01—Abstract
Summary
Summary of the 8-K filed December 13, 2024. Cited figures are marked; the original filing is the authoritative source.
On December 9, 2024, International Paper Company's Management Development and Compensation Committee approved the 2025 Long-Term Incentive Compensation Plan (2025 LTIP) under the shareowner-approved 2024 Long-Term Incentive Compensation Plan.
Under the 2025 LTIP, equity awards for executive officers will consist of 100%a performance stock units (PSUs), replacing the prior year's mix of 80% PSUs and 20% restricted stock units. The sole performance metric for these PSUs will be 100% relative total shareowner return (TSR), measured over a three-year period against an expanded peer group of the 40 constituents of the S&P Composite 1500 Materials Index with the highest three-year stock price correlation with the Company. The performance range remains 0% to 200%, and the PSUs vest after the three-year performance period.
The new approach takes effect with annual equity grants on January 1, 2025. The filing lists approved total target LTIP award values for those grants: $12,500,000b for Andrew K. Silvernail, Chairman and Chief Executive Officer; $3,500,000 for Timothy S.
Nicholls, Senior Vice President and Chief Financial Officer; $2,800,000c for W. Thomas Hamic, Executive Vice President and President – North American Packaging Solutions; and $2,000,000 for Joseph R. Saab, Senior Vice President, General Counsel and Corporate Secretary.
The Committee also approved an increase in total direct compensation for Mr. Nicholls and Mr. Saab based on position to market. The Committee states that these changes are in the best interests of shareowners, will motivate and retain key executives, and will align pay with performance over a longer period.
02—Key points
Key Highlights
- Executive equity awards shift to 100% performance stock units, up from 80% PSUs and 20% restricted stock units in the prior year.
- The sole PSU performance metric is 100% relative total shareowner return over a three-year period.
- The TSR peer group expands to the 40 constituents of the S&P Composite 1500 Materials Index with the highest three-year stock price correlation with the Company.
- The performance range for the PSU goal remains 0% to 200%, with vesting after a three-year performance period.
- The new approach takes effect with annual equity grants on January 1, 2025.
- Approved January 1, 2025 total target LTIP award values are $12.5 million for the Chairman and CEO, $3.5 million for the CFO, $2.8 million for W. Thomas Hamic, and $2.0 million for Joseph R. Saab.
- The Committee approved an increase in total direct compensation for Mr. Nicholls and Mr. Saab based on position to market.
03—Questions
Frequently Asked Questions
What is changing in how International Paper grants long-term equity awards to executives?
Equity-based long-term incentive awards for executive officers will be 100% performance stock units, compared with 80% PSUs and 20% restricted stock units in the prior year. The new approach takes effect with the annual equity grants on January 1, 2025.
How will the performance of the PSUs be measured?
The sole performance metric is 100% relative total shareowner return, measured over a three-year period against a TSR peer group of the 40 constituents of the S&P Composite 1500 Materials Index with the highest three-year stock price correlation with the Company. The performance range for the goal remains 0% to 200%.
What are the approved target LTIP award values for the named executive officers?
For the January 1, 2025 annual grants, the approved total target LTIP award values are $12,500,000 for Andrew K. Silvernail, $3,500,000 for Timothy S. Nicholls, $2,800,000 for W. Thomas Hamic, and $2,000,000 for Joseph R. Saab. The filing notes these apply to officers who continue to be employed by the Company.
Did the Committee change compensation for any executives beyond the equity award structure?
Yes. The Committee approved an increase in total direct compensation for Mr. Nicholls and Mr. Saab based on position to market. The filing does not quantify the increase.
What reasons does the Committee give for these changes?
The Committee believes the changes are in the best interests of shareowners, will provide further incentive to motivate and retain key executives, and will continue to align pay with performance over a longer period of time.
04—Continue