PCH » Topics » Compensation of the Chief Executive Officer and Chief Financial Officer

This excerpt taken from the PCH DEF 14A filed Apr 2, 2009.

Compensation of the Chief Executive Officer and Chief Financial Officer

Chief Executive Officer.    Mr. Covey participated in our annual incentive plan in 2008 with a target annual bonus opportunity of $495,800, or 70% of his base salary, and earned 74% of this target amount for 2008 under the annual incentive plan, a portion of which was deferred and the remainder of which was paid in cash in February 2009. The actual bonus could have ranged from zero to two times the target amount based on corporate performance criteria established by the Compensation Committee, and was subject to further modification based on the results of individual performance measures for Mr. Covey established by the Committee. Mr. Covey also participates in our long-term incentive award plan on terms established by the Committee.

Mr. Covey receives other benefits generally available to our officers, including participation in our Management Deferred Compensation Plan or Management Plan, Management Performance Award Plan II or MPAP, Supplemental Benefit Plan II, or Supplemental Plan II, and Salaried Employees’ Retirement Plan, or Retirement Plan. Mr. Covey’s employment agreement, which expired in February 2009, also provides him with a minimum retirement benefit at age 55 equal to the retirement benefit that he would have been entitled to at age 55 had he remained with his former employer, offset by any retirement benefit paid by his former employer and any paid under our Supplemental Plan II and Retirement Plan. In 2008, Mr. Covey’s employment agreement was amended to provide immediate vesting of his pension benefit from the Potlatch Retirement Plan. The minimum retirement benefit described above will vest immediately upon a change of control. See narrative following the Pension Benefits Table. Mr. Covey is entitled to certain payments upon termination or a change of control. See Potential Payments Upon Termination or Change of Control—Mr. Covey’s Employment Agreement. Mr. Covey is prohibited from competing against us or soliciting our employees or affiliates for two years following termination of his employment for good reason by Mr. Covey or without cause by us, or three years following termination of his employment upon a change of control.

The Compensation Committee has reviewed all components of Mr. Covey’s compensation, including base salary, short-term cash incentive awards and long-term incentive grants as described above, plus the cost to us of any other salaried employee benefits and our projected payout obligations under several potential severance and change of control scenarios. Based on this review, the Committee has determined that Mr. Covey’s total compensation, and in the case of the severance and the change of control scenarios, the potential payouts, are in the aggregate reasonable and not excessive because they are in line with comparable companies’ pay practices and consistent with the Committee’s evaluation of his performance.

This excerpt taken from the PCH DEF 14A filed Apr 3, 2008.

Compensation of the Chief Executive Officer and Chief Financial Officer

Chief Executive Officer.    Mr. Covey participated in our annual incentive plan in 2007 with a target annual bonus opportunity of $466,700, or 70% of his base salary, and earned $1,000,000 for 2007 under the annual incentive plan, a portion of which was deferred and the remainder of which was paid in cash in February 2008. The actual bonus may range from zero to two times the target amount based on corporate performance criteria to be established by the Compensation Committee, and was subject to further modification based on the results of individual performance measures for Mr. Covey established by the Committee. Mr. Covey also participates in our long-term incentive award plan on terms established by the Committee.

Mr. Covey receives other benefits generally available to our officers, including participation in our Supplemental Benefit Plan II, or Supplemental Plan II, and Salaried Employees’ Retirement Plan, or Retirement Plan. Mr. Covey’s employment agreement also provides him with a minimum retirement benefit at age 55 equal to the retirement benefit that he would have been entitled to at age 55 had he remained with his former employer, offset by any retirement benefit paid by his former employer and any paid under our Supplemental Plan II and Retirement Plan. Mr. Covey must remain employed by us until age 55 to receive this minimum benefit. See

 

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narrative following the “Pension Benefits Table.” Mr. Covey is entitled to certain payments upon termination or a change of control. SeePotential Payments Upon Termination or Change of Control—Mr. Covey’s Employment Agreement.” Mr. Covey is prohibited from competing against us or soliciting our employees or affiliates for two years following termination of his employment for good reason by Mr. Covey or without cause by us, or three years following termination of his employment upon a change of control.

The Compensation Committee has reviewed all components of Mr. Covey’s compensation, including base salary, short-term incentive bonus awards and long-term incentive grants as described above, plus the cost to us of any other salaried employee benefits and our projected payout obligations under several potential severance and change of control scenarios. Based on this review, the Committee has determined that Mr. Covey’s total compensation, and in the case of the severance and the change of control scenarios, the potential payouts, are in the aggregate reasonable and not excessive because they are in line with comparable companies’ potential payouts and are consistent with the Committee’s evaluation of his performance.

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