Kevin H. Rhodes
3MAbout Kevin H. Rhodes
Kevin H. Rhodes is Executive Vice President, Chief Legal Affairs Officer, and Corporate Secretary of 3M (elected to current title in 2025; EVP Chief Legal Affairs Officer since 2022). He is 62 years old and previously served as Senior Vice President and Deputy General Counsel (2019–2021) and President & Chief Intellectual Property Counsel (2008–2019) . His annual incentive compensation is tied to company-wide metrics (Local Currency Sales, Operating Income, Operating Cash Flow), which paid at 104% of target for 2023, yielding an approved AIP payout of $816,928 . As a named executive officer in 2023, his compensation mix emphasized equity and performance shares with PSU metrics weighting equally adjusted EPS growth, free cash flow growth, and relative organic sales growth over a 3-year period .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| 3M | Executive Vice President, Chief Legal Affairs Officer, and Secretary | 2025–present | Corporate Secretary signing SEC filings; executive oversight of legal affairs |
| 3M | Executive Vice President, Chief Legal Affairs Officer | 2022–2024 | Led legal strategies including PFAS and Combat Arms Earplugs settlements; supported Health Care spin-off |
| 3M | Senior Vice President and Deputy General Counsel | 2019–2021 | Deputy GC leadership across litigation, compliance, governance |
| 3M | President & Chief Intellectual Property Counsel | 2008–2019 | Led IP portfolio and strategy across 3M Innovative Properties |
External Roles
No external board roles disclosed for Mr. Rhodes in the available filings. Selected leadership activities include executive sponsorship within 3M of the Black Leadership Advancement Coalition and engagement in organizations promoting diversity in the legal profession .
Fixed Compensation
| Item | 2023 |
|---|---|
| Base salary ($) | $872,787 |
| Target Total Cash Compensation (adjusted Apr 1, 2023) ($) | $1,686,060 |
| AIP target payout ($) | $785,508 |
| AIP actual payout ($) | $816,928 |
| Stock awards (grant-date fair value) ($) | $3,809,184 |
| Option awards (grant-date fair value) ($) | — (none granted in 2023) |
| All other compensation ($) | $87,951 |
| Change in pension value & nonqualified deferred comp earnings ($) | $1,121,163 |
| Pension present value (ERIP + nonqualified) ($) | $1,075,762 + $2,871,075 = $3,946,837 |
Notes:
- 2023 compensation actions included a base salary increase effective April 1, 2023 (from $828,947 to $887,400) and long-term incentives totaling $3,809,000 split equally between PSUs and RSUs .
- The 3M program limits perquisites and provides no tax gross-ups other than taxable relocation benefits .
Performance Compensation
Annual Incentive Plan (AIP) – 2023 design and attainment
| Metric | Weighting | Threshold | Target | Maximum | Actual vs. target | Payout % | Weighted payout % |
|---|---|---|---|---|---|---|---|
| Local Currency Sales vs. Plan ($mm) | 50% | $29,527 | $32,095 | $34,663 | 98% | 81.3% | 40.7% |
| Operating Income vs. Plan ($mm) | 30% | $5,198 | $6,115 | $7,032 | 104% | 126.7% | 38.0% |
| Operating Cash Flow Conversion vs. Plan (%) | 20% | 119% | 140% | 161% | 104% | 126.7% | 25.3% |
| Total Business Performance Factor (3M Worldwide for Rhodes) | — | — | — | — | — | — | 104.0% |
| Individual performance multiplier | — | — | — | — | 100% (for Rhodes) | — | — |
| ESG modifier | — | — | — | — | Not applied for 2023 | — | — |
AIP formula and metrics apply on a 12-month period; final payment ranges from 0–200% of weighted-average target . For Rhodes, approved payout was $816,928 (104% of target; individual multiplier 100%) .
Long-Term Incentives (LTI) – 2023 awards and structure
| Award type | Grant date | Target (# / $) | Threshold | Maximum | Vesting/Performance |
|---|---|---|---|---|---|
| Performance Share Award (PSA) | 03/01/2023 | 17,282 shares; $1,904,649 FV | 3,456 shares | 34,564 shares | 3-year performance period (2023–2025); metrics: Adjusted EPS Growth (33.3%), Free Cash Flow Growth (33.3%), Relative Organic Sales Growth (33.3%) |
| Restricted Stock Units (RSU) | 02/07/2023 | 16,292 units; $1,904,535 FV | — | — | 3-year cliff vest; dividend equivalents payable only if earned |
| Stock Options (annual) | — | — | — | — | Rhodes did not receive options in 2023 |
Performance metrics and weightings for PSUs are approved by the Compensation and Talent Committee; payouts capped at 200% of target . RSUs and options have service-based vesting, with options vesting ratably over three years and max 10-year term .
Equity Ownership & Alignment
Beneficial Ownership (as of Feb 29, 2024)
| Holding type | Amount |
|---|---|
| Common stock (direct/indirect) | 39,161 shares |
| Restricted stock units | 23,797 units |
| Deferred stock | 2,284 units |
| Total stock-based holdings | 65,242 |
- Stock ownership guidelines: 3x base salary for Rhodes; status In compliance. Compliance recalculation window gives him until January 1, 2027 to attain any increased requirement due to triennial recalculation .
- Hedging/pledging: Prohibited—no hedging, short sales, standing orders, margin accounts, or pledging 3M securities; pre-clearance required during trading windows .
Outstanding Equity Awards at FYE 2023 (selected)
| Category | Count | Market/Payout value ($) |
|---|---|---|
| Unvested RSUs (footnote 6) | 414 | $52,048 |
| Unvested RSUs (footnote 8) | 8,040 | $975,091 |
| Unvested RSUs (footnote 9) | 15,757 | $1,817,097 |
| Unearned PSUs (footnote 11) | 9,328 | $1,117,401 |
| Unearned PSUs (footnote 12) | 34,564 | $3,934,074 |
Option awards outstanding (selected expirations for Rhodes):
- 25,867 @ $126.72 exp 02/03/2024
- 6,028 @ $165.94 exp 02/02/2025
- 7,019 @ $147.87 exp 02/01/2026
- 6,749 @ $175.76 exp 02/06/2027
- 5,721 @ $233.63 exp 02/05/2028
- 4,783 @ $201.12 exp 02/04/2029
- 3,790 @ $157.24 exp 02/03/2030
- 1,974 exercisable + 988 unexercisable @ $175.02 exp 02/01/2031
Stock vested and option exercises (2023):
- Shares acquired on vesting: 1,418; value realized $148,461
- Option exercises: none
- Deferral: Rhodes elected to defer 50% of shares from 2021 PSUs until after termination
Employment Terms
Severance and Change-in-Control Economics (as of Dec 31, 2023)
| Scenario | Cash severance ($) | PSAs ($) | Unvested RSUs ($) | Unvested options ($) | Life insurance proceeds ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Death | — | 3,084,438 | 2,844,849 | — | 3,000,000 | — | 8,929,287 |
| Disability | — | — | 2,844,849 | — | — | — | 2,844,849 |
| Qualifying termination (no CIC) | 2,529,090 | — | — | — | — | 3,500 | 2,532,590 |
| Qualifying termination (with CIC) | 2,529,090 | 324,724 | 2,844,849 | — | — | 3,500 | 5,702,163 |
Key terms and policies:
- No fixed-term employment or change-in-control agreements; no single-trigger automatic accelerated vesting or excise tax gross-ups for executives .
- Clawback policy covering cash and equity; forfeiture for misconduct; FW Cook advises the Committee; compensation risk assessments found no material adverse risk .
- Hedging/pledging prohibited; discretionary trades pre-cleared .
- Upon termination for other reasons: vested options exercisable for 90 days (not beyond original expiration); all unvested options/RSUs/PSUs forfeited .
Governance and committee:
- Compensation and Talent Committee (independent directors) sets metrics, approves NEO compensation; independent consultant FW Cook supports design and risk assessment .
- Board recommends “FOR” say‑on‑pay; Rhodes signs orders of the Board and proxy materials as Corporate Secretary .
Performance & Track Record
- 2023 highlights include leading legal efforts on PFAS public water systems settlements and Combat Arms Earplugs litigation; reducing litigation/regulatory risk; guiding legal workstreams for Health Care spin-off; Board support on major corporate actions; budget discipline; visible leadership on compliance/ethics; and mentoring/sponsorship for diversity initiatives .
- AIP business performance achieved 104% vs target for 2023 (company-wide metrics applied to Rhodes), reflecting adjusted performance against plan for sales, operating income, and operating cash flow conversion .
Investment Implications
- Alignment: Strong alignment via stock ownership guidelines (3x salary; in compliance), prohibition on hedging/pledging, and heavy weighting to at‑risk equity/PSUs tied to EPS, FCF, and relative growth—reducing misalignment and signaling incentives to improve cash/earnings quality .
- Vesting/Selling Pressure: RSUs follow a 3‑year cliff and PSUs for 2023–2025 may settle; 2023 vesting was modest (1,418 shares), and Rhodes deferred 50% of 2021 PSU shares until post‑termination, moderating near‑term selling pressure .
- Retention/Severance: Executive Severance Plan provides consistent separation economics (e.g., $2.53M cash severance under qualifying termination; $5.70M under CIC scenarios as of 12/31/23), which supports retention without single-trigger accelerations—balanced but not excessive .
- Execution Risk: Legal stewardship of major settlements and spin-off governance indicates capability in de-risking litigation and structural transformation; AIP payout at 104% reflects delivery on adjusted operating and cash metrics amid portfolio changes (PFAS exit, divestitures), which should be monitored as PSUs for 2023–2025 mature .