Kimberly-Clark (KMB) DEFR14ARevised proxy

February 27, 2023

Michael D. Hsu
Chairman of the Board and
Chief Executive Officer

FELLOW STOCKHOLDERS:

In 2022, we marked Kimberly-Clark’s 150th anniversary – a significant milestone. For 150 years, our team has transformed insights into new categories and products that have made a difference in the lives of people around the world. Our commitment to help people with their most essential needs remains core to how we deliver meaningful innovation and bring to life our purpose of Better Care for a Better World.

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 20, 2023, at 8:00 a.m. Central Time.

At the Annual Meeting, stockholders will be asked to elect twelve directors for a one-year term, ratify the selection of Kimberly-Clark’s independent auditor, approve the compensation for our named executive officers, and approve the frequency of future stockholder votes on named executive officers’ compensation. 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 through the Internet or by telephone. If Internet or telephone 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,

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.

The Board has established a leadership structure that allocates responsibilities between our Chairman of the Board and 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 CEO 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 CEO
	Coordinating the activities of the Independent Directors
	Providing input on and approving the agendas and schedules for Board meetings
	Leading (with the Chair of the Nominating and Corporate Governance Committee) the annual Board evaluation

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 Securities and Exchange Commission (“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 director Ian C. Read, who did not stand for re-election at our 2022 Annual Meeting, and found that Mr. Read was 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.

The Board of Directors met nine times in 2022. 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 2022 Annual Meeting.

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.

Audit Committee

The Board has determined that each of Mmes. Burwell, Mahlan and 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 2022 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 2022, see “Proposal 2. Ratification of Auditor - Audit Committee Report.”

Management Development and Compensation Committee

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 2022.

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 CEO
	Approving, in consultation with the CEO, 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 CEO and other key officer positions, in conjunction with our Board
		key organizational effectiveness and engagement policies
	Reviewing inclusion, equity and diversity 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 CEO 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 CEO 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 CEO 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 CEO. While our CEO 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 CEO 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.”

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 2022, 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 Chair of the Committee between meetings from time to time.

The scope of Semler Brossy’s engagement in 2022 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 CEO
	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 Chair of the Committee

During 2022, 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 2022, 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 2022, 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

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 2022 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

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 2022.

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.”

At the end of 2022, we formed a new Sustainability Subcommittee of the Nominating and Corporate Governance Committee to support the Committee in executing its oversight responsibilities for matters relating to sustainability, corporate social responsibilities and corporate citizenship and as we continue to incorporate related risks and opportunities into the Board’s overall strategic decision-making. The Sustainability Subcommittee will be chaired by independent director Dr. Jemison.

Executive Committee

The Committee met one time in 2022.

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

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.

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 15 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.

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.

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 (Corporate Governance tab).

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.

In 2022, we continued our focus on regularly engaging with investors to understand their perspectives on a variety of topics. This process helps ensure that management and the Board understand and consider the issues that matter most to our stockholders and enables us to address them effectively. We reached out to stockholders representing approximately 50 percent of our common stock and engaged with stockholders representing approximately 28 percent of our common stock. We discussed many key topics, including our approach to director refreshment, our commitment to inclusion, equity and diversity, our corporate governance practices, significant enhancements to our corporate social responsibility and sustainability disclosures and our executive compensation program.

Investors continued to express broad support for our governance structures and executive compensation program and shared their views on matters related to shareholder rights and our independent, well-qualified Board. Further, investors highlighted the importance of continuing our ongoing engagement with them on corporate social responsibility and sustainability initiatives. Our corporate governance profile, executive compensation programs, and sustainability initiatives reflect the input of stockholders from our outreach efforts. In particular, in response to recent investor feedback, we have enhanced our proxy statement disclosure regarding our inclusion, equity and diversity goals used in our annual cash incentive program and we have also added a discussion regarding our approach to employee engagement and talent attraction, retention, and development.

Everything we do at Kimberly-Clark is connected to our ambition and purpose to provide Better Care for a Better World. Our teams 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 work to safeguard natural systems, tackle inequality, and lift up people around the world.

In 2020, we refined our Sustainability strategy to look further ahead to 2030 and sharpen our focus on areas where we believe 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 ambition is to improve the lives and well-being of one billion people in underserved and vulnerable communities globally, with the smallest environmental footprint. 

Strategic Focus		Our 2030 Aspiration		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 and 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		Increase energy efficiency while seeking lower carbon solutions.		Reduce absolute greenhouse gas (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%.

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, equity 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 issues, including climate-related risks and opportunities, 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 customer and consumer preferences toward sustainable products, increasing regulation and mandates related to single-use plastics and climate emissions, supply chain risks related to water security and deforestation and the cost of the commodities and natural resources required to make and market our products.

At the end of 2022, we formed a new Sustainability Subcommittee of the Nominating and Corporate Governance Committee of the Board to support the Committee in executing its oversight responsibilities for matters relating to sustainability, corporate social responsibilities and corporate citizenship and as we continue to incorporate related risks and opportunities into the Board’s overall strategic decision-making. The Sustainability Subcommittee will be chaired by independent director Dr. Mae Jemison.

Recent Results. In 2022, we published our 2021 achievements in our Global Sustainability Report, which shows significant progress against our goals. Highlights include:

	Our RightCycle program, which helps our K-C Professional customers recycle our products, celebrated its tenth year of innovation. Since inception, RightCycle has enabled K-C Professional customers in North America to divert over 1,600 metric tons of used personal protective equipment (PPE) and other waste from landfills.
	Huggies sponsored “Hand to Hold,” which provided critical resources, educational materials, and virtual support to over 18,000 mothers and families struggling with infants in intensive care.
	We donated 20 million diapers through partnerships to struggling families.
	We made substantial progress in pursuit of our Science-Based Targets initiative (SBTi)-approved carbon reduction goal, cutting our Scope 1 and 2 GHG emissions to achieve a 40.7 percent reduction against our 2015 baseline.
	We achieved 87 percent environmentally preferred fiber use globally by increasing procurement of Forest Stewardship Council® (FSC®)-certified virgin wood fiber as well as recycled fiber for tissue products.
	We launched our Women’s Inclusion Network India Employee Resource Group across Kimberly-Clark India business groups.

In 2020, we announced new climate targets which have been validated with the SBTi. These include a 50 percent reduction in Scope 1 + 2 GHG emissions and 20 percent reduction in Scope 3 GHG emissions from the purchased goods and services and end-of-life treatment of sold products categories by 2030 (vs. a 2015 base year).

Progress toward our climate goals remains focused through a combination of energy conservation, alternative/renewable energy projects and manufacturing footprint optimization. In 2021, a pilot program introduced standardized energy and water management systems into select manufacturing sites, supporting energy use reduction that delivered a reduction of 8,000 metric tons of CO2 equivalents. As we deploy these systems further, we are poised to accelerate Scope 1 & 2 emissions reduction in the coming years. For Scope 3 GHG emissions, we achieved a 6.3 percent GHG emissions reduction from a 2015 base year, with a focus on purchased goods and services and end-of-life treatment of sold products. Noteworthy executions towards our global goals include our Paris, Texas mill sourcing 100 percent of its electricity from renewable sources, signing a virtual power purchase agreement for renewable energy that will offset GHG emissions, and completing 140 energy conservation projects in 2021.

Sustainability Reporting. Each year, Kimberly-Clark publishes a Global Sustainability Report outlining our key strategies, initiatives and results in greater detail. Our report includes an addendum of material organized and presented in accordance with the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) Standards, and can be found on our website at www.kimberly-clark.com/esg. We also publish a Task Force on Climate-related Financial Disclosures (TCFD)-aligned disclosure to enhance visibility to our climate risks and opportunities. Within our disclosure, we cover TCFD’s four core areas: governance, strategy, risk management, and metrics and targets.

Stakeholder Engagement and Recognition. In setting our sustainability priorities and implementing our programs, we are supported by an independent Sustainability Advisory Board with external thought leaders who provide guidance on key governance, social and environmental issues. 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 and priorities relevant to our business.

External partnerships also play an important role in our sustainability programs. 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 FSC^®, with many of our tissue products around the world proudly displaying the FSC marks.

Our sustainability program continues to receive strong recognition from our external stakeholders. Most recent rankings include:

	CDP (formerly Carbon Disclosure Project) 2021 “A-” ranking for Climate Change, and “B” in Water Security and Forests
	FTSE4Good Index Series - 18th consecutive year - for excellence in environmental, social, and governance
	Rating of “AA” in MSCI Global Sustainability Index
	Forbes JUST Capital 2022 Top 100
	U.S. Environmental Protection Agency’s Green Power Partnership National Top 100
	Barron’s 100 Most Sustainable Companies

Inclusion, Equity and Diversity

By leading with inclusion, we are crafting an organization that leverages its diversity as a competitive advantage to deliver on our purpose of Better Care for a Better World. We are on the journey to becoming a global organization that looks and thinks like the people who use (and have yet to use) our essential products.

Our Board of Directors and Global Leadership. Our Board remains committed to growing and leveraging multiple dimensions of diversity to fuel our company growth. We believe that having a Board that is representative of our customer, consumer, employee and stockholder base is an important element of our leadership and gives us a competitive advantage.

	Women and people of color comprise 31 percent and 54 percent, respectively, of the Executive Leadership Team roles reporting to our CEO.
	Women and people of color comprise 37.2 percent and 25.1 percent of our employee leadership population at the director-level and above, respectively.
	Women and people of color comprise 37.7 percent and 21.9 percent of our employee leadership population in all levels of management, respectively.

Our Strategy and Activations. In 2022, we continued to deliver on our global inclusion, equity and diversity strategy through a focused approach to achieve the following outcomes: Culture of Inclusion & Belonging, Workforce Reflective of our Consumer Base, Equity in the Employee Experience and being a Community Advocate and Preferred Employer.

To achieve our desired outcomes, we are continuing to activate globally by:

	Creating Communities: Develop a Kimberly-Clark community whose deepened understanding and daily actions drive inclusion, embrace diversity, empower authenticity and foster a sense of belonging.
	Empowering Employees: Equip and empower talent to thrive, and embrace hiring, promotion, and development practices that reflect our diverse consumer base.
	Leveraging Leadership: Raise the standard, expecting our leaders to act as cultural cultivators who build and nurture diverse, high-performing teams and infuse inclusion and equity into decision-making and the employee’s lifecycle experience.
	Accelerating Action: Using our global strength, we partner with organizations to combat inequities for our people, our consumers, and our communities around the world – to make lives better today and tomorrow.

Our business success is tied to cultivating workplaces, communities, and experiences where inclusion, equity and diversity are evident and thriving. Building on our momentum of 2021, we held our Global Inclusion Power Days, engaging employees in over 59 countries over five days to activate a culture of inclusion.

Aligned with our value of Growing Our People, we launched the SheCan THRIVE global mentoring program for emerging and existing female leaders. We believe in investing in development to build and retain our talent as a critical growth lever.

We re-introduced our Activating Inclusive Leadership initiative geared towards enhancing inclusion and diversity capabilities within our Global Team Leader population. To date, approximately 70 percent of all Kimberly-Clark leaders have completed this requisite training where they reflect on and learn how to lead with conscious inclusion, with the objective of infusing it into how we work, enabling better business decisions and empowering employees to build an inclusive culture. We believe inclusion is a strategic capability we must build from the inside out. By embedding inclusion into our ways of working, we will co-create and innovate in new ways while seeking to ensure that everyone is treated with dignity, recognized for their abilities, and valued for who they are.

We continue to provide transparent updates on our progress, disclosing our results in our Global Sustainability Report and included below.

It is our practice to disclose our annual 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.

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 commitments, 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.”

Service on Other Public Boards. Under our Corporate Governance Policies, directors should not serve on more than four public company boards (including the Kimberly-Clark Board). The Board has reviewed the number of outside directorships held by directors and determined that all directors are in compliance. In addition, when nominating a director for service on the Board or for re-election, the Board considers whether, in light of other commitments (including public company board leadership positions), the nominee will have adequate time to serve as a director of Kimberly-Clark.

Code of Conduct. Kimberly-Clark has a Code of Conduct that applies to all of our directors, executive officers and employees, including our CEO, 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 CEO, Chief Financial Officer or Vice President and Controller will also be posted at that location. It is our policy that any waiver of our Code of Conduct for executive officers or directors may be made only by our Board or a committee of our Board.

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 quarterly reports from our Chief Digital and Technology 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 National Institute of Standards and Technology cybersecurity framework (NIST CSF) to assess the maturity of our cybersecurity programs. Our robust information security training program for employees includes:

	Information security concepts included in our mandatory onboarding Code of Conduct training for all employees
	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. Includes training focused on timely, risk-based topics that align to corporate initiatives.
	Table-top exercises with senior leaders covering ransomware and third-party threats

We maintain cyber security insurance coverage. We have not experienced a known material information security breach nor incurred material breach-related expenses over the last three years.

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 Compliance Officer. Our Vice President, Deputy General Counsel and Chief 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 CEO and other key officers, as well as the emergency succession plan for the CEO 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.

As of the date of this proxy statement, the Board of Directors consists of thirteen 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 2024 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.

Robert W. Decherd is not standing for re-election. Mr. Decherd will continue to serve as a director until the Annual Meeting. We extend our deep gratitude to Mr. Decherd for his many years of dedicated service, strategic vision and leadership 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, eleven of the twelve directors on our Board will be Independent Directors.

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.

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 appoint directors 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. 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

The following table shows the compensation paid to each Outside Director for his or her service in 2022.

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 2022.

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.

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 chair are directly involved in the selection of the new lead engagement partner.

For 2023, 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 2023, 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 2022 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 2023 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 2023 independent auditor
	a review and approval of Deloitte’s proposed estimated fees for 2023
	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, including its understanding of our global business, accounting policies and practices, and internal control over financial reporting, and its conclusion that its term of 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.

Our aggregate fees to Deloitte (excluding value added taxes) with respect to the fiscal years ended December 31, 2022 and 2021, were as follows (dollars in millions):

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 2022 and 2021 were pre-approved by the Audit Committee or the Audit Committee Chair.

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 2022 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 on an annual basis. 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.

This Compensation Discussion and Analysis is intended to provide investors with an understanding of our compensation policies and decisions regarding 2022 compensation for our named executive officers.

For 2022, our named executive officers are:

References in the following discussion to our “named executive officers” do not include Ms. Henry, our former Senior Vice President and Chief Financial Officer, unless we specify otherwise. We discuss Ms. Henry’s compensation separately under “Executive Compensation for 2022 - Compensation of Former Named Executive Officer” below.

In 2022, we faced significant headwinds, including significant and persistent input cost inflation and unfavorable changes in foreign currency exchange rates. We nevertheless prudently managed our business through extreme market conditions and continued to make good progress executing strategies for our long-term success, including:

	focusing on targeted growth initiatives and product innovations, including the acquisition of a controlling interest in Thinx, and continuing to enhance our commercial capabilities for long-term success,
	aligning our portfolio, including entering into an agreement to sell our Neve tissue brand and associated assets in Brazil,
	emphasizing market share improvement in our priority markets, including in our personal care business,
	leveraging cost and financial discipline to fund growth and improve margins, taking multiple pricing actions, generating significant cost savings and managing discretionary spending, and
	allocating capital in stockholder-friendly ways, increasing the annual dividend by 1.8 percent, and returning approximately $1.7 billion to stockholders through dividends and share repurchases.

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

For our additional corporate financial and non-financial strategic performance goals, we achieved 91 percent of the target level, based on performance of 83 percent for our brand equity and market performance goals and 107 percent for our inclusion, equity and diversity goals.

In 2022, our pay decisions were consistent with our pay-for-performance philosophy. Based on our performance, the Management Development and Compensation Committee of our Board (the “Committee”) concluded that management did not deliver its financial or nonfinancial targets for 2022. Accordingly, the Committee approved annual cash incentives for 2022 below the target amount, including an incentive payout for the CEO at 85 percent of his target payment amount.

In February 2023, the Committee evaluated the results of the three-year performance period for the performance based restricted share units that were granted in 2020. Based on this review, the Committee determined that we exceeded our performance goal for adjusted net sales growth but did not achieve our performance goal for adjusted ROIC. As a result, the payout percentage for the share units was 72 percent of target.

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 2022. 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 2022 was equity based.

COMPOSITION OF TARGET DIRECT COMPENSATION

	Chairman and CEO
	Named Executive Officers

	Chairman and CEO		Named Executive Officers

Committee Consideration of 2022 Stockholder Advisory Vote

At our 2022 Annual Meeting, our executive compensation program received the support of approximately 93 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, we continued our general approach to compensation for 2023, specifically our pay-for-performance philosophy and our efforts to attract, retain, and motivate our executives. 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 CEO’s target direct annual compensation and realizable direct compensation over the last three years. 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:

	For unexercised stock options, the amount by which our 2022 year-end stock price ($135.75) 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 2020) or are expected to be paid out based on projected performance (for the grants made in 2021 and 2022), multiplied by our 2022 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 158 percent of target (2020), 62 percent of target (2021) and 85 percent of target (2022).
	Actual performance that resulted in the number of shares to be issued as a result of performance-based restricted share unit payouts of 72 percent of target (2020 award) and projected payouts of 125 percent of target (2021 award) and 160 percent of target (2022 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 our CEO were $138.96 (2020), $132.63 (2021) and $139.18 (2022).

The Committee believes that this chart demonstrates that our CEO’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.

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:

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

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.

This section describes how the Committee thinks about annual compensation and the processes that it followed in setting 2022 target annual compensation for our named executive officers.

Focus on Direct Annual Compensation

In setting 2022 compensation for our executive officers, including our CEO, 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 peer companies. In 2022, 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:

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 the Committee’s retained independent compensation consultant, Semler Brossy, and the company’s retained consultant, Mercer), 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 2022, the Committee did not make any changes to the peer group used in 2021. Likewise, in setting compensation for 2023, 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’ total direct compensation are based on an assessment of pay positioning against comparable positions in our peer group. To reinforce a pay-for-performance culture, targets for individual executive officers may also reflect the individual’s performance in prior years and experience in the position. The Committee believes that setting targets as 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.

CEO Direct Annual Compensation

The Committee determines the CEO’s direct annual compensation in the same manner as the direct annual compensation of the other named executive officers. Consistent with past practices, the Committee reviewed the pay relationship of Mr. Hsu to the other named executive officers in 2022.

Direct Annual Compensation Targets for 2022

Consistent with its focus on direct annual compensation, the Committee approved 2022 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 2022, were appropriate and consistent with our executive compensation objectives:

These 2022 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 2022 – Base Salary.”
	Annual cash incentive compensation is included at the target level, while the Summary Compensation Table reflects the actual amount earned for 2022.
	As described below under “Long-Term Equity Incentive Compensation – 2022 Stock Option Awards,” for compensation purposes the Committee values stock options differently than how they are required to be reflected in the Summary Compensation Table.
	Annual target amounts do not count off-cycle awards such as one-time sign-on cash bonuses and one-time restricted share unit awards reported in the Summary Compensation Table.
	In setting direct annual compensation targets, the Committee does not include increases in deferred compensation earnings or other compensation, while those amounts are required to be included in the Summary Compensation Table.

To help achieve the objectives discussed above, our executive compensation program for 2022 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. 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:

The increases for Mr. Hsu, Mr. Torres and Mr. Melucci, which range from 3.8 to 5.2 percent, are consistent with the annual merit increases provided to all employees. In the case of Mr. Urdaneta and Mr. Hicks, the Committee determined the base salaries and annual cash incentive targets when the company extended them employment offers, taking into account prior pay, prior experience, skills and peer company data.

Mr. Urdaneta and Mr. Hicks received cash signing bonuses of $250,000 and $1,100,000, 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.

2022 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 FOR 2022 ANNUAL CASH INCENTIVE PROGRAM

In February 2022, the Committee increased Mr. Hsu’s target by 5 percent to align with the market.

2022 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 2022. It then weighted the three elements for each executive (note that the business unit or staff function performance goals did not apply to our CEO 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 2022 PERFORMANCE GOALS AND WEIGHTS

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.

n ELEMENT 1: CORPORATE KEY FINANCIAL GOALS

For 2022, the Committee chose the following as the corporate key financial goals for the annual cash incentive program, which are weighted equally:

For more information regarding these adjustments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K. For purposes of the annual incentive program, the Committee added the amount below to exclude the impact of the operations/earnings (loss) of Thinx, in which we acquired a majority interest in 2022, on these full-year performance metrics.

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 net sales and adjusted EPS goals established in February of each year. For 2022, the Committee set these goals and the corresponding initial payout percentages at the following levels:

While the 2022 adjusted EPS target was lower than 2021 results, this was due to uncertainty around the volatility of the business environment, including significant input cost inflation and unfavorable foreign currency translation effects. The target was consistent with Kimberly-Clark’s financial outlook range as communicated to investors at the beginning of 2022.

Actual results. For 2022, our net sales result was $20.1 billion and our adjusted EPS result was $5.68. Based on these results, the 2022 payout percentage for achieving the corporate key financial goals was 82 percent of target.

n Element 2: Additional corporate financial and strategic performance goals

At the beginning of 2022, the Committee also established additional corporate financial and non-financial strategic performance goals and corresponding payout percentages 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 the level of achievement relative to the established goals. The weighting of Element 2 for each officer is shown in the table above under “Annual Cash Incentive Program 2022 Performance Goals and Weights.”

For 2022, the Committee chose the following as additional corporate financial and non-financial strategic performance goals:

Brand equity and market performance

Grow or maintain market share in priority markets

Grow or maintain overall weighted market share

Inclusion, equity and diversity

Representation of women in global manager roles

Representation of people of color in U.S. manager roles

The Committee established the targets for each goal to be challenging and rigorous and require strong performance for achievement. The targets are measurable and quantifiable. There is no subjectivity applied to the calculation of performance against these objectives. The calculation of performance is formulaic to reflect the proportionate level of achievement relative to the target.

Brand equity and market performance goals. Targets for our brand equity and market performance goals are considered confidential business information, disclosure of which could harm our operating performance or ability to compete. For our “grow or maintain market share in priority markets” goal (weighted at 33% of Element 2), actual results against the target corresponded to a calculated payout level of 78 percent. For “grow or maintain overall weighted market share” (weighted at 33%), actual results against the target corresponded to a calculated payout level of 87 percent.

Inclusion, equity and diversity goals. For our “representation of women in global senior manager roles” goal (weighted at 17% of Element 2), the Committee established a target of 38.1 percent. Our actual result was 37.7 percent, corresponding to a calculated payout level of 64 percent for this goal. For “representation of people of color in U.S. manager roles” (weighted at 17%), the Committee established a target of 20.4 percent. Our actual result was 21.9 percent, corresponding to a calculated payout level of 150 percent.

The inclusion, equity and diversity targets were set in accordance with our long-term global inclusion, equity and diversity strategy. While we did not achieve our target for women in global manager roles, we will continue to focus on retention, hiring, growth and development of our pipeline as critical areas of success for 2023.

Actual payout percentage. For 2022, our calculated payout for our brand equity and market performance goals was 83 percent and our inclusion, equity and diversity goals was 107 percent. Based on these results, the 2022 payout percentage for achieving these other financial and strategic goals (i.e., Element 2) was 91 percent of target.

n ELEMENT 3: BUSINESS UNIT OR STAFF FUNCTION PERFORMANCE GOALS

In addition to the performance goals established by the Committee, our CEO 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:

Annual Cash Incentive Payouts for 2022

The following table shows the payout opportunities and the actual payouts of annual cash incentives for 2022 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 48.

Summary of Annual Cash Incentive Payouts: 2018 through 2022

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 2018 through 2022, 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

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.”

2022 Grants

In determining the 2022 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 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 2022 annual awards because such amounts represent compensation attributable to prior years.

To determine target values, the Committee considered individual performance and the other factors listed above, as applicable. Target grant values were approved in February 2022, other than for Mr. Urdaneta and Mr. Hicks, who were hired in 2022, 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 12.5 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.

Target grant values were as follows:

In addition to their annual long-term incentive awards, the Committee granted time-vested restricted share awards to Mr. Torres and Mr. Melucci for purposes of both retention and to drive future performance on key strategic initiatives including, in the case of Mr. Torres, elevating our core KCNA businesses, and in the case of Mr. Melucci, leading our disciplined acquisition/development program. These awards vest in full on the third anniversary of grant. The Committee also granted time-vested restricted share awards to Mr. Urdaneta and Mr. Hicks as an incentive to join the company and to replace certain compensation forfeited upon leaving their former employers. These awards vest ratably over two and three years, respectively, for Mr. Urdaneta and Mr. Hicks.

Performance Goals and Potential Payouts for

2022 - 2024 Performance-Based Restricted Share Units

In April 2022, the Committee determined the performance objectives for the performance-based restricted share unit awards granted in 2022 based on average annual organic sales growth and modified free cash flow (MFCF) for the three-year period January 1, 2022 through December 31, 2024, weighted equally.

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.

Payout of 2019 - 2021 Performance-Based Restricted Share Units

In February 2022, the Committee evaluated the results of the three-year performance period for the performance-based restricted share units that were granted in 2019. The performance objectives for these 2019 awards were based on average annual adjusted net sales growth and average adjusted return on invested capital (ROIC) for the period January 1, 2019 through December 31, 2021, each weighted equally.

Based on this review, the Committee determined that we exceeded our performance goal for both adjusted ROIC and adjusted net sales growth. As a result, the payout percentage for the share units was 130 percent of target.

The shares underlying these performance-based restricted share unit awards were distributed to our named executive officers in February 2022 and are included in the table below entitled “Option Exercises and Stock Vested in 2022.”

Payout of 2020 - 2022 Performance-Based Restricted Share Units

In February 2023, the Committee evaluated the results of the three-year performance period for the performance-based restricted share units that were granted in 2020. The performance objectives for these 2020 awards were based on average annual adjusted net sales growth and average adjusted ROIC for the period January 1, 2020 through December 31, 2022, each weighted equally.

Based on this review, the Committee determined that we exceeded our performance goal for adjusted net sales growth but did not achieve our performance goal for adjusted ROIC. As a result, the payout percentage for the share units was 72 percent of target.

The Committee believes that these payouts, along with the payouts for the 2019 - 2021 performance restricted share units described above, 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 will be distributed to Mr. Hsu and Mr. Melucci on February 28, 2023 and to Mr. Torres on April 29, 2023. Mr Urdaneta and Mr. Hicks joined Kimberly-Clark after these grants were made.

Vesting Levels of Outstanding Performance-Based Restricted Share Unit Awards

As of February 8, 2023, the performance-based restricted share units granted in 2022 and 2021 were on pace to vest at the following levels: 160 percent for the 2022 award and 125 percent for the 2021 award.

2022 Stock Option Awards

As noted above, 25 percent of the annual long-term equity incentive grants to executive officers in 2022 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.

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 12.5 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 April 18, 2022, Ms. Henry’s role changed from Senior Vice President and Chief Financial Officer to a transitional role and she served in this role until she retired on September 1, 2022. For her retirement, Ms. Henry received our standard benefits for retirement-eligible employees under our compensation plans. Because Ms. Henry’s departure was a retirement, she did not receive benefits under our Severance Pay Plan.

Prior to her retirement, Ms. Henry received an annual base salary of $920,000. She received a prorated payout for 2022 in accordance with the retirement provisions of our annual cash incentive program based upon (1) an individual target of 100 percent of her base salary (67 percent based on her departure date) and (2) a payout equal to 100 percent of her target. In February 2022, Ms. Henry received a grant of 20,745 performance-based restricted share units and in April 2022 she received a grant of 51,732 stock options.

In addition to the compensation described above, Ms. Henry received accelerated vesting of outstanding equity awards in accordance with the retirement provisions of the terms of our 2021 Equity Participation Plan (the “2021 Plan”) and the predecessor 2011 Equity Participation Plan (the “2011 Plan” and collectively with the 2021 Plan, the “Equity Plans”), described below under “Potential Payments on Termination or Change of Control - Severance Benefits - Departure of Former Named Executive Officer.”

Retirement Benefits

Our named executive officers receive company contributions 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”). 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.”

Beginning in 2023, executives will be eligible to participate in our Voluntary Deferred Compensation Plan (“VDCP”) by deferring up to 50 percent of base salary and up to 90 percent of annual performance bonus into a deferred compensation account with investment choices that are a subset of those available under the 401(k) Profit Sharing Plan. No above-market or preferential interest will be credited on deferred compensation, as those terms are defined by the SEC. There is no employer match or similar company contribution under the VDCP, but in connection with the adoption of the VDCP, the Supplemental 401(k) Plan was amended to provide for a restoration contribution based on compensation that is not recognized under the 401(k) Profit Sharing Plan as a result of it being deferred by an executive under the VDCP.

Other Compensation

We provide only limited perquisites to our executive officers, consistent with our focus on more direct, performance-based 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.

Our CEO may use our corporate aircraft for limited personal travel consistent with our executive security program, and security services are provided for our CEO 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.

Beginning in 2023, we will provide our executive officers with long-term disability coverage in excess of the limit provided under our group long-term disability plan. The maximum monthly disability benefit under the combined executive long-term disability plan and the group long-term disability plan will be 70 percent of eligible compensation (base salary and certain bonuses) up to a maximum of $40,000 per month.

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 events 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.

For 2023, the Committee approved changes to the annual cash incentive plan metrics and the long-term equity incentive award mix.

2023 Changes to Our Annual Cash Incentive Metrics

As discussed in “2022 Performance Goals, Performance Assessments and Payouts” above, one element of our performance goals is comprised of corporate key financial goals. For 2023, the Committee determined to replace the previous net sales corporate key financial goal with an organic sales growth goal to enhance management’s focus on “controllable” currency-neutral results, incentivize optimal actions in differing foreign exchange environments, and enhance alignment with peer company practice. Similar to 2022, the 2023 corporate key financial goals will also include an adjusted EPS goal, and organic sales growth and adjusted EPS will be weighted equally.

Similar to 2022, the Committee also established corporate non-financial goals for 2023, which include

	Focusing on market share improvement in global markets
	Inclusion, equity and diversity

In addition, goals have been established for each named executive officer, other than our CEO, relating to his or her business unit or specific staff function.

2023 Changes to our Long-Term Incentive Compensation Equity Award Mix

For 2023, the Committee determined that long-term incentive compensation awards for the named executive officers will consist of awards of performance-based restricted share units comprising 60 percent of the target long-term incentive award value, with the remaining 40 percent to be granted in time-vested restricted share units. The Committee adjusted the mix from the previous allocation (75 percent performance-based restricted share units / 25 percent stock options). The new mix is intended to more closely align with peer group practices, create better balance between pay-for-performance and retention and reduce the impact of stock price volatility on retentive value.

Similar to 2022, the performance objectives for the 2023 performance-based restricted share unit awards are based on modified free cash flow and average annual organic sales growth for the period January 1, 2023 through December 31, 2025. 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. The share units vest in full on the third anniversary of the grant date.

The 2023 time-vested restricted share units will vest in three annual installments of 30 percent, 30 percent and 40 percent.

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 2022 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 2021 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.

The CEO has been delegated the authority to approve equity grants 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 CEO is not permitted to make any grants to any of our elected officers, including our executive officers.

Recruiting, special recognition and retention stock-based awards are made on pre-determined dates following our quarterly earnings releases.

With respect to grants of performance-based restricted share units to executive officers, in 2022 the Committee approved the dollar value of the grants at its February meeting and the grants were effective on the last business day of February. 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 as necessary to comply with NYSE listing standards implementing new Exchange Act Rule 10D-1.

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

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 2022 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.

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.
	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.