International Paper shareholders gave 45%-support to this proposal topic in 2018. The 45%-support would have been higher if all shareholders had access to independent proxy voting advice.

Any claim that a shareholder right to call a special meeting can be costly – may be moot. When shareholders have a good reason to call a special meeting – our board should be able to take positive responding action to make a special meeting unnecessary. This proposal deserves added attention since the price of our stock fell from $55 to $45 in the year leading up to the due date for this proposal.

Please vote yes:
Special Shareholder Meeting Improvement – Proposal 4”

BoardTable of DirectorsContents

Matters to be Acted upon at the 2019 Annual Meeting

		Our Board of Directors unanimously recommends that you vote AGAINSTthis proposal.

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Directors Standing for Election —– Term Expiring in 20172020

The following 1211 individuals are nominated for election at the 20162019 annual meeting. Each of these nominees is standing for election to serve a term that will expire in 2017.

2020. In addition to biographical information and committee memberships as of the date of the annual meeting for each director nominee, we describe the specific experience, qualifications, attributes or skills that led our Board to conclude such person should serve as a director in light of the Company’s business.

										David J. Bronczek, 61, president and chief executive officer of FedEx Express, the world’s largest express transportation company and a subsidiary of FedEx Corporation, since February 2000. Mr. Bronczek started with FedEx in 1976 and, prior to being named president, served as executive vice president and chief operating officer of FedEx Express. He also serves on the Strategic Management Committee of FedEx Corporation. A native of Cleveland, Ohio, Mr. Bronczek graduated from Kent State University. Mr. Bronczek was appointed by former President George W. Bush to the National Infrastructure Advisory Council. He is a member of the Board of Governors of the International Air Transport Association (IATA); a board member for Airlines for America; a member of the Board of Governors for National Safe Kids Campaign; and a board member for the Smithsonian’s National Air and Space Museum. He is also a member of Memphis Tomorrow. Director since October 9, 2006.
											William J. Burns 59, president of the Carnegie Endowment for International Peace, the oldest international affairs think tank in the United States, since February 2015. He served in the U.S. Department of State as Deputy Secretary of State from July 2011 to November 2014, as Under Secretary for Political Affairs from 2008 to July 2011,

	Independent Age:62 Director since:2015	Committees ●Governance ●Public Policy and as Ambassador to Russia from 2005 to 2008, among many other posts during his 33 years in the Foreign Service. He earned a bachelor’s degree in history from LaSalle University and a master’s degree and doctorate in international relations from Oxford University, where he studied as a Marshall Scholar. He speaks Russian, Arabic and French. Director since February 11, 2015.Environment Key Skills & Experience

Biography
President of the Carnegie Endowment for International Peace, the oldest international affairs think tank in the United States, since February 2015. He served in the U.S. Department of State as Deputy Secretary of State from July 2011 to November 2014, as Under Secretary for Political Affairs from 2008 to July 2011, and as Ambassador to Russia from 2005 to 2008, among many other posts during his 33 years in the Foreign Service.

Board Qualifications
Ambassador Burns’s service as Deputy Secretary of State in the U.S. State Department, Under Secretary for Political Affairs and Ambassador to Russia, as well as numerous other posts during his 33 years in the Foreign Service, brings a unique and valuable perspective to the Board. His extensive public policy experience, both domestic and international, is valuable particularly in considering a broad range of strategic and tactical business matters. His current position as president of the Carnegie Endowment for International Peace, the oldest international affairs think tank, further strengthens his international management and public policy expertise.

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Board of Directors

									Ahmet C. Dorduncu, 62, chief executive officer of Akkök Group, a financial and industrial conglomerate located in Turkey, since January 2013. Mr. Dorduncu served as chief executive officer of Sabanci Holding, another financial and industrial conglomerate located in Turkey, from 2005 to 2010. He also served from 2006 to 2010 as chairman of the board of Olmuksa, then an industrial packaging business joint venture between Sabanci Holding and International Paper. Sabanci Holding is the parent company of the Sabanci Group, a leading Turkish financial and industrial company. Director since March 6, 2011.
										Ilene S. Gordon, 62, chairman, president and chief executive officer of Ingredion Incorporated (formerly Corn Products International, Inc.), a publicly traded global ingredient solutions company, since May 2009. Ms. Gordon is also a member of the board of directors of Ingredion Incorporated and World Business Chicago, a not-for-profit economic development organization. Ms. Gordon previously served as president and chief executive officer of Rio Tinto’s Alcan Packaging, a multinational company engaged in the production of flexible and specialty packaging, from 2007 until 2009, and in various senior executive roles at Alcan Packaging and its affiliate and predecessor companies from 1999 until 2007. Prior to 1999, Ms. Gordon was employed for 17 years with Tenneco Inc., a conglomerate, in a variety of management positions, including vice president and general manager leading its folding carton business. Additionally, during the past five years, Ms. Gordon served on the board of directors of Arthur J. Gallagher & Co., a publicly traded international insurance brokerage and risk management business. Director since October 1, 2012.

										Jay L. Johnson, 69, retired as chairman and chief executive officer of General Dynamics Corporation, a publicly traded manufacturer of worldwide defense, aerospace, and other technology products, in December 2012. He served as its chairman from May 2010 and as its chief executive officer from July 2009. He served on its board of directors from 2003 to December 2012. From 2000 to 2008, he served in various senior executive roles at Dominion Resources Inc., a publicly traded energy company, including as chief executive officer of Dominion Virginia Power. Prior to 2000, he had a distinguished 32-year career in the U.S. Navy. He retired as an admiral in July 2000, after serving as chief of naval operations and a member of the Joint Chiefs of Staff since 1996. He is a director of the USAA, the U.S. Naval Academy Foundation, and The Peregrine Fund. Director since October 1, 2013.
Christopher M. Connor

Independent Age:63 Director since:2017

Committees ●Management Development and Compensation (Chair – Starting May 1) ●Audit and Finance Key Skills & Experience

Stacey J. Mobley, 70, retired in June 2008 as senior vice president, chief administrative officer and general counsel of DuPont, a global science company, and a member of DuPont’s office of the chief executive. Mr. Mobley was with DuPont for 35 years and had senior management responsibility for legal and governmental affairs. From November 2008 until June 2015, Mr. Mobley served as senior counsel, Dickstein Shapiro LLP, a multi-service law firm. He is a director of Nuclear Electric Insurance Ltd. and HP Inc. (formerly Hewlett-Packard Company), and serves as chairman of the board of trustees of Howard University. He previously served as a director of Hewitt Associates Inc. (through October 2010) and Wilmington Trust Company (through April 2010). Director since July 7, 2008.

Joan E. Spero, 71, an adjunct senior research scholar at Columbia University’s School of International and Public Affairs since November 2010. Ms. Spero is also a member of the board of directors of Citigroup and International Business Machines Corporation. Ms. Spero previously served as Undersecretary of State for Economic, Business and Agricultural Affairs of the U.S. Department of State from 1993 until 1996, and as Ambassador to the United Nations for Economic and Social Affairs of the U.S. Department of State from 1980 until 1981. Ms. Spero held various leadership positions at American Express Company from 1981 until 1993, served as president of the Doris Duke Charitable Foundation from 1997 to 2008, and was a visiting scholar at the Foundation Center from 2009 until 2010. Additionally, during the past five years, Ms. Spero served on the board of directors of ING Groep N.V. Ms. Spero is a trustee of the International Center for Transitional Justice and the Wisconsin Alumni Research Foundation, and a trustee (emeritus) of Columbia University, Amherst College, the Brookings Institution, and the Council on Foreign Relations. Director since June 10, 2011.

Mark S. Sutton, 54, chairman (since January 1, 2015) & chief executive officer (since November 1, 2014) of International Paper. Mr. Sutton previously served as president & chief operating officer from June 1, 2014, to October 1, 2014, senior vice president – industrial packaging from November 2011, to May 31, 2014, senior vice president – printing and communications papers of the Americas from 2010 until 2011, senior vice president – supply chain from 2008 to 2009, vice president – supply chain from 2007 until 2008, and vice president – strategic planning from 2005 until 2007. Mr. Sutton joined International Paper in 1984. Mr. Sutton serves on the board of directors of Memphis Tomorrow and board of trustees for the New Memphis Institute. Director since June 1, 2014.

Biography
Retired as executive chairman of The Sherwin-Williams Company, a global manufacturer of paint, architectural coatings, industrial finishes and associated supplies, in December 2016. Mr. Connor joined The Sherwin-Williams Company in 1983 and served as its chairman and chief executive officer from 2000 to December 2015. Mr. Connor is chairman of the Rock & Roll Hall of Fame in Cleveland, Ohio, and serves on the boards of directors of Eaton Corporation PLC and Yum! Brands, Inc.

Board Qualifications
Having served as CEO and executive chairman of The Sherwin-Williams Company, Mr. Connor brings significant senior management experience and strong financial expertise to the Board. He understands the various issues facing a large, global manufacturing company, including operational, financial and strategic issues. His technical background and long tenure with The Sherwin-Williams Company bring industrial expertise, which further strengthens our Board.

										John L. Townsend,III, 60, retired managing partner and chief operating officer of Tiger Management, LLC, an investment management business, a position he held from 2010 to 2012. From 2012 to 2015, Mr. Townsend served as senior advisor to Tiger Management, LLC. Mr. Townsend is also a member of the Riverstone Group, a private investment fund. Mr. Townsend was previously employed by Goldman Sachs & Co. from 1987 to 2002 and was a general partner from 1992 to 1999 and a managing director from 1999 to 2002. Mr. Townsend is a director of The Heritage Group, an industrial conglomerate. Additionally, during the past five years, Mr. Townsend served on the board of directors of Belk, Inc., a department store retailer. Director since March 13, 2006.
										William G. Walter, 70, retired chairman of FMC Corporation, an agriculture, specialty and industrial chemical company, a position he held from 2001 to September 2010. Mr. Walter also served as FMC’s president and chief executive officer from 2001 until December 2009. Mr. Walter served as executive vice president of FMC Corporation from 2000 to 2001 and vice president and general manager of FMC’s Specialty Chemicals Group from 1997 to 2000. Mr. Walter is a member of the board of the New York Life Insurance Company. Director since January 1, 2005.
Ahmet C. Dorduncu

	Independent Age:65 Director since:2011	Committees ●Audit and Finance ●Public Policy and Environment Key Skills & Experience

Biography
Chief executive officer of Akkök Group, a financial and industrial conglomerate located in Turkey, since January 2013. Mr. Dorduncu served as chief executive officer of Sabanci Holding, another financial and industrial conglomerate located in Turkey, from 2005 to 2010. He also served from 2006 to 2010 as chairman of the board of Olmuksa, then an industrial packaging business joint venture between Sabanci Holding and International Paper. Sabanci Holding is the parent company of the Sabanci Group, a leading Turkish financial and industrial company.

Board Qualifications
As CEO of Akkök Group and retired chairman and CEO of Sabanci Holding, two leading financial and industrial conglomerates, Mr. Dorduncu brings vast experience in international operations for a non-U.S. manufacturing company. His keen financial literacy also adds to the strength of our Board. His knowledge of regions of key importance to the Company brings even greater perspective to our Board.

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Board of Directors

	Independent Presiding Director Age:65 Director since:2012	Committees ●Governance (Chair) ●Management Development and Compensation Key Skills & Experience

Biography
Retired executive chairman of Ingredion Incorporated (formerly Corn Products International, Inc.), a publicly traded global ingredient solutions company, from January 1, 2018 until July 31, 2018. Ms. Gordon served as chairman, president and chief executive officer of Ingredion from May 2009 through December 2017. Ms. Gordon is also a member of the board of trustees of MIT (known as the Corporation) and the Conference Board. Ms. Gordon previously served as president and chief executive officer of Rio Tinto’s Alcan Packaging, a multinational company engaged in the production of flexible and specialty packaging, from 2007 until 2009, and in various senior executive roles at Alcan Packaging and its affiliate and predecessor companies from 1999 until 2007. Prior to 1999, Ms. Gordon was employed for 17 years with Tenneco Inc., a conglomerate, in a variety of management positions, including vice president and general manager leading its folding carton business. Ms. Gordon serves on the board of directors of Lockheed Martin Corporation, a publicly traded global security and aerospace company.

Board Qualifications
As the former chairman, CEO and president of Ingredion Incorporated, Ms. Gordon brings senior management expertise and leadership capabilities, as well as broad understanding of the operational, financial and strategic issues facing public companies. Her previous experience at Rio Tinto’s Alcan Packaging includes manufacturing, supply chain and marketing. She has experience with operations overseas, including South America, Asia Pacific and Europe. Ms. Gordon also brings strong financial expertise to our Board.

Anders Gustafsson

	Independent Age:58 Director since:2019	Committees ●Audit and Finance ●Public Policy and Environment Key Skills & Experience

Biography
Chief executive officer of Zebra Technologies Corporation, a global leader in innovating at the edge of the enterprise, designing and marketing specialty printers, mobile computing, data capture, radio frequency identification products and real-time locating systems, since September 2007. Mr. Gustafsson served as chief executive officer of Spirent Communications plc, a publicly traded telecommunications company, from 2004 to 2007. Prior to Spirent, Mr. Gustafsson was a senior executive vice president, global business operations for Tellabs, Inc. Mr. Gustafsson serves as a trustee of the Shedd Aquarium. Mr. Gustafsson also serves on the boards of Zebra Technologies and Dycom Industries, a leading provider of specialty contracting services throughout the U.S. and Canada.

Board Qualifications
As CEO of Zebra Technologies Corporation, former CEO of Spirent Communications plc and a former senior executive at several different communications networking companies, Mr. Gustafsson brings significant international business experience and strong financial expertise to the Board. He will provide a unique and valuable technology perspective, and his service on other public company boards further broadens his range of knowledge and allows him to draw on various perspectives and viewpoints.

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	Independent Age:57 Director since:2017	Committees ●Audit and Finance ●Management Development and Compensation (Starting May 1) Key Skills & Experience

Biography
Served as chairman, president and chief executive officer of CH2M HILL Companies, Ltd., a Fortune 500 engineering and consulting firm focused on delivering infrastructure, energy, environmental and industrial solutions for clients and communities around the world, until December 2017, when the firm was acquired by Jacobs Engineering. Prior to becoming chairman in September 2014 and president and chief executive officer in January 2014, Ms. Hinman served as president of CH2M’s International Division from 2011 until 2014, and she served on CH2M’s board of directors from 2008 through 2017. She recently served on the Executive Committee of the Business Roundtable, chairing its Infrastructure Committee, and was a member of the Business Council. Ms. Hinman also serves on the board of directors of Dow Chemical Company (as of April 2019) and the board of directors of Catalyst, a leading nonprofit organization accelerating progress for women through workplace inclusion.

Board Qualifications
Having served as chairman, president, and chief executive officer of CH2M HILL Companies, Ms. Hinman brings senior management and leadership capabilities to the Board, as well as particular understanding of global manufacturing companies. Because of her experience in a global engineering consulting business, she has unique knowledge of environmental and sustainability issues globally. Ms. Hinman, in her previous roles at CH2M HILL, also brings international operations and strategic planning expertise to our Board.

	Independent Age:52 Director since:2017	Committees ●Governance ●Public Policy and Environment Key Skills & Experience

Biography
Executive vice president and president of international operations, commercial development, genetics and PHARMAQ at Zoetis Inc., a NYSE-listed global leader in the discovery, development, manufacture and commercialization of animal health medicines and vaccines that was spun off by Pfizer in 2013. Prior to being named to his current role in May 2015, Mr. Lewis served as president of U.S. operations at Zoetis from October 2012 to May 2015 and at Pfizer Animal Health from 2007 to October 2012. He joined Pfizer in 1988, and held positions of increasing responsibility across various commercial operations dedicated to human health prior to joining the animal health organization. He formerly served as chairman of the board for the Animal Health Institute (AHI), an industry trade association in the U.S., and as treasurer for the International Federation for Animal Health (IFAH), the industry trade association in Europe.

Board Qualifications
As executive vice president and president of international operations, commercial development, genetics and PHARMAQ at Zoetis, Inc., Mr. Lewis brings critical business insight to a large, diversified company with global operations. He brings experience in international operations for a U.S. multinational company manufacturing globally. Mr. Lewis’s knowledge and strategic planning expertise, as well as knowledge of regions of key importance to the Company, bring even greater perspective to our Board.

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Board of Directors

	Independent Age:67 Director since:2017	Committees ●Public Policy and Environment (Chair) ●Governance Key Skills & Experience

Biography
Ambassador-at-Large at the Smithsonian National Air and Space Museum, where she served as The Charles A. Lindbergh Fellow of Aerospace History from March 2017 through August 2017. Dr. Sullivan is also a Senior Fellow at the Potomac Institute for Policy Studies. Dr. Sullivan served in several roles in the U.S. Department of Commerce and the National Oceanic and Atmospheric Administration (NOAA) between May 2011 and January 2017, including as Under Secretary of Commerce for Oceans & Atmosphere and NOAA Administrator from March 2014 until January 2017. She served as a Director for Ohio State University’s Battelle Center for Mathematics and Science Education Policy from 2006 through 2011. Between 1996 and 2005, Dr. Sullivan served as President and CEO of the Center of Science and Industry (COSI). Between 1978 and 1993, Dr. Sullivan was a Mission Specialist for NASA. She is a veteran of three Shuttle missions with over 500 hours in space and she is the first American woman to walk in space. Dr. Sullivan served on the boards of directors of several public companies between 1997 and 2011. She is a member of the National Academy of Engineering, the American Academy of Arts and Sciences and the board of directors of Accenture Federal Services.

Board Qualifications
Dr. Sullivan’s service at NOAA brings a valuable perspective on current issues in sustainability, which is a critical issue to the Company. As a former NASA space shuttle astronaut, she also brings a strong technical background, leadership capabilities, and strategic planning experience. Dr. Sullivan’s service on other public company boards gives her experience and oversight of natural resource conservation and production as well as a broad range of strategic and tactical business matters. She also brings finance and budgeting experience having served as president and chief executive officer of COSI, as well as her service on a public company’s audit and finance committee.

	Chairman & CEO Age:57 Director since:2014	Key Skills & Experience

Biography
Chairman (since January 1, 2015) and Chief Executive Officer (since November 1, 2014). Mr. Sutton previously served as President & Chief Operating Officer from June 1, 2014 to October 31, 2014, Senior Vice President – Industrial Packaging from November 2011 to May 31, 2014, Senior Vice President – Printing and Communications Papers of the Americas from 2010 until 2011, Senior Vice President – Supply Chain from 2008 to 2009, Vice President – Supply Chain from 2007 until 2008, and Vice President – Strategic Planning from 2005 until 2007. Mr. Sutton joined International Paper in 1984. Mr. Sutton serves on the board of directors for The Kroger Company. He is a member of The Business Council, serves on the American Forest & Paper Association board of directors, the Business Roundtable board of directors, and the international advisory board of the Moscow School of Management – Skolkovo. He was appointed chairman of the U.S. Russian Business Council. He also serves on the board of directors of Memphis Tomorrow and the board of governors for New Memphis Institute.

Board Qualifications
Mr. Sutton has been with International Paper his entire 30 plus-year career and served in various senior leadership roles, including President and Chief Operating Officer and Senior Vice President – Industrial Packaging, the Company’s largest business. He has also served as the senior leader of Printing and Communications Papers, supply chain, corporate strategic planning, as well as leading packaging operations in Europe, Middle East and Africa. As a result, he brings deep experience and institutional knowledge to the Board and management in his roles as Chairman and CEO.

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Board of Directors

	Independent Age:64 Director since:2007	Committees ●Governance ●Management Development and chief executive officer of Phelps Dodge Corporation, an international mining company, upon its merger with Freeport-McMoRan Inc. in March 2007. Mr. Whisler served as chairman and chief executive officer of Phelps Dodge Corporation fromCompensation (Chair – until May 2000 until March 2007, and served on the board of Phelps Dodge Corporation from 1995 through March 2007. Mr. Whisler is a director of CSX Corporation and the Brunswick Corporation. He is also a director of the C.M. Russell Museum. Director since December 11, 2007.1) Key Skills & Experience

Biography
Retired as chairman and chief executive officer of Phelps Dodge Corporation, an international mining company, upon its merger with Freeport-McMoRan Inc. in March 2007. Mr. Whisler served as chairman and chief executive officer of Phelps Dodge Corporation from May 2000 until March 2007, and served on the board of Phelps Dodge Corporation from 1995 through March 2007. Mr. Whisler is a director of CSX Corporation and the Brunswick Corporation. He is also a director of the C.M. Russell Museum.

Board Qualifications
Mr. Whisler served as chairman and CEO of Phelps Dodge Corporation, a large, publicly traded, manufacturing company with international operations, prior to its acquisition in March 2007. He also served as general counsel of Phelps Dodge and, as a result, has a deep understanding of the governance, compliance and regulatory issues facing public companies. His service on other public company boards further augments his range of knowledge and allows him to draw on various perspectives and viewpoints.

	Independent Age:57 Director since:2014	Committees ●Audit and Finance (Chair) ●Management Development and Compensation Key Skills & Experience

Information About Corporate GovernanceBiography
Executive vice president and chief financial officer of Archer-Daniels-Midland Company (“ADM”), with responsibility for strategic oversight of ADM’s business in Asia. ADM is a publicly traded company and one of the largest agricultural processers and food ingredients companies in the world, and Mr. Young has been its chief financial officer since December 2010. Prior to joining ADM, he was employed on four continents at General Motors Company (“GM”), a publicly traded company and producer of vehicles throughout the world, from 1986 to 2010. At GM and its affiliates, he served in various senior executive roles, including as its president of the Mercosur Region from 2004 to 2007, its chief financial officer from 2008 to 2009 and its vice president, International Operations, based in China, in 2010. He currently serves on the boards of the U.S. China Business Council and the American Cancer Society Illinois Division. He also serves as board member of Wilmar International, a Singapore-listed global agricultural processor and food ingredients company.

Board Qualifications
As executive vice president and chief financial officer of ADM, a large, publicly traded company, Mr. Young brings strong financial expertise and strategic acumen to the Board. In addition to his experience at ADM, he also served in various executive roles at General Motors Company for over 20 years, and as a result, has a deep knowledge of global manufacturing operations.

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Information About Corporate Governance

Director Qualifications and Experience

Director Qualification Criteria and Experience

Our Board has adoptedDirector Qualification Criteria and Independence Standards, which it uses to evaluate incumbent directors being considered for re-election at each annual meeting, as well as to evaluate new director candidates. The Governance Committee of our Board is responsible for evaluating each director candidate, and for recommending qualified director nominees for election to the Board. We seek candidates with ample experience and a proven record of professional success, leadership and the highest level of personal and professional ethics, integrity and values. The Governance Committee also considers whether each candidate demonstrates the following:

●	Commitment to the Company’s mission and purpose, and loyalty to the interests of the Company and its shareowners;
●	Ability to exercise objectivity and independence in making informed business decisions;
●	Willingness and commitment to devote the extensive time necessary to fulfill his/her duties;
●	Ability to communicate effectively and collaboratively with other Board members to contribute effectively to the diversity of perspectives that enhances Board and Committee deliberations and decision-making; and
●	Skills, knowledge and expertise relevant to the Company’s business.

Commitment to the Company’s mission and purpose, and loyalty to the interests of the Company and its shareholders;

Ability to exercise objectivity and independence in making informed business decisions;

Willingness and commitment to devote the extensive time necessary to fulfill his/her duties;

Ability to communicate effectively and collaboratively with other Board members to contribute effectively to the diversity of perspectives that enhances Board and Committee deliberations and decision-making; and

Skills, knowledge and expertise relevant to the Company’s business.

Recommendations for Director Nomination ProceduresCandidates

Shareowners may submit recommendations for director candidates to the Governance Committee by writing to the Corporate Secretary. The candidates should meet the director qualifications criteria described above. The Governance Committee applies the same criteria in evaluating candidates recommended by shareowners as those from other sources. If a shareowner would like to otherwise nominate a director candidate, the shareowner must follow the procedures set forth in our By-Laws, including the deadline to make such nominations. See “Communicating with the Board” above.above and “Adoption of Proxy Access” below.

Diversity of Our Directors

Our Board and the Governance Committee have assembled a Board comprised of experienced directors who are currently, or have recently been, leaders of major companies and institutions, are independent thinkers and have a diverse range of expertise and skills that they bring to the boardroom. The Board, through its Governance Committee, seeks to have a group of directors with a mix of backgrounds, experiences and tenure that will enhance the quality of its deliberations and decisions, and provide a blend of institutional knowledge and fresh perspective. The criteria considered by the Board and the Governance Committee include a person’s skills, current and previous occupations, other board memberships and professional experiences in the context of the current needs of the Board. The Governance Committee Charter specifically directs the Committee to seek qualified candidates with diverse backgrounds including, but not limited to, such factors as race, gender, and ethnicity. While the Company does not have a formal policy on Board diversity, the Governance Committee actively considers diversity in the recruitment and nomination of directors. The current composition of our Board reflects those efforts and the importance of diversity to the Board. The satisfaction of theseall director qualification and other criteria, qualifications and objectives is

www.internationalpaper.com

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Information About Corporate Governance

implemented and assessed through ongoing consideration of directors and nominees by the Governance Committee and the Board, as well as through the Board’s annual self-evaluation process.

Our Board believes that its membership should include individuals with a diverse background in the broadest sense, and is particularly interested in maintaining a mix of skills and experience that includes the following:

Our Director Qualification Criteria and Independence Standards may be found atwww.internationalpaper.com under the “Company” tab at the top of the page followed by the “Leadership” link and then under the “Governance” link.

Specific Qualifications and ExperienceBoard Composition – Results of Our Directors

We describe below for each director nominee the specific experience, qualifications, attributes or skills that led ourSuccession Planning & Board to conclude that such person should serve as a director of the Company in light of the Company’s business.

Refreshment Efforts

Director		Significant Experience		Rationale
David J. Bronczek11	director nominees; 10 independent Highly qualified directors with a diverse mix of qualifications, skills and experience	5 •new directors added in past 2 years with key areas of expertise with fresh perspectives  Current CEO Of the 5 new directors –•2  International Operations are women and1 •   Environment, Sustainability, Public Policy •  Strategic Planning •  Supply Chain •  Technology •   Marketing is African-American		As President and CEO of FedEx Express, a subsidiary of FedEx Corporation, Mr. Bronczek brings critical business insight to a large, diversified company with international operations. Mr. Bronczek has served in many capacities at FedEx Corporation, beginning his career in operations in 1976. His experience includes serving as senior vice president of Europe, the Middle East and Africa (EMEA), which is a region of strategic importance to International Paper.
William J. Burns		3.8•years  Environment, Sustainability, Public Policy •   International Operations •  Strategic Planning		Ambassador Burns’ service as Deputy Secretary of State in the U.S. State Department, Under Secretaryaverage tenure for Political Affairs and Ambassador to Russia, as well as numerous other posts during his 33 years in the Foreign Service, brings a unique and valuable perspective to the Board. His extensive public policy experience, both domestic and international, is valuable particularly in considering a broad range of strategic and tactical business matters. His current position as President of the Carnegie Endowment for International Peace, the oldest international affairs think tank, further strengthens his international management and public policy expertise.

Director		Significant Experience		Rationale
Ahmet C. Dorduncu		• Current CEO • Manufacturing •  International Operations • Finance, Accounting • Strategic Planning • Environment, Sustainability, Public Policy •  Supply Chain • Technology •  Marketing		As CEO of Akkök Group and retired chairman and CEO of Sabanci Holding, two leading financial and industrial conglomerates, Mr. Dorduncu brings vast experience in international operations for a non-U.S. manufacturing company. He also has financial expertise that adds to the strength of our Board. His knowledge of regions of key importance to the Company brings even greater perspective to our Board.
Ilene S. Gordon		• Current CEO • Manufacturing •  International Operations • Diversity •  Environment, Sustainability, Public Policy • Finance, Accounting • Strategic Planning • Supply Chain •  Technology •  Marketing		As chairman, CEO and president of Ingredion Incorporated (formerly Corn Products International, Inc.), Ms. Gordon brings senior management expertise and leadership capabilities, as well as broad understanding of the operational, financial and strategic issues facing public companies. Her previous experience at Rio Tinto’s Alcan Packaging includes manufacturing, supply chain and marketing. She has experience with operations overseas, including South America, Asia Pacific and Europe. Ms. Gordon also brings strong financial expertise to our Board.
Jay L. Johnson		• Former CEO • Manufacturing •  International Operations • Environment, Sustainability, Public Policy • Finance, Accounting • Strategic Planning •  Technology •  Supply Chain		Having served as chairman and CEO of General Dynamics Corporation and CEO of Dominion Virginia Power, Admiral Johnson is an experienced business leader who brings strong financial expertise and global business acumen to our Board. He also brings strong leadership and management skills as a result of his distinguished 32-year military career. In addition, Admiral Johnson’s prior positions as a public company director provide him with a deep understanding of public company governance.
Stacey J. Mobleynominees		• Manufacturing • Legal •  International Operations • Environment, Sustainability, Public Policy • Diversity • Strategic Planning •  Supply Chain		Having served with DuPont for 35 years, including senior management responsibility for legal and government affairs, Mr. Mobley brings a deep understanding of legal compliance and oversight of a diversified, publicly traded company. Mr. Mobley’s service on other public company boards allows him to bring current insight into governance and other significant issues facing public companies. These experiences give Mr. Mobley a strong background upon which to draw as a member of our Board.
Joan E. Spero		• Environment, Sustainability, Public Policy •  Finance, Accounting • Strategic Planning • Diversity • Marketing		Having served in various positions with the U.S. Department of State, Ms. Spero brings government relations depth and perspective to the Board, which is critical as we work constructively with governments around the world. Ms. Spero also served in leadership positions at American Express and, as a result, brings business insight to a large, diversified company with international operations. Her service on other public company boards gives her experience with corporate governance issues and a broad range of strategic and tactical business matters.

Director		Significant Experience		Rationale
Mark S. Sutton		• Current CEO • Manufacturing •  International Operations • Environment, Sustainability, Public Policy • Finance, Accounting • Strategic Planning •  Supply Chain • Technology •  Marketing		Mr. Sutton has been with International Paper his entire 30+-year career and served in various senior leadership roles, most recently as president and chief operating officer, as well as senior vice president — Industrial Packaging. He has also served as the senior leader of Printing and Communications Papers, supply chain, corporate strategic planning, as well as leading packaging operations in Europe, Middle East and Africa. As a result, Mr. Sutton was instrumental in the transformation of the Company over the last decade. He brings deep experience and institutional knowledge to the Board and management in his roles as chairman and CEO.
John L. Townsend, III		• Finance, Accounting • Strategic Planning		Mr. Townsend brings strong financial acumen to our Board with his recent experience working with private investment funds, as well as his previous experience as general partner and managing director for Goldman Sachs & Co. Mr. Townsend’s financial background, experience with the investment community and knowledge of financial markets make him well qualified to serve as a member of our Board.
William G. Walter		• Former CEO • Manufacturing •  International Operations • Finance, Accounting • Strategic Planning • Technology •  Marketing		Mr. Walter is an experienced business leader, having served from 2001 to 2009 as chairman and CEO of FMC Corporation, a large, publicly traded, manufacturing company with international operations. Mr. Walter continued to serve as FMC’s chairman through September 2010. Mr. Walter brings senior management experience, leadership capabilities, strong financial knowledge and business acumen to our Board.
J. Steven Whisler		• Former CEO • Manufacturing •  International Operations • Environment, Sustainability, Public Policy • Finance, Accounting • Strategic Planning •  Supply Chain		Mr. Whisler served as chairman and CEO of Phelps Dodge Corporation, a large, publicly traded, manufacturing company with international operations, prior to its acquisition in March 2007. He also served as general counsel of Phelps Dodge and, as a result, has a deep understanding of the governance, compliance and regulatory issues facing public companies. His service on other public company boards further augments his range of knowledge and allows him to draw on various perspectives and viewpoints in his role as our Presiding Director.
Ray G. Young		• Current CFO • Finance, Accounting •  International Operations • Diversity •  Manufacturing • Strategic Planning • Supply Chain • Technology		As executive vice president and chief financial officer of Archer Daniels Midland (“ADM”), a large, publicly traded company, Mr. Young brings strong financial expertise and strategic acumen to the Board. In addition to his experience at ADM, he also served in various executive roles at General Motors Company for over twenty years, and as a result, has a deep knowledge of global manufacturing operations.

Board Leadership &and Corporate Governance Practices

Board Leadership Structure

Our Board believes that the Company and its shareowners are best served by having the flexibility to determine the right leadership structure for the Company at any given point in time, taking into consideration the current business environment and shareholder landscape. We currently combine the role of Chairman and CEO and believe this is the most effective leadership structure for the Company at this time. When Mr. Sutton was appointed as CEO in 2014, the Board evaluated whether continuing to combine the role of Chairman and CEO was in the best interests of the Company and the shareowners. The Board concluded that maintaining the combined position of Chairman and CEO is appropriate to further strengthen the Company’s governance

structure by promoting unified leadership and direction for the Company, fostering accountability and allowing for a single, clear focus for management to execute the Company’s strategy and business plans.

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As a counterbalance, we have an independent Presiding Director, J. Steven Whisler,Ilene S. Gordon, whose role and responsibilities provide strong independent leadership in the boardroom. The authority and duties of our independent Presiding Director are set forth in theCorporate Governance Guidelinesand provided below.

Role of the Presiding Director

The Presiding Director is elected each year by the independent directors for a term of not less than one year. Effective January 1, 2018, the independent directors elected Ilene S. Gordon as Presiding Director, rotating that position. J. Steven Whisler had previously served as Presiding Director. The Presiding Director has authority to call meetings of independent directors. HeShe may consult and directly communicate with certain shareowners if requested. The other duties of the Presiding Director include:

Determining a schedule and agenda for regular executive sessions in which independent directors meet without management present, and presiding over these sessions;

Presiding over meetings of the Board in the event the Chairman is not present;

Serving as liaison between the Chairman and independent directors;

Approving agendas of the Board and meeting schedules to assure there is ample discussion time;

Approving information sent to the Board; and

Organizing the process for evaluating the performance of the Chairman and CEO not less than annually in consultation with the Management Development and Compensation Committee.

●	Determining a schedule and agenda for regular executive sessions in which independent directors meet without management present, and presiding over these sessions;
●	Presiding over meetings of the Board in the event the Chairman is not present;
●	Serving as liaison between the Chairman and independent directors;
●	Approving agendas of the Board and meeting schedules to assure there is ample discussion time;
●	Approving information sent to the Board; and
●	Organizing the process for evaluating the performance of the Chairman and CEO not less than annually in consultation with the Management Development and Compensation Committee.

The Board considers its own leadership structure as part of the Company’s succession planning process. The Board will continue to evaluate this structure going forward in light of factors and considerations prevailing at the time to determine whether a combined CEO and Chairman role is in the best interests of the Company and its shareholders.shareowners.

Commitment to Sound Corporate Governance Principles

We believe good corporate governance is critical to achieving business success and serves the best interests of our shareowners. Our Board has adopted ourCorporate Governance Guidelinesthat reflect its commitment to sound governance practices. In addition, each of our Board committees has its own charter to assure that our Board fully discharges its responsibilities to our shareowners. Our Board regularly reviews itsCorporate Governance Guidelinesand committee charters and makes changes from time to time to reflect developments in the law and the corporate governance area. Our Amended and Restated Certificate of Incorporation permits the size of our Board to range from nine to 18 members. Currently, the size of our Board is 1211 members. Our Board maintains four standing committees, as well as an Executive Committee, which is comprised of the Presiding Director and the chairs of each of the standing committees.

Adoption of Proxy Access

On February 9,In 2016, our Board of Directors adopted a proxy access By-Law that permits stockholders owning 3 percent or more of our common stock for at least three years to nominate the greater of two directors or up to 20 percent of the board,Board, and include these nominees in our proxy materials. The number of stockholdersshareowners who may aggregate their shares to meet the ownership threshold is limited to 20. Nominations are subject to the eligibility, procedural and disclosure requirements set forth in the By-Laws.

 
Our By-Laws are available at www.internationalpaper.com, under the “Company” tab at the top of the page followed by the “Leadership” link and then under the “Governance” link. A paper copy is available at no cost by written request to the Corporate Secretary.

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Our Board believes that a shareowner-focused governance model is the right fit for International Paper. The below table highlights our sound corporate governance practices:

Shareholder Rights		✓Annual elections and majority voting for directors, with a director resignation policy ✓Shareholder right to call special meetings ✓Shareholder right to act by written consent ✓Shareholder right to proxy access
Board Independence		✓10 of 11 director nominees are independent ✓Robust independent Presiding Director role ✓Executive sessions without management present at every in-person Board meeting ✓Focus on Board composition and refreshment
Other Governance Practices		✓Robust engagement with our shareowners ✓Strong anti-hedging and anti-pledging stock trading provisions ✓Annual Board, committee and individual director self-evaluations ✓Strong stock ownership requirements

OurCorporate Governance Guidelinesand our Board committee charters are available atwww.internationalpaper.comunder the “Company” tab at the top of the page followed by the “Leadership” link and then under the “Governance” link. A paper copy is available at no cost by written request to the Corporate Secretary at the address on page 514 of this proxy statement.

In each of the areas discussed below, we have embraced sound principles, policies and procedures to ensure that our Board and our management goals are aligned with our shareowners’ interests.

Board of Directors’ Policies and Practices

Annual Board, Committee and CommitteeIndividual Director Self Assessment

In accordance with a procedure established by the Governance Committee, our Board conducts an annual self assessment of its own and its committees’ performance.

●	•The Board is committed to a robust and constructive evaluation process and recognizes this process promotes continuous improvement and overall Board effectiveness.
●	Our Board conducts an annual self assessment of its own and its committees’ performances, in accordance with a procedure established by the Governance Committee.
●	The assessment is based on individualGeneral Counsel conducts interviews with each independent director, conducted byof the General Counsel. directors based on a detailed questionnaire. Topics covered include, among others:

●	Effectiveness of Board and Committee leadership structure;
●	Board and Committee skills, composition, diversity, and succession planning;
●	Effectiveness of each individual director’s performance and contributions to the functioning of the Board;
●	Board culture and dynamics, including the effectiveness of discussion and debate at meetings; and
●	Board and management dynamics, including the quality of management presentations and information provided to the Board.

●	Separately, an assessment of individual Board members is conducted by the Governance Committee and the Chairman of the Board prior to their nomination for election by shareowners, in accordance with theDirector Qualification Criteria and Independence Standards discussed above.

Board, Committee and Annual Meeting Attendance

The Board met 10 times during 2015, with an average attendance rate of 95 percent.

Each director attended 75 percent or more of the aggregate number of meetings of the Board and committees on which he or she served.

●	•The Board met nine times during 2018, with an average attendance rate of 98 percent.
●	Each director attended 75 percent or more of the aggregate number of meetings of the Board and committees on which he or she served.
●	As expected by ourCorporate Governance Guidelines, all those who were directors but oneat the time of the 2018 annual meeting were in attendance at the 2015 annualthat meeting. The director who did not attend was absent due to the death of an immediate family member.

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Executive Sessions of Non-Management and Independent Directors

●	After each regularly scheduled face-to-face meeting and, if needed, after telephonic meetings, non-management and independent directors of our Board meet in executive session, without management present, chaired by the Presiding Director.
●	If any non-management directors are not independent, then the Presiding Director will also chair an executive session of independent directors at least once annually.
●	In 2018, executive sessions were held at every regularly scheduled face-to-face Board meeting and after the January and July telephonic meetings.
●	Independent directors may engage, at the Company’s expense, independent legal, financial, accounting and other advisors as they may deem appropriate, without obtaining management’s approval.

After each regularly scheduled face-to-face meeting and, if needed, after telephonic meetings, non-management and independent directors of our Board meet in executive session without management present, chaired by the Presiding Director.

If non-management directors are not independent, then the Presiding Director will also chair an executive session of independent directors at least once annually.

In 2015, executive sessions were held at every regularly scheduled face-to-face Board meeting.

Independent directors may engage, at the Company’s expense, independent legal, financial, accounting and other advisors as they may deem appropriate, without obtaining management approval.

Orientation and Continuing Education

●	Our new directors participate in a director orientation that includes written materials and presentations by Company employees who are subject-matter experts, as well as meetings with senior management, our independent registered public accounting firm and both the Company’s and the Management Development and Compensation Committee’s compensation consultants.
●	New directors visit several of our facilities and meet with employees.
●	Continuing education occurs at Board and committee meetings, with specific topics of interest covered by management or outside experts.
●	Directors are also offered the opportunity to attend director education programs provided by third parties.
●	From time to time, directors attend meetings of Company officers, and, at each Board meeting, they meet informally and formally with senior leaders of the Company.

Our new directors participate in a director orientation that includes written materials and presentations by Company employees who are subject matter experts, as well as meetings with senior management, our independent registered public accounting firm and both the Company’s and the Management Development and Compensation Committee’s compensation consultants.

New directors visit several of our facilities and meet with employees.

Continuing education occurs at Board and committee meetings, with specific topics of interest covered by management or outside experts.

Directors are also offered the opportunity to attend director education programs provided by third parties. From time to time, directors attend meetings of Company officers, and, at each Board meeting, they meet informally and formally with senior leaders of the Company.

Mandatory Retirement Policies

Our Board has a mandatory retirement policy for non-employee directors, under which a non-employee director is required to retire from our Board effective December 31 of the year in which he or she attains the age of 72.

No director was required to retire under this policy during 2015. Joan E. Spero, who has served on our Board since 2011, will retire under this policy in December 2016.

In addition, we have a mandatory retirement policy for CEOs, under which our CEO is required to retire as CEO effective on the first day after the month in which he or she attains the age of 65.

Resignation Policies

We have two policies relating to director resignation. The first applies when a director has a substantial change in his or her principal occupation, and the second applies in relation to a director who does not receive a majority of shares voted in favor of his or her election. We describe each policy below.

●	¡Our Board has a mandatory retirement policy for non-employee directors, under which a non-employee director is required to retire from our Board effective December 31 of the year in which he or she attains the age of 72. Jay L. Johnson, who had served on our Board since 2013, retired under this policy in December 2018.
●	In addition, we have a mandatory retirement policy for CEOs, under which our CEO is required to retire as CEO effective on the first day after the month in which he or she attains the age of 65.

Resignation Policies

●

We have two policies relating to director resignation. The first applies when a director has a substantial change in his or her principal occupation, and the second applies in relation to a director who does not receive a majority of shares voted in favor of his or her election. We describe each policy below.

●

First, if a director’s principal occupation changes substantially, he or she is required to tender his or her resignation for consideration by the Governance Committee. The Governance Committee then recommends to the Board whether or not to accept the resignation using theDirector Qualification Criteria and Independence Standards.

●

¡

Second, our Amended and Restated Certificate of Incorporation provides for majority voting of directors in non-contested elections. Pursuant to our By-Laws, any director nominee in a non-contested election who fails to receive the requisite majority of votes cast“for” his or her election must tender his or her resignation, and the Board, through its Governance Committee (excluding the nominees in question), will determine whether or not to accept the resignation. resignation at its next regularly scheduled meeting. In case the resignation is not accepted, the Board will disclose the explanation of its decision via a Form 8-K.

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Board Oversight of the Company

Risk Oversight

Risk Oversight

As set forth in the Company’sCorporate Governance Guidelines, the Board exercises oversight of the Company’s strategic, operational and financial matters, as well as compliance and legal risks. The Board is responsible for assuring appropriate alignment of its leadership structure and oversight of management with the interests of shareowners and the communities in which the Company operates. The Board exercises oversight of the Company’s enterprise risk management (ERM) program, which includes strategic, operational and financial matters, as well as compliance and legal risks. Pursuant to delegated authority as permitted by the Company’s By-Laws,Corporate Governance Guidelines,and committee charters, the Board’s four standing committees oversee certain risks, and therisks. The Audit and Finance Committee coordinates the risk oversight role exercised by various committees and management.management, and it receives updates on the risk management processes twice per year. The Company’sCorporate Governance Guidelinesprovide the foundation upon which the Board oversees a working system of principled goal-setting and effective decision-making, with the objective of establishing a vital, agile, and ethical corporate entity that provides value to the shareowners who invest in the Company and to the communities in which it operates.

Code of Conduct

Our Board has adopted a codeCode of conductConduct (the “Code”)that applies to our directors, officers and all employees to ensure we conduct business in a legal and ethical manner. The Code is available atwww.internationalpaper.com, under the“CompanyCompany”” tab at the top of the page, then under“EthicsEthics.”.” A paper copy is available at no cost by written request to the corporate secretary.Corporate Secretary.

Our Global Ethics and Compliance office is located at our global headquarters in Memphis, Tennessee. If an employee, customer, vendor or shareowner has a concern about ethics or business practices of the Company or any of its employees or representatives, he or she may contact the Global Ethics and Compliance office in person, via mail, e-mail, facsimile or telephone. The Code describesTheCodedescribes multiple channels by which employees may report a concern, such as through their managers, a human resources professional, legal counsel or our internal audit department.

Our HelpLine is also available 24 hours a day, seven days a week, to receive calls from anyone wishing to report a concern or complaint, whether anonymous or otherwise.

Our HelpLine contact information can be found atwww.internationalpaper.com, under the“CompanyCompany”” tab at the top of the page, then under“Ethics”andEthics” and “How Can We Help You?HelpLine.”

All HelpLine reports are immediately forwarded to the Global Ethics and Compliance office for further action and for a response to the person reporting, unless he or she has chosen to remain anonymous. A report made through any of our other reporting channels that involves an impropriety relating to our accounting, internal controls or other financial or audit matters is also forwarded immediately to the Global Ethics and Compliance office. That office has responsibility for investigating all such matters, and will report certain of those matters, unfiltered, to the chair of our Audit and Finance Committee in accordance with the procedures established by the Audit and Finance Committee to ensure compliance with the Sarbanes-Oxley Act of 2002.

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Independence of Directors

Director Independence Standards

It is the policy of our Board that a majority of its members be independent from the Company, its management and its independent registered public accounting firm. Based on the Governance Committee’s review of our current directors, our Board has determined each of our current non-employee directors and each of our former non-employee directors who served as a director during 2018 is independent: David J. Bronczek; William J. Burns; Christopher M. Connor; Ahmet C. Dorduncu; Ilene S. Gordon; Anders Gustafsson; Jacqueline C. Hinman; Jay L. Johnson; Stacey J. Mobley; Joan E. Spero;Clinton A. Lewis, Jr.; Kathryn D. Sullivan; John L. Townsend, III; William G. Walter;Townsend; J. Steven Whisler; and Ray G. Young. We have one employee-director, our Chairman, Mr. Sutton, who is not independent. Each standing committee of the Board is comprised entirely of independent directors.

Further, the Governance Committee concluded and recommended to our Board, and our Board determined, each of our current non-employee directors and each of our former non-employees who served as a director during 2018 meets the independence requirements for service on our Audit and Finance Committee, the Management Development and Compensation Committee and the Governance Committee.

Director Independence Determination Process and Standards

Annually, our Board determines the independence of directors based on a review conducted by the Governance Committee and the General Counsel. The Governance Committee and the Board evaluate and determine each director’s independence under theNYSE Listed Company Manual’sindependence standards and the Company’sDirector Qualification Criteria and Independence Standards, which are consistent with, but more rigorous than, the NYSE standards.

Under SEC rules, the Governance Committee is required to analyze and describe any transactions, relationships or arrangements not specifically disclosed as a related party transaction in this proxy statement that were considered in determining our directors’ independence. To facilitate this process, the Governance Committee reviews directors’ responses to our annual Directors’ and Officers’ Questionnaire, which requires disclosure of each director’s and his or her immediate family’s relationships to the Company, as well as any potential conflicts of interest.

In this context, the Governance Committee considered the relationships described below. Based on its analysis of the relationships and our independence standards, the Governance Committee concluded and recommended to our Board that none of these relationships impaired the independence of any current non-employee director including:

Non-profit and charitable organization affiliations of our directors. None of our directors serveor any former non-employee director who served as an executive officer of any organization to which we make charitable contributions.

Service by several of our directors as an executive officer at a company with whom we may do business. The Governance Committee determined that the commercial relationships involving routine, arms-length purchases and sales transactions between International Paper and these companies were not material under our independence standards. These standards provide that payments to or payments from the Company to a company for which a director in 2018, including:

●

Non-profit and charitable organization affiliations of our directors. None of our directors serve as an executive officer of any organization to which we make charitable contributions.

●

Service by several of our directors as an executive officer at a company with whom we may do business. The Governance Committee determined that the commercial relationships involving routine, arms-length purchases and sales transactions between International Paper and these companies were not material under our independence standards. These standards provide that payments to or payments from the Company to a company for which a director serves as an executive officer, for property or services that are less than the greater of $750,000 or 1.75 percent of such other company’s consolidated gross revenue, are not considered a material relationship that would impair the director’s independence. We provide additional details about these relationships in the following table.

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Table of $750,000 or 1.75 percent of such other company’s consolidated gross revenues, are not considered a material relationship that would impair the director’s independence. We provide additional details about these relationships in the following table.

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Information About Corporate Governance

Transactions Considered in Analysis of Director Independence

Director		Name of Employer		Business Relationship (including affiliated companies)		Dollar Amount of Routine Sales Transactions (approximate)		Amount exceeds greater of $750,000 or 1.75% of other company’s gross revenue?
David J. Bronczek (through February 2019)		FedEx Corporation (through February 2019)		Routine sales to FedEx		$402,000 in total, representing less than 0.002% of International Paper’s gross revenue in 2018		No
				Routine purchases from FedEx
Director		Name of Employer		Business Relationship (including affiliated companies)		Dollar Amount of Routine Sales Transactions (approximate)		Amount exceeds greater of $750,000 or 1.75% of other company’s gross revenues?
David J. Bronczek		FedEx Express,a subsidiary of FedEx Corporation		Routine sales to FedEx Corp.		$177,4756.3 million in total, representing less than 0.0008%0.01% of International Paper’sFedEx’s gross revenuesrevenue in 20152018		No
				Routine purchases from FedEx Corp.		$8,013,819 in total, representing less than 0.07% of FedEx’s gross revenues in 2015		No
Ilene S. Gordon		Ingredion Incorporated (through July 2018)		Routine sales to Ingredion		$83,577 in total, representing less than 0.0004% of International Paper’s gross revenues in 2015		No
			Routine purchases from Ingredion		$30,050,75246.8 million in total, representing less than 0.51%0.81% of Ingredion’s gross revenuesrevenue in 20152018		No
Ray G. Young G.Young		Archer-Daniels-Midland Company (“ADM”)		Routine sales to ADM		$4,619,2073.39 million in total, representing less than 0.03%0.02% of International Paper’s gross revenuesrevenue in 20152018		No
				Routine purchases from ADM		$53,379,81057.1 million in total, representing less than 0.08%0.09% of ADM’s gross revenuesrevenue in 20152018		No

Board Committees

As described above, in order to fulfill its responsibilities, the Board has delegated certain authority to its committees. The Board has four standing committees and one ad hoc Executive Committee: (i) Audit and Finance; (ii) Governance; (iii) Management Development and Compensation; and (iv) Public Policy and Environment. The Executive Committee meets only if Board action is required and a quorum of the full Board cannot be convened and there is an urgent need to meet.on a timely basis.

Each committee has its own charter, and each charter is reviewed annually by each committee to assure ongoing compliance with applicable law and sound governance practices. The Governance Committee assesses the Executive Committee Charter. Committee charters are available atwww.internationalpaper.comunder the“CompanyCompany”” tab at the top of the page followed by the“LeadershipLeadership”” link and then under the“GovernanceBoard Committees”” link. A paper copy is available at no cost by written request to the Corporate Secretary.

Committee Assignments

Independent Board members are assigned to one or more committees. The Governance Committee recommends any changes in assignments to the entire Board. Committee chairs are rotated periodically, usually every three to five years.

Governance Committee

Current Members Ilene S. Gordon (Chair) William J. Burns Clinton A. Lewis, Jr. Kathryn D. Sullivan J. Steven Whisler All Members are Independent

Meetings Meeting agendas are developed by the Governance Committee chair in consultation with committee members and senior leaders, who regularly attend the meetings. Responsibilities Governance Committee Meetings. Meeting agendas are developed by the Governance Committee chair in consultation with committee members and senior leaders, who regularly attend the meetings. Responsibilities. The Governance Committee is responsible for assuring the Company abides by sound corporate governance principles, including compliance with the Company’s Certificate of Incorporation, By-Laws, andCorporate Governance Guidelines, and reviewing conflicts of interest, including related person transactions under ourRelated Person Transactions Policy and Procedures. The committee also serves as the Board’s nominating committee, responsible for identifying and recommending individuals qualified to become Board members and for evaluating directors being considered for re-election. The committee is also responsible for assuring that shareowner communications, including shareowner proposals, are addressed appropriately by the Board or Company management. The committee also recommends non-employee director compensation, and assists the Board in its annual self assessment.

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Audit and Finance Committee

Current Members Ray G. Young (Chair) Christopher M. Connor Ahmet C. Dorduncu Anders Gustafsson Jacqueline C. Hinman All Members are Independent

Meetings.  Meeting agendas are developed by the Audit and Finance Committee chair in consultation with committee members and senior management, who regularly attend the meetings. TheAt each meeting, the committee holds executive sessions without members of management, and it also meets privately with representatives from our independent registered public accounting firm, and separately with each of the Chief Financial Officer, General Counsel, Vice President of Internal Audit, and Controller. Responsibilities.Responsibilities The Audit and Finance Committee assists our Board in monitoring the integrity of our financial statements and financial reporting procedures, reviewing the independent registered public accounting firm’s qualifications and independence, overseeing the performance of our internal audit function and independent registered public accounting firm, coordinating our compliance with legal and regulatory requirements relating to the use and development of our financial resources, and monitoring the risk of financial fraud involving management and ensuring that controls are in place to prevent, deter and detect fraud by management. Governance Committee Current Members Stacey J. Mobley (Chairman) William J. Burns Jay L. Johnson Joan E. Spero J. Steven Whisler Four Meetings in 2015 Attendance Rate 100 percent All Members are Independent Audit In overseeing the performance of our internal audit function and Finance Committee Current Members William G. Walter (Chairman) Ahmet C. Dorduncu Ilene S. Gordon Jay L. Johnson John L. Townsend, III Ray G. Young 10 Meetings in 2015 Attendance Rate 93 percent All Members are Independent The Company’s Independent Registered Public Accounting Firm The Audit & Finance Committee is responsible forindependent registered public accounting firm, the appointment, compensation, retention and oversight of the independent external audit firm retained to audit the Company’s financial statements. The committee has evaluated the qualifications, performance and independence of Deloitte & Touche LLP and appointed Deloitte & Touche LLP as the Company’s independent external auditor for the fiscal year 2016. Deloitte & Touche LLP has served as International Paper’s independent external auditor continuously since 2002. In order to assure continuing auditor independence, the Audit & Finance Committee periodically considers whether there should be a rotation of the independent external audit firm. Further, in conjunction with the mandated rotation of the audit firm’s lead engagement partner for the period beginning with the 2014 reporting year, the Audit & Finance Committee and its chairperson were directly involved in the selection of Deloitte & Touche LLP’s new lead engagement partner. The members of the Audit & Finance Committee and the Board believe the continued retention of Deloitte & Touche LLP to serve as the Company’s independent external auditor is in the best interests of International Paper and its shareowners. Deloitte & Touche’s reports on the consolidated financial statements for each of the three fiscal years in the period ended December 31, 2015, did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. Independent Auditor Fees The Audit and Finance Committee engaged Deloitte & Touche to perform an annual integrated audit ofdiscusses the Company’s financial statements, which includes an audit of the Company’s internal controls over financial reporting,scope, significant risks and plans for the years ended December 31, 2014 and December 31, 2015. The total fees and expenses paid to Deloitte & Touche areindependent audit as follows:      2014 ($, in thousands)     2015 ($, in thousands)   Audit Fees     16,048        15,146    Audit-Related Fees     3,427        672    Tax Fees     2,862        2,851    All Other Fees     10        185    Total Fees     22,347        18,854    Services Provided bywell as the Independent Auditors All services rendered by Deloitte & Touche are permissible under applicable laws and regulations, and are pre-approved byannual internal audit workplan. Throughout the year, at the Audit and Finance Committee. For a complete copy of International Paper’s “Guidelines of International Paper CompanyCommittee meetings and in private sessions, the Audit and Finance Committee for Pre-Approvaldiscusses issues encountered or any changes in planned audit scopes. These meetings may include key members of Independent Auditor Services,” please write to the Corporate Secretary, or visit us on our Web site,www.internationalpaper.com, underaudit teams, subject matter experts, and key members of the “Company” tab, then the “Governance” management team.

The Company’s Independent Registered Public Accounting Firm

The Audit and Finance Committee is responsible for the appointment, compensation, retention and oversight of the independent external audit firm retained to audit the Company’s financial statements. The committee has evaluated the qualifications, performance and independence of Deloitte & Touche, including discussions regarding PCAOB inspection results, peer reviews and any other internal inspection results and trends in their internal system of quality controls, and appointed Deloitte & Touche as the Company’s independent external auditor for the fiscal year 2019. Deloitte & Touche has served as International Paper’s independent external auditor continuously since 2002. In order to assure continuing auditor independence, the Audit and Finance Committee periodically considers whether there should be a rotation of the independent external audit firm. The members of the Audit and Finance Committee and the Board believe the continued retention of Deloitte & Touche to serve as the Company’s independent external auditor is in the best interests of International Paper and its shareowners.

Deloitte & Touche’s reports on the consolidated financial statements for each of the three fiscal years in the period ended December 31, 2018, which were included in the Company’s 2018 Annual Report on Form 10-K, did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. Representatives of Deloitte & Touche will be present at the 2019 annual meeting to answer questions, and they also will have the opportunity to make a statement if they desire to do so.

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Independent Auditor Fees

The Audit and Finance Committee engaged Deloitte & Touche to perform an annual integrated audit of the Company’s financial statements, which includes an audit of the Company’s internal controls over financial reporting, for the years ended December 31, 2017, and December 31, 2018. The total fees and expenses paid to Deloitte & Touche are as follows:

		2017		2018
		($, in thousands)		($, in thousands)
Audit Fees		16,368		16,027
Audit-Related Fees		1,730		3,667
Tax Fees		3,632		5,536
All Other Fees		172		79
Total Fees		21,902		25,309

Services Provided by the Independent Auditors

All services rendered by Deloitte & Touche are permissible under applicable laws and regulations, and are pre-approved by the Audit and Finance Committee. For a complete copy of International Paper’s “Guidelines of International Paper Company Audit and Finance Committee for Pre-Approval of Independent Auditor Services,” please write to the Corporate Secretary, or visit us on our website,www.internationalpaper.com, under the“Company”tab, then the“Governance”link.

Pursuant to rules adopted by the SEC, the fees paid to Deloitte & Touche for services provided are presented in the table above under the following categories:

1.

1. Audit Fees —Audit Fees– These are fees for professional services performed by Deloitte & Touche for the audit and review of our annual financial statements that are normally provided in connection with statutory and regulatory filings or engagements, comfort letters, consents and other services related to SEC matters. Audit fees in both years include amounts related to the audit of the effectiveness of internal controls over financial reporting. 2. Audit-Related Fees — These are fees for assurance and related services performed by Deloitte & Touche that are reasonably related to the performance of the audit or review of our financial statements. This includes employee benefit and compensation plan audits, accounting consultations on divestitures and acquisitions, attestations by Deloitte & Touche that are not required by statute or regulation, 2. Audit-Related Fees– These are fees for assurance and related services performed by Deloitte & Touche that are reasonably related to the performance of the audit or review of our financial statements. This includes employee benefit and compensation plan audits, accounting consultations on divestitures and acquisitions, attestations by Deloitte & Touche that are not required by statute or regulation, consulting on financial accounting and reporting standards, and consultations on internal controls and quality assurance audit procedures related to new or changed systems or work processes. 3. Tax Fees– These are fees for professional services performed by Deloitte & Touche with respect to tax compliance, tax advice and tax planning. This includes consultations on preparation of original and amended tax returns for the Company and its consolidated subsidiaries, refund claims, payment planning, and tax audit assistance. Deloitte & Touche has not provided any services related to tax shelter transactions, nor has Deloitte & Touche provided any services under contingent fee arrangements. 4. All Other Fees– These are fees for other permissible work performed by Deloitte & Touche that do not meet the above category descriptions. The services relate to various consultations that are permissible under applicable laws and regulations, which are primarily related to engagements to provide advice, observations, and recommendations regarding operations, infrastructure and distribution to be considered by the Company. 36 2019 Proxy Statement Table of Contents consulting on financial accounting and reporting standards, and consultations on internal controls and quality assurance audit procedures related to new or changed systems or work processes. 3. Tax Fees —Information About Corporate Governance These are fees for professional services performed by Deloitte & Touche with respect to tax compliance, tax advice and tax planning. This includes consultations on preparation of original and amended tax returns for the Company and its consolidated subsidiaries, refund claims, payment planning, and tax audit assistance. Deloitte & Touche has not provided any services related to tax shelter transactions, nor has Deloitte & Touche provided any services under contingent fee arrangements. 4. All Other Fees — These are fees for other permissible work performed by Deloitte & Touche that do not meet the above category descriptions. The services relate to various consultations that are permissible under applicable laws and regulations, which are primarily related to engagements to provide advice, observations, and recommendations regarding operations, infrastructure and distribution to be considered by the Company. Audit and Finance Committee Report The following is the report of the Audit and Finance Committee with respect to the Company’s audited financial statements for the fiscal year ended December 31, 2015. The Audit and Finance Committee assists the Board of Directors in its oversight of the Company’s financial reporting process and implementation and maintenance of effective controls to prevent, deter and detect fraud by management. The Audit and Finance Committee’s responsibilities are more fully described in its charter, which is accessible on the Company’s Web site atwww.internationalpaper.com under the “Company” tab at the top of the page and then under the “Leadership” link and the “Board Committees” section. Paper copies of the Audit and Finance Committee charter may be obtained, without cost, by written request to Ms. Sharon R. Ryan, Corporate Secretary, International Paper Company, 6400 Poplar Avenue, Memphis, TN 38197. In fulfilling its oversight responsibilities, the Audit and Finance Committee has reviewed and discussed the Company’s annual audited and quarterly consolidated financial statements for the 2015 fiscal year with management and Deloitte & Touche LLP (“Deloitte & Touche”), the Company’s independent registered public accounting firm. The Audit and Finance Committee has discussed with Deloitte & Touche the matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board (United States). The Audit and Finance Committee has received the written disclosures and the letter from Deloitte & Touche required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with Deloitte & Touche its independence from the Company and its management. The Audit and Finance Committee has also considered whether the provision of non-audit services by Deloitte & Touche is compatible with maintaining the firm’s independence. The Board has determined that the following members of the Audit and Finance Committee are audit committee financial experts as defined in Item 407(d)(5)(ii) of Regulation S-K: William G. Walter, Ilene S. Gordon, Jay L. Johnson, John L. Townsend, III, and Finance Committee with respect to the Company’s audited financial statements for the fiscal year ended December 31, 2018. The Audit and Finance Committee assists the Board of Directors in its oversight of the Company’s financial reporting process and implementation and maintenance of effective controls to prevent, deter and detect fraud by management. The Audit and Finance Committee’s responsibilities are more fully described in its charter, which is accessible on the Company’s website atwww.internationalpaper.comunder the “Company” tab at the top of the page and then under the “Leadership” link and the “Board Committees” section. Paper copies of the Audit and Finance Committee charter may be obtained, without cost, by written request to Ms. Sharon R. Ryan, Corporate Secretary, International Paper Company, 6400 Poplar Avenue, Memphis, TN 38197. In fulfilling its oversight responsibilities, the Audit and Finance Committee has reviewed and discussed the Company’s annual audited and quarterly consolidated financial statements for the 2018 fiscal year with management and Deloitte & Touche LLP (“Deloitte & Touche”), the Company’s independent registered public accounting firm, including discussions related to significant accounting policies and critical accounting estimates and their related disclosures. The Audit and Finance Committee has discussed with Deloitte & Touche the matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board (United States). The Audit and Finance Committee has received the written disclosures and the letter from Deloitte & Touche required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with Deloitte & Touche its independence from the Company and its management. The Audit and Finance Committee has also considered whether the provision of non-audit services by Deloitte & Touche is compatible with maintaining the firm’s independence. The Board has determined that the following members of the Audit and Finance Committee are audit committee financial experts as defined in Item 407(d)(5)(ii) of Regulation S-K: Christopher M. Connor, Anders Gustafsson (joined committee effective March 1, 2019), Jacqueline C. Hinman and Ray G. Young. The Board has determined each member of the Audit and Finance Committee meets the independence and financial literacy requirements for audit committee members set forth under the listing standards of the NYSE and our independence standards. Based on the review and discussions referred to above, the Audit and Finance Committee recommended to the Company’s Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The Audit and Finance Committee has approved and selected, and the Board of Directors has ratified, Deloitte & Touche as the Company’s independent registered public accounting firm for 2019. Audit and Finance Committee Ray G. Young. The Board has determined each member of the Audit and Finance Committee meets the independence and financial literacy requirements for audit committee members set forth under the listing standards of the NYSE and our independence standards.Young, Chair Based on the review and discussions referred to above, the Audit and Finance Committee recommended to the Company’s Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.Ahmet C. Dorduncu The Audit and Finance Committee has approved and selected, and the Board of Directors has ratified, Deloitte & Touche as the Company’s independent registered public accounting firm for 2016. Audit and Finance Committee Christopher M. Connor Jacqueline C. Hinman www.internationalpaper.com 37 Table of Contents William G. Walter, Chairman Information About Corporate Governance                     Jay L. Johnson Ahmet C. Dorduncu John L. Townsend, III Ilene S. Gordon Ray G. Young Public Policy and Environment Committee Current Members (as of May 1, 2019) David J. Bronczek (Chairman) Kathryn D. Sullivan (Chair) William J. Burns Ahmet. Ahmet C. Dorduncu Anders Gustafsson Clinton A. Lewis, Jr. Stacey J. Mobley Joan E. Spero Ray G. Young Six Meetings in 2015 Attendance Rate 94 percent All Members are Independent Executive CommitteeMeetings Current Members Mark S. Sutton (Chairman) David J. Bronczek Stacey J. Mobley William G. Walter J. Steven Whisler No Meetings in 2015 Management Development and Compensation Committee Current Members J. Steven Whisler (Chairman) David J. Bronczek Ilene S. Gordon John L. Townsend, III William G. Walter Six Meetings in 2015 Attendance Rate 97 percent All Members are Independent Public Policy and Environment Committee Meetings. Meeting agendas are developed by the Public Policy and Environment Committee chair in consultation with committee members and senior leaders, who regularly attend the meetings. Responsibilities. The Public Policy and Environment Committee has overall responsibility for the review of contemporary and emerging public policy issues, as well as technology issues pertaining to the Company. The committee reviews the Company’s health and safety policies, as well as environmental policies, including the Office of Sustainability policies, to ensure continuous improvement and compliance. The committee also reviews the Company’s policies and procedures for complying with certain of its legal and regulatory obligations, including our code of conduct,Code, and charitable and political contributions. Executive Committee Current Members (as of May 1, 2019) Mark S. Sutton (Chair) Christopher M. Connor Ilene S. Gordon Kathryn D. Sullivan Ray G. Young Executive Committee The Executive Committee may act for our Board, to the extent permitted by law, if Board action is required and a quorum of our full Board cannot be convened on a timely basis in person or telephonically. The Chairman of our Board, the independent Presiding Director, and the chair of each Board committee are members of the Executive Committee. 38 2019 Proxy Statement Table of Contents Information About Corporate Governance Management Development and Compensation Committee Current Members (as of May 1, 2019) Christopher M. Connor (Chair) Ilene S. Gordon Jacqueline C. Hinman J. Steven Whisler Ray G. Young All Members are Independent Meetings. Meeting agendas are developed by the Management Development and Compensation Committee chair in consultation with committee members and senior leaders, who regularly attend the meetings. An executive session without management present is held at each meeting. The committee’s independent compensation consultant is Frederic W. Cook & Co., Inc. (“FW Cook”). FW Cook regularly attends the committee’s meetings. Responsibilities. The Management Development and Compensation Committee is responsible for overseeing our overall compensation programsprogram and approving the compensation of our senior management (other than the CEO). The committee is responsible for conducting performance evaluations of the Chairman and CEO not less than annually, in accordance with the process organized by the Presiding Director, and recommending compensation of the CEO to the independent directors based on such evaluations. The committee is also responsible for discussing with Company management the required disclosure under Item 407(e)(5) of Regulation S-K, including the Compensation Discussion & Analysis that is prepared as part of this proxy statement, and for recommending that it be included in our proxy statement. The committee is responsible for ensuring we have in place policies and programs for the development of senior leaders and succession planning. The committee acts as the oversight committee with respect to our retirement and benefit plans for senior officers and must approve significant changes to the retirement and benefit plans for our employees. With respect to those plans, the committee may delegate authority for both day-to-day administration and interpretation of the programs, except as it may impact our senior leaders, orincluding the CEO. Role of Independent Consultant. The committee engaged Cook, commencing in mid-2011, to serve as its independent, external compensation consultant. The committee has sole authority for retaining Role of Independent Consultant. The Management Development and Compensation Committee engaged FW Cook, commencing in mid-2011, to serve as its independent, external compensation consultant. The committee has sole authority for retaining or terminating FW Cook, as well as approving the terms of engagement, including fees. FW Cook works exclusively for the committee and provides no services to the Company. FW Cook is expected to achieve the following objectives: ● Attend meetings of the Management Development and Compensation Committee as requested; ● Acquire adequate knowledge and understanding of our compensation philosophy and incentive programs; ● Provide advice on the direction and design of our executive and director compensation programs; ● • Provide insight into the general direction of executive compensation withinFortune 250Provide insight into the general direction of executive compensation within Fortune 500 companies; and ● Facilitate open communication between our management and the Management Development and Compensation Committee, assuring both parties are aware and knowledgeable of ongoing issues. www.internationalpaper.com Assessment and Management of Compensation-Related Risk. The committee has39 Table of Contents Information About Corporate Governance Assessment and Management of Compensation-Related Risk.The Committee is committed to completing an annual risk assessment to evaluate the Company’s compensation plans and practices. In 2018, at the committee’s request, FW Cook conducted a risk assessment with the objective of identifying any compensation plans and practices that may encourage employees to take unnecessary or excessive risks that could threaten the Company. No such plans or practices were identified. The results of this 2018 evaluation indicated, and the Committee thus concluded, that there are no significant compensation-related risk areas at the Company and that our compensation plans and programs. In 2015, at the committee’s request, Cook conducted a risk assessment with the objective of identifying any compensation policies and practices that may encourage employees to take unnecessary or excessive risks that could threaten the Company. No such plans or practices were identified. The results of this 2015 evaluation indicated, and the Committee thus concluded, that there are no significant compensation-related risk areas at the Company and that our compensation policies and practices do not encourage unnecessary or excessive risk-taking and do not create risks that are reasonably likely to have a material adverse effect on the Company. Also, based on this evaluation, the committee concluded that the Company’s executive compensation program appropriately aligns compensation with long-term shareowner value creation and avoids short-term rewards for decisions that could pose long-term risks to the Company. These conclusions were based on the following factors: ● Our compensation mix is appropriately balanced and incentive compensation is not overly weighted toward short-term performance at the expense of long-term value creation; ● Our short-term incentive compensation award pool is appropriately capped, thereby limiting payout potential; ● Our long-term incentive compensation is also capped and is based entirely on performance shares, which are less leveraged than stock options and, unlike time-based restricted stock awards, reward both Company performance and stock price; ● Our performance is measured against absolute and relative metrics to ensure quality and sustainability of Company performance; ● We have adopted several programs that serve to mitigate potential risk, including officer stock ownership requirements, clawback policies in our incentive compensation programs, and non-compete and non-solicitation agreements to deter behavior that could be harmful to the Company either during or after employment; and ● The committee maintains strict controls over the Company’s equity granting practices, and our incentive compensation plan prohibits option re-pricing without shareowner approval. Compensation Committee Interlocks and Insider Participation Compensation Committee Interlocks and Insider Participation The members of the Management Development and Compensation Committee during 2018 were Mr. J. Steven Whisler, outgoing Chair (until May 1, 2019), Mr. David J. Bronczek, Mr. Christopher M. Connor, incoming Chair (beginning May 1, 2019), Ms. Ilene S. Gordon, Mr. John L. Townsend, III, and Mr. Ray G. Young. No member of the Management Development and Compensation Committee was, during the fiscal year, an officer or employee of the Company or was formerly an officer of the Company. Please refer to the discussion below related to “Transactions with Related Persons,” for additional information requiring disclosure by us under Item 404 of Regulation S-K under the Exchange Act for members of the Company’s Management Development and Compensation Committee. In addition, no executive officer of the Company served as a member of the compensation committee (or its equivalent) of another entity, or as a director of another entity, one of whose executive officers served on our Management Development and Compensation Committee. No executive officer of the Company served as a member of the compensation committee (or its equivalent) of another entity, one of whose executive officers served as one of our directors. Transactions with Related Persons Transactions Covered.Our Board has adopted a written policy and procedures for review and approval or ratification of transactions involving the Company and “related persons” (directors and executive officers and their immediate family members or shareowners owning 5 percent or greater of our outstanding common stock and their immediate family members). The policy covers any related person transaction that meets the minimum threshold for disclosure in the proxy statement under the SEC’s rules, specifically, any transaction involving us in which: The members of the Management Development and Compensation Committee during 2015 were Mr. J. Steven Whisler, Chairman, Mr. David J. Bronczek, Ms. Ilene S. Gordon, Mr. John L. Townsend, III, and Mr. William G. Walter. No member of the Management Development and Compensation Committee was, during the fiscal year, an officer or employee of the Company or was formerly an officer of the Company. Please refer to the discussion below related to “Transactions with Related Persons,” for additional information requiring disclosure by us under Item 404 of Regulation S-K under the Exchange Act for members of the Company’s Management Development and Compensation Committee. In addition, no executive officer of the Company served as a member of the compensation committee (or its equivalent) of another entity, or as a director of another entity, one of whose executive officers served on our Management Development and Compensation Committee. No executive officer of the Company served as a member of the compensation committee (or its equivalent) of another entity, one of whose executive officers served as one of our directors. Transactions with Related Persons Transactions Covered. Our Board has adopted a written policy and procedures for review and approval or ratification of transactions involving the Company and “related persons” (directors and executive officers and their immediate family members or shareowners owning 5 percent or greater of our outstanding common stock and their immediate family members). The policy covers any related person transaction that meets the minimum threshold for disclosure in the proxy statement under the SEC’s rules (specifically, any transaction involving us in which: (i) the amount involved exceeded $120,000, and (ii) a related person had a direct or indirect material interest). Related Person Transaction Review Procedures. Related person transactions are approved in advance by the Governance Committee whenever possible, or must be ratified as promptly as possible thereafter. We disclose in our proxy statement any transactions that are found to be directly or indirectly material to a related person. Prior to entering into a transaction, a related person must provide the details of the transaction to the General Counsel, including the relationship of the person to the Company, the dollar amount involved, and whether the related person or his or her family member has or will have a direct or indirect interest in the transaction. The General Counsel evaluates the transaction to determine if the Company or the related person has a direct or indirect material interest in the transaction. If so, then the General Counsel notifies the CEO and submits the facts of the transaction to the Governance Committee for its review. The Governance Committee may approve a transaction only if these review procedures have been followed, and the Governance Committee determines that the transaction is not detrimental to the Company and does not violate the Company’sConflict of Interest Policy.interest.

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Our Related Person Transaction procedures are available atwww.internationalpaper.com under the “Company” tab at the top of the page followed by the “Leadership” link and then under the “Governance” link. A paper copy is available at no cost by written request to the Corporate Secretary.

Related Person Transactions. Please see the table on page 20 of this proxy statement under the heading “Transactions Considered in Analysis of Director Independence” for a description of related person transactions during 2015.

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Information About Corporate Governance

Related Person Transaction Review Procedures.Related person transactions are approved in advance by the Governance Committee whenever possible, or must be ratified as promptly as possible thereafter. We disclose in our proxy statement any transactions that are found to be directly or indirectly material to a related person.

Prior to entering into a transaction, a related person must provide the details of the transaction to the General Counsel, including the relationship of the person to the Company, the dollar amount involved, and whether the related person or his or her family member has or will have a direct or indirect interest in the transaction. The General Counsel evaluates the transaction to determine if the Company or the related person has a direct or indirect material interest in the transaction. If so, then the General Counsel notifies the CEO and submits the facts of the transaction to the Governance Committee for its review. The Governance Committee may approve a transaction only if these review procedures have been followed, and the Governance Committee determines that the transaction is not detrimental to the Company and does not violate the Company’sConflict of Interest Policy.

Related Person Transactions.Please see the table under the heading “Transactions Considered in Analysis of Director Independence” for a description of related person transactions during 2018.

Our Related Person Transaction procedures are available at www.internationalpaper.com under the “Company” tab at the top of the page followed by the “Leadership” link and then under the “Governance” link. A paper copy is available at no cost by written request to the Corporate Secretary.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and certain officers, as well as persons who own more than 10 percent of our common stock, to file with the SEC initial reports of beneficial ownership on Form 3, and reports of subsequent changes in beneficial ownership on Forms 4 or 5. Based solely on our review of these forms, and certifications from our executive officers and directors that no other reports were required for such persons, we believe that all directors and officers complied with the filing requirements applicable to them for the fiscal year ended December 31, 2018.

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Section 16(a) of the Exchange Act requires our directors and certain officers, as well as persons who own more than 10 percent of our common stock, to file with the SEC initial reports of beneficial ownership on Form 3, and reports of subsequent changes in beneficial ownership on Forms 4 or 5. Based solely on our review of these forms, and certifications from our executive officers and directors that no other reports were required for such persons, we believe that all directors and officers complied with the filing requirements applicable to them for the fiscal year ended December 31, 2015.

Director Compensation

Compensation Philosophy

Compensation Philosophy

Our compensation program for non-employee directors is guided by the following principles. We believe our director compensation program should:

●	Provide total compensation comprising both cash and equity that targets the median level of compensation paid by our Compensation Comparator Group (“CCG”) listed in the Compensation Discussion & Analysis section of this proxy statement;
●	Align the interests of our directors with the interests of our shareowners;
●	Attract and retain top director talent; and
●	Be flexible to meet the needs of a diverse group of directors. Each element of director compensation discussed below is recommended by the Governance Committee and approved by our Board. Stock Ownership Requirements Our director stock ownership policy requires our directors to hold equity of the Company valued at two times the annual Board retainer, which, through April 30, 2015, is equivalent to 4.9 times the annual cash retainer (and requires ownership of Company stock equivalent to $510,000). We believe this helps align the interests of our directors with the interests of our shareowners. New directors have four years from the date of their election to meet the ownership requirement. As of December 31, 2015, all directors who were required to meet the ownership levels held the requisite amount of equity. Elements of Our Director Compensation Program For the May 2015 – April 2016

Each element of director compensation discussed below is recommended by the Governance Committee and approved by our Board. Mr. Sutton does not receive compensation for his service as a director.

Stock Ownership Requirements

Our director stock ownership policy requires our directors to hold equity of the Company valued at two times the total annual Board retainer, which, through April 30, 2019, is equivalent to 4.9 times the annual cash retainer (and requires ownership of Company stock equivalent to $550,000). We believe this helps align the interests of our directors with the interests of our shareowners. New directors have four years from the date of their election to meet the ownership requirement. As of December 31, 2018, all directors who were required to meet the ownership levels held the requisite amount of equity.

Elements of Our Director Compensation Program

For the May 2018 to April 2019 service year, compensation for our non-employee directors consists of:

●	An annual retainer fee that is a mix of cash and equity;
●	Committee chair fees, a Presiding Director fee, and an Audit and Finance Committee member fee, as applicable; and
●	Life insurance, business travel accident insurance, and liability insurance. We evaluate the reasonableness and appropriateness of the total compensation paid to our directors in comparison to peer companies who comprise our CCG. We target our director compensation at the median of our CCG. Annual Compensation The annual retainer fees for the May 2015 – April 2016 service year are shown in the table below. A director’s annual compensation is $255,000, approximately 41 percent of which is payable in cash and 59 percent of which is payable in equity. A director may elect to convert all or 50 percent of his or her cash retainer fee into shares of restricted stock. In order to encourage director stock ownership, a director who makes this election receives a 20 percent premium in additional shares of restricted stock. Seven of the 11 non-employee directors who served during 2015

On at least a biennial basis, we evaluate the reasonableness and appropriateness of the total compensation paid to our directors in comparison to peer companies who comprise our CCG. We target our director compensation at the median of our CCG.

Annual Compensation

The annual retainer fees for the May 2018 to April 2019 service year are shown in the table below. A director’s annual compensation paid as board fees is $275,000, approximately 41 percent of which is payable in cash and 59 percent of which is payable in equity. A director may elect to convert all or 50 percent of his or her cash retainer fee into shares of restricted stock. In order to encourage director stock ownership, a director who makes this election receives a 20 percent premium in additional shares of restricted stock. Ten of the 12 non-employee directors who served during 2018 elected to receive stock in lieu of all or 50 percent of the cash retainer fee and received the applicable premium. Restrictions on shares awarded to our directors under our current compensation plan lapse one year from the date of grant, and then the shares are freely transferable, subject to our director stock ownership requirement and securities regulations.

Directors may also elect to defer receipt of their equity retainer fee. Directors who make this election receive restricted stock units (“RSUs”) in lieu of restricted stock. RSUs are not transferable until a director’s retirement from the Board, death or disability. The cash value of RSUs is paid in January following retirement, death or disability. Five of the 11 non-employee directors who served during 2015 elected to defer payment of all or a portion of their equity compensation until retirement, death or disability. Elections with regard to form of payment and deferrals are made in December preceding each service year.

We use the closing market price of the Company’s common stock on the day preceding our annual meeting in May to award the equivalent number of shares for the $151,000 equity retainer and restricted stock elected by our directors in lieu of their cash retainer fee. RSUs are settled in cash based on the closing price of the Company’s common stock as of December 31 of the year of the director’s retirement.

Directors earn dividends on their shares of stock and RSUs, which they may elect to receive either as cash or in the form of additional shares of restricted stock or RSUs. Dividends are paid to the director at the time the underlying award is vested or settled.

In addition, each committee chair receives a fee for his or her service in such role. For 2015,

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Director Compensation

Directors may also elect to defer receipt of their equity retainer fee. Directors who make this election receive restricted stock units (“RSUs”) in lieu of restricted stock. RSUs are not transferable until a director’s retirement from the Board, death or disability. The cash value of RSUs is paid in January following retirement, death or disability. Six of the 12 non-employee directors who served during 2018 elected to defer payment of all or a portion of their equity compensation until retirement, death or disability. Elections with regard to form of payment and deferrals are made in December preceding each service year.

We use the closing market price of the Company’s common stock on the day preceding our annual meeting in May to award the equivalent number of shares for the $163,000 equity retainer and restricted stock elected by our directors in lieu of their cash retainer fee. RSUs are settled in cash based on the closing price of the Company’s common stock as of December 31 of the year of the director’s retirement.

Directors earn dividends on their shares of stock and RSUs, which they may elect to receive either as cash or in the form of additional shares of restricted stock or RSUs. Dividends are paid to the director at the time the underlying award is vested or settled.

In addition, each committee chair receives a fee for his or her service in such role. For 2018, Messrs. Bronczek, Mobley, Walter and Whisler and Young and Admiral Johnson each received a committee chair fee. Members of our Audit and Finance Committee also receive an additional fee for their services on this committee. For 2018, Messrs. Connor, Dorduncu, Townsend and Young, Ms. Hinman and Admiral Johnson each received an Audit and Finance Committee member fee. As Presiding Director, Ms. Gordon also received a Presiding Director fee for 2018.

Type of Fee		2018-2019 Fee Amount ($)
Board Fees
Cash Retainer		112,000
Equity Retainer		163,000
Committee Fees
Audit and Finance Committee also receive an additional fee for their services on this committee. For 2015, Messrs. Dorduncu, Townsend and Young, Ms. Gordon and Admiral Johnson each received an Chair		25,000
Audit and Finance Committee member fee. As Member		10,000
Management Development and Compensation Committee Chair		20,000
Governance Committee Chair		20,000
Public Policy and Environment Chair		20,000
Presiding Director Mr. Whisler also received a Presiding Director fee for 2015. Fee 27,500 Type of Fee 2015-2016 Fee Amount ($) Board Fees Cash Retainer 104,000 Equity Retainer 151,000 Committee Fees Audit and Finance Committee Chair 25,000 Audit and Finance Committee Member 10,000 Management Development and Compensation Committee Chair 20,000 Governance Committee Chair 20,000 Public Policy and Environment Chair 20,000 Presiding Director Fee 25,000 Directors’ Charitable Award Program Directors who joined our Board on or before July 1, 2007, are eligible to participate in our charitable award program. Under this program, the Company will make a charitable donation in the aggregate amount of $1 million in the director’s name in 10 equal, annual installments following the director’s death to the eligible colleges or universities selected by the director. This program was closed to new participants effective July 1, 2007. Insurance and Indemnification Contracts We provide life insurance in the amount of $10,500 to each of our non-employee directors, and travel accident insurance in the amount of $500,000 that covers a director if he or she dies or suffers certain injuries while traveling on Company business. We provide liability insurance for our directors, officers and certain other employees at an annual cost of approximately $4 million. The primary underwriters of coverage, which was renewed in 2015 and extends to July 1, 2016,

Insurance and Indemnification Contracts

We provide life insurance in the amount of $10,500 to each of our non-employee directors, and travel accident insurance in the amount of $500,000 that covers a director if he or she dies or suffers certain injuries while traveling on Company business.

We provide liability insurance for our directors, officers and certain other employees at an annual cost of approximately $3 million. The primary underwriters of coverage, which was renewed in 2018 and extends to July 1, 2019, are XL Specialty Insurance Company and ACE American Insurance Company.

Our By-Laws provide for standard indemnification of our directors and officers in accordance with New York law. We also have contractual arrangements with our directors that indemnify them in certain circumstances for costs and liabilities incurred in actions brought against them while acting as our directors.

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Director Compensation

Our Analysis

We believe our director compensation program appropriately compensates our directors for their time and commitment to the Company and is consistent with our compensation philosophy as shown in the following table.

	Our Director Pay Principles		Our 2018 Director Pay Policies and Practices
✓Target compensation at median of CCG		●Maintained mix of cash and equity in line with cross-section of similar companies (CCG)
✓Align the interests of our directors with the interests of our shareowners		●Paid 59 percent of board fees in the form of equity to ensure that directors, like shareowners, have a personal stake in the Company’s financial performance
✓Attract and retain top director talent		●Our Director Pay Principles		Our 2015 Director Pay Policies and Practices
þ        Target compensation at median of CCG		•     Maintained mix of cash and equity in line with cross-section of similar companies (CCG)
þ        Align the interests of our directors with the interests of our shareowners		•     Paid 59 percent of compensation in the form of equity to ensure that directors, like shareowners, have a personal stake in the Company’s financial performance
þ        Attract and retain top director talent		•     Compensated directors competitively, based on a cross-section of similar companies (CCG)
þ        Maintain flexibility to meet the needs of a diverse group of directors		•     Continued to allow directors to choose between cash and equity and to elect to defer their fees until retirement

Non-Employee Director Compensation Table

The following table provides information on 2015 compensation for non-employee directors. This table shows fiscal year 2015 compensation based on a cross-section of similar companies (CCG)

✓Maintain flexibility to meet the SEC’s compensation disclosure requirements, though we pay ourneeds of a diverse group of directors on a May

●Continued to April service year. The amounts in the table below show differences amongallow directors because (i) each director makes an individual election to receive his or herchoose between cash and equity and to elect to defer their fees in cash and/or equity; (ii) certain directors receive committee chair fees, a Presiding Director fee, and/or member fees; and (iii) directors may join our Board on different dates, so their compensation is prorated for the year.

Name of Director		Fees Earned or Paid in Cash ($)(1)				Stock Awards ($)(2)				All Other Compensation ($)(3)				Total ($)
David J. Bronczek			59,576				223,439				18,735				301,750
William J. Burns			-				275,823				-				275,823
Ahmet C. Dorduncu			111,592				151,021				-				262,613
Ilene S. Gordon			-				285,814				-				285,814
Jay L. Johnson			-				285,814				-				285,814
Stacey J. Mobley			119,000				151,021				-				270,021
Joan E. Spero			-				275,823				-				275,823
John L. Townsend, III			110,667				151,021				18,735				280,423
William G. Walter			125,667				151,021				18,735				295,423
J. Steven Whisler			-				320,807				-				320,807
Ray G. Young			-				285,814				-				285,814

until retirement

Non-Employee Director Compensation Table

The following table provides information on 2018 compensation for non-employee directors. This table shows fiscal year 2018 compensation based on the SEC’s compensation disclosure requirements, though we pay our directors on a May to April service year. The amounts in the table below show differences among directors because (i) each director makes an individual election to receive his or her fees in cash and/or equity; (ii) certain directors receive committee chair fees, a Presiding Director fee, and/or member fees; and (iii) directors may join our Board on different dates, so their compensation is prorated for the year.

Name of Director		Fees Earned or Paid in Cash ($)(1)		Stock Awards ($)(2)		Total ($)
David J. Bronczek (retired 2/28/2019)		66,000		240,231		306,231
William J. Burns		—		297,379		297,379
Christopher M. Connor		—		307,399		307,399
Ahmet C. Dorduncu		123,275		162,989		286,264
Ilene S. Gordon		—		324,883		324,883
Jacqueline C. Hinman		61,000		235,220		296,220
Jay L. Johnson (retired 12/31/2018)		3,070		327,388		330,458
Clinton A. Lewis, Jr.		—		297,379		297,379
Kathryn D. Sullivan		56,000		230,210		286,210
John L. Townsend, III (retired 4/30/2018)		44,111		—		44,111
J. Steven Whisler		—		317,367		317,367
Ray G.Young		—		322,378		322,378

(1)	As described above, certain directors elected to receive shares of restricted stock in lieu of cash and therefore had no cash compensation during 2015.

(2)

The value of stock awards shown in the “Stock Awards” column is based on grant date fair value calculated under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The grant date fair value of the equity awards shown in the “Stock Awards” column is based on the closing price of the Company’s common stock on the last business day immediately preceding the date of grant. Directors who elect to defer their equity retainer fee receive RSUs rather than restricted stock. Restrictions on shares awarded to our directors under our current compensation plan lapse one year from

the date of grant, and then the shares are freely transferable, subject to our director stock ownership requirement and securities regulations. RSUs are not transferable until a director’s retirement from the Board, death or disability. The cash value of RSUs is paid in January following retirement, death or disability.

(3)

Represents the annual expense of our charitable award program. We determine the total annual expense to the Company by using assumptions related to each current and retired director who participates in the program. We take into account each director’s age, years of service on our Board, and mandatory retirement age. We make a standard mortality assumption for all directors and use a discount rate of 6 percent. For directors who served in 2015, the aggregate accrued liability increased by $56,206, which was allocated ratably to those directors eligible to participate in the program based on the number of months each served. Non-employee directors vest in the program upon the earliest of (i) serving on our Board for at least 10 years, (ii) retiring from our Board at the mandatory retirement age, or (iii) in the event of disability or death. Directors derive no financial benefit from our charitable award program. We finance the program in part through life insurance policies, of which we are the beneficiary. We expect to receive an income tax deduction when we make the designated charitable awards. The amounts shown do not include the cost for each director of a $10,500 life insurance policy and a $500,000 business travel accident policy, the cost of which is less than $10,000 for each director.

The following table shows the aggregate number of unvested shares of restricted stock in lieu of cash and therefore had no cash compensation during 2018.⁽²⁾The value of stock awards shown in the “Stock Awards” column is based on grant date fair value calculated under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The grant date fair value of the equity awards shown in the “Stock Awards” column is based on the closing price of the Company’s common stock on the last business day immediately preceding the date of grant, which was May 7, 2018. Directors who elect to defer their equity retainer fee receive RSUs rather than restricted stock. Restrictions on shares awarded to our directors under our current compensation plan lapse one year from the date of grant, and then the shares are freely transferable, subject to our director stock ownership requirement and securities regulations. RSUs are not transferable until a director’s retirement from the Board, death or disability. The cash value of RSUs is paid in January following retirement, death or disability. With respect to these stock awards, Mr. Bronczek forfeited 767 restricted shares and Admiral Johnson forfeited 2,091 RSUs due to their respective retirements from the Company.

44

2019 Proxy Statement

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Table of Contents

Director Compensation

The following table shows the aggregate number of unvested shares of restricted stock and RSUs outstanding as of December 31, 2018, for each non-employee director who served as of that date.

Name of Director

Aggregate Number of Shares Outstanding That Have Not Vested and RSUs outstanding as of December 31, 2015, for each non-employee director. (#) David J. Bronczek (retired 2/28/2019) 10,053 William J. Burns 26,567 Christopher M. Connor 9,574 Ahmet C. Dorduncu 3,123 Ilene S. Gordon 6,225 Jacqueline C. Hinman 4,507 Clinton A. Lewis, Jr. 8,777 Kathryn D. Sullivan 4,411 J. Steven Whisler 117,773 Ray G.Young 30,129 Total 221,139 www.internationalpaper.com 45 Table of Contents Name of Director   Aggregate Number of Shares Outstanding That Have Not Vested and RSUs (#) David J. Bronczek 8,916 William J. Burns 6,752 Ahmet C. Dorduncu 2,857 Ilene S. Gordon 5,407 Jay L. Johnson 15,021 Stacey J. Mobley 2,857 Joan E. Spero 33,305 John L. Townsend, III 2,857 William G. Walter 97,444 J. Steven Whisler 86,302 Ray G. Young 8,941 Total 270,659 Compensation Discussion & Analysis (“CD&A”) Introduction This CD&A describes our compensation program that applies to all of our executive officers, including our CEO and Senior Vice Presidents, whom we refer to as our Senior Leadership Team (“SLT”). It is designed to provide shareowners with an understanding of our compensation philosophy, core design principles and decision-making process. This narrative further explains how our Management Development and Compensation Committee (“MDCC”) oversees and designs the program and reviews the 2018 compensation of our Named Executive Officers (“NEOs”) as shown below: Mark S. Sutton CEO & Chairman of the Board (Principal Executive Officer) Timothy S. Nicholls Senior Vice President and Chief Financial Officer (Principal Financial Officer) Glenn R. Landau Former Senior Vice President and Chief Financial Officer (Principal Financial Officer until June 20, 2018) Catherine I. Slater Senior Vice President – Global Cellulose Fibers and IP Asia Sharon R. Ryan Senior Vice President, General Counsel and Corporate Secretary Jean-Michel Ribieras Senior Vice President – Industrial Packaging the Americas Mr. Nicholls was appointed Senior Vice President and Chief Financial Officer of the Company, effective June 20, 2018, a position he previously held from December 2007 through November 2011. Mr. Nicholls previously served as Senior Vice President – Industrial Packaging the Americas, from November 2014 until his appointment as CFO, immediately prior to which he served as Senior Vice President – Printing & Communications Papers the Americas from November 2011. Mr. Landau left the Company effective July 31, 2018, and served as the Company’s CFO and Principal Financial Officer until the appointment of Mr. Nicholls. Overview of Our CD&A COMPENSATION COMMITTEE Q&A ON 2018 PLAN DESIGN Compensation Committee Report 48 EXECUTIVE SUMMARY 2018 Financial Highlights 49 2018 Executive Compensation Highlights 49 Responsiveness to Shareowners – Say-on-Pay Consideration 53 Compensation Governance 53 HOW WE DESIGN OUR EXECUTIVE COMPENSATION PROGRAM TO PAY FOR PERFORMANCE Executive Compensation Philosophy 54 Pay for Performance – CCG Analysis 54 Peer Group Benchmarking 56 HOW WE MAKE COMPENSATION DECISIONS Role of MDCC 58 Role of Management in Compensation Decisions 58 Role of Compensation Consultants 58 ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM Overview 59 Base Salary 59 Variable Compensation: Overview and How We Assess Performance 59 How and Why We Chose Our Performance Metrics 60 Why We Use Different Peer Groups 62 Management Incentive Plan (“MIP”) 63 Performance Share Plan (“PSP”) 64 Other Equity Awards 65 Retirement and Benefit Plans 65 Change-in-Control (CIC) Agreements 65 Perquisites 65 NEO COMPENSATION Overview 66 2018 Actual “Realized” Compensation and Comparison to 2018 Targeted Compensation 66 OTHER GOVERNANCE- AND COMPENSATION-RELATED MATTERS Insider Trading and Anti-Hedging/Anti-Pledging Policies 73 Officer Stock Ownership and Retention Requirements 73 Board Policy on Personal Use of Company Aircraft 73 Clawback or Forfeiture of Incentive Awards 73 Non-Competition and Non-Solicitation Agreements 74 Board Policy on (Non-CIC) Severance Agreements with Senior Officers 74 Prohibition on Repricing 74 Equity Grant Practices 74 Deductibility of Executive Compensation 74 Accounting for Stock-Based Compensation 74 ADDITIONAL INFORMATION ABOUT OUR EXECUTIVE COMPENSATION Summary Compensation Table 75 Other Grants of Plan-Based Awards During 2018 77 Narrative to the Grants of Plan-Based Awards Table 77 Outstanding Equity Awards at December 31, 2018 78 Stock Vested in 2018 79 Pension Benefits in 2018 80 Narrative to Pension Benefits Table 81 Non-Qualified Deferred Compensation in 2018 82 Narrative to Non-Qualified Deferred Compensation Table 82 Post-Employment Termination Benefits 83 46 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Our MDCC approved significant changes to our short-term incentive (“STI”) and long-term incentive (“LTI”) compensation programs for 2018 and future years, as explained below. Compensation Committee Q&A on 2018 Plan Design Q. Why did we change our incentive plan design for 2018? A.After conducting a thorough review in 2017 of our incentive program design, which included comparisons to market practice and discussions with several large shareowners, we decided to revise our incentive programs for 2018 to align with market practice and structure the incentives to focus the management team on the Company’s forward-looking strategic objectives. The enhancements to our STI plan focus on the key drivers of sustainable value creation—top- and bottom-line growth combined with efficient use of cash—while our LTI plan metrics balance the achievement of above cost-of-capital returns with competitive total shareholder return (“TSR”) performance. Q. What did we change in our STI plan, the Management Incentive Plan (MIP)? A.We eliminated absolute Adjusted Return on Invested Capital (“ROIC”), which is now only in the long-term incentive program, and replaced it with Revenue and Cash Conversion, each weighted at 15% of the target award. Adjusted EBITDA remained unchanged at a 70% weighting. Also, the performance ranges were reconsidered to ensure that payouts best represent management performance for the year, which included a tightening of the performance range for Adjusted EBITDA. This makes payouts more sensitive to incremental performance changes and increases the chances of obtaining a zero payout if we fall below threshold performance, or a maximum payout if we exceed our goals. See page 50 for a graphic representation of our MIP. Q. What did we change in our LTI plan, the Performance Share Plan (PSP)? A.We kept the same metrics, but now the Adjusted ROIC performance metric is measured on an absolute basis against our internal target, rather than on a relative basis, ranked against peers. Both performance metrics (absolute Adjusted ROIC and relative TSR) are now weighted 50 percent each forall participants. Previously, only officer awards were equally weighted. To determine performance achievement for relative TSR, we now use a percentile ranking for comparison to our peers, rather than an absolute position ranking, as well as a broader and better aligned TSR comparator group. See page 50 for a graphic representation of our PSP. Q. Why did we choose the three performance metrics for the MIP? A.We believe EBITDA should continue to be the primary metric for MIP, as it is the strongest driver of free cash flow generation and value creation. EBITDA is also a good fit because it is important to the Company’s investors, focuses on both top-line and bottom-line performance, and provides consistency in the plan from year to year. Revenue, or net sales, was added to the MIP because it is a key earnings growth driver that reflects and rewards commercial excellence. Cash Conversion was added to drive capital efficiency and better align with shareowner interests. Cash Conversion measures how efficiently the Company is able to generate cash from normal business operations after non-strategic capital expenditures. See page 60 for definitions of all performance metrics. Q. Why did we eliminate ROIC from the MIP and move from relative ROIC to absolute ROIC in the PSP? A.ROIC remains important, as it drives value creation and captures capital efficiency. However, the Company determined that using the same metric in the annual and long-term incentive programs was not ideal and that ROIC is best measured over a multi-year period because investment decisions can take time to be implemented and demonstrate results. ROIC is a very company-specific measurement, and thus “relative” ROIC is not a common metric—most companies that use ROIC as a performance metric have an internal ROIC target. Our internal Adjusted ROIC goals are based on covering our weighted average cost of capital (WACC), which is the basis for the Adjusted ROIC payout scale in the PSP. Q. Why did we increase the weighting of relative TSR for non-officers (from 25% to 50%) in the PSP? A.The rationale for the current design of our long-term plan is to maximize shareholder returns through value creation and disciplined investments, and relative TSR is the ultimate measure of return on investment for shareholders. So, we increased the emphasis on relative TSR for non-officers becauseallparticipants need to be focused on maximizing shareowner returns. www.internationalpaper.com 47 Table of Contents Compensation Discussion & Analysis (“CD&A”) Q. Why did we change our TSR Peer Group in the PSP? A.After studying the prior TSR Peer Group and how the Company’s stock price moved in relation to the stock prices in that group of companies, as well as market practices with respect to TSR peer groups, the Company revised its TSR Peer Group for 2018. The purpose of the revision is to ensure the stock prices of the included companies (the companies with whom we compete for investment dollars) move in a manner most similar to the Company’s stock price in order to better align with shareowner interests and to be a better measure of the Company’s relative stock price performance. See page 62 for a list of the TSR peer group companies for 2018. Q. Why did we change our award scale measuring relative TSR in the PSP? A.We believe a percentile ranking is better for comparison to peers, as it provides for incremental performance achievement. The most profound advantage of this approach is that the payout is more proportionate to the Company’s relative performance versus the peer group. In other words, it serves to eliminate situations where a very small difference in TSR has a significant effect (positive or negative) on the final payout. Compensation Committee Report      On behalf of the Board of Directors, the Management Development and Compensation Committee of the Board of Directors, referred to as the MDCC, oversees the Company’s compensation programs. In fulfilling its oversight responsibilities, the MDCC has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with the Company’s management. Based on the review and discussions referred to above, the MDCC recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and its proxy statement on Schedule 14A filed in connection with the Company’s 2019 Annual Meeting of Shareowners. Management Development and Compensation Committee J. Steven Whisler, Chair (until May 1, 2019) Christopher M. Connor Ilene S. Gordon Ray G.Young 48 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Executive Summary 2018 Financial Highlights International Paper delivered another year of strong performance in 2018: We achieved Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization(“EBITDA”) of $4.347 billion, an increase of over 16 percentfrom the prior year.* International Paper (“IP” orWe hadsolid commercial performanceacross all three businesses andgrew revenue by over 7 percentfrom the “Company”) generated strong earnings and free cash flow and record return on invested capital in 2015, and weprior year. We continue to return cash tostrengthen our shareowners. We have repurchased approximately $2.1 billion of our shares since September 2013. We increased our dividend again by 10 percent in 2015, our fourth-consecutive year of double-digit dividend increases. We also continue to repaybalance sheet, through debt repayment and pension risk mitigation, and make strategic investments in long-term projects as part of our global strategy toposition the Company for future profitable growth.growth. In this CD&A, we discuss the compensation paidWe increased our dividend by5.3 percentto $2.00 per share annually,our seventh-consecutive year of dividend increases. We returned cash to our executive officers whoshareowners throughsystematic stock buybacksas well, and our Board of Directors provided authorization for anadditional $2 billion of repurchases. * SeeAppendix Afor a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. 2018 Executive Compensation Highlights The following section briefly highlights the MDCC’s key compensation decisions for 2018 as well as our performance achievement attained in our incentive compensation plans. These decisions were made with the support of the MDCC’s independent consultant, Frederic W. Cook & Co. (FW Cook) (see section titled “Role of Compensation Consultant”), and this information is discussed in greater detail elsewhere in this CD&A. Key Highlights for 2018 ● We continue to have exceptionallystrong pay-for-performance correlation (see Section 2). ● We haverobust compensation governance(see Section 6). ● OurLTI Plan is basedsolely on Company Performance achievement for ALL participants—no individual performance modifiers are identified as Named Executive Officers (“NEOs”) in the Summary Compensation Table found on page 64 of this proxy statement. The executive compensation program discussed in this CD&A applies to all ofapplied. ● We implementeddesign changes for both our executive officers, including our Chief Executive Officer (“CEO”) and 10 Senior Vice Presidents, whom we refer to as our Senior Leadership Team (“SLT”). Philosophy and Design Principles. In addition to discussing the compensation paid to our NEOs, we describe our pay-for-performance philosophy, key design principles and the governance policies that reinforce these principles. Our objective is to design an executive compensation program that encourages all of our leaders to produce outstanding financial results and create sustainable long-term value for our shareowners, while continuing to uphold the highest standards of ethics and integrity. We embrace three key design principles that reinforce our pay-for-performance philosophy: • We target our executives’ pay at the median level of our Compensation Comparator Group (“CCG”). In our long-term incentive plan –representing the greatest percentage of total targeted compensation for our NEOs – we require slightly above-median Company performance, relative to our peers, for executives to receive a target payout. To assure that our executives are focused on producing outstanding financial results, our short-term incentive compensation (“STI”)short- and long-term incentive compensation (“LTI”) programs useplans for 2018after conducting a combinationthorough review of both plans in 2017, including discussions with several large shareowners (see Compensation Committee Q&A on page 47). ● As another example of the following performance measuresCompany’s continued focus on pay alignment, the MDCC conducted a Benchmarking Strategy Review in 2018. As a result of this comprehensive review,a more sustainable data-collection strategy for benchmarking executive pay levels was adopted (see next two pages for 2016 changes): Section 2 – Peer Group Benchmarking on page 56). STI Metrics 2015 LTI Metrics 2015 www.internationalpaper.com 49 Table of Contents Compensation Discussion & Analysis (“CD&A”) 2018 Incentive Plan Design Overview with Metrics and Weightings 2018 Short-Term Incentive Plan MANAGEMENT INCENTIVE PLAN (MIP) COMPONENT WEIGHTINGS MANAGEMENT INCENTIVE PLAN PAYOUT SCALE ALL METRICS: Below Threshold (0% Payout) Threshold (50% Payout) Target (100% Payout) Maximum (200% Payout) Absolute Cash Flow from Operations 2018-2020 Long-Term Incentive Plan Relative Return on Invested Capital (relative “ROIC” PERFORMANCE SHARE PLAN (PSP) COMPONENT WEIGHTINGS PERFORMANCE SHARE PLAN PAYOUT SCALE (Same Metric Weightings forALLParticipants) ROIC (50%) Below Threshold (0% Payout) Threshold (50% Payout) Target (100% Payout) Maximum (200% Payout) RELATIVE TSR (50%) Below 25thpercentile (0% Payout) 25thpercentile (25% Payout) 50thpercentile (100% Payout) At or above 75thpercentile (200% Payout) Absolute Return on Invested Capital * See page 60 for definition. 50 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) (absolute “ROIC”) Relative Total Shareholder Return (relative “TSR”) 2018 Total Target Compensation Mix CEO The Board’s Management Development Other NEOs (excluding departed NEO: Mr. Landau) The chart above demonstrates our commitment to place pay at risk. For 2018, 89% of our CEO’s target compensation and, on average, 78% of our other NEOs’ (excluding Mr. Landau) target compensation was based on Company performance and was therefore at risk. Importantly, base salary comprises a relatively small portion of our NEOs’ compensation and is the only component of their Total Direct Compensation (defined below and known as “TDC”) that is not tied to Company performance. 2018 Base Salary Changes The Committee elected to increase Mr. Sutton’s base salary by 7.4%, effective March 1, 2018, recognizing his strong performance and to bring him in closer alignment with the market median. Mr. Landau and Ms. Ryan also received market-based base salary adjustments in 2018, and Mr. Nicholls, Ms. Slater and Mr. Ribieras received base salary adjustments, effective July 2018, to reflect their respective appointments to new roles. 2018 STI Performance Achievement      Description      Weight     Target     Actual      Target Award Earned     Weighted Target Award Earned Adjusted EBITDA* To achieve EBITDA of $4.1B 70 % $4.1B $4.347B 160.2 % 112.2 % Revenue To achieve revenue of $22.262B 15 % $22.262B $23.306B 193.8 % 29.1 % Cash Conversion* To achieve cash conversion of 71.4% 15 % 71.4 % 68.41 % 89.5 % 13.4 % Overall Corporate Weighting: 100.0 % 154.7 % * SeeAppendix A for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. www.internationalpaper.com 51 Table of Contents Compensation Discussion & Analysis (“CD&A”) 2016-2018 LTI Performance Achievement Non-Officers   Officers Performance Metric     Achievement Rank Against Peers     %Target Award Earned     Metric Weight     Weighted Target Award Earned     Metric Weight     Weighted Target Award Earned Relative Adjusted ROIC 3 of 12 145 % 75.0 % 108.8 % 50.0 % 72.5 % Relative TSR 8 of 17 100 % 25.0 % 25.0 % 50.0 % 50.0 % 2016 LTI Grant Performance Achievement 133.8 % 122.5 % Other NEO Compensation Decisions Glenn R. Landau ● Mr. Landau, former Senior Vice President and Compensation Committee (the “Committee”) conducts an annual risk assessment to ensure our incentive plans do not motivate excessive risk taking, as describedChief Financial Officer, left the Company effective July 31, 2018. Mr. Landau and the Company entered into a termination agreement and release, which was approved by the Committee. Under the Agreement, Mr. Landau received the standard termination allowance and other standard severance benefits under the heading “AssessmentCompany’s Salaried Employee Severance Plan, as well as an additional payment of $20,500 intended to be used by Mr. Landau for the payment of his COBRA insurance premiums for an additional 12 months beyond the standard six months offered to all employees. The standard termination allowance is a lump sum cash payment equal to two weeks of salary for each year or partial year of service, which was $726,923 for Mr. Landau (based on his 28 full or partial years of service). ● The Company also waived the terms of Mr. Landau’s non-competition agreement with respect to any company except for WestRock Company, KapStone Paper and ManagementPackaging Corporation, Georgia-Pacific LLC, Packaging Corporation of Compensation Related Risk” on page 25. America, Domtar Corporation, Graphic Packaging Holding Company, and any affiliate or successor of those six companies. Responsiveness to Shareowners – Say-on-Pay Consideration52 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Responsiveness to Shareowners – “Say-on-Pay” Consideration In May 2015,2018, our shareowners again approved our “Say-on-Pay” proposal again received overwhelming approval, with support from 97over 94 percent of votes cast by our shareowners (97 percent in 2014 and 2013, and 98 percent in 2012). for the seventh straight year. The CommitteeMDCC interpreted this consistently strong level of support as continued affirmation of the current design and direction of our executive compensation program. While the program was approved by nearly all shares voted in each of the past fourseven years, the CommitteeMDCC and management remain firmly committed to continuing to strengthen our pay-for-performance correlation, as well as the overall architecture of our executive compensation program. We continue to engage both our investors and proxy advisory firms to understand their views on our executive compensation programs as well as the underlying analytics that drive voting recommendations. The CommitteeMDCC and management will continue to use the annual “Say-on-Pay” vote as a guidepost for shareowner sentiment and will continue to engage with our shareowners and respond to their feedback. 2016 Change – Performance Metrics and Weighting for STI Program As an example, we met with several key shareowners in 2017 and 2018 to discuss the re-design of continually strengtheningour 2018 STI and LTI plans. Compensation Governance ✓ Reduced Change-in-Control Benefits. Change-in-control severance benefits reduced from three to two times target cash compensation for future non-CEO executive officers beginning in 2012. ✓ Double Trigger in the link betweenEvent of a Change in Control. Equity incentive awards have a double trigger assuming replacement awards are provided; that is, they will not vest in the Company’s payevent of a change in control unless also accompanied by a qualifying termination of employment. ✓ Robust Equity Ownership and performance, upon approvalRetention Requirements. All officers are required to own IP shares equal to a multiple of their base salary and to retain 50 percent of equity payouts until the ownership requirement is met. ✓ Clawback of Incentive Compensation If Restatement. Incentive compensation awards are subject to clawback in specified circumstances. ✓ Limit on Severance for Executive Officers. Aggregate severance payments to an executive officer may not exceed two times the officer’s base salary plus target cash bonus in the absence of a change in control or shareowner preapproval. ✓ Non-Competition and Non-Solicitation Agreements. We require our leaders to enter into Non-Competition Agreements and Non-Solicitation Agreements, the violation of which may result in clawback or forfeiture of incentive compensation awards. ✓ Personal Use of Company Aircraft by the Committee,CEO is Subject to Cap. While our CEO is authorized to use the Company has modifiedaircraft for personal travel, he is required to reimburse the metrics and their respective weightings in its STI programCompany for 2016. The 2016 Management Incentive Plan (“MIP”) performance metrics and weightings are: 70% absolute Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) (from 50% absolute Cash Flow from Operations in 2015); and 30% absolute ROIC (down from 50% absolute ROIC). What is the MIP, and how does it differ fromincremental cost of such use above $75,000. ✕ No Employment Agreements for Executive Officers. Our executive officers are at-will employees with no employment contracts. ✕ No Guaranteed Annual Salary Increases or Bonuses. For the Company’s Performance Share Plan (“PSP”)? As explained in more detail later in this CD&A, the MIP (our STI program) is annamed executives, annual cash-based incentive compensation plan designed to motivate the approximately 3,500 employees who participate andsalary increases are responsible for achieving the most critical short-term financial goals of the Company. While our SLT participates in the MIP, participation extends to first-line leaders and individual contributors, including numerous facility/mill team members, across the globe. Each participant’s MIP award is based on Company performance against specific enterprise-wide financial goals. The award is then adjusted based onevaluations of individual performance and dependingmarket competitiveness, while their annual cash incentives are tied to corporate and individual performance. ✕ No Tax Gross-Ups. No tax gross-ups are provided. ✕ No Repricing or Exchange of Underwater Stock Options. Our equity incentive plan does not permit repricing or exchange of underwater stock options or stock appreciation rights without shareowner approval. Also, we discontinued granting stock options over 10 years ago and all outstanding stock options have expired. ✕ No Plans that Encourage Excessive Risk-Taking. Based on the employee’s role,annual review, it may be further adjusted for business unit or facility/mill performance to determine the employee’s final award. By contrast, the PSP (our LTI program) is a long-term, equity-based incentive compensation plan designed to motivate the approximately 1,300 more senior-level management employees who participate and who are held responsible for creating long-term shareowner value. PSP awards are granted annually in performance-based restricted stock units, but are earned based solely on Company performance. This means all participants, divided into a non-officer and an officer group, earn the same performance achievement percentage of their respective target award, which is based on position in the Company. These awards, which are ultimately paid in shares of Company stock, are earned over a three-year performance period based onwas determined that the Company’s performance achievementcompensation practices are appropriately structured and avoid incenting employees to engage in relative ROICunnecessary and relative TSR. For 2016, weexcessive risk-taking. ✕ No Hedging or Pledging of International Paper Securities. Officers, directors and employees are making no changes to our PSP metrics or their respective weightings: 75% relative ROIC / 25% relative TSR for non-officers, and 50% relative ROIC / 50% relative TSR for officers. What is EBITDA? EBITDA is commonly used as a proxy for a company’s operating profitability. EBITDA measures how much operating profit the Company makes with its present assets and operations. Refer to page 41 for a detailed definition of EBITDA. EBITDA also serves as an approximation for cash flow, as it is the single largest driver of Cash Flowstrictly prohibited from Operations. As a result, EBITDA is a major indicator of the on-going operational strength of the Company. Why did we shift from Cash Flow from Operations to EBITDA and increase its weighting in the MIP? We shifted to EBITDA and increased its weighting in the MIP for the following reasons: Achieving earnings growth is important to the Company’s ongoing success and attractiveness to investors, and EBITDA is widely used by our investors to measure the Company’s performance. Within the Company, among the many employees who participate in the MIP, we set goals for EBITDA and track and discuss EBITDA performance at the business level each month and quarter to establish a readily transparent and ongoing line of sight to our performance. Our constant focus, tracking and dialogue around EBITDA enables us to identify needed adjustments and engage our teams in improvement efforts throughout the year. By contrast, enterprise-wide Cash Flow from Operations is impacted by some other factors, such as interest expense and taxes, beyond the control of the businesses and thus is less visible and less widely used to measure performance at the business level. Shifting the MIP metric to EBITDA and increasing the weighting to 70% will incentivize the approximately 3,500 employees who participate in the MIP to enhance our focus on the things we control that can positively impact our earnings growth and operating profitability. By eliminating Cash Flow from Operations as an MIP performance measure, are we saying cash flow is no longer important? No. While our MIP has included a cash flow metric for seven years and our cash flow has been strong as a result, EBITDA is simply a more visible and widely-recognized metric throughout our businesses among the many employees who participate in our MIP. We are also confident that increasing employee focus on EBITDA will, in fact, continue to drive improvement in cash flow (in addition to EBITDA), since EBITDA is the single largest driver of Cash Flow from Operations. EBITDA thus serves as a proxy for our cash flow. By reducing the weighting of ROIC in the MIP, are we saying that ROIC is no longer as important? No. ROIC remains equally important, as it is a key measure of value creation. As noted above, ROIC is so important that it is used in both our STI and LTI plans, in one on an absolute basis and, in the other, relative to peer groups. Moreover in our PSP, not only does relative ROIC carry a significant weighting (50% forhedging IP securities. Directors, executive officers and 75% for non-officers), but the PSP representsother senior executives are strictly prohibited from pledging IP securities as collateral or holding securities in a much greater percentagemargin account. ✕ No Inclusion of our more senior leaders’ total target compensation than the MIP. ROIC,Equity Awards in Pension Calculations. ✕ No Excessive Benefits. We offer only limited executive benefits as required to remain competitive and previously ROI, has been a large component of both the MIPto attract and the PSP since 2000 to incentivize our management team to continue to focus on improving our returns. It is worth noting that in 2015 the Company achieved record ROIC for our shareowners. Did the Company make any other plan design changes for 2016? Although we made no change to our PSP metrics or their respective weightings, in 2015 (with approval by the Committee), we modified our 2016 PSP Peer Groups for both relative ROIC and relative TSR to ensure we accurately benchmark the Company’s projected performance over the coming three years, and maintain a robust peer group. Summary of Plan Design Changes for 2015 and Beyond Program Element Design Change Rationale Peer Groupsretain highly talented executives. www.internationalpaper.com 53 ROIC Peer Group Table of Contents Compensation Discussion & Analysis (“CD&A”) •Removed: MeadWestvaco Corp. (2015) Rock-Tenn Company (2015) • Added: WestRock Company (2015) Graphic Packaging Corp. (2016) •  MeadWestvaco and Rock-Tenn merged in July 2015, forming WestRock. •   Graphic Packaging has a similar profile, which will allow the Company to more accurately benchmark performance. TSR Peer Group •   Added: Graphic Packaging Corp. (2016) PPG Industries (2016) •  Graphic Packaging and PPG have similar profiles, which will allow the Company to more accurately benchmark performance. Variable Compensation Performance Share Plan (“PSP”) Beginning in 2015, the performance achievement for the relative TSR portion of the award will be capped at 100% of target if the Company’s TSR over the three-year performance period is negative. More closely aligns with the interests of shareholders in the event of a declining stock price. Management Incentive Plan (“MIP”) Beginning in 2016, performance metrics and their respective weightings will be adjusted as follows: •   70% EBITDA (from 50% Cash Flow from Operations); •  30% ROIC (from 50% ROIC) •  EBITDA, while directionally aligned to “Cash Flow from Operations,” is more widely used within our businesses to measure their performance and provides better line of sight for our employees. •  Generating robust earnings continues to be a strong focus for the Company and the adjustment in performance weighting reflects the importance of this objective. Executive Benefits Extra tax withholding in PSP Beginning with PSP payments with performance periods ending in 2015, SLT members may no longer elect to have additional shares withheld from PSP payouts to cover payment of federal taxes. Instead, the Company will now withhold at the statutory minimum withholding rate for all participants. Better alignment with best practices and preferential accounting treatment. Other Governance Matters Officer Stock Ownership Requirements Beginning in 2015, increased stock ownership requirements for all SLT members. Better alignment with best practices and interests of shareowners. NOTE: The above changes are discussed in detail throughout the remainder of this CD&A. As shown in the table below, we have organized our CD&A to explain how the amounts paid to our NEOs are tied directly to our Company’s performance. Part I: How We Design Executive Compensation Program to Pay for Performance Explains our philosophy and demonstrates our CEO’s pay is appropriately tied to Company performance, describes how the Committee uses benchmarking to guide its decision-making, and how the Committee, consultants and executive officers participate in the development of our program Page 35 Part II: Elements of Executive Compensation Program Describes each element of our program and explains how our incentive compensation plans are designed Page 40 Part III: NEO Compensation Describes the 2015 compensation actually “realized” by each NEO, as well as the rationale for each such compensation element and amount, and compares the actual amounts paid to his or her targeted compensation Page 49 Part IV: Other Governance and Compensation Related Matters Discusses the governance policies that reinforce our pay-for-performance philosophy and limit executive benefits, including, among others, our stock ownership requirements and clawback features of our incentive plans Page 60 Part V: Additional Information About Executive Compensation Provides detailed information about our NEO compensation for 2013, 2014 and 2015 in the Summary Compensation Table and other tables Page 64 Part I: How We Design Our Executive Compensation Program to Pay for Performance Executive Compensation Philosophy Executive Compensation Philosophy Our executive compensation program continues to be designed to attract, retain and motivate our SLT to deliver Company performance that builds long-term shareowner value. To achieve our objectives, our program is designed around two guiding principles: Pay for Performance We reward achievement of specific goals that improve our financial performance and drive strategic initiatives to ensure sustainable long-term profitability. Pay at Risk We believe a significant portion of an executive’s compensation should be specifically tied to performance—both Company performance that builds long-term shareowner value. To achieve our objectives, our program is designed around two guiding principles:and individual performance. Compensation Principles   Rationale Pay for performance Pay for Performance – CCG Analysis The MDCC reviews our CEO’s pay in relation to the Company’s performance to ensure alignment. We conduct this review against our Compensation Comparator Group (“CCG”) because it is the same group against which we benchmark our program design and targeted pay amounts. Historical CEO Pay-for-Performance Alignment The following table demonstrates the close correlation between our CEO’s realizable pay and the Company’s performance over the past five three-year performance periods as compared to our CCG. We reward achievement of specific goals that improve our financial performance and drive strategic initiatives to ensure sustainable long-term profitability. Pay at risk We believe a significant portion of an executive’s compensation should be specifically tied to Company and individual performance. Three-Year Performance Period Our CEO’s Realizable Pay for Performance – CCG Analysis The Committee reviews our CEO’s pay in relation to the Company’s performance to ensure alignment. While there are many companies to which we could compare ourselves based on industry, revenue or other criteria, we conduct our pay-for-performance review against our Compensation Comparator Group (“CCG”) because it is the group against which we benchmark our program design and targeted pay amounts. See page 38 for a discussion of our approach to peer group benchmarking. Each point on the chart below represents a CCG CEO’s three-yearrealizable compensation (the cash compensation actually paid plus the economic value of equity-based grants) relative to his or her company’s three-year performance in Total Shareholder Return (“TSR”) over the period 2012-2014. Compared to our CCG, our CEO earned compensation at the 65th percentile while the Company delivered TSR at the 60th Rank (percentile of our peer group. CCG) The Committee continues to believe this graph clearly illustrates a strong pay-for-performance correlation, especially when compared year over year.The table shown on the next page demonstrates the close correlation between our CEO’s pay and theOur Company’s performance over the past five three-year performance periods. As the table makes clear, relative increases in the CEO’s pay correspond with advancement in the Company’s relative TSR which benefits allRank (percentile of our shareowners.CCG) 2015-2017 35th 35th 2014-2016 40th 50th 2013-2015 20th 20th 2012-2014 65th 60th 2011-2013 50th 80th 54 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Current CEO Pay-for-Performance Alignment Each point on the graph below represents a CCG CEO’s three-yearrealizablecompensation (the cash compensation actually paid plus the economic value of equity-based grants) relative to his or her company’s three-year performance in TSR over the period 2015-2017. Compared to our CCG, our CEO earned compensation at the 35th percentile while the Company delivered TSR at the 35th percentile of our peer group.The MDCC continues to believe this graph clearly illustrates a strong pay-for-performance correlation, especially when compared year over year(as shown in the table on the previous page). CEO Realizable Pay vs. TSR Performance (2015-2017) ● This graph is based on the 20152018 proxy filings of our CCG. ● Total Shareholder Return reflects share price appreciation, adjusted for dividends and stock splits. ● Realizable pay consists of: 1. actual base salary paid over the three-year period, 2. actual STI payouts over the three-year period, and 3. LTI determined as shown below, with equity awards based on December 31, 2017 market value for each company; 3. LTI determined as shown below, with equity awards based on December 31, 2014 market value for each company: a. in-the-money value of stock options granted over the three-year period; b. service-based restricted stock awards granted over the three-year period; c. performance share awards: i. actual shares earned using actual performance achievement for grant cycles beginning and ending between 2015 and 2017; and ii. target shares granted over the three-year period assuming target performance, for performance cycles that have not yet been completed. d. performance cash awards: i. actual cash paid using actual performance achievement for grant cycles beginning and ending between 2015 and 2017; and ii. target cash levels provided over the three-year period assuming target performance, for performance cycles that have not yet been completed. ● c. performance share awards: i. actual shares earned using actual performance achievement for grant cycles beginning and ending between 2012 and 2014; and ii. target shares granted over the three-year period assuming target performance, for performance cycles that have not yet been completed; and d. performance cash awards: i. actual cash paid using actual performance achievement for grant cycles beginning and ending between 2012 and 2014; and ii. target cash amounts provided over the three-year period assuming target performance, for performance cycles that have not yet been completed. The graph reflects CEO compensation for each company regardless of who actually served in the CEO role. This allows us to compare CEO compensation for a full three-year period for each company and focuses on the CEO position rather than specific individuals. The graph reflects compensation for our former CEO John V. Faraci, who served as our CEO during the three years covered by the graph. Mr. Faraci retired as CEO effective October 31, 2014, but remained an executive officer and an employee until February 28, 2015. The following table demonstrates the close correlation between our CEO’s pay and the Company’s performance over the past five three-year performance periods. Historical CEO Pay-for-Performance Alignment as Compared to CCG Three-Year Performance Period Our CEO’s Realizable Pay Rank Our Company’s TSR Rank www.internationalpaper.com 55 2012 - 2014 65th 60th 2011 - 2013 50th 80th 2010 - 2012 85th 80th 2009 - 2011 60th 100th 2008 - 2010 30th 40th Pay at Risk – 2015 Total Target Compensation Mix The chart below demonstrates our commitment to pay at risk. For 2015, 88 percent of our CEO’s target compensation and, on average, 78 percent of our other NEOs’ target compensation was based on Company performance and was therefore at risk. Importantly, base salary comprises a relatively small portion of our NEOs’ compensation and is the only component of their Total Direct Compensation (defined below) that is not tied to Company performance. Peer Group Benchmarking The Committee benchmarks our compensation program against our CCG to assure our pay remains competitive. We strive for consistency by retaining as many of the same companies in this group as appropriate from year to year. Changes are made to assure sufficient or appropriate data on which to base compensation decisions. Table of Contents Compensation Discussion & Analysis (“CD&A”) Peer Group Benchmarking We use our CCG when making compensation decisions to assure our pay remains competitive. We strive for consistency by retaining as many of the same companies in this group as appropriate from year to year. Changes are made to assure sufficient or appropriate data on which to base compensation decisions. As described below, changes were made for 2019. For 2018, our CCG continued to consist of 20 publicly traded companies selected by the MDCC from the Willis Towers Watson General Industry Executive Compensation Survey database. How Our CCG consists of 20 publicly traded companies selected by the Committee from the Towers Watson General Industry Executive Compensation Survey database. CCG companies are selected utilizing the following criteria: Is Selected OCompetition for executive talent; OComparable annual revenue (one-half to two times), with market capitalization used as a modifier as appropriate; (as appropriate); OGlobal geographic presence; and OComplexity of business operations. operations; and We believe our approach produces a more appropriate comparison than an industry peer group, such as one based on Global Industry Classification Standard (GICS) codes, because our industry peer group does not provide a sufficient number of companies that are of a comparable size and complexity. Additionally, our executives are aggressively recruited by, and we recruit from, businesses outside our limited industry peer group. The Committee reviews an analysis, prepared by its OAvailable compensation consultant, Frederic W. Cook & Co., Inc. (“Cook”), of the compensation of each member of our SLT to comparable positions at the CCG companies. Towers Watson provides data to Cook in order to compare the three elements of Total Direct Compensation (“TDC”): Base salary; data. Short-term incentive compensation; and Long-term incentive compensation. The Committee targets all elements of TDC at the median level (50th percentile) of our CCG. In our 2014 review, our SLT had target TDC amounts that were 96% of the CCG survey median (excluding three members of the SLT that were promoted in November 2014, including Mr. Sutton). At the time Cook’s analysis was completed in 2014, Mr. Sutton was serving in the role of President and Chief Operating Officer, rather than CEO. The Committee used the study, however, in making its decision to increase Mr. Sutton's target TDC for the role of CEO to $10,000,000, which positioned him at 79% of the CCG survey median. The Committee believed this initial positioning for Mr. Sutton's CEO pay was appropriate given that he was promoted from within and had not previously served as a CEO. The study also suggested the CFO's target TDC was appropriately positioned at 98% of the CCG median. 2015 Compensation Comparator Group (“CCG”) (Revenues shown were used in late 2014 to benchmark pay for 2015)   How We Use Our CCG   Revenues (in billions) (1) 3M Company $31.5 Alcoa Inc. $22.6 E.I. DuPont de Nemours $35.5 Eaton Corp. $22.4 Emerson Electric Company $24.5 FedEx Corp. $45.6 Goodyear Tire & Rubber Company $18.9 Hess Corp. $18.8 Honeywell International Inc. $40.0 Johnson Controls, Inc. $42.9 Kimberly-Clark Corp. $21.2 L-3 Communications Holdings $12.2 Lockheed Martin Corp. $44.8 Northrop Grumman Corp. $24.2 Parker-Hannifin Corp. $13.2 PPG Industries, Inc. $15.4 Schlumberger Limited $46.8 United States Steel Corp. $17.2 Whirlpool Corp. $18.8 Xerox Corp. $21.2      25th Percentile OAs an input for developing base salary ranges and short- and long-term incentive targets; OTo assess competitiveness of total direct compensation awarded to the SLT; OTo benchmark equity vehicle and incentive plan metrics; OTo benchmark officer stock ownership guidelines and other executive compensation practices and policies; and OTo evaluate share utilization, overhang levels and annual value-based run rate. The MDCC targets TDC, in the aggregate, at the median level (50thpercentile) of our CCG. In light of Mr. Sutton’s conservative target TDC positioning and strong Company and individual performance during 2017, the MDCC approved a market adjustment to bring his target TDC to $13.3 million, which still positioned him below the projected 2018 market median. The other active NEOs have 2018 target TDC levels that were, in aggregate, 95% of the projected 2018 market median, and thus were well-positioned within the market range and aligned with the Company’s compensation philosophy. The MDCC, in conjunction with its consultant, uses this analysis as a frame of reference when setting target compensation. Target compensation positioning for individual SLT members will vary from the market median based on factors such as: ● Position scope and responsibilities; ● Individual performance; and ● Internal comparisons. 56 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) 2018 Compensation Comparator Group (“CCG”)   $18.8 50th Percentile $22.5 75th Percentile $36.6      International Paper Company(2) $28.9 IP Percent Rank 66.4% IP Rank 8 of 21 (1)        Most recently reported 12 months as of August 31, 2014. (2)        IP’s revenues include xpedx through July 1, 2014, the date of its divestiture. Excluding xpedx, IP’s revenues for this period would have been $23.6 billion. The Committee, in conjunction with its consultant, uses this analysis as a frame of reference when setting target compensation. Actual compensation paid to our SLT will vary from benchmark medians based on factors such as: Position scope and responsibilities; Individual performance; and Internal comparisons. 3M Company Honeywell International Inc. PPG Industries, Inc. Arconic Inc. (former Alcoa Inc.) Johnson Controls, Inc. Schlumberger Limited DowDuPont Inc. Kimberly-Clark Corp. United States Steel Corp. Eaton Corp. L-3 Communications Holdings WestRock Emerson Electric Company Lockheed Martin Corp. Whirlpool Corp. FedEx Corp. Northrop Grumman Corp. Xerox Corp. Goodyear Tire & Rubber Company Parker-Hannifin Corp. IP’s Targeted TDC = CCG Median International Paper vs. CCG Revenue1 IP’s Targeted TDC = CCG Median (50thpercentile) (50th percentile)

1 Based on the most recently reported four quarters as of August 31, 2017, used in late 2017 to benchmark pay for 2018 2 IP’s revenue represents the pro forma revenue including the full-year impact of Weyerhaeuser’s pulp business. Changes for 2019 Peer Group Benchmarking As noted above, the CCG has historically been comprised of 20 companies of comparable size and complexity that also participated in the Willis Towers Watson Executive Compensation Survey. In 2018, the MDCC conducted a Benchmarking Strategy Review and approved a new approach that was first used by the Committee to inform senior executive target TDC levels for 2019. Two primary changes were made as part of this new approach. ● Our primary reference point will be the average of two national, general industry surveys (scoped by revenue responsibility) so as to increase the number of participants comprising the data. This change provides greater incumbent counts for each benchmarked role, which will yield more consistency in the data from year-to-year and better handle changes in company size that may result from mergers, acquisitions or divestitures. ● The MDCC made changes to the CCG. Given that participation in the Willis Towers Watson Survey was now no longer a requirement for CCG inclusion, this allowed the Company more freedom in selecting CCG companies that are most relevant in terms of size, industry and scope of operations. CCG proxy data will be used as a secondary reference point for our CEO, CFO and others, as applicable. www.internationalpaper.com 57 Table of Contents Compensation Discussion & Analysis (“CD&A”) How We Make Compensation Decisions Role of the Management Development and Compensation Committee The CommitteeMDCC is responsible for the Company’s executive compensation program including the design elements of our program.and decision-making process for SLT compensation. The CommitteeMDCC approves: ●Our compensation benchmarking process, as well as the companies used for comparison (our CCG) to ensure reasonableness and stability; ●Overall effectiveness of our executive compensation program to ensure the design achieves our objectives; ●Performance metrics and their respective weighting,weightings, as well as the companies against which we compare our relative performance; ●Non-CEO SLT compensation, based on recommendations from the CEO; and ●An annual evaluation of risk as it pertains to our Company-wide compensation plans and programs. In addition, in a process directed by the Presiding Director in Executive Session, the Committee approvesMDCC: ●Approves the CEO’s annual objectives and semi-annually reviews his performance achievement,achievement; and recommends CEO compensation to the independent directors. The Committee reviews CEO performance semi-annually. The Committee recommends ●Recommends the CEO’s base salary increase, target bonus opportunities and annual incentive award and base salary merit increasepayment to the Board based on its assessment of the CEO’s performance achievement. achievement, as well as the CEO’s long-term incentive compensation. All elements of CEO pay are approved by the independent directors of the Board. Role of Management in Compensation Decisions The CEO makes recommendations concerning the strategic direction of our executive compensation program to the MDCC. Our Senior Vice President, Human Resources, is responsible for making recommendations to the MDCC concerning program design and administration, and our General Counsel provides legal advice to the MDCC concerning disclosure obligations, governance and its oversight responsibilities. The CEO reviews the performance of SLT members against their annual and individual pre-established performance objectives and discusses his assessment with the MDCC. In consultation with our Senior Vice President, Human Resources, the CEO makes individual recommendations on base salary and annual incentive award payment. The MDCC reviews these recommendations, and then, considering input from its compensation consultant, discusses, modifies and approves, as appropriate, each SLT member’s compensation. The CEO does not participate in any MDCC or Board deliberations that involve his own compensation matters. Role of Compensation Consultants The CommitteeMDCC continued to engage FW Cook in 20152018 to serve as its independent, external compensation consultant. The CommitteeMDCC relies on FW Cook to advise on its decision-making process and has sole authority for retaining and terminating its consultant,the relationship, as well as approving the terms of engagement, including fees. FW Cook works exclusively for the CommitteeMDCC and provides no services to the Company. Accordingly, the CommitteeMDCC has determined the firm to be independent from the Company. Separately, FW Cook has attested in writing as to its independence from the Company. The Company retains Exequity and Willis Towers Watson as its primary compensation consultantconsultants to advise on program design, provide and analyze benchmarking data, apprise management of evolving practices and trends, and perform other consulting services as needed. TheFrom time to time, the Company engages other consultants from time to time, for special projects as needed. MDCC’s Consultant: Role Management’s Consultants: Frederic W. Cook & Co., Inc. Exequity LLP Willis Towers Watson PLC 58 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Elements of Executive Officers in Compensation Decisions The CEO makes recommendations to the Committee concerning the strategic direction of our executive compensation program. The Committee works closely with Mr. Thomas G. Kadien, Senior Vice President, Human Resources, Government Relations & Global Citizenship, who is responsible for making recommendations to the Committee concerning program design and administration, and with Ms. Sharon Ryan, Senior Vice President, General Counsel and Corporate Secretary, who provides legal advice to the Committee concerning disclosure obligations, governance and its oversight responsibilities. Annually, the CEO reviews the performance of SLT members against their individual, pre-established performance objectives and discusses his assessment with the Committee. Each NEO’s pre-established objectives incorporate both qualitative and quantitative measures. In this way, measurement of individual performance differs from measurement of Company performance, which is based exclusively on quantitative measures. Based on each NEO’s year-end performance evaluation, the CEO, in consultation with Mr. Kadien, recommends to the Committee any base salary increase and annual incentive award payment. Ultimately, the Committee takes into account the CEO’s recommendation, as well as input from its compensation consultant, in approving each SLT member’s compensation. The CEO does not participate in any Committee or Board deliberations that involve his own compensation. Part II: Elements ofOur Executive Compensation Program Overview The primary elements of our executive compensation program are base salary, short-term (annual) incentive compensation under our Management Incentive Plan (“MIP”), long-term incentive compensation under our Performance Share Plan (“PSP”), ad hoc equity awards, and benefits. Total Direct Compensation (“TDC”) is the combination of fixed and variable compensation. Other compensation elements, such as our limited executive benefits, are not part of TDC, but the MDCC also reviews these elements. Elements of Executive Compensation Base Salary Base salary is the only fixed element of TDC. The MDCC considers base salary merit increases annually based on individual performance, while taking into account whether market-based adjustments are necessary. Annual merit increases for most employees across the globe, including the NEOs, are effective March 1. The following table shows the annual base salary in effect during 2018 and currently for each NEO. Mr. Sutton received a salary adjustment in 2018, as shown below, recognizing his strong performance and to bring him in closer alignment with the market median. Mr. Landau and Ms. Ryan received market-based adjustments in 2018, and Mr. Nicholls, Ms. Slater and Mr. Ribieras received adjustments, effective July 2018, to reflect their respective appointments to new roles. Ms. Ryan received another market-based adjustment in 2019. Name    Annual Base Salary (Jan.-Feb.)     March 2018 Base Salary    March 2018 Increase    July 2018 Base Salary    July 2018 Increase    December 2018 Base Salary    March 2019 Increase    Current Annual Base Salary Mr. Sutton (CEO)     $ 1,350,000     $ 1,450,000 7.4 %     $ 1,450,000 n/a         $ 1,450,000 n/a         $ 1,450,000 Mr. Nicholls (CFO) $ 710,000 $ 710,000 n/a $ 750,000 5.6 % $ 750,000 n/a $ 750,000 Mr. Landau(former CFO)A $ 600,000 $ 675,000 12.5 % n/a n/a n/a n/a n/a Ms. Slater $ 600,000 $ 600,000 n/a $ 620,000 3.3 % $ 620,000 n/a $ 620,000 Ms. Ryan $ 602,000 $ 620,000 3.0 % $ 620,000 n/a $ 620,000 4.8 % $ 650,000 Mr. Ribieras $ 560,000 $ 560,000 n/a $ 700,000 25.0 % $ 700,000 n/a $ 700,000 OverviewA The primary elements of our executive compensation program are base salary, short-term (annual) incentive compensation under our Management Incentive Plan (“MIP”), long-term incentive compensation under our Performance Share Plan (“PSP”), and benefits. Total Direct Compensation (“TDC”) TDC is Left the combination of fixed and variable compensation. Other compensation elements, such as benefits, are not part of TDC, but the Committee also reviews these elements. Base Salary Base salary is the only fixed element of TDC. The Committee considers base salary merit increases annually based on individual performance, while taking into account whether market-based adjustments are necessary. BeginningCompany in 2015, annual merit increases for most employees across the globe, including the NEOs, are effective March 1 (as compared to April 1 for most employees in prior years) to better align our processes globally. The following table shows for each NEO the annual base salary in effect during 2015. The Company did not achieve all of our goals in 2015, and no SLT member received a merit increase in 2016.      Annual Base Salary (Jan. - Feb.)     March 2015 Increase     Annual Base Salary (December 31, 2015)     Salary as Shown in Parts III and V     March 2016 Increase     Current Annual Base Salary   Mr. Sutton (CEO)   $ 1,200,000        0.0 %    $ 1,200,000      $ 1,200,000        0.0 %    $ 1,200,000    Ms. Roberts (CFO)   $ 750,000        0.0 %    $ 750,000      $ 750,000        0.0 %    $ 750,000    Mr. Amick   $ 500,000        0.0 %    $ 500,000      $ 500,000        0.0 %    $ 500,000    Mr. Hoel   $ 580,000        3.4 %    $ 600,000      $ 596,667        0.0 %    $ 600,000    Mr. Nicholls   $ 710,000        0.0 %    $ 710,000      $ 710,000        0.0 %    $ 710,000    Variable Compensation: Overview and How We Assess Performance2018. Variable Compensation: Overview and How We Assess Performance We do not have guaranteed bonuses. Variable compensation is pay at risk and it is tied directly to both Company and individual performance. Company performance is based on the achievement of specific financial goals described below. Individual performance is rewarded upon achievement of specific pre-established objectives or priorities. Element IP Incentive Plan / Program 2018 Performance Metrics Metric Weight Individual Performance Modifier Short-Term Incentive Plan Management Incentive Plan (MIP) ●Adjusted EBITDA 70 % Yes ●Revenue 15 % ●Cash Conversion 15 % Long-Term Incentive Plan Performance Share Plan (PSP) ●Adjusted ROIC 50 % No ●TSR Relative to Peers 50 % Element IP Incentive Plan / Program 2015 Performance Metrics Other equity awards, including awards of stock and service-based restricted stock/units, may be granted from time to time under limited circumstances to address specific recruitment, retention or other recognition efforts. All SLT compensation, including any such equity awards, must be approved by the MDCC. www.internationalpaper.com 59 Short-term Incentive Plan Management Incentive Plan, or MIP - Cash Flow from Operations - Absolute ROIC Long-term Incentive Plan Performance Share Plan, or PSP - ROIC Relative to Peers - TSR Relative to Peers Other equity awards, including awards of stock and service-based restricted stock/units, may be granted from time to time under limited circumstances to address specific recruitment, retention or other recognition efforts. How and Why We Chose Our Performance Metrics and Peer Groups Our incentive compensation plans are designed around achievement of pre-established performance objectives that will drive improved financial performance of the Company. Each year the Committee

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Table of Contents

Compensation Discussion & Analysis (“CD&A”)

How and Why We Chose Our Performance Metrics

Our incentive compensation plan design is based upon achievement of pre-established performance objectives that will drive improved financial performance of the Company. Each year the MDCC assesses the appropriateness of the performance metrics, and periodically makes adjustments based on the financial objectives most critical to the Company’s success.

We explain below why the MDCC chose the performance metrics we used for our 2018 incentive compensation plans.

Adjusted EBITDA(see the following page for more definitional details)

Adjusted EBITDA1is commonly used as a proxy for a company’s operating profitability. Adjusted EBITDA measures how much operating profit the Company makes with its present assets and operations. Driving earnings growth is currently the best way to drive shareowner value. Within the Company, we set goals for, and periodically makes adjustments based ontrack and discuss, Adjusted EBITDA performance at the financial objectives most criticalbusiness level to establish a readily transparent and ongoing line of sight to our performance. Adjusted EBITDA also serves as an approximation for cash flow, as it is the Company’s success. We explain below why the Committee chose the performance metrics we used for our 2015 incentive compensation plans. 2015 ROIC PEER GROUP Domtar Inc Fibria Celulose S.A. Klabin S.A. Metsa Board (formerly M-real Corp) Mondi Group Packaging Corporationsingle largest driver of America Smurfit Kappa Group Stora Enso Corp UPM-Kymmene Corp WestRock Company* 2015 TSR PEER GROUP Alcoa Inc Domtar Inc Dow Chemical Company E.I. DuPont de Nemours & Co Fibria Celulose S.A. Klabin S.A. Mondi Group Packaging Corporation of America S&P 100 Index S&P Basic Materials Index Sappi Limited Smurfit Kappa Group Stora Enso Corp United States Steel Corp UPM-Kymmene Corp WestRock Company* Cash Flow from Operations1Operations. As a result, Adjusted EBITDA is a major indicator of the on-going operational strength of the Company.

Revenue(see the following page for more definitional details)

Revenue2 is a complementary measure of a company’s ability to generate cashEBITDA but helps focus participants on top-line growth. Utilizing Revenue will also help focus participants on commercial and productivity improvement initiatives.

Cash Conversion(see the following page for more definitional details)

Cash Conversion3drives capital efficiency and is an important indicator of its stock value. Focusing our leadersalso a complementary measure to EBITDA. Employees can influence this measure by not overspending on generating cash flow is important to maintain a strong balance sheet, pay dividends, repurchase stock, repay debt, maintain our assetslow-return projects and make investmentsdelivering better project management and planning.

Adjusted ROIC(see the following page for future growth.more definitional details)

Return on Invested Capital (“ROIC”)Adjusted ROIC24measures a company’s returns and can be compared to the cost of capital. Earning an Adjusted ROIC target that is equal to or greater than our cost of capital is necessary for the Company to create long-term value for our shareowners.

TSR(see the following page for more definitional details)

Total Shareholder Return (“TSR”)TSR35reflects share price appreciation and dividends paid. TSR can be used to compare the performance of companies’ stocks over time, and we measure our relative TSR position over a three-year period against our TSR Peer Group. This is a key financialperformance measure that aligns our long-term incentive pay with the value we create for our shareowners.

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Table of Contents

Compensation Discussion & Analysis (“CD&A”)

The footnotes below explain the details of our performance metric calculations for purposes of our incentive compensation plans:

See“Calculation of Performance Metrics”footnotes on following page.

Why We Use Different Peer Groups

In the chart below, we explain why we use different peer groups for compensation benchmarking and measuring Company performance in

1	Consistent with our incentive plans. Peer Group Composition Rationale CCG Includes 20 companies from many industries (Companies range in size from approximately 0.5 to 2.0 times IP’s revenue, which puts us in the mid-range) These are the companies against which we are likely to compete for executive talent. They are of comparable size and scope of operations to the Company, which is critical for benchmarking target TDC amounts. ROIC Peers Includes global industry competitors These are the companies against which we compete for customer business. TSR Peers Broader cross-section of basic materials companies engaged in global manufacturing and capital-intensive businesses These are the companies against which we compete for investment dollars; and we include two indices: the S&P 100 and the S&P Basic Materials Index, which are commonly used for comparative purposes when analyzing investments. *MeadWestvaco Corp. and Rock-Tenn Company merged in July 2015, forming WestRock Company. 41 Calculation of Performance Metrics The footnotes below explain the details of our performance metric calculations. ¹ For purposes of the incentive compensation plans discussed here, Cash Flow from Operations is calculated as cash flow from discontinued and continuing operations as well as cash flow from special items, and is shown in the Company’s Statement of Cash Flow as “Cash Provided by (Used for) Operations.” Cash flow as a result of pension contributions or other unanticipated, highly unusual items may be excluded in the calculation of “Cash Flow from Operations” for purposes of determining achievement of this cash flow metric. ² For purposes of the incentive compensation plans discussed here, ROIC is calculated as operating earnings before interest (including earnings from continuing and discontinued operations up through the date of sale), and before the impact of special items and non-operating pension expense, divided by average invested capital. Invested capital is total equity (adjusted for pension) plus interest bearing liabilities. The numerator in the Company’s ROIC metric excludes the impact of special items (such as gains or losses associated with asset sales, restructuring costs, and significant out-of-period or “one-off” items) and non-operating pension expense. We calculate International Paper’s ROIC and our peer companies’ ROIC using the same methodology. ³ For purposes of the incentive compensation plans discussed here, TSR is calculated as the change in the Company’s common stock price during the performance period plus the impact of any dividends paid and reinvested in Company stock during the performance period. For all companies in our TSR Peer Group, both the beginning and ending common stock prices used are the average closing price of the 20 trading days immediately preceding the beginning and ending of the performance period. We calculate International Paper’s TSR and our peer companies’ TSR using the same methodology. Note: As discussed in detail on pages 32-33, beginning in 2016, the Company will use EBITDA as a performance metric in the MIP.external financial reporting to investors, Adjusted EBITDA is defined as Earnings from Continuing Operations Before Interest, Income Taxes and Equity Earnings and before the impact of special items and non-operating pension expense plus Depreciation, Amortization and Cost of Timber Harvested.
2	Revenue means “Net Sales” as reported on the Consolidated Statement of Operations in the Company’s financial statements included in its periodic filings with the SEC. Revenue may be adjusted, in the Committee’s discretion, for any impact of acquisitions, divestitures, and/or the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results.
3	“Cash Conversion” means Adjusted EBITDA (as defined above) less Non-Strategic Capital Spending plus/minus changes in Operating Working Capital, divided by Adjusted EBITDA. “Non-Strategic Capital Spending” means “Invested in Capital Projects” as reported on the Consolidated Statement of Cash Flows in the Company’s financial statements included in its periodic filings with the SEC, less capital spending from projects intended to improve market position or customer service/satisfaction, but including volume increases and performance or quality improvements. “Operating Working Capital” means Trade Receivables plus Total Inventory less absolute Trade Accounts Payable as reported internally. Non-Strategic Capital Spending and Operating Working Capital may be adjusted, in the Committee’s discretion, for any impact of acquisitions, divestitures, and/or the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results.
4	Consistent with our external financial reporting to investors, Adjusted ROIC is calculated as operating earnings before interest (including earnings from continuing and discontinued operations up through the date of sale), and before the impact of special items and non-operating pension expense, divided by average invested capital. Invested capital is total equity (adjusted to remove pension-related amounts, including prior service costs and net actuarial gains/losses, that are included in Accumulated Other Comprehensive Income (Loss)) plus interest bearing liabilities. For the relative Adjusted ROIC metric used in the 2016 PSP and 2017 PSP plans, we calculate International Paper’s Adjusted ROIC and our peer companies’ Adjusted ROIC using the same methodology. For the absolute Adjusted ROIC metric used beginning with the 2018 PSP, the Company’s Weighted Average Cost of Capital (“WACC”) will be used as the minimum threshold for Adjusted ROIC performance. Target Adjusted ROIC performance will be set at 200 basis points (“bp”) above WACC, and maximum Adjusted ROIC performance will be set at 400 bp above WACC. The Company’s “Weighted Average Cost of Capital” or “WACC” equals Cost of Equity X (Equity/Capital) + Cost of Debt X (Debt/Capital). The Company’s WACC is calculated prior to the beginning of each grant year and stays fixed for the three-year PSP performance period. WACC may be adjusted for any impact of acquisitions, divestitures, and/or the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results.
5	TSR is calculated as the change in the Company’s common stock price during the performance period plus the impact of any dividends paid and reinvested in Company stock (including the dividends paid on stock obtained by reinvesting dividends) during the performance period. For all companies in our TSR Peer Group, both the beginning and ending common stock prices used are the average closing price of the 20 trading days immediately preceding the beginning and ending of the performance period. We calculate International Paper’s TSR and our peer companies’ TSR using the same methodology.

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Table of Contents

Compensation Discussion & Analysis (“CD&A”)

Why We Use Different Peer Groups

In the chart below, we explain why we use different peer groups for compensation benchmarking and measuring Company performance in our incentive plans.

Previously, our 2017 PSP TSR peer group was comprised of 15 companies and two indices that were hand-selected as companies that IP competed against for investment dollars. Beginning with the 2018 PSP grant, the peer group was selected using a more formulaic process and was expanded to 28 companies. The member companies of the below indices were used to form the TSR Peer Group:

●	S&P 500 Materials Index – excluding companies identified as metals and mining, fertilizer and/or agricultural companies and Albemarle Corporation
●	S&P 1500 Composite Index – includes paper products and paper packaging companies with a market cap of $2.5B, plus Graphic Packaging Holding Company
●	S&P 500 Index – eight selected comparable companies, plus Crown Holdings, Inc.

The goal was to select closely correlated peers against which to compare our performance. This should minimize market factors outside of IP’s control from overly impacting our performance achievement. The share prices of the companies selected are impacted by many of the same macroeconomic and industry factors as IP, thereby reducing the influence of external/market factors when measuring relative performance.

Peer Group		Composition		Rationale
CCG		Includes 20 companies from multiple industriesManagement Incentive Plan (“MIP”)(Companies range in size from approximately 0.5 to 2.0 times IP’s revenue, which positions IP near the median) Overview(For 2019 changes to our Benchmarking Strategy, see Section 2 – Peer Group Benchmarking.)		These are the companies against which we are likely to compete for executive talent. They are of comparable size and scope of operations to the Company, which is critical for benchmarking target TDC amounts.
TSR Peers		Broader cross-section of basic materials companies engaged in global manufacturing and capital-intensive businesses.		These are the companies against which we compete for investment dollars. We include the S&P 1500 paper packaging and paper products companies, as well as a key competitor, Graphic Packaging Holding Corp., and the S&P 500 Materials companies, excluding metals & mining and fertilizers & agricultural chemicals companies.

2018 TSR Peer Group
Air Products and Chemicals, Inc.		LyondellBasell Industries NV
Avery Dennison Corporation		Martin Marietta Materials Inc.
Ball Corporation		Mohawk Industries Inc.
Bemis Company, Inc.		Packaging Corporation of America
Crown Holdings, Inc.		PPG Industries, Inc.
Cummins Inc.		Praxair, Inc.
Domtar Corporation		Rockwell Automation Inc.
Eastman Chemical Company		Sealed Air Corporation
Ecolab Inc.		The MIP is an annual, cash-based incentive compensation plan designed to motivate employees to achieve our most critical short-term financial goals. In 2015, the MIP award pool, described below, was distributed among approximately 3,500 employees globally.Sherwin-Williams Company
Ford Motor Company		Sonoco Products Company
Graphic Packaging Holding Company		Union Pacific Corporation
Ingersoll-Rand PLC		Vulcan Materials Company
International Flavors & Fragrances Inc.		WestRock Company
Johnson Controls International plc		Weyerhaeuser Company

Bolded companies are also part of our 2018 CCG.

2015 Company Performance Metrics and Performance Achievement62 The Company continued to use absolute ROIC and Cash Flow from Operations in determining 2015

2019 Proxy Statement

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Table of Contents

Compensation Discussion & Analysis (“CD&A”)

Management Incentive Plan (“MIP”)

Overview

The MIP is our annual, cash-based incentive compensation plan designed to motivate employees to achieve our most critical short-term financial goals. In 2018, the MIP award pool, described below, was distributed among approximately 3,900 employees globally.

2018 Company Performance Metrics and Performance Achievement

As shown below, and as discussed on page 47, changes were made to the MIP design for 2018. The Company used Adjusted EBITDA, Revenue and Cash Conversion in determining 2018 MIP awards. The chart below describes the specific design elements.

2018 MIP Performance Metrics

Metric Weight

Threshold Performance Payout 50%

Target Performance Payout 100%

Maximum Performance Payout 200%

Adjusted EBITDAA

70

%

Achieve $3.28B

Achieve $4.1B

Achieve $4.51B

Revenue

15

%

Achieve $20.036B

Achieve $22.262B

Achieve $23.375B

Cash ConversionA

15

%

Achieve 57.1

%

Achieve 71.4

%

Achieve 78.5

%

2015

The MDCC believes our MIP performance targets should motivate management to achieve results that will drive superior investor returns.

		Description		Weight			Target			Actual		Target Award Earned		Weighted Target Award Earned
Adjusted EBITDAA		To achieve EBITDA of $4.1B		70	%		$4.1B			$4.347B		160.2	%	112.2	%
Revenue		To achieve revenue of $22.262B		15	%		$22.262B			$23.306B		193.8	%	29.1	%
Cash ConversionA		To achieve cash conversion of 71.4%		15	%		71.4	%		68.41	%	89.5	%	13.4	%
Overall Corporate Weighting:				100.0	%									154.7	%

A	SeeAppendix Afor a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. MIP Performance Metrics		Metric Weight		Threshold Performance Payout %		Target Performance Payout %		Maximum Performance Payout %

2018 Award Pool Calculation

The Company’s MIP target award pool is equal to the sum of each MIP-eligible employee’s target award, based on his or her position in the Company. To calculate the actual award pool, the target award pool is multiplied by the Company’s 2018 total payout of 154.7 percent, resulting in an award pool of approximately $179.7 million. This pool was distributed among all employee participants.

Our 2018 MIP performance achievement reflects our outstanding financial results for the year. We generated over $4.3 billion in adjusted EBITDA, which represents an increase of 16% from 2017 (see Appendix A for a reconciliation of our non-GAAP measures to comparable GAAP measures). All of our businesses and regions contributed in a meaningful way, whether it was through outperforming their respective competitors, growing new product sales, or leveraging innovation and customized products. Additionally, we grew revenue by more than 7%, supported by organic gains in volume, pricing and mix. These strong commercial gains are especially significant given the majority of our businesses operate in low-growth segments. We did, however, fall short in our Cash Conversion goal due to higher working capital, resulting primarily from price increases and an increase in average customer payment terms.

The MDCC has the discretion to decrease the award pool and has done so in the past. Additionally, consistent with our philosophy that management should be rewarded for delivering outstanding financial results, the MDCC has discretion to increase the award pool by up to 25%, provided the total final award pool does not exceed the maximum amount permitted under the 2018 MIP, which is 200% of target. The MDCC did not exercise its discretion to decrease or increase the 2018 MIP award pool.

Individual MIP Awards

For all MIP-eligible employees, their respective awards are based on Company performance, but then may be modified by their individual performance achievement as determined by their direct manager. The CEO has discretion to recommend an additional award outside the MIP, called a CEO Award, in recognition of exceptional individual performance beyond what is captured in individual objectives.

As described in Section 5, for 2018, Mr. Sutton’s MIP award was not modified for individual performance and thus was based solely on the Company’s financial performance percentage of 154.7%.

www.internationalpaper.com	63
Absolute ROIC		50%		8.4% ROIC 50%		11.2% ROIC 100%		14.6% ROIC 200%

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Table of Contents

Compensation Discussion & Analysis (“CD&A”)

Performance Share Plan (“PSP”)

Overview

The PSP is our long-term, equity-based incentive compensation plan designed to motivate employees to create long-term shareowner value. PSP awards are granted in performance-based restricted stock units annually to approximately 1,300 management-level employees globally based on position in the Company and satisfactory performance evaluations. PSP awards are earned over a three-year performance period based on the Company’s performance achievement in absolute Adjusted ROIC (relative Adjusted ROIC for grants made prior to 2018) and relative TSR. Awards are paid in shares of Company stock. The number of shares ultimately paid may include additional shares for prorated PSP grants due to promotion during the grant year and includes the reinvestment of dividends earned on such shares during the three-year performance period.

The MDCC does not have discretion to increase the performance achievement, but may decrease it in the event the Company experiences negative Adjusted ROIC or negative TSR. In addition, if the Company’s TSR over the three-year performance period is negative, performance achievement for the TSR portion of the PSP award may not exceed 100%.

		2016		2017		2018		2019		2020		2021
2016 Grant		3-year Performance Measurement Period						Paid*
2017 Grant				3-year Performance Measurement Period						Paid*
2018 Grant						3-year Performance Measurement Period						Paid*

*	Assuming threshold performance objective is achieved.
Cash Flow from Operations		50%		Achieve $2.4B 50%		Achieve $3.2B 100%		Achieve $3.8B 200%

Company Performance Metrics and Objectives

As shown below, and as discussed above on page 47, changes were made to the PSP design beginning in 2018:

●	Both metrics (Adjusted ROIC and relative TSR) will be weighted 50% each forallparticipants, not just our officers.

The Committee believes●Relative Adjusted ROIC was changed to absolute Adjusted ROIC, which means that for this metric we will no longer be ranked against peers, but instead our MIP performance targets should motivate management to achieve results thatgoal will drive superior investor returns.

2015 MIP Performance Metrics		Metric Weight		Actual Performance Attainment		Award Earned (% of Target)		Weighted Award Earned (% of Target)
Absolute ROIC		50%		11.0% ROIC		97.1%		48.6%
Cash Flow from Operations(A)		50%		$3.127B		95.4%		47.7%
Total Company Payout Percent								96.3%

(A)   In accordance withbe an internal target. Our internal Adjusted ROIC goals are based on covering our weighted average cost of capital (WACC), which is the 2015 MIP plan document, the Committee adjustedbasis for the following itemsAdjusted ROIC payout scale in determining sourcesthe PSP. We considered the maximum Adjusted ROIC level established as recognizing the potential tradeoff between maximizing absolute ROIC and uses of cashmaximizing the potential for purposes of calculatingadditional value creation by growing our portfolio.●To determine our performance achievement under the Cash Flowrelative TSR metric, we are moving from Operations metric:

(i)

Excluded $0.750 billion pension contributions;

(ii)

Excluded $0.240 billion tax benefit resulting from pension contributions; and

(iii)

Included $0.037 billion proceeds from sale of fixed assets.

2015 Award Pool Calculation

The Company’s MIP target award pool is equal to the sum of each MIP-eligible employee’s target award, based on his or heran absolute position in the Company. To calculate the actual award pool, the target award pool is multiplied by the Company’s 2015 total payout percent of 96.3 percent, resulting in an award pool of approximately $100.2 million. This pool was distributed among all employee participants.

The Committee has the discretion to decrease the award pool and has done so in the past. Additionally, consistent with our philosophy that management should be rewarded for delivering outstanding financial results, the Committee has discretion to increase the award pool by up to 25 percent, provided the total final award pool does not exceed the maximum amount permitted under the 2015 MIP, which is 200 percent of target. The Committee did not exercise its discretion to decrease or increase the 2015 MIP award pool.

Individual MIP Awards

For all MIP-eligible employees, their respective awards are based on Company performance, but then modified by their individual performance. The CEO has discretion to recommend an award above the calculated award in recognition of exceptional individual performance beyond what is captured in explicit individual objectives. Additionally, individual MIP awards made to the SLT are capped at $10 million because they are made pursuantranking to a plan approved bypercentile ranking for comparison to our shareowners for the purpose of qualifying as performance-based compensation under Internal Revenue Code (“IRC”)peers, and using a broader and better correlated TSR peer group (see Section 162(m)3, “Why We Use Different Peer Groups”).

					Performance Objective
2018-2020 PSP Performance Metrics		Metric Weight			Threshold ROIC – Payout 50% TSR – Payout 25%			Target Payout 100%			Maximum Payout 200%
Adjusted ROIC		50	%		7.0	%		9.0	%		11.0	%
Relative TSR		50	%		25thpercentile			50thpercentile			75thpercentile

Payout Calculation

Based on market data, each PSP participant has a target award based on his or her position. The actual number of shares paid may be higher or lower than the target award, based solely on the Company’s performance achievement. Possible payouts under the 2018 PSP range from 0 percent to 200 percent of the target award.

2016-2018 PSP Payout

For the 2016-2018 PSP, the performance achievement approved by the MDCC in February 2019 is shown in the chart below, and the award paid to each of our NEOs is described in Section 5.

The MIP award paid to each of our NEOs is described in Part III.

2016 Change Upon approval by the Committee, the Company has altered the MIP performance metrics and their respective weightings for 2016 as follows: 70% EBITDA (up from 50% Cash Flow from Operations in 2015) and 30% ROIC (down from 50% ROIC in 2015). While EBITDA serves as an approximation for cash flow, this change reinforces the Company’s focus on earnings growth and operating profitability and incorporates a metric more widely used within our businesses to measure their performance, thereby providing our employees with better line of sight. See pages 32-33 for a detailed discussion of this change. Performance Share Plan (“PSP”) Overview The2016-2018 PSP is a long-term, equity-based incentive compensation plan designed to motivate employees to create long-term shareowner value. PSP awards are granted in performance-based restricted stock units (“PSUs”) annually to approximately 1,300 management-level employees globally based on position in the Company and satisfactory performance evaluations. PSP awards are earned over three years based on the Company’s performance achievement in relative ROIC and relative TSR over the three-year performance period. Awards are paid in shares of Company stock. The number of shares ultimately paid may include additional shares for prorated PSP grants due to promotion during the grant year and includes the reinvestment of dividends earned on such shares during the three-year performance period. The Committee does not have discretion to adjust performance achievement upward, but may adjust it downward in the event the Company experiences negative ROIC or negative TSR. In addition, in December 2014, the Committee approved a cap on performance achievement in the event of negative TSR. Beginning with the 2015 PSP grant, if the Company’s TSR over the three-year performance period is negative, performance achievement for the TSR portion of the PSP award may not exceed 100%. Company Performance Metrics		Metric Weight for Officers			2016-2018 Performance Results and ObjectivesAward Earned In 2015, the
Relative Adjusted ROIC		50	%		Ranked 3 of 12(A)	72.5	%
Relative TSR		50	%		Ranked 8 of 17(A)	50	%
Total 2016-2018 PSP continued to focus on relative performance in ROIC and TSR as shown below. Our officers’ awards are more heavily weighted to TSR, as compared to other employees’ awards. We believe our most senior leaders, who more directly influence the strategic direction of the Company, should have a greater percentage of their PSP awards tied to TSR, as it better aligns their pay with the long-term interests of the Company and our shareowners.       2015-2017 PSP Performance Metrics     Metric Weight     Performance Objective   Officers     Non- Officers     Threshold Payout %     Target Payout %     Maximum Payout %             ROIC Relative to Peers   50%   75%   Rank 9 of 12 25%   Rank 6 of 12 100%   Rank 1 of 12 200%             TSR Relative to Peers   50%   25%   Rank 13 of 18 25%   Rank 9 of 18 100%   Rank 1 of 18 200% Payout Calculationfor Officers						122.5 Based on market data, each PSP participant has a target award based on his or her position. The actual number of shares paid may be higher or lower than the target award, based solely on the Company’s performance achievement. Possible payouts under the 2015 PSP range from 0 percent to 200 percent of the target award.	2013 – 2015 PSP Payout For the 2013 – 2015 PSP, the performance achievement approved by the Committee in February 2016 is shown in the chart below, and the award paid to each of our NEOs is described in Part III. 2013–2015 PSP Performance Metrics Metric Weight for Officers 2013-2015 Performance Results and Award Earned ROIC Relative to Peers 50 %  Ranked 3 of 11A,B 72.5% TSR Relative to Peers 50 %  Ranked 13 of 17B 12.5% Total 2013-2015 PSP Payout for Officers 85.0%% A – Boise Inc. was eliminated from the peer group due to its acquisition by PCA.(A) B – MeadWestvaco Corp Dow and Rock-Tenn Company merged in July 2015, forming WestRock Company. Other Equity Awards Grants of Stock and Restricted Stock / Units Other types of equity awards, such as grants of stock, restricted stock awards (“RSAs”) or restricted stock units (“RSUs”), are used infrequently for purposes of recruitment, retention or recognition. Vesting provisions for these awards vary on a case-by-case basis, but in all cases are forfeited if the participant voluntarily terminates employment prior to vesting. During 2015, thereDuPont were no equity awards other than the PSP awards granted to any SLT members. Health Benefits Health benefits are offered to all U.S. salaried employees and the Company pays approximately half of the costs to provide those benefits. The NEOs participate in the same health programs as other U.S. salaried employees. We do not offer any supplemental health care benefits to the SLT. Employees who annually earn more than $150,000 pay 25 percent more, on average, for comparable plans than employees who annually earn less than $75,000. Retirement Benefits The Company provides attractive retirement benefits that help the Company remain competitive in the market for top talent. In addition to our tax-qualified 401(k) savings plan and, if applicable, the Deferred Compensation Savings Plan, we provide retirement benefits to our U.S. salaried employees, including the SLT, as follows: For employees hired prior to July 1, 2004: retirement benefits are provided under the Retirement Plan and the Pension Restoration Plan. For employees hired on or after July 1, 2004: retirement benefits are provided through a retirement savings account funded by the Company through the Salaried Savings Plan. We offer the Pension Restoration Plan to supplement the Retirement Plan for employees whose compensation is greater than the limits set by the Internal Revenue Service (“IRS”) for qualified retirement plans. Absent this plan, certain employees would not achieve a retirement benefit commensurate with their earnings during the course of their careers with us. Members of the SLT may receive their non-qualified pension benefits under the Unfunded Supplemental Retirement Plan for Senior Managers (“SERP”). We have offered the SERP since 1983 to recruit and retain senior and mid-career executives. The benefit formula was reduced for all new entrants into the program after June 30, 2004. SERP participants become vested upon reaching age 55 with five years of service and, once vested, are eligible to receive their SERP benefit following retirement at the earlier of age 55 with 10 years of service or age 65 with five years of service. As described in the narrative following the “Pension Benefits” table, SERP benefits are calculated under one of two formulas, depending on the dates of the participant’s employment and SERP eligibility. The SERP was closed to new participants, effective January 1, 2012,both excluded due to the declining prevalencestructure of this benefitthe 2017 merger transaction in the market. In addition, as approvedwhich both predecessor companies were acquired by the Committee in February 2014,a newly created company, DowDuPont Inc. 64 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Other Equity Awards Other types of equity awards, such as grants of stock, restricted stock awards (“RSAs”) or restricted stock units (“RSUs”), are used for purposes of recruitment, retention or recognition. Vesting provisions for these awards vary on a case-by-case basis, but are forfeited if the participant voluntarily terminates employment prior to vesting. During 2018, there were no equity awards other than the PSP awards granted to any SLT member. Retirement and Benefit Plans Members of the SLT participate in the same health, welfare and retirement programs available to most of the Company’s salaried U.S. employees. Additionally, our unfunded, non-qualified plans—the Pension Restoration Plan and the Deferred Compensation Savings Plan (“DCSP”)—are available to eligible U.S. salaried employees, including the NEOs, whose compensation is higher than the limits set by the Internal Revenue Service (“IRS”) for tax-qualified plans. Absent these plans, these employees would not achieve a retirement benefit commensurate with their earnings during the course of their careers with us. Finally, while the Unfunded Supplemental Retirement Plan for Senior Managers (“SERP”) was closed to new participants effective January 1, 2012, some SLT members, including all active NEOs except Ms. Slater and Mr. Ribieras, participate in this plan. Name CEO SLT Other Officers and Eligible Managers U.S. Salaried Employees The Company will freezefroze participation (including credited service and compensation) in the Retirement Plan, Pension Restoration Plan and SERP for eligible salaried employees, including the named executive officers, for all service on or after January 1, 2019. For service after this date, employees affected by the freezeemployees will receive Retirement Savings Account contributions.contributions (“RSAc”). Health and Welfare Plans ● ● ● ● Qualified Retirement (Pension) Plan/ RSAc(B) ● ● ● ● Pension Restoration Plan / RSAc(B) ● ● ● Retiree Medical BenefitsSERP(B) Effective ● (A) ● (A) Qualified Salaried Savings Plan – 401(k) ● ● ● ● DCSP(B) ● ● ● (A)This executive benefit was closed to new participants effective January 1, 2016,2012. (B)See Section 7 for additional information on this benefit. Change-in-Control (CIC) Agreements The Company has entered into CIC agreements with certain executives, including the SLT, that provide severance and other benefits, including acceleration of equity-award vesting, in the event of a “double trigger,” which requiresbotha CIC of the Companyanda qualifying termination of employment (i.e., involuntary termination without “cause” or departure for “good reason”). We believe these potential benefits align executive and shareowner interests by enabling leaders of the Company to focus on the interests of shareowners and other constituents when considering a potential CIC, without undue concern for their own financial and employment security. No benefits are provided to our NEOs upon a CIC alone (i.e., without also experiencing an accompanying termination) so long as the acquiring company provides replacement awards as substitution for outstanding equity awards. Moreover, in no event will the Company gross up or pay for excise taxes relating to any CIC benefits. For more detail on these CIC agreements and benefits, see Section 7. Perquisites As disclosed in Section 7, we do not offer perquisites to our SLT other than the following: the CEO’s limited personal use of Company aircraft; standard benefits under our Global Mobility Policy which establishes many of the benefits provided to employees who serve or have served as expatriates; benefits granted to grandfathered participants in our Executive Supplemental Life Insurance Program; and tax preparation related to board service at the Company’s Ilim joint venture in Russia at the Company’s request. www.internationalpaper.com 65 Table of Contents Compensation Discussion & Analysis (“CD&A”) NEO Compensation Overview The compensation benchmarking review used to establish NEO target TDC levels for 2018 indicated that our CEO’s 2018 target TDC was 93% of the projected 2018 market median and the 2018 target TDC levels for all other active NEOs (excluding Mr. Landau, who left the Company during 2018), in aggregate, were 95% of the projected 2018 market median. We do not, nor do we believe it is necessary to, have a policy that dictates a specific ratio of CEO compensation to other NEOs or the SLT. Generally, we base our compensation decisions on principles of internal equity and external market competitiveness. The difference that exists between our CEO’s compensation and our other NEOs is based on the complexity of the CEO’s leadership responsibilities for the global enterprise. 2018 Actual “Realized” Compensation and Comparison to 2018 Targeted Compensation In this section, we describe the 2018 compensation actually “realized” by each NEO, as well as the rationale for each such compensation element and amount. We also illustrate 2018 targeted versus actual compensation in the individual graphs for each NEO. The “Target” amount includes: (i) 2018 actual base salary paid; (ii) 2018 target MIP(prorated for Mr. Landau); (iii) the target value of the 2016-2018 PSP granted in 2016(prorated for Mr. Landau); (iv) the target value of the RSA grants that vested during 2018; and (v) for Ms. Slater, the actual amount of 2018 make-whole cash payments for forfeited Weyerhaeuser LTI awards. The “Actual” amount represents what we believe is the appropriate way to illustrate 2018 actual pay earned, and includes: (i) 2018 actual base salary paid; (ii) 2018 MIP paid in February 2019; (iii) the actual value of the 2016-2018 PSP paid (including reinvested dividends) in February 2019; (iv) the actual value of the RSA grants that vested (including reinvested dividends) during 2018; and (v) for Ms. Slater, the actual amount of 2018 make-whole cash payments for forfeited Weyerhaeuser LTI awards. In comparing the following charts to the Summary Compensation Table, you will see the value shown for the “equity awards” differs. Equity awards granted in 2018 are shown in the Summary Compensation Table, while the following charts show PSP awards valued and paid in 2019 for performance periods ending in 2018 (and RSA grants that vested during 2018). The equity awards for the 2016-2018 PSP in the following charts were valued based on the closing price ($45.99) of the Company’s common stock on February 8, 2019, which is the trading day immediately preceding the date the MDCC approved payout of the 2016-2018 PSP award. 66 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Mark S. Sutton Chairman of the Board and Chief Executive Officer Mark Sutton has 34 years of service with the Company no longer provides retiree medical benefitsand was appointed CEO effective November 2014 and Chairman of the Board effective January 2015. Mr. Sutton served as President and Chief Operating Officer from June through October 2014, prior to U.S. salaried employees. However,which he was Senior Vice President, Industrial Packaging, a role he assumed in November 2011. Prior to that role, he led our Printing and Communication Papers business since January 2010. He previously served as Senior Vice President – Supply Chain from March 2008 through 2009, Vice President – Supply Chain from June 2007 through February 2008, and Vice President – Strategic Planning from January 2005 through May 2007. 2018 Realized Compensation Element of Compensation Compensation Amount Rationale 2018 Base Salary $1,433,333 (incorporates 7.4% increase effective March 2018) Mr. Sutton received a salary adjustment recognizing his strong performance and to bring him in closer alignment with the market median. 2018 MIP Award $3,364,700 (154.7% Company performance achievement) Mr. Sutton’s MIP payment was not modified for individual performance and thus was based solely on the Company’s financial performance achievement percentage. 2016-2018 PSP Payout 258,261 shares, including reinvested dividends (valued at $11,877,444, including a fractional share) PSP payout of 122.5% is based solely on the Company’s performance achievement in relative Adjusted ROIC and relative TSR described in Section 4. The chart below compares Mr. Sutton’s 2018 actual compensation paid against targeted compensation amounts. Target LTIis based on 188,782 target shares valued at $37.08, using the 20-day average stock price as of December 31, 2015. Actual LTIis based on 258,261 shares, which includes the original target shares plus reinvested dividends, multiplied by 122.5% performance achievement and valued at $45.99, IP’s closing share price on February 8, 2019. www.internationalpaper.com 67 Table of Contents Compensation Discussion & Analysis (“CD&A”) Timothy S. Nicholls Senior Vice President and Chief Financial Officer Tim Nicholls has 27 years of service with the Company does offer assistanceand was appointed CFO effective June 2018, a position he previously held from December 2007 through November 2011. In addition to his role in enrollingfinance, Mr. Nicholls also has oversight for the Company’s information technology group. He previously served as Senior Vice President – Industrial Packaging the Americas, a position he held since November 2014, immediately prior to which he served as Senior Vice President – Printing & Communications Papers the Americas from November 2011. In 1991, he joined Union Camp Corporation, which was acquired by the Company in such benefits through1999. 2018 Realized Compensation Element of Compensation Compensation Amount Rationale 2018 Base Salary $730,000 (incorporates 5.6% increase effective July 2018) Mr. Nicholls’s base salary increase reflected his appointment to a new role. 2018 MIP Award $1,100,200 (158.3% combined Company and individual performance achievement) Mr. Nicholls’s MIP payment was modified upward based on individual performance, which reflected his assumption of the individual market. For employees whoserole of CFO and management of a smooth and rapid transition of the associated responsibilities. 2016-2018 PSP Payout 73,789 shares, including reinvested dividends (valued at $3,393,574, including a fractional share) PSP payout of 122.5% is based solely on the Company’s performance achievement in relative Adjusted ROIC and relative TSR described in Section 4. 2014 Restricted Stock Award 23,030 shares vested on August 1, 2018, representing 100% of his 2014 grant, including reinvested dividends (valued at $1,237,402) This RSA grant of 20,000 shares was made on August 1, 2014, for the purpose of recognizing service, commitment and execution of key initiatives, and the shares vested on August 1, 2018. The chart below compares Mr. Nicholls’s 2018 actual compensation paid against targeted compensation amounts. Target LTIis based on 53,938 target shares valued at $37.08 using the 20-day average stock price as of December 31, 2015. Actual LTIis based on 73,789 shares, which includes the original target shares plus reinvested dividends, multiplied by 122.5% performance achievement and valued at $45.99, IP’s closing share price on February, 8 2019. 68 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Glenn R. Landau Former Senior Vice President and Chief Financial Officer Glenn Landau left the Company effective July 31, 2018, after more than 27 years of ageservice. Mr. Landau had served as CFO since February 2017. Prior to becoming CFO, he served as Senior Vice President & President of IP Latin America from 2013 to 2017 (elected SVP in November 2014), with overall responsibility for the Company’s paper and service were equalpackaging businesses in Brazil as well as the strategic direction for South America. Prior to or greater than 60 on January 1, 2004,that role, he served as Vice President of Investor Relations from 2011 through 2013. Previously, he held positions of increasing responsibility in the Company’s U.S. container and European container businesses. 2018 Realized Compensation Element of Compensation Compensation Amount Rationale 2018 Base Salary $451,348 (incorporates 12.5% increase effective March 2018) Mr. Landau’s base salary increase better aligned his pay with comparable positions within our CCG companies. The amount shown reflects base salary paid to Mr. Landau prior to his departure from the Company, will makeeffective July 31, 2018, as well as $70,098 of cash paid in lieu of vacation upon his departure. 2018 MIP Award $577,500 (154.7% Company performance achievement) Mr. Landau’s MIP payment was not modified for individual performance and thus was based solely on the Company’s financial performance achievement percentage, and was prorated to reflect his departure effective July 31, 2018. 2016-2018 PSP Payout 20,651 shares, including reinvested dividends (valued at $949,737, including a one-time contribution upon retirementfractional share) PSP payout of 122.5% is based solely on the Company’s performance achievement in relative Adjusted ROIC and relative TSR described in Section 4, and was prorated to reflect his departure effective July 31, 2018. The chart below compares Mr. Landau’s 2018 actual compensation paid against targeted compensation amounts. Target LTIis based on 15,095 prorated target shares valued at $37.08 using the 20-day average stock price as of December 31, 2015. Actual LTIis based on 20,651 shares, which includes the original target shares plus reinvested dividends, multiplied by 122.5% performance achievement and valued at $45.99, IP’s closing share price on February 8, 2019. Upon his departure from the Company effective July 31, 2018, Mr. Landau received severance in the aggregate amount of $747,423 (including $20,500 intended for payment of COBRA insurance), which amount is within the limits set forth in the Board’s 2005 Policy on Severance Agreements with Senior Officers and is reflected in the Summary Compensation Table for 2018. www.internationalpaper.com 69 Table of Contents Compensation Discussion & Analysis (“CD&A”) Catherine I. Slater Senior Vice President – Global Cellulose Fibers and IP Asia Cathy Slater joined the Company as a senior vice president from Weyerhaeuser Company in December 2016, effective with the completion of the acquisition of Weyerhaeuser’s cellulose fibers business, which she previously led. In June 2018, Ms. Slater was appointed as the Company’s Senior Vice President – Global Cellulose Fibers and IP Asia. She previously served as Senior Vice President – Consumer Packaging, with responsibility for the Company’s Coated Paperboard and Foodservice businesses, from the time she joined the Company until those businesses were transferred to a subsidiary of Graphic Packaging Holding Company at the beginning of 2018. Her 24-year career with Weyerhaeuser included leadership roles in manufacturing, printing papers, consumer products, wood products and the cellulose fibers business. 2018 Realized Compensation Element of Compensation Compensation Amount Rationale 2018 Base Salary $610,000 (incorporates 3.3% increase effective July 2018) Ms. Slater’s base salary increase reflected her appointment to a new role. 2018 MIP Award $745,800 (147.0% combined Company and individual performance achievement) Ms. Slater’s MIP payment was modified downward, reflecting a temporary setback in fluff pulp volume at the Global Cellulose Fibers business resulting from incomplete execution of a mix improvement plan that was initiated in late 2018. 2016 Restricted Stock Award 8,754 shares vested on December 1, 2018, representing 33% of her 2016 grant, including reinvested dividends (valued at $404,335) This RSA grant of 24,631 shares was made December 1, 2016, for recruitment and retention purposes, and vests ratably over the three-year period ending December 1, 2019. Make-Whole Cash Payments for Forfeited Weyerhaeuser LTI Awards $1,341,537  Ms. Slater received these cash payments in 2018 to compensate her for the loss of portions of Weyerhaeuser equity grants that were (i) awarded in 2014, 2015 and 2016 under Weyerhaeuser’s long-term equity incentive plan, (ii) scheduled to vest in 2018, and (iii) forfeited as a result of the Company’s acquisition of Weyerhaeuser’s pulp business, effective December 1, 2016. These “make-whole” payments are being provided to all similarly situated employees of the acquired business. For more information, see footnote (2) to Summary Compensation Table. The chart below compares Ms. Slater’s 2018 actual compensation paid against targeted compensation amounts. Ms. Slater did not receive a 2016-2018 PSP grant, as she was employed by Weyerhaeuser, not the Company. 70 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Sharon R. Ryan Senior Vice President, General Counsel and Corporate Secretary Sharon Ryan has over 30 years of service with the Company. Ms. Ryan was appointed to the retiree’s Health Reimbursement Account (“HRA”)position of Senior Vice President, General Counsel and Corporate Secretary in November 2011, following her service as Acting General Counsel and Corporate Secretary since May 2011 and Vice President since February 2011. Ms. Ryan previously served in a variety of legal roles, including as Chief Ethics and Compliance Officer (beginning in 2009), Associate General Counsel – Corporate Law, and General Counsel of various business divisions within the Company. 2018 Realized Compensation Element of Compensation Compensation Amount Rationale 2018 Base Salary $617,000 (incorporates 3.0% increase effective March 2018) Ms. Ryan’s base salary increase better aligned her pay with comparable positions within our CCG companies. 2018 MIP Award $804,100 (162.4% combined Company and individual performance achievement) Ms. Ryan’s MIP payment was modified upward based on individual performance, which reflected her role in director succession planning and Board refreshment efforts, ensuring the highest standards of ethics and compliance, and fostering diversity and inclusion. 2016-2018 PSP Payout 55,343 shares, including reinvested dividends (valued at $2,545,212, including a fractional share) PSP payout of 122.5% is based solely on the Company’s performance achievement in relative Adjusted ROIC and relative TSR described in Section 4. The chart below compares Ms. Ryan’s 2018 actual compensation paid against targeted compensation amounts. Target LTIis based on 40,454 target shares valued at $37.08 using the 20-day average stock price as of December 31, 2015. Actual LTIis based on 55,343 shares, which includes the original target shares plus reinvested dividends, multiplied by 122.5% performance achievement and valued at $45.99, IP’s closing share price on February 8, 2019. www.internationalpaper.com 71 Table of Contents Compensation Discussion & Analysis (“CD&A”) Jean Michel Ribieras Senior Vice President – Industrial Packaging the Americas Jean-Michel Ribieras has over 25 years of service with the Company. He has served as Senior Vice President – Industrial Packaging the Americas since June 2018. He previously served as Senior Vice President – Global Cellulose Fibers from July 2016 through June 2018 and led the integration of Weyerhaeuser’s cellulose fibers business with International Paper’s pulp business. Prior to that role, he served as Senior Vice President & President, IP Europe, Middle East, Africa & Russia from 2013 until June 2016, and Vice President & President – IP Latin America from 2009 until 2013. He previously held a variety of roles of increasing responsibility at the Company in Europe and in the United States, including Vice President of European Papers from 2002 to 2004 and Vice President of the Company’s pulp and Converting Papers businesses from 2005 to 2009. 2018 Realized Compensation Element of Compensation Compensation Amount Rationale 2018 Base Salary $630,000 (incorporates 25.0% increase effective July 2018) Mr. Ribieras’s base salary increase reflected his appointment to a new role. 2018 MIP Award $810,600 (154.7% Company performance achievement) Mr. Ribieras’s MIP payment was not modified for individual performance and thus was based solely on the Company’s financial performance achievement percentage. 2016-2018 PSP Payout 39,923 shares, including reinvested dividends (valued at $1,836,049, including a fractional share) PSP payout of 122.5% is based solely on the Company’s performance achievement in relative Adjusted ROIC and relative TSR described in Section 4. 2014 Restricted Stock Award 11,667 shares vested on December 31, 2018, representing 100% of his 2014 grant, including reinvested dividends (valued at $464,460) This RSA grant of 10,000 shares was made on November 1, 2014, for the purposes of recognition and retention, and the shares vested on December 31, 2018. The chart below compares Mr. Ribieras’s 2018 actual compensation paid against targeted compensation amounts. Target LTIis based on 29,217 target shares valued at $37.08 using the 20-day average stock price as of December 31, 2015. Actual LTIis based on 39,923 shares, which includes the original target shares plus reinvested dividends, multiplied by 122.5% performance achievement and valued at $45.99, IP’s closing share price on February 8, 2019. 72 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Other Governance- and Compensation-Related Matters Insider Trading and Anti-Hedging/Anti-Pledging Policies The Company has adopted comprehensive and detailed policies that regulate trading in Company securities by our insiders, including the SLT and Board members. These policies include information regarding trading “blackout” periods and explain when transactions in Company securities are permitted. The policies strictly prohibit our SLT and Board members (as well as our corporate controller) from holding Company securities in a margin account or pledging them as collateral for a loan and prohibit all Company officers and Board members from engaging in any of the following short-term or speculative transactions involving Company securities: short sales; publicly traded options, such as puts, calls or other derivative instruments; and hedging and monetization transactions, such as zero-cost collars, forward-sale contracts, equity swaps and exchange funds. Officer Stock Ownership and Retention Requirements All of our officers are expected to own shares of our common stock with a minimum market value based on a multiple of base pay. This policy is intended to align our officers’ interests with those of our shareowners and encourage long-term shareowner value creation by requiring officers to have a significant equity stake in the Company. Our stock ownership requirements are based on position: Position Current Ownership Requirement Chief Executive Officer 6x base pay Senior Vice President 3x base pay Vice President 1.5x base pay* * Increased from 1x, effective April 1, 2019. The following are counted toward meeting the ownership requirement: freely held shares (whether purchased on open market or fully earned through Company plan or program); “beneficial” shares held indirectly by a trust or family member; and share equivalents held in the Salaried Savings Plan and Deferred Compensation Savings Plan. However, unvested restricted shares (e.g., PSP awards and RSAs) arenotcounted toward meeting the ownership requirement. Officers are required to retain 50 percent of their net shares paid under any Company long-term incentive plan or program, such as shares paid out under the PSP and vested RSA shares, until their ownership requirements are satisfied. SLT stock ownership is reviewed annually by the MDCC to assure compliance. As of our last annual evaluation, all SLT members were in compliance with our policy. Board Policy on Personal Use of Company Aircraft The Board encourages the CEO to use Company aircraft for business continuity and efficiency purposes, where appropriate. Use of the Company aircraft allows the CEO to be available at all times for business needs, whether on business or personal travel. Pursuant to Board resolutions and his Time Sharing Agreement, Mr. Sutton is authorized to use the Company aircraft for personal travel and is required to reimburse the Company for the incremental cost of personal use of the aircraft above $75,000. The value of such use is imputed income to him, and is not grossed up for taxes. Clawback or Forfeiture of Incentive Awards Both MIP and PSP awards are subject to a clawback provision contained in our plan documents. Under this clawback provision, if the Company’s financial statements are restated as a result of errors, omission, or fraud, the MDCC may, at its discretion, based on the facts and circumstances surrounding the restatement, require some or all participants to return all or a portion of their awards to the Company. In addition, both MIP and PSP awards may be forfeited in the event a participant engages in conduct that is detrimental to the business interest or reputation of the Company. Additionally, an SLT member who does not provide one-year’s notice of retirement may forfeit his or her MIP and PSP awards. www.internationalpaper.com 73 Table of Contents Compensation Discussion & Analysis (“CD&A”) Non-Competition and Non-Solicitation Agreements The Company maintains Non-Competition and Non-Solicitation Agreements with leaders of the Company, including our SLT, to prohibit such leaders from engaging in certain competitive activities and to protect confidential information and trade secrets from unauthorized use or disclosure. Violation of these agreements may result in clawback or forfeiture of incentive compensation awards. Board Policy on (Non-CIC) Severance Agreements with Senior Officers A supplemental severance payment to the CEO must be approved by the independent directors of the Board. A supplemental severance payment to any other executive officer must be approved by the MDCC. Moreover, pursuant to a 2005 Board policy, in the absence of a change in control, the supplemental severance, plus severance under the Salaried Employee Severance Plan, may not exceed two times base salary plus target MIP for the year in which the termination occurs. Any severance amount greater than the amount described above must be approved in advance by our shareowners. Prohibition on Repricing We do not backdate or reprice equity grants. Our incentive compensation plan provides that stock options may not be repriced, directly or indirectly, without the prior consent of the Company’s shareowners. The Company discontinued granting stock options in 2005 and all outstanding stock options expired in 2015. Equity Grant Practices The Company does not have any program, plan or practice to time, and has not timed, equity grants to coordinate with the release of material non-public information. Annual equity grants (including pro rata grants for promotions and employees hired in the prior year) under the PSP are approved at the MDCC’s meeting in December. Having a predetermined annual grant date minimizes any concern that grant dates could be selectively chosen based upon market price at any given time. Service-based restricted stock awards are used from time to time, and may be granted anytime during the year by our Senior Vice President, Human Resources (as delegated by the Board), within parameters approved by the MDCC. An award to an SLT member requires approval by the MDCC (or by the Board for an award to the CEO). Deductibility of Executive Compensation Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation for certain executive officers that is more than $1 million. Prior to the enactment of the Tax Cuts and Jobs Act in December 2017, Section 162(m) provided an exemption from this deduction limitation for compensation that qualified as “performance-based compensation.” However, the exemption for performance-based compensation was repealed, effective for taxable years beginning after December 31, 2017, subject to transition relief for certain arrangements in place as of November 2, 2017. On August 21, 2018, the Internal Revenue Service issued initial guidance on certain aspects of new Section 162(m), effective for any taxable year ending on or after September 10, 2018. The Internal Revenue Service also indicated that it anticipates issuing further guidance on new Section 162(m) in the form of proposed regulations and requested additional comments from the public. Given the absence of any proposed or final regulations at this time, the MDCC will continue to monitor developments in this regard. The MDCC continues to have the flexibility to pay non-deductible compensation if it believes it is in the best interests of the Company. Accounting for Stock-Based Compensation The accounting treatment of stock-based compensation is not determinative of the type, timing, or amount of any particular grant made to our employees. 74 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Additional Information About Our Executive Compensation The following tables in this Section provide detailed information regarding compensation for our NEOs. Summary Compensation Table The table below shows base salary, stock awards under our PSP and, if applicable, RSA program, cash awards under our MIP, the change in pension value, and all other compensation to our NEOs for the years ended December 31, 2018, 2017, and 2016. Name and Principal Position    Year    Salary ($)(1)    Bonus ($)(2)    Stock Awards ($)(3)    Non-Equity Incentive Plan Compensation ($)(4)    Change in Pension Value ($)(5)    All Other Compensation ($)(6)    Total ($) Mark S. Sutton 2018 1,433,333 — 9,821,775 3,364,700 7,078,438 212,891 21,911,137 CEO & Chairman of the Board 2017 1,325,000 — 8,717,030 2,099,900 7,120,740 179,069 19,441,739 (Principal Executive Officer) 2016 1,200,000 — 6,867,889 1,296,000 3,750,758 185,661 13,300,308 Timothy S. Nicholls 2018 730,000 — 2,537,923 1,100,200 759,616 66,463 5,194,202 Senior Vice President 2017 710,000 — 2,141,921 663,700 1,392,396 64,376 4,972,393 and Chief Financial Officer 2016 710,000 — 1,962,264 460,800 1,000,639 64,546 4,198,249 (Principal Financial Officer)(7) Glenn R. Landau 2018 451,348 — 2,030,364 577,500 — 798,384 3,857,596 Former Senior Vice President 2017 600,000 — 1,743,417 560,000 1,066,989 63,850 4,034,256 and Chief Financial Officer (Principal Financial Officer until June 20, 2018)(8) Catherine I. Slater 2018 610,000 1,341,537 1,116,719 745,800 245,274 23,095 4,082,425 Senior Vice President – Global Cellulose Fibers and IP Asia Sharon R. Ryan 2018 617,000 — 1,776,552 804,100 429,319 60,316 3,687,287 Senior Vice President, General 2017 602,000 — 1,743,417 499,800 1,622,355 51,219 4,518,791 Counsel & Corporate Secretary 2016 602,000 — 1,471,717 346,800 1,102,136 56,543 3,579,196 Jean-Michel Ribieras 2018 630,000 — 1,218,256 810,600 426,230 247,192 3,332,278 Senior Vice President – Industrial 2017 550,000 25,000 1,228,218 501,700 597,191 50,159 2,952,268 Packaging the Americas 2016 487,503 — 1,030,209 237,200 271,702 251,018 2,277,632 (1) Mr. Landau’s salary includes $70,098 of cash paid in lieu of accrued but unpaid vacation upon his departure from the Company. (2) Ms. Slater received these cash payments in 2018 to compensate her for the loss of portions of Weyerhaeuser equity grants that were (i) awarded in 2014, 2015 and 2016 under Weyerhaeuser’s long-term equity incentive plan, (ii) scheduled to vest in 2018, and (iii) forfeited as a result of the Company’s acquisition of Weyerhaeuser’s pulp business, effective December 1, 2016. These “make-whole” payments are being provided to all employees of the acquired business who participated in Weyerhaeuser’s incentive compensation plans and forfeited a portion of their outstanding awards as a result of the acquisition and their resulting involuntary termination from Weyerhaeuser. The payments are based on the “intended value” at the time of grant, which means using the value of the awards at the time of grant and assuming target performance. The payments are being made according to the original vesting schedule of the employee’s award provided the employee is still employed by the Company on the date of the respective payment. Mr. Ribieras received this cash payment, known as a CEO Award, in February 2018 to reward his leadership during 2017 of the highly successful Global Cellulose Fibers integration. (3) The amounts reported in this column reflect the aggregate grant date fair value of stock awards under our PSP and RSA programs granted to the NEO during each year, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in calculating these values for the 2018 fiscal year may be found in Note 20 to our audited financial statements beginning on page 78 of our 2018 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on February 20, 2019. The value shown for 2018 includes the aggregate grant date fair value of each NEO’s 2018-2020 PSP award. The maximum value of the 2018-2020 PSP awards based on achieving maximum Company performance is as follows: Mr. Sutton: $19,643,550; Mr. Nicholls: $5,075,846; Mr. Landau: $4,060,727; Ms. Ryan: $3,553,105; Ms. Slater: $2,233,438; and Mr. Ribieras: $2,436,513. Mr. Landau forfeited the following number of share units due to his departure from the Company during 2018: 25,724. (4) Represents the amount earned under the MIP based on Company and individual performance during the year shown, which is paid in February of the following year. www.internationalpaper.com 75 Table of Contents Compensation Discussion & Analysis (“CD&A”) (5) Amounts shown in this column represent the change in accruals under our Retirement Plan, Pension Restoration Plan, and SERP as shown in the “Pension Benefits in 2018” table. Importantly, the change in pension value is not currently paid to an executive as compensation, but is a measurement of the change in value of the pension from the prior year. Changes in value arise from, among other things, additional benefit accruals for another year of service, changes in pensionable compensation, the decrease in the discount period and the impact of a change in the discount rate from the prior year’s measurement, and changes in mortality rate assumptions. The discount rate used is the same as the rate used by the Company for financial statement disclosure as of the end of the fiscal year. This rate, which increased by 70 basis points from the prior year, is based on economic conditions at year end. The assumed SERP lump sum interest rate also increased from the prior year with the level of increase varying based on each SERP participant’s lock-in rate. The NEOs do not receive “preferential or her age at retirement. Messrs. Sutton and Hoel and Ms. Roberts are eligibleabove market” earnings on non-qualified deferred compensation. Accordingly, there is no amount included in this column for this subsidy because they mettype of earnings credit. The actual change in pension value for Mr. Landau was a decrease of $1,393,758. (6) A breakdown of the age and service requirements on January 1, 2004. We also offer a“All Other Compensation” amounts for 2018 is shown in the following table: Name       Company Matching Contribution ($)(a)       Group Life Insurance ($)(b)       ESIP ($)(c)       Corporate Aircraft ($)(d)       Company Matching Gift ($)(e)       Medical Coverage Transition Payment ($)(f)       Amount Related to Overseas Assignment ($)(g)       Severance Payments ($)(h)       Total ($)(i) M. S. Sutton 70,720 7,224 53,647 75,000 6,300 — — — 212,891 T. S. Nicholls 36,960 3,679 16,219 — 9,605 — — — 66,463 G. R. Landau 46,300 3,339 — — — — 1,322 747,423 798,384 C. I. Slater 15,120 2,306 — — 3,600 2,069 — — 23,095 S. R. Ryan 55,526 3,110 — — 1,680 — — — 60,316 JM Ribieras 57,442 3,175 — — 6,300 — 180,275 — 247,192 (a) Represents the Company match to the NEO’s contribution to the Salaried Savings Plan, Retiree Medical Savings Plan (“RMSP”) to U.S. salaried employees. Upon reaching age 45, employees may contribute to an RMSP account, and the contributions are credited with a Company match. Amounts contributed to the RMSP may be used to reimburse the cost of retiree medical coverage. Each of the NEOs is eligible to participate in the RMSP. Salaried Savings Plan (“SSP”)Program and Deferred Compensation Savings Plan, (“DCSP”) The Company maintains a tax-qualified Salaried Savings Plan (“SSP”), an IRC Section 401(k) plan, for U.S. salaried employees. Under the SSP, participants may defer compensation for retirement up to the limits set by the IRS. In addition, the Company offers an unfunded, non-qualified Deferred Compensation Savings Plan (“DCSP”) for employees whose compensation is higher than the compensation limit set by the IRS for tax-qualified plans. The DCSP permits additional deferrals up to 85 percent of compensation, including base salary and MIP, beyond the contribution limits set by the IRS. Deferred amounts under both the SSP and DCSP are credited with Company matching contributions equal to 70 percent of the participant’s contributions up to 4 percent of their compensation, plus 50 percent of contributions up to an additional 4 percent of compensation. Amounts deferredas shown in the DCSP earn returns based on investment options modeled after the investment funds in the SSP elected by the participant. Details regarding the DCSP follow the “Non-Qualified Deferred Compensation”Compensation Plan” table. Salaried Employee Severance Plan(b) The Company provides severance to U.S. salaried employees who are involuntarily terminated. SLT members participate in Represents the same Salaried Employee Severance Plan that covers all U.S. salaried employees. The plan provides alump-sumCompany’s annual premium payment equal to two weeks’ salary for every year or partial year of service. Under certain circumstances, supplemental severance may be paid. Supplemental severance is limitedthe NEO’s group life insurance benefit. (c) Represents the amount paid by the Board policy described in Part IV. Employees are eligibleCompany for severance if they are terminated through no fault of their own and sign a termination agreement acceptablethe NEO’s executive supplemental insurance program (“ESIP”). (d) Represents the aggregate incremental cost to the Company. The termination agreement includes confidentiality provisions, as well as restrictive covenants, as appropriate. PerquisitesCompany of Mr. Sutton’s personal travel on Company aircraft. Pursuant to Board resolutions and Other Personal Benefits Thehis Time Sharing Agreement, Mr. Sutton is required to reimburse the Company presently offers no perquisites to our NEOs other than: for the CEO’s limitedincremental cost of personal use of the aircraft above $75,000. For 2018, this reimbursable amount was $19,930. We calculate the incremental cost of personal use of the Company aircraft which is describedbased upon the per mile variable cost of operating the aircraft multiplied by the number of miles flown for personal travel by Mr. Sutton. The variable operating costs include fuel, maintenance, airway fees, user fees, communication, crew expenses, supplies and catering. We impute into Mr. Sutton’s income the value of personal use of the aircraft in Part IV and disclosed in Part V; accordance with IRS regulations, minus any amounts he reimbursed during the calendar year. Mr. Sutton receives no tax gross-up on this imputed income. (e) Represents the Company’s 60-percent match of each NEO’s donation to the United Way of America as part of a Company-wide campaign. (f) Represents the amount paid by the Company to Ms. Slater to offset the increased cost of medical coverage at the Company compared with Weyerhaeuser. These payments were provided through the end of 2018 toall employees of the acquired business who moved from Weyerhaeuser medical coverage to Company medical coverage. (g) Represents standard benefitsamounts paid under our Global Mobility Policy which establishes many of the benefits provided to employees who serve or have served as expatriates, which are described on the next pagefor expatriates. Messrs. Landau and disclosed in Part V; and benefits granted to grandfathered participants in our Executive Supplemental Life Insurance Program (“ESIP”), which are described on the next page and disclosed in Part V. As disclosed in Part V, in 2015 the Company paid a third-party vendor to install security equipment at Mr. Sutton’s residence as a result of bona fide business-related security concerns. Global Mobility Policy Benefits The Company provides standard benefits to globally mobile employees under our Global Mobility Policy. This program is designed to relocate and support employees who are sent on an assignment outside of their home country. The purpose of the program is to make sure that when the Company requests that an employee move outside his or her home country, economic considerations do not play a role. This helps the Company quickly meet its business needs around the world and develop its employees. Under the tax equalization provision of the program, we make the payments that are necessary to ensure the international assignee does not pay more or less taxes, regardless of the country of assignment, than the assignee would have paid had he or she remained in the home country during the tax period involved. As a U.S. citizen, Mr. AmickRibieras participated in the program when he wasthey were based in India.Brazil and Belgium, respectively. Although hethey moved back to the U.S. in late 2014 and no longer participates in the program,prior to 2018, certain benefits and payments  related to histhose prior assignment in India, includingoverseas assignments, primarily foreign tax equalization, payments and transportation of household goods, were paid in 2015 (as disclosed2018. (h) Represents amounts paid to Mr. Landau for severance when he left the Company, which amounts are within the limits set forth in Part V)the Board’s 2005 Policy on Severance Agreements with Senior Officers. (i) Represents the sum of columns (a) through (h). (7) Mr. Nicholls was appointed Senior Vice President and Chief Financial Officer of the Company, effective June 20, 2018. (8) Mr. Landau left the Company effective July 31, 2018, and served as the Company’s Principal Financial Officer through June 20, 2018. 76 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Other Grants of Plan-Based Awards During 2018 The table below shows payout ranges for our NEOs under the 2018 MIP and 2018-2020 PSP, as described in our CD&A. There were no other plan-based cash or equity awards granted to our NEOs in 2018. Estimated Possible Payouts Under Non-Equity Incentive Plan Awards Estimated Future Payouts Under Equity Incentive Plan Awards Grant Date Fair Value of Stock and Option Awards ($)(3) Name     Committee Action Date(1)     Grant Date     Threshold ($)     Target ($)     Maximum ($)     Threshold (#)     Target (#)(2)     Maximum (#)     M. S. Sutton 163,125 2,175,000 4,350,000 12/11/2017 1/1/2018 19,310 154,479 308,958 9,821,775 T. S. Nicholls 52,125 695,000 1,390,000 12/11/2017 1/1/2018 4,990 39,917 79,834 2,537,923 G. R. Landau 27,998 373,300 746,600 12/11/2017 1/1/2018 3,992 31,934 63,868 2,030,364 C.I. Slater 38,063 507,500 1,015,000 12/11/2017 1/1/2018 2,196 17,564 35,128 1,116,719 S. R. Ryan 37,125 495,000 990,000 12/11/2017 1/1/2018 3,493 27,942 55,884 1,776,552 JM Ribieras 39,300 524,000 1,048,000 12/11/2017 1/1/2018 2,395 19,161 38,322 1,218,256 (1) The 2018-2020 PSP grant was approved by the MDCC for all NEOs (except Mr. Sutton, whose grant was approved by the full Board) at its December 2017 meeting, effective the first day of the following calendar year. (2) Mr. Landau forfeited 25,724 share units due to his departure from the Company during 2018. (3) The amounts shown in this column reflect the grant date fair value of the PSP awards computed in accordance with FASB ASC Topic 718 based on the probable satisfaction of the performance conditions at January 1, 2018 for such awards (i.e., 100 percent of target), as explained in further detail in the narrative following this table. Narrative to the Grants of Plan-Based Awards Table Estimated Possible Payouts under Non-Equity Incentive Plan Awards These columns show the threshold, target and maximum payouts under the 2018 MIP. The actual amount paid is shown in the Summary Compensation Table. The amount shown in the “Threshold” column was the amount that would have been paid under the 2018 MIP if the Company had achieved only the minimum performance level required in the following performance metrics: absolute Revenue, absolute Cash Conversion, and absolute Adjusted EBITDA. Since absolute Revenue is weighted at 15 percent, a threshold payout at 15 percent would result in weighted performance achievement of 7.5 percent (or one-half of 15 percent). Minimum performance in at least one objective is required to fund an MIP award pool. The amount shown in the “Maximum” column was the possible payout for each NEO based on maximum Company performance achievement of 200 percent. Estimated Future Payouts under Equity Incentive Plan Awards These columns show the threshold, target and maximum payouts under the 2018-2020 PSP. The amount shown in the “Threshold” column is the number of shares each NEO would receive if the Company achieved only the minimum performance level required in the following performance metrics: absolute Adjusted ROIC and relative TSR. Since relative TSR is weighted at 50 percent, a threshold payout at 25 percent would result in weighted performance achievement of 12.5 percent (or one-half of 25 percent). The amount shown in the “Maximum” column is the possible number of shares each NEO would receive based on maximum Company performance of 200 percent. www.internationalpaper.com 77 Table of Contents Compensation Discussion & Analysis (“CD&A”) Grant Date Fair Value of Stock Awards The amounts shown in this column reflect the grant date fair value of the awards granted to each NEO under the 2018-2020 PSP computed in accordance with FASB ASC Topic 718 based on the probable satisfaction of the performance conditions at January 1, 2018 for such awards (i.e., 100 percent of target). For the absolute Adjusted ROIC component of the awards, the grant date fair value is based on the closing price of our common stock on the trading day immediately preceding the grant date. Valuing Relative TSR is more complicated because the value must take into account the probable payout of the 2018-2020 PSP based on our expected future performance relative to the other companies in our TSR Peer Group. The market value of the TSR component is based on a Monte Carlo simulation as prescribed by FASB ASC Topic 718. The amount ultimately paid to PSP participants may or may not be the same amount as the value shown in the table due to two factors: (1) the ultimate number of shares paid to our PSP participants will vary based on the relative performance of the Company to the other companies in our TSR and ROIC Peer Groups; and (2) the value of the PSP award received by each participant is based on the fair value of the Company’s stock as of the effective date of the payment. Outstanding Equity Awards at December 31, 2018 The following table shows the outstanding equity awards held by our NEOs as of December 31, 2018. Stock Awards Name       Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)       Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) M. S. Sutton 548,431 (2) 22,134,675 T. S. Nicholls 145,225 (3) 5,861,281 G. R. Landau 42,014 (4) 1,695,685 C. I. Slater 49,469 (5) 1,996,569 S. R. Ryan 109,633 (6) 4,424,788 JM Ribieras 76,789 (7) 3,099,204 (1) The market value is calculated based on the closing price of our common stock on December 31, 2018, of $40.36. (2) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2018: (i) 188,782 units awarded under the 2016-2018 PSP, (ii) 165,064 units awarded under the 2017-2019 PSP, (iii) 154,479 units awarded under the 2018-2020 PSP, and (iv) 40,106 reinvested dividends on those units. (3) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2018: (i) 53,938 units awarded under the 2016-2018 PSP, (ii) 40,559 units awarded under the 2017-2019 PSP, (iii) 39,917 units awarded under the 2018-2020 PSP, and (iv) 10,811 reinvested dividends on those units. (4) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2018: (i) 16,522 units awarded under the 2016-2018 PSP, (ii) 18,337 units awarded under the 2017-2019 PSP, (iii) 6,317 units awarded under the 2018-2020 PSP, and (iv) 838 reinvested dividends on those units. (5) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2018: (i) 20,751 units awarded under the 2017-2019 PSP, (ii) 17,564 units awarded under the 2018-2020 PSP, (iii) 2,200 reinvested dividends on those units, and (iv) 8,954 shares (including reinvested dividends) related to a restricted stock award that vests on December 1, 2019. (6) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2018: (i) 40,454 units awarded under the 2016-2018 PSP, (ii) 33,013 units awarded under the 2017-2019 PSP, (iii) 27,942 units awarded under the 2018-2020 PSP, and (iv) 8,224 reinvested dividends on those units. (7) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2018: (i) 29,217 units awarded under the 2016-2018 PSP, (ii) 22,638 units awarded under the 2017-2019 PSP, (iii) 19,161 units awarded under the 2018-2020 PSP, and (iv) 5,773 reinvested dividends on those units. 78 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Stock Vested in 2018 The following table shows the value received upon the vesting in 2018 of shares previously awarded under our PSP and restricted stock programs as described in our CD&A. Stock Awards Name       Number of Shares Acquired on Vesting (#)(1)       Value Realized on Vesting ($)(2) M. S. Sutton 104,458 5,974,998 T. S. Nicholls 49,846 2,944,593 G. R. Landau 9,700 554,840 C. I. Slater 8,754 404,335 S. R. Ryan 22,385 1,280,422 JM Ribieras 27,336 2,171,651 (1) Amounts shown represent shares (including shares acquired in respect of reinvested dividends) under the PSP awards that vested on February 12, 2018. Mr. Nicholls’s, Mr. Ribieras’s and Ms. Slater’s amounts include 23,030, 11,667 and 8,754 shares, respectively, relating to restricted stock awards that vested on August 1, 2018, December 31, 2018 and December 1, 2018, respectively. (2) Amounts shown represent the value of the vested shares based on our closing stock price on the date immediately preceding the vesting date of the award: $57.20 for each PSP share; and $53.73 for Mr. Nicholls’s restricted stock award, $39.81 for Mr. Ribieras’s restricted stock award and $46.19 for Ms. Slater’s restricted stock award. www.internationalpaper.com 79 Table of Contents Compensation Discussion & Analysis (“CD&A”) Pension Benefits in 2018 The following table shows the present value of benefits payable to our NEOs under our Retirement Plan, Pension Restoration Plan, or SERP at December 31, 2017 and December 31, 2018. The change in the present value of the accrued benefit is shown in the “Change in Pension Value” column of the Summary Compensation Table for 2018. All of our NEOs are eligible for a benefit calculated under the Retirement Plan. The NEOs are also eligible for a benefit that is calculated under the Pension Restoration Plan formula. Mr. Sutton, Mr. Nicholls and Ms. Ryan are also eligible for a benefit calculated under the SERP formula. We amended the SERP to comply with IRC Section 409A, effective January 1, 2008. As amended, the portion of the benefit that is earned prior to SERP eligibility is paid under the Pension Restoration Plan, and the portion earned following SERP eligibility is paid from the SERP. Mr. Landau, Ms. Slater and Mr. Ribieras are not eligible for a SERP benefit as they did not meet the eligibility requirements prior to the date the SERP was closed to new participants, on January 1, 2012. Name     Plan Name       Number of Years of Credited Service in 2018 (#)       12/31/2017 Present Value of Accumulated Benefit ($)(1)       12/31/2018 Present Value of Accumulated Benefit ($)(2) M. S. Sutton Retirement Plan 34.58 1,788,518 1,740,899 Pension Restoration Plan 34.58 1,123,079 1,045,245 SERP 34.58 19,337,469 26,541,360 Total 22,249,066 29,327,504 T. S. Nicholls Retirement Plan 27.25 1,371,550 1,345,969 Pension Restoration Plan 27.25 722,698 672,612 SERP 27.25 7,215,469 8,050,752 Total 9,309,717 10,069,333 G. R. Landau Retirement Plan 27.08 1,114,102 785,113 Pension Restoration Plan 27.08 2,203,483 1,138,714 SERP — — — Total 3,317,585 1,923,827 C. I. Slater Retirement Plan 2.08 56,979 101,238 Pension Restoration Plan 2.08 212,639 413,654 SERP — — — Total 269,618 514,892 S. R. Ryan Retirement Plan 30.50 1,770,511 1,752,447 Pension Restoration Plan 30.50 832,412 784,610 SERP 30.50 6,072,212 6,567,397 Total 8,675,135 9,104,454 JM Ribieras Retirement Plan 13.83 638,393 646,491 Pension Restoration Plan 13.83 1,454,493 1,872,625 SERP — — — Total 2,092,886 2,519,116 (1) The calculation of the present value of accumulated benefits as of December 31, 2017, assumes a discount rate of 3.60 percent for annuity payments and deferral periods and 1.10 percent for lump sum payments. The calculation further assumes benefit commencement at the earliest age at which the NEO would be entitled to an unreduced benefit (the earlier of age 61 and completion of 20 years of service or age 62 and completion of 10 years of service). For individuals who are already eligible for an unreduced benefit, we use their age as of the end of the fiscal year. (2) The calculation of the present value of accumulated benefits as of December 31, 2018, assumes a discount rate of 4.30 percent for annuity payments and deferral periods. Lump sum payment calculations are based on the lower of the December 2018 municipal bond rate of 2.59 percent, or the locked-in rate elected by the NEO, if applicable. The assumptions regarding the benefit commencement date are the same as described in footnote (1). 80 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Narrative to Pension Benefits Table Retirement Plan of International Paper Company Our Retirement Plan is a funded, tax-qualified plan that covers all U.S. salaried employees hired prior to July 1, 2004. U.S. employees hired on or after July 1, 2004, are eligible for a Company-paid Retirement Savings Account contribution to our Salaried Savings Plan and Deferred Compensation Savings Plan in lieu of participation in the Retirement Plan. All of our NEOs, except Ms. Slater, were hired prior to July 1, 2004, and thus are eligible to participate in the Retirement Plan. Ms. Slater is eligible to participate in the Retirement Plan because she was hired by Weyerhaeuser on or before December 1, 2011, and participating in Weyerhaeuser’s salaried pension plan on December 1, 2016, the date of the Company’s acquisition of Weyerhaeuser’s pulp business. All similarly situated employees of the acquired business were allowed to participate and begin accruing a benefit under the Retirement Plan as of December 1, 2016. We calculate the benefit under the Retirement Plan at the rate of 1.67% of the participant’s average pensionable earnings received over the highest five consecutive calendar years of the last 10 calendar years, multiplied by his or her years of service, then reduced by a portion of Social Security benefits. We include as pensionable earnings the participant’s base salary plus MIP awards that were not deferred, up to the maximum limit set by the IRS. International Paper Company Pension Restoration Plan for Salaried Employees Our supplemental retirement plan for our salaried employees is an unfunded, non-qualified plan that covers all U.S. salaried employees hired prior to July 1, 2004. This plan augments our Retirement Plan by providing retirement benefits based on compensation that is greater than the limits set by the IRS. We include as eligible compensation under this plan the participant’s base salary plus MIP awards, including amounts deferred. All of our NEOs, except Ms. Slater, were hired prior to July 1, 2004, and thus are eligible to participate in the Pension Restoration Plan. Ms. Slater is eligible to participate in the Pension Restoration Plan because she was hired by Weyerhaeuser on or before December 1, 2011, and participating in Weyerhaeuser’s salaried pension plan on December 1, 2016, the date of the Company’s acquisition of Weyerhaeuser’s pulp business. All similarly situated employees of the acquired business were allowed to participate and begin accruing a benefit under the Pension Restoration Plan as of December 1, 2016. We calculate the benefit under the Pension Restoration Plan in the same manner as the Retirement Plan and then reduce the benefit by the amount payable under the Retirement Plan. The International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers Our SERP is an alternative retirement plan available to certain senior executives, including the NEOs (other than Mr. Landau, Ms. Slater and Mr. Ribieras). The SERP was closed to new participants effective January 1, 2012. SERP benefits vest once the participant reaches age 55 and has completed five years of service. The normal form of payment is a lump sum. We calculate benefits under the SERP at the same rate as our Retirement Plan and Pension Restoration Plan. Participants are eligible to receive a lump sum payment of the benefit earned for service after becoming eligible in the SERP; the benefit earned prior to SERP eligibility remains payable as an annuity. Benefits are payable under the SERP on the later of the participant’s retirement date or the date six months following separation from service. We define “retirement date” as the date the participant reaches the earlier of age 55 with 10 years of service or age 65 with five years of service. A participant who has announced retirement at least 12 months in advance has the right to lock in a discount rate used to determine the amount of the lump sum payment based on the average for the month in which they choose to lock in. All NEOs who are eligible for a SERP benefit have locked in the discount rate under this provision. Policies with Regard to Granting Additional Years of Service Our change-in-control agreements described elsewhere in this proxy statement provide additional years of age and service to be added to the calculation of retirement benefits in the event of a qualifying termination of each NEO’s employment following a change-in-control. The change-in-control agreements for Mr. Sutton, Mr. Nicholls and Ms. Ryan provide three additional years of age and service. The change-in-control agreements for Ms. Slater and Mr. Ribieras provide two additional years of age and service. www.internationalpaper.com 81 Table of Contents Compensation Discussion & Analysis (“CD&A”) Eligibility for Early Retirement Benefits Normal retirement under our Retirement Plan and Pension Restoration Plan is age 65. Participants, including the NEOs, are eligible for early retirement under the Retirement Plan, the Pension Restoration Plan and the SERP at age 55 with 10 years of service. However, a participant’s accrued benefit is reduced by 4% for each year that the participant retires before reaching age 62. Eligible active employees may receive an unreduced benefit once they reach age 61 and have completed at least 20 years of service. All NEOs are eligible for early retirement; their benefit would be reduced based on age and years of service. Pension Change In February 2014, the MDCC approved changes to the Retirement Plan, the Pension Restoration Plan and the SERP such that credited service and compensation were capped effective December 31, 2018, for salaried employees, including the NEOs. For service after this date, employees affected by the freeze will receive Retirement Savings Account contributions. Non-Qualified Deferred Compensation in 2018 The following table shows contributions in 2018 by the Company and each of our NEOs to the DCSP, which is our non-qualified deferred compensation plan, and each NEO’s DCSP account balance as of December 31, 2018. The account balance includes amounts deferred by the NEO in December 2018, which were actually credited to his or her account in January 2019. Name       Executive Contributions in Last Fiscal Year ($)(1)       Registrant Contributions in Last Fiscal Year ($)(2)       Aggregate Earnings in Last Fiscal Year ($)(3)       Aggregate Withdrawals/ Distributions in Last Fiscal Year ($)       Aggregate Balance at Last Fiscal Year End ($)(4) M. S. Sutton 96,667 58,000 (60,634 ) — 2,329,024 T. S. Nicholls 55,050 29,360 (126,708 ) — 1,158,688 G. R. Landau 69,625 33,420 (95,211 ) — 1,101,123 C. I. Slater — — — — — S. R. Ryan 67,344 40,406 (421,590 ) — 1,323,405 JM Ribieras 79,353 42,322 (36,733 ) — 1,076,590 (1) These amounts are included in the “Salary” column of the Summary Compensation Table for 2018 for each NEO. (2) These amounts are included in the “All Other Compensation” column of the Summary Compensation Table for 2018 for each NEO. (3) These amounts are not included in the Summary Compensation Table because they are not “preferential or above-market earnings.” (4) Of the amounts shown in this column, the following amounts were included in the “Salary” column of the Summary Compensation Table for prior years as follows: Mr. Sutton: $441,203 was included for the periods of 2011 and 2013-2017; Mr. Nicholls: $432,370 was included for the period 2010-2017; Mr. Landau: $59,820 was included for the period of 2017; Ms. Ryan: $172,280 was included for the periods of 2012 and 2016-2017; Mr. Ribieras: $32,516 was included for the period of 2014. Narrative to Non-Qualified Deferred Compensation Table The DCSP allows participants to save for retirement by deferring up to 85% of eligible cash compensation, which includes base salary and MIP awards. Participants may contribute to the DCSP after deferring either the maximum pre-tax amount or total pre-tax and after-tax amount to the 401(k) plan or after reaching the IRS compensation limit for that year. The Company credits matching contributions equal to 70% of the participant’s contributions up to 4% of compensation, plus 50% of contributions up to an additional 4% of compensation. For 2018, NEO contribution amounts were as follows: Mr. Sutton contributed 8% of base salary, Mr. Nicholls contributed 9% of his base salary, Mr. Landau contributed 10% of all eligible cash compensation, Ms. Slater contributed 0% of all eligible cash compensation, Ms. Ryan contributed 8% of all eligible cash compensation, and Mr. Ribieras contributed 9% of all eligible cash compensation. As a result of the varying contribution amounts, the actual amounts deferred and the Company’s resulting matching contribution will vary for each NEO. Participant contributions are credited with earnings (or losses) based on the participant’s choice of investment fund equivalents. Investment fund equivalents match the investment returns of the funds available in the 401(k) plan. Investment elections may be changed daily subject to securities laws restrictions. Differences in earnings reported in the “Non-Qualified Deferred Compensation” table above, are based on the individual participant’s investment elections. 82 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Participants are fully vested in their contributions at all times. Amounts contributed by the Company become vested upon completing three years of service, reaching age 65, death, disability, termination of employment as a result of the permanent closing of the participant’s facility, or eligibility for severance under the Salaried Employee Severance Plan. Participant accounts are divided into contribution accounts for amounts deferred prior to January 1, 2005, and contribution accounts for amounts deferred after January 1, 2005. Distributions of amounts contributed on or after January 1, 2005, may only be made in the event of termination of employment, death, disability or through an in-service distribution at a date elected during the initial enrollment period. Participants must elect their distribution form of payment in an initial deferral election, which may only be changed under a subsequent distribution election that meets the requirements under IRC Section 409A. In the event no election has been made, the participant will receive a lump-sum form of payment. In-service withdrawals are limited to unforeseeable emergencies. Post-Employment Termination Benefits Potential Payments Upon Death or Disability The Company provides to our NEOs the following benefits in the event of death or disability, which are also available to all of our U.S. salaried employees. Upon reaching age 65, the disabled individual is covered under our retirement programs, if eligible, as described above. We provide the following disability benefits: ● Long-term disability income benefit equal to 60 percent of base salary plus the employee’s average MIP during the last three calendar years; and ● Continuation of medical and life insurance coverage. The Company provides the same benefits to the beneficiary of an SLT member (including a NEO) upon death as are available to our U.S. salaried employees, with two additional benefits: ● Executive Supplemental Life Insurance (“ESIP”) supplemental life insurance, which is described earlier in this section 7 of this proxy statement. This SLT benefit was closed to new participants effective January 1, 2008, and thus Mr. Amick and four othereight SLT members (including three active NEOs) do not have this benefit. The ESIP providesbenefit; and ● If the SLT member is eligible for the SERP and has completed five years of vesting service at the time of death, an individually owned, permanent life insurance policy with a pre-retirement death benefitamount equal to 50% of the SLT member’s SERP benefit is payable to a surviving spouse. In the event of disability or death, PSP awards are prorated based upon the number of months the participant worked during the performance period, and are paid at the end of the three-year performance period based on actual Company performance. Service-based restricted stock awards also become vested upon death or disability. Potential Payments Upon Retirement The following table presents the potential payments to our NEOs, assuming that they retired at the end of 2018. Name       Retirement Plan Annuity ($)       Pension Restoration Plan Annuity ($)       TOTAL Annuity ($)(1)       Lump Sum Pension Payment ($)(2)       Vesting of Equity ($)(3) M. S. Sutton 115,604 69,409 185,013 27,894,225 5,615,045 T. S. Nicholls 89,379 44,665 134,044 8,461,115 1,407,111 C. I. Slater 6,247 25,525 31,772 — 680,026 S. R. Ryan 111,668 49,996 161,664 6,522,358 1,081,809 JM Ribieras 42,546 123,239 165,785 — 741,817 (1) Amounts shown in this column are the annual annuity benefits payable from the tax-qualified Retirement Plan and from the Pension Restoration Plan as of December 31, 2018. (2) Lump sum payment calculations are based on the lower of the December 2018 municipal bond rate of 2.59 percent, or the locked-in rate elected by the NEO, if applicable. Additional information regarding the calculation of benefits may be found following the “Pension Benefits” table. (3) Amounts shown in this column reflect the dollar value, based on the closing price of our common stock on December 31, 2018, of the prorated portions of the 2017-2019 PSP and 2018-2020 PSP, including reinvested dividends, that would be paid at the end of the performance period. In addition, the NEO would receive the 2016-2018 PSP award, which has a performance period ending on December 31, 2018, which is not shown here because it would have already vested. www.internationalpaper.com 83 Table of Contents Compensation Discussion & Analysis (“CD&A”) Potential Payments Upon Involuntary Termination Without Cause The following table represents all amounts that would be payable to our NEOs in the event of involuntary termination without cause, including earned pension amounts not payable as a result of the termination, assuming that the termination occurred at the end of 2018. Name     Years of Credited Service (#)     Lump Sum Severance Payment ($)(1)     Lump Sum Pension Payment ($)(2)     TOTAL Benefit at Termination ($)(3)     Vesting of Equity ($)(4)     Value of Continued Benefits ($)(5)     TOTAL Pension Annuity ($)(6) M. S. Sutton 35 5,662,393 27,894,225 33,556,618 5,615,045 151,480 185,013 T. S. Nicholls 28 2,057,892 8,461,115 10,519,007 1,407,111 81,480 134,044 C. I. Slater 27 1,513,646 — 1,513,646 680,026 68,480 31,772 S. R. Ryan 31 1,691,177 6,522,358 8,213,535 1,081,809 68,480 161,664 JM Ribieras 26 1,650,600 — 1,650,600 741,817 76,480 165,785 (1) The amounts shown in this column reflect estimated amounts under the Salaried Employee Severance Plan formula of two weeks’ salary for each year or partial year of service. Amounts shown also include the following benefits to which the NEO would be entitled: (i) unused current year vacation pay; (ii) 2019 earned vacation pay; and (iii) MIP award for 2018. We do not gross-up standard severance benefits. (2) Amounts shown in this column are the lump sum benefit payable under the SERP. The methodology used to calculate the lump sum benefit can be found in footnote 2 to the “Potential Payments Upon Retirement” table above. (3) Amounts shown in this column reflect the sum of the amounts in the previous two columns payable to the NEO upon termination. (4) Amounts shown in this column reflect the dollar value, based on the closing price of our common stock on December 31, 2018, of the prorated portions of the 2017-2019 PSP and 2018-2020 PSP, including reinvested dividends, that would be paid at the end of the performance period. In addition, the NEO would receive the 2016-2018 PSP award, which has a performance period ending on December 31, 2018, which is not shown here because it would have already vested. (5) Amounts shown in this column reflect the cost of (i) six months of continued dental and Employee Assistance Program coverage and (ii) executive outplacement services. Since all NEOs are eligible for early retirement, the amounts also include a $3,000 Health Reimbursement Account contribution made by the Company on behalf of the employee and if applicable, an additional $3,000 for the spouse of the employee. (6) Amounts shown in this column are the annual annuity benefits payable from the Retirement Plan and the Pension Restoration Plan as of December 31, 2018. All NEOs are eligible for Early Retirement as of December 31, 2018. Potential Payments Upon Involuntary Termination With Cause An executive officer who is terminated with cause would not be eligible for the severance benefits included in the previous table, other than vacation pay. Further, the executive officer would lose outstanding equity awards under the PSP or other restricted stock grants, and not be eligible for payment of an MIP award. Name     Years of Credited Service (#)     Unused/Earned Vacation Pay ($)(1)     Lump Sum Pension Payment ($)(2)     TOTAL Benefit at Termination ($)(3)     Pension Annuity ($)(4) M. S. Sutton 35 345,770 27,894,225 28,239,995 185,013 T. S. Nicholls 28 150,000 8,461,115 8,611,115 134,044 C. I. Slater 27 124,000 — 124,000 31,772 S. R. Ryan 31 147,846 6,522,358 6,670,204 161,664 JM Ribieras 26 140,000 — 140,000 165,785 (1) The amounts shown in this column represent unused 2018 vacation pay and 2019 earned vacation pay. (2) The amounts shown in this column represent the lump sum benefit payable under the SERP. (3) Amounts shown in this column represent the sum of columns (1) and (2) payable to the NEO upon termination. (4) Amounts shown in this column are the annual annuity benefits payable from the Retirement Plan and the Pension Restoration Plan as of December 31, 2018. All NEOs were eligible for Early Retirement as of December 31, 2018. 84 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) Potential Payments Upon Qualifying Termination After Change in Control The following table represents amounts that would be payable to our NEOs upon termination of employment without cause (including by the NEO for “good reason”) within two years following a change in control of the Company on December 31, 2018. Name     Lump Sum Severance Payment ($)(1)     Lump Sum Pension Payment ($)(2)     Value of Continued Benefits ($)(3)     TOTAL Cash-Based Award ($)     Accelerated Vesting of Equity ($)(4)     TOTAL Pre-Tax Benefit ($)(5)     Pension Annuity ($)(6) M. S. Sutton 10,875,000 35,799,280 29,517 46,703,797 13,625,754 60,329,551 185,013 T. S. Nicholls 4,335,000 11,607,692 29,517 15,972,210 3,430,144 19,402,354 134,044 C. I. Slater 2,255,000 1,243,962 19,678 3,518,640 2,618,401 6,137,041 6,247 S. R. Ryan 3,311,930 8,523,445 29,517 11,864,893 2,601,411 14,466,305 161,664 JM Ribieras 2,448,000 3,231,761 19,678 5,699,440 1,783,880 7,483,319 42,546 (1) Amounts shown in this column reflect a change in control severance payment of multiple of the sum of (i) base salary and (ii) target MIP for 2019, which would be paid in the event of termination of employment without cause, including voluntary termination for limited situations that meet the definition of “good reason,” as described below. For Mr. Sutton, Mr. Nicholls and Ms. Ryan, the severance payment is three times the sum of the amounts described above. For Ms. Ryan, this amount has been reduced to reflect application of the “best net” approach described following this table. For Ms. Slater and Mr. Ribieras, the severance payment is two times annual salarythe sum of the amounts described above. (2) For Mr. Sutton, Mr. Nicholls and a cashMs. Ryan, the amount shown represents the SERP benefit with an additional three years of age and service. For Ms. Slater and Mr. Ribieras, the amount shown represents the Pension Restoration Plan formula with an additional two years of age and service. (3) Amounts shown in this column reflect the cost of continued medical and dental benefits for three years following termination of employment (two years for Ms. Slater and Mr. Ribieras). (4) Amounts shown in this column reflect the dollar value, accumulation designed to provide a post-retirement death benefit equal to one times final salary. The Company pays the full premium cost, and participants are responsible for the income tax duebased on the premiums. closing price of our common stock on December 31, 2018, of the vesting of (i) outstanding 2017-2019 PSP awards, including reinvested dividends, based on actual Company performance through December 31, 2017, (ii) outstanding 2018-2020 PSP awards including reinvested dividends, based on target performance, and (iii) outstanding service-based restricted stock awards, if any. In addition, the NEO would receive the 2016-2018 PSP award, which has a performance period ending on December 31, 2018, but is not included in the amount shown because it would have already vested. Change-in-Control Agreements(5) Amounts shown in this column represent the total of the cash amounts payable as well as the value of accelerated vesting of equity. (6) For Mr. Sutton, Mr. Nicholls and Ms. Ryan, the amount shown represents the annual benefits payable from the Retirement Plan and the Pension Restoration Plan as of December 31, 2018. For Ms. Slater and Mr. Ribieras, the amount shown represents the annual benefit payable from the Retirement Plan as of December 31, 2018. Narrative to Potential Payments Upon Qualifying Termination After Change in Control Table The Company has entered into change-in-control agreements with certain executives that provide severance and other benefits in the event of a change in control of the Company. Our Board believes that maintaining change-in-control agreements is a sound business practice that protects shareowner value prior to, during and after a change in control, and allows us to recruit and retain top executive talent. Our program is available only to the SLT, except for those vice presidents grandfathered in the program as of February 2008. We believe this program aligns executive and shareowner interests by enabling leaders of the Company to focus on the interests of shareowners and other constituents when considering a potential change in control, without undue concern for their own financial and employment security. As part of its ongoing oversight of this program, the Board modified it in 2010 to eliminate the excise tax gross-up provision, replacing it with a “best net” calculation. Under this “best net” approach, the Company will, prior to making any payments, perform a calculation comparing: ● the net benefit after payment of excise tax by the executive that would be applied, and ● the net benefit if the payment had been limited to the extent necessary to avoid the imposition of an excise tax. This comparison will determine the higher “net” benefit payable under the agreement. Benefits are not payable unless an irrevocable release of any employment-related claims is signed. This change reflects a best practice in the marketplace.In no event will the Company pay a gross-up for excise taxes. This comparison will determine the higher “net” benefit payable under the agreement. Benefits are not payable unless an irrevocable release of any employment-related claims is signed. This change reflects a best practice in the marketplace.In no event will the Company pay for excise taxes. www.internationalpaper.com In 2013, the Committee and the Board approved and required our officers to sign amended change-in-control agreements. The new agreements provide for double-trigger acceleration of equity-award vesting upon a change in control when the acquiring company provides replacement awards as substitution for outstanding equity awards. Previously, the agreements provided for single-trigger equity-award vesting upon a change in control in all circumstances. The double trigger requires both a change in control and a qualifying termination of employment (i.e., involuntary termination without cause or departure for “good reason”) for the vesting of equity awards to accelerate. This treatment is widely recognized as a good governance practice, as it prevents officers from receiving an automatic windfall in the event of a change in control. It also serves as an incentive for the officers to continue with the Company through and after a change in control in order to receive the benefit of their unvested equity awards.85 Table of Contents Compensation Discussion & Analysis (“CD&A”) In 2013, the MDCC and the Board approved and required our officers to sign amended change-in-control agreements. The new agreements provide for double-trigger acceleration of equity-award vesting upon a change in control when the acquiring company provides replacement awards as substitution for outstanding equity awards. Previously, the agreements provided for single-trigger equity-award vesting upon a change in control in all circumstances. The double trigger requires both a change in control and a qualifying termination of employment (i.e., involuntary termination without cause or departure for “good reason”) for the vesting of equity awards to accelerate. This treatment is widely recognized as a good governance practice, as it prevents officers from receiving an automatic windfall in the event of a change in control. It also serves as an incentive for the officers to continue with the Company through and after a change in control in order to receive the benefit of their unvested equity awards. As shown in greater detail in the above table, our change-in-control agreements provide the following benefits to NEOs only if there has been both a change in control of the Company and a qualifying termination of employment,i.e., they are terminated without cause by the new employer or the employee departs for “good reason” within two years of the change in control (“double-trigger” benefits): Benefits Available Upon Termination of Employment Following Change in Control As shown in greater detail in the “Potential Payments Upon Qualifying Termination After Change in Control” table in Part V, our change-in-control agreements provide the following benefits to NEOs only if there has been both a change in control of the Company and a qualifying termination of employment,i.e., they are terminated without cause by the new employer or the employee departs for “good reason” within two years of the change in control (“double-trigger” benefits): ● Cash severance payment equal to three times (two times for Mr. Amick) the sum of base salary plus target MIP; MIP (two times for Ms. Slater and Mr. Ribieras); ● Prorated MIP for the year of termination of employment (based on target achievement if the employee is terminated in the same year as the change in control, or based on actual achievement if the employee is terminated in the year following the change in control)control and the MIP payment has not yet been made); ● SERP participants whosewill receive their benefit is calculated under Formula A (see description above “Pension Benefits” table in Part V) will receive a benefit equal to the higher of (i) 50 percent of compensation, or (ii) the SERP benefit that would be paid absent a change in control, but with three additional years of service and age. SERP participants whose benefit is calculated under Formula B (see description above “Pension Benefits” table in Part V)Ms. Slater and Mr. Ribieras will receive their benefit calculated under the Pension Restoration Plan formula that would be paid absent a change in control, but with threetwo additional years (two additional years for Mr. Amick) of service and age; age. ● Medical and dental insurance for three years (two years for Ms. Slater and Mr. Amick)Ribieras); and ● Where replacement awards are provided in substitution for outstanding equity awards upon the change in control, all such replacement awards vest and become unrestricted. Beginning in 2012, for change-in-control agreements with future non-CEO SLT members, the cash severance payment multiple has been reduced to two times (from three times) the sum of base salary plus target MIP, and the additional years of pension credit and the benefit continuation period have been reduced to two years (from three years). Benefits Available upon Change in Control Currently, the following benefits are payable upon a change in control and do not require termination of employment: Where replacement awards (as defined in the change-in-control agreements) are not provided in substitution for outstanding equity awards upon the change in control, all equity awards vest and become unrestricted, as follows: 1. All PSP shares vest and the full value of all PSP awards is paid for all performance periods (including those not yet completed) based on (a) target performance if the change in control occurs during the first year of the performance period, and (b) actual performance measured through the date of the change in control if it occurs on or after the first year of the performance period; 2. Service-based restricted stock awards vest and become unrestricted; and SERP participants whose benefit is calculated under Formula A will vest in their benefit and the minimum benefit will increase from 25 percent of compensation to 50 percent of compensation. We have offered these limited single-trigger benefits for the purpose of: Maintaining our competitiveness in attracting and retaining executive talent; Ensuring that our executives receive the benefit of their efforts prior to a change in control and are not penalized with a loss of equity compensation; and Further aligning the interests of our executives with our shareowners, since the risk of losing equity compensation could create a conflict of interest for our executives if the Company were pursuing a change-in-control transaction. In light of the difficulty in determining relative performance achievement in our PSP following a change in control of the Company, we provide for payment of PSP awards as described above. Further, in light of the seniority of our covered executives, and their proximity to retirement age, we believe that increasing their pension protection provides appropriate retirement security in their employment following a change in control. Part III: NEO Compensation 2015 Actual “Realized” Compensation: Description and Comparison to 2015 Targeted Compensation In this Part III, we describe the 2015 compensation actually “realized” by each NEO, as well as the rationale for each such compensation element and amount. We also illustrate 2015 targeted versus actual compensation in the individual graphs for each NEO. The “Target” column includes: (i) 2015 actual base salary paid; (ii) 2015 target MIP; and (iii) the target value of the 2013-2015 PSP granted in 2013. The “Actual” column represents what we believe is the appropriate way to illustrate 2015 actual pay earned, and includes: (i) 2015 actual base salary paid; (ii) 2015 MIP paid in February 2016; and (iii) the actual value of the 2013-2015 PSP paid (including reinvested dividends) in February 2016. In comparing the following charts to the Summary Compensation Table, you will see the value shown for the “equity awards” differs. PSP awardsgranted in 2015 are shown in the Summary Compensation Table, while the following charts show PSP awardsvalued andpaid in 2016 for performance periods ending in 2015. The equity awards for the 2013-2015 PSP in the following charts were valued based on the closing price ($34.97) of the Company’s common stock on February 5, 2016, which is the trading day immediately preceding the date the Committee approved payout of the 2013-2015 PSP award. Comparison of 2015 Targeted Compensation to CCG Median The compensation benchmarking review used to establish NEO target TDC amounts for 2015 indicated that the three NEOs without pending promotions (Ms. Roberts and Messrs. Hoel and Nicholls) had current target TDC amounts that were 83% of the market median, in aggregate. While the market comparisons of 2014 target TDC amounts for Messrs. Sutton and Amick were not relevant in light of their pending promotions, the market data was used by the Committee for establishing target TDC amounts for their new roles as Chairman & CEO and SVP - North American Papers, Pulp & Consumer Packaging, respectively. The Committee established Mr. Sutton’s target TDC in his first full year as CEO (2015) at 79% of the market median and established Mr. Amick’s target TDC in his first full year in his new role (2015) at 75% of the market median. Comparison of CEO’s Compensation to Other NEOs’ Compensation We do not have a policy that dictates a specific ratio of CEO compensation to other NEOs or the SLT. Generally, we base our compensation decisions on principles of internal equity and external market competitiveness. The difference that exists between our CEO’s compensation and our other NEOs is based on the complexity of the CEO’s leadership responsibilities for the global enterprise. Mark S. Sutton Chairman of the Board and Chief Executive Officer Mark Sutton has over 31 years of service with the Company and was appointed CEO effective November 2014 and Chairman of the Board effective January 2015. Mr. Sutton served as President and Chief Operating Officer from June through October 2014, prior to which he was Senior Vice President, Industrial Packaging, a role he assumed in November 2011. Prior to that role, he led our Printing and Communication Papers business since January 2010. He previously served as Senior Vice President – Supply Chain from March 2008 through 2009, Vice President – Supply Chain from June 2007 through February 2008, and Vice President – Strategic Planning from January 2005 through May 2007. 2015 Realized Compensation Element of Compensation Compensation Amount Rationale 2015 Base Salary $1,200,000 (no base salary increase in 2015) No base salary adjustment was deemed necessary in 2015 in light of Mr. Sutton’s relatively recent promotion to the role of CEO and the base salary increase relating to such promotion. 2015 MIP Award $1,681,200 (93.4% combined Company and individual performance achievement) Mr. Sutton’s MIP payout was based on the Company’s financial performance and his individual achievements, but also reflects opportunities for improvement at the Company in the area of safety. Among the achievements considered by the Committee in its evaluation of Mr. Sutton and its compensation recommendations to the Board were: •  Successfully assumed role as Chairman of the Board. •   Led the Company to deliver record ROIC in 2015. •  Led the Company to generate highest adjusted earnings per share, or EPS, in 20 years. •  Returned additional cash to shareowners in 2015, with fourth consecutive year of double-digit percentage increase in annual dividend and repurchase of approximately $500 million of shares. 2013-2015 PSP Payout 39,924 shares, including reinvested dividends and anti-dilution adjustment (related to xpedx/Unisource business combination) (valued at $1,396,142) PSP payout of 85% is based solely on the Company’s performance achievement in relative ROIC and relative TSR described in Part II. The chart below compares Mr. Sutton’s 2015 actual compensation paid against targeted compensation amounts. Note: Mr. Sutton’s target and actual compensation for 2015 (illustrated above) reflects the target and actual values of an equity-based LTI (PSP) award granted in 2013, before Mr. Sutton became CEO or even President and COO. Carol L. Roberts Senior Vice President – Chief Financial Officer Carol Roberts has over 34 years of service with the Company. She has served as our CFO since November 2011. Prior to this, she led our Industrial Packaging Group (“IPG”) business, which represents a significant part of the Company’s overall business. Ms. Roberts began her career with International Paper in 1981 as an Associate Engineer at a mill in Mobile, Alabama. Ms. Roberts was named Vice President of our Industrial Packaging business in 2000 and was named Senior Vice President in late 2005. Until June 2015, Ms. Roberts was a director of Ilim Holding S.A., a Swiss holding company in which International Paper holds a 50% interest, and of its subsidiary, Ilim Group. 2015 Realized Compensation Element of Compensation Compensation Amount Rationale 2015 Base Salary $750,000 (no base salary increase in 2015) No base salary adjustment was deemed necessary in 2015 in light of our CCG benchmarking data. 2015 MIP Award $743,900 (99.2% combined Company and individual performance achievement) Ms. Roberts’ MIP payout was based on the Company’s financial performance and her individual achievements. Among the achievements considered by the Committee were: •   Led successful execution of extension of the installment notes from the sale of the Company’s forestlands and the loan agreements used to monetize such notes, as well as the restructuring of the underlying entities. •   Executed excellent cash management and allocation decisions, including returning additional cash to shareowners in 2015 with fourth consecutive year of double-digit percentage increase in annual dividend and repurchase of approximately $500 million of shares. •  Provided active involvement and effective leadership in Russia as a Board member at the Company’s Ilim JV, which achieved record operational EBITDA in 2015. •  Made important contributions toward the Company’s 2015 achievement of record ROIC and highest adjusted EPS in 20 years. 2013-2015 PSP Payout 45,716 shares, including reinvested dividends and anti-dilution adjustment (related to xpedx/Unisource business combination) (valued at $1,598,689) PSP payout of 85% is based solely on the Company’s performance achievement in relative ROIC and relative TSR described in Part II. The chart below compares Ms. Roberts’ 2015 actual compensation paid against targeted compensation amounts. W. Michael Amick, Jr. Senior Vice President – North American Papers, Pulp and Consumer Packaging Mike Amick has over 25 years of service with the Company. In November 2014, Mr. Amick assumed responsibility for our North American Papers, Pulp and Consumer Packaging businesses. Mr. Amick previously served as Vice President & President, IP India, since August 2012, and as Vice President and General Manager for our coated paperboard business from 2010 to 2012. From 2007 to 2010, Mr. Amick served as Vice President, xpedx, and prior to that, as Vice President, Supply Chain, from 2002 to 2006. Mr. Amick began his career with IP in 1990 as an Area Process Manager at our Louisiana Mill. 2015 Realized Compensation Element of Compensation Compensation Amount Rationale 2015 Actual Base Salary Paid $500,000 (no base salary increase in 2015) No base salary adjustment was deemed necessary in 2015 in light of Mr. Amick’s relatively recent promotion to his SVP role and the base salary increase relating to such promotion. 2015 MIP Award $350,300 (93.4% combined Company and individual performance achievement) Mr. Amick’s MIP payout was based on the Company’s financial performance and his individual achievements, but also reflects opportunities for improvement in the area of safety for the businesses he oversees. Among the achievements considered by the Committee were: •   Led North American Printing Papers business to several big customer wins, which helped grow its overall market share. •   Led North American Printing Papers to improved year-over-year EBITDA performance. •  Led Consumer Packaging’s Foodservice business to market share and revenue growth while completing significant capacity expansion in Kenton, Ohio, on time and under budget. •   Led the strategic initiative to expand the Company’s fluff pulp business and convert the Riegelwood, North Carolina, mill to 100% pulp. 2013-2015 PSP Payout 8,988 shares, including reinvested dividends and anti-dilution adjustment (related to xpedx/Unisource business combination) (valued at $314,310) PSP payout of 85% is based solely on the Company’s performance achievement in relative ROIC and relative TSR described in Part II. The chart below compares Mr. Amick’s 2015 actual compensation paid against targeted compensation amounts. William P. Hoel Senior Vice President – Container The Americas Bill Hoel has over 32 years of service with the Company. Mr. Hoel has served as Senior Vice President, Container The Americas, since February 2012. He previously served as Vice President, Container The Americas, from 2005 to 2012, Senior Vice President, Corporate Sales & Marketing, from 2004 to 2005, and Vice President, Wood Products, from 2000 to 2004. 2015 Realized Compensation Element of Compensation Compensation Amount Rationale 2015 Actual Base Salary Paid $596,667 (incorporates 3.4% increase effective March 2015) Mr. Hoel’s base salary increase better aligned his pay with comparable positions within our CCG companies. 2015 MIP Award $491,100 (96.3% combined Company and individual performance achievement) Mr. Hoel’s MIP payout was based on the Company’s financial performance and his individual achievements. Among the achievements considered by the Committee were: •   Led the Container The Americas (CTA) business to a 50% year-over-year reduction in LIFE(life-changing injury and fatality elimination) events. •   Led CTA to market share “net wins.” •   Led CTA to outstanding waste performance. •  Led successful completion of box plant system optimization project. 2013-2015 PSP Payout 24,976 shares, including reinvested dividends and anti-dilution adjustment (related to xpedx/Unisource business combination) (valued at $873,411) PSP payout of 85% is based solely on the Company’s performance achievement in relative ROIC and relative TSR described in Part II. The chart below compares Mr. Hoel’s 2015 actual compensation paid against targeted compensation amounts. Timothy S. Nicholls Senior Vice President – Industrial Packaging Tim Nicholls has over 24 years of service with the Company. In November 2014, Mr. Nicholls assumed responsibility for our Industrial Packaging Group (“IPG”) business. He served as our CFO from December 2007 through November 2011, when he assumed responsibility of our Printing and Communication Papers and Latin American businesses, a role he held for three years. Mr. Nicholls previously served as Vice President and Executive Project Leader of IP Europe during 2007, and Vice President and CFO of IP Europe from 2005 to 2007. He was also President of Weldwood (formerly a wholly owned subsidiary of International Paper headquartered in Vancouver, Canada) from 2002 to 2005. 2015 Realized Compensation Element of Compensation Compensation Amount Rationale 2015 Actual Base Salary Paid $710,000 (no base salary increase in 2015) No base salary adjustment was deemed necessary in 2015 in light of our CCG benchmarking data. 2015 MIP Award $616,300 (96.3% combined Company and individual performance achievement) Mr. Nicholls’ MIP payout was based on the Company’s financial performance and his individual achievements. The Committee considered the following achievements by Mr. Nicholls in making its decision: •   Provided strategic leadership to IPG, which resulted in strong margins and earnings for the business. •   Led IPG to achieve EBITDA margin of 23.6% in 2015. •  Led North American IPG to second consecutive year of operating profit over $2 billion. •  Effectively led the containerboard mill optimization strategy for IPG. 2013-2015 PSP Payout 45,716 shares, including reinvested dividends and anti-dilution adjustment (related to xpedx/Unisource business combination) (valued at $1,598,689) PSP payout of 85% is based solely on the Company’s performance achievement in relative ROIC and relative TSR described in Part II. The chart below compares Mr. Nicholls’ 2015 actual compensation paid against targeted compensation amounts. Part IV: Other Governance and Compensation Related Matters Insider Trading and Anti-Hedging/Anti-Pledging Policies The Company has adopted comprehensive and detailed policies that regulate trading in Company securities by our insiders, including the SLT and Board members. These policies include information regarding trading “blackout” periods and explain when transactions in Company securities are permitted. The policies strictly prohibit our SLT and Board members (as well as our corporate controller) from holding Company securities in a margin account or pledging them as collateral for a loan and from engaging in any of the following short-term or speculative transactions involving Company securities: short sales; publicly traded options, such as puts, calls or other derivative instruments; hedging and monetization transactions, such as zero-cost collars, forward-sale contracts, equity swaps and exchange funds. In October 2015, upon approval by the Committee, the policy prohibition against these types of transactions was expanded to apply toall Company officers. Rule 10b5-1 Trading Plans SLT members are permitted to establish trading plans under Section 10b5-1 of the Exchange Act during certain open trading windows when the executive does not possess any material, non-public information about the Company. The purpose of these plans is to permit the executive to diversify his or her holdings of Company stock during periods in which the executive would otherwise be unable to buy or sell such stock because he or she possessed material, non-public information about the Company. In consultation with his or her financial advisor, each executive may enter into his or her own pre-determined plan, which includes specific instructions for the broker to exercise stock options and/or sell Company stock on the open market. Any such trading plan must be submitted in writing to the Company’s General Counsel for review and approval prior to its effective date and must meet certain requirements, including: no purchases or sales of Company securities may be made outside of the plan, once in effect; the plan must run for at least one year and no more than 18 months (but can end prior to that time if all sales or purchases have been completed); a plan may not be voluntarily terminated prior to its expiration date without the General Counsel’s pre-approval or when the executive possesses any material, non-public information about the Company, and a new plan may not be established until at least 180 days after any such voluntary termination; the first trade under the plan cannot occur until 30 days after execution of the plan; and execution of the plan is disclosed in an SEC filing. None of our SLT members currently has such a plan. Officer Stock Ownership and Retention Requirements All of our officers are expected to own shares of our common stock with a minimum market value based on a multiple of base pay. This policy is intended to align our officers’ interests with those of our shareowners and encourage long-term shareowner value creation by requiring officers to have a significant equity stake in the Company. Our stock ownership requirements are based on position: Position Current Ownership Requirement Chief Executive Officer 6x base pay President 5x base pay Executive Vice President 4x base pay Senior Vice President 3x base pay Vice President 1x base pay The following are counted toward meeting the ownership requirement: Freely held shares (whether purchased on the open market; fully earned through a Company long-term incentive compensation plan or program, such as shares paid out under the PSP and vested RSA shares; or acquired through option exercises); “Beneficial” shares held indirectly by a trust or by a family member (spouse, dependent child or other family member residing in household); and Share equivalents held in the Salaried Savings Plan and Deferred Compensation Savings Plan. However, the following arenot counted toward meeting the ownership requirement: • Unvested restricted shares (e.g.,PSP awards and RSAs); and Unexercised stock options. Officers are required to retain 50 percent of their net shares paid under any Company long-term incentive plan or program, such as shares paid out under the PSP and vested RSA shares, until their ownership requirements are satisfied. SLT stock ownership is reviewed annually by the Committee to assure compliance. As of our last annual evaluation, all SLT members were in compliance with our policy. Board Policy on Personal Use of Company Aircraft The Board encourages the CEO to use Company aircraft for business continuity and efficiency purposes, where appropriate. Use of the Company aircraft allows the CEO to be available at all times for business needs, whether on business or personal travel. Pursuant to Board resolutions and his Time Sharing Agreement, Mr. Sutton is authorized to use the Company aircraft for personal travel and is required to reimburse the Company for the incremental cost of personal use of the aircraft above $75,000. The value of personal use of the aircraft that is not reimbursed is imputed income to him, and is not grossed up for taxes. Clawback or Forfeiture of Incentive Awards Both MIP and PSP awards are subject to a clawback provision contained in our plan documents. Under this clawback provision, if the Company’s financial statements are restated as a result of errors, omission, or fraud, the Committee may, at its discretion, based on the facts and circumstances surrounding the restatement, require some or all participants to return all or a portion of their awards to the Company. In addition, both MIP and PSP awards may be forfeited in the event a participant engages in conduct that is detrimental to the business interest or reputation of the Company. Additionally, an SLT member who does not provide one-year’s notice of retirement may forfeit his or her MIP and PSP awards. Non-Competition and Non-Solicitation Agreements The Company maintains Non-Competition and Non-Solicitation Agreements with leaders of the Company to prohibit such leaders from engaging in certain competitive activities and to protect confidential information and trade secrets from unauthorized use or disclosure. Each of our NEOs has entered into a Non-Competition Agreement and a Non-Solicitation Agreement. Violation of these agreements may result in clawback or forfeiture of incentive compensation awards. Board Policy on (Non-CIC) Severance Agreements with Senior Officers A supplemental severance payment to the CEO must be approved by the independent directors of the Board. A supplemental severance payment to any other executive officer must be approved by the Committee. Moreover, pursuant to a 2005 Board policy, in the absence of a change in control, the supplemental severance, plus severance under the Salaried Employee Severance Plan, may not exceed two times base salary plus target MIP for the year in which the termination occurs. This limit does not apply to other benefits that may be payable, such as restricted stock, PSP, retirement benefits, or post-termination benefits that are available to employees generally, such as continued medical and dental benefits. Any severance amount greater than the amount described above must be approved in advance by our shareowners. Prohibition on Repricing We do not backdate or reprice equity grants. Our incentive compensation plan provides that stock options may not be repriced, directly or indirectly, without the prior consent of the Company’s shareowners. The exchange of an “underwater” option (i.e., an option having an exercise price in excess of the current market value of the underlying stock) for another award or for cash would be considered an indirect repricing and, therefore, would require the prior consent of our shareowners. Equity Grant Practices The Company does not have any program, plan or practice to time, and has not timed, equity grants in coordination with the release of material non-public information. Annual equity grants (includingpro rata grants for promotions and employees hired in the prior year) under the PSP are approved at the Committee’s meeting in December. Having a pre-determined annual grant date minimizes any concern that grant dates could be selectively chosen based upon market price at any given time. Service-based restricted stock awards are used infrequently, and may be granted anytime during the year by Mr. Kadien (as delegated by the Board) within parameters approved by the Committee. An award to an SLT member requires approval by the Committee (or by the Board for an award to the CEO). Deductibility of Executive Compensation The goal of the Committee is to comply with the provisions of IRC Section 162(m), which allows the Company to take an income tax deduction for compensation up to $1 million and for certain compensation exceeding $1 million paid in any taxable year to a “covered employee” as that term is defined in the IRC. We generally structure incentive compensation plans with the objective that amounts paid under those plans will be tax deductible, and the plans must be approved by the Company’s shareowners. However, the Committee may elect to provide incentive compensation outside the requirements of Section 162(m) when necessary to achieve its compensation objectives. Each element of incentive compensation earned by our NEOs in 2015 qualified as performance-based compensation under Section 162(m). Accounting for Stock-Based Compensation The accounting treatment of stock-based compensation is not determinative of the type, timing, or amount of any particular grant made to our employees. The Company withholds PSP shares payable to a participant at the statutory minimum withholding rate to pay the participant’s federal taxes. Previously, SLT members could elect to have additional shares withheld (up to 85 percent of the earned award) for payment of taxes. Because we offered this option to our SLT, their PSP awards were considered “liability” awards for accounting purposes. This means that we re-measured the amount of the PSP liability at fair market value at each quarterly balance sheet date with the resulting income or expense recorded by the Company in the quarter. In 2014, the Committee retroactively eliminated this SLT benefit to conform with best practices. Effective with the 2013 PSP grant (which was paid in February 2016) and with all subsequent grants, the Company withholds PSP shares payable to all participants, including all SLT members, at the statutory minimum withholding rate. Compensation Committee Report On behalf of the Board of Directors, the Management Development and Compensation Committee of the Board of Directors, referred to as the Committee, oversees the Company’s compensation programs. In fulfilling its oversight responsibilities, the Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with the Company’s executive officers. Based on the review and discussions referred to above, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and its proxy statement on Schedule 14A filed in connection with the Company’s 2016 Annual Meeting of Shareowners. This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this proxy statement into any other filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such laws. Management Development and Compensation Committee J. Steven Whisler, Chairman David J. Bronczek Ilene S. Gordon John L. Townsend, III William G. Walter Part V: Additional Information About Executive Compensation The following tables in this Part V provide detailed information regarding compensation for our NEOs. Summary Compensation Table The table below shows base salary, bonus, stock awards under our PSP and, if applicable, RSA program, cash awards under our MIP, the change in pension value, and all other compensation to our NEOs for the years ended December 31, 2015, 2014, and 2013. Messrs. Sutton, Amick and Hoel received promotions in 2014 and thus were granted two PSP awards in January 2015: the usual 2015-2017 PSP award, as received by all NEOs; and a pro-rated 2014-2016 PSP award to reflect their respective promotions. Accordingly, as described in footnote (1) to the table below, the amounts shown for Messrs. Sutton, Amick and Hoel for 2015 in the “Stock Awards” column include the value of both awards. Name and Principal Position   Year     Salary ($)     Stock Awards ($)(1)     Non-Equity Incentive Plan Compensation ($)(2)     Change in Pension Value ($)(3)     All Other Compensation ($)(4)     Total ($)   Mark S. Sutton     2015        1,200,000        10,901,741        1,681,200        2,886,189        173,292        16,842,422    CEO & Chairman of the Board (Principal Executive Officer)     2014        880,708        1,784,032        911,400        3,044,519        74,740        6,695,399        2013        628,875        1,797,184        577,000        416,045        58,008        3,477,112    Carol L. Roberts     2015        750,000        1,980,477        743,900        238,998        95,441        3,808,816    Senior Vice President and Chief Financial Officer (Principal Financial Officer)     2014        742,500        2,992,703        653,100        2,464,636        95,375        6,948,314        2013        720,000        2,057,931        633,000        —        91,301        3,502,232    W. Michael Amick, Jr.     2015        500,000        1,991,891        350,300        341,657        1,044,932        4,228,780    Senior Vice President, N.A. Papers, Pulp and Consumer Packaging                                                         William P. Hoel     2015        596,667        1,605,055        491,100        1,102,673        76,667        3,872,162    Senior Vice President, Container The Americas                                                         Timothy S. Nicholls     2015        710,000        1,980,477        616,300        214,017        64,060        3,584,854    Senior Vice President, Industrial Packaging     2014        710,000        2,992,703        653,100        1,499,862        64,353        5,920,018        2013        710,000        2,057,931        434,000        8,736        66,225        3,276,892    (1) The amounts reported in this column reflect the aggregate grant date fair value of stock awards under our PSP and RSA programs granted to the NEO during each year, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in calculating these values for the 2015 fiscal year may be found in Note 18 to our audited financial statements beginning on page 79 of our annual report on Form 10-K filed with the SEC on February 25, 2016. The value shown for 2015 includes the aggregate grant date fair value of each NEO’s 2015-2017 PSP award and, for Messrs. Sutton, Amick and Hoel, the aggregate grant date fair value of pro-rated 2014-2016 PSP awards they each received in January 2015 to reflect their respective promotions in 2014. The maximum value of the 2015-2017 PSP awards (and for Messrs. Sutton, Amick and Hoel, the maximum value of their respective 2015-2017 PSP awards and pro-rated 2014-2016 PSP awards combined) based on achieving maximum Company performance is as follows: Mr. Sutton: $21,803,483; Ms. Roberts: $3,960,953; Mr. Amick: $3,983,782; Mr. Hoel: $3,210,110; and Mr. Nicholls: $3,960,953. (2) Represents the amount earned under the MIP based on Company and individual performance during the year shown, which is paid in February of the following year. (3) Amounts shown in this column represent the change in accruals under our Retirement Plan, Pension Restoration Plan, and SERP as shown in the “Pension Benefits” table. Importantly, the change in pension value is not currently paid to an executive as compensation, but is a measurement of the change in value of the pension from the prior year. Changes in value arise from, among other things, additional benefit accruals for another year of service, changes in pensionable compensation, the decrease in the discount period and the impact of a change in the discount rate from the prior year’s measurement, and changes in mortality rate assumptions. The discount rate used is the same as the rate used by the Company for financial statement disclosure as of the end of the fiscal year. This rate is based on economic conditions at year end. The NEOs do not receive “preferential or above market” earnings on non-qualified deferred compensation. Accordingly, there is no amount included in this column for this type of earnings credit. (4) A breakdown of the “All Other Compensation” amounts for 2015 is shown in the following table: Name   Company Matching Contribution   ($)(a)     Group Life Insurance   ($)(b)     ESIP   ($)(c)     Corporate Aircraft   ($)(d)     Security Equipment   ($)(e)     Company Matching Gift   ($)(f)     Amount Related to Overseas Assignment   ($)(g)     Tax Return Preparation   ($)(h)     Total   ($)(i)   M. S. Sutton     57,600        6,048        42,790        40,150        20,704        6,000        —        —        173,292    C. L. Roberts     67,349        3,780        16,069        —        —        6,048        —        2,195        95,441    W. M. Amick, Jr.     34,579        2,523        —        —        —        3,600        1,003,411        819        1,044,932    W. P. Hoel     50,480        3,007        17,168        —        —        6,012        —        —        76,667    T. S. Nicholls     34,080        3,581        17,399        —        —        9,000        —        —        64,060    (a) Represents the Company match to the NEO’s contribution to the Salaried Savings Plan and Deferred Compensation Savings Plan, as shown in the “Non-Qualified Deferred Compensation Plan” table. (b) Represents the Company’s annual premium payment for the NEO’s group life insurance benefit. (c) Represents the amount paid by the Company for the NEO’s executive supplemental insurance program (“ESIP”). (d) Represents the aggregate incremental cost to the Company of Mr. Sutton’s personal travel on Company aircraft. Pursuant to Board resolutions and his Time Sharing Agreement, Mr. Sutton is required to reimburse the Company for the incremental cost of personal use of the aircraft above $75,000; no such reimbursement was required in 2015. We calculate the incremental cost of personal use of the Company aircraft based upon the per mile variable cost of operating the aircraft multiplied by the number of miles flown for personal travel by Mr. Sutton. The variable operating costs include fuel, maintenance, airway fees, user fees, communication, crew expenses, supplies and catering. We impute into Mr. Sutton’s income the value of personal use of the aircraft in accordance with IRS regulations, minus any amounts he reimbursed during the calendar year. Mr. Sutton receives no tax gross-up on this imputed income. (e) Represents the aggregate incremental cost to the Company of security equipment installed at Mr. Sutton’s residence. (f) Represents the Company’s 60-percent match of each NEO’s donation to the United Way of America as part of a Company-wide campaign. (g) Represents standard amounts payable under our Global Mobility Policy for expatriates. As a U.S. citizen, Mr. Amick participated in the program when he was based in India. Although he moved back to the U.S. in late 2014 and no longer participates in the program, certain benefits and payments related to his prior assignment in India, including tax equalization payments ($924,208) and transportation of household goods ($74,178), were paid in 2015. (h) Represents payment of fees for the preparation of Ms. Roberts’ and Mr. Amick’s individual income tax returns per Company policy: for Ms. Roberts, due to her service on the board of directors of the Company’s Ilim joint venture in Russia at the Company’s request; and for Mr. Amick, due to his prior service overseas as a U.S. expatriate. (i) Represents the sum of columns (a) through (h). Grants of Plan-Based Awards During 2015 The table below shows payout ranges for our NEOs under the 2015 MIP, 2014-2016 PSP for pro-rated awards, and 2015-2017 PSP, described in our CD&A. There were no other plan-based cash or equity awards granted to our NEOs in 2015. Name   Committee Action Date (1)     Grant Date     Estimated Possible Payouts Under Non-Equity Incentive Plan Awards     Estimated Future Payouts Under Equity Incentive Plan Awards     Grant Date Fair Value of Stock and Option Awards ($)(3)         Threshold ($)     Target ($)     Maximum ($)(2)     Threshold (#)     Target (#)     Maximum (#)     M. S. Sutton                     450,000        1,800,000        3,600,000                                                1/1/2015                                9,955        79,642        159,284        3,970,153        12/8/2014        1/1/2015                                16,144        129,152        258,304        6,931,588    C. L. Roberts                     187,500        750,000        1,500,000                                        12/8/2014        1/1/2015                                4,613        36,901        73,802        1,980,477    W. M. Amick, Jr.                     93,750        375,000        750,000                                                1/1/2015                                1,643        13,141        26,282        655,079        12/8/2014        1/1/2015                                3,114        24,908        49,816        1,336,812    W. P. Hoel                     127,500        510,000        1,020,000                                                1/1/2015                                673        5,381        10,762        268,243        12/8/2014        1/1/2015                                3,114        24,908        49,816        1,336,812    T. S. Nicholls                     160,000        640,000        1,280,000                                        12/8/2014        1/1/2015                                4,613        36,901        73,802        1,980,477    (1) The 2015-2017 PSP grant was approved by the Committee for all NEOs (except Mr. Sutton, whose grant was approved by the full Board) at its December 2014 meeting, effective the first business day of the following calendar year. (2) Non-equity incentive plan awards are intended to qualify as performance-based compensation under IRC Section 162(m) and are awarded pursuant to the Amended and Restated 2009 Incentive Compensation Plan approved by our shareowners. The maximum individual award under the Section 162(m) plan is capped at $10 million. (3) The amounts shown in this column reflect the grant date fair value of the PSP awards computed in accordance with FASB ASC Topic 718 based on the probable satisfaction of the performance conditions at January 1, 2015 for such awards (i.e., 100 percent of target), as explained in further detail in the narrative following this table. Narrative to the Grants of Plan-Based Awards Table Estimated Possible Payouts under Non-Equity Incentive Plan Awards These columns show the threshold, target and maximum payouts under the 2015 MIP. The actual amount paid is shown in the Summary Compensation Table. The amount shown in the “Threshold” column was the amount that would have been paid under the 2015 MIP if the Company had achieved only the minimum performance level required in only one performance metric: Absolute ROIC or Cash Flow from Operations. Since each metric is evenly weighted at 50 percent, a threshold payout at 50 percent would result in weighted performance achievement of 25 percent (or one-half of 50 percent). Minimum performance in at least one objective is required to fund an MIP award pool. The amount shown in the “Maximum” column was the possible payout for each NEO based on maximum Company performance achievement of 200 percent. Estimated Future Payouts under Equity Incentive Plan Awards These columns show the threshold, target and maximum payouts under the 2015-2017 PSP (and for Mr. Sutton, Mr. Amick and Mr. Hoel, the threshold, target and maximum payouts under the 2015-2017 PSP and under the 2014-2016 PSP for a pro-rated award granted on January 1, 2015). The amount shown in the “Threshold” column is the number of shares each NEO would receive if the Company achieved only the minimum performance level in either Relative ROIC or Relative TSR to achieve a payout of 12.5 percent (which represents a 25 percent threshold for either metric, each weighted at 50 percent). The amount shown in the “Maximum” column is the possible number of shares each NEO would receive based on maximum Company performance of 200 percent. Grant Date Fair Value of Stock Awards With the exception of the pro-rated 2014-2016 awards for Messrs. Sutton, Amick and Hoel, the amounts shown in this column reflect the grant date fair value of the awards granted to each NEO under the 2015-2017 PSP computed in accordance with FASB ASC Topic 718 based on the probable satisfaction of the performance conditions at January 1, 2015 for such awards (i.e., 100 percent of target). For the ROIC component of the awards, the grant date fair value is based on the closing price of our common stock on the trading day immediately preceding the grant date. Valuing TSR is more complicated because the value must take into account the probable expense of the 2015-2017 PSP based on our expected future performance relative to the other companies in our TSR Peer Group. The market value of the TSR component is based on a Monte Carlo simulation as prescribed by FASB ASC Topic 718. The amount ultimately paid to PSP participants may or may not be the same amount as the value shown in the table due to two factors: (1) the ultimate number of shares paid to our PSP participants will vary based on the relative performance of the Company to the other companies in our TSR and ROIC Peer Groups; and (2) the value of the PSP award received by each participant is based on the fair value of the Company’s stock as of the effective date of the award. Outstanding Equity Awards at December 31, 2015 The following table shows the outstanding equity awards held by our NEOs as of December 31, 2015. Name Stock Awards Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) M. S. Sutton 302,229 (2) 11,394,033 C. L. Roberts 157,468 (3) 5,936,544 W. M. Amick, Jr. 58,753 (4) 2,214,988 W. P. Hoel 85,034 (5) 3,205,782 T. S. Nicholls 157,468 (3) 5,936,544 (1) The market value is calculated based on the closing price of our common stock on December 31, 2015, of $37.70. (2) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2015: (i) 42,237 units awarded under the 2013-2015 PSP, (ii) 115,430 units awarded under the 2014-2016 PSP, (iii) 129,152 units awarded under the 2015-2017 PSP, (iv) 1,154 units for an anti-dilution adjustment related to the xpedx/Unisource business combination, and (v) 14,256 reinvested dividends on those units. (3) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2015: (i) 48,365 units awarded under the 2013-2015 PSP, (ii) 40,977 units awarded under the 2014-2016 PSP, (iii) 36,901 units awarded under the 2015-2017 PSP, (iv) 1,321 units for an anti-dilution adjustment related to the xpedx/Unisource business combination, (v) 8,863 reinvested dividends on those units, and (vi) 21,041 shares (including reinvested dividends) relating to a restricted stock award that vests on August 1, 2018. (4) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2015: (i) 9,508 units awarded under the 2013-2015 PSP, (ii) 21,198 units awarded under the 2014-2016 PSP, (iii) 24,908 units awarded under the 2015-2017 PSP, (iv) 261 units for an anti-dilution adjustment related to the xpedx/Unisource business combination, and (v) 2,878 reinvested dividends on those units. (5) The amount shown includes the following units of restricted stock that remained subject to open PSP performance periods as of December 31, 2015: (i) 26,422 units awarded under the 2013-2015 PSP, (ii) 27,767 units awarded under the 2014-2016 PSP, (iii) 24,908 units awarded under the 2015-2017 PSP, (iv) 723 units for an anti-dilution adjustment related to the xpedx/Unisource business combination, and (v) 5,214 reinvested dividends on those units. Stock Vested in 2015 The following table shows the value received upon the vesting in 2015 of shares previously awarded under our PSP program as described in our CD&A. Name   Stock Awards     Number of Shares Acquired on Vesting (#)(1)     Value Realized on Vesting ($)(2)   M. S. Sutton     78,577        4,280,875    C. L. Roberts     89,975        4,901,838    W. M. Amick, Jr.     16,702        909,925    W. P. Hoel     48,852        2,661,457    T. S. Nicholls     89,975        4,901,838    (1) Amounts shown represent shares of restricted stock and shares acquired in respect of reinvested dividends under the PSP that vested on February 9, 2015. (2) Represents the value of the vested shares based on our closing stock price on the date immediately preceding the vesting date of the award: $54.48 for each PSP share. Pension Benefits in 2015 The following table shows the present value of benefits payable to our NEOs under our Retirement Plan, Pension Restoration Plan, or SERP at December 31, 2014 and December 31, 2015. The change in the present value of the accrued benefit is shown in the “Change in Pension Value” column of the Summary Compensation Table for 2015. All of our NEOs are eligible for a benefit calculated under the Retirement Plan. The NEOs are also eligible for a benefit that is calculated under the Pension Restoration Plan formula. With the exception of Mr. Amick, all of the NEOs are eligible for a benefit under the SERP formula. We amended the SERP to comply with IRC Section 409A, effective January 1, 2008. As amended, the benefit under SERP Formula A is paid from the SERP, even if the applicable formula that determines the benefit is the formula under the Pension Restoration Plan. As a result of this change, the pension benefits shown below for Mr. Hoel are shown as coming from the SERP rather than the Pension Restoration Plan. This differs from the pension benefits shown for Mr. Sutton, Ms. Roberts and Mr. Nicholls, who became eligible for the SERP after July 1, 2004, and whose benefit is therefore calculated under SERP Formula B. Under Formula B, the portion of the benefit that is earned prior to SERP eligibility is paid under the Pension Restoration Plan, and the portion earned following SERP eligibility is paid from the SERP. Mr. Amick is not eligible for a benefit under the SERP formula because he did not meet the requirements for participation until after December 31, 2011, when the SERP was closed to new participants. No NEO received payments of a retirement benefit in 2015. Name   Plan Name   Number of Years of Credited Service in 2015 (#)     12/31/2014 Present Value of Accumulated Benefit ($)(1)     12/31/2015 Present Value of Accumulated Benefit ($)(2)   M. S. Sutton   Retirement Plan     31.58        1,260,341        1,330,221      Pension Restoration Plan     31.58        908,012        913,176      SERP     31.58        6,323,026        9,134,171      Total             8,491,379        11,377,568    C. L. Roberts   Retirement Plan     34.50        1,564,003        1,635,168      Pension Restoration Plan     34.50        854,006        853,134      SERP     34.50        9,390,614        9,559,319      Total             11,808,623        12,047,621    W. M. Amick, Jr.   Retirement Plan     25.08        909,152        962,101      Pension Restoration Plan     25.08        1,301,478        1,590,186      SERP     25.08        —        —      Total             2,210,630        2,552,287    W. P. Hoel   Retirement Plan     32.00        1,496,534        1,599,601      Pension Restoration Plan     32.00        —        —      SERP     32.00        6,057,699        7,057,305      Total             7,554,233        8,656,906    T. S. Nicholls   Retirement Plan     24.25        940,649        1,002,788      Pension Restoration Plan     24.25        584,303        587,626      SERP     24.25        5,177,713        5,326,268      Total             6,702,665        6,916,682    (1) The calculation of the present value of accumulated benefits as of December 31, 2014, assumes a discount rate of 4.10 percent for annuity payments and deferral periods and 1.60 percent for lump sum payments. The calculation further assumes benefit commencement at the earliest age at which the NEO would be entitled to an unreduced benefit (the earlier of age 61 and completion of 20 years of service or age 62 and completion of 10 years of service). For individuals who are already eligible for an unreduced benefit, we use their age as of the end of the fiscal year. (2) The calculation of the present value of accumulated benefits as of December 31, 2015, assumes a discount rate of 4.40 percent for annuity payments and deferral periods and 1.90 percent for lump sum payments. The assumptions regarding the benefit commencement date are the same as described in footnote (1). Narrative to Pension Benefits Table Retirement Plan of International Paper Company Our Retirement Plan is a funded, tax-qualified plan that covers all U.S. salaried employees hired prior to July 1, 2004. U.S. employees hired on or after July 1, 2004, are eligible for a Company-paid retirement savings account in our Salaried Savings Plan and Deferred Compensation Savings Plan in lieu of participation in the Retirement Plan. All of our NEOs were hired prior to July 1, 2004, and thus are eligible to participate in the Retirement Plan. We calculate the benefit under the Retirement Plan at the rate of 1.67% of the participant’s average pensionable earnings received over the highest five consecutive calendar years of the last 10 calendar years, multiplied by his or her years of service, then reduced by a portion of Social Security benefits. We include as pensionable earnings the participant’s base salary plus MIP awards that were not deferred, up to the maximum limit set by the IRS. International Paper Company Pension Restoration Plan for Salaried Employees Our supplemental retirement plan for our salaried employees is an unfunded, non-qualified plan that covers all U.S. salaried employees hired prior to July 1, 2004. This plan augments our Retirement Plan by providing retirement benefits based on compensation that is greater than the limits set by the IRS. We include as eligible compensation under this plan the participant’s base salary plus MIP awards, including amounts deferred. All of our NEOs were hired prior to July 1, 2004, and thus are eligible to participate in the Pension Restoration Plan. We calculate the benefit under the Pension Restoration Plan in the same manner as the Retirement Plan and then reduce the benefit by the amount payable under the Retirement Plan. The International Paper Company Unfunded Supplemental Retirement Plan for Senior Managers Our SERP is an alternative retirement plan available to certain senior executives, including the NEOs (excluding Mr. Amick). The SERP was closed to new participants, effective January 1, 2012. SERP benefits vest once the participant reaches age 55 and has completed five years of service. The normal form of payment is a lump sum. We calculate benefits under the SERP under one of two formulas based on the participant’s date of eligibility for SERP participation. Benefits are payable under the SERP on the later of the participant’s retirement date or the date six months following separation from service. We define “retirement date” as the date the participant reaches the earlier of age 55 with 10 years of service or age 65 with five years of service. A participant who has announced retirement at least 12 months in advance has the right to lock-in a discount rate used to determine the amount of the lump sum payment based on the average for the month in which they choose to lock-in. Ms. Roberts and Mr. Hoel have locked-in the discount rate under this provision. • Participants eligible to participate prior to July 1, 2004 (Formula A): We calculate benefits under this formula as the greatest of (i) the sum of the benefits under our Retirement Plan and Pension Restoration Plan; (ii) the lesser of 3.25% of eligible compensation, defined below, multiplied by the participant’s years of service or 50% of eligible compensation, with both amounts reduced by a portion of Social Security benefits; or (iii) 25% of eligible compensation. The benefit payable under the SERP is reduced by the benefits payable under the Retirement Plan. In calculating benefits under (ii) and (iii), we include as eligible compensation the sum of (a) the participant’s highest annual base salary during any of the three consecutive calendar years prior to retirement and (b) the participant’s target MIP for the year of retirement. The benefit for Mr. Hoel is calculated under SERP Formula A. In the event of termination for cause, an executive whose SERP benefit is calculated under Formula A would forfeit the right to receive a lump sum benefit under the SERP, and his or her vested retirement benefits under the Retirement Plan and the Pension Restoration Plan would be paid as an annuity. • Participants eligible to participate on or after July 1, 2004 (Formula B): We calculate benefits under this formula at the same rate as our Retirement Plan and Pension Restoration Plan. Participants are eligible to receive a lump sum payment of the benefit earned for service after becoming eligible in the SERP; the benefit earned prior to SERP eligibility remains payable as an annuity. The benefit for Mr. Sutton, Ms. Roberts and Mr. Nicholls is calculated under SERP Formula B. Policies with Regard to Granting Additional Years of Service Our change-in-control agreements described in our CD&A provide three years (for Mr. Amick, two years) of age and service to be added to the calculation of retirement benefits in the event of a qualifying termination of the NEO’s employment following a change in control. Eligibility for Early Retirement Benefits Normal retirement under our Retirement Plan and Pension Restoration Plan is age 65. Participants, including the NEOs, are eligible for early retirement under the Retirement Plan, the Pension Restoration Plan and the SERP at age 55 with 10 years of service. However, a participant’s accrued benefit is reduced by 4% for each year that the participant retires before reaching age 62. Participants are eligible for an unreduced benefit once they reach age 61 and have completed at least 20 years of service with us. Mr. Sutton is currently vested in the retirement plans, but he will not be eligible for early retirement (or vested in the SERP benefit) until July 2016. Ms. Roberts is eligible for early retirement; her benefit would be reduced based on age and years of service. Mr. Amick is currently vested in the retirement plans, but he will not be eligible for early retirement until 2018. Mr. Hoel is eligible for early retirement; his benefit would be reduced based on age and years of service. Mr. Nicholls is currently vested in the retirement plans, but he will not be eligible for early retirement (or vested in the SERP benefit) until July 2016. Pension Change In February 2014, the Committee approved changes to the Retirement Plan, the Pension Restoration Plan and the SERP such that credited service and compensation will be capped effective December 31, 2018, for salaried employees, including the NEOs. For service after this date, employees affected by the freeze will receive Retirement Savings Account contributions. Non-Qualified Deferred Compensation in 2015 The following table shows contributions in 2015 by the Company and each of our NEOs to the DCSP, which is our non-qualified deferred compensation plan, and each NEO’s DCSP account balance as of December 31, 2015. The account balance includes amounts deferred by the NEO in December 2015, which were actually credited to his or her account in January 2016. Name   Executive Contributions in Last Fiscal Year ($)(1)     Registrant Contributions in Last Fiscal Year ($)(2)     Aggregate Earnings in Last Fiscal Year ($)(3)     Aggregate Withdrawals/ Distributions in Last Fiscal Year ($)     Aggregate Balance at Last Fiscal Year End ($)(4)   M. S. Sutton     80,000        48,000        (37,933 )      -            1,505,029    C. L. Roberts     91,048        54,629        (18,734 )      -            1,865,507    W. M. Amick, Jr.     84,060        26,899        (218,325 )      -            889,816    W. P. Hoel     62,933        37,760        (25,462 )      -            2,295,667    T. S. Nicholls     59,167        28,400        (71,770 )      -            763,033    (1) These amounts are included in the “Salary” column of the Summary Compensation Table for 2015 for each NEO. (2) These amounts are included in the “All Other Compensation” column of the Summary Compensation Table for 2015 for each NEO. (3) These amounts are not included in the Summary Compensation Table because they are not “preferential or above-market earnings.” (4) Of the amounts shown in this column, the following amounts were included in the “Salary” column of the Summary Compensation Table for prior years as follows: Mr. Sutton: $191,203 was included for the periods 2011, 2013 and 2014; Ms. Roberts: $532,097 was included for the period 2008-2014; Mr. Nicholls: $276,407 was included for the period 2010-2014. Narrative to Non-Qualified Deferred Compensation Table The DCSP allows participants to save for retirement by deferring up to 85% of eligible cash compensation, which includes base salary and MIP awards. Participants may contribute to the DCSP after deferring either the maximum pre-tax amount or total pre-tax and after-tax amount to the 401(k) plan or after reaching the IRS compensation limit for that year. The Company credits matching contributions equal to 70% of the participant’s contributions up to 4% of compensation, plus 50% of contributions up to an additional 4% of compensation. For 2015, NEO contribution amounts were as follows: Mr. Sutton contributed 8% of base salary, Ms. Roberts contributed 8% of all eligible cash compensation, Mr. Amick contributed 15% of all eligible cash compensation, Mr. Hoel contributed 8% of all eligible cash compensation, and Mr. Nicholls contributed 10% of base salary. As a result of the varying contribution amounts, the actual amounts deferred and the Company’s resulting matching contribution will vary for each NEO. Funds Available 2015 Fund Returns Conservative Fund 1.3% Moderate Fund 0.2% Aggressive Fund (0.3)% Stable Value Fund 1.9% U.S. Bond Fund 0.8% High Yield Bond Fund (2.8)% Emerging Market Bond Fund (0.5)% Large Cap Stock Fund 1.6% Stock Index Fund 1.3% Mid Cap Stock Fund (0.7)% Small Cap Stock Fund (4.6)% International Stock Fund 1.9% Emerging Market Stock Fund (14.7)% Company Stock Fund (27.1)% Participant contributions are credited with earnings (or losses) based on the participant’s choice of investment fund equivalents. Investment fund equivalents match the investment returns of the funds available in the 401(k) plan. Investment elections may be changed daily subject to securities laws restrictions. Differences in earnings reported in the “Non-Qualified Deferred Compensation” table above, are based on the individual participant’s investment elections. The earnings (or losses) on the funds available under the DCSP are shown at left. Participants are fully vested in their contributions at all times. Amounts contributed by the Company become vested upon completing three years of service, reaching age 65, death, disability, termination of employment as a result of the permanent closing of the participant’s facility, or eligibility for severance under the Salaried Employee Severance Plan. Participant accounts are divided into contribution accounts for amounts deferred prior to January 1, 2005, and contribution accounts for amounts deferred after January 1, 2005. Distributions of amounts contributed on or after January 1, 2005, may only be made in the event of termination of employment, death or disability. Participants must elect their distribution form of payment in an initial deferral election, which may only be changed under a subsequent distribution election that meets the requirements under IRC Section 409A. In the event no election has been made, the participant will receive a lump-sum form of payment. In-service withdrawals are limited to unforeseeable emergencies. Post-Employment Termination Benefits Potential Payments Upon Death or Disability The Company provides to our NEOs the following benefits in the event of death or disability, which are available to all of our U.S. salaried employees. Upon reaching age 65, the disabled individual is covered under our retirement programs, if eligible, as described above. Disability benefits we provide are: Long-term disability income benefit equal to 60 percent of base salary plus the employee’s average MIP during the last three calendar years; Continuation of medical and life insurance coverage; and If eligible for the Retirement Plan, continuation of pension benefit accruals. The Company provides the same benefits to the beneficiary of an SLT member (including a NEO) upon death as are available to our U.S. salaried employees, with two additional benefits: Executive supplemental life insurance, which is described in the CD&A section of this proxy statement (this benefit was closed to new participants effective January 1, 2008, and thus five SLT members (including one NEO) do not have this benefit); and If the SLT member has completed five years of vesting service at the time of death, an amount equal to 50 percent of the SLT member’s SERP benefit is payable to a surviving spouse. In the event of disability or death, PSP awards are prorated based upon the number of months the participant worked during the performance period, and are paid at the end of the three-year performance period based on actual Company performance. Service-based restricted stock awards also become vested upon death or disability. Potential Payments Upon Retirement The following table presents the potential payments to our NEOs, assuming that they retired at the end of 2015. Name   Retirement Plan Annuity ($)     Pension Restoration Plan Annuity ($)     TOTAL Annuity ($)(1)     Lump Sum Pension Payment ($)(2)     Accelerated Vesting of Equity ($)(3)   M. S. Sutton     49,522        291,360        340,882        —        3,431,152    C. L. Roberts     102,633        53,548        156,181        10,741,918        1,157,315    W. M. Amick, Jr.     38,914        64,317        103,231        —        642,710    W. P. Hoel     108,225        —        108,225        7,254,002        778,844    T. S. Nicholls     37,333        171,949        209,282        —        1,157,315    (1) Amounts shown in this column are the annual annuity benefits payable from the tax-qualified Retirement Plan and from the Pension Restoration Plan, if applicable, as of December 31, 2015, if eligible on that date, and otherwise, at the earliest eligibility age at which benefits could commence. For Ms. Roberts and Mr. Hoel, the amount shown is the benefit payable at December 31, 2015. For the other NEOs, the amount shown is a reduced benefit payable at age 55. (2) Lump sum payment calculations are based on the lower of the December 2015 municipal bond rate of 1.83 percent, or the locked-in rate elected by the NEO, if applicable. Additional information regarding the calculation of benefits may be found following the “Pension Benefits” table. (3) Amounts shown in this column reflect the dollar value, based on the closing price of our common stock on December 31, 2015, of the prorated portions of the 2014-2016 PSP and 2015-2017 PSP, including reinvested dividends, that would be paid at the end of the performance period. In addition, the NEO would receive the 2013-2015 PSP award, which has a performance period ending on December 31, 2015, which is not shown here because the vesting is not accelerated. Potential Payments Upon Involuntary Termination Without Cause The following table represents standard severance amounts that would be payable to our NEOs in the event of involuntary termination without cause. Name   Years of Credited Service (#)     Lump Sum Severance Payment ($)(1)     Lump Sum Pension Payment ($)(2)     TOTAL Benefit at Termination ($)(3)     Accelerated Vesting of Equity ($)(4)     Value of Continued Benefits ($)(5)     TOTAL Pension Annuity ($)(6)   M. S. Sutton     32        3,444,277        —        3,444,277        3,431,152        126,456        613,588    C. L. Roberts     35        1,932,362        10,741,918        12,674,280        1,157,315        81,456        156,181    W. M. Amick, Jr.     26        950,300        —        950,300        642,710        57,341        103,231    W. P. Hoel     33        1,395,715        7,254,002        8,649,717        778,844        66,456        108,225    T. S. Nicholls     25        1,440,993        —        1,440,993        1,157,315        77,456        376,707    (1) The amounts shown in this column reflect estimated amounts under the Salaried Employee Severance Plan formula of two weeks’ salary for each year or partial year of service. Amounts shown also include the following benefits to which the NEO would be entitled: (i) unused current year vacation pay; (ii) 2016 earned vacation pay; and (iii) MIP award for 2015. We do not gross-up standard severance benefits. (2) Amounts shown in this column are the lump sum benefit payable under the SERP. The methodology used to calculate the lump sum benefit can be found in footnote 2 to the “Potential Payments Upon Retirement” table above. (3) Amounts shown in this column reflect the sum of the amounts in the previous two columns payable to the NEO upon termination. (4) Amounts shown in this column reflect the dollar value, based on the closing price of our common stock on December 31, 2015, of the prorated portions of the 2014-2016 PSP and 2015-2017 PSP, including reinvested dividends, that would be paid at the end of the performance period. In addition, the NEO would receive the 2013-2015 PSP award, which has a performance period ending on December 31, 2015, which is not shown here because the vesting is not accelerated. (5) Amounts shown in this column reflect the cost of (i) six months of continued dental and Employee Assistance Program coverage and (ii) executive outplacement services. For employees eligible for early retirement, the amounts also include a $3,000 HRA contribution made by the company on behalf of the employee and, if applicable, an additional $3,000 for the spouse of the employee. For employees not eligible for early retirement, the amounts reflect the cost of six months of COBRA premiums for medical coverage. (6) Amounts shown in this column are the annual annuity benefits payable from the Retirement Plan and the Pension Restoration Plan, if applicable, as of December 31, 2015, if eligible on that date, and otherwise, at the earliest eligibility age. For Ms. Roberts and Mr. Hoel, the amount shown is the benefit payable at December 31, 2015. Mr. Sutton and Mr. Nicholls would be bridged to early retirement and eligible for an immediate annuity under the terms of the Retirement Plan and Restoration Plan as a participant eligible for severance benefits who is at least age 53 with eight years of service. For Mr. Amick, the amount shown is a reduced benefit payable at age 55. Potential Payments Upon Termination With Cause An executive officer who is terminated with cause would not be eligible for severance benefits as described above, other than vacation pay. Further, the executive officer would lose outstanding equity awards under the PSP or other restricted stock grants, and not be eligible for payment of an MIP award. As a participant in the SERP whose benefit is determined under Formula A, Mr. Hoel would further forfeit the ability to receive a lump sum pension payment, and his vested retirement benefits under the Retirement Plan and the Pension Restoration Plan would be paid as an annuity. Name   Years of Credited Service (#)     Unused/ Earned Vacation Pay ($)(1)     Lump Sum Pension Payment ($)(2)     TOTAL Benefit at Termination ($)(3)     Pension Annuity ($)(4)   M. S. Sutton     32        286,154        -        286,154        340,882    C. L. Roberts     35        178,846        10,741,918        10,920,764        156,181    W. M. Amick, Jr.     26        100,000        -        100,000        103,231    W. P. Hoel     33        143,077        -        143,077        440,661    T. S. Nicholls     25        142,000        -        142,000        209,282    (1) The amounts shown in this column represent unused 2015 vacation pay and 2016 earned vacation pay. (2) The amounts shown in this column represent the lump sum benefit payable under the SERP. Under our SERP, participants whose benefit is calculated under Formula A will forfeit a lump sum payment in the event of termination with cause, and will receive their benefit as an annuity under the Pension Restoration Plan. (3) Amounts shown in this column represent the sum of columns (1) and (2) payable to the NEO upon termination. (4) Amounts shown in this column are the annual annuity benefits payable from the tax-qualified Retirement Plan and from the Pension Restoration Plan, if applicable, as of December 31, 2015, if eligible to commence benefits on that date, and otherwise at the earliest retirement eligibility date. Potential Payments Upon Qualifying Termination After Change in Control The following table represents amounts that would be payable to our NEOs upon termination of employment without cause (including by the NEO for good reason) within two years following a change in control of the Company on December 31, 2015. Name   Lump Sum Severance Payment ($)(1)     Lump Sum Pension Benefit ($)(2)     Value of Continued Benefits ($)(3)     TOTAL Cash-Based Award ($)     Accelerated Vesting of Equity ($)(4)     TOTAL Pre-Tax Benefit ($)(5)     Pension Annuity ($)(6)   M. S. Sutton     9,000,000        15,350,926        21,564        24,372,490        9,602,680        33,975,170        83,518    C. L. Roberts     4,400,430        14,448,857        21,564        18,870,851        3,885,287        22,756,138        156,181    W. M. Amick, Jr.     1,750,000        394,763        14,376        2,159,139        1,811,711        3,970,850        103,231    W. P. Hoel     2,811,171        8,855,305        21,564        11,688,040        2,085,149        13,773,189        108,225    T. S. Nicholls     1,980,028        9,534,436        21,564        11,536,028        3,885,287        15,421,315        59,210    (1) Amounts shown in this column reflect a change in control severance payment of three times (two times for Mr. Amick) the sum of (i) base salary and (ii) target MIP for 2015, which would be paid in the event of termination of employment without cause, including voluntary termination for limited situations that meet the definition of “good reason,” as described below. For Ms. Roberts and Messrs. Hoel and Nicholls, this amount has been reduced to reflect application of the “best net” approach described earlier in this proxy statement. (2) For Mr. Hoel, who joined the SERP prior to July 1, 2004, the amount shown represents an enhanced SERP benefit equal to the higher of 50 percent of compensation or the Pension Restoration Plan benefit formula with an additional three years of age and service. For the NEOs who joined the SERP after July 1, 2004, the amount shown represents the Pension Restoration Plan benefit formula earned after SERP participation with an additional three years of age and service. Mr. Amick is not in the SERP, but his change in control enhancement would be paid as a lump sum. (3) Amounts shown in this column reflect the cost of continued medical and dental benefits for three years (two years for Mr. Amick) following termination of employment. (4) Amounts shown in this column reflect the dollar value, based on the closing price of our common stock on December 31, 2015, of the vesting of (i) outstanding 2014-2016 and 2015-2017 PSP awards, including reinvested dividends, based on actual Company performance (for completed portions of the three-year performance period) or on target performance (for not-yet-completed portions of the three-year performance period) and (ii) outstanding service-based restricted stock awards, if any. In addition, the NEO would receive the 2013-2015 PSP award, which has a performance period ending on December 31, 2015, but is not included in the amount shown because it is not accelerated. (5) Amounts shown in this column represent the total of the cash amounts payable as well as the value of accelerated vesting of equity. (6) Amounts shown in this column are the annual benefits payable from the Retirement Plan and the Pension Restoration Plan, if applicable, as of December 31, 2015, if eligible on that date, and otherwise, at the earliest eligibility date. For Ms. Roberts and Mr Hoel, the amount shown is the benefit payable at December 31, 2015. For the other NEOs, the amount shown is a reduced benefit payable at age 55. The amount differs from the total pension annuity shown in the “Potential Payments Upon Retirement” table above for Mr. Sutton and Mr. Nicholls, because, in the event of a change in control, their SERP benefits would become vested and payable as a lump sum under the SERP, rather than as an annuity under the Pension Restoration Plan. For Mr. Sutton and Mr. Nicholls, whose benefits are calculated under Formula B, the amount of the Pension Restoration Plan benefit that accrued after becoming a SERP participant would become vested and payable as a lump sum. Definition of “Change in Control” A “change in control” is defined in our agreements as any of the following events: ● Acquisition of 30 percent or more of the Company’s stock; ● Change in the majority of the Board of Directors within two consecutive years, unless two-thirds of the directors in office at the beginning of the period approved the nomination or election of the new directors; ● Merger or similar business combination; ● Sale of substantially all of the Company’s assets; or ● Approval by our shareowners of a complete liquidation or dissolution of the Company. Definition of “Good Reason” The lump sum cash severance benefit shown above is payable only in the event of termination of employment without cause within two years following a change in control. This includes voluntary resignation only in limited situations that meet the definition of “good reason,” listed below. Under no circumstance will an executive receive a cash severance benefit under the agreement if he or she leaves voluntarily other than for “good reason,” which is defined as: ● The assignment to the executive of duties inconsistent with his or her position or a substantial decrease in responsibilities; ● Reduced annual base salary; ● Elimination of a material compensation plan (including the MIP, PSP or SERP) or a change in the executive’s participation on substantially the same basis; ● Elimination of substantially similar pension or welfare plans (except for across-the-board reductions of such benefits for executives), or a material reduction of any fringe benefit, or failure to provide the same number of vacation days; ● Failure by the Company to secure an agreement by the successor to assume the change in control agreement; ● Any other termination without sufficient notice; or ● Relocation more than 50 miles from place of work. Currently, the following benefits are payable upon a change in control and do not require termination of employment: 86 2019 Proxy Statement Table of Contents Compensation Discussion & Analysis (“CD&A”) ● Where replacement awards (as defined in the change-in-control agreements) are not provided in substitution for outstanding equity awards upon the change in control, all equity awards vest and become unrestricted, as follows: 1. All PSP shares vest and the full value of all PSP awards is paid for all performance periods (including those not yet completed) based on (a) target performance if the change in control occurs during the first year of the performance period, and (b) actual performance measured through the date of the change in control if it occurs on or after the first year of the performance period; 2. Service-based restricted stock awards vest and become unrestricted; and We have offered these limited single-trigger benefits for the purpose of: ● Maintaining our competitiveness in attracting and retaining executive talent; ● Ensuring that our executives receive the benefit of their efforts prior to a change in control and are not penalized with a loss of equity compensation; and ● Further aligning the interests of our executives with our shareowners, since the risk of losing equity compensation could create a conflict of interest for our executives if the Company were pursuing a change-in-control transaction. In light of the difficulty in determining relative performance achievement in our PSP following a change in control of the Company, we provide for payment of PSP awards as described above. Further, in light of the seniority of our covered executives, and their proximity to retirement age, we believe that increasing their pension protection provides appropriate retirement security in their employment following a change in control. www.internationalpaper.com 87 Table of Contents CEO Pay Ratio International Paper is one of the world’s leading producers of fiber-based packaging, pulp, and paper, with 52,223 employees in 28 countries (as of October 1, 2018). As expected in a manufacturing business, a significant percentage—approximately 70%—of our employee population is hourly-based employees. To determine the pay ratio required by Item 402(u) of Regulation S-K, the Company first identified the median employee using our global employee population as of October 1, 2018, which included all global full-time, part-time, temporary, and seasonal employees who were employed (and not on a leave of absence) on that date. We did not exclude any employees from any countries, and we did not make any cost-of-living adjustments in identifying our median employee. We used a consistently applied compensation measure across our global employee population to calculate the median employee compensation. The consistently applied compensation measure we used was “base salary/wages paid,” which we measured from January 1 through September 30, 2018. Once the median employee was identified, we then determined the median employee’s annual total compensation using the Summary Compensation Table methodology as detailed in Item 402(c)(2)(x) of Regulation S-K, and compared it to the total compensation of Mr. Sutton, our Chairman and CEO, as detailed in the Summary Compensation Table for 2018, to arrive at the pay ratio disclosed below. As noted above, a large segment of our employees is hourly-based, as is our median employee. Our median employee is located in the United States and works in one of our box plants. ● Our CEO’s 2018 compensation was $21,911,137, of which 32.3% is comprised of a change in pension value of $7,078,438. ● Our median employee’s 2018 compensation was $61,508, of which only 3.4% is comprised of a change in pension value of $2,123. ● Our CEO to Median Employee Pay Ratio is 356:1. Our pension plans were frozen for all salaried employees as of December 31, 2018. Therefore, Mr. Sutton’s actual accrued pension benefit will not change going forward. However, his Change in Pension Value disclosed in the Summary Compensation Table will fluctuate from year-to-year, reflecting annual changes in the underlying discount rates, the mortality tables and his age. For this reason, we have also calculated our pay ratio excluding the change in pension value for both employees and the resulting ratio is: 250:1. 88 2019 Proxy Statement Table of Contents Ownership of Company Stock Security Ownership of Certain Beneficial Owners Security Ownership of Certain Beneficial Owners The following table sets forth information concerning beneficial ownership of our common stock by persons known to us to own more than 5 percent of our common stock outstanding as of March 14, 2019, the record date for our 2019 annual meeting. Name and Address of Beneficial Owner Shares of Stock Beneficially Owned (#)       Percentage of Common Stock Outstanding (%) BlackRock, Inc.(1) 36,558,928 9.11 The Vanguard Group(2) 31,713,299 7.90 Wellington Management Company, LLP(3) 29,241,348 7.28 State Street Corporation(4) 24,825,317 6.18 (1) The address of BlackRock, Inc. (“BlackRock”) is 55 East 52nd Street, New York, NY 10055. We have relied upon information supplied by BlackRock in a Schedule 13G furnished to us reporting information as of December 31, 2018. According to the Schedule 13G, BlackRock had sole voting power over 33,251,849 shares and sole dispositive power over 36,558,928 shares. (2) The address of The Vanguard Group (“Vanguard”) is 100 Vanguard Blvd., Malvern, PA 19355. We have relied upon information supplied by Vanguard in a Schedule 13G furnished to us reporting information as of December 31, 2018. According to the Schedule 13G, Vanguard had sole voting power over 467,693 shares, shared voting power over 79,723 shares, sole dispositive power over 31,169,786 shares and shared dispositive power over 543,513 shares. (3) The address of Wellington Management Company, LLP (“Wellington”) is 280 Congress Street, Boston, MA 02210. We have relied upon information supplied by Wellington in a Schedule 13G furnished to us reporting information as of December 31, 2018. According to the Schedule 13G, Wellington had shared voting power over 8,236,119 shares and shared dispositive power over 29,241,348 shares. (4) The address of State Street Corporation (“State Street”) is State Street Financial Center, One Lincoln Street, Boston, MA 02111. We have relied upon information supplied by State Street in a Schedule 13G furnished to us reporting information as of December 31, 2018. According to the Schedule 13G, State Street had shared voting power over 23,255,391 and shared dispositive power over 24,821,264 shares. State Street held shares of common stock by persons known to us to own more than 5 percent of ourthe Company as independent trustee in trust funds for employee savings, thrift and similar employee benefit plans of the Company and its subsidiaries (“Company Trust Funds”). In addition, State Street is trustee for various third-party trusts and employee benefit plans. The common stock outstanding asheld by the Company Trust Funds is allocated to participants’ accounts and such stock or the cash equivalent will be distributed to participants upon termination of March 15, 2016,employment or pursuant to withdrawal rights. For purposes of the record date for our 2016 annual meeting. Name and Address of Beneficial Owner   Shares of Stock Beneficially Owned (#)     Percentage of Common Stock Outstanding (%)   BlackRock, Inc. (1)     33,343,855        8.11    State Street Corporation (2)     26,666,512        6.49    The Vanguard Group (3)     25,640,104        6.24    Wellington Management Company, LLP (4)     25,424,334        6.18    (1) The address of BlackRock, Inc. is 40 East 52nd Street, New York, NY 10022. We have relied upon information supplied by BlackRock, Inc. in a Schedule 13G furnished to us reporting information as of December 31, 2015. According to the Schedule 13G, BlackRock, Inc. had sole voting power over 29,823,100 shares, shared voting and dispositive power over 34,021 shares, and sole dispositive power over 33,309,834 shares. (2) The address of State Street Corporation (“State Street”) is State Street Financial Center, One Lincoln Street, Boston, MA 02111. We have relied upon information supplied by State Street in a Schedule 13G furnished to us reporting information as of December 31, 2015. According to the Schedule 13G, State Street had shared voting and dispositive power over 26,666,512 shares. State Street held shares of common stock of the Company as independent trustee in trust funds for employee savings, thrift and similar employee benefit plans of the Company and its subsidiaries (“Company Trust Funds”). In addition, State Street is trustee for various third party trusts and employee benefit plans. The common stock held by the Company Trust Funds is allocated to participants’ accounts and such stock or the cash equivalent will be distributed to participants upon termination of employment or pursuant to withdrawal rights. For purposes of the reporting requirements of the Exchange Act, State Street is deemed to be a beneficial owner of such securities; however, State Street expressly disclaims that it is, in fact, the beneficial owner of such securities. (3) The address of The Vanguard Group (“Vanguard”) is 100 Vanguard Blvd., Malvern, PA 19355. We have relied upon information supplied by Vanguard in a Schedule 13G furnished to us reporting information as of December 31, 2015. According to the Schedule 13G, Vanguard had sole voting power over 772,081 shares, shared voting power over 38,400 shares, sole dispositive power over 24,825,264 shares and shared dispositive power over 814,840 shares. (4) The address of Wellington Management Company, LLP (“Wellington”) is 280 Congress Street, Boston, MA 02210. We have relied upon information supplied by Wellington in a Schedule 13G furnished to us reporting information as of December 31, 2015. According to the Schedule 13G, Wellington had shared voting power over 8,996,617 shares and shared dispositive power over 25,424,334 shares. Security Ownership of Management The following table sets forth the numberExchange Act, State Street is deemed to be a beneficial owner of sharessuch securities; however, State Street expressly disclaims that it is, in fact, the beneficial owner of our common stock beneficially owned by each of our directors and NEOs, and by all of our directors and executive officers as a group, as of March 15, 2016, the record date for our 2016 annual meeting. Share and unit numbers are rounded.      Amount and Nature of Beneficial Ownership   Name of Beneficial Owner   Shares of Common Stock Held (#)(1)     Stock Units Owned (#)(2)     Percentage of Class (%)   Non-Employee Directors                         David J. Bronczek     57,901        4,932        *    William J. Burns     —        6,826        *    Ahmet C. Dorduncu     13,493        —        *    Ilene S. Gordon     22,157        —        *    Jay L. Johnson     —        15,186        *    Stacey J. Mobley     47,042        —        *    Joan E. Spero     —        33,669        *    John L. Townsend, III     42,614        —        *    William G. Walter     2,857        95,620        *    J. Steven Whisler     1,000        87,245        *    Ray G. Young     2,000        9,039        *                              Named Executive Officers                         Mark S. Sutton     548,655        2,234        *    Carol L. Roberts     269,819        2,457        *    W. Michael Amick, Jr.     103,088        15,252        *    William P. Hoel     177,768        3,548        *    Timothy S. Nicholls     226,353        4,108        *    All directors and executive officers as a group (22 persons)     2,277,642        337,555        *    such securities. www.internationalpaper.com 89 Table of Contents Ownership of Company Stock Security Ownership of Management The following table sets forth the number of shares of our common stock beneficially owned by each of our directors and NEOs, and by all of our directors and executive officers as a group, as of March 14, 2019, the record date for our 2019 annual meeting. No amounts are included for outstanding PSP awards that have not yet been paid. Share and unit numbers are rounded.         Amount and Nature of Beneficial Ownership Name of Beneficial Owner Shares of Common Stock Held (#)(1)       Stock Units Owned (#)(2)       Percentage of Class (%) Non-Employee Directors               William J. Burns   —   26,566   * Christopher M. Connor   —   9,574   * Ahmet C. Dorduncu   20,405   —   * Ilene S. Gordon   42,019   —   * Anders Gustafsson   982   —   * Jacqueline C. Hinman   6,968   —   * Clinton A. Lewis, Jr.   —   8,777   * Kathryn D. Sullivan   9,596   —   * J. Steven Whisler   1,000   117,767   * Ray G. Young   2,000   30,130   * Named Executive Officers             Mark S. Sutton   423,264   2,486   * Timothy S. Nicholls   111,621   4,571   * Glenn R. Landau (left the Company July 31, 2018)   26,073   —   * Catherine I. Slater   20,155   —   * Sharon R. Ryan   84,061   26,583   * Jean-Michel Ribieras   62,271   1,574   * All directors and executive officers as a group (20 persons)   1,053,573   271,531   * * Indicates less than 1 percent of the class of equity securities. (1) Includes securities over which the individual has, or, with another shares, directly or indirectly, voting or investment power, including ownership by certain relatives and ownership by trusts for the benefit of such relatives, as well as target share payout amounts for outstanding PSP awards. (1) Includes securities over which the individual has, or, with another shares, directly or indirectly, voting or investment power, including ownership by certain relatives and ownership by trusts for the benefit of such relatives. (2) Represents stock equivalent units owned by our NEOs under the International Paper Company Deferred Compensation Savings Plan or by our directors under the Restricted Stock and Deferred Compensation Plan for Non-Employee Directors. These units will be paid out in cash and are not convertible into shares of common stock. Accordingly, these units are not included as shares of common stock beneficially owned. Equity Compensation Plan Information The following table provides information as of December 31, 2015, regarding compensation plans under which our equity securities are authorized for issuance. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (#) Weighted-average exercise price of outstanding options, warrants and rights ($) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) (#) Equity compensation plans approved by security holders -     -     16,242,634 Equity compensation plans not approved by security holders -     -     -     Total -     -     16,242,634 6400 Poplar Avenue Memphis, Tennessee 38197 Printed on Accent® Opaque 40# Smooth Finish, made by our employees at the Ticonderoga Mill. INTERNATIONAL PAPER COMPANY C/O COMPUTERSHARE P.O. BOX 43004 PROVIDENCE, RI 02940-3004 VOTE BY INTERNET -www.proxyvote.com You may use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. EDT May 8, 2016, except that participants in the International Paper Company SalariedDeferred Compensation Savings Plan or International Paper Company Hourly Savingsby our directors under the Restricted Stock and Deferred Compensation Plan must provide voting instructions on or before 11:59 P.M. EDT May 4, 2016. Have your proxy cardfor Non-Employee Directors. These units will be paid out in hand when you access the web sitecash and follow the instructions on that site.are not convertible into shares of common stock. Accordingly, these units are not included as shares of common stock beneficially owned.

Equity Compensation Plan Information

The following table provides information as of December 31, 2018, regarding compensation plans under which our equity securities are authorized for issuance.

ELECTRONIC DELIVERY OF FUTURE SHAREOWNER COMMUNICATIONSPlan Category		Number of securities to be issued upon exercise of outstanding options, warrants and rights (#)		Weighted-average exercise price of outstanding options, warrants and rights ($)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) (#)
Equity compensation plans approved by security holders		—		—		11,944,398
Equity compensation plans not approved by security holders		—		—		—
Total		—		—		11,944,398

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2019 Proxy Statement

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If you would like to reduce the costs incurred by International Paper Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareowner communications electronically in future years.

VOTE BY PHONE 1-800-690-6903Appendix A – Reconciliations of Non-GAAP Measures

The tables below present reconciliations of our presented non-GAAP financial measures to the most directly comparable previously reported measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).

In millions, at December 31		2018		2017
Calculation of Adjusted EBITDA
Earnings from Continuing Operations Before Interest, Income Taxes, Equity Earnings and Cumulative
Effect of Accounting Changes		$2,317		$1,420
Depreciation, amortization and cost of timber harvested		1,328		1,343
Special items		208		491
Non-operating pension expense		494		484
Adjusted EBITDA		$4,347		$3,738

The Company defines and calculates Adjusted ROIC using in the numerator Operating Earnings Before Interest, the most directly comparable GAAP measure to which is Earnings Before Income Taxes and Equity Earnings.

Adjusted ROIC = Operating Earnings Before Interest / Average Invested Capital

Average Invested Capital = Equity adjusted to remove pension-related amounts in OCI, net of taxes + interest-bearing debt

In millions, at December 31		2018
Reconciliation of Operating Earnings Before Net Interest Expense to Net Earnings Before Taxes and Equity Earnings
Earnings (Loss) From Continuing Operations Before Income Taxes and Equity Earnings		$	1,781
Add back: Net Interest Expense			536
Add back: Special Items Before Taxes			214
Add back: Non-Operating Pension Expense Before Taxes			494
Operating Earnings Before Interest, Taxes and Equity Earnings			3,025
Tax Rate			25	%
Operating Earnings Before Interest and Equity Earnings			2,269
Equity Earnings, Net of Tax			336
Operating Earnings Before Interest		$	2,605

www.internationalpaper.com

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©2019 International Paper Company.
All rights reserved. Accent is a registered trademark
of International Paper Company. All other product
and company names are trademarks or registered
trademarks of their respective holders.

Printed on Accent^®Opaque Cover Smooth 65lb.
and Accent^®Opaque Text Smooth 50lb.

You may use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. EDT May 8, 2016, except that participants in the International Paper Company Salaried Savings Plan or International Paper Company Hourly Savings Plan must provide voting instructions on or before 11:59 P.M. EDT May 4, 2016. Have your proxy card in hand when you call and then follow the instructions the “Vote Voice” provides you.

VOTE BY MAILInternationalPaper.com Please mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to International Paper Company, c/o Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 11717 so that it is received by May 8, 2016. Voting instructions provided by participants in the International Paper Company Salaried Savings Plan or International Paper Company Hourly Savings Plan must be received by May 4, 2016.

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INTERNATIONAL PAPER COMPANY
C/O COMPUTERSHARE
P.O. BOX 43004
PROVIDENCE, RI 02940-3004

VOTE BY INTERNET -www.proxyvote.com
You may use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. EDT May 12, 2019, except that participants in the International Paper Company Salaried Savings Plan or International Paper Company Hourly Savings Plan must provide voting instructions on or before 11:59 P.M. EDT May 8, 2019. Have your proxy card in hand when you access the web site and follow the instructions on that site.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by International Paper Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE 1-800-690-6903
You may use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. EDT May 12, 2019, except that participants in the International Paper Company Salaried Savings Plan or International Paper Company Hourly Savings Plan must provide voting instructions on or before 11:59 P.M. EDT May 8, 2019. Have your proxy card in hand when you call and then follow the instructions.

If you or your duly appointed proxy holder are planning to attend the annual meeting of shareowners on May 9, 2016, please check the box in the space indicated on the proxy card below, or so indicate when you vote by Internet or phone. If you wish to attend the annual meeting and vote the shares in person, please see “How do I attend the annual meeting?” in the proxy statement.Shareholders must bring proof of ownership and valid photo identification in order to be admitted to the meeting.

TO VOTE BY MAIL
Please mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to International Paper Company, c/o Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, NY 11717 so that it is received by May 12, 2019. Voting instructions provided by participants in the International Paper Company Salaried Savings Plan or International Paper Company Hourly Savings Plan must be received by May 8, 2019.

If you or your duly appointed proxy holder are planning to attend the annual meeting of shareowners on May 13, 2019, please check the box in the space indicated on the proxy card below, or so indicate when you vote by Internet or phone. If you wish to attend the annual meeting and vote the shares in person, please see “How do I attend the annual meeting?” in the proxy statement.Shareowners must bring proof of ownership and valid photo identification in order to be admitted to the meeting.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:   x
		E61479-P18031		KEEP THIS PORTION FOR YOUR RECORDS
				DETACH AND RETURN THIS PORTION ONLY
THIS PROXY/VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED. INTERNATIONAL PAPER COMPANY

INTERNATIONAL PAPER COMPANY

The Board of Directors recommends a vote “FOR"FOR"” each of the nominees listed under Item 1. Item 1 — Election of Directors (one-year term)   For   Against Abstain Nominees: 1a. William J. Burns  ☐ ☐ ☐ 1b. Christopher M. Connor  ☐ ☐ ☐ 1c. Ahmet C. Dorduncu  ☐ ☐ ☐ 1d. Ilene S. Gordon  ☐ ☐ ☐ 1e. Anders Gustafsson  ☐ ☐ ☐ 1f. Jacqueline C. Hinman  ☐ ☐ ☐ 1g. Clinton A. Lewis, Jr.  ☐ ☐ ☐ 1h. Kathryn D. Sullivan  ☐ ☐ ☐ 1i. Mark S. Sutton ☐ ☐ ☐ 1j. J. Steven Whisler ☐ ☐ ☐ 1k. Ray G. Young ☐ ☐ ☐ For address changes and/or comments, please check this box and write them on the back where indicated. ☐ The Board of Directors recommends a vote "FOR"Items 2 & 3.   For   Against Abstain Item 2  — Ratification of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for 2019 ☐ ☐ ☐ Item 3  — A Non-Binding Resolution to Approve the Compensation of the Company’s Named Executive Officers, as Disclosed Under the Heading "Compensation Discussion & Analysis" ☐ ☐ ☐ The Board of Directors recommends a vote "AGAINST"Item 4. Item 4  — Shareowner Proposal to Reduce Special Shareowner Meeting Ownership Threshold to 10 Percent ☐ ☐ ☐ Item 1 – Election of Directors (one-year term) For Against Abstain Nominees: 1a.    David J. Bronczek ¨ ¨ ¨ 1b.    William J. Burns ¨ ¨ ¨ 1c.    Ahmet C. Dorduncu ¨ ¨ ¨ 1d.    Ilene S. Gordon ¨ ¨ ¨ 1e.    Jay L. Johnson ¨ ¨ ¨ 1f.    Stacey J. Mobley ¨ ¨ ¨ 1g.    Joan E. Spero ¨ ¨ ¨ 1h.    Mark S. Sutton ¨ ¨ ¨ 1i.    John L. Townsend, III ¨ ¨ ¨ 1j.    William G. Walter ¨ ¨ ¨ 1k.    J. Steven Whisler ¨ ¨ ¨ 1l.    Ray G. Young ¨ ¨ ¨ The Board of Directors recommends a vote “FOR” Items 2 & 3. Item 2 – Ratification of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for 2016 ¨ ¨ ¨ Item 3 – A Non-Binding Resolution to Approve the Compensation of the Company’s Named Executive Officers, as Disclosed Under the Heading “Compensation Discussion & Analysis” ¨ ¨ ¨ In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. This proxy/voting instruction card, when properly executed, will be voted in the manner directed herein by the undersigned shareowner.If no direction is made, this proxy/voting instruction card will be voted FOR all of the nominees in Item 1, and FOR the Proposals in Items 2 and 3.3, and AGAINST Item 4. If you are a participant in one or more of the plans shown on the reverse side of this proxy/voting instruction card, the shares will be voted by the Trustee in its discretion.

	Yes No Please indicate if you plan to attend this meeting. ☐ ☐ For address changes and/or comments, please check this box and write them on the back where indicated.      ¨ Please indicate if you plan to attend this meeting. Yes¨ No¨ Please sign exactly as your name appears on this proxy. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee, guardian or guardian,other fiduciary, please give your full title. If a corporation, please sign in full corporate name by authorized officer. If a partnership or LLC, please sign in firm name by authorized partner or member. Signature [PLEASE SIGN WITHIN BOX]/Date   Signature(Joint Owners)/Date INTERNATIONAL PAPER COMPANY SHAREOWNER PROXY AND CONFIDENTIAL VOTING INSTRUCTION CARD ANNUAL MEETING OF SHAREOWNERS – MONDAY, MAY 9, 2016 THIS PROXY/VOTING INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INTERNATIONAL PAPER COMPANY AND BY THE TRUSTEES OF THE PLANS LISTED BELOW. THIS MAY ONLY BE USED AT THE ANNUAL MEETING OF SHAREOWNERS, TO BE HELD ON MAY 9, 2016, AT 11 A.M. CDT AT THE INTERNATIONAL PAPER COMPANY HEADQUARTERS, TOWER IV, LOCATED AT 1740 INTERNATIONAL DRIVE IN MEMPHIS, TENNESSEE, 38119, AND AT ANY ADJOURNMENT THEREOF. If you are a registered shareowner, by submitting this proxy you are appointing Mark S. Sutton, Carol L. Roberts and Sharon R. Ryan, jointly or individually, as proxies with power of substitution, to vote all shares you are entitled to vote at the Annual Meeting of Shareowners on May 9, 2016,
	Signature [PLEASE SIGN WITHIN BOX]	Date		Signature (Joint Owners)	Date

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Important Notice Regarding the Availability of Proxy Materials for the Shareowner Meeting
To Be Held on May 13, 2019:
The Notice & Proxy Statement and the Annual Report are Available at
http://materials.proxyvote.com/460146

	E61480-P18031

INTERNATIONAL PAPER COMPANY

SHAREOWNER PROXY AND CONFIDENTIAL VOTING INSTRUCTION CARD
ANNUAL MEETING OF SHAREOWNERS – MONDAY, MAY 13, 2019

THIS PROXY/VOTING INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INTERNATIONAL PAPER COMPANY AND BY THE TRUSTEES OF THE PLANS LISTED BELOW.THIS MAY ONLY BE USED AT THE ANNUAL MEETING OF SHAREOWNERS, TO BE HELD ON MAY 13, 2019, AT 11 A.M. CDT AT THE INTERNATIONAL PAPER COMPANY HEADQUARTERS, TOWER IV, LOCATED AT 1740 INTERNATIONAL DRIVE IN MEMPHIS, TENNESSEE 38197, AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF.

If you are a registered shareowner, by submitting this proxy you are appointing Mark S. Sutton, Tim S. Nicholls and Sharon R. Ryan, jointly or individually, as proxies with power of substitution, to vote all shares you are entitled to vote at the Annual Meeting of Shareowners on May 13, 2019, and any adjournment or postponement thereof. If no direction is made on the reverse side, this proxy will be voted FOR all nominees in Item 1, FOR Items 2 and 3, and AGAINST Item 4. The proxies are authorized to vote upon such other business as may properly come before the meeting.

If you are a participant in either the International Paper Salaried Savings Plan or the International Paper Hourly Savings Plan, by signing this proxy/voting instruction card, you are instructing the Trustee to vote the shares of common stock in accordance with your voting instructions. The Company has authorized Broadridge as the agent to tabulate the votes under each of the plans. Any shares held by the Trustee for which it has not received voting instructions by Internet, phone or mail by 11:59 P.M. EDT May 8, 2019, will be voted by the Trustee in its discretion. Plan participants may attend the meeting but may only vote these shares by submitting voting instructions by Internet, phone or mail by 11:59 P.M. EDT May 8, 2019.

The proxies are instructed to vote as indicated on the reverse side. This proxy revokes all prior proxies given by you. Please sign on the reverse side exactly as your name or names appear(s) there. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee, guardian or other fiduciary, please give your full title. If a corporation, please sign in full corporate name by authorized officer. If a partnership or LLC, please sign in firm name by authorized partner or member.

	Address Changes/Comments:
	(If you noted any address changes/comments, please mark the corresponding box on the reverse side, this proxy will be voted FOR all nominees in Item 1, and FOR Items 2 and 3. The proxies are authorized to vote upon such other business as may properly come before the meeting. If you are a participant in either the International Paper Salaried Savings Plan or the International Paper Hourly Savings Plan, by signing this proxy/voting instruction card, you are instructing the Trustee to vote the shares of common stock in accordance with your voting instructions. The Company has authorized Broadridge as the agent to tabulate the votes under each of the plans. Any shares held by the Trustee for which it has not received voting instructions by Internet, phone or mail by 11:59 P.M. EDT May 4, 2016, will be voted by the Trustee in its discretion. Plan participants may attend the meeting but may only vote these shares by submitting voting instructions by Internet, phone or mail by 11:59 P.M. EDT May 4, 2016. The proxies are instructed to vote as indicated on the reverse side. This proxy revokes all prior proxies given by you. Please sign on the reverse side exactly as your name or names appear(s) there. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If a corporation, please sign in full corporate name by authorized officer. If a partnership or LLC, please sign in firm name by authorized partner or member. ) Address Changes/Comments:         (If you noted any address changes/comments, please mark the corresponding box on the reverse side.) Important Notice Regarding the Availability of Proxy Materials for the Shareowner Meeting To Be Held on May 9, 2016: A Form of Proxy, the Proxy Statement and the Annual Report are Available at http://materials.proxyvote.com/460146

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