Kimberly-Clark Corporation ($KMB)

Hello, and welcome to the Annual Meeting of Stockholders of Kimberly-Clark Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Mike Hsu, Chairman and CEO of Kimberly-Clark. Mr. Hsu, the floor is yours.

Good morning, everyone, and welcome to Kimberly-Clark's Annual Meeting. This meeting is called to order. Before we get started with the business of the meeting, I will comment briefly on our recent performance and strategic transformation. Over the past 2 years, our Powering Care strategy has put us on a virtuous cycle of value creation. Through our team's excellent execution of our strategy, we have created a durable growth engine that is enabling Kimberly-Clark to win with consumers around the world. In 2025, we accelerated our momentum across the board, delivering strong results while navigating a dynamic external environment. We took several decisive actions to pivot our portfolio to higher growth, higher-margin personal care categories. We announced our pending acquisition of Kenvue, a powerful next step in our transformation to create a new kind of health and wellness leader and serve billions of consumers across every stage of life. This transaction is a generational opportunity to reimagine care and create lasting value for shareholders. We remain on track to close the acquisition in the second half of 2026. To lay important groundwork for our acquisition of Kenvue, we announced a strategic joint venture with Suzano to create a preeminent international tissue and professional products company with substantially all the assets of our IFP business in which we'll own a 49% stake. This joint venture positions Kimberly-Clark and IFP to move forward with clarity and seize the tremendous opportunities ahead. We remain on track to close this transaction in mid-2026. Additionally, in 2025, we took a decisive step to optimize our supply chain network in North America with a $2 billion investment focused on building a new advanced manufacturing facility in Warren, Ohio, and an automated distribution center at our Beech Island, South Carolina plant. These investments will accelerate our innovation plans, support our growth ambitions and enable us to serve consumers even better. Our 2025 results reflect the enhanced strength and resilience of our business. Our teams around the world continue to perform while transforming, and I want to thank them for their passion and dedication. The investments we made in innovation and marketing are differentiating our products across the good, better, best ladder and strengthening brand love with consumers. This has driven our strong shift to delivering broad-based volume plus mix-led growth even while volume growth has been somewhat challenging to achieve across the broader CPG landscape. At the same time, through Powering Care, we have transformed our organization and processes to maximize returns on those investments. We've wired Kimberly-Clark for speed and consistency with a lean and agile operating model. We have improved enterprise-wide visibility and discipline with a focus on delivering the best products at the lowest cost across all price value tiers and in every category market where we compete. Critically, we've embedded a growth and accountability mindset across the organization. These fundamentals help us deliver financial performance that gives us the flexibility to reinvest and sustain the virtuous cycle. Our growth engine is innovation-led and amplified by emotionally resonant advertising and superior commercial activation. As we deliver volume and mix growth and industry-leading productivity, we use the savings to invest for impact and fuel the cycle. I want to thank our Board of Directors who are with us on today's call. They have played a key role in overseeing our transformation and are committed to serving our global consumers and driving balanced sustainable growth that enhances shareholder value. We're building for the future and working to create a company unlike any other in our industry today through our acquisition of Kenvue. We've hit the ground running in 2026, and we are excited to seamlessly plug Kenvue's brands and businesses into our proven durable operating model. Together, we will unlock a new phase of growth and capitalize on the opportunity to provide extraordinary everyday care to billions of people around the world and deliver generational value for shareholders. I now invite Courtney Roane, our Vice President and Corporate Secretary, to inform us of housekeeping matters and open the polls.

Thank you, Mike. I will first go over a few housekeeping matters. Today's virtual-only meeting is a live webcast. Through the meeting portal, you will find our agenda and rules of conduct. The portal also has links to our annual report and our proxy materials for the meeting. A representative from our Inspector of Election is in attendance and has confirmed that a quorum is present. If you have not voted or wish to change your vote, you may do so during the meeting through the virtual meeting portal by clicking on the vote icon located in the upper right-hand corner. However, any stockholder who has already voted and does not want to change his or her vote need not take any further action. The polls are now open. We will accept votes until the polls close later in the meeting. [Voting]

Feel free to ask a question at any time during the meeting by clicking the message icon in the upper right-hand corner of the screen. We will respond to questions and comments later in the meeting after we close the polls. We have 4 proposals for this meeting: first, the election of 13 directors; second, ratification of the selection of our independent auditors; third, approval of the compensation of our named executive officers; and fourth, a stockholder proposal to require an independent Board Chair. Each proposal is described in our 2026 proxy statement. I would like to introduce our director nominees who are all in attendance on today's call: Sylvia Burwell; John Culver; Mike Hsu, who is our Board Chair; Mae Jemison, Deeptha Khanna, Todd Maclin, Deirdre Mahlan, Sherilyn McCoy, Christa Quarles, Jaime Ramirez, Joe Romanelli, Dunia Shive, Mark Smucker. Also joining this meeting are representatives of Deloitte & Touche, our independent auditors. Melissa Cloniger, who is the partner in charge of our 2026 audit, is in attendance today. The proponent of Proposal 4 is Mr. Matt Prescott, acting on behalf of the Accountability Board, which owns greater than $25,000 of the company's common stock. Operator, could you please play Mr. Prescott's prerecorded statement in support of this proposal?

Hi, everybody. I can keep our remarks brief today for the sake of everybody's time and just say that we think the proposal speaks for itself and would refer anybody with questions about it to the proxy statement. Only want to add that Institutional Shareholder Services and Glass Lewis are both recommending a vote in favor of the proposal. And obviously, we also encourage shareholders to vote for it. Thank you very much.

Mike, I will now ask for a motion that the 4 proposals listed on the agenda be introduced for a vote by the stockholders.

Moved.

I second the motion. For the reasons stated in the proxy statement, the Board of Directors unanimously recommends that you vote against Proposal 4. We'll now have a brief pause to allow any stockholders desiring to submit or change their vote now to do so. [Voting]

I now declare that the polls are closed. The inspectors have advised me based on preliminary results that all 13 nominees have been elected to the Board. Our stockholders have approved the proposal to ratify our independent auditors and approve our executive compensation. The stockholders did not approve the proposal to require an Independent Board Chair. We will announce the final voting results in a current report on Form 8-K to be filed with the SEC within 4 business days of today's meeting. We will now consider questions you may have about Kimberly-Clark. It is possible that our responses will include forward-looking statements or certain financial measures that have not been calculated in accordance with generally accepted accounting principles. Please see the meeting rules of conduct for more information on these matters.

Great. Mike, we have one question already from Phil Brown, a long-time shareholder, he notes he's enjoyed our dividend over holding our stock. However, is concerned that the payout ratio, his math has now reached a higher level. Could you please comment on that?

Yes. Mr. Brown, thank you so much for the question, and thank you for being a long-time Kimberly-Clark shareholder. Hey, we're really proud of our 54-year history of increasing the dividend, but also recognize that we do that with, I would say, discipline and rigor, right? And so I think your question is appropriate. In 2025, as we looked at the payout ratio, I think your number -- your math is correct. However, there were some restructuring charges that were noncash that affected kind of the stated earnings. And so we feel great from a cash flow perspective that the dividend is an appropriate ratio for what the company can afford. And so we're going to continue to work hard to continue to increase I would say, the growth and the profitability of the company over time, and we'll continue to strive to drive for an increased dividend to satisfy long-term shareholders like you.

Mike, we have not received any additional questions via the virtual meeting portal. And with that, I will ask you to please adjourn the meeting.

Okay. We thank you all for your continued support of Kimberly-Clark. This meeting is now adjourned.

The meeting has now concluded. You may now disconnect.