International Paper's stock jumps after replacing longtime CEO with an investment-firm veteran

By Tomi Kilgore

Departing CEO Sutton was with International Paper his entire career, while incoming CEO Silvernail was an adviser at investment firm KKR

International Paper investors cheered Tuesday, after the paper and packaging company named an investment advisor as its new CEO, replacing a chief executive whose only experience has been with the company.

Mark Sutton will be stepping down as CEO effective May 1, a role he's held since Nov. 1, 2014. He had started his career at International Paper (IP) as an engineer in 1984, became a paper mill manager in 1994, moved to Europe in 2000 then relocated to the Memphis headquarters in 2005.

Sutton will remain chairman of the company's board to help provide a smooth leadership transition.

Taking his place as CEO will be Andrew Silvernail, who joins from investment firm KKR & Co. (KKR), where he was an executive adviser.

International Paper's stock ran up 9.2% toward a 13-month high in midday trading, enough to pace the S&P 500 index's SPX gainers. That put the stock on track for its biggest one-day gain since it soared 10.7% on Jan. 31, 2023.

Silvernail's experience includes being CEO of privately held investment company Madison Industries and of pumps, valves and fittings maker IDEX Corp. (IEX). He's also held executive positions at industrial-equipment maker Rexnord Industries, consumer-goods company Newell Rubbermaid and medical and diagnostics products maker Danaher Corp. (DHR)

Sutton's parting words seemed to highlight Silvernail's lack of paper-industry experience:

"The board's succession process was comprehensive, and I'm confident that Andy's experience, paired with the industry expertise of our senior leadership team, will amplify the company's success going forward."

But that seems to be OK for IP, since the company appears to be more focused on creating shareholder value, as the stock has declined since Sutton took charge, while the shares of rival Packaging Corp. of America (PKG) and the S&P 500 have more than doubled.

And 2023 net sales of $18.9 billion were 20% less than 2014 net sales of $23.6 billion.

During the time Sutton's time as CEO overlapped with Silvernail's time as CEO of IDEX - Silvernail was CEO of IDEX from Aug. 10, 2011, to Dec. 15, 2020 - IP's stock fell while Idex's stock came close to tripling.

As Chris Connor, IP's lead director, indicated, the company wants Andy Silvernail to show it the money.

"Andy is an experienced CEO with an extensive track record for creating value," Connor said. "His strategic agility, core values and drive for results align with and will enhance IP's outstanding leadership team."

-Tomi Kilgore

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03-19-24 1304ET

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