Proxy Statement (Form DEF 14A)
SCHEDULE14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of
We are holding this meeting to:
Your Board of Directors has selected
Your vote is important, so please vote your shares promptly.To vote your shares, please refer to the instructions on the enclosed proxy card or voting instruction form, or review the sections titled "Annual Meeting Information - Voting"and "Instructions for Attending the Annual Meeting"of the accompanying proxy statement.
By Order of the Board of Directors,
Vice President, General Counsel
& Corporate Secretary
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Important Notice Regarding the Availability of Proxy Materials for
the Company's Annual Meeting of Stockholders on
The Annual Meeting on
The PotlatchDeltic Corporation Proxy Statement and 2024 Annual Report to Stockholders
are available online atwww.proxyvote.comandwww.potlatchdeltic.com.
TABLE OF CONTENTS
ANNUAL MEETING INFORMATION
This proxy statement and the enclosed proxy card are being furnished to stockholders of
Date, time, and place of the meeting
The 2025 Annual Meeting of Stockholders (the "Annual Meeting") will be held online in a virtual-only meeting format on
If you plan to participate in the Annual Meeting, please see the section entitled "Instructions for Attending the Annual Meeting." Stockholders will be able to listen, vote, and submit questions from their home or from any remote location that has Internet connectivity. Stockholders may participate online by logging in at the following web address:
www.virtualshareholdermeeting.com/PCH2025
A replay of the webcast will be available on the Investor Relations page of our website atwww.potlatchdeltic.comuntil
The purpose of the meeting is to vote upon three proposals. The inspector of election will tabulate affirmative and negative votes, abstentions, and broker non-votes, for the vote on each proposal, as applicable. These proposals and the vote required for approval of each proposal are as follows:
Recommendation of the Board of Directors
Our Board recommends that you vote as follows:
FOReach director nominee named in this proxy statement
FORthe ratification of the appointment of
FORadvisory approval of our named executive officer compensation
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Who may vote
Stockholders who owned common stock at the close of business on
Quorum
On
Proxy Solicitation
We are making this solicitation and will bear its costs. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation materials to beneficial owners. Proxies may also be solicited by certain of our directors, officers and employees, without additional compensation, personally or by telephone. While we have not chosen at this time to engage the services of a proxy solicitor to aid in the solicitation of proxies and to verify records relating to the solicitation, should we do so, we will bear all costs of such solicitation of proxies. We anticipate that if we retain the services of a proxy solicitor, we will pay that firm customary fees for those services, which we believe would not be significant.
Tabulation of Votes-Inspector of Election
An officer of the Company will act as the inspector of election at the Annual Meeting.
Voting
You may vote your shares in one of several ways, depending upon how you own your shares.
Shares registered directly with
If you retuyour proxy card by mail or vote via the Internet or by telephone but do not select a voting preference, the individuals named as proxies on the enclosed proxy card or voting instruction form will vote your sharesFORthe election of the three nominees for director named in this proxy statement,FORthe ratification of the appointment of
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Shares held in "street" or "nominee" name (through a bank, broker or other nominee):
Revoking your proxy
If you are a stockholder of record, you may revoke your proxy at any time before the Annual Meeting by giving our Corporate Secretary written notice of your revocation or by submitting a later-dated proxy, and you may revoke your proxy by voting online during the Annual Meeting. Online attendance at the meeting, by itself, will not revoke a proxy. If shares are registered in your name, you may revoke your proxy by telephone by calling 1-800-690-6903 and following the instructions or via the Internet by going towww.proxyvote.comand following the instructions.
If you are a stockholder whose shares are held in "street" or "nominee" name, you may revoke your voting instructions by informing the bank, broker, or other nominee in accordance with that entity's procedures for revoking your voting instructions.
Annual Meeting attendance
We cordially invite and encourage all of our stockholders to attend the Annual Meeting online. (See "Instructions for Attending the Annual Meeting"in this proxy statement.) Persons without a Control Number and persons who are not stockholders may attend the Annual Meeting as guests, but they will not have the option to vote shares, ask questions, or examine our list of stockholders of record.
Other matters presented at the Annual Meeting
We do not expect any matters, other than those included in this proxy statement, to be presented at the Annual Meeting. If other matters are presented, the individuals named as proxies on the enclosed proxy card will have discretionary authority to vote your shares on such matters.
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PROPOSAL 1 - ELECTION OF DIRECTORS
We recommend a voteFOReach nominee.
Our Board of Directors is divided into three classes serving staggered three-year terms. The Board has nominated each of the individuals named below for election as a director at the Annual Meeting. Our
The individuals named as proxies on the enclosed proxy card will voteFORthe election of all nominees unless you direct them to vote against any nominee or abstain from voting for any nominee. Each of this year's nominees are currently members of the Board. If any nominee becomes unable to serve as a director before the meeting (or decides not to serve), the individuals named as proxies may vote for a substitute nominee proposed by the Board or we may reduce the number of members of the Board. We recommend a voteFOReach nominee listed below.
Nominees for Election at the Annual Meeting for a Term Expiring in 2028:
Age 66, a director since
Age 67, a director since
Age 66, a director since
The affirmative vote of a majority of the votes cast at the Annual Meeting is required to elect each of the nominees for director listed in Proposal 1. Abstentions and broker non-votes will not be counted as votes cast with respect to this proposal.
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BOARD OFDIRECTORS
The Board of Directors is authorized to fix the number of directors within the range of 7 to 15 members, and has fixed the number at nine. At the Annual Meeting, you and the other stockholders will elect three individuals to serve as directors until the 2028 Annual Meeting. See"Proposal 1 - Election of Directors."Our Bylaws require our directors to be elected by a majority vote of the votes cast at the Annual Meeting on each nominee.
Below are the names and ages of our directors who will be continuing directors as of the date of this proxy statement, the year each of them became a director, their principal occupation or employment for at least the past five years, and certain of their other directorships. In addition, set forth below for each director is a description of the particular experience, qualifications, attributes or skills that led the Board to conclude that the person should serve as a director for the company. If you do not select a voting preference, the persons named as proxies in the accompanying proxy will vote for the election of the nominees listed below. We have no reason to believe that any of these nominees will be unable to serve as a director.
Each of our directors has skills and experience in one or more aspects of corporate responsibility matters, including
Our Board is committed to diverse representation in its membership and leadership. Currently, our Board of Directors includes three women, one director who identifies herself as ethnically diverse, and one military veteran. Two of our Board's three standing committees are chaired by women.
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Nominees for Election at this Meeting for a Term Expiring in 2028 (Class II)
As our former Chief Executive Officer,
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Directors Continuing in Office until 2027 (Class I)
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Directors Continuing in Office until 2026 (Class III)
Through her service as Chief Financial Officer of various publicly traded companies and major health care organizations over the past decade,
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CORPORATEGOVERNANCE
Attention: Corporate Secretary
Telephone: (509) 835-1500
Corporate Governance Guidelines; Corporate Conduct and Ethics Code
Our Board of Directors and management operate within our comprehensive plan of corporate governance that defines our Board's and executives' responsibilities, sets high standards for their professional and personal conduct and provides for monitoring of their compliance with those responsibilities and other legal standards. Our Board has adopted Corporate Governance Guidelines ("Governance Guidelines"), which provide standards and practices of corporate governance that we have designed to help contribute to our success and to assure public confidence in our company. In addition, all committees of the Board operate under charters that describe the responsibilities and practices of each committee.
We have adopted a Corporate Conduct and Ethics Code ("Ethics Code"), which provides ethical standards and policies that apply to all of our directors, officers and employees. Our Ethics Code requires that our directors, officers and employees avoid conflicts of interest, comply with laws and other legal requirements, conduct business honestly and ethically, provide full and accurate reporting to us and otherwise act with integrity and in the company's best interests. We have also established procedures so that complaints regarding our accounting and auditing matters, conflicts of interests, securities law compliance and other matters can be submitted confidentially and anonymously. See "Communications with Directors" below.
The Ethics Code and the Governance Guidelines may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," then "Corporate Governance," and then selecting the appropriate link.
Majority Voting in Director Elections
We have adopted majority voting procedures for the election of directors in uncontested elections. In an uncontested election, each nominee is elected by the vote of a majority of the votes cast on such nominee's election. Abstentions and broker non-votes will not be counted as votes cast in an uncontested election, and so will have no effect on the outcome of the vote. As provided in our Bylaws, an "uncontested election" is one in which the number of nominees equals the number of directors to be elected in such election. The Board may nominate or elect as a director only persons who agree to tender, promptly following his or her election or re-election to the Board, an irrevocable resignation that will be effective upon (i) the failure of the candidate to receive the required vote at the next annual meeting at which he or she faces re-election and (ii) the acceptance by the Board of such resignation. If an incumbent director fails to receive the required vote for re-election in an uncontested election, the
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Nominees for Director
Our
The Nominating Committee periodically consults with the Board to establish, modify and affirm a specific set of skills, professional or business experience, and attributes that should be represented on the Board of Directors and recommends to the Board any changes deemed appropriate by the Committee. Annually, in connection with the Board and committee performance evaluations, and when retirements or other changes are expected to occur, the Nominating Committee reviews a written matrix that illustrates these desired qualities and matches them with individual members of the Board to assess how well these qualities are currently represented on the Board or if there are any gaps. From time to time, when the Nominating Committee concludes that one or more gaps exist, it will seek to find a director candidate who would bring the desired trait to the Board.
Currently, the Committee's director skill matrix sets forth the following desired backgrounds that should be represented on the Board by at least one director:
In addition to seeking highly qualified and dedicated directors, the Board recognizes the value in diversity and endeavors to assemble a Board with diverse backgrounds, skills, professional experience, perspectives, age, race, ethnicity and gender. Accordingly, the Board is committed to actively seeking out diverse candidates, including women and individuals from underrepresented groups, to include in the pool from which new director nominees are selected. Currently, 33% of the members of the Board are diverse, with 33% who are women and 11% who are ethnically diverse.
Prior to each annual meeting of stockholders, our Nominating Committee identifies director nominees first by evaluating the current directors whose terms will expire at the annual meeting and who are willing to continue in service. These candidates are evaluated based on the criteria described above, the candidate's prior service as a director, and the needs of the
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The Director Nomination Policy and our Bylaws set forth the process for nomination of directors by stockholders. A stockholder who wishes to recommend a prospective nominee to the
The company may require any prospective nominee recommended by a stockholder to furnish such other information as may reasonably be required by the company to determine the eligibility of such person to serve as an independent director or that could be material to a reasonable stockholder's understanding of the independence, or lack thereof, of such person.
The foregoing is only a summary of the detailed requirements set forth in our Director Nomination Policy and Bylaws regarding director nominations by stockholders. This description is qualified in its entirety by reference to the full text of our Director Nomination Policy and Bylaws. Copies of our Director Nomination Policy and Bylaws may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," and then "Corporate Governance."
In addition to satisfying the requirements under our Bylaws with respect to advance notice of any nomination, any stockholder that intends to solicit proxies for a director nominee in accordance with SEC Rule 14a-19 under the Exchange Act (the universal proxy rules) must comply with all the requirements of Rule 14a-19(b).
Director Independence
The role of our Board is to oversee and provide policy guidance on our business and affairs. The Board believes that it will best serve our stockholders if the majority of its members are independent.
With the exception of
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Board Leadership Structure
Our Board has determined that the leadership structure of the Board, in particular having
At each of its regular meetings and, as necessary at special meetings, the Board meets in executive session without members of management present. Each committee of the Board also schedules an executive session without members of management present as necessary for regularly scheduled meetings and, when appropriate, for special meetings.
Risk Oversight
Our company has an enterprise risk management program overseen by senior management. The Board oversees the company's business, the risks associated with its business, and the steps that senior management is taking to evaluate, manage and mitigate those risks. This oversight is supported by the Board's leadership structure, which provides for oversight and monitoring of strategic and other material risks by the full Board under the leadership of the Chair and the Lead Director, and for oversight and evaluation of discrete risks in committees.
The Board also oversees corporate responsibility matters, including our environmental management, sustainability strategy, social responsibility, health and safety program performance, public policy, advocacy and government relations, corporate governance policies and practices, human capital management initiatives, organizational culture and climate-related risks and opportunities. See "Our Commitment to Corporate Responsibility" below.
As required by Nasdaq listing rules and pursuant to its charter, the Board's Audit Committee, composed entirely of independent directors, provides oversight on matters relating to accounting, financial reporting, internal controls, auditing, and legal and regulatory compliance activities, including monitoring our compliance with tax and other rules pertaining to our status as a REIT, and other matters as the Board deems appropriate. The Audit Committee's responsibilities include assisting the Board in its oversight of the company's enterprise risk management program, carbon accounting, and corporate responsibility-related audit matters. The Audit Committee's oversight of the enterprise risk management program includes reviewing and discussing with management at least annually (i) management's report on risk management, including management's assessment of risk exposure (for example,
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risks relating to operations, climate change, cybersecurity threats and regulatory compliance, among others), the processes in place to identify and manage significant risks, and steps taken by management to control or mitigate such exposures, and (ii) management's report on cybersecurity risk management, which may include a review of the company's cybersecurity framework, priorities, risk profile, and processes, controls, and strategy to mitigate data protection and cybersecurity risks. The Audit Committee's responsibilities also include discussing with management any significant cybersecurity incidents that may have a material effect on the company's business or its financial statements and management's mitigation and remediation plan for such incidents. The Audit Committee periodically updates the Board on risk management matters. The Board may also receive updates between meetings from the President and Chief Executive Officer relating to risk oversight matters. In carrying out its responsibilities, the Audit Committee also oversees the appointment and compensation of the Internal Audit Director and reviews the staffing of the
The Audit Committee also:
The Audit Committee meets at least quarterly with the Internal Audit Director and other members of management.
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Our Commitment to Corporate Responsibility
The table below highlights some of our recent corporate responsibility initiatives and commitments.
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Category |
Practice |
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Corporate Responsibility |
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We issued our 2023 Corporate Responsibility Report in
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We published data describing our carbon record including our estimated carbon removals and our estimated Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions.
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Our Vice President, Public Affairs and Chief Sustainability Officer provides senior leadership on corporate responsibility reporting, reports directly to the President and Chief Executive Officer, and reports regularly to the Board on corporate responsibility matters and initiatives.
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We have an established governance system that develops our corporate responsibility strategy and goals, with oversight by the Board. An enterprise-wide risk management and control framework identifies, assesses and mitigates where possible material risks facing the company, including climate risks. Our
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In 2024, we increased our reporting to certain third-party ratings services, submitting questionnaire responses to CDP, Sustainalytics, ISS and S&P Global CSA.
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Corporate Responsibility Goals and Targets |
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Each executive's annual incentive compensation goals for 2024 included goals based on corporate responsibility metrics. See "Compensation, Discussion and Analysis - 2024 Annual Incentive Awards - 2024 Non-Financial Performance Metrics and Results"below.
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We continue to make progress towards our 2030 GHG reduction targets from a 2021 baseline. These targets include a 42% reduction in Scope 1 and Scope 2 emissions and a 25% reduction in Scope 3 value chain emissions.
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Board Composition |
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Our Board is committed to diverse representation in its membership and leadership, and currently maintains the following diversity characteristics:
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Three of our nine directors are women (33% of the full Board and 43% of our independent directors).
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Women chair two of the Board's three standing committees.
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One of our nine directors (11% of the Board) is ethnically diverse.
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One of our nine directors (11% of the Board) is a military veteran.
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Corporate Responsibility Skills of Directors |
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Each of our directors has skills and experience in one or more aspects of corporate responsibility, including business ethics and compliance; governance; cybersecurity, data security, and privacy; social responsibility, including human capital and health and safety; workforce engagement; culture; talent development; environmental sustainability; climate; regulatory and public policy matters; and risk management.
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Governance Documents and Policies |
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OurCorporate Governance Guidelines and
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OurCorporate Governance Guidelinesreflect the Board's oversight of sustainability strategy, public policy and government relations, and health and safety program performance.
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OurDirector Nomination Policy and Corporate Governance Guidelinesprovide that, in connection with the selection of director candidates, the Board is committed to actively seeking out diverse candidates, including women and individuals from underrepresented groups, to include in the pool from which new director nominees are selected.
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OurNominating and Corporate Governance Committee Charterprovides that the Committee assists the Board in the development of the company's approach to corporate governance issues, including but not limited to the Board's oversight of the company's overall compliance with applicable environmental laws and operating permits, and works with the Audit Committee on environmental compliance issues that could have a material financial effect on the company.
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OurExecutive Compensation and Personnel Policies Committee Charterreflects the Committee's practice of assisting the Board in its oversight of our policies and strategies relating to human capital management, including workforce engagement, and talent recruitment, development, and retention.
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OurAudit Committee Charterprovides for the Committee's oversight of carbon accounting and corporate responsibility-related audit matters, and our enterprise risk management program. See "Risk Oversight"above.
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We have adopted additional policies and procedures to further integrate our mission and values into the operation of our business, including aWorkforce Engagement Policy,aHuman Rights Policy,aSupplier Code of Conductand aForest Stewardship Policy.
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Employee Workforce |
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The average variance in median pay between men and women by pay grade is less than 2% across the company.
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As of
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As of
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We continued to promote the professional development of women throughout our businesses by launching a new employee resource group during Women's History Month, which is focused on providing a sense of community, meaningful connections and mentorship opportunities for women at the Company called LIFT (Lead. Inspire. Foster. Thrive!).
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Our employee resource group for military veterans, SALUTE, continued to be active among our employees, furthering its mission to support veterans personally and professionally at
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Shareholder Engagement |
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We regularly engage with our shareholders. During 2024, members of executive management met with shareholders owning approximately 60% of outstanding active institutional ownership. These engagements included in-person meetings and video and telephone conference calls covering topics such as company strategy, business fundamentals, capital allocation priorities, growth, emerging natural climate solutions opportunities, and corporate responsibility. We discuss key themes and feedback with the Board to keep it apprised of shareholder views, insights, and trends.
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Health and Safety Matters |
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Four of our seven facilities have been recognized by voluntary protection programs in partnership with the
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Our
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Our
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Our
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Environmental Matters |
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We reported 2023 estimated Scope 1, Scope 2, and Scope 3 GHG emissions in 2024.
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We utilize a comprehensive timberland environmental management system, which focuses on continual improvement in achieving our sustainable forest management objectives, and complying with laws, regulations and standards.
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For additional information on our human capital resources matters, see Part I, Item 1, Business, Environmental, Social and Governance Practices - Social Responsibility Practices, in our 2024 Annual Report, which can be found atwww.proxyvote.comandwww.potlatchdeltic.com. In addition, our Corporate Responsibility Report and our climate and carbon data and other information on our commitment to corporate responsibility can be found atwww.potlatchdeltic.com.
Transactions with Related Persons
Securities laws require us to disclose certain business transactions that are considered related person transactions. In order to comply with these requirements, our Audit Committee has adopted a Related Person Transactions Policy that applies to any director or executive officer of the company, any nominee for director, any beneficial owner of more than 5% of our voting stock, any immediate family member of any of the foregoing persons, and any entity that employs any of the foregoing persons, or in which any of the foregoing persons is a general partner, principal or 10% or greater beneficial owner. Transactions covered by this policy are those in which (a) we or any of our subsidiaries participate, (b) the amount involved exceeds
Any proposed related person transaction is reviewed by our Audit Committee at its next regularly scheduled meeting, unless our Corporate Secretary determines that it is not practicable or desirable to wait until the next scheduled meeting for review of a particular transaction, in which case the Chair of the Audit Committee has the authority to review and consider the proposed transaction. Only those transactions determined to be fair and in the company's best interests are approved, after taking into account all factors deemed relevant by the Audit Committee, or its Chair, as the case may be. If the Chair approves any related person transaction, then that approval is reported to the Audit Committee at its next regularly scheduled meeting. The entire Related Persons Transaction Policy may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," then "Corporate Governance."
There were no transactions with related persons in 2024 that required disclosure in this proxy statement or that required approval by the Audit Committee pursuant to the policy described above.
Board Meetings
During 2024, our Board met four times. None of our directors attended less than 75% of all meetings of the Board and committees on which such director served that were held while the director was a member of the Board or committee. The Board does not have a policy requiring director attendance at annual meetings of the stockholders. Six of our directors attended the 2024 Annual Meeting of Stockholders.
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Committees of the Board
Our Board currently has three standing committees, as described below. The current charters of each of these committees may be viewed by going to our website atwww.potlatchdeltic.com, selecting "Investors," and then "Corporate Governance."
The following table shows the current membership of each Committee:
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Audit Committee |
Executive Compensation and Personnel Policies Committee |
Nominating and Corporate Governance Committee |
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X |
X |
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X (Chair) |
X |
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X |
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X |
X |
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X |
X (Chair) |
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X |
X |
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X |
X (Chair) |
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Audit Committee
Our Audit Committee is responsible for assisting the Board in its oversight of our accounting, financial reporting, internal controls, auditing, legal and regulatory compliance activities, including monitoring our compliance with the tax and other rules pertaining to our status as a REIT, and other matters as the Board deems appropriate. In accordance with Nasdaq requirements and pursuant to its charter, the Audit Committee also provides risk oversight as described above under the heading"Risk Oversight."In addition, the Audit Committee is responsible for assisting the Board in its oversight of the company's enterprise risk management program, carbon accounting and corporate responsibility-related audit matters. The Audit Committee has sole authority to retain, compensate and terminate our independent registered public accounting firm and oversees the appointment and compensation of our Internal Audit Director. In addition, the Audit Committee oversees and administers our Related Person Transactions Policy described above under the heading"Transactions with Related Persons."The Committee has appointed
Our Board has determined that all members of our Audit Committee are independent within the meaning of applicable Nasdaq listing rules and our Director Independence Policy, and that all members are "financially literate." The Board also has determined that Committee Chair
Our Audit Committee met eight times in 2024. See"Audit Committee Report"in this proxy statement for a description of the Committee's activities during 2024.
Our
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in this proxy statement and recommends that the Board approve its inclusion in the proxy statement. The Compensation Committee may delegate any of its duties and responsibilities, as it deems appropriate, to a subcommittee consisting of one or more members of the Compensation Committee, except where delegation is not permitted by applicable law or Nasdaq rules or standards. Our Board has determined that all members of our Compensation Committee are independent within the meaning of applicable Nasdaq listing rules and our Director Independence Policy. Our Compensation Committee met four times in 2024.
Nominating and Corporate Governance Committee
Our
Compensation Committee Interlocks and Insider Participation
Communications with Directors
Stockholders may contact our Lead Director or our non-management directors by email or by regular mail, as follows:
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Email: |
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Mail: |
Lead Director or Non-Management Directors |
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c/o Corporate Secretary |
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All communications received will be processed by our Corporate Secretary. We forward all proper communications to the intended non-management director or directors. The Lead Director of the Board is responsible for facilitating an appropriate response. These procedures may also be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," then "Corporate Governance," then "Governance Documents," and then "Director Communications Policy."
Our Audit Committee has established procedures to address complaints and concerns about our accounting, internal controls and auditing matters for two different groups: (a) employees, who may receive confidential and anonymous treatment at their option, and (b) third parties (such as competitors, vendors and customers), who are not entitled to confidential and anonymous treatment. All such complaints and concerns are directed through an independent, third-party hotline provider and are routed directly to the Chair of the Audit Committee. The procedures and hotline numbers are available by going to our website atwww.potlatchdeltic.com, and selecting "About," and then "Contacts/Hotlines."
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COMPENSATION OF DIRECTORS
Our key objectives for our non-employee director compensation program are to recruit and retain the best directors that we can and to align our directors'interests with those of our stockholders. We do this by providing our directors a fair compensation package comprising an annual equity award and a cash retainer that is tied to the services they perform and that we believe is comparable to director compensation levels of companies of our size. Our Nominating Committee reviews and makes recommendations to our Board regarding non-employee director compensation.
The Nominating Committee has retained
2024 Director Compensation
The following table sets forth certain information with respect to 2024 compensation for each of the company's non-employee directors. Compensation information for
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Fees Earned or Paid in Cash |
Stock Awards |
Change in Pension Value and Nonqualified Deferred Compensation Earnings |
All Other Compensation |
Total |
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92,000 |
130,000 |
- |
- |
222,000 |
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114,500 |
130,000 |
- |
- |
244,500 |
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180,000 |
130,000 |
276,736 |
- |
586,736 |
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87,000 |
130,000 |
- |
- |
217,000 |
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85,722 |
130,000 |
- |
- |
215,722 |
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109,500 |
130,000 |
- |
- |
239,500 |
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112,500 |
130,000 |
- |
1,500 |
244,000 |
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104,500 |
130,000 |
- |
- |
234,500 |
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Director |
Common Stock Units |
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8,472 |
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27,214 |
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6,237 |
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6,237 |
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96,001 |
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8,472 |
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81,298 |
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20,521 |
Retainer and Fees.We paid our non-employee directors at the following rates, which were unchanged in 2024:
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ROLE |
FEES |
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Board Member |
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Non-Employee Chair of the Board |
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Lead Director |
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Audit Committee |
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-- Member |
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-- Chair |
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-- Member |
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-- Chair |
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Nominating & Corporate Governance Committee |
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-- Member |
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-- Chair |
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During 2024, we paid our non-employee directors, or deferred on their behalf, an aggregate total of
Equity Awards. On
Other Benefits. We provide coverage for directors under our Director and Officer Liability Insurance Policy and Accidental Death and Dismemberment Insurance Policy. In addition, we provide coverage for their spouses under
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the Accidental Death and Dismemberment Insurance Policy. Directors are eligible to participate in our
Director Stock Ownership Guidelines. In order to promote and increase equity ownership by our directors and to further align their interests with those of our stockholders, the Board has adopted stock ownership guidelines that require each non-employee director to beneficially own company shares with a value of at least five times the amount of the director's annual cash retainer, including common stock units held under our Directors Compensation Plan, by the fifth anniversary of his or her election as a director. As of
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Security Ownership of More than 5% Stockholders
This table shows the number of shares beneficially owned as of
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Number of Shares Beneficially Owned |
Percent of Class |
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11,679,137(1) |
14.8% |
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55 East 52ndStreet |
11,314,820(2) |
14.4% |
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PO Box 1179 Sentrum NO 0107 Oslo |
5,441,503(3) |
6.9% |
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Security Ownership of Directors and Executive Officers
This table shows the number of shares beneficially owned as of
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Directors & Named Executive Officers |
Number of Shares Beneficially Owned |
Percent of Class |
Common Stock Units (1) |
|
|
|
- |
- |
8,472 |
|
|
|
- |
- |
27,214 |
|
|
|
117,030 |
(2) |
* |
6,237 |
|
|
11,598 |
* |
25,181 |
|
|
|
204,584 |
* |
76,549 |
|
|
|
4,763 |
* |
6,237 |
|
|
|
57,684 |
* |
14,009 |
|
|
|
242,687 |
(3) |
* |
96,561 |
|
|
18,738 |
* |
8,472 |
|
|
|
10,441 |
(4) |
* |
81,298 |
|
|
7,711 |
* |
20,521 |
|
|
|
21,562 |
* |
17,884 |
|
|
|
12,449 |
* |
15,252 |
|
|
Directors & Executive Officers as a Group(17 persons) |
803,482 |
1.0% |
439,873 |
* Less than 1%
23
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of five outside (non-employee) directors, all of whom have been determined by the Board of Directors to meet Nasdaq listing standards for audit committee independence. The Audit Committee is an "audit committee" for purposes of Section 3(a)(58) of the Securities Exchange Act of 1934. The Committee's charter is reviewed periodically by the Audit Committee, which recommends appropriate changes to the Board of Directors.
The Committee is responsible for providing oversight on matters relating to
In connection with the audit process, the Committee has received from our independent registered public accounting firm,
The Committee reviewed and discussed the audited consolidated financial statements for the fiscal year ended
Based on these reviews and discussions with management,
|
The Committee Members |
|
|
|
|
|
|
|
|
|
|
|
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24
Fees Paid to Independent Registered Public Accounting Firm in 2024 and 2023
The Audit Committee has considered and determined that the services provided by
|
Year |
Audit Fees ( |
Audit-Related Fees ( |
Tax Fees ($) |
All Other Fees ($) |
|
2024 |
2,059,752 |
265,000 |
- |
- |
|
2023 |
1,525,350 |
5,000 |
- |
- |
The Audit Committee is required to pre-approve the audit, audit related, tax and all other services provided by
25
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT AUDITOR FOR 2025
We recommend a voteFORthis proposal.
Based on its review of
The appointment of our independent registered public accounting firm is not required to be submitted for ratification by the stockholders. The listing standards of the Nasdaq Global Select Market provide that the Audit Committee is solely responsible for the appointment, compensation, evaluation and oversight of our independent registered public accounting firm. However, as a matter of good corporate governance, the Audit Committee is submitting its appointment of
If the stockholders fail to ratify the appointment of
The affirmative vote of a majority of the common stock present virtually or represented by proxy and entitled to vote at the Annual Meeting is required to ratify the appointment of
Representatives of
26
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes the compensation policies and decisions of the
Executive Summary
Summary of 2024 Results
Challenging lumber markets impacted our 2024 financial performance in our Wood Products and Timberlands segments. Various market dynamics, including a cautious buyer sentiment, ample lumber supply, and soft demand in end markets, exerted downward pressure on lumber prices. However, our Real Estate segment had a very strong year as we capitalized on opportunities to sell rural land at premiums to timberland value. Despite the challenging market conditions, we focused on effectively managing our controllable operational metrics across all of our business segments and achieving our strategic objectives for the year. Below is a list of our key 2024 accomplishments.
|
Subject |
Accomplishment |
|
Financial Results |
•
The company generated
•
Our Timberlands segment harvested 7.6 million tons during 2024, realizing
•
Our Wood Products division had
•
Our Real Estate business realized
|
|
Returning Cash to Shareholders |
•
We paid
•
We repurchased 846,845 shares at a total consideration of
|
|
Financing Matters |
•
We repaid our
•
We refinanced a
•
We used a portion of our interest rate swaps to fix the interest rates associated with the term loans between 4.02% and 4.28% and maintain our weighted-average cost of debt at 2.3%.
•
We maintained a strong liquidity position of
|
|
|
•
In
|
27
|
Following the completion of the ramp-up phase, we expect the sawmill to be a top quartile sawmill, which means that it is expected to achieve financial performance, as measured by cash processing costs, that is ranked in the top quartile of the industry.
|
|
|
Noteworthy Transactions |
•
In
•
In
|
|
Safety |
•
We exceeded our 2024 safety goals for incident and severity rates.
|
|
Corporate Responsibility Matters |
•
We included corporate responsibility goals in our goals for 2024 annual cash incentive awards under our Annual Incentive Program. See "2024 Annual Cash Incentive Awards - 2024 Non-Financial Performance Metrics and Results" below.
•
We published our 2023 Corporate Responsibility Report and our 2023 Carbon and Climate data. See "Our Commitment to Corporate Responsibility" above for information on additional corporate responsibility accomplishments.
•
We continue to make progress towards our 2030 GHG reduction targets from a 2021 baseline, which include a 42% reduction for Scope 1 and Scope 2 emissions and a 25% reduction in Scope 3 value chain emissions.
|
|
|
•
We added meaningful bench strength across our operations in support of our human capital management and succession planning goals, and continued to develop internal leaders through holding our first
|
*A reconciliation of Total Adjusted EBITDDA to net income, the closest comparable GAAP measure, is found in Note 2 to the audited consolidated financial statements included in our 2024 Annual Report on Form 10-K.
Summary of Key Compensation Decisions for 2024
2024 Annual Incentive Program
The Compensation Committee approved the continued use of both financial and non-financial goals for annual cash incentive awards for 2024. The financial goals account for 80% of the award opportunity and the non-financial goals account for 20% of the award opportunity. Financial goals are based on FFO or FFO and EBITDDA targets, depending on the participant group. Non-financial goals account for the achievement of targets across a variety of operational and corporate responsibility metrics, which are tailored to each participant group's area of responsibility (such as safety goals, capital project completion, and progress toward achieving GHG emission reduction targets). We believe that structuring our annual incentive program to incorporate the achievement of non-financial goals incentivizes our management team to work to accomplish important strategic and operations goals, which deliver value but are not always captured directly in financial results on an annual basis. The results of our 2024 Annual Incentive Program are discussed below under "2024 AIP Target Achievement," and are summarized in the following chart:
|
|
2024 Total AIP Payout Achieved |
|
Corporate |
97% |
|
Timberlands |
80% |
|
Wood Products |
45% |
|
Real Estate |
161% |
2022-2024 Long-Term Equity Incentive Awards. The 2022-2024 Long-Term Equity Incentive awards included both time-based restricted stock units and performance shares. Performance shares are earned based on the company's annualized total shareholder retu("TSR") over a three-year performance period relative to the median TSR of our performance peer group (weighted 50%) and the company's TSR percentile ranking relative to all companies within the FTSE Nareit All Equity REITs Index (weighted 50%) during the performance period. See"2024 Long-Term Equity Incentive Awards -
28
Long-Term Equity Incentive awards, 78.67% vested because (1) our annualized TSR for the performance period was (3.99)%, which underperformed the median TSR of our peer group by 2.38 percentage points and (2) our TSR of (11.46)% for the full performance period ranked us 75th out of 137 companies in the FTSE Nareit All Equity REITs Index. Participants also received dividend credits with respect to the vested portion of the award. See "2024 Long-Term Equity Incentive Awards - PotlatchDeltic Corporation TSR Comparison"below.
Aligned Base Salaries. The Compensation Committee approved base salary increases for our executive officers with the input of Semler Brossy, the Compensation Committee's independent compensation consultant. These increases were 10.0% for
Summary of Executive Compensation Program and Practices
The Compensation Committee has worked with company management and the company's independent compensation consultant to adopt compensation policies and procedures that represent strong corporate governance, including the following:
|
✓
Independent Compensation Committee
|
The Compensation Committee is composed solely of independent directors within the meaning of Nasdaq listing rules relating to compensation committees. |
|
✓
Independent Compensation Consultant
|
In 2024, the Compensation Committee was advised by Semler Brossy, an independent compensation consultant that provides no other services to the company and has no prior relationship with any of the named executive officers. |
|
✓
Competitive Market Assessments
|
The Compensation Committee requests that its independent consultant conduct a review of the company's executive compensation program at least every two years to evaluate whether it is comparable to compensation programs of companies of similar size. |
|
✓
Peer Group Review
|
The competitive market and the peer group of companies used for TSR comparison in determining performance share outcomes is reviewed annually by the Compensation Committee with input from its independent consultant. Changes to the peer group require Compensation Committee approval. |
|
✓
Annual Stockholder Advisory Vote
|
The company seeks an annual stockholder advisory vote to approve executive compensation. The results of the advisory vote on executive compensation are considered by the Compensation Committee in determining executive compensation in the following year. |
|
✓
Compensation Risk Assessment
|
Company management and the Compensation Committee's independent consultant complete a risk assessment of the company's executive compensation programs annually to evaluate whether they are designed and administered in a manner that discourages undue risk-taking by executives. The assessment is reviewed by the Compensation Committee. |
|
✓
Double-Trigger Acceleration
|
A "double trigger" is required before severance benefits are paid and equity awards vest in connection with a change in control event. In general this means that an executive must experience an actual or constructive termination in connection with a change in control event to be eligible to receive any benefits. |
|
✓
Limited Perquisites
|
The company does not provide excessive perquisites or other personal benefits to officers or senior employees, such as aircraft for personal use, paid parking spaces, or company cars. |
29
|
The company pays the premiums for accidental death and dismemberment insurance and relocation benefits that may include tax protection for costs associated with relocation. |
|
|
✓
Executive Stock Ownership Guidelines
|
Our stock ownership policy requires the company's President and Chief Executive Officer to achieve minimum stock ownership that is five times his base salary and the other named executive officers to achieve minimum stock ownership that is two times their respective base salaries. |
|
✓
Clawback Policies
|
The company has a mandatory incentive compensation recovery policy that requires the company to recover incentive-based compensation from executive officers in the event of an accounting restatement pursuant to Nasdaq Listing Rule 5608. The company also has a separate incentive compensation recovery policy to permit recovery of compensation earned as a result of a material financial restatement that resulted from fraud or misconduct by a company employee or when an employee is terminated from employment for cause. See "Recovery of Incentive Compensation" below. |
|
✓
Insider Trading Policy
|
The company has a securities law compliance and insider trading policy with procedures for compliance with the securities laws. See "Insider Trading Policies and Procedures" below. |
|
✓
Hedging Policy
|
Under the company's securities law compliance and insider trading policy, directors, officers and employees are prohibited from hedging their ownership interest in company securities. |
|
✓
Pledging Policy
|
Under the company's securities law compliance and insider trading policy, directors and executive officers are prohibited from pledging company securities as collateral except under limited circumstances and only with approval by the Compensation Committee. |
2024 Stockholder Advisory Vote to Approve Executive Compensation
At our annual meeting of stockholders in
Pursuant to its charter, the Compensation Committee has the sole authority to retain, terminate and approve the fees and other terms of engagement of compensation consultants and other advisers to assist it in its ongoing development and evaluation of company compensation policies and practices and the Compensation Committee's determination of compensation awards. For 2024, the Compensation Committee engaged Semler Brossy as its independent compensation consultant. Semler Brossy reports directly to the committee and not to management.
30
All of the decisions with respect to determining the amount and form of executive compensation under our compensation programs are ultimately made by the Compensation Committee and may reflect factors and considerations other than the information and advice provided by the Compensation Committee's independent compensation consultant.
Competitive Market Assessments
As part of determining compensation for our named executive officers, the Compensation Committee reviews information regarding the compensation paid by other companies of comparable size both in our industry and more broadly. At least every two years, the Compensation Committee asks its independent compensation consultant to provide it with a market assessment that utilizes market data from the most relevant compensation surveys available. In its review presented to the Compensation Committee in
Management Input
In early 2024, the company's President and Chief Executive Officer and Vice President, Human Resources recommended to the Compensation Committee changes to base salaries and target amounts for annual cash incentive awards and long-term equity incentive awards for each named executive officer, except the President and Chief Executive Officer. These recommendations were based on the principal duties and responsibilities of each executive officer, pay levels of peers within our industry, pay levels for comparable companies of similar size within regional and national markets, internal pay equity, and individual performance. They also made recommendations regarding one-time increases to long-term equity incentive awards (comprising time-based restricted stock units and performance shares) for
The Compensation Committee determines any change to the base salary, annual cash bonus and equity awards for the President and Chief Executive Officer based upon its evaluation of his performance and advice from Semler Brossy.
31
Compensation Objectives and Elements of Compensation
Compensation Philosophy and Objectives. Our compensation philosophy is to provide all of our executives a fair and competitive incentive-based compensation package that is tied to the performance of both the individual and the company. We also believe that a significant portion of total compensation for our senior executives should be at risk and contingent on the achievement of target levels of performance. The key objectives of our compensation program are aimed at helping us to recruit, motivate and retain talented and experienced executives, ensure our incentive compensation is aligned with short-term and long-term company performance and align our employees'interests with those of our stockholders.
Compensation Components. Our executives'compensation packages include three components, as shown below.
|
EXECUTIVE COMPENSATION |
= |
BASE SALARY |
+ |
ANNUAL CASH INCENTIVES |
+ |
LONG-TERM EQUITY INCENTIVES |
Salaries are provided to employees as compensation for basic services to the company and to meet the objective of attracting and retaining the talent needed to run our business. Our annual cash incentives reward employees for helping us achieve annual financial and non-financial goals, and our long-term equity incentives reward employees for helping us to achieve the company's overall long-term business objectives and perform at a level of TSR that meets or exceeds that of our peers. The Compensation Committee also considers the individual's performance against his or her operational, financial, safety, environmental, and/or human capital objectives (i.e., non-financial goals) when approving annual incentive awards for executives. (See "2024 Annual Cash Incentive Awards" below.) We structure our executives' compensation so that at-risk incentive compensation and equity compensation are a greater proportion of total compensation to more closely align their interests with those of our stockholders. For 2024, approximately 68% to 81% of our named executive officers' total compensation is composed of a combination of annual cash incentive target awards and long-term equity incentive target grants. Sixty percent of our 2024 long-term incentive awards to our named executive officers vest based on performance, which is measured based on achievement of relative TSR over a three-year period.
To ensure fiscal discipline, we set threshold performance levels so that incentive award payments depend on performance results achieving minimum levels. To limit risk taking, we set caps on the aggregate amount of incentive compensation that we pay, regardless of actual performance results.
2024 Base Salary
As part of determining executive base salaries, the Compensation Committee reviews information regarding base salaries for companies of comparable size, both in our industry and more broadly, as well as job performance, long-term potential, and tenure. We determine an executive's rate of pay within a market range for his or her position based upon the executive's level of experience and performance relative to his or her individual performance plan. Each executive's individual performance plan contains operational, financial, safety, environmental, and/or human capital objectives determined by the executive together with his or her supervisor. For 2025, the salaries of our named executive officers were set by the Compensation Committee or the Board in its sole discretion after consultation with its independent compensation consultant and discussions with the President and Chief Executive Officer.
For 2024, the Compensation Committee approved a base salary increase of 10.0% for
32
|
|
Base Salary Increase |
Base Salary 2024 |
Base Salary 2023 |
|
|
3.3% |
|
|
|
|
10.0% |
|
|
|
|
3.5% |
|
|
|
|
4.8% |
|
|
|
|
4.8% |
|
|
2024 Annual Cash Incentive Awards
Pursuant to the terms of the company's Annual Incentive Plan, each year the Compensation Committee establishes target annual bonuses for our executive officers as a percentage of base salary. These targets are based on the recommendations of management and Semler Brossy after a review of the compensation practices of companies of comparable size both in our industry and generally. These targets are set forth below.
|
|
Target Annual Bonus |
|
|
125% |
|
|
65% |
|
|
45% |
|
|
50% |
|
|
45% |
2024 Program Design
The Compensation Committee approved the continued use of both financial and non-financial goals for annual cash incentive awards for 2024. In this structure, financial goals account for 80% of the award opportunity and non-financial goals account for 20% of the award opportunity. The resulting achievement is subject to an individual modifier of 0% to 200%, based on individual performance.
In our compensation program, financial goals are based on FFO or FFO and EBITDDA targets, depending on the participant group. Non-financial goals account for the achievement of targets across a variety of operational and corporate responsibility metrics (such as goals related to safety, completing significant capital projects, and making progress toward greenhouse gas emission reduction targets), which are tailored to each participant group's area of responsibility. We believe that structuring our annual incentive program to incorporate non-financial goals will incentivize our management team to work to accomplish important strategic and operational goals, which deliver value but are not always captured directly in financial results on an annual basis.
The charts below summarize the overall program design for 2024, which is unchanged from 2023. Each financial metric has a performance leverage of 0% to 200% of target. The non-financial goals have a performance leverage of 50% to 150% of target, determined on an aggregate basis. Awards have a payout range of 10% to 190%, and individual awards are subject to an individual modifier of between 0% and 200%.
33
2024 Financial Performance Metrics and Results
In order to reflect both our REIT structure and our wood products operations, the Committee approved the use of the following financial performance metrics, depending on the participant type:
The Compensation Committee approved the 2024 financial targets and related performance modifiers and scales shown below. The financial performance modifier proportionally increases or decreases between threshold (80% of target) and target levels and between target and maximum levels (126.7% of target).
|
Financial Performance Metric |
Threshold (Pays 0.25 X Target) |
Target (Pays 1.00 X Target) |
Maximum (Pays 2.00 X Target) |
|
Corporate FFO |
|
|
|
|
Divisional EBITDDA |
|||
|
•
Timberlands
|
|
|
|
|
•
Wood Products
|
|
|
|
|
•
Real Estate
|
|
|
|
Actual 2024 Results: FFO
We define FFO as net income, plus depletion, depreciation and amortization, and basis of real estate sold, and excluding the effect on net income of certain special items such as bond discounts and deferred loan fees, and gains and losses on disposition of fixed assets. We use this measure to focus eligible employees on generating profits by both increasing revenues and controlling costs. In addition, FFO is the primary measure used by the investment community to measure REIT performance. We believe that profitable growth reflected in our FFO and EBITDDA measures will drive stockholder value over time.
For 2024, the company's actual FFO was
|
FUNDS FROM OPERATIONS (millions) |
|
|
Net income |
|
|
Total depreciation, depletion and amortization |
111,497 |
|
Basis of real estate sold |
86,870 |
|
Bond discounts and deferred loan fees |
1,601 |
|
Loss on disposition of assets |
541 |
|
FFO |
|
34
Actual 2024 Results: EBITDDA
The Committee believes that, at the division level, measuring EBITDDA provides more transparency to employees because the divisional employees do not make capital allocation decisions, which are not accounted for in EBITDDA. The actual 2024 EBITDDA for each operating division relative to the target 2024 EBITDDA was as follows:
|
Operating Division |
Actual 2024 EBITDDA (millions) |
Target 2024 EBITDDA (millions) |
Percent of Target Achieved |
|
Timberlands |
|
|
92% |
|
Wood Products |
|
|
0% |
|
Real Estate |
|
|
124% |
Each operating division's actual 2024 EBITDDA is shown in Note 2 to the audited consolidated financial statements included in our 2024 Annual Report on Form 10-K. Actual 2024 EBITDDA for each of the Timberlands and Wood Products divisions was calculated by taking the division's operating income/(loss) and adding depreciation, depletion and amortization and loss on disposition of fixed assets. Actual 2024 EBITDDA for the Real Estate division was calculated by taking the division's operating income and adding the basis of real estate sold plus depreciation.
2024 Non-Financial Performance Metrics and Results
The Compensation Committee approved non-financial performance metrics for additional operational focus in 2024. These metrics incorporate performance objectives in the areas of operational excellence, safety, environmental stewardship, and human capital management. The summary below describes the outcomes in these areas that were key drivers of the overall performance for participants.
35
2024 AIP Target Achievement
The tables below show the total 2024 AIP target percentage based on the level of achievement of the 2024 financial and non-financial goals for the respective participant groups.
|
CORPORATE |
||
|
Metric |
Weighting |
Achievement* |
|
FFO |
80% |
88% |
|
Non-Financial Goals |
20% |
130% |
|
Total Payout Achieved (% of Target) |
97% |
|
|
DIVISIONS |
||
|
Metric |
Weighting |
Achievement* |
|
Timberlands |
||
|
--Corporate FFO |
20% |
88% |
|
--Corporate Non-Financial Goals |
5% |
130% |
|
--Division EBITDDA |
60% |
68% |
|
--Division Non-Financial Goals |
15% |
100% |
|
--Total Payout Achieved (% of Target) |
80% |
|
|
Wood Products |
||
|
--Corporate FFO |
20% |
88% |
|
--Corporate Non-Financial Goals |
5% |
130% |
|
--Division EBITDDA |
60% |
0% |
|
--Division Non-Financial Goals |
15% |
140% |
|
--Total Payout Achieved (% of Target) |
45% |
|
|
Real Estate |
||
|
--Corporate FFO |
20% |
88% |
|
--Corporate Non-Financial Goals |
5% |
130% |
|
--Division EBITDDA |
60% |
191% |
|
--Division Non-Financial Goals |
15% |
150% |
|
--Total Payout Achieved (% of Target) |
161% |
|
*Due to rounding, the ratio of an actual award amount to the target award amount may not equal the ratio represented by the Total Payout Achieved (% of Target). The resulting achievement is subject to an individual modifier of 0% to 200%, based on individual performance.
Determination of 2024 Annual Incentive Award Payment.The Compensation Committee made awards to our named executive officers based on the total target percentage payout achieved for the applicable participant group, recommendations from the President and Chief Executive Officer, and the results of individual performance reviews.
In determining the award for
36
The recommendations of the President and Chief Executive Officer to the Compensation Committee concerning the payment of awards for each of the other executive officers were based on the individual performance evaluations of those officers. These evaluations took into account objective criteria in the form of operating results against budget, and subjective criteria such as performance against strategic goals which involve the exercise of discretion and judgment in assessing performance. In addition, the Compensation Committee evaluates our executive officers' actual compensation as compared to their target compensation.
2024 Long-Term Equity Incentive Awards
Our long-term incentive program is intended to link compensation to long-term company performance. Under our long-term incentive program, we grant two types of equity awards:
We do not grant stock options, stock appreciation rights, or other option-like awards, so we are not required to provide disclosure under Item 402(x) of Regulation S-K.
Annual equity awards comprise 60% performance shares and 40% restricted stock units, emphasizing the performance-based component of the award. The effective grant date for equity awards is the day of the Compensation Committee meeting at which the awards are approved, typically in February of each year. These meetings are scheduled well in advance and are not coordinated with the release of any material, non-public information. We also may grant equity awards to recognize increased responsibilities or significant contributions, attract new hires, retain executives or recognize certain other unique circumstances that occur throughout the year. The effective date of these grants is determined based on the timing of the recognition or hiring date.
Long-Term Equity Incentive Award Guidelines. The Compensation Committee has approved "guideline" long-term incentive values for each executive eligible for long-term equity incentive awards other than the President and Chief Executive Officer. These guideline values are targeted at the median of competitive practice, and for the 2024 long-term incentive grants, were based on a 2022 assessment of compensation programs of comparably sized companies by the Compensation Committee's independent compensation consultant. The employee's guideline value may be increased or decreased at the Compensation Committee's discretion based upon management's assessment of an individual employee's past contributions and potential future contributions to the company. Guideline values are then converted to performance shares and restricted stock units in a given year by dividing the values by an amount equal to the closing price of company common stock on the grant date. In the case of the company's President and Chief Executive Officer, the Compensation Committee determines in its sole discretion the value of equity awards to be granted based on a review by the Compensation Committee's independent compensation consultant of competitive practices and the Compensation Committee's evaluation of the President and Chief Executive Officer's performance.
Restricted Stock Units. The annual restricted stock unit grants vest on
Performance Shares. Performance shares are earned based on the company's TSR measured over a three-year period relative to (1) the median TSR of a select group of peer companies and (2) the percentile ranking of the company's TSR relative to all companies within the FTSE Nareit All Equity REITs Index over the performance period. See"2024 Long-Term Equity Incentive Awards -
2024 Long-Term Equity Incentive Awards. In
37
using the guidelines described above under "Long-Term Equity Incentive Award Guidelines."In addition, the Compensation Committee approved one-time increases to the long-term equity incentive awards for
2024 Performance Share Awards.The performance shares granted in 2024 are earned based on the company's TSR performance over a three-year period ending
|
Median TSR of Performance |
Nareit All Equity REIT Index TSR Ranking |
Percent of Shares Issued |
|
Below Threshold |
Below Threshold |
- |
|
Threshold (7.5% Below Median) |
Threshold (33rdpercentile) |
25% |
|
Target (Median) |
Target (50thpercentile) |
100% |
|
Maximum (15% Above Median) |
Maximum (85thpercentile) |
200% |
The Compensation Committee sets thresholds, targets and caps for performance-based awards. The threshold means that if performance falls below a specified level, the award has no value, making the performance share portion of the executive's compensation truly at risk. The target means that if 100% of a performance target is achieved, the value of the performance award to the participant will be at or near the guideline. Consistent with our philosophy of compensating executives at or near the median compensation paid by companies of comparable size, the performance measures at target are established at median levels. The cap means that an executive cannot eagreater than 200% of target, regardless of actual performance, which we believe has the effect of reducing risk taking and maintaining fiscal discipline. The number of performance shares earned for each factor proportionately increases or decreases between threshold and target levels for the factor and between target and maximum levels for the factor.
Performance
|
Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WesteForest Products |
Adjustments to Performance Share Awards.The Compensation Committee reserves the right to reduce or eliminate any performance share award to an executive, or to all executives as a group, for any reason. The Compensation Committee did not exercise this discretion for 2024.
38
Other Elements of the Executive Compensation Program
Perquisites and Personal Benefits. We do not provide excessive perquisites or other personal benefits to our named executive officers, such as aircraft for personal use, paid parking spaces, or company cars. We do pay insurance premiums for accidental death and dismemberment insurance and we may reimburse executive officers for certain relocation expenses pursuant to a relocation program. Pursuant to our relocation program, reimbursement of the employee's loss on sale of his or her home is capped and the relocating employee's home is only purchased if not sold within 90 days and then only at a purchase price equal to the average of two independent appraisals of fair market value. The company may provide tax protection for costs associated with relocation.
Salaried Retirement Plan.Our Salaried Retirement Plan provides a pension to our salaried and certain other eligible employees who were participants in the plan before
Supplemental Plan II.Our Salaried Supplemental Benefit Plan II (Supplemental Plan) provides retirement benefits to our eligible salaried employees including our named executive officers, based upon the benefit formula of our Salaried Retirement Plan and our Salaried 401(k) Plan but without regard to the
401(k) Plan.Our Salaried 401(k) Plan permits our salaried and certain other eligible employees, including our named executive officers, to make voluntary pre-tax and after-tax contributions to the plan, subject to applicable tax limitations. We match
Health and Welfare Benefits.All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical, dental, and vision care coverage, disability insurance and life insurance.
Post-Termination Severance Benefits.The company maintains a severance program that provides severance benefits to our named executive officers and certain other officers and executive employees. Benefits are payable under the severance program both in connection with a termination of the executive officer's employment with us and in connection with a separation of employment following a change in control. The Compensation Committee believes the severance program is competitive with those of our peer companies and serves our recruitment and retention efforts. The section entitled"Potential Payments Upon Termination or Termination Following a Change in Control"provides additional information regarding the severance program and the estimated potential incremental benefits under the program for the named executive officers.
Officer Stock Ownership Guidelines
In the interest of promoting and increasing equity ownership by our senior executives and to further align our executives'long-term interests with those of our stockholders, we have adopted the following stock ownership guidelines:
|
Executive |
Value of Shares |
|
President and Chief Executive Officer |
5 x Base Salary |
|
Chief Financial Officer |
2 x Base Salary |
|
Vice President |
2 x Base Salary |
39
Each executive must achieve equity ownership in the company having a value equal to the thresholds above within five years of becoming an executive officer subject to the stock ownership guidelines. Shares held in a brokerage account or an account with our transfer agent, common stock units owned as a result of deferred awards paid under our annual incentive program, and any vested restricted stock units count towards the ownership requirement. Shares subject to unvested restricted stock units or unearned performance shares, however, do not count toward the ownership guidelines. An executive must meet and maintain the stock ownership requirement in order to sell any company stock.
As of
Our officers'stock ownership guidelines may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," then "Corporate Governance," and "Officer Stock Ownership Guidelines."
Risk Assessment
Company management provides ongoing information to the Compensation Committee regarding aspects of our executive compensation program that could mitigate or encourage excessive risk taking by company executives. Management and the Compensation Committee evaluate the following factors, among others, when assessing the risks arising from our compensation policies and procedures:
Insider Trading Policies and Procedures
General
We haveadoptedinsider trading policies and procedures that govethe purchase, sale, and other disposition of our securities by us and by our employees, directors, and officers. We believe our insider trading policies and procedures are reasonably designed to promote compliance with insider trading laws, rules, and regulations as well as the exchange listing standards applicable to us. Our Securities Law Compliance and Insider Trading Policy (the "Insider Trading Policy") governs the purchase, sale, and/or other disposition of securities of the company and specific other companies by our directors, officers and employees or the company. In that regard, the Insider Trading Policy broadly prohibits the trading of the securities of the company or other companies on the basis of material non-public information.
Prohibition on Hedging and Pledging
The company's Insider Trading Policy prohibits directors, officers and employees from engaging in speculative transactions involving company securities, including entering into hedging or monetization transactions or similar arrangements with respect to company securities. The policy also prohibits directors and executive officers from pledging company securities except under limited circumstances and with approval by the Compensation Committee.
40
The foregoing summary of our insider trading policies and procedures does not purport to be complete and is qualified by reference to our Insider Trading Policy. A copy of our Insider Trading Policy may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," then "Corporate Governance," and "Securities Law Compliance and Insider Trading Policy." In addition, our Insider Trading Policy is included as Exhibit 19 to our 2024 Annual Report on Form 10-K.
Recovery of Incentive Compensation
Rule 5608 Incentive Compensation Recovery Policy
We have adopted a "clawback" policy as required by Nasdaq Listing Rule 5608. This policy requires the company to reasonably promptly recover erroneously awarded incentive-based compensation received by executive officers on or after
General Compensation Recovery Policy
In addition, the company has a separate policy that provides that, for all incentive awards granted to executive officers after
The amount to be reimbursed under this policy is the pre-tax amount by which any incentive awards previously paid, settled, granted or vested on the basis of previously stated financial results within the two-year period preceding the date of disclosure of the material financial restatement, exceeded the lower amounts that would have been paid, settled, granted or vested based on the restated financial results.
The policy also provides that, unless the Board or Compensation Committee determines otherwise, for all employees, all outstanding incentive awards automatically terminate upon a termination for "Cause" (as defined in the policy). Additionally, if an employee is terminated for any reason, and the company later learns that the employee engaged in conduct constituting Cause during his or her employment, then all outstanding incentive awards automatically terminate, the employee is ineligible to receive any payments under any outstanding incentive awards, and the employee must pay the company up to the total amount or value of incentive award payments received during the period between 12 months before and 36 months after the employee's employment was terminated.
A copy of our Incentive Compensation Recovery Policy for Executive Officers and our Compensation Recovery Policy (applicable to executive officers and other employees) may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," then "Corporate Governance," then "Incentive Compensation Recovery Policy for Executive Officers" or "Incentive Compensation Recovery Policy," as applicable. In addition, our Incentive Compensation Recovery Policy for Executive Officers is included as Exhibit 97 to our 2024 Annual Report on Form 10-K.
41
REPORT OF THE EXECUTIVE COMPENSATION AND PERSONNEL POLICIES COMMITTEE
|
The Committee Members |
|
|
|
|
|
|
42
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The table below sets forth information regarding the compensation for each of our 2024 named executive officers. The information contained in the Summary Compensation Table should be viewed together with the "2024 Grants of Plan-Based Awards" table, which includes target levels for annual incentive awards and long-term performance share awards, to obtain the most accurate representation of annual and long-term incentive compensation elements and the total compensation provided to our named executive officers.
|
|
Year |
Salary |
Bonus |
Stock Awards |
Non-Equity Incentive Plan Compensation |
Change in Pension Value and Nonqualified Deferred Compensation Earnings |
All Other Compensation |
Total |
|
|
2024 |
925,385 |
- |
3,202,475 |
1,124,300 |
955,478 |
96,407 |
6,304,045 |
|
President & |
2023 |
900,000 |
- |
3,112,639 |
1,105,200 |
1,267,426 |
123,688 |
6,508,953 |
|
Chief Executive Officer |
2022 |
596,154 |
- |
2,725,012 |
1,800,000 |
- |
111,368 |
5,232,534 |
|
|
2024 |
439,269 |
- |
544,429 |
280,100 |
- |
34,439 |
1,298,237 |
|
Vice President & |
2023 |
308,584 |
- |
380,543 |
323,300 |
- |
25,574 |
1,038,001 |
|
Chief Financial Officer |
2022 |
- |
- |
- |
- |
- |
- |
- |
|
|
2024 |
471,523 |
- |
579,163 |
96,400 |
- |
27,018 |
1,174,104 |
|
Vice President, Wood Products |
2023 |
454,808 |
- |
590,520 |
88,000 |
- |
38,045 |
1,171,373 |
|
2022 |
435,831 |
- |
620,506 |
394,000 |
- |
143,699 |
1,594,036 |
|
|
|
2024 |
416,177 |
- |
1,070,799 |
202,700 |
- |
30,906 |
1,720,582 |
|
Vice President, General Counsel & |
2023 |
397,392 |
- |
539,404 |
245,700 |
- |
34,950 |
1,217,446 |
|
Corporate Secretary |
2022 |
380,777 |
- |
566,760 |
382,500 |
- |
33,679 |
1,363,716 |
|
|
2024 |
340,100 |
- |
837,089 |
248,900 |
195,885 |
27,345 |
1,649,319 |
|
Vice President, Real Estate |
2023 |
- |
- |
- |
- |
- |
- |
- |
|
2022 |
- |
- |
- |
- |
- |
- |
- |
|
401(k) Company Match |
401(k) Plan Allocation under Salaried Supplemental Benefit Plan II |
Life Insurance Premiums |
|
|
|
14,490 |
70,795 |
11,122 |
|
|
14,490 |
17,538 |
2,411 |
|
|
14,490 |
9,010 |
3,518 |
|
|
14,490 |
13,309 |
3,107 |
|
|
14,490 |
9,828 |
3,027 |
43
2024 Grants of Plan-Based Awards
The table below provides information regarding 2024 grants of annual and long-term incentive awards for the named executive officers, including the range of estimated possible payouts under our annual incentive plan and estimated future payouts under our performance share program and the grant date fair value of restricted stock units. The following table excludes any dividend equivalents that may become payable with respect to the awards.
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other Stock Awards: Number of Shares of Stock or Units |
Grant Date Fair Value |
||||||
|
Grant Date |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
|||
|
|
|
116,250 |
1,162,500 |
4,417,500 |
9,681 |
38,724 |
77,448 |
- |
2,049,274 |
|
|
- |
- |
- |
- |
- |
- |
25,816 |
1,153,201 |
|
|
|
|
28,958 |
289,575 |
1,100,385 |
1,646 |
6,583 |
13,166 |
- |
348,372 |
|
|
- |
- |
- |
- |
- |
- |
4,389 |
196,057 |
|
|
|
|
21,330 |
213,300 |
810,540 |
1,751 |
7,003 |
14,006 |
- |
370,599 |
|
|
- |
- |
- |
- |
- |
- |
4,669 |
208,564 |
|
|
|
|
20,955 |
209,550 |
796,290 |
3,237 |
12,948 |
25,896 |
- |
685,208 |
|
|
- |
- |
- |
- |
- |
- |
8,632 |
385,591 |
|
|
|
|
15,413 |
154,125 |
585,675 |
2,531 |
10,122 |
20,244 |
- |
535,656 |
|
|
- |
- |
- |
- |
- |
- |
6,748 |
301,433 |
|
44
2024 Outstanding Equity Awards at Fiscal Year-End
The table below sets forth information regarding the outstanding unvested or unearned stock awards held by the named executive officers as of
|
Restricted Stock Units |
Performance Shares |
|||||
|
Grant Date |
Number of Shares or Units of Stock That Have Not Vested |
Market Value of Shares or Units of Stock That Have Not Vested |
Equity Incentive Plan Awards: Number of Unearned |
Equity Incentive Plan Awards: Market or |
||
|
|
|
26,594 |
(A) |
1,043,815 |
40,394 |
1,585,465 |
|
|
23,557 |
(B) |
924,612 |
36,246 |
1,422,656 |
|
|
|
|
4,578 |
(A) |
179,687 |
6,866 |
269,491 |
|
|
3,826 |
(C) |
150,171 |
- |
- |
|
|
|
1,595 |
(B) |
62,604 |
2,393 |
93,925 |
|
|
|
|
4,870 |
(A) |
191,148 |
7,305 |
286,721 |
|
|
4,584 |
(B) |
179,922 |
6,876 |
269,883 |
|
|
|
10,950 |
(D) |
429,788 |
- |
- |
|
|
|
|
9,004 |
(A) |
353,407 |
13,506 |
530,111 |
|
|
4,187 |
(B) |
164,340 |
6,281 |
246,529 |
|
|
|
|
7,003 |
(A) |
274,868 |
10,558 |
414,402 |
|
|
3,206 |
(B) |
125,836 |
4,909 |
192,678 |
|
45
2024 Stock Vested
The table below provides, for each of our named executive officers, the number of stock awards vested in 2024 and the value realized due to the vesting.
|
Number of Shares Acquired on Vesting |
Value Realized on Vesting |
|
|
|
36,673 |
1,439,415 |
|
|
2,913 |
114,335 |
|
|
8,448 |
331,584 |
|
|
7,716 |
302,853 |
|
|
4,884 |
191,697 |
2024 Pension Benefits
The table below shows the actuarial present value of each named executive officer's accumulated benefit payable on retirement under our qualified Salaried Retirement Plan (the "Retirement Plan") and under the Retirement Plan Supplemental Benefit portion of our non-qualified Salaried Supplemental Benefit Plan II (the "Supplemental Plan"). Effective
|
Plan |
Number of Years Credited Service |
Present Value of Accumulated Benefit |
Payments During Last Fiscal Year |
|
|
|
Supplemental Plan |
17.46 |
5,107,813 |
- |
|
Retirement Plan |
17.46 |
888,910 |
- |
|
|
|
Supplemental Plan |
18.63 |
629,618 |
- |
|
Retirement Plan |
18.63 |
813,037 |
- |
46
Summary of Retirement Plan Benefits
Salaried and other eligible employees who were participants in the plan before
|
Benefit |
Benefit Available If: |
Benefit Amount |
|
Normal Retirement |
Employment with company terminates after eligible employee attains age 65 |
Calculate the final average monthly earnings (highest consecutive 60 months of final 120 months earnings divided by 60) multiplied by 1%, multiplied by years of credited service, plus portion of final average monthly earnings that exceeds the Social Security Benefit Base multiplied by ½% multiplied by years of credited service up to 35 |
|
Early Retirement |
Employment with company terminates after eligible employee turns 55 and has ten or more years of vesting service |
Calculate the monthly normal retirement benefit (as described above), then reduce that amount by 1/12 of 5% (5% per year) for each month the retirement age is less than age 62 |
Required survivor benefits are paid under the Retirement Plan. Benefits generally are paid in the form of joint and survivor 50% annuity or single life annuity if the participant is unmarried. Alternate annuity forms of payment are available subject to the actuarial equivalence factors used for all salaried employees in the Retirement Plan.
The benefits payable under the Retirement Plan and our Salaried 401(k) Plan (401(k) Plan), are supplemented by benefits paid under the Supplemental Plan for certain salaried and other eligible employees including our named executive officers.Benefits paid under the Supplemental Plan are calculated in accordance with the normal retirement benefit formula or early retirement formula described in the table above with respect to the Retirement Plan, taking into account the vested benefit that would have been paid under the Retirement Plan if:
From this sum, the benefit paid under the Retirement Plan is subtracted to determine the benefit paid under the Supplemental Plan.
For example, in 2024 the maximum compensation allowed under the Retirement Plan was
Eligible employees become vested in the Supplemental Plan on the completion of five years of vesting service. Benefits paid under the retirement portion of the Supplemental Plan are paid beginning no later than 90 days after the date the eligible employee turns 55 or terminates employment, whichever is later and, at the eligible employee's election, in one of the annuity forms available under the Retirement Plan (other than the
47
2024 Nonqualified Deferred Compensation
The table below shows the fiscal year contributions made by and on behalf of each of the named executive officers under the 401(k) Plan portion of the Supplemental Plan, as well as amounts deferred during the fiscal year under our Management Deferred Compensation Plan. The amounts shown for aggregate earnings, aggregate withdrawals/distributions and aggregate balance include all such amounts for these plans as well as the Supplemental Plan and certain other predecessor deferred compensation plans in which the named executive officer participates.
|
Executive Contributions |
Registrant Contributions |
Aggregate Earnings in |
Aggregate Withdrawals/ |
Aggregate Balance at Last FYE |
|
|
|
- |
70,795 |
2,477 |
- |
864,089 |
|
|
- |
17,538 |
3,378 |
- |
44,589 |
|
|
- |
9,010 |
4,537 |
- |
51,214 |
|
|
- |
13,309 |
8,104 |
- |
86,038 |
|
|
34,010 |
9,828 |
257,737 |
- |
1,304,785 |
|
|
2024 |
2023 |
2022 |
|
|
70,795 |
99,540 |
88,071 |
|
|
17,538 |
10,071 |
6,020 |
|
|
9,010 |
21,790 |
11,482 |
|
|
13,309 |
18,895 |
18,777 |
|
|
9,828 |
11,591 |
11,726 |
In addition to the retirement benefits described above, the Supplemental Plan also provides benefits supplemental to the 401(k) Plan to the extent that the eligible employee's allocations of "company contributions" are reduced under the 401(k) Plan due to Internal Revenue Code limits.For years after 2004, eligible employees are credited with contributions under the Supplemental Plan equal to the difference between the amount of company contributions and allocable forfeitures actually allocated to the eligible employee under the 401(k) Plan for the year and the amount of company contributions and allocable forfeitures that would have been allocated to the eligible employee under the 401(k) Plan if the eligible employee had made "participating contributions" equal to 6% percent of his or her earnings determined without regard to the Internal Revenue Code limit on maximum eligible compensation (
Eligible employees become vested in this supplemental benefit upon the earliest of completion of two years of service, attainment of age 65 while an employee, or total and permanent disability. The supplemental benefits are paid in 10 or fewer annual installments or in a lump sum, at the eligible employee's election, following separation from service. Benefit payments made under the Supplemental Plan to "key employees," as defined under the Internal Revenue Code, on account of their separation from service will be delayed for a minimum of six months following their separation date. Account balances that are equal to less than the annual 401(k) contribution limit (
Certain eligible employees, including the named executive officers, who eaawards under our annual incentive plan are permitted to defer receipt of those awards. These employees may defer receipt of a minimum of 50% and a maximum of 100% of the award prior to 2024 (or commencing with 2024, a minimum of 1% and a maximum of 90% of the award) pursuant to rules established under our Management Deferred Compensation Plan. Eligible
48
employees, including the named executive officers, may also defer up to 50% of their base salary under the Management Deferred Compensation Plan. At the employee's election, deferrals may be deemed invested in a stock unit account, a directed investment account with certain deemed investments available under the 401(k) Plan or a combination of these investment vehicles. If stock units are elected, dividend equivalents are credited to the units.
Potential Payments Upon Termination or Termination Following a Change in Control
Termination Other Than in Connection with Change in Control, Retirement, Death or Disability. The following table sets forth the severance benefits payable to each of our named executive officers under the Severance Program if the named executive officer's employment is terminated in the circumstances described below. No benefits are payable if the termination of service is voluntary or for cause, and a separate set of provisions apply when termination is a result of retirement, death or disability. The following table assumes the termination of employment occurred on
|
|
Cash Severance Benefit |
Pro-Rata Annual Bonus |
Value of Equity Acceleration |
Benefit Continuation |
Other |
Total |
|
|
930,000 |
- |
- |
21,770 |
20,000 |
971,770 |
|
|
445,500 |
- |
- |
14,933 |
20,000 |
480,433 |
|
|
474,000 |
- |
- |
14,933 |
20,000 |
508,933 |
|
|
419,100 |
- |
- |
1,356 |
20,000 |
440,456 |
|
|
355,673 |
- |
- |
17,847 |
20,000 |
393,520 |
Under the Severance Program, basic severance benefits generally are payable to each eligible employee when his or her employment terminates in the following circumstances:
49
Upon the occurrence of any of the events described above, (which expressly excludes a termination by the employee outside of the reasons noted above) the following basic severance benefits shown in the above table are payable to the named executive officers:
Termination of an employee's employment (for reasons other than in connection with a change in control or upon death, disability or retirement) will result in the automatic termination of any unvested performance shares and restricted stock units.
No basic severance benefits are payable under the Severance Program in connection with an eligible employee's termination generally if (1) the employee separates from service on or after his or her normal retirement date, (2) during the two-year period immediately before retirement, the employee is an eligible employee under the Severance Program, and (3) the employee is entitled to benefits under the Retirement Plan, the 401(k) Plan (excluding benefits representing employee contributions) and the Supplemental Plan which, when converted into a straight life annuity, equal at least
Termination Following a Change in Control. The following table sets forth the severance benefits payable to each of our named executive officers under the Severance Program upon a termination of employment in connection with a change in control. Payment of these benefits requires a "double trigger," or a change in control coupled with an involuntary loss of employment or a voluntary termination of employment for Good Reason (as defined in the Plan document) within one month prior to or two years after the change in control. The following table assumes the termination of employment and a change in control each occurred on
|
|
Cash Severance Benefit |
Pro-Rata Annual Bonus |
Value of Equity Acceleration |
Benefit Continuation |
Enhancement of Retirement Benefits |
Other |
Total |
|
|
6,277,500 |
1,162,500 |
4,976,547 |
21,770 |
- |
20,000 |
12,458,317 |
|
|
1,837,700 |
289,575 |
755,877 |
14,933 |
- |
20,000 |
2,918,085 |
|
|
1,718,300 |
213,300 |
1,357,461 |
14,933 |
- |
20,000 |
3,323,994 |
|
|
1,571,600 |
209,550 |
1,294,387 |
1,356 |
- |
20,000 |
3,096,893 |
|
|
1,241,600 |
154,125 |
1,007,783 |
17,847 |
- |
20,000 |
2,441,355 |
Under the Severance Program, benefits are payable to each of our named executive officers upon termination following a change in control. Unless the Compensation Committee determines otherwise with respect to an award at the time it is granted or unless otherwise defined for purposes of an award in a written employment, services or other agreement between a participant and us, a change in control of the company generally means the occurrence of any of the following events:
50
Upon a change in control, the performance period for outstanding unvested performance share awards for the 2023-2025 and 2024-2026 performance periods will be deemed concluded on the effective date of the change of control, and target awards of such performance shares plus dividend equivalents will be converted to restricted stock units that vest at the end of the respective performance period.
In addition, other change in control benefits are payable to our named executive officers if, within two years following a change in control, one of the following events occurs:
Upon the occurrence of any of the events described above within two years following a change of control, the following change of control severance benefits are payable to our named executive officers:
51
Benefits Protection Trust Agreement. We have entered into a Benefits Protection Trust Agreement (the "Trust"), which provides that in the event of a change in control, the Trust will become irrevocable and that within 30 days of the change in control we will deposit with the trustee enough assets to ensure that the total assets held by the Trust are sufficient to cover any anticipated trust expenses and to guarantee payment of the benefits payable to our employees under the Supplemental Plan; the Salaried Employees' Supplemental Benefit Plan (the predecessor plan to our current Supplemental Plan); the Management Performance Award Plan and Management Performance Award Plan II (predecessor plans to our current annual incentive plan); the Annual Incentive Plan (our current annual incentive plan); the Severance Program; the Management Deferred Compensation Plan; the Deferred Compensation Plan for Directors; the Deferred Compensation Plan for Directors II; certain other plans that are not material for executives and directors; and agreements between us and certain of our former employees. At least annually thereafter, an actuary will be retained to re-determine the benefit commitments and expected fees. If the Trust assets do not equal or exceed 110% of the re-determined amount, then we are, or our successor is, obligated to deposit additional assets into the Trust.
Potential Payments Upon Termination in Connection with Retirement, Death or Disability. The following table summarizes the value as of
|
|
Pro-Rata Annual Bonus |
Pro-Rated Number of Shares Issued at End of Performance Period |
Value of Performance Shares as of |
Accelerated Number of RSUs |
Value of RSUs as of |
Total |
|
|
1,162,500 |
37,629 |
1,476,938 |
24,569 |
964,333 |
3,603,771 |
|
|
289,575 |
3,884 |
152,447 |
4,715 |
185,064 |
627,086 |
|
|
213,300 |
7,019 |
275,496 |
14,032 |
550,756 |
1,039,552 |
|
|
209,550 |
8,689 |
341,043 |
5,793 |
227,375 |
777,968 |
|
|
154,125 |
6,792 |
266,586 |
4,472 |
175,526 |
596,237 |
52
Annual Incentive Plan. Under our annual incentive plan, upon the death, disability or retirement of an employee, the employee or his or her beneficiary or estate, is entitled to a pro rata portion of the employee's target annual cash incentive award.
Long-Term Equity Incentive Plan. If an employee's employment terminates during the performance period because of retirement, disability or death, the employee, or his or her beneficiary, is entitled to a prorated number of the performance shares subject to the award. The prorated number of performance shares earned is determined at the end of the performance period based on the ratio of the number of completed calendar months the employee is employed during the performance period to the total number of months in the performance period. The prorated number of performance shares, plus dividend equivalents equal to the cash distributions that would have been paid on the shares earned are paid at the end of the applicable performance period. With respect to restricted stock units, if the employee's employment terminates because of retirement, disability or death, and the vesting of the employee's restricted stock units is to occur in its entirety as of a single date, the employee, or his or her beneficiary, will be entitled to a pro rata portion of the restricted stock units. If the vesting is to occur ratably, such as 20%, 20% and 60% over a three-year period, the employee, or his or her beneficiary, will receive the already vested restricted stock units as well as the next tranche of restricted stock units scheduled to vest.
53
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information as of
|
Plan Category |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) |
|
Equity Compensation Plans Approved by Security Holders |
837,524 |
- |
1,467,793 |
|
Equity Compensation Plans Not Approved by Security Holders |
- |
- |
- |
|
Total |
837,524 |
- |
1,467,793 |
54
PROPOSAL 3 - ADVISORY VOTE TO APPROVE N
We recommend a voteFORthis proposal.
Section 14A of the Exchange Act enables our stockholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement.
As described under the heading"Compensation Discussion and Analysis,"starting on page27, our key compensation objectives are to recruit, motivate and retain talented and experienced executives, ensure our incentive compensation is aligned with short-term and long-term company performance and align our employees' interests with those of our stockholders. Our executive compensation programs are designed to provide all of our executives a fair and competitive incentive-based compensation package that is tied to the performance of both the individual and the company. We target our compensation levels to be at, or near, the median compensation paid by other comparable companies in our industry. A significant portion of total compensation for our senior executives is at risk and dependent on the achievement of target levels of performance. In addition, in order to maintain fiscal discipline and limit risk taking, incentive compensation includes thresholds and caps. We urge stockholders to read the"Compensation Discussion and Analysis"for a more detailed discussion of our executive compensation programs and how they reflect our philosophy and are linked to company performance.
We are asking our stockholders to approve our named executive officer compensation as described in this proxy statement by voting "FOR" the following advisory resolution at the Annual Meeting:
RESOLVED, that the company's stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the"Compensation Discussion and Analysis,"the"Summary Compensation Table"and the related compensation tables, notes and narratives in the company's proxy statement for the 2025 Annual Meeting of Stockholders.
The say-on-pay vote is advisory, and therefore not binding on the company, the Compensation Committee or our Board of Directors. However, our Board and our Compensation Committee value the opinions of our stockholders and will consider the outcome of the vote when making future executive compensation decisions.
Our Board of Directors has adopted a policy providing for an annual say-on-pay vote until the next required stockholder vote on the frequency of such votes.
55
CEO PAYRATIO
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of
|
Pay Ratio |
||
|
President and CEO |
Median Employee |
|
|
Base Salary |
925,385 |
74,024 |
|
Stock Awards |
3,202,475 |
|
|
Non-Equity Incentive Plan Compensation |
1,124,300 |
1,344 |
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings |
955,478 |
|
|
All Other Compensation |
96,407 |
5,757 |
|
TOTAL |
6,304,045 |
81,125 |
|
CEO Pay to Median Employee Pay Ratio |
77.7 |
1.0 |
We determined the median employee by reviewing the gross income maintained in company payroll records for 2024 for each company employee who was employed by us on
56
PAY VERSUS PERFORMANCE DISCLOSURE
In accordance with rules adopted by the
|
Year |
Summary Compensation Table Total for First PEO¹ |
Summary Compensation Table Total for Second PEO1 |
Compensation Actually Paid to First PEO1,2,3 |
Compensation Actually Paid to Second PEO1,2,3 |
Average Summary Compensation Table Total for Non-PEO NEOs1 |
Average Compensation Actually Paid to Non-PEO NEOs¹˒²˒³ |
Value of Initial Fixed |
Net Income |
FFO ($)*,⁵ |
|
|
TSR |
Peer Group TSR |
|||||||||
|
2024 |
- |
6,304,045 |
- |
1,888,569 |
1,460,561 |
630,158 |
117.95 |
123.25 |
22 |
223 |
|
2023 |
- |
6,508,953 |
- |
5,989,879 |
1,215,964 |
813,185 |
141.08 |
113.35 |
62 |
188 |
|
2022 |
- |
5,532,534 |
- |
3,702,409 |
1,490,192 |
1,057,653 |
121.92 |
99.67 |
334 |
468 |
|
2021 |
- |
5,690,852 |
- |
6,965,292 |
1,479,821 |
1,625,874 |
157.12 |
131.78 |
424 |
528 |
|
2020 |
6,838,249 |
- |
9,713,519 |
- |
1,735,782 |
2,345,324 |
119.30 |
92.00 |
167 |
302 |
* Dollars in millions.
1.
|
2020 |
2021 |
2022 |
2023 |
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
- |
|
- |
2. The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the company's NEOs during the applicable year. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below.
3.Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEOs and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the amounts from the Stock Awards column set forth in the Summary Compensation Table. Amounts in the Exclusion of Change in Pension Value column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table. Amounts in the Inclusion of Pension Service Cost are based on the service cost for services rendered during the listed year.
|
Year |
Summary Compensation Table Total for |
Exclusion of Change in Pension Value for |
Exclusion of Stock Awards for |
Inclusion of Pension Service Cost for |
Inclusion of Equity Values for |
Compensation Actually Paid to |
|
2024 |
6,304,045 |
(955,478) |
(3,202,475) |
346,733 |
(604,256) |
1,888,569 |
57
|
Year |
Average Summary Compensation Table Total for Non-PEO NEOs |
Average Exclusion of Change in Pension Value for Non-PEO NEOs |
Average Exclusion of Stock Awards for Non-PEO NEOs |
Average Inclusion of Pension Service Cost for Non-PEO NEOs |
Average Inclusion of Equity Values for Non-PEO NEOs |
Average Compensation Actually Paid to Non-PEO NEOs |
|
2024 |
1,460,561 |
(48,971) |
(757,870) |
18,895 |
(42,458) |
630,158 |
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
|
Year |
Year-End |
Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for |
Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for |
Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for |
Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for |
Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for |
Total - Inclusion of |
|
2024 |
2,043,090 |
(1,505,980) |
- |
(1,141,366) |
- |
- |
(604,256) |
|
Year |
Average Year-End |
Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs |
Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs |
Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs |
Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs |
Average Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for Non-PEO NEOs |
Total - Average Inclusion of |
|
2024 |
483,500 |
(289,531) |
- |
(236,427) |
- |
- |
(42,458) |
4.The Peer Group TSR set forth in this table utilizes the NAREIT Equity Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2024. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the company and in the NAREIT Equity Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.
5.We determined Funds from Operations orFFO, to be the most important financial performance measure used to link company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2024. FFO is a non-GAAP financial measure that is defined and reconciled to net income in the Compensation Discussion and Analysis, under the heading "2024 Annual Cash Incentive Awards" on page33.
58
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company and Peer Group Total Shareholder Retu("TSR")
The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, the Company's cumulative TSR over the five most recently completed fiscal years, and the NAREIT Equity Index over the same period.
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the five most recently completed fiscal years.
59
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and FFO
The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Funds from Operations during the five most recently completed fiscal years.
Tabular List of Most Important Financial Performance Measures
The following table presents the financial performance measures that the company considers to have been the most important in linking Compensation Actually Paid to our PEO and other NEOs for 2024 to company performance. We break out this table into a separate list for our PEO and for each of our NEOs for 2024. The measures in this table are not ranked.
|
|
|
|
|
|
|
FFO |
FFO |
FFO |
FFO |
FFO |
|
TSR |
TSR |
TSR |
TSR |
TSR |
|
- |
- |
EBITDDA |
- |
EBITDDA |
60
GENERAL INFORMATION
Stockholder Proposals for 2026
We anticipate that the next Annual Meeting of Stockholders will be held in May of 2026. In order to be considered for inclusion in our 2026 proxy statement, stockholder proposals must comply with SEC Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials and must be submitted in writing to: Office of the Corporate Secretary,
Our Bylaws require that any stockholders who intend to present an item of business, including nominees for candidates for election as directors, at the 2026 Annual Meeting of Stockholders (other than a stockholder proposal submitted for inclusion in our 2026 proxy statement) must provide notice of such business to the Office of the Corporate Secretary at the address above not earlier than January 5, 2026 and not later than the close of business on February 4, 2026. Proposals should include the information set forth in our Bylaws. A copy of our Bylaws may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investor Resources," and then "Corporate Governance."
In addition to satisfying the foregoing requirements under our bylaws with respect to advance notice of any nomination, stockholders who intend to solicit proxies in support of director nominees other than the company's nominees for the 2026 Annual Meeting of Stockholders in accordance with SEC Rule 14a-19 (the universal proxy rules) must comply with all the requirements of Rule 14a-19(b).
Householding Information
We deliver only one annual report and one proxy statement to multiple shareholders at the same address unless we have received contrary instructions from one or more of the shareholders. We will, upon written or oral request, promptly deliver a separate copy of the annual report or proxy statement to a shareholder at a shared address to which a single copy of the annual report or proxy statement was delivered. Registered shareholders who wish to receive a separate annual report or proxy statement in the future, or registered shareholders sharing an address who wish to receive a single copy of the annual report or proxy statement in the future, should contact our Transfer Agent at
Other Information
We will make available to a stockholder, free of charge, any of the following documents at the stockholder's request:
Filings with the Securities and Exchange Commission
Charter Documents
61
Committee Charters
Governance Documents
These documents may be viewed by going to our website atwww.potlatchdeltic.com, and selecting "Investors," and then "Corporate Governance." You may also submit a request for printed copies by mail or by email to the following address:
Attn: Corporate Secretary
601 W. First Ave., Suite 1600
Email: investorinfo@potlatchdeltic.com
The information on our website is not, and shall not be deemed to be, a part of this proxy statement or incorporated herein or into any of our other filings with the
Forward-Looking Statements
Certain statements in this proxy statement, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this proxy statement. These forward-looking statements generally are identified by the words "annual," "anticipate," "aspire," "become," "believe," "commit," "continue," "could," "develop," "estimate," "every two years," "expect," "future," "goal," "initiative," "intend," "may," "objective," "opportunities," "plan," "potential," "project," "seek," "should," "target," "will," "would," or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section titled "Risk Factors" in our Annual Report on Form 10-K and in the company's other filings with the
62
INSTRUCTIONS FOR ATTENDING THEANNUAL MEETING
You are entitled to participate in the Annual Meeting if you were a stockholder as of the close of business on March 10, 2025, the record date, or hold a legal proxy for the meeting provided by your bank, broker, or nominee. We have worked to offer the same participation opportunities as would be provided at an in-person meeting. You will be able to listen, vote, submit questions and examine our list of our stockholders of record via live webcast from your home or from any remote location that has Internet connectivity.
To be admitted to the Annual Meeting, log onto the virtual meeting platform atwww.virtualshareholder meeting.com/PCH2025, beginning at 8:45 a.m. Pacific Daylight Time on May 5, 2025, and enter your 16-digit Control Number. The Control Number may be found on your proxy card, voting instruction form or notice.Persons without a Control Number may attend the Annual Meeting as guests, but they will not have the option to vote shares, ask questions or examine our list of stockholders of record.Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the Annual Meeting by one of the methods described in this proxy statement.
During the Annual Meeting, you may vote by completing a ballot online and ask questions by following the instructions available onwww.virtualshareholdermeeting.com/PCH2025.Questions may be submitted through the virtual meeting platform during the Annual Meeting or during the fifteen (15) minutes before commencement of the Annual Meeting. In addition, you may submit questions in advance of the meeting date atwww.proxyvote.comafter logging in with your Control Number. To allow us to answer questions from as many stockholders as possible, each stockholder will be limited to one question. Questions from multiple stockholders on the same topic or that are otherwise related may be grouped, summarized and answered together. Types of appropriate questions include questions of general conceto all stockholders, e.g., information about the meeting, the proposals to be voted on, corporate governance and executive compensation. Questions involving personal matters are not pertinent to meeting matters and therefore will not be addressed. If there are any appropriate questions which were not otherwise answered during the meeting, the questions and answers will be posted online and answered on our Investor Relations page of our website atwww.potlatchdeltic.com. The questions and answers will be available as soon as practical after the meeting and will remain available until one week after posting.
The Annual Meeting's Rules of Conduct will be posted on the virtual meeting platform. A replay of the webcast will be available on the Investor Relations page of our website atwww.potlatchdeltic.comuntil May 5, 2026.
The Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong connection to the internet wherever they intend to participate in the Annual Meeting and that they can hear streaming audio prior to the start of the meeting.
If you have any technical difficulties or questions regarding the Annual Meeting website, please call the support team at the numbers listed on the log-on screen. If there are any technical issues in convening or hosting the meeting, we will promptly post information to the Investor Relations page of our website atwww.potlatchdeltic.com, including information on when the meeting will be reconvened.
63
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Photo credit: Jay Brittain Photography © 2024 |
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FSC®-Certified Paper |
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE,
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