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3M CEO in line for $26 million pension — as company freezes the plan for



A previous version of this story misstated the number of nonunionized 3M employees. It has been corrected.

Another day, another U.S. corporation cuts retirement benefits for its workers while fattening benefits for the people in its executive suite.

Storied manufacturing giant 3M
MMM,
-0.19%

has announced that it is freezing the company pension plan for nonunionized workers in favor of a 401(k). While workers will keep benefits that they have accrued so far, new contributions will end in 2028.

Read more: 3M to scrap pension plans for nonunion employees

But there’s one employee who won’t be feeling the pain: Mike Roman, the company’s chair and chief executive.

Company accounts reveal that Roman, 63, has received a staggering $19.3 million boost to his company pension (and other nonqualified deferred compensation plans) in recent years, according to statements filed to the Securities and Exchange Commission. This includes a $3 million gain in 2021, $7.7 million in 2020, $5.6 million in 2019 and $3 million in 2018.

This has left him in line for a company pension so gigantic that the present value is $25.8 million — enough to generate a guaranteed lifetime income of $165,000 per month, according to immediateannuities.com.

That’s not all. Since taking over as CEO in 2018, Roman has also been paid $65 million in cash, stock, options and other benefits.

None of these numbers, incidentally, include last year’s pay or pension benefits. Those won’t be disclosed until the spring.

We have become so inured to these rich executive payouts, they may not even raise an eyebrow. The usual justification is that stockholders have to pony up to get the top talent, and that they pay for performance.

In the case of 3M, I can only respond with laughter.

During Roman’s nearly six years as CEO, 3M’s stock has been a dog with fleas. Since he took the helm at the company in July 2018, the stock has managed the difficult feat of underperforming the Dow Jones Industrial Average
DJIA,
the S&P 500
SPX,
an equal-weighted version of the S&P 500 and every other stock that the company itself names in its filings as its “executive peer group.”

If you had invested $10,000 in 3M on the day Roman took over, then held onto the stock and reinvested all dividends, today you would be sitting on about $7,000.

That’s ignoring the ravages of inflation, which have made that balance worth even less. It’s also ignoring taxes.

If you had invested that $10,000 in the SPDR Dow Jones Industrial Average exchange-traded fund
DIA,
which tracks the Dow, you’d have roughly $17,400.

If you’d invested in the S&P 500 via the SPDR S&P 500 ETF
SPY,
you’d have more than $19,000.

The results would be similar if you’d invested in one of the companies in 3M’s self-identified peer group instead. While a couple of names have changed since 2018 — usually in response to…



Read More: 3M CEO in line for $26 million pension — as company freezes the plan for

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