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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International Paper Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Investor Investor “Say “Say on on Pay” Pay” Discussion Discussion April 2015 |
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 2015 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 9, 2015. 2 2015 Proxy Statement – Annual “Say-on-Pay” Vote |
2014 Strong Financial Results Shareowner-Focused Plan Design Changes Continued Emphasis on Pay for Performance 3 Table of Contents |
Delivered record cash from operations and free cash flow of $2.1B N.A. Industrial Packaging achieved EBITDA of $2.7B and 24% margins ROIC above cost of capital for fifth consecutive year Margin expansion across key businesses Increased dividend by 14% to $1.60/share Share buyback program purchases of ~ $1B in 2014 Courtland closure completed Completed xpedx spin-off; $400MM received $470MM operational EBITDA up 126% at Ilim JV; $56MM dividend to IP 4 2014 Strong Financial Results |
5 Shareowner-Focused Plan Design Changes (2012-2015) Program Element Design Change / Rationale Peer Group Composition • Added and replaced companies from Compensation Comparator Group and both Performance Share Plan (PSP) peer groups to more closely align with IP and our compensation approach (2012; 2014; 2015) Management Incentive Plan (“MIP”) and Performance Share Plan (“PSP”) • • • Eliminated ROI Stretch Goal (“kicker”) from both MIP and PSP (2012) • employed, for both MIP and PSP to more closely align with investment community expectations (2013) • Performance achievement for relative TSR portion of PSP award now capped at 100% of target if TSR over • Retroactively eliminated opportunity for executive officers to elect to have additional shares withheld from PSP payouts to cover payment of federal taxes (2015) Change in Control Agreements • 2X for future agreements with SVPs to conform to compensation best practices (2012) • • • Froze participation in the SERP, Retirement Plan and Restoration Plan effective January 1, 2019 (2014) Officer Stock Ownership Requirement • (2013) • 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 is 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) Return on investment metric now defined as “Return on Invested Capital,” rather than return on capital three-year performance period is negative (2015) Reduced severance multiple, additional years of pension credit, and benefit continuation period from 3X to Amended all agreements and plan documents to move from a “single-trigger” to a “double-trigger” approach for acceleration of vesting of equity awards (2013; 2014) SERP closed to new participants because of declining prevalence of SERP in market (2012) Replaced four-year grace period with a 50% stock retention requirement until ownership requirement is met Increased stock ownership requirements for all executive officers (2015) Unfunded Supplemental Retirement Plan for Senior Performance Metrics and Design of Managers (“SERP”) |
2014 Compensation Comparator Group 3M Company Alcoa Inc. 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. L-3 Communications Holdings Lockheed Martin Corp. Northrop Grumman Corp. Parker-Hannifin Corp. PPG Industries Schlumberger Limited United States Steel Corp. Whirlpool Corp. Xerox Corp. 6 IP compares well: CEO pay at 50 percentile of CCG while TSR is at 80 percentile th th Continued Emphasis on Pay for Performance |
Three-Year Performance Period Our CEO’s Realizable Pay Rank Our Company’s TSR Rank 2011 - 2013 50th 80th 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 2014, 88% of our former and current CEO’s target compensation was based on performance – and therefore at risk. 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 |