James Royalty
INTERNATIONAL PAPER CO /NEW/About James Royalty
James P. “Jay” Royalty, Jr. is Senior Vice President, Containerboard & Recycling at International Paper, a role he has held since January 2023 after 34 years with the company across converting, sales, marketing, finance, and leadership roles including President EMEA Packaging, VP-Strategic Projects, and VP Investor Relations . Pay-for-performance alignment is evidenced by 2024 AIP payout at 179.1% of target driven by Adjusted EBITDA and Cash Conversion outperformance , and the 2022–2024 PSP vesting at 131.88% on strong relative TSR (86th percentile) despite sub-target Adjusted ROIC .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| International Paper | SVP, Containerboard & Recycling | Jan 2023–present | Took leadership of containerboard & recycling; retained interim responsibility for EMEA Packaging at appointment |
| International Paper | SVP & President, EMEA Packaging | 2019–2022 | Led EMEA Packaging; senior leadership role spanning region |
| International Paper | VP, Strategic Projects | 2017–2019 | Corporate strategic initiatives |
| International Paper | VP, Investor Relations | 2013–2017 | Investor relations leadership; listed as investor contact on multiple 8-Ks |
| International Paper | VP & GM, Container – The Americas | 2008–2013 | General management in packaging operations |
| International Paper | Various (converting, sales, marketing, finance) | 1991–2008 | Progressive operating and commercial roles |
Fixed Compensation
| Metric | 2024 | 2025 |
|---|---|---|
| Salary paid ($) | $556,667 | — |
| Annual base rate in effect ($) | $560,000 (post Mar 1, 2024 3.7% increase) | $585,000 (effective Mar 1, 2025, +4.5%) |
| AIP target ($) | $450,000 | — |
| AIP actual ($) | $805,950 (179.1% of target) | — |
Performance Compensation
2024 AIP Metrics and Outcomes
| 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 | $18.618B | 95.4% | 19.1% |
| Cash Conversion | 10% | 45.5% | 56.9% | 62.6% | 67.0% | 200.0% | 20.0% |
| Total | 100% | — | — | — | — | — | 179.1% |
2022–2024 PSP Achievement (PSUs)
| Metric | Weight | Target | Actual | % of Target Earned | Weighted % |
|---|---|---|---|---|---|
| 3-Year Adjusted ROIC | 50% | 9.0% | 7.55% | 63.75% | 31.88% |
| Relative TSR | 50% | 50th percentile | 86th percentile | 200% | 100.00% |
| Total | 100% | — | — | — | 131.88% |
Grants of Plan-Based Awards During 2024 (LTIP and Recognition)
| Award Type | Grant Date | Shares/Units (#) | Grant Date Fair Value ($) |
|---|---|---|---|
| LTIP RSUs | 1/1/2024 | 6,529 | $236,023 |
| LTIP PSUs (target) | 1/1/2024 | 24,961 | $944,150 |
| Recognition RSU | 1/1/2024 | 20,000 | $723,000 |
• International Paper discontinued stock options; plan prohibits repricing or exchange of underwater options/SARs without shareholder approval .
Equity Ownership & Alignment
Beneficial Ownership (as of March 14, 2025)
| Holder | Shares of Common Stock (#) | Stock Units (#) | % of Class |
|---|---|---|---|
| James P. Royalty, Jr. | 92,604 | 28,059 | <1% (*) |
Outstanding Equity Awards (as of December 31, 2024)
| Award | Unvested Units/Shares (#) | Market/Payout Value ($) |
|---|---|---|
| 2022 PSP PSUs | 20,968 | $1,128,490 |
| 2023 LTIP RSUs | 4,636 | $249,514 |
| 2023 LTIP PSUs | 26,471 | $1,424,689 |
| 2024 LTIP RSUs | 6,797 | $365,840 |
| 2024 LTIP PSUs | 25,987 | $1,398,642 |
| 2024 Recognition RSUs | 20,822 | $1,120,662 |
• Officer stock ownership guidelines: Senior Vice President must hold shares equal to 3x base pay; officers must retain 50% of net shares from long-term incentives until compliant .
• Anti-hedging/anti-pledging: Officers and directors are prohibited from hedging IP securities and from pledging or holding them in margin accounts .
Employment Terms
Change-in-Control (CIC) Economics (Double Trigger)
| Component | Amount |
|---|---|
| Lump Sum Severance Payment | $2,020,000 |
| Lump Sum Pension Payment | $2,405,153 |
| Value of Continued Benefits | $29,830 |
| Total Cash-Based Award | $4,454,983 |
| Accelerated Vesting of Equity | $5,251,203 |
| Total Pre-Tax Benefit | $9,706,186 |
| Pension Annuity | $82,294 |
• CIC agreements provide double-trigger vesting of equity (requires both change-in-control and qualifying termination), “best net” excise tax approach (no tax gross-ups), and severance multiple for SVPs equal to 2x base salary + target AIP .
Involuntary Termination Without Cause (Non-CIC)
| Component | Amount |
|---|---|
| Lump Sum Severance Payment | $1,674,381 |
| Vesting of Equity (prorated PSUs/RSUs) | $3,383,069 |
| Value of Continued Benefits | $50,706 |
| Total Pension Annuity | $176,132 |
• Executive Severance Plan (Feb 11, 2025): For NEOs other than CEO, severance equals 1.5x “Total Cash Compensation” (base + target AIP) upon a qualifying termination; includes earned/unpaid AIP, pro-rata bonus, health continuation (up to 1.5 years), and outplacement (up to $40,000) .
Termination for Cause
| Component | Amount |
|---|---|
| Unused/Earned Vacation Pay | $131,815 |
| Pension Annuity | $176,132 |
Retirement and Pension
| Plan | Present Value of Accumulated Benefit (12/31/2024) |
|---|---|
| Retirement Plan | $1,020,881 |
| Pension Restoration Plan | $1,164,083 |
| Total | $2,184,964 |
• Pension Restoration Plan covers salaried employees hired prior to July 1, 2004; credited service and compensation were frozen as of Dec 31, 2018 .
• Non-compete and non-solicit agreements with clawback/forfeiture of incentive awards for violations; severance benefits subject to clawback consistent with policy and listing standards .
• International Paper executive officers are at-will with no employment contracts .
Investment Implications
- Strong pay-for-performance linkage: 2024 AIP paid 179.1% on Adjusted EBITDA and Cash Conversion outperformance; PSP paid 131.88% on top-quartile relative TSR, aligning incentives with margin, cash discipline, and shareholder returns .
- Retention signals and potential vesting-related supply: Material unvested PSUs/RSUs and a 2024 recognition grant (service-based) support retention through 2026; monitor upcoming vest dates and standard tax-withholding transactions as potential non-open-market share flows .
- Governance protections reduce misalignment risk: Anti-pledging/hedging, 3x base-pay ownership requirement, clawback provisions, and CIC double-trigger vesting (no tax gross-ups) mitigate red flags typical in executive compensation programs .
- Downside protection moderate outside CIC: Non-CIC severance at 1.5x total cash compensation for NEOs suggests balanced retention economics without excessive guarantees; CIC benefits are formulaic and performance-based equity acceleration remains tethered to actual/target performance .