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FOOTNOTED

Pay Inequity At 3M

05/05/08

I once feared that companies around here wouldn’t provide enough fodder for a weekly column, but that was before I browsed the proxy statements of such local players as Phoenix Cos., Travelers and Northeast Utilities (each the subject of a past column). Now I’ve stopped worrying that I’ll run out of material and am back to fretting about more important things, like rising food prices and what humidity does to my hair.

This week I’m getting to know 3M, which is headquartered in Minnesota but maintains an outpost here in Windsor. In addition to the famous Post-its, these guys produce a strange potpourri of items ranging from callus cream to sandpaper to engine degreaser. Surely one of this company’s 55,000 products will solve my hair problems.

Security Perks

3M makes a film one can apply to windows “to hold your glass in place during … smash and grab burglaries.” Perhaps Chief Executive Officer George Buckley uses this stuff on his own windows. The latest proxy says 3M spent $172,000 last year for “several projects improving the personal security of Mr. Buckley and his family at their residences.” (Yes, that last word was plural.)

Total 2007 compensation for Buckley was over $17 million, more than triple the figure for 3M’s next highest paid executive, Chief Financial Officer Patrick Campbell. Given this disparity, it’s not surprising that a phrase suddenly in vogue among public companies this year, “internal pay equity,” doesn’t appear in 3M’s proxy.

Severance Powerball

Buckley was also the sole recipient of some special perks like personal travel on company aircraft ($100,000 worth) and in company cars ($51,000). But the cost of “ground transportation” to move Buckley’s family to Minnesota from Illinois (where he used to head up bowling ball-maker Brunswick Corp.) only came to $516. Pretty cheap, though it’s doubtful the vehicle they rode in had a picture of a greyhound on it.

Buckley also received $34,000 in “gross-ups” to cover his taxes on payments 3M made to help him relocate and to pay the legal bills he ran up while negotiating his employment contract. That contract, according to the proxy, promises Buckley about $26 million in severance if things don’t work out.

The perks chart also lists modest amounts, in the neighborhood of $500 to $1000, for “certain 3M products” given to senior executives for their personal use. Hmm … fly fishing equipment? Or Hannah Montana bandages?

Wendy Fried, a freelance writer, is a contributing editor at footnoted.org and also blogs about matters corporate at her own site, proxyland.blogspot.com.