Ray Shirley
Senior Vice President — Corporate Engineering and Process Technology at PKG
Executive
About Ray Shirley
D. Ray Shirley, 53, is Executive Vice President – Corrugated Products at Packaging Corporation of America (PCA) as of February 2025, after serving as Senior Vice President – Corporate Engineering & Process Technology since 2019 and joining PCA in 1996; he previously worked at Georgia‑Pacific Corporation . Under PCA’s leadership team, company performance has been strong: 2024 net sales were $8.383B vs. $7.802B in 2023, EBITDA rose to $1,626.9M from $1,592.8M, and EPS excluding special items increased to $9.04 from $8.70 . PCA’s one-, three-, and five-year total shareholder returns (TSR) were 41.7%, 81.9%, and 135.2%, respectively, with corrugated shipments up 10.5% YoY in 2024—key operational outcomes directly tied to Shirley’s engineering and process technology remit and his new role overseeing the corrugated business .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Packaging Corporation of America | Executive Vice President – Corrugated Products | 2025–present | Leads day-to-day corrugated products business; continues oversight of engineering and technology organization |
| Packaging Corporation of America | Senior Vice President – Corporate Engineering & Process Technology | 2019–Feb 2025 | Executed capital projects across box plants; enabled best-in-class production capabilities |
| Packaging Corporation of America | Vice President – Containerboard Mills Engineering & Process Technology | 2012–2019 | Drove mill engineering/process technology across PCA’s mill system |
| Packaging Corporation of America | Mill Manager, Counce (TN) | 2010–2012 | Led operations at the Counce linerboard mill |
| Packaging Corporation of America | Operations Manager, Filer City (MI) | N/A | Operations leadership within containerboard mills |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Georgia‑Pacific Corporation | Various management roles | Pre‑1996 | Pulp and paper operations experience prior to PCA |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $601,008 | $623,550 | $646,938 |
| Non‑Equity Incentive (Annual Cash Bonus) ($) | $837,900 | $779,250 | $810,420 |
| Change in Pension Value & Nonqualified Deferred Comp ($) | ($381,046) | $324,415 | $67,067 |
| All Other Compensation ($) | $31,252 | $19,635 | $30,729 |
| Total Compensation ($) | $2,895,238 | $3,143,314 | $3,091,240 |
| Annual Bonus Design (EICP) | Target | Actual 2024 |
|---|---|---|
| Target Award ($) | $580,000 | — |
| Payout (% of Target) | — | 140% (matrix-wide 139% based on EPS excluding special items of $9.04) |
Performance Compensation
| Annual Incentive (EICP) | Metric | Weighting | Threshold | Target | Max | Actual (2024) | Payout | Vesting |
|---|---|---|---|---|---|---|---|---|
| 2024 EICP | EPS excluding special items | 100% | $5.63 | $7.50 | $9.75 | $9.04 | 140% of target for Shirley (matrix 139%) | Cash, paid after year-end |
| Long‑Term Equity (2024 Grants) | Metric | Target Units (#) | Max Units (#) | Grant Date Fair Value ($) | Vest Timing | Payout Curve / Notes |
|---|---|---|---|---|---|---|
| Restricted Stock | Time‑based | 2,903 | N/A | $511,973 | Cliff vest 4 years (2/28/2028) | Dividends payable during vesting |
| ROIC Units | ROIC vs peer group | 2,903 | 3,484 (120%) | $511,973 (at 100% probable) | 4‑yr performance; vest/pay ~2/28/2028 | Above median = ≥100%; top three: 106.66%–120%; third quartile: 40%–100%; fourth quartile: 0% |
| TSR Units | Relative TSR vs peer group | 2,498 | 4,996 (200%) | $512,140 (Monte Carlo) | 3‑yr period 3/1/2024–2/28/2027; pay after certification | Above median = 100%–200%; 33.33–50th percentile: 0%–100%; <33.33rd: 0% |
| Prior Performance Unit Outcomes | Award Year | Metric | Performance Period | Outcome |
|---|---|---|---|---|
| 2021 ROIC Units | 2021 | ROIC vs peers | 2021–2024 | 114% of target earned (second‑highest avg ROIC; certified March 4, 2025) |
| 2021 TSR Units | 2021 | Relative TSR | 3/1/2021–2/28/2024 | 176.4% of target earned; paid 3/25/2024 |
2024 stock vested for Shirley: 11,835 shares valued at $2,133,196, reflecting time‑based RS vesting and payouts from 2021 ROIC and TSR units, with dividends equivalents included .
Equity Ownership & Alignment
| Ownership Detail | Amount |
|---|---|
| Total beneficial ownership (shares) | 26,101 |
| Breakdown | 7,246 direct fully vested; 12,566 restricted stock subject to forfeiture; 6,289 held in 401(k) |
| Ownership % of outstanding | ~0.029% (26,101 ÷ 89,928,116 shares outstanding as of 3/14/2025) |
| Unvested restricted stock (12/31/2024) | 12,465 shares; market value $2,806,245 (at $225.13) |
| Unearned performance units at target (12/31/2024) | 21,378 shares; payout value $4,812,870 (at $225.13); dividend equivalents accrued $244,341 |
| Scheduled vesting years (Restricted) | 2025: 2,837; 2026: 3,270; 2027: 3,455; 2028: 2,903 |
| Scheduled unit payouts (at target) | 2025: ROIC 3,234; TSR 2,891; 2026: ROIC 3,270; TSR 3,127; 2027: ROIC 3,455; TSR 2,498; 2028: ROIC 2,903 |
| Hedging/pledging policy | Hedging, short selling, and pledging prohibited for executives/directors; blackout and preclearance apply |
| Stock ownership guidelines | CEO: 6x salary; EVP/SVP first elected before 2019: 4.5x; other execs: 3x salary; all NEOs in compliance or making progress |
Employment Terms
- Employment agreements: None; PCA does not contractually entitle executive officers to severance payments; severance/vesting adjustments only case‑by‑case .
- Change‑of‑control: Double‑trigger equity vesting; qualifying substitute awards avoid single‑trigger vest; Good Reason definitions included .
- Clawback: Company must recover erroneously awarded incentive compensation for any current/former executive officer upon a financial restatement; applies to TSR as a financial reporting measure .
- Pension/SERP: Participates in PCA Pension Plan and SERP; 25.71 credited service years; present values as of 12/31/2024: Plan 1 $652,956; Plan 2 $1,018,450 .
- Deferred compensation: No executive contributions or registrar contributions disclosed for Shirley in 2024 .
- Perquisites: No perquisite amounts disclosed for Shirley beyond standard benefits; PCA does not provide tax gross‑ups for club dues (only applies to certain executives) .
Compensation Committee Analysis
- Committee composition: Thomas S. Souleles (Chair), Karen E. Gowland, Samuel M. Mencoff, Roger B. Porter; all independent under NYSE/SEC rules .
- Consultants: FW Cook (independent advisor to the committee); Meridian supports management with benchmarking/valuation; FW Cook attested independence .
- Peer group benchmarking and pay design: Program emphasizes long‑term equity; two‑thirds of awards are performance‑based (ROIC, TSR) with rigorous payout caps/slopes; annual bonus tied to EPS excluding special items .
- Say‑on‑Pay outcomes: At least 93% approval for each of the last five years; ~94% last year (excluding abstentions) .
Related Party Transactions
- Stephen Johnson, brother‑in‑law of D. Ray Shirley, employed by PCA as a manager; 2024 total compensation approximately $149,000 .
Investment Implications
- Alignment: High equity mix with multi‑year, relative performance metrics (ROIC, TSR) and strict clawback policy supports pay‑for‑performance and shareholder alignment; hedging/pledging prohibitions further strengthen alignment .
- Retention risk: No contractual severance or single‑trigger vesting reduces windfalls; meaningful unvested equity through 2028 and ongoing pension/SERP participation support retention. Upcoming scheduled payouts (e.g., 2025 ROIC payout at 114% attainment for 2021 grant) and annual RS cliffs indicate continued equity “stickiness” .
- Trading signals/overhang: 2024 vest of 11,835 shares and scheduled unit/RS payouts through 2028 map potential supply; blackout/preclearance and anti‑hedging mitigate adverse trading behaviors. Monitor Form 4 filings around February/March vest dates for execution patterns .
- Execution track record: Company growth (10.5% corrugated shipments; Jackson mill conversion; ROIC/TSR outperformance) aligns with Shirley’s engineering/process technology leadership and expanded operating role, supporting confidence in continued value creation in corrugated .