SEC Form DEF 14A filed by Louisiana-Pacific Corporation

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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Louisiana-Pacific Corporation

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

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No fee required.

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Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1)
and 0-11.

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LETTER FROM OUR
CHAIRPERSON AND
CHIEF EXECUTIVE OFFICER

*

Includes stock repurchases ($2.2B) and cash dividends ($200M).

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Agenda

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Board Recommendations

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Proposal 1

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To elect three Class III directors;

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FOR

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5

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Proposal 2

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To ratify the appointment of Deloitte & Touche LLP as LP’s independent registered public accounting firm for 2024;

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FOR

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32

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Proposal 3

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To approve, on a non-binding, advisory basis, named executive officer compensation; and

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FOR

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36

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​	VIA THE INTERNET	​	​	BY MAIL	​	​	BY TELEPHONE	​	​	DURING THE MEETING	​
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 10, 2024

In accordance with the rules of the Securities and Exchange Commission (the “SEC”), we are sending to many of our stockholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of each of this proxy statement and our Annual Report to Stockholders (with our Form 10-K for the year ended December 31, 2023). The Notice of Internet Availability of Proxy Materials contains instructions on how stockholders can access the proxy materials over the Internet as well as how stockholders can receive a paper copy of our proxy materials, including this proxy statement, the Annual Report to Stockholders (with our Form 10-K for the year ended December 31, 2023) and a form of proxy card. This proxy statement and related proxy materials are being furnished to stockholders and made available on the Internet on or about March 27, 2024, or mailed on or around the same date to those stockholders who have previously requested printed materials. On written request, LP will provide, without charge, a copy of the Annual Report to Stockholders (with our Form 10-K for the year ended December 31, 2023 filed with the SEC (including the financial statements and a list briefly describing the exhibits thereto)) to any record holder or beneficial owner of LP’s Common Stock on March 12, 2024, the record date for the 2024 Annual Meeting, or to any person who subsequently becomes such a record holder or beneficial owner. Requests should be mailed via first class U.S. postage to: Corporate Affairs, Louisiana-Pacific Corporation, 1610 West End Avenue, Suite 200, Nashville, Tennessee 37203.

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This proxy statement includes estimates, projections and statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may appear throughout this report and include all statements other than statements of historical or current facts. These forward-looking statements generally are preceded by, followed by or include words like “may,” “will,” “could,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “target,” “potential,” “continue,” “likely,” or “future” or the negative or other variations thereof. Forward-looking statements are based upon the beliefs and assumptions of, and on information available to, our management. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include those that are described in the Annual Report to Stockholders (with our Form 10-K for the year ended December 31, 2023) and elsewhere in our filings with the SEC. We caution readers not to place undue reliance on forward-looking statements, which speak only as of their dates and are inherently uncertain. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.

​	PROXY SUMMARY​	​	​	​	​	1	​	​
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​	PROPOSAL 1: ELECTION OF DIRECTORS​	​	​	​	​	5	​	​
​	General	​	​	​	​	6	​	​
​	Nominees For Director	​	​	​	​	7	​	​
​	Continuing Directors	​	​	​	​	8	​	​
​	​	​	​	​	​	​	​	​
​	CORPORATE GOVERNANCE​	​	​	​	​	12	​	​
​	Current Board Composition	​	​	​	​	12	​	​
​	Principles of Corporate Governance	​	​	​	​	13	​	​
​	The Board Leadership Structure	​	​	​	​	15	​	​
​	Oversight of Risk	​	​	​	​	16	​	​
​	Sustainability	​	​	​	​	18	​	​
​	Human Capital Management	​	​	​	​	21	​	​
​	Anti-Hedging and Anti-Pledging Policy	​	​	​	​	22	​	​
​	Committees of the Board	​	​	​	​	23	​	​
​	Annual Board and Committee Self-Evaluation Process	​	​	​	​	27	​	​
​	Director Stock Ownership Guidelines	​	​	​	​	27	​	​
​	Consideration of Director Nominees	​	​	​	​	27	​	​
​	Stockholder Nominations for Election of Directors	​	​	​	​	28	​	​
​	Stockholder Engagement	​	​	​	​	29	​	​
​	Communications with the Board	​	​	​	​	29	​	​
​	Director Compensation	​	​	​	​	29	​	​
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​	PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM​	​	​	​	​	32	​	​
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​	AUDIT MATTERS​	​	​	​	​	34	​	​
​	Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm	​	​	​	​	34	​	​
​	Audit Committee Report	​	​	​	​	35	​	​

​	PROPOSAL 3: APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION​	​	​	​	​	36	​	​
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​	COMPENSATION OF EXECUTIVE OFFICERS​	​	​	​	​	38	​	​
​	Compensation Discussion and Analysis	​	​	​	​	38	​	​
​	Compensation Committee Report	​	​	​	​	54	​	​
​	Summary Compensation Table	​	​	​	​	55	​	​
​	Grants of Plan-Based Awards for 2023	​	​	​	​	57	​	​
​	Outstanding Equity Awards at December 31, 2023	​	​	​	​	59	​	​
​	Option Exercises and Stock Vested in 2023	​	​	​	​	60	​	​
​	Nonqualified Deferred Compensation for 2023	​	​	​	​	61	​	​
​	Potential Payments Upon Termination of Employment or Change of Control of LP	​	​	​	​	62	​	​
​	CEO Pay Ratio	​	​	​	​	70	​	​
​	Pay Versus Performance	​	​	​	​	71	​	​
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​	EQUITY COMPENSATION PLAN INFORMATION​	​	​	​	​	74	​	​
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​	OTHER BUSINESS​	​	​	​	​	75	​	​
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​	HOLDERS OF COMMON STOCK​	​	​	​	​	76	​	​
​	Five Percent Beneficial Owners	​	​	​	​	76	​	​
​	Directors and Named Executive Officers	​	​	​	​	77	​	​
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​	DELINQUENT SECTION 16(a) REPORTS​	​	​	​	​	78	​	​
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​	RELATED PERSON TRANSACTIONS​	​	​	​	​	79	​	​
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​	STOCKHOLDER PROPOSALS​	​	​	​	​	81	​	​
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​	QUESTIONS & ANSWERS​	​	​	​	​	82	​	​

 

Louisiana-Pacific Corporation, a Delaware corporation (“LP”), is soliciting proxies on behalf of its Board of Directors (“Board”) to be voted at the 2024 Annual Meeting of Stockholders (including any postponement, adjournment or recess of the meeting). The proxy statement and related proxy materials are first being furnished to stockholders and made available on the Internet beginning on or around March 27, 2024, or mailed beginning on or around the same date to those stockholders who have previously requested printed materials.

MEETING INFORMATION

PROPOSALS AND BOARD RECOMMENDATIONS

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 1

PROXY SUMMARY

BUSINESS OVERVIEW

LP is a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide. Serving the new home construction, repair and remodeling, and outdoor structures markets, we have leveraged our expertise to become an industry leader known for innovation, quality, reliability, and sustainability. The principal customers for our building solutions are retailers, wholesalers, and home building and industrial businesses in North America and South America, with limited sales to Asia, Australia, and Europe. Since our founding in 1972, LP has been Building a Better World™ by helping customers construct beautiful, durable homes.

From our sustainable forestry practices to the way we protect the health, safety and well-being of our team members, we work to ensure that LP contributes to better, more efficient and more resilient building products and, in turn, a better world for all.

OUR LOCATIONS

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 2

PROXY SUMMARY

BOARD OF DIRECTORS

AC = Audit Committee   CC = Compensation Committee   GC = Governance Committee   EC = Executive Committee

 = Chair     = Committee member

BOARD AND GOVERNANCE HIGHLIGHTS

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 3

PROXY SUMMARY

SUSTAINABILITY AT LP

Throughout our more than 50-year history, we have integrated sustainability practices across our operations—from the way we manage forests and pursue environmental sustainability in our products to the way we support our team members and engage with our communities.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 4

PROPOSAL 1: ELECTION OF DIRECTORS

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 5

PROPOSAL 1: ELECTION OF DIRECTORS

GENERAL

We have a diverse Board that consists of a majority of independent directors. The Board currently has eight members, consisting of our Chief Executive Officer and seven independent directors. LP’s Amended and Restated Bylaws (the “Bylaws”) provide for a classified Board consisting of three classes, with directors in each class serving three-year terms. If elected at the 2024 Annual Meeting of Stockholders, the terms of our Class III directors will expire at the 2027 Annual Meeting of Stockholders. The terms of our Class I directors will expire at the 2025 Annual Meeting of Stockholders and the terms of our Class II directors will expire at the 2026 Annual Meeting of Stockholders.

Stockholders are being asked to vote on the election of three Class III director nominees, F. Nicholas Grasberger III, Ozey K. Horton, Jr. and W. Bradley Southern, to serve until the 2027 Annual Meeting of Stockholders and until their successors are duly elected and qualified. Each of these director nominees was recommended to the Board by the Governance and Corporate Responsibility Committee of the Board (the “Governance Committee”) and currently serves as a Class III director of LP. The Board has determined that each of Mr. Grasberger and Mr. Horton (i) has no material relationship with LP (either directly or as a partner, stockholder, officer or director of an organization that has a relationship with LP) other than his service as a director of LP, and (ii) is independent under the listing standards adopted by the New York Stock Exchange (the “NYSE”). Mr. Southern is LP’s Chief Executive Officer.

We believe that all nominees will be able and willing to serve if elected. However, should any nominee become unable or unwilling to serve for any reason, your proxy may be voted for a substitute nominee designated by the Board, or the Board may decrease the size of the Board. Each nominee who receives the affirmative vote of a majority of the total votes cast on his election will be elected, meaning that a nominee will be elected if the number of shares voted for that nominee’s election exceeds the number of votes cast against that nominee’s election. Abstentions and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on a nominee’s election.

Set forth below is certain information about the background, skills and expertise of each director nominated for election relevant to his service as a director, as well as certain information about the background, skills and expertise of the other members of the Board whose terms of office will continue beyond the 2024 Annual Meeting of Stockholders. The summary of qualifications that the Governance Committee uses in its review of director nominees is described below under “Corporate Governance—Consideration of Director Nominees.”

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 6

PROPOSAL 1: ELECTION OF DIRECTORS

NOMINEES FOR DIRECTOR

(For Three-Year Terms Expiring at the 2027 Annual Meeting)

SKILLS:

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 7

PROPOSAL 1: ELECTION OF DIRECTORS

CONTINUING DIRECTORS

The current members of the Board whose terms of office will continue beyond the 2024 Annual Meeting of Stockholders are listed below. The Board has determined that each continuing director named below (i) has no material relationship with LP (either directly or as a partner, stockholder, officer or director of an organization that has a relationship with LP) other than his or her service as a director of LP, and (ii) is independent under the NYSE listing standards.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 8

PROPOSAL 1: ELECTION OF DIRECTORS

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 9

PROPOSAL 1: ELECTION OF DIRECTORS

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 10

PROPOSAL 1: ELECTION OF DIRECTORS

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 11

CURRENT BOARD COMPOSITION

The following matrices provide information regarding the members of our Board, including demographic information and a summary of certain qualifications and experience possessed by the members of our Board that our Board believes are relevant to our business and industry and provide a range of viewpoints that are invaluable for our Board’s discussions and decision-making processes. The matrices do not encompass all of the qualifications, experiences or attributes of the members of our Board, and the fact that a particular qualification, experience or attribute is not listed does not mean that a director does not possess it. In addition, the absence of a particular qualification, experience or attribute with respect to any of the members of our Board does not mean that the director in question is unable to contribute to our Board’s decision-making process in that area. The type and degree of qualification and experience listed below may vary among the members of our Board.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 12

CORPORATE GOVERNANCE

The Board held four meetings in 2023. While LP does not have a policy regarding attendance by directors at LP’s annual meetings of stockholders, all directors on the Board at that time attended the 2023 Annual Meeting of Stockholders.

PRINCIPLES OF CORPORATE GOVERNANCE

Strong corporate leadership of the highest ethics and integrity has long been a major focus of LP’s Board and management. The key tenets of LP’s Corporate Governance Guidelines include the following:

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The Board elects the director who serves as Chairperson of the Board, who may be the Chief Executive Officer (or “CEO”) or any other director. Currently, the CEO serves as Chairperson of the Board. Pursuant to LP’s Corporate Governance Guidelines, when the positions of Chairperson of the Board and CEO are held by the same person, the Board adopts a counterbalancing governance strategy, pursuant to which a Lead Independent Director is elected annually by the independent directors to preside over executive sessions of the independent directors, facilitate information flow and communications between the directors and the Chairperson of the Board, coordinate the activities of the other independent directors and perform such other duties as specified by the Board and outlined in the Lead Independent Director Profile contained in LP’s Corporate Governance Guidelines. Currently, Dustan E. McCoy serves as Lead Independent Director.

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LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 13

CORPORATE GOVERNANCE

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A majority of the members of the Board and all members of the Audit Committee, the Compensation Committee of the Board (the “Compensation Committee”), and the Governance Committee must be independent. To be considered independent under LP’s Corporate Governance Guidelines, a director must:

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meet the applicable standards imposed by the SEC, the NYSE and any federal laws as may from time to time be made applicable to the Board;

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be independent of management and LP and free of any relationship that, applying the rules of the NYSE, would preclude a finding of independence;

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not have been an officer or employee of LP (including its subsidiaries or affiliates) at any time in the past three years and in order to qualify for service on the Compensation Committee, not have been an officer or employee of LP (including its subsidiaries or affiliates) at any time in the past five years; and

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have no material relationship with LP or any of its affiliates or any executive officer of LP or any of its affiliates (either directly or as a partner, shareholder or officer of an organization) as affirmatively determined by action of the Board.

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The Board has determined that each current director other than Mr. Southern is independent under the standards listed above. LP’s independence standards, together with the rest of LP’s Corporate Governance Guidelines, as summarized in this section, are available on its website at www.lpcorp.com by clicking on “For Investors,” then “Corporate Governance,” then “Additional Policies,” and then “Corporate Governance Guidelines.”

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The independent directors meet in executive session without management present in connection with each quarterly Board meeting.

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No director may serve as a director of more than four other public companies, and any director who is employed as an executive officer (other than executive chair) of a public company may not serve as a director of more than one other public company (excluding the public company for which the individual serves as an executive officer), in each case without the prior approval of the Board. Any director who serves as an executive chair of a public company may not serve as a director of more than two other public companies (excluding the public company for which the individual serves as an executive chair), without the prior approval of the Board. The CEO may not serve as a director of more than two public companies (including LP). The Governance Committee reviews all requests to serve on another public company’s board of directors

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Following any material change in his or her principal occupation or business association, including retirement from any such other occupation or association, such director must immediately tender his or her resignation for consideration by the Board, which may choose not to accept it.

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Directors must retire as of the date of the next annual meeting of stockholders after attaining age 75.

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Directors are provided with orientation and continuing education opportunities on an ongoing basis relating to performance of their duties as directors and Board committee members.

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The composition, structure, purpose, responsibilities and duties of each of the standing Board committees are set forth in written charters approved from time to time by the Board.

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The Board and each of the Board committees have authority to engage outside advisors, including an independent compensation consultant and outside legal counsel, who are independent of management to provide expert or legal advice to the directors.

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The Governance Committee oversees annual evaluations of the operations and effectiveness of the Board and the committees of the Board in governing LP, with feedback from the Lead Independent Director, and communicates the results of these evaluations to the full Board.

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Each director must receive a majority of the total stockholder votes cast in an uncontested election of directors. Under LP’s Bylaws, an incumbent director who is not re-elected (and whose successor was not elected at the meeting) is expected to promptly tender his or her resignation. The Governance Committee will make a recommendation to the full Board on the acceptance or rejection of the tendered resignation, and the Board must act on the tendered resignation within 90 days and publicly disclose its decision (and its rationale for the decision if the resignation is rejected).

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LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 14

CORPORATE GOVERNANCE

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LP has adopted both a Code of Business Conduct and Ethics and a Code of Ethics for senior financial officers.

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The Code of Business Conduct and Ethics is applicable to all directors, officers, and employees and addresses, among other matters, conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of company assets, legal and regulatory compliance, and reporting of illegal or unethical behavior.

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The Code of Ethics for senior financial officers, including the CEO, relates to conflicts of interest and full, fair and accurate financial reporting.

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Directors and executive officers may be granted waivers of either Code only by a decision of the Board (or a Board committee to which this responsibility is delegated), which will be promptly disclosed to LP’s stockholders by posting on LP’s website at www.lpcorp.com. In 2023, there were no waiver requests.

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LP’s CEO is responsible for maintaining a succession-planning process with respect to top management positions and must report to the Board at least annually regarding specific assessments and recommendations.

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The Board has adopted stock ownership guidelines for both directors and executive officers. The guidelines specify target amounts of share ownership. Each outside director is expected to acquire and hold a number of shares equal in value to five times the regular annual cash retainer for outside directors within five years of joining the Board. For 2023, all of the directors met the guidelines. See the section below captioned “—Director Stock Ownership Guidelines.” The guidelines for executive officers are discussed under the heading “Compensation of Executive Officers—Compensation Discussion and Analysis—Section VI: Additional Policies and Guidelines Affecting Executive Compensation—Executive Stock Ownership Guidelines.”

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Current copies of LP’s Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Code of Ethics for senior financial officers are available on LP’s website at www.lpcorp.com by clicking on “For Investors,” then “Corporate Governance” and then “Additional Policies.” Any amendments to either Code will also be posted at www.lpcorp.com. Copies of any of these documents may also be obtained free of charge by writing to Corporate Affairs, Louisiana-Pacific Corporation, 1610 West End Avenue, Suite 200, Nashville, Tennessee 37203.

THE BOARD LEADERSHIP STRUCTURE

The members of the Board have a diverse set of skills and experiences and all of the members are independent except Mr. Southern, our CEO. As discussed above, Mr. Southern currently serves as both the CEO of LP and the Chairperson of the Board, and the Board has elected Mr. McCoy to serve as our Lead Independent Director. We believe that our leadership structure is in the best interests of LP and its stockholders and that it fosters innovative, responsive and strong leadership for LP as a whole. Our Board has determined that the election of an executive Chairperson must be accompanied by the election of a Lead Independent Director with a clearly defined and dynamic leadership role in the governance of the Board. In May 2020, the Board determined that appointing Mr. Southern as Chairperson of the Board and Mr. McCoy as Lead Independent Director would result in the governance structure best suited to enable our Board and management to carry out their responsibilities to our stockholders and promote the growth of LP. We believe the structure promotes, through the clearly articulated roles and responsibilities of the Lead Independent Director and Board committees, the objective and effective oversight of management.

The Chairperson’s current Board duties include: calling meetings of the Board; taking primary responsibility for preparing agendas for Board meetings in consultation with the Lead Independent Director, other directors and management; chairing meetings of the Board and the annual meeting of stockholders; receiving feedback from executive sessions of the independent directors; chairing meetings of the Executive Committee of the Board (the “Executive Committee”); communicating with directors on key issues and concerns outside of Board meetings; and representing LP to, and interacting with, external stakeholders and LP employees.

The Lead Independent Director’s current duties include: participating in Board meetings; acting as an intermediary in the event the Chairperson refers to the Lead Independent Director for guidance or to have something taken up at executive session of the independent directors; suggesting calling Board meetings to the Chairperson when appropriate; calling meetings of the independent directors and setting the agenda for, and leading, executive sessions of the independent directors; briefing the Chairperson on issues arising in the executive sessions; collaborating with the

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 15

CORPORATE GOVERNANCE

Chairperson to set the Board agenda and providing the Board with information; facilitating discussion among the independent directors on key issues and concerns outside of Board meetings; serving as the exclusive conduit to the Chairperson of views, concerns and issues of the independent directors; retaining advisors and consultants at the request of independent directors; serving on the Executive Committee; and coordinating with the Compensation Committee in the performance and evaluation of the CEO.

OVERSIGHT OF RISK

The directors are elected representatives of the stockholders and act as fiduciaries on their behalf. In performing its general oversight function, the Board reviews and assesses LP’s strategic and business planning, as well as management’s approach to addressing significant risks. All committees report directly to the Board regularly, and all committee minutes are distributed for review by the entire Board when requested. Additionally, the Board and committees are authorized to retain independent advisors, including attorneys or other consultants, to assist in their oversight activities.

As set out in LP’s Corporate Governance Guidelines, it is the responsibility of the CEO, and of executive management under the CEO’s direction, to:

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operate and manage the business of LP on a day-to-day basis in a competent and ethical manner to produce value for the stockholders;

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regularly inform the Board of the status of LP’s business operations;

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engage in strategic planning;

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prepare annual operating plans and budgets; and

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oversee risk management and financial reporting.

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The Board fulfills its oversight responsibilities as set out in the Corporate Governance Guidelines on behalf of the stockholders and in furtherance of LP’s long-term health. The Board’s role does not involve managing the daily complexities of business transactions.

As part of its oversight responsibilities, the Board and its committees are involved in the oversight of risk management of LP. The current leadership structure provides directors with significant information related to risks faced by LP, as well as an opportunity to synthesize, discuss and consider these risks independent of management and to provide guidance to management. The Board oversees risk management in part through its review of findings and recommendations by LP’s Risk Management Council, the participants of which are executives and/or functional department leaders in the areas of risk management, finance, internal audit, legal and compliance, information technology (including cybersecurity), environmental, and product quality, all of whom supervise day-to-day risk management throughout LP. The purpose of the Risk Management Council is to help the CEO assess the effectiveness of LP’s identification and handling of risks. The Board and its committees have direct access to financial and compliance leaders on a quarterly basis or more frequently if requested. Further, the Board is provided a comprehensive report as to the Risk Management Council’s risk mapping efforts, as well as management’s efforts to mitigate and transfer risk.

The Board committees consider risks within their areas of responsibilities under each of their charters. The Audit Committee is responsible for the following risk oversight functions:

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overseeing LP’s enterprise risk management program, which includes consideration of operational risks, cyber-security risks, and financial risk related to accounting matters, financial reporting and legal and regulatory compliance;

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reviewing various guidelines for cash, credit and liquidity measures;

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reviewing risks related to financial disclosures and reporting; and

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reviewing the audit risk assessment identifying internal controls and risks that affect the audit plan for the coming year.

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The Board and the Audit Committee share oversight of risks from cybersecurity threats. The Audit Committee oversees our cybersecurity program. LP’s Information Security Officer provides the Audit Committee with an annual presentation

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 16

CORPORATE GOVERNANCE

and other periodic updates on our cybersecurity program, emerging threats, and the state of LP’s cybersecurity maturity. In addition, the Information Security Officer provides quarterly updates to the Audit Committee regarding LP’s cybersecurity program.

The Governance Committee is responsible for oversight of risk related to various regulatory changes and trends related to corporate governance, including Board member selection and maintaining appropriate corporate governance principles and guidelines, as well as overseeing annual evaluations to assess Board and committee effectiveness. Additionally, the Governance Committee is responsible for oversight of risk related to LP’s sustainability strategy, safety, environmental and product quality policies and practices, programs for ethics and business conduct, including various matters raised through LP’s anonymous hotline reporting service, legal compliance, political activities and advocacy and human resource practices.

The Compensation Committee is responsible for oversight of risk relating to employment policies and LP’s compensation and benefits systems, and annually reviewing these policies and practices to determine whether they are reasonably likely to have a material adverse effect on LP.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 17

For more than half a century, LP has worked to deliver on our purpose: Building a Better World™. Our purpose guides all that we do, from the way we responsibly develop and manufacture products to the way we treat team members and support our communities.

Our environmental, social and governance (ESG) program demonstrates our purpose at work and the continued evolution of our sustainability journey. Our sustainability program is centered on five pillars: governance, people, environment, products and community.

For additional information about our program, goals and metrics, read our 2023 Sustainability Report. The 2023 Sustainability Report is available on our website at www.lpcorp.com/sustainability. The 2023 Sustainability Report and other information contained on our website are not incorporated by reference herein.

OVERSIGHT

Oversight for LP’s ESG program begins with the Governance Committee. The committee meets at least three times a year and oversees our sustainability strategy as well as our performance in relation to our goals. The committee also oversees the programs and processes related to management succession, safety, environmental and product quality, ethics and business conduct, political activities and human resources. Management oversees LP’s ESG program through LP’s ESG Executive Council, which is a cross-functional committee comprised of members of LP’s executive team, including the General Counsel, the Chief Financial Officer and the Senior Vice President of Manufacturing Services. The ESG Executive Council oversees the ESG Task Force, a group of subject matter experts responsible for developing and executing our ESG strategies. The ESG Task Force is led by the General Counsel and includes a cross-departmental group of leaders from Investor Relations and Business Development, Sustainability and Public Policy, Internal Audit, Sourcing, Corporate Communications and Marketing. The ESG Council meets quarterly with the ESG Task Force to discuss ESG strategies.

APPROACH TO SUSTAINABILITY

LP measures our progress in relation to our goals, as well as the programs, processes and initiatives we have in place across five critical areas: governance, people, environment, products and community. We evaluate risks and opportunities in each of these areas carefully. In 2021, we conducted an ESG priority assessment to ensure we incorporate the opinions of our employees, customers, investors and other stakeholders as we execute our sustainability strategy. The priority assessment revealed the most critical sustainability topics for LP based on six factors: meaningful impact on financial returns; reputational importance to LP; probability of negative outcome; LP’s ability to control, influence and mitigate; importance to stockholders; and importance to non-owner stakeholders.

We provide ESG disclosures in line with the International Financial Reporting Standards Foundation’s Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations. Our business is aligned with SASB’s Building Products and Furnishings and Forestry Management

 

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standards. Our TCFD index communicates how climate risks and opportunities are incorporated into our business strategy to facilitate long-term business resilience.

Governance

Our corporate governance practices and programs represent our commitment to ethical business operations. We work to create an environment within the workplace where all LP representatives—from directors to individual contributors—​have a strong sense of accountability and integrity.

We have a diverse, independent Board that helps the company manage risk, as well as Board committees that oversee auditing, corporate responsibility, and executive compensation.

We expect all LP team members to act with the highest standards of ethics and integrity and carry our commitment to business ethics through to our suppliers. Our Code of Business Conduct and Ethics, Code of Ethics for senior financial officers and Supplier Code of Conduct outline our standards and expectations. Our Human Rights Policy further details our expectations for working conditions and human rights in our operations. Each of these documents is available online at our website at www.lpcorp.com.

People

At LP, people come first. We work to foster a safe, inclusive environment where every LP team member can grow, thrive and belong. Additional information concerning LP’s people-focused initiatives can be found in the “—Human Capital Management” section of this proxy statement.

Environment

Environmental stewardship is an important component of our business. We strive to responsibly manage our environmental footprint from product innovation and sourcing to manufacturing and all the way through product installation and end-use. Our Policy on Environmental Stewardship, which may be viewed at www.lpcorp.com/about-lp/​sustainability/the-environment, details our broader commitment to reducing emissions, waste and water use, and conserving the environment in and around our operations.

Climate Change

We believe we have a role to play in mitigating the impacts of climate change—both through our innovative products and by limiting the potential environmental impacts of our operations. As detailed in our 2023 Sustainability Report and our TCFD index, we strive to incorporate climate change considerations into the way we do business, from product development to product end-of-life.

Our Policy on Environmental Stewardship informs our operations and is supported by innovative programs and processes that help us in our efforts to minimize emissions, reduce waste and water use, and conserve biodiversity in and around our operations.

Sustainable Sourcing

We believe that one of the greatest environmental opportunities we have at LP is to ensure that the forest resources we rely on are managed sustainably to meet the needs of future generations. As early adopters of third-party forest certification standards, we work with suppliers to implement sustainable forestry practices and ensure 100% of our wood fiber volume is sourced through certified sourcing programs, including Sustainable Forestry Initiative® (SFI®) and the Programme for the Endorsement of Forestry Certification (PEFC®). This helps assure LP and our customers that these forestlands are being managed responsibly and are achieving the environmental standards we demand.

We work to protect and maintain biodiversity in and near our operations, primarily by conducting biodiversity assessments before we begin operating to understand and mitigate potential biodiversity risks. Our forest management process helps preserve a range of age classes and forest types to protect habitats for plant and animal species that require younger as well as older forests to thrive.

LP received the SFI® President’s Award in 2022, recognizing our sustainable forestry leadership.

 

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Manufacturing Efficiency

Our manufacturing systems are intended to limit our environmental impact. All LP manufacturing facilities use site-specific environmental management programs to help reduce waste and promote clean air and water quality when producing engineered wood building products. To further promote sustainability and limit non-greenhouse gas (“GHG”) air emissions in our manufacturing processes, we strive to source technology that helps save energy and reduce waste. One example of this technology in action is the emissions control systems we have in place across our operations. These systems capture 99.9% of the particulate matter produced from biomass combustion and pressing wood and resins under high heat before it leaves our emissions stacks. Where possible, the captured particulate matter is then used in the manufacturing process or for energy recovery. This circular process supports our efforts to achieve or exceed air quality regulatory standards and mitigate our air emissions. We maintain additional control systems at our facilities that allow us to track, capture and destroy non-GHG air emissions to prevent them from entering the atmosphere. We aim to continue to evaluate our operations for opportunities to reduce emissions and maximize efficiency—whether by designing new systems, upgrading systems or identifying small changes that can have a big impact.

Quantifying Our Carbon Footprint

Understanding our emissions is critical for developing and guiding our decarbonization efforts. Our Scope 1 and 2 GHG emissions arise primarily from the natural gas and electricity used in our operations. However, a significant amount of our energy is derived from the use of residual biomass resulting from our manufacturing process.

In addition to evaluating our Scope 1 and 2 GHG emissions, we have measured our Scope 3 GHG emissions inventory since 2019. This evaluation is an important step in understanding emissions across our supply chain.

Products

Across our more than 50-year history, one thing that has remained consistent is our dedication to creating innovative, longer-lasting, more sustainable building products for our customers. We are committed to producing products that are both responsibly sourced and known for exceeding the performance expectations of our customers.

We work with third parties to develop life cycle assessments (LCA) and environmental product declarations (EPD) for LP products. The LCAs and EPDs allow us to assess and compare the environmental impact of our products’ life cycles in line with internationally recognized standards, including International Organization for Standardization (ISO) standards. We believe EPDs are a valuable tool for comparing products and providing transparency into the environmental footprint of a product across its full manufacturing value chain, from raw materials to product end-of-life.

We have evaluated the full life cycle of eight LP products, including LP® SmartSide® products, LP SmartSide ExpertFinish® products, LP BuilderSeries® products, and the LP Structural Solutions portfolio (except for LP NovaCore® sheathing). The related EPDs demonstrate the carbon negativity of certain of our products, meaning that such products store more carbon than is released during their entire life cycles.

Communities

The way we live, work, and interact within our communities is guided by our respect for the interconnectedness we share as community members. We support local communities through product and monetary donations and through the LP Foundation, our separate, LP-funded 501(c)(3) nonprofit. We also give LP team members the opportunity to donate their funds, time and skills to better their communities, whether through LP-sponsored volunteer events or through our charitable giving employee match program. The LP Foundation provides grants and other support to public schools and a variety of local nonprofit organizations that fall within our giving categories which are assessed annually by LP’s executive team. These giving areas focus on: programs that provide new homes and home repairs to those in need; environmental programs primarily focused on forests; public science, technology, engineering and math (STEM) education; and causes that support diversity, equity, and inclusion.

Our Human Rights Policy, Code of Business Conduct and Ethics and Policy for Respecting the Rights of Indigenous Peoples detail our commitments to respecting and collaborating with Indigenous communities across the areas where we operate. We work with Indigenous nations to promote economic growth, provide education and employment and support community infrastructure projects.

 

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MORE INFORMATION

More information about our environmental, social and governance program is available in LP’s 2023 Sustainability Report located at www.lpcorp.com/sustainability. Our 2023 Sustainability Report and other information contained on the website are not incorporated by reference herein.

HUMAN CAPITAL MANAGEMENT

At LP, we believe that by building and developing a more diverse, engaged, and highly skilled workforce, we are also building a better, more sustainable, and more competitive company—because when our people thrive, our company thrives. LP’s human capital management priorities include employee safety, talent acquisition and workforce composition, talent development, compliance and enablement and employee well-being. These factors impact LP’s readiness to meet future business needs and achieve organizational value creation goals.

SAFETY

We are committed to creating a healthy, safe workplace for all of our team members. Our safety programs aim to prevent incidents before they occur. Applicable to all team members and contractors, our Environmental, Health and Safety (EHS) Protocol Standard defines our expectations for creating a safe work environment. Additionally, our recently introduced Serious Injury and Fatality (SIF) Prevention program uses predictive tools to further identify and target potential safety risks. Every LP team member or contractor receives baseline safety training when they join the company, plus supplemental training based on their job requirements. In addition to this baseline training, each facility provides extra training specific to safety considerations for the time of year, needs or high-risk activities. Since 2010, we have won 85 safety awards recognizing us for our performance and commitment to safety.

TALENT ACQUISITION AND WORKFORCE COMPOSITION

We are committed to cultivating a safe and supportive workplace that attracts and welcomes innovative, agile, diverse, and resilient talent focused on value creation.

We embrace the diversity of our team members, customers, stakeholders, and consumers, including their unique backgrounds, experiences, ideas, and talents, and are committed to continued efforts to increase diversity and foster an inclusive workplace. We work to ensure all LP team members are valued and appreciated for their distinct contributions to the growth and sustainability of our business. We strive to cultivate a culture and vision that supports and enhances our ability to recruit, develop, and retain diverse talent at every level.

 

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Our executive management team provides oversight of our policies, programs, and initiatives focusing on workforce diversity, equity, and inclusion, talent and development, and compensation and benefits, and it is our policy to fully comply with all laws (domestic and foreign) applicable to equal employment opportunity and discrimination in the workplace.

Information as of December 31, 2023.

(1)

U.S. and Canada

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(2)

U.S.

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TALENT DEVELOPMENT

We are committed to empowering team members’ growth and development by offering an array of innovative and diverse educational and developmental programs to drive better business performance. We believe our team members’ growth must outpace the growth we want to achieve as a business.

COMPLIANCE AND ENABLEMENT

We are committed to creating a data-rich environment that enables high performance, consistent practices, efficient processes, and quality decision-making that supports our company values.

EMPLOYEE WELL-BEING

We are committed to recognizing and rewarding the contributions of our valued team members. We work to ensure that our competitive total rewards package offers the flexibility, inclusivity, choice and protection that will enable LP to attract and retain top talent.

ANTI-HEDGING AND ANTI-PLEDGING POLICY

LP’s Insider Trading Policy prohibits directors, executive officers, and certain employees of LP from engaging in short-term, hedging or speculative transactions involving LP common stock, $1 par value per share (“Common Stock”) unless otherwise approved in writing by LP’s General Counsel. LP maintains this policy because such transactions, which might be considered short-term bets on the movements of LP Common Stock, could create the appearance that the person is trading on insider information. In addition, hedging transactions may permit a director, executive officer, or

 

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manager of LP to continue to own securities of LP obtained through employee benefit plans or otherwise but without the full risks and rewards of ownership. When that occurs, the person may no longer have the same objectives as LP’s other stockholders.

Under LP’s Insider Trading Policy, the following hedging and monetization transactions with respect to LP securities are prohibited unless otherwise approved in writing by LP’s General Counsel:

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engaging in “short sales”;

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buying and selling options (“put” or “call”);

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prepaid variable forwards;

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equity swaps;

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collars; and

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exchange funds.

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While not prohibited, under the Insider Trading Policy, LP discourages insiders from placing standing or limit orders on LP securities.

LP’s Insider Trading Policy also prohibits the pledging of LP securities unless otherwise approved in writing, including pledges of LP securities as collateral for margin and other loans.

COMMITTEES OF THE BOARD

The Board’s committees, membership on each committee as of March 12, 2024 and the number of meetings held during fiscal year 2023 are set forth in the table below. Each committee shown below has a written charter delineating its membership, duties and functions. Copies of the current committee charters are available on LP’s website, www.lpcorp.com, by clicking on “For Investors,” then “Corporate Governance” and then “Committee Charters” and may also be obtained by writing to Corporate Affairs, Louisiana-Pacific Corporation, 1610 West End Avenue, Suite 200, Nashville, Tennessee 37203.

 = Chair     = Committee member

During 2023, each director attended at least 75% of the total number of Board meetings and meetings held by all committees of the Board on which he or she served during his or her tenure on the Board or such committees.

Descriptions of the Audit Committee, the Compensation Committee and the Governance Committee are provided below.

 

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FINANCE AND AUDIT COMMITTEE

Members

F. Nicholas Grasberger III (Chair) | Jose A. Bayardo | Ozey K. Horton, Jr. | Stephen E. Macadam

Responsibilities

The Audit Committee is responsible for:

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assisting the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of LP (including LP’s financial statements);

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LP’s compliance with legal and regulatory reporting requirements;

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assessing the independence and qualifications of LP’s independent auditor and evaluating the performance of LP’s independent and internal auditors;

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oversight of LP’s enterprise risk management program and certain other risks, as described under the heading “—Oversight of Risk” above;

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receiving and reviewing regular reports regarding issues such as:

​

—

the status and findings of internal audits and audits being conducted by LP’s independent registered public accounting firm,

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—

the status of material litigation,

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—

LP’s cybersecurity program, emerging cybersecurity threats, and the state of LP’s cybersecurity maturity,

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—

significant accounting events,

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—

accounting changes that could affect LP’s financial statements, and

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—

proposed audit adjustments;

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because of the importance of the integrity of our information technology systems to financial reporting, reviewing LP’s information technology platform and processes, as well as strategies, to prevent, detect and mitigate any cybersecurity threat; and

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such other duties as directed by the Board.

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Additionally, the Audit Committee has sole authority for the appointment, compensation and oversight of LP’s independent registered public accounting firm, including the approval of any significant non-audit relationship. To satisfy its various oversight responsibilities, the Audit Committee meets regularly with LP’s Chief Financial Officer, Director of Internal Audit, independent registered public accounting firm and other members of management, as needed.

The Audit Committee charter requires that each member of the Audit Committee meet the qualification and independence requirements of the NYSE listing standards, and the independence standards set forth in Rule 10A-3 of the Exchange Act and LP’s Corporate Governance Guidelines. The Board has determined that each member of the Audit Committee has met such qualification and independence requirements and standards.

The Audit Committee Charter also requires that we have at least one member of the Audit Committee who has past employment experience in finance or accounting and requisite professional certification in accounting or other comparable experience that, in the judgment of the board, results in the individual’s financial sophistication and qualification as an audit committee financial expert (as such term is defined under applicable rules of the SEC). The Board has determined that Mr. Grasberger, Mr. Macadam and Mr. Bayardo are audit committee financial experts (as such term is defined under applicable rules of the SEC).

 

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COMPENSATION COMMITTEE

Members

Stephen E. Macadam (Chair) | Tracy A. Embree | Lizanne C. Gottung | Dustan E. McCoy

Responsibilities

The Compensation Committee is responsible for:

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assisting the Board in fulfilling its responsibility for oversight relating to the compensation of the executive officers of LP, including by reviewing and establishing compensation levels for LP’s executive officers on at least an annual basis;

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reviewing and approving the strategy and design of LP’s compensation and benefits systems, and overseeing the administration of LP’s compensation and benefit plans;

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making recommendations to the Board for incentive compensation and equity-based compensation plans, including specifically reviewing and making recommendations regarding the compensation of LP’s CEO and reviewing and approving salaries and incentive compensation of other executive officers;

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administering LP’s equity and cash incentive compensation plans;

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reviewing and making recommendations to the Board regarding any employment agreements and any severance agreements or plans including any benefits to be provided to LP’s executive officers in connection with a change of control of LP;

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approving and administering, through a subcommittee of the Compensation Committee comprised of all members of the Compensation Committee who qualify as a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act (the “Subcommittee for Performance and Equity-Based Compensation”), any stock options or other stock-based awards that are intended to be exempt from short-swing profit liability under applicable rules of the SEC;

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selecting and regularly reviewing the peer group used for benchmarking compensation for executive officers;

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overseeing certain risks related to LP’s compensation policies and practices as described under the heading “—Oversight of Risk” above; and

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making recommendations to the Board regarding the frequency with which LP will conduct “say on pay” votes in accordance with Section 14A of the Exchange Act.

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The Compensation Committee meets regularly with management to understand the financial, human resources and stockholder implications of compensation decisions being made. In accordance with its written charter adopted by the Board, the Compensation Committee has oversight responsibility with respect to compensation policies designed to align compensation with our overall business strategy, values and management initiatives. In discharging its oversight responsibility, the Compensation Committee has retained its own independent compensation consultant, FW Cook, to advise the Compensation Committee regarding market and general compensation trends, assist in determining the appropriate executive officer compensation and advise the Compensation Committee about its executive compensation programs and policies. At the Compensation Committee’s request, FW Cook attends committee meetings and meets with individual committee members to plan for committee meetings. The Compensation Committee chair also regularly meets with management and the Compensation Committee’s consultant between formal Compensation Committee meetings. In 2023, the Compensation Committee generally sought input from FW Cook on a range of factors related to LP’s compensation programs, including comparative peer company data, competitive positioning of executive pay, plan design, long-term incentive pay practices, and market trends.

FW Cook is responsible solely to the Compensation Committee, with the exception of its services to the Governance Committee regarding director compensation, and undertook no work with the management of LP without approval from the Compensation Committee chair. The Compensation Committee has affirmed the independence of FW Cook through a review of the firm’s independence policy and other relevant matters, and is not aware of any conflict of interest that would prevent the consultant from providing independent advice to the Compensation Committee regarding executive compensation matters. FW Cook has had no other business relationship with LP and has received no payments from us other than fees for services to the Compensation Committee and the Governance Committee. FW

 

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Cook is not the beneficial owner of any shares of LP Common Stock, and fees payable by LP to FW Cook during 2023 were less than 1% of the firm’s gross revenues.

LP’s Chief Executive Officer makes recommendations to, and participates in the deliberations with, the Compensation Committee regarding the amount and form of the compensation of the other executive officers, but does not participate in the determination of his own compensation or the compensation of directors.

The Compensation Committee charter requires that each member of the Compensation Committee qualify as an “independent director” under the NYSE listing standards. The Board has determined that each member of the Compensation Committee has met such independence requirements. The Board has also determined that each member of the Compensation Committee is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are named above under “—Members”. No members of the Compensation Committee were officers or employees of LP or any of its subsidiaries in 2023, were formerly LP officers, or had any relationship otherwise requiring disclosure under the applicable rules. In addition, no executive officer of LP serves, or in the last fiscal year has served, as a director of, or as a member of the compensation committee (or other board committee performing equivalent functions) of, another entity that has one or more of its executive officers serving as a director of LP or as a member of the Compensation Committee.

GOVERNANCE AND CORPORATE RESPONSIBILITY COMMITTEE

Members

Lizanne C. Gottung (Chair) | Jose A. Bayardo | Tracy A. Embree | F. Nicholas Grasberger III | Ozey K. Horton, Jr. | Stephen E. Macadam | Dustan E. McCoy

Responsibilities

The Governance Committee is responsible for:

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making recommendations to the Board as to the candidates to be elected as Chairperson of the Board and Lead Independent Director;

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determining criteria for selecting and evaluating potential nominees for director, including skills and diversity that would be advantageous to add to the Board, identifying and screening persons qualified to become directors and recommending candidates for membership on the Board;

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if appropriate, in the sole discretion of the Governance Committee, retaining a search firm to identify potential candidates for the Board and approving such firm’s fees and other retention terms;

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considering and making recommendations to the Board regarding the composition of the Board and Board committees, the nomination of directors, and all elements of compensation of directors;

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developing, and recommending for consideration by the Board, a set of corporate governance guidelines applicable to LP and reviewing charters of all committees of the Board;

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managing the process of evaluating the Board and its committees, with feedback from the Lead Independent Director, and assessing the effectiveness of the Governance Committee, including the adequacy of its charter, at least annually;

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considering and making recommendations to the Board regarding LP’s Bylaws, stockholder proposals and other corporate governance items that may arise from time to time;

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managing the CEO selection and evaluation process used by the Board and reviewing management succession processes;

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providing oversight and direction on LP’s (i) sustainability strategy and performance and (ii) safety, environmental and product quality policies and practices;

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reviewing the implementation of LP’s safety products and trends and the environmental performance of LP as it affects employees, communities, vendors and customers;

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»

reviewing and implementing LP’s product quality policies and standards, including claims and quality incident reports;

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overseeing LP’s (i) programs for ethics and business conduct, including reviewing matters raised through LP’s confidential hotline reporting service, and (ii) political activities and advocacy, including political fundraising and contributions;

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reviewing, at least annually, LP’s ethics and business conduct practices, trends and issues, and reporting to the Board on findings related thereto;

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providing oversight of LP’s compliance with federal and state laws, regulations and rules;

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providing oversight and policy direction on diversity and employee satisfaction; and

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providing oversight of certain risks related to corporate governance as described under the heading “—Oversight of Risk” above.

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In 2023, the Governance Committee sought input from FW Cook related to director compensation, including competitive positioning of director pay.

The Governance Committee charter requires that each member of the Governance Committee be an independent director. The Board has determined that each member of the Governance Committee has met the independence requirements of the NYSE listing standards.

ANNUAL BOARD AND COMMITTEE SELF-EVALUATION PROCESS

LP’s Board believes that periodic self-evaluation is important to its ongoing effectiveness. The Board and each of its committees conduct annual self-evaluations to assess whether they are functioning effectively and to provide an opportunity to reflect upon and improve processes and effectiveness. The Governance Committee designs and establishes the overall evaluation framework and oversees this annual evaluation process, which is led by the Lead Independent Director. As part of the evaluation process, the Lead Independent Director conducts individual discussions with each Board member to obtain their assessment of the performance and effectiveness of the Board and its committees. A summary of the results of this process are then reported to the full Board and to each of its committees, which consider the results and the ways in which Board and committee processes and effectiveness might be enhanced.

DIRECTOR STOCK OWNERSHIP GUIDELINES

The Board has adopted stock ownership guidelines for directors as part of LP’s Corporate Governance Guidelines, which specify target amounts of share ownership. Each outside director is expected to acquire and hold a number of shares equal in fair market value to five times the regular annual cash retainer for outside directors within five years of joining the Board. As of December 31, 2023, all of the directors met the guidelines.

CONSIDERATION OF DIRECTOR NOMINEES

The Board believes that all directors must possess a considerable amount of education and business management experience. The Board also believes that it is necessary for each of LP’s directors to possess certain general qualities and that there are certain skills and experiences that should be represented on the Board as a whole, but not necessarily by each director individually.

 

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Under the Governance Committee charter, the Governance Committee is responsible for determining the criteria for membership on the Board. The Governance Committee uses the results of annual evaluations of the Board and Board committees in evaluating the skills and attributes desired in new director candidates. The following are criteria for membership on the Board:

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directors must be persons of integrity, with significant accomplishments and recognized business stature, who will bring a diversity of perspectives to the Board;

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one or more directors should have significant experience in the type of industry and business in which LP operates;

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experience in some capacity with publicly traded companies is a desirable attribute;

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although the Board has not adopted a specific policy regarding consideration of diversity in identifying director nominees, the Corporate Governance Guidelines require the Governance Committee to take into account diversifying factors that it deems appropriate which include, among other things, diversity in professional and personal experience, skills, expertise, background, gender, race and ethnic background, and cultural and geographical diversity; and

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directors must be able to commit the requisite time to prepare for and attend all regularly scheduled meetings of the Board and committees on which they serve, except when there are unavoidable business or personal conflicts.

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Additionally, the Governance Committee believes it to be desirable for all new outside directors (as is true of all current outside directors) to qualify as independent under the NYSE listing standards and applicable SEC rules. The Corporate Governance Guidelines recognize that LP’s CEO will normally be a director and that other senior officers may be elected to the Board in appropriate circumstances, as long as a majority of directors are independent as determined by the Board in accordance with the NYSE listing standards and applicable SEC rules.

As part of its annual self-evaluation process, the Board and its committees determine the specific skill sets, perspectives and characteristics necessary for the Board and each of its committees to function effectively. If the Board, generally or through the Governance Committee, determines that a necessary skill set, perspective or characteristic is absent, the Board may authorize an increase in the number of Board members.

In the event of a vacancy on the Board, the Governance Committee determines which skills should be sought in filling the vacancy and then each current director is asked to suggest names of potential director candidates based on the applicable criteria. The Governance Committee is also authorized by its charter to retain a third-party search firm to assist in identifying director candidates. As part of its search process for potential candidates for director, the Governance Committee considers a potential candidate’s ability to contribute to the diversity of personal and professional experiences, skills, opinions, perspectives and backgrounds on the Board. After potential candidates are identified, the Governance Committee designates one or more directors to screen each potential candidate. Following that screening process, the Governance Committee (or a subcommittee) conducts in-person or telephone interviews with candidates warranting further consideration, and based on the results of those interviews, the Governance Committee recommends a candidate to the full Board for election, as well as alternative candidates whom the Board may wish to consider.

The Governance Committee will consider stockholders’ recommendations concerning nominees for director. Any such recommendation, including the name and qualifications of a nominee, may be submitted to LP at its corporate offices: Louisiana-Pacific Corporation, 1610 West End Avenue, Suite 200, Nashville, Tennessee 37203, to the attention of the Chair of the Governance Committee. Stockholder-recommended candidates will be evaluated using the same qualities and criteria described above.

STOCKHOLDER NOMINATIONS FOR ELECTION OF DIRECTORS

LP’s Bylaws permit nominations for election to the Board to be made by any stockholder of record entitled to vote at the Annual Meeting. The number of nominees a stockholder may nominate for election at a stockholder meeting may not exceed the number of directors to be elected at such meeting. Notice of a stockholder’s intent to make such a nomination must be given in writing to the Corporate Secretary of LP, and must comply with the requirements set forth in LP’s Bylaws. Such notice must be delivered to, or mailed and received by, LP’s Corporate Secretary at least 90, and no more than 120, calendar days prior to the first anniversary of the preceding year’s annual meeting of stockholders.

 

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For the 2025 Annual Meeting of Stockholders, this notice must be received by LP at its corporate offices: Louisiana-Pacific Corporation, 1610 West End Avenue, Suite 200, Nashville, Tennessee 37203, no earlier than January 11, 2025, and no later than February 10, 2025.

In addition, stockholders who intend to solicit proxies in support of director nominees other than the Board’s nominees in connection with the 2025 Annual Meeting of Stockholders must comply with the SEC’s universal proxy rules and provide notice to LP by March 11, 2025 setting forth the information required by Rule 14a-19 under the Exchange Act.

STOCKHOLDER ENGAGEMENT

LP believes that effective corporate governance should involve stockholder engagement to gain stockholder insights, answer stockholder inquiries, and understand and consider the issues that matter most to our stockholders. We seek active dialogues with our stockholders to ensure a diversity of perspectives is thoughtfully considered on a broad range of matters, including strategy, business performance, corporate governance, risk and compensation practices, and other environmental, social, and governance issues. We provide regular updates regarding our financial performance and strategic actions to the investor community through our participation in investor conferences, one-on-one meetings and earnings calls. We also communicate through our filings with the SEC, press releases, website, annual report and sustainability report. During fiscal 2023, our management solicited feedback from investors representing well over half of our outstanding shares of Common Stock. Feedback on these stockholder engagements is discussed by the Board periodically throughout the year. LP’s management will be available to answer questions from stockholders at the 2024 Annual Meeting of Stockholders. We value our stockholders’ perspective on our business and intend to continue our outreach efforts to better understand their views and priorities.

COMMUNICATIONS WITH THE BOARD

Stockholders and other interested parties may communicate with the Board by sending written correspondence to either the Chair of the Governance Committee or our Lead Independent Director by e-mail at [email protected], or to our headquarters at Louisiana-Pacific Corporation, 1610 West End Avenue, Suite 200, Nashville, Tennessee 37203. If the communication is addressed to an individual director, it will first be sent to that individual for a determination as to whether it relates to a personal matter rather than an LP or an LP Board matter. Absent a conflict of interest, the Chair of the Governance Committee and the Lead Independent Director, in their sole discretion, will determine how to handle each communication, including forwarding it for consideration by the full Board, the independent directors only, a Board committee, or an individual director.

DIRECTOR COMPENSATION

The Governance Committee reviews, on an annual basis, director compensation in relation to other comparable companies and in light of other factors that the Governance Committee deems appropriate, and discusses director compensation with, and makes recommendations to, the Board, with the Board approving director compensation.

Pursuant to our director compensation policy, each of our non-employee directors receives a $90,000 annual cash retainer, each chair of the Audit, Compensation and Governance Committees receives an annual cash committee chair retainer, and our Lead Independent Director receives an annual cash retainer, with each retainer paid quarterly in equal installments, as follows:

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 29

CORPORATE GOVERNANCE

The annual retainer for our Lead Independent Director recognizes the additional time commitment for this role compared to the other independent directors, which currently includes acting as an intermediary in the event the Chairperson refers to the Lead Independent Director for guidance or to have something taken up at executive session of the independent directors; suggesting calling Board meetings to the Chairperson when appropriate; calling meetings of the independent directors and setting the agenda for and leading executive sessions of the independent directors; briefing the Chairperson on issues arising in the executive sessions; collaborating with the Chairperson to set the Board agenda and providing the Board with information; facilitating discussion among the independent directors on key issues and concerns outside of Board meetings; serving as the exclusive conduit to the Chairperson of views, concerns and issues of the independent directors; retaining advisors and consultants at the request of independent directors; serving on the Executive Committee; and coordinating with the Compensation Committee in the performance and evaluation of the CEO.

Under our Amended and Restated Louisiana-Pacific Corporation Non-Employee Directors Compensation Plan (the “Non-Employee Directors Compensation Plan”), any independent director may elect to (i) defer receipt of all or a portion of his or her annual cash retainer to a cash account to be paid at a future date specified in the election form or (ii) exchange all or a portion of his or her annual cash retainer for an award of deferred stock units (“DSUs”) (which award is a form of restricted stock unit entitling the grantee to the right to the delivery of shares in the future) granted under the Louisiana-Pacific Corporation 2022 Omnibus Stock Award Plan (the “2022 Plan”). Elections must be made by December 31 for the deferral of fees in the next calendar year and must state the amount or portion of fees to be deferred; whether and to what extent fees are to be deferred to a cash account or exchanged for DSUs; and the date on which such payout of cash or issuance of shares pursuant to any DSUs will commence. In the case of exchanges for DSUs, the number of DSUs to be issued is calculated by dividing the amount of the annual cash retainer to be exchanged by the closing price of LP Common Stock as of the date(s) on which the annual cash retainer would otherwise have been paid. DSUs are issued on the date on which the annual cash retainer would otherwise have been paid and credited to the independent director’s DSU recordkeeping account. Any annual cash retainer payment deferred to a cash account will be credited with interest, compounded monthly, from the date the cash would otherwise have been paid until the amount credited to his or her cash account is paid to the independent director. The rate of interest credited for each quarter will be the annual rate on 30-year Treasury securities, as of the first business day of each quarter, on an annual basis. Independent directors holding DSUs or deferred payments in their cash account are entitled to distribution thereof upon the earliest to occur of (i) such independent director’s separation from the Board, (ii) a change of control of LP (as defined in the 2022 Plan), or (iii) the distribution date specified in the independent director’s deferral election form, if any (a “Distribution Event”).

In addition, non-employee directors receive an annual grant of RSUs with a grant date fair value of $135,000. The RSUs vest in full on the earliest to occur of one year following the grant date, upon the director’s death, disability or retirement (as defined in the award agreement), or a change of control of LP. If the director ceases to be a director before the restrictions lapse, the shares are forfeited. Equity awards to non-employee directors during 2023 were made pursuant to LP’s 2022 Plan. Directors who are also LP employees (i.e., Mr. Southern) receive no additional compensation for their Board service.

The Non-Employee Directors Compensation Plan also permits any independent director of LP to defer receipt of any LP Common Stock issuable pursuant to RSUs that vest according to their terms. Directors who elect to defer settlement of their annual RSU grants receive, on the scheduled RSU vesting date, a number of DSUs that is equal to the number of RSUs to which the deferral election applies. Independent directors who have elected to receive DSUs in lieu of shares from the settlement of their RSUs are entitled to receive one share of LP Common Stock for each DSU upon the occurrence of a Distribution Event.

Pursuant to the Non-Employee Directors Compensation Plan, independent directors will have no rights of ownership in the shares of LP Common Stock underlying the DSUs, no right to current dividends, and no right to vote the shares of LP Common Stock underlying the DSUs until the date on which the shares of LP Common Stock underlying such DSUs are issued as a result of a Distribution Event. However, from and after the grant date of the DSUs and until such DSUs are settled in shares of LP Common Stock, on the date LP pays a dividend (if any) to holders of shares of LP Common Stock generally, independent directors holding DSUs will be credited with dividend equivalent additional DSUs equal to the number obtained by dividing (i) the amount of the dividend the independent director would have received had he or she owned a number of shares of LP Common Stock equal to the number of DSUs then credited to his or her DSU recordkeeping account, by (ii) the closing price of LP Common Stock on the day before the date of the dividend payment.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 30

CORPORATE GOVERNANCE

Such dividend equivalent DSUs are credited to the independent director’s DSU recordkeeping account and paid to such independent director only if, and at the same time as, the shares of LP Common Stock underlying such DSUs are distributed to such independent director pursuant to the terms of the Non-Employee Directors Compensation Plan.

Ms. Embree, Mr. Horton and Mr. Macadam elected to defer settlement of their 2023 RSU awards that are scheduled to vest on May 5, 2024, pursuant to the Non-Employee Directors Compensation Plan. Mr. Grasberger elected to defer his 2023 annual cash retainer to a lump sum payment on January 1, 2027 pursuant to the Non-Employee Directors Compensation Plan.

The following table summarizes compensation paid to non-employee directors for services during 2023.

​

(1)

The amounts shown reflect the fair value as of the date of grant (computed in accordance with FASB ASC Topic 718) with respect to awards of RSUs under the 2022 Plan. At December 31, 2023, each of LP’s outside directors held RSUs for 2,208 shares, which included dividend equivalents equal to 26 shares. The RSUs held by the directors vest on May 5, 2024.

​

(2)

Mr. Grasberger elected to defer his 2023 annual cash retainer to a lump sum payment on January 1, 2027.

​

(3)

Ms. Embree, Mr. Horton and Mr. Macadam elected to defer settlement of their 2023 RSU awards pursuant to the Non-Employee Directors Compensation Plan, which will result in the issuance of DSUs upon their vesting on May 5, 2024, in lieu of the issuance of shares of Common Stock.

​

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 31

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 32

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Deloitte & Touche LLP as LP’s independent registered public accounting firm to, among other services, audit its consolidated financial statements for 2024. The Audit Committee reviews the performance of the independent registered public accounting firm on an annual basis. In making the determination to appoint Deloitte & Touche LLP for 2024, the Audit Committee considered, among other factors, the independence and performance of Deloitte & Touche LLP, and the quality and candor of Deloitte & Touche LLP’s communications with the Audit Committee and LP’s management. Deloitte & Touche LLP has served as LP’s independent registered public accounting firm since 1997.

Although LP is not required to seek stockholder approval of the appointment of its independent registered public accounting firm, the Board values the opinion of LP’s stockholders and considers the appointment to be an important matter of stockholder concern and therefore, as a matter of good corporate governance, requests stockholder ratification of this action. In the event of a negative vote on this proposal, the Audit Committee will investigate the possible basis for the negative vote and consider the results of its investigation in connection with the appointment of LP’s independent registered public accounting firm for 2025. Even if this proposal is approved, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that it would be in the best interests of LP and its stockholders.

Representatives of Deloitte & Touche LLP are expected to attend the 2024 Annual Meeting of Stockholders where they will be available to respond to questions and, if they desire, may make a statement.

Approval of this proposal requires the affirmative vote of a majority of the total votes cast on this proposal. Abstentions and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 33

PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee pre-approved all audit services provided by LP’s independent registered public accounting firm, Deloitte & Touche LLP, for the years ended December 31, 2023 and 2022. The Audit Committee also pre-approved all audit-related and permissible non-audit services provided by Deloitte & Touche LLP during 2023 and 2022, and concluded that the provision of those services was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

The Audit Committee has adopted a policy for the pre-approval of services provided by the independent registered public accounting firm. Under the policy, pre-approval is generally provided for up to one year. Each pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. In addition, the Audit Committee may pre-approve particular services on a case-by-case basis. For each proposed service, the independent registered public accounting firm must provide a statement that such service is consistent with the SEC’s rules on auditor independence. The Audit Committee may delegate pre-approval authority to one or more of its members. Any such member must report any decisions to the Audit Committee at its next scheduled meeting. Unless specified otherwise by the Audit Committee, the Chair of the Audit Committee has been delegated pre-approval authority under the pre-approval policy.

The aggregate fees, including expenses, billed to LP for the years ended December 31, 2023 and 2022, by LP’s independent registered public accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu LLC, and their respective affiliates, were as follows:

​

(1)

Audit Fees. Includes fees for audit services involving the audit of LP’s consolidated financial statements, the review of interim quarterly statements, the audit of LP’s internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002, any other procedures required to be performed by LP’s independent registered public accounting firm in order to render its opinion on LP’s consolidated financial statements, and services in connection with statutory audits and financial audits for certain of LP’s subsidiaries.

​

(2)

Audit-Related Fees. Includes any fees for assurance and related services that are traditionally performed by the independent registered public accounting firm and are not reported as audit fees. These audit-related services may include due diligence services pertaining to potential business acquisitions or dispositions, due diligence procedures related to debt or equity offerings, accounting consultations related to accounting, financial reporting, or disclosure matters not classified as audit services, assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities not classified as audit services, financial audits of employee benefit plans, and assistance with internal control reporting requirements. Audit-related fees for 2023 and 2022 primarily included fees for services related to environmental agreed upon procedures.

​

(3)

Tax Fees. Includes fees incurred for research, compliance and other permissible tax services.

​

(4)

All Other Fees. Amounts represent fees for a license to use a financial accounting technical research database.

​

As described above, all audit and permissible non-audit services provided by Deloitte & Touche LLP to LP during 2023 and 2022 were pre-approved by the Audit Committee.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 34

AUDIT MATTERS

AUDIT COMMITTEE REPORT

The Audit Committee oversees LP’s financial reporting process on behalf of the Board. LP’s management has primary responsibility for LP’s financial statements and the reporting process, including the systems of internal controls. LP’s independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”), is responsible for planning and conducting, in accordance with the standards of the Public Company Accounting Oversight Board, an audit of LP’s annual consolidated financial statements and a review of LP’s quarterly consolidated financial statements and expressing opinions on LP’s annual consolidated financial statements, and effectiveness of its internal control over financial reporting. In this context, the Audit Committee has met and held discussions with LP’s management and Deloitte regarding LP’s accounting functions and the audit process, as well as the fair and complete presentation of LP’s results and the assessment of LP’s internal control over financial reporting.

The Audit Committee has also reviewed and discussed LP’s audited consolidated financial statements for the year ended December 31, 2023 with management and Deloitte. In addition, the Audit Committee discussed and reviewed with Deloitte all matters that the firm was required to communicate and discuss with the Audit Committee under applicable auditing standards and all other legal, regulatory and corporate governance standards, including those described in Auditing Standard 1301, as amended, regarding communications with audit committees. The Audit Committee also reviewed and discussed with Deloitte the auditor’s independence from LP and its management. As part of that review, Deloitte provided the Audit Committee with the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding communications with the Audit Committee concerning independence and has discussed Deloitte’s independence from LP.

Based on the reviews and discussions with management and Deloitte, the Audit Committee recommended to the Board, and the Board has approved, that LP’s audited consolidated financial statements for the year ended December 31, 2023 be included in LP’s Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC.

Respectfully submitted,

Nicholas Grasberger III, Chair
Jose A. Bayardo
Ozey K. Horton, Jr.
Stephen E. Macadam

This Audit Committee Report does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing made by us under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate this Audit Committee Report by reference therein.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 35

PROPOSAL 3: APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 36

PROPOSAL 3: APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION

The Board recognizes the interest of stockholders in executive compensation matters. As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Exchange Act, LP provides its stockholders an opportunity to cast an advisory vote to approve, on a non-binding basis, the compensation of LP’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC. This advisory vote is commonly referred to as the “say-on-pay” vote. In LP’s advisory say-on-pay vote at the 2023 Annual Meeting of Stockholders, approximately 97% of the votes cast were “FOR” approval of the executive compensation as disclosed in our 2023 Proxy Statement. LP values continued and constructive feedback from our stockholders on compensation and other important matters.

As described in the “Compensation of Executive Officers—Compensation Discussion and Analysis” ​(“CD&A”) section of this proxy statement, we believe that our compensation packages provide competitive compensation that enables us to attract, retain and motivate a high-performance executive management team, link executive performance to corporate financial performance, and align the interests of management and stockholders by promoting ownership of LP Common Stock. For more details on our compensation philosophy, please read the CD&A which discusses our executive compensation programs, including specific information about the compensation of our named executive officers for 2023.

On behalf of the stockholders, the Compensation Committee continually reviews current market practices and data, and our compensation programs and ancillary policies, in addition to actual executive compensation. The Compensation Committee seeks to achieve the desired goals of aligning our executive compensation structure with our stockholders’ interests. As a result of the Compensation Committee’s review in 2023, the Compensation Committee took several important actions and maintained existing compensation practices, including the following:

»

Maintained compensation packages, with assistance from an independent compensation consultant, so that each executive is within a competitive range of total compensation for executives in comparable positions;

​

»

Continued to place a strong emphasis on variable compensation through our annual cash incentive award plan and performance stock unit (“PSU”) awards which are designed so that the payout opportunity is directly linked to the achievement of pre-determined financial performance metrics;

​

»

Maintained objective financial goals, Adjusted EBITDA and Economic Profit (each as defined herein), for annual cash incentive award metrics based upon business unit and corporate performance;

​

»

Aligned annual incentive compensation programs between our executives and other employees to encourage a unified effort in achieving our goals and objectives; and

​

»

Maintained the three-year performance period and the performance metric of Adjusted EBITDA (as defined herein) for the PSU awards, along with the Total Shareholder Return (“TSR”) modifier to align with public reporting.

​

We believe that proper administration of our executive compensation programs will result in attracting and retaining a management team that is motivated to lead our company to improved fundamental financial performance furthering the long-term interests of LP and its stakeholders.

We are asking our stockholders to vote on the following resolution:

“Resolved, that the compensation paid to our named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K adopted by the SEC, including the Compensation Discussion and Analysis section, the Summary Compensation Table, the other executive compensation tables and accompanying footnotes and narrative discussion, is hereby approved.”

The above resolution will be deemed to be approved if it receives the affirmative vote of a majority of the total votes cast on this proposal. Abstentions and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote on this proposal. As this vote is an advisory vote, the outcome is not binding with respect to future executive compensation decisions, including those relating to our named executive officers. Our Compensation Committee and Board will, however, take the outcome of the vote into account in making future executive compensation decisions, as they have done in prior years. Consistent with the views expressed by LP’s stockholders at our 2023 Annual Meeting of Stockholders, LP presently intends to conduct an advisory say-on-pay vote annually until the next required advisory vote on the frequency of say-on-pay votes.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 37

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

THIS CD&A DESCRIBES LP’S EXECUTIVE COMPENSATION PROGRAM, EXPLAINS HOW THE COMPENSATION COMMITTEE OVERSEES AND IMPLEMENTS THIS PROGRAM, AND REVIEWS THE 2023 COMPENSATION DECISIONS FOR THE NAMED EXECUTIVE OFFICERS IDENTIFIED BELOW.

THIS CD&A IS DIVIDED INTO THE FOLLOWING SECTIONS:

 

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COMPENSATION OF EXECUTIVE OFFICERS

OUR NAMED EXECUTIVE OFFICERS FOR 2023

Throughout this CD&A and elsewhere in this proxy statement, we refer to the following group of individuals as the “NEOs”:

SECTION I: 2023 BUSINESS AND FINANCIAL HIGHLIGHTS

LP’s performance during 2023 is summarized below, with comparisons to 2022 performance as noted:

»

Consolidated net sales decreased by 33% to $2.6 billion

​

»

OSB net sales decreased by 50% to $1.0 billion, due to 40% lower selling prices and 18% lower sales volumes

​

»

Siding net sales decreased by 10% to $1.3 billion, due to 14% lower sales volumes partially offset by 5% higher selling prices

​

»

Net income was $178 million, a year-over-year decrease of $905 million

​

»

Net income per diluted share (“EPS”) was $2.46 per diluted share, a year-over-year decrease of $11.41 per diluted share

​

»

Adjusted EBITDA* was $478 million, a year-over-year decrease of $911 million

​

»

Adjusted Diluted EPS* was $3.22 per diluted share, a year-over-year decrease of $8.55 per diluted share

​

»

Cash provided by operating activities decreased by $828 million to $316 million

​

»

Paid $300 million in capital expenditures

​

»

Paid $80 million to acquire a manufacturing facility, including real estate and certain physical assets, in Wawa, Ontario, Canada

​

»

Returned $69 million of capital to stockholders through quarterly cash dividends

​

»

Liquidity as of December 31, 2023 consisted of $222 million of cash and $550 million of undrawn revolver capacity

​

*

Adjusted EBITDA and Adjusted Diluted EPS are non-GAAP financial measures. Please refer to pages 36-38 of LP’s Annual Report on Form 10-K for the year ended December 31, 2023 for a description and reconciliation of these non-GAAP financial measures.

​

 

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COMPENSATION OF EXECUTIVE OFFICERS

The following charts (i) outline LP’s performance using key metrics: Net sales, Adjusted EBITDA, Adjusted Diluted EPS and Operating Cash Flow, and (ii) demonstrate LP’s TSR compared to certain published indices and LP’s compensation peer group for 2023. Results for all periods presented exclude the results of our former Engineered Wood Products (EWP) segment, which have been presented as discontinued operations in our Consolidated Statements of Income in our Form 10-K for the year ended December 31, 2023. The Compensation Committee believes the compensation earned by the NEOs in 2023 reflects LP’s solid financial performance in challenging market conditions and continued execution with respect to several metrics tied to increased stockholder value as discussed further in “—Section IV: Elements and Philosophy of Executive Compensation” below.

(1)

TSR is equal to share price change plus dividends based on a 30-day average. Source: FactSet.

​

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 40

COMPENSATION OF EXECUTIVE OFFICERS

SECTION II: 2023 COMPENSATION HIGHLIGHTS

LP uses its compensation program to attract, motivate and retain high-quality executive talent to lead the organization. The Compensation Committee has established programs and practices designed to pay for performance and to align executive officers’ interests with those of LP’s stakeholders. The Compensation Committee believes that LP’s compensation program helps drive LP’s performance by providing compensation that is commensurate with performance. The 2023 executive compensation program was guided by the following core principles:

Equity-based compensation aligns executive officers’ interests with stakeholders’ interest, drives performance and facilitates retention of superior talent

LP believes that equity-based compensation aligns executive officers’ interests with those of its stakeholders. Annual equity awards consist of PSUs and RSUs. PSUs are only paid out if the performance goals set for a three-year cumulative performance period are met and only if the NEO remains in continuous employment through the vesting date, subject to acceleration upon certain events. Payout upon final achievement of performance goals is also subject to a TSR modifier relative to LP’s capital market peer group. For PSUs awarded in 2023, the performance goals were based on Cumulative Company Adjusted EBITDA (defined below) for the period from January 1, 2023 to December 31, 2025. RSUs vest in three equal annual installments beginning on the first anniversary of the grant date and only if the NEO remains in continuous employment through the applicable vesting dates, subject to acceleration upon certain events. PSUs and RSUs are settled in shares of LP Common Stock, other than the PSUs and RSUs granted on February 10, 2022, which may be settled in shares of LP Common Stock or in cash, in the sole discretion of the administrator of the 2013 Omnibus Stock Award Plan, as amended (the “2013 Plan”). RSU and PSU awards granted on and after February 10, 2022 provide for double-trigger vesting in the event of a change of control, if the acquirer assumes the awards.

The 2022 Plan allows LP to offer equity-based compensation to its officers, employees, directors and consultants in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, other stock-based awards and/or cash-based awards. As of December 31, 2023, 256,852 shares of LP Common Stock were subject to outstanding awards, and 3,667,325 shares of LP Common Stock were reserved for future issuance, under the 2022 Plan.

 

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COMPENSATION OF EXECUTIVE OFFICERS

Cash incentive compensation is designed to drive increasing profits and returns

The Compensation Committee strongly believes that linking compensation to certain critical performance metrics results in increased profits and stronger stockholders returns. For 2023, LP’s annual cash incentive award plan (“Annual Incentive Plan”) for NEOs was based upon Adjusted EBITDA (adjusted for certain market influences related to OSB commodities), Economic Profit (each as defined below) and certain business unit-specific operational goals for the year ended December 31, 2023. The Economic Profit metric further links asset utilization and financial performance of LP. No amounts would have been payable under the 2023 Annual Incentive Plan unless the minimum threshold for at least one of the corporate or business unit-specific performance goals was achieved. In 2023, the target threshold amount for each of the corporate and business unit-specific performance goals was exceeded except for the business unit performance goal for the Siding business, and annual cash incentives awarded pursuant to the 2023 Annual Incentive Plan were paid at an average of 123% of the target award amount.

Base salary is appropriately weighted to emphasize performance-based compensation

The Compensation Committee continuously strives to appropriately weight base salary and variable compensation (annual cash and equity incentives) for each NEO. The target compensation mix for LP’s NEOs reflects LP’s emphasis on long-term, performance-based compensation that incentivizes LP’s NEOs to make strategic decisions that will strengthen its business and create long-term value for its stakeholders. Performance-based compensation includes PSUs and the Annual Incentive Plan. In 2023, 58% of LP’s CEO’s target compensation and 45% of LP’s other NEOs’ target compensation was performance-based, as shown in the graphs below.

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 42

COMPENSATION OF EXECUTIVE OFFICERS

The following chart summarizes annual total target compensation awarded to each NEO in 2023:

​

(1)

The amounts listed in this column reflect the NEO’s annual base salary that went into effect February 19, 2023.

​

(2)

Includes the value of annual equity awards, expressed as the aggregate value of PSUs (at target) and RSUs, determined using the closing price of LP Common Stock on the date of grant, February 10, 2023, of $65.67 per share.

​

SECTION III: RESULTS OF THE 2023 SAY-ON-PAY VOTE

In 2023, approximately 97% of the votes cast on LP’s say-on-pay proposal approved the compensation of LP’s NEOs as disclosed in last year’s proxy statement. Although the vote was approved on a non-binding advisory basis, the Compensation Committee believes this level of approval indicates that stockholders strongly support LP’s executive compensation programs and policies. The Compensation Committee will consider the results of this year’s say-on-pay proposal, as well as feedback from our stockholders, when making future executive compensation decisions.

The Compensation Committee recognizes that the success of LP’s executive compensation program over the long-term requires a robust framework of compensation governance. As a result, the Compensation Committee regularly reviews external compensation practices and trends and incorporates best practices into LP’s executive compensation program.

 

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COMPENSATION OF EXECUTIVE OFFICERS

SECTION IV: ELEMENTS AND PHILOSOPHY OF EXECUTIVE COMPENSATION

Elements

For 2023, there were no new elements of compensation provided to NEOs. The following table outlines the objectives and purposes of each element of LP’s executive compensation program:

Review of Compensation Peer Group and Survey Data for Comparison Purposes

To ensure that LP’s compensation programs are reasonable and competitive in the marketplace, the Compensation Committee compares LP’s programs to those of its peers. In the third quarter of each year, with the assistance of FW Cook, the Compensation Committee’s independent compensation consultant, the Compensation Committee approves LP’s compensation peer group for purposes of benchmarking LP’s executive officer compensation. For 2023, the

 

LOUISIANA-PACIFIC CORPORATION ● 2024 PROXY STATEMENT | 44

COMPENSATION OF EXECUTIVE OFFICERS

Compensation Committee approved LP’s compensation peer group consisting of the companies identified below, as recommended by FW Cook. The companies in this compensation peer group were selected because of similarities in channels, business cycles, manufacturing expertise and size in terms of revenue and market capitalization, among other financial metrics, thus providing appropriate benchmark data.

The Compensation Committee, with assistance from FW Cook, also reviews size-adjusted general industry survey data to supplement the compensation peer group data.

In 2023, the Compensation Committee relied on both compensation peer group and general industry survey data to more clearly understand the relevant market for executive talent, and to help inform its decision-making and ensure that LP’s executive compensation program supports its recruitment and retention needs. Specifically, the Compensation Committee compared each executive officer’s base salary, total cash compensation opportunities (salary and target cash incentive award), and total direct compensation opportunities (salary, target cash incentive award, and annualized grant-date present value of equity-based awards) for 2023 against comparable information from the compensation peer group and general industry survey data. The Compensation Committee believes using several benchmark data sources improves the quality of comparison because it may be difficult to identify an appropriate match for some executive officer positions within the compensation peer group alone. In addition, the general industry survey data reflects the broader industries with which LP competes for management talent.

Base Salaries

In setting 2023 base salary levels, the Compensation Committee (together with Mr. Southern for the NEOs other than himself) considered market data, individual performance and competitiveness of total direct compensation for each NEO. The 2023 base salary for each NEO, determined in February 2023, is indicated below.

Annual Cash Incentive Plan

LP’s 2023 Annual Incentive Plan metrics included corporate financial performance goals and business unit financial performance goals, as further described below. No amounts would have been payable under the 2023 Annual Incentive Plan unless the threshold level for at least one performance goal was achieved, and awards are paid only if the NEO remains in continuous employment through the payment date, subject to acceleration upon certain events. The Compensation Committee has the authority, in its sole discretion, to reduce or eliminate the payout of annual cash

 

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COMPENSATION OF EXECUTIVE OFFICERS

incentive awards under the 2023 Annual Incentive Plan, despite its determination that performance was at or above the threshold level, if it finds that paying the awards is not in the best interests of LP.

Corporate Financial Performance Goals

The 2023 Annual Incentive Plan performance metrics included an Adjusted EBITDA goal (adjusted for certain market influences related to OSB commodities) and an Economic Profit goal. Adjusted EBITDA is a non-GAAP financial measure and is defined as income attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and excludes stock-based compensation expense, loss on impairment attributed to LP, product-line discontinuance charges, business exit charges, other operating credits and charges, net loss on early debt extinguishment, investment income, pension settlement charges, and other non-operating items. Economic Profit is defined as income from operations, less tax, minus a capital charge (based on average invested capital multiplied by weighted-average cost of capital). As adjusted for certain market influences related to OSB commodities, the Adjusted EBITDA performance goal for the year ended December 31, 2023 had a threshold level of $316 million and a target level of $437 million, with maximum payment achieved at $545 million. LP’s reported 2023 Adjusted EBITDA of $478 million for the year ended December 31, 2023 exceeded the target performance level under the 2023 Annual Incentive Plan. LP’s Economic Profit performance goal for the year ended December 31, 2023 had a threshold level of $(3) million and a target level of $88 million, with maximum payment achieved at $169 million. LP’s 2023 Economic Profit of $109 million for the year ended December 31, 2023 exceeded the target performance level under the 2023 Annual Incentive Plan.

Business Unit Financial Performance Goals

The Compensation Committee established specific business unit financial performance goals for the 2023 Annual Incentive Plan. Following the end of the year, performance is assessed against those goals to determine each NEO’s level of achievement. Each goal is assigned a value based on a variety of factors which can result in the performance component ranging from 0-200% based on the level of attainment.

Weighting of Awards and Payout

The Compensation Committee established weightings for LP’s CEO, Executive Vice President, CFO, Senior Vice President, General Counsel and Corporate Secretary, and Senior Vice President, Manufacturing Services, for 2023 as follows:

 

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COMPENSATION OF EXECUTIVE OFFICERS

The following table summarizes the target payout opportunities for LP’s NEOs and the actual incentive payouts under the 2023 Annual Incentive Plan paid in 2024, reflecting performance in 2023: