Eric Cremers
About Eric Cremers
Eric J. Cremers (age 61) is President & CEO of PotlatchDeltic (PCH) and has served as a director since 2013. He became CEO in January 2021 after roles as President & COO (2013–2020) and CFO (2007–2013), bringing deep timber REIT, capital allocation, and M&A experience . Pay design ties to FFO, divisional EBITDDA, and multi-year relative TSR; 2022–2024 PSU payout was 78.67% (below target), evidencing alignment with performance . In 2024, PCH generated $1.1B revenue and $232.1M Total Adjusted EBITDDA; Real Estate was strong while lumber markets pressured Wood Products . Q3’24 commentary from Cremers highlighted the Waldo, AR sawmill modernization (targeting top-quartile costs and ~$25M mid-cycle EBITDDA uplift) and disciplined capital returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PotlatchDeltic | President & Chief Executive Officer | 2021–Present | Led portfolio through lumber downcycle; advanced Waldo sawmill expansion; balanced dividends/buybacks |
| PotlatchDeltic | President & Chief Operating Officer | 2013–2020 | Drove operating execution and REIT discipline across Timberlands, Wood Products, Real Estate |
| PotlatchDeltic | EVP & Chief Financial Officer | 2012–2013 | Capital allocation, M&A, REIT stewardship |
| PotlatchDeltic | VP & Chief Financial Officer | 2007–2012 | Financial strategy and REIT compliance |
Board Governance (service history, committee roles, dual-role implications)
- Board service: Director since March 2013 .
- Committees: Not listed as a member of the Audit, Compensation, or Nominating committees (all-independent composition shown below) .
- Independence: Not independent (as CEO); only Cremers and Chair Michael J. Covey are non-independent .
- Leadership structure: Chair and CEO roles are separated (Covey is Chair; Cremers is CEO). A Lead Independent Director (Lawrence Peiros) presides over independent sessions and governance matters, mitigating dual-role concerns .
- Board activity/attendance: Board met 4 times in 2024; no director attended less than 75% of meetings .
Committee membership (2024)
| Director | Audit | Compensation | Nominating |
|---|---|---|---|
| Independent directors (selected) | L. Breard (Chair); A. Alonzo; J. DeCosmo; D.M. Leland; L.M. Sullivan | D.M. Leland (Chair); L. Breard; W.L. Driscoll; L.S. Peiros | L.M. Sullivan (Chair); A. Alonzo; W.L. Driscoll; L.S. Peiros |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 900,000 | 930,000 (3.3% increase) |
| CEO Pay Ratio (CEO:Median) | — | 77.7x (Total $6,304,045 vs $81,125) |
Pension/retirement accruals (12/31/2024)
| Plan | Credited Service (yrs) | Present Value ($) |
|---|---|---|
| Retirement Plan (DB) | 17.46 | 888,910 |
| Supplemental Plan II (DB top-up) | 17.46 | 5,107,813 |
2024 “All Other” compensation included 401(k) match and Supplemental Plan allocations: $14,490 match; $70,795 Supplemental 401(k) allocation; $11,122 life insurance premiums .
Performance Compensation
2024 Annual Incentive (AIP) – Structure and Results (Corporate participants, incl. CEO)
- Weighting: 80% Corporate FFO; 20% non-financial (safety, ESG, operational goals); individual modifier 0–200% .
- Corporate achievement: FFO at 88% of target; non-financial at 130%; total payout 97% of target before individual modifier .
- CEO target bonus: 125% of salary; 2024 AIP target $1,162,500; actual paid $1,124,300 .
| Metric | Weight | Target | Actual/Result | Payout Factor |
|---|---|---|---|---|
| Corporate FFO | 80% | $229.5M | $222.4M (96.9% of target) | 88% achievement |
| Non-Financial Scorecard | 20% | Company targets | Above target on safety/ESG/ops | 130% achievement |
| Total AIP Achievement | — | — | — | 97% (Corporate group) |
| CEO AIP ($) | — | 1,162,500 | 1,124,300 | 97% (pre-individual mod) |
FFO definition and 2024 reconciliation provided in proxy (Net income + DDA + basis of real estate sold ± specified items) .
Long-Term Equity Incentives
Program design:
- Mix: 60% performance shares (PSUs) and 40% time-based RSUs (introduced 60/40 in 2023) .
- PSU metrics: 3-year TSR vs (i) median of timber/forest peers and (ii) percentile within FTSE Nareit All Equity REITs Index; equal 50/50 weighting. Threshold/Target/Max: 25%/100%/200% at 33rd/50th/85th percentile or -7.5% below/+15% above peer median .
- RSU vesting: cliff vest on Dec 31 immediately preceding 3rd anniversary of grant .
2024 CEO grants
| Award | Grant Date | Target/Units | Grant-Date FV ($) |
|---|---|---|---|
| PSUs (2024–2026 cycle) | 2/8/2024 | 38,724 target | 2,049,274 |
| RSUs (time-based) | 2/8/2024 | 25,816 | 1,153,201 |
Historical PSU outcome
| Cycle | Metric | Result | Payout |
|---|---|---|---|
| 2022–2024 | Relative TSR vs peer median and FTSE Nareit All Equity REITs (50/50) | Annualized TSR (3.99)% vs peer median; FTSE Nareit rank 75/137 | 78.67% vested |
2024 stock vested (value realized at vest)
| Shares Vested | Value ($) |
|---|---|
| 36,673 | 1,439,415 |
Equity Ownership & Alignment
Beneficial ownership (3/1/2025)
| Holder | Shares Owned | % of Class | Common Stock Units (deferred/RSUs) |
|---|---|---|---|
| Eric J. Cremers | 204,584 | <1% | 76,549 |
Unvested as of 12/31/2024 and vesting cadence
| Grant | Units | Vesting/Terms | Market Value ($) |
|---|---|---|---|
| RSUs (2/8/2024) | 26,594 | Vest 12/31/2026 | 1,043,815 |
| RSUs (2/9/2023) | 23,557 | Vest 12/31/2025 | 924,612 |
| PSUs (2024–2026) | 40,394 (at target) | Earned on 3-yr relative TSR | 1,585,465 |
| PSUs (2023–2025) | 36,246 (at target) | Earned on 3-yr relative TSR | 1,422,656 |
Ownership policies and trading constraints
- CEO stock ownership guideline: 5x base salary; all NEOs in compliance or within tenure window as of 3/1/2025 .
- Hedging/pledging: Hedging prohibited; pledging prohibited except limited pre-approved exceptions .
- Insider trading windows and clawbacks in place (see below) .
Implications for selling pressure:
- RSU cliffs on 12/31/2025 and 12/31/2026 could create tax-sale activity around those dates; sales constrained by ownership guidelines and trading policies .
Employment Terms
Severance (non-CIC) — illustrative values if terminated 12/31/2024
| Component | Amount ($) |
|---|---|
| Cash severance (min 12 months base) | 930,000 |
| Benefits continuation cash | 21,770 |
| Outplacement | 20,000 |
| Equity/Bonus | Forfeited outside death/disability/retirement |
Change-in-Control (double-trigger) — illustrative values if CIC and termination on 12/31/2024
| Component | Amount ($) |
|---|---|
| Cash severance (3x salary + target bonus) | 6,277,500 |
| Pro-rata/target AIP | 1,162,500 |
| Equity acceleration (RSUs and PSUs per terms) | 4,976,547 |
| Benefits continuation cash | 21,770 |
| Outplacement | 20,000 |
Key CIC mechanics and protections
- Double-trigger required; PSUs convert to target RSUs at CIC and vest at cycle end; unvested RSUs at least 6 months old vest upon qualifying termination; detailed Good Reason protections apply .
- Benefits Protection Trust to fund obligations upon CIC, with annual adequacy tests (110% threshold) .
Retirement, death, disability (illustrative values at 12/31/2024)
| Component | Amount |
|---|---|
| Pro-rata AIP | $1,162,500 |
| Pro-rated PSUs (at target, midpoint cycle) | 37,629 shares; $1,476,938 |
| RSU acceleration (pro rata per terms) | 24,569 shares; $964,333 |
Clawbacks and policies
- Mandatory Nasdaq Rule 5608 clawback for restatements (covers stock-price/TSR-based pay) .
- Additional company recovery policy for fraud/misconduct-driven restatements; termination-for-cause forfeitures; 12–36 month recovery window .
Performance & Track Record
Selected 2024 outcomes and strategic execution
- Total Adjusted EBITDDA $232.1M on $1.1B revenue; Timberlands EBITDDA $138.7M; Real Estate EBITDDA $147.0M; Wood Products EBITDDA $(7.7)M (price/cost headwinds) .
- Completed $131M Waldo modernization; expected +85 MMBF capacity, ~6% recovery gain, ~30% cash cost reduction; targeting top-quartile cost position post ramp .
- Capital returns: $142.4M dividends; 846,845 shares repurchased for $35M .
- Q3’24: Cremers emphasized stabilization in lumber and potential demand catalysts from rate cuts; liquidity $460M; continued repurchases .
Pay-versus-performance context
| Year | PCH TSR ($100 init) | Peer Index TSR ($100 init) | Net Income ($M) | FFO ($M) |
|---|---|---|---|---|
| 2020 | 119.30 | 92.00 | 167 | 302 |
| 2021 | 157.12 | 131.78 | 424 | 528 |
| 2022 | 121.92 | 99.67 | 334 | 468 |
| 2023 | 141.08 | 113.35 | 62 | 188 |
| 2024 | 117.95 | 123.25 | 22 | 223 |
Say-on-pay support
- 2024 say-on-pay approved by over 96% of votes cast; committee retained approach .
Compensation Structure Analysis
- Increased use of RSUs vs options (no options granted); 60/40 PSU/RSU mix since 2023 reduces risk while retaining multi-year TSR alignment .
- Annual plan integrates non-financial metrics (20%) since 2023, reinforcing safety/ESG/operational execution regardless of commodity cycles .
- PSU underperformance (78.67% payout) ties realized pay to relative TSR headwinds; AIP corporate payout at 97% reflects FFO below target offset by strong non-financials .
- Strong governance: double-trigger CIC, robust clawbacks, ownership/hedging/pledging policies, independent comp consultant (Semler Brossy) .
Equity Ownership & Alignment (Summary Table)
| Item | Detail |
|---|---|
| Beneficial ownership | 204,584 shares; <1% of outstanding |
| Deferred/RSU units | 76,549 common stock units |
| Upcoming RSU cliffs | 12/31/2025; 12/31/2026 |
| PSU cycles outstanding | 2023–2025; 2024–2026, TSR-based |
| Ownership guideline | CEO 5x salary; NEOs in compliance or within five-year window |
| Hedging/Pledging | Prohibited; pledging only with pre-approval (execs/directors) |
Employment Terms (Key Provisions)
- Severance (non-CIC): minimum 12 months of base salary; benefits cash; outplacement; equity forfeited (except retirement/death/disability) .
- CIC: double-trigger; 3x salary+target bonus; pro-rata (or target) AIP; equity conversion/acceleration terms; trust funding for benefits .
- Retirement/death/disability: pro-rata AIP, pro-rated PSU settlement at end of cycle, RSU pro-rata acceleration per terms .
Investment Implications
- Pay-for-performance linkage is credible: below-target PSU payouts and near-target AIP amid lumber headwinds indicate discipline; shareholder alignment bolstered by ownership guidelines and stringent hedging/pledging bans .
- Retention risk appears contained: competitive severance/CIC protections, meaningful unvested equity through 2026, and significant pension/SERP value encourage continuity through the cycle .
- Trading signals: Expect periodic tax-related sales around RSU cliffs (12/31/2025, 12/31/2026); overall selling constrained by ownership policy .
- Execution focus: Waldo modernization and Real Estate monetization are key near-term value levers; TSR-linked PSUs keep management focused on relative outperformance as lumber markets normalize .