Marcia Vargas
About Marcia Vargas
Marcia Vargas is Senior Vice President and Chief People Officer (CPO) at Sylvamo, appointed in June 2024 after serving as VP, Talent & Organizational Development (May 2023–May 2024) and VP, Human Resources (May 2024) . She is 61 and holds a bachelor’s degree in industrial relations from Loyola University Chicago, with 35+ years of HR and labor leadership spanning Barr Brands International (CHRO), Fred’s, Inc. (SVP & CHRO), and McDonald’s Corporation (U.S. VP, Inclusion & Diversity HR) . Company performance benchmarks informing pay-for-performance: 2024 Adjusted EBITDA $632 million (17% margin), Free Cash Flow $248 million, net debt/Adjusted EBITDA 0.9x, and three-year TSR of 166.73% at the 93rd percentile of peers, which anchor incentive plans and alignment frameworks .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Barr Brands International | Chief Human Resources Officer | 2014–2023 | Led enterprise HR strategy and execution across talent, culture, and organizational development |
| Fred’s, Inc. | SVP & Chief Human Resources Officer | 2010–2014 | Drove HR transformation supporting retail operations and leadership effectiveness |
| McDonald’s Corporation | U.S. Vice President, Inclusion & Diversity HR Officer | 1993–2010 | Advanced inclusion, diversity, and workforce policies at scale |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| President’s Committee on Employment of People with Disabilities | Member | N/A | Committee formed by U.S. presidential executive order to expand job opportunities for people with disabilities |
| Oregon Council for Hispanic Advancement | Board Member | N/A | Community leadership for Hispanic advancement |
| Hispanic Alliance for Career Advancement | Board Member | N/A | Advocacy for Hispanic career development |
Fixed Compensation
- Vargas is not a Named Executive Officer (NEO); individual base salary and cash pay were not disclosed. Sylvamo’s executive pay framework comprises base salary, annual cash incentive (AIP), and long-term equity incentives (LTIP), with heavy weighting to variable, at-risk pay .
- For context, NEO base salaries were disclosed (e.g., CEO $1,125,000; CFO $625,000), reflecting the pay positioning philosophy; however, these do not apply to Vargas .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Company Outcomes
| Metric | Weight | Threshold | Target Range | Maximum | Actual | Company Achievement | Notes |
|---|---|---|---|---|---|---|---|
| Adjusted EBITDA Margin (%) | 50% | 13.0% | 14.5%–16.1% | 17.6% | 16.8% | 146.67% (73.33% contribution) | AIP based on EBITDA margin and FCF |
| Free Cash Flow ($ millions) | 50% | $177.6 | $210.9–$233.1 | $266.4 | $248.0 | 144.74% (72.37% contribution) | Strong cash generation |
| Total Company Achievement | 100% | — | — | — | — | 145.71% | Drives AIP payouts across executives |
Long-Term Incentive Plan (LTIP) – Structure and 2022 PSU Results
| Element | Metric | Weight | Design / Measurement Window | Outcome | Payout |
|---|---|---|---|---|---|
| PSUs (2022 LTIP) | ROIC (Absolute) | 50% | 3-year avg ROIC through 12/31/2024 | 26.56% | 89.28% (ROIC tranche) |
| PSUs (2022 LTIP) | Relative TSR | 50% | vs S&P 600 Small Cap Materials; method defined | 93rd percentile | 200% capped to 194.92% due to value cap |
| Total 2022 PSU payout | Blended | 100% | Plan cap applied | — | 142.1% |
| RSUs (ongoing) | Service-based | — | Vest ratably over 3 years | N/A | N/A |
- 2024 LTIP: 60% PSUs (ROIC and rTSR) and 40% RSUs; PSUs settle March 1, 2027; RSUs vest in equal thirds on March 1 each year following grant; DEUs accrue on unvested awards .
Equity Ownership & Alignment
| Policy / Item | Details |
|---|---|
| Ownership Guidelines | CEO: 6x base salary; SVP: 3x base salary; five-year compliance window; retain 50% of net shares until met |
| Hedging/Pledging | Prohibited for directors and officers; no short selling, options trading (puts/calls), zero-cost collars, forward sales, margin pledging |
| Clawback | Recoupment for restatements and misconduct; AIP/LTIP forfeiture provisions; 3-year lookback for executive LTIP awards |
| Insider Trading Controls | Blackout periods, restrictions on standing/limit orders for Section 16 insiders |
| Beneficial Ownership Updates | Form 4 filed for Vargas on Oct 20, 2025 reflecting changes tied to dividend equivalent units credited (DEUs) on unvested equity; DEUs convert 1-for-1 upon vesting; details per EDGAR Form 4 . |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreements | Company-wide: no guaranteed employment agreements for NEOs; executives governed by policies and plans (indicative for SVPs) |
| Executive Severance Plan (ESP) | Double-trigger CIC; CEO 2.5x base + target AIP; other executive officers (incl. SVPs): 1.5x base + target AIP under CIC; non-CIC: CEO 2x base + target AIP; other execs: 1x base; COBRA continuation and outplacement included |
| Non-Compete / Non-Solicit | Required for executive officers; violations may trigger clawback/forfeiture; confidentiality and non-disparagement apply |
Vesting Schedules and Insider Selling Pressure
- RSUs vest in three equal tranches annually on March 1 over three years; PSUs vest based on 3-year performance, settled on March 1 after the period; DEUs accrue and vest with the underlying award .
- Recent insider activity for Vargas is a Form 4 tied to DEUs (non-sale, accrual mechanism), which does not indicate selling pressure; pledging and hedging are prohibited, reducing forced-selling risk from collateral arrangements .
Compensation Structure Analysis
- Pay mix emphasizes at-risk compensation via AIP and LTIP; LTIP shifted to RSUs/PSUs, with no stock options and explicit prohibition on option repricing .
- Multiple performance metrics (EBITDA margin, FCF, ROIC, rTSR) create balanced incentives and discourage risk-taking misalignment; annual risk assessment conducted by MDCC .
- Stock ownership and retention rules (3x salary for SVPs; retain 50% of net shares until met) strengthen long-term alignment .
Compensation Peer Group (Benchmarking, pay level risk)
| Peer Group (BPG) used for 2024 benchmarking |
|---|
| AptarGroup; Ashland; Clearwater Paper; Glatfelter; Graphic Packaging; Greif; H.B. Fuller; Innospec; Kaiser Aluminum; Louisiana-Pacific; Mativ; Mercer International; O-I Glass; Packaging Corp of America; Sealed Air; Silgan Holdings; Sonoco Products |
Say-on-Pay & Shareholder Feedback
- 2023 NEO compensation received 98% support in the May 2024 advisory vote, indicating strong investor alignment with pay design .
- 2024 Annual Meeting voting outcomes disclosed in 8-K; say-on-pay approved (32,806,204 for; 568,212 against; 65,324 abstain) .
Performance & Track Record (Company context during tenure)
| Indicator | Value | Period / Context |
|---|---|---|
| Adjusted EBITDA | $632 million | FY2024 |
| Adjusted EBITDA Margin | 16.8% | FY2024 (AIP actual) |
| Free Cash Flow | $248 million | FY2024 |
| Net Debt / Adjusted EBITDA | 0.9x | 12/31/2024 |
| Three-Year TSR | 166.73%; 93rd percentile | Performance period through 12/31/2024 |
Governance and Risk Indicators
- Clawback policy in place; strong prohibitions on hedging/pledging; annual risk review by MDCC; double-trigger CIC protections; extensive ownership requirements .
- Insider transactions disclosed via timely Section 16 filings; 2025 governance updates include CEO succession (Dec. 31, 2025 retirement), COO appointment, and CFO transition (May 1, 2025) providing continuity of strategic execution .
Investment Implications
- Vargas’ remit over culture, succession, inclusion, and leadership development aligns with core levers for talent retention and execution quality; combined with strict ownership/clawback/anti-pledging policies, this reduces alignment risk and promotes long-term value creation .
- Incentive architecture tied to FCF, EBITDA margin, ROIC, and rTSR—with robust recent outperformance—supports pay-for-performance integrity; DEU-related Form 4 activity suggests accrual rather than selling pressure, while prohibitions on pledging and hedging further mitigate forced-sales risk .
- Strong say-on-pay support (98%) and disciplined peer benchmarking reduce pay inflation and governance friction; executive severance and double-trigger CIC terms balance retention with shareholder protections .