3M Co. kicked off its annual meeting in Austin, Texas, Tuesday morning with a video celebrating a century of innovation and the staggering $7 billion the company invested last year in research, factories and equipment and acquisitions.
The annual meeting was only the third 3M has conducted outside of Minnesota.
CEO Inge Thulin told 150 attending shareholders that 3M invested $1.8 billion in research and development last year and another $1.5 billion in factories, facilities and equipment improvements. The investments came on top of the sizable $3.7 billion 3M spent on acquisitions last year, which ended a two-year buying freeze.
Thulin noted that 3M, one of only two Minnesota-based companies in the Dow Jones industrial average, saw 1.3 percent growth in organic local sales and enjoyed a 22.5 percent return in invested capital.
He noted that 3M’s “focus on operational excellence is enabling us to deliver premium returns even in a low growth environment.”
Thulin told shareholders that 3M’s strategic playbook relies on three key “levers” to strengthen the company: portfolio management, innovation investments, and business transformation.
At the meeting, shareholders elected 12 director nominees and voted to rehire the PricewaterhouseCoopers accounting firm.
They also approved proposals to accept the company’s executive compensation plan and to adopt a new long-term equity-incentive program for executives.
Lastly, they rejected two shareholder proposals. One had sought to expand the ability of shareholders to call a special meeting. The other sought to exclude share repurchases from any formula used to calculate executive pay, under the theory that executives should not benefit from reducing the number of shares outstanding.
Karen Esposito with Domini Social Investments told shareholders during the meeting that over several years 3M spent $16 billion on research and development and capital expenditures but spent $21 billion to buy back its own shares.
She worried that share buybacks would boost earnings-per-share returns short term but would hurt long-term growth.
3M’s board did not favor either of the later two proposals and urged meeting attendees to vote against them. In the end, they did just that.
3M’s stock closed Tuesday at $170.26, up more than 1 percent or $1.74.