted Share Units may be granted to Participants as of the first day of a Restricted Period. The number of Restricted Share Units to be granted to each Participant and the Restricted Period shall be determined by the Committee in its sole discretion. Transferability Restrictions. During the Restricted Period, Restricted Share Units may not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, a Participant’s right, if any, to receive cash and/or Common Stock upon termination of the Restricted Period may not be assigned or transferred except by will or by the laws of descent and distribution. With respect to each grant of Restricted Share Units, the Committee shall determine the Transferability Restrictions which will apply to the Restricted Share Units for all or part of the Restricted Period. By way of illustration but not by way of limitation and subject to Section 13 of the Plan, the Committee may provide (i) that the Participant will forfeit any Restricted Share Units unless he or she is still employed by the Corporation or one of its Affiliates at the end of the Restricted Period, (ii) that the Participant will forfeit any or all Restricted Share Units unless he or she has met the Performance Goals according to the schedule determined by the Committee, (iii) that the Participant will become vested in Restricted Share Units according to a schedule determined by the Committee, or under other terms and conditions, including Performance Goals, determined by the Committee, and (iv) how any Transferability Restrictions will be applied, modified or accelerated in the case of the Participant’s death or Total and Permanent Disability. Subject to subsection 10(c) of the Plan, holders of Restricted Share Units shall have none of the rights of a stockholder with respect to shares subject to the Restricted Share Units. In particular, holders of Restricted Share Units are not entitled to receive distribution of rights in respect of such shares, nor to vote such shares as the record owner thereof. Unless otherwise determined by the Committee, (i) during the Restricted Period, Participants will be credited with dividend equivalents equal in value to those declared and paid on shares of Common Stock, on all Restricted Share Units granted to them and (ii) these dividend equivalents will be regarded as having been reinvested in Restricted Share Units on the date of the Common Stock dividend payments based on the then Fair Market Value of the Common Stock thereby increasing the number of Restricted Share Units held by a Participant. However, any such dividend equivalents will be paid only to the extent the underlying Awards vest. Payment of Restricted Share Units. The payment of Restricted Share Units shall be made in cash or shares of Common Stock, or a combination of both, as determined by the Committee. The Committee may from time to time designate those Participants who shall receive Performance Awards. Performance Awards include arrangements under which the grant, issuance, retention, vesting and/or transferability of any Award is subject to such Performance Goals, Transferability Restrictions and such additional conditions or terms as the Committee may designate. Subject to the terms of the Plan and any applicable Award Agreement, a Performance Award granted under the Plan: The Committee may from time to time designate those Participants who shall receive such other Awards (“Other Stock-Based Awards”) that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Stock (including, without limitation, securities convertible into Common Stock), as are deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions, including Performance Goals and Transferability Restrictions, if any, of such Awards. Common Stock or other securities delivered pursuant to a purchase right granted under this Section 12 shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Common Stock, other securities, or other Awards, or any combination thereof, as the Committee shall determine, the value of which consideration, as established by the Committee shall not be less than the Fair Market Value of such Common Stock or other securities as of the date such purchase right is granted. In the event that an Other Stock-Based Award carries a right to dividend equivalents, such dividend equivalents will be paid only to the extent the Other Stock-Based Award vests. No Award denominated in shares of Common Stock that is granted under the Plan may vest in less than one year from its date of grant. Notwithstanding the foregoing, (a) Awards with respect to up to five percent (5%) of the available shares of Common Stock authorized for issuance under the Plan may vest (in full or in part) in less than one year from their date of grant; and (b) nothing in this Section 13 shall limit the Corporation’s ability to grant Awards that contain rights to accelerated vesting on a termination of employment or limit any rights to accelerated vesting in connection with a shutdown or divestiture of all or a portion of the Corporation’s or its Affiliate’s business or following a Change of Control and shall not limit the changes in capitalization provisions of Section 17. For avoidance of doubt, the minimum vesting provisions of this Section 13 shall not apply to Substitute Awards. Unless otherwise set forth in an Award Agreement, in the event of a Qualified Termination of Employment, all of the Participant’s Awards that were not subject to Performance Goals shall be considered to vest immediately. Unless otherwise set forth in an Award Agreement, in the event of a Qualified Termination of Employment, for Restricted Shares and/or Restricted Share Units subject to Performance Goals (“PRSUs”), a cash amount shall be paid equal to the Average PRSU Attainment Level multiplied by the number of the Participant’s outstanding PRSUs which are forfeited due to the Qualified Termination of Employment multiplied by the Fair Market Value on the date of the Qualified Termination of Employment. For purposes of this subsection 14(b), the “Average PRSU Attainment Level” shall mean the three year average of the Performance Goal attainment level with respect to PRSUs paid to the Participant under the Plan. The Participant’s three year average Performance Goal attainment level will be determined based on the higher of two attainment level averages computed during alternative three year periods consisting of either (i) the year in which the date of the Change of Control occurred (or, if the attainment level with respect to PRSUs has not been determined as of the date of the Change of Control, for the preceding year) and the two preceding years or (ii) the year of the Qualified Termination of Employment (or, if the attainment level with respect to PRSUs has not been determined as of the Qualified Termination of Employment, for the preceding year) and the two preceding years. If a Participant does not have PRSUs for which the Performance Goal attainment level has been determined for three prior years, the Average PRSU Attainment Level will be determined based on the average Performance Goal attainment level with respect to the Participant’s PRSUs under the Plan in the number of applicable prior years. If the Performance Goal attainment level with respect to PRSUs granted to the Participant has not previously been determined, the Average PRSU Attainment Level will be determined as follows Notwithstanding the foregoing, no severance or other amount shall be paid to any Participant with respect to any Awards upon a Qualified Termination of Employment to the extent that the Participant is entitled to receive payment pursuant to an executive severance agreement between the Participant and the Corporation under the Kimberly-Clark Corporation executive severance program in effect at the time of such Qualified Termination of Employment. Unless otherwise determined by the Committee or set forth in an Award Agreement (with respect to Awards that are not required to meet the requirements of Section 409A), a termination of employment shall not be deemed to have occurred while a Participant is on military leave or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Participant retains a right to reemployment with the Corporation or an Affiliate under an applicable statute or by contract. For purposes of this subparagraph, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Corporation or an Affiliate. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period. Notwithstanding the foregoing sentence, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence is substituted for such six-month period in determining whether a termination of employment shall be deemed to have occurred. A termination of employment with the Corporation or an Affiliate to accept immediate reemployment with the Corporation or an Affiliate likewise shall not be deemed to be a termination of employment for purposes of the Plan. However, unless otherwise required by applicable law or set forth in an Award Agreement, a Participant who is classified as an intermittent employee shall be deemed to have a termination of employment for purposes of the Plan. Notwithstanding anything in the Plan to the contrary, a termination of employment with respect to any Restricted Share Units, Performance Awards and Other Stock-Based Awards that are required to meet the requirements of Section 409A shall not be deemed to be a termination of employment for purposes of the Plan if it is anticipated that the level of bona fide services the Participant would perform after such date would continue at a rate equal to more than 20 percent (20%) of the average level of bona fide services performed over the immediately preceding 36-month period (or the full period of services to the Corporation or an Affiliate if the Participant has been providing such services less than 36 months). Subject to the adjustment provision set forth in Section 17 hereof, the maximum number of shares of Common Stock covered by Awards which may be granted to any Participant within any calendar year period shall not exceed 1,500,000 in the aggregate, except that in connection with a newly-hired Participant’s initial service, a Participant may be granted Awards covering up to an additional 1,500,000 shares of Common Stock. In the event there are any changes in the Common Stock or the capitalization of the Corporation through a corporate transaction, such as any merger, any acquisition through the issuance of capital stock of the Corporation, any consolidation, combination, or exchange of shares, any separation of the Corporation (including a spin-off, split-up or other distribution of stock of the Corporation), any reorganization of the Corporation (whether or not such reorganization comes within the definition of such term in Section 368 of the Code), any partial or complete liquidation by the Corporation, or a recapitalization, stock dividend, stock split, extraordinary cash dividend or other change in the corporate structure, appropriate adjustments and changes shall be made by the Committee, to the extent necessary to preserve the benefit to the Participant contemplated hereby, to reflect such changes in (a) the aggregate number and type or class of shares in the Share Reserve, (b) the maximum number and type or class of shares that may be issued pursuant to the exercise of Incentive Stock Options, (c) the maximum number and type or class of shares for which Awards may be granted to any Participant, (d) the number and type or class of shares, and the Option Price or Grant Price thereof, if applicable, of all shares subject to outstanding Awards, (e) the maximum number and type or class of shares of Common Stock covered by Awards which may be granted by any party pursuant to a delegation of authority under Section 4 of the Plan, and (f) such other provisions of the Plan and individual Awards as may be necessary and equitable to carry out the foregoing purposes. All payments and benefits under the Plan shall constitute special and discretionary incentives and shall not affect the level of benefits provided to or received by any Participant (or the Participant’s estate or beneficiaries) as part of any employee benefit plan of the Corporation or an Affiliate. The Plan shall not be construed to affect in any way a Participant’s rights and obligations under any other plan maintained by the Corporation or an Affiliate on behalf of employees. The Plan shall remain in effect until terminated by the Committee pursuant to Section 20(k) below; provided however, that no Incentive Stock Options may be granted on or after the tenth (10th) anniversary of the date that the Board adopted the Plan on February 11, 2021. No Award may be granted or awarded after the date that the Plan is terminated, but Awards theretofore granted or awarded shall continue in force beyond that date pursuant to their terms. No payment that constitutes deferred compensation under Section 409A that would otherwise be made under the Plan or an Award Agreement upon a Participant’s termination of employment will be made or provided unless and until such termination is also a “separation from service,” as determined in accordance with Section 409A, and further, notwithstanding anything in the Plan or any Award Agreement, if a Participant is a “specified employee” within the meaning of Section 409A at the time of such separation from service, then solely to the extent necessary to avoid the imposition of any additional tax under Section 409A, such payment (or the commencement thereof, if applicable) may not occur prior to the date that is six months after the date of such Participant’s separation from service or, if earlier, the date of the Participant’s death. Following any applicable six-month delay, all such delayed payments will be paid to the Participant in a single lump sum on the earliest date permitted under Section 409A that is also a business day. Further, notwithstanding anything to the contrary in the Plan, to the extent required under Section 409A in order to make payment of an Award upon a Change of Control, the applicable transaction or event described in Section 3 of the Plan must qualify as a change in the ownership or effective control of the Corporation or as a change in the ownership of a substantial portion of the assets of the Corporation pursuant to Section 409A(a)(2)(A)(v) of the Code, and if it does not, then unless otherwise specified in the applicable Award Agreement, payment of such Award will be made on the Award’s original payment schedule or, if earlier, upon the death of the Participant. For purposes of Section 409A, each of the payments that may be made in respect of any Award granted under the Plan is designated as a separate payment. Although the Corporation may attempt to avoid adverse tax treatment under Section 409A, the Corporation makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Corporation shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan. Appendix B “Fair Market Value” means (a) the reported closing price of the Stock, on the relevant date as reported on the composite list used by The Wall Street Journal for reporting stock prices, or if no such sale shall have been made on that day, on the last preceding day on which there was such a sale, or (b) if clause (a) is not applicable, the value determined by the Board using such reasonable method of valuation that complies with Section 409A of the Code, to the extent applicable. Notwithstanding the foregoing, for U.S. and non-U.S. federal, state, and local tax reporting and withholding purposes, fair market value may be determined by the Board in accordance with uniform and nondiscriminatory standards adopted by it from time to time, consistent with applicable law. “Nominating and Corporate Governance Committee” means the Nominating and Corporate Governance Committee of the Board. “Option” means a right to purchase a specified number of shares of Stock at a fixed Option Price equal to no less than the Fair Market Value of the Stock on the date the Option is granted. “Outside Director” means a Director who is not on the date of grant of an Award pursuant to the Plan an employee of the Corporation or any of its Affiliates. “Prior Plan” means the Kimberly-Clark Corporation 2011 Outside Directors’ Compensation Plan. “Restricted Period” shall mean the period of time during which the Transferability Restrictions applicable to Awards will be in force. “Restricted Share” shall mean a share of Stock which may not be traded or sold, until the date the Transferability Restrictions expire. “Restricted Share Unit” means the right, as described in Section 10, to receive an amount, payable in either cash and/or shares of Stock, equal to the value of a specified number of shares of Stock. No certificates shall be issued with respect to such Restricted Share Unit, and the Corporation shall maintain a bookkeeping account in the name of the Outside Director to which the Restricted Share Unit shall relate. “Rule 16b-3” means Rule 16b-3 under the Exchange Act. “Retirement” and “Retires” means the separation from service as a Director on or after the date the Director has attained age 55. “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder, as amended from time to time. “Stock” means the shares of the Corporation’s common stock, par value $1.25 per share, and shall include both treasury shares and authorized but unissued shares and shall also include any security of the Corporation issued in substitution, in exchange for, or in lieu of the Stock. “Stock Appreciation Right” or “SAR” has the meaning set forth in subsection 8(i)(i) of this Plan. The Corporation or the Board may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan, and may rely upon any advice or opinion received from any such counsel or consultant and any computation received from any such consultant or agent. No member of the Board shall be liable for any act done or omitted to be done by such member, or by any other member of the Board, in connection with the Plan, except for such member’s own willful misconduct or as otherwise expressly provided by statute. The Board shall have the power to promulgate rules and other guidelines in connection with the performance of its obligations, powers and duties under the Plan, including its duty to administer and construe the Plan and the Awards. Restricted Shares the Board may (i) cause a legend or legends to be placed on any such certificates, and/or (ii) issue “stop transfer” instructions as it deems necessary or appropriate. Holders of Restricted Shares limited as to sale under this subsection 9(b) shall have rights as a shareholder with respect to such shares to receive dividends in cash or other property or other distribution or rights in respect of such shares, and to vote such shares as the record owner thereof. With respect to each grant of Restricted Shares, the Board shall determine the Transferability Restrictions which will apply to the Restricted Shares for all or part of the Restricted Period. By way of illustration but not by way of limitation, the Board may provide (i) that the Outside Director will not be entitled to receive any shares of Stock unless he or she still serves as a Director of the Corporation at the end of the Restricted Period, (ii) that the Outside Director will become vested in Restricted Shares according to a schedule determined by the Board, or under other terms and conditions determined by the Board, and (iii) how any Transferability Restrictions will be applied, modified or accelerated in the case of the Outside Director’s death or total and permanent disability. Manner of Holding and Delivering Restricted Shares. Shares of Stock subject to an award of Restricted Shares may be (i) held in book entry form subject to the Corporation’s instructions or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board, in either case until the end of the applicable Restricted Period or, if the Board has provided for earlier termination of the Transferability Restrictions following an Outside Director’s death, total and permanent disability or other earlier vesting of the shares of Stock, such earlier termination of the Transferability Restrictions. Upon termination of the Restricted Period or any earlier termination of the Transferability Restrictions, the Outside Director’s Restricted Shares will be delivered to the Outside Director free and clear of the Transferability Restrictions in such form (e.g., a stock certificate or electronic entry evidencing such shares) as determined appropriate by the Corporation. The Board shall from time to time designate those Outside Directors who shall receive Restricted Share Unit Awards. The Board shall advise such Outside Directors of their Awards by a letter indicating the number of Restricted Share Units awarded and the following terms and conditions of the award. Restricted Share Units may be granted to Outside Directors as of the first day of a Restricted Period. The number of Restricted Share Units to be granted to each Outside Director and the Restricted Period shall be determined by the Board in its sole discretion. Transferability Restrictions. During the Restricted Period, Restricted Share Units may not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, an Outside Director’s right, if any, to receive cash or Stock upon termination of the Restricted Period may not be assigned or transferred except by will or by the laws of descent and distribution. With respect to each grant of Restricted Share Units, the Board shall determine the Transferability Restrictions which will apply to the Restricted Share Units for all or part of the Restricted Period. By way of illustration but not by way of limitation, the Board may provide (i) that the Outside Director will forfeit any Restricted Share Units unless he or she still serves as a Director of the Corporation at the end of the Restricted Period, (ii) that the Outside Director will become vested in Restricted Share Units according to a schedule determined by the Board or under other terms and conditions determined by the Board, and (iii) how any Transferability Restrictions will be applied, modified or accelerated in the case of the Outside Director’s death or total and permanent disability. Dividends. During the Restricted Period, Outside Directors will be credited with dividends, equivalent in value to those declared and paid on shares of Stock, on all Restricted Share Units granted to them. These dividend equivalents will be regarded as having been reinvested in Restricted Share Units on the date of the Stock dividend payments based on the then Fair Market Value of the Stock thereby increasing the number of Restricted Share Units held by an Outside Director. Holders of Restricted Share Units under this subsection 10(c) shall have none of the rights of a shareholder with respect to such shares. Holders of Restricted Share Units are not entitled to receive dividends in cash or other property, nor other distribution of rights in respect of such shares, nor to vote such shares as the record owner thereof. Payment of Restricted Share Units. The payment of Restricted Share Units shall be made in shares of Stock unless the Board determines at the time of grant that payment will be made in cash or a combination of both cash and shares of Stock. Any notice required or permitted to be given by the Corporation or the Board pursuant to the Plan shall be deemed given when personally delivered or deposited in the United States mail, registered or certified, postage prepaid, addressed to the Outside Director at the last address shown for the Outside Director on the records of the Corporation. The Board may at any time amend, suspend, or discontinue the Plan or alter or amend any or all Awards under the Plan to the extent (i) permitted by law, (ii) permitted by the rules of any stock exchange on which the Stock or any other security of the Corporation is listed, and (iii) permitted under applicable provisions of the Securities Act, the Exchange Act (including Rule 16b-3 thereof); provided, however, that if any of the foregoing requires the approval by the stockholders of any such amendment, suspension or discontinuance, then the Board may take such action subject to the approval of the stockholders. Except as provided in subsection 7(b), no such amendment, suspension or termination of the Plan shall, without the consent of the Director, adversely alter or change any of the rights or obligations under any Award granted to the Director unless such amendment is necessary or appropriate to comply with applicable laws. The Board may in its sole and absolute discretion, by written notice to a Director, (1) limit the period in which an Option may be exercised to a period ending at least three months following the date of such notice, and/or (2) limit or eliminate the number of shares of Stock subject to Award after a period ending at least three months following the date of such notice. Except as provided in subsection 8(h) and this Section 12 or as may be necessary or appropriate to comply with applicable laws, no such amendment, suspension, or termination of the Plan shall, without the consent of the Director, adversely alter or change any of the rights or obligations under any Awards or other rights previously granted the Director under the Plan. The Corporation shall require the withholding of all taxes as required by law. An Outside Director may elect, to the extent allowed by law, to have any portion of the federal, state or local income tax withholding required with respect to an Award satisfied by tendering Stock to the Corporation, which, in the absence of such an election, would have been issued to the Director in connection with the Award. The terms of the Plan shall be governed, construed, administered and regulated in accordance with the laws of the state of Delaware and applicable federal law. In the event any provision of the Plan shall be determined to be illegal or invalid for any reason, the other provisions of the Plan shall continue in full force and effect as if such illegal or invalid provision had never been included herein. Nothing contained in the Plan, or with respect to any grant hereunder, shall interfere with or limit in any way the right of stockholders of the Corporation to remove any Director from the Board, nor confer upon any Director any right to continue to serve on the Board as a Director. To the maximum extent possible, Awards under the Plan are intended to be exempt from Section 409A and the Plan and any notices, letters, agreements or other instruments thereunder shall be construed accordingly; provided, however, that to the extent that any Award is subject to Section 409A, such Award and the Plan are intended to comply with the applicable requirements of Section 409A and shall be limited, construed and interpreted in accordance with such intent. If the Board determines that an Award, payment, distribution, transaction or any other action or arrangement contemplated by the Plan would, if undertaken, cause a Director to become subject to any additional taxes or other penalties under Section 409A, then unless the Board specifically provides otherwise, such Award, payment, distribution, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A, in each case without the consent of or notice to the Director. Further, notwithstanding anything to the contrary in the Plan, to the extent required under Section 409A in order to make payment of an Award upon a Change in Control, the applicable transaction or event described in Section 2 of the Plan must qualify as a change in the ownership or effective control of the Corporation or as a change in the ownership of a substantial portion of the assets of the Corporation pursuant to Section 409A(a)(2)(A)(v) of the Code, and if it does not, then unless otherwise specified in the applicable Award Agreement, payment of such Award will be made on the Award’s original payment schedule or, if earlier, upon the death of the Director. For purposes of Section 409A, each of the payments that may be made in respect of any Award granted under the Plan is designated as a separate payment. Although the Corporation may attempt to avoid adverse tax treatment under Section 409A, the Corporation makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Corporation shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan. Appendix C The proposed amendment would amend Article VI, Section (3) of the Amended and Restated Certificate of Incorporation as follows (with additions indicated by underlining and deletions indicated by strikeout): Kimberly-Clark Corporation Your vote matters Phone Save paper, time and money! Using ablack inkpen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. Proposals — The Board of Directors recommends a vote FOR the listed nominees (terms to expire at 09 - Dunia A. Shive 03DTTC Proxy — Kimberly-Clark Corporation IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL STOCKHOLDER MEETING The 2021 Annual Meeting of Stockholders of Kimberly-Clark Corporation will be held on To access the virtual meeting, you must have the information that is printed in the shaded bar The password for this meeting is — KMB2021. Small steps make an impact. Solicited on Behalf of the Board of Directors Michael D. Hsu, Jeffrey P. Melucci and Grant B. McGee, or any of them, with full power of substitution to each, hereby are appointed proxies and are authorized to vote, as specified on the reverse side of this card, all shares of common stock that the undersigned is entitled to vote at the Annual Stockholder Meeting of Kimberly-Clark Corporation, to be held virtually via the internet at IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE LISTED NOMINEES IN PROPOSAL 1, FOR PROPOSALS 2, IF YOU PREFER TO VOTE SEPARATELY ON INDIVIDUAL PROPOSALS YOU MAY DO SO BY MARKING THE APPROPRIATE BOXES, ON THE REVERSE SIDE AND SIGNING AND DATING This card also constitutes voting instructions to the trustees of the Corporation’s employee benefits and stock purchase plans to vote whole shares attributable to accounts the undersigned may hold under such plans. If no voting instructions are provided, the respective plan committees, which are comprised of management personnel, will direct the trustees to vote the shares. Please date, sign and return this proxy/voting instruction card promptly. If you own shares directly and plan to attend the Annual Stockholder Meeting, please so indicate in the space provided below. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE PLEASE RETURN THIS CARD IN THE SELF-ADDRESSED ENVELOPE PROVIDED. Change of Address — Please print new address below.Roles of the Committee and the CEO in Compensation DecisionsEach year, the Committee reviews and sets the compensation of the officers that are elected by the Board (our “elected officers”), including our Chief Executive Officer and other key officer positions, in conjunction with our other executive officers. The Committee’s charter does not permit the Committee to delegate to anyone the authority to establish any compensationBoard➢ key organizational effectiveness and engagement 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 Chief Executive Officer has the authority to establish compensation► Reviewing diversity and inclusion programs and to approve equity grants. However, only the Committee may make grants to elected officers, including our executive officers.Our Chief Executive Officer makes a recommendation to the Committee each year on the appropriate target annual compensation for each of the other executive officers (other than for our Executive Chairman in 2019). The Committee makes the final determination of the target annual compensation for each executive officer, including our Chief Executive Officer. While our Chief Executive Officer, Chief Human Resources Officer and Executive Chairman (in 2019) 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, neither our Chief Executive Officer nor our Executive Chairman (in 2019) is present during the portion of the Committee’s meetings when his compensation is set.2020 Proxy Statement13related metricsCorporate Governance Board CommitteesFor additional information on the Committee’s processes and procedures for determining executive compensation, and for a detailed discussion of► Annually reviewing our compensation policies see “Compensation Discussion and practices for the purpose of mitigating risks arising from these policies and practices that could reasonably have a material adverse effect
Each year, the Committee reviews and sets the compensation of the officers that are elected by the Board (our “elected officers”), including our Chief Executive Officer 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 Chief Executive Officer 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.2021 Proxy Statement 15 Use of Compensation ConsultantsThe 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.Corporate GovernanceIn 2019, Board Committees
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.► 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 Chief Executive Officer ► 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 between meetings from time to time.The scope of Semler Brossy’s engagement in 2019 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 Chief Executive Officer and Executive Chairman►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 CommitteeDuring 2019, at the request of the Committee, a representative of Semler Brossy attended all 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 2019, 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 2019,► 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 142020 Proxy StatementTable► 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 Contentsthe proxy statement and other disclosures, as requested► 16 2021 Proxy Statement Corporate Governance Board Committees ►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 mattersCommittee 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 2019
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.”Nancy J. KarchRobert W. DecherdSherilynChrista S. McCoyQuarles and Marc J. ShapiroIan C. Read2019.2020.► Maintaining and reviewing a Board succession plan ► Overseeing the process for Board nominations ► Advising the Board on: ➢ ➢ 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 2020 Proxy Statement15Corporate Governance Stockholder Rights► 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 2021 Proxy Statement 17 Corporate Governance Stockholder Rights Chairman: Ian C. ReadChair: Michael D. White (Lead Independent Director)Abelardo E. Bru,Robert W. Decherd, Michael D. Hsu, Nancy J. KarchSherilyn S. McCoy and Michael D. WhiteDunia A. Shivedid not meetmet one time in 2019.2020 and acted one time by unanimous written consent.162020 Proxy StatementTable In Proposal 6 of Contentsthis proxy statement, we are requesting stockholders to approve an amendment to our Certificate of Incorporation reducing the required ownership threshold from 25 to 15 percent.Corporate Governance Our Approach to Sustainability18 2021 Proxy Statement Corporate Governance Our Approach to Sustainability 2019,2020, we offered meetings to stockholders representing more thanapproximately 50 percent of our common stock and held numerous discussions. Our executive compensation programs and corporate governance profile reflect the input of stockholders from our outreach efforts.We striveOur teams around the world are working to deliver onprovide the best experiences for our value of caring forconsumers, customers and the communities where we livework and work -solive. We are committed to doing our part to safeguard natural systems, tackle inequality, and lift up people around the environment around us and the people we serve will have a brighter future.world.Our sustainability strategy,In 2016, Kimberly-Clark established our Sustainability 2022 goals, which focused on improving the well-being of people in need while reducing waste, greenhouse gas emissions and forest impacts associated with the manufacture of our products. In 2020, we refined our strategy to look further ahead to 2030 and sharpen our focus on areas where we can make the greatest difference. We challenged ourselves to reset our ambition level to drive action that we believe is our frameworkproportionate to help us achievethe challenges and opportunities that mission. Under this framework, we have set ambitious goalslie ahead. Our new commitment is to improve the lives and well-being of one billion people in the areas of social impact, forestsunderserved and fiber, waste and recycling, energy and climate, and supply chain which enable us to have a lasting impactvulnerable communities around the world.world, with the smallest environmental footprint.20202021 Proxy Statement1719Corporate GovernanceOur Approach to Sustainability Priority What We’re Doing 20222030 GoalForests & FiberInnovating our tissue products to reduce their natural forest footprint.50% reduction in natural forest fiber use.Waste & RecyclingDelivering innovation to help keep product and packaging material out of landfills.Identify and deploy solutions that avoid and/or divert 150,000 MT of materials to higher value alternatives.Energy & ClimateIncreasing our energy efficiency while seeking lower carbon solutions.20% reduction of greenhouse gas emissions.Supply ChainCreating value from source to shelf with a sustainable supply chain.Set sustainable water use targets.Improving lives throughProvide product innovation and social and community program investments that increase access to sanitation, help children thrive and empower women and girls.ImproveAdvance the liveswell-being of 25 million1 billion people in need.vulnerable and underserved communities.
Footprint
Footprint
Footprint
Footprintsustainability program provides cost savings, provides us withenables a more resilient supply chain for the long-term, grows brand equity and provides opportunities for more meaningful employee and consumer engagement.diversityinclusion and inclusiondiversity 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.energy we usecommodities/natural resources required to make and market our products.182020202021 Proxy StatementCorporate GovernanceOur Approach to Sustainability 2019,2020, we published our progress threefour years into our Sustainability 2022 program through 2018,2019, which included significant progress against our goals. Highlights from 2018 include:► Co-foundedCelebrated five years of the Alliance“Toilets Change Lives” program, which has improved access to sanitation for Period Supplies to help women and girlsnearly 4 million people in need access period supplies► MetExpanded 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 greenhouse gas (GHG) reduction goals four years early, down 27% fromof 35 percent (vs. 2005 baseline) ► Reduced use of fiber from natural forest landscapes by 30% since31 percent (vs. 2011►Diverted more than 21,000 metric tons of material to higher value alternatives►Reduced baseline) and our water use at our facilities in high-stress regions by 24%29 percent (vs. 2015 baseline) ► Introduced alternative energy sources across sixLaunched new waste-reduction initiatives that helped us divert 96 percent of our manufacturing sites, including wind, solarwaste and cogeneration projects26,300 metric tons of post-consumer product and packaging waste to value-adding alternatives energy and climate goals were accelerated byover the past several years through a combination of energy conservation and alternative energy projects. Overprojects, along with manufacturing footprint optimization. In 2019, the past three years, we have executedcompany reduced its Scope 1 and Scope 2 greenhouse gas emissions by more than 400 energy conservation projects and deployed lean energy projects at 37 sites. We also implemented six alternative energy projects around biomass boilers, lower GHG emitting fuels and cogeneration. The electricity produced because of the company’s virtual power purchase agreements with two wind farms offset 99% of the electricity purchased by its Kimberly-Clark Professional manufacturing sites in the United States.400,000 MTCO2e, a 35% reduction since 2005.response2020, we announced new climate targets, which have been aligned with the Science-Based Targets Initiative. These include a 50 percent reduction in Scope 1 + 2 greenhouse gas emissions by 2030 (over a 2015 base year) and 20 percent reduction in Scope 3 greenhouse gas emissions by 2030 (vs. 2015 base year). We are also continuing to meetingassess climate risk within our energy and climate goals early, we determinedsupply chain in order to double our GHG reduction target from 20%further identify material issues that may arise due to 40% reduction by 2022.a changing climate.oura Global Sustainability Report outlining our strategies and results in greater detail. Our report is organized and presented in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Standards and can be found on our website at www.kimberly-clark.com.www.kimberly-clark.com/esg. We continue to monitor best practices on reporting frameworks including the emerging trend towards reportingand in 2020 we added sector disclosures aligned with standards of the Sustainability Accounting Standards Board (SASB) and three of the four climate specific disclosures of the Task Force on Climate-relatedClimate-Related Financial Disclosures (TCFD). We regularly engage with key stakeholders on this issue.For more information, see the Addendum to our Global Sustainability Report (under “2019 Data and Disclosures”). continue to engage key external stakeholders. We maintain an independent Sustainability Advisory Board with external members to provide guidance on key governance, social and environmental issues to inform our sustainability priories and programs.In 2018, Kimberly-Clark’s consumerFor example, we are a signatory to the U.K. and professional businesses signed on to Wrap UK’sU.S. Plastics Pact,Pacts and we serve as members of the company joinedsteering committee for Ocean Conservancy’s Trash Free Seas Alliance as members of the steering committee.Alliance. In addition, the company continued to fosterwe have strong relationships with World Wildlife Fund (WWF) and the Forest Stewardship Council® (FSC®(FSC®) and usedwe use the FSC partnership to build consumer awareness of responsible forestry practices.20202021 Proxy Statement1921Corporate Governance Other Corporate Governance Policies and PracticesOur Approach to Sustainability► CDP (formerly Carbon Disclosure Project) Leadership category“A-” ranking for Climate Change and Forests, and B in Water Security and Supply Chain► FTSE4Good Index Series - 16th17th consecutive year - for excellence in environmental, social, and governance►MSCI “AA” ranking for environmental, social, and governance► Ethibel Sustainability Index Excellence Global ► Rating of “AA” in MSCI Global Sustainability Index ► Forbes’ The JUST 100: America’s Most JUST Companies, America’s Best Corporate Citizens, Best Employers List and Best Employers for Diversity ► US Environmental Protection Agency’s SmartWay Excellence Award (6th(7th consecutive year) for freight supply chain energy and environmental performance►Perfect score on 2018 Human Rights Campaign Foundation’s Corporate Equality Index for policies and practices pertinent to lesbian, gay, bisexual and transgender (LGBT) employees► Corporate ReputationResponsibility Magazine’s (3BL) 100 Best Corporate Citizens
2020 was a year like no other. We faced a global pandemic, which has taken millions of lives and created economic and social disruption throughout the world. We also experienced cultural moments highlighting the pain caused by a history of racial and social injustice. 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.22 2021 Proxy Statement Corporate Governance Our Approach to Sustainability
While we have recognized for years that our path to growth and prosperity rested on building a more inclusive and diverse global organization, the racial awakening we experienced in 2020 made clear that we all need to do more.► Create Community: Develop a Kimberly-Clark community whose deepened understanding and daily actions drive inclusion, embrace diversity, and empower authenticity. ► EcoVadis Gold rating covering environment, fair laborLeverage 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 ethics/fair business practices,that reflect our diverse consumer base.► Accelerate Action: Integrate I&D into everything we do, using our strength to combat inequities for our people, our consumers, and supply chainour communities around the world – to make lives better today and tomorrow.2021 Proxy Statement 23 Corporate GovernanceOther Corporate Governance Policies and Practices Full-time Employee
Diversity2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Women 29.9% 30.1% 31.0% 35.6% 31.8% 32.8% 31.8% 30.5% 30.0% 30.9% 31.1% 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% Ethnic minorities
(U.S.)18.0% 18.0% 19.0% 19.0% 18.0% 19.0% 19.0% 19.0% 19.0% 21.0% 21.1% Ethnic minorities 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% www.kimberly-clark. com.www.kimberly-clark.com. Any amendments to or waivers of our Code of Conduct applicable to our Chief Executive Officer, Chief Financial Officer or Vice President and Controller will also be posted at that location.202420202021 Proxy StatementCorporate Governance Other Corporate Governance Policies and Practices ► 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 cybersecurity,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. ► 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 2021 Proxy Statement 25 Corporate Governance Other Corporate Governance Policies and Practices 2020 Proxy Statement21Corporate Governance Other Corporate Governance Policies and Practices► 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. 222620202021 Proxy Statement
Election of Directorsthirteentwelve members. Each director’s term will expire at this year’s Annual Meeting. All the nominees standing for election at the Annual Meeting are being nominated to serve until the 20212022 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.Nancy J. Karch and Marc J. Shapiro areAbelardo E. Bru is not standing for re-election as they havehe has reached our mandatory retirement age. Ms. Karch and Mr. ShapiroBru will continue to serve as directorsa director until the Annual Meeting. We would like to thank Ms. Karch and Mr. ShapiroBru for theirhis many years of service and substantial contributions to the Board, Kimberly-Clark and our stockholders.Executive 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 to fill any vacancies that occur between annual meetings of stockholders.This year, Mr. Smucker was recommended for nomination by an Independent Director. The Nominating and Corporate Governance Committee periodically retains a search firm to assist it in identifying and recruiting director candidates meeting the criteria specified by the Committee. The Committee utilized a search firm20202021 Proxy Statement2327Proposal 1. Election of Directors Diversity of Directors the criteria specified by the Committee.in connection with Mr. Culver’s nomination. 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.” 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 242820202021 Proxy StatementProposal 1. Election of Directors The Nominees 2005
September 2020
Age 7160 Abelardo E. BruJohn W. CulverRetired Vice Chairman, PepsiCo, Inc.Group President of International, Channel Development and Global Coffee & Tea, Starbucks CorporationBru retiredCulver joined Starbucks Corporation in 2002 and has served as Vice Chairman of PepsiCo, a foodGroup President, International, Channel Development and beverage company, in 2005. He joined PepsiCo in 1976. Mr. Bru served from 1999 to 2003 as President and Chief Executive Officer and in 2003 to 2004 as Chief Executive Officer and Chairman of Frito-Lay Inc., a division of PepsiCo.Global Coffee & Tea since 2018. Prior to leading Frito-Lay,that, he served in a number of leadership roles, including 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. Bru led PepsiCo’s largest international business, Sabritas Mexico,Culver serves as President and General Manager from 1992 to 1999. Mr. Bru is a memberdirector of the board of directors of the Education is Freedom Foundation.The Mission Continues.DIRECTV (through July 2015) and Kraft Foods Group, Inc. (through July 2015)Columbia Sportswear Company (since January 2021).BruCulver satisfies the financial literacy requirements of the NYSE, has leadership experience as a chiefsenior executive, officer, has knowledge about our industries, provides diversity of background and viewpoint, has international experience and experience with branded consumer packaged goods, and has marketing compensation, governance and public company board experience.
Age 6869 CorporationCorporation.has been determined by our Board to be an “audit committeesatisfies the financial expert” underliteracy requirements of the SEC’s rules and regulations,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.20202021 Proxy Statement2529Proposal 1. Election of Directors Diversity of DirectorsThe Nominees
Age 5556 was electedhas served as Chairman of the Board insince January 2020 and as Chief Executive Officer insince 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.Mr. Hsu has been elected to the board of Texas Instruments Incorporated effective(since April 1, 2020.2020).
Age 6364 263020202021 Proxy StatementProposal 1. Election of Directors Diversity of DirectorsThe Nominees
May 2019
Age 6364 predecessorpredessor banks, where he rose to Chairman, Chase Commercial and Consumer Banking in 2013, and served on the company'scompany’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'sChancellor’s Council, on the Board of Visitors of UT Southwestern Health System, on the Steering Committee for the O'DonnellO’Donnell Brain Institute for UT Southwestern, and on the Board of Southwestern Medical Foundation and a member of its Investment Committee. Mr. Maclin also serves on the Board of The University of Texas Ex-Students'Ex-Students’ Alumni Association (Texas Exes) and served as its Interim Co-Executive Director during 2017. Mr. Maclin is President of Texas Exes for the term of June 2019-2020. He is also a lifetime member of Texas Exes and the UT President'sPresident’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.; is a Board Advisor for Cyber Defense Labs; and he is an Advisory Director ofa Board Advisor for BancAffiliated, Inc.None.Trinity Industries, Inc. (since September 2020).
Age 6162 20202021 Proxy Statement2731Proposal 1. Election of Directors Diversity of DirectorsThe Nominees
Age 4647 Former Chief Executive Officer, OpenTable, Inc.Corel Corporation and part of The Priceline Group, Inc. 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.NoneAffirm Holdings, Inc. (since January 2021).
Age 6667 283220202021 Proxy StatementProposal 1. Election of Directors Diversity of DirectorsThe Nominees
May 2019
Age 5960 2019)2020) and Trinity Industries, Inc.
September 2019
Age 5051 CompanyCompany.SEC���sSEC’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.20202021 Proxy Statement2933Proposal 1. Election of Directors Diversity of DirectorsThe Nominees
Age 6869 July 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.has been determined by our Board to be an “audit committeesatisfies the financial expert” underliteracy requirements of the SEC’s rules and regulations,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 voteFOR the election of each of the eleven nominees for director. 303420202021 Proxy StatementProposal 1. Election of Directors Director Compensation ► ► ► ► 2018,2019, 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 2019,2020, and the Board agreed with the Committee’s recommendation.2019:2020:Board Members 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 $30,000, awarded and valued on the first business day of the year Stockholder
AlignmentRestricted share units are not paid out until retirement or other termination of Board service 20202021 Proxy Statement3135Proposal 1. Election of Directors 20192020 Outside Director Compensation2019.2020.Name(1) Fees Earned or
Paid in Cash($)Stock
Awards
($)(2)(3)(4)All Other
Compensation
($)(5)Total($)(6) Fees Earned or
Paid in Cash($)Stock
Awards
($)(2)(3)(4)All Other
Compensation
($)(5)Total($)(6) John F. Bergstrom 50,000 180,000 20,000 250,000 Abelardo E. Bru 100,000 200,000 10,000 310,000 100,000 200,000 — 300,000 John W. Culver 50,000 60,000 — 110,000 Robert W. Decherd 100,000 180,000 30,000 310,000 100,000 180,000 10,000 290,000 Fabian T. Garcia 100,000 180,000 — 280,000 Mae C. Jemison, M.D. 100,000 180,000 — 280,000 100,000 180,000 — 280,000 James M. Jenness 50,000 180,000 — 230,000 Nancy J. Karch 100,000 200,000 10,000 310,000 50,000 200,000 10,000 260,000 S. Todd Maclin 75,000 120,000 — 195,000 100,000 180,000 — 280,000 Sherilyn S. McCoy 100,000 180,000 — 280,000 100,000 180,000 — 280,000 Christa S. Quarles 100,000 180,000 5,000 285,000 100,000 180,000 — 280,000 Ian C. Read 100,000 210,000 10,000 320,000 100,000 210,000 — 310,000 Marc J. Shapiro 100,000 180,000 — 280,000 50,000 180,000 — 230,000 Dunia A. Shive 75,000 120,000 — 195,000 100,000 180,000 — 280,000 Mark T. Smucker 50,000 60,000 — 110,000 100,000 180,000 — 280,000 Michael D. White 100,000 200,000 — 300,000 100,000 200,000 — 300,000 (1) Messrs. BergstromMs. Karch and JennessMr. Shapiro served as directors until their retirement on May 2, 2019April 29, 2020 and received fees for two quarters. Mr. Maclin and Ms. Shive joined the Board on May 2, 2019 and received a pro-rated stock award as well as fees for three quarters. Mr. SmuckerCulver joined the Board on September 18, 201916, 2020 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. See Note 56 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 20192020 for the assumptions used in valuing these restricted share units.
(3) Restricted share unit awards were granted to the Outside Directors on January 2, 2019,2020, except for Mr. Maclin and Ms. Shive who joined the Board and received a grant on May 2, 2019 and Mr. SmuckerCulver who joined the Board and received a grant on September 18, 2019.16, 2020. The number of restricted share units granted is set forth below:Name Restricted Share Unit Grants in 2019(#)2020(#)John F. Bergstrom1,610Abelardo E. Bru 1,7891,472John W. Culver 406 Robert W. Decherd 1,610Fabian T. Garcia1,6101,325Mae C. Jemison, M.D. 1,610James M. Jenness1,6101,325Nancy J. Karch 1,7891,472S. Todd Maclin 9431,325Sherilyn S. McCoy 1,6101,325Christa S. Quarles 1,6101,325Ian C. Read 1,8791,546Marc J. Shapiro 1,6101,325Dunia A. Shive 9431,325Mark T. Smucker 4511,325Michael D. White 1,7891,47232362020 Proxy Statement Proposal 1. Election of Directors 20192020 Outside Director Compensation(4) As of December 31, 2019,2020, Outside Directors had the following stock awards outstanding: Name Restricted Stock(#) Restricted Share Units(#) John F. Bergstrom——Abelardo E. Bru — 37,13939,794John W. Culver — 406 Robert W. Decherd 3,000 47,034Fabian T. Garcia——49,845 Mae C. Jemison, M.D. — 43,388James M. Jenness——46,086 Nancy J. Karch — 20,546— S. Todd Maclin — 9572,342 Sherilyn S. McCoy — 2,1813,603 Christa S. Quarles — 5,7857,319 Ian C. Read — 30,85933,395 Marc J. Shapiro — 48,089— Dunia A. Shive — 9572,342 Mark T. Smucker — 4511,820 Michael D. White — 7,4129,147(5) Reflects charitable matching gifts paid in 20192020 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 2019 in connection with certain matching gifts for Messrs. Bergstrom, Decherd and Read and Mmes. Karch and Quarles reflect donations made in 2018. In addition, $10,000 of the amount shown for Mr. Decherd was paid in 2019 in connection with a donation made in 2017. Not included in this column is the value of retirement gifts to each of Mr. BergstromMs. Karch and Mr. Jenness,Shapiro, which had a value of less than $1,000. In addition, we made a charitable contribution of $50,000 in honor of each of Mr. BergstromMs. Karch and Mr. Jenness.Shapiro. These contributions were made directly by Kimberly-Clark to charitable organizations selected by Kimberly-Clark and were not made in the name or at the direction of Mr. Bergstrom or Mr. Jenness. Mr. BergstromMs. Karch and Mr. JennessShapiro. Ms. Karch and Mr. Shapiro did not receive any personal benefit from these contributions and accordingly, the amount of the contribution has been excluded from the Director Compensation table.
(6) During 2019,2020, Outside Directors received credit for cash dividends on restricted stock held by them. These dividends are credited to interest bearing accounts maintained by us on behalf of those Outside Directors with restricted stock. Earnings on those accounts are not included in the Outside Director Compensation Table because the earnings were not above market or preferential. Also in 2019,2020, Outside Directors received additional restricted share units with a value equal to the cash dividends paid during the year on our common stock on the restricted share units held by them. Because we factor the value of the right to receive dividends into the grant date fair value of the restricted stock and restricted share units awards, the dividends and dividend equivalents received by Outside Directors are not included in the Outside Director Compensation table. The dividends and other amounts credited on restricted stock and additional restricted share units credited in 20192020 were as follows: Name Dividends Credited on
Restricted Stock($)Number of Restricted Share
Units Credited in 2019(#)2020(#)Grant Date Fair Value of
Restricted Share Units
Credited($) John F. Bergstrom6,090721.2984,079Abelardo E. Bru — 1,162.331,183.35147,222164,100 RobertJohn W. Decherd12,2701,477.90187,098Fabian T. Garcia—486.1361,696Mae C. Jemison, M.D.—1,362.23172,472James M. Jenness—568.0966,239Nancy J. Karch—635.8780,654S. Todd Maclin—14.141,950Sherilyn S. McCoy—54.777,153Christa S. Quarles—169.1221,611Ian C. Read—962.28121,940Marc J. Shapiro—1,511.38191,331Dania A. Shive—14.141,950Mark T. SmuckerCulver— — — Robert W. Decherd 12,270 1,486.14 206,078 Mae C. Jemison, M.D. — 1,373.32 190,437 Nancy J. Karch — 339.37 44,888 S. Todd Maclin — 60.34 8,394 Sherilyn S. McCoy — 98.20 13,644 Christa S. Quarles — 209.72 29,105 Ian C. Read — 990.74 137,397 Marc J. Shapiro — 776.77 102,795 Dunia A. Shive — 60.34 8,394 Mark T. Smucker — 44.67 6,222 Michael D. White — 219.14263.4727,96236,5622020 Proxy Statement 3337Proposal 1. Election of Directors 20192020 Outside Director Compensation2019.2020.2019,2020, 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 not to make any changes to our Outside Director Compensation Program for 2020.2021.343820202021 Proxy Statement
Ratification of Auditor2020,2021, 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 2020,2021, 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 20192020 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 20202021 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 20202021 independent auditor► a review and approval of Deloitte’s proposed estimated fees for 20202021 ► 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, and its conclusion that this service does not impact Deloitte’s independence The Board of Directors unanimously recommends a voteFOR ratification of Deloitte’s selection as Kimberly-Clark’s auditor for 2020.2021.20202021 Proxy Statement3539Proposal 2. Ratification of AuditorAudit Committee Approval of Audit and Non-Audit Services 20192020 and 2018,2019, were as follows (dollars in millions):2019($) 2018($) 2020($) 2019($) Audit Fees(1) 11.5 11.8 11.1 11.5 Audit-Related Fees(2) 0.3 4.4 0.6 0.3 Tax Fees(3) 2.3 1.9 2.6 2.3 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, 20192020 and 2018,2019, 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 20192020 and 2018.2019. Approximately $0.1 million and $0.2 million was for tax compliance/preparation fees in 2019each of 2020 and 2018, respectively.2019.Using the following procedures,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 all audit andnon-audit services to be performed by Deloitte, reviews a report summarizing year-to-date approved non-audit services provided by Deloitte, to Kimberly-Clark:►At the first face-to-face Audit Committee meeting each year, our Chief Financial Officer presents a proposal, including fees, to engage Deloitte for audit services;►Before the first face-to-face Audit Committee meeting of the year, our Vice President and Controller oversees the preparation of a detailed memorandum regarding non-audit services to be provided by Deloitte during the year. This memorandum includes the services to be provided, the estimated cost of these services, reasons why it is appropriate to have Deloitte provide these services, and reasons why the requested service is not inconsistent with applicable auditor independence rules; and►Before each subsequent face-to-face meeting of the Audit Committee, our Vice President and Controller oversees the preparation of an additional memorandum that includes updated information regarding the approved services and highlights any new audit and non-audit services to be provided by Deloitte. All new non-audit services to be provided are described in individual requests for services.The Audit Committee reviews an updated projection of the requests presented in these proposals and memoranda and approves all services it finds acceptable.ChairmanChair 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. Any actions taken under this authority are reported to theThe Audit Committee at its next face-to-face Committee meeting.20192020 and 20182019 were pre-approved by the Audit Committee or the Audit Committee Chairman.Chair.364020202021 Proxy StatementProposal 2. Ratification of AuditorAudit Committee Approval of Audit and Non-Audit Services 2019,2020, with management and the auditor. The Audit Committee also reviewed management’s assessment of the effectiveness of internal controls as of December 31, 2019,2020, and discussed the auditor’s examination of the effectiveness of Kimberly-Clark’s internal control over financial reporting.2019,2020, 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 2020.2021.Michael D. White, ChairmanDunia A. Shive, ChairRobertJohn W. DecherdCulver
S. Todd Maclin
Christa S. QuarlesDunia A. Shive
Mark T. Smucker20202021 Proxy Statement3741
to Approve Named Executive
Officer Compensation► ► ► ► 20192020 compensation of our named executive officers, see “Compensation Discussion and Analysis,” below.The Board of Directors unanimously recommends a voteFOR the approval of named executive officer compensation, as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules. 384220202021 Proxy Statement
and Analysis20192020 compensation for our named executive officers.2019,2020, our named executive officers are:Named Executive Officer Title Michael D. HsuChief Executive Officer Thomas J. FalkExecutive Chairman of the BoardMaria G. HenrySenior Vice President and Chief Financial Officer Russell Torres* President, K-C Professional Kimberly K. UnderhillGroup President, K-C North America Jeffrey P. MelucciSandi Karrmann**Senior Vice President and General CounselChief Human Resources OfficerMr. Falk* Mr. Torres joined Kimberly-Clark on March 9, 2020. ** Ms. Karrmann joined Kimberly-Clark on October 26, 2020. Executive Chairman ofour President, K-C Asia-Pacific until March 1, 2020 when he transitioned to a non-executive role as Chief Transformation Officer until he departed the Board during 2019 and retiredcompany on December 31, 2019.2020. References in the following discussion to our “named executive officers” do not include Mr. Agarwal unless we specify otherwise. We discuss Mr. Agarwal’s compensation separately under “Executive Compensation for 2020 - Compensation of Former Named Executive Officer” below. and adjusted operating profit return on sales (OPROS).Performance Measure* 2019 Results 2019 Target 2020 Results 2020 Target Net sales $18.45 billion $18.13 billion $19.07 billion $18.62 billion Adjusted EPS $6.89 $6.61 $7.73 $7.23 Adjusted OPROS Improvement +78 bps +60 bps * See “2019“2020 Performance Goals, Performance Assessments and Payouts” for additional information on how we use these measures to promote our pay-for-performance culture.20192020 performance, the Management Development and Compensation Committee of our Board (the “Committee”) concluded that:► 20192020 with above target level net sales and adjusted earnings per share, and adjusted OPROS growth, and ► ➢ ➢ ➢ 20192020 above the target amount, including an incentive payout for the Chief Executive Officer at 132158 percent of his target payment amount.20202021 Proxy Statement3943Compensation Discussion and Analysis 20192020 Compensation Highlights2019.2020. 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 20192020 was equity based.Chairman and CEO Named Executive
OfficersChairman and CEO Named Executive Officers 20192020 Stockholder Advisory Vote20192020 Annual Meeting, our executive compensation program received the support of approximately 95 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 2020.2021. 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.2017 and 2018 and Mr. Hsu’s service in 2019.2019 and 2020. 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:404420202021 Proxy StatementCompensation Discussion and Analysis 2019 Compensation Highlights ► 20192020 year-end stock price ($137.55)134.83) 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 ► 2017)2018) or are expected to be paid out based on projected performance (for the grants made in 20182019 and 2019)2020), multiplied by our 20192020 year-end stock price.► 77 percent of target (2017), 49 percent of target (2018) and, 132 percent of target (2019), and 158 percent of target (2020). ► 62 percent of target (2017 award) and projected payouts of 57100 percent of target (2018 award) and 137projected payouts of 185 percent of target (2019 award) and 175 percent of target (2020 award), and ► $132.82 (2017) and $103.06 (2018) and to Mr. Hsu were $125.47 (2019) and $138.96 (2020).20202021 Proxy Statement4145Compensation Discussion and Analysis Executive Compensation Objectives and Policies Objective Description Related Policies ► ► ► 424620202021 Proxy StatementCompensation Discussion and AnalysisComponents of Our Executive Compensation Program Component Objectives Purpose Target Competitive Position Base salary Quality of talent Annual cash
incentivePay-for-
performanceLong-term
equity
incentive
alignment
long-term
success
performanceRetirement
benefitsQuality 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 20202021 Proxy Statement4347Compensation Discussion and AnalysisSetting Annual Compensation 20192020 target annual compensation for our named executive officers.20192020 compensation for our executive officers, including our Chief Executive Officer, 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.2019,2020, 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:20192020 Executive Compensation Peer Group
2019,2020, the Committee did not make any changes to the peer group used in 2018.2019. Likewise, in setting compensation for 2020,2021, the Committee did not make any changes to the peer group.442020 Proxy StatementCompensation Discussion and AnalysisSetting Annual Compensation48 2021 Proxy Statement Compensation Discussion and Analysis Setting Annual Compensation 2019,2020, Mr. Hsu’s direct annual target compensation was slightly belowat or near the median of direct annual compensation of chief executive officers of companies included in the peer group.2019.2020.2020 Proxy Statement45Compensation Discussion and AnalysisExecutive Compensation for 20192019202020192020 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 2019,2020, were appropriate and consistent with our executive compensation objectives:Name 20192020 Direct Annual Compensation Target($)Michael D. Hsu 11,312,500Thomas J. Falk6,625,00011,445,000Maria G. Henry 4,840,0005,060,000Russell Torres 3,575,000 Kimberly K. Underhill 4,049,0004,218,500Jeffrey P. MelucciSandi Karrmann2,802,5002,006,250The Committee approved Mr. Hsu’s compensation target in connection with his promotion to Chief Executive Officer and Mr. Falk’s target upon his election as Executive Chairman, in each case taking into account market data for officers performing similar functions at our peer companies.20192020 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 20192020 – Base Salary.” (Note that in 2019 the adjustments for Mr. Hsu and Mr. Falk were effective January 1, the date of our CEO transition.) ► Annual cash incentive compensation is included at the target level, while the Summary Compensation Table reflects the actual amount earned for 2019.2020. ► As described below under “Long-Term Equity Incentive Compensation – 20192020 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.2021 Proxy Statement 49 Compensation Discussion and Analysis Executive Compensation for 2020 ► Annual target amounts do not count off-cycle awards such as the one-time sign-on cash bonuses and restricted stock unit awards to Mr. Torres and Ms. Karrmann 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. 20192020 consists of fixed and performance-based components, as well as short-term and long-term components.462020 Proxy StatementCompensation Discussion and AnalysisExecutive Compensation for 2019Name 20192020 Base Salary($)Michael D. Hsu 1,250,000Thomas J. Falk650,0001,300,000Maria G. Henry 820,000830,000Russell Torres 750,000 Kimberly K. Underhill 820,000830,000Jeffrey P. MelucciSandi Karrmann650,000575,000and Mr. Falk’s base salary and target cash incentive based on peer company market data relating to their new roles. The Committee approved an increaseand 1.2 percent increases in Ms. Henry and Ms. Underhill’s base salary of 2.5 percent,salaries, consistent with the annual merit increase provided to all other company employeesemployees. In the case of Mr. Torres and an increase in Mr. Melucci’sMs. Karrmann, the Committee determined the base salaries and annual cash incentive targets when the company extended them employment offers, taking into account prior salary, of 6.6 percent based onprior experience and peer company market data.50 2021 Proxy Statement Compensation Discussion and Analysis Executive Compensation for 2020 20192020 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.
FOR 2020 ANNUAL CASH INCENTIVE PROGRAMTARGET PAYMENT AMOUNTS AND RANGE OF POSSIBLE PAYOUTSFOR 2019 ANNUAL CASH INCENTIVE PROGRAMTarget Payment Amount Possible Payout Michael D. Hsu 165% of base salary 0% - 200% of target payment amount Thomas J. FalkMaria G. Henry150%100% of base salary0% - 200% of target payment amount Maria G. HenryRussell Torres100%70% of base salary0% - 200% of target payment amount Kimberly K. Underhill 95% of base salary 0% - 200% of target payment amount Jeffrey P. MelucciSandi Karrmann85%75% of base salary0% - 200% of target payment amount 2020 Proxy Statement47Table of ContentsThe payouts for Mr. Torres and Ms. Karrmann were prorated based on their hire dates.Compensation Discussion and Analysis Executive Compensation for 201920192020 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.2019.2020. It then weighted the three elements for each executive (note that the business unit or staff function performance goals did not apply to our Chief Executive Officer or our Executive Chairman because theirhis 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.20192020 PERFORMANCE GOALS AND WEIGHTS4820202021 Proxy Statement51 Compensation Discussion and AnalysisExecutive Compensation for 201920202019,2020, the Committee chose the following as corporate key financial goals for the annual cash incentive program:20192020 GoalExplanation Reason for Use as a
Performance Measure2019Adjusted OPROSAfter net sales and adjusted EPS are determined as described above, a multiplier based on adjusted OPROS is applied to the calculation result to determine the final payout percentage(2)A measure of margin efficiency and a helpful method of tracking our cost structure performance(1) In 20192020 the following adjustments were made to diluted net income per share to determine adjusted EPS, consistent with our earnings releaseForm 10-K results:Diluted Net Income Per Share $ 6.24 Add- Charges related to 2018 Global Restructuring Program $ 0.72 Subtract - Gain on sale of former mill site $ (0.07 ) Rounding $ — Adjusted EPS $ 6.89 For more information regarding these adjustments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Annual Report on Form 10-K.(2)For purposes of determining annual cash incentive amounts, we calculate adjusted OPROS using our reported financial results, adjusted for the same items described above in determining adjusted EPS.Diluted Net Income Per Share $ 6.87 Add- Charges related to 2018 Global Restructuring Program $ 0.94 Add- Softex Indonesia acquisition-related costs $ 0.08 Subtract- Gain related to Brazilian business tax credits $ (0.15 ) Rounding $ — Adjusted EPS (Form 10-K Results) $ 7.74 Adjusted EPS (Form 10-K results) $ 7.74 Subtract- Softex Indonesia operations impact on earnings $ (0.01 ) Adjusted EPS for compensation payouts $ 7.73 officer. To determine this percentage, the Committee follows the following process.First, it determines an initial payout percentageofficer based on how Kimberly-Clark performed against the net sales and adjusted EPS goals established in February of each year. For 2019,2020, the Committee set these goals and the corresponding initial payout percentages at the following levels:Measure
(each weighted 50%)Range of Performance Levels Range of Performance Levels Threshold Target Maximum Threshold Target Maximum Net sales (billions) $16.73 $18.13 $19.53 $17.19 $18.62 $20.05 Adjusted EPS $6.11 $6.61 $7.11 $6.68 $7.23 $7.78 Initial Payout Percentage 0% 100% 200% 0% 100% 200% Second, it applies a multiplier to this initial payout percentage. The multiplier is basedActual results.For 2020, our net sales result was $19.07 billion and our adjusted EPS result was $7.73. Based on how Kimberly-Clark performed againstthese results, the adjusted OPROS goals also established in February. Depending on the level of basis point improvement, the multiplier may either decrease or increase the initial2020 payout percentage (butfor achieving the amountcorporate key financial goals was 161 percent of the final payout percentage cannot exceed a 200 percent cap).each named executive officer’s target payment amount.2020522021 Proxy Statement 49Compensation Discussion and AnalysisExecutive Compensation for 20192020For 2019, the Committee set the following ranges for this adjusted OPROS multiplier:Range of Performance LevelsThresholdTargetMaximumAdjusted OPROS (bps improvement)+20 bps+60 bps+100 bpsAdjusted OPROS Multiplier Applied to InitialPayout Percentage0.8 x1.0 x1.2 xActual results.For 2019, our net sales result was $18.45 billion and our adjusted EPS result was $6.89. Based on these results, the initial payout percentage was determined to be 139 percent. To this percentage, we then applied the OPROS multiplier of 1.09, which was based on the actual 2019 improvement of 78 bps.The resulting 2019 payout percentage for achieving the corporate key financial goals was 152 percent of each named executive officer’s target payment amount.2019,2020, the Committee also established additional corporate financial and non-financial strategic performance goals that are intended to challenge our executives to exceed our long-term objectives. At the end of the year, it determined a payout percentage based on its assessment of the degree to which these goals are achieved.20192020 goals and how the Committee assessed Kimberly-Clark’s performance against each one:Additional Corporate Financial and Strategic Performance Goals for 20192020Final Result Below
Goal At
GoalAbove
GoalBrand equity and
market performanceXX Innovation 2019.2020.X Diversity and
inclusionX 85150 percent of target.502020 Proxy StatementCompensation Discussion and Analysis Executive Compensation for 2019Name 20192020 Business Unit/Staff Function Payout PercentageMichael D. Hsu N/A Thomas J. FalkN/AMaria G. Henry 121%124%Russell Torres 80% Kimberly K. Underhill 143%170%Jeffrey P. MelucciSandi Karrmann125% 2021 Proxy Statement 53 Compensation Discussion and Analysis Executive Compensation for 2020 20192020
The following table shows the payout opportunities and the actual payouts of annual cash incentives for 20192020 for each of our named executive officers. Payouts were based on the payout percentages for each element, weighted for each executive as shown on page 48.51.Annual
Incentive TargetAnnual Incentive
Maximum2019 Annual
Incentive PayoutAnnual
Incentive TargetAnnual Incentive
Maximum2020 Annual
Incentive PayoutName % of Base
Salary Amount($) % of
Target Amount($) % of
Target Amount($) % of Base
Salary Amount($) % of
Target Amount($) % of
Target Amount($) Michael D. Hsu 165% 2,062,500 200% 4,125,000 132% 2,723,646 165% 2,145,000 200% 4,290,000 158% 3,383,739 Thomas J. Falk 150% 975,000 200% 1,950,000 132% 1,287,542 Maria G. Henry 100% 820,000 200% 1,640,000 139% 1,142,306 100% 830,000 200% 1,660,000 149% 1,235,396 Russell Torres* 70% 437,500 200% 875,000 103% 450,688 Kimberly K. Underhill 95% 779,000 200% 1,558,000 137% 1,064,749 95% 788,500 200% 1,577,000 166% 1,310,600 Jeffrey P. Melucci 85% 552,500 200% 1,105,000 140% 773,807 Sandi Karrmann** 75% 71,875 200% 143,750 149% 107,196 * Mr. Torres’ annual target amount of $525,000 was prorated based on his start date of March 9, 2020. ** Ms. Karrmann’s annual target amount of $431,250 was prorated based on her start date of October 26, 2020. 20152016 through 20192020
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 20152016 through 2019,2020, 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 136145 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.2020 Proxy Statement51Table of ContentsPAYOUT PERCENTAGES FOR DESIGNATED NAMED EXECUTIVE OFFICERSCompensation Discussion and Analysis Executive Compensation for 2019PAYOUTS FOR CORPORATE GOALS AND AVERAGE TOTAL
PAYOUT PERCENTAGES FOR DESIGNATED NAMED EXECUTIVE OFFICERS 2019 2018 2017 2016 2015 Average Payout for Corporate GoalsCombination of corporate key financial goals and additional corporate financial and strategic performance goals 132% 49% 77% 109% 105% 94% Average Total Payout Percentages(including business unit or staff function performance) for executives designated as named executive officers for year shown 136% 58% 75% 108% 108% 97% 2020 2019 2018 2017 2016 Average Payout for Corporate Goals
Combination of corporate key financial goals and additional corporate financial and strategic performance goals158% 132% 49% 77% 109% 107% Average Total Payout Percentages (including business unit or staff function performance) for executives designated as named executive officers for year shown 145% 136% 58% 75% 108% 94% 54 2021 Proxy Statement Compensation Discussion and Analysis Executive Compensation for 2020 20192020 Grants
In determining the 20192020 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. Because theseThe Committee did not consider the amount of outstanding equity awards are part of ourcurrently held by a named executive officer when making the 2020 annual awards because such amounts represent compensation program that compares direct annual compensationattributable to the median of our peer group comparison, grants from prior years were not considered when setting 2019 targets or granting awards.years.20192020 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 12.510 percent of the price of one share of our common stock on the date of grant of the stock option.Mr. Falk’s target grant value was allocated 100 percent to performance-based restricted share units, reflecting the strategic nature of his transition role as Executive Chairman and the time period over which his influence may have an impact.herhis annual long-term incentive award. Ms. Karrmann, who joined the company on October 26, did not receive an annual long-term incentive award the Committee granted a time-vested restricted share award to Ms. Henry for retention purposes.2020.522020 Proxy StatementCompensation Discussion and Analysis Executive Compensation for 201920192020 - 20212022 Performance-Based Restricted Share Units
For the performance-based restricted share unit awards granted in 2019,2020, 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.20192020 awards are based on average annual net sales growth and the average adjusted return on invested capital (ROIC) for the period January 1, 20192020 through December 31, 2021.2022. Adjusted ROIC 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. The formula we use to calculate adjusted ROIC can be found under the Investors section of our website at www.kimberly-clark.com.20192020 - 20212022 PERFORMANCE-BASED RESTRICTED SHARE UNITS:
POTENTIAL PAYOUTS AT VARYING PERFORMANCE LEVELSGoals (Each weighted 50%) Performance Levels Performance Levels Average annual net sales growth (2.12)% 0.53% 3.18% (1.07)% 1.58% 4.23% Average adjusted ROIC 23.73% 25.23% 26.73% 24.71% 26.21% 27.71% Potential Payout (as a percentage of target) 0% 100% 200% 0% 100% 200% 2021 Proxy Statement 55 Compensation Discussion and Analysis Executive Compensation for 2020 20162017 - 20182019 Performance-Based Restricted Share Units
In February 2019,2020, the Committee evaluated the results of the three-year performance period for the performance-based restricted share units that were granted in 2016.2017. The performance objectives for these 20162017 awards were based on average annual adjusted net sales growth and average adjusted ROIC for the period January 1, 20162017 through December 31, 2018,2019, each weighted equally.Goals (Each weighted 50%) Performance Levels Performance Levels Average annual adjusted net sales growth* (0.90)% 1.60% 4.10% (0.32)% (0.80)% 1.85% 4.50% 0.44% Average adjusted ROIC** 22.20% 23.20% 24.20% 23.90% 22.71% 24.21% 25.71% 23.88% Potential Payout (as a percentage of target) 0% 100% 200% Actual 0% 100% 200% Actual * ** our 2014 organization restructuring, (2) the deconsolidation of our Venezuelan operations, (3)(2) tax reform, and (4)(3) our 2018 Global Restructuring Program.Program and (4) gain on the sale of property associated with a former manufacturing facility.2020 Proxy Statement53Compensation Discussion and Analysis Executive Compensation for 2019exceeded our performance goal for adjusted ROIC but did not achieve our performance goalgoals for either adjusted net sales growth.growth or adjusted ROIC. As a result, the payout percentage for the share units was 9762 percent of target. The following table includes information about the opportunities and payouts (including reinvested dividends) regarding these grants to our named executive officers:2016 - 2018 Performance-Based Restricted Share Unit Award (Paid in Share Amount February 2019) % of Amount of Value of Shares on Share Amount 2017 - 2019 Performance-Based
Restricted Share Unit Award (Paid in
February 2020)Name Target Maximum Target Shares(#) Date Received($) Target Maximum % of
Target Amount of
Shares(#) Value of Shares on
Date Received($)Michael D. Hsu 16,801 33,602 97% 16,297 1,903,979 22,482 44,964 62% 13,939 1,828,657 Thomas J. Falk 63,399 126,798 97% 61,497 7,184,695 Maria G. Henry 15,216 30,432 97% 14,759 1,724,294 17,798 35,596 62% 11,035 1,447,682 Russell Torres* — — — — — Kimberly K. Underhill 7,608 15,216 97% 7,380 862,205 8,119 16,238 62% 5,034 660,410 Jeffrey P. Melucci 3,170 6,340 97% 3,075 359,252 Sandi Karrmann* — — — — — * 20192020 and are included in the table below entitled “Option Exercises and Stock Vested in 2019.2020.”
As of February 12, 2020,10, 2021, the performance-based restricted share units granted in 20192020 and 20182019 were on pace to vest at the following levels: 137175 percent for the 20192020 award and 57185 percent for the 20182019 award.20172018 award vested at 62100 percent. Payouts under these awards will be reflected in 20202021 compensation.56 2021 Proxy Statement Compensation Discussion and Analysis Benefits and Other Compensation 20192020 Stock Option Awards
As noted above, 25 percent of the annual long-term equity incentive grants to executive officers in 20192020 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.12.510 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.”542020 Proxy StatementCompensation Discussion and Analysis Benefits and Other Compensation2021 Proxy Statement 57 Compensation Discussion and Analysis Executive Compensation for 2021 In 2019, we provided Mr. Falk, who was serving as our Executive Chairman, with security services and use of our corporate aircraft. The incremental cost to us of providing security services at Mr. Hsu’s and Mr. Falk’s residences and personal travel for these officersMr. Hsu and theirhis guests on our corporate aircraft is included in “All Other Compensation” in the Summary Compensation Table.plansprograms that cover our executive officers: the Severance Pay Plan and the Executive Severance Plan.Program. An executive officer may not receive severance payments under more than one severance plan.program. Benefits under these plansprograms are payable only if the executive’s employment terminates under the conditions specified in the applicable plan.program. We believe that our severance plansprograms 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 plansprograms and their terms, see “Potential Payments on Termination or Change of Control – Severance Benefits.”2020 Proxy Statement55Compensation Discussion and Analysis Executive Compensation for 2020
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.PlanProgram
Our Executive Severance PlanProgram provides severance benefits to eligible employees, including our named executive officers, in the event of a qualified termination of employment (as defined in the plan)participant agreements) in connection with a change of control. For an eligible employee to receive a payment under this plan,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 plan)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 planprogram that expires on December 31, 2020.2023.20202021 Base Salary2020,2021, the Committee approved the following base salaries for our named executive officers, effective April 1, 2020:2021:Name 20202021 Base Salary($)Michael D. Hsu 1,300,0001,375,000Maria G. Henry 875,000 Russell Torres 750,000 Kimberly K. Underhill 830,000 Kimberly K. UnderhillSandi Karrmann575,000 58 830,0002021 Proxy StatementJeffrey P. MelucciCompensation Discussion and Analysis 700,000Executive Compensation for 202120202021 Annual Cash Incentive Targets20202021 annual cash incentives, which will be payable in 2021.2022. The target payment amounts and range of possible payouts for 20202021 are as follows:Target Payment Amount Possible Payout Michael D. Hsu 165%170% of base salary0% - 200% of target payment amount Maria G. Henry 100% of base salary 0% - 200% of target payment amount Russell Torres 75% of base salary 0% - 200% of target payment amount Kimberly K. Underhill 95%100% of base salary0% - 200% of target payment amount Jeffrey P. MelucciSandi Karrmann85%75% of base salary0% - 200% of target payment amount 562020 Proxy StatementCompensation Discussion and Analysis Executive Compensation for 2020“2019“2020 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 20202021 performance goals and relative weights for our named executive officers:20202021 PERFORMANCE GOALS AND WEIGHTS20202021 are designed to encourage a continued focus on executing our long-term strategic objectives and include achieving net sales and adjusted EPS goals.2020.2021. These goals, intended to further align compensation with achieving our strategic objectives, include:► Focusing on market share improvement in global markets ►Driving innovation► Diversity and inclusion 20202021 Proxy Statement5759Compensation Discussion and AnalysisExecutive Compensation for 2020202120202021 Long-Term Equity Compensation Incentive Awards2020,2021, 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 20202021 are based on modified free cash flow (MFCF) and average annual netorganic sales growth and average adjusted ROIC improvement for the period January 1, 20202021 through December 31, 2022. 2023.Performance
ObjectiveExplanation Reason for Use as a Performance Measure 20202021Name Target Amount of Shares($) Maximum Amount of Shares($) Target Amount of Shares($) Maximum Amount of Shares($) Michael D. Hsu 6,000,000 12,000,000 6,750,000 13,500,000 Maria G. Henry 2,550,000 5,100,000 2,550,000 5,100,000 Russell Torres 1,725,000 3,450,000 Kimberly K. Underhill 1,950,000 3,900,000 2,100,000 4,200,000 Jeffrey P. Melucci 1,350,000 2,700,000 Sandi Karrmann 750,000 1,500,000 2020,2021, the Committee also approved the dollar amount of stock options to be granted to our named executive officers in April 2020,2021, 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 2,000,0002,250,000Maria G. Henry 850,000 Russell Torres 575,000 Kimberly K. Underhill 650,000700,000Jeffrey P. MelucciSandi Karrmann450,000250,000586020202021 Proxy StatementCompensation Discussion and AnalysisAdditional Information about Our Compensation Practices 20192020 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-Management Development and Compensation Committee” for information about the use of compensation consultants.20202021 Proxy Statement5961Compensation Discussion and AnalysisAdditional Information about Our Compensation Practices which are subject to an annual limit set by the Committee, and recruiting and special employee recognition and retention grants, which may not exceed 200,000 shares in any calendar year.grants. The Chief Executive Officer is not permitted to make any grants to any of our elected officers, including our executive officers.May 2019,April 2020, our Chief Executive Officer authorized an aggregate of 1.381.51 million options, performance-based restricted share units and time-vested restricted share units to employees who are not elected officers. In 2019,2020, our Chief Executive Officer also authorized an aggregate of 32,47748,190 shares underlying recruiting and retention grants, consisting of options, performance-based restricted share units and time-vested restricted share units.In 2019, the Committee updatedUnder our clawback policy to address situations involving significant financial or reputational harm. Under the new 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. 606220202021 Proxy StatementCompensation Discussion and AnalysisAdditional Information about Our Compensation Practices 20192020 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.The United States income tax laws generally limitWhile an exception exists for certain arrangements in place as of November 2, 2017, only the deductibility offirst $1 million in compensation paid to certain “covered employees” including the chief executive officer and each of the three other highest-paidour named executive officers (other than the chief financial officer) to $1,000,000 per annum. The Tax Cuts and Jobs Act, among other things, expanded the number of covered employees to include the chief financial officer (and they remain covered employees for all future years) and eliminated the exception for certain performance-based compensation beginning with our 2018 tax year (subject to the grandfathering of certain preexisting arrangements). Several classes of our pre-existing compensation arrangements were designed to meet the previous requirements for deductibility.20202021 Proxy Statement6163Compensation Discussion and AnalysisAdditional Information about Our Compensation Practices 2019.2020.COMMITTEE OF THE BOARD OF DIRECTORS Abelardo E. Bru, Chairman Mae C. Jemison, M.D. Sherilyn S. McCoy Marc J. ShapiroIan C. Read 626420202021 Proxy StatementCompensation Discussion and Analysis Analysis of Compensation-Related Risks ► ► ► ► ► ► ► ► 20202021 Proxy Statement636569.71.Name and
Principal PositionYear Salary($) Stock
Awards($)Option
Awards($)Non-Equity
Incentive Plan
Compensation($)Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings($)(1)All Other
Compensation($)Total
($)Michael D. Hsu(2)
Chief Executive Officer2019 1,250,000 6,000,038 1,726,634 2,723,646 — 327,802 12,028,120 2018 962,500 3,562,529 1,244,417 596,461 — 447,011 6,812,918 2017 925,000 2,700,044 828,039 887,672 — 214,666 5,555,421 Thomas J. Falk(3)
Executive Chairman
of the Board2019 650,000 4,999,974 — 1,287,542 1,240,356 324,896 8,502,768 2018 1,420,000 7,499,967 2,619,837 1,181,421 — 288,858 13,010,083 2017 1,396,250 7,499,944 2,300,110 1,853,267 2,809,395 350,568 16,209,534 Maria G. Henry
Senior Vice President
and Chief Financial
Officer2019 820,000 3,205,556 690,648 1,142,306 — 153,752 6,012,262 2018 815,000 2,399,976 838,350 499,711 — 114,362 4,667,399 2017 795,000 2,137,501 655,530 650,173 — 131,390 4,369,594 Kimberly K. Underhill(4)
Group President,
K-C North America2019 815,000 1,837,502 528,778 1,064,749 137,981 139,674 4,523,684 2018 734,167 1,837,404 641,858 473,372 — 370,697 4,057,498 Jeffrey P. Melucci(4)
Senior Vice President
and General Counsel2019 640,000 1,199,961 345,324 773,807 — 109,424 3,068,516 Name and
Principal PositionYear Salary($) Bonus($) Stock
Awards($)Option
Awards($)Non-Equity
Incentive Plan
Compensation($)Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings($)(1)All Other
Compensation($)Total
($)Michael D. Hsu(2)
Chief Executive
Officer2020 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 2018 962,500 — 3,562,529 1,244,417 596,461 — 447,011 6,812,918 Maria G. Henry
Senior Vice President
and Chief Financial
Officer2020 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 2018 815,000 — 2,399,976 838,350 499,711 — 114,362 4,667,399 Russell Torres(3)
President, K-C
Professional2020 610,795 400,000 4,225,079 659,995 450,688 — 82,204 6,428,761 Kimberly K.
Underhill
Group President,
K-C North America2020 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 2018 734,167 — 1,837,404 641,858 473,372 — 370,697 4,057,498 Sandi Karrmann(3)
Senior Vice President
and Chief Human
Resources Officer2020 106,724 750,000 3,250,046 — 107,196 — 4,909 4,218,875 Achal Agarwal(3)(4)
Former President,
K-C Asia Pacific2020 805,950 — 1,174,951 258,262 461,789 — 2,355,770 5,056,722 (1) For 2018, the aggregate value of pension benefits for Mr. Falk and Ms. Underhill decreased by $2,327,313 and $59,911, respectively.$59,911. Because these amountsthis amount decreased, they haveit has been excluded from the table above under the SEC’s regulations. No other named executive officer participates in our pension plans.(2) Mr. Hsu served as President and Chief Operating Officer in 2017 and 2018. Effective January 1, 2019, Mr. Hsu was promoted to Chief Executive Officer and effective January 1, 2020 he was appointed Chairman of the Board.(3) None of Mr. Falk began serving as Executive Chairman of the Board uponTorres, Ms. Karrmann or Mr. Hsu’s promotion to Chief Executive Officer effective January 1, 2019. He retired from the company and the Board on December 31, 2019.(4)Ms. UnderhillAgarwal was not a named executiveexecuted officer in 2017 and Mr. Melucci was not a named executive officer in 20172018 or 2018.2019. Therefore, no compensation information for these years appears in this table for these officers.(4) Each of Mr. Agarwal’s 2020 salary, annual cash incentive, and severance payment was paid in Singapore dollars and has been translated into U.S. dollars at the December 31, 2020 exchange rate of 0.75557 Singapore dollars. 646620202021 Proxy StatementCompensation Tables 56 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 20192020 for the assumptions we used in valuing and expensing these restricted share units and stock option awards in accordance with ASC Topic 718.Name Year Stock Awards at
Grant Date Value($)Stock Awards at Highest Level
of Performance Conditions($) Year Stock Awards at
Grant Date Value($) Stock Awards at Highest Level
of Performance Conditions($)Michael D. Hsu 2019 6,000,038 12,000,076 2020 5,999,975 11,999,950 2018 3,562,529 7,125,058 2017 2,700,044 5,400,088 Thomas J. Falk 2019 4,999,974 9,999,948 2018 7,499,967 14,999,934 2019 6,000,038 12,000,076 2017 7,499,944 14,999,888 2018 3,562,529 7,125,058 Maria G. Henry 2019 3,205,556 6,411,112 2020 2,549,940 5,099,880 2018 2,399,976 4,799,952 2019 2,400,039 4,800,078 2017 2,137,501 4,275,002 2018 2,399,976 4,799,952 Russell Torres 2020 1,725,049 3,450,098 Kimberly K. Underhill 2019 1,837,502 3,675,004 2020 1,950,008 3,900,016 2018 1,837,404 3,674,808 2019 1,837,502 3,675,004 Jeffrey P. Melucci 2019 1,199,961 2,399,922 2018 1,837,404 3,674,808 Sandi Karrmann 2020 — — Achal Agarwal 2020 674,973 1,349,946 2020 Proxy Statement65Compensation TablesMr. Falk has compensation from before 2005 that he elected to defer pursuant to a Deferred Compensation Plan then in effect. Beginning in 2010, eachEach of our named executive officers participates in the Supplemental 401(k) Plan, a non-qualified defined contribution plan. Earnings on each of these plansthis plan are not included in the Summary Compensation Table because the earnings were not above-market or preferential. See “Nonqualified Deferred Compensation” for a discussion of these plansthis plan and each named executive officer’s earnings under these plansthis plan in 2019.2020.2021 Proxy Statement 67 Compensation Tables Name Year Perquisites($)(1) Defined
Contribution Plan
Amounts($)(2)Tax
Gross-Ups($)(3)Total($)(4) Year Perquisites($)(1) Defined
Contribution Plan
Amounts($)(2)Tax
Gross-Ups($)(3)Severance
Payments ($)(4)Total($)(5) Michael D. Hsu 2019 120,990 206,812 — 327,802 2020 153,527 344,959 — 498,486 2018 242,375 136,913 67,723 447,011 2017 64,564 142,875 7,227 214,666 Thomas J. Falk 2019 70,947 253,949 — 324,896 2018 46,636 242,222 — 288,858 2019 120,990 206,812 — 327,802 2017 45,420 305,148 — 350,568 2018 242,375 136,913 67,723 — 447,011 Maria G. Henry 2019 3,750 150,002 — 153,752 2020 13,000 169,403 — 182,403 2018 5,939 108,423 — 114,362 2019 3,750 150,002 — 153,752 2017 8,000 123,390 — 131,390 2018 5,939 108,423 — 114,362 Russell Torres 2020 19,685 52,528 9,991 — 82,204 Kimberly K. Underhill 2019 1,700 137,974 — 139,674 2020 13,000 162,733 — 175,733 2018 249,412 87,905 33,380 370,697 2019 1,700 137,974 — 139,674 Jeffrey P. Melucci 2019 7,631 101,793 — 109,424 2018 249,412 87,905 33,380 — 370,697 Sandi Karrmann 2020 — 4,909 — 4,909 Achal Agarwal 2020 399,724 — 1,956,046 2,355,770 (1) Perquisites.ForPerquisites. 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 20192020 included the following: Name Executive
Financial
Counseling
Program($)Personal
Use ofof Corporate
Aircraft($)Security
Services($)Executive
Health
Screening
Program($)Relocation
Expenses($)(a)Expatriate
Payments($)(b)Total($) Michael D. Hsu — 111,52456,5341,98196,9937,485— 120,990— — 153,527 Thomas J. FalkMaria G. Henry—13,00068,717— 2,230— — 70,947— — 13,000 Maria G. HenryRussell Torres3,7504,060— — —3,4113,75012,214— 19,685 Kimberly K. Underhill 1,70013,000— — — 1,700— — 13,000 Jeffrey P. MelucciSandi Karrmann3,409— — — 4,222— 7,631— — — Achal Agarwal 13,000 — — — — 386,724 399,724 (a) (b) 666820202021 Proxy StatementCompensation Tables (2) 2018 and 20172018 for all named executive officers, as applicable. A profit-sharing contribution was also made under the 401(k) Profit Sharing Plan and the Supplemental 401(k) Plan in early 2021, 2020 2019 and 20182019 with respect to our performance in 2020, 2019 2018 and 2017,2018, respectively, for the named executive officers as follows:Name Performance Year Profit Sharing Contribution($) Michael D. Hsu 20192020184,513 2019 79,398 2018 62,906 2018Maria G. Henry62,906202090,611 2019 56,748 2018 49,816 2017Russell Torres70,533Thomas J. Falk2020201978,75128,0972018Kimberly K. Underhill111,291202087,043 2019 55,400 2018 40,389 2017Sandi Karrmann150,643Maria G. Henry2020201956,7484,9092018Achal Agarwal49,8162017202060,914Kimberly K. Underhill201955,400201840,389Jeffrey P. Melucci201941,330—
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) Ups.Ups. The amounts shown for Mr. Hsu, Mr. Torres and Ms. Underhill reflect tax reimbursement for moving and related expenses incurred for a relocation (1) in the case of Mr. Hsu, upon his promotion to President and Chief Operating Officer in 2017, (2) in the case of Mr. Torres, upon his joining the company in 2020 and (2)(3) in the case of Ms. Underhill, upon her promotion to Group President, K-C North America in 2018.(4) (5) Dividends.DividendDividends. 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.20202021 Proxy Statement6769Compensation Tables 20192020 on a grant-by-grant basis.20192020Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1)Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1)Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)Name Grant Type Grant
DateThreshold
($)Target
($)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
($)(5)Grant Type Grant
DateThreshold
($)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. Annual cash — 2,062,500 4,125,000 Annual cash — 2,145,000 4,290,000 Hsu incentive award incentive award Performance- 2/28/2019 — 51,357 102,714 6,000,038 Performance- 2/28/2020 — 45,735 91,470 5,999,975 based RSU based RSU Time-vested 5/1/2019 127,521 125.47 1,726,634 Time-vested 4/29/2020 143,926 138.96 2,295,620 stock option stock option Thomas J. Annual cash — 975,000 1,950,000 Falk incentive award Maria G. Annual cash — 830,000 1,660,000 Henry incentive award Performance- 2/28/2019 — 42,797 85,594 4,999,974 Performance- 2/28/2020 — 19,437 38,874 2,549,940 based RSU based RSU Maria G. Annual cash — 820,000 1,640,000 Henry incentive award Time-vested 4/29/2020 61,169 138.96 975,646 stock option Russell Annual cash — 437,500 875,000 Torres incentive award Performance- 2/28/2019 — 20,543 41,086 2,400,039 Performance- 4/29/2020 — 12,414 24,828 1,725,049 based RSU based RSU Time-vested 2/28/2019 6,420 805,517 Time-vested 4/29/2020 41,379 138.96 659,995 RSU stock option Time-vested 5/1/2019 51,008 125.47 690,648 Time-vested 4/29/2020 17,991 2,500,029 stock option RSU Kimberly K. Annual cash — 779,000 1,558,000 Annual cash — 788,500 1,577,000 Underhill incentive award incentive award Performance- 2/28/2019 — 15,728 31,456 1,837,502 Performance- 2/28/2020 — 14,864 29,728 1,950,008 based RSU based RSU Time-vested 5/1/2019 39,053 125.47 528,778 Time-vested 4/29/2020 46,776 138.96 746,077 stock option stock option Jeffrey P. Annual cash — 552,500 1,105,000 Melucci incentive award Sandi Annual cash — 71,875 143,750 Karrmann incentive award Time-vested 10/30/2020 24,512 3,250,046 RSU Achal Annual cash — 461,789 923,578 Agarwal incentive award Performance- 2/28/2019 — 10,271 20,542 1,199,961 Performance- 2/28/2020 5,145 10,290 674,973 based RSU based RSU Time-vested 5/1/2019 25,504 125.47 345,324 Time-vested 4/29/2020 16,192 138.96 258,262 stock option stock option Time-vested 4/29/2020 3,598 499,978 RSU (1) 2019.2020. These awards were granted under our Executive OfficerManagement Achievement Award Program, which is our annual cash incentive program for executive officers, which was approved by stockholders in 2002.officers. Actual amounts earned in 20192020 were based on the 20192020 objectives established by the Management Development and Compensation Committee at its February 7, 201912, 2020 meeting. See “Compensation Discussion and Analysis – Executive Compensation for 20192020 – 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 extent to which the 20192020 objectives were met. The target payouts for Mr. Torres and Ms. Karrmann were prorated based on their hire dates of March 9, 2020 and October 26, 2020, respectively. The actual amounts paid in 20202021 based on the 20192020 objectives are set forth in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.”70 2021 Proxy Statement Compensation Tables (2) Performance-based restricted share units granted under the 2011 Plan to our named executive officers on February 28, 2019.2020. The number of performance-based restricted share units granted in 20192020 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 net sales growth and average adjusted ROIC performance objectives for those awards are met. See “Compensation Discussion and Analysis – Long-Term Equity Incentive Compensation – 20192020 Grants.”682020 Proxy StatementCompensation Tables(3) Time-vested restricted stockshare units granted under the 2011 Plan to Mr. Torres and Mr. Agarwal on April 29, 2020 and to Ms. HenryKarrmann on February 28, 2019.
October 30, 2020. Mr. Agarwal’s units were forfeited when he departed the company on December 31, 2020.(4) Time-vested stock options granted under the 2011 Plan to our named executive officers (other than Mr. Falk) on May 1, 2019.
April 29, 2020.(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 56 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 20192020 for the assumptions used in valuing and expensing these restricted share units and stock option awards in accordance with ASC Topic 718.20192020 table was paid or awarded, are described under “Compensation Discussion and Analysis.”plansprograms described below, none of our named executive officers has an employment agreement with us. See “Potential Payments on Termination or Change of Control.”HenryKarrmann in 2019 for retention purposes2020 as an incentive to join the company which vest on the third anniversary of the date of grant. Mr. Agarwal received time-vested restricted share units in 2020 as a retention award; however, these units were forfeited upon his departure on December 31, 2020. In 2019,2020, each named executive officer (other than Ms. Karrmann) received grants of stock options and performance-based restricted share units under the 2011 Plan and each named executive officer (other than Mr. Falk) received grants of stock options.Plan.20192020 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 Plan.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.20192020 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 net sales growth and average adjusted ROIC performance during the three years. As of February 12, 2020,10, 2021, the performance-based restricted share units granted in 20192020 and 20182019 were on pace to vest at the following levels: 137175 percent for the 20192020 award and 57185 percent for the 20182019 award. The Committee has determined that the 20172018 award vested at 62100 percent.20202021 Proxy Statement6971Compensation Tables 2019.2020. 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. Where applicable, the numbers of shares subject to option awards and option exercise prices in this table and throughout this proxy statement reflect adjustments for the Halyard Health spin-off on October 31, 2014.20192020(1)Option Awards(2) Stock Awards Option Awards(2) Stock Awards Name Grant
DateNumber of
Securities
Underlying
Unexercised
Options (#)
ExercisableNumber of
Securities
Underlying
Unexercised
Options (#)
UnexercisableOption
Exercise
Price ($)(3)Option
Expiration
DateNumber
of Shares
or Units
of Stock
That Have
Not Vested
(#)(4)Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(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 ($)(5)Grant
DateNumber of
Securities
Underlying
Unexercised
Options (#)
ExercisableNumber of
Securities
Underlying
Unexercised
Options (#)
UnexercisableOption
Exercise
Price
($)(3)Option
Expiration
DateNumber
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 5/1/2019 — 127,521 125.47 5/1/2029 4/29/2020 — 143,926 138.96 4/29/2030 2/28/2019 105,130 14,460,632 2/28/2020 93,591 12,618,875 5/9/2018 27,653 64,526 103.06 5/9/2028 5/1/2019 38,256 89,265 125.47 5/1/2029 2/28/2018 34,093 4,689,492 2/28/2019 108,383 14,613,280 4/25/2017 40,656 27,105 132.82 4/25/2027 5/9/2018 55,307 36,872 103.06 5/9/2028 2/28/2017 22,313 3,069,153 2/28/2018 35,148 4,739,005 5/3/2016 52,525 — 126.13 5/3/2026 4/25/2017 67,761 — 132.82 4/25/2027 4/29/2015 54,191 — 110.72 4/29/2025 5/3/2016 52,525 — 126.13 5/3/2026 4/30/2014 46,508 — 107.51 4/30/2024 4/29/2015 54,191 — 110.72 4/29/2025 5/1/2013 41,698 — 98.92 5/1/2023 4/30/2014 46,508 — 107.51 4/30/2024 Thomas J. Falk 5/1/2013 41,698 — 98.92 5/1/2023 Maria G. Henry 2/28/2019 87,607 12,050,343 4/29/2020 — 61,169 138.96 4/29/2030 5/9/2018 — 135,844 103.06 5/9/2028 2/28/2020 39,775 5,362,863 2/28/2018 71,774 9,872,514 5/1/2019 15,302 35,706 125.47 5/1/2029 4/25/2017 112,935 75,290 132.82 4/25/2027 2/28/2019 43,354 5,845,420 2/28/2017 61,979 8,525,211 2/28/2019 6,774 913,338 5/3/2016 198,208 — 126.13 5/3/2026 5/9/2018 37,260 24,840 103.06 5/9/2028 2/28/2018 23,678 3,192,505 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 707220202021 Proxy StatementCompensation Tables Option Awards(2) Stock Awards Option Awards(2) Stock Awards Name Grant
DateNumber of
Securities
Underlying
Unexercised
Options (#)
ExercisableNumber of
Securities
Underlying
Unexercised
Options (#)
UnexercisableOption
Exercise
Price ($)(3)Option
Expiration
DateNumber
of Shares
or Units
of Stock
That Have
Not Vested
(#)(4)Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(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 ($)(5)Grant
DateNumber of
Securities
Underlying
Unexercised
Options (#)
ExercisableNumber of
Securities
Underlying
Unexercised
Options (#)
UnexercisableOption
Exercise
Price
($)(3)Option
Expiration
DateNumber
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)Maria G. Henry 5/1/2019 — 51,008 125.47 5/1/2029 2/28/2019 42,052 5,784,253 2/28/2019 6,571 903,841 5/9/2018 18,630 43,470 103.06 5/9/2028 2/28/2018 22,967 3,159,111 4/25/2017 32,186 21,458 132.82 4/25/2027 Russell Torres 2/28/2017 17,664 2,429,683 4/29/2020 — 41,379 138.96 4/29/2030 5/3/2016 47,570 — 126.13 5/3/2026 4/29/2020 25,195 3,397,042 4/29/2015 49,675 — 110.72 4/29/2025 4/29/2020 18,257 2,461,591 Kimberly K. Underhill 5/1/2019 — 39,053 125.47 5/1/2029 4/29/2020 — 46,776 138.96 4/29/2030 2/28/2019 32,196 4,428,560 2/28/2020 30,417 4,101,124 5/9/2018 — 33,282 103.06 5/9/2028 5/1/2019 — 27,338 125.47 5/1/2029 5/9/2018 7,271 1,000,126 2/28/2019 33,192 4,475,277 2/28/2018 10,766 1,480,863 5/9/2018 — 19,018 103.06 5/9/2028 4/25/2017 14,681 9,788 132.82 4/25/2027 5/9/2018 7,496 1,010,686 2/28/2017 8,058 1,108,378 2/28/2018 11,099 1,496,478 Jeffrey P. Melucci Sandi Karrmann 10/30/2020 24,512 3,304,953 Achal Agarwal 5/1/2019 — 25,504 125.47 5/1/2029 4/29/2020 — 16,192 138.96 4/29/2030 2/28/2019 21,025 2,891,989 4/29/2020 3,651 492,264 5/9/2018 — 21,056 103.06 5/9/2028 2/28/2020 10,529 1,419,625 2/28/2018 11,125 1,530,244 5/1/2019 4,303 10,043 125.47 5/1/2029 9/1/2017 4,380 602,469 2/28/2019 12,194 1,644,117 4/25/2017 — 5,271 132.82 4/25/2027 5/9/2018 10,479 6,987 103.06 5/9/2028 2/28/2017 4,339 596,829 2/28/2018 6,659 897,833 4/25/2017 15,058 — 132.82 4/25/2027 5/3/2016 13,875 — 126.13 5/3/2026 4/29/2015 15,241 — 110.72 4/29/2025 4/30/2014 15,115 — 107.51 4/30/2024 5/1/2013 17,690 — 98.92 5/1/2023 (1) The amounts shown reflect outstanding equity awards granted under the 2011 Plan. Under the 2011 Plan, an executive officer may receive awards of stock options, restricted stock or restricted share units, or a combination of stock options, restricted stock and restricted share units. 2021 Proxy Statement 73 Compensation Tables (2) Stock options granted under the 2011 Plan 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 three years 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 Plan.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.2020 Proxy Statement71Compensation TablesIn connection with the Halyard Health spin-off on October 31, 2014 the numbers of stock options were increased and the exercise prices were decreased to maintain the fair value of outstanding options immediately before and after the spin-off. Specifically, for each stock option held by a Kimberly-Clark employee, officer, or director, the exercise price was divided by 1.044134 (the “Adjustment Ratio”) and the number of shares subject to the outstanding stock option was multiplied by the Adjustment Ratio, with fractional shares rounded down to the nearest whole share. No incremental fair value was generated as a result of the adjustments. (3) The 2011 Plan provides that the option price per share shall be no less than the closing price per share of our common stock at grant date. (4) The amounts shown represent awards of time-vested restricted share units. Subject to accelerated vesting as described in “Potential Payments on Termination or Change of Control,” the time-vested restricted share unit awards granted to Ms. Henry, Mr. Torres and Mr. MelucciMs. Karrmann vest on the third anniversary of the grant date. Dividend equivalents on these time-vested restricted share units equal to cash dividends on our Common Stock will be accumulated and paid in additional shares when the time-vested restricted share units vest. The units listed include dividend equivalents.
Upon Mr. Agarwal’s departure on December 31, 2020, the time-vested restricted share units shown were forfeited.(5) The values shown in this column are based on the closing price of our common stock on December 31, 20192020 of $137.55$134.83 per share.(6) The amounts shown represent awards of performance-based restricted share units granted to our named executive officers in 2017, 2018, 2019 and 2019.2020. Subject to accelerated vesting as described in “Potential Payments on Termination or Change of Control,” performance-based restricted share unit awards granted in 2017, 2018, 2019 and 20192020 vest on the third anniversary of the grant date, in a range from zero to 200 percent of the target levels indicated based on the achievement of specific performance goals. Based on the current vesting pace of these awards, the amounts shown represent the target level for the 2017 and 2018 grants and the maximum level for the 2019 grant.and 2020 grants. See “Discussion of Summary Compensation and Plan-Based Awards Tables.” The units listed include equivalents on performance-based restricted share units granted to our named executive officers equal to cash dividends on our Common Stock based on the target level for the 2017 and 2018 grants and the maximum level for the 2019 grant.and 2020 grants.722020 Proxy StatementCompensation Tables20192020 for our named executive officers.20192020Option Awards Stock Awards Option Awards Stock Awards Name Number of
Shares Acquired
on Exercise(#)Value
Realized on
Exercise($)(1)Number of
Shares Acquired
on Vesting(#)Value
Realized on
Vesting($)(2)Number of
Shares Acquired
on Exercise(#)Value
Realized on
Exercise($)(1)Number of
Shares Acquired
on Vesting(#)Value
Realized on
Vesting($)(2)Michael D. Hsu — 16,297 1,903,979 — 13,939 1,828,657 Thomas J. Falk 284,186 5,073,329 61,497 7,184,695 Maria G. Henry — 14,759 1,724,294 — 11,035 1,447,682 Russell Torres — Kimberly K. Underhill 48,435 627,800 7,380 862,205 50,448 960,172 5,034 660,410 Jeffrey P. Melucci 34,742 712,685 3,096 361,555 Sandi Karrmann — Achal Agarwal — 3,098 406,427 (1) The dollar amount reflects the total pre-tax value realized by our named executive officers (number of shares exercised times the difference between the fair market value on the exercise date and the exercise price). It is not the grant date fair value disclosed in other locations in this proxy statement. Value from these option exercises was only realized to the extent our stock price increased relative to the stock price at grant (the exercise price). (2) The dollar amount reflects the total pre-tax value received by our named executive officers upon the vesting of time-vested restricted share units or performance-based restricted share units (number of shares vested times the closing price of our common stock on the vesting date), including cash paid in lieu of fractional shares. It is not the grant date fair value disclosed in other locations in this proxy statement. 2020742021 Proxy Statement 73Compensation Tables 20192020 concerning potential payments to our named executive officers under our pension plan and supplemental pension plans. Information about these plans follows the table.20192020 PENSION BENEFITSName(1) Plan Name Number of
Years Credited
Service(#)(3)Present Value
of Accumulated
Benefit($)Plan Name Number of
Years Credited
Service(#)(3)Present Value
of Accumulated
Benefit($)Thomas J. Falk(2) Pension Plan 26.5 1,334,253 Supplemental
Pension Plans26.5 21,144,143 Kimberly K. Underhill(2) Pension Plan 9.6 442,610 Pension Plan 9.6 512,724 Supplemental
Pension Plans9.6 385,025 Supplemental
Pension Plans9.6 322,813 (1) Each named executive officer other than Mr. Falk and Ms. Underhill joined Kimberly-Clark after January 1, 1997 and therefore is not eligible to participate in our defined benefit pension plans.(2) At the time of Mr. Falk’s departure on December 31, 2019, he was eligible for early retirement under the plans. Ms. Underhill is currently eligible for retirement under the plans and would be eligible to receive the full unreduced retirement benefit described in the table below.(3) Mr. Falk had 36.4 years of actual service upon his departure on December 31, 2019. Beginning in 2010, the number of years of credited service was frozen for Mr. Falk at the amounts set forth in the table, as a result of our ceasing to accrue compensation and benefit service under the plans. Ms. Underhill has 32.033.0 years of actual service. Ms. Underhill’s years of credited service were frozen in 1997 upon her election to participate in a predecessor defined contribution plan to the 401(k) Profit Sharing Plan.Pension Plan Supplemental Pension Plans Reason for Plan Provide eligible participants with a competitive level of retirement benefits based on pay and years of service. Provide eligible participants with benefits as are necessary to fulfill the intent of the pension plan without regard to limitations imposed by the Internal Revenue Code. Eligible Participants Salaried employees who joined Kimberly-Clark prior to January 1, 1997. Salaried employees impacted by limitations imposed by the Internal Revenue Code on payments under the pension plan. 742020 Proxy StatementCompensation TablesPension PlanSupplemental Pension PlansPayment Form Normal benefit: Accrued benefits prior to 2005: 2021 Proxy Statement 75 Compensation Tables Pension Plan Supplemental Pension Plans Retirement Eligibility Full unreduced benefit: Same Benefits Payable Service and earnings frozen as of December 31, 2009. Benefit depends on the participant’s years of service under our plan and monthly average earnings over the last 60 months of service or, if higher, the monthly average earnings for the five calendar years in his or her last fifteen years of service for which earnings were the highest. Same Benefit Formula for Salaried Employees (As (As of December 31, 2009) (Payable in the form of a single life annuity)Unreduced monthly benefit = 1/12 of ((1.125% x final average annual earnings (up to 2/3 of the Social Security Taxable Wage Base)) + (1.425% x final average annual earnings (in excess of 2/3 of the Social Security Taxable Wage Base up to Taxable Wage Base)) + (1.5% x final average annual earnings (over the Social Security Taxable Wage Base))) multiplied by the years of credited service.serviceSame Pensionable Earnings Annual cash compensation. Long-term equity compensation is not included. Same Change of control or reduction in our long-term credit rating (below investment grade) Not applicable Participants have the option of receiving the present value of their accrued benefits prior to 2005 in the supplemental pension plans in a lump sum, reduced by 10 percent and 5 percent for active and former employees, respectively. 2020 Proxy Statement75Compensation Tables20192020 appears in the 20192020 Pension Benefits table. For purposes of determining the present value of accumulated benefits, we have used the potential earlier retirement ages as described above rather than the normal retirement age under the plans, which is 65. For a discussion of how we value these obligations and the assumptions we use in that valuation, see Note 67 to our audited consolidated financial statements included in our 20192020 Annual Report on Form 10-K. The calculation of actuarial present value generally is consistent with the methodology and assumptions outlined in our audited consolidated financial statements, except that benefits are reflected as payable as of the date the executive is first entitled to full unreduced benefits (as opposed to the assumed retirement date) and76 2021 Proxy Statement Compensation Tables MP-2019,MP-2020, and for the supplemental plans were calculated using the 20212022 417(e) mortality table adjusted for mortality improvement to the assumed retirement age using scale MP-2019. For Mr. Falk, the present values reflect actual lump sum payments as of January 1, 2020, from both the qualified and supplemental plans.MP-2020. With respect to the supplemental pension plans, the amount of the earlier retirement age lump sum benefit was determined using an approximate 30-year Treasury Bond rate of 2.16%1.30%, consistent with the methodology used for purposes of our consolidated financial statements; any actual lump sum benefit would be calculated using the 30-year Treasury Bond rate in effect as of the beginning of the month prior to termination. Present value amounts were determined as of December 31, 20192020 based on the financial accounting discount rates for United States pension plans of 3.39%2.65% and 3.31%2.45% for the qualified plan and the supplemental plans, respectively.20192020 of the projected retirement benefits can be found in footnote 1 to the Summary Compensation Table under the heading “Change in Pension Value and Nonqualified Deferred Compensation Earnings.” No payments were made to our named executive officers under our pension plans during 2019; however, upon Mr. Falk’s retirement on December 31, 2019, certain distributions became payable in 2020. See “Potential Payments on Termination or Change of Control – Retirement of Mr. Falk.”– Benefits–Benefits and Other Compensation – Retirement Benefits.”762020 Proxy StatementCompensation Tables2019.2020.20192020 NONQUALIFIED DEFERRED COMPENSATIONName Plan Company
Contributions
in 2019($)(1)Aggregate
Earnings in
2019($)(2)Aggregate
Balance at
December 31,
2019($)(3)Plan Company
Contributions in
2020($)(1)Aggregate
Earnings in
2020($)(2)Aggregate
Balance at
December 31,
2020($)(3)Michael D. Hsu Supplemental
401(k) Plan183,572 134,169 926,334 Supplemental
401(k) Plan 320,449 148,365 1,395,148 Thomas J. Falk Supplemental
401(k) Plan230,709 805,701 3,927,393 Deferred
Compensation Plan(4)— 484,876 3,229,344 Maria G. Henry Supplemental
401(k) Plan126,762 70,810 512,307 Supplemental
401(k) Plan144,893 79,502 736,702 Russell Torres Supplemental
401(k) Plan28,018 1,032 — Kimberly K. Underhill Supplemental
401(k) Plan114,734 87,366 648,090 Supplemental
401(k) Plan138,223 89,412 875,726 Jeffrey P. Melucci Supplemental
401(k) Plan78,553 45,029 306,227 Sandi Karrmann Supplemental
401(k) Plan— Achal Agarwal Supplemental
401(k) Plan— 64,890 650,037 (1) Contributions consist solely of amounts accrued by Kimberly-Clark under the Supplemental 401(k) Plan, including the profit-sharing contribution in February 20202021 with respect to our performance in 2019.2020. These amounts are included in the Summary Compensation Table and represent a portion of the Defined Contribution Plan Payments included in All Other Compensation.(2) The amounts in this column show the changes in the aggregate account balance for our named executive officers during 20192020 that are not attributable to company contributions. Aggregate earnings are not included in the Summary Compensation Table because the earnings are not above-market or preferential.(3) Balance for the Supplemental 401(k) Plan includes the profit-sharing contribution made in early 20202021 with respect to our performance in 2019,2020, as well as the following aggregate amounts that were previously reported in the Summary Compensation Table for 20182019 and 2017,2018, combined: Mr. Hsu - $238,107, Mr. Falk $505,690,$300,135, Ms. Henry - $190,133,$214,835, Mr. Torres - $0, Ms. Underhill - $131,747,$182,289, Ms. Karrmann - $0 and Mr. MelucciAgarwal - $102,345.$0. The information in this footnote is provided to clarify the extent to which the balances shown represent compensation reported in our prior proxy statements, rather than additional currently earned compensation.(4)In addition to amounts shown in the table that reflect participation in the Supplemental 401(k) Plan, amounts shown for Mr. Falk represent compensation deferred in prior years under our Deferred Compensation Plan and accumulated earnings. Effective in 2005, no further amounts may be deferred under this plan. Participants in the Deferred Compensation Plan may elect to have deferrals credited with yields equal to those earned on any of a subset of funds available in the 401(k) Profit Sharing Plan. Generally, benefits are payable under the Deferred Compensation Plan in accordance with the participant’s election in a lump sum or in quarterly installments over a period between two and 20 years. If a participant ceases employment (other than as a result of a total and permanent disability or death or on or after age 55 with five or more years of service), the account balance is paid in a lump sum. In the event of a change of control or a reduction in our long-term credit rating (below investment grade), currently-employed participants have the option to elect an immediate lump-sum payment of their account balance, less a 10 percent penalty.20202021 Proxy Statement77 Compensation Tables 401(k) Profit Sharing Plan Supplemental 401(k) Plan Purpose To assist employees in saving for retirement, as well as to provide a discretionary profit sharing contribution in which contributions will be based on our profit performance. To provide benefits to the extent necessary to fulfill the intent of the 401(k) Profit Sharing Plan without regard to the limitations imposed by the Internal Revenue Code on qualified defined contribution plans. Eligible participants Most U.S. employees. Salaried employees impacted by limitations imposed by the Internal Revenue Code on the 401(k) Profit Sharing Plan. Is the plan qualified under the Internal Revenue Code? Yes. No. Can employees make contributions? Yes. No. Do we make contributions or match employee contributions? We match 100% of employee contributions, to a yearly maximum of 4% of eligible compensation. In addition, we may make a discretionary profit sharing contribution of 0% to 8% of eligible compensation based on our profit performance. We provide credit to the extent our contributions to the 401(k) Profit Sharing Plan are limited by the Internal Revenue Code. When do account balances vest? Account balances under these plans vest immediately. Account balances under these plans vest immediately. How are account balances invested? Account balances are invested in certain designated investment options selected by the participant. Account balances are credited with earnings and losses as if these account balances were invested in certain designated investment options selected by the participant. When are account balances distributed? Distributions of the participant’s vested account balance are only available after termination of employment. Loans, hardship and certain other withdrawals are allowed prior to termination of employment for certain vested amounts under the 401(k) Profit Sharing Plan. Distributions of the participant’s vested account balance are payable after termination of employment. 78 20202021 Proxy StatementCompensation Tables
We maintain two severance plansprograms that cover our executive officers, depending on the circumstances that result in their termination. Those plans include the Executive Severance Plan,Program, which is applicable when an executive officer is terminated following a change of control, and the Severance Pay Plan, which is applicable in the event of certain other involuntary terminations. An executive officer may not receive severance payments under more than one of the plansprograms described below.Plan.Program. We have agreements under our Executive Severance PlanProgram with each named executive officer. The agreements provide that, in the event of a “Qualified Termination of Employment” (as described below), the participant will receive a cash payment in an amount equal to the sum of:► Two times the sum of annual base salary and the average annual incentive award for the three prior fiscal years, ► The value of any forfeited awards, based on the closing price of our common stock at the date of the participant’s separation from service, of restricted stock and time-vested restricted share units, ► The value of the target number of any forfeited performance-based restricted share units multiplied by the average payout percentage for performance-based restricted share awards for the prior three years, ► The value of the employer match and an assumed target level profit sharing contribution the named executive officer would have received if he or she had remained employed an additional two years under the 401(k) Profit Sharing Plan and Supplemental 401(k) Plan, and ► the cost of two years of COBRA premiums for medical and dental coverage. 2020,2023, unless extended by the Committee.20202021 Proxy Statement79 Compensation Tables ► ► If the termination occurs after March 31, the pro-rated current year annual incentive award based on actual performance, ► An amount equal to the cost of six months of COBRA premiums for medical coverage, and ► An amount equal to the cost of six months of outplacement services and three months of participation in our employee assistance program. 802020 Proxy StatementCompensation Tables80 2021 Proxy Statement Compensation Tables
Retirement.In the event of retirement (separation from service on or after age 55), our named executive officers are entitled to receive:► ► Their account balance, if any, under the Deferred Compensation Plan, ► Their account balance under the Supplemental 401(k) Plan, ► Their account balance under the 401(k) Profit Sharing Plan, ► Accelerated vesting of unvested stock options, and the options will be exercisable until the earlier of five years or the remaining term of the options, ► For units outstanding more than six months after the date of grant, performance-based restricted share units will be payable based on attainment of the performance goal at the end of the restricted period, ► Annual incentive award payment under the Executive OfficerManagement Achievement Award Program as determined by the Committee in its discretion, ► For participants with at least fifteen years of vesting service and who joined Kimberly-Clark before January 1, 2004, retiree medical credits based on number of years of vesting service (up to a maximum of $104,500 in credits), and ► For participants with at least fifteen years of vesting service, continuing coverage under Kimberly-Clark’s group life insurance plan. ► ► Their account balance, if any, under the Deferred Compensation Plan, ► Their account balance under the Supplemental 401(k) Plan, ► Their account balance under the 401(k) Profit Sharing Plan, ► Accelerated vesting of unvested stock options, and the options will be exercisable until the earlier of three years or the remaining term of the options, 2020 Proxy Statement81Compensation Tables► Time-vested restricted share units will be vested pro rata, based on the number of full months of employment during the restricted period prior to the participant’s termination of employment, payable within 70 days following the end of the restricted period, ► For units outstanding more than six months after the date of grant, performance-based restricted share units will be vested pro rata, based on attainment of the performance goal at the end of the restricted period, payable within 70 days following the end of the restricted period, 2021 Proxy Statement 81 Compensation Tables ► Annual incentive award payment under the Executive OfficerManagement Achievement Award Program as determined by the Committee in its discretion, ► For participants who were at least age 55, had at least fifteen years of vesting service and joined Kimberly-Clark before January 1, 2004, medical credits payable to their spouse or dependent based on number of years of vesting service (up to a maximum of $104,500 in credits), and ► Payment of benefits under Kimberly-Clark’s group life insurance plan (which is available to all salaried employees in the U.S.) equal to two times the participant’s annual pay, up to $2 million (plus any additional coverage of three, four, five or six times the participant’s annual pay, in increments of up to $1 million each, purchased by the participant at group rates). Benefits provided by Kimberly-Clark and employee-purchased benefits cannot exceed $6 million. ► ► ► Accelerated vesting of unvested stock options, and the options will be exercisable until the earlier of three years or the remaining term of the options, ��► Time-vested restricted share units will be vested pro rata, based on the number of full months of employment during the restricted period prior to the participant’s termination of employment, payable within 70 days following the end of the restricted period, ► For units outstanding more than six months after the date of grant, performance-based restricted share units will be vested pro rata, based on attainment of the performance goal at the end of the restricted period, payable within 70 days following the end of the restricted period, ► Annual incentive award payment under the Executive OfficerManagement Achievement Award Program as determined by the Committee in its discretion, ► For participants of at least age 55 with at least fifteen years of vesting service and who joined Kimberly-Clark before January 1, 2004, medical credits based on number of years of vesting service (up to a maximum of $104,500 in credits), ► Continuing coverage under Kimberly-Clark’s group life insurance plan (available to all U.S. salaried employees), with no requirement to make monthly contributions toward coverage during disability, and ► Payment of benefits under Kimberly-Clark’s Long-Term Disability Plan (available to all U.S. salaried employees). Long-term disability under the plan would provide income protection of monthly base pay, ranging from a minimum monthly benefit of $50 to a maximum monthly benefit of $20,000. Benefits are reduced by the amount of any other Kimberly-Clark or government-provided income benefits received (but will not be lower than the minimum monthly benefit). 82 20202021 Proxy StatementCompensation Tables
The following table presents the approximate value of (i) the severance benefits for our named executive officers under the Executive Severance PlanProgram had a Qualified Termination of Employment under that planthe participant agreement occurred on December 31, 2019;2020; (ii) the severance benefits for our named executive officers under the Severance Pay Plan if an involuntary termination had occurred on December 31, 2019;2020; (iii) the benefits that would have been payable on the death of our named executive officers on December 31, 2019;2020; (iv) the benefits that would have been payable on the total and permanent disability of our named executive officers on December 31, 2019;2020; and (v) the potential payments to Mr. Hsu, Ms. Underhill and Ms. UnderhillKarrmann if they had retired on December 31, 2019.2020. If applicable, amounts in the table were calculated using the closing price of our common stock on December 31, 20192020 of $137.55$134.83 per share.UnderhillKarrmann were eligible to retire as of December 31, 2019;2020; thus, potential payments assuming retirement on that date are not included for the other named executive officers.Falk retiredAgarwal left the company on December 31, 2019 and2020, he is discussed separately below under “Retirement“Departure of Mr. Falk.Former Named Executive Officer.”20202021 Proxy Statement83 Compensation Tables Name Cash
Payment($)Equity with
Accelerated
Vesting($)Additional
Retirement
Benefits($)Continued
Benefits
and Other
Amounts($)Total($) Cash
Payment($)Equity with
Accelerated
Vesting($)Additional
Retirement
Benefits($)Continued
Benefits
and Other
Amounts($)Total($) Michael D. Hsu Qualified Termination of Employment 6,802,095 (1) 26,113,439 (2) 326,276 (3) 26,136 (4) 33,267,946 8,788,925 (1) 33,981,735 (2) 432,415 (3) 28,296 (4) 43,231,371 Involuntary Termination(5) 6,802,095 — — 8,721 (6) 6,810,816 8,788,925 — — 9,238 (6) 8,798,163 Death 4,673,646 (7) 13,675,449 (8) — — 18,349,095 5,383,739 (7) 31,353,832 (8) — — 36,737,571 Disability 2,723,646 (7) 13,675,449 (8) — — (9) 16,399,095 3,383,739 (7) 31,353,832 (8) — — (9) 34,737,571 Retirement 2,723,646 (1) 26,113,439 — — (10) 28,837,085 3,383,739 (1) 61,210,258 — — (10) 64,593,997 Maria G. Henry Qualified Termination of Employment 4,060,165 (1) 14,493,841 (2) 233,429 (3) 26,136 (4) 18,813,571 4,423,523 (1) 16,439,242 (2) 255,050 (3) 28,296 (4) 21,146,111 Involuntary Termination(5) 4,060,165 — — 8,721 (6) 4,068,886 4,423,523 — — 9,238 (6) 4,432,761 Death 2,782,306 (7) 8,299,987 (8) — — 11,082,293 2,875,396 (7) 14,820,466 (8) — — 17,695,862 Disability 1,142,306 (7) 8,299,987 (8) — — (9) 9,442,293 1,235,396 (7) 14,820,466 (8) — — (9) 16,055,862 Russell Torres Qualified Termination of Employment 2,904,687 (1) 5,859,068 (2) 196,320 (3) 43,872 (4) 9,003,947 Involuntary Termination(5) 2,904,687 — — 12,862 (6) 2,917,549 Death 1,950,688 (7) 2,434,265 (8) — — 4,384,953 Disability 450,688 (7) 2,434,265 (8) — — (9) 2,884,953 Kimberly K. Underhill Qualified Termination of Employment 3,629,528 (1) 9,683,881 (2) 205,182 (3) 26,136 (4) 13,544,727 4,298,509 (1) 11,944,936 (2) 239,033 (3) 28,296 (4) 16,510,774 Involuntary Termination(5) 3,629,528 — — 8,721 (6) 3,638,249 4,298,509 — — 9,238 (6) 4,307,747 Death 1,114,749 (7) 5,375,727 (8) — (11) 104,500 (12) 6,594,976 1,360,600 (7) 10,021,612 (8) — (11) 104,500 (12) 11,486,712 Disability 1,064,749 (7) 5,375,727 (8) 58,854 (13) 104,500 (9) 6,603,830 1,310,600 (7) 10,021,612 (8) — (13) 104,500 (9) 11,436,712 Retirement 1,064,749 (1) 9,683,881 — 104,500 (10) 10,853,130 1,310,600 (1) 19,509,367 — 104,500 (10) 20,924,467 Jeffrey P. Melucci Sandi Karrmann Qualified Termination of Employment 2,744,103 (1) 6,680,773 (2) 157,624 (3) 40,629 (4) 9,623,129 2,211,195 (1) 3,305,198 (2) 168,320 (3) 46,728 (4) 5,731,441 Involuntary Termination(5) 2,744,103 — — 12,086 (6) 2,756,189 2,211,195 — — 13,576 (6) 2,224,771 Death 4,433,807 (7) 3,813,181 (8) — — 8,246,988 1,257,196 (7) 183,608 (8) — — 1,440,804 Disability 773,807 (7) 3,813,181 (8) — — (9) 4,586,988 107,196 (7) 183,608 (8) — — (9) 290,804 Retirement 107,196 (1) — — — (10) 107,196 (1) Assumes the Committee would approve full payment under the Executive OfficerManagement Achievement Award Program for 2019;2020; actual amount that would be paid is determined by the Committee in its discretion.(2) Assumes vesting of unvested performance-based restricted share units at the target level for the 2017 and 2018 grantsgrant and the maximum level for the 2019 grant.and 2020 grants. See “Outstanding Equity Awards.” In addition, under the terms of the 2011 Plan, if the Committee were to determine that, pending a change of control, our common stock would cease to exist without an adequate replacement security, the payment of this amount would not be contingent upon the Qualified Termination of Employment of the named executive officer. This provision also applies to grants under the 2011 Plan to employees other than our named executive officers.(3) Includes the value of two additional years of employer contributions under the 401(k) Profit Sharing Plan and the Supplemental 401(k) Plan, pursuant to the terms of the Executive Severance Plan. (4) Includes an amount equal to 24 months of COBRA medical and dental coverage. (5) Benefits payable under the Severance Pay Plan. For Mr. Hsu, Ms. Underhill and Ms. Underhill,Karrmann, does not include accelerated equity vesting that occurred when they became retirement eligible at age 55. See the benefits payable for Mr. Hsu and Ms. Underhillthese officers for retirement for the amount of this accelerated equity vesting.(6) Includes an amount equal to six months of COBRA medical coverage under each executive’s specific health insurance plan, three months of Employee Assistance Program, and outplacement services valued at $2,700. 842020 Proxy StatementCompensation Tables(7) For death, includes the payment of benefits under Kimberly-Clark’s group life insurance plan (which is available to all U.S. salaried employees). For death and disability, assumes the Committee would approve full payment under the Executive OfficerManagement Achievement Award Program for 2019;2020; actual amount that would be paid is determined by the Committee in its discretion. For disability, does not include benefits payable under Kimberly-Clark’s Long-Term Disability Plan (which is available to all U.S. salaried employees), the value of which would be dependent on the life span of the named executive officer and the value of any Kimberly-Clark or government-provided income benefits received.(8) Assumes pro rata vesting of unvested performance-based restricted share units at the target level for the 2017 and 2018 grantsgrant and the maximum level for the 2019 grant.and 2020 grants. See “Outstanding Equity Awards.”(9) For Ms. Underhill, includes the value of retiree medical credits assuming total and permanent disability on December 31, 2019.2020. Our named executive officers would also be eligible for continuing coverage under Kimberly-Clark’s group life insurance plan assuming total and permanent disability on December 31, 2019,2020, which benefit does not discriminate in scope, terms or operation in favor of our named executive officers compared to the benefits offered to all U.S. salaried employees and is therefore not included in the table.84 2021 Proxy Statement Compensation Tables (10) For Ms. Underhill, includes the value of retiree medical credits assuming Ms. Underhill’s retirement on December 31, 2019.2020. Mr. Hsu, Ms. Underhill and Ms. UnderhillKarrmann would also be eligible for continuing coverage under Kimberly-Clark’s group life insurance plan assuming retirement on December 31, 2019,2020, which benefit does not discriminate in scope, terms or operation in favor of our executive officers compared to the benefits offered to all U.S. salaried employees and is therefore not included in the table.(11) For Ms. Underhill the estimated actuarial present value of the pension benefits payable on death is less than the present value of the aggregate accumulated benefit set forth in the Pension Benefits table; as a result, no incremental benefit as a result of her death is included in the amount. (12) For Ms. Underhill, includes the value of retiree medical credits assuming death on December 31, 2019.
2020.(13) IncludesFor Ms. Underhill, includes the excess, if any, of the estimated actuarial present value of the retirement benefits payable on disability for the named executive officer through December 31, 20192020 (assuming the named executive officershe elects to receive a continuing benefit for her surviving spouse) over the present value of the aggregate accumulated benefit set forth in the Pension Benefits table.RetirementDeparture of Mr. Falk
Former Named Executive Officer
Mr. Falk retiredAgarwal left the company on December 31, 2019.2020. He received a payout under our Severance Pay Plan in the amount of $1,956,046, which represents two times the sum of Mr. Agarwal’s annual base salary and average annual incentive award for 2019the three prior years. He also received a payout for 2020 under our annual cash incentive program which is shown in the Summary Compensation Table above. Because Mr. FalkAgarwal is over age 55, under the terms of the 2011 Plan, his unvested stock options vested on the date of his departure and will be exercisable until the earlier of five years or the remaining term of the options, and his unvested performance-based restricted share units will be payable in full based on attainment of the performance goal at the end of the restrictedperformance period. The value of the unvested stock options and performance-based restricted share units was $34,719,513$4,277,554 at the time of Mr. Falk’s retirementAgarwal’s departure (assuming that theall performance-based restricted share units vest at the target level for the 2017 and 2018 grants and the maximum level for the 2019 grant)level). Upon Mr. Falk’s retirement, the following benefits under the Supplemental Pension Plan became payable: (1) a distribution of $7,937,511, payable on January 2, 2020, for required income and payroll taxes withheld in 2019 and (2) a lump sum distribution having a present value of $13,206,632, payable on July 1, 2020, relating to benefits accrued after 2004. Commencement of Mr. Falk’s remaining benefits under the Pension Plan and Supplemental Pension Plan is subject to his election, as described above under Pension Benefits. Mr. Falk received retiree medical credits valued at $104,500 and heAgarwal is eligible to receive payments for continuingsix months of COBRA medical coverage under Kimberly-Clark’s group life insurance plan. Mr. Falk will be provided post-retirement securitypremiums, six months of outplacement services during 2020 valued at approximately $4,000 and administrative support services through 2022 at no incremental cost to the company.three months of participation in our employee assistance program.2020 Proxy Statement85Compensation Tables2019.2020.Number of securities
to be issued upon
exercise of
outstanding options,
warrants, and rights
(in millions)
(a)Weighted average
exercise price of
outstanding
options, warrants,
and rights
(b)Number of securities
remaining available for
future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(in millions)
(c) Number of securities
to be issued upon
exercise of
outstanding options,
warrants, and rights
(in millions)
(a)Weighted average
exercise price of
outstanding
options, warrants,
and rights
(b)Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
(in millions)
(c)Equity compensation plans approved by stockholders(1) 8(2) $115.26 12.5 7.5(2) $123.14 10.6 (1) Includes (a) the stockholder-approved 2011 Plan, which effective April 21, 2011 amended and restated the stockholder-approved 2001 Equity Participation Plan and (b) the stockholder-approved 2011 Outside Directors’Directors' Compensation Plan, which effective April 21, 2011 amended and restated the Outside Directors’Directors' Compensation Plan.(2) Includes 1.9 million restricted share units granted under the 2011 Plan (including shares that may be issued pursuant to outstanding performance-based restricted share units, assuming the target award is met; actual shares issued may vary, depending on actual performance). Upon vesting, a share of Kimberly-Clark common stock is issued for each restricted share unit. Column (b) does not take these awards into account because they do not have an exercise price. Also includes 0.2 million restricted share units granted under the 2011 Outside Directors’Directors' Compensation Plan. Upon retirement from or any other termination of service from the Board, a share of Kimberly-Clark common stock is issued for each restricted share unit. Column (b) does not take these awards into account because they do not have an exercise price.
In 2011, our Board and our stockholders approved the 2011 Outside Directors’Directors' Compensation Plan (as amended in 2016). A maximum of 1,044,134 shares of Kimberly-Clark common stock was available for grant under this plan (as adjusted for the Halyard Health spin-off). The Board may grant awards in the form of cash, stock options, SARs, restricted stock, restricted share units, or any combination of cash, stock options, SARs, restricted stock or restricted share units under this plan.2021 Proxy Statement 85
2021 Equity Participation PlanProposed 2021 Plan Share Reserve 86 20202021 Proxy StatementProposal 4. Approval of 2021 Equity Participation Plan Proposed 2021 Plan Share Reserve Shares subject to outstanding option awards* 5,391,000 Shares subject to outstanding restricted share unit (RSU) awards** 1,928,000 Shares available for future grant under 2011 Plan 10,153,000 Shares available for future grant under 2011 Directors Plan*** 200,000 New shares under 2021 Plan 2,100,000 New shares under 2021 Directors Plan*** — Sum of above 19,772,000 Common shares outstanding 338,700,000 Fully diluted shares outstanding 346,200,000 * ** Includes 1.5 million shares that may be issued pursuant to outstanding performance-based restricted share units, assuming the target level is met; actual shares issued may vary depending on actual performance. *** No new shares are requested under this plan. The 200,000 shares that may be issued under the 2021 Directors Plan reflects a reduction of the approximately 468,000 remaining unissued shares under the 2011 Directors Plan as of December 31, 2020. Such 200,000 shares will become available for issuance under the 2021 Directors Plan and the remainder of the shares unissued under the 2011 Directors Plan will be retired. Burn rate (number of shares in thousands) 2018 2019 2020 Options granted 1,644 1,197 1,568 PRSUs and RSUs granted 850 824 746 Total shares granted 2,494 2,021 2,314 Weighted average shares outstanding 348,000 343,600 340,700 Burn rate (shares granted ÷ shares outstanding) 0.72% 0.59% 0.68% 2021 Proxy Statement 87 Proposal 4. Approval of 2021 Equity Participation Plan Purpose Highlights of the 2021 Plan ► ► ► ► ► ► ► ► 88 2021 Proxy Statement Proposal 4. Approval of 2021 Equity Participation Plan Shares Authorized; Share and Award Limitations 2021 Proxy Statement 89 Proposal 4. Approval of 2021 Equity Participation Plan Awards 90 2021 Proxy Statement Proposal 4. Approval of 2021 Equity Participation Plan Awards
The 2021 Plan provides that specific performance goals may be established by the Committee, which, if achieved, will result in the amount of payment, or the early payment, of an award under the 2021 Plan. The performance goals may consist of one or more or any combination of the following criteria: organic sales, modified free cash flow, return on invested capital, stock price, market share, sales revenue, cash flow, earnings per share, return on equity, total stockholder return, gross margin, net sales, operating profit return on sales, costs and/or such other financial, accounting or quantitative metric determined by the Committee. The performance goals may be described in terms that are related to the individual participant, to Kimberly-Clark as a whole, or to a subsidiary, division, department, region, function or business unit of Kimberly-Clark in which the2021 Proxy Statement 91 Proposal 4. Approval of 2021 Equity Participation Plan Awards
No award denominated in shares of common stock that is granted under the 2021 Plan may vest in less than one year from its date of grant. Notwithstanding the foregoing, (i) awards with respect to up to five percent of the available shares of common stock authorized for issuance under the 2021 Plan may vest in less than one year from their date of grant; and (ii) this limit does not affect our ability to grant awards that contain rights to accelerated vesting on a termination of employment or any rights to accelerated vesting in connection with a shutdown or divestiture of all or a portion of our business or following a change of control and shall not limit the provisions of the 2021 Plan related to changes in capitalization or substitute awards.
In the event there are changes in Kimberly-Clark’s common stock or Kimberly-Clark’s capitalization through a corporate transaction as described in the 2021 Plan, then to the extent necessary to preserve the benefits to participants under the 2021 Plan, the Committee will make appropriate adjustments to (i) the aggregate number and type or class of shares subject to the 2021 Plan, (ii) the maximum number and type or class of shares that may be issued pursuant to Incentive Stock Options, (iii) the maximum number and type or class of shares for which awards may be granted to any participant, (iv) the number and type or class of shares, and the option price or grant price of all shares subject to outstanding awards, (v) the maximum number and type or class of shares covered by awards which may be granted by any party pursuant to a delegation of authority, and (vi) such other provisions of the 2021 Plan and individual awards as may be necessary and equitable to carry out the foregoing purpose.
Except in connection with a change in Kimberly-Clark common stock or the capitalization of Kimberly-Clark as provided in Section 17 of the 2021 Plan, no option or SAR may be re-priced, replaced, re-granted through cancellation, or modified without stockholder approval if the effect would be to reduce the exercise price for the shares underlying the option, and no stock option or SAR may be repurchased for cash or another award at a time when the price is equal to or less than the fair market value of the underlying shares. The Committee may take these actions, however, subject to the approval of stockholders.
The 2021 Plan provides that the Committee may amend, suspend or discontinue the 2021 Plan or amend any or all awards under the 2021 Plan to the extent permitted by law, permitted by the rules of any stock exchange on which Kimberly-Clark common stock is listed, and permitted under applicable provisions of the Securities Act of 1933 and the Exchange Act. However, if an amendment must be approved by the stockholders, any such proposed amendment will be submitted to the stockholders for approval.92 2021 Proxy Statement Proposal 4. Approval of 2021 Equity Participation Plan Awards
In the event of a “Qualified Termination of Employment” (as defined in the 2021 Plan) of a participant in the 2021 Plan in connection with a “Change of Control” of Kimberly-Clark (as defined in the 2021 Plan), all of the awards not subject to performance goals would become fully vested, unless otherwise set forth in an award agreement. Further, unless otherwise set forth in an award agreement, for any awards subject to performance goals that are forfeited upon the Qualified Termination of Payment, a cash payment is made equal to the fair market value of the number of shares that would have been paid out under the performance awards based on the average performance goal attainment level for the prior three years. However, no severance or other benefits will be provided under the 2021 Plan in the case of a Qualified Termination of Employment if the participant is entitled to benefits pursuant to an executive severance agreement under the Kimberly-Clark executive severance program in effect at the time of such Qualified Termination of Employment.
During a participant’s lifetime, options shall be exercisable only by that participant. Awards are not transferable other than by will or the laws of descent and distribution upon the participant’s death. However, the Committee may grant to designated participants the right to transfer awards, subject to the terms and conditions of administrative rules approved by the Committee.2021 Proxy Statement 93 Proposal 4. Approval of 2021 Equity Participation Plan Awards
All awards will be subject to forfeiture and/or repayment to Kimberly-Clark to the extent and in the manner required (i) to comply with applicable laws, regulations, stock exchange listing rules or other rules, (ii) under the terms of the Kimberly-Clark Corporation Compensation Recoupment Policy, to the extent applicable to the participant, or under any other policy or guideline adopted by us for purposes of fraud prevention, governance, avoidance of monetary or reputational damage to us or our affiliates, whether or not such policy or guideline was in place at the time of grant of an award, and (iii) under such other forfeiture and/or recoupment provisions set forth in any applicable award agreement.
Section 409A of the Code imposes certain requirements applicable to “nonqualified deferred compensation plans.” Awards under the 2021 Plan are intended to be exempt from Section 409A to the maximum extent possible and will be construed accordingly, provided that to the extent that any award is subject to Section 409A, such award and the 2021 Plan are intended to comply with Section 409A and will be construed accordingly. If the Committee determines that an award or any other action or arrangement contemplated by the 2021 Plan would cause a participant to become subject to any additional taxes or other penalties under Section 409A, then such award or other action or arrangement will not be given effect to the extent it causes such result and the related provisions of the 2021 Plan and/or applicable award agreement will be deemed modified or suspended in order to comply with Section 409A without the consent of or notice to the participant.
Prior to the delivery of any shares or cash pursuant to an award (or exercise thereof), we have the power and the right to deduct or withhold, or require a participant to remit to us, an amount sufficient to satisfy U.S. and non-U.S. federal, state, local or other taxes required to be withheld with respect to such award.
The proceeds we receive from the sale of stock under the 2021 Plan will be used for general corporate purposes.
The following discussion is intended only as a brief summary of the federal income and employment tax rules relevant to stock options, SARs, performance awards, restricted shares and, restricted share units under the 2021 Plan. These rules are highly technical and subject to change. The following discussion is limited to the United States federal income tax laws relevant to us and to the individuals who are citizens or residents of the United States. The discussion does not address the state, local or foreign income tax rules relevant to stock options, SARs, performance awards, restricted shares, and restricted share units.94 2021 Proxy Statement Proposal 4. Approval of 2021 Equity Participation Plan Awards 2021 Proxy Statement 95 Proposal 4. Approval of 2021 Equity Participation Plan Awards
The selection of officers and other employees who will receive awards under the 2021 Plan and the size and types of awards will be determined by the Committee in its discretion and the 2021 Plan does not contain objective criteria for determining the compensation payable thereunder. Therefore, the amount of any future awards under the 2021 Plan is not yet determinable and it is not possible to predict the benefits or amounts that will be received by, or allocated to, particular individuals or groups of employees. For information concerning awards granted in 2020 to our named executive officers under the 2011 Plan see “Executive Compensation - Grants of Plan Based Awards” above.
The closing quotation of Kimberly-Clark common stock on February 28, 2021 was $[●] per share.The Board of Directors unanimously recommends a vote FOR approval of the 2021 Equity Participation Plan. 96 2021 Proxy Statement
2021 Outside Directors’
Compensation Plan2021 Proxy Statement 97 Proposal 5. Approval of 2021 Outside Directors’ Compensation Plan Awards 98 2021 Proxy Statement Proposal 5. Approval of 2021 Outside Directors’ Compensation Plan Administration 2021 Proxy Statement 99 Proposal 5. Approval of 2021 Outside Directors’ Compensation Plan U.S. Federal Tax Consequences 100 2021 Proxy Statement Proposal 5. Approval of 2021 Outside Directors’ Compensation Plan U.S. Federal Tax Consequences 2021 Proxy Statement 101 Proposal 5. Approval of 2021 Outside Directors’ Compensation Plan Fair Market Value of the Common Stock The Board of Directors unanimously recommends a vote FOR approval of the 2021 Outside Directors’ Compensation Plan. 102 2021 Proxy Statement ► Action by written consent has the potential to lead to significant matters being approved without all stockholders receiving notice and an opportunity to express their views at an open and transparent stockholder meeting; ► Adding a new right to act by written consent to the existing right to call a special meeting could have a disruptive effect on the Corporation, create stockholder confusion, and result in additional costs and time spent by the Board and management on such matters; and ► Reducing the required ownership threshold to call a special meeting of stockholders provides stockholders with a meaningful right to act without the potential negative consequences of action by written consent. 2021 Proxy Statement 103 Proposal 6. Reduce Ownership Threshold Required to Call a Special Meeting of Stockholders The Board of Directors unanimously recommends a vote FOR approval of the amendment to the Corporation’s Certificate of Incorporation. 104 2021 Proxy Statement 4.7. Stockholder Proposal Regarding Right to Act by Written Consent47 - Right to Act by Written Consent2019 include2020 includes the following:In exceptional circumstances and with sufficiently broad support,… shareholders should have the opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting. We therefore believe that shareholders should have the right to solicit votes by written consent provided that: 1) there are reasonable requirements to initiate the consent solicitation process (in order to avoid the waste of corporate resources in addressing narrowly supported interests); and 2) shareholders receive a minimum of 50% of outstanding shares to effectuate the action by written consent.20202021 Proxy Statement87105Proposal 4.7. Stockholder ProposalBoard of Directors Statement in OppositionThis proposal topic won majority support at 13 major companies in a single year. This included 67% support at both Allstate and Sprint. More recently, the topic won majority votes at Gilead Sciences, Newell Brands, Determine, Sentinel Energy, Flowserve, JetBlue, United Rentals, Capital One, Cigna, Applied Materials, Nuance Communications, and others.47
____________________TheAfter thoughtful consideration of the proposal, the Board of Directors (the “Board”) has concluded that the proposal’s adoption is not in the best interests of the Company and its stockholders.proposal.proposal for the following reasons:► ► ► ► ► ► ► ► ► ► ► ► Single class share capital structure (one share, one vote). already provides stockholders with a meaningful right to act in between annual meetings through the ability of stockholders to call a special meeting. Note that in Proposal 6 above the Board is already requesting stockholder approval of an amendment to the Corporation’s Certificate of Incorporation to reduce the ownership threshold required for stockholders to call a special meeting from 25 percent to 15 percent.106 2021 Proxy Statement Proposal 7. Stockholder Proposal Board of Directors Statement in Opposition as proposed is not necessary at this time given our current governance structures and is not in the best interests of our stockholders because it does not provide for an orderly and transparent discussion of all of our stockholders’ views on a topic.Matters subjectThe Board believes matters that are so important to arequire stockholder voteapproval should be communicated to all stockholders in the context of an annual or special meeting, (which may be called by 25 percent of outstanding shares), with adequate time to consider the matters proposed. Our governing documents provide protections, such as advance notice and thorough disclosure to all stockholders, for the conduct of business at annual and special meetings, to ensure a well-informed, fair and equitable process. Annual and special meetings also allow opportunity for discussion and interaction among stockholders so that all points of view may be considered prior to a vote. In contrast, enabling a limited group of stockholders to act by written consent mayhas the potential to deprive almost half of our stockholders of these important rights.44)48) and 7069 percent of the 468470 S&P 500 companies surveyed by FactSet in January 2020.2021. also provides an open, transparent, and constructive forum for our stockholders to raise their concerns. During 20192020 we offered meetings to stockholders representing more thanapproximately 50 percent of our common stock and held numerous discussions on corporate governance topics such as board composition and refreshment, executive compensation, and corporate social responsibility and sustainability.882020 Proxy StatementProposal 4. Stockholder Proposal Board of Directors Statement in OppositionIn addition We solicited specific feedback from our stockholders related to the right to call special meetings and the right for stockholders to act by written consent. A majority of the stockholders with whom we met expressed a preference for the Corporation to reduce the required special meeting and extensive investor outreach, we maintain robust corporate governance practices and structures which empower our stockholders, promote accountability and oversight and provide stockholders with an opportunityownership threshold rather than adopt the right to express their views:act by written consent.►Independent Lead Director with expansive duties►Demonstrated commitment to Board refreshment, with six new independent directors since 2015►Proxy access for director nominations►Majority voting standard for the election of directors►Majority voting for amendments to our Certificate of Incorporation and By-Laws, i.e., no supermajority requirement►No “poison pill”In lightConsistent with its current practices and procedures, the Board will continue to carefully evaluate the future implementation of appropriate corporate governance measures. Nonetheless, the availability of more effective alternativesBoard believes Kimberly-Clark’s current practices and procedures serve to address stockholder concerns,protect and maximize long-term value for all stockholders.stockholders.stockholders at this time.The Board unanimously recommends that the stockholders voteAGAINST the adoption of this proposal. 20202021 Proxy Statement891072019,2020, by each director and nominee, by each named executive officer, and by all directors, nominees and executive officers as a group.Name Number of Shares(1)(2)(3)(4) Percent of Class Achal Agarwal 164,686 (5) * Abelardo E. Bru 37,13939,794* John W. Culver 406 * Robert W. Decherd 92,478(5)*Thomas J. Falk1,166,55698,289(6) (7)* Maria G. Henry 235,258301,129(6)(5)* Michael D. Hsu 413,705541,337(6)(5)(7)* Mae C. Jemison, M.D. 43,38846,087* Nancy J. KarchSandi Karrmann21,54624,512* S. Todd Maclin 9572,342* Sherilyn S. McCoy 2,1813,604*Jeffrey P. Melucci37,762(6)* Christa S. Quarles 5,7857,319* Ian C. Read 31,559*Marc J. Shapiro68,19034,096(8) * Dunia A. Shive 1,0002,385* Mark T. Smucker 4511,821* Russell Torres 30,855 * Kimberly K. Underhill 89,72085,982(6) * Michael D. White 9,51211,247* All directors, nominees and executive officers 2,449,2141,577,585(6)(9) * as a group (22(23 persons)* (1) (2) 9010820202021 Proxy StatementOther InformationSecurity Ownership Information (3) Name Time-Vested Restricted Share Units(#) Performance-Based Restricted Share Units(#) Thomas J. FalkAchal Agarwal—3,651177,55618,020Maria G. Henry 6,5716,77461,65765,243Michael D. Hsu — 108,971136,134Jeffrey P. MelucciSandi Karrmann4,38024,51225,977—Russell Torres 18,257 12,598 Kimberly K. Underhill — 42,19350,400(4) 20192020 Outside Director Compensation table for the number of shares of restricted stock and restricted share units that the Outside Directors had outstanding as of December 31, 2019.
2020.Voting and investment power with respect to 41,944 of the shares is shared with Mr. Decherd’s spouse.(6)20192020 by:Name Number of Shares That Could be Acquired
Within 60 Days of December 31, 20192020Thomas J. FalkAchal Agarwal311,14391,761Maria G. Henry 148,061203,451Michael D. Hsu 263,231356,246Jeffrey P. MelucciSandi Karrmann— Russell Torres — Kimberly K. Underhill 14,681—All directors, nominees and executive officers as a group (22(23 persons)708,817 (6) (7) 830,749(7)99,41121,991 shares held by TKM, Ltd. and 562,956 shares held by TKM II, Ltd. TKM, Ltd. is a family limited partnership, which is owned by (i) an entity owned by Mr. Falk and his spouse as general partner and (ii) two family trusts previously establishedtrust for the benefit of Mr. Falk’s child as limited partners. TKM II, Ltd.Hsu’s spouse and certain other relatives. Mr. Hsu’s spouse is a family limited partnership which is owned by (i) an entity owned bytrustee of the trust. Mr. Falk and his spouse as general partner, and (ii) Mr. Falk and his spouse as limited partners. Mr. FalkHsu shares voting control over the shares held by TKM, Ltd. and TKM II, Ltd.
the trust.(8) 8,000700 shares held by a family trust for the benefit of Mr. Shapiro’s childrenRead’s spouse and for whichcertain other relatives. Mr. Shapiro shares voting and investment power.
Read’s spouse is trustee of the trust.(9) 819,64672,666 of the shares is shared.2019,2020, each Outside Director has met the specified ownership level or is still within three years of joining the Board.20202021 Proxy Statement91109Other InformationTransactions With Related Persons 2019,2020, regarding persons or groups known to us to be beneficial owners of more than five percent of our common stock.Name and Address of Beneficial Owner Number of Shares of Common
Stock Beneficially OwnedPercentage of Common
Stock OutstandingThe Vanguard Group Inc.(1) 28,573,228 8.3% 100 Vanguard Boulevard Malvern, PA 19355 BlackRock, Inc.(2) 25,014,801 7.3% 55 East 52nd Street New York, NY 10055 State Street Corporation(3) 18,531,092 5.4% State Street Financial Center One Lincoln Center Boston, MA 02111 Name and Address of Beneficial Owner Number of Shares of Common
Stock Beneficially OwnedPercentage of Common
Stock OutstandingThe Vanguard Group Inc.(1) 28,049,209 8.3% 100 Vanguard Boulevard Malvern, PA 19355 BlackRock, Inc.(2) 26,644,473 7.8% 55 East 52nd Street New York, NY 10055 State Street Corporation(3) 17,017,544 5.0% State Street Financial Center One Lincoln Street Boston, MA 02111 (1) 12, 2020.10, 2021. According to the filing, Vanguard had sole voting power with respect to 508,482 shares, sole dispositive power with respect to 27,976,67126,529,394 shares, shared dispositive power with respect to 596,5571,519,815 shares and shared voting power with respect to 117,001567,436 shares, and did not have sole voting power as to any shares.(2) February 5, 2020.January 29, 2021. According to the filing, BlackRock had sole voting power with respect to 21,550,59123,309,324 shares, sole dispositive power with respect to 25,014,80126,644,473 shares, and did not have shared voting or dispositive power as to any shares.(3) 13, 2020.9, 2021. According to the filing, State Street had shared voting power with respect to 16,360,73614,911,852 shares, shared dispositive power with respect to 18,497,13816,981,199 shares and did not have sole voting or dispositive power as to any shares.► ► ► 9211020202021 Proxy StatementOther Information CEO Pay Ratio DisclosureStockholders Sharing the Same Household► ► ► ► 20192020 Related Person Transactions. We share aircraft hangar space, pilots and related services with Bergstrom Corporation, an entity that is majority-owned by John F. Bergstrom, who served as a director for a portion of 2019 but did not stand for re-election at our 2019 Annual Meeting. During 2019, Bergstrom Corporation paid us $508,000 for its share of the costs associated with these services. We believe this arrangement is fair and reasonable, advantageous to Kimberly-Clark, and consistent with national benchmarking. Based on an analysisthe company’s review of the arrangement, we also believe its termstransactions, there were no transactions considered to be comparable to those that could be obtained in arm’s-length dealings with an unrelated third party. The Nominating and Corporate Governance Committee reviewed and approved the arrangement.a related person transaction during 2020.2019:2020:► $47,328$47,549 ► $12,028,120$13,465,320 ► 254283 to 1As permitted by SEC rules, we used the same median employee that was identified in the preparation of our pay ratio disclosure in 2018 because we believe there has been no change in our employee population or compensation arrangements that would result in a significant change to our pay ratio disclosure. Further, there has been no change in the circumstances of the employee identified as the median employee in 2018. in 2018, we compared the base salary, overtime, shift-differential, call-in and other statutory pay (e.g., 13-month bonus for certain Latin American employees) of our employees based on 10-month trailing payroll data as of October 31, 2018.2020. At that date, we had 41,87141,375 employees, of which 11,36911,192 were U.S. employees and 30,50230,183 were non-U.S. employees. We excluded the following numbers of our employees based in the following countries as permitted by SEC rules under ade minimisexemption: Ecuador (395)Honduras (83), Honduras (254)Kazakhstan (49), Indonesia (313), Nicaragua (37), Nigeria (116), Panama (228), Ukraine (53), Vietnam (639)Mexico (1,904). The total number of excluded employees (2,035)under the exemption (2,036) represented less than 5.0 percent of our population. We also excluded the approximately 5,400 employees of Softex Indonesia, which business we acquired on October 1, 2020. As a result of the exclusions, the “considered population” for identifying the median employee was 39,836.39,339. We did not make any cost-of-living adjustments.2020 Proxy Statement93Other Information Stockholder Director Nominees Not Included in Next Year’s Proxy Statement2021 Proxy Statement 111 Other Information Other Stockholder Proposals Not Included in Next Year’s Proxy Statement 20212022 Annual Meeting of Stockholders must submit their proposals to the Corporate Secretary, Kimberly-Clark Corporation, P.O. Box 619100, Dallas, Texas 75261-9100, so that they are received at this address no later than November 6, 2020.[●], 2021. Upon receipt of a proposal, we will determine whether or not to include the proposal in the proxy statement and form of proxy in accordance with applicable law. We suggest that proposals be forwarded by certified mail, return receipt requested.20212022 Annual Meeting of Stockholders must submit written notice of the nomination to the Corporate Secretary so that it is received between October 7, 20209, 2021 and November 6, 2020,8, 2021, unless the 20212022 Annual Meeting is held earlier than March 30, 20212022 or later than June 28, 2021,2022, in which case the notice must be received at least 120 days, but not more than 150 days, before the 20212022 Annual Meeting of Stockholders (unless we give less than 120 days’ notice of the annual meeting date, in which case the notice must be received within 10 days after the meeting date is announced). Any notice of a proxy access nomination must comply with the requirements of our By-Laws, which may be found in the Investors section of our website at www.kimberly-clark.com, and any applicable law.20212022 Annual Meeting of Stockholders is required to give written notice to our Corporate Secretary. We must receive this notice at least 75 days, but not more than 100 days, before the 20212022 Annual Meeting of Stockholders (unless we give less than 75 days’ notice of the annual meeting date, in which case the notice must be received within 10 days after the meeting date is announced). Any notice of a director nomination must comply with the requirements of our By-Laws and any applicable law. A nomination that does not comply with the requirements set forth in our Certificate of Incorporation and By-Laws will not be considered for presentation at the annual meeting, but will be considered by the Nominating and Corporate Governance Committee for any vacancies arising on the Board between annual meetings in accordance with the process described in “Proposal 1. Election of Directors - Process and Criteria for Nominating Directors.”942020 Proxy StatementOther InformationOther Stockholder Proposals Not Included in Next Year’s Proxy Statement20212022 Annual Meeting of Stockholders, other than a matter brought under SEC Rule 14a-8 or a director nomination, must submit written notice of the proposal to the Corporate Secretary. This notice must be received between January 19, 20212022 and February 13, 2021,2022, unless the 20212022 Annual Meeting is held earlier than March 30, 20212022 or later than June 28, 2021,2022, in which case the notice must be received at least 75 days, but not more than 100 days, before the 20212022 Annual Meeting of Stockholders (unless we give less than 75 days’ notice of the annual meeting date, in which case the notice must be received within 10 days after the meeting date is announced). Any notice of a proposal must comply with the requirements of our By-Laws and any applicable law.20201122021 Proxy Statement 95
to be Presented at
the Annual Meeting
P.O. Box 619100
Dallas, Texas 75261-9100
Telephone (972) 281-1200
March 6, 2020[●], 2021
Grant B. McGeeVice President –Senior Deputy General Counsel
and Corporate Secretary962021 Proxy Statement2020113
2021 Equity Participation Plan
(Effective April 29, 2021)1. Purpose 2. Effective Date 3. Definitions 114 2021 Proxy Statement Appendix A 3. Definitions 2021 Proxy Statement 115 Appendix A 3. Definitions 116 2021 Proxy Statement Appendix A 4. Administration (a) (b) (c) (d) (e) (f) 4. Administration 2021 Proxy Statement 117 Appendix A 7. Stock Options 5. Eligibility 6. Form of Grants 7. Stock Options (a) (b) (c) 118 2021 Proxy Statement Appendix A 7. Stock Options (d) (e) (f) (g) (i) An Incentive Stock Option may be granted only to an employee of the Corporation or one of the Corporation’s present or future “parent corporations” or “subsidiary corporations” as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. (ii) No person who, at the time the Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation and its Affiliates may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code. 2021 Proxy Statement 119 Appendix A 8. Stock Appreciation Rights (iii) To the extent that the aggregate Fair Market Value of all shares with respect to which Incentive Stock Options are exercisable by a Participant for the first time during any calendar year exceeds $100,000, the Options shall be treated as Nonqualified Stock Options to the extent required by Section 422 of the Code. The aggregate Fair Market Value of such shares shall be determined at the time the Option is granted. (h) (i) At the same time as Nonqualified Stock Options are granted the Committee may also grant to designated Participants a tandem SAR, subject to the terms and conditions of this subsection 7(h) and Section 8. If Nonqualified Stock Options and a SAR are granted in tandem, as designated in the relevant Award Agreements, such tandem Option shall be cancelled to the extent that the shares of Common Stock subject to such Option are used to calculate amounts or shares receivable upon the exercise of the related tandem SAR. The tandem SAR shall expire when the period of the subject Option expires. Participants to whom a tandem SAR has been granted shall be notified of such grant and of the Options to which such SAR pertains. A tandem SAR may be revoked by the Committee, in its sole discretion, at any time. (ii) At the time a Participant converts one or more shares of Common Stock covered by an Option to cash pursuant to a SAR, such Participant must exercise one or more Nonqualified Stock Options, which were granted at the same time as the Option subject to such SAR, for an equal number of shares of Common Stock. In the event that the number of shares and the Option Price per share of all shares of Common Stock subject to outstanding Options is adjusted as provided in the Plan, the above SARs shall automatically be adjusted in the same ratio which reflects the adjustment to the number of shares and the Option Price per share of all shares of Common Stock subject to outstanding Options. (i) Dividend Equivalents. No dividend equivalents may be granted in relation to Options granted under the Plan. 8. Stock Appreciation Rights (a) (b) Grant Price. The grant price of a SAR shall be determined by the Committee, provided, however, that such price shall not be less than one hundred percent (100%) of the Fair Market Value of one share of Common Stock on the date of grant of the SAR, except that if a SAR is at any time granted in tandem to an Option, the grant price of the SAR shall not be less than the Option Price of such Option, and also except in the case of SARs granted as Substitute Awards (the “Grant Price”). (c) Term. The term of each SAR shall be such period of time as is fixed by the Committee; provided, however, that the term of any SAR shall not exceed ten (10) years from the date of grant. The Committee in its discretion at the time of grant may establish Performance Goals that may affect the grant, exercise and/or settlement of a SAR. 120 2021 Proxy Statement Appendix A 9. Restricted Shares (d) (e) (f) 9. Restricted Shares (a) (b) 2021 Proxy Statement 121 Appendix A 10. Restricted Share Units (c) 10. Restricted Share Units (a) (b) (c) (d) 122 2021 Proxy Statement Appendix A 14. Terminations and Leaves of Absence 11. Performance Awards (a) may be denominated or payable in cash, Common Stock (including, without limitation, Restricted Shares), other securities, or other Awards; (b) shall confer on the holder thereof rights valued as determined by the Committee and payable to, or exercisable by, the holder of the Performance Award, in whole or in part, upon the achievement of such Performance Goals during such performance periods as the Committee shall establish; and (c) as specified in the relevant Award Agreement, the Committee may provide that Performance Awards denominated in shares earn dividend equivalents. Dividend equivalents for Performance Awards will accrue and will not be paid unless and until the underlying Awards vest. 12. Other Stock-Based Awards 13. Vesting 14.Terminations and Leaves of Absence (a) Unless otherwise set forth in an Award Agreement, in the event the Participant’s employment with the Corporation or an Affiliate is terminated by reason of a shutdown or divestiture of all or a portion of the Corporation’s or the respective Affiliate’s business, a proportion of any Restricted Shares or Restricted Share Unit Award shall be considered to vest as of the Participant’s termination of employment. The portion of each Award that shall vest shall be 2021 Proxy Statement 123 Appendix A 14. Terminations and Leaves of Absence prorated for the number of full years of employment during the Restricted Period prior to the Participant’s termination of employment. In the event the number of Restricted Shares or Restricted Share Units was to be determined by the attainment of Performance Goals according to a schedule determined by the Committee, the portion of the Award that shall vest shall be determined at the end of the Restricted Period, prorated for the number of full years of employment during the Restricted Period prior to the Participant’s termination of employment. (b) (1) For a Participant classified at the Corporation’s Grade 1 through 6 level, as defined by the Corporation’s Compensation Department, the Average PRSU Attainment Level shall be calculated based on the prior three year average attainment level with respect to PRSUs as it relates to other employees at the same grade level. (2) For a Participant at the Global Senior Leadership Team (“GSLT”) level (except for the Chief Executive Officer of the Corporation), the Average PRSU Attainment Level shall be calculated based on the prior three year average attainment level with respect to PRSUs as it relates to Participants at the GSLT level. (3) For the Chief Executive Officer of the Corporation, the Average PRSU Attainment Level shall be calculated based on the prior three year average attainment level with respect to PRSUs as it relates to the previous Chief Executive Officer(s) of the Corporation. 124 2021 Proxy Statement Appendix A 14. Terminations and Leaves of Absence (c) If, pending a Change of Control, the Committee determines that as a result of the Change of Control the Common Stock will cease to exist without an adequate replacement security that preserves the Participant’s economic rights and positions with respect to his or her Awards, or if the applicable successor or surviving corporation upon a Change of Control otherwise refuses to assume the Participant’s Award or replace it with a comparable award for shares of the capital stock of such successor or surviving corporation, then, by action of the Committee, the following shall occur: (i) All Options and SARs, except for Incentive Stock Options, shall become exercisable immediately prior to the consummation of the Change of Control in such manner as is deemed fair and equitable by the Committee. (ii) The restrictions on all Restricted Shares shall lapse, and all Restricted Share Units, Performance Awards and Other Stock-Based Awards shall vest immediately prior to consummation of the Change of Control and shall be settled upon the Change of Control in cash equal to the Fair Market Value of the number of shares of Common Stock (or target number, as applicable) subject to the Restricted Share Units, Performance Awards and Other Stock-Based Awards at the time of the Change of Control. (d) (e) If any amounts payable under the Plan would constitute a parachute payment under Section 280G(b)(2) of the Code then such amounts shall be reduced to the extent necessary to provide the Participant with the greatest aggregate net after tax receipt as determined by applying the procedures set forth in the Committee Rules. 2021 Proxy Statement 125 Appendix A 17. Changes in Capitalization 15. Shares Subject to the Plan (a) Subject to subsection 15(b) and the adjustment provision set forth in Section 17 hereof, the number of shares of Common Stock available with respect to all Awards that may be issued under the Plan shall not exceed the sum of (i) 2,100,000 newly authorized shares and (ii) the number of shares which as of the Effective Date were previously authorized but not awarded under the Prior Plan (the “Share Reserve”); provided, however, that no more than 10,000,000 shares may be issued upon the exercise of Incentive Stock Options. (b) If any shares of Common Stock subject to an Award granted under the Plan or under the Prior Plan are forfeited or expire, are converted to shares of another person in connection with a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other similar event, or if an Award is settled in cash (in whole or in part), the shares subject to such Award shall, to the extent of such forfeiture, conversion, expiration or cash settlement, again be available for future grants of Awards under the Plan. Notwithstanding the foregoing, no shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code. (c) Notwithstanding anything to the contrary herein, the following shares shall notbe added to the shares of Common Stock authorized for grant under subsection 15(a) and shall not be available for future grants of Awards under the Plan: (i) shares tendered by a Participant or withheld by the Company in payment of an Option Price; (ii) shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (iii) shares subject to Stock Appreciation Rights that are not issued in connection with the stock settlement of the Stock Appreciation Rights on exercise thereof; and (iv) shares purchased on the open market by the Company with the cash proceeds received from the exercise of Options. (d) Substitute Awards may be granted on such terms as the Committee deems appropriate, notwithstanding limitations on Awards in the Plan. For avoidance of doubt, Substitute Awards shall not reduce the shares of Common Stock authorized for grant under the Plan, except as may be required by reason of Section 422 of the Code, and shares of Common Stock subject to such Substitute Awards shall not be added to the shares available for Awards under the Plan pursuant to subsection 15(b) above. 16. Individual Limits 17. Changes in Capitalization 126 2021 Proxy Statement Appendix A 20. General Provisions 18. Effect on Other Plans 19.Term of the Plan 20. General Provisions (a) No Right of Continued Employment. Neither the establishment of the Plan nor the grant or payment of Awards hereunder nor any action of the Corporation, its Affiliates, the Board or the Committee shall be held or construed to confer upon any person any legal right to be continued in the employ of the Corporation or any of its Affiliates, and the Corporation and its Affiliates expressly reserve the right to discharge any Participant without liability to the Corporation, its Affiliates, the Board or the Committee. (b) Binding Effect. Any decision made or action taken by the Corporation, the Board or by the Committee arising out of or in connection with the construction, administration, interpretation and effect of the Plan shall be conclusive and binding upon all persons. The Committee may determine in its sole discretion whether a termination of employment for purposes of the Plan is caused by Total and Permanent Disability, Retirement or for other reasons. (c) Modification of Awards. Except as otherwise provided in Section 7(e) related to repricings, the Committee may in its sole and absolute discretion, by written notice to a Participant, (i) limit the period in which an Incentive Stock Option may be exercised to a period ending at least three months following the date of such notice, (ii) limit or eliminate the number of shares subject to an Incentive Stock Option after a period ending at least three months following the date of such notice, (iii) accelerate the Restricted Period with respect to the Restricted Shares, Restricted Share Units, Performance Awards and Other Stock-Based Awards granted under the Plan or otherwise accelerate the vesting of any Award, (iv) subject any Performance-Based Award or any other Award subject to Performance Goals to any policy adopted by the Corporation relating to the recovery of such Award to the extent that after payment of such Award it is determined that the Performance Goals were not actually achieved, (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Common Stock, other securities or other Awards, or canceled, forfeited, or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended, (vi) make other adjustments in the terms and conditions (including Performance Goals) applicable to Awards and/or (vii) otherwise amend or modify any outstanding Award. Except as provided in this subsection and in subsection 2021 Proxy Statement 127 Appendix A 20. General Provisions 20(d), no amendment, suspension, or termination of the Plan or any Awards under the Plan shall, without the consent of the Participant, adversely alter or change any of the rights or obligations under any Awards or other rights previously granted the Participant, unless such amendment is necessary or appropriate to comply with applicable laws. (d) Non-U.S. Employees. In the case of any Award granted to a Participant who is not a resident of the United States, who is employed by an Affiliate other than an Affiliate that is incorporated, or whose place of business is, in a State of the United States or who is otherwise subject to the laws of a country outside the United States, the Committee may (i) establish, waive or alter the terms and conditions of any Awards to the extent that such action is necessary or advisable to conform such Award to applicable law or to achieve the purposes of the Plan, (ii) establish subplans to meet requirements under applicable law or to achieve favorable tax treatment, and (iii) take any action, either before or after the Award is made, which is deemed advisable to obtain approval of such Award by an appropriate governmental entity; provided, however, that no action may be taken hereunder if such action would (A) materially increase any benefits accruing to any Participants under the Plan, (B) increase the number of shares of Common Stock which may be issued under the Plan, (C) modify the requirements for eligibility to participate in the Plan, or (D) result in a failure to comply with applicable provisions of the U.S. Securities Act, the Exchange Act or the Code. (e) No Segregation of Cash or Stock. The Restricted Share Unit accounts established for Participants are merely a bookkeeping convenience and neither the Corporation nor its Affiliates shall be required to segregate any cash or stock which may at any time be represented by Awards. Nor shall anything provided herein be construed as providing for such segregation. Neither the Corporation, its Affiliates, the Board nor the Committee shall, by any provisions of the Plan, be deemed to be a trustee of any property, and the liability of the Corporation or its Affiliates to any Participant pursuant to the Plan shall be those of a debtor pursuant to such contract obligations as are created by the Plan, and no such obligation of the Corporation or its Affiliates shall be deemed to be secured by any pledge or other encumbrance on any property of the Corporation or its Affiliates. (f) Non-Transferability. During the Participant’s lifetime, Options and SARs shall be exercisable only by such Participant. Awards shall not be transferable other than by will or the laws of descent and distribution upon the Participant’s death. Notwithstanding anything in this subsection 20(f) to the contrary, the Committee may grant to designated Participants the right to transfer Awards, subject to the terms and conditions of the Committee Rules. Except as otherwise provided in the Plan, no benefit payable under or interest in the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action shall be void and no such benefit or interest shall be in any manner liable for or subject to debts, contracts, liabilities, engagements, or torts of any Participant or beneficiary. (g) Delaware Law to Govern. All questions pertaining to the construction, interpretation, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of Delaware. (h) Purchase of Common Stock. The Corporation and its Affiliates may purchase from time to time shares of Common Stock in such amounts as they may determine for purposes of the Plan. The Corporation and its Affiliates shall have no obligation to retain, and shall have the unlimited right to sell or otherwise deal with for their own account, any shares of Common Stock purchased pursuant to this paragraph. (i) Use of Proceeds. The proceeds received by the Corporation from the sale of Common Stock pursuant to the exercise of Options shall be used for general corporate purposes. 128 2021 Proxy Statement Appendix A 20. General Provisions (j) Tax Withholding. Prior to the delivery of any shares of Common Stock or cash pursuant to an Award (or exercise thereof), the Corporation will have the power and the right to deduct or withhold, or require a Participant to remit to the Corporation, an amount sufficient to satisfy U.S. and non-U.S. federal, state, local or other taxes required to be withheld with respect to such Award. The Company will have no obligation to permit exercise of an Award or to issue any shares or cash pursuant to an Award, unless and until either the exercise of the Award or the issuance of shares or cash pursuant thereto is accompanied by sufficient payment, as determined by the Corporation in its absolute discretion, to meet those withholding obligations on such exercise, issuance, lapse or disposition or other arrangements are made that are satisfactory to the Corporation in its absolute discretion to provide otherwise for such payment. The Corporation will have no liability to any Participant for exercising the foregoing right not to permit exercise or issue or deliver shares or cash. (k) Amendments. The Committee may at any time amend, suspend, or discontinue the Plan or alter or amend any or all Awards and Award Agreements under the Plan to the extent (i) permitted by law, (ii) permitted by the rules of any stock exchange on which the Common Stock or any other security of the Corporation is listed, and (iii) permitted under applicable provisions of the Securities Act, the Exchange Act (including Rule 16b-3 thereof); provided, however, that if any of the foregoing requires the approval by stockholders of any such amendment, suspension or discontinuance, then the Committee may take such action subject to the approval of the stockholders. Except as provided in subsections 20(c), 20(d) and 20(l), no such amendment, suspension, or termination of the Plan shall, without the consent of the Participant, adversely alter or change any of the rights or obligations under any Awards or other rights previously granted the Participant, unless such amendment is necessary or appropriate to comply with applicable laws. (l) Section 409A. To the maximum extent possible, Awards under the Plan are intended to be exempt from Section 409A and the Plan and Award Agreements shall be construed accordingly; provided, however, that to the extent that any Award is subject to Section 409A, such Award and the Plan are intended to comply with the applicable requirements of Section 409A and shall be limited, construed and interpreted in accordance with such intent. If the Committee determines that an Award, payment, distribution, transaction or any other action or arrangement contemplated by the Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section 409A, then unless the Committee specifically provides otherwise, such Award, payment, distribution, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A, in each case without the consent of or notice to the Participant. 2021 Proxy Statement 129 Appendix A 20. General Provisions (m) Forfeiture and Recoupment. All awards shall be subject to forfeiture and/or repayment to the Corporation to the extent and in the manner required (i) to comply with any requirements imposed under applicable laws, regulations, stock exchange listing rules or other rules; (ii) under the terms of the Kimberly-Clark Corporation Compensation Recoupment Policy, to the extent applicable to the Participant, or under any other policy or guideline adopted by the Corporation for purposes of fraud prevention, governance, avoidance of monetary or reputational damage to the Corporation and its Affiliates or similar reasons, whether or not such policy or guideline was in place at the time of grant of an Award (and such requirements shall be deemed incorporated into the Plan without the consent of the Participant) and (iii) under such other forfeiture and/or recoupment provisions set forth in an Award Agreement. (o) Severability. If all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid. 130 2021 Proxy Statement
Kimberly-Clark Corporation
2021 Outside Directors’ Compensation Plan
(Effective April 29, 2021)1. Introduction 2. Definitions 2021 Proxy Statement 131 Appendix B 2. Definitions 132 2021 Proxy Statement Appendix B 7. Shares Subject to the Plan; Adjustments; Individual Limit 3. Compensation and Form of Grant 4. Participation 5. Administration of the Plan 6. Term of Plan 7. Shares Subject to the Plan; Adjustments; Individual Limit (a) Shares Subject to the Plan. The aggregate maximum number of shares of Stock available for grant under the Plan shall be the number of shares which as of the Effective Date were previously authorized but not awarded under the Prior Plan not to exceed 200,000 shares, subject to the adjustment provision set forth in subsection 7(b) below. If any shares of Stock subject to an Award granted under the Plan or under the Prior Plan are forfeited or expire, are converted to shares of another person in connection with a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other similar event, or if an Award is settled in cash (in whole or in part), the shares subject to such Award shall, to the extent of such forfeiture, conversion, expiration or cash settlement, again be available for future grants of Awards under the Plan. However, the following shares of Stock shall not be added to the shares of Stock authorized for grant under this subsection 7(a) and shall not 2021 Proxy Statement 133 Appendix B 8. Stock Options be available for future grants of Awards under the Plan: (i) shares tendered by a Director or withheld by the Company in payment of an Option Price; (ii) shares tendered by the Director or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (iii) shares subject to Stock Appreciation Rights that are not issued in connection with the stock settlement of the Stock Appreciation Rights on exercise thereof; and (iv) shares purchased on the open market by the Company with the cash proceeds received from the exercise of Options. Notwithstanding anything in this Plan to the contrary, each grant of Awards under this Plan shall be subject to the availability of shares of Stock under this subsection 7(a). (b) Adjustments. In the event there are any changes in the Stock or the capitalization of the Corporation through a corporate transaction, such as any merger, any acquisition through the issuance of capital stock of the Corporation, any consolidation, any separation of the Corporation (including a spin-off or other distribution of stock of the Corporation), any reorganization of the Corporation (whether or not such reorganization comes within the definition of such term in Section 368 of the Code), any partial or complete liquidation by the Corporation, or a recapitalization, stock dividend, stock split or other change in the corporate structure, appropriate adjustments and changes shall be made by the Board, to the extent necessary to preserve the benefit to the Outside Director contemplated hereby, to reflect such changes in (i) the aggregate number and type or class of shares of Stock subject to the Plan, (ii) the number and type or class of shares and the Award price per share, if applicable, of all shares of Stock subject to outstanding Awards, and (iii) such other provisions of the Plan and individual Awards as may be necessary and equitable to carry out the foregoing purposes, provided, however, that no such adjustment or change may be made to the extent that such adjustment or change will result in the dilution or enlargement of any rights of any Outside Director. (c) Individual Limit. Notwithstanding anything in this Plan to the contrary, the aggregate dollar value of equity-based (based on the grant date fair value of equity-based Awards as determined for financial reporting purposes) and cash compensation granted under this Plan or otherwise during any calendar year to any individual Outside Director for services in such capacity shall not exceed one million dollars ($1,000,000); provided, however, that in the calendar year in which an Outside Director first joins the Board or is first designated as Chairman of the Board or Lead Director, the maximum aggregate dollar value of equity-based and cash compensation to the Outside Director may be up to two hundred percent (200%) of the foregoing limit. For avoidance of doubt, compensation will count towards this limit for the calendar year in which it was granted or earned, and not later when distributed, in the event it is deferred. 8. Stock Options (a) Period of Option. The period of each Option shall be 10 years from the date it is granted. (b) Option Price. The exercise price of an Option shall be the Fair Market Value of the Stock at the time the Option is granted. (c) Limitations on Exercise. Each Option shall not be exercisable until at least one year has expired after the granting of the Option, during which time the Outside Director shall have been in the continuous service as a Director of the Corporation; provided, however, that the provisions of this subsection 8(c) shall not apply and all Options outstanding under the Plan shall be exercisable in full if the Outside Director separates from service as a Director within the two (2) year period following the date a Change of Control occurs. Commencing one year 134 2021 Proxy Statement Appendix B 8. Stock Options after the date the Option was granted, the Outside Director may purchase the total number of shares of Stock covered by the Option; provided, however, that if the Director separates from service as a Director for any reason other than death, Retirement, a voluntary decision by the Outside Director not to stand for reelection to the Board or total and permanent disability, the Option shall be exercisable within the remaining period of the Option but only for the number of shares of Stock for which it was exercisable on the date of such separation from service. In no event, however, may an Option be exercised more than 10 years after the date of its grant. (d) Exercise; Notice Thereof. Options shall be exercised by delivering to the Corporation, as directed by the office of the Treasurer at the World Headquarters, written notice of the number of shares of Stock with respect to which Option rights are being exercised and by paying in full the Option Price of the shares at the time being acquired. Except as otherwise authorized by the Board, payment may be made in cash, a check payable to the Corporation or in shares of Stock transferable to the Corporation and having a Fair Market Value on the transfer date equal to the amount payable to the Corporation. The date of exercise shall be deemed to be the date the Corporation receives the written notice and payment for the shares being purchased. An Outside Director shall have none of the rights of a stockholder with respect to shares covered by an Option until the Outside Director becomes the record holder of such shares. (e) Exercise after Death, Retirement, Disability or Voluntary Separation of Service. If a Director dies, Retires, becomes totally and permanently disabled, or separates from service on the Board by reason of a voluntary decision by the Outside Director not to stand for reelection to the Board, without having exercised an Option in full, the remaining portion of such Option may be exercised, without regard to the limitations in subsection 8(c), within the remaining period of the Option. Upon an Outside Director’s death, the Option may be exercised by the person or persons to whom such Outside Director’s rights under the Option shall pass by will or the laws of descent and distribution or, if no such person has such rights, by his executor or administrator. (f) Non-transferability. During the Outside Director’s lifetime, Options shall be exercisable only by such Outside Director. Options shall not be transferable other than by will or the laws of descent and distribution upon the Outside Director’s death. Notwithstanding anything in this subsection 8(f) to the contrary, Outside Directors shall have the right to transfer Options, subject to the same terms and conditions applicable to Options granted to the Chief Executive Officer of the Corporation under Committee Rules. (g) Purchase for Investment. It is contemplated that the Corporation will register shares sold to Directors pursuant to the Plan under the Securities Act. In the absence of an effective registration, however, an Outside Director exercising an Option hereunder may be required to give a representation that he/she is acquiring such shares as an investment and not with a view to distribution thereof. (h) Options for Non-U.S. Directors. In the case of any Option awarded to an Outside Director who is not a resident of the United States or who is otherwise subject to the laws of a country outside the United States, the Board may (i) waive or alter the conditions set forth in subsections 8(a) through 8(g) to the extent that such action is necessary to conform such Option to applicable law or achieve the purposes of the Plan, or (ii) take any action, either before or after the award of such Option, which it deems advisable to obtain approval of such Option by an appropriate governmental entity; provided, however, that no action may be taken hereunder if such action would (1) materially increase any benefits accruing to any Outside Directors under the Plan, (2) increase the number of securities which may be issued under the Plan, (3) modify the requirements for eligibility to participate in the Plan, or (4) result in a failure to comply with applicable provisions of the Securities Act, the Exchange Act or the Code. (i) Election to Receive Cash Rather than Stock. 2021 Proxy Statement 135 Appendix B 9. Restricted Shares (i) At the same time as Options are granted the Board may also grant to designated Outside Directors the right to convert a specified number of shares of Stock covered by such Options to cash, subject to the terms and conditions of this subsection 8(i). For each such Option so converted, the Outside Director shall be entitled to receive cash equal to the difference between the Outside Director’s Option Price and the Fair Market Value of the Stock on the date of conversion. Such a right shall be referred to herein as a Stock Appreciation Right (“SAR”). Outside Directors to whom a SAR has been granted shall be notified of such grant and of the Options to which such SAR pertains. A SAR may be revoked by the Board, in its sole discretion, at any time. (ii) An Outside Director who has been granted a SAR may exercise such SAR during such periods as provided for by the Board. The SAR shall expire when the period of the subject Option expires. (iii) At the time an Outside Director converts one or more shares of Stock covered by an Option to cash pursuant to a SAR, such Outside Director must exercise one or more Options, which were granted at the same time as the Option subject to such SAR, for an equal number of shares of Stock. In the event that the number of shares and the Option Price per share of all shares of Stock subject to outstanding Options is adjusted as provided in the Plan, the above SARs shall automatically be adjusted in the same ratio which reflects the adjustment to the number of shares and the Option Price per share of all shares of Stock subject to outstanding Options. (j) No Repricings. No Option or SAR may be re-priced, replaced, re-granted through cancellation, or modified without stockholder approval (except in connection with a change in the Common Stock or the capitalization of the Corporation as provided in Section 7 hereof) if the effect would be to reduce the exercise price for the shares underlying such Option or SAR. In addition, no Option or SAR may be repurchased or otherwise cancelled in exchange for cash or another Award (except in connection with a change in the Common Stock or the capitalization of the Corporation as provided in Section 7 hereof) if the Option Price or Grant Price of the SAR is equal to or less than the Fair Market Value of the Common Stock at the time of such repurchase or exchange. Notwithstanding anything herein to the contrary, the Committee may take any such action set forth in this subsection 8(j) subject to the approval of the stockholders. 9. Restricted Shares (a) Grant of Restricted Shares. The Board shall determine the number of Restricted Shares to be included in the grant and the period or periods during which the Transferability Restrictions applicable to the Restricted Shares will be in force (the “Restricted Period”). The Restricted Period may be the same for all Restricted Shares granted at a particular time to any one Outside Director or may be different with respect to different Outside Directors or with respect to various of the Restricted Shares granted to the same Outside Director, all as determined by the Board at the time of grant. (b) Transferability Restrictions. During the Restricted Period, Restricted Shares may not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, an Outside Director’s right, if any, to receive Stock upon termination of the Restricted Period may not be assigned or transferred except by will or by the laws of descent and distribution. In order to enforce the limitations imposed upon the 136 2021 Proxy Statement Appendix B 10. Restricted Share Units (c) 10. Restricted Share Units (a) (b) (c) 2021 Proxy Statement 137 Appendix B 15. Director’s Service (d) 11. Notices 12. Amendment and Termination 13.Taxes 14. Governing Law 15. Director’s Service 138 2021 Proxy Statement Appendix B 16. Section 409A 16. Section 409A 2021 Proxy Statement 139
Amendment to Amended and Restated Certificate of Incorporation:
Reduce Ownership Threshold Required to Call a Special Meeting of StockholdersArticle VI (3) MeetingMeetings of stockholders of the Corporation may be called only by (i) the Board of Directors pursuant to a resolution adopted by the affirmative vote of a majority of the entire Board of Directors, (ii) the Chairman of the Board, (iii) Chief Executive Officer, or (iv) the Chairman of the Board or the Secretary of the Corporation at the written request of the holders ofstockholder or stockholders owning (as defined in the By-Laws of the Corporation) not less than twenty-fivefifteen percent (25%)15%) in voting power of the issued and outstanding shares of capital stock entitled to vote on any business proposed to be considered at such special meeting that complies with the requirements and procedures for calling a special meeting of stockholders as may be set forth in the By-Laws of the Corporation, as may be amended from time to time.140 2021 Proxy Statement
Invitation to Stockholders
Notice of 20202021 Annual Meeting
Proxy Statement–- here’s how to vote!
You may vote online or by phone instead of mailing this card.Votes submitted electronically must be received by 1:00 a.m., Central Time, on April 29, 2020. Online Go towww.envisionreports.com/KMB or scan the QR code — login details are located in the shaded bar below.
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Sign up for electronic delivery at www.envisionreports.com/KMBAnnual Stockholder Meeting Proxy Card ▼ ▼ A Proposals -20212022 Annual Stockholder Meeting), FOR Proposals 2, 3, 4, 5 and 3,6, and AGAINST Proposal 4.7. 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain 01 - Abelardo E. BruJohn W. Culver ☐ ☐ ☐ 02 - Robert W. Decherd ☐ ☐ ☐ 03 - Michael D. Hsu ☐ ☐ ☐ 04 - Mae C. Jemison, M.D. ☐ ☐ ☐ 05 - S. Todd Maclin ☐ ☐ ☐ 06 - Sherilyn S. McCoy ☐ ☐ ☐ 07 - Christa S. Quarles ☐ ☐ ☐ 08 - Ian C. Read ☐ ☐ ☐ ☐ ☐ ☐ 10 - Mark T. Smucker ☐ ☐ ☐ 11 - Michael D. White ☐ ☐ ☐ For Against Abstain For Against Abstain 2. Ratification of Auditor ☐ ☐ ☐ 3. Advisory Vote to Approve Named Executive Officer Compensation ☐ ☐ ☐ 4. Stockholder Proposal Regarding Right to Act by Written Consent ☐ ☐ ☐ B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below.Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box.ForAgainst Signature 2 — Please keep signature within the box./ /Abstain For Against Abstain 2. Ratification of Auditor ☐ ☐ ☐ 3. Advisory Vote to Approve Named Executive Officer Compensation ☐ ☐ ☐ 4. Approval of 2021 Equity Participation Plan ☐ ☐ ☐ 5. Approval of 2021 Outside Directors’ Compensation Plan ☐ ☐ ☐ 6. Reduce Ownership Threshold required to call a Special Meeting of Stockholders ☐ ☐ ☐ 7. Stockholder Proposal Regarding Right to Act by Written Consent ☐ ☐ ☐ 036GWD1PCF
TO BE HELD ON APRIL 29, 2020:20192020 Annual Report, including Form 10-K, are available at http://www.kimberly-clark.com/investors.
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IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE▼ENVELOPE.Proxy/Voting Instructions for the Annual Stockholder Meeting — April 29, 20202021 the Kimberly-Clark World Headquarters, 351 Phelps Drive, Irving, Texas 75038www.meetingcenter.io/277152589 on Wednesday,Thursday, April 29, 20202021 at 9:00 a.m. Central Time and at any adjournment thereof. In their discretion, the proxies are authorized to vote on such other business as may properly come before the meeting.AND 3, 4, 5 and 6, AND AGAINST PROPOSAL 4. 7. ON THE REVERSE SIDE.BELOW. C B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. Non-Voting Items/ /C Non-Voting Items Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. ☐