Andy Silvernail
INTERNATIONAL PAPER CO /NEW/About Andy Silvernail
Andrew K. “Andy” Silvernail is Chairman and Chief Executive Officer of International Paper, appointed CEO effective May 1, 2024, and Chairman effective October 1, 2024. He previously served as Chairman & CEO of IDEX Corporation (2011–2020), Chairman & CEO of Madison Industries (2021), and as an executive advisor at KKR and founder/CEO of 5 Nails, LLC (2022–2024). He currently serves on the boards of Stryker Corporation and privately held Potter Global Technologies, and as Chairman of nonprofit Paws for Patrick . International Paper’s 2024 incentive scorecard paid at 179.1% on the back of 200% achievement on Adjusted EBITDA and Cash Conversion (revenue slightly below target), while the 2022–2024 PSU cycle paid at 131.88% driven by 86th percentile relative TSR (Adjusted ROIC below target at 7.55% vs 9.0% target) . The company highlighted 2024 financials including $2.0B Adjusted EBITDA, $1.7B cash from operations, and $0.8B free cash flow .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| IDEX Corporation (NYSE: IEX) | Chairman & Chief Executive Officer | 2011–2020 | Led global industrial technology company |
| Madison Industries | Chairman & Chief Executive Officer | 2021 | Led one of the largest privately held companies across filtration, medical, energy |
| KKR & Co., Inc. | Executive Advisor | 2022–2024 | Senior operating/advisory capacity to global investment firm |
| 5 Nails, LLC | Founder, Chair & Chief Executive Officer | 2022–2024 | Founded and led private investment advisory firm |
| Rexnord Industries; Newell Rubbermaid; Danaher | Executive roles (prior) | — | Leadership roles at diversified industrial/consumer companies |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Stryker Corporation (NYSE: SYK) | Director | Current | Public company board service |
| Potter Global Technologies | Director | Current | Private company (fire and safety solutions) |
| Paws for Patrick | Chairman of the Board | Current | Nonprofit focused on youth mental health via emotional support animals |
Board Governance at IP
- Board leadership: roles of Chairman and CEO are combined; Board determined this structure is appropriate at this time to promote unified leadership and direction .
- Independence: 10 of 11 director nominees are independent; robust Lead Independent Director role; executive sessions without management are held at every Board meeting .
- Committees and attendance (2024):
- Management Development & Compensation Committee (MDCC): 7 meetings, 97% attendance; all independent; FW Cook serves as independent compensation consultant .
- Public Policy & Environment Committee: 6 meetings, 100% attendance; all independent .
- Executive Committee: chaired by Silvernail; may act for the Board if a quorum cannot be convened .
Fixed Compensation
| Item | Value | Period/Notes |
|---|---|---|
| Base salary | $1,000,000 | Initial CEO salary set in offer letter |
| 2024 base salary actually paid | $666,667 | Prorated from May 1, 2024 start date |
| Target annual incentive (AIP) | 150% of base salary | Prorated in 2024 |
| Perquisites | Personal aircraft use up to $150,000 imputed (no tax gross-up; reimburse incremental costs above $150,000); standard relocation plus $210,000 one-time cash; legal fee reimbursement up to $50,000 | Offer letter terms |
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Design and Results
| Metric | Weight | Threshold | Target | Maximum | Actual | % of Target Earned | Weighted % |
|---|---|---|---|---|---|---|---|
| Adjusted EBITDA | 70% | $1.237B | $1.546B | $1.855B | $1.986B | 200.0% | 140.0% |
| Revenue | 20% | $16.911B | $18.790B | $19.730B | $18.618B | 95.4% | 19.1% |
| Cash Conversion | 10% | 45.5% | 56.9% | 62.6% | 67.0% | 200.0% | 20.0% |
| Total | 100% | — | — | — | — | — | 179.1% |
- Silvernail’s 2024 AIP payout: $1,791,000, equal to 179.1% of target, prorated for time in role; individual performance modifier at 100% (i.e., company performance drove outcome) .
Long-Term Incentive Plan (LTIP) – Structure and Achievements
| Component | Metric | Weight | Payout scale |
|---|---|---|---|
| PSUs (2024–2026 program) | Adjusted ROIC | 50% | 0%–200% vs target performance |
| PSUs (2024–2026 program) | Relative TSR | 50% | 0% at below 25th; 100% at 50th; 200% at ≥75th percentile |
| Performance Cycle | Metric | Target | Actual | % of Target Earned | Weighted % |
|---|---|---|---|---|---|
| 2022–2024 PSP | 3-Year Adjusted ROIC | 9.0% | 7.55% | 63.75% | 31.88% |
| 2022–2024 PSP | Relative TSR | 50th Percentile | 86th Percentile | 200.00% | 100.00% |
| Total Payout | — | — | — | — | 131.88% |
Silvernail Equity Awards and Vesting
| Award | Grant Date | Form | Target Shares | Program/Value Reference | Vesting/Performance Terms |
|---|---|---|---|---|---|
| 2024 LTIP CEO Award | May 1, 2024 | PSUs | 350,926 | Target LTIP value of $12.5M per offer letter; grant-date FV $12,085,891 | Vests after 3-year performance period; performance per LTIP; scheduled vest Feb 2027 |
| 2024 Inducement PSU Award | May 1, 2024 | PSUs | 240,930 | Target value $8.5M per offer letter; grant-date FV $5,107,716 | Earned on stock-price hurdles + service; 3-year performance/vesting; accelerated in certain involuntary terminations; scheduled vest May 1, 2027 |
Forward-looking 2025 LTIP Design (adopted Dec 2024)
| Effective Date | Design | CEO Target LTIP Value |
|---|---|---|
| Jan 1, 2025 | 100% PSUs for executive officers; sole metric is 3-year relative TSR vs 40 S&P Composite 1500 Materials constituents most correlated with IP; 0%–200% payout range | $12,500,000 |
Equity Ownership & Alignment
| As of March 14, 2025 | Shares of Common Stock Held (#) | Stock Units Owned (#) | Percentage of Class |
|---|---|---|---|
| Andrew K. Silvernail | — | — | * (<1%) |
- Unvested equity at target: 350,926 PSUs (2024 LTIP) and 240,930 PSUs (Inducement Award), both subject to performance; LTIP performance period 1/1/2024–12/31/2026; Inducement Award tied to stock-price hurdles and service over three years .
- Anti-hedging/anti-pledging: company maintains strong anti-hedging and anti-pledging provisions, supporting alignment; no personal pledging is disclosed in the ownership table .
Employment Terms
| Term | Detail |
|---|---|
| Start and roles | CEO effective May 1, 2024; Chairman effective Oct 1, 2024 |
| Base and bonus | $1,000,000 base; AIP target 150% of salary (prorated in 2024) |
| Aircraft | Personal use permitted; reimburse incremental cost above $150,000; value up to $150,000 imputed as income; no tax gross-up |
| Relocation | Standard relocation benefits plus one-time $210,000 cash for uncovered relocation expenses |
| Legal fees | Reimbursement up to $50,000 for offer negotiation |
| Retirement eligibility | Retirement eligibility at age 60 regardless of service (as specified in agreement context) |
| Clawback | Robust Dodd-Frank compliant clawback policy adopted in 2023; administered by MDCC |
| Severance plan | Executive Severance Plan adopted Feb 11, 2025, replacing 2005 policy; designed to provide defined payments/benefits on qualifying terminations |
| Change-in-Control (CIC) | Tier I CIC agreement: 2.99x base salary + target AIP cash severance; double-trigger; no excise tax gross-ups; accelerated vesting subject to terms |
Potential Payments Upon Qualifying Termination After CIC (as of 12/31/2024)
| Name | Lump Sum Severance ($) | Lump Sum Pension Payment ($) | Continued Benefits ($) | Total Cash-Based ($) | Accelerated Equity ($) | Total Pre-Tax Benefit ($) | Pension Annuity ($) |
|---|---|---|---|---|---|---|---|
| A.K. Silvernail | 7,475,000 | 464,972 | 44,744 | 7,984,716 | 42,454,354 | 50,439,070 | — |
Compensation Structure Analysis
- Pay mix and leverage: 93% of Silvernail’s annualized target 2024 compensation was performance-based (excludes inducement PSUs), and CEO/direct reports move to 100% PSU LTI based solely on relative TSR starting 2025, indicating high market-linked at-risk pay .
- Short-term plan rigor and outcomes: 2024 AIP emphasized profitability and cash (70% Adjusted EBITDA, 10% Cash Conversion) with revenue at 20%; payout reflected outperformance on EBITDA and cash conversion despite revenue below target .
- Peer frameworks: target total direct compensation for 2024 set near CCG median; TSR peer group broader and formulaically selected to reduce exogenous factor bias in relative performance .
Risk Indicators & Red Flags
- Dual role governance: Combined Chair/CEO role; mitigants include robust Lead Independent Director, 10/11 independent directors, and executive sessions without management at every Board meeting .
- CIC economics: Tier I 2.99x cash severance and significant equity acceleration potential upon double-trigger CIC termination; no excise tax gross-up .
- Perquisites: Personal aircraft use is capped for company-paid incremental cost (above threshold reimbursed) and not grossed-up, limiting shareholder-unfriendly optics .
- Clawback/pledging: Dodd-Frank compliant clawback in place; strong anti-hedging and anti-pledging policies .
Performance Compensation – Metric-to-Payout Detail (for analysts)
| Plan Year | Element | Metric | Target | Actual | Payout (% of Target) |
|---|---|---|---|---|---|
| 2024 | AIP | Total (weighted) | — | — | 179.1% |
| 2022–2024 | PSUs | Relative TSR | 50th Percentile | 86th Percentile | 200.0% |
| 2022–2024 | PSUs | 3-year Adjusted ROIC | 9.0% | 7.55% | 63.75% |
Equity Grants & Vesting Schedule (Selected)
| Award | Grant Date | Target Shares | ASC 718 Grant-Date FV ($) | Vesting Date | Notes |
|---|---|---|---|---|---|
| 2024 LTIP PSUs | 5/1/2024 | 350,926 | 12,085,891 | Feb 2027 | LTIP metrics (50% ROIC, 50% rTSR) |
| 2024 Inducement PSUs | 5/1/2024 | 240,930 | 5,107,716 | 5/1/2027 | 100% performance-based with stock-price hurdles + service |
Board Service History and Committee Roles (at IP)
- Director since May 2024 (CEO appointment), Chairman since October 2024; currently chairs the Executive Committee .
- MDCC composition (independent): Hinman (Chair), Connor, Lewis, Vincent; committee oversees CEO comp and succession with FW Cook as independent consultant; MDCC recommended CD&A inclusion .
- Governance practices include majority voting, proxy access, special meeting and written consent rights .
Investment Implications
- Incentive alignment: Shift to 100% PSU LTI based solely on relative TSR for CEO and directs from 2025 increases external market linkage and payout symmetry, a positive for alignment but potentially heightening sensitivity to sector-relative performance moves .
- 2024 scorecard reveals emphasis on profitability and cash conversion (over revenue), aligning with deleveraging/returns narratives; high payout reflected EBITDA/cash outperformance despite revenue just under target .
- Ownership optics and overhang: As of the 2025 record date, no beneficial share ownership was reported for Silvernail, but significant unvested PSUs (inducement and LTIP) create meaningful performance-contingent alignment; key vesting events cluster in 2027, which may affect supply dynamics if hurdles are met .
- Transaction dynamics: Tier I CIC at 2.99x cash with substantial equity acceleration could influence executive incentives around strategic alternatives; absence of excise tax gross-ups and double-trigger design mitigate some shareholder concerns .
- Governance mitigants: Combined Chair/CEO structure is tempered by strong independence profile, executive sessions without management, and anti-hedging/anti-pledging and clawback policies, reducing agency risk .