Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.            )
 
Filed by the Registrant [X]
Filed by a Party other than the Registrant [   ] 
 
Check the appropriate box:
 
[   ]        Preliminary Proxy Statement
[   ]   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X]   Definitive Proxy Statement
[   ]   Definitive Additional Materials
[   ]   Soliciting Material Pursuant to §240.14a-12

  Kimberly-Clark Corporation  
  (Name of Registrant as Specified In Its Charter)  
 
       
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 

Payment of Filing Fee (Check the appropriate box):
[X]        No fee required.
[   ]
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
    1)         Title of each class of securities to which transaction applies:
         
2) Aggregate number of securities to which transaction applies:
 
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
4) Proposed maximum aggregate value of transaction:
 
5) Total fee paid:
 
[   ]
 
Fee paid previously with preliminary materials.
 
[   ]
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
    1)   Amount Previously Paid:
         
  2)   Form, Schedule or Registration Statement No.:
         
  3)   Filing Party:
         
  4)   Date Filed:
 


Table of Contents



















Proxy Statement
For 2021 Annual Meeting of Stockholders




















Table of Contents

 

Preliminary Proxy Statement — Subject to Completion

March 8, 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 Thursday, April 29, 2021, at 9:00 a.m. 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,


2021 Proxy Statement


Table of Contents

 

Notice of
Annual Meeting
of Stockholders

TO BE HELD
April 29, 2021

VIA
live webcast at
www.meetingcenter.
io/277152589

The Annual Meeting of Stockholders of Kimberly-Clark Corporation will be held virtually on Thursday, April 29, 2021, 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 2021;
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 1, 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 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 envelope provided.

To attend the meeting, please register by following the instructions on page 11.

By Order of the Board of Directors. March 8, 2021

Grant B. McGee
Senior Deputy General Counsel and Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on April 29, 2021:The Proxy Statement and proxy card, as well as our Annual Report on Form 10-K for the year ended December 31, 2020, are available at http://www.kimberly-clark.com/investors.


2021 Proxy Statement

1


Table of Contents

 

Table of Contents

     5      Proxy Summary
 
9 Information About Our Annual Meeting
9 How We Provide Proxy Materials
9 Who May Vote
9 How To Vote
10 How to Revoke or Change Your Vote
10 Votes Required
10 How Abstentions will be Counted
10 Effect of Not Instructing Your Broker
11 Direct Stock Purchase and Dividend Reinvestment Plan
11 Employee Benefit Plans
11 Attending the Virtual Annual Meeting; Preregistration
12 Costs of Solicitation
 
13 Corporate Governance
13 Board Leadership Structure
14 Director Independence
14 Board Meetings
15 Board Committees
19 Compensation Committee Interlocks and Insider Participation
19 Stockholder Rights
20 Communicating With Directors; Stockholder Engagement Policy
20 Investor Outreach
20 Our Approach to Sustainability
25 Other Corporate Governance Policies and Practices
 
28 Proposal 1. Election of Directors
28 Process for Director Elections
28 Process and Criteria for Nominating Directors
29 Committee Review of Attributes of Current Directors
29 Diversity of Directors
30 The Nominees
36 Director Compensation
37 2020 Outside Director Compensation
 
40 Proposal 2. Ratification of Auditor
41 Principal Accounting Firm Fees
41 Audit Committee Approval of Audit and Non-Audit Services
42 Audit Committee Report

2

2021 Proxy Statement


Table of Contents

 

43 Proposal 3. Advisory Vote to Approve Named Executive Officer Compensation
           
44 Compensation Discussion and Analysis
44 2020 Compensation Highlights
47 Executive Compensation Objectives and Policies
48 Components of Our Executive Compensation Program
49 Setting Annual Compensation
51 Executive Compensation for 2020
58 Benefits and Other Compensation
59 Executive Compensation for 2021
62 Additional Information About Our Compensation Practices
65 Management Development and Compensation Committee Report
66 Analysis of Compensation-Related Risks
 
67 Compensation Tables
67 Summary Compensation
71 Grants of Plan-Based Awards
72 Discussion of Summary Compensation and Plan-Based Awards Tables
73 Outstanding Equity Awards
75 Option Exercises and Stock Vested
76 Pension Benefits
78 Nonqualified Deferred Compensation
80 Potential Payments on Termination or Change of Control
86 Equity Compensation Plan Information
 
87 Proposal 4. Approval of 2021 Equity Participation Plan
89 Purpose
90 Plan Term
90 Administration
90 Eligibility
90 Shares Authorized; Share and Award Limitations
91 Awards
92 Performance Goals
93 Minimum Vesting Requirement
93 Adjustments
93 Re-pricings and Cash Buyouts Prohibited
93 Amendment of the 2021 Plan; Modification of Awards
94 Effect of Change of Control
94 Non-Transferability of Awards
95 Forfeiture and Recoupment
95 Section 409A of the Code
95 Tax Withholding

2021 Proxy Statement 3


Table of Contents

 

95 Use of Proceeds
95 U.S. Federal Tax Consequences
97 New Plan Benefits
97 Fair Market Value of the Common Stock
             
98 Proposal 5. Approval of 2021 Outside Directors’ Compensation Plan
98 Plan Term
98 Shares to be Granted
99 Adjustments
99 Annual Individual Limit
99 Awards
100 Administration
101 Re-pricings and Cash Buyouts Prohibited
101 Amendment; Termination
101 Section 409A of the Code
101 U.S. Federal Tax Consequences
103 New Plan Benefits
103 Fair Market Value of the Common Stock
 
104 Proposal 6. Reduce Ownership Threshold Required to Call a Special Meeting of Stockholders
 
106 Proposal 7. Stockholder Proposal Regarding Right to Act by Written Consent
 
109 Other Information
109 Security Ownership Information
111 Transactions with Related Persons
112 CEO Pay Ratio Disclosure
112 Stockholders Sharing the Same Household
113 Stockholder Proposals for Inclusion in Next Year’s Proxy Statement
113 Stockholder Director Nominees for Inclusion in Next Year’s Proxy Statement
113 Stockholder Director Nominees Not Included in Next Year’s Proxy Statement
113 Other Stockholder Proposals Not Included in Next Year’s Proxy Statement
 
114 Other Matters to be Presented at the Annual Meeting
 
115 Appendix A
 
132 Appendix B
 
141 Appendix C

4 2021 Proxy Statement


Table of Contents

 

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 2021 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

2020 Performance and Compensation Highlights

The Management Development and Compensation Committee of our Board concluded that Kimberly-Clark’s management delivered financial performance in 2020 that was above target from an overall perspective, as reflected in the financial metrics of our annual incentive program.

Performance Measures       2020 Results       2020 Target
Adjusted net sales $19.07 billion $18.62 billion
Adjusted EPS $7.73 $7.23
Adjusted EPS is adjusted earnings per share. For details on how these measures are adjusted, see “Compensation Discussion and Analysis -Executive Compensation for 2020, 2020 Performance Goals, Performance Assessments and Payouts.”


Based on this performance, the Committee approved annual cash incentives for 2020 above the target amount, including an annual incentive payout for our Chief Executive Officer of 158 percent.

2021 Proxy Statement 5


Table of Contents

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 seven 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
Corel Corporation
2016
Michael D. White Former Chairman, President and Chief Executive Officer
DIRECTV
2015

6 2021 Proxy Statement


Table of Contents

Proxy Summary

DIRECTOR NOMINEE EXPERIENCE IN PRIORITY AREAS GENDER DIVERSITY

 
 
      ETHNIC DIVERSITY
 

Governance Highlights. The Corporate Governance section beginning on page 12 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

2021 Proxy Statement 7


Table of Contents

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 Audit Committee MDC Committee NCG Committee Executive
Committee
Michael D. Hsu
Chairman of the Board and CEO
Kimberly-Clark Corporation
John W. Culver
Group President of International,
Channel Development and
Global Coffee & Tea
Starbucks Corporation
Robert W. Decherd
Chairman, President and CEO
A.H. Belo Corporation
Chair
Mae C. Jemison, M.D.
President
The Jemison Group
S.Todd Maclin
Retired Chairman, Chase Commercial
and Consumer Banking
JPMorgan Chase & Co.
Sherilyn S. McCoy
Former CEO
Avon Products, Inc.
Chair
Christa S. Quarles
CEO
Corel Corporation
Ian C. Read
Former Chairman and CEO
Pfizer, Inc.
Dunia A. Shive
Former CEO and President
Belo Corp.
Chair
Mark T. Smucker
President and CEO
The J.M. Smucker Company
Michael D. White
Former Chairman, President and CEO
DIRECTV
Chair

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


Table of Contents

 

Information About Our
Annual Meeting

 
On behalf of the Board of Directors of Kimberly-Clark Corporation, we are soliciting your proxy for use at the 2021 Annual Meeting of Stockholders, to be held virtually on April 29, 2021, at 9:00 a.m. Central Time.


How We Provide Proxy Materials
We began providing our proxy statement and form of proxy to stockholders on March 8, 2021.

As Securities and Exchange Commission (“SEC”) rules permit, we are making our proxy statement and our annual report available to many of our stockholders via the Internet rather than by mail. This reduces printing and delivery costs and supports our sustainability efforts. You may have received in the mail a “Notice of Electronic Availability” explaining how to access this proxy statement and our annual report on the Internet and how to vote online. If you received this Notice but would like to receive a paper copy of the proxy materials, you should follow the instructions contained in the notice for requesting these materials.


Who May Vote
If you were a stockholder of record at the close of business on the record date of March 1, 2021, you are eligible to vote at the meeting. Each share that you own entitles you to one vote.

As of the record date, 338,006,715 shares of our common stock were outstanding.


How To Vote
You may vote by attending the meeting, by using the Internet or telephone, or (if you received printed proxy materials) by completing and returning a proxy form by mail. If telephone or Internet voting is available to you, see the instructions on the notice of electronic availability or the proxy form and have the notice or proxy form available when you access the Internet website or place your telephone call. To vote your proxy by mail, mark your vote on the proxy form, then follow the instructions on the card.

Please note that if you received a notice of electronic availability as described above, you cannot vote your shares by filling out and returning the notice. Instead, you should follow the instructions contained in the notice on how to vote by using the Internet or telephone.

The named proxies will vote your shares according to your directions. The voting results will be certified by independent Inspectors of Election.

If you sign and return your proxy form, or if you vote using the Internet or by telephone, but you do not specify how you want to vote your shares, the named proxies will vote your shares as follows:

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


Table of Contents

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


How To
Revoke or
Change
Your Vote
There are several ways to revoke or change your vote:

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


Votes
Required
There must be a quorum to conduct business at the Annual Meeting, which is established by having a majority of the shares of our common stock present in person or represented by proxy.

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.

Other Proposals or Matters. Approval of the proposed amendment to the Corporation’s Amended and Restated Certificate of Incorporation described in Proposal 6 requires the affirmative vote of a majority of shares outstanding as of the record date. Approval of all other matters requires the affirmative vote of a majority of shares that are present at the Annual Meeting in person or by proxy and are entitled to vote on the proposal or matter.


How
Abstentions
will be
Counted

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


Effect of Not
Instructing
Your Broker

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.

Non-Routine Matters. Without instructions, your broker cannot vote your shares on non-routine matters, resulting in what are known as “broker non-votes.” Broker non-votes will not be considered present or entitled to vote on non-routine matters and will also not be counted for the purpose of determining the number of votes cast on these proposals.


10 2021 Proxy Statement


Table of Contents

Information About Our Annual Meeting Attending the Virtual Annual Meeting; Preregistration

Direct Stock Purchase and Dividend Reinvestment Plan

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.



Employee Benefit Plans

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.



Attending the Virtual Annual Meeting; Preregistration

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, as described below. Alternatively, you can join as a “Guest” in listen-only mode.

If you hold shares through our transfer agent, Computershare, you do not need to preregister. To join the meeting as a “Stockholder,” use the annual meeting control number listed in the shaded bar on the proxy card or notice you previously received or in the email you received with your voting instructions.
If you hold your shares through a broker, bank or other intermediary, and want to join the meeting as a “Stockholder” you must follow one of the two processes below.

Registration in Advance. You may register in advance by 4:00 p.m. Central Time on April 23, 2021. To preregister, 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. In order to obtain a legal proxy, you should as soon as possible (1) log into the voting site listed on the voting instruction form you received and click on “Vote in person at the meeting” or (2) request one through your bank or broker. After you transmit the image of the legal proxy, you will receive an annual meeting control number from our virtual meeting provider to use when joining the meeting as a “Stockholder.” Note that once you request a legal proxy you will need the new virtual meeting control number to vote your shares at the meeting and your original number referenced below in “Registration at the Meeting” will no longer enable you to vote.

Registration at the Meeting. This year our virtual meeting platform provides a new service where you should be able to register at the time of the meeting as a “Stockholder” by using the annual meeting control number located in the voting instruction form or email you received. Given that this is the first year of the service, we urge street name (i.e., through a broker, bank or other intermediary) holders wanting to join as a “Stockholder” to consider using the preregistration process discussed above to mitigate the risk of technical problems. If we become aware of technical problems with this service a reasonable time before the meeting, we intend to issue a press release with any updated information on available options and registration instructions.

In any event, please go to www.meetingcenter.io/277152589 for more information.

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 register as a holder in street name as described above.


2021 Proxy Statement 11


Table of Contents

Information About Our Annual Meeting Costs of Solicitation
 

Technical Assistance and Questions. Call Computershare at (888) 724-2416 (U.S. toll-free) or +1-781-575-2748 (outside of U.S.) for technical assistance for the virtual meeting. For additional shareholder support, call Stockholder Services by telephone at (972) 281-5317 or by e-mail at stockholders@kcc.com.


Costs of Solicitation

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.



12 2021 Proxy Statement


Table of Contents

  

Corporate Governance

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.


Board Leadership Structure

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


2021 Proxy Statement 13


Table of Contents

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


Director Independence

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.


Board Meetings

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.


Board Committees

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.


14 2021 Proxy Statement


Table of Contents

Corporate Governance Board Committees

Audit Committee

Chair: Dunia A. Shive
Other members: John W. Culver, S. Todd Maclin, and Mark T. Smucker

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.”


2021 Proxy Statement 15


Table of Contents

Corporate Governance Board Committees

Management Development and Compensation Committee

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 Chief Executive Officer and other key officer positions, in conjunction with our Board
   
  key organizational effectiveness and engagement policies
   
Reviewing diversity and inclusion programs and related metrics
 
Annually reviewing our compensation policies and practices for the purpose of mitigating risks arising from these policies and practices that could reasonably have a material adverse effect

Roles of the Committee and the CEO in Compensation Decisions
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.

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.

For additional information on the Committee’s processes and procedures for determining executive compensation, and for a detailed discussion of our compensation policies, see “Compensation Discussion and Analysis.”


16 2021 Proxy Statement


Table of Contents

Corporate Governance Board Committees

Use of Compensation Consultants
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.

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:

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

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:

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
   
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 matters



2021 Proxy Statement 17


Table of Contents

Corporate Governance Board Committees

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
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.”

Nominating and Corporate Governance Committee

Chair: Robert W. Decherd

Other Members: 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 four times in 2020.

The Committee’s principal functions, as specified in its charter, include the following:

Maintaining and reviewing a Board succession plan
   
Overseeing the process for Board nominations
   
Advising the Board on:
   

Board organization, membership, function, performance and compensation

   
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
   
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

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.”



18 2021 Proxy Statement


Table of Contents

Corporate Governance Stockholder Rights

Executive Committee

Chair: Michael D. White (Lead Independent Director)

Other Members: Robert W. Decherd, Michael D. Hsu, Sherilyn S. McCoy and Dunia A. Shive

The Committee met one time in 2020 and acted one time by unanimous written consent.

The Committee’s principal function is to exercise, when necessary between Board meetings, the Board’s powers to direct our business and affairs.


Compensation
Committee
Interlocks
and Insider
Participation

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.



Stockholder
Rights

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. In Proposal 6 of this 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.

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.



2021 Proxy Statement 19


Table of Contents

Corporate Governance Our Approach to Sustainability

Communicating
with Directors;
Stockholder
Engagement
Policy

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.

Under our stockholder engagement policy, set forth in our Corporate Governance Policies, stockholders who wish to meet directly with members of our Board may send a meeting request to our Lead Director who will consider the request in consultation with the Corporate Secretary. Requests should include information about the requesting party (including the number of shares held), the reason for requesting the meeting and the topics to be discussed.


Investor
Outreach

Each year we meet with investors on corporate governance matters, including executive compensation, board composition and refreshment and corporate social responsibility and sustainability. This process ensures that management and the Board understand and consider the issues that matter most to our stockholders and enables the company to address them effectively. During 2020, we offered meetings to stockholders representing approximately 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.


Our
Approach to
Sustainability

Everything we do at Kimberly-Clark is connected to our vision to lead the world in essentials for a better life. Our teams around the world are working to provide the best experiences for our consumers, customers and the communities where we work and live. We are committed to doing our part to safeguard natural systems, tackle inequality, and lift up people around the world.

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 proportionate to the challenges and opportunities that lie ahead. Our new commitment is to improve the lives and well-being of one billion people in underserved and vulnerable communities around the world, with the smallest environmental footprint.


20 2021 Proxy Statement


Table of Contents

Corporate Governance Our Approach to Sustainability

 

Priority What We’re Doing 2030 Goal

Social Impact

Provide product innovation and social and community program investments that increase access to sanitation, help children thrive and empower women and girls.

Advance the well-being of 1 billion people in vulnerable and underserved communities.

Plastics
Footprint

Deliver solutions that incorporate more renewable materials that can be regenerated after use.

Reduce plastics footprint by 50%.

Forests
Footprint

Address the climate and biodiversity crises by reducing reliance on fiber from natural forests.

Reduce Natural Forest Fiber footprint by 50%.

Carbon
Footprint

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
Footprint

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 program provides cost savings, enables a more resilient supply chain for the long-term, grows brand equity and provides opportunities for more meaningful employee and consumer engagement.

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 inclusion and diversity 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.

Our Board oversees risk management, including risks related to environmental and social issues. The Board is focused on our long-term business strategy, including fostering sustainability-driven innovations, and incorporates our sustainability risks and opportunities into its overall strategic decision-making. Sustainability risk areas for our company include shifting consumer preferences toward sustainable choices, single-use plastics, supply chain risks related to water security and deforestation and the cost of commodities/natural resources required to make and market our products.


2021 Proxy Statement 21


Table of Contents

Corporate Governance Our Approach to Sustainability

 

Recent Results. In 2020, we published our progress four years into our Sustainability 2022 program through 2019, which included significant progress against our goals. Highlights include:

Celebrated five years of the “Toilets Change Lives” program, which has improved access to sanitation for nearly 4 million people in need
Expanded 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 of 35 percent (vs. 2005 baseline)
Reduced use of fiber from natural forest landscapes by 31 percent (vs. 2011 baseline) and our water use at our facilities in high-stress regions by 29 percent (vs. 2015 baseline)
Launched new waste-reduction initiatives that helped us divert 96 percent of our manufacturing waste and 26,300 metric tons of post-consumer product and packaging waste to value-adding alternatives

Our climate goals were accelerated over the past several years through a combination of energy conservation and alternative energy projects, along with manufacturing footprint optimization. In 2019, the company reduced its Scope 1 and Scope 2 greenhouse gas emissions by more than 400,000 MTCO2e, a 35% reduction since 2005.

In 2020, 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 assess climate risk within our supply chain in order to further identify material issues that may arise due to a changing climate.

Sustainability Reporting. Each year, Kimberly-Clark publishes a 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/esg. We continue to monitor best practices on reporting frameworks and in 2020 we added sector disclosures aligned with the Sustainability Accounting Standards Board (SASB) and three of the four climate specific disclosures of the Task Force on Climate-Related Financial Disclosures (TCFD). For more information, see the Addendum to our Global Sustainability Report (under “2019 Data and Disclosures”).

Stakeholder Engagement and Recognition. In setting our sustainability priorities and implementing our program, 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. 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.

External partnerships also play an important role in our sustainability results. For example, we are a signatory to the U.K. and U.S. Plastics Pacts and we serve as members of the steering committee for Ocean Conservancy’s Trash Free Seas Alliance. In addition, we have strong relationships with World Wildlife Fund (WWF) and the Forest Stewardship Council® (FSC®) and we use the FSC partnership to build consumer awareness of responsible forestry practices.


22 2021 Proxy Statement


Table of Contents

Corporate Governance Our Approach to Sustainability

 

Our sustainability program continues to receive strong recognition from our external stakeholders. 2019 highlights included:

CDP (formerly Carbon Disclosure Project) “A-” ranking for Climate Change and Forests, and B in Water Security and Supply Chain
FTSE4Good Index Series - 17th consecutive year - for excellence in 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 (7th consecutive year) for freight supply chain energy and environmental performance
Corporate Responsibility Magazine’s (3BL) 100 Best Corporate Citizens

Living our Values in 2020
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.

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 46,000 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.

To help those most threatened by the virus, Kimberly-Clark donated $2.5 million to UNICEF and its programs focused on preventing the spread of the virus, including providing hygiene and medical kits to schools and health facilities, as well as efforts to increase children’s access to health, education and social services during the pandemic. We also donated $2.5 million to the International Federation of Red Cross and Red Crescent Societies and the American Red Cross, a global humanitarian network of nearly 14 million volunteers, to deliver its lifesaving mission to help prevent the spread of this disease, alleviate human suffering through basic humanitarian aid, and deliver lifesaving health messages amidst this global pandemic.


2021 Proxy Statement 23


Table of Contents

Corporate Governance Our Approach to Sustainability

 

Governance during COVID-19. Throughout 2020, governance and risk management played an important role as we responded to COVID-19. Our operations faced supply chain disruptions, volatility in consumer demand, financial market disruptions, as well as significant uncertainty more broadly. As we confronted these challenges, we implemented global and regional governance teams to oversee daily decision-making on key operational issues and to ensure our actions remained consistent with our priorities. Our Board played an integral role in overseeing our response to COVID-19, including ensuring our priorities aligned to our long-term strategy and values, and regularly overseeing our management of key risks throughout the pandemic.

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 objectives.

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
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.

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:

Create Community: Develop a Kimberly-Clark community whose deepened understanding and daily actions drive inclusion, embrace diversity, and empower authenticity.
Leverage 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 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 our communities around the world – to make lives better today and tomorrow.

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.


24 2021 Proxy Statement


Table of Contents

Corporate Governance Other Corporate Governance Policies and Practices

 

Our Workforce and Transparency. As part of our commitment to building a diverse workforce, we remain focused on making progress on goals for women in senior roles globally and ethnic minorities in senior roles in the United States. This remains an element of our annual incentive plan for our leadership as described further in “Compensation Discussion and Analysis.” We continue to provide transparent updates on our progress, disclosing our results in our Sustainability report and included below. We intend to disclose our 2020 EEO-1 data on the Sustainability section of our website after our submission of the corresponding report to the U.S. Equal Employment Opportunity Commission.

Full-time Employee
Diversity
2010 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%


Other
Corporate
Governance
Policies and
Practices
Corporate Governance Policies. The Board of Directors has adopted Corporate Governance Policies which guide Kimberly-Clark and the Board on matters of corporate governance, including: director responsibilities, Board committees and their charters, director independence, director compensation, performance assessments of the Board and individual directors, Board succession planning, confidentiality and conflicts of interest, director orientation and education, director access to management, Board access to outside financial, business and legal advisors, management development and succession planning, and Board interaction with stockholders. Our Corporate Governance Policies provide for retirement at age 72. The Board monitors emerging issues and amends these policies from time to time as rules and regulations change and governance practices develop. To see the policies, go to the Investors section of our website at www.kimberly-clark.com.

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 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.


2021 Proxy Statement 25


Table of Contents

Corporate Governance Other Corporate Governance Policies and Practices

 

Board and Management Roles in Risk Oversight. The Board is responsible for providing risk oversight with respect to our operations. In connection with this oversight, the Board particularly focuses on our strategic and operational risks, as well as related risk mitigation. In addition, the Board reviews and oversees management’s response to key risks facing Kimberly-Clark.

The Board’s committees review particular risk areas to assist the Board in its overall risk oversight of Kimberly-Clark:

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 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.

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:

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

We maintain an information security insurance policy that provides coverage for security breaches.


26 2021 Proxy Statement


Table of Contents

Corporate Governance Other Corporate Governance Policies and Practices

 

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:

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.


2021 Proxy Statement 27


Table of Contents

Proposal 1.
Election of Directors

As of the date of this proxy statement, the Board of Directors consists of twelve 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 2022 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.

Abelardo E. Bru is not standing for re-election as he has reached our mandatory retirement age. Mr. Bru will continue to serve as a director until the Annual Meeting. We would like to thank Mr. Bru for his many years of service and substantial contributions to the Board, Kimberly-Clark and our stockholders.

Given the independent status of the nominees, if all nominees are elected at the Annual Meeting, ten of the eleven directors on our Board will be Independent Directors.


Process for
Director
Elections
Our Certificate of Incorporation provides that all of our directors must be elected annually. Our By-Laws provide that, in uncontested elections, directors must be elected by a majority of votes cast rather than by a plurality. If any incumbent director does not receive a majority of votes, he or she is required to tender his or her resignation for consideration by the Board.


Process and
Criteria for
Nominating
Directors
The Board of Directors is responsible for approving candidates for Board membership. The Board has adopted a Board succession planning policy which formalizes its commitment to refreshing and maintaining a group of directors with diverse perspectives and capabilities. The Board believes that adding fresh perspectives is critical, but also values the institutional knowledge and experience of long-serving directors. The Board is committed to balancing these factors through our succession plan, retirement policy and director evaluation process.

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 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.

The Committee may receive recommendations for Board candidates from various sources, including our directors, management and stockholders. 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 firm


28 2021 Proxy Statement


Table of Contents

Proposal 1. Election of Directors Diversity of Directors

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.”

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

           
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
           


Committee
Review of
Attributes
of Current
Directors
The Nominating and Corporate Governance Committee has reviewed the background of each of our director nominees in light of the experience attributes described above. The Committee has determined that each nominee possesses a sufficient mix of the experience attributes and that the nominees collectively possess the necessary experience to effectively guide our company.

For details about each nominee’s specific experience attributes, see “The Nominees” below.



Diversity of
Directors
As noted above, the Nominating and Corporate Governance Committee believes that diversity of backgrounds and viewpoints is a key attribute to include in the boardroom. As a result, the Committee seeks to have a diverse Board that is representative of our customer, consumer, employee and stockholder base. While the Committee carefully considers this diversity when identifying potential director candidates, the Committee has not established a formal policy regarding diversity. Our Board currently includes individuals of differing ages, races and genders.


2021 Proxy Statement 29


Table of Contents

Proposal 1. Election of Directors The Nominees

The Nominees
 


     

Director since
September 2020
Age 60

   

John W. Culver

Group President of International, Channel Development and Global Coffee & Tea, Starbucks Corporation

Mr. Culver joined Starbucks Corporation in 2002 and has served as Group President, International, Channel Development and Global Coffee & Tea since 2018. Prior to 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. Culver serves as a director of The Mission Continues.

Other public company boards served on since 2015: Columbia Sportswear Company (since January 2021).

Experience attributes: Mr. Culver satisfies the financial literacy requirements of the NYSE, has leadership experience as a senior executive, has knowledge about our industries, has international experience and experience with branded consumer goods, and has marketing experience.

     

Director since 1996
Age 69

   

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 Corporation.

Experience attributes: Mr. Decherd satisfies the financial literacy requirements of the 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.

30 2021 Proxy Statement


Table of Contents

Proposal 1. Election of Directors The Nominees

     

Director since 2017
Age 56

   

Michael D. Hsu

Chairman of the Board and Chief Executive Officer

Mr. Hsu has served as Chairman of the Board since January 2020 and as Chief Executive Officer since 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.

Other public company boards served on since 2015: Texas Instruments Incorporated (since April 2020).

Experience attributes: Mr. Hsu satisfies the financial literacy requirements of the NYSE, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, has knowledge about our industries, has international experience and experience with branded consumer packaged goods, and has marketing experience.

     

Director since 2002
Age 64

   

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).

Experience attributes: Dr. Jemison satisfies the financial literacy requirements of the NYSE, has international experience and leadership experience of entrepreneurial start-up enterprises and non-profit organizations, provides diversity of background and viewpoint, and has compensation, governance and public company board experience.

2021 Proxy Statement 31


Table of Contents

Proposal 1. Election of Directors The Nominees

     

Director since
May 2019
Age 64

   

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 predessor banks, where he rose to Chairman, Chase Commercial and Consumer Banking in 2013, and served on the company’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’s Council, on the Board of Visitors of UT Southwestern Health System, on the Steering Committee for the O’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’ 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’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 a Board Advisor for BancAffiliated, Inc.

Other public company boards served on since 2015: Trinity Industries, Inc. (since September 2020).

Experience attributes: Mr. Maclin has been determined by our Board to qualify as an “audit committee financial expert” under the SEC’s rules and regulations and has a banking and finance background, has leadership experience as a senior executive, and provides diversity of background and viewpoint.

     

Director since 2018
Age 62

   

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).

Ms. McCoy currently serves on five public company boards, including Kimberly-Clark’s. Ms. McCoy has expressed her intention to reduce her participation to not more than four boards by the time of the 2022 Annual Meeting of Stockholders.

Experience attributes: Ms. McCoy satisfies the financial literacy requirements of the NYSE, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, has knowledge about our industries, has international experience and experience with branded consumer packaged goods, and has marketing, compensation, governance and public company board experience.

32 2021 Proxy Statement


Table of Contents

Proposal 1. Election of Directors The Nominees

     

Director since 2016
Age 47

   

Christa S. Quarles

Chief Executive Officer, Corel Corporation

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, 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.

Other public company boards served on since 2015: Affirm Holdings, Inc. (since January 2021).

Experience attributes: Ms. Quarles has been determined by our Board to be an “audit committee financial expert” under the SEC’s rules and regulations and has a background in finance, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, and has marketing, digital marketing and e-commerce experience.

     

Director since 2007
Age 67

   

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).

Experience attributes: Mr. Read satisfies the financial literacy requirements of the NYSE and has a background in finance, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, has international experience, and has marketing, compensation, governance and public company board experience.

2021 Proxy Statement 33


Table of Contents

Proposal 1. Election of Directors The Nominees

     

Director since
May 2019
Age 60

   

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 2020) and Trinity Industries, Inc.

Experience attributes: Ms. Shive has been determined by our Board to qualify as an “audit committee financial expert” under the SEC’s rules and regulations and has an accounting and finance background, has leadership experience as a chief executive officer, provides diversity of background and viewpoint, and has marketing, compensation, governance and public company board experience.

     

Director since
September 2019
Age 51

   

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 Company.

Experience attributes: Mr. Smucker has been determined by our Board to qualify as an “audit committee financial expert” under the SEC’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.

34 2021 Proxy Statement


Table of Contents

Proposal 1. Election of Directors The Nominees

     

Director since 2015
Age 69

   

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 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.

Other public company boards served on since 2015: Bank of America Corporation (since June 2016), DIRECTV (through July 2015) and Whirlpool Corporation.

Experience attributes: Mr. White satisfies the financial literacy requirements of the 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 vote FOR the election of each of the eleven nominees for director.

2021 Proxy Statement 35


Table of Contents

Proposal 1. Election of Directors Director Compensation

Director
Compensation
Directors who are not officers or employees of Kimberly-Clark or any of our subsidiaries, affiliates or equity companies are “Outside Directors” for compensation purposes and are compensated for their services under our 2011 Outside Directors’ Compensation Plan. All Independent Directors currently on our Board are Outside Directors and are compensated under this Plan.

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 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 2020, and the Board agreed with the Committee’s recommendation.

The table below shows how we structured Outside Director compensation in 2020:

Board Members      

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

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
Alignment
Restricted share units are not paid out until retirement or other termination of Board service

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.

Restricted share units are not shares of our common stock. Rather, restricted share units represent the right to receive a pre-determined number of shares of our common stock within 90 days following a “restricted period” that begins on the date of grant and expires on the date the Outside Director retires from or otherwise terminates service on the Board. In this way, they align the director’s interests with the interests of our stockholders. Outside Directors may not dispose of the units or use them in a pledge or similar transaction. Outside Directors also receive additional restricted share units equivalent in value to the dividends that would have been paid to them if the restricted share units granted to them were shares of our common stock.


36 2021 Proxy Statement


Table of Contents

Proposal 1. Election of Directors 2020 Outside Director Compensation

2020 Outside
Director
Compensation
The following table shows the compensation paid to each Outside Director for his or her service in 2020.

Name(1) Fees Earned or
Paid in Cash($)
Stock
Awards
($)(2)(3)(4)
All Other
Compensation
($)(5)
Total($)(6)
Abelardo E. Bru 100,000 200,000 300,000
John W. Culver 50,000 60,000 110,000
Robert W. Decherd 100,000 180,000 10,000 290,000
Mae C. Jemison, M.D. 100,000 180,000 280,000
Nancy J. Karch 50,000 200,000 10,000 260,000
S. Todd Maclin 100,000 180,000 280,000
Sherilyn S. McCoy 100,000 180,000 280,000
Christa S. Quarles 100,000 180,000 280,000
Ian C. Read 100,000 210,000 310,000
Marc J. Shapiro 50,000 180,000 230,000
Dunia A. Shive 100,000 180,000 280,000
Mark T. Smucker 100,000 180,000 280,000
Michael D. White 100,000 200,000 300,000

(1) Ms. Karch and Mr. Shapiro served as directors until their retirement on April 29, 2020 and received fees for two quarters. Mr. Culver joined the Board on September 16, 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 6 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 2020 for the assumptions used in valuing these restricted share units.
 
(3) Restricted share unit awards were granted to the Outside Directors on January 2, 2020, except for Mr. Culver who joined the Board and received a grant on September 16, 2020. The number of restricted share units granted is set forth below:
Name Restricted Share Unit Grants in 2020(#)
Abelardo E. Bru 1,472
John W. Culver 406
Robert W. Decherd 1,325
Mae C. Jemison, M.D. 1,325
Nancy J. Karch 1,472
S. Todd Maclin 1,325
Sherilyn S. McCoy 1,325
Christa S. Quarles 1,325
Ian C. Read 1,546
Marc J. Shapiro 1,325
Dunia A. Shive 1,325
Mark T. Smucker 1,325
Michael D. White 1,472


2021 Proxy Statement 37


Table of Contents

Proposal 1. Election of Directors 2020 Outside Director Compensation

(4) As of December 31, 2020, Outside Directors had the following stock awards outstanding:

      Name Restricted Stock(#) Restricted Share Units(#)
  Abelardo E. Bru 39,794
  John W. Culver 406
  Robert W. Decherd 3,000 49,845
  Mae C. Jemison, M.D. 46,086
  Nancy J. Karch
  S. Todd Maclin 2,342
  Sherilyn S. McCoy 3,603
  Christa S. Quarles 7,319
  Ian C. Read 33,395
  Marc J. Shapiro
  Dunia A. Shive 2,342
  Mark T. Smucker 1,820
  Michael D. White 9,147

(5) Reflects charitable matching gifts paid in 2020 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. Not included in this column is the value of retirement gifts to each of Ms. Karch and Mr. 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 Ms. Karch and Mr. 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 Ms. Karch and Mr. Shapiro. 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 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 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 2020 were as follows:

      Name Dividends Credited on
Restricted Stock($)
Number of Restricted Share
Units Credited in 2020(#)
Grant Date Fair Value of
Restricted Share Units
Credited($)
  Abelardo E. Bru 1,183.35 164,100
  John W. Culver
  Robert W. Decherd 12,720 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 263.47 36,562


38 2021 Proxy Statement


Table of Contents

Proposal 1. Election of Directors 2020 Outside Director Compensation

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 2020.

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 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 2021.


2021 Proxy Statement 39


Table of Contents

Proposal 2.
Ratification of Auditor

 

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 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 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 2020 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 2021 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 2021 independent auditor
a review and approval of Deloitte’s proposed estimated fees for 2021
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 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.


The Board of Directors unanimously recommends a vote FOR ratification of Deloitte’s selection as Kimberly-Clark’s auditor for 2021.

40 2021 Proxy Statement


Table of Contents

Proposal 2. Ratification of Auditor Audit Committee Approval of Audit and Non-Audit Services

Principal Accounting Firm Fees
Our aggregate fees to Deloitte (excluding value added taxes) with respect to the fiscal years ended December 31, 2020 and 2019, were as follows (dollars in millions):

2020($) 2019($)
Audit Fees(1) 11.1 11.5
Audit-Related Fees(2) 0.6 0.3
Tax Fees(3) 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, 2020 and 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 2020 and 2019. Approximately $0.1 million was for tax compliance/preparation fees in each of 2020 and 2019.


Audit Committee Approval of Audit and Non-Audit Services
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 non-audit services to be performed by Deloitte, reviews a report summarizing year-to-date approved non-audit services provided by Deloitte, and reviews an updated projection of the year’s estimated non-audit service fees. To ensure prompt handling of unexpected matters, the Audit Committee has delegated to the Chair 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. The Audit Committee then reviews the Chair’s approval decisions each quarter.

All Deloitte services and fees in 2020 and 2019 were pre-approved by the Audit Committee or the Audit Committee Chair.


2021 Proxy Statement 41


Table of Contents

Proposal 2. Ratification of Auditor Audit Committee Approval of Audit and Non-Audit Services
 

Audit Committee Report

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, 2020, with management and the auditor. The Audit Committee also reviewed management’s assessment of the effectiveness of internal controls as of December 31, 2020, and discussed the auditor’s examination of the effectiveness of Kimberly-Clark’s internal control over financial reporting.

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, 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 2021.

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

Dunia A. Shive, Chair
John W. Culver
S. Todd Maclin
Christa S. Quarles
Mark T. Smucker

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.


42 2021 Proxy Statement


Table of Contents

Proposal 3. Advisory Vote to Approve Named Executive Officer Compensation

 

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 2020 compensation of our named executive officers, see “Compensation Discussion and Analysis,” below.

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.


The Board of Directors unanimously recommends a vote FOR the approval of named executive officer compensation, as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules.


2021 Proxy Statement 43


Table of Contents

 

Compensation Discussion
and Analysis

This Compensation Discussion and Analysis is intended to provide investors with an understanding of our compensation policies and decisions regarding 2020 compensation for our named executive officers.

For 2020, our named executive officers are:

Named Executive Officer Title
Michael Hsu Chief Executive Officer
Maria Henry Senior Vice President and Chief Financial Officer
Russell Torres* President, K-C Professional
Kimberly Underhill Group President, K-C North America
Sandi Karrmann** Senior Vice President and Chief Human Resources Officer

* Mr. Torres joined Kimberly-Clark on March 9, 2020.
** Ms. Karrmann joined Kimberly-Clark on October 26, 2020.

In addition, we provide compensation information regarding Achal Agarwal who served as our 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 company on December 31, 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.


2020
Compensation
Highlights
As measured under our annual incentive program, we delivered the results below in adjusted net sales and adjusted earnings per share (EPS).

Performance Measure* 2020 Results 2020 Target
Adjusted net sales $19.07 billion $18.62 billion
Adjusted EPS $7.73 $7.23

* See “2020 Performance Goals, Performance Assessments and Payouts” for additional information on how we use these measures to promote our pay-for-performance culture.

Based on 2020 performance, the Management Development and Compensation Committee of our Board (the “Committee”) concluded that:

management delivered a strong financial performance in 2020 with above target level adjusted net sales and adjusted earnings per share, and

   

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.


Accordingly, the Committee approved annual cash incentives for 2020 above the target amount, including an incentive payout for the Chief Executive Officer at 158 percent of his target payment amount.


44 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis 2020 Compensation Highlights

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 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 2020 was equity based.

COMPOSITION OF TARGET DIRECT COMPENSATION

Chairman and CEO
   
Named Executive
Officers

Chairman and CEO       Named Executive Officers

Committee Consideration of 2020 Stockholder Advisory Vote

At our 2020 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 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.

CEO Target Direct Compensation and Realizable Direct Compensation

The following chart compares our Chief Executive Officer’s target direct annual compensation and realizable direct compensation over the last three years, covering Mr. Falk’s service as Chief Executive Officer in 2018 and Mr. Hsu’s service in 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:


2021 Proxy Statement 45


Table of Contents

Compensation Discussion and Analysis 2020 Compensation Highlights

For unexercised stock options, the amount by which our 2020 year-end stock price ($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

   

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 2018) or are expected to be paid out based on projected performance (for the grants made in 2019 and 2020), multiplied by our 2020 year-end stock price.

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 49 percent of target (2018), 132 percent of target (2019) and 158 percent of target (2020).

   

Actual performance that resulted in the number of shares to be issued as a result of performance-based restricted share unit payouts of 100 percent of target (2018 award) and projected payouts of 185 percent of target (2019 award) and 175 percent of target (2020 award), and

   

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 $103.06 (2018) and to Mr. Hsu were $125.47 (2019) and $138.96 (2020).

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



46 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Executive Compensation Objectives and Policies

Executive
Compensation
Objectives and
Policies

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:

Objective       Description       Related Policies

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



2021 Proxy Statement 47


Table of Contents

Compensation Discussion and Analysis Components of Our Executive Compensation Program

Components of Our Executive Compensation Program

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.

Component      Objectives      Purpose      Target Competitive Position
Base salary Quality of talent

Provide annual cash income based on:

level of responsibility, experience and performance
comparison to market pay information
Compared to median of peer group
Actual base salary will vary based on the individual’s level of responsibility, experience in the position and performance
Annual cash
incentive
Pay-for-
performance

Motivate and reward achievement of the following annual performance goals:

corporate key financial goals
other corporate financial and strategic performance goals
performance of the business unit or staff function of the individual
Target compared to median of peer group
Actual payout will vary based on actual corporate and business unit or staff function performance
Long-term
equity
incentive

Stockholder
alignment

Focus on
long-term
success

Pay-for-
performance

Quality of talent

Provide an incentive to deliver stockholder value and to achieve our long-term objectives, through awards of:

performance-based restricted share units
stock options

Time-vested restricted share units may be granted from time to time for recruiting, retention or other purposes

Target compared to median of peer group
Actual payout of performance-based restricted share units will vary based on actual corporate performance
Actual payout will also vary based on actual stock price performance
Retirement
benefits
Quality of talent Provide competitive retirement plan benefits through 401(k) plan and other defined contribution plans
Benefits comparable to those of peer group
Perquisites Quality of talent Provide minimal additional benefits
Benefits comparable to or below those of peer group
Post-
termination
compensation
(severance
and change of
control)
Quality of talent

Encourage attraction and retention of executives critical to our long-term success and competitiveness:

Severance Pay Plan, which provides eligible employees, including executives, payments and benefits in the event of certain involuntary terminations
Executive Severance Plan, which provides eligible employees, including executives, payments in the event of a qualified separation of service following a change of control
Benefits comparable to those of peer group


48 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Setting Annual Compensation

Setting Annual Compensation

This section describes how the Committee thinks about annual compensation and the processes that it followed in setting 2020 target annual compensation for our named executive officers.

Focus on Direct Annual Compensation

In setting 2020 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.

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 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:

2020 Executive Compensation Peer Group

3M
 
Campbell Soup
 
Clorox
 
Coca-Cola
 
Colgate-Palmolive
 
Conagra Brands
 
General Mills
     
Hershey
 
Honeywell International
 
Johnson & Johnson
 
J.M. Smucker
 
Kellogg
 
Kraft Heinz
     
Mondelēz International
 
Newell Brands
 
Nike
 
PepsiCo
 
Procter & Gamble
 
V.F. Corp.

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 2020, the Committee did not make any changes to the peer group used in 2019. Likewise, in setting compensation for 2021, the Committee did not make any changes to the peer group.

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



2021 Proxy Statement 49


Table of Contents

Compensation Discussion and Analysis Setting Annual Compensation

 

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 2020, Mr. Hsu’s direct annual target compensation was at or near the median of direct annual compensation of chief executive officers of companies included in the peer group.

Consistent with past practices, the Committee reviewed the pay relationship of Mr. Hsu to the other named executive officers in 2020.

Direct Annual Compensation Targets for 2020

Consistent with its focus on direct annual compensation, the Committee approved 2020 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 2020, were appropriate and consistent with our executive compensation objectives:

Name 2020 Direct Annual Compensation Target($)
Michael D. Hsu 11,445,000
Maria G. Henry 5,060,000
Russell Torres 3,575,000
Kimberly K. Underhill 4,218,500
Sandi Karrmann 2,006,250

These 2020 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 2020 – Base Salary.”
   
Annual cash incentive compensation is included at the target level, while the Summary Compensation Table reflects the actual amount earned for 2020.
   
As described below under “Long-Term Equity Incentive Compensation – 2020 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.


50 2021 Proxy Statement


Table of Contents

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.


Executive Compensation for 2020

To help achieve the objectives discussed above, our executive compensation program for 2020 consists of fixed and performance-based components, as well as short-term and long-term components.

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:

Name 2020 Base Salary($)
Michael D. Hsu 1,300,000
Maria G. Henry 830,000
Russell Torres 750,000
Kimberly K. Underhill 830,000
Sandi Karrmann 575,000

The Committee approved a 4.0 percent increase in Mr. Hsu’s base salary based on peer company market data and 1.2 percent increases in Ms. Henry and Ms. Underhill’s salaries, consistent with the annual merit increase provided to all other company employees. In the case of Mr. Torres and Ms. Karrmann, the Committee determined the base salaries and annual cash incentive targets when the company extended them employment offers, taking into account prior salary, prior experience and peer company data.

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.



2021 Proxy Statement 51


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2020

2020 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.

TARGET PAYMENT AMOUNTS AND RANGE OF POSSIBLE PAYOUTS
FOR 2020 ANNUAL CASH INCENTIVE PROGRAM

Target Payment Amount Possible Payout
Michael D. Hsu 165% of base salary 0% - 200% of target payment amount
Maria G. Henry 100% of base salary 0% - 200% of target payment amount
Russell Torres 70% of base salary 0% - 200% of target payment amount
Kimberly K. Underhill 95% of base salary 0% - 200% of target payment amount
Sandi Karrmann 75% of base salary 0% - 200% of target payment amount

The payouts for Mr. Torres and Ms. Karrmann were prorated based on their hire dates.

2020 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.

As shown in the table below, the Committee established goals for three different performance elements for 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 because his 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.

ANNUAL CASH INCENTIVE PROGRAM 2020 PERFORMANCE GOALS AND WEIGHTS


52 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2020

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 2020, the Committee chose the following as corporate key financial goals for the annual cash incentive program:

2020 Goal Explanation Reason for Use as a
Performance Measure
Adjusted net sales Net sales for 2020(1) 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)(2) A key indicator of our overall performance

(1) For purposes of the annual incentive program, the Committee subtracted the amounts below to exclude the impact of the operations/earnings of Softex Indonesia, which we acquired on October 1, 2020, on these full-year performance metrics.

Adjusted Net Sales       $72 million
Adjusted EPS $0.01

(2) In addition to adjustments for the Softex Indonesia acquisition, in 2020 the following adjustments were made to diluted net income per share to determine adjusted EPS, consistent with our Form 10-K results:

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

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. As described above in footnote 1, the Committee made the following additional adjustment to determine adjusted EPS for compensation purposes:

Adjusted EPS (Form 10-K results) $ 7.74
Subtract- Softex Indonesia operations impact on earnings $ (0.01 )
Adjusted EPS for compensation payouts $ 7.73

Because Element 1 represents key company-wide goals, it produces the same payout percentage for each named executive officer based on how Kimberly-Clark performed against the adjusted net sales and adjusted EPS goals established in February of each year. For 2020, the Committee set these goals and the corresponding initial payout percentages at the following levels:

Measure
(each weighted 50%)
Range of Performance Levels
Threshold       Target       Maximum
Adjusted net sales (billions) $17.19 $18.62 $20.05
Adjusted EPS $6.68 $7.23 $7.78
Initial Payout Percentage 0% 100% 200%

Actual results. For 2020, our adjusted net sales result was $19.07 billion and our adjusted EPS result was $7.73. Based on these results, the 2020 payout percentage for achieving the corporate key financial goals was 161 percent of each named executive officer’s target payment amount.

2021 Proxy Statement 53


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2020

ELEMENT 2: ADDITIONAL CORPORATE FINANCIAL AND STRATEGIC PERFORMANCE GOALS

At the beginning of 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.

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 2020 goals and how the Committee assessed Kimberly-Clark’s performance against each one:

Additional Corporate Financial and Strategic Performance Goals for 2020 Final Result
      Below
Goal
      At
Goal
      Above
Goal
 
Brand equity and
market performance
Increasing market share in select markets.
X
Innovation
Attaining adjusted net sales from innovation goals (one and three year measures) in new products and line extensions in 2020.
X
Diversity and
inclusion
Making progress on goals for women in senior roles globally and ethnic minorities in senior roles in the United States.
X

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 150 percent of target.

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:

Name 2020 Business Unit/Staff Function Payout Percentage
Michael D. Hsu                                N/A                               
Maria G. Henry 124%
Russell Torres 80%
Kimberly K. Underhill 170%
Sandi Karrmann 125%

54 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2020

Annual Cash Incentive Payouts for 2020
The following table shows the payout opportunities and the actual payouts of annual cash incentives for 2020 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 51.

Annual
Incentive Target
Annual Incentive
Maximum
2020 Annual
Incentive Payout
Name       % of Base
Salary
      Amount($) % of
Target
      Amount($) % of
Target
      Amount($)
Michael D. Hsu 165% 2,145,000 200% 4,290,000 158% 3,383,739
Maria G. Henry 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% 788,500 200% 1,577,000 166% 1,310,600
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.

Summary of Annual Cash Incentive Payouts: 2016 through 2020
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 2016 through 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 145 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.

PAYOUTS FOR CORPORATE GOALS AND AVERAGE TOTAL
PAYOUT PERCENTAGES FOR DESIGNATED NAMED EXECUTIVE OFFICERS

2020 2019 2018 2017 2016 Average
Payout for Corporate Goals
Combination of corporate key financial goals and additional corporate financial and strategic performance goals
158% 132% 49% 77% 109% 105%
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% 104%

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.”

2021 Proxy Statement 55


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2020

 

2020 Grants
In determining the 2020 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. The Committee did not consider the amount of outstanding equity awards currently held by a named executive officer when making the 2020 annual awards because such amounts represent compensation attributable to prior years.

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 2020 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 10 percent of the price of one share of our common stock on the date of grant of the stock option.

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 his annual long-term incentive award. Ms. Karrmann, who joined the company on October 26, did not receive an annual long-term incentive award for 2020.

Performance Goals and Potential Payouts for
2020 - 2022 Performance-Based Restricted Share Units
For the performance-based restricted share unit awards granted in 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.

The performance objectives for the 2020 awards are based on average annual adjusted net sales growth and the average adjusted return on invested capital (ROIC) for the period January 1, 2020 through December 31, 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.

2020 - 2022 PERFORMANCE-BASED RESTRICTED SHARE UNITS:
POTENTIAL PAYOUTS AT VARYING PERFORMANCE LEVELS

Goals (Each weighted 50%) Performance Levels
Average annual adjusted net sales growth (1.07)%       1.58%       4.23%
Average adjusted ROIC 24.71% 26.21% 27.71%
Potential Payout (as a percentage of target) 0% 100% 200%


56 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2020

 

Payout of 2017 - 2019 Performance-Based Restricted Share Units
In February 2020, the Committee evaluated the results of the three-year performance period for the performance-based restricted share units that were granted in 2017. The performance objectives for these 2017 awards were based on average annual adjusted net sales growth and average adjusted ROIC for the period January 1, 2017 through December 31, 2019, each weighted equally.

Goals (Each weighted 50%) Performance Levels
Average annual adjusted net sales growth* (0.80)%       1.85%       4.50%       0.44%
Average adjusted ROIC** 22.71% 24.21% 25.71% 23.88%
Potential Payout (as a percentage of target) 0% 100% 200% Actual

*

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) the deconsolidation of our Venezuelan operations, (2) tax reform, (3) our 2018 Global Restructuring Program and (4) gain on the sale of property associated with a former manufacturing facility.

Based on this review, the Committee determined that we did not achieve our performance goals for either adjusted net sales growth or adjusted ROIC. As a result, the payout percentage for the share units was 62 percent of target. The following table includes information about the opportunities and payouts (including reinvested dividends) regarding these grants to our named executive officers:

Share Amount 2017 - 2019 Performance-Based
Restricted Share Unit Award (Paid in
February 2020)
Name Target       Maximum       % of
Target
      Amount of
Shares(#)
      Value of Shares on
Date Received($)
Michael D. Hsu 22,482 44,964 62% 13,939 1,828,657
Maria G. Henry 17,798 35,596 62% 11,035 1,447,682
Russell Torres*
Kimberly K. Underhill 8,119 16,238 62% 5,034 660,410
Sandi Karrmann*

*

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 2020 and are included in the table below entitled “Option Exercises and Stock Vested in 2020.”

Vesting Levels of Outstanding Performance-Based Restricted Share Unit Awards
As of February 10, 2021, the performance-based restricted share units granted in 2020 and 2019 were on pace to vest at the following levels: 175 percent for the 2020 award and 185 percent for the 2019 award.

The Committee has determined that the 2018 award vested at 100 percent. Payouts under these awards will be reflected in 2021 compensation.



2021 Proxy Statement 57


Table of Contents

Compensation Discussion and Analysis Benefits and Other Compensation

 

2020 Stock Option Awards
As noted above, 25 percent of the annual long-term equity incentive grants to executive officers in 2020 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.

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 10 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.”

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.”



Benefits and Other Compensation

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.



58 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2021

 

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. The incremental cost to us of providing security services at Mr. Hsu’s residences and personal travel for Mr. Hsu and his guests on our corporate aircraft is included in “All Other Compensation” in the Summary Compensation Table.

Post-Termination Benefits

We maintain two severance programs that cover our executive officers: the Severance Pay Plan and the Executive Severance Program. An executive officer may not receive severance payments under more than one severance program. Benefits under these programs are payable only if the executive’s employment terminates under the conditions specified in the applicable program. We believe that our severance programs 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 programs and their terms, see “Potential Payments on Termination or Change of Control – Severance Benefits.”

Severance Pay Plan
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.

Executive Severance Program
Our Executive Severance Program provides severance benefits to eligible employees, including our named executive officers, in the event of a qualified termination of employment (as defined in the participant agreements) in connection with a change of control. For an eligible employee to receive a payment under this 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 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 program that expires on December 31, 2023.



Executive Compensation for 2021

2021 Base Salary

In February 2021, the Committee approved the following base salaries for our named executive officers, effective April 1, 2021:

Name 2021 Base Salary($)
Michael D. Hsu 1,375,000
Maria G. Henry 875,000
Russell Torres 750,000
Kimberly K. Underhill 830,000
Sandi Karrmann 575,000


2021 Proxy Statement 59


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2021

2021 Annual Cash Incentive Targets

The Committee also established objectives for 2021 annual cash incentives, which will be payable in 2022. The target payment amounts and range of possible payouts for 2021 are as follows:

Target Payment Amount Possible Payout
Michael D. Hsu 170% of base salary 0% - 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 100% of base salary 0% - 200% of target payment amount
Sandi Karrmann 75% of base salary 0% - 200% of target payment amount

As discussed in “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 2021 performance goals and relative weights for our named executive officers:

ANNUAL CASH INCENTIVE PROGRAM 2021 PERFORMANCE GOALS AND WEIGHTS

 

The corporate key financial goals for 2021 are designed to encourage a continued focus on executing our long-term strategic objectives and include achieving net sales and adjusted EPS goals.

The Committee also established other corporate financial and non-financial goals for 2021. These goals, intended to further align compensation with achieving our strategic objectives, include:

Focusing on market share improvement in global markets
Diversity and inclusion

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.


60 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Executive Compensation for 2021

2021 Long-Term Equity Compensation Incentive Awards

In February 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 2021 are based on modified free cash flow (MFCF) and average annual organic sales growth and for the period January 1, 2021 through December 31, 2023.

Performance
Objective
    Explanation       Reason for Use as a Performance Measure

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.

A key indicator of our overall growth.
Encompasses streams of revenues that are a direct result of existing operations.
Excludes the impact of currency changes, which are difficult to predict, and outside of management’s control.

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 2021

Name Target Amount of Shares($) Maximum Amount of Shares($)
Michael D. Hsu 6,750,000 13,500,000
Maria G. Henry 2,550,000 5,100,000
Russell Torres 1,725,000 3,450,000
Kimberly K. Underhill 2,100,000 4,200,000
Sandi Karrmann 750,000 1,500,000

In February 2021, the Committee also approved the dollar amount of stock options to be granted to our named executive officers in April 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 2,250,000
Maria G. Henry 850,000
Russell Torres 575,000
Kimberly K. Underhill 700,000
Sandi Karrmann 250,000


2021 Proxy Statement 61


Table of Contents

Compensation Discussion and Analysis Additional Information about Our Compensation Practices

Additional Information about Our Compensation Practices

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 2020 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 Development and Compensation Committee” for information about the use of compensation consultants.

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.


62 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Additional Information about Our Compensation Practices

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 and recruiting and special employee recognition and retention grants. The Chief Executive Officer is not permitted to make any grants to any of our elected officers, including our executive officers.

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 April 2020, our Chief Executive Officer authorized an aggregate of 1.51 million options, performance-based restricted share units and time-vested restricted share units to employees who are not elected officers. In 2020, our Chief Executive Officer also authorized an aggregate of 48,190 shares underlying recruiting and retention grants, consisting of options, performance-based restricted share units and time-vested restricted share units.

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

Under our clawback 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.

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



2021 Proxy Statement 63


Table of Contents

Compensation Discussion and Analysis Additional Information about Our Compensation Practices

 

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 2020 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.

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

While an exception exists for certain arrangements in place as of November 2, 2017, only the first $1 million in compensation paid to our named executive officers 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.



64 2021 Proxy Statement


Table of Contents

Compensation Discussion and Analysis Additional Information about Our Compensation Practices

 

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, 2020.

MANAGEMENT DEVELOPMENT AND COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
 
Abelardo E. Bru, Chairman
Mae C. Jemison, M.D.
Sherilyn S. McCoy
Ian C. Read

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.


2021 Proxy Statement 65


Table of Contents

Compensation Discussion and Analysis Analysis of Compensation-Related Risks

Analysis of Compensation-Related Risks

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.


66 2021 Proxy Statement


Table of Contents

 

Compensation Tables

Summary Compensation

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 71.

SUMMARY COMPENSATION TABLE

Name and
Principal Position
Year 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
Officer
2020 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
Officer
2020 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
Professional
2020 610,795 400,000 4,225,079 659,995 450,688 82,204 6,428,761
Kimberly K.
Underhill

Group President,
K-C North America
2020 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 Officer
2020 106,724 750,000 3,250,046 107,196 4,909 4,218,875
Achal Agarwal(3)(4)
Former President,
K-C Asia Pacific
2020 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 Ms. Underhill decreased by $59,911. Because this amount decreased, it 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 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) Mr. Torres, Ms. Karrmann and Mr. Agarwal were not named executed officers in 2018 or 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.

2021 Proxy Statement 67


Table of Contents

Compensation Tables

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 6 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 2020 for the assumptions we used in valuing and expensing these restricted share units and stock option awards in accordance with ASC Topic 718.

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:

Name       Year       Stock Awards at
Grant Date Value($)
      Stock Awards at Highest Level
of Performance Conditions($)
Michael D. Hsu 2020 5,999,975   11,999,950
2019 6,000,038   12,000,076
2018 3,562,529   7,125,058
Maria G. Henry 2020 2,549,940   5,099,880
2019 2,400,039   4,800,078
2018 2,399,976   4,799,952
Russell Torres 2020 1,725,049   3,450,098
Kimberly K. Underhill 2020 1,950,008   3,900,016
2019 1,837,502   3,675,004
2018 1,837,404   3,674,808
Sandi Karrmann 2020 —  — 
Achal Agarwal 2020 674,973   1,349,946

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.”

Each of our named executive officers participates in the Supplemental 401(k) Plan, a non-qualified defined contribution plan. Earnings on this 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 this plan and each named executive officer’s earnings under this plan in 2020.


68 2021 Proxy Statement


Table of Contents

Compensation Tables

All Other Compensation. All other compensation consists of the following:

Name Year Perquisites($)(1) Defined
Contribution Plan
Amounts($)(2)
Tax
Gross-Ups($)(3)
Severance
Payments ($)(4)
Total($)(5)
Michael D. Hsu 2020 153,527 344,959 —  —  498,486
2019 120,990 206,812 —  —  327,802
2018 242,375 136,913 67,723 —  447,011
Maria G. Henry 2020 13,000 169,403 —  —  182,403
2019 3,750 150,002 —  —  153,752
2018 5,939 108,423 —  —  114,362
Russell Torres 2020 19,685 52,528 9,991 —  82,204
Kimberly K. Underhill 2020 13,000 162,733 —  —  175,733
2019 1,700 137,974 —  —  139,674
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. 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 2020 included the following:


      Name Executive
Financial
Counseling
Program($)
Personal
Use of
Corporate
Aircraft($)
Security
Services($)
Executive
Health
Screening
Program($)
Relocation
Expenses($)(a)
Expatriate
Payments($)(b)
Total($)
Michael D. Hsu —  56,534 96,993 —  —  —  153,527
Maria G. Henry 13,000 —  —  —  —  —  13,000
Russell Torres 4,060 —  —  3,411 12,214 —  19,685
Kimberly K. Underhill 13,000 —  —  —  —  —  13,000
Sandi Karrmann —  —  —  —  —  —  — 
Achal Agarwal 13,000 —  —  —  —  386,724 399,724

(a)

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.

(b)

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.



2021 Proxy Statement 69


Table of Contents

Compensation Tables

(2)

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 and 2018 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 and 2019 with respect to our performance in 2020, 2019 and 2018, respectively, for the named executive officers as follows:


Name Performance Year Profit Sharing Contribution($)
      Michael D. Hsu 2020 184,513
2019 79,398
2018 62,906
Maria G. Henry 2020 90,611
2019 56,748
2018 49,816
Russell Torres 2020 28,097
Kimberly K. Underhill 2020 87,043
2019 55,400
2018 40,389
Sandi Karrmann 2020 4,909
Achal Agarwal 2020 — 

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)

Tax Gross 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 (3) in the case of Ms. Underhill, upon her promotion to Group President, K-C North America in 2018.

(4)

Severance Payments. For additional information, see “Potential Payments on Termination or Change of Control -Severance Benefits - Departure of Former Named Executive Officer.”

(5)

Certain Dividends. 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.



70 2021 Proxy Statement


Table of Contents

Compensation Tables

Grants of Plan-Based Awards

The following table sets forth plan-based awards granted to our named executive officers during 2020 on a grant-by-grant basis.

GRANTS OF PLAN-BASED AWARDS IN 2020

Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1)
Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
Name Grant Type Grant
Date
Threshold
($)
Target
($)
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 2,145,000 4,290,000
Hsu incentive award
Performance- 2/28/2020 45,735 91,470 5,999,975
based RSU
Time-vested 4/29/2020 143,926 138.96 2,295,620
stock option
Maria G. Annual cash 830,000 1,660,000
Henry incentive award
Performance- 2/28/2020 19,437 38,874 2,549,940
based RSU
Time-vested 4/29/2020 61,169 138.96 975,646
stock option
Russell Annual cash 437,500 875,000
Torres incentive award
Performance- 4/29/2020 12,414 24,828 1,725,049
based RSU
Time-vested 4/29/2020 41,379 138.96 659,995
stock option
Time-vested 4/29/2020 17,991 2,500,029
RSU
Kimberly K. Annual cash 788,500 1,577,000
Underhill incentive award
Performance- 2/28/2020 14,864 29,728 1,950,008
based RSU
Time-vested 4/29/2020 46,776 138.96 746,077
stock option
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- 2/28/2020 5,145 10,290 674,973
based RSU
Time-vested 4/29/2020 16,192 138.96 258,262
stock option
Time-vested 4/29/2020 3,598 499,978
RSU

(1)

Represents the potential annual performance-based incentive cash payments each named executive officer could earn in 2020. These awards were granted under our Management Achievement Award Program, our annual cash incentive program for executive officers. Actual amounts earned in 2020 were based on the 2020 objectives established by the Management Development and Compensation Committee at its February 12, 2020 meeting. See “Compensation Discussion and Analysis – Executive Compensation for 2020 – 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 2020 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 2021 based on the 2020 objectives are set forth in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.”


2021 Proxy Statement 71


Table of Contents

Compensation Tables

(2) Performance-based restricted share units granted under the 2011 Plan to our named executive officers on February 28, 2020. The number of performance-based restricted share units granted in 2020 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 adjusted net sales growth and average adjusted ROIC performance objectives for those awards are met. See “Compensation Discussion and Analysis – Long-Term Equity Incentive Compensation – 2020 Grants.”
(3) Time-vested restricted share units granted under the 2011 Plan to Mr. Torres and Mr. Agarwal on April 29, 2020 and to Ms. Karrmann on 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 on 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 6 to our audited consolidated financial statements included in our Annual Report on Form 10-K for 2020 for the assumptions used in valuing and expensing these restricted share units and stock option awards in accordance with ASC Topic 718.

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 2020 table was paid or awarded, are described under “Compensation Discussion and Analysis.”

Other than the executive severance programs described below, none of our named executive officers has an employment agreement with us. See “Potential Payments on Termination or Change of Control.”

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. Karrmann in 2020 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 2020, each named executive officer (other than Ms. Karrmann) received grants of stock options and performance-based restricted share units under the 2011 Plan.

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 2020 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 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.

Performance-based restricted share unit awards granted in 2020 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 adjusted net sales growth and average adjusted ROIC performance during the three years. As of February 10, 2021, the performance-based restricted share units granted in 2020 and 2019 were on pace to vest at the following levels: 175 percent for the 2020 award and 185 percent for the 2019 award. The Committee has determined that the 2018 award vested at 100 percent.

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.

72 2021 Proxy Statement


Table of Contents

Compensation Tables

Outstanding Equity Awards

The following table sets forth information concerning outstanding equity awards for our named executive officers as of December 31, 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.

OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2020(1)

Option Awards(2) Stock Awards
Name Grant
Date
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise
Price
($)(3)
Option
Expiration
Date
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(4)
Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($)
(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                          
4/29/2020 143,926 138.96 4/29/2030
2/28/2020                 93,591        12,618,875
5/1/2019 38,256 89,265 125.47 5/1/2029
2/28/2019 108,383 14,613,280
5/9/2018 55,307 36,872 103.06 5/9/2028
2/28/2018 35,148 4,739,005
4/25/2017 67,761 132.82 4/25/2027
5/3/2016 52,525 126.13 5/3/2026
4/29/2015 54,191 110.72 4/29/2025
4/30/2014 46,508 107.51 4/30/2024
5/1/2013 41,698 98.92 5/1/2023
Maria G. Henry
4/29/2020 61,169 138.96 4/29/2030
2/28/2020 39,775 5,362,863
5/1/2019 15,302 35,706 125.47 5/1/2029
2/28/2019 43,354 5,845,420
2/28/2019 6,774 913,338
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

2021 Proxy Statement 73


Table of Contents

Compensation Tables

Option Awards(2) Stock Awards
Name Grant
Date
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise
Price
($)(3)
Option
Expiration
Date
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(4)
Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($)(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)
Russell Torres                          
4/29/2020 41,379 138.96 4/29/2030
4/29/2020                25,195          3,397,042
4/29/2020 18,257 2,461,591
Kimberly K. Underhill
4/29/2020 46,776 138.96 4/29/2030
2/28/2020 30,417 4,101,124
5/1/2019 27,338 125.47 5/1/2029
2/28/2019 33,192 4,475,277
5/9/2018 19,018 103.06 5/9/2028
5/9/2018 7,496 1,010,686
2/28/2018 11,099 1,496,478
Sandi Karrmann
10/30/2020 24,512 3,304,953
Achal Agarwal
4/29/2020 16,192 138.96 4/29/2030
4/29/2020 3,651 492,264
2/28/2020 10,529 1,419,625
5/1/2019 4,303 10,043 125.47 5/1/2029
2/28/2019 12,194 1,644,117
5/9/2018 10,479 6,987 103.06 5/9/2028
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.

74 2021 Proxy Statement


Table of Contents

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 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.
In 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 Ms. 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, 2020 of $134.83 per share.
(6) The amounts shown represent awards of performance-based restricted share units granted to our named executive officers in 2018, 2019 and 2020. Subject to accelerated vesting as described in “Potential Payments on Termination or Change of Control,” performance-based restricted share unit awards granted in 2018, 2019 and 2020 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 2018 grants and the maximum level for the 2019 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 2018 grants and the maximum level for the 2019 and 2020 grants.

Option Exercises and Stock Vested

The following table sets forth information concerning stock options exercised and stock awards vested during 2020 for our named executive officers.

OPTION EXERCISES AND STOCK VESTED IN 2020

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)
Michael D. Hsu 13,939 1,828,657
Maria G. Henry 11,035 1,447,682
Russell Torres
Kimberly K. Underhill 50,448 960,172 5,034 660,410
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.

2021 Proxy Statement 75


Table of Contents

Compensation Tables

Pension Benefits

The following table sets forth information as of December 31, 2020 concerning potential payments to our named executive officers under our pension plan and supplemental pension plans. Information about these plans follows the table.

2020 PENSION BENEFITS

Name(1) Plan Name Number of
Years Credited
Service(#)(3)
Present Value
of Accumulated
Benefit($)
Kimberly K. Underhill(2) Pension Plan               9.6         512,724
Supplemental
Pension Plans
9.6 385,025

(1) Each named executive officer other than Ms. Underhill joined Kimberly-Clark after January 1, 1997 and therefore is not eligible to participate in our defined benefit pension plans.
(2) 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) Ms. Underhill has 33.0 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.

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.

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.
Payment Form Normal benefit:
Single-life annuity payable monthly
Other optional forms of benefit are available, including a joint and survivor and a lump sum benefit.
Accrued benefits prior to 2005:
Monthly payments or a lump sum after age 55
Accrued benefits for 2005 and after:
Lump sum six months after termination of employment

76 2021 Proxy Statement


Table of Contents

Compensation Tables

Pension Plan Supplemental Pension Plans
Retirement Eligibility Full unreduced benefit:
Normal retirement age of 65
Age 62 with 10 years of service
Age 60 with 30 years of service
Disability retirement
Early retirement benefit:
Age 55 with five years of service. The amount of the benefit is reduced according to the number of years the participant retires before the age the participant is eligible for a full, unreduced benefit. The amount of the reduction is based on age and years of vesting service.
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 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 Same
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.

The estimated actuarial present value of the retirement benefits accrued through December 31, 2020 appears in the 2020 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 7 to our audited consolidated financial statements included in our 2020 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) and

2021 Proxy Statement 77


Table of Contents

Compensation Tables

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 MP-2020, and for the supplemental plans were calculated using the 2022 417(e) mortality table adjusted for mortality improvement to the assumed retirement age using scale 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 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, 2020 based on the financial accounting discount rates for United States pension plans of 2.65% and 2.45% for the qualified plan and the supplemental plans, respectively.

The actuarial increase in 2020 of the projected retirement benefits can be found in 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 2020.

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 –Benefits and Other Compensation – Retirement Benefits.”

Nonqualified Deferred Compensation

The following table sets forth information concerning nonqualified defined contribution and deferred compensation plans for our named executive officers during 2020.

2020 NONQUALIFIED DEFERRED COMPENSATION

Name Plan Company
Contributions in
2020($)(1)
Aggregate
Earnings in
2020($)(2)
Aggregate
Balance at
December 31,
2020($)(3)
Michael D. Hsu Supplemental
401(k) Plan
         320,449     148,365     1,395,148
Maria G. Henry Supplemental
401(k) Plan
144,893 79,502 736,702
Russell Torres Supplemental
401(k) Plan
28,018 1,032
Kimberly K. Underhill Supplemental
401(k) Plan
138,223 89,412 875,726
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 2021 with respect to our performance in 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 2020 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 2021 with respect to our performance in 2020, as well as the following aggregate amounts that were previously reported in the Summary Compensation Table for 2019 and 2018, combined: Mr. Hsu - $300,135, Ms. Henry - $214,835, Mr. Torres - $0, Ms. Underhill - $182,289, Ms. Karrmann - $0 and Mr. Agarwal - $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.

78 2021 Proxy Statement


Table of Contents

Compensation Tables

Overview of 401(k) Profit Sharing Plan and Supplemental 401(k) Plan.

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.

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.

2021 Proxy Statement 79


Table of Contents

Compensation Tables

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
We maintain two severance programs that cover our executive officers, depending on the circumstances that result in their termination. Those plans include the Executive Severance 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 programs described below.

Executive Severance Program. We have agreements under our Executive Severance Program 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.

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, 2023, unless extended by the Committee.

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.


80 2021 Proxy Statement


Table of Contents

Compensation Tables

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 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.

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


2021 Proxy Statement 81


Table of Contents

Compensation Tables

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
Retirement. In the event of retirement (separation from service on or after age 55), our named executive officers are entitled to receive:

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),

   
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 Management 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.

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,

   
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,
   
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,


82 2021 Proxy Statement


Table of Contents

Compensation Tables

Annual incentive award payment under the Management 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.

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,

   
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 Management 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).


2021 Proxy Statement 83


Table of Contents

Compensation Tables

Potential Payments on Termination or Change of Control Table
The following table presents the approximate value of (i) the severance benefits for our named executive officers under the Executive Severance Program had a Qualified Termination of Employment under the participant agreement occurred on December 31, 2020; (ii) the severance benefits for our named executive officers under the Severance Pay Plan if an involuntary termination had occurred on December 31, 2020; (iii) the benefits that would have been payable on the death of our named executive officers on December 31, 2020; (iv) the benefits that would have been payable on the total and permanent disability of our named executive officers on December 31, 2020; and (v) the potential payments to Mr. Hsu, Ms. Underhill and Ms. Karrmann if they had retired on December 31, 2020. If applicable, amounts in the table were calculated using the closing price of our common stock on December 31, 2020 of $134.83 per share.

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. Karrmann were eligible to retire as of December 31, 2020; thus, potential payments assuming retirement on that date are not included for the other named executive officers.

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. Agarwal left the company on December 31, 2020, he is discussed below under “Departure of Former Named Executive Officer.”


84 2021 Proxy Statement


Table of Contents

Compensation Tables

POTENTIAL PAYMENTS ON TERMINATION OR CHANGE OF CONTROL TABLE

Name       Cash
Payment($)
Equity with
Accelerated
Vesting($)
Additional
Retirement
Benefits($)
Continued
Benefits
and Other
Amounts($)
Total($)
Michael D. Hsu
Qualified Termination of Employment 8,788,925 (1)  33,981,735 (2)  432,415 (3)  28,296 (4)  43,231,371
Involuntary Termination(5) 8,788,925 9,238 (6)  8,798,163
Death 5,383,739 (7)  31,353,832 (8)  36,737,571
Disability 3,383,739 (7)  31,353,832 (8)  (9)  34,737,571
Retirement 3,383,739 (1)  61,210,258 (10)  64,593,997
Maria G. Henry
Qualified Termination of Employment 4,423,523 (1)  16,439,242 (2)  255,050 (3)  28,296 (4)  21,146,111
Involuntary Termination(5) 4,423,523 9,238 (6)  4,432,761
Death