Mark Kowlzan
About Mark Kowlzan
Mark W. Kowlzan (age 70) has served as Chief Executive Officer of Packaging Corporation of America (PCA) since July 2010, Chairman since January 2016, and a director since 2010, after leading PCA’s containerboard mill system from 1998–2010 and previously holding senior mill roles from 1996–1998; prior to PCA he spent 15 years at International Paper in operational and managerial positions . Under his leadership, PCA posted 2024 EPS excluding special items of $9.04 (up from $8.70 in 2023) with one-, three-, and five‑year cumulative TSR of 41.7%, 81.9%, and 135.2%, respectively, alongside record containerboard production, >10% corrugated volume growth vs an industry roughly flat, ~$1.2B operating cash flow, ~$670M capex, and ~$521M free cash flow in 2024 . He is Chairman & CEO (not independent), with board governance mitigations including a Lead Independent Director and executive sessions at every regular board meeting .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Packaging Corporation of America | Chairman of the Board | 2016–present | Combined Chair/CEO leadership aligned to operational excellence and capital allocation focus . |
| Packaging Corporation of America | Chief Executive Officer; Director | 2010–present | Led growth, TSR outperformance vs peers; operational execution including Jackson mill conversion and record production . |
| Packaging Corporation of America | SVP—Containerboard; VP & GM (led mill system) | 1998–2010 | Ran integrated containerboard mill system, core to PCA cost and service strategy . |
| Packaging Corporation of America | Senior operating positions; Counce (TN) mill manager | 1996–1998 | Mill operations leadership and performance improvements . |
| International Paper Company | Various operational and managerial roles | 15 years (pre‑1996) | Deep mill operations and managerial experience in paper/packaging . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Forest & Paper Association | Director | 2011–present | Industry policy and sustainability engagement; complements PCA sustainability oversight . |
Board Governance
- Board service: Director since 2010; Chairman since 2016; not independent (management) .
- Committee roles: Member, Sustainability Committee (committee met 4x in 2024) .
- Independent oversight: Lead Independent Director (Samuel M. Mencoff) coordinates agendas, advisor retention, and executive sessions; independent directors meet in executive session at every regular meeting .
- Attendance/meetings: Board met 4 times in 2024; all nominees attended ≥75% of board/committee meetings .
- Dual role implications: Combined Chair/CEO structure maintained for operational familiarity/efficiency; mitigated by Lead Independent Director and fully independent Audit/Compensation/Nominating committees .
Fixed Compensation
Multi‑year compensation (SCT basis):
| Year | Salary ($) | Stock Awards ($) | Non‑Equity Incentive ($) | Change in Pension Value/Deferred Comp ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 1,487,340 | 10,633,352 | 3,412,280 | 66,711 | 72,787 | 15,672,470 |
| 2023 | 1,433,580 | 9,604,906 | 3,281,040 | 888,965 | 19,699 | 15,228,190 |
| 2022 | 1,381,764 | 7,250,018 | 3,528,000 | (3) (see note) | 71,852 | 12,231,634 |
Additional fixed/other:
- Target annual bonus (2024): $2,450,000; actual paid: $3,412,280 (139% of target) .
- All Other Compensation (2024) detail: Company 401(k) contrib $17,940 and extended 401(k) match $54,847 (total $72,787) .
- CEO pay ratio (2024): 184.2:1 .
- Base salary increases: ~3.75% for NEOs in 2024 (merit-based) .
Performance Compensation
Annual cash incentive (EICP) – 2024 framework and outcome:
| Metric | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|
| EPS excluding special items | $5.63 | $7.50 | $9.75 | $9.04 | 139% of target |
Long-term equity awards (2024 grants; approximately equal thirds):
| Award Type | Grant Date | Target/Granted | Payout Range | Performance Period | Vest/Pay Timing | Notes |
|---|---|---|---|---|---|---|
| Restricted Stock | 2/28/2024 | 20,098 shares | n/a | n/a | Cliff vests 4 years (2/28/2028) | Time-vest; dividends paid as regular dividends . |
| ROIC Performance Units | 2/28/2024 | 20,098 target; 8,039 threshold; 24,118 max | 0–120% | 2024–2027 (avg ROIC vs peers) | Vest/pay ~2/28/2028 | Above-median = ≥100% payout; top three capped at 120% . |
| TSR Performance Units | 2/28/2024 | 17,288 target; 0 threshold; 34,576 max | 0–200% | 3/1/2024–2/28/2027 (relative TSR) | Pay post-certification after period | Above-median for ≥100%; max at top of peer group . |
Peer group for ROIC/TSR units includes 18 packaging/industrial names (e.g., International Paper, WestRock/Smurfit WestRock, Graphic Packaging, Avery Dennison, Celanese, etc.); unchanged from 2023 .
Recent performance unit payouts (evidence of rigor and realized pay):
- 2020 ROIC units (performance 2020–2023) paid at 100% on 2/25/2024; 2021 ROIC units (2021–2024) certified at 114% on 3/4/2025 .
- 2021 TSR units (3/1/2021–2/28/2024) paid at 176.4% on 3/25/2024 (PCA TSR ~88th percentile) .
Program design features (risk/control):
- No option repricing; no single-trigger change-in-control vesting; majority of CEO comp in long-term equity; two-thirds of LTI tied to performance (ROIC/TSR) .
- Strong Say-on-Pay support (≥93% for five years; ~94% in 2024) .
- Compensation consultants: FW Cook (committee independent); Meridian supports management benchmarking .
- Compensation committee: independent directors; 6 meetings in 2024 .
Equity Ownership & Alignment
Beneficial ownership and breakdown (as of 3/14/2025):
| Holder | Beneficial Shares | Notes |
|---|---|---|
| Mark W. Kowlzan | 467,822 (<1%) | Includes 369,761 not subject to vesting, 78,493 restricted stock, and 19,568 shares in 401(k); 2,565 held by spouse (disclaimed) . |
Unvested and unearned equity at 12/31/2024:
| Category | Shares/Units | Year-end Value ($) | Notes |
|---|---|---|---|
| Unvested Restricted Stock | 77,338 | 17,411,104 | Vests: 2025 16,838; 2026 16,637; 2027 23,765; 2028 20,098 . |
| Unearned Performance Units (ROIC/TSR) | 133,194 (target basis) | 29,986,037 | 2025 payouts include ROIC (19,195) and TSR (14,706) tranches; schedule disclosed through 2028 . |
Recent vesting (liquidity timing signal):
| Year | Shares Vested | Value Realized ($) | Dates/Prices |
|---|---|---|---|
| 2024 | 70,250 | 12,661,265 | RS (2/25/2024, $174.08), RSUs (2/28/2024, $176.36), TSR PSU payout (3/25/2024, $187.31) . |
Ownership policies and practices:
- Ownership guideline: CEO 6x base salary; all NEOs/directors in compliance or on track .
- Hedging/pledging prohibited; trading windows/blackouts and pre‑clearance required for officers/directors .
- Clawback policy: recoup erroneously awarded incentive comp (incl. TSR as a financial measure) upon restatement for prior 3 years .
Insider selling pressure assessment:
- Large scheduled February/March vesting cycles (illustrated by 2024 vesting/payouts) can create predictable liquidity windows; upcoming RS cliff vests in 2025–2028 and PSU pay windows could similarly concentrate selling opportunities, subject to blackout and pre‑clearance controls .
Employment Terms
- Employment agreement/severance: None; no contractual severance. Any severance/retirement treatment considered case‑by‑case; committee may consider non‑compete/non‑solicit covenants in arrangements .
- Change-of-control: No cash severance; equity has double‑trigger vesting (requires qualifying termination or resignation for good reason within 2 years of CoC if substitute awards provided; otherwise acceleration) .
- Illustrative values of unvested equity (12/31/2024 stock price $225.13) in various scenarios: termination/retirement consideration (case‑by‑case) $46.87M; death/disability $49.87M; CoC double-trigger or no substitute award $58.16M .
- Pension/SERP: Present value of accumulated benefits—PCA Pension Plan (Plan 1): $1,113,953; PCA SERP (Plan 2): $9,271,985; 25.71 years credited service; 2024 distribution from legacy Pactiv plan: $11,742 .
- Deferred compensation: No 2024 executive or registrant contributions for Kowlzan; no reported balance .
- Perquisites: Limited; CEO “All Other” comp primarily 401(k) contributions and extended match; no tax gross-up noted for perquisites (club membership gross-ups not applicable to CEO) .
- Trading policy: Blackouts begin 15 days pre‑quarter-end through the day after earnings release; pre‑clearance required; hedging/short sales/pledging prohibited .
Compensation Structure Analysis
- Mix/at‑risk pay: Majority of CEO compensation is long‑term equity; two‑thirds of equity is performance‑based (ROIC/TSR), reinforcing pay‑for‑performance .
- Annual plan rigor: EPS ex‑specials target raised modestly vs prior year; 2024 payout 139% on $9.04 actual vs $7.50 target and $9.75 max, consistent with strong operating results .
- LTI rigor and calibration: ROIC units capped at 120% (lower cap than common 200%); TSR max requires top rank in peer group (more stringent than typical 75th percentile max) .
- Program stability/shareholder support: No material structural changes; Say‑on‑Pay support ≥93% over five years (~94% in 2024) .
- Governance protections: No single‑trigger; no repricing; robust clawback; hedging/pledging bans .
Performance & Track Record
- Operating execution: 2024 corrugated product volumes +10% YoY vs industry roughly flat; record containerboard production; Jackson mill conversion completed, supporting growth .
- Financial outcomes: 2024 EPS ex‑special items $9.04 (up from $8.70); ~$1.2B operating cash flow; ~$521M free cash flow after ~$670M capex; $852M cash and marketable securities; low leverage .
- TSR: 1/3/5‑year cumulative TSR of 41.7%/81.9%/135.2% through 2024 .
Say‑on‑Pay & Shareholder Feedback
- 2024 advisory vote: nearly 94% approval; ≥93% approval each of last five years; annual frequency maintained .
Compensation Peer Group (benchmarking)
- Peer set spans direct competitors, related packaging/industrial firms, and local comparables; PCA 2024 revenue near median; market cap ~75th percentile; one‑year TSR above 75th percentile; three‑year TSR highest in group .
- No fixed cash/equity mix targets; majority of top officer pay delivered in long‑term equity .
Equity Ownership & Director Compensation (Board context)
- Management directors (incl. CEO/Chair) do not receive director fees; non‑employee directors receive $275,000 annual (cash/equity split), with added retainers for Lead Director and committee chairs; 2024 equity retainer 616 fully vested shares on 5/7/2024 ($178.54) .
- Director ownership guideline: ≥$450,000; outside director annual compensation capped at $650,000 under plan .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited for directors/executives (mitigates alignment risks) .
- Clawback: Restatement‑based recovery applies to financial-metric compensation, including TSR (enhances accountability) .
- Related party transactions: 2024 disclosures did not identify any reportable related transactions involving Kowlzan; family employment disclosures related to other executives only .
- Equity practices: No repricing; no single-trigger CoC; double-trigger standard .
- Say‑on‑Pay: High support reduces governance friction risk .
Investment Implications
- Pay-for-performance alignment is strong: heavy performance equity (ROIC/TSR) with stringent caps/curves, EPS‑based cash bonus, robust clawback and anti‑hedging policies; high Say‑on‑Pay support suggests low governance overhang .
- Insider supply windows: Large scheduled vesting events (historically late Feb/Mar) and multi‑year PSU cycles can concentrate selling windows; monitor blackout/clearance timing around these dates for potential technical pressure .
- Retention/turnover risk appears low: No employment agreement but substantial unvested equity, pension/SERP value, and ownership guidelines support retention; no contractual severance or single‑trigger CoC mitigates parachute risk .
- Dual role (Chair/CEO) governance risk is mitigated by a Lead Independent Director, independent key committees, routine executive sessions, and strong board tenure/industry expertise .
- Execution track record (volume outgrowth, mill conversion, TSR) under Kowlzan supports confidence in operational levers and capital allocation discipline into the next cycle .