Dr. Carsten Merforth
MERCER INTERNATIONALAbout Dr. Carsten Merforth
Dr. Carsten Merforth, age 58, is Chief Operating Officer, Wood Products at Mercer International (MERC) since August 2022; he previously managed Mercer’s Friesau sawmill and has extensive European sawmill leadership experience . He holds a Master of Forestry from Georg August University and a Doctorate of Forestry Economics from Albert Ludwigs University . Company performance during his tenure includes 2024 Operating EBITDA of $243.7 million and a net loss of $85.1 million, with company TSR value of $59.84 versus peer group TSR value of $86.62 for the SEC “pay versus performance” disclosure (company-level metrics) . Mercer’s 2022 PSUs (including those held by Merforth) vested at 0% based on ROAA and Relative TSR outcomes, reinforcing pay-for-performance risk in the LTIP .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mercer International (Friesau sawmill) | Managing Director | April 2017–August 2022 | Led operations of a major sawmill within Mercer’s German wood business |
| Rettenmeier Holding AG | Managing Director of high‑capacity sawmills | 2000–2010; 2013–2014 | Managed several high‑capacity sawmills, bringing extensive operational leadership |
| Pfeifer Holz GmbH | Managing Director | 2010–2012 | Leadership of high‑capacity sawmill operations |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| German Sawmill Association (DeSH) | Board Member | Not disclosed | Current service identified in company disclosures |
| Main Association of the German Wood Industry (HDH) | Vice President | Not disclosed | Current role noted in disclosures |
| Raw Wood Working Group | Spokesperson | Not disclosed | Industry advocacy role |
Fixed Compensation
| Component (FY 2024) | Amount (USD) | Notes |
|---|---|---|
| Base Salary | $409,662 | Annual salary paid; increases effective January 1 for European NEOs |
| Target Bonus % of Base | 75% | STIP target percentage for 2024 |
| Actual Annual Bonus Paid | $225,146 | Paid for fiscal 2024 performance |
| Stock Awards (Grant-date fair value) | $304,520 | Primarily PSUs under 2022 Plan (ASC 718) |
| Change in Pension Value & Deferred Earnings | $24,737 | Unfunded account change per European program |
| All Other Compensation | $38,847 | Perquisites/benefits |
| Total Compensation | $1,002,912 | Sum of components |
European retirement program contributions: Company contributed $25,226 on Merforth’s behalf in 2024 (10% of salary plus 50% of cash bonus, subject to caps) . Non‑qualified deferred compensation table shows $24,737 registrant contributions recorded in excess of statutory limits, $1,411 aggregate earnings and a $49,064 aggregate year‑end balance .
Performance Compensation
Short‑Term Incentive Plan (STIP) – FY 2024
| Metric | Weighting | Target Definition | Actual Outcome (Payout of Target) | Payout Mechanics | Vesting |
|---|---|---|---|---|---|
| EBITDA | 40% | Company target EBITDA | 59% | Linear payout vs target | N/A (cash) |
| Safety | 10% | Company safety metrics | 104% | Linear payout vs target | N/A |
| GHG Emissions | 5% (not applicable) | Company GHG reduction metrics | NA | NA | N/A |
| Productivity | 15% | Weighted mill achievement (sawmills for Merforth) | 101% | Weighted by wood consumption | N/A |
| Costs/Profitability | 15% (for Merforth) | Weighted mill cost/EBITDA metrics; sawmills only for Merforth | 27% | Weighted by wood consumption | N/A |
| Individual Component | 20% | Individual objectives | 100% | Committee discretion | N/A |
| Total STIP Achievement | — | — | 73% of bonus target achieved | Applies to 75% target bonus | N/A |
Long‑Term Incentive Program (LTIP) – PSUs
| Award | Grant Date | Target PSUs (#) | Max PSUs (#) | Grant Date Fair Value (USD) | Performance Period | Vesting/Settlement Terms |
|---|---|---|---|---|---|---|
| 2024 PSUs | Feb 14, 2024 | 39,651 | 79,302 | $609,039 | Jan 1, 2024 – Dec 31, 2026 | Eligible to vest after Dec 31, 2026 based on LTIP criteria; 0–200% payout |
| 2022 PSUs | 2022 (target level shown) | 21,059 | 42,118 (implied 200%) | Not disclosed | Jan 1, 2022 – Dec 31, 2024 | Vested at 0% (Nil) based on metrics outcomes |
2022 PSU Performance Outcomes (Company‑level, applies to NEOs)
| Component | Target Achieved | Payout of Target |
|---|---|---|
| Absolute Return on Average Assets (ROAA) | (0.81)% | 0% |
| Relative Total Shareholder Return (TSR) | 14th percentile | 0% |
PSUs were granted at a closing share price of $7.68 on Feb 14, 2024 for valuation purposes (ASC 718) . The 2022 PSU three‑year performance period ended with no vesting for all NEOs including Dr. Merforth .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Record Date) | 15,651 Shares; less than 1% of outstanding (66,870,774 Shares) |
| Outstanding Unvested Awards | 224,300 Shares covered by awards (assumes 200% PSU vesting for display) |
| Stock Ownership Guidelines | NEOs (other than CEO) must hold Shares equal to 3× base salary within 3 years; unvested time‑based RSUs/DSUs count |
| Hedging/Pledging | Hedging prohibited; pledging discouraged; margin loan risks and pre‑clearance for insiders highlighted |
| Say‑on‑Pay Support | 2024 advisory vote approval ~99.2%; 2025 meeting “For” votes 50,455,258 vs 118,623 “Against” |
No pledging or hedging by Dr. Merforth is disclosed; policies prohibit hedging and caution against pledging/margin arrangements .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | Dated Feb 17, 2017; initial base salary €168,000 (reviewed annually); annual bonus tied to Mercer and individual targets; European retirement participation |
| Termination/Notice | Six months’ notice by either party; terminates at scheduled retirement age under German law |
| Change‑of‑Control Clause | His agreement does not contain a change‑of‑control provision; plan‑level double‑trigger acceleration applies upon termination within 12 months post CoC for NEOs (100% of target for performance awards) |
| Severance (Dec 31, 2024 hypothetical, without cause) | Cash Severance $398,093; PSU Acceleration $422,351; Total $820,444 (based on $6.50 share price) |
| Change‑of‑Control (Dec 31, 2024 hypothetical) | Cash Severance $398,093; Performance Award Acceleration $559,234; Total $957,327 (based on $6.50 share price; assumes triggering event and accelerated vesting) |
| Clawback Policy | Amended/restated policy enables recovery of erroneously awarded incentive compensation after restatements and for specified misconduct; plan awards subject to forfeiture/clawback |
The 2022 Stock Incentive Plan prohibits option repricing and restricts transferability; awards are subject to non‑transferability and forfeiture provisions .
Investment Implications
- Alignment: Compensation emphasizes variable pay (STIP and PSUs) with explicit operational cost/productivity metrics for Wood Products; 2024 STIP outcomes for Merforth show strong safety/productivity but weak costs/profitability (27% payout), signaling ongoing margin/cost headwinds in sawmills that directly impact bonus and LTIP prospects .
- Retention/Acceleration: Severance is modest relative to CEO/CFO peers (cash ~$398k) but plan‑level double‑trigger PSU acceleration (100% of target upon termination within 12 months post change‑of‑control) can create event‑driven equity windfalls; investors should monitor M&A or restructuring catalysts for potential incentive accelerations .
- Ownership/Pressure: Beneficial ownership is low (<1%); policies prohibit hedging and caution against pledging/margin loans, reducing forced‑sale risk; no individual pledging disclosed, limiting a common red flag .
- Performance Risk: Company‑level 2022 PSUs paid 0% on ROAA/TSR, demonstrating that LTIP payouts are sensitive to profitability and relative returns; continued focus on costs and EBITDA is necessary for future vesting under the 2024–2026 PSU cycle .
- Governance Support: Strong say‑on‑pay approvals (99.2% in 2024 and overwhelming support in 2025) reduce headline compensation risk, but burn‑rate/overhang trends should be watched as plan share authorizations increase to meet compensation needs through 2028 .