3M Co.’s Inge Thulin, named today to become chief executive officer Feb. 24, pledged to keep the strategy set by predecessor George Buckley of using research and development and emerging-market expansion to drive growth.
3M’s revenue rose 40 percent to $29.6 billion in 2011 from 2005, when Buckley took the reins as chairman, CEO and president, increasing the number of new products and expanding sales in markets such as China and Brazil. Thulin, 58, said he worked closely with Buckley to develop that plan for St. Paul, Minnesota-based 3M, the maker of products as diverse as Scotch tape, Nexcare thermometers and Novec electronic coatings.
“If you think about where we try to take the company from a growth perspective, those strategies are not changing because they are working for us,” Thulin said in a telephone interview.
Thulin, who was named in May to the newly created position of chief operating officer, joined 3M in 1979 and rose through the company’s healthcare business. He had run international operations, for which he helped expand sales to almost $20 billion, about two-thirds of 3M’s revenue, the company said.
Thulin was the “heir apparent” after being named COO, and the only surprise in the succession was how long the company waited to announce it, Deane Dray, an analyst with Citigroup Inc. in New York, said in a note today.
“His acumen in orchestrating profitable growth in international markets was likely a key factor in the board’s decision,” Dray said.
Buckley will step down as president and CEO when he turns 65 on Feb. 23, in line with 3M’s mandatory retirement rule. He will keep his chairman title until 3M’s May 8 annual shareholder meeting, where the board said it expects to elect Thulin chairman. Buckley will retire from the company on June 1.
Thulin’s appointment ended speculation that the board would waive the retirement policy for Buckley, who said in a December interview that he wanted to stay on the job.
“Inge is a proven leader with a terrific blend of strategic, business and analytical skills, and an excellent record of delivering both sales growth and operational efficiency in a wide range of global businesses,” Vance D. Coffman, a 3M board member, said in a statement today.
3M will pay Thulin an annual salary of $1.3 million and a cash incentive target of $2 million, the company said in a filing. For 2012, he will receive stock options and performance shares with a target value of $8 million, the company said.
3M will keep its organic sales growth target of 7 percent to 8 percent. The company has struggled to meet the goal since Buckley announced the target in December 2009.
“As we speak today, there’s no reason to change that,” Thulin said of the target. “We believe we’ll get there and that’s what we’re laying the plan around and that’s the plan we have at this point in time.”
The company is also grappling with declines at its Displays & Graphics unit, where lower consumer demand for liquid-crystal display televisions has hurt sales of 3M optical films. The business still makes money and is on a down cycle that will turn in the company’s favor, Thulin said. He said the business depends on innovation and technology, which are 3M’s strengths.
“There’s no question that’s a good business for us to be in,” Thulin said.
3M rose less than 1 percent to $87.97 at the close of trading in New York. The shares have climbed 7.6 percent this year, tracking gains in the Standard & Poor’s 500 Index.
With Thulin’s appointment, 3M returns to its tradition of finding CEOs from within its ranks. Buckley had been CEO of sports-equipment maker Brunswick Corp. (BC), and the previous 3M chief, James McNerney, was hired in 2002 from General Electric Co. (GE) McNerney left in 2005 to run Boeing Co. (BA)
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