Good morning, welcome to 3M's Annual Shareholders Meeting for shareholders. Every year, we open this meeting with a tribute to our servicemen and women. Today, 10 3Mers on active duty serving their country with honor. To all of our current and former military personnel, we salute your service to freedom and to 3M. Gregg Larson, our corporate secretary, advises that a quorum is present and that all shareholders of record have been sent a notice of this meeting. On the record date of March 14, 2017, there were approximately 598 million shares of common stock issued and outstanding. 85% are represented here today in person or by proxy. Therefore, I declare this meeting open for business. We have five business items on the agenda for today, which Gregg Larson will discuss. First, however, I will make some brief comments about our enterprise.
As you saw in my annual letter to our shareholders, 3M is strong and getting stronger. In 2016, we executed a 3M playbook and delivered a great operational performance. We're also building for the future. Company-wide total sales were $30 billion with earnings of $8.16 per share, up 8% year-over-year. We expanded margins to 24% and posted robust free cash flow conversion of 104%, our third consecutive year above 100%. Return on invested capital was also strong at 23%, which is our fourth straight year above 20%, and we achieved these results in a challenging economic environment. 2016 was also significant with respect to our dividend, as we marked our 100th consecutive year of dividends to our shareholders. Over the last five years, we have doubled our per share dividend, which is clear evidence that 3M is becoming even stronger.
I think you can give an applause there because that's incredible results. For the full year, we'll return a total of $6.4 billion to you through both dividends and share repurchases. Beyond the numbers, we continue to invest for the long term to our three key levers. The first is portfolio management. This includes consolidations within 3M, acquisitions and partnership, and divestitures of non-core businesses. In short, portfolio management is making us even more relevant to our customers and also allowing us to intensify our focus on profitable, faster-growing businesses. The second lever is investing in innovation. The heartbeat of our company is research and development, and in 2016, we invested $1.7 billion, or nearly 6% of sales. For the last five years, we have invested $8.5 billion in research and development. This investment supports organic growth, along with our ability to consistently deliver premium margins.
Business transformation is the third lever, which starts and ends with our customers. It's making it easier for our customers to do business with us while creating an even more agile and efficient 3M. By 2020, business transformation will result in $500 million-$700 million in annual operational savings and another half a billion reduction in working capital. Looking upon our performance in 2016, the 3M playbook is working, or as some external investors have recently stated, the 3M playbook is winning. As we announced our earnings call for two weeks ago, we posted strong organic growth of 5% in the first quarter of 2017. We are well-positioned for another successful year. That concludes my remarks at this point of time. I will now introduce our board of directors. I will please ask our board members to stand as they're introduced and remain standing.
Please hold your applause until all are introduced. Sondra Barbour, retired Executive Vice President, Information Systems and Global Solutions, Lockheed Martin Corporation. Tony Brown, retired Group Vice President, Global Purchasing, Ford Motor Company. Dr. Vance Coffman, retired Chairman of the Board and Chief Executive Officer, Lockheed Martin Corporation. Dave Dillon, retired Chairman of the Board and Chief Executive Officer, The Kroger Co. Mike Eskew, retired Chairman of the Board and Chief Executive Officer, United Parcel Service. Herb Henkel, retired Chairman of the Board and Chief Executive Officer, Ingersoll Rand. Muhtar Kent, Chairman of the Board and retired Chief Executive Officer, The Coca-Cola Company. Ed Liddy, retired Chairman of the Board and Chief Executive Officer, The Allstate Corporation. Greg Page, retired Chairman of the Board and Chief Executive Officer, Cargill, Incorporated. Pat Woertz, retired Chairman of the Board and Chief Executive Officer, ADM Company.
Let's recognize our entire board of directors. Thank you. I will now turn over the program to Gregg Larson. Gregg?
Thank you, Inge. Good morning, everyone. Before discussing the business items, please review the meeting rules you received this morning. They are summarized on the screen behind me. These rules allow 3M to better accommodate the shareholders who attend this meeting and to be fair to everyone who wishes to speak. As the agenda you also received indicate, the board of directors is presenting four proposals, a stockholder is presenting one proposal, all of which are described in the proxy statement. We will vote on all of these proposals together after presenting each one. No other items of business will be considered at the meeting. The first proposal is to elect the 11 directors named in the proxy statement for a one-year term that expires at the 2018 annual meeting. All the nominees are standing for re-election to the board.
The second proposal is to ratify the audit committee's appointment of PricewaterhouseCoopers as 3M's independent registered public accounting firm for 2017. The third proposal is to approve our executives' compensation as described in the proxy statement. The fourth proposal allows shareholders to indicate whether they prefer future advisory votes on executive compensation every one, two, or three years. The board recommends a vote for each nominee, for each of these proposals, and for an annual advisory vote on executive compensation. We will now consider this shareholder proposal. James Kilkenny represents the Holy Land Principles and may make a brief three-minute statement on the merits of the proposal.
Thank you. Is that on? Okay. Good morning, Mr. Chairman and all present. I rise to move the resolution on the Holy Land Principles. My name is James Kilkenny. The Holy Land Principles are pro-Jewish, pro-Palestinian, and pro-company. The principles do not call for quotas, reverse discrimination, divestment, disinvestment, or boycotts. The principles do not take any position on solutions to the Israeli-Palestine issue. The principles do not try to tell the Palestinians or the Israelis what to do. The Holy Land Principles only call for fair employment by American companies in Palestine and Israel. Let me repeat that. The Holy Land Principles only call for fair employment by 3M and the other American companies doing business in the Holy Land. Irrespective of what Americans think about the Palestine-Israeli issue, one thing is certain: Americans expect American companies in the Holy Land to practice fair employment.
Incredibly, before the Holy Land Principles were launched in 2012, this issue had never been brought before 3M or any of the other 542 American companies doing business in Israel and Palestine. Our resolution calls on 3M to set the standard by signing and implementing the Holy Land Principles, which are based on the very effective MacBride Principles for Northern Ireland. Initially, American companies resisted the MacBride Principles, now 116 companies have signed the MacBride Principles. Why would 3M or any American company refuse to sign the Holy Land Principles? In 2015, GE, Corning, and Intel tried to get the SEC to exclude the Holy Land Principles resolution from their 2015 proxy materials. However, the SEC ruled in favor of the Holy Land Principles. Therefore, you know the Holy Land Principles are intrinsically valid, inherently fair and reasonable, and in the best American tradition.
Furthermore, the Holy Land Principles are fully consistent with ESG issues and are a practical and particularized application of the Ruggie Principles. Fair employment by the company is not only morally right but makes good economic sense, good for the company, enhancing its reputation, and making it more profitable for its investors. Signing the Holy Land Principles will send out a very strong message that 3M, in principle and practice, is committed to American fairness in its operations in the Holy Land. Who could be opposed to that? Please vote for the Holy Land Principles. It's the American way. Thank you.
Well, thank you for your views, Mr. Kilkenny. The board opposes your proposal for the following reasons: 3M already has a comprehensive human resource policy in effect to provide employees with a safe, respectful, and nondiscriminatory work environment. As a global company, 3M must apply the same human resource policy worldwide. For these reasons, the board recommends voting against this proposal. We are finished presenting the items of business in the proxy statement, now it is time to vote. If you submitted your proxy over the internet, by telephone, or by mail, it will be voted as you instructed. Please ask for a ballot only if you did not previously vote or if you wish to change your vote. If you need a ballot, please stand and an attendant will give you a ballot. When you have marked your ballots, please stand and the attendants will collect them.
The polls are about to close. If there's any shareholder who has not turned in a ballot and wishes to do so at this time, please stand so that the attendants can pick up your ballot. The polls are now closed. The preliminary results of the voting will be announced later in the meeting. This concludes the business segment of the meeting and our live webcast. For those watching online, thank you for joining us.