Timothy Nicholls
INTERNATIONAL PAPER CO /NEW/About Timothy Nicholls
Timothy S. Nicholls, age 63, is Executive Vice President and President, DS Smith (International Paper’s EMEA business) effective April 1, 2025, after serving as IP’s CFO since 2018 and previously from 2007–2011; he has 33 years of service at IP, joining via Union Camp in 1999 and earlier working at Union Camp since 1991 . In 2024, IP’s AIP (short‑term incentive) paid at 179.1% of target driven by Adjusted EBITDA of $1.986B versus a $1.546B target, and PSUs for 2022–2024 vested at 131.88% based on 86th percentile relative TSR and Adjusted ROIC outcomes, linking Nicholls’s pay directly to EBITDA, ROIC, and TSR performance . IP designated Adjusted EBITDA as its “Company‑Selected Measure” for pay-versus-performance and reported 2024 net earnings of $1,986 million; a $100 investment in IP from 2019 was valued at $155 at year-end 2024 vs $143 for its peer group, underscoring alignment of compensation with performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| International Paper | Executive Vice President & President, DS Smith (EMEA) | 2025–present | Leads EMEA operations and integration post-DS Smith acquisition; reports to CEO . |
| International Paper | Interim leader, combined IP & DS Smith EMEA | Jan–Mar 2025 | Oversaw EMEA integration planning and operations immediately post-close . |
| International Paper | Chief Financial Officer | 2018–2025 | CFO oversight plus corporate development and capital effectiveness . |
| International Paper | Chief Financial Officer | 2007–2011 | First CFO tenure . |
| International Paper | SVP, Industrial Packaging (Americas) | 2014–2018 | Led Packaging business in North & South America . |
| International Paper | SVP, Printing & Communications Papers (Americas) | 2011–2014 | Led regional Papers business . |
| International Paper Europe | VP & CFO; VP & Executive Project Leader | 2005–2007 | Finance leadership and strategic projects in Europe . |
| Union Camp Corporation | Various roles | 1991–1999 | Pre‑acquisition career; IP acquired Union Camp in 1999 . |
External Roles
No external public company directorships or committee roles were disclosed for Mr. Nicholls in the latest proxy or 8‑K filings .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $770,833 | $775,000 | $801,250 |
| Stock Awards ($) | $2,950,892 | $2,813,803 | $2,886,532 |
| Non‑Equity Incentive Compensation ($) | $253,600 | $181,400 | $1,516,080 |
| All Other Compensation ($) | $219,683 | $173,253 | $138,008 |
| Total ($) | $4,195,008 | $3,943,456 | $5,341,870 |
- Current base salary: $900,000 effective January 1, 2025 (11.6% increase from $806,500) .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Company Metrics and Outcome
| Metric | Weight | Target | Actual | % of Target Earned | Weighted % of Target Earned | Payout Mechanics |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($) | 70% | $1.546B | $1.986B | 200.0% | 140.0% | Linear between points; 0% below threshold . |
| Revenue ($) | 20% | $18.790B | $18.618B | 95.4% | 19.1% | Linear; 0% below threshold . |
| Cash Conversion (%) | 10% | 56.9% | 67.0% | 200.0% | 20.0% | Linear; 0% below threshold . |
| Total AIP Company Achievement | 100% | — | — | — | 179.1% | All NEOs received 100% individual modifier; awards solely reflect company performance . |
- Nicholls’s AIP target opportunity (2024): $846,500; threshold $42,325; maximum $1,693,000 .
- Nicholls’s actual AIP award paid for 2024: $1,516,080 (179.1% of target) .
Long‑Term Incentive (PSUs) – 2022–2024 Performance Achievement and Vesting
| Metric | Weight | Target | Actual | % of Target Earned | Period/Vesting |
|---|---|---|---|---|---|
| 3‑Year Adjusted ROIC | 50% | 9.0% | 7.55% | 63.75% | 3‑year performance; paid Feb 2025 . |
| Relative TSR | 50% | 50th percentile | 86th percentile | 200.0% | 3‑year performance; paid Feb 2025 . |
| Total PSU Payout | 100% | — | — | 131.88% | PSU payouts based solely on Company performance . |
- Nicholls’s 2022–2024 PSP payout: 89,099 shares (incl. reinvested dividends) valued at $4,995,770, paid in Feb 2025 .
Equity Ownership & Alignment
| Ownership Item | Value |
|---|---|
| Shares of Common Stock Held | 235,755 |
| Stock Units Owned (DCSP/plan units; cash-settled) | 38,342 |
| Percentage of Class | Less than 1% (*) |
- Outstanding, unvested equity awards at 12/31/2024 (Nicholls): 2022 PSP PSUs 67,564 ($3,636,244); 2023 LTIP RSUs 11,896 ($640,274); 2023 LTIP PSUs 67,935 ($3,656,252); 2024 LTIP RSUs 16,627 ($894,848); 2024 LTIP PSUs 63,560 ($3,420,820) .
- RSUs generally vest ratably in three equal installments over three years; PSUs vest after a three‑year performance period; RSUs fully vest upon death or disability .
- Stock ownership guidelines: EVP 4x base pay; SVP 3x; CEO 6x; Presidents 5x; unvested RSUs/PSUs do not count; officers must retain 50% of net shares until guideline met .
- Insider Trading Policy: Strict prohibitions on hedging, short sales, pledging/margin accounts, and trading derivatives by officers/Directors; pre‑clearance required; policy referenced in 2024 Form 10‑K exhibit .
Employment Terms
| Scenario | Key Terms | Economics (Nicholls) |
|---|---|---|
| Involuntary termination without cause (non‑CIC) | Severance per Salaried Employee Severance Plan; two weeks of salary per year of service; prorated vesting of certain LTIP awards; six months of medical/dental and EAP; outplacement | Lump‑sum severance $2,766,776; SERP lump‑sum $8,674,184; equity vesting value $5,683,406; continued benefits $50,706; annual annuity $164,135 . |
| Retirement at 12/31/2024 | Pension annuity under Retirement and Restoration Plans; SERP lump‑sum; prorated LTIP equity vesting | Retirement annuity $164,135; SERP lump‑sum $8,674,184; equity vesting $5,683,406 . |
| Qualifying termination within two years post‑Change in Control (double‑trigger) | Legacy Tier I CIC Agreement; cash severance multiple; health benefits; accelerated vesting of equity; “best net” excise tax approach; no excise tax gross‑up; double‑trigger equity acceleration when replacement awards provided | Cash severance 3x base+target AIP = $4,959,000; SERP lump‑sum $9,984,653 (adds 3 years age/service); continued benefits $44,744; accelerated equity $10,325,386; total pre‑tax $25,313,783; annuity $164,135 . |
| CIC agreement update | Board approved revised CIC agreements (Tier II) for SVPs and above; Nicholls grandfathered at 3x; revised agreement offered post six‑month termination notice of current agreement in 2025 . |
- Clawback policy and incentive plan clawback provisions in place; option re‑pricing prohibited without shareowner approval; non‑compete/non‑solicit agreements used to mitigate risk .
- SERP participation: With Mr. Sutton’s retirement, Nicholls is the sole NEO in this legacy plan (closed to new participants since 2012) .
- Executive supplemental life insurance: Benefit closed to new participants since 2008; only Nicholls has this among NEOs .
- Say‑on‑Pay: 96% approval in May 2024; ~96% average over ten years, signaling strong investor support for program design .
Investment Implications
- Strong pay-for-performance alignment: 2024 AIP paid 179.1% on EBITDA/cash conversion outperformance and PSUs paid 131.88% on 86th percentile TSR; Nicholls’s realized pay is highly sensitive to EBITDA, ROIC, and TSR outcomes, which are core equity value drivers .
- Retention and continuity: Legacy Tier I 3x CIC multiple, ongoing SERP benefits, and sizable unvested PSU/RSU overhang support retention through EMEA integration; double‑trigger CIC terms and “best net” excise provision are governance‑friendly while still protective .
- Selling pressure considerations: Program requires 50% net share retention until guidelines are met and prohibits hedging/pledging, mitigating forced‑sale risk; upcoming RSU tranches and PSU cycles could create liquidity events but policy guardrails reduce speculative trading behavior .
- Alignment and governance: Ownership requirements (EVP 4x salary), strict anti‑hedging/pledging, clawbacks, and high Say‑on‑Pay support lower governance risk and indicate durable investor acceptance of compensation architecture .