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. )
Filed by the Registrantx Filed by a Party other than the Registrant¨
Check the appropriate box:
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
¨ | Definitive Proxy Statement |
x | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to §240.14a-12 |
International Paper Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. | |||
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. | |||
(1) Title of each class of securities to which the transaction applies:
| ||||
(2) Aggregate number of securities to which the transaction applies:
| ||||
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
| ||||
(4) Proposed maximum aggregate value of the transaction:
| ||||
(5) Total fee paid:
| ||||
¨ | Fee paid previously with preliminary materials. | |||
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) Amount Previously Paid:
| ||||
(2) Form, Schedule or Registration Statement No.:
| ||||
(3) Filing Party:
| ||||
(4) Date Filed:
|
April 2014 Investor “Say on Pay” Discussion |
Shareowners are asked annually to vote on a non-binding resolution to approve the compensation of our named executive officers (“Say-on-Pay” proposal), as disclosed in our proxy statement. To assist you in casting your 2014 Say-on-Pay vote, please review the following summary slides together with the more detailed information, including the Compensation Discussion and Analysis (“CD&A”), the related compensation tables and narrative disclosure, in our proxy statement dated April 10, 2014. 2 2014 Proxy Statement – Annual “Say-on-Pay” Vote |
2013 Strong Financial Results Shareowner-Focused Plan Design Changes Continued Emphasis on Pay for Performance 3 Table of Contents |
Delivered record operating earnings and cash from operations Strong free cash flow on increased EBITDA Industry-leading EBITDA margins across NA businesses Further strengthened a healthy Balance Sheet Increased dividend by 17% in 4Q and implemented $1.5B share buyback program Solid operational performance across key businesses Exceeded Cost of Capital with ROIC of 9+% 4 2013 Strong Financial Results |
Program Element Design Change / Rationale Peer Group Composition • Added and removed companies from Compensation Comparator Group and both Performance Peer Groups to more closely align with IP and our compensation approach (2012; 2014) Performance Metrics and Design of Management Incentive Plan (“MIP”) and Performance Share Plan (“PSP”) • Replaced Free Cash Flow with Cash Flow from Operations in MIP to eliminate concern that capital expenses might be delayed to achieve MIP payout to long-term detriment of business (2012) • PSP performance achievement now measured over a single, three-year performance period, rather than using a segmented approach to enhance long-term nature and reduce complexity of program (2012) • Eliminated ROI Stretch Goal from both MIP and PSP (2012) • Return on investment metric now defined as “Return on Invested Capital,” rather than return on capital employed, for both MIP and PSP to more closely align with investment community (2013) Change in Control Agreements • Reduced severance multiple, additional years of pension credit, and benefit continuation period from 3X to 2X for future agreements with SVPs to conform to compensation best practices (2012) • Amended acceleration of vesting of equity awards (2013) Unfunded Supplemental Retirement Plan for Senior Managers (“SERP”) • SERP closed to new participants because of declining prevalence of SERP in market (2012) Officer Stock Ownership Requirement • Replaced four-year grace period with a 50% stock retention requirement until ownership requirement is met (2013) 5 Shareowner-Focused Plan Design Changes (2012-2014) all agreements to move from a “single-trigger” to a “double-trigger” approach for |
2013 Compensation Comparator Group 3M Company Alcoa Inc. Bunge Limited Caterpillar Inc. Dow Chemical Company E.I. DuPont de Nemours Eaton Corp. Emerson Electric Company FedEx Corp. Goodyear Tire & Rubber Company Hess Corp. Honeywell International Inc. Johnson Controls, Inc. Kimberly-Clark Corp. Lockheed Martin Corp. PPG Industries Schlumberger Limited United States Steel Corp. Whirlpool Corp. Xerox Corp. 6 IP compares well: CEO pay at 85 percentile of CCG while TSR is at 80 percentile IP 50th 25th 75th 25th 50th 75th Realizable Pay Rank (percentile of peer group) Pay for Performance Alignment CEO Realizable Pay vs. TSR Performance (2010 - 2012) Below median shareholder return Above median realizable pay Above median shareholder return Below median realizable pay Continued Emphasis on Pay for Performance th th |
Three-Year Performance Period Our CEO’s Realizable Pay Rank Our Company’s TSR Rank 2010 - 2012 85th 80th 2009 -2011 60th 100th 2008 -2010 30th 40th 2007 - 2009 40th 40th 7 This table demonstrates the close correlation between our CEO’s pay and Company’s performance over the past four three-year performance periods. Continued Emphasis on Pay for Performance |
8 This chart illustrates our commitment to pay at risk. For 2013, 88% of our CEO’s target compensation was based on performance – and therefore at risk. CEO Other NEOs 2013 Total Target Compensation Mix 12% 71% 88% Pay at Risk 23% 59% 77% Pay at Risk Actual Base Salary STI Target LTI Target Continued Emphasis on Pay for Performance |
Questions? Please contact our Investor Relations Team Jay Royalty Vice President, Investor Relations 901-419-1731 Michele Vargas Manager, Investor Relations 901-419-7287 9 |