Jeffrey Melucci
KIMBERLY CLARKAbout Jeffrey Melucci
Jeffrey Melucci, 54, is Chief Business, Strategy & Transformation Officer at Kimberly-Clark, elected to this role in October 2024 after serving as Chief Business & Transformation Officer earlier that year; he joined K‑C in 2013 and previously held senior legal and transformation positions including Chief Transformation Officer (2020–2021) . He holds a bachelor’s from The Ohio State University, a J.D. from the University of Cincinnati College of Law, and completed Harvard Business School’s Program for Leadership Development . Company performance in 2024: net sales $20.1B, organic sales growth 3.2%, adjusted EPS $7.30; cash from operations $3.234B and adjusted free cash flow $2.669B . Over the prior five years, KMB’s TSR index value rose to 113.18 while net income reached $2,545M and organic sales growth was 3.2% in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kimberly-Clark | Chief Business, Strategy & Transformation Officer | Oct 2024–present | Oversees enterprise strategy, portfolio actions and transformation aligned with the 2024 transformation initiative . |
| Kimberly-Clark | Chief Business & Transformation Officer | Jan–Oct 2024 | Led business transformation agenda; title updated in Oct 2024 to reflect expanded strategy remit . |
| Kimberly-Clark | Chief Business Development & Legal Officer | Nov 2020–Jan 2024 | Drove M&A/corporate development and legal oversight during portfolio realignments . |
| Kimberly-Clark | Chief Transformation Officer (concurrent) | Nov 2020–Oct 2021 | Led corporate transformation program . |
| Kimberly-Clark | SVP, Business Development & General Counsel | Apr–Nov 2020 | Combined BD and legal leadership . |
| Kimberly-Clark | SVP – General Counsel | Sep 2017–Apr 2020 | Led global legal; supported governance and strategy execution . |
| Kimberly-Clark | VP/Senior Deputy GC; GC Global Operations; Corporate Secretary | 2013–2017 | Built legal operations; governance support across international businesses . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| GE Aviation (General Electric) | General Counsel – Aviation Systems & Business Development; International Transactions Counsel and other counsel roles | ~2004–2013 | Led complex M&A/regulatory matters; transformed legal functions; supported global operations . |
Fixed Compensation
Multi-year compensation (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $805,000 | $841,425 | $900,000 |
| Stock Awards (grant-date fair value) | $2,574,888 | $2,200,105 | $4,150,060 |
| Non-Equity Incentive (Annual Bonus Paid) | $690,372 | $1,045,804 | $1,235,303 |
| All Other Compensation | $110,570 | $171,391 | $202,713 |
| Total Compensation | $4,840,801 | $4,258,725 | $6,488,076 |
Additional 2024 fixed terms:
- Target bonus as % of base salary: 110%; increased 25% upon promotion (effective Jan 30, 2024) .
- 2024 perquisites: Executive financial counseling $13,000; executive health screening $4,862; total perqs $17,862 .
- Deferred compensation: Company contributions $152,076; 2024 earnings $91,920; balance $1,054,943 at Dec 31, 2024 .
Performance Compensation
Annual Incentive Mechanics and 2024 Results
| Element | Metric | Target | Actual | Payout |
|---|---|---|---|---|
| Corporate Financial (50%/50%) | Organic Sales Growth | 4.0% | 3.2% | 82% |
| Corporate Financial (50%/50%) | Adjusted EPS | $6.95 | $7.36 | 183% |
| Corporate Financial – Combined | — | — | — | 133% |
| Non-Financial | Market Share | Confidential target | Achieved | 110% |
| Non-Financial | Inclusion, Equity & Diversity | Qualitative | Achieved | 100% |
| Non-Financial – Combined | — | — | — | 107% |
| Actual 2024 Payout | Melucci Annual Incentive | — | — | 125% of target (paid $1,235,303) |
Program design: NEOs (other than unit leads) are measured on Element 1 (financial) and Element 2 (non-financial); business unit goals applied to unit leaders (e.g., North America) .
Long-Term Incentive Design and 2024 Grants
- Performance-based RSUs (PRSUs) and time-vested RSUs; no stock options granted in 2024 .
- Vesting schedules:
- Annual time-vested RSUs: 30%/30%/40% over three anniversaries .
- Special RSU (promotion award): equal installments over two anniversaries .
- PRSUs: cliff vest on third anniversary, payout 0–200% of target based on performance .
2024 grants to Melucci:
| Grant Type | Grant Date | Units | Fair Value ($) | Vesting |
|---|---|---|---|---|
| PRSU (target) | 5/1/2024 | 13,849 | $1,889,973 | Third anniversary; 0–200% payout |
| Time-vested RSU (annual) | 5/1/2024 | 9,233 | $1,260,028 | 30%/30%/40% over 3 years |
| Special Time-vested RSU (promotion) | 1/31/2024 | 8,267 | $1,000,059 | 50%/50% over 2 years |
Performance metrics (2024–2026 PRSU cohort; equally weighted): average annual organic sales growth (ex-Argentina) and cumulative modified free cash flow (MFCF) .
Multi-year PRSU outcomes and cadence:
- 2022–2024 PRSU payout: 200% of target; shares distributed to Melucci on Feb 28, 2025 .
- As of Feb 12, 2025, on-pace vesting levels: 2023 grant ~160%; 2024 grant ~105% (subject to final performance) .
Realized 2024 equity/option activity:
- Options exercised: 47,901 shares; value realized $500,210 .
- Stock awards vested: 24,520 shares; value realized $2,999,390 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Dec 31, 2024) | 143,771 shares; <1% of outstanding . Approx. 0.043% of 331,651,706 shares outstanding (computed from and ). |
| Components of reported ownership | Time-vested RSUs: 30,906; PRSUs (target): 37,170; options acquirable within 60 days: 55,760 . |
| Options outstanding | 4/29/2020: 32,383 exercisable, $138.96 strike, exp. 4/29/2030; 4/26/2022: 18,106 exercisable/12,071 unexercisable, $139.18 strike, exp. 4/26/2032; 4/25/2017: 5,271 exercisable, $132.82 strike, exp. 4/25/2027 . |
| Ownership guidelines | 3x base salary for NEOs; time-vested RSUs count, PRSUs/options excluded . |
| Compliance status | Each NEO met guideline or is within the five-year window (2024 review) . |
| Hedging/pledging | Prohibited for directors/officers; no shares pledged as of proxy date . |
| Trading windows | Pre-clearance required; quarterly blackout periods under insider trading policy . |
Vesting/settlement schedule indicators (potential liquidity windows):
- Special RSU (1/31/2024): scheduled vesting on Jan 31, 2025 and Jan 31, 2026 .
- Annual RSU (5/1/2024): scheduled tranches around May 1, 2025/2026/2027 .
- PRSUs (5/1/2024): performance vest on May 1, 2027 (third anniversary) .
- 2022 PRSU distributed Feb 28, 2025 (payout event) .
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreement | No individual employment agreement; covered by company severance programs . |
| Severance Pay Plan (involuntary) | If employed ≥1 year: 2x (base + current target bonus); pro-rata current year target if after Jan 31; 6 months COBRA; 12 months outplacement; no payment if terminated for cause/other exclusions . |
| Executive Severance Program (change of control; double trigger) | 2x (base + current target bonus); value of forfeited time-vested RSUs at closing price; target PRSUs valued at average payout % of prior 3 years; employer match + assumed target profit sharing for 2 years; 24 months COBRA; options vest and are exercisable up to earlier of 5 years or remaining term; payments reduced to avoid excise tax if beneficial . |
| Clawback policies | Two policies: compensation recoupment (restatement/misconduct/significant violations) and SEC/NYSE “no fault” recovery on restatements for Section 16 officers (3-year lookback) . |
| Tax gross-ups | No excise tax gross-ups upon change of control; governance highlights affirm no excessive perquisites, no option repricing without shareholder approval, and dividends/equivalents not paid until RSUs are earned . |
Change-of-Control and Other Scenario Values (as of Dec 31, 2024; USD):
| Scenario | Cash Payment | Equity (Accel. Vest) | Additional Retirement Benefits | COBRA/Other | Total |
|---|---|---|---|---|---|
| Qualified Termination (Double Trigger) | $5,015,303 | $10,154,658 | $340,200 | $50,856 | $15,561,017 |
| Involuntary Termination (No CoC) | $4,770,000 | — | — | $21,887 | $4,791,887 |
| Death | $6,335,303 | $7,570,667 | — | — | $13,905,970 |
| Disability | $1,235,303 | $7,570,667 | — | — | $8,805,970 |
Compensation Structure vs Performance Metrics
- Annual cash incentives tie directly to organic sales growth and adjusted EPS (50/50), plus non-financial goals (market share; inclusion) with calculated payout percentages; Melucci’s 2024 payout was 125% of target reflecting above-target aggregate financial performance .
- Long-term incentives emphasize stockholder alignment: majority in PRSUs over 3 years using average organic sales growth and cumulative MFCF; 2022–2024 cycle paid at 200% (strong MFCF and organic growth) .
- Peer benchmarking and governance: Semler Brossy (independent) and Mercer advise the committee; executive peer group includes consumer staples leaders (e.g., P&G, PepsiCo, Colgate, General Mills) and select industrials (e.g., 3M, Honeywell) .
Equity Ownership & Alignment (Skin-in-the-Game)
| Category | Detail |
|---|---|
| Beneficial ownership total | 143,771 shares including RSUs/PRSU targets and options acquirable within 60 days; <1% of class . |
| Guideline | 3x salary; compliant or within window; strong alignment via material unvested RSUs/PRSUs . |
| Pledging/Hedging | Prohibited; none pledged . |
| Options | Multiple tranches outstanding with strikes ~$132–$139 and expirations 2027–2032 . |
Employment Contracts, Severance & CoC Economics
- Double-trigger CoC policy; cash multiple 2x salary+target; full treatment for time-vested RSUs; PRSUs valued at average payout percentage over prior 3 years; COBRA 24 months; option vesting/exercisability extended; excise-tax cutback if beneficial .
- Standard severance (non-CoC): 2x salary+target; COBRA 6 months; outplacement 12 months; pro-rata bonus if termination after Jan 31 .
- No individual employment contract; governance policies emphasize clawbacks, anti-hedge/pledge, and no gross-ups .
Performance & Track Record
- 2024 transformation year: realigned segments and improved adjusted operating profit to $3.237B (from $2.958B), adjusted EPS $7.30, adjusted free cash flow $2.669B; management exceeded aggregate financial targets and market share objectives under the annual incentive plan .
- PRSUs from 2022–2024 paid at 200%, evidencing strong execution on organic growth and free cash flow goals over the cycle .
Say-on-Pay & Shareholder Feedback
- Say-on-pay support: ~94% in 2023; ~90% in 2024—committee maintained pay-for-performance design into 2025 .
Risk Indicators & Red Flags
- No related-party transactions since the beginning of 2024; no pledging; robust clawbacks; no excise tax gross-ups; no option repricing without shareholder approval .
- Insider trading policy imposes pre-clearance and blackout periods, moderating near-vesting selling pressure timing .
Performance Compensation – Detailed Metric Table (2024)
| Metric | Weighting | Target | Actual | Payout % |
|---|---|---|---|---|
| Organic Sales Growth (corporate) | 50% of Element 1 | 4.0% | 3.2% | 82% |
| Adjusted EPS (corporate) | 50% of Element 1 | $6.95 | $7.36 | 183% |
| Element 1 Combined | — | — | — | 133% |
| Market Share (non-financial) | Part of Element 2 | Confidential | Achieved | 110% |
| Inclusion, Equity & Diversity | Part of Element 2 | Qualitative | Achieved | 100% |
| Element 2 Combined | — | — | — | 107% |
| Melucci Annual Incentive Result | — | — | — | 125% of target; $1,235,303 |
Equity Grant and Vesting Schedule (Melucci)
| Grant | Date | Units | Value ($) | Vesting |
|---|---|---|---|---|
| PRSU (target) | 5/1/2024 | 13,849 | 1,889,973 | Cliff vest at 3 years; performance 0–200% . |
| RSU (annual) | 5/1/2024 | 9,233 | 1,260,028 | 30/30/40 over 3 anniversaries . |
| RSU (promotion) | 1/31/2024 | 8,267 | 1,000,059 | 50/50 over 2 anniversaries . |
| 2022–2024 PRSU payout | 2/28/2025 | — | — | Paid out at 200%; shares distributed Feb 28, 2025 . |
Employment Terms – Scenario Economics (as of 12/31/2024)
| Scenario | Cash | Equity | Retirement Credits | COBRA/Other | Total |
|---|---|---|---|---|---|
| CoC Qualified Termination | $5,015,303 | $10,154,658 | $340,200 | $50,856 | $15,561,017 |
| Involuntary (No CoC) | $4,770,000 | — | — | $21,887 | $4,791,887 |
Investment Implications
- Alignment and retention: Significant unvested RSUs/PRSUs, compliance with 3x salary ownership guideline, and anti-hedge/pledge policies signal strong alignment with shareholders; double-trigger CoC terms and material equity acceleration provide retention but also clear economics in a transaction .
- Near-term selling pressure: Scheduled vestings (Jan 31 and May 1 tranches) and the Feb 28, 2025 PRSU distribution create potential liquidity events; however, trading is subject to pre-clearance and blackout windows, moderating timing of sales .
- Pay-for-performance credibility: High PRSU payout (200%) reflects delivery on multi-year organic growth/MFCF; annual incentive above target supported by EPS outperformance, reinforcing incentive structure efficacy .
- Governance quality: Strong clawbacks, no gross-ups, no repricing, and robust say-on-pay results (~90–94%) reduce governance risk and compensation-related backlash .