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 |