John P. Banovetz
3MAbout John P. Banovetz
Executive Vice President, Chief Technology Officer and Environmental Responsibility at 3M, John P. Banovetz leads global R&D, environmental responsibility and sustainability, and emerging growth ventures. He joined 3M in 1995 as a research chemist, rejoined after a stint at McKinsey in 2007, and has served as CTO since 2017; he holds a Ph.D. in inorganic chemistry (Stanford) and a B.A. in chemistry (Hamline) . In 2024, 3M delivered a 46.1% one-year TSR, while company incentive outcomes (128.6% AIP payout; 48.7% payout for 2022 PSAs) reflected stronger near‑term execution but mixed three‑year performance, the backdrop for management incentives in which Banovetz participates as a senior officer .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| 3M | EVP, Chief Technology Officer & Environmental Responsibility | 2017–present | Leads 3M’s R&D and environmental responsibility; stewards corporate technology platforms and growth ventures . |
| 3M | Managing Director, D‑A‑C‑H Region (Germany/Austria/Switzerland) | 2016–2017 | Oversaw combined operations across DACH markets, aligning regional execution with corporate strategy . |
| 3M | Head, Corporate Research Laboratory | 2015–2016 | Led corporate research lab and cross‑business technology transfer . |
| 3M | Global Business Director, Industrial Adhesives & Tapes | 2012–2015 | Drove business execution in core materials franchises . |
| 3M | Corporate Strategic Initiatives (post‑rejoin) | 2007–2012 | Oversaw planning and implementation of corporate strategic initiatives . |
| McKinsey & Company | Consultant/Engagement Manager | 2003–2007 | Strategy and operations advisory; returned to 3M afterward . |
| 3M | Research Chemist, Corporate R&D | 1995–2003 | Early R&D roles in acrylic adhesives and tapes . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| U.S. President’s Council of Advisors on Science and Technology (PCAST) | Member | 2021–2024 | Advised U.S. administration on science/technology policy . |
| EMERGE (Minneapolis) | Board member | Current | Workforce and community economic opportunity governance . |
| University of Minnesota Foundation | Trustee | Current | Supports institutional advancement and research ecosystem . |
Fixed Compensation
Note: Banovetz was not a Named Executive Officer (NEO) in the 2025 proxy; 3M did not disclose his individual base salary or target bonus. The tables below summarize company‑wide design features applicable to senior executives.
| Element | Design | Key terms |
|---|---|---|
| Base Salary | Fixed cash | Reviewed annually; market and role based . |
| Annual Incentive (AIP) | Variable cash | Metrics/weights: Local Currency Sales (33.3%), Operating Income (33.3%), Operating Cash Flow (33.3%); individual performance modifier (±20%) and sustainability modifier (±10% of target) . |
| Long‑Term Incentives (LTI) – 2024 | 50% PSAs; remainder RSUs or options by role | PSAs: Adjusted EPS Growth (33.3%), Relative Organic Sales Growth (ROS) (33.3%), Free Cash Flow (FCF) Growth (33.3%); measured annually over 3 years (50%/30%/20% weights) with 0–200% payout; options vest ratably over 3 years; RSUs cliff vest at 3 years . |
| Long‑Term Incentives – 2025 changes | Cumulative 3‑year plan, TSR modifier | PSAs measure 3‑year cumulative Adjusted EPS (50%) and Free Cash Flow (50%), with a ±20% relative TSR modifier vs S&P 500 Industrials; single 3‑year performance period (no annual resets) . |
Performance Compensation
Company incentive outcomes and rigor (these apply to NEOs; CTO‑specific payouts not disclosed):
| Program | Metric | Target | Actual | Payout | Vesting/notes |
|---|---|---|---|---|---|
| 2024 AIP (Company level) | Local Currency Sales vs Plan | $25,809mm | 101% of target | 112.5% component | Paid annually; before individual/sustainability modifiers . |
| 2024 AIP (Company level) | Operating Income vs Plan | $5,499mm | 103% of target | 120.0% component | — . |
| 2024 AIP (Company level) | Operating Cash Flow vs Plan | $5,421mm | 108% of target | 153.3% component | — . |
| 2024 AIP (Company level) | Weighted Business Performance Factor | — | — | 128.6% | NEOs on company grid; sustainability modifier not used . |
| 2022 PSAs (3‑yr 2022–2024) | Final payout | — | 3‑yr TSR (annualized): (0.6)% | 48.7% | Reflects below‑target multi‑year performance . |
| 2024 PSAs (Year 1 accrual) | Adjusted EPS Growth | 14.0% | 20.0% | 33.3% tranche | Year‑1 (50% weight) accrual . |
| 2024 PSAs (Year 1 accrual) | Relative Organic Sales Growth | 0.0% | 0.9% | 31.7% tranche | Year‑1 (50% weight) accrual . |
| 2024 PSAs (Year 1 accrual) | Free Cash Flow | $3,810mm | $4,309mm | 33.3% tranche | Year‑1 (50% weight) accrual . |
Additional context:
- 2024 say‑on‑pay support was 45.3%, prompting program changes (three‑year cumulative PSA design; TSR modifier) and enhanced disclosure of adjustments .
- 2024 one‑year TSR was 46.1%; 2022 PSA payout reflected mixed three‑year performance (48.7%) .
Equity Ownership & Alignment
| Policy/Practice | Details |
|---|---|
| Stock ownership guidelines | Robust guidelines for executive officers; examples shown for current NEOs in 2024: CEO 6x salary; business group leaders generally 3x; Controller 2x. CTO multiple not disclosed in proxy; all executives have a grace period to reach compliance . |
| Hedging/pledging | Strict prohibition on hedging, short sales, standing orders, margin accounts, and pledging; all discretionary transactions must be pre‑cleared and within trading windows . |
| Clawback | Broad recoupment policy covers restatements (regardless of fault), misconduct causing financial or reputational harm, and significant risk‑management failures; applies to cash and equity . |
| Award vesting | Options: 3‑yr ratable; RSUs: 3‑yr cliff; PSAs: legacy annual measurement with 3‑yr period (changing to cumulative 3‑yr from 2025) . |
| Ownership disclosure | Individual beneficial holdings disclosed for directors and NEOs; CTO holdings not itemized in the 2025 proxy. All executive officers as a group held 2,600,323 stock‑based units as of Feb 28, 2025 . |
Employment Terms
| Topic | Economics/terms |
|---|---|
| Employment agreements | 3M has no fixed‑term employment agreements and no standalone change‑of‑control agreements for senior executives (including CEO); no single‑trigger vesting or excise tax gross‑ups . |
| Severance plan (executives) | Executive Severance Plan provides salary continuation and pro‑rata/continued treatment of incentives and equity upon qualifying termination; NEO calibration in 2024: CEO 24 months; other NEOs generally 18 months; specific CTO multiple not disclosed . |
| Change in control | Double‑trigger vesting for equity upon qualifying termination within 18 months of a change in control; no excise tax gross‑up (cutback applies if beneficial) . |
| Non‑compete/protective covenants | Senior executives are required to execute protective covenant agreements (illustrated in CEO and new‑hire inducement awards) . |
| Deferred compensation/pension | Executives may participate in VIP Excess and other nonqualified deferred compensation plans; 3M will cease pension accruals for U.S. non‑union employees after Dec 31, 2028 . |
| Perquisites | Limited perqs; no perq tax gross‑ups other than taxable relocation benefits . |
Performance & Track Record
| Area | Evidence |
|---|---|
| R&D strategy and throughput | Banovetz emphasized reducing product cycle times to under ~12 months and building a “new product engine”; reiterated corporate ~$1B R&D investment envelope and globally integrated technology platforms . |
| Growth markers | At 2025 Investor Day, management committed to 1,000 new product launches over 3 years, $1B sales above macro, and $1B supply chain productivity; executive LTI re‑anchored to cumulative EPS/FCF with TSR overlay . |
| 2024 financial performance backdrop | Companywide AIP payout 128.6% (above target) and 46.1% 1‑yr TSR; 2022 PSA payout 48.7% (below target) on mixed three‑year TSR and fundamentals . |
| Program responsiveness | Following a 45.3% say‑on‑pay approval in 2024, the Compensation & Talent Committee adopted cumulative 3‑yr PSAs and a relative TSR modifier and enhanced adjustment transparency . |
Compensation Committee & Peer Benchmarking
| Topic | Detail |
|---|---|
| Compensation & Talent Committee | Independent directors; 2024 membership included Chair Anne H. Chow; responsibilities cover CEO/exec pay, plan design, risk review, stock ownership policy, and clawback administration . |
| 2024 peer group (for benchmarking) | Abbott, Boeing, Caterpillar, Corning, Deere, DuPont, Eaton, Emerson, GE, Honeywell, ITW, J&J, Johnson Controls, Kimberly‑Clark, Parker‑Hannifin, Procter & Gamble, TE Connectivity . |
| 2025 peer group updates | Removed consumer/health names; added Carrier, Colgate‑Palmolive, Cummins, Dow, Ecolab, General Dynamics, Northrop Grumman, Trane to reflect post‑spin size/footprint . |
Say‑on‑Pay & Shareholder Feedback
| Year | Result | Actions |
|---|---|---|
| 2024 | 45.3% support | Extensive outreach with top holders; shifted PSAs to 3‑year cumulative with relative TSR modifier; expanded disclosure on adjustments and rigor . |
Expertise & Qualifications
- Education: Ph.D., Inorganic Chemistry, Stanford University; B.A., Chemistry, Hamline University .
- Technical leadership: Leads >8,000 scientists across ~50 technology platforms and a globally federated research network .
- Policy/boards: Former PCAST member (2021–2024); board roles at EMERGE and UMN Foundation .
Investment Implications
- Pay‑for‑performance alignment improving: 2025 shift to cumulative 3‑yr PSAs with TSR overlay directly ties senior executive pay (incl. CTO) to sustained EPS/FCF delivery and relative returns, addressing investor concerns after a low 2024 say‑on‑pay outcome .
- Retention framework: Multi‑year vesting of PSAs/RSUs and strict hedging/pledging prohibitions reduce short‑term selling pressure and encourage long‑term alignment; severance/change‑in‑control terms are market‑standard with no tax gross‑ups .
- Execution lever: Banovetz’s mandate (cycle‑time compression, platform leverage, ~$1B R&D) is central to 3M’s target of 1,000 new launches and above‑macro growth; delivery against these markers should be visible in organic growth/ROS and supports the redesigned LTI metrics .
- Risk flags to monitor: Continued scrutiny on performance metric adjustments, litigation and PFAS exit effects in compensation math, and future say‑on‑pay outcomes remain governance watch‑items despite enhanced transparency .
References:
- 3M 2025 Proxy Statement (DEF 14A) .
- 3M Corporate Officers – Banovetz bio .
- 3M Investor Day remarks/transcript (Feb 26, 2025) – CEO commitments and CTO remarks .
- CNBC TEC profile – Banovetz background .