DEF 14A of Packaging Corp Of America, Mar 28, 2024

DEF 14A of Packaging Corp Of America

Filed Mar 28, 2024 · FY20230001193125-24-079613

Open on EDGAR

  1. What happens if a nominee for director does not receive a majority of the vote in an uncontested election?

    What happens if a nominee for director does not receive a majority of the vote in an uncontested election? Ten of the eleven nominees for election to the board of directors at the 2024 annual meeting are incumbent directors currently serving on the board and the election is uncontested. Ms. Gowland is being nominated for election for the first time. An incumbent director nominee who does not receive the necessary number of votes to be elected at the annual meeting would, under Delaware law, continue to serve on the board as a “holdover director.” However, under our bylaws, any director who fails to receive the necessary number of votes to be elected must tender his or her resignation to the board promptly. Our independent directors (excluding the director who tendered the resignation) would be required to determine whether to accept or reject the resignation, or whether to take any other action. The board would then act on the tendered resignation and publicly disclose its decision within 90 days following certification of the stockholder vote. If Ms. Gowland does not receive a majority of the vote, she will not be elected to the board.

  2. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our board currently has ten directors. Effective upon the time of the 2024 annual meeting, the size of the board will be increased to 11 directors. The 11 nominees named below are proposed to be elected at the annual meeting to serve until the 2025 Annual Meeting of Stockholders and until their successors are elected and qualified. All of the nominees have been nominated for election by our board of directors upon the recommendation of the nominating and governance committee of the board of directors. A properly submitted proxy will be voted by the persons named on the proxy card for the election of each nominee, unless you vote against the nominee or abstain. If elected, each nominee will serve until the expiration of his or her term and his or her successor is elected and qualified or until his or her earlier resignation, removal or death. Each of the nominees is willing to serve if elected, and the board of directors has no reason to believe that any of the nominees will be unavailable for election. If such a situation should arise, the proxy will be voted in accordance with the best judgment of the proxy holder for such person or persons as may be designated by the board of directors, unless the stockholder has directed otherwise. Set forth below is information regarding each nominee. Standing for election are: Mark W. Kowlzan is 69 years old and has served as Chief Executive Officer and a director of PCA since July 2010 and as Chairman since January 2016. From 1998 through June 2010, Mr. Kowlzan led PCA’s containerboard mill system, first as Vice President and General Manager and then as Senior Vice President—Containerboard. From 1996 through 1998, Mr. Kowlzan served in various senior operating positions with PCA in its mill operations, including as manager of the Counce, Tennessee linerboard mill. Prior to joining PCA, Mr. Kowlzan spent 15 years at International Paper Company, where he held a series of operational and managerial positions within its mill organization. Mr. Kowlzan has been a member of the board of directors of American Forest & Paper Association since February 2011. Mr. Kowlzan was chosen to serve on our board primarily for his extensive leadership and technical expertise in the paper and packaging industries and his familiarity with our business through his leadership of our containerboard mill system and our company. Mr. Kowlzan self identifies as a Caucasian male. Cheryl K. Beebe is 68 years old and has served as a director of PCA since May 2008. From February 2004 until her retirement in February 2014, Ms. Beebe served as the Chief Financial Officer of Ingredion Incorporated (formerly named Corn Products International, Inc.), a manufacturer and seller of a number of ingredients to food and industrial customers. Ms. Beebe previously served Ingredion as Vice President, Finance from July 2002 to February 2004, as Vice President from February 1999 to 2004 and as Treasurer from 1997 to February 2004. From 1980 to 1997, she served in various financial positions of increasing responsibility for Corn Products. Ms. Beebe is a member of the board of directors of The Mosaic Company and served on the boards of directors of Convergys Corporation and Hanesbrands, Inc. during the past five years. Ms. Beebe is a trustee of Goldman Sachs Asset Management funds. Ms. Beebe was chosen to serve on our board primarily for her experience as a chief financial officer of a public company, her extensive financial and accounting background, and her knowledge of the manufacturing industry and the strategic and business issues and risks similar to those facing PCA. Ms. Beebe self identifies as a Caucasian female. Duane C. Farrington is 65 years old and has served as a director of PCA since August 2015. Mr. Farrington was employed by State Farm Mutual Automobile Insurance Company from 1980 until his retirement in 2020. He served State Farm as Senior Vice President for Sales and Operations in the mid-Atlantic operation from 2005 to 2008. He moved to the corporate headquarters in 2009 and was named Executive Vice President and Chief Administrative Officer in 2013 and served in such position until he retired in 2020. In his State Farm senior leadership role, he had overall responsibility for the organization’s information technology, systems and business integration, information security, and innovation functions. Mr. Farrington earned the Chartered Property Casualty Underwriter (CPCU) designation in 1995. Mr. Farrington was chosen to serve on our board primarily because of his extensive experience with information technology and security, as well as his business experience gained from 40 years of service at State Farm. Mr. Farrington self identifies as an African-American male. Karen E. Gowland is 65 years old and is nominated for election to our board for the first time at the 2024 annual meeting. Before her retirement in March 2014, Ms. Gowland was vice president, general counsel, and corporate secretary for Boise Inc, a manufacturer of packaging and paper products, from February 2008 to July 2010 and senior vice president, general counsel and secretary from July 2010 until we acquired Boise in October 2013. From October 2004 to February 2008, Ms. Gowland served as vice president, general counsel, and corporate secretary of Boise Cascade, L.L.C. During her 30 years in the forest products, paper and packaging industries, Ms. Gowland held various legal and compliance positions, which included over 15 years of experience as a corporate secretary for various public and private entities. Ms. Gowland currently serves on the board of directors of Boise Cascade Company, a producer of engineered wood products and plywood and a distributor of building products. Ms. Gowland was chosen to serve on our board due to her relevant experience as an executive in our industry, including serving as a general counsel addressing risks and issues similar to those we face, as well as her background in governance and compliance matters. Ms. Gowland self identifies as a Caucasian female. Donna A. Harman is 64 years old and has served as a director of PCA since December 2019. She served as President and Chief Executive Officer of American Forest and Paper Association (AF&PA), the national trade association of the paper and wood products industries, from 2007 until her retirement in 2019. Earlier in her career, she held positions as AF&PA’s senior vice president, policy and government affairs, served in governmental affairs for Champion International Corporation and The Dow Chemical Company and served as a legislative assistant in Congress. Ms. Harman is the 2019 recipient of the Bryce Harlow award, which recognizes her exemplary career in business-government relations. Ms. Harman was chosen to serve on our board primarily for her considerable experience with sustainability, public policy matters relevant to our industry and senior leadership experience, through her service as president of AF&PA for more than a decade. Ms. Harman self identifies as a Caucasian female.

  3. ELECTION OF DIRECTORS

    Robert C. Lyons is 60 years old and has served as a director of PCA since August 2011. Mr. Lyons has served as President and Chief Executive Officer of, and has served on the board of directors of, GATX Corporation, a rail, marine and industrial equipment leasing company, since April 2022. Prior to that, Mr. Lyons served as Executive Vice President and President—Rail North America of GATX Corporation from August 2018 to April 2022 and as Chief Financial Officer of GATX from November 2004 to August 2018. Mr. Lyons has been employed by GATX since 1997 and served in various positions of increasing responsibility through 2004. Prior to his employment with GATX, Mr. Lyons worked for the Financial Relations Board and in the corporate banking division of The Bank of Tokyo- Mitsubishi. Mr. Lyons was chosen to serve on our board primarily for his extensive financial and accounting background, experience as a chief executive officer, business unit leader and chief financial officer of a public company, and his familiarity with strategic and business issues and risks for companies similarly situated to PCA. Mr. Lyons self identifies as a Caucasian male. Thomas P. Maurer is 72 years old and has served as a director of PCA since May 2014. Mr. Maurer spent his entire career with Ernst & Young, LLP, a global professional services firm, from 1973 until his retirement in 2011. He served as the global coordinating partner on the audits of large companies primarily in the manufacturing and consumer products industries. Mr. Maurer was a member of the Ernst & Young Global Account Partner Group and he served two terms on the Ernst & Young Partner Advisory Council. Mr. Maurer also served as the leader of the Retail, Consumer Products and Industrial Products Group in Ernst & Young’s Chicago office. Mr. Maurer is also a director of Lamb Weston Holdings, Inc. Mr. Maurer was chosen to serve on our board primarily for his experience working with and assisting similarly situated companies to ours, his extensive financial, auditing and accounting background and his knowledge of similarly situated manufacturing companies. Mr. Maurer self identifies as a Caucasian male. Samuel M. Mencoff is 67 years old and has served as a director of PCA since January 1999 and served as Vice President of PCA from January 1999 through January 2000. Mr. Mencoff has been employed principally by Madison Dearborn Partners, LLC since 1993 and currently serves as Senior Advisor, after having served as Co-Chief Executive Officer from 2008 to 2023. From 1987 until 1993, Mr. Mencoff served as Vice President of First Chicago Venture Capital. Mr. Mencoff was chosen to serve on our board primarily for his substantial operational and financial experience gained from the acquisition and management of similarly-situated portfolio companies during his career at Madison Dearborn. Mr. Mencoff self identifies as a Caucasian male. Roger B. Porter is 77 years old and has served as a director of PCA since May 2005. Mr. Porter is currently the IBM Professor of Business and Government at Harvard University and has served on the faculty at Harvard University since 1977. Mr. Porter also held senior economic policy positions in the Gerald Ford, Ronald Reagan and George H.W. Bush White Houses, serving as special assistant to the President and executive secretary of the Economic Policy board from 1974 to 1977, as deputy assistant to the President and director of the White House Office of Policy Development from 1981 to 1985, and as assistant to the President for economic and domestic policy from 1989 to 1993. Mr. Porter is also a director of Extra Space Storage Inc. and has served as a director of Zions Bancorporation and Tenneco, Inc. during the last five years. Mr. Porter was chosen to serve on our board primarily for his perspectives and insights gained through his significant business, governmental and public policy experience. Mr. Porter self identifies as a Caucasian male. Thomas S. Souleles is 55 years old and has served as a director of PCA since September 2010, and previously served on PCA’s Board of Directors from 1999 to 2008. Mr. Souleles has been employed principally by Madison Dearborn Partners, LLC since 1995 and currently serves as Co-Chief Executive Officer, to which he was appointed in 2023, after having served as Managing Director concentrating on investments in the basic industries sector. Mr. Souleles was chosen to serve on our board primarily for his substantial operational and financial experience gained from the acquisition and management of similarly-situated portfolio companies, including several in the paper and forest products industry during his career at Madison Dearborn and his expertise in financial analysis. Mr. Souleles self identifies as a Caucasian male. Paul T. Stecko is 79 years old and has served as a director of PCA since March 1999, including as Chairman from March 1999 through December 2015. He served as a Senior Advisor to PCA from December 2015 through the end of 2017. He served as Executive Chairman of PCA from July 2010 until his retirement as an officer and employee of the company in December 2013. Mr. Stecko served as Chief Executive Officer of PCA from January 1999 to July 2010. From January 1997 to April 1999, Mr. Stecko served as Chief Operating Officer of Tenneco, Inc. From December 1993 through January 1997, Mr. Stecko served as President and Chief Executive Officer of Tenneco Packaging Inc. Prior to joining Tenneco Packaging, Mr. Stecko spent 16 years with International Paper Company. Mr. Stecko has served on the board of directors of Tenneco, Inc. during the past five years. Mr. Stecko was chosen to serve on our board primarily for his extensive experience in the paper and packaging industries and general business experience, including more than ten successful years as our chief executive officer. Mr. Stecko self identifies as a Caucasian male.

  4. Compensation Objectives

    | • | focus executive officers on both annual and long-term business objectives with the goal of creating stockholder value; |

  5. Compensation Objectives

    | • | align the interests of our executives and stockholders through equity-based compensation awards with rigorous performance metrics, comprising a significant portion of our executive compensation; and |

  6. 2023 Summary

    | • | Annual incentive award. Our officers may earn an annual cash incentive award, which is determined based upon our earnings performance for the year. Our CEO’s target award of $2.45 million was 18% of target awarded compensation. Awards paid out based upon performance against PCA’s earnings per share goal for the year. Actual awards paid out at approximately 134% of target, which for the CEO was $3.3 million and 23% of actual awarded compensation. |

  7. 2023 Summary

    | • | Long-term equity awards. Long-term equity awards consisted of approximately equal portions of time-vesting restricted stock, performance units using return on invested capital as a performance measure (ROIC units) and performance units using total shareholder return as a performance measure (TSR Units). The grant date value of the long-term equity awards for our CEO was $9.6 million, which comprised 71% of our CEO’s target awarded compensation and 67% of actual awarded compensation for the year. |

  8. 2023 Summary

    PCA’s actual awarded compensation for 2023 for our CEO increased approximately 18% from 2022 awarded compensation. The increase was primarily due to a higher value of the annual equity award, which is discussed in more detail later under the caption “Long Term Equity Awards.” 2023 Say on Pay Vote We believe that our compensation practices have historically achieved an appropriate alignment of pay with company performance. Shareholders have overwhelmingly supported our practices, with our “say-on-pay” vote receiving at least 93% votes in favor over each of the last five years, with last year’s say-on-pay vote receiving nearly 95% of the vote, excluding abstentions. Our compensation program has largely remained consistent in terms of practices and structure during such five-year period and we did not make material changes to our compensation practices in response to the vote. We consider shareholder expectations generally in light of best compensation practices when making compensation decisions and assessing our compensation program.

  9. Compensation Consultant

    Compensation Consultant During 2023, FW Cook served as the committee’s independent compensation consultant. FW Cook attends meetings of the committee, assesses the company’s compensation practices and advises on the committee’s decision-making process. The committee has the sole authority to retain FW Cook, approve its fees and determine the other terms and conditions of FW Cook’s engagement. FW Cook works solely for the committee and provides no other services to the Company. FW Cook is independent from the company, and FW Cook has attested in writing as to its independence. Management retains Meridian Compensation Partners (“Meridian”) as a compensation consultant to provide and analyze benchmarking data, provide valuation services, and perform other consulting services as needed. Representatives of Meridian do not attend meetings of the committee.

  10. Comparative Assessments

    Comparative Assessments Consistent with our compensation objectives described above, our executive compensation program is designed to be competitive with the programs that are offered at paper, packaging and related manufacturing companies comparable to us. While comparing our compensation to other companies may not always be totally appropriate due to aspects of our business, these comparisons assist the committee’s decision-making process. We annually obtain an assessment of the compensation of our named executive officers relative to a group of named executive officers at other peer companies that provides us with information in support of our compensation practices. The assessments include the compilation of compensation data from the peer group companies approved by the committee, and the comparison of the compensation of each of our named executive officers relative to similar officers at the peer group companies. Compensation is compared to a peer group designed to include: (1) direct industry competitors, (2) companies viewed by PCA and its investors as operating in related paper, packaging or container industries or in the basic materials sector and that are comparable in size or scope, across such measures as total revenues, taking into account the integrated nature of PCA’s business, and market capitalization; (3) other companies of similar size and scope in the basic materials sector and (4) manufacturing companies of similar size or scope headquartered near the location of PCA’s headquarters. As part of the committee’s review of the peer group, during the year Aptargroup, Inc. and PPG Industries, Inc. were added to the peer group and Sylvamo Company and Tenneco, Inc. were removed from the peer group for purposes of future assessments. Certain information regarding the peer group used in connection with the assessment of 2023 compensation is as follows:

  11. Comparative Assessments

    (1) Sylvamo Company become an independent public company in 2021. PCA’s 2023 revenues are between the 25th percentile and the median of the group, its market capitalization is above the 75th percentile of the group, its one-year total stockholder return is above the 75th percentile of the group and its three-year total stockholder return is between the median and the 75th percentile of the group. Annually, our compensation consultant completes a compensation assessment against the peer group, using the most recently filed proxy statements and public filings to obtain comparative compensation data. The committee uses the assessment to help ensure that our executive compensation is competitive and in line with industry and market practice. The committee also uses these assessments as a guide when determining each element of incentive compensation, the mix of base salary, annual performance-based, cash incentive awards and equity grants within the overall compensation package, and the total compensation compared to the peer group companies. There is no pre-established policy or target for the mix between cash and non-cash, or short and long-term incentive compensation though the substantial majority of compensation awarded to our top two officers is in the form of long-term equity compensation.

  12. Annual Cash Incentive Awards

    Annual Cash Incentive Awards Overview. Our annual cash incentive award program under our Executive Incentive Compensation Plan (EICP) is designed to motivate performance in the most important aspects of our business. Threshold, target and maximum awards and performance measures to be considered for actual payouts are determined during the year, and payouts are determined based on consideration of actual performance at or around year end. In 2023 and historically, annual earnings per share, excluding special items, served as the performance measure for the annual cash incentive award. We use earnings per share after special items as the performance measure because it measures management’s effectiveness in generating shareholder value, provides a measure of affordability for award payouts and measure management’s effectiveness in running the business against the internal profit plan. Target Award Levels and Payout Matrix. Target award level, thresholds and maximums are determined based upon our review of competitive information and historical award payouts and the importance to our business of, and our expectations for, the individual positions. Our maximum 2023 EICP award level was approximately 160% of target awards for each of our officers. The maximum award level was $3.90 million for Mr. Kowlzan, our CEO, which was a slight decrease from 2022. In establishing its payout matrix, the committee also considers prior year award levels and the company’s forecasted performance against the prior year. The 2023 target awards were $2,450,000 for Mr. Kowlzan and ranged from $580,000 to $1.67 million for the other officers. For our officers, target award levels were approximately 12.5% lower than 2022 target award levels due to lower forecasted earnings. The committee has historically considered affordability into its award determination (i.e., higher or lower absolute earnings drive higher or lower potential award payouts). In order to achieve such objective, the committee varies target award levels each year by comparing the year over year change in forecasted earnings. The committee establishes a payout matrix annually and reviews the payout matrix at every meeting in light of business conditions and forecasted performance. The payout matrix was developed in connection with the review of the company’s annual operating plan at the committee’s February and May meetings and assessment of forecasted business and operating conditions. While the committee reserves the right to make adjustments to the matrix at any time, in practice, the committee finalizes the matrix during the first half of the year as the board assesses the company’s performance against the annual operating plan. The committee established the payout matrix to pay:

  13. Annual Cash Incentive Awards

    | • | awards at the target level if the company achieved $7.35 of earnings per share excluding special items. |

  14. Annual Cash Incentive Awards

    | • | maximum awards (approximately 160% of target award levels) if the company achieved $9.56 of earnings per share excluding special items. |

  15. Annual Cash Incentive Awards

    | • | threshold level (50% of target award levels) if the company achieved $5.51 of earnings per share excluding special items. |

  16. Annual Cash Incentive Awards

    Actual Performance. In January 2024, after 2023 results were finalized, the committee made award determinations in accordance with the payout matrix, based upon actual earnings per share, excluding special items, of $8.70.(2) The matrix yielded a payout at 134% of target and 93% of the prior year award level. The committee performed a final review of the year and determined that those award levels were appropriate, taking into account the factors described above under the caption “2023 Summary.”

  17. Long-Term Equity Awards

    Long-Term Equity Awards Overview. Named executive officers have the opportunity to receive equity awards under our Long-Term Equity Incentive Plan. The purpose of the plan is to promote our long-term growth and profitability by aligning the interests of our executive officers with the interests of our stockholders and by attracting, retaining and rewarding the best available persons for positions of responsibility. Our equity awards have resulted in substantial share ownership by our officers. Annual awards have historically been made to the named executive officers on the same date as other plan participants. We make equity awards to all eligible executive and non-executive recipients in the regularly scheduled February meetings of the board of directors and compensation committee at the same time we approve the filing of the Annual Report on Form 10-K, which includes the prior year’s audited financial statements. Equity Award Structure. In 2023, consistent with our historical practice, we made three forms of equity awards to our executive officers. These awards include time vesting restricted stock, ROIC Units, which utilize return on invested capital as the performance measure, and TSR Units, which utilize total stockholder return as the performance measure. These are awarded in approximately equal values, such that each form of award represents approximately one third of the aggregate grant date fair value of stock awards disclosed in the “Summary Compensation Table.” Our restricted stock awards cliff vest four years after the date of award and the ROIC Units and TSR Units vest based upon relative return on invested capital and total stockholder return performance, respectively, against a peer group over the relevant performance period. ROIC is used as a performance measure to reward sustained long-term return-on-capital performance against peer companies with whom we are compared by investors. We selected total stockholder return as a performance measure because it is the ultimate measurement of generation of value for our stockholders and is commonly used by peer companies as a portion of long-term compensation awarded to executive officers. Based upon our review of competitive market survey information for peer companies, we believe that our equity award structure is rigorous and highly performance-based. Our restricted stock and ROIC Unit awards do not vest for four years, providing a longer-term performance horizon and retention incentive. Our TSR Units require performance at the top of the peer group to pay out at maximum, which is a more challenging slope than typically used by peer companies, which often pay out at maximum if 75th percentile performance is achieved. We also cap payout on the ROIC Units at 120%, (2) Earnings per share excluding special items and free cash flow are Non-GAAP financial measures, which we present throughout this proxy statement. Important information relating to our use of these Non-GAAP financial measures and a reconciliation of these Non-GAAP financial measure to the most comparable financial measure presented in accordance with Generally Accepted Accounting Principles (GAAP) are included on Appendix A to this proxy statement. instead of a more commonly used 200% and performance at or above the 90th percentile is required to pay above target. The amount paid out under the ROIC Units and the TSR Units will be determined based upon our performance on the applicable performance measure compared to a peer group consisting of the following companies: AptarGroup, Inc; Avery Dennison Corporation; Berry Global, Inc.; Cascades, Inc.; Celanese Corporation; Clearwater Paper Corporation; Crown Holdings, Inc.; PH Glatfelter Co.; Graphic Packaging Holding Company; Greif, Inc.; International Paper Company; OI Glass, Inc.; Sealed Air Corporation; The Sherwin Williams Corporation; Silgan Holdings Inc.; Sonoco Products Co.; Sylvamo Company; and WestRock Company. Holders will also receive dividend equivalents upon vesting with a value equal to the amount of dividends accrued on the shares that actually vest. Dividend equivalents will be paid in cash unless the committee determines to pay them in shares. The peer group is intended to be a comprehensive group of publicly traded paper, packaging and other industrial companies, which may compete with us for investor capital. The peer group was not changed from 2022, except to remove Resolute Forest Products, which was acquired during the year. This group is not intended to be the same group used for comparative assessments as described above under “—Comparative Assessments.” For the ROIC Units, annual return on invested capital for PCA and each peer company will be calculated for each of 2023, 2024, 2025 and 2026 and averaged. Return on invested capital means pre-tax operating profit before publicly reported special items divided by the sum of net debt and equity. The ROIC Units will vest on, and pay out on or promptly after, February 22, 2027, the fourth anniversary of the date of the award, as long as the recipient is employed by, or otherwise provides services to, PCA. PCA must perform above the median of the group for the ROIC units to pay out at or above target. If PCA performs in the top three companies in the group, the units will pay out at 120% for first place, 113.33% for second place and 106.66% for third place. If PCA performs between median and fourth place, the units will pay out at 100%. If PCA performs in the third quartile of the group, a number of shares between 40% and 100% of the target number of shares will pay out. If PCA performs in the fourth quartile, no shares will vest. For the TSR Units, total stockholder return for PCA and each peer company will be calculated for the period beginning on March 1, 2023 and ending on February 28, 2026 with the beginning and ending Stock price determined on a 20-day, volume weighted average price basis preceding such dates. The TSR Units will vest and pay out after certification of performance by the committee promptly after the end of the performance period. PCA must perform above the median of the group for the TSR Units to pay out at or above target. If PCA is the highest performer in the peer group, 200% of the target number of shares will vest. If PCA performs between the median and the highest performer of the group, a number of shares between 100% and 200% of the target number of shares will vest. If PCA performs between the 33.33rd percentile and the median, a number of shares between 0% and 100% of the target number of shares will vest. If PCA performs below the 33.33rd percentile, then no shares will vest. The actual number of shares vesting within each range will be determined based upon linear interpolation of PCA’s performance within that range. The terms of the units are consistent with prior years. 2023 Award Levels. Our historical approach has been to vary award levels based upon the change in our stock price; i.e., higher or lower stock price drives higher or lower absolute award levels for each officer, and we consider individual adjustments based upon competitive market information, individual performance, retention needs or changes in responsibilities. As further described below, award levels were increased by approximately 33% for each of Mr. Kowlzan and Mr. Hassfurther. Award levels were down approximately 2% for each of the other officers to reflect a slightly lower year-over-year stock price.

  18. Long-Term Equity Awards

    Mr. Kowlzan and Mr. Hassfurther each have nearly 15 years in their current positions as CEO and leader of our corrugated business, respectively making them longer tenured than rest of the peer company officers to whom they are compared. Since July 1, 2010, when Mr. Kowlzan was promoted to CEO and approximately one year after Mr. Hassfurther was promoted to his position, the company’s aggregate total shareholder return is in excess of 1000%, more than doubling the return of the S&P 500 during that time. They are the stewards of our strategy, focusing on profitable growth from unyielding service to our customers, operational excellence and disciplined and balanced capital allocation in furtherance of these goals. While both are at or around retirement age, each has indicated to our board as part of the board’s ongoing succession process, that he is willing to serve for multiple years while continuing to develop internal candidates who can take over their positions and continue our company’s success. In light of the importance of retaining Mr. Kowlzan and Mr. Hassfurther as they continue to execute upon our strategy and develop internal succession candidates, the board believes that it is in the best interest of shareholders to provide an appropriate incentive for such retention. In consultation with our compensation consultant, the compensation committee determined to provide a 33% increase in the long-term incentive portion of their compensation, which is heavily weighted towards performance-based compensation that is subject to the attainment of rigorous long-term performance goals and has no provision for vesting on retirement. The committee believes these award levels are appropriate in light of historical performance and the importance of continuing the company’s success. Payout of Prior Year Performance Unit Awards. The performance period for the ROIC performance units awarded in 2019 ended on December 31, 2022 and vested, subject to continued service, on June 28, 2023. PCA achieved the fifth-highest average return on invested capital of the peer group companies (approximately the 80th percentile) for the three years in the performance period, resulting in 100% of the target shares under the units being earned plus dividend equivalents, which are reported in the “2023 Stock Vested” table. The performance period for the ROIC performance units awarded in 2020 ended on December 31, 2023. PCA achieved the fourth-highest average return on invested capital of the peer group companies (approximately the 85th percentile) for the three years in the performance period, resulting in 100% of the target shares under the units being earned. These units were not vested as of the end of the year and are reported as unvested awards in the accompanying “Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023” table. The three-year performance period for the TSR performance units awarded in 2020 began on March 1, 2020 and ended on February 28, 2023. PCA’s total shareholder return was at the 72nd percentile of the peer group, resulting in the units paying out in shares equal to at 144% of the number of target shares plus dividend equivalents, which are reported in the “2023 Stock Vested Table”.

  19. Potential Payments Upon Termination or a Change of Control

    Potential Payments Upon Termination or a Change of Control Changes in employment status such as termination, death or disability, a change of control or retirement can trigger a benefit or accelerate a benefit for our salaried employees, including the named executive officers. These payments are described below. Named executive officers are not entitled to receive any incremental benefits or accelerated benefits that are different in scope, terms or operation than what are generally available to our salaried employees who are eligible to participate in our various compensation plans. However, the committee will consider post-retirement or post-termination arrangements and acceleration or continued vesting of certain equity awards for named executive officers on a case-by-case basis in the event of a retirement or termination.

  20. Payments Made Upon a Change of Control

    Payments Made Upon a Change of Control There are no employment agreements for any named executive officers, nor are we contractually obligated to make any type of cash payment to any named executive officer in the event of a change of control. Equity awards include double trigger change of control provisions. If a substitute equity award meeting certain conditions is provided to the executive officer in connection with a change of control, that award will not vest as a result of the change of control unless the officer’s employment is terminated or the officer resigns for good reason within two years after a change of control. “Good reason” includes breach of certain obligations by the company, diminution of duties or authority of the officer, certain reductions of compensation of the officer or relocation of the principal office where the officer works.

  21. Severance Benefits

    Severance Benefits We have no contractual obligation to pay severance to any of our named executive officers in the event of a termination. Any severance payments made to our named executive officers would be considered on a case-by-case basis, and any payment of severance that might be deemed appropriate would require approval of the committee. The committee will assess post-retirement arrangements and acceleration of equity with retiring named executive officers on a case-by-case basis, taking into account transitional needs, expertise needed, customer relationships, the company’s succession plans and other factors, such as non-competition and non-solicitation covenants, that the committee determines to be important.

  22. Summary Compensation Table

    Summary Compensation Table

  23. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($)(4) | Total ($) | | Mark W. Kowlzan Chief Executive Officer | 2023 2022 2021 | 1,433,580 1,381,764 1,416,516 | 9,604,906 7,250,018 6,745,717 | 3,281,040 3,528,000 3,600,000 | 888,965 (3) 325,321 | 19,699 71,852 69,759 | 15,228,190 12,231,634 12,157,313 | | Thomas A. Hassfurther Executive Vice President— Corrugated Products | 2023 2022 2021 | 1,131,444 1,090,548 1,058,784 | 6,650,040 5,000,061 4,666,064 | 2,232,930 2,401,000 2,450,000 | 922,673 (3) 234,415 | 86,096 121,012 140,181 | 11,023,183 8,612,621 8,549,444 | | Robert P. Mundy Executive Vice President and Chief Financial Officer | 2023 2022 2021 | 766,392 738,690 717,174 | 2,180,461 2,225,016 1,770,763 | 1,458,240 1,568,000 1,600,000 | - - - | 92,448 108,587 95,293 | 4,497,542 4,640,293 4,183,231 | | Charles J. Carter Executive Vice President— Mill Operations | 2023 2022 2021 | 766,392 738,690 670,494 | 1,849,739 1,887,462 1,461,725 | 1,171,800 1,260,000 900,000 | - - - | 96,198 112,312 90,266 | 3,884,130 3,998,464 3,122,485 | | Donald R. Shirley Senior Vice President, Corporate Engineering and Process Technology | 2023 2022 2021 | 623,550 601,008 583,500 | 1,396,463 1,425,078 1,136,551 | 779,250 837,900 855,000 | 324,415 (3) 159,503 | 19,635 31,252 30,342 | 3,143,314 2,895,238 2,764,897 |

  24. Summary Compensation Table

    | (1) The values shown for stock awards reflect the grant date fair value of the award determined in accordance with FASB ASC Topic 718, as more fully described in Note 14 to the consolidated financial statements included in our annual report accompanying this proxy statement. |

  25. Summary Compensation Table

    The grant date fair value of restricted stock awarded is the closing price of PCA common stock on the date of the award. The grant date fair values of the ROIC Units awarded in 2023 (as described in “Compensation Discussion and Analysis—Long-Term Equity Awards—Equity Award Structure”), based upon the probable outcome of the performance conditions, which was 100%, are $3,201,621, $2,216,683, $726,814, $616,613, and $465,458 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, respectively. The grant date fair values of the awards at a maximum payout of 120% are $3,851,945, $2,660,019, $872,177, $739,936, and $558,549 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, respectively. The grant date fair values of the TSR Units awarded in 2023 (as described in “Compensation Discussion and Analysis—Long-Term Equity Awards—Equity Award Structure”) as determined based upon a Monte Carlo simulation as prescribed by FASB ASC Topic 718 are $3,201,664, $2,216,674, $726,832, $616,512, and $465,548 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, respectively. The grant date fair values of the awards at a maximum payout of 200% are $6,403,329, $4,433,349, $1,453,664, $1,233,024 and $931,096 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley respectively.

  26. Summary Compensation Table

    | (2) Non-equity incentive plan awards for 2023 to the named executive officers were 134% of the target awards under our Executive Incentive Compensation Plan. The 2023 target awards and the actual awards are summarized in the following table. |

  27. Summary Compensation Table

    | | Target Award | Actual Award | Target vs Actual Percent | | Mark W. Kowlzan | $2,450,000 | $3,281,040 | 134% | | Thomas A. Hassfurther | 1,666,667 | 2,232,930 | 134% | | Robert P. Mundy | 1,090,000 | 1,458,240 | 134% | | Charles J. Carter | 875,000 | 1,171,800 | 134% | | Donald R. Shirley | 580,000 | 779,250 | 134% | | Total | 6,661,667 | 8,923,260 | 134% |

  28. Summary Compensation Table

    | (3) For further information regarding our pension plans and benefits, please see “Pension Benefits as of December 31, 2023” below. Mr. Mundy and Mr. Carter do not participate in our defined benefit pension plans. |

  29. Summary Compensation Table

    2023 amounts include the following for Mr. Kowlzan, Mr. Hassfurther and Mr. Shirley: (a) the changes in value of the PCA Pension Plan of $54,509, $18,439 and $93,794, respectively; and (b) the changes in value of the Supplemental Executive Retirement Plan of $822,715, $888,531 and $230,621, respectively. Mr. Kowlzan’s and Mr. Hassfurther’s total include distributions paid pursuant to the Pactiv pension plan of $11,742 and $15,704, respectively. 2022 amounts for each of Mr. Kowlzan, Mr. Hassfurther and Mr. Shirley were negative, as the values of the pension obligations for the PCA Pension Plan and the Supplemental Executive Retirement Plan decreased for each officer. The amount of such decreases for Mr. Kowlzan, Mr. Hassfurther and Mr. Shirley were (a) ($173,780), ($152,471) and ($230,530), respectively, for the PCA Pension Plan and (b) ($940,991), ($1,294,536) and ($150,516), respectively, for the Supplemental Executive Retirement Plan. 2021 amounts include the following for Mr. Kowlzan, Mr. Hassfurther and Mr. Shirley: (a) the changes in value of the PCA Pension Plan of $5,597, $29,495 and $24,772 respectively; and (b) the changes in value of the Supplemental Executive Retirement Plan of $319,725, $263,910 and $134,730, respectively.

  30. Summary Compensation Table

    | (4) “All Other Compensation” for 2023 is broken down as follows: |

  31. Summary Compensation Table

    | Name | Company Contributions to 401(k) Plan | Company Contribution to Non- Qualified Deferred Comp. Plan | Club Memberships | | Mark W. Kowlzan | $19,699 | - | - | | Thomas A. Hassfurther | 19,526 | - | $66,570 | | Robert P. Mundy | 31,148 | $61,300 | - | | Charles J. Carter | 32,798 | 63,400 | - | | Donald R. Shirley | 19,635 | - | - |

  32. Summary Compensation Table

    The methodology for calculating the aggregate incremental cost for payments for club membership dues for Mr. Hassfurther is the actual amounts paid without any tax gross-up.

  33. Grants of Plan-Based Awards for 2023

    Grants of Plan-Based Awards for 2023 The following table describes the plan-based awards made in 2023, including the annual restricted stock awards, the performance unit awards and the annual cash incentive awards made to the named executive officers during the year.

  34. Grants of Plan-Based Awards for 2023

    | | | Estimated Possible Payouts Under Non-Equity Inventive Plan Awards (1) | | | Estimated Future Payouts Under-Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(#) (2) | Grant Date Fair Value of Stock Awards(2) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Mark W. Kowlzan | | | | | | | | | | | Restricted Stock | 2/22/2023 | | | | | | | 23,765 | 3,201,621 | | ROIC Units | 2/22/2023 | | | | 9,506 | 23,765 | 28,518 | | 3,201,621 | | TSR Units | 2/22/2023 | | | | 0 | 21,505 | 43,010 | | 3,201,664 | | Annual Cash Incentive | | $1,225,000 | $2,450,000 | $3,900,000 | | | | | | | Thomas A. Hassfurther | | | | | | | | | | | Restricted Stock | 2/22/2023 | | | | | | | 16,454 | 2,216,683 | | ROIC Units | 2/22/2023 | | | | 6,582 | 16,454 | 19,745 | | 2,216,683 | | TSR Units | 2/22/2023 | | | | 0 | 14,889 | 29,778 | | 2,216,674 | | Annual Cash Incentive | | 833,334 | 1,666,667 | 2,650,000 | | | | | | | Robert P. Mundy | | | | | | | | | | | Restricted Stock | 2/22/2023 | | | | | | | 5,395 | 726,814 | | ROIC Units | 2/22/2023 | | | | 2,158 | 5,395 | 6,474 | | 726,814 | | TSR Units | 2/22/2023 | | | | 0 | 4,882 | 9,764 | | 726,832 | | Annual Cash Incentive | | 545,000 | 1,090,000 | 1,733,000 | | | | | | | Charles J. Carter | | | | | | | | | | | Restricted Stock | 2/22/2023 | | | | | | | 4,577 | 616,613 | | ROIC Units | 2/22/2023 | | | | 1,831 | 4,577 | 5,492 | | 616,613 | | TSR Units | 2/22/2023 | | | | 0 | 4,141 | 8,282 | | 616,512 | | Annual Cash Incentive | | 437,500 | 875,000 | 1,391,000 | | | | | | | Donald R. Shirley | | | | | | | | | | | Restricted Stock | 2/22/2023 | | | | | | | 3,455 | 465,458 | | ROIC Units | 2/22/2023 | | | | 1,382 | 3,455 | 4,146 | | 465,458 | | TSR Units | 2/22/2023 | | | | 0 | 3,127 | 6,254 | | 465,548 | | Annual Cash Incentive | | 290,000 | 580,000 | 925,000 | | | | | |

  35. Grants of Plan-Based Awards for 2023

    | (1) The amounts shown under “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” reflect the 2023 threshold, target and maximum awards for each named executive officer under our annual cash incentive compensation plan, described in “Compensation Discussion and Analysis—Annual Cash Incentive Awards.” The 2023 awards have been paid to the named executive officers and are reported as non-equity incentive plan compensation in the Summary Compensation Table. |

  36. Grants of Plan-Based Awards for 2023

    | (2) The grant date fair value of our stock awards is determined in accordance with FASB ASC Topic 718. Please refer to Note 14 of our consolidated financial statements included in the accompanying annual report for a description of how such value is determined. |

  37. Grants of Plan-Based Awards for 2023

    Restricted stock may not be sold or transferred until such stock vests. As a condition to vesting, the holder of restricted stock must remain employed by, serve as a director of, or otherwise provide services to, PCA on the vesting date (the “service condition”). Restricted stock vests in full on the fourth anniversary of the date of the award. Restricted stock may be voted by the holder, and holders receive dividends on the same basis as holders of outstanding common stock. ROIC Units vest and pay out on the fourth anniversary of the date of the award. Holders must meet the service condition for vesting to occur. Awards are paid out entirely in shares. The amount paid out will range from 0% to 120% of the number of units awarded and is determined based upon our average annual return on invested capital for the performance period consisting of the years 2023, 2024, 2025 and 2026 compared to a peer group of companies in our industry and related industries. Dividend equivalents are paid out on the vesting date in cash or, if the committee so elects, a number of shares equal in value to the cumulative dividends actually paid on the number of shares that pay out. The grant date fair value is based upon the probable outcome of the performance conditions, which was 100%. The grant date fair values of the awards at a maximum payout of 120% are $3,841,945 $2,660,019, $872,177, $739,936, and $558,549 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, respectively. TSR Units vest and pay out after the end of the three-year performance period (March 1, 2023 to February 28, 2026). Holders must meet the service condition for vesting to occur. Awards are paid out entirely in shares. The amount paid out will range from 0% to 200% of the number of units awarded and is determined based upon our total stockholder return for the performance period compared to a peer group of companies in our industry and related industries. Dividend equivalents are paid out on the vesting date in cash or, if the committee so elects, a number of shares equal in value to the cumulative dividends actually paid on the number of shares that pay out. The grant date fair value is based upon a Monte Carlo simulation as provided by FASB ASC Topic 718. The grant date fair values of the awards at a maximum payout of 200% are $6,403,329, $4,433,349, $1,453,664, $1,233,024 and $931,096 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, respectively.

  38. Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

    Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

  39. Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

    | | Stock Awards(1) | | | | | Name | Number of Shares, or Units of Stock That Have Not Vested (1) | Value of Shares or Units of Stock That Have Not Vested(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)(2)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(2)(3) | | Mark W. Kowlzan | 76,951 | $12,536,087 | 128,339 | $20,907,706 | | Thomas A. Hassfurther | 53,209 | 8,668,278 | 88,738 | 14,456,308 | | Robert P. Mundy | 20,095 | 3,273,676 | 33,474 | 5,453,249 | | Charles J. Carter | 16,828 | 2,741,449 | 28,086 | 4,575,490 | | Donald R. Shirley | 12,883 | 2,098,770 | 21,458 | 3,495,723 |

  40. Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

    | (1) The following table shows the year in which the restricted stock held by the named executive officers will vest. |

  41. Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

    | Name | 2024 | 2025 | 2026 | 2027 | | Mark W. Kowlzan | 19,711 | 16,838 | 16,637 | 23,765 | | Thomas A. Hassfurther | 13,634 | 11,647 | 11,474 | 16,454 | | Robert P. Mundy | 5,174 | 4,420 | 5,106 | 5,395 | | Charles J. Carter | 4,271 | 3,649 | 4,331 | 4,577 | | Donald R. Shirley | 3,321 | 2,837 | 3,270 | 3,455 |

  42. Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

    | (2) The closing market price of our common stock on December 29, 2023, the last trading day of the year, was $162.91 per share. |

  43. Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

    | (3) The unearned shares identified in this column relate to potential future payouts pursuant to ROIC Units and TSR Units awarded in 2020, 2021, 2022 and 2023. ROIC Units vest and pay out on or around the fourth anniversary of the date of the award. TSR Units vest and pay out on or around the third anniversary of the date of the award. The performance period has completed for the ROIC Units awarded in 2020 and vesting in 2024; these units will pay out at target level of performance, which is reflected in the 2024 ROIC Units column. As the performance periods have not completed for all other units, all shares are presented at the target level of performance, representing payout at the 100% level. For all units, dividend equivalents will be only paid to the extent the shares actually vest, and, at the election of the committee, will be paid in cash or shares at the time of vesting. The amount of total dividend equivalents accrued on the number of shares presented in the table through December 31, 2023 is: $1,309,603, $905,379, $349,304, $291,653, and $179,191 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, respectively. If we paid such dividend equivalents out in shares on December 31, 2023, the number of shares paid out would be 8,038, 5,557, 2,144, 1,790, and 1,099 for Mr. Kowlzan, Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, respectively. Such shares are not reflected in the table. |

  44. Outstanding Equity Awards Held by the Named Executive Officers at December 31, 2023

    | | 2024 | | 2025 | | 2026 | | 2027 | | Name | ROIC Units | TSR Units | ROIC Units | TSR Units | ROIC Units | TSR Units | ROIC Units | | Mark W. Kowlzan | 19,711 | 15,177 | 16,838 | 14,706 | 16,637 | 21,505 | 23,765 | | Thomas A. Hassfurther | 13,634 | 10,498 | 11,647 | 10,142 | 11,474 | 14,889 | 16,454 | | Robert P. Mundy | 5,174 | 3,984 | 4,420 | 4,513 | 5,106 | 4,882 | 5,395 | | Charles J. Carter | 4,271 | 3,288 | 3,649 | 3,829 | 4,331 | 4,141 | 4,577 | | Donald R. Shirley | 3,321 | 2,557 | 2,837 | 2,891 | 3,270 | 3,127 | 3,455 |

  45. 2023 Stock Vested Table

    2023 Stock Vested Table

  46. 2023 Stock Vested Table

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Mark W. Kowlzan | 69,223 | $9,058,063 | | Thomas A. Hassfurther | 47,882 | 6,265,514 | | Robert P. Mundy | 18,170 | 2,377,663 | | Charles J. Carter | 14,999 | 1,962,776 | | Donald R. Shirley | 11,662 | 1,526,089 |

  47. 2023 Stock Vested Table

    Restricted stock and restricted stock units held by each of the officers vested on June 28, 2023. The amounts indicated in the table above include, in addition to vests of restricted stock on June 28, 2023: (a) shares earned by the named executive officers under ROIC units for the 2020-2022 performance period which paid out at target level and dividend equivalents thereon paid out in shares; and (b) shares earned by the named executive officers under TSR units for the March 1, 2020 to February 28, 2023 performance period, which paid out at 144% of target on March 21, 2023. The closing price of PCA’s common stock on the New York Stock Exchange on June 28, 2023 was $129.40 and on March 21, 2023, the payout date for the TSR unit shares was $132.96. The amounts in the “Value Realized on Vesting” column include the value of fractional shares paid out in cash for dividend equivalents.

  48. Pension Benefits as of December 31, 2023

    Pension Benefits as of December 31, 2023 Mr. Kowlzan, Mr. Hassfurther and Mr. Shirley participate in our defined benefit pension plans. Mr. Mundy and Mr. Carter do not participate in our defined benefit pension plans, as they joined PCA after April 12, 1999.

  49. Pension Benefits as of December 31, 2023

    | Name | Plan Name(1) | Number of Years Credited Service (#)(2) | Present Value of Accumulated Benefits ($)(2) | Payments During Last Fiscal Year ($) | | Mark W. Kowlzan | Plan 1 Plan 2 | 24.71 24.71 | $1,148,973 9,198,685 | 11,742 - | | Thomas A. Hassfurther | Plan 1 Plan 2 | 24.71 24.71 | 1,015,803 11,051,940 | 15,704 - | | Donald R. Shirley | Plan 1 Plan 2 | 24.71 24.71 | 664,966 944,048 | - - |

  50. Pension Benefits as of December 31, 2023

    | (1) Plan 1 reflects the Pactiv pension plan (April 12, 1999 — April 30, 2004) and its successor plan, the PCA Pension Plan for Eligible Grandfathered Salaried Employees (May 1, 2004 — December 31, 2023) (the “PCA Pension Plan”). |

  51. Pension Benefits as of December 31, 2023

    Plan 2 reflects the Pactiv supplemental executive retirement plan (April 12, 1999 — April 30, 2004) and its successor plan, the PCA Supplemental Executive Retirement Plan (“SERP”) (May 1, 2004 — December 31, 2023). The Pactiv supplemental executive retirement plan was terminated and the present value of all benefits earned under that plan was paid out to all participants, including PCA named executive officers participating in that plan, during December 2010. Years of service under that plan are credited for purposes of determining benefits under the PCA plan. However, the present value of accumulated benefits reflected in the table for Plan 2 reflect only the present value of benefits earned under the PCA SERP from and after May 1, 2004, which is the date of inception of the PCA SERP. The PCA Pension Plan provides for normal retirement at age 65 with full retirement benefits and early retirement at age 55 and 10 years of eligibility service with reduced retirement benefits. The reduction in retirement benefits by retirement age is as follows:

  52. Pension Benefits as of December 31, 2023

    | Retirement Age | Reduction in Benefits (%) | | 62, 63 or 64 | No reduction | | 61 | 3 | | 60 | 6 | | 59 | 12 | | 58 | 18 | | 57 | 24 | | 56 | 30 | | 55 | 36 |

  53. Pension Benefits as of December 31, 2023

    The formula used for computing monthly benefit payments at normal retirement age is as follows: 55% of average career base compensation earned since January 1, 2000 multiplied by years of credited service (up to a maximum of 35) divided by 35 less the monthly normal retirement benefit earned under the Pactiv pension plan. The PCA SERP provides additional pension benefits to Mr. Kowlzan, Mr. Hassfurther and Mr. Shirley. The benefits under the SERP are determined using the same formula as the PCA Pension Plan but in addition to career base compensation, the SERP includes executive annual cash incentive plan awards as well as any career base compensation earned in excess of the annual compensation limits imposed under Section 401(a)(17) of the Internal Revenue Code. Benefits earned under the SERP are reduced by any benefits paid from the PCA Pension Plan and any prior benefits under Pactiv’s qualified pension plan and non-qualified SERP. The maximum years of credited service for Mr. Hassfurther for purposes of the SERP is 50 years.

  54. Pension Benefits as of December 31, 2023

    | (2) The present values of accumulated benefits reported for the named executive officers are for benefits earned under Plan 1 from April 12, 1999 through December 31, 2023 and the present value of accumulated benefits earned under Plan 2 from May 1, 2004 through December 31, 2023. The Number of Years of Credited Service reflects employment of the named executive officers by PCA since April 12, 1999. The years of service attributable to each of Mr. Kowlzan, Mr. Hassfurther and Mr. Shirley while employed by PCA is 24.71 years. |

  55. Pension Benefits as of December 31, 2023

    The present values of accumulated benefits are based upon interest rate and mortality rate assumptions consistent with those used in our December 31, 2023 financial statements. We calculated the present values shown in the Pension Benefits Table using: (i) a 4.89% discount rate for Plan 1 and a 4.86% discount rate for Plan 2, the same discount rates we use for ASC 715 calculations for financial reporting purposes; and (ii) the plan’s unreduced retirement age of 62. The present values shown in the table reflect postretirement mortality, based on the ASC 715 assumption (the Amounts-weighted Pri-2012 Retiree Mortality Table with White Collar Adjustment projected generationally using MP-2021) but do not include a factor for preretirement termination, mortality, or disability. Amounts for the pension plans are based on the present value of the annuity elections reflected in the ASC 715 calculation.

  56. Pension Benefits as of December 31, 2023

    | 2023 Non-Qualified Deferred Compensation | | | | | | | Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($)(1) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | | Mark W. Kowlzan | - | - | | - | - | | Thomas A. Hassfurther | - | - | 1,610,202 | - | 6,903,235 | | Robert P. Mundy | - | 61,300 | 208,476 | - | 789,163 | | Charles J. Carter | 500,000 | 63,400 | 426,992 | - | 3,103,524 | | Donald R. Shirley | - | - | | - | - |

  57. Pension Benefits as of December 31, 2023

    | (1) We provide annual deferred compensation account contributions to Mr. Mundy and Mr. Carter because they are not eligible to participate in our defined benefit pension plans. Amounts reported in this column were reported in the Summary Compensation Table as “All Other Income” for 2023. |

  58. Pension Benefits as of December 31, 2023

    | (2) Earnings on deferred compensation are not included in “Change in Pension Value and Nonqualified Deferred Compensation Earnings” in the Summary Compensation Table because the earnings are not considered above-market or at a preferential rate of earnings. |

  59. Incremental Payments on Termination or a Change of Control

    Incremental Payments on Termination or a Change of Control Named executive officers are not entitled to receive any incremental benefits or accelerated benefits that are different in scope, terms or operation than what are generally available to our salaried employees who are eligible to participate in our various compensation plans. We have no contractual obligation to pay severance to any of our named executive officers in the event of a termination. If a named executive officer terminates or retires, post-termination arrangements or post-retirement arrangements would be considered on a case-by-case basis, and we will consider such arrangements if we require transitional services and/or non-competition or non-solicitation covenants. We would consider acceleration or continued vesting of unvested equity awards in connection with termination or retirement on a case-by-case basis. Based on the closing market price of our common stock of $162.91 on the New York Stock Exchange on December 29, 2023, the last trading day of the year, the value of unvested restricted stock and performance units, assuming payout at the target level of performance for all performance units, held by each named executive officer was: Mr. Kowlzan, $33,443,794; Mr. Hassfurther, $23,124,486; Mr. Mundy, $8,726,926; Mr. Carter, $7,316,940; and Mr. Shirley, $5,594,492. Each of Mr. Kowlzan and Mr. Hassfurther are retirement eligible under the terms of the PCA Pension Plan, and, in the event of a termination, would be entitled to receive the benefits described above under “Pension Benefits as of December 31, 2023.” If a named executive officer terminates employment as a result of death or disability, then all restrictions on restricted stock will lapse. In the event of death, (a) TSR units will vest on the date of death and pay out a pro-rated portion through the date of death of the holder, based upon actual performance through the date of death; and (b) ROIC units will vest on the date of death and pay out based upon actual performance through the calendar year preceding the date of death (or at the target level if the date of death is before the end of the first year of the performance period). In the event of disability, (a) the TSR units will not vest early and will pay out a pro-rated portion through the date of disability based upon performance through the entire performance period; and (B) ROIC units will not vest early and will pay out on the fourth anniversary of the award date based upon actual performance through the entire performance period. Based on the closing market price of our common stock of $162.91 on the New York Stock Exchange on December 29, 2023, the last trading day of the year, (i) the value of unvested restricted stock and performance units held by each named executive officer that would vest as a result of death on December 31, 2023 was: Mr. Kowlzan, $34,720,360; Mr. Hassfurther, $24,005,337; Mr. Mundy, $9,217,904; Mr. Carter, $7,660,363; and Mr. Shirley, $5,886,332; and (ii) the value of unvested restricted stock and performance units held by each named executive officer that would vest as a result of disability on December 31, 2023 was: Mr. Kowlzan, $36,801,810; Mr. Hassfurther, $25,446,861; Mr. Mundy, $9,613,943; Mr. Carter, $8,052,369; and Mr. Shirley, $6,163,609. The foregoing values of awards that would vest upon death reflect the estimated degree of performance attained under the performance units through December 31, 2023 and the actual degree of performance for awards that vested earlier in 2024. The value of performance units that would vest as a result of disability on December 31, 2023 is not determinable because the payout of those awards would depend on actual performance through the end of the performance period; accordingly, we have assumed that performance units will vest at the target level for purposes of the calculation made in clause (ii) above, except that we used the actual degree of performance for awards that vested earlier in 2024. Our equity awards include double-trigger change-of-control provisions for restricted stock and performance units if a qualifying substitute equity award is made. Based on the closing market price of our common stock of $162.91 on the New York Stock Exchange on December 29, 2023, the last trading day of the year, the value of unvested restricted stock and performance units held by each named executive officer that would vest either as a result of death or disability if the officer terminated or resigned for good reason within two years after, the change of control, or if a qualifying substitute equity award was not awarded to such officer was: Mr. Kowlzan, $40,772,622; Mr. Hassfurther, $28,190,735; Mr. Mundy, $10,672,748; Mr. Carter, $8,950,599; and Mr. Shirley, $6,841,837. The foregoing values reflect the estimated degree of performance through December 31, 2023 and the actual degree of performance for awards that vested earlier in 2024.

  60. Pay Versus Performance Table

    Pay Versus Performance Table The following table shows for 2023, 2022, 2021 and 2020:

  61. Pay Versus Performance Table

    | ● | the total compensation disclosed in the Summary Compensation Table (SCT Compensation) for Mr. Kowlzan, our principal executive officer (the PEO) for each of those years; |

  62. Pay Versus Performance Table

    | ● | the average SCT Compensation for Mr. Hassfurther, Mr. Mundy, Mr. Carter and Mr. Shirley, who were our other named executive officers (the Non-PEO NEOs) for each of those years; |

  63. Pay Versus Performance Table

    | ● | the Compensation Actually Paid (CAP), as determined in accordance with Item 402(v) of Regulation S-K under the Securities Exchange Act of 1934, for Mr. Kowlzan for each of those years; |

  64. Pay Versus Performance Table

    | ● | the average CAP for the Other NEOs for each of those years; |

  65. Pay Versus Performance Table

    | ● | the value of an initial fixed $100 investment made on January 1, 2020 as of the end of each of those years in: (a) the Company; and (b) the comparative peer group (the “Comparative Peer Group”) described under “—Long Term Equity Awards” elsewhere in this section (which is the peer group we measure performance against on a relative basis for purposes of determining payouts under our performance units and which is unchanged from the peer group we used in last year’s PVP table) on a weighted-average market capitalization basis; |

  66. Pay Versus Performance Table

    | ● | our net income for each of those years, as reported in accordance with generally accepted accounting principles; and |

  67. Pay Versus Performance Table

    | ● | our earnings per share, excluding special items 3 , for each of those years, which we believe is the most important financial performance measure to us, other than TSR to link compensation actually paid to our performance. |

  68. Pay Versus Performance Table

    | Year | SCT Total for PEO(1) | CAP for PEO(1) | Average SCT Total for Non- PEO NEOs(1) | Average CAP to Non-PEO NEOs(1) | Value of Initial Fixed $100 Investments based on: | | Net Income (in millions) | Company Selected Measure of Earnings Per Share, Excluding Special Items | | | | | | | Total Shareholder Return of the Company | Peer Group Total Shareholder Return | | | | 2023 | $15,228,190 | $26,358,360 | $5,637,042 | $9,342,353 | $166.01 | $149.05 | $765.2 | $8.70 | | 2022 | 12,231,634 | 14,187,010 | 5,036,654 | 5,617,099 | 125.88 | 121.86 | 1,029.8 | 11.14 | | 2021 | 12,517,313 | 8,937,387 | 4,655,014 | 3,497,059 | 129.32 | 152.87 | 841.1 | 9.39 | | 2020 | 10,443,674 | 17,543,943 | 4,029,973 | 6,289,416 | 127.27 | 118.94 | 461.0 | 5.78 |

  69. Pay Versus Performance Table

    Earnings per share excluding special items is a Non-GAAP financial measure, which we present throughout this proxy statement. Important information relating to our use of this Non-GAAP financial measure and a reconciliation of this Non-GAAP financial measure to the most comparable financial measure presented in accordance with Generally Accepted Accounting Principles (GAAP) are included on Appendix A to this proxy statement as well as in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 under the captions “Executive Summary” and “Reconciliations of Non-GAAP Financial Measures to Reported Amounts.”

  70. Pay Versus Performance Table

    | (1) Below is a reconciliation of the SCT total to the CAP total for the PEO: |

  71. Pay Versus Performance Table

    | Year | Summary Compensation Table (SCT) Total Compensation | SCT Change in Pension Value | | CAP Pension Service Cost | SCT Equity Value | | Fair Value as of Year End of Equity Awards Granted During the Year | Increase (Decrease) from Prior- Year-End Fair Value of Awards that Vested During the Year | Year-over- Year Increase (Decrease) in Fair Value of Unvested Awards Granted in Prior Years | Dividends | Total | | 2023 | $15,228,190 | ($ | 888,965) | $252,829 | ($ | 9,604,906) | $12,497,223 | $1,159,227 | $7,167,023 | $547,739 | $26,358,360 | | 2022 | 12,231,634 | | - | 394,222 | | (7,250,018) | 5,991,532 | 2,605,270 | (284,918) | $499,288 | $14,187,010 | | 2021 | 12,517,313 | | (325,321) | 409,787 | | (6,745,717) | 6,398,487 | (1,142,952) | (2,563,862) | 389,652 | 8,937,387 | | 2020 | 10,443,674 | | (1,164,693) | 476,277 | | (5,575,067) | 8,854,213 | (845,467) | 5,104,418 | 250,588 | 17,543,943 |

  72. Pay Versus Performance Table

    Below is a reconciliation of the average SCT total to the average CAP total for the non-PEO NEOs.

  73. Pay Versus Performance Table

    | Year | Summary Compensation Table (SCT) Total Compensation | SCT Change in Pension Value | | CAP Pension Service Cost | SCT Equity Value | | Fair Value as of Year End of Equity Awards Granted During the Year | Increase (Decrease) from Prior- Year-End Fair Value of Awards that Vested During the Year | Year-over- Year Increase (Decrease) in Fair Value of Unvested Awards Granted in Prior Years | Dividends | Total | | 2023 | $5,637,042 | ($ | 311,772) | $63,957 | ($ | 3,019,176) | $3,928,335 | $388,155 | $2,471,924 | $183,888 | $9,342,353 | | 2022 | 5,036,654 | | - | 98,616 | | (2,634,404) | 2,177,112 | 852,667 | (95,409) | 181,863 | 5,617,099 | | 2021 | 4,655,014 | | (98,480) | 102,592 | | (2,258,776) | 2,142,514 | (326,641) | (856,519) | 137,355 | 3,497,059 | | 2020 | 4,029,973 | | (423,033) | 91,261 | | (1,866,742) | 2,964,722 | (146,679) | 1,559,373 | 80,541 | 6,289,416 |

  74. Pay Versus Performance Table

    Outstanding and unvested stock awards included in CAP are valued as of the end of the year presented using methodology consistent with the valuation of such awards on the grant date and described in Note 1 to the Summary Compensation Table included in this proxy statement. Restricted stock is valued at the closing market price on the New York Stock Exchange on the last trading day of the year presented. The valuation of ROIC Units is determined based upon the probable outcome, which, for all outstanding units for all periods, was payout at 100%. The valuation of the TSR Units was redetermined as of the end of each year based upon a Monte Carlo simulation. In each case, “Dividends” include dividends paid in cash on unvested restricted stock awards and the year over year change in value of accrued dividends on ROIC Performance Units.

  75. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION For service on the board, we do not compensate management. In 2023, non-employee directors received the compensation described below.

  76. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | Total ($) | | Cheryl K. Beebe | 190,000 | 84,938 | - | 274,938 | | Duane C. Farrington | 165,000 | 84,938 | - | 249,938 | | Donna A. Harman | 185,000 | 84,938 | - | 269,938 | | Robert C. Lyons | 165,000 | 84,938 | - | 249,938 | | Thomas P. Maurer | 165,000 | 84,938 | - | 249,938 | | Samuel M. Mencoff | 190,000 | 84,938 | - | 274,938 | | Roger B. Porter | 185,000 | 84,938 | - | 269,938 | | Paul T. Stecko | 165,000 | 84,938 | 40,591 | 290,529 | | Thomas S. Souleles | 185,000 | 84,938 | - | 269,938 |

  77. DIRECTOR COMPENSATION

    | (1) All stock awards are fully vested at the time of award. |

  78. Description of Fee Arrangements

    Description of Fee Arrangements Each non-management director receives annual fees of $250,000, of which $165,000 is paid in cash in quarterly installments and $85,000 is paid in fully vested shares valued on the date of the annual meeting of stockholders and rounded to the nearest whole share. The lead director and audit committee chair receive additional annual cash fees of $25,000 and the other committee chairs receive additional annual cash fees of $20,000. Each non-management director was awarded 636 fully vested shares on May 2, 2023, on which date the closing price of PCA’s common stock on the New York Stock Exchange was $133.55. We annually review our director fees against our compensation peer group. Our compensation consultant prepared a survey showing the amounts and fee structures of the members of the peer group used for comparing the executive officer compensation, as described under “Compensation Discussion & Analysis-Comparative Assessments.” The committee reviewed the survey that assessed 2022 director fees paid by the peer group companies. Our approved annual director compensation in 2022 was at approximately the median of the peer group. We made no changes to the compensation amount or structure, other than to increase the annual cash fees for the lead director and the audit committee chair from $20,000 to $25,000. Our compensation committee leads the annual review of director compensation and survey information. The full board approves director fees. Our shareholder-approved equity incentive plan includes a limit on outside director compensation of $650,000 per year. Pension Benefits as of December 31, 2023

  79. Description of Fee Arrangements

    | Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Paul T. Stecko | Plan 1 | 14.71 | 414,420 | 51,232 |

  80. Description of Fee Arrangements

    Mr. Stecko retired as an officer of PCA at the end of 2013 and has continued to serve on our board of directors since his retirement. While he was employed by PCA, Mr. Stecko participated in the PCA Pension Plan described in Notes 1 and 2 to the “Pension Benefits as of December 31, 2023” table above. He did not participate in the SERP. He had 14.71 years of service under the plan through his retirement on December 30, 2013.

  81. CHIEF EXECUTIVE OFFICER PAY RATIO

    CHIEF EXECUTIVE OFFICER PAY RATIO As disclosed in “Executive and Director Compensation—Summary Compensation Table,” the 2023 annual total compensation of our chief executive officer, Mark W. Kowlzan, was $15,228,190. The 2023 annual total compensation of our median employee, as calculated in accordance with the requirements of Item 402 (c)(2)(x) of Regulation S-K, was $83,406. As permitted under applicable rules, we used the same median employee as we identified for 2022. Our median employee was identified as of December 31, 2022 using gross earnings for our domestic employees as provided by our payroll system, at which time we had 14,895 employees substantially all of whom are domestic. As permitted under applicable rules, we omitted our foreign employees from the determination, as our number of foreign employees is less than 5% of our total number of employees. As a result, we excluded approximately 14 Hong Kong employees. We annualized compensation for employees hired during the year. We did not otherwise make adjustments or estimates in connection with our determination of the median employee. The 2023 ratio of the annual total compensation of our chief executive officer to the median of the annual total compensation of our employees was 182.6 to 1.

  82. Recommendations for Board-Nominated Director Nominees

    Recommendations for Board-Nominated Director Nominees A stockholder may recommend persons as potential nominees to be elected to the board by submitting the names of such persons in writing to our corporate secretary. Recommendations should be accompanied by a statement of qualifications and confirmation of the person’s willingness to serve, and the information that would be required to be furnished if the stockholder was directly nominating such person for election to the board (described below under “Director Nominations or Other Business to be Brought Before the 2025 Annual Meeting”). To be nominated by the board for election, the nominee must meet the qualifications and selection criteria set forth in the corporate governance guidelines and the selection criteria as determined by the nominating and governance committee. The committee evaluates nominees recommended by stockholders in the same manner in which it evaluates other nominees. The selection criteria identifies desirable skills and experience for prospective board members, including those properly nominated by stockholders, and addresses the issues of diversity and background. The board selects potential new members using the criteria and priorities established from time to time. The composition, skills and needs of the board change over time and will be considered in establishing the desirable profile of candidates for any specific opening on the board. Our bylaws include customary “proxy access” provisions. Pursuant to these provisions, in general, a person or group of up to 20 persons that has continually held 3% or more of our common stock for three or more years may nominate up to the greater of 20% of the total number of directors or two directors and include such nomination in our proxy statement. The notice and other procedures set forth in our amended and restated by-laws in order to nominate a director candidate must be strictly complied with, and stockholders are encouraged to review those procedures carefully if they are interested in utilizing that process. If a candidate has been properly nominated, we will include his or her name and biography in the proxy statement and on the proxy card for the annual meeting. If an eligible shareholder determines to nominate a person for director pursuant to the “proxy access” provisions described above, then written notice of such nomination must be received no earlier than the close of business on October 30, 2024 and no later than the close of business on November 29, 2024. If the 2025 annual meeting is called for a date that is not within 30 days before or 60 days after May 8, 2025 then notice must be received not later than the close of business on the 10th day after public announcement of the meeting date.

  83. As Amended and Restated February 28, 2024

    | (ii) Director Compensation. The sum of any cash compensation or other compensation and the value of any Awards granted to a director that is not employed by the Company as compensation for services as a director during any the period beginning on the date of one regular annual meeting of our stockholders until the date of the next regular annual meeting of our stockholders may not exceed $650,000. If an Award is denominated in cash but an equivalent amount of Common Stock is delivered in lieu of delivery of cash under this Section 4(c)(ii), the limitations of this Section shall be applied to the cash based on the methodology used by the Committee to convert the cash into Common Stock. If an Award are denominated in of Common Stock but an equivalent amount of cash is delivered in lieu of delivery of Shares, the limitations of this Section 4(c)(ii) shall be applied based on the methodology used by the Committee to convert the number of Shares into cash. If delivery of Common Stock or cash is deferred until after cash has been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the cash is earned shall be disregarded |