International Paper Company | Shareowner Opportunity to Vote on Excessive Golden Parachutes at International Paper Company

Status
Filed
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
IP:US
Lead filer
Individual
ESG theme
  • Governance
ESG sub-theme
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Materials
Company HQ country
United States
Resolved clause
Shareholders request that the Board adopt a policy to seek shareholder approval of senior managers’ new or renewed
pay package that provides for golden parachute payments with an estimated value exceeding 2.99 times the sum of the
executive’s base salary plus target short-term bonus. This proposal only applies to Section 16 Officers.
Whereas clause
Golden parachute payments include cash, equity or other compensation that is paid out or vests due to a senior
executive’s termination for any reason. Payments include those provided under employment agreements, severance
plans, and change-in-control clauses in long-term equity plans, but not life insurance, pension benefits, or deferred
compensation earned and vested prior to termination. “Estimated total value” includes: lump-sum payments; payments
offsetting tax liabilities; perquisites or benefits not vested under a plan generally available to management employees;
post-employment consulting fees or office expense; and equity awards if vesting is accelerated, or a performance
condition waived, due to termination.
The Board shall retain the option to seek shareholder approval at an annual meeting after material terms are agreed
upon. Generous performance-based pay can sometimes be justified but shareholder ratification of golden parachutes
with a total cost exceeding 2.99 times base salary plus target short-term bonus better aligns management pay with
shareholder interests. This proposal is relevant even if there are current golden parachute limits. A limit on golden
parachutes is like a speed limit. A speed limit by itself does not guarantee that the speed limit will never be exceeded.
Like this proposal the rules associated with a speed limit provide consequences if the limit is exceeded. With this
proposal the consequences are a non-binding shareholder vote is required for unreasonably high golden parachutes.
This proposal places no limit on long-term equity pay or any other type pay. This proposal thus has no impact on the
ability to attract executive talent or discourage the use of long-term equity pay because it places no limit on golden
parachutes. It simply requires that extra large golden parachutes be subject to a non-binding shareholder vote at a
shareholder meeting already scheduled for other matters.

This proposal is relevant because the annual say on executive pay vote does not have a separate section for approving or
rejecting golden parachutes.
The topic of this proposal received between 51% and 65% support at:
FedEx
Spirit AeroSystems
Alaska Air
Fiserv
Supporting statement
Filed by John Chevedden

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