Smurfit Westrock chief executive Tony Smurfit’s remuneration package was officially recorded as $21.3 million (€19.5 million) last year, driven by a tweak to the accounting treatment of existing stock options and improved pay plan following the merger of Ireland’s first multinational group with a US peer.
The figure was up from the $6.35 million compensation Mr Smurfit enjoyed in 2023, according to company filings with the US Securities and Exchange Commission (SEC) on Wednesday.
The 2024 total included remuneration before and after Smurfit Kappa merged last July with Atlanta-based cardboard box-making rival Westrock to create one of the largest packaging groups in the world. This saw the group exit the Dublin stock exchange as it adopted Westrock’s existing New York Stock Exchange quotation as its main listing.
“Our compensation committee approved a target long-term incentive opportunity for each of our NEOs (named executive officers), informed by their review of long-term incentive opportunities in our compensation peer group and intended to reflect our US-listed status and expanded geographical and industry footprint, to align pay to performance, and to motivate our executives to execute a significant multiyear integration for long-term success,” Smurfit Westrock said in the filing.
“In determining the target annual long-term incentive opportunity for each of the NEOs, the compensation committee considered each executive’s level of responsibility and experience, the executive’s overall target total direct compensation, and market-competitive compensation aligned with the companies in our compensation peer group.”
The remuneration of Mr Smurfit (61) was comprised of a basic salary of $1.42 million; some $17.1 million of stock awards, including modifications of existing Smurfit Kappa stock awards at the time of the merger, as required by certain SEC rules; a $2.64 million bonus, and $204,750 of other compensation.
“Amounts shown in the stock awards column for 2024 do not reflect the actual value – if any – that has or may be received by the NEOs for the respective awards,” the report said.
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Excluding the modifications, Mr Smurfit’s remuneration amounted to $14.9 million, it said.
Meanwhile, under another remuneration metric known as compensation actually paid (CAP), introduced by the SEC in recent years, Mr Smurfit’s remuneration was put at $27.9 million. This calculation requires companies to also disclose recent changes in the value of current and potential stock holdings.
Shares in Smurfit Westrock have declined almost 15 per cent so far this year as a tentative recovery in demand for paper packaging products last year, following a downturn in 2023, ran out of steam by the end of last year. The sector is also grappling with high fibre costs.
While the Dublin-based group reported last month that its earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 160 per cent to $1.17 billion (€1.13 billion) on the back of the merger, the figure was $40 million behind expectations.
Its forecast that Ebitda would amount to $1.25 billion in the current quarter also disappointed the market.
The management estimates that incoming US trade tariffs that President Donald Trump plans to impose on Mexico and Canada next month could have a significant impact on the group.
The group’s Mexican operations face the largest risk, even if this is indirect. The US imports a large amount of consumer goods and foods from that country, and fear of the impact of tariffs on end products may cause packaging demand to decline.
Smurfit Westrock has one mill in Canada that exports to the US. A 25 per cent tariff could make this business uncompetitive, according to analysts.
