Interim 3M chief earns a comfortable
$100,000 per month -- before perks!

Whoever said temporary jobs don't pay?

Aug 13, 2005

Whoever said temporary jobs don't pay?

Bob Morrison, 3M Co.'s interim chief executive, is on pace to earn $100,000 per month in base salary, or $1.2 million a year.

He'll also participate in profit sharing, based on company performance, that could pay up to $1.44 million per year. Profit sharing and base salary will be pro-rated based on how long he serves in the CEO position at Maplewood-based 3M.

The pay package details, disclosed in a regulatory filing this week, also show that Morrison will receive stock options on 48,386 shares of 3M with an exercise price of $72.65 per share.

3M's stock closed Friday at $71.94, down 42 cents. But the options come with a 10-year window in which Morrison can exercise them.

The total compensation package is in the ballpark for what an interim CEO at a company 3M's size could expect, but the structure of the stock options is a little puzzling, said Frank Glassner, chief executive of Compensation Design Group, a New York City-based consulting firm.

That's because the options vest in annual installments over a 3-year period. "Time-based vesting is becoming a thing of the past. Most companies are shifting to performance-based vesting of options," Glassner said. "This program is great for retaining him, not great for motivating him."

3M is searching for a successor to James McNerney, who left at the end of June for the top job at aircraft maker Boeing Co. in Chicago.

Morrison, 62, took the temporary post about six weeks ago. He had a long history in the food business before joining 3M's board of directors in 2002. He was CEO of Quaker Oats Co. when it was bought by PepsiCo and left that position with a $19 million payout and stock options valued at up to $90 million.

For the 3M gig, Morrison also will be reimbursed for temporary housing expenses, he can use 3M company aircraft, and he gets a company-furnished car along with a driver.

Glassner described those benefits as "very standard." A deal that has 3M covering tax expenses incurred by Morrison for any personal use of those perks is "reasonably generous," he said.

On the downside, 3M did suspend the $150,000 annual retainer that Morrison received as a member of the company's corporate board. Last year, 91 percent of that $150,000 was paid out in the form of 3M stock.