UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    )

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Soliciting Material under §240.14a-12

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CUMMINS INC.

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Letter from our Chairman

To Cummins Shareholders:

After 10 years writing to you as Cummins’ Chairman and Chief Executive Officer, I am pleased to pen this one in my new capacity as Executive Chairman of Cummins. I trust you all saw the exciting news that in July 2022, we announced the appointment of Jennifer Rumsey to Chief Executive Officer and my transition to Executive Chairman. In her letter to you, Jennifer discusses the plans and opportunities she envisions to strengthen our enterprise, grow our business and reinforce our commitment to being a responsible global citizen.

When I took on the role of CEO a decade ago, I felt a solemn duty to build on the achievements and legacy of the great leaders who preceded me and to leave the company stronger than I found it: stronger financially, stronger in the eyes of customers and stronger strategically. I believe that the company is stronger in all those ways today and is positioned for success in a decarbonized world. I feel immense pride and gratitude for having the opportunity to be part of this great company’s success.

One of my greatest sources of optimism about our future is the strength of our leadership team. With Jennifer at the helm, the capability, expertise and diversity of our leadership team is unmatched. Jennifer is a once-in-a generation talent and the right leader for Cummins at this important time in our history. She uniquely understands our customers and business, having worked across many different parts of our company, and in every role, consistently delivering results. Most importantly, she is a principled leader who cares deeply about our stakeholders and lives Cummins’ values. We share a common vision for Cummins, and I am confident that Jennifer will lead Cummins into an even more prosperous future.

Jennifer is also just one example of the careful succession planning our Board undertakes to ensure continuity of leadership, and there are noteworthy messages embedded in her succession to CEO that I would like to share.

First is that talent, energy and dedication are recognized at Cummins and are rewarded with increased responsibility. Second, we are a continuous learning organization committed to providing the mentorship and training for our people to advance their careers and achieve their full potential. Third, we embrace diversity, equity and inclusion, and upward mobility is not constrained by gender or race. We are proud that Cummins is now one of 34 companies in the S&P 500 being led by a woman CEO, and I hope to see more companies added to that list soon. And fourth, there is value to refreshing leadership. Innovative ideas and fresh perspectives are necessary to navigate an already complex world.

Above all, we are committed to doing our part to address climate change, ensuring that our planet is still livable for our children and grandchildren. We have a long, and successful, history of embracing environmental challenges and leveraging them as an opportunity to innovate and drive growth in our business. Over the last 20 years, we have reduced emissions from our products by more than 90%. During that same period, our company has grown from $6.3 billion to $28.1 billion in revenue and significantly expanded our global presence.

Our Board of Directors and our management team are aligned on investing in the future of decarbonization and seizing the growth opportunity it presents for Cummins. In her letter, Jennifer covers in detail our initiatives and progress toward decarbonization. We are confident in our ability to play a leading role in bringing lower-carbon technologies to the commercial and industrial markets globally while generating strong returns due to the unique capabilities we have built over many years.

Cummins has a long legacy of delivering on our commitments. Our more than 73,600 dedicated employees around the world will enable our continued success through forward thinking, adaptability and focus.

I am grateful for the support of our shareholders, and I urge you to read this proxy statement and cast your vote. Your voice is important to us.

Letter from our President and Chief Executive Officer

To Cummins Shareholders:

Last year was an incredibly exciting one for Cummins and our stakeholders. I feel deeply honored to have been named our newest, and just the seventh, Chief Executive Officer of Cummins. My life and leadership have prepared me for this role at this critical period for Cummins and our planet. A focus on purpose, people and impact has shaped my career and will influence how I lead. With these guiding principles, I believe this moment of truth for our planet and society is Cummins’ time to shine.

I am grateful to my long-time mentor, Tom Linebarger, for his continuing guidance as Executive Chairman. Tom has been an extraordinary leader for Cummins and a true partner and coach to me. Over Tom’s ten-year tenure as CEO, our revenues have grown about 50% with a total return to shareholders of around 200%. Our financial strength, market position and key capabilities position us well to execute our Destination Zero strategy and achieve our goal of reaching net-zero emissions by 2050 while growing our business and delivering strong returns to our investors. Our leadership and Board of Directors share a common vision for the role our company plays in powering a more prosperous world.

Cummins powers some of the world’s most demanding and economically vital applications. Responding to the critical needs of our customers and addressing climate change requires innovation and focus across our entire business. We are advancing technology and reducing greenhouse gas emissions from engine-based and new power solutions while helping our customers choose the solution that is right for their application and optimize how they use our products.

Our business and environmental strategies are aligned to capture the growth opportunity that decarbonization presents for Cummins. In 2022, we articulated our strategy to drive growth across our business as a part of this decarbonization journey and have projected that by 2030 this work will generate revenues of $33-$35 billion in our base business, between $6-$13 billion in our New Power business, and $41-$46 billion in total for Cummins. Based on our 2030 targets, we expect to generate more than $30 billion in cash from operations and are committed to our long-term goal of returning 50% of that to shareholders over that time period. We are excited about the growth trajectory of the company and are focused on driving improved profitability throughout our business. Although there will certainly be risks through this energy transition, we have a proven track record of outsized growth in the segments we serve while delivering strong returns to shareholders.

While the biggest impact and opportunity we have is through our products, we are working to address climate change across all aspects of Cummins – improving our operations, developing new products, working closely with our customers and suppliers, and having a net positive impact on every community in which we do business. Connecting people to this powerful purpose is one of my key responsibilities as CEO. In order to strengthen the connection to our purpose, and reconnect employees with one another and our unique culture post-pandemic, Cummins leaders around the world held 415 interactive sessions that reached more than 37,000 employees in the first quarter of 2023 alone. The feedback we received was overwhelmingly positive; 89% rated their trust and confidence in the direction of the company as very high and expressed excitement about the future and strategy of Cummins. This focus on our people and keeping them at the center of all we do also extends to our customers and suppliers, communities, and of course, our shareholders.

In 2022, we made great progress in executing our Destination Zero strategy. To highlight just a few, we:

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Completed the acquisition of Meritor, which will accelerate the development of economically viable decarbonized powertrain solutions. Meritor also delivers complementary synergies to our core business by expanding our product offerings, sales and service network and customer relationships.

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Finalized the acquisition of Jacobs Vehicle Systems to advance the engine braking and cylinder deactivation necessary to meet current and future emissions regulations, especially for medium and heavy-duty engines.

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Launched our industry-first fuel-agnostic powertrain platforms that help customers decarbonize today and make it easier to adopt alternative fuel types by featuring a series of engine versions that are derived from a common base engine, which means they have a high degree of parts commonality.

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Unveiled our fourth-generation hydrogen fuel-cell engine, demonstrating the commercial viability of hydrogen as a solution for customers to decarbonize their profile.

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Shared that Cummins, Chevron, and Walmart are working together to integrate Cummins X15N natural gas engine, powered by renewable natural gas, into Walmart’s heavy-duty truck fleet. Also announced collaborations with Daimler Truck North America and Scania to deliver fuel cell electric powertrains for heavy-duty truck applications.

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Signed a memorandum of understanding with Tata Motors to collaborate on the design and development of low- and zero-emission power technologies for commercial vehicles in India, including the production of the B6.7 hydrogen internal combustion engine, part of the new fuel-agnostic platform.

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Invested in Germany-based VoltStorage to innovate new solutions for energy storage systems that are crucial to the conversion of conventional electric power to 100% renewable energy.

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Closed on Siemen’s Commercial Vehicles business, which provides critical components for the next generation of electric powertrains.

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Drove the commercialization of green hydrogen forward with the first U.S. electrolyzer manufacturing facility at our Fridley, Minnesota plant. Electrolysis is a leading hydrogen production pathway to zero greenhouse emissions, and Cummins now has electrolyzer manufacturing capabilities in the U.S., Belgium, Canada with two new factories in Spain and China underway.

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Continued to reduce our own carbon footprint with our second largest solar farm at our Rocky Mountain Engine Plant in North Carolina. To date, we have completed 51 solar array installations at locations around the world from North America to Australia.

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This list reflects the significant investments we have made to position Cummins to meet our evolving customer needs. We did this while navigating numerous supply chain and operational challenges and delivering record revenue of $28.1 billion; earnings per share of $15.12; net income of $2.2 billion; and EBITDA of $3.8 billion* in 2022 – a testament to the capability and dedication of our employees.

People are at the center of our success, and it is our more than 73,600 employees who power innovation across Cummins. I share Tom’s commitment to forward thinking in how we continue to attract, build and retain the best talent. We do that through two distinct ways: investing in leadership and development opportunities and creating environments where we harness the diverse perspectives of employees to solve complex challenges. These are key elements of our strategy and a competitive advantage that contribute to our continued success and growth.

Embedding Diversity, Equity and Inclusion (DE&I) into the fabric of our company starts at the top, and as CEO, I want to reinforce that this work is critical to our success as a business and deeply personal to me. While there is more to be done, the diversity of our Cummins Leadership Team – my direct team members – has increased in several areas. Nearly half of the Cummins Leadership Team are women, and 40% are people of color, which includes Black and Asian representation. In addition, three of the five Cummins business segments are led by women. We cover more specifics on our representation aspirational goals and progress in the Compensation Discussion and Analysis section of this proxy.

The health of our communities affects the health of our people and business. Since Cummins’ inception in 1919, we have worked across a wide variety of community initiatives, finding opportunities that leverage the unique skills of our colleagues worldwide. In 2022, more than 70% of our employees volunteered in their communities, contributing 292,188 hours of their time and energy. Employee-led engagement is complemented by our focused effort on three global strategic priorities.

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Advocating for equitable educational systems and high-quality learning environments. High quality education leads to strong social and economic outcomes for students, a skilled workforce for employers and vibrant, prosperous Cummins communities. Among many Cummins education initiatives is Cummins TEC: Technical Education for Communities, a global strategic program to build technical vocational skills through school-based, industry-supported skills training leading to living wage jobs.

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Increasing opportunity and equity. Cummins has a deep commitment to removing barriers for those who have historically been denied access to opportunity, including racial and ethnic minorities, women, people with disabilities, economically disadvantaged, immigrants and refugees, and the LGBTQ community. Cummins Powers Women is our commitment to creating large-scale change in the lives of women and girls globally. CARE: Cummins Advocating for Racial Equity unites Cummins employees and our communities around dismantling institutional racism and creating systemic equity in the U.S.

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Creating net positive impact and near zero local environmental footprint. Cummins will make a net positive environmental impact in our communities through volunteerism and partnerships, which means that our positive impact will be greater than our local environmental footprint. Among many programs to achieve Cummins’ environmental goals, Cummins Water Works is a global strategic program to strengthen communities through sustainable water and to address the global water crisis.

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As we move forward into 2023 and beyond, we will leverage our expertise to develop more sustainable solutions that support our customers’ success, positively impact our communities and protect our planet for future generations. We will also realize continued growth and strong returns by executing our strategy and delivering results for all of our stakeholders. This is an incredible opportunity and responsibility, and there is no company better positioned to make a lasting impact.

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See Annex A for reconciliation of GAAP to non-GAAP measures referenced in this section.

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​	DATE May 9, 2023	​
​	TIME 11:00 a.m. Eastern Time	​
​	RECORD DATE March 7, 2023	​
​	VOTING​	​
​	BY THE INTERNET Visit the website noted on your proxy card to vote online	​
​	BY TELEPHONE Use the toll-free telephone number on your proxy card to vote by telephone	​
​	BY MAIL Sign, date, and return your proxy card in the enclosed envelope to vote by mail.	​

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Information provided in this proxy statement that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on strategies regarding the future. These forward-looking statements include, without limitation, statements relating to our plans and expectations for our revenues and EBITDA. Our actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to: any adverse results of our internal review into our emissions certification process and compliance with emission standards; increased scrutiny from regulatory agencies, as well as unpredictability in the adoption, implementation and enforcement of emission standards around the world; changes in international, national and regional trade laws, regulations and policies; changes in taxation; global legal and ethical compliance costs and risks; evolving environmental and climate change legislation and regulatory initiatives; future bans or limitations on the use of diesel-powered products; failure to successfully integrate and / or failure to fully realize all of the anticipated benefits of the acquisition of Meritor, Inc.; raw material, transportation and labor price fluctuations and supply shortages; any adverse effects of the conflict between Russia and Ukraine and the global response (including government bans or restrictions on doing business in Russia); aligning our capacity and production with our demand; the actions of, and income from, joint ventures and other investees that we do not directly control; large truck manufacturers’ and original equipment manufacturers’ customers discontinuing outsourcing their engine supply needs or experiencing financial distress, or change in control; product recalls; variability in material and commodity costs; the development of new technologies that reduce demand for our current products and services; lower than expected acceptance of new or existing products or services; product liability claims; our sales mix of products; failure to complete, adverse results from or failure to realize the expected benefits of the separation of our filtration business; our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions and divestitures and related uncertainties of entering such transactions; increasing interest rates; challenging markets for talent and ability to attract, develop and retain key personnel; climate change, global warming, more stringent climate change regulations, accords, mitigation efforts, greenhouse gas (GHG) regulations or other legislation designed to address climate change; exposure to potential security breaches or other disruptions to our information technology environment and data security; political, economic and other risks from operations in numerous countries including political, economic and social uncertainty and the evolving globalization of our business; competitor activity; increasing competition, including increased global competition among our customers in emerging markets; failure to meet environmental, social and governance (ESG) expectations or standards, or achieve our ESG goals; labor relations or work stoppages; foreign currency exchange rate changes; the performance of our pension plan assets and volatility of discount rates; the price and availability of energy; continued availability of financing, financial instruments and financial resources in the amounts, at the times and on the terms required to support our future business; and other risks detailed from time to time in our SEC filings, including particularly in the Risk Factors section of our 2022 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this proxy statement and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available at http://www.sec.gov or at http://www.cummins.com in the Investor Relations section of our website.

Website references and links to websites included in this proxy statement are provided solely for convenience purposes. Content on the websites, including content on our company website, is not, and shall not be deemed to be, part of this proxy statement or incorporated by reference herein.

 PROXY STATEMENT FOR 2023
ANNUAL SHAREHOLDERS MEETING

Generally

We are furnishing this proxy statement in connection with the solicitation by our Board of Directors of proxies to be voted at our 2023 Annual Meeting of Shareholders to be held on Tuesday, May 9, 2023, and at any adjournment thereof, which we refer to as our “Annual Meeting.” This proxy statement, together with the enclosed proxy card, is first being made available to our shareholders on or about March 27, 2023.

Holders of our Common Stock of record at the close of business on March 7, 2023 are entitled to vote at the Annual Meeting. On that date there were issued and outstanding 141,539,731 shares of Common Stock, each of which is entitled to one vote on each matter submitted to a shareholder vote at the Annual Meeting.

Each share of Common Stock represented by a properly executed and delivered proxy card will be voted at the Annual Meeting in accordance with the instructions indicated on that proxy card, unless such proxy card has been previously revoked. If no instructions are indicated on a signed proxy card, the shares represented by such proxy card will be voted as recommended by our Board.

A shareholder may revoke his or her proxy card at any time before the Annual Meeting by delivering to our Secretary written notice of such revocation. This notice must include the number of shares for which the proxy card had been given and the name of the shareholder of such shares as it appears on the stock certificate(s), or in book entry form on the records of our stock transfer agent and registrar, Broadridge Corporate Issuer Solutions, Inc., evidencing ownership of such shares. In addition, except with respect to shares attributable to accounts held in the Cummins Retirement and Savings Plans (the “Cummins RSPs”), any shareholder who has executed a proxy card but is present virtually at the Annual Meeting will be entitled to cast his or her vote electronically instead of by proxy card, thereby canceling the previously executed proxy card.

Participants in the Cummins RSP who hold shares of Common Stock in their account and provide voting instructions to the trustee with respect to such shares will have their shares voted by the trustee as instructed. Such participants will be considered named fiduciaries with respect to the shares allocated to their accounts solely for purposes of this proxy solicitation. If no voting instructions are provided, shares held in the accounts will be voted in the same manner and proportion as shares with respect to which valid voting instructions were received. Any instructions received by the trustee from participants regarding their vote shall be confidential. Cummins RSP participants may attend the Annual Meeting virtually but cannot vote the shares in their Cummins RSP accounts at the Annual Meeting.

Information About the Virtual Annual Meeting

Attendance and Participation

Our virtual Annual Meeting will be conducted on the Internet via live webcast. You will be able to participate online and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/CMI2023. Shareholders will be able to vote their shares electronically during the Annual Meeting. We believe a virtual meeting allows broader access by our shareholders and other parties without restricting participation while also reducing the environmental impact and cost of conducting the meeting.

To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or your voting instruction form. The Annual Meeting will begin promptly at 11:00 a.m. Eastern Time. We encourage you to access the Annual Meeting prior to the start time. Online access will begin at 10:45 a.m. Eastern Time.

The virtual Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong

Internet connection wherever they intend to participate in the Annual Meeting. Participants should also allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Annual Meeting.

Questions

Following adjournment of the formal business of the Annual Meeting, the Chief Executive Officer (CEO), Jennifer Rumsey, will give a presentation about the company’s business. At the conclusion of this presentation, the company will address appropriate general questions from shareholders regarding the company. We may also respond to questions on an individual basis or by posting answers on our Investor Relations website after the meeting. Shareholders eligible to vote may submit questions to the CEO by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CMI2023, typing a question into the “Ask a Question” field, and clicking “Submit.” Your question or comment should be addressed to the CEO, who will either respond or refer it to others as appropriate. Time permitting, the CEO will attempt to answer as many questions as possible. It will help us if questions are succinct and cover only one topic per question. Questions from multiple shareholders on the same topic or that are otherwise related may be grouped, summarized and answered together. If there are any matters of individual or personal concern to a shareholder and not of general concern to all shareholders, or if a question posed was not otherwise answered, such matters may be raised separately after the Annual Meeting by contacting Investor Relations at www.cummins.com. Recording of the Annual Meeting is prohibited. A webcast playback, including responses to shareholder questions, will be available at www.virtualshareholdermeeting.com/CMI2023 24 hours after the completion of the meeting.

Technical Difficulties

Technical support, including related technical support phone numbers, will be available on the virtual meeting platform at www.virtualshareholdermeeting.com/CMI2023 beginning at 10:45 a.m. Eastern Time on May 9, 2023 through the conclusion of the Annual Meeting.

PROXY SUMMARY

This summary highlights selected information contained in this proxy statement, but it does not contain all the information you should consider. We urge you to read the whole proxy statement before you vote. This proxy statement is being made available to shareholders on or about March 27, 2023.

 Chair      Member

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Cummins expects that Mr. Belske will assume the role of Chair of the Audit Committee immediately following the Annual Meeting.

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Our 2022 Performance*

In 2022, our revenues reached a record $28.1 billion. Excluding Meritor, Inc. (“Meritor”), the acquisition of which was completed on August 3, 2022, revenues were $26.2 billion, 9 percent higher than 2021. Sales in North America increased 18 percent and international revenues decreased 2 percent compared to 2021, as strong demand across all global markets were partially offset by a market slowdown in China, as well as Russia, where operations have been suspended indefinitely. While we saw strong demand in most of our major markets, the ongoing supply chain disruptions resulted in a collective inability to meet end-user demand, as well as elevated freight, labor and logistics costs, impacting our profitability. We have worked diligently to leverage our global footprint to ensure that we meet the needs of our customers while still delivering solid financial results.

For the full year, our earnings per share (EPS) was $15.12, up from $14.61 in 2021. The 2022 reported EPS includes the impact of costs related to the indefinite suspension of operations in Russia ($0.72 per diluted share), the costs related to the acquisition, integration and purchase accounting impact of Meritor ($0.67 per diluted share), and the costs related to the separation of the Filtration business ($0.45 per diluted share). The solid financial performance was made possible by our employees, who worked tirelessly to support our customers and manage through supplier shutdowns, part shortages and extended lead times.

Key business highlights include:

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See Annex A for reconciliation of GAAP to non-GAAP measures referenced in this section.

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Composition of the Board

BOARD INDEPENDENCE AND DIVERSITY

Our Board represents a balance of longer-tenured members with in-depth knowledge of our business and newer members who bring valuable additional attributes, skills and experience. Eleven of our thirteen directors are independent and provide strong oversight of our long-term strategy. We believe that directors with different backgrounds and experiences makes our boardroom and our company stronger. Robert K. Herdman will be retiring from the Board and not standing for reelection at our Annual Meeting. Accordingly, our Board will consist of 12 directors following the conclusion of the Annual Meeting.

QUALIFICATIONS, SKILLS AND EXPERIENCE

Our Board embodies a broad and diverse set of qualifications, skills and experiences as illustrated below.

Corporate Governance Highlights

We long have believed that good corporate governance is important in ensuring that we are managed for the long-term benefit of our shareholders.

2022 Recognition Highlights

Our practices and policies have earned Cummins recognition on a range of issues.

Executive Compensation

ADVISORY VOTE ON EXECUTIVE COMPENSATION

Our long-term success depends on our ability to attract, motivate, focus and retain highly talented individuals committed to Cummins’ vision, strategy and corporate culture. To that end, our executive compensation program is designed to link our executives’ pay to their individual performance, to Cummins’ annual and long-term performance and to successful execution of Cummins’ business strategies. We also use our executive compensation program to encourage high-performing executives to remain with us over the course of their careers.

We believe the compensation packages for our Named Executive Officers reflect their extensive management experience, continued high performance, and exceptional service to Cummins. We also believe our compensation strategies have been effective in attracting executive talent and promoting performance and retention.

EXECUTIVE COMPENSATION PRINCIPLES

We believe the level of compensation received by executives should be closely tied to our corporate financial and stock price performance. This principle is apparent in the design of our executive compensation program and in the specific compensation packages we award.

In addition to aligning our executives’ pay with performance, we follow several other principles when designing and implementing our executive compensation program.

EXECUTIVE COMPENSATION ELEMENTS

TARGET COMPENSATION MIX

We believe the compensation of our most senior executives should be based on Cummins’ overall performance. Every executive’s pay is tied to the same financial metrics and a significant amount of their pay is incentive-based and therefore at risk.

TARGET TOTAL DIRECT COMPENSATION MIX – FISCAL YEAR 2022

CORPORATE
GOVERNANCE

We long have believed that good corporate governance is important in ensuring that we are managed for the long-term benefit of our shareholders. We regularly engage with our shareholders to understand their expectations. We also benchmark our governance structure and policies against industry best practices and the practices of other comparable public companies. Our corporate governance principles, charters for each of our Board’s Audit, Talent Management and Compensation and Governance and Nominating Committees, our code of business conduct and our by-laws, along with certain other corporate governance documents, are available on our website, www.cummins.com, and are otherwise available in print to any shareholder who requests them from our Secretary.

Corporate Governance Overview

Additional Governance Features

Director Selection and Board Refreshment

It is a top priority of our Board and our Governance and Nominating Committee that our directors have the skills, background and values to effectively represent the long-term interests of our shareholders and other stakeholders. Throughout the year, our Board reviews a matrix of the qualifications, skills and experience that we believe our Board needs to have and discusses whether there are any gaps that need to be filled that will improve our Board’s performance. We assess potential new director candidates in light of the matrix and whether they possess the qualifications, skills and experience needed by our Board. When we identify potential new director candidates, we review extensive background information compiled by our professional search firm, evaluate their references, consider their prior board experience and conduct virtual and in-person interviews.

We also focus on board refreshment because we believe that new perspectives and ideas are essential for an innovative and strategic board. Since 2015, we have added seven new directors to our Board. Board members also represent diverse perspectives, including five female directors, two African-American directors and one director from Latin America.

The Governance and Nominating Committee routinely reviews the Board’s committee assignments with a goal of rotating membership on committees every three to five years. The committee assignments were most recently rotated in May 2020. Our Board will continue to review and refresh the skills, qualifications and experiences that our Board needs to have to serve the long-term interests of our shareholders.

As required by our corporate governance principles, our Governance and Nominating Committee must recommend director nominees such that our Board is comprised of a substantial majority of independent directors and possesses a variety of experience and backgrounds, including those who have substantial experience in the business community, those who have substantial experience outside the business community (such as public, academic or scientific experience) and those who will represent our stakeholders as a whole rather than special interest groups or individual constituencies.

Each candidate must have sufficient time available to devote to our affairs and be free of any conflict of interest that would violate any applicable law or regulation or interfere with the proper performance of his or her responsibilities, including being able to represent the best long-term interests of all of our shareholders and other stakeholders. Each candidate also should possess substantial and significant experience that would be of particular importance to us in the performance of his or her duties as a director. The Committee does not intend to alter the manner in which it evaluates candidates, including the foregoing criteria, based on whether or not the candidate was recommended by a shareholder.

Importance of Diversity

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• We believe that directors with different backgrounds and experiences makes our boardroom and our company stronger. ​ • Our slate of director nominees for this Annual Meeting has five female directors, two African-American directors and one director from Latin America ​

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Shareholder Outreach

We believe that meaningful corporate governance should include regular conversations between our directors and our shareholders. Our Board members routinely meet with shareholders for conversations focused on our Board’s skill set and refreshment and its oversight of a variety of topics, including company strategy, growth, risk management and ESG issues. In addition, our Corporate Secretary held discussions in 2022 with several top investors to capture their input on governance matters and practices. We capture the feedback from these sessions and present it to the full Board for its consideration.

Succession Planning

CEO and leadership succession planning is one of our Board’s most important responsibilities. Many times throughout the year, our full Board discusses succession planning for our CEO and other critical leaders of the company. At least once a year, our Board dedicates itself to examining the succession plans for our complete leadership team.

Sustainability and ESG

Sustainability is not new to Cummins. For several decades both sustainability and efforts related to environmental, social, and governance issues (ESG) have been critical elements of our long term business and growth strategies. Well before “ESG” entered the general lexicon, Cummins was focused on producing engines that reduced the environmental impact, supported healthier communities and embraced diversity and inclusion among our values. With these principles embedded in everything we do, our ESG strategy is our business strategy. With the support and oversight of our Board, we continue our focus on sustainability, which includes our efforts related to ESG. We ensure Board oversight of our top ESG risks and opportunities in the following committees depending upon the topic: Talent Management and Compensation Committee; Safety, Environmental and Technology Committee; Audit Committee and the Governance and Nominating Committee. We also review the ESG Strategy

and progress with the full Board at least once per year. The company’s Executive Director, Global Risk, provides accountability over ESG strategic direction and serves as a primary point of contact for the Board and the Cummins executive management team. Below is a summary of our achievements over the past 12 months:

As a result of our efforts on ESG, Cummins received multiple rewards and recognitions including having our ESG rating elevated to AAA, the highest rating possible, by Morgan Stanley Capital International (MSCI). The MSCI ratings upgrade accompanied other strong ratings for environmental, social and governance excellence, including a 2022 gold medal for sustainability achievement from EcoVadis, a leading provider of business sustainability ratings, and one of the best performing ESG companies rated by Sustainalytics, a global leader in ESG research and data.

To learn more about the company’s sustainability efforts, go to the company’s ESG web page at https://www.cummins.com/company/esg. Websites disclosed herein are not incorporated into this proxy statement by reference.

Independence

Ten of our twelve director nominees qualify as independent directors within the meaning of the rules adopted by the Securities and Exchange Commission, or SEC, and the corporate governance standards for companies listed on the NYSE. Our Board has adopted independence standards that meet or exceed the independence standards of the NYSE, including categorical standards to assist the Governance and Nominating Committee and our Board in evaluating the independence of each director. The categorical standards are included in our corporate governance principles, which are available on our website at www.cummins.com. A copy also may be obtained upon written request.

Following a discussion and applying the standards referenced above, the Governance and Nominating Committee of our Board determined that all director nominees standing for election, except Jennifer W. Rumsey, our President and Chief Executive Officer, and N. Thomas Linebarger, our Chairman of the Board and Executive Chairman, qualify as independent. Based on the recommendation of the Committee, our full Board approved this conclusion.

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OUR LEAD DIRECTOR’S RESPONSIBILITIES INCLUDE:​ SERVING as Chairman of the Governance and Nominating Committee; CONFERRING with the Chairman on, and approving, Board meeting agendas and meeting schedules to assure there is sufficient time for discussion of all agenda items; CALLING AND PRESIDING over all meetings of the Board at which the Chairman is not present, including executive sessions of independent directors and communicating feedback on executive sessions to the Chairman; LEADING the annual performance reviews of the Chief Executive Officer and the Board; ENSURING that there is open communication between our independent directors and the Chairman and other management members; BEING AVAILABLE, when deemed appropriate by the Board, for consultation and direct communication with shareholders; REVIEWING, at his or her discretion, information to be sent to the Board; and CONFERRING with the Chairman on other issues of corporate importance, as appropriate.

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Risk Oversight

Our Board and its committees are involved on an ongoing basis in the oversight of our material enterprise-related risks. The company has a mature enterprise risk management program that identifies, categorizes and analyzes the relative severity and likelihood of the various types of material enterprise-related risks to which we are or may be subject. The company has an executive risk council, comprised of the Senior Vice President, Chief Financial Officer, Vice President and Chief Legal Officer, Vice President – Corporate Strategy and Vice President and Chief Administrative Officer that meets quarterly with our Executive Director, Global Risk to review and update our material enterprise-related risks and mitigation plans for each. We assign ownership of our most significant enterprise risks to a member of our executive management team. The Executive Director, Global Risk oversees enterprise risk management and sets the strategic direction for and the coordination of ESG and sustainability efforts of the company.

Our Board, Audit Committee, Finance Committee, Talent Management and Compensation Committee, Governance and Nominating Committee and Safety, Environment and Technology Committee receive periodic reports and information directly from our senior leaders who have functional responsibility for the mitigation of our enterprise risks. Our Board and/or its appropriate committees then review such information, including management’s proposed mitigation strategies and plans, to monitor our progress on mitigating the risks. For example, to oversee the company’s work to mitigate cybersecurity risks, we have identified separate risks for enterprise cybersecurity and product cybersecurity. The Audit Committee provides primary oversight for enterprise cybersecurity while the Safety, Environment and Technology Committee provides oversight of product cybersecurity. Our Executive Director, Global Risk and our global cybersecurity leader meet regularly with the Board and its committees to review relevant areas including:

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Review of a cybersecurity dashboard to track key metrics of the information security/cybersecurity program,

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The purchase of cybersecurity risk insurance to mitigate exposure to the company, and

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Metrics of the company’s training and compliance program on information security and awareness of cyber risk.

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Additionally, the Board and its Committees provide oversight of the company’s ESG risks and opportunities, including at least one annual review by our full Board of ESG strategy and challenges. The designated committees undertake detailed reviews of specific ESG risks and opportunities. For example, our Safety, Environment and Technology Committee provides primary oversight for environmental risks and opportunities and our Audit Committee provides oversight of the data integrity of ESG-related disclosures. Our Board or its Committees review ESG strategy, risks and progress with dedicated time at every regular Board meeting. We believe that our Board’s current leadership structure effectively supports the risk oversight function of our Board based on the level of independence, qualifications, diversity and skills of its members.

Board of Directors and Committees

Our Board held 10 meetings during 2022. All of the directors attended 75% or more of the aggregate number of meetings of our Board and the committees on which they served that were held during the periods in which they served. The non-employee members of our Board also met in executive session without management present as part of each regular meeting. Thomas J. Lynch, our current Lead Director, presided over these sessions.

Under our corporate governance principles, our Board has established six standing committees, with five of the committees consisting entirely of independent directors. Certain of the principal functions performed by these committees and the members of our Board currently serving on these committees are as follows:

* As noted above, Mr. Herdman will retire from the Board effective at the conclusion of the Annual Meeting. Cummins expects that Mr. Belske will assume the role of Chair of the Audit Committee immediately following the Annual Meeting.

Executive Committee

The current members of our Executive Committee are N. Thomas Linebarger (Chairman), Thomas J. Lynch and William I. Miller. Our Executive Committee is authorized to exercise the powers of our Board in the management and direction of our business and affairs during the intervals between meetings of our Board. It also acts upon matters specifically delegated to it by our Board. Our Executive Committee did not meet during 2022.

Shareholder Nominations

Shareholder director candidate recommendations, including biographical information as to the proposed candidate and a statement from the shareholder as to the qualifications and willingness of such person to serve on our Board, along with the required disclosures set forth in our by-laws, must be properly and timely submitted in writing to our Secretary, as further described below. Any shareholder entitled to vote for the election of directors at a meeting may nominate a person or persons for election as directors only if written notice of such shareholder’s intent to make such nominations is given, either by personal delivery or by mail, postage prepaid, to the Secretary of our company not later than 160 days in advance of the originally scheduled date of such meeting (provided, however, that if the originally scheduled date of such meeting is earlier than the anniversary of the date of the previous year’s annual meeting, such written notice may be so given and received not later than the close of business on the 10th day following the date of the first public disclosure, which may include any public filing by us with the SEC, of the originally scheduled date of such meeting).

Each notice required by our by-laws must be signed manually or by facsimile by the shareholder of record and must set forth the information required by our by-laws, including (i) the name and address, as they appear on our books, of the shareholder who intends to make the nomination and of any beneficial owner or owners on whose behalf the nomination is made; (ii) a representation that the shareholder is a holder of record of shares of our Common Stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) certain other information regarding the shareholder and its interests in our company; (iv) the name, age, business address and residential address of each nominee proposed in such notice; (v) the principal occupation or employment of each such nominee; (vi) the number of shares of our capital stock that are owned of record or beneficially by each such nominee; (vii) with respect to each nominee for election or reelection to our Board, a completed and signed questionnaire, representation and agreement described in our by-laws; (viii) such other information regarding each nominee proposed by such shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had each nominee been nominated, or intended to be nominated, by our Board; (ix) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, including all arrangements or understandings pursuant to which the nominations are being made, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or any other person or persons (naming such person or persons), on the other hand; and (x) the written consent of each nominee to serve as a director if so elected.

The deadline for receiving any written notice of a shareholder’s intent to make a nomination with respect to the Annual Meeting was the close of business on November 30, 2022, which was 160 days in advance of the Annual Meeting (which is typically held on the second Tuesday of each May). We received no such qualifying nominations before this deadline with respect to the Annual Meeting.

Communication with the Board of Directors

Shareholders and other interested parties may communicate with our Board, including our Lead Director and other non-management directors, by sending written communication to the directors c/o our Secretary, 301 East Market Street, Indianapolis, Indiana 46204. All such communications will be reviewed by the Secretary or his or her designee to determine which communications are appropriate to be forwarded to the directors. All communications will be forwarded except those that are related to our products and services, are solicitations or otherwise relate to improper or irrelevant topics as determined in the sole discretion of the Secretary or his or her designee.

Our Secretary maintains and provides copies of all such communications received and determined appropriate to be forwarded to the Governance and Nominating Committee in advance of each of its meetings and reports to the Committee on the number and nature of communications that were not determined appropriate to be forwarded.

We require all of our director nominees standing for election at an annual meeting of shareholders to attend such meeting. All director nominees standing for election at our 2022 Annual Meeting of Shareholders were present at the virtual meeting. We currently expect all director nominees to be present virtually at the Annual Meeting.

ELECTION
OF DIRECTORS

(Items 1 through 12 on the Proxy Card)

General

Except for Mr. Herdman, who is retiring from the Board effective at the Annual Meeting, all of our current directors are nominated for reelection at the Annual Meeting to hold office until our 2024 annual meeting of shareholders and until their successors are elected and qualified. Any submitted proxy will be voted in favor of the nominees named below to serve as directors unless the shareholder indicates to the contrary on his or her proxy. All nominees have been previously elected to our Board by our shareholders and have served continuously since the date indicated below.

Majority Vote Required for Director Elections

To be elected, each director nominee must receive a majority of the votes cast by shareholders at the Annual Meeting. Receipt by a nominee of the majority of votes cast means that the number of shares voted “for” exceeds the number of votes “against” that nominee. Abstentions and broker non-votes are not counted as a vote either “for” or “against” a nominee. Our by-laws provide that the term of any incumbent director who receives more “against” votes than “for” votes in an uncontested election will automatically terminate at the shareholder meeting at which the votes were cast. In the case of a contested election, directors will be elected by a plurality of the votes represented in person or by proxy and entitled to vote in the election.

Our Board expects that each of the nominees will be able to serve as a director if elected at the Annual Meeting, but if any of them is unable to serve at the time the election occurs, proxies received that have been voted either for such nominee or for all nominees or which contain no voting instructions will be voted for the election of another nominee to be designated by our Board, unless our Board decides to reduce the number of our directors.

Nominees for Board of Directors

The names of the nominees for directors, together with biographical sketches, including their business experience during the past five years, directorships of other public corporations and their qualifications to serve on our Board are set forth below, beginning with our President and Chief Executive Officer and our Chairman of the Board and Executive Chairman, then followed by our independent directors in alphabetical order.

Our Board Recommends that Shareholders Vote for Each of the Nominees Set Forth Below.

The table below summarizes key qualifications, skills and attributes most relevant to the decision to nominate the candidates to serve on our Board. A mark indicates a specific area of focus or experience on which the Board relies most. The lack of a mark does not mean the director nominee does not possess that qualification or skill. Each director nominee biography above in this section describes each nominee’s qualifications and relevant experience in more detail.

EXECUTIVE COMPENSATION

Note from the Chair of Our Talent Management & Compensation Committee

As Chair of the Talent Management and Compensation Committee (“TMCC”), I am pleased to report significant progress on several key initiatives in 2022.

First, the TMCC participated in driving tremendous progress on our Diversity, Equity and Inclusion (DE&I) initiatives. DE&I was a regular agenda topic at all TMCC meetings and was the subject of a number of special interim meetings. Over the course of the year, the company developed detailed measures and goals across many dimensions of diversity, including representation, employee sentiment, and fair outcomes in performance assessments, advancement and compensation. The TMCC provided insight and ideas for accelerating the company’s DE&I work and outcomes and is holding our leaders accountable for achieving our ambitious goals.

Second, the TMCC, in conjunction with our full Board, drove our succession planning efforts, which were particularly critical in this year of leadership transition. In July 2022, Cummins announced the transition of the Chief Executive Officer role from Tom Linebarger to Jennifer Rumsey. Jen, a 24-year veteran at Cummins, is the first woman in our 104-year history to assume the top leadership role. She combines impeccable business acumen with high emotional intelligence, and by example, has forged a clear path for all those who aspire to career advancement at Cummins. Our strong succession planning efforts also have enabled Jen to fill key positions on her team with highly talented leaders.

Third, the TMCC supported Destination Zero, our roadmap to decarbonization, which is one of the most important initiatives in our history. Cummins has demonstrated a clear resolve to tackle formidable environmental challenges by developing low-emission solutions. Now, we have an opportunity to innovate and grow by driving the adoption of new zero-carbon solutions. In 2022, the TMCC worked with our internal Cummins team and our independent consultant to develop new human resource and compensation strategies to support Destination Zero. Our programs will continue to operate within a cohesive “One Cummins” framework, characterized by a strong culture and synergies across business units, while also recognizing the need for differentiated approaches and agility across those units. Our new approach, which will be implemented in 2023, is described in greater detail in this year’s CD&A.

Cummins’ TMCC, full Board, and management will continue to engage in deep examination of difficult issues and take action accordingly. In doing so, I am optimistic that we will continue to be successful in building and navigating critical pathways to the future for the benefit of all our stakeholders.

Executive Summary

Cummins operates with a strong pay for performance and team-oriented philosophy and continued to do so in 2022. The summary below highlights our business results, how our talent management supported those results, our governance framework, and compensation for our executives and the rationale for those decisions.

HOW DID WE PERFORM?

KEY 2022 PERFORMANCE HIGHLIGHTS*

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See Annex A for reconciliation of GAAP to non-GAAP measures referenced in this section.

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In 2022, our revenues reached a record $28.1 billion. Excluding Meritor, Inc. (“Meritor”), the acquisition of which was completed on August 3, 2022, revenues were $26.2 billion, 9 percent higher than 2021. Sales in North America increased 18 percent and international revenues decreased 2 percent compared to 2021, as strong demand across all global markets was partially offset by a market slowdown in China, as well as Russia, where operations have been suspended indefinitely. While we saw strong demand in most of our major markets, the ongoing supply chain disruptions resulted in a collective inability to meet end-user demand, as well as elevated freight, labor and logistics costs, impacting our profitability. We have worked diligently to leverage our global footprint to ensure that we meet the needs of our customers while still delivering solid financial results.

For the full year, our earnings per share (EPS) was $15.12, up from $14.61 in 2021. The 2022 reported EPS includes the impact of costs related to the indefinite suspension of operations in Russia ($0.72 per diluted share), the costs related to the acquisition, integration and purchase accounting impact of Meritor ($0.67 per diluted share), and the costs related to the separation of the Filtration business ($0.45 per diluted share). The solid financial performance was made possible by our employees, who worked tirelessly to support our customers and manage through supplier shutdowns, part shortages and extended lead times.

In 2022, we formalized our long-term decarbonization growth strategy, Destination Zero, which includes making meaningful reductions in carbon emissions through advanced internal combustion technologies widely accepted by the market today, while continuing to invest in and advance zero emission technologies ahead of widespread market adoption. We unveiled the industry’s first unified, fuel-agnostic internal combustion powertrain platforms, and we continue to see momentum in our electrolyzer technology and green hydrogen production opportunities. We also made significant strides in advancing our growth strategy most notably through the acquisitions of Jacobs Vehicles Systems (“Jacobs”), Meritor, and the Siemens Commercial Vehicles business, as well as announced several major new partnerships that will help generate future growth in our New Power Business.

As outlined in our strategy, we continued investing in new technologies that will fuel profitable growth in the future across our businesses. In 2022, we invested a record $1.3 billion in research and development in our product portfolio of diesel, natural gas, battery, fuel cells, electrolyzers and related components. We remain disciplined as we examine new organic investment, partnership and acquisition opportunities that leverage our capabilities and are committed to continuing to deliver top quartile return on our invested capital.

HOW DO OUR PAY STRATEGY AND PROGRAMS SUPPORT OUR BUSINESS STRATEGY?

Our compensation programs are designed to drive our business strategy and results. In 2022, our Annual Bonus Plan (ABP) continued to focus on Return on Average Net Assets (ROANA). Our Long-Term Incentive Plan (LTIP) continued to focus on growth in Earnings Before Interest Taxes, Depreciation, and Amortization (EBITDA) and Return on Invested Capital (ROIC). Both plans are designed to encourage plan participants to appropriately balance our growth, profitability, and our efficient management of capital to drive shareholder value in the short term as well as through our economic cycles in the long term.

In 2022, we conducted a comprehensive review of our pay strategy and programs to ensure their alignment with the company’s decarbonization strategy. This process resulted in changes to our approach to pay on a go-forward basis, beginning in 2023. Highlights include:

In recognition of the increasing competitiveness for talent, the program will allow for greater flexibility in making pay decisions.

In 2023, we also are offering a Deposit Share Program to encourage long-term retention and continuity and alignment of the interests of our named executive officers with our shareholders. Under the Program, designated participants, including certain of our named executive officers, are eligible to receive matching grants of restricted stock units if they commit newly acquired shares of our common stock and agree to hold those newly acquired shares for five years. The matching grants of restricted stock units will cliff vest on the fifth anniversary of the participation deadline if the participant has remained continuously employed and has satisfied the holding requirement for the newly acquired shares.

2023 CHANGES TO CUMMINS’ INCENTIVE FRAMEWORK

The changes to our 2023 pay programs are designed to reinforce those drivers of value that continue to be important, while also recognizing the changing demands of our future. These changes are summarized in the chart below:

HOW DID OUR TALENT STRATEGIES AND ACTIONS SUPPORT OUR PERFORMANCE?

We employ approximately 73,600 people operating in 52 countries around the globe. We believe that a global, diverse, and healthy workforce, supported by talented, inspiring leaders, is a critical ingredient to our maintaining a competitive advantage in our global marketplace. Our talent strategy is designed to “Inspire and Encourage All Employees to Reach Their Full Potential.” This strategy is built upon four pillars, each of which is described in more detail below:

CUMMINS’ TALENT STRATEGY: BUILT ON FOUR PILLARS

We consider Diversity, Equity, and Inclusion (DE&I) to be a business imperative that creates value for all our stakeholders. In 2022, we advanced our DE&I framework that prioritized the establishment of equitable experiences throughout the employee life cycle of under-represented groups and the enablement of DE&I skills and competence in our leaders and employees. Specifically, Cummins identified a number of primary global DE&I initiatives on which to focus:

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Disability inclusion, enabling people with disabilities to work toward their full potential. Examples include accessibility-related features integrated into Cummins’ global building standards and accessible technology solutions for employees with disabilities

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Global gender representation, with multiple initiatives focused on the attraction, retention, development, and advancement of women. Examples include Cummins College of Engineering for Women, gender-focused supply chain development in Latin America, and Cummins RePower program for female engineers and technical professionals

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Veteran inclusion, accelerating the strategy and engagement of this initiative to improve workforce inclusion and support Veterans and their families. Examples include signing the United Kingdom Armed Forces Covenant, increasing Veteran hires through the Skillbridge program, participating in the U.S. Chamber of Commerce’s Hiring our Heroes Fellowship Program, and creating our veteran mentoring program

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Cummins’ intentional focus is having a significant impact on the company and its employees. Here is a look at key diversity demographics at Cummins. Please note that these calculations do not include employees from Meritor, which the company acquired in August 2022.

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Cummins appointed its first woman President and Chief Executive Officer, Jennifer Rumsey, in July 2022

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46% of the Cummins Leadership Team (CLT), the top leadership team at the company, are women

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Over 40% of the company’s Vice Presidents are women

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28.3% of the Cummins global workforce is comprised of women, up from 27.8% in 2021

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25% of the company’s U.S. based Vice Presidents are Black or Latinx

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60% of the CLT has lived and worked outside of the United States during their time with Cummins

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The 13-member Board of Directors has five women (38%) and three members who are Black or Latinx (23%)

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Cummins has established aspirational representation goals at all company levels for women, Black, and Latinx employees. We measure our progress against these goals quarterly.

Given these and other efforts, Cummins was recognized with a number of distinctions, including:

At Cummins, providing meaningful, equitable health, wellness and rewards programs is at the center of our compensation and benefits strategy. In 2022, we:

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Continued to strengthen our global mental health campaign to normalize and destigmatize mental health

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Created equitable and inclusive care by expanding our U.S. benefits to include LGBTQ+ inclusive care, hearing benefits, broader travel benefits, and better dental care

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Supported our employees across the globe in our 2022 post-COVID-19 environment by distributing thousands of self-administered COVID-19 detection tests, providing direct medical case management support for employees on leave, and assisting employees with their return to work following an illness; and

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Launched a global recognition program that demonstrated care and concern for our employees who contributed significantly to Cummins’ success in the face of difficult economic challenges. In particular, we delivered recognition awards in the form of either restricted stock or cash to 53,000 employees

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Cummins views talent development and succession planning as critical to achieving its DE&I objectives. For talent development, we focus on the entire employee lifecycle experience, from recruitment and hiring, to development and progression, to retirement. To achieve a distinguishing positive experience, we focus holistically on our employees being able to easily learn about talent strategy and planning, leadership and other development opportunities, retention strategies, performance management, compensation and benefits management, and succession planning. We provide our leaders the tools they need to advance their personal growth as well as their contribution to the sustainable growth of our enterprise.

Cummins follows a disciplined process to ensure it is generating capable and diverse talent slates for all senior positions and developing high-potential leaders to close any skill and behavioral gaps. Cummins views a robust succession planning process as a critical component to minimizing risks and achieving its diversity objectives. Importantly, in 2022, Cummins’ succession planning process resulted in a successful transition of the CEO role from Tom Linebarger to Jennifer Rumsey. In addition, the Cummins Leadership Team (CLT), comprised of those who are directly reporting to Jennifer Rumsey, was successfully reconstituted. The CLT is comprised of a diverse and talented group of 15 executives, including 7 women and 6 people of color.

Cummins has created a strong work environment in which people can enter the firm at an early stage in their careers and grow with the company, aided by best-in-class development programs. Given our long-term decarbonization strategy, we also recognize the need to act with agility at all levels, including mid- and senior-career hires, particularly with respect to our highly competitive technical positions.

As a result, we implemented new approaches to help manage the career and pay progression of Cummins’ employees. This new approach will provide managers greater autonomy and flexibility so they can more effectively recruit, retain, and optimize the deployment of our people to overcome challenges in our highly competitive talent markets. We also have developed more effective mechanisms for recruiting talented individuals at all levels in the organization, as well as progressing people more quickly within the organization. This diversifies our approach to talent management, which is benefiting both our employees and the company.

HOW DID WE ALIGN EXECUTIVE PAY AND PERFORMANCE?

Purpose and Principles of our Executive Compensation Program

PURPOSE OF OUR EXECUTIVE COMPENSATION PROGRAM

Our long-term success depends on our ability to attract, motivate, focus, and retain highly talented individuals committed to Cummins’ vision, strategy and corporate culture. To that end, our incentive plans, which apply to all participants including executives, are designed to link pay to Cummins’ annual and long-term performance, and to the successful execution of Cummins’ business strategies. Our salary levels and incentive targets are intended to recognize individual performance and market pay levels. We also use our executive compensation program to encourage high performing executives to remain with us over the course of their careers.

Named Executive Officers (“NEOs”)

Advisory Shareholder Say-on-Pay Vote

Compensation Elements Support Pay For Performance Philosophy

As in prior years, our compensation program is designed to support our pay-for-performance philosophy aligned with the interests of our shareholders and other stakeholders. The key elements of our executive compensation program for 2022 were:

As described below under “One-time Bonus and Special Equity Awards” in 2022 we granted a one-time special cash bonus payment to Ms. Barner in recognition of her service as interim Chief Human Resources Officer. In 2022, we also granted a special equity award to Ms. Embree. This grant was intended to be an extraordinary award focused on the retention of a highly capable and sought-after business leader and was issued outside of our annual long-term incentive compensation program.

We believe the compensation of our most senior executives should be based on Cummins’ overall financial performance and a significant portion of their pay should be incentive-based and therefore at risk.

In 2022, performance-linked components (annual bonus and long-term incentive compensation other than the special equity award and a one-time special cash payment described below under “One-time Bonus and Special Equity Awards) were 87% of the CEO’s target total direct compensation opportunity and 77% of the average target total direct compensation opportunity for the Named Executive Officers. These pay elements were allocated as shown below.

TARGET TOTAL DIRECT COMPENSATION MIX – FISCAL YEAR 2022

Target Executive Compensation Informed By the Market

The Committee reviews our executive compensation levels and programs on a regular basis. For pay levels, we generally target the median of the market for total direct compensation as well as its components, including salary, bonus targets, and long-term incentive target values. We consider target compensation to be market competitive if it is within +/-10% of the median level indicated by the benchmarking data.

For making 2022 pay decisions, our primary compensation benchmarking sources were manufacturing companies in nationally recognized compensation surveys. We also considered data from our Custom Peer Group (described below) regarding pay levels for the CEO and CFO and pay program design, dilution, and performance. We believe this approach provides an appropriate representation of the market, and using multiple sources lessens the impact of fluctuations in market data over time.

Our Custom Peer Group, identified in 2021 for making 2022 pay decisions, was made up of the fifteen public companies listed below. All companies fell into at least one of the following categories:

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customers with a strong presence in one or more of our major markets;

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companies that compete directly or indirectly with one or more of Cummins’ businesses;

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key suppliers of related products; and

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diversified industrial companies that compete for investor capital within the Industrial market segment.

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The Custom Peer Group companies are also similar to Cummins in size and investor profile and compete with us for customers and talent.

Navistar was dropped from the peer group identified in 2021 for making 2022 pay decisions. The decision to drop Navistar was due to the Traton Group’s acquisition of the company.

Executive Compensation Best Practices

We continually review best practices in the area of executive compensation and incorporate those practices in our executive compensation arrangements.

How Performance Measures and Goals are Determined

The Committee regularly reviews all elements of our executive compensation program and makes changes as it deems appropriate. Each review includes general comparisons against market data and analysis prepared by Farient, including information on market practices in the following areas:

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Pay strategy and positioning;

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Annual bonus plan design, including performance measures and goals and plan leverage;

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Long-term incentive plan strategy and design, including the mix of elements, as well as performance measures and goals and plan leverage;

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Stock ownership guidelines;

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Executive perquisites, including personal use of company aircraft; and

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Executive benefits and protection policies, including severance practices for officers, supplemental retirement plans, deferred compensation plans and change in control arrangements.

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The Talent Management and Compensation Committee establishes performance measures and goals each year for the annual and long-term incentive plans that are designed to help achieve our business strategy and objectives. The Committee also benchmarks against the historical performance of the Custom Peer Group and considers whether Cummins’ goals are sufficiently demanding relative to our peers. Additionally, the Committee solicits Farient’s assessment regarding the degree of difficulty associated with the incentive plan performance targets relative to both external analyst expectations for performance and peer performance expectations. The Committee believes this process leads to appropriate performance targets and incentive awards that reflect the creation of shareholder value.

The Talent Management and Compensation Committee has discretion to adjust performance results that reflect significant transactions (such as acquisitions, divestitures, or newly-formed joint ventures) or other unusual items (such as pension plan contributions above required levels, restructuring, or significant tax legislation) if such events were not anticipated at the time performance targets were initially established.

Compensation Programs

Our executive compensation program consists of three principal elements: base salary, annual bonus, and long-term incentive compensation. Together, these elements constitute total direct compensation.

Base Salary

We target base salary, on average, at the median of the market for similar executive positions. Some officers’ base salaries may vary from the median due to factors such as experience, tenure, potential, performance, and internal equity.

Annual Bonus

HOW BONUSES ARE CALCULATED

Our annual bonus is designed to link participants’ pay to our annual financial performance. The payout for each participant, including our NEOs, is calculated using the following formula:

Target awards as a percentage of salary are set such that performance at the target goal level generates an annual bonus aligned with the median range of the market. The “payout factor” is determined based on Cummins’ actual financial performance against its annual goals.

2022 ANNUAL BONUS PERFORMANCE MEASURE

ROANA was the sole performance measure for our 2022 annual bonus plan because ROANA appropriately balances our growth, profitability, and the management of our assets, all of which combine to drive our share value.

ROANA for compensation purposes equals:

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(1)

Average Net Assets is the average of the Net Assets ending in the five quarters preceding our fiscal year. Net Assets is derived from our consolidated balance sheet and excludes debt and related financing accounts, deferred tax amounts, and certain pension and post-retirement liability accounts

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ROANA PERFORMANCE TARGETS FOR 2022

Setting the target with the appropriate level of difficulty underscores the importance of achieving or exceeding our annual operating plan (AOP) performance commitment. This approach requires increasingly difficult targets during economic upturns and realistic goals during cyclical downturns. The 2022 ROANA goals were set with this philosophy in mind.

Target ROANA increased from 25.56% in 2021 to 32.35% in 2022. This increase was due to the AOP projections for 2022. Target ROANA was established by the TMCC after reviewing the AOP and considering input from Farient, the Committee’s independent outside consultant.

Target ROANA (a 100% payout factor) was the amount required to achieve our AOP. As shown below, the possible payout factors for 2022 ranged from 10% for threshold performance (70% of target ROANA) to a maximum of 200% for superior performance (115% of target ROANA or better). The payout factor changed in increments of 10% for results that fell between threshold and target, or between target and maximum.

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(1)

Interpolate for performance between discrete points, rounded to the nearest 10% increment

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Long-Term Incentive Compensation

TARGET GRANT VALUES

The TMCC generally sets the target long-term incentive values for our officers on average at the median of the market. Grant values are set using a market-based economic valuation methodology which converts the targeted value of the grants into a targeted number of performance shares and dollar amount of performance cash. The number of performance shares granted is based on a three-month average daily trading day stock price in the final quarter of our prior fiscal year to mitigate the impact of temporary stock price spikes or drops on the number of shares to be granted.

PERFORMANCE PLAN MEASURES

For the last several years, we have used two metrics for our long-term performance cash and performance shares: Return on Invested Capital (ROIC), which has an 80% weighting, and earnings before interest, taxes, depreciation, and amortization (EBITDA), which has a 20% weighting. The Talent Management and Compensation Committee reaffirmed these metrics were appropriate for the 2022-2024 award cycle as we continued to focus on both growth and delivering strong returns on the capital we invest. Together these metrics strongly correlate with total shareholder return.

ROIC AND EBITDA PERFORMANCE TARGETS FOR THE 2020-2022 AWARD CYCLE

For the 2020-2022 performance cycle, we set a stable ROIC target of 15%, which represents a target that is both above the median of our peer group as well as a challenging goal across the 3-year performance period. We endeavor to maintain a stable target as long as our strategy remains the same in delivering competitive long-term returns. We also established a cumulative 3-year EBITDA goal the Talent Management and Compensation Committee deemed to be challenging, yet realistic, and consistent with our long-term strategy and financial plans.

ROIC for compensation purposes equals:

EBITDA for compensation purposes equals:

The table below summarizes the ROIC and EBITDA targets for the 2020-2022 award cycle.

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(1)

Interpolate for performance between discrete points

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(2)

Plan does not require that both measures are above threshold for a payout to occur

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2020-2022 LONG-TERM PERFORMANCE CASH AND PERFORMANCE SHARE PAYOUTS

Based on our actual performance from January 1, 2020 through December 31, 2022, our ROIC was 15.2% and our 3-year Cumulative EBITDA was $10,594 million. As a result, the payout factor used to calculate the awards for all long-term incentive plan participants was 90%. We made the following exclusions:

In calculating the 2020-2022 long-term incentive performance, we made the following exclusions:

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$81 million in costs associated with the separation of the Filtration business

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$26 million of net benefit from the Meritor business which includes acquisition and integration costs

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$111 million of expense related to the indefinite suspension of operations in Russia, including inventory write-offs, account receivable write-offs, breach of contract accruals, employee severance, and other required expenses

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ROIC AND EBITDA PERFORMANCE TARGETS FOR THE 2021-2023 AND 2022-2024 AWARD CYCLES

The table below summarizes the ROIC and EBITDA targets for the 2021-2023 award cycle.

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(1)

Interpolate for performance between discrete points

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(2)

Plan does not require that both measures are above threshold for a payout to occur

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The table below summarizes the ROIC and EBITDA targets for the 2022-2024 award cycle.