DEF 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the
Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 |
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WEYERHAEUSER COMPANY
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the
appropriate box):
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Fee computed on table below per Exchange Act Rules 14a(6)(i)(4) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
Notes:
NOTICE OF THE 2017
ANNUAL MEETING
AND PROXY STATEMENT
WEYERHAEUSER COMPANY
DEAR SHAREHOLDER:
We are pleased to invite you to attend your companys annual meeting of shareholders at 9:00 a.m. on Friday, May 19, 2017 at the Courtyard by Marriott, Pioneer Square, 612 2nd Avenue, Seattle, WA 98104. A map and directions to the
meeting are provided on the back cover of the accompanying proxy statement.
The annual meeting will include a report on our operations
and consideration of the matters set forth in the accompanying notice of annual meeting and proxy statement. All shareholders of record as of March 24, 2017 are entitled to vote.
To reduce annual meeting costs and conserve resources, we are electronically disseminating annual meeting materials to a majority of our shareholders as permitted under the rules of the U.S.
Securities and Exchange Commission. These shareholders will receive a Notice Regarding the Availability of Proxy Materials (Notice) instead of a paper copy of the proxy materials. The Notice contains instructions on how to:
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electronically access our proxy statement for our 2017 annual meeting and our 2016 Annual Report to Shareholders and Form 10-K; |
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vote via the internet, by telephone or by mail; and |
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receive a paper copy of our proxy materials by mail, if desired. |
We first mailed the Notice to the majority of our shareholders on April 6, 2017. The Notice will serve as an admission ticket to the 2017 annual meeting of shareholders.
On April 6, 2017, we also first mailed the proxy statement and a proxy card to certain shareholders. If you receive a paper copy of the proxy
materials in the mail, the proxy statement includes an admission ticket to the annual meeting of shareholders.
Your vote is
important. Whether or not you plan to attend the annual meeting in person, we urge you to please vote as soon as possible. You can vote over the internet, by telephone or by mailing back a proxy card.
Sincerely,
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Rick R. Holley |
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Doyle R. Simons |
Chairman of the Board |
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President and CEO |
TABLE OF CONTENTS
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
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Meeting Date: |
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May 19, 2017 |
Meeting Time: |
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9:00 a.m. (Pacific) |
Meeting Location: |
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Courtyard by Marriott, Pioneer Square 612 2nd Avenue Seattle, WA 98104 |
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Record Date: |
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March 24, 2017 |
Agenda
Weyerhaeuser Companys annual meeting of shareholders will be held May 19, 2017 to:
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elect as directors the 11 nominees named in the accompanying proxy statement; |
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approve, on an advisory basis, the compensation of our named executive officers; |
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approve, on an advisory basis, the frequency of future advisory votes on the compensation of our named executive officers;
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ratify the selection of KPMG LLP as the companys independent registered public accounting firm for 2017; and |
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transact any other business that may be properly brought before the annual meeting. |
Admission
All shareholders
are invited to attend the annual meeting. You will need an admission ticket or proof of ownership of Weyerhaeuser common stock, as well as a form of personal photo identification, to be admitted. Your admission ticket is either the Notice
Regarding the Availability of Proxy Materials or, if you received a paper copy of the proxy materials, the admission ticket that was included with the proxy materials. Seating will be limited and on a first come basis. Please refer to
Information About the Meeting on page 7 of the proxy statement for more information about attending the meeting.
Voting
Your vote is
important. Shareholders owning Weyerhaeuser common stock at the close of business on March 24, 2017, the record date, or their legal proxy holders, are entitled to vote at the annual meeting. Whether or not you expect to attend the annual
meeting in person, we urge you to vote as soon as possible by one of these methods:
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via the internet: go to www.envisionreports.com/WY, |
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by toll-free telephone: call
1-800-652-VOTE (8683), or |
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if you received a paper copy of the proxy materials, by mail: mark, sign, date and return the enclosed proxy card as soon as possible in advance
of the meeting to ensure that your vote is recorded. |
Shareholders may also vote in person at the annual meeting. For
more information on how to vote your shares, please refer to Proxy and Voting Information beginning on page 5 of the proxy statement.
Kristy T. Harlan
Senior Vice President, General Counsel and Corporate Secretary
Seattle, Washington
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to be Held on May 19, 2017
This Notice of the Annual Meeting of Shareholders, our Proxy Statement and our Annual Report to Shareholders and
Form 10-K are available free of charge at www.edocumentview.com/WY.
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PROXY SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should
consider. Please read this entire proxy statement carefully before voting.
2017 ANNUAL MEETING INFORMATION (page 7)
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Meeting Date: |
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May 19, 2017 |
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Record Date: |
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March 24, 2017 |
Meeting Time: |
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9:00 a.m. (Pacific) |
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Meeting Place: |
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Courtyard by Marriott, Pioneer Square 612 2nd Avenue Seattle, WA 98104 |
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Voting: |
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All common shareholders of record as of March 24, 2017 may vote. Each outstanding share of common stock is entitled to one vote on each matter to be voted
upon at the annual meeting. |
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Admission: |
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You will need an admission ticket or proof of ownership of Weyerhaeuser common stock, as well as a form of personal photo identification, to be admitted to the
annual meeting. Your admission ticket is either the Notice Regarding the Availability of Proxy Materials or, if you received a paper copy of the proxy materials, the admission ticket that was included with the proxy materials. Please refer to
Information About the Meeting on page 7 of the proxy statement for more information about attending the meeting. A map and directions to the meeting are provided on the back cover of the proxy statement. |
ADVANCE VOTING METHODS (page 6)
Even if you plan to attend the 2017 annual meeting of shareholders in person, we urge you to vote in advance of the meeting using one of these advance voting methods.
MEETING AGENDA AND VOTING RECOMMENDATIONS
The Weyerhaeuser Company board of directors is asking shareholders to vote on these matters:
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Items of Business |
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Board Recommendation |
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Page Number |
1. Election of the 11 directors
named as nominees in the proxy statement |
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2. Approval, on an advisory basis,
of the compensation of our named executive officers |
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FOR |
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3. Approval, on an advisory basis,
of the frequency of future advisory votes on the compensation of our named executive officers |
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ONE YEAR |
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4. Ratification of selection of
independent registered public accounting firm |
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In addition to the above matters, we will transact any other business that is properly brought before the
shareholders at the annual meeting.
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DIRECTOR NOMINEES (page 8)
We have included summary information about each director nominee in the table below. Each director is elected annually by a majority of votes cast. See Nominees for Election and
Board of Directors and Committee Information beginning on page 8 of the proxy statement for more information regarding our directors and our process for nominating directors.
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Committees
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Name |
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Age |
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Director Since
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Primary
Occupation |
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Independent
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EC |
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AC |
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CC |
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GCRC
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Mark A. Emmert |
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64 |
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2008 |
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President, National Collegiate Athletic Association |
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Rick R. Holley |
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65 |
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2016 |
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Former Chief Executive Officer of Plum Creek Timber Company, Inc. |
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✓ |
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Sara Grootwassink Lewis |
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49 |
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2016 |
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Chief Executive Officer of Lewis Corporate Advisors, LLC |
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✓ |
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John F. Morgan, Sr. |
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70 |
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2016 |
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Private Timber Investor |
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✓ |
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Nicole W. Piasecki |
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54 |
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2003 |
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Vice President and General Manager, Propulsion Division, Boeing Commercial Airplanes |
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C |
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Marc F. Racicot |
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68 |
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2016 |
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Retired, President and CEO of the American Insurance Association and Former Governor, State of
Montana |
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✓ |
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Lawrence A. Selzer |
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57 |
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2016 |
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President and Chief Executive Officer, The Conservation Fund |
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✓ |
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Doyle R. Simons |
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53 |
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2012 |
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President and Chief Executive Officer, Weyerhaeuser Company |
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D.
Michael Steuert |
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68 |
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2004 |
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Retired CFO, Fluor Corporation |
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C, FE |
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Kim Williams |
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61 |
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2006 |
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Retired Partner and SVP, Wellington Management Company, LLP |
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✓ |
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Charles R. Williamson |
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68 |
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2004 |
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Retired EVP, Chevron Corporation and CEO, Unocal Corporation |
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C |
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C |
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AC = Audit Committee CC = Compensation Committee C = Committee Chair |
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EC = Executive Committee GCRC = Governance and Corporate Responsibility Committee FE = Financial
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2016 BUSINESS HIGHLIGHTS (page 20)
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We completed the merger with Plum Creek Timber Company, Inc. (Plum Creek), creating the worlds premier timber, land and forest
products company, with more than 13 million acres of productive and diverse timberland. |
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We completed the sale of our Cellulose Fibers business for $2.5 billion. |
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We generated net earnings of $1.027 billion. We also generated net earnings from continuing operations attributable to common shareholders
of $393 million, or $534 million before special items,* on net sales of $6.4 billion. |
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We increased full year Adjusted EBITDA by over 50% to nearly $1.6 billion.* |
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We captured our merger cost synergies faster than expected, and increased our run rate target by 25% to $125 million.
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We delivered on our 2016 operational excellence targets. |
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We returned over $2 billion to shareholders through the repurchase of our common shares. |
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We returned $932 million to common shareholders through dividends. |
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Our five-year total shareholder return (TSR) was 90%, which was the 42nd percentile compared to the TSR of the S&P 500 over the
same period. |
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We were named to the Dow Jones Sustainability World Index for the sixth straight year. |
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Represents a measure of performance that is calculated and presented other than in accordance with generally accepted accounting principles (GAAP).
See Appendix A for an explanation of these non-GAAP measures, a full reconciliation of these non-GAAP results to our GAAP Net Earnings results, and a brief discussion of why we use these non-GAAP performance measures. |
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We were named one of the Worlds Most Ethical Companies by the Ethisphere Institute for the fifth year in a row.
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CORPORATE GOVERNANCE HIGHLIGHTS
Our corporate governance policies promote the long-term interests of shareholders, accountability and trust in the company. Below is a summary of some of the highlights of our corporate governance
framework.
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✓ Annual election of all directors |
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✓ Regular executive
sessions of independent directors |
✓ Majority voting |
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✓ Risk oversight by the
board and committees |
✓ 9 of 11 director nominees are independent |
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✓ Annual board and
committee self-assessments |
✓ Appointed lead independent director |
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✓ No supermajority
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✓ Clawback policy |
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✓ No shareholder rights
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✓ Anti-hedging and anti-pledging policy |
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✓ Independent committee
chairs and members |
✓ Executive stock ownership guidelines |
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✓ Shareholder
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✓ Director stock ownership guidelines ✓ Separation of board chair and CEO |
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✓ Annual say-on-pay advisory votes |
EXECUTIVE COMPENSATION HIGHLIGHTS (page 21)
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Our executive compensation programs are designed to align the interests of our executive officers with those of our shareholders.
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Total compensation opportunities are maintained at market-competitive levels, and are also tied to the achievement of the Companys short-
and long-term financial and strategic goals. |
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Our compensation programs clearly communicate desired behavior and use incentive pay to reward the achievement of performance goals.
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We tie pay to performance by: measuring individual, business and company performance; using performance to differentiate the amount of incentive
compensation; and allocating more reward dollars to higher performers. |
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At our 2016 annual meeting, we received more than 95% support for our executive compensation program. |
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2017 PROXY STATEMENT
WEYERHAEUSER COMPANY
220 Occidental Avenue South
Seattle, Washington 98104
(206) 539-3000
April 6, 2017
PROXY AND VOTING INFORMATION
Weyerhaeuser Company (Weyerhaeuser or the Company) will hold its annual meeting of shareholders at the
Courtyard by Marriott, Pioneer Square, 612 2nd
Avenue, Seattle, WA 98104 on Friday, May 19, 2017 at 9:00 a.m. (Pacific) to consider the items on the accompanying notice of the annual meeting of shareholders. All items on the accompanying notice are more fully described in this proxy
statement.
On or about April 6, 2017, we began distributing to each shareholder entitled to vote at the annual meeting either
(i) a Notice Regarding the Availability of Proxy Materials with instructions on how to access electronic copies of our annual meeting materials and vote their shares or (ii) this proxy statement, a proxy card and our 2016 annual report.
Shares represented by a properly executed proxy will be voted in accordance with instructions provided by the shareholder. Proxies are solicited by the board of directors of the Company.
SHAREHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING
Only common shareholders
of record at the close of business on March 24, 2017 are eligible to vote at the annual meeting. On that date, 751,294,581 common shares were outstanding. Each common share entitles the holder to one vote at the annual meeting.
VOTE REQUIRED
The presence,
in person or by proxy, of holders of a majority of Weyerhaeusers outstanding common shares is required to constitute a quorum for the transaction of business at the annual meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a quorum. Under Washington law and the Companys Articles of Incorporation and Bylaws, if a quorum is present at the
meeting:
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Item 1nominees for election as
directors will be elected to the board of directors if the votes cast for each such nominee exceed the votes cast against the nominee; |
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Item 2the advisory vote on the
compensation of the named executive officers disclosed in the proxy statement will be approved if the votes cast in favor of the proposal exceed the votes cast against the proposal; |
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Item 3the alternative
receiving the greatest number of votesevery year, every two years or every three yearswill be the frequency that shareholders approve; and |
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Item 4ratification of the
selection of KPMG LLP as our independent registered public accounting firm will be approved if the votes cast in favor of the proposal exceed the votes cast against the proposal. |
EFFECT OF ABSTENTIONS AND BROKER NON-VOTES
The following will not be considered votes cast and will not count towards the election of any director nominee or approval of other proposals:
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a share whose ballot is marked as abstain; |
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a share otherwise present at the annual meeting but for which there is an abstention; and |
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a share otherwise present at the annual meeting as to which a shareholder gives no authority or direction. |
If your shares are held in street name on your behalf (that is, you own shares in the name of a bank, broker or other holder of record), the broker
or other registered holder must receive explicit voting instructions from you to be able to vote on the election of directors and executive compensation, each of which is considered to be non-routine under the
applicable rules of the New York Stock Exchange. Brokers do not have discretion to vote on non-routine matters unless the
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beneficial owner of the shares has given explicit voting instructions. Consequently, if you do not give your broker explicit instructions, your shares will not be voted on the election of
directors, the advisory vote on executive compensation or the advisory vote on the frequency of the advisory vote on executive compensation, and your shares will instead be considered broker
non-votes on each such proposal. The ratification of the selection of KPMG LLP as our independent registered public accounting firm is considered a routine matter and, as such, your broker is entitled to
vote your shares on such proposal in its discretion, even if you do not provide voting instructions on that item.
VOTING INFORMATION
You may vote your shares in one of several ways, depending upon how you own your common shares.
If you are a shareholder of record (that is, if your shares are registered in your own name with our transfer agent), you can vote any one of four
ways:
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Voting on the Internet. Go to www.envisionreports.com/WY and follow
the instructions. You will need to have your control number (from your Notice Regarding the Availability of Proxy Materials or proxy card) with you when you go to the website. |
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Voting by Telephone. Call the toll-free number listed on the voting
website (www.envisionreports.com/WY) or your proxy card and follow the instructions. You will need to have your control number with you when you call. |
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Voting by Mail. Complete, sign, date and return your proxy card in
the envelope provided in advance of the meeting. |
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Voting at the Annual Meeting. If you decide to attend the meeting
and vote in person, you may deposit your proxy card in the ballot box at the registration desk at the annual meeting or you may complete a ballot that will be distributed at the meeting. |
The Company is incorporated under Washington law, which specifically permits electronically transmitted proxies, provided that the transmission set
forth or be submitted with information from which it can reasonably be determined that the transmission was authorized by the shareholder. The electronic voting procedures provided for the annual meeting are designed to authenticate each shareholder
by use of a control number to allow
shareholder to vote their shares and to confirm that their instructions have been properly recorded.
If you are a beneficial owner of shares held in street name (that is, if you hold your shares through a broker, bank or other holder of record), you should follow the voting instructions you receive
from the holder of record to vote your shares.
SHAREHOLDERS SHARING THE SAME ADDRESS
Each year, we are required to send to each of our registered shareholders of record a Notice of Internet Availability of Proxy Materials and, for
those who elect to receive a paper copy of our proxy materials in the mail, one copy of our proxy statement and annual report. We are also required to arrange for these materials to be sent to our beneficial shareholders whose shares are held in
street name by a broker, bank, or other holder of record. However, many of our shareholders hold their shares in multiple accounts or share an address with other shareholders, and this results in duplicate mailings of these proxy materials.
Shareholders who elect to receive a paper copy of our proxy materials may avoid receiving duplicate mailings and save the Company the cost of producing and mailing duplicate documents as follows:
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Shareholders of Record. If your shares are registered in your own name and you would like to consent to the delivery of a single Notice of Internet Availability of Proxy Materials, proxy statement or annual report, you may
contact our transfer agent, Computershare, by mail at P.O. Box 30170, College Station, TX 77842-3170, or by telephone at 1-800-561-4405. |
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Beneficial Shareholders. If your shares are held in street name, please contact a representative of your broker, bank, or other holder of record. |
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Right to Request Separate Copies. If you consent to the delivery of a single Notice of Internet Availability of Proxy Materials, proxy statement or annual report, but later decide that you would prefer to receive a separate copy of
the Notice of Internet Availability of Proxy Materials, proxy statement or annual report, please notify Computershare using the contact information above if you are a registered shareholder, or contact your broker, bank, or other holder of record if
you are a beneficial shareholder. |
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REVOCATION OF PROXIES
Shareholders who execute proxies retain the right to revoke them at any time before the shares are voted by proxy at the meeting. A shareholder may revoke a proxy by delivering a signed statement to
our Corporate Secretary at or prior to the annual meeting or by timely executing and delivering, by internet, telephone, mail or in person at the annual meeting, another proxy dated as of a later date.
INFORMATION ABOUT THE MEETING
Attendance at the annual meeting is limited to holders of the Companys common shares. The meeting will be held at 9:00 a.m. Pacific time at the Courtyard by Marriott, Pioneer Square, 612
2nd Avenue, Seattle, WA 98104. A map and
directions to the meeting are provided on the back cover of this proxy statement.
To reduce costs and conserve resources, instead of a
paper copy of our proxy materials, we are sending to the majority of our shareholders a Notice Regarding the Availability of Proxy Materials (the Notice). The Notice contains instructions on how to:
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electronically access our proxy statement and our 2016 Annual Report to Shareholders and Form 10-K;
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vote via the internet, by telephone or by mail; and |
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receive a paper copy of our proxy materials by mail, if desired. |
The Notice will serve as your admission ticket to attend the meeting. If you received a paper copy of the proxy materials in the mail, the proxy materials included an admission ticket. You must
present the Notice or the admission ticket included with your proxy materials, together with a government-issued photo identification (such as drivers license or passport), at the registration desk to be allowed into the annual meeting. If you
plan to attend the annual meeting in person, please vote your proxy, but keep the Notice or admission ticket and bring it with you to the annual meeting along with your photo identification. If you arrive at the meeting without your Notice or
admission ticket, we will admit you only if you have photo identification and we are able to verify that you were a shareholder of record as of March 24, 2017.
If you are a street name shareholder and you plan to attend the annual meeting, you must present
proof of your ownership of Weyerhaeuser common shares as of the March 24, 2017 record date. Acceptable proof would be an original bank or brokerage account statement as of that date. You also must present photo identification to be admitted. If
you arrive at the meeting without proof of your ownership of common shares as of the record date or photo identification, you will not be admitted to the meeting.
If you are a street name shareholder and intend to designate a proxy holder, the designee must present:
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your original signed form of proxy; |
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proof of your ownership of common shares (such as a bank or brokerage statement) as of the March 24, 2017 record date; and
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If we cannot verify that you are a shareholder, your designee will not be admitted to the meeting.
If you are hearing impaired or require other special accommodation due to disability, please contact our Corporate Secretary prior to the meeting to indicate the accommodations that you will need.
You may do so by writing to Weyerhaeuser Company, Attention: Corporate Secretary, 220 Occidental Avenue South, Seattle, WA 98104 or sending an email to CorporateSecretary@weyerhaeuser.com.
No banners, placards, signs, literature for distribution, cameras, recording equipment, electronic devices, large bags, briefcases or packages will
be permitted in the annual meeting.
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ITEM 1. ELECTION OF DIRECTORS
All directors elected at the annual meeting will be elected for a term of one year. Our board of directors currently has 13 members. John I.
Kieckhefer and David P. Bozeman are retiring from the Board of Directors and therefore have not been nominated to stand for re-election. Under our Bylaws, the board of directors is authorized to fix the number
of directors within the range of 9 to 13 members. The 11 persons identified below are nominated to be elected as directors at the 2017 annual meeting for one-year terms expiring at the 2018 annual meeting. All
of the nominees were elected as directors by shareholders at the 2016 annual meeting for a one-year term expiring at the 2017 annual meeting.
Unless a shareholder instructs otherwise on the proxy card, it is intended that the shares represented by properly signed proxies will be voted for the persons nominated by the board of directors.
The board of directors anticipates that the listed nominees will be able to serve, but if at the time of the meeting any nominee is unable or unwilling to serve, the proxy holders may vote such shares at their discretion for a substitute nominee.
The biography of each of the nominees below contains information regarding the individuals service as a director, business
experience, director positions held currently or at any time during the last five years, and information regarding their experiences, qualifications, attributes or skills that caused the Governance and Corporate Responsibility Committee and the
board of directors to determine that the person should serve as a nominee for director of the Company for 2017.
The board of directors recommends that shareholders vote FOR the election of each of
the following directors.
NOMINEES FOR ELECTION
Mark A. Emmert, 64, a director of the Company since 2008, has been the president of the National Collegiate Athletic Association since 2010. He served as president of the University of Washington in Seattle,
Washington, from 2004 to 2010; as chancellor of Louisiana State University from 1999 to 2004; and chancellor and provost of the University of Connecticut from 1994 to 1999. Prior
to 1994, he was provost and vice president for Academic Affairs at Montana State University and held faculty and administrative positions at the University of Colorado. He also is a director of
Expeditors International of Washington, Inc. (global logistics services). He previously served on the board of directors of Omnicare, Inc. (healthcare services) until 2015. He is a Life Member of the Council on Foreign Relations and is a Fellow of
the National Academy of Public Administration. He has also been a Fulbright Fellow, a Fellow of the American Council on Education and served on many non-profit boards. He is an experienced leader of major
organizations, with strong skills in government and international relations, strategic planning and public company executive compensation.
Rick R. Holley, 65, a director of the Company and
chairman of the board of directors since February 2016, was the president and chief executive officer of Plum Creek from 1994 to 2013 and continued to serve as chief executive officer until February 2016. From 1989 to 1994, Mr. Holley
served as Plum Creeks chief financial officer. He previously served on the board of directors of Avista Corporation (electric and natural gas utility) until 2014 and as a director and chairman of the board of Plum Creek (timber) until February
2016. Mr. Holley, one of the longest tenured chief executive officers in the timber industry, has a deep and broad understanding of the Companys industry and business lines, as well as experience in strategic planning and finance.
Sara Grootwassink Lewis, 49, a director of the Company since February 2016, founded, and is the chief executive officer of, Lewis Corporate Advisors, LLC (capital markets advisory firm). From 2002 to 2009, she was
chief financial officer of Washington Real Estate Investment Trust Company (equity real estate investment trust). Ms. Grootwassink Lewis also serves on the board of directors of PS Business Parks, Inc. (commercial real estate), and Sun Life
Financial Inc. (financial services). She was a member of the board of directors of Plum Creek (timber) until February 2016, Adamas Pharmaceuticals, Inc. (specialty pharmaceuticals) until June 2016 and CapitalSource, Inc. (commercial lending) until
its acquisition in 2014. Ms. Grootwassink Lewis is a member of the Public Company Accounting Oversight Board Standing Advisory Group, the Board of Trustees of The
8
Brookings Institution, and a member of the Leadership Board of the United States Chamber of Commerce Center for Capital Markets Competitiveness. Ms. Grootwassink Lewis has extensive
executive, financial and real estate industry experience, having served as a senior executive of a publicly traded REIT. Ms. Grootwassink Lewis is also a chartered financial analyst.
John F. Morgan, Sr., 70, a director of the Company since
February 2016, has owned and managed Morgan Timber, LLC (a private timberland and real estate management and development company) since 2001. He has also owned and managed South Coast Commercial, LLC (a real estate investment firm) since 2009.
Mr. Morgan previously held positions in general banking and public securities investment management at First Orlando Corporation (Sun Trust) from 1969 to 1972 and Citizens & Southern Corporation (Bank of America) from 1973 to 1978. He
later helped found INVESCO Capital Management (global money management), where he served from 1979 to 2000. He served on the board of directors of Plum Creek (timber) until February 2016 and Post Properties, Inc. (equity real estate investment
trust) until its merger in December 2016. Mr. Morgan has extensive experience in the timber industry, as well as in banking, finance and capital markets.
Nicole W. Piasecki, 54, a director of the Company since
2003, has been vice president and general manager of the Propulsion Systems Division of Boeing Commercial Airplanes (aerospace) since March 2013. Previously she served as executive vice president of Business Development and Strategic Integration for
Boeing Commercial Airplanes from 2010 to March 2013; president of Boeing Japan from 2006 to 2010; vice president of Business Strategy & Marketing for Boeing Commercial Airplanes, from 2003 to 2006; vice president of Sales, Leasing Companies
for Boeing Commercial Airplanes from 2000 until January 2003; and served in various positions in engineering, sales, marketing, and business strategy for the Commercial Aircraft Group from 1992. She is Vice Chairman of Seattle University in Seattle,
a former director of the Seattle Branch Board of Directors for the Federal Reserve Bank, and a former member of the Board of Governors, Tokyo, of the American Chamber of Commerce of Japan, and the Federal Aviations Administration
Advisory Council. She has extensive executive experience in capital intensive industries, sales and marketing, strategic planning and international operations and relations.
Marc F. Racicot, 68, a director of the Company since February 2016, is an attorney and served as president and chief executive officer of the American Insurance Association (property-casualty insurance trade
organization) from 2005 until 2009. From 2001 to 2005, he was an attorney at the law firm of Bracewell & Giuliani, LLP. He is a former Governor (1993 to 2001) and Attorney General (1989 to 1993) of the state of Montana. Mr. Racicot was
appointed by President Bush to serve as the Chairman of the Republican National Committee from 2002 to 2003, and he served as Chairman of the Bush/Cheney Re-election Committee from 2003 to 2004. He presently
serves on the board of directors of Avista Corporation (electric and natural gas utility) and Massachusetts Mutual Life Insurance Company (insurance). He previously served on the board of directors of Plum Creek (timber) until February 2016.
Mr. Racicot has extensive experience in government and the interaction between government and large, complex business organizations. As an experienced lawyer, he also has valuable skill and background in the areas of regulatory and operational
risk oversight.
Lawrence A. Selzer, 57, a director of the Company since February 2016 has served as the president and chief executive officer of The Conservation Fund (one of the nations premiere environmental non-profit organizations) since 2001. He previously served on the board of directors of Plum Creek (timber) until February 2016. As chief executive officer of a large conservation organization, Mr. Selzer has
experience and expertise in the areas of conservation procurement, conservation finance, land acquisition and disposition, and real estate management. He has experience managing
and overseeing a large, complex, and geographically diverse environmental conservation organization.
Doyle R. Simons, 53, has been president and chief
executive officer of the Company since August 2013 and a director of the Company since June 2012. He had been previously appointed chief executive officer-elect and an executive officer of
the Company in June 2013. He served as chairman
9
and chief executive officer of Temple-Inland, Inc. (forest products) from 2008 until February of 2012 when it was acquired by International Paper Company. Previously, he held various management
positions with Temple-Inland, including executive vice president from 2005 through 2007 and chief administrative officer from 2003 to 2005. Prior to joining Temple-Inland in 1992, he practiced real estate and banking law with Hutcheson and Grundy,
L.L.P. He also serves on the board of directors for Fiserv, Inc. (financial services technology). He has extensive experience in managing forest products companies and capital intensive industries, with strong skills in corporate finance, executive
compensation and strategic planning.
D. Michael
Steuert, 68, a director of the Company since 2004, was senior vice president and chief financial officer for Fluor Corporation (engineering and construction) from 2001 until his
retirement in 2012. He served as senior vice president and chief financial officer at Litton Industries Inc. (defense electronics, ship construction and electronic technologies) from 1999 to 2001 and as a senior officer and chief financial officer
of GenCorp Inc. (aerospace, propulsion systems, vehicle sealing systems, chemicals and real estate) from 1990 to 1999. He also serves as a director of LNG Ltd. (owner and developer of liquefied natural gas projects) and Great Lakes Dredge &
Dock Corporation (dock and dredging infrastructure solutions). He previously served on the board of directors of Prologis, Inc., (industrial real estate) until 2015. Mr. Steuert was formerly a member of the National Financial Executives
Institute and the Carnegie Mellon Council on finance. He has extensive executive experience in corporate finance and accounting, managing capital intensive industry operations, natural resources development and strategic planning.
Kim Williams, 61, a director of the Company since 2006, was senior vice president and associate director of global industry research for Wellington
Management Company LLP (investment management) from 2001 to 2005, was elected a partner effective in 1995 and held various management positions with Wellington from 1986 to 2001. Prior to joining
Wellington, she served as vice president, industry analyst for Loomis, Sayles & Co., Inc (investment management) from 1982 to 1986. She is also a director of E.W. Scripps Company (diverse media), Xcel Energy Inc. (utilities), and MicroVest
(asset management firm). She is a member of the Womens Health Leadership Council of Brigham and Womens Hospital in Boston, Massachusetts, a member of the board of Oxfam America (global antipoverty agency), and president of the board of
trustees of Concord Academy, Concord, Massachusetts. She has extensive experience in corporate finance, strategic planning and international operations.
Charles R. Williamson, 68, a director of the Company
since 2004, was the executive vice president of Chevron Corporation (international oil and gas) from mid-2005 until his retirement in December 2005. Mr. Williamson served as Weyerhaeusers chairman
of the board from 2009 until February 2016. He was chairman and chief executive officer of Unocal Corporation (oil and natural gas) until its acquisition by Chevron Corporation in 2005. He served as Unocal Corporations executive vice
president, International Energy Operations, from 1999 to 2000; group vice president, Asia Operations, from 1998 to 1999; group vice president, International Operations from 1996 to 1997. He is also lead director of PACCAR Inc. (manufacturer of
high-quality trucks) and is a director of Greyrock Energy (gas transformation). Mr. Williamson previously served as director and chairman of the board of Talisman Energy Inc. (oil and gas) until 2015. He has extensive executive experience in
corporate finance, management of capital intensive operations, development of natural resources, technology, international operations, strategic planning and public company executive compensation.
10
BOARD OF DIRECTORS AND COMMITTEE INFORMATION
DIRECTOR INDEPENDENCE; BOARD OPERATION AND LEADERSHIP
The Companys Governance Guidelines require that a majority of the board must at all times be independent directors, as defined from time to time by law, the listing requirements of the New
York Stock Exchange and any specific requirements established by the board. You can find the Companys Governance Guidelines on our website at www.weyerhaeuser.com by clicking on Investors at the top of the page, then
Corporate Governance and then Governance Guidelines.
The Companys board of directors has determined that
each of the Companys directors with the exception of Mr. Holley, the chairman of the board of directors, and Mr. Simons, the Companys president and chief executive officer, is independent within the meaning of the listing
requirements established by the New York Stock Exchange. The board determined that Mr. Simons is not independent because he is the president and chief executive officer of the Company and that Mr. Holley is not independent because he was
the chief executive officer of Plum Creek prior to the Plum Creek merger. The independent directors meet regularly in separate executive session.
The Company separates the positions of chairman of the board and chief executive officer in recognition of the differences between the two roles. The chief executive officer is responsible for the
strategic direction and day-to-day leadership and performance of the Company. The non-executive chairman of the board, in
consultation with the chief executive officer, provides oversight, direction and leadership to the board, sets the agenda for and presides over meetings of the board, presides at our meetings of shareholders, facilitates communication among our
directors and between management and the board, and provides input to the Governance and Corporate Responsibility Committee and Compensation Committee, as appropriate, with respect to our annual board self-evaluation process, succession planning for
our management and board of directors, and the performance evaluation process for our chief executive officer. The Company believes that this separation of roles provides more effective monitoring and objective
evaluation of the chief executive officers performance and strengthens the boards independent oversight of the Companys performance and governance standards. It also allows the
board to draw on the leadership skills and business experience of two persons, the chairman of the board and the chief executive officer.
The board has determined that our non-executive chairman is not an independent director; therefore,
Mr. Williamson was appointed to serve as lead independent director. The lead independent director serves as chairman of the Executive Committee and presides at all meetings of the board of directors or committees of the board at which the non-executive chairman is not present or able to preside, including executive sessions of the independent directors.
SUCCESSION PLANNING
The board is actively
engaged and involved in succession planning. The board reviews the Companys people development activities in support of its business strategy regularly. This includes a detailed discussion of the Companys leadership bench and
succession plans with a focus on key positions at the senior officer level.
As part of these activities, the board engages in a robust
CEO succession planning process, including reviewing development plans for potential CEO candidates and engaging with potential successors at board meetings and in less formal settings to allow directors to personally assess candidates.
RISK OVERSIGHT
The board is actively involved in the oversight of risks that could affect the Company. This oversight is conducted primarily through committees of the board, as described in the summaries of each
of the committees below and in the charters of each of the committees. The full board has retained responsibility for general oversight of risks. The board satisfies this responsibility through reports by each committee chair regarding the
committees considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within the Company. The board believes that this structure provides the appropriate leadership to
help ensure effective risk oversight by the board.
11
The Company employs robust strategic planning and enterprise risk management processes. The
Company has an integrated risk management
process, conducts a review of risk every year and reports to the board of directors on the results of the review. This review includes an identification of specific risks, ranking of the likelihood
and magnitude of effect of those risks, scenario analysis, review of risk appetite, and a review of mitigation plans. The Company analyzes risk areas that have the potential to materially affect its businesses and integrates this information into
its planning and its reports to the board of directors.
In addition to the annual enterprise risk management process, we conduct
internal audits and audits by our independent public accounting firm. We have also established a robust compliance
and ethics program, as well as disciplined processes designed to oversee our sustainability strategy and environmental and safety performance. You can find a description of our risk management
processes on the Companys website at www.weyerhaeuser.com by clicking on Sustainability at the top of the page, then Governance and then Risk Management.
BOARD AND COMMITTEE MEMBERS
The current members of the Companys board of directors and their committee assignments are set forth in the following table. All directors were elected by shareholders at the 2016 annual
meeting.
|
|
|
|
|
|
|
|
|
Name |
|
Executive |
|
Audit |
|
Compensation |
|
Governance and
Corporate
Responsibility |
David P. Bozeman |
|
|
|
|
|
|
|
✓ |
Mark A. Emmert |
|
|
|
|
|
✓ |
|
|
Rick R. Holley |
|
✓ |
|
|
|
|
|
|
John I. Kieckhefer |
|
|
|
|
|
✓ |
|
|
Sara Grootwassink
Lewis |
|
|
|
✓ |
|
|
|
|
John F. Morgan,
Sr. |
|
|
|
✓ |
|
|
|
|
Nicole W. Piasecki |
|
|
|
|
|
✓ |
|
✓* |
Marc F. Racicot |
|
|
|
✓ |
|
|
|
✓ |
Lawrence A. Selzer |
|
|
|
|
|
✓ |
|
✓ |
Doyle R. Simons |
|
✓ |
|
|
|
|
|
|
D. Michael Steuert |
|
|
|
✓* |
|
|
|
|
Kim Williams |
|
|
|
✓ |
|
|
|
✓ |
Charles R.
Williamson |
|
✓* |
|
|
|
✓* |
|
|
BOARD AND COMMITTEE MEETINGS IN 2016
The board of directors currently has four committees that assist in the execution of the boards responsibilities and perform certain functions
for the board: Executive Committee, Audit Committee, Compensation Committee and Governance and Corporate Responsibility Committee.
The following table summarizes meeting information for the board and each of the boards
committees in 2016. The board of directors met on seven occasions in 2016. In 2016, each of the directors attended at least 75% of the total meetings of the board and the committees on which he or she served.
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Meetings |
|
Name |
|
Board of Directors |
|
|
Executive
|
|
|
Audit
|
|
|
Compensation
|
|
|
Governance and Corporate
Responsibility
|
|
Total meetings in
2016 |
|
|
7 |
|
|
|
|
|
|
|
10 |
|
|
|
4 |
|
|
|
3 |
|
12
COMMITTEES OF THE BOARD
Each committee of the board of directors is described below. Each committee has adopted a charter, which you can find on the Companys website
at www.weyerhaeuser.com by clicking on Investors at the top of the page, then Corporate Governance and then Committee Charters and Composition. If you would like to receive a paper copy of any committee
charter, you may request one by writing to Weyerhaeuser Company, Attention: Corporate Secretary, 220 Occidental Avenue South, Seattle, Washington 98104 or by sending an email to CorporateSecretary@weyerhaeuser.com.
Executive Committee
The
board of directors has given the Executive Committee the power and authority to act for the board in the interval between board meetings, except to the extent limited by law and the Companys Articles of Incorporation.
Audit Committee
The Audit
Committee is responsible for assisting the board of directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, and financial reporting practices of the Company, including the Companys
compliance with legal and regulatory requirements, and such other duties as directed by the board of directors. The committee has sole authority for the appointment, compensation and oversight of the Companys independent auditors, including
the approval of any significant non-audit relationship. The board of directors has determined that Mr. Steuert is an audit committee financial expert (as such term is defined under applicable rules of the
Securities and Exchange Commission).
Independence: The board of directors has determined that each member of the Audit Committee
is independent within the meaning of the listing requirements of the New York Stock Exchange.
Risk Oversight: The Audit
Committee is responsible for oversight of Company risks relating to accounting matters, financial reporting and legal and regulatory compliance. To satisfy these oversight responsibilities, the committee separately meets regularly with the
Companys chief accounting officer, director of internal audit, general counsel, KPMG LLP and management. The
committee chair regularly meets between formal committee meetings with the Companys chief accounting officer, director of internal audit and KPMG LLP. The committee also receives regular
reports regarding issues such as the status and findings of audits being conducted by the internal and independent auditors, the status of material litigation, accounting changes that could affect the Companys financial statements and proposed
audit adjustments.
Compensation Committee
The Compensation Committee is responsible for:
|
● |
|
reviewing and approving the strategy and design of the Companys compensation and benefits systems; |
|
● |
|
making recommendations to the board for incentive compensation and equity-based plans; |
|
● |
|
reviewing and making recommendations to the board regarding the compensation of the Companys chief executive officer;
|
|
● |
|
reviewing and approving salaries and incentive compensation of executive officers; |
|
● |
|
administering the Companys equity and cash incentive compensation plans; |
|
● |
|
selecting and regularly reviewing the peer group used for benchmarking compensation for executive officers; |
|
● |
|
reviewing and making recommendations to the board regarding the compensation of the Companys directors; and |
|
● |
|
annually determining the independence of the Compensation Committees compensation consultant and whether the consultants work raises
any conflicts of interest. |
Independence: The board of directors has determined that each member of the
Compensation Committee is independent within the meaning of the listing requirements of the New York Stock Exchange.
Risk
Oversight: The Compensation Committee is responsible for oversight of risks relating to employment policies and the Companys compensation and benefits systems and for annually reviewing these policies and practices to determine whether
they are reasonably likely to have a material adverse effect on the Company. To assist it in satisfying these oversight responsibilities, the committee has retained its own compensation consultant and meets regularly with
13
management to understand the financial, human resources and shareholder implications of compensation decisions being made. The committee chair also regularly meets between formal committee
meetings with management and the committees consultant.
Governance and Corporate Responsibility Committee
The Governance and Corporate Responsibility Committee takes a leadership role in shaping the governance of the Company. It provides oversight and
direction regarding the functioning and operation of the board. It also recommends to the board candidates for nomination and election as directors and director candidates
for election as the chairman of the board. The committee manages the processes used by the board in its self-assessment and its evaluation of the chief executive officer. The committee also provides
oversight of:
|
● |
|
senior management succession planning; |
|
● |
|
sustainability strategy and performance; |
|
● |
|
environmental and safety issues; |
|
● |
|
ethics and business conduct; |
|
● |
|
political activities and governmental issues; and |
|
● |
|
human resources practices. |
Independence: The board of directors has determined that each member of the Governance and Corporate Responsibility Committee is independent within the meaning of the listing requirements of
the New York Stock Exchange.
Risk Oversight: The Governance and Corporate Responsibility Committee is responsible for oversight
of risks relating to management and board succession planning, the Companys sustainability and environmental practices and policies, stakeholder responses to the Companys ethics and business practices, the Companys political
activities and governmental policy development that could affect Company operations and strategic decisions, and employee and investor responses to the Companys human resources practices. To satisfy these oversight responsibilities, the
committee receives regular reports from officers of the Company responsible for each of these risk areas on matters such as progress against succession planning programs and goals, trends in risk levels, the employee climate, risk management
activities, and
non-governmental and governmental policies or proposals that could affect Company operations. Because many of these risks could have financial and
reporting implications for the Company, the board and the Governance and Corporate Responsibility Committee have determined that at least one member of the committee must serve concurrently on the Audit Committee.
Governance Guidelines
The
board of directors has documented the governance practices followed by the Company by adopting Governance Guidelines. The Governance Guidelines establish the practices the board of directors follows with respect to board function and operation,
Company operations, board organization and composition and board conduct. The Governance Guidelines are available on the Companys website at www.weyerhaeuser.com by clicking on Investors at the top of the page, then
Corporate Governance and then Governance Guidelines. If you would like to receive a paper copy, you may request one by writing to Weyerhaeuser Company, Attention: Corporate Secretary, 220 Occidental Avenue South, Seattle,
Washington 98104 or by sending an email to CorporateSecretary@weyerhaeuser.com.
CONSIDERATION OF
DIRECTOR NOMINEES
Director Qualifications
The board has codified standards for directors in the boards Governance Guidelines. The Governance Guidelines provide that the board should encompass a diverse range of talent, skill and
expertise sufficient to provide sound and prudent oversight and guidance with respect to the Companys operations and interests. The Governance Guidelines also provide that at all times a majority of the board must be independent
directors as defined from time to time by the listing requirements of the New York Stock Exchange and any specific requirements established by the board. Each director also is expected to:
|
● |
|
exhibit high standards of integrity, commitment and independence of thought and judgment; |
|
● |
|
use his or her skills and experiences to provide independent oversight to the business of the Company; |
|
● |
|
participate in a constructive and collegial manner;
|
14
|
● |
|
be willing to devote sufficient time to carrying out the duties and responsibilities of a director; |
|
● |
|
devote the time and effort necessary to learn the business of the Company and the board; and |
|
● |
|
represent the long-term interests of all shareholders. |
In addition, the board of directors has determined that the board as a whole must have the right diversity, mix of characteristics, talents, skills and expertise to provide sound and prudent
guidance with respect to the Companys operations and interests. The board believes it should be comprised of persons with skills in areas such as:
|
● |
|
development of strategies for sustainability; |
|
● |
|
human resources and diversity; |
|
● |
|
relevant industries, especially natural resource companies; |
|
● |
|
leadership of large, complex organizations; |
|
● |
|
government and governmental relationships; and |
|
● |
|
information technology. |
In addition to the targeted skill areas, the Governance and Corporate Responsibility Committee looks for a strong record of achievement in key knowledge areas that it believes are critical for
directors to add value to a board, including:
|
● |
|
Strategy formulation of corporate strategies, knowledge of key competitors and global markets; |
|
● |
|
Leadership skills in coaching senior executives and the ability to assist the CEO in his or her development;
|
|
● |
|
Organizational Issues understanding of strategy implementation, change management processes, group effectiveness and organizational
design; |
|
● |
|
Relationships understanding how to interact with governments, investors, financial analysts, and communities in which the Company
operates; |
|
● |
|
Finance and Operations understanding of finance matters, financial statements and auditing procedures, technical expertise, legal
issues, information technology and marketing; and
|
|
● |
|
Ethics the ability to identify and raise key ethical issues concerning the activities of the Company and senior management as they
affect the business community and society. |
The board is committed to assessing its own performance as a board in
order to identify its strengths as well as areas in which it may improve its performance. As part of its self-assessment process, the board annually determines the diversity of specific skills and characteristics necessary for the optimal
functioning of the board in its oversight of the Company over both the short- and long-term.
The Governance and Corporate
Responsibility Committee has adopted a policy regarding the director selection process. The policy requires the committee to assess the skill areas currently represented on the board and those skill areas represented by directors expected to retire
or leave the board in the near future against the target skill areas established annually by the board, as well as recommendations of directors regarding skills that could improve the overall quality and ability of the board to carry out its
function. The Governance and Corporate Responsibility Committee then establishes the specific target skill areas or experiences that are to be the focus of a director search, if necessary. Specific qualities or experiences could include matters such
as experience in the Companys industry, financial or technological expertise, experience in situations comparable to the Companys (e.g., companies that have grown through acquisitions, or companies that have restructured their asset
portfolios successfully), leadership experience, relevant geographical experience, and diversity in personal experience and worldview arising from differences of culture and circumstance. The effectiveness of the boards diverse mix of skills
and experiences is considered as part of each board self-assessment.
Identifying and Evaluating Nominees for Directors
The Governance and Corporate Responsibility Committee uses a variety of methods for identifying and evaluating nominees for
director. The committee regularly assesses the mix of skills and industries currently represented on the board, whether any vacancies on the board are expected due to retirement or otherwise, the skills
15
represented by retiring directors, and additional skills highlighted during the board self-assessment process that could improve the overall quality and ability of the board to carry out its
responsibilities. In the event vacancies are anticipated, or arise, the Governance and Corporate Responsibility Committee considers various potential candidates for director. Candidates may come to the attention of the committee through current
board members, professional search firms, shareholders or other persons. The committee or a subcommittee may interview potential candidates to further assess the qualifications possessed by the candidates and their ability to serve as a director.
The committee then determines the best qualified candidates based on the established criteria and recommends those candidates to the board for election at the next annual meeting of shareholders.
Shareholder Nominees
The
Governance and Corporate Responsibility Committee will consider nominees for the board of directors recommended by shareholders. If a shareholder wishes to recommend a nominee, he or she should write to the Governance and Corporate Responsibility
Committee, care of the Corporate Secretary, Weyerhaeuser Company, 220 Occidental Avenue South, Seattle, Washington 98104, specifying the name of the nominee and the nominees qualifications for membership on the board of directors.
Recommendations will be brought to the attention of and be considered by the Governance and Corporate Responsibility Committee.
The
Companys Bylaws establish procedures that must be followed for shareholder nominations of directors. See Future Shareholder Proposals and Nominations below for more information.
SHAREHOLDER AND INTERESTED PARTY COMMUNICATIONS
Communications to the board of directors may be sent to Weyerhaeuser Company, Attention: Corporate Secretary, 220 Occidental Avenue South, Seattle, Washington 98104 and marked to the attention of
the board or any of its committees, the independent directors or individual directors. Communications also may be sent by email to CorporateSecretary@weyerhaeuser.com.
ANNUAL MEETING ATTENDANCE
The directors are expected to attend the Companys annual meetings, if possible. All of the directors serving at the time of the 2016 annual
meeting attended the 2016 annual meeting.
DIRECTORS COMPENSATION
The following table shows the annual compensation of our non-employee directors for 2016, which consisted of
annual retainer fees paid in cash, including the amounts for serving as chair of a board committee, and restricted stock unit awards. Directors fees are paid annually for the period commencing on the date of their election or appointment and
ending on the date of the next annual meeting. All values are reported in U.S. dollars.
|
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|
|
|
|
|
Name |
|
Fees Earned or Paid in Cash (1) ($) |
|
Stock Awards (2) ($) |
|
Total ($) |
David P. Bozeman |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
Mark A. Emmert |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
Rick R. Holley |
|
|
|
160,000 |
|
|
|
|
179,990 |
|
|
|
|
339,990 |
|
John I. Kieckhefer |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
Sara Grootwassink
Lewis |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
John F. Morgan,
Sr. |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
Nicole W. Piasecki |
|
|
|
115,000 |
|
|
|
|
119,973 |
|
|
|
|
234,973 |
|
Marc F. Racicot |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
Lawrence A. Selzer |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
D. Michael Steuert |
|
|
|
120,000 |
|
|
|
|
119,973 |
|
|
|
|
239,973 |
|
Kim Williams |
|
|
|
100,000 |
|
|
|
|
119,973 |
|
|
|
|
219,973 |
|
Charles R.
Williamson |
|
|
|
120,000 |
|
|
|
|
119,973 |
|
|
|
|
239,973 |
|
(1) |
The amounts for each of Mr. Steuert (Audit) and Mr. Williamson (Compensation) include cash compensation of $20,000 for their service as chair of
their respective committees during 2016. The amount for Ms. Piasecki (Governance and Corporate Responsibility) includes cash compensation of $15,000 for her service as chair during 2016. Of the amounts of cash compensation earned, the following
directors elected to defer cash fees into common stock equivalent units under our Fee Deferral Plan for Directors and were credited with the following common stock equivalent units: Mr. Kieckhefer$100,000, or 3,284 units;
Ms. Lewis$100,000, or 3,284 units; and Mr. Williamson$120,000, or 3,940 units. Amounts deferred into common stock equivalent units under the Fee Deferral Plan for Directors will be paid following the directors termination
of service in the form of shares of the Companys common stock. |
(2) |
The amounts in this column reflect the grant date fair value of director compensation paid in the form of restricted stock units
(RSUs). The grant date fair value was computed in accordance with Financial Accounting Standards Board
|
16
|
Accounting Standards Codification Topic 718, and for each director is based on a grant date that is the date of the Companys 2016 annual meeting. The number of RSUs awarded is based on the
amount of the fees to be paid in RSUs divided by the average of the high and the low price of the Companys common stock on the date of grant as reported by The Wall Street Journal for the New York Stock Exchange Composite Transactions. The
average of the high and low price on the grant date of May 20, 2016 was $30.45. Each of the directors other than the chairman of the board received $119,973 of RSUs in May 2016, or 3,940 RSUs. Mr. Holley, as chairman of the board, received
$179,990 of RSUs, or 5,911 RSUs. The following directors chose to defer RSUs into common stock equivalent units under our Fee Deferral Plan for Directors and were credited with the following common stock equivalent units:
Mr. Kieckhefer3,940 units; and Ms. Lewis3,940 units. Amounts deferred into common stock equivalent units under the Fee Deferral Plan for Directors will be paid following the directors termination of service in the form of
shares of the Companys common stock. |
Non-Employee Director
Compensation Program for 2016
The board believes that the level of non-employee director
compensation should be based on board and committee responsibilities and be competitive with comparable companies. In addition, the board believes that a significant portion of non-employee director
compensation should be awarded in the form of equity to align director interests with the long-term interests of shareholders.
In 2016,
continuing non-employee directors, other than the chairman of the board, received a base annual retainer fee of $220,000, of which $120,000 (subject to share rounding) was paid in the form of RSUs and $100,000
was paid in cash. The non-employee director who served as chair of the Governance and Corporate Responsibility Committee received an additional cash retainer fee of $15,000.
Non-employee directors who served as chair of the Audit Committee and Compensation Committee received an additional cash retainer fee of $20,000. No additional fees were paid for attending board or committee
meetings. The non-employee director serving as chairman of the board received an annual retainer of $340,000 of which $180,000 (subject to share rounding) was paid in RSUs and $160,000 was paid in cash.
All retainer fees are paid annually, immediately following the annual shareholders meeting. Directors who are appointed to fill a
vacancy on the board are paid a pro rata amount of the annual retainer immediately following the effective date of
the directors appointment. The Company reimburses non-employee directors for actual travel and out-of-pocket expenses incurred in connection with their service.
The number of RSUs paid to
directors was determined by dividing the dollar amount of the retainer equity award by the average of the high and the low price of Weyerhaeuser Company common stock on the date of grant as reported by The Wall Street Journal for the New York
Stock Exchange Composite Transactions. For May 2016 awards, the average of the high and low price of the Companys common stock on the date of grant was $30.45, which resulted in a grant of 5,911 RSUs for the chairman of the board and 3,940
RSUs for each of the other directors. The RSUs vest over one year and will be settled in shares of the Companys common stock at the one-year anniversary of the date of grant. The RSUs are generally
forfeitable during the one-year vesting period, except that directors who leave the board during the one-year period receive a
pro-rata number of shares on the settlement date. Vesting provisions may be modified by the Compensation Committee or board of directors. RSUs granted to directors are credited with dividends during the one-year vesting period. As the RSUs vest, dividends credited to the RSUs similarly vest. If any RSUs are forfeited, dividends related to the forfeited shares also are forfeited.
Deferral Option for Cash Retainer
Directors may elect to defer all or a portion of the annual cash retainer. A director who elects to defer all or a portion of the cash retainer has the option of deferring the designated amount into
common stock equivalent units or into an interest-bearing account (with interest at 120% of the applicable federal long-term rate (AFR) as published by the IRS in January of each plan year), in each case under the Fee Deferral Plan for Directors.
The number of common stock equivalent units credited to a directors account will be determined by dividing any cash being deferred into common stock equivalent units by the average of the high and the low price of the Companys common
stock on the date such fees would have been paid in cash. Deferred stock equivalent units will be paid in the form of shares of the Companys common stock at the end of the deferral period, but no earlier than the directors separation
from service unless permitted by Section 409A of the Internal Revenue Code. During
17
the deferral period, common stock equivalent units are credited with dividends, which are paid along with the deferred shares at the end of the deferral period in the form of shares of the
Companys common stock. Amounts deferred into the interest-bearing account will be paid in cash at the end of the deferral period, but no earlier than the directors separation from service.
Deferral Option for Retainer Equity Awards
Directors may elect to defer receipt of all or a portion of their RSUs. Any deferred RSUs are deferred into common stock equivalent units under the Fee Deferral Plan for Directors. RSUs deferred
into common stock equivalent units are paid in the form of shares of the Companys common stock at the end of the deferral period, but no earlier than the directors separation from service unless permitted by Section 409A of the
Internal Revenue Code. During the deferral period, common stock equivalent units are credited with dividends, which are paid along with the deferred shares at the end of the deferral period in the form of shares of the Companys common stock.
Share Ownership Guidelines for Directors
The board of directors has adopted share ownership guidelines under which directors are
required to own shares of Weyerhaeuser Company common stock valued at five times their cash compensation. Until the ownership requirement has been satisfied, a director may sell shares issuable
upon vesting of RSUs to pay the taxes due upon vesting, but must otherwise hold 100% of the net shares granted to him or her. RSUs or cash retainer fees deferred into common stock equivalent units under the Fee Deferral Plan for Directors are
included for purposes of determining whether a director has satisfied the share ownership requirement. The Compensation Committee annually reviews the compliance of the directors with the share ownership guidelines.
Director Compensation Review Practices
The Compensation Committee is responsible for annually reviewing the Companys non-employee director compensation practices in relation to comparable
companies. Any changes to be made to non-employee director compensation practices must be recommended by the Compensation Committee for approval by the board of directors. The Compensation Committee reviewed non-employee director compensation at its May 2016 meeting, and recommended the compensation levels described above for 2016. This recommendation was approved by the board of directors at its May 2016 meeting.
18
BENEFICIAL OWNERSHIP OF COMMON SHARES
DIRECTORS AND NAMED EXECUTIVE OFFICERS
The following table shows, as of February 28, 2017, the number of common shares beneficially owned by each current director and named executive officer, and by all current directors and all
executive officers as a group, as well as the number of common stock equivalent units owned by each current director and named executive officer and by all current directors and all executive
officers as a group under the Companys deferred compensation plans. Percentages of total beneficial ownership have been calculated based upon 750,968,668 shares, which was the total number of common shares outstanding as of February 28,
2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Individual or Identity of Group |
|
Voting and or Dispositive Powers (number of common shares)
(1)(2)(3)(4)(5)(6)(7)
|
|
|
Percent of Class (common shares) |
|
|
Common Stock Equivalent Units (8) |
|
Patricia M. Bedient |
|
|
721,206 |
|
|
|
* |
|
|
|
74,515 |
|
Adrian M. Blocker |
|
|
110,570 |
|
|
|
* |
|
|
|
|
|
David P. Bozeman |
|
|
6,393 |
|
|
|
* |
|
|
|
|
|
Mark A. Emmert |
|
|
9,846 |
|
|
|
* |
|
|
|
21,788 |
|
Russell S. Hagen |
|
|
123,313 |
|
|
|
* |
|
|
|
|
|
Rick R. Holley |
|
|
1,002,265 |
|
|
|
* |
|
|
|
|
|
Rhonda D. Hunter |
|
|
129,717 |
|
|
|
* |
|
|
|
16,340 |
|
John I. Kieckhefer |
|
|
6,479,295 |
|
|
|
* |
|
|
|
179,960 |
|
James A. Kilberg |
|
|
64,877 |
|
|
|
* |
|
|
|
|
|
Sara Grootwassink Lewis |
|
|
12,406 |
|
|
|
* |
|
|
|
7,450 |
|
Thomas Lindquist |
|
|
217,527 |
|
|
|
* |
|
|
|
|
|
John F. Morgan, Sr. |
|
|
39,786 |
|
|
|
* |
|
|
|
|
|
Nicole W. Piasecki |
|
|
193,974 |
|
|
|
* |
|
|
|
59,086 |
|
Marc F. Racicot |
|
|
26,788 |
|
|
|
* |
|
|
|
|
|
Lawrence A. Selzer |
|
|
20,388 |
|
|
|
* |
|
|
|
|
|
Doyle R. Simons |
|
|
677,945 |
|
|
|
* |
|
|
|
13,478 |
|
Catherine I. Slater |
|
|
138,928 |
|
|
|
* |
|
|
|
|
|
D.
Michael Steuert |
|
|
14,620 |
|
|
|
* |
|
|
|
62,062 |
|
Kim Williams |
|
|
18,977 |
|
|
|
* |
|
|
|
60,129 |
|
Charles R. Williamson |
|
|
27,514 |
|
|
|
* |
|
|
|
137,627 |
|
Directors and executive officers as a group (19 persons) |
|
|
9,026,204 |
|
|
|
1.2 |
|
|
|
562,884 |
|
* |
Denotes amount is less than 1% |
(1) |
Includes the number of shares that could be acquired within 60 days after February 28, 2017 pursuant to outstanding stock options, as follows:
Ms. Bedient, 537,903 shares; Mr. Blocker, 82,462 shares; Mr. Hagen, 60,800 shares; Mr. Holley, 448,000 shares; Ms. Hunter, 98,356 shares; Mr. Simons, 479,037 shares; Ms. Slater, 112,505 shares, and of the directors
and executive officers as a group, 1,221,216 shares. |
(2) |
For all executive officers as a group, includes a total of 1,011 shares representing the number of RSUs that vest within 60 days after February 28, 2017.
|
(3) |
For all executive officers as a group, includes a total of 2,018 shares representing the number of PSUs that vest within 60 days after February 28, 2017.
|
(4) |
Includes shares for which certain of the directors and nominees share voting and dispositive powers with one or more other persons as follows:
Mr. Kieckhefer, 5,161,121 shares; and Ms. Piasecki, 148,754 shares. |
(5) |
Beneficial ownership of the common shares is disclaimed by certain of the persons listed as follows: Mr. Kieckhefer, 5,507,493 shares and
Ms. Piasecki, 155,648 shares. |
19
(6) |
Includes RSUs granted to the directors May 20, 2016 that will vest and be payable on May 20, 2017 in shares of the Companys common stock,
together with dividends credited to those shares as of November 18, 2016, as follows: Mr. Bozeman, 4,069 shares; Mr. Emmert, 4,069 shares; Mr. Holley, 6,105 shares; Mr. Morgan, 4,069 shares; Ms. Piasecki, 4,069 shares;
Mr. Racicot, 4,069 shares; Mr. Selzer, 4,069 shares; Mr. Steuert, 4,069 shares; Ms. Williams, 4,069 shares; and Mr. Williamson, 4,069 shares. |
(7) |
Amount shown for Ms. Grootwassink Lewis excludes 7,987 shares of common stock that she deferred under the Plum Creek Deferral Plan, for which
Ms. Grootwassink Lewis does not have voting or dispositive power. Ms. Grootwassink Lewis maintains an economic and pecuniary interest in these shares. |
(8) |
Common stock equivalent units held as of February 28, 2017 under the Fee Deferral Plan for Directors or under the Incentive Compensation Plan for
Executive Officers. The common stock equivalent units will be repaid to the director at the end of the deferral period in the form of shares of Company common stock. |
OWNERS OF MORE THAN 5% OF THE COMPANYS COMMON SHARES
The following table shows the number of common shares held by persons known to the Company to beneficially own more than five
percent of its outstanding common shares.
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner |
|
Amount and Nature of Beneficial Ownership |
|
|
Percent of Class (common shares) |
|
BlackRock, Inc. |
|
|
53,433,793(1 |
) |
|
|
7.12 |
% |
55 East 52nd Street New York, NY
10022 |
|
|
|
|
|
|
|
|
The Vanguard Group |
|
|
46,319,568(2 |
) |
|
|
6.17 |
% |
100 Vanguard Blvd. Malvern, PA
19355 |
|
|
|
|
|
|
|
|
(1) |
Based on a Schedule 13G/A dated January 27, 2017 in which BlackRock, Inc. reported that as of December 31, 2016 it had sole voting power over
46,834,856 shares, shared voting power over 1,188 shares, sole dispositive power over 53,432,605 shares and shared dispositive power over 1,188 shares. |
(2) |
Based on a Schedule 13G/A dated February 9, 2017 in which The Vanguard Group reported that as of December 31, 2016 it had sole voting power over
1,173,757 shares, shared voting power over 136,420 shares, sole dispositive power over 45,007,832 shares and shared dispositive power over 1,311,736 shares. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities
Exchange Act of 1934 requires the Companys directors and certain of its officers to file reports of their ownership of Company stock, and of changes in such ownership, with the Securities and Exchange Commission and the New York Stock
Exchange. Based solely on the Companys review of the copies of such reports in its possession and written representations from reporting persons, the Company believes that all of its directors and officers filed all such reports on a
timely basis with respect to transactions during 2016, except that one untimely Form 4 report was filed on behalf of Jeanne M. Hillman, the Companys chief accounting officer, reporting one
transaction involving her acquisition of Weyerhaeuser common shares in connection with the Plum Creek merger.
COMPENSATION
DISCUSSION AND ANALYSIS (CD&A)
EXECUTIVE SUMMARY
Weyerhaeusers executive
compensation programs are designed to align the interests of our executive officers with those of our shareholders. Our compensation philosophy is to provide market-competitive programs that ensure we attract and retain world-class talent, with pay
directly linked to the achievement of short- and long-term business results. The Compensation Committee reviews executive compensation program components, targets and payouts on an annual basis to ensure the strength of our pay-for-performance alignment.
2016 Business Highlights
|
● |
|
We completed the merger with Plum Creek, creating the worlds premier timber, land and forest products company, with more than
13 million acres of productive and diverse timberland. |
|
● |
|
We completed the sale of our Cellulose Fibers business for $2.5 billion. |
|
● |
|
We generated net earnings of $1.027 billion. We also generated net earnings from continuing operations attributable to common shareholders
of $393 million, or $534 million before special items,* on net sales of $6.4 billion. |
|
● |
|
We increased full year Adjusted EBITDA by over 50% to nearly $1.6 billion.*
|
* |
Represents a measure of performance that is calculated and presented other than in accordance with generally accepted accounting principles (GAAP).
See Appendix A for an explanation of these non-GAAP measures, a full reconciliation of these non-GAAP results to our GAAP Net Earnings results, and a brief discussion of why we use these non-GAAP performance measures. |
20
|
● |
|
We captured our merger cost synergies faster than expected, and increased our run rate target by 25% to $125 million.
|
|
● |
|
We delivered on our 2016 operational excellence targets. |
|
● |
|
We returned over $2 billion to shareholders through the repurchase of our common shares. |
|
● |
|
We returned $932 million to common shareholders through dividends. |
|
● |
|
Our five-year total shareholder return (TSR) was 90%, which was the 42nd percentile compared to the TSR of the S&P 500 over the
same period. |
|
● |
|
We were named to the Dow Jones Sustainability World Index for the sixth straight year. |
|
● |
|
We were named one of the Worlds Most Ethical Companies by the Ethisphere Institute for the fifth year in a row.
|
Executive Compensation Practices
Our leading practices include:
✓
|
Stock ownership guidelines for the CEO (6 times salary) and senior vice presidents (2 times salary). Senior officers who have not yet accumulated the required
ownership level must hold 75% of the net shares remaining after vesting of restricted stock units (RSUs) and performance share units (PSUs). |
✓
|
An executive compensation program designed and managed to mitigate undue risk. |
✓
|
A clawback policy for incentive compensation recovery. |
✓
|
A policy prohibiting hedging and pledging of company stock by directors and officers. |
✓
|
An independent compensation consultant, Frederic W. Cook & Co., Inc. (Cook & Co.), which advises the Compensation Committee.
|
✓
|
Double trigger accelerated vesting of our long-term incentive equity awards upon a change of control. |
✓
|
No executive perquisites other than limited relocation-related benefits. |
Compensation Highlights
Pay for Performance. Our compensation
program is designed to reflect a strong pay-for-performance alignment that will result in superior financial results and create long-term value for shareholders. We tie
pay to performance by measuring individual, business and company performance; using performance to differentiate the amount of incentive compensation; and allocating more reward dollars to higher performers.
Annual Incentive Plan. Our short-term annual incentive plan is funded based primarily
on the absolute financial performance of each individual business against pre-determined targets and partly based on the performance of the business against certain
pre-determined metrics relating to operational excellence, such as financial and competitive performance, cost competitiveness, reliability, cash generation and performance against strategic goals such as
people development. Based on their absolute financial performance and performance against their business metrics, bonuses for each business segment funded at the following levels in 2016:
|
|
|
|
|
Business Segment |
|
Funding Times Target |
|
Timberlands |
|
|
1.25 |
|
Real Estate, Energy &
Natural Resources |
|
|
1.35 |
|
Wood Products |
|
|
1.75 |
|
Corporate Staff |
|
|
1.47 |
|
As a result of our financial performance and achievement of several strategic goals in 2016, the current
named executive officers employed at year-end received payments under our annual incentive cash bonus plan ranging from 148.7% to 183.9% of target levels for 2016. These strategic goals included completion of
the Plum Creek merger and related integration activities, completion of the Cellulose Fibers divestiture, execution of our share repurchase program and other strategic capital allocation initiatives, exceeding our cost synergy savings targets and
significant progress against our operational excellence and people development goals. For more discussion, see Compensation ComponentsDetermination of CompensationShort-Term Incentive Plan on page 27.
Long-Term Incentive Plan. Long-term incentive grants for executive officers in 2016 included a mix of forms of equity, with 50% of
the value of the award granted as PSUs, 25% of the value granted as stock options, and 25% of the value granted as RSUs, consistent with the long-term incentive grant mix since 2011. The Compensation Committee has decided to eliminate stock options
from long-term incentive grants, beginning with the 2017 long-termincentive compensation grant cycle. PSUs granted in 2016 will be earned within a range from 0 to 150% of the target number of PSUs based on three independent performance measures: the
21
Companys three-year total shareholder return (TSR) relative to companies in the S&P 500 Index (35% weighting); the Companys three-year TSR relative to a designated
industry peer group (35% weighting); and achievement of a cost synergy target in connection with the Plum Creek merger over a one-year period (30% weighting). The Companys performance against each
performance goal will be measured separately to determine actual percentile performance and the corresponding PSU payout percentage, multiplied by the appropriate weighting factor. For more discussion, see Compensation
ComponentsDetermination of CompensationLong-Term Incentive Compensation on page 31.
Shareholder Engagement
Shareholder Communication.
We believe that maintaining an active dialogue with our shareholders is important to our long-term success. We value the opinions of our shareholders and other stakeholders and welcome their views
throughout the year on key issues, such as portfolio strategy, capital allocation, corporate governance, transparent public disclosure, sustainability, corporate social responsibility and compensation.
How the Compensation Committee Considered the 2016 Advisory Vote on Our Executive Compensation Program.
We received a level of support greater than 95% in 2016 for our shareholder advisory vote on say-on-pay and a 97% level of support in 2015. In general, we believe our shareholders support our overall compensation philosophy, programs and practices. Our Compensation Committee and board of
directors value the opinions of our shareholders and consider those opinions when making compensation decisions. To the extent we receive a significant vote against the compensation of our named executive officers, we will consider our
shareholders concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
NAMED EXECUTIVE OFFICERS
Our named executive officers (NEOs) for 2016 were:
|
|
|
Executive Officer |
|
Title |
Doyle R. Simons |
|
President and Chief Executive Officer |
Russell S. Hagen |
|
Senior Vice President and Chief Financial Officer |
Patricia M. Bedient |
|
Former Executive Vice President and Chief Financial Officer |
Adrian M. Blocker |
|
Senior Vice President, Wood Products |
Rhonda D. Hunter |
|
Senior Vice President, Timberlands |
James A. Kilberg |
|
Senior Vice President, Real Estate, Energy & Natural
Resources |
Thomas M. Lindquist |
|
Former Executive Vice President, Real Estate, Energy & Natural
Resources |
Catherine I. Slater |
|
Former Senior Vice President, Cellulose Fibers |
COMPENSATION PHILOSOPHY AND PRINCIPLES
Our compensation philosophy is to motivate and reward employees for performance that will result in superior financial results and create long-term
value for shareholders. We do this by generally targeting base pay at or slightly below the competitive median and targeting incentive pay, which is tied directly to performance, at or slightly above the competitive median. We tie pay to performance
by:
|
● |
|
measuring individual, business and company performance; |
|
● |
|
using performance to differentiate the amount of incentive compensation; and |
|
● |
|
allocating more reward dollars to higher performers. |
Our goal is to ensure Weyerhaeusers executive compensation programs are competitive and support key financial, strategic and human resources objectives. These include:
|
● |
|
attracting and retaining highly skilled executives; |
|
● |
|
tying total compensation opportunities to the achievement of the Companys short- and long-term financial and strategic goals; and
|
|
● |
|
enhancing the commonality of interests between management and shareholders by encouraging executives to think and behave like owners.
|
22
The following key compensation principles guide the design and administration of the Companys
compensation program:
|
● |
|
maintain total compensation opportunities at market-competitive levels; |
|
● |
|
clearly communicate desired behavior and use incentive pay to reward the achievement of performance goals;
|
|
● |
|
provide a broad range of payout opportunities based on performance; and |
|
● |
|
design simple pay programs to ensure employee understanding.
|
Total Compensation
To provide a competitive overall compensation and benefits package that is tied to creating shareholder value and that supports the
execution of our business strategies, we use a range of compensation components. The combination and the amount of each component are influenced by the role of the executive in the Company, market data, and the total value of all the compensation
and benefits available to the executive. Following is a summary of our compensation program for executive officers for 2016. Beginning in 2017, stock options will no longer be included in our long-term incentive program.
|
|
|
|
|
Element |
|
Objectives and Basis |
|
Form |
Base salary |
|
Provide a minimum fixed level of compensation that is competitive for each role |
|
Cash |
Annual cash incentives |
|
Annual incentive to drive company, business unit and individual performance |
|
Cash |
Long-term incentives |
|
Long-term incentive to drive company performance, align executives interests with
shareholders interests, and retain executives through long-term vesting and potential wealth accumulation |
|
PSUs, stock options and RSUs |
Special bonuses |
|
Reward extraordinary performance and attract and retain top talent for key roles within the
organization |
|
Cash or equity |
Retirement benefits |
|
Provide means to save for retirement |
|
Eligibility to participate in
a tax-qualified defined benefit pension plan, a tax-qualified defined contribution 401(k) plan, and a non-qualified supplemental retirement
plan |
Deferred compensation benefits |
|
Allow executives to defer compensation on a tax-efficient
basis |
|
Eligibility to participate in a deferred compensation
plan |
Medical and other benefits |
|
Provide competitive benefits package that generally includes benefits offered to all
employees |
|
Health and welfare plans, and other broad-based employee benefits |
Compensation Mix
We seek to accomplish our executive compensation goals through an appropriate mix of short-term and long-term compensation, by providing a larger percentage of our executive officers total
compensation opportunity in the form of equity
compensation, and by ensuring that a significant portion of our executive officers total pay opportunity is in the form of performance-based compensation. The following discussion concerns
total compensation mix for 2016, which included the use of stock options as a portion of long-term incentive compensation.
23
The following charts illustrate 2016 target compensation for Mr. Simons and an average for all
other NEOs by type of compensation. A significant portion (approximately 71% and 65%, respectively) of the total target compensation of our CEO and our NEOs is performance-based.
|
● |
|
Fixed vs. performance-based compensation. We believe our mix of fixed (primarily base salary and RSUs) and performance-based
compensation (primarily annual cash incentive plan, PSUs and stock options (eliminated in 2017)), with a significant weighting toward performance-based compensation at the executive officer level, supports the Companys overall pay-for-performance culture and drives superior business performance. The percentage of an employees compensation opportunity that is performance-based, versus fixed, is
based primarily on the employees role in the Company. In general, employees with more ability to directly influence overall Company and business segment performance have a greater portion of variable, performance-based pay at risk through
short- and long-term incentive programs. |
|
● |
|
Short-term vs. long-term compensation. We believe our mix of short-term (primarily base salary and annual cash incentive plan) and
long-term incentives (primarily PSUs, stock options (eliminated in 2017) and RSUs), with a significant portion of total compensation provided through long-term incentives for our executive officers, encourages focus on both long-term strategic
objectives and shorter-term business objectives without introducing excessive risk. In general, employees with more ability to directly influence overall Company and business segment performance have a greater portion of their overall compensation
provided through long-term incentives.
|
|
● |
|
Cash vs. equity compensation. We believe our mix of cash (primarily base salary and annual cash incentive plan) and equity
compensation (primarily PSUs, stock options (eliminated in 2017) and RSUs), with a significant portion of each executive officers total compensation opportunity coming through equity incentive grants, closely aligns the interests of our
executive officers with those of our shareholders. In general, employees with more ability to directly influence overall Company and business segment performance have a greater portion of total pay opportunity provided through equity incentive
programs. |
Performance Management
Our policy is to reward achievement of specific financial, strategic and individual performance goals. We use an annual Performance Management Process (PMP) for our employees to assess
individual performance. In the PMP process, each employee, including each of our NEOs, establishes his or her performance goals at the beginning of the year in consultation with the employees manager. The CEOs performance goals are
recommended by the Compensation Committee and approved by the board of directors. We assess the employees performance against these performance goals. Performance goals may include a broad spectrum of metrics aligned with achieving our vision,
such as safety results, workforce effectiveness, financial and operating results, people development, governance and corporate responsibility,
24
environment and sustainability, and customer value delivery. At the end of the year, the employees performance is assessed against these multiple goals, which results in an aggregate
ranking of exceeds, achieves or below. The employees individual performance ranking is one important factor in decisions regarding compensation. The Compensation Committee and the board of directors review
the CEOs performance against his goals annually.
Key performance goals for our NEOs in 2016 were principally in the areas of:
cash flow generation, return on net assets (RONA), operational excellence, merger synergy goals, relative competitive performance, capital effectiveness, strategic priorities, safety, workforce effectiveness, and people development.
Mr. Simons principal individual performance goals for 2016 were based on the three key levers on which the Company is focused to drive shareholder valueportfolio, performance and capital allocationas well as growth and
achievement against the Companys vision. For 2016 compensation decisions, each of our NEOs was determined to have performed at the level of achieves or above in relation to his or her performance goals.
Forms of Long-Term Incentive Compensation
In 2016, grants under our long-term incentive program for senior officers, including our NEOs, included a mix of forms of equity, with 50% of the value of the award granted as PSUs, 25% of the value
granted as stock options and 25% of the value granted as time-vested RSUs. This mix puts more compensation at risk for senior executives and provides for greater rewards if superior performance is generated. Beginning in 2017, stock options have
been eliminated and the mix of long-term incentive compensation will be 60% of the value granted as PSUs and 40% granted as time-vested RSUs. In light of the Companys strategic transformation of its asset portfolio and increased focus on
increasing cash flow and the dividend, the Compensation Committee decided that the long-term incentive program should better reflect, and align with, the way we deliver value to our shareholders. The Compensation Committee believes that, for REITs,
which pay a large portion of annual earnings to shareholders in the form of dividends, stock options do not effectively capture the way we create value for our shareholders. This change in practice also takes into account that the
vast majority of REITs do not use stock options in their long-term incentive programs, opting instead to use varying combinations of performance share plans and restricted stock unit grants.
Market Positioning
The Company uses comparative executive compensation data publicly available from a designated peer group of companies in combination with executive compensation survey data to evaluate the
competitiveness of our executive compensation program. We use this data to design our program to focus executive officers on meeting Company performance objectives. Our objective is to set total target compensation and benefit levels within the
median range of market pay and benefit levels. Each component of total compensation and other benefits is intended to be consistent with market practices as established by the peer group described below to help the Company attract and retain
talented executives and incentivize them to produce superior long-term shareholder returns.
We review market compensation levels to
determine whether total target compensation for our executive officers remains in the targeted median pay range and make adjustments when needed. This assessment includes evaluation of base salary, annual incentive opportunities and long-term
incentives. In addition, we review other rewards such as health benefits and retirement programs relative to the market. We also review the competitive performance of our peers to help establish performance targets for incentive plans and to assess
appropriate payout levels for performance. In analyzing this information, we compare the pay of individual executives if we believe the positions are sufficiently similar to make meaningful comparisons and we consider each executives level of
responsibility, prior experience, job performance, contribution to the Companys success and results achieved. We do not target a specific percentile in the range of comparative data for each individual or for each component of our compensation
program. The Compensation Committee exercises its business judgment and discretion and does not apply formulas or assign factors specific mathematical weights.
For the market assessment conducted in 2015 to help the Compensation Committee set 2016 executive target pay opportunities, total target
25
compensation for our NEOs relative to similarly situated executive officers in the competitive market was within the median range. See Compensation Components below for details.
Peer Group
When
establishing target pay opportunities for our NEOs for 2016, the Compensation Committee reviewed competitive market data in 2015 for the following group of comparator companies, comprised of basic materials and manufacturing companies and REITs:
|
|
|
|
|
|
|
|
|
Company |
|
Revenue(1) ($MM) |
|
|
Market Cap(2) ($MM) |
|
Air Products & Chemicals, Inc. (APD) |
|
$ |
9,895 |
|
|
$ |
28,029 |
|
Alcoa Inc. (AA) |
|
$ |
22,534 |
|
|
$ |
12,931 |
|
American Tower Corp (AMT) |
|
$ |
4,538 |
|
|
$ |
41,065 |
|
AvalonBay Communities, Inc. (AVB) |
|
$ |
1,867 |
|
|
$ |
25,203 |
|
Boston Properties, Inc. (BXP) |
|
$ |
2,503 |
|
|
$ |
19,587 |
|
Crown Castle International Corp. (CCI) |
|
$ |
3,795 |
|
|
$ |
28,855 |
|
Eastman Chemical Company (EMN) |
|
$ |
9,772 |
|
|
$ |
10,032 |
|
Equity Residential (EQR) |
|
$ |
2,706 |
|
|
$ |
29,720 |
|
General Growth Properties, Inc. (GGP) |
|
$ |
2,555 |
|
|
$ |
24,006 |
|
International Paper Company (IP) |
|
$ |
22,865 |
|
|
$ |
15,629 |
|
Nucor Corporation (NUE) |
|
$ |
17,986 |
|
|
$ |
12,880 |
|
Potash Corp of Saskatchewan Inc. (POT) |
|
$ |
6,303 |
|
|
$ |
14,264 |
|
PPG Industries, Inc. (PPG) |
|
$ |
15,341 |
|
|
$ |
26,609 |
|
Prologis Inc. (PLD) |
|
$ |
2,166 |
|
|
$ |
22,503 |
|
Public Storage (PSA) |
|
$ |
2,433 |
|
|
$ |
42,891 |
|
The Mosaic Company (MOS) |
|
$ |
9,111 |
|
|
$ |
9,726 |
|
Vornado Realty Trust (VNO) |
|
$ |
2,784 |
|
|
$ |
18,847 |
|
WestRock Company (WRK) |
|
$ |
11,381 |
|
|
$ |
11,617 |
|
75th Percentile |
|
$ |
11,010 |
|
|
$ |
27,674 |
|
50th Percentile |
|
$ |
5,420 |
|
|
$ |
21,045 |
|
25th Percentile |
|
$ |
2,593 |
|
|
$ |
13,264 |
|
Weyerhaeuser Company (WY) |
|
$ |
8,500 |
|
|
$ |
23,611 |
|
(1) |
4Qs of revenue closest to 2015 calendar year-end |
Each year
the Compensation Committee, working with its independent compensation consultant, reviews the composition of the peer group and determines whether any changes should be made. For 2016, changes were made to the peer group to reflect the
Companys increased size and scope of operations following the Plum Creek merger. Five large-cap REIT companies were added to the previous years peer group and six were removed. Four of those
removed were no longer comparable
to the Company based on revenue or market capitalization, and two were eliminated because of merger and acquisition activity, including Plum Creek. In addition to reviewing the current pay
practices of these peer companies, the Compensation Committee reviews various pay surveys, including surveys of pay practices of forest products companies and comparably-sized manufacturing companies as well
as general industry data for similarly-sized companies. The peer group and survey data are generally reviewed separately to understand pay differences, if any, by industry or business segment and to assess
whether any changes in pay data from year to year reflect true market trends.
COMPENSATION
COMPONENTSDETERMINATION OF COMPENSATION
Base Salary
Base salary is the principal fixed element of executive compensation. In setting base salaries for executives, our Compensation Committee generally targets base salary to be at or slightly below the
median level for the applicable role among the peer group companies described above. We also consider other factors to allow us to meet our objective of attracting and retaining critical talent, such as the Companys performance, the
executives individual performance, and his or her experience and potential to assume roles with greater responsibility. The Compensation Committee reviews executive salaries on an annual basis. Increases in salaries generally are based on the
market level salary for the role in which the executive serves, individual performance assessments, overall Company budgets and specific talent needs. Based on the competitive assessment conducted in late 2015, Mr. Simons 2016 base salary
was below median to reflect the Companys general philosophy to have a greater portion of the CEOs total pay at risk through short-and long-term incentive programs. Base salaries for each of
Mr. Blocker, Ms. Hunter, Ms. Bedient and Ms. Slater were within the median range. Base salary for Mr. Lindquist was, at the time of the Plum Creek merger, within the competitive range of pay relative to his new role with the
Company. During 2016, base salaries for Messrs. Hagen and Kilberg were adjusted to reflect their new responsibilities with the Company following the Plum Creek merger and to bring their salaries within the market median range for their new
positions.
26
Base salaries for our NEOs in 2016 were:
|
|
|
|
|
|
|
Named Executive Officer |
|
Percentage Increase Over 2015 |
|
2016 Base Salary |
|
Doyle R. Simons |
|
0% |
|
$ |
1,000,000 |
|
Russell S. Hagen |
|
|
|
$ |
550,000 |
|
Patricia M.
Bedient |
|
0% |
|
$ |
640,000 |
|
Adrian M. Blocker |
|
7.55% |
|
$ |
570,000 |
|
Rhonda D. Hunter |
|
7.55% |
|
$ |
570,000 |
|
James A. Kilberg |
|
|
|
$ |
542,000 |
|
Thomas M.
Lindquist |
|
|
|
$ |
645,000 |
|
Catherine I.
Slater |
|
7.55% |
|
$ |
570,000 |
|
Short-Term Incentive Plan
Our Annual Incentive Plan (AIP) is an annual cash bonus plan designed to:
|
● |
|
motivate our executive officers, including our NEOs, and other participants to generate strong financial performance and achieve our strategic
goals; |
|
● |
|
link pay to performance; and |
|
● |
|
attract and retain top talent employees. |
Each AIP participant is assigned a target bonus opportunity that reflects competitive practices in the market for similar positions. The AIP is funded based on achieving the pre-established financial performance and business scorecard measures described below. The actual bonus amounts awarded to individual employees are based on the level of plan funding and the individual
employees individual performance against his or her performance goals. Executives with a performance rating of achieves will generally receive an award at or near the bonus level funded by financial and business performance.
AIP Performance Measures and Plan Mechanics
For 2016, the AIP focused on the performance of the Companys three business segments: Timberlands, Real Estate, Energy & Natural Resources, and Wood Products. Real Estate,
Energy & Natural Resources was added to the AIP performance measures for 2016 because it is a new business segment of the Company, while the Cellulose Fibers business segment was eliminated for 2016 because it was under strategic review and
held for sale. We view each of the Companys businesses separately to optimize the performance of each business. The AIP is designed to be easy
for employees to understand and give them a clear view of the effect of their business improvement efforts on their compensation.
AIP funding is calculated using financial performance metrics and business scorecard metrics, with the financial performance metrics weighted 70% and the business scorecard metrics weighted 30%.
Employees of each business segment, including the executive officer leading a segment, receive bonuses under the AIP based on:
|
● |
|
the performance of the business against its financial performance metrics targets, which are funds from operations (FFO) for
Timberlands and Real Estate, Energy & Natural Resources combined, and return on net assets (RONA) for Wood Products; |
|
● |
|
the performance of the business against its business scorecard metrics; and |
|
● |
|
the performance of each employee against his or her individual performance goals. |
The CEO and staff function employees, including the Chief Financial Officer, receive annual bonuses based on a weighting of actual funding of the
AIP for the business segments40% for Timberlands, 20% for Real Estate, Energy & Natural Resources, and 40% for Wood Productsmodified by the performance of the individual employee against his or her performance goals. This
funding mechanism is designed to make the CEO accountable for the results of all of our businesses and to focus corporate staff efforts on helping each of the businesses be successful.
Earnings before interest and taxes (EBIT) is used in our calculations of FFO and RONA and is defined as net earnings, less earnings from discontinued operations and interest income, plus
income tax expense and interest expense, net of capitalized interest.
FFO is defined as EBIT, less gains on Section 1031 exchanges
and large asset sales, plus depletion, depreciation and amortization, plus the net book value from cash land sales, and less fertilizer spending. We use FFO as a performance measure for the Timberlands and the Real Estate, Energy & Natural
Resources businesses because it is a commonly used metric by real estate investment
trusts (REITs) to measure operating performance.
27
FFO is intended to focus participants on generating cash flow, which supports the Companys focus on a growing and sustainable dividend for shareholders.
RONA is defined as EBIT divided by average net assets. We define net assets for Wood Products as total segment assets less cash and cash
equivalents and current liabilities. We use RONA as the principal performance measure for our Wood Products business because of its strong link over time to total shareholder return in the basic materials sector and for Weyerhaeuser. The use of this
measure is intended to focus participants on generating profitability, both through increasing revenues and controlling costs. In addition, use of this measure reinforces the importance of making capital investments that will improve the
Companys overall returns.
While we report our financial results in accordance with U.S. GAAP, for the reasons described above we
base our incentive programs financial targets, including the AIP, on non-GAAP financial measures such as FFO and RONA.
The Compensation Committee has discretion to adjust the FFO or RONA calculations for special items as appropriate. For AIP purposes in 2016, we excluded asset impairments and equity earnings from
joint ventures.
Financial Performance Metrics
The 2016 financial performance metrics for AIP funding:
|
● |
|
for the Timberlands and Real Estate, Energy & Natural Resources businesses, were based on the combined FFO achieved by the two
businesses; |
|
● |
|
for the Wood Products business, was based on RONA; and |
|
● |
|
for the CEO and staff function employees, were based on a weighting of actual funding of the AIP for the three businesses40% for
Timberlands, 20% for Real Estate, Energy & Natural Resources and 40% for Wood Products. |
Targets for the
financial performance metrics are established by the Compensation Committee at the beginning of each plan year and are not subject to adjustment by management. The Compensation Committee determines the level of FFO and RONA performance necessary for
funding the threshold, target and maximum levels, which represent funding at 20%, 100% and 200% of target levels, respectively. If the applicable FFO result (for Timberlands and Real Estate, Energy & Natural Resources businesses combined)
or RONA result (for Wood Products) is below the threshold, the funding level for this portion of the AIP is 0%. Targets for the AIPs financial performance metrics are established based on a variety of factors:
|
● |
|
The near-term outlook, prior year performance and competitive position influences the performance goal set for target funding for the Timberlands
and the Real Estate, Energy & Natural Resources businesses. |
|
● |
|
The cost of capital and competitive position influences the performance goal set for target funding for the Wood Products business.
|
|
● |
|
Internal benchmarks of outstanding performance influence the performance goal set for maximum funding.
|
For 2016, the Compensation
Committee set a combined FFO target for the Timberlands and Real Estate, Energy & Natural Resources businesses and a RONA target for the Wood Products business at the following levels:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metric |
|
|
Threshold (20% of Target Funding) |
|
|
Target (100% of Target Funding) |
|
|
Maximum (200% of Target Funding) |
|
Timberlands |
|
|
FFO |
|
|
$ |
811M |
|
|
$ |
1,014M |
|
|
$ |
1,268M |
|
Real Estate, Energy &
Natural Resources |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood Products |
|
|
RONA |
|
|
|
6% |
|
|
|
12% |
|
|
|
22% |
|
For 2017, FFO is being replaced by a new performance measure for the Timberlands and Real
Estate, Energy & Natural Resources segments: earnings before depreciation, depletion, amortization,
28
basis of real estate sold, pension and postretirement costs not allocated to business segments and special items, or Adjusted EBITDA. The Compensation Committee made this change to
use Adjusted EBITDA because it believes it aligns this important incentive compensation program with the way the Company evaluates and reports its performance to shareholders.
Business Scorecard Metrics
The remainder of the AIP funding determination
(30%) is based on the performance of each business against certain controllable business metrics approved in advance by the Compensation Committee (the business scorecard). The business scorecard metrics measure performance against
achievement of the Companys vision in areas such as operational excellence and people development, financial and competitive performance, cost competitiveness and performance against strategic goals and priorities.
Bonus Opportunities Under the AIP
At the beginning of the year, each AIP participant, including each of our NEOs, was assigned a target bonus opportunity that reflected competitive practices in the market for similar positions.
Target bonus opportunities in 2016 were 150% of base salary for our CEO and 85-90% of base salary for all other NEOs. Under the AIP, the bonus for each executive officer can range from 0% to 300% of the target
incentive value. Funding based on the financial performance and business scorecard metrics ranges from 0% to 200% of target. Based on individual performance, such funded amounts may be modified by 0 to 150%, i.e., decreased to 0% of target or
increased up to a maximum of 300% of target value. Targets set for the NEOs were based on competitive market practices and designed to focus the executive on financial performance, operational excellence and people development.
AIP Bonus Allocation Process
After the end of each plan year, the Compensation Committee approves the funding for the AIP based on the performance of each business against its pre-determined financial performance metrics and business scorecard metrics. The bonus opportunities for executive officers are adjusted up or down from each officers target opportunity based on the level of
funding achieved (e.g., 50%
funding would reduce an officers target opportunity by half). Funded awards are allocated to executive officers based on each officers individual performance rating against his or her
pre-established performance goals, based on a qualitative and quantitative assessment of performance (see Compensation Philosophy and PrinciplesPerformance Management) and other individual
performance criteria. In general, an executive officer with a performance rating of achieves receives an annual incentive award at or near his or her funding-adjusted individual target level. Similarly, an executive officer with an
exceeds rating may receive an annual incentive award greater than his or her individual funding-adjusted target level and an executive officer with a below rating will typically receive less than the individual
funding-adjusted target incentive opportunity.
The board of directors determines the bonus to be paid to our CEO based on the
recommendation of the Compensation Committee. The Compensation Committee determines the bonuses to be paid to executive officers based on recommendations by our CEO and chief human resources officer.
For 2016, the Compensation Committee also established overall performance measures of cash flow (net cash from operations meets or exceeds $500
million) and earnings per share (EPS) (diluted net earnings attributable to Weyerhaeuser common shareholders meets or exceeds $0.50). These pre-established objective performance measures were
established to qualify bonuses to covered employees as deductible performance-based compensation under Section 162(m) of the Internal Revenue Code. See Other Factors Affecting CompensationLimitations on Deductibility of Compensation
for AIP Awards below for more information. Achievement of the cash flow and EPS performance measures established the maximum award level for each NEO. Once either performance measure is met, the actual payouts of short-term incentives are
based on consideration of the performance measure under the AIP and the exercise of negative discretion by the Compensation Committee. In determining actual 2016 payouts for our NEOs, the Compensation Committee first confirmed that the cash flow and
EPS performance measures were attained. Failure to attain at least one of these measures would have resulted in forfeiture of each NEOs entire AIP bonus opportunity.
29
AIP Funding and Allocation Illustration
Individual AIP awards are calculated as follows (the amounts correlate to Mr. Simons 2016 AIP funding calculations):
For 2016, AIP funding multiples were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business (Financial Measure) |
|
Financial Performance Metrics |
|
|
Business Scorecard Metrics |
|
|
|
|
|
2016
Financial Results |
|
|
Funding Multiple [A]
|
|
|
2016 Scorecard Results |
|
Funding Multiple [B]
|
|
|
2016
Total Funding Multiple [A+B] |
|
Timberlands (1) |
|
|
$ 1,037MM |
|
|
|
0.75 |
|
|
High Achieves |
|
|
0.50 |
|
|
|
1.25 |
|
Real Estate, Energy & Natural Resources (1) |
|
|
$ 1,037MM |
|
|
|
0.75 |
|
|
Exceeds |
|
|
0.60 |
|
|
|
1.35 |
|
Wood Products (2) |
|
|
32% |
|
|
|
1.40 |
|
|
Achieves |
|
|
0.35 |
|
|
|
1.75 |
|
Chief Executive Officer, Chief
Financial Officer and other staff functions (3) |
|
|
|
|
|
|
1.01 |
|
|
|
|
|
0.46 |
|
|
|
1.47 |
|
(1) |
Based on a combined FFO for Timberlands and Real Estate, Energy & Natural Resources. |
(2) |
Based on segment RONA. |
(3) |
Based on performance of Timberlands, Real Estate, Energy & Natural Resources, and Wood Products (weighted for each segment at 40%, 20% and 40%,
respectively). |
AIP bonus targets and actual payout amounts for our NEOs in 2016 were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer |
|
Target Bonus (% of Base Salary) |
|
Target Bonus Amount ($) [A](1) |
|
Total Funding Multiple [B] |
|
Adjustment Based on Performance Rating ($) [C] |
|
2016 Bonus Earned ($) [(A x B) + C] |
|
2016 Bonus Earned (% of Target) |
Doyle R. Simons |
|
|
|
150 |
% |
|
|
$ |
1,500,000 |
|
|
|
|
1.47 |
|
|
|
$ |
195,000 |
|
|
|
$ |
2,400,000 |
|
|
|
|
160.0 |
% |
Russell S. Hagen
(2) |
|
|
|
85 |
% |
|
|
$ |
427,903 |
|
|
|
|
1.47 |
|
|
|
$ |
93,983 |
|
|
|
$ |
723,000 |
|
|
|
|
169.0 |
% |
Adrian M. Blocker |
|
|
|
85 |
% |
|
|
$ |
484,500 |
|
|
|
|
1.75 |
|
|
|
$ |
43,125 |
|
|
|
$ |
891,000 |
|
|
|
|
183.9 |
% |
Rhonda D. Hunter |
|
|
|
85 |
% |
|
|
$ |
484,500 |
|
|
|
|
1.25 |
|
|
|
$ |
152,375 |
|
|
|
$ |
758,000 |
|
|
|
|
156.4 |
% |
James A. Kilberg
(2) |
|
|
|
85 |
% |
|
|
$ |
421,679 |
|
|
|
|
1.35 |
|
|
|
$ |
57,734 |
|
|
|
$ |
627,000 |
|
|
|
|
148.7 |
% |
Patricia M. Bedient
(3) |
|
|
|
85 |
% |
|
|
$ |
272,000 |
|
|
|
|
1.47 |
|
|
|
$ |
0 |
|
|
|
$ |
399,840 |
|
|
|
|
147.0 |
% |
Thomas M. Lindquist
(4) |
|
|
|
90 |
% |
|
|
$ |
289,455 |
|
|
|
|
1.00 |
|
|
|
$ |
0 |
|
|
|
$ |
289,455 |
|
|
|
|
100.0 |
% |
Catherine I. Slater
(5) |
|
|
|
85 |
% |
|
|
$ |
443,463 |
|
|
|
|
1.00 |
|
|
|
$ |
0 |
|
|
|
$ |
443,463 |
|
|
|
|
100.0 |
% |
(1) |
Target Bonus Amounts shown for Ms. Bedient, Mr. Lindquist and Ms. Slater represent prorated target amounts based on their time in service with
the Company during 2016. |
(2) |
Amounts shown for Messrs. Hagen and Kilberg exclude $25,547 and $27,382, respectively, representing one-twelfth of the
annual bonus earned under the former Plum Creek Annual Incentive Plan, calculated at target level performance, paid to them in accordance with the terms of the Plum Creek merger. Mr. Kilberg assumed his current position on April 11, 2016.
|
(3) |
Ms. Bedient was paid a prorated bonus based on her time in service with the Company during 2016. |
(4) |
Mr. Lindquist was paid a prorated bonus at target performance level in accordance with the terms of his Plum Creek change of control agreement.
|
(5) |
Ms. Slater was paid a prorated bonus at target performance level in connection with the terms of the Companys divestiture of its Cellulose Fibers
business. |
30
The AIP bonus for each of Messrs. Blocker, Hagen, Kilberg and Simons and Ms. Hunter was above
target in part because the funding multiple applicable to their respective AIP opportunities exceeded target based on business performance. The 2016 funding multiple for Messrs. Simons and Hagen was 1.47, based on the performance of the Timberlands,
Real Estate, Energy & Natural Resources and Wood Products segments. The 2016 funding multiple for Ms. Hunter was 1.25, based on the performance of the Timberlands segment. The 2016 funding multiple for Mr. Blocker was 1.75, based
on the performance of the Wood Products segment. The 2016 funding multiple for Mr. Kilberg was 1.35, based on the performance of the Real Estate, Energy & Natural Resources segment.
Mr. Simons AIP bonus was further increased based on his vision and execution with respect to key strategic matters, including the merger
with Plum Creek and the divestiture of the Cellulose Fibers business, as well as his continued strong leadership in driving significant progress against the Companys operational excellence and people development goals in 2016.
Ms. Hunters AIP bonus was further increased to recognize her extraordinary leadership in combining the Weyerhaeuser and Plum Creek timberlands organizations and driving operational synergies and operational excellence efforts.
Mr. Blockers AIP bonus was further increased to recognize his continued strong leadership in driving operational excellence improvements and people development, as well as the integration of the Plum Creek wood products mills.
Mr. Kilbergs AIP bonus was further increased to recognize his extraordinary leadership in implementing the asset value optimization process, or AVO, on the legacy Weyerhaeuser lands, as well as building a working relationship
between his organization and the Timberlands business. Mr. Hagens AIP bonus was further increased to recognize his leadership in the integration of Plum Creek, the divestiture of the Cellulose Fibers business, the allocation of capital,
including the share repurchase program, and identifying and driving cost synergies.
Long-Term Incentive Compensation
Each year, target long-term incentive award opportunities are set for each of the Companys executives, including our NEOs. Target award
opportunities generally are set at or above the
median of peer companies, reflecting the Companys desire to have a greater proportion of pay tied to performance and long-term shareholder value. Grants of long-term incentives are not
guaranteed. In addition, these opportunities may be increased or decreased based on the executive officers performance rating using the criteria described in Compensation Philosophy and PrinciplesPerformance Management.
Participants do not receive an equity grant if performance against their performance goals does not meet minimum standards. The Compensation Committee also considers competitive market conditions, expected future contributions to the Company and
retention concerns in determining the final grants to executive officers.
Weyerhaeuser makes its annual long-term incentive grants to
employees in February of each year at the regular meeting of the Compensation Committee, which typically is within one to two weeks after the Company publicly releases earnings. For executive officers who are hired or promoted during the year, the
Compensation Committee considers compensation levels in connection with the boards appointment of the executive and may approve equity grants for the executive that are effective upon the later of (i) the officers start date or the
effective date of the promotion or (ii) the date the grant is approved by the Compensation Committee.
For the NEOs other than
Messrs. Kilberg, Hagen and Simons, the Compensation Committees February meeting date was the effective grant date for the 2016 annual equity grants. Equity grants to Mr. Simons were made on the day following the Compensation Committee
meeting at the meeting of the full board of directors. Messrs. Hagen, Kilberg and Lindquist joined the Company in February 2016 following the Plum Creek merger. Grants of 2016 PSUs were subsequently made to Messrs. Hagen and Kilberg by the
Compensation Committee at its May 2016 meeting; grants of stock options and RSUs were not included in their 2016 long-term incentive compensation because they had received long-term incentive award grants while employed at Plum Creek, which the
Company assumed in connection with the Plum Creek merger. No long-term incentive compensation grants were made to Mr. Lindquist because he was no longer serving as an executive officer of the Company at the time of the Compensation
Committees May meeting.
31
Total Long-Term Incentive Compensation Grants
The Compensation Committee established a target level of long-term incentives for each executive officer position relative to the median of
competitive market long-term incentive levels. For 2016, the target long-term incentive values for the NEOs were:
|
|
|
|
|
Executive Officer |
|
2016 Target Long-Term Incentive Value (1) |
|
Doyle R. Simons |
|
$ |
7,000,000 |
|
Russell S. Hagen |
|
$ |
1,030,000 |
|
Patricia M.
Bedient |
|
$ |
1,592,000 |
|
Adrian M. Blocker |
|
$ |
1,550,000 |
|
Rhonda D. Hunter |
|
$ |
1,550,000 |
|
James A. Kilberg |
|
$ |
1,000,000 |
|
Thomas M.
Lindquist |
|
|
|
|
Catherine I.
Slater |
|
$ |
1,550,000 |
|
(1) |
These amounts reflect the approved target value of long-term incentive compensation granted to each NEO in 2016, other than Messrs. Hagen and Kilberg, who
joined the Company in February 2016 following the Plum Creek merger. The amounts shown for Messrs. Hagen and Kilberg represent the value of their respective PSU grants from the Company, but do not include the value of the RSU awards they received
from Plum Creek in 2016, which awards were assumed by the Company in the Plum Creek merger. No grants of long-term incentive compensation awards were made to Mr. Lindquist because he was no longer serving as an executive officer of the Company
at the time of the Compensation Committees May 2016 meeting. The actual grant-date fair values of these grants, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, are shown in the
Summary Compensation Table on page 42 and the Grants of Plan-Based Awards for 2016 table on page 44. |
For 2016, the long-term
incentive awards were granted in the form of PSUs, stock options and time-vested RSUs, with 50% of the value of the award granted in the form of PSUs, 25% of the value in the form of stock options, and 25% of the value in the form of RSUs, except,
as previously discussed, long-term incentive grants for Messrs. Hagen and Kilberg were comprised entirely of PSUs. Beginning in 2017, stock options will no longer be a part of the mix of our long-term incentive awards.
Performance Share Unit Awards
PSUs are tied to achievement of the Companys long-term operational objectives and are designed to align pay and performance, a key Company goal. Weyerhaeuser grants PSUs to executive officers
to incent production of superior long-term shareholder returns and achievement of strategic business goals. PSUs align compensation with shareholder interests by focusing the executive officer on long-term
shareholder return compared to other large-cap companies, represented by the constituents of the S&P 500 index, and an industry peer group of
companies. For the PSUs granted in 2016, performance is measured in part by the Companys relative shareholder return over a three-year performance period, and in part by achievement of certain cost synergies in connection with the Plum Creek
merger over a one-year performance period.
32
2016 PSUs
A target number of PSUs were granted to the NEOs in 2016, as shown in the following table.
|
|
|
|
|
Named Executive Officer |
|
Performance Share Units |
|
Doyle R. Simons |
|
|
161,670 |
|
Russell S. Hagen |
|
|
29,697 |
|
Patricia M.
Bedient |
|
|
36,712 |
|
Adrian M. Blocker |
|
|
35,743 |
|
Rhonda D. Hunter |
|
|
35,743 |
|
James A. Kilberg |
|
|
28,832 |
|
Thomas M.
Lindquist |
|
|
|
|
Catherine I.
Slater |
|
|
35,743 |
|
The actual number of PSUs earned may range from 0 to 150% of the target number of PSUs based on three independent
performance measures: the Companys three-year total shareholder return (TSR) relative to companies in the S&P 500 Index (35% weighting); the Companys three-year TSR relative to a designated industry peer group (35%
weighting); and achievement of a cost synergy target in connection with the Plum Creek merger over a one-year period (30% weighting). Company performance against each performance goal is measured separately to
determine actual percentile performance and the corresponding PSU payout percentage, multiplied by the appropriate weighting factor.
For example, if the Company achieves 50th percentile performance against each of the comparator groups and $150 million in cost synergies, then a participant holding a target award of 1,000 PSUs would earn 1,150 PSU shares as follows:
(a) 1,000 x 100% payout x 35% weighting = 350 shares; (b) 1,000 x 100% payout x 35% weighting = 350 shares; and (c) 1,000 x 150% x 30% weighting = 450 shares.
These three independent performance measures ensure that payouts under the PSUs are strongly aligned with shareholder interests. The Companys relative TSR performance against each of the two
comparator groups over a three-year performance period ranges from a threshold minimum of 25th percentile performance to a maximum performance of greater than or equal to 75th percentile performance. The industry peer group of companies includes: Boise Cascade Company, Catchmark Timber
Trust, Louisiana-Pacific Corporation, Potlatch Corporation,
Rayonier Inc., St. Joe Company and West Fraser Timber Co. Ltd. Canfor Corporation, Deltic Timber Corporation, Domtar Corporation and International Paper Company were removed from the group
because paper companies were no longer relevant to the Companys business, and Plum Creek was removed from the group due to its merger with the Company. The cost synergy targets range from a threshold minimum of $80 million to a maximum
performance of $150 million or greater over a one-year performance period.
Payout
percentages at various levels of relative TSR performance and achievement of the cost synergy target for the 2016 PSUs are illustrated in the table below.
|
|
|
|
|
TSR Percentile Rank Against Each Peer Group (35% Weighting Each) |
|
Payout % of Target Awards (1) |
|
< 25th
percentile |
|
|
0% |
|
25th percentile |
|
|
50% |
|
50th percentile |
|
|
100% |
|
³ 75th percentile |
|
|
150% |
|
|
|
|
|
|
Cost Synergy Target (30% weighting) |
|
Payout % of Target Awards (1) |
|
< $ 80 M |
|
|
0% |
|
$80 M |
|
|
50% |
|
$100 M |
|
|
100% |
|
³ $150 M |
|
|
150% |
|
(1) |
Payout percentages for performance above threshold (TSR performance above the 25th percentile and Cost Synergy performance above $80 million) will be linearly
interpolated between percentiles and cost synergy dollar targets, in each case with a weighted maximum of 150%. |
If
the Company declares and pays dividends on the Companys common stock during the time period when PSUs are outstanding, the PSUs will be credited with the dividends, which will be reinvested in additional units to be paid out in shares if and
when the PSUs vest. To the extent the PSUs vest and are paid to participants, the dividends credited to the PSUs will also vest and be paid.
Stock Options
Stock options align executives interests with those of
shareholders since stock options have realizable value only when the Companys stock price increases. Stock options have an exercise price equal to 100% of the fair market value of one share of stock on the grant date. Stock options generally
33
have a term of 10 years from the date of grant and vest ratably over 4 years with 25% vesting on each of the first, second, third and fourth anniversaries of the grant date. The value of the
stock options granted to our NEOs in 2016 was 25% of the value of the long-term incentive grant, with the specific value of the long-term incentive grant based on the factors described above under Long-Term Incentive Grants. The number
of stock options granted to each executive is calculated by dividing the intended grant value of the stock options by the Black-Scholes option value (as described in Note 16 of Notes to Consolidated Financial Statements in the Companys Annual
Report on Form 10-K). In 2016, the following awards of stock options were granted to the NEOs:
|
|
|
|
|
Executive Officer |
|
Stock Options |
|
Doyle R. Simons |
|
|
579,431 |
|
Russell S. Hagen
(1) |
|
|
|
|
Patricia M.
Bedient |
|
|
131,570 |
|
Adrian M. Blocker |
|
|
128,099 |
|
Rhonda D. Hunter |
|
|
128,099 |
|
James A. Kilberg
(1) |
|
|
|
|
Thomas M. Lindquist
(1) |
|
|
|
|
Catherine I.
Slater |
|
|
128,099 |
|
(1) |
Messrs. Hagen and Kilberg were not granted stock options because they had been granted long-term incentive awards in February 2016 while employed at Plum
Creek, which awards the Company assumed in connection with the Plum Creek merger. No grants of long-term incentive compensation awards were made to Mr. Lindquist because he was no longer serving as an executive officer of the Company at the
time of the Compensation Committees May meeting. |
In February of 2017, the Compensation Committee decided to
eliminate stock options from the Companys executive compensation program. Beginning in 2017, all of the value of our long-term incentive compensation will therefore be comprised of PSUs and RSUs.
Restricted Stock Unit Awards
The Company grants RSU awards to align the interests of executive officers with those of our shareholders by creating a strong incentive to create
and preserve long-term shareholder value. Through RSUs, executive officers, like our shareholders, share both the risks and rewards of stock ownership. In addition, RSUs reward total shareholder return, whether delivered through share
price appreciation or dividends. The Company believes this is appropriate since, as a REIT, our dividend distribution requirements lead to a significant portion of our total shareholder return
being delivered through dividends. Through multi-year vesting, the RSU grants also serve as a strong retention vehicle. RSUs vest ratably over 4 years with 25% vesting on each of the first, second, third and fourth anniversaries of the grant date.
During the vesting period, unvested awards are credited with dividend equivalents, which are subject to the same vesting and release schedule as the original RSU awards.
The value of the RSUs granted in February of 2016 to the NEOs, other than Ms. Slater, was 25% of the value of the long-term incentive grant, with the specific value of the long-term incentive
grant based on the factors described above under Long-Term Incentive Compensation. In 2016, the following RSU awards were granted to the NEOs:
|
|
|
|
|
Executive Officer |
|
Restricted Stock Units |
|
Doyle R. Simons |
|
|
75,905 |
|
Russell S. Hagen
(1) |
|
|
|
|
Patricia M.
Bedient |
|
|
17,236 |
|
Adrian M. Blocker |
|
|
16,782 |
|
Rhonda D. Hunter |
|
|
16,782 |
|
James A. Kilberg
(1) |
|
|
|
|
Thomas M. Lindquist
(1) |
|
|
|
|
Catherine I. Slater
(2) |
|
|
38,436 |
|
(1) |
Messrs. Hagen and Kilberg were not granted RSUs because they had been granted long-term incentive awards in February 2016 while employed at Plum Creek, which
awards the Company assumed in connection with the Plum Creek merger. No grants of long-term incentive compensation awards were made to Mr. Lindquist because he was no longer serving as an executive officer of the Company at the time of the
Compensation Committees May 2016 meeting. |
(2) |
Ms. Slater received two grants of RSUs in 2016 totaling 38,436 units, both of which were subject to ratable vesting over 4 years, with 25% vesting on each
of the first, second, third and fourth anniversaries of the grant date. Of that amount, the grant representing 21,654 units was subject to accelerated vesting upon the completion of the Companys previously announced strategic review and sale
of its Cellulose Fibers business, which occurred on December 1, 2016. The Compensation Committee believes these RSU grants were appropriate and in its best interests because it encouraged Ms. Slater, who was expected to play, and did play,
a critical role leading the strategic alternatives review process, to remain employed with the Company through the conclusion of the review and sale process.
|
34
Other Benefits
All U.S. salaried employees, including executive officers, are eligible for:
|
● |
|
a tax-qualified defined benefit pension plan, if hired before January 1, 2014;
|
|
● |
|
in lieu of participation in a tax-qualified defined benefit pension plan, if hired on or after
January 1, 2014 a non-elective employer contribution in a tax-qualified defined contribution 401(k) or savings plan; |
|
● |
|
a tax-qualified defined contribution 401(k) or savings plan; |
|
● |
|
health and dental coverage; |
These rewards are designed to be competitive with overall market practices and are in place to attract and retain high-level talent. In addition,
executive officers may be eligible to participate in a non-qualified supplemental retirement plan if hired before January 1, 2014, or a supplemental defined contribution retirement plan if hired on or
after January 1, 2014, a deferred compensation plan, and to receive other benefits described below.
Supplemental Retirement
Plan and Supplemental DC Plan
Executive officers in the U.S. are eligible to participate in the Supplemental Retirement Plan (the
Supplemental Plan) if hired before January 1, 2014. The Supplemental Plan provides the benefits that were not provided under the qualified defined benefit plan due to compensation limits imposed by Internal Revenue Code Section
401(a)(17) ($265,000 in 2016, subject to adjustment). We provided the Supplemental Plan to our executives because it was a competitive practice within the basic materials industry and the Compensation Committee believed that the Company should
provide competitive retirement benefits linked to overall Company performance through the Supplemental Plan. Supplemental Plan benefits are paid from the general funds of the Company, not from the
tax-qualified Weyerhaeuser Pension Plan (the Pension Plan). Consistent with general market practices, benefits under the Supplemental Plan are determined based on compensation paid in the five
consecutive years when the executive officer was paid the highest total compensation during the 10 calendar years before retirement. Total compensation means base salary
plus any award under the Companys eligible annual incentive compensation plans, limited to one times base pay. This amount is multiplied by the formula for determining salaried plan
benefits under the Pension Plan. Details of the Supplemental Plan benefits and the amounts accrued to each NEO are found in the Pension Benefits table. Executives and other highly-paid employees hired on or after January 1, 2014 are eligible to
participate in the Weyerhaeuser Supplemental Defined Contribution Plan (the Supplemental DC Plan). The Supplemental DC Plan is intended to be a replacement plan for participants who are not eligible to receive a benefit under the Pension
Plan. The Supplemental DC Plan provides for non-elective employer contributions equal to 5% of bonus pay plus the amount that would otherwise be provided under the
tax-qualified defined contribution 401(k) plan if deferred compensation were included in the definition of pay and without regard to the compensation limits imposed by Internal Revenue Code
Section 401(a)(17) described above.
Deferred Compensation
Executive officers also are eligible to participate in a deferred compensation plan. The deferred compensation plan provides the opportunity to defer up to 50% of base salary and up to 100% of cash
bonuses into an interest-bearing account for payment at a future date. This plan is provided to be competitive in the market for executive talent, and to provide executives with tax planning flexibility at a nominal cost to the Company. The interest
credited to deferred compensation plan accounts is determined each year by the Compensation Committee. The current interest rate formula is 120% of the applicable federal long-term rate (AFR) as published by the IRS in January of the plan year. The
2016 rate of 3.21% is not considered to be a preferential return as it is based on the applicable long-term federal rate.
In addition,
executive officers can choose to defer all or a portion of cash bonuses into a deferred compensation plan account denominated in Weyerhaeuser common stock equivalent units. The Company applies a 15% premium to the deferred amounts if payment is
delayed for at least five years. The value of the deferred account grows or declines based on the performance of Weyerhaeuser common stock (plus dividends). The purpose of this program is to further align executive interests with those of
shareholders by providing an incentive linked to the performance of Weyerhaeuser common stock. Contributions during
35
2016 and year-end account balances can be found in the Non-qualified Deferred Compensation table.
Additional Benefits
There
are no significant additional benefits. Other than limited relocation benefits and limited tax-gross up payments for severance-related health care replacement costs, we do not provide perquisites, nor do we
provide vehicles for personal use, personal travel for executives on Company aircraft or any other kind of tax-gross ups.
OTHER FACTORS AFFECTING COMPENSATION
Limitations on Deductibility of Compensation for AIP Awards
Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation paid by a public company to its CEO and the three other most highly compensated executive officers
(other than the companys chief financial officer) to $1 million per year. There are exceptions to this limit, such as for performance-based compensation that meets certain requirements that have been approved by our shareholders.
For 2016, the Compensation Committee conditioned annual bonus payments under the AIP for these covered employees on attainment of
certain pre-established objective performance measures. If any one of such performance measures were attained, the Compensation Committee was authorized to award a cash bonus under the AIP up to the maximum
amount approved by our shareholders under the Weyerhaeuser Company 2013 Long-Term Incentive Plan (2013 Plan). This process is intended to qualify the AIP bonus awards as performance-based compensation under Section 162(m) and
thereby permit those awards to be fully deductible. However, the requirements of Section 162(m) are complicated and subject to interpretation and change, so these plans may not qualify from time to time. The performance measures adopted by the
Compensation Committee for 2016 were:
|
|
|
|
|
Cash flow: |
|
|
|
net cash from operations meets or exceeds $500 million |
|
|
|
EPS: |
|
|
|
diluted net earnings attributable to Weyerhaeuser common shareholders meets or exceeds $0.50 |
The calculation of performance results takes into account certain adjustments based on adjustment
criteria established at the beginning of the performance period. The categories of adjustments that were approved by the Compensation Committee relate to items such as significant acquisitions or divestitures, significant litigation or claim
judgments or settlements, the effects of changes in tax laws or accounting principles, and extraordinary or non-recurring charges. Based on this adjustment criteria, the results on which the performance
measures were based were adjusted to eliminate the effects of specified items. These adjustments were intended to ensure that performance achievement represented the underlying performance of the core businesses. During the first quarter of 2017,
the Compensation Committee certified achievement of each of the performance measures that had been established for 2016. The Compensation Committee has the negative discretion to approve bonuses lower than the maximum permitted awards. This
permitted the Company to pay the actual bonuses described in this proxy statement based on the processes and criteria discussed under Compensation ComponentsDetermination of Compensation above.
In structuring total compensation for our CEO and our other NEOs, the Compensation Committee considers, among other things, whether a form of
compensation will be deductible for federal income tax purposes. However, other factors may be of greater importance than preserving the tax deductibility for a particular form of compensation and the Compensation Committee retains the discretion to
award compensation that may not be deductible, consistent with our compensation philosophy and principles.
Change of Control
Agreements
The Company has entered into change of control agreements with each of its executive officers. The Compensation Committee
believes that change of control policies are an important element of the executive compensation program, support shareholder value creation and are necessary to attract and retain senior talent in a competitive market. Because the agreements give
the executive officers reasonable assurance of transitional employment support, the Compensation Committee
36
believes executive officers are able to maintain a more balanced, shareholder-focused approach to change of control situations. The Compensation Committee believes it is appropriate to have such
agreements provided the agreements are subject to periodic review. The Compensation Committee periodically reviews the benefits provided under the agreements to ensure that they serve the Companys interests in retaining these key executives,
are consistent with market practice and are reasonable.
These agreements provide for specified payments and other benefits if the
officers employment was terminated by the Company or its successor during the period beginning on the effective date of a change of control of the Company and ending 24 months after a change of control. Change of control payments are not
made if the termination is for cause, retirement, disability or death. Change of control payments also may be required if the officer leaves voluntarily because of significant changes in the officers circumstances following the change of
control. See the description of the specific factors that would result in a change of control payment and the amounts that can be received in connection with a change of control in Potential Payments Upon Termination or Change of Control
below. The changes triggering a change of control payment and the amounts paid are intended to enable executive officers to have a balanced perspective in making overall business decisions and to be competitive within overall market practices.
In addition, the Companys long-term incentive plans provide that in the event the officer is terminated, other than for cause,
during the period beginning on the effective date of a change of control and ending 24 months after a change of control of the Company, all outstanding options held by the officer become exercisable, RSUs become vested and PSUs will vest and pay out
at target. The accelerated vesting and payout of equity grants in the event of a change of control are intended to allow the executives to recognize the value of their contributions to the Company and encourage executive officers to take a balanced
perspective in making overall business decisions in the context of a change of control scenario. The agreements do not provide for payment of any golden parachute excise taxes.
Mr. Lindquist received certain
change-of-control payments and benefits during 2016. These payments and benefits, which are disclosed in the Summary Compensation Table on page 42, were payable under
the terms and conditions of a change-of-control agreement between Mr. Lindquist and Plum Creek, the obligations of which the Company assumed in connection with the
Plum Creek merger.
Severance Agreements
The Company has severance agreements with each of its executive officers. Under these agreements, the executive receives severance benefits upon termination unless the termination is for cause, is a
result of the Companys mandatory retirement policy, is because of the death or disability of the executive or is because the executive leaves or retires voluntarily. The specific amounts that executive officers would receive as severance
payments are described in Potential Payments Upon Termination or Change of Control below. The Compensation Committee believes that severance policies are an essential component of the executive compensation program and are necessary to
attract and retain senior talent in a competitive market. The Compensation Committee believes it is appropriate to have such agreements provided the agreements are subject to periodic review. The Compensation Committee periodically reviews the
benefits provided under the agreements to ensure that they serve the Companys interests in retaining these key executives, are consistent with market practice and are reasonable.
CEO Employment Agreement
In recognition of Mr. Simons
transformational leadership of Weyerhaeuser since 2013, on February 17, 2016 the Company entered into an executive employment agreement (the Employment Agreement) with Doyle R. Simons, the Companys president and chief
executive officer. The Companys board of directors believes that Mr. Simons has played, and will continue to play, a vital role in maximizing shareholder value and positioning Weyerhaeuser for long-term success. As the Company moved
forward with integrating the merger with Plum Creek and completing the strategic alternatives review of the Cellulose Fibers business, in addition to its continued drive for operational excellence within the businesses, the board of directors
determined that it was in the best interests of the Company and shareholders to enter into the
37
Employment Agreement to ensure Mr. Simons continued leadership of the organization.
A summary of the material terms of the Employment Agreement is set forth below:
|
● |
|
The term of the Employment Agreement is five years. |
|
● |
|
Mr. Simons annual base salary will be $1,000,000 per year, subject to increase (but not decrease) by the board at its discretion.
|
|
● |
|
Mr. Simons will be eligible to participate in the Companys annual cash incentive bonus plan (a performance-based incentive plan) with
a target value of not less than 150% of his base salary, although in any year the board may pay a greater or lesser amount in its discretion based on its assessment of his performance. |
|
● |
|
Mr. Simons will be eligible to receive annual grants under the Companys long-term incentive compensation plans on terms and conditions
no less favorable than the awards made generally to other senior executives. The target value for such long-term incentive grants will be no less than the target value of the long-term incentive grants made to Mr. Simons in 2016. However, the
actual payout under any particular long-term incentive award may be greater or lesser than the target value in any year based on actual achievement against performance goals or targets as the board may determine is appropriate.
|
|
● |
|
Mr. Simons will be eligible to participate in the Companys other benefit plans (such as pension, health insurance and life insurance)
on the same basis as other senior executives. |
|
● |
|
Mr. Simons will continue to be covered by the Companys existing change of control and severance agreements (collectively the
Severance Agreements) (see Change of Control Agreements and Severance Agreements above for more information). |
|
● |
|
If Mr. Simons terminates the Employment Agreement due to Retirement (as defined in the Employment Agreement), all equity awards will remain
outstanding through their remaining term and vest on their regularly scheduled vesting date (or earlier as provided in the Severance Agreements, if applicable), except that a pro-rata portion of any equity
awards granted within the one year prior to Retirement will be forfeited. |
|
● |
|
Mr. Simons employment will remain at will and the Employment Agreement and his employment may be terminated by the Company
or
|
|
|
Mr. Simons at any time for any reason or no reason. |
Retention Agreement
In
connection with the Companys strategic alternatives review of its Cellulose Fibers business, the Compensation Committee authorized the Company to enter into a retention award agreement with Ms. Slater, which was executed on
November 4, 2015. The Company believes the retention agreement was appropriate and in its best interests because Ms. Slater was expected to, and did, play a critical role leading the Companys strategic alternatives review process for
its Cellulose Fibers business. In accordance with the terms of the agreement, Ms. Slater was paid $1.5 million in cash for her support of the strategic alternatives review process and for remaining employed with the Company through the
closing of the several sale transactions involving the Cellulose Fibers business.
MANAGEMENTS ROLE
IN THE EXECUTIVE COMPENSATION PROCESS
The Companys CEO and chief human resources officer each played an important role in the
Compensation Committees executive compensation process for 2016 and regularly attended committee meetings. The CEO provided his opinions to the committee regarding executive compensation matters generally and the performance of the executives
reporting to him. The chief human resources officer presented recommendations to the committee on the full range of annual executive compensation decisions. At the committees February 2016 meeting, human resources executives presented the
committee with specific compensation recommendations for all executives other than the CEO. These recommendations were developed in consultation with the CEO and accompanied by market data provided by the Compensation Committees compensation
consultant. The committee exercised its independent discretion whether to accept managements recommendations and made final decisions about each executive officers compensation. Decisions related to the CEOs compensation were made
independently by the committee, in consultation with its consultant, and recommended to the full board of directors. Charles Williamson, the committees chair in 2016, also met periodically with human resources executives to confer on current
and upcoming topics likely to be brought before the committee.
38
STOCK OWNERSHIP REQUIREMENTS
Stock ownership requirements for executive officers have been in place since 1996, and were most recently amended in 2015. Under the current
requirements, each executive officer must acquire and hold a multiple of his or her base salary in shares of Weyerhaeuser stock. Minimum ownership levels are based on the executives salary grade and range from two to six times base salary as
follows:
|
|
|
Position |
|
Holding Requirement |
CEO |
|
6X base salary value |
SVPs |
|
2X base salary value |
|
Ownership Sources Included |
● direct ownership of common shares
● the value of amounts deferred into a stock equivalent account (through the voluntary deferral program described above)
● shares of Company stock held in the Companys 401(k) plan |
Until the required ownership levels are achieved, executives must retain 75% of the net profit shares acquired when
RSUs and PSUs vest. Net profit shares are shares remaining after payment of taxes upon vesting.
ANTI-HEDGING POLICY AND TRADING RESTRICTIONS
The
Company has a policy that prohibits our directors and executive officers from hedging their ownership of the Companys stock, including trading in options, puts, calls, or other derivative instruments related to Company stock or debt. The
policy also prohibits directors and executive officers from pledging Company stock and trading Company stock on margin. A copy of the Companys policy is available on the Companys website at www.weyerhaeuser.com under
Investors at the top of the page, then Corporate Governance and then under Policies & Documents. Paper copies may be obtained by written request to Weyerhaeuser Company, Attention: Corporate Secretary,
220 Occidental Avenue South, Seattle, WA 98104 or by email to CorporateSecretary@Weyerhaeuser.com.
CLAW BACK POLICY
The Company has an incentive compensation claw back policy to ensure that incentive compensation is paid based on accurate financial and operating
data, and the correct calculation of performance against incentive targets. It provides that in the event of a restatement of the financial or operating results of the Company or one of its business segments, the Company may seek recovery of
incentive compensation that would not otherwise have been paid if the correct performance data had been used to determine the amount payable. A copy of the Companys claw back policy is available on the Companys website at
www.weyerhaeuser.com under Investors at the top of the page, then Corporate Governance and then under Policies & Documents Paper copies may be obtained by written request to Weyerhaeuser Company,
Attention: Corporate Secretary, 220 Occidental Avenue South, Seattle, WA 98104 or by email to CorporateSecretary@Weyerhaeuser.com.
SHAREHOLDER ADVISORY VOTE ON NEO COMPENSATION
The Company annually seeks a shareholder vote on a proposal to approve on an advisory basis the compensation of our NEOs. This proposal, commonly known as a say-on-pay proposal, was supported by more than 95% of the votes cast at last years annual meeting. Our board of directors and our Compensation Committee value the opinions of our
shareholders and consider the results of the say-on-pay vote. To the extent there are significant votes against our NEO compensation as disclosed in this proxy statement
we will consider our shareholders concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns in making future compensation decisions.
39
RELATIONSHIP
WITH COMPENSATION COMMITTEE CONSULTANT
Cook & Co. has been engaged by the Compensation Committee to act as its compensation consultant and to assist the committee with its responsibilities related to the Companys executive
and board of directors compensation programs. A representative of Cook & Co. attends Compensation Committee meetings, as requested, and communicates with the Chair of the Compensation Committee between meetings.
The Compensation Committee has the sole authority from the board of directors for the appointment, compensation and oversight of the Companys
independent compensation consultant.
Cook & Co. reports directly to the Compensation Committee and all work conducted by
Cook & Co. for Weyerhaeuser is on behalf of the committee. Cook & Co. provides no services to the Company other than these executive and board of director compensation consulting services, and has no other direct or indirect
business relationships with the Company or any of its affiliates. All executive compensation services provided by Cook & Co. are conducted under the direction and authority of the Compensation Committee.
In addition, in its engagement agreement with the committee, Cook & Co. agrees to advise the Chair of the Compensation Committee if any
potential conflicts of interest arise that could cause Cook & Co.s independence to be questioned, and to undertake no projects for Weyerhaeuser management except at the request of the Compensation Committee Chair and as agent for the
Compensation Committee. The Compensation Committee has reviewed the independence of Cook & Co. and has concluded that Cook & Co.s work has not raised any conflict of interest.
COMPENSATION COMMITTEE REPORT
The Compensation Committee acts on behalf of the board of directors to establish and oversee the Companys executive compensation program in a
manner that serves the interests of Weyerhaeuser and its shareholders. For a discussion of the Compensation Committees policies and procedures, see Committees of the Board Compensation Committee above.
The Companys management has prepared the CD&A for the NEOs listed in the Summary
Compensation Table. The Compensation Committee has reviewed and discussed with management the CD&A included in this proxy statement. Based on this review and discussions, the committee recommended to the board of directors that the CD&A be
included in the proxy statement for the Companys 2017 annual meeting of shareholders.
The current members of the Compensation
Committee are set forth below. All members of the Compensation Committee participated in the review, discussion and approval of the Compensation Discussion and Analysis included in this proxy statement and remain as members of the board of
directors.
|
|
|
●Charles R. Williamson, Chairman
●Mark A. Emmert ●John I. Kieckhefer |
|
●Nicole W. Piasecki ●Lawrence A. Selzer |
|
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On February 19, 2016,
Messrs. Williamson, Emmert and Selzer and Ms. Piasecki were appointed to the Compensation Committee, with Mr. Williamson serving as chairman. Mr. Kieckhefer also served as a member of the Compensation Committee during 2016. No
person who served on the Compensation Committee during 2016 was an officer of the Company or any of its subsidiaries during 2016 or any prior period. No executive officer of the Company served as either (1) a member of the Compensation
Committee, or (2) as a director of any company with an executive officer of such company serving as a member of the Compensation Committee or as a director of the Company.
CODE OF ETHICS
The Companys Code of Ethics was first adopted in 1976. The Code of Ethics currently is in its ninth edition and is issued to all directors and
employees. It also is available to customers, contractors, suppliers and the public. The current edition of the Code of Ethics is available on the
40
Companys web site at www.weyerhaeuser.com under Sustainability at the top of the page, then Governance, then Operating Ethically, and then by
clicking the Code of Ethics icon. Paper copies may be obtained by written request to Weyerhaeuser Company, Attention: Corporate Secretary, 220 Occidental Avenue South, Seattle, WA 98104 or by email to
CorporateSecretary@Weyerhaeuser.com. If a listed companys board of directors or a board committee grants a waiver under the Code of Ethics for an executive officer or director, NYSE rules require that the waiver be disclosed to
shareholders. If we grant such a waiver, we will provide notice of the waiver on the Companys website at www.weyerhaeuser.com. We did not grant any such waivers for executive officers or directors in 2016.
RISK ANALYSIS OF OUR COMPENSATION PROGRAMS
The Compensation Committee reviews our compensation plans and policies to ensure that they do not encourage unnecessary risk taking and instead
encourage behaviors that support
sustainable value creation. In 2016, the committee, with the assistance of Cook & Co., reviewed the Companys compensation policies and practices for employees, including NEOs, and
believes that our compensation programs are not reasonably likely to have a material adverse effect on the Company. We believe the following factors reduce the likelihood of excessive risk-taking:
|
● |
|
the program design provides a balanced mix of cash and equity, short-term and long-term incentives, fixed and performance-based pay, and
performance metrics; |
|
● |
|
maximum payout levels for incentive awards are capped; |
|
● |
|
the Compensation Committee has downward discretion over incentive program payouts; |
|
● |
|
executive officers are subject to share ownership guidelines; |
|
● |
|
compliance and ethical behaviors are integral factors considered in all performance assessments; |
|
● |
|
the Company has adopted policies prohibiting hedging and pledging by executives and directors; and |
|
● |
|
the Company has adopted a clawback policy.
|
41
SUMMARY COMPENSATION TABLE
The following table sets forth information
regarding 2016 compensation for each of our 2016 NEOs. 2015 and 2014 compensation is presented for the executive officers who were also NEOs in 2015 and 2014. The Summary Compensation Table and the Grants of Plan-Based Awards for 2016 table should
be reviewed together for a more complete representation of both the annual and long-term incentive compensation elements of our compensation program.
|
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|
|
|
|
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|
|
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|
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|
|
|
Name and Principal Position |
|
Year |
|
|
Salary (1)($) |
|
|
Bonus (2)($) |
|
|
Stock Awards
(3)($)
|
|
|
Option Awards
(4)($)
|
|
|
Non-Equity Incentive
Plan
Compensation (5)($) |
|
|
Change in Pension Value
and
Nonqualified Deferred Compensation
Earnings
(6)($) |
|
|
All Other
Compensation
(7)($) |
|
|
Total ($) |
|
Doyle R. Simons
President and Chief Executive
Officer |
|
|
2016 2015 2014 |
|
|
|
1,000,000 987,500 950,000 |
|
|
|
|
|
|
|
5,120,233 4,265,369 3,957,023 |
|
|
|
1,581,847 1,420,491 1,321,206 |
|
|
|
2,400,000 1,950,000 1,712,000 |
|
|
|
228,934 150,153 149,103 |
|
|
|
7,950 7,950 55,102 |
|
|
|
10,338,963 8,781,463 8,144,434 |
|
Russell S. Hagen
Senior Vice President and
Chief Financial Officer |
|
|
2016 |
|
|
|
434,201 |
|
|
|
25,547 |
|
|
|
1,004,056 |
|
|
|
|
|
|
|
723,000 |
|
|
|
207,631 |
|
|
|
80,649 |
|
|
|
2,475,084 |
|
Patricia M. Bedient
Former Executive Vice
President and
Chief Financial Officer |
|
|
2016 2015 2014 |
|
|
|
344,615 632,500 610,000 |
|
|
|
|
|
|
|
1,162,690 1,161,578 1,188,231 |
|
|
|
359,186 386,820 397,114 |
|
|
|
399,840 925,000 811,000 |
|
|
|
203,420 478,511 600,971 |
|
|
|
1,826,169 7,950 8,808 |
|
|
|
4,295,920 3,592,359 3,616,124 |
|
Adrian M. Blocker
Senior Vice President,
Wood Products |
|
|
2016 2015 2014 |
|
|
|
560,000 520,962 437,500 |
|
|
|
|
|
|
|
1,132,023 1,021,460 564,261 |
|
|
|
349,710 340,172 188,577 |
|
|
|
891,000 779,000 609,000 |
|
|
|
167,579 113,261 96,563 |
|
|
|
7,950 25,450 37,986 |
|
|
|
3,108,262 2,800,305 1,933,887 |
|
Rhonda D. Hunter
Senior Vice President,
Timberlands |
|
|
2016 2015 2014 |
|
|
|
560,000 522,500 477,308 |
|
|
|
|
|
|
|
1,132,023 1,021,460 616,507 |
|
|
|
349,710 340,172 206,041 |
|
|
|
758,000 682,000 578,000 |
|
|
|
988,172 613,801 664,435 |
|
|
|
59,100 7,950 48,671 |
|
|
|
3,847,005 3,187,883 2,590,962 |
|
James Kilberg
Senior Vice President,
Real Estate,
Energy & Natural Resources |
|
|
2016 |
|
|
|
428,778 |
|
|
|
27,382 |
|
|
|
974,810 |
|
|
|
|
|
|
|
627,000 |
|
|
|
43,748 |
|
|
|
634,499 |
|
|
|
2,736,217 |
|
Thomas M. Lindquist Former Executive Vice President, Real
Estate, Energy & Natural Resources |
|
|
2016 |
|
|
|
231,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,812,960 |
|
|
|
6,195,854 |
|
|
|
9,239,947 |
|
Catherine I. Slater Former Senior Vice President, Cellulose
Fibers |
|
|
2016 2015 |
|
|
|
533,692 520,962 |
|
|
|
|
|
|
|
1,257,009 1,021,460 |
|
|
|
349,710 340,172 |
|
|
|
1,500,000 689,000 |
|
|
|
846,599 290,916 |
|
|
|
554,763 7,950 |
|
|
|
5,041,774 2,870,460 |
|
|
Ms. Bedients last day with the Company was July 1, 2016, Mr. Lindquists last day with the Company was June 30, 2016 and
Ms. Slaters last day with the Company was November 30, 2016. |
(1) |
The amount reported in this column for each executive officer reflects the dollar amount of base salary paid in cash in the fiscal year.
|
(2) |
In accordance with the terms of the Plum Creek merger, Messrs. Hagen and Kilberg received $25,547 and $27,382, respectively, reflecting one-twelfth of the annual bonus under the former Plum Creek Annual Incentive Plan, calculated at target level performance. |
(3) |
Amounts in this column reflect grants of RSUs and PSUs to the executive officers, except that Messrs. Hagen and Kilberg were granted only PSUs in 2016, and for
all periods reported reflect the grant date fair value of awards granted under the Companys long-term incentive plans computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Details
regarding 2016 stock awards can be found in the table Grants of Plan-Based Awards for 2016. Details regarding outstanding stock awards can be found in the table Outstanding Equity Awards At 2016 Fiscal Year End. The grant
date fair value for PSUs is reported based upon the probable outcome of the performance conditions on the grant date. The value of the 2016 and 2015 PSU grants, assuming achievement of the maximum performance levels, would be as follows:
Mr. Simons$5,051,379 (2016) and $4,205,882 (2015); Mr. Hagen$1,506,083 (2016); Ms. Bedient$1,147,066 (2016) and $1,145,369 (2015)); Mr. Blocker$1,116,790 (2016) and $1,007,223 (2015);
Ms. Hunter$1,116,790 (2016) and $1,007,223 (2015); Mr. Kilberg$1,462,215 (2016); and Ms. Slater$1,116,790 (2016) and $1,007,223 (2015). The value of the 2014 PSU grants, based on actual performance levels, were as
follows: Mr. Simons$3,942,493 (2014); Ms. Bedient$1,185,270 (2014); Mr. Blocker$562,857 (2014); and Ms. Hunter$614,941 (2014). |
42
(4) |
Amounts in this column for all grants of stock options to Mr. Simons, Ms. Bedient, Mr. Blocker, Ms. Hunter and Ms. Slater for all
periods reflect the grant date fair value of awards granted under the Companys long-term incentive plans computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Assumptions used in the
calculation of these values are included in Note 16 of Notes to Consolidated Financial Statements in the Companys Annual Report on Form 10-K. Details regarding outstanding stock option awards
can be found in the table Outstanding Equity Awards At 2016 Fiscal Year End. |
(5) |
Amounts for Mr. Simons, Mr. Hagen, Ms. Bedient, Mr. Blocker, Ms. Hunter, and Mr. Kilberg represent the value of the incentive
awards earned in fiscal year 2016 based on the Companys performance and the performance of the Companys businesses against performance levels set by the Compensation Committee of the board of directors. The measures are described in
Compensation Discussion and AnalysisCompensation ComponentsDetermination of CompensationShort-Term Incentive PlanAIP Performance Measures and Plan Mechanics above. The amount for Ms. Bedient represents a
prorated bonus paid at target performance level in the amount of $399,840. The amount for Ms. Slater represents payment of a previously disclosed $1,500,000 retention payment. |
(6) |
Amounts represent annual changes in the actuarial present value of accumulated pension benefits. |
(7) |
Amounts under All Other Compensation for each of the NEOs are described in the following table: |
ALL OTHER COMPENSATION
|
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|
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|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
Name |
|
Year |
|
|
Company Contribution to Defined
Contribution
Plan ($) |
|
|
Executive Term Life Insurance Premium ($) (1) |
|
|
Premium Contribution to Deferred Compensation ($) |
|
|
Other ($) |
|
|
Total ($) |
|
Doyle R. Simons |
|
|
2016 2015 2014 |
|
|
|
7.950 7,950
7,800 |
|
|
|
1,008 |
|
|
|
|
|
|
|
46,294 |
|
|
|
7,950 7,950
55,102 |
|
Russell S. Hagen |
|
|
2016 |
|
|
|
35,513(2 |
) |
|
|
|
|
|
|
|
|
|
|
45,136(3 |
) |
|
|
80,649 |
|
Patricia M.
Bedient |
|
|
2016 2015 2014 |
|
|
|
7,385 7,950
7,800 |
|
|
|
1,008 |
|
|
|
|
|
|
|
1,793,227(4 |
)
|
|
|
1,800,612 7,950
8,808 |
|
Adrian M. Blocker |
|
|
2016 2015 2014 |
|
|
|
7,950 7,950
7,800 |
|
|
|
1,008 |
|
|
|
|
|
|
|
17,500 29,178 |
|
|
|
7,950 25,450
37,986 |
|
Rhonda D. Hunter |
|
|
2016 2015 2014 |
|
|
|
7,950 7,950
7,800 |
|
|
|
1,008 |
|
|
|
51,150
|
|
|
|
39,863 |
|
|
|
59,100 7,950
48,671 |
|
James A. Kilberg |
|
|
2016 |
|
|
|
34,953(2 |
) |
|
|
|
|
|
|
|
|
|
|
599,546(5 |
) |
|
|
634,499 |
|
Thomas M.
Lindquist |
|
|
2016 |
|
|
|
26,650(2 |
) |
|
|
|
|
|
|
|
|
|
|
6,169,204(6 |
) |
|
|
6,195,854 |
|
Catherine I.
Slater |
|
|
2016 2015 |
|
|
|
7,950 7,950 |
|
|
|
|
|
|
|
103,350 |
|
|
|
443,463(7 |
)
|
|
|
554,763 7,950 |
|
(1) |
As of 2015, the executive term life insurance benefit is no longer provided. |
(2) |
Amount includes a non-elective Company contribution of $21,240, $20,935, and $10,750 for Messrs. Hagen, Kilberg and Lindquist, respectively. Amount also
includes a matching contribution of $14,273, $14,018, and $15,900 for Messrs. Hagen, Kilberg and Lindquist, respectively. See discussion under Pension Benefits for more information. |
(3) |
Amount represents cash dividends paid on unvested RSU awards previously granted to Mr. Hagen while employed by Plum Creek and assumed by the Company in
connection with the Plum Creek merger. |
(4) |
Amount relates to Ms. Bedients separation from service and includes $1,776,000 in severance, $10,000 to assist with health care expenses and a
$7,277 tax gross-up payment related to the health care expense payment. |
(5) |
Amount includes: (i) temporary living expenses in the amount of $90,796, which were paid by the Company in connection with Mr. Kilbergs
relocation from Georgia to Washington and were treated as compensation; (ii) $463,465 paid by the Company in connection with the sale of Mr. Kilbergs former home and the purchase of a new home; and (iii) cash dividends in the amount
of $45,285 paid on unvested RSU awards previously granted to Mr. Kilberg while employed by Plum Creek and assumed by the Company in connection with the Plum Creek merger. |
(6) |
Amount reflects payments to Mr. Lindquist under the terms of his change of control agreement with Plum Creek that was assumed by the Company in the Plum
Creek merger, and includes $3,676,500 in severance, $1,950,000 for the settlement of a Plum Creek long-term incentive award assumed by the Company in the Plum Creek merger, a prorated bonus of $289,455 calculated in accordance with the terms of his
Plum Creek change of control agreement, $75,000 to assist with health care expenses and a $54,199 tax gross-up payment related to the health care expense payment. Amount also includes $124,050 in cash
dividends paid on unvested RSU awards previously granted to Mr. Lindquist while employed by Plum Creek and assumed by the Company in connection with the Plum Creek merger. |
(7) |
Amount for Ms. Slater represents a prorated bonus paid at target performance level in the amount $443,463. |
43
GRANTS OF PLAN-BASED AWARDS FOR 2016
The following table provides information
for each of our NEOs regarding 2016 annual and long-term incentive award opportunities, including the range of potential payouts under non-equity and equity incentive plans. Specifically, the table presents
the 2016 grants of annual incentive awards, PSU awards, stock options, and RSU awards.
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|
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|
|
|
|
|
|
|
|
|
Estimated Future Payout
Under Non-Equity Plan
Awards
(2) |
|
|
Estimated Future Payouts
Under
Equity Plan Awards (3) |
|
|
Stock Awards Number of Shares or Stock Units
(#)
|
|
|
Option Awards: No. of
Securities
Under- lying Options (#) |
|
|
Exercise or Base Price of Option Awards ($/Sh)
(4)
|
|
|
Grant Date Closing Price ($/Sh) |
|
|
Grant Date Fair Value of Stock and
Option Awards
($) |
|
Name |
|
Type
of Award |
|
Grant Date (1) |
|
|
Thres-hold ($)
|
|
|
Target ($) |
|
|
Maximum ($) |
|
|
Thres- hold (#) |
|
|
Target (#) |
|
|
Maximum (#) |
|
|
|
|
|
|
Doyle R. Simons |
|
AIP |
|
|
2/10/2016 |
|
|
|
300,000 |
|
|
|
1,500,000 |
|
|
|
4,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU |
|
|
2/10/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,417 |
|
|
|
161,670 |
|
|
|
242,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,367,586 |
|
|
|
RSU |
|
|
2/10/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,752,646 |
|
|
|
Option |
|
|
2/10/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
579,431 |
|
|
|
23.055 |
|
|
|
22.68 |
|
|
|
1,581,847 |
|
Russell S. Hagen
|
|
AIP |
|
|
2/19/2016 |
|
|
|
93,500 |
|
|
|
467,500 |
|
|
|
1,402,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU |
|
|
5/19/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,424 |
|
|
|
29,697 |
|
|
|
44,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,004,056 |
|
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patricia M. Bedient |
|
AIP |
|
|
2/9/2016 |
|
|
|
108,000 |
|
|
|
544,000 |
|
|
|
1,632,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,178 |
|
|
|
36,712 |
|
|
|
55,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
764,711 |
|
|
|
RSU |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
397,979 |
|
|
|
Option |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131,570 |
|
|
|
23.090 |
|
|
|
23.08 |
|
|
|
359,186 |
|
Adrian M. Blocker |
|
AIP |
|
|
2/9/2016 |
|
|
|
96,900 |
|
|
|
484,500 |
|
|
|
1,453,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,936 |
|
|
|
35,743 |
|
|
|
53,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
744,527 |
|
|
|
RSU |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
387,496 |
|
|
|
Option |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,099 |
|
|
|
23.090 |
|
|
|
23.08 |
|
|
|
349,710 |
|
Rhonda D. Hunter |
|
AIP |
|
|
2/9/2016 |
|
|
|
96,900 |
|
|
|
484,500 |
|
|
|
1,453,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,936 |
|
|
|
35,743 |
|
|
|
53,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
744,527 |
|
|
|
RSU |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
387,496 |
|
|
|
Option |
|
|
2/9/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,099 |
|
|
|
23.090 |
|
|
|
23.08 |
|
|
|
349,710 |
|
James A. Kilberg
|
|
AIP |
|
|
2/19/2016 |
|
|
|
92,140 |
|
|
|
460,700 |
|
|
|
1,382,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU |
|
|
5/19/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,208 |
|
|
|
28,832 |
|
|
|
43,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
974,810 |
|
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|