Board of Directors
Our board of directors oversees the management of our global business, including our commitment to sustainability.
COMPOSITION, STRUCTURE AND INDEPENDENCE
We follow New York Stock Exchange corporate governance rules and requirements, which require that a majority of our board
of directors be independent. As of April 2012, ten directors served on our board and all except the CEO are independent directors
under the standards of the New York Stock Exchange. These directors are or have recently been leaders of major companies
and institutions and possess a wide range of experience and skills.
Our 90-percent independent board is higher than the average of our peers. According to an analysis of the most recent proxy
statements from the S&P 500 and responses to a supplemental survey conducted by Spencer Stuart, a recruiting and leadership
consulting firm, the average percent of independent directors as of 2011 was 84.
The Weyerhaeuser board also has appointed an independent director to serve as chairman. The Spencer Stuart study found that
in 2011, 41 percent of boards split the chairman and CEO roles; however only 21 percent of the non-CEO chairmen are independent.
As is true for most companies who have separated the roles of chairman and CEO, our board has declined to adopt a policy
that requires it to have an independent chairman at all times. However, the board has provided that during periods when
it does not have an independent chairman, the independent chair of the Executive Committee will serve as Lead Director.
A survey of 322 large and small public companies conducted by The Conference Board in collaboration with NASDAQ OMX and
NYSE Euronext found that, in general, the larger the company is the more diverse the board is, a finding confirmed by the
Spencer Stuart study. The Spencer Stuart study found that women held an average of 16 percent of board seats. The highest
percentage of women directors was 17 percent for companies with revenues of $5 billion or more according to The Conference
Board study. Three of the independent directors on our board are women, which is 30 percent. One independent director on
our board is African-American, which is 10 percent and generally consistent with the average of approximately 12.5 percent
minority directors found by The Conference Board study and approximately 15 percent minority directors among the largest
200 of the S&P 500 companies according to the Spencer Stuart study.
GOVERNANCE HIGHLIGHTS
Governance practices implemented by the board of directors and the company in recent years include the following:
- The CEO has no employment contract.
- The company has eliminated all tax gross-ups.
- The company has eliminated single triggers in its change-in-control plans.
- Change-in-control benefits for a termination occurring within the period six months prior to a change-in-control were eliminated.
- Severance benefits of a prorated annual bonus calculated based on the executive’s target annual bonus were changed to be
calculated based on the actual bonus paid.
- The Compensation Committee engaged F.W. Cook, an independent consultant who does no other work for the company.
- The company has minimal executive perquisites.
- The company has increased officer stock ownership guidelines to five times salary for the CEO and three times salary for
executive vice presidents and requires senior officers who are not in compliance with the guidelines to hold 75 percent
of their net shares remaining after vesting of restricted stock and earn-out of performance shares.
- The board of directors approved stock ownership guidelines for directors of five times their cash annual fees.
- The Compensation Committee completed a formal risk assessment of the company’s compensation programs and, as a result, revised
stock ownership guidelines for directors and officers and adopted a policy prohibiting hedging.
- Majority election of directors was implemented.
- Annual election of directors was implemented.
- Supermajority voting provisions were eliminated.
- Shareholders owning at least 25 percent of the outstanding common shares have the right to call special shareholder meetings.
- The board elected an independent director as chairman.
RESPONSIBILITY FOR SUSTAINABILITY MATTERS
Our stakeholders expect us to operate in a healthy, safe, legal and environmentally responsible manner. To meet this expectation,
we have developed effective systems for identifying and evaluating risks, setting standards, implementing programs, monitoring
performance, and complying with the law. Our board addresses aspects of sustainability at every meeting and board committees
address aspects of sustainability on a regular basis (e.g., legal compliance). Safety is addressed at every board meeting.
The governance and corporate responsibility committee has responsibility for oversight of our sustainability practices and
hears a full report once a year. In 2010, we adopted a formal sustainability strategy, which was approved by the governance
and corporate responsibility committee. Diversity is addressed at least once a year in a report to the governance committee
or in succession planning discussions by the board.
Our board, through its company direction-setting process, establishes companywide strategic direction for capital spending,
and business and financial matters, as well as social and environmental issues. We employ this process in three- to five-year
cycles to set overall strategic direction of the company. As part of the process, we analyze global trends that have the
potential to affect our businesses over the long term, analyze the capabilities and challenges of our businesses, and integrate
this information into our planning and decision-making regarding company direction.
Board committees are responsible for sustainability issues in their areas of oversight, and for ensuring that all aspects
of sustainability are addressed on an ongoing basis. Our board annually, with the assistance of the governance and corporate
responsibility committee, reviews its overall performance and reviews the performance of board committees. Learn more about
our board committees and their charters in the investors
section.
QUALIFICATIONS AND EXPERTISE
Weyerhaeuser's Corporate Governance Guidelines provide that our board should encompass a diverse range of talent, skill
and expertise sufficient to give sound and prudent guidance with respect to the company's operations and interests. See
our Governance Guidelines
and Avoiding Conflicts of Interest.
Each director is expected to exhibit high standards of integrity, commitment and independence of thought and judgment; to
use his or her skills and experience to provide independent oversight to the business of the company; to participate in
a constructive and collegial manner; and to represent the long-term interests of all shareholders. Directors must be willing
to devote sufficient time and effort to learn the business of the company and to carry out their duties and responsibilities
effectively. As part of its periodic self-assessment process, the board determined that, as a whole, it must have the right
diversity and mix of characteristics and skills for optimal oversight of the company. It should be composed of people with
skills in areas such as:
- Finance
- Sales and markets
- Strategic planning
- Sustainability strategies
- Human resources and diversity
- Safety
- Relevant industry business, especially natural resource companies
- Leadership of large, complex organizations
- Legal
- Banking
- Government and governmental relationships
- International business and international cultures
- Information technology
In addition to the targeted skill areas, the governance and corporate responsibility committee identified key knowledge
areas critical for directors to add value to a board, including strategy, leadership, organizational issues, relationships
and ethics.
PROVIDING RECOMMENDATIONS
Any shareholder can communicate directly with our board, the independent directors, and any individual director or the chair
of any committee via our corporate secretary. The processes for communicating with the board, recommending nominees for
the board, or submitting shareholder proposals are outlined in our 2012 Proxy Statement.
Our board also requests regular reports about interests and concerns of shareholders and communication with shareholders.
As part of its periodic self-assessment process, our board annually determines the diversity of specific skills and characteristics
necessary for optimal functioning in its oversight of the company over both the short and longer term. The governance and
corporate responsibility committee has adopted a policy regarding the director selection process that requires the committee
to assess the skill areas currently represented on our board and those skill areas represented by directors expected to
retire or leave in the near future, against the target skill areas established annually by our board, as well as recommendations
of directors regarding skills that could improve the overall quality and ability of our board to carry out its function.
The governance and corporate responsibility committee then establishes the specific target skill areas or experiences that
are to be the focus of a director search, if necessary. The effectiveness of our board’s diverse mix of skills and experiences
is considered as part of each board self-assessment.
Candidates recommended for consideration as nominees for director are evaluated against the targeted skill and knowledge
areas. Based on these analyses, the committee determines the best qualified candidates and recommends those candidates to
the board for election at the next shareholders' meeting. The governance and corporate responsibility committee carefully
reviews shareholder proposals submitted for consideration at the next annual meeting, develops a suggested response, then
presents these recommendations to the full board. The board may engage outside advisers to provide support of its consideration
of some proposals. The full board approves the suggested responses to any shareholder proposals that will be included in
the proxy statement for the annual shareholders' meeting.
Examples of recent topics considered in shareholder proposals include:
- Governance (shareholder right to call special meetings, majority vote, director election by majority, executive compensation,
appointment of auditors, independent chairman)
- Forestry practices (certification, wood supply)
- Social issues (aboriginal peoples relations)
DIRECTOR SHARE OWNERSHIP GUIDELINES AND COMPENSATION
Share ownership guidelines
Our board believes the interests and focus of directors must be closely tied to the long-term interests of shareholders.
As a result, the board has established share ownership guidelines for directors. Directors are required to own company common
stock valued at five times the director’s annual cash compensation. Unless the director is in compliance with the guidelines,
he or she must hold 100 percent of the net shares granted as part of the annual fee for serving as a director. Shares deferred
into the stock equivalent account of the Deferred Compensation Plan for Directors are counted for purposes of determining
whether a director has satisfied the share ownership requirement.
Equity and Cash Components of Compensation
Each independent director, other than the chairman of the board, will be paid an annual fee for service of $160,000, and
$90,000 of the annual fee will be paid in the form of Restricted Stock Units. The number of RSUs is determined by dividing
the dollar amount of the fees to be granted as RSUs by the average of the high and the low price of the company’s common
stock on the date of grant. These RSUs will vest over one year and will be settled at the end of the year. The remaining
$70,000 will be paid in the form of cash.
Deferral Option
Directors may choose to further defer receipt of some or all of their vested RSUs into the stock equivalent account under
the Deferred Compensation Plan for Directors. RSUs deferred into stock equivalent units will be paid following the director’s
termination from the board, in the form of shares of the company’s common stock. During the deferral period, stock equivalent
units will be credited with dividends, which will be paid along with the deferred shares at the end of the deferral period
in the form of shares of the company’s common stock.
Directors also may choose to defer some or all of the cash portion of the annual fee under the Deferred Compensation Plan
for Directors. A director who chooses to defer some or all of the cash portion has the option of deferring the designated
amount into the stock equivalent account or into the interest-bearing account. The number of stock units credited to a director’s
account will be determined by dividing any cash being deferred into the stock equivalent account by the average of the high
and the low price of the company’s common stock on the date of grant. Amounts deferred into stock equivalent units will
be paid following the director’s termination from the board, in the form of shares of the company’s stock. Amounts deferred
into the interest-bearing account will be paid in cash.
Special Fees for Serving as Chair
Each director who serves as a chair of a committee receives an additional fee of $10,000 in cash, which can be taken immediately
or deferred into either the stock equivalent account or the interest-bearing account. The chairman of the board receives
an annual fee of $300,000 of which $150,000 will be paid in the form of Restricted Stock Units that vest over one year and
may be further deferred into stock equivalent units. The remaining $150,000 will be paid immediately in cash or may be deferred
into either the stock equivalent account or the interest-bearing account in the Deferred Compensation Plan for Directors.
Reimbursement for Travel
Directors are reimbursed for travel expenses in connection with meetings. Compensation also is available for extended travel
on board business at the request of the board or a committee of the board. Compensation for extended travel on board business
is at the rate of $2,000 per day, including travel days and workdays.
For more information about our compensation programs, including departure arrangements, see the Notice of 2012 Annual Meeting of Shareholders and Proxy Statement.
AVOIDING CONFLICTS OF INTEREST
Our board of directors is bound by our business ethics core policy and code of ethics, as are our officers and employees.
The code explicitly addresses conflicts of interest and the consequences of noncompliance. The board also has adopted a
policy regarding related party transactions, which defines specific areas that could result in conflicts of interest and
procedures for reviewing these transactions.
In addition, the board of directors has documented its governance practices in the Corporate Governance Guidelines. The
guidelines cover board functions and operation, company operations, board organization and composition, and board conduct—including
ethics and conflicts of interest. View governance policies and guidelines in the investors section.
The governance and corporate responsibility committee takes a leadership role in shaping the governance of the company and
provides oversight and direction regarding the operation of the board of directors. The committee regularly reviews recommended
corporate governance practices and advises the board to adopt practices the committee considers to be best practices. As
a result, our bylaws clarify that a director must stand for election at the next annual shareholders' meeting if the director
was appointed to fill a vacancy on the board. We also recently amended our board charter to require a director to submit
a letter of resignation for consideration by the governance committee if the director changes his or her principal occupation.
