Brad Southern
LOUISIANA-PACIFICAbout Brad Southern
W. Bradley “Brad” Southern is Chairperson of the Board (since May 2020) and Chief Executive Officer of Louisiana‑Pacific (LP) (since July 2017). He joined LP in 1999 and previously served as EVP & COO; EVP & GM, OSB; SVP, Siding; and VP, Specialty Operations. He is 65 and holds B.S. and M.S. degrees in Forest Resources from the University of Georgia . In 2024, LP delivered 14% revenue growth to $2.9B, net income of $420M, Adjusted EBITDA of $688M, and operating cash flow of $605M; Siding achieved record net sales (+17% YoY), and total capital returns were $286M, supporting pay-for-performance narratives under his tenure . Since 12/31/2020, $100 invested in LP grew to $375.07 vs. $214.80 for the S&P 500 Building Products index by 2024, reinforcing alignment between realized performance and incentive outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Louisiana-Pacific (LP) | EVP & COO | Not disclosed | Enterprise operations leadership prior to CEO transition |
| Louisiana-Pacific (LP) | EVP & GM, OSB | Not disclosed | Led OSB segment operations and strategy |
| Louisiana-Pacific (LP) | SVP, Siding | Not disclosed | Grew Siding business; later achieved record sales in 2024 |
| Louisiana-Pacific (LP) | VP, Specialty Operations | Not disclosed | Specialty product and plant management experience |
External Roles
| Organization | Role | Years |
|---|---|---|
| National Association of Manufacturers | Director | Current |
| Forest Products Association of Canada | Director | Current |
| Federal Reserve Bank of Atlanta, Nashville Branch | Director | Current |
| GMS Inc. (NYSE: GMS) | Director | Current |
Fixed Compensation
| Year | Base Salary ($) |
|---|---|
| 2022 | 1,121,154 |
| 2023 | 1,146,154 |
| 2024 | 1,216,346 |
| 2025 (approved) | 1,200,000 |
Perquisites and other 2024 compensation:
- Financial/tax planning allowance $23,355; life insurance premiums $9,840; employer contributions to defined contribution plans $93,177; recognition award $860 (total perqs/other $127,232) .
- CEO receives no additional compensation for Board service .
Performance Compensation
Annual Incentive Plan – 2024 Design and Outcomes
- Metrics and thresholds:
- Corporate Adjusted EBITDA (OSB-adjusted): threshold $412M, target $527M, max $630M; actual $688M → 200% payout on this component .
- Corporate Economic Profit: threshold $33M, target $119M, max $197M; actual $239M → 200% payout on this component .
- Weighting for CEO: 70% Corporate (35% EBITDA, 35% Economic Profit), 30% Business Units (OSB EP 10%, Siding EP 10%, South America EP 10%) .
- Aggregate 2024 payout factors for CEO: Corporate 200%; Business Units 172% .
| Item | Target | Actual | Payout |
|---|---|---|---|
| 2024 Target Bonus ($) | 1,410,000 | — | — |
| Corporate Goals Factor | — | — | 200% |
| Business Unit Goals Factor | — | — | 172% |
| 2024 Annual Incentive Paid ($) | — | — | 2,702,146 |
2024 pay mix emphasis: 58% of CEO target compensation performance-based (AIP + PSUs) .
Long‑Term Incentives (granted 2/8/2024)
- Mix: CEO 60% PSUs / 40% RSUs (settled in shares; double-trigger CIC if assumed) .
- PSUs: 3‑year performance period (1/1/2024–12/31/2026), metric = 3‑year ROIC; TSR modifier ±20% vs capital market peer group (cap at 200%) .
- RSUs: vest in three equal annual installments starting first anniversary .
| 2024 LTI Component | Target Grant Value ($) | Key Terms |
|---|---|---|
| PSUs | 3,249,000 | 3‑yr ROIC goal; TSR modifier ±20%; vest 2/8/2027; shares on settlement |
| RSUs | 2,166,000 | 1/3 vest annually starting 2/8/2025; shares on settlement |
Historical PSU performance: 2022 PSUs (performance period 2022–2024, Adjusted EBITDA improvement metric) certified at 0% payout on 2/13/2025 .
Pay Versus Performance and Say‑on‑Pay
- 2024 PVP: Value of $100 investment in LP $375.07 vs S&P 500 Building Products $214.80; Net Income $420M; Company Adjusted EBITDA $688M .
- Say‑on‑pay support: over 95% “FOR” at 2024 meeting .
Equity Ownership & Alignment
Beneficial Ownership and Guidelines
- Shares beneficially owned: 549,525; includes 512,324 shares held jointly with spouse (shared voting/dispositive power). Each individual director/NEO holds <1% of shares outstanding .
- Executive stock ownership guidelines: CEO = 5x base salary; all NEOs met guidelines in 2024 .
- Anti‑hedging/anti‑pledging: Insiders (directors and executive officers) are prohibited from hedging and from pledging LP securities as collateral; standing/limit orders discouraged .
Outstanding and Recently Vested Equity (as of 12/31/2024)
| Instrument | Quantity | Market/Notes |
|---|---|---|
| Unvested RSUs | 59,767 | Market value $6,188,827 at $103.55/sh |
| Unvested PSUs (reporting at status as of 12/31/2024) | 67,757 | Market value $7,016,284 at $103.55/sh; note 2022 PSU tranche later certified at 0% |
Scheduled RSU vesting (CEO):
- 2/8/2025: 10,197; 2/10/2025: 19,147; 2/8/2026: 10,197; 2/10/2026: 10,030; 2/8/2027: 10,196 (total 59,767) .
Scheduled PSU vesting (CEO; as reported at 12/31/2024; 2022 tranche later 0%):
- 2/10/2025: 20,512; 2/10/2026: 23,479; 2/8/2027: 23,767 (total 67,757) .
Insider exercises/vesting (2024):
- Exercised 104,830 SSARs; realized value $8,152,971; 82,349 shares vested (PSUs/RSUs), value realized $5,815,134 .
Deferred Compensation (CEO, 2024):
- Employer contributions $69,327; aggregate earnings $50,016; year‑end balance $677,497; no executive deferrals in 2024 .
Employment Terms
Severance and Change‑of‑Control (CIC) Economics (CEO)
- Termination without cause / good reason (non‑CIC): cash = 2x (base + target bonus); pro‑rata target AIP; COBRA reimbursement up to 24 months; outplacement (up to $10k); RSUs vest in full; PSUs vest pro‑rata based on actual performance at end of period .
- CIC (double‑trigger if awards assumed): cash = 3x (base + target bonus) + 36 months cash value of welfare benefits; pro‑rata target AIP for CIC year; RSUs/PSUs vest per plan (assumed vs. not assumed rules); PSUs use “adjusted award” if CIC mid‑cycle .
- Restrictive covenants: non‑compete and non‑solicit obligations for 24 months after termination (CEO) .
Illustrative payout values if event occurred 12/31/2024:
| Event (12/31/2024) | Payments Earned but Unpaid ($) | Severance/CIC Cash ($) | Equity ($) | Other ($) | Total ($) |
|---|---|---|---|---|---|
| Termination without cause / good reason | 1,522,981 | 5,215,148 | 10,713,794 | 687,497 | 18,139,420 |
| Death or Disability | 1,522,981 | — | 19,932,952 | 677,497 | 22,133,430 |
| Termination following CIC | 1,522,981 | 7,854,322 | 20,221,395 | 794,997 | 30,393,695 |
| CIC not resulting in termination | — | — | 20,221,395 | — | 20,221,395 |
| Retirement‑eligible (CEO only) | 1,522,981 | — | 15,056,585 | 677,497 | 17,257,062 |
Clawbacks and Recoupment:
- NYSE‑compliant clawback for restatements (effective 12/1/2023; covers 3 prior fiscal years; applies to incentive‑based comp) .
- Additional recoupment policy for fraud/intentional misconduct tied to restatements (cancellation/recovery of incentive awards) .
Board Governance & Director Service
- Board service: Director since 2017; Chairperson since May 2020; CEO; serves as Chair of the Executive Committee .
- Independence and dual‑role mitigants: 10 of 11 directors independent; independent Lead Director (Dustan E. McCoy) elected annually with defined responsibilities; executive sessions held at each quarterly Board meeting .
- Board activity/attendance: Board held four meetings in 2024; each director attended at least 75% of Board/committee meetings .
- Director compensation policy: employee‑directors (Southern) receive no additional pay for Board service .
- Anti‑hedging/pledging and ownership guidelines apply to directors as well .
Compensation Structure Analysis
- Strong linkage to financial results: 2024 corporate metrics exceeded maximums (Adjusted EBITDA and Economic Profit), driving a 200% corporate factor; CEO AIP paid $2.70M vs $1.41M target .
- High at‑risk mix and multi‑year focus: 58% of CEO target pay is performance‑based; PSUs use 3‑year ROIC with a relative TSR modifier; 2022 PSUs paid 0%, evidencing downside sensitivity .
- Governance and shareholder alignment: No hedging/pledging; meaningful ownership guidelines (CEO 5x salary, met); no excise tax gross‑ups; no discounted stock options; robust clawbacks .
- Peer benchmarking and oversight: Independent consultant (FW Cook); market medians guide target positioning; defined peer group in adjacent building products/manufacturing .
Equity Ownership & Alignment Details
| Item | Detail |
|---|---|
| Shares beneficially owned | 549,525 (includes 512,324 jointly with spouse; individual ownership <1%) |
| Ownership guidelines | CEO 5x salary; in compliance |
| Anti‑hedge/pledge | Prohibited |
| 2024 SSAR exercises | 104,830 exercised; $8,152,971 value realized |
| 2024 stock vested | 82,349 shares; $5,815,134 value |
| Deferred comp (balance) | $677,497 at 12/31/2024 |
Say‑on‑Pay & Shareholder Feedback
- 2024 advisory vote: >95% approval; ongoing engagement, emphasis on at‑risk pay and performance alignment .
Risk Indicators & Red Flags
- No related‑party transactions requiring disclosure in 2024; no code waivers .
- No option repricing/discounting; no hedging/pledging permitted .
- 2022 PSUs at 0% payout underscores performance gating and lack of windfalls during down cycles .
Employment & Contracts Snapshot
| Term | CEO Provision |
|---|---|
| Severance (non‑CIC) | 2x (base + target bonus) + pro‑rata target AIP; 24 months COBRA reimbursement; $10k outplacement; RSUs full vest; PSUs pro‑rata at actual |
| CIC (double‑trigger) | 3x (base + target bonus) + welfare benefits (36 months cash value); equity vesting per “assumed/not assumed” rules; PSUs use adjusted award if mid‑cycle |
| Non‑compete / non‑solicit | 24 months post‑termination (CEO) |
| Clawbacks | NYSE restatement clawback; additional recoupment for fraud/intentional misconduct |
Investment Implications
- Alignment is strong: high at‑risk pay, rigorous multi‑year ROIC/TSR PSUs, strict anti‑hedge/pledge, and ownership compliance mitigate agency risk; say‑on‑pay support >95% signals investor alignment .
- Execution track record improving: 2024 rebound in sales/EBITDA with record Siding net sales and robust TSR since 2020; future PSU outcomes depend on sustaining ROIC performance through 2026 .
- Overhang/flow considerations: sizable unvested RSUs/PSUs and sizeable 2024 SSAR exercises/vesting indicate potential periodic supply; however, hedging/pledging bans and guidelines reduce misalignment risk .
- Retention risk appears low near term: competitive pay, meaningful unvested equity, and robust severance/CIC protections (including double‑trigger) provide stability through the cycle .