International Paper Company · NYSE:IP
International Paper — International Paper Co /New/ — Proxy Contest (April 2016)
10 slides from International Paper's proxy contest presentation, Apr 8, 2016
Slide 1: Incentive Compensation Plan Performance Metrics April 2016
Incentive Compensation Plan Performance Metrics April 2016
Slide 2: 2016 Proxy Statement – Annual Say-on-Pay Vote
2016 Proxy Statement – Annual “Say-on-Pay” Vote 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 2016 Say-on-Pay vote, please revie
Slide 3: Compensation Architecture
Compensation Architecture The primary elements of our executive compensation program include: Base salary Short-term (annual) Incentive Compensation This is our Management Incentive Plan or “MIP” Long-term Incentive Compensation This is our Performance Share Plan or “PSP” Built on a pay-for-performa
Slide 4: Incentive Plan Overview
Incentive Plan Overview Management Incentive Plan Cash-based incentive plan Designed to motivate employees to achieve our most critical short-term financial goals Approximately 3,500 employees participate globally Performance Share Plan Long-term, equity-based incentive plan Designed to motivate emp
Slide 5: 2016 Incentive Plan Metrics
2016 Incentive Plan Metrics MIP - Changes for 2016 From: Absolute Cash Flow from Operations – 50% Absolute ROIC – 50% To: Absolute EBITDA – 70% Absolute ROIC – 30% PSP - No Changes for 2016 Officers: Relative ROIC – 50% Relative TSR – 50% Non-Officers: Relative ROIC – 75% Relative TSR – 25%
Slide 6: Why EBITDA?
Why EBITDA? What is EBITDA? Commonly used as a proxy for a company’s performance Measures the operating profitability of the company Also serves as an approximation for cash flow Single largest driver of Cash Flow from Operations Major indicator of the on-going operational strength of the company
Slide 7: Why Make the Change in the MIP plan?
Why Make the Change in the MIP plan? Achieving our annual earnings target is important to the company’s ongoing success EBITDA is widely used by our investors to measure the company’s performance We set goals for EBITDA and track performance each month and quarter Establishes an important and transp
Slide 8: The Importance of Other Key Metrics
The Importance of Other Key Metrics Cash Flow Cash flow remains a critical component of our business EBITDA is more visible and widely-recognized metric for many employees Increasing employee focus on EBITDA will continue to drive improvement in cash flow EBITDA remains the single largest driver of
Slide 9: Conclusion
Conclusion IP is committed to paying for performance and aligning both short-term and long-term metrics with the best interests of our shareowners MIP is designed to align and motivate IP leadership around the most critical short-term financial goals Both the senior lead team and our Board of Direct
Slide 10: Contacts
Contacts Questions? Please contact our Investor Relations Team Jay Royalty Vice President, Investor Relations 901-419-1731 Michele Vargas Director, Investor Relations 901-419-7287
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