Arsen Kitch
About Arsen Kitch
Arsen S. Kitch, age 43, has served as Clearwater Paper’s President and Chief Executive Officer since April 1, 2020 and as a director since the same date; his board tenure is 4.9 years and he holds no other public company directorships . In 2024, Kitch led a transformative year: acquiring the Augusta, GA paperboard mill ($708M), selling the consumer products division ($1.06B), reducing net debt by $199M, authorizing a $100M buyback, and navigating an SBS down-cycle with cost actions targeting $40–$50M run-rate savings by end-2025 . Pay-for-performance links are explicit: 2024 AIP weighted to Adjusted EBITDA and strategic objectives, and PSUs tied to three-year FCF/ROIC with an rTSR modifier versus the S&P SmallCap 600; the 2022–2024 PSU cycle paid 175% of target on maximum FCF/ROIC despite rTSR underperformance, signaling strong internal cash/returns delivery even as relative TSR lagged .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Clearwater Paper | President & CEO | Apr 2020–present | Led strategic portfolio shift (Augusta acquisition; CPD sale) and deleveraging; implemented cost reductions . |
| Clearwater Paper | SVP & GM, Consumer Products Division | Jan 2018–Apr 2020 | Division leadership preceding ascension to CEO . |
| Clearwater Paper | VP Finance; VP FP&A | Jan 2015–Dec 2017 | Corporate finance and planning leadership . |
| Clearwater Paper | Senior Director, Strategy & Planning | Aug 2013–Dec 2014 | Corporate strategy and planning . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Spokane Symphony (non-profit) | Chair of the Board | 2024 (at least) | Company contributed $20,000 on his behalf as board chair . |
| Public company boards | — | — | None; “Other Public Boards: 0” in proxy . |
Fixed Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $888,461 | $940,385 | $990,385 |
| Stock Awards (grant-date fair value) | $2,113,054 | $2,872,321 | $3,755,680 |
| Option Awards | $0 | $0 | $0 |
| Non-Equity Incentive (AIP) | $1,549,100 | $1,263,700 | $1,033,300 |
| Change in Pension/SERP | $0 | $0 | $0 |
| All Other Compensation | $143,073 | $211,690 | $194,865 |
| Total | $4,693,688 | $5,288,096 | $5,974,230 |
Performance Compensation
AIP Design (CEO, enterprise-wide)
- 75% Company Adjusted EBITDA; 25% Company Strategic Objectives .
| 2024 AIP Scale | Threshold | Target | Maximum | Attainment | Payout Modifier |
|---|---|---|---|---|---|
| Company Adjusted EBITDA ($) | $180.0M | $225.0M | $270.0M | $212.6M | 72.4% of target |
| Strategic Objectives | — | — | — | “Remarkable achievements” (Augusta acquisition; CPD sale; deleveraging) | 200% of target |
| CEO AIP Target vs Actual | $993,300 | — | Cap 200% | Actual $1,033,300 | — |
LTIP Design (2024–2026 cycle)
- PSUs 60% of LTIP; RSUs 40% of LTIP; PSUs: 70% FCF, 30% ROIC; rTSR modifier ±25% vs S&P SmallCap 600; total PSU payout capped at 200% .
| LTIP Component | Weight | Metric | Modifier |
|---|---|---|---|
| PSUs | 60% | 70% FCF; 30% ROIC | rTSR ±25% vs S&P SmallCap 600 |
| RSUs | 40% | Time-based (3-year ratable vesting) | None |
PSU Outcomes (2022–2024 cycle)
| Metric | Threshold | Target | Maximum | Actual Attainment | Payout |
|---|---|---|---|---|---|
| FCF (cumulative 3-year) | $171M | $201M | $232M | $248M | 200% |
| ROIC (avg) | 5.6% | 7.0% | 8.4% | 8.8% | 200% |
| rTSR vs S&P 600 | — | — | — | Absolute TSR -11.96%; 15.62pp below index | -25% modifier |
| PSU Total Payout | — | — | — | — | 175% |
Equity Ownership & Alignment
Beneficial Ownership and Guideline Compliance
| Item | Value |
|---|---|
| Shares beneficially owned | 275,910 |
| Ownership % of outstanding (16,239,929 shares) | 1.69% |
| Breakdown (within 60 days of 2/28/25) | 16,605 options exercisable; 31,781 RSUs vesting |
| CEO Stock Ownership Guideline | 5× base salary required |
| Compliance Status | Met or on track per policy |
| Hedging/Pledging Policy | Short sales, pledging, margin, exchange-traded derivatives prohibited |
Outstanding and Vesting Schedules (as of 12/31/2024; CEO)
| Award | Shares | Vesting Dates | Market Value Basis |
|---|---|---|---|
| RSUs 2024 grant | 38,232 | 33%/33%/34% on Mar 15, 2025/2026/2027 | $29.77 per share at 12/31/24 |
| RSUs 2023 grant | 29,032 | ~50%/50% on Mar 15, 2025/2026 | $29.77 per share at 12/31/24 |
| RSUs 2022 grant | 28,187 | 100% on Mar 15, 2025 | $29.77 per share at 12/31/24 |
| PSUs 2024–2026 (target) | 57,347 | Cliff at 12/31/2026, subject to performance | — |
| PSUs 2023–2025 (target) | 43,549 | Cliff at 12/31/2025, subject to performance | — |
| Stock options (various 2015–2018 grants) | 16,605 total exercisable (multiple lots) | Expire 2025–2028 at listed strikes | — |
2024 Equity Settlements and Withholding (CEO)
| Item | Shares | Notes |
|---|---|---|
| RSUs settled in 2024 | 69,093 | Gross before withholding; vesting events in 2024 |
| PSUs (2022–2024) settled | 73,992 | Paid at 175% based on performance |
| Shares withheld for taxes | 50,849 | Withholding at settlement; not open-market selling |
Insider Transactions (2025 Form 4 snapshots)
| Date (filed) | Period | Action | Detail |
|---|---|---|---|
| Mar 18, 2025 | Mar 15, 2025 | Form 4 | CEO reported changes; see issuer IR and third-party summaries |
| Feb 26, 2025 | Feb 24, 2025 | Form 4 | EDGAR acceptance of Form 4 filing |
| Plainsite summary | Feb 26, 2025 | Form 4 | Shares withheld to satisfy tax on 2022–2024 PSU settlement (no open-market sale) |
| Oct 3, 2025 | — | Form 4 | Additional Form 4 filing referenced on IR site |
Note: 2025 Form 4s indicate tax withholding at settlement rather than discretionary selling, moderating near-term “selling pressure” signals.
Employment Terms
| Provision | CEO Terms |
|---|---|
| Severance (no CIC) | 18 months base salary; pro-rata AIP based on actual performance; 18 months benefits continuation |
| CIC Severance (double trigger) | 2.5× base + target bonus; pro-rata target bonus for termination year; 2.5 years benefits continuation |
| Equity treatment on CIC | PSUs: pro-rata at target upon double trigger; RSUs: full or pro-rata vesting depending on vest year and double trigger |
| Clawback | Dodd-Frank compliant clawback policy adopted; financial restatement clawbacks in cash/equity plans |
| Tax gross-ups | No excise tax gross-ups |
| Single-trigger vesting | Not provided; double trigger required |
| Non-compete/Non-solicit | Not specifically disclosed for CEO in proxy excerpts; severance triggers defined (Good Reason causes) |
Board Governance
- Board independence: 7 of 8 directors independent post-2025 meeting; Chair independent; CEO and Chair roles separated, with regular executive sessions without management .
- Committees: Audit, Compensation, and Nominating & Governance comprised entirely of independent directors; CEO not listed on committees; compensation committee conducts annual CEO review .
- Attendance: Board and committees met 36 times in 2024; all directors attended all meetings; all attended 2024 annual meeting .
- Say-on-pay: 2024 support exceeded 95% .
- Board declassification approved in 2024, moving to annual elections by 2027 .
Compensation Structure: Detailed Incentive Mechanics
Target Pay Mix (CEO)
- 2024 target compensation: 81% incentive-based (AIP + LTIP); emphasizes performance-aligned equity .
AIP Adjustments for 2024 Strategic Transactions
- Committee pre-approved adjustments to equitably account for CPD sale and Augusta acquisition in AIP attainment (annualizing CPD EBITDA; excluding Augusta impact from PPD EBITDA): Company Adj. EBITDA increased from $183M to $212.6M for AIP purposes; CPD EBITDA from $139.1M to $167.0M; PPD below threshold .
Peer Group and Benchmarking
- 2024 peer group refreshed (adds: Advansix, Cascades, Ennis, Koppers, Mativ, Pactiv Evergreen, Sonoco, Sylvamo; removes several acquired firms); Semler Brossy advises; targeting competitive market alignment .
Equity Ownership Guidelines and Trading Policies
- Executive stock ownership guidelines: CEO 5× base salary; retention requirements apply if shortfall; measurement uses greater of acquisition/vesting value or 20-day average at measurement date .
- Trading restrictions: No hedging, short sales, pledging, margin purchases, or exchange-traded derivatives by insiders .
Performance & Track Record
- 2024 outcomes: Net income $196M; Adjusted EBITDA (total operations) $182M; net debt reduction $199M; strategic transactions executed; industry operating rates ~85% (below typical 90–95%) .
- rTSR (2022–2024): absolute TSR -11.96%, 15.62pp below S&P SmallCap 600; PSU payout still strong (175%) due to maximum financial goal achievement .
- Cost actions: ~10% reduction in positions; targeted fixed cost reduction ~10% in 2025; expected $40–$50M annual run-rate savings by end of year .
Director Compensation (CEO Dual Role)
- CEO receives no additional director compensation; director equity and fees apply only to non-employee directors .
- Dual-role implications: Separation of Chair/CEO and fully independent committees mitigate independence concerns associated with CEO serving on the board; regular executive sessions without management further address governance robustness .
Risk Indicators & Red Flags
- Repricing/underwater options: Prohibited without shareholder approval .
- Clawbacks: Implemented per Dodd-Frank; restatement clawbacks also in plans .
- Hedging/Pledging: Prohibited by policy .
- Related party transactions: None requiring disclosure in 2024 .
Investment Implications
- Pay-for-performance alignment is strong: heavy equity weighting; rigorous FCF/ROIC PSU metrics with rTSR modifier; AIP grounded in EBITDA and strategic execution. The 175% PSU payout underscores cash/returns strength even amid relative TSR drag, suggesting internally favorable capital discipline .
- Insider selling pressure appears limited: 2025 Form 4s show tax withholding at settlement rather than discretionary sales; vesting cadence concentrated around mid-March could create mechanical supply, but not a signal of sentiment-driven selling .
- Governance offsets dual-role concerns: independent Chair, fully independent committees, and high board attendance mitigate CEO/director independence risks; say-on-pay support (>95%) indicates shareholder acceptance of structure and outcomes .
- Retention economics are competitive but bounded: Double-trigger CIC terms (2.5× base+target, equity acceleration per plan) balance retention with shareholder protections (no gross-ups, clawbacks, no single-trigger vesting), limiting windfall risk while ensuring leadership stability through strategic cycles .
- Execution risk: SBS down-cycle and integration costs necessitate tight execution of cost reductions; AIP now includes a cost reduction component in 2025, reinforcing near-term operational focus .