DEF 14A of Avery Dennison Corp
Filed Mar 7, 2025 · FY20240001193125-25-048919
2025 DIRECTOR NOMINEES (PROPOSAL 1)
2025 DIRECTOR NOMINEES (PROPOSAL 1)
OUR BOARD OF DIRECTORS
OUR BOARD OF DIRECTORS
OVERVIEW
OVERVIEW Our Board oversees, counsels and ensures management is serving the best interests of our company, with a view toward maximizing the performance of our businesses and delivering long-term value for all our stakeholders.
OVERVIEW
| PRIMARY BOARD RESPONSIBILITIES | | • Establish Board/Committee composition, structure and responsibilities to ensure strong independent oversight • Conduct director succession planning to maintain engaged Board with balance of skills, qualifications and demographics • Oversee businesses, strategy execution, risk mitigation, governance profile and sustainability progress • Approve annual operating plan and key strategic decisions, including acquisitions and significant fixed and information technology capital expenditures • Maintain integrity of financial statements and oversee capital allocation, including dividends and share repurchases • Evaluate performance of senior leaders and determine executive compensation • Conduct CEO and other executive succession planning to help develop leaders that advance our future growth and ensure engaged and empowered teams |
2025 Director Nominees
2025 Director Nominees Our Governance Guidelines provide our Board’s view that a size between 8 and 12 directors allows for effective Board functioning, although it may periodically comprise a larger or smaller number of directors. Under our Bylaws, the number of directors shall be fixed from time to time by Board resolution; our Board has fixed the current number of directors at 9. Our 2025 director nominees are shown in the chart below. As shown by individual in the Director Matrix in the proxy summary, they bring a balance of industry and functional experience in overseeing management in advancing our strategies and achieving our financial goals.
2025 Director Nominees
| | NAME | AGE | DIRECTOR SINCE | PRINCIPAL OCCUPATION | INDEPENDENT | AC | CC | GC | FC | | 1 | Bradley A. Alford | 68 | 2010 | Retired Chairman & CEO, Nestlé USA | ✓ | | ● | ● | | | 2 | Mitchell R. Butier | 53 | 2016 | Chairman-Elect, Avery Dennison Corporation | – | | | | ● | | 3 | Ward H. Dickson^ | 62 | 2024 | Retired EVP & CFO, WestRock Company | ✓ | ● | | | ● | | 4 | Andres A. Lopez | 62 | 2017 | Retired President & CEO, O-I Glass, Inc. | ✓ | | ● | | | | 5 | Maria Fernanda Mejia | 61 | 2024 | Retired CEO, International, Newell Brands Inc. | ✓ | ● | | | | | 6 | Francesca Reverberi | 53 | 2023 | SVP, Engineered Materials & Plastics Solutions, Trinseo PLC | ✓ | | ● | | | | 7 | Patrick T. Siewert* | 69 | 2005 | Retired Managing Director & Partner, The Carlyle Group Inc. | ✓ | ● | | ● | ● | | 8 | Deon M. Stander | 56 | 2023 | President & CEO, Avery Dennison Corporation | – | | | | ● | | 9 | William R. Wagner | 58 | 2022 | CEO, Semrush Holdings, Inc. | ✓ | ● | | ● | |
2025 Director Nominees
AC = Audit Committee CC = Compensation Committee GC = Governance Committee FC = Finance Committee * = Lead Independent Director ● = Chair ● = Member ^ = New Director The ages of our director nominees range from 53 to 69, with an average age of 61. Their lengths of service range from less than one to 20 years, with an average tenure of 7 years.
Board Meetings and Attendance
Board Meetings and Attendance Our Board met five times during 2024. There were 27 Board Committee meetings during the year. All directors attended at least 75% of their respective Board and Committee meetings; average attendance was 98%. In addition, our directors regularly engaged on strategic, business and financial matters with each of our Executive Chairman and CEO outside of meetings. Directors are strongly encouraged to attend annual stockholder meetings under our Governance Guidelines and all then-serving directors attended the 2024 Annual Meeting.
Board Meetings and Attendance
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Additional Board Engagement
Additional Board Engagement Bringing their industry and functional expertise, some of our directors participate – in certain cases, together with third-party experts – on our Advisory Councils, providing their insights outside the boardroom in a non-fiduciary capacity to management on key strategic initiatives and cybersecurity risk management. These councils do not possess governing authority, which remains with applicable management teams. At this time, Mr. Wagner is a member of our Digital Advisory Council and our Cybersecurity Advisory Council; Mses. Mejia and Reverberi are members of our Future of Consumer Packaging Advisory Council; and Mr. Alford is a member of our Food Advisory Council. At year-end 2024, Mr. Butier served on the Cybersecurity Advisory Council and Mr. Stander served on the other three councils, in each case in their capacity as company officers. Directors serving on Advisory Councils are not currently provided any additional compensation for doing so, but that could change for non-employee directors as the time commitments of their service continue to be assessed.
GOVERNANCE GUIDELINES
GOVERNANCE GUIDELINES Our Governance Guidelines provide the governance framework for our company and reflect the values of our Board, as highlighted below. They are reviewed at least annually and amended from time to time to reflect changes in regulatory requirements, evolving market practices, recommendations from our advisors and feedback from our investors. Our Governance Guidelines were last amended in December 2024.
GOVERNANCE GUIDELINES
| BOARD GOVERNANCE HIGHLIGHTS | | | Board Composition | ✓ Board of 9 directors reflects significant refreshment in recent years ✓ Mandatory retirement after age 72 with no exemptions or waivers allowed or granted ✓ On average, director age of 61 years and tenure of 7 years ✓ 33% of directors voluntarily self-reported as being from demographically diverse backgrounds | | Director Independence | ✓ Director nominees 78% independent ✓ Executive sessions of independent directors held at 3 Board meetings in 2024 | | Board Leadership Structure | ✓ Annual review of Board leadership structure ✓ Robust Lead Independent Director role and independent Audit, Compensation and Governance Chairs | | Board Committees | ✓ Annual composition review and periodic structural review and Chair/member rotation, including in 2024 given new and departing directors ✓ Act under annually reviewed charters reflecting stakeholder expectations and best practices ✓ Directors required to attend Board/Committee and stockholder meetings | | Board Duties | ✓ Regular CEO and executive leadership succession planning ✓ Ongoing review of long-term strategic plans, including key risks and mitigating strategies ✓ Directors entitled to rely on independent legal, financial or other advisors at our expense | | Continuous Board Improvement | ✓ New directors receive orientation materials and engage with senior management to familiarize themselves with our Board and company, receiving additional orientation after joining Board committees to better understand their responsibilities and processes ✓ Continuing education through meetings with management, visits to our facilities and participation in director education programs ✓ Annual evaluation process ensures Board, Committees, Chairman, Lead Independent Director and Committee Chairs are functioning effectively | | Director Succession Planning | ✓ Regular review of Board composition and ongoing director succession planning ✓ Biannual individual director feedback process advances continuous director development and assists with succession planning |
GOVERNANCE GUIDELINES
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PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS Our Governance Guidelines provide for a Board of between 8 and 12 directors and our Bylaws require the number to be fixed by resolution of our Board. Our Board has fixed the current number of directors at 9. Each of our nominees is presently serving on our Board and has consented to being named in this proxy statement and serving if elected by stockholders. All nominees are standing for election for a one-year term ending at the 2026 Annual Meeting.
SELECTION OF DIRECTOR NOMINEES
SELECTION OF DIRECTOR NOMINEES Directors are annually recommended by the Governance Committee for nomination by our Board and election by our stockholders. New directors may also be recommended by the Governance Committee for appointment to our Board, with their election by stockholders taking place at the next Annual Meeting. The Director Matrix in the proxy summary shows the balance of industry experience, functional experience and demographics on our Board. In evaluating whether to recommend a new or incumbent director nominee, the Governance Committee primarily considers the criteria described below.
SELECTION OF DIRECTOR NOMINEES
| • | Independence, to ensure a substantial majority of our Board is independent |
SELECTION OF DIRECTOR NOMINEES
| • | U.S. public company leadership and/or Board experience and working or having worked outside the U.S., as well as industry and functional experience, in each case considering factors such as size, scope and complexity |
SELECTION OF DIRECTOR NOMINEES
| • | Board service at other U.S. public companies |
SELECTION OF DIRECTOR NOMINEES
| • | Experience in finance, accounting and/or executive compensation, as well as in functional areas such as marketing, M&A, environmental sustainability, cybersecurity and science/engineering/R&D |
SELECTION OF DIRECTOR NOMINEES
| • | For incumbent directors, Board/Committee engagement and effectiveness, meeting attendance, compliance with our stock ownership policy, and mandatory retirement date |
SELECTION OF DIRECTOR NOMINEES
| • | Time commitments, including service on other boards; directors who are public company executive officers may not serve on more than one other U.S. public company board |
SELECTION OF DIRECTOR NOMINEES
| • | Potential conflicts of interest |
SELECTION OF DIRECTOR NOMINEES
| • | Ability to contribute to our company’s governance and sustainability priorities |
SELECTION OF DIRECTOR NOMINEES
| • | Individual profile; when evaluating nominees, the committee seeks to consider (and asks any search firm engaged to provide) a varied pool of candidates with respect to industry experience, functional experience and demographics |
SELECTION OF DIRECTOR NOMINEES
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SELECTION OF DIRECTOR NOMINEES
The Governance Committee reviews the profile of any candidate with those of our current directors to ensure our Board has a broad representation of experiences and viewpoints. Sources for identifying potential nominees include current Board members, senior management, executive search firms and investors. The Governance Committee regularly reviews the composition of our Board and conducts director succession planning to ensure that our Board continues to meet the needs of our businesses, effectively oversee management in executing our strategies and advance the interests of our stakeholders. Its search for new directors with retail/consumer packaged goods and/or finance expertise led to the appointments of Ms. Mejia and Mr. Dickson to our Board in February and June 2024, respectively.
Stockholder Submission of Director Nominees
Stockholder Submission of Director Nominees The Governance Committee considers stockholder nominees on the same basis as it considers all other nominees.
2025 DIRECTOR NOMINEES
2025 DIRECTOR NOMINEES The following pages provide information on our 2025 director nominees, including their age, service commencement, independence, current Board roles and business experience during at least the past five years. We also indicate the name of any other U.S. public company board on which each nominee currently serves or has served during the past five years. For each nominee, we present select skills and qualifications, which includes U.S. public company leadership and/or board experience, industry and functional expertise or experience, and working or having worked outside the U.S. Consistent with the Director Matrix presented in the proxy summary, Select Skills and Qualifications excludes board service at U.S. public companies at which the individual served or serves as CEO, COO or CFO. All director nominees have demonstrated the ability to fulfill the time commitments necessary to serve on our Board and advance the long-term interests of our stockholders, as well as those of our other stakeholders.
2025 DIRECTOR NOMINEES
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2025 DIRECTOR NOMINEES
| BRADLEY A. ALFORD |
2025 DIRECTOR NOMINEES
| Age 68 Director since April 2010 Independent | RECENT BUSINESS EXPERIENCE Nestlé USA, a nutrition, health and wellness company • Chairman & CEO from January 2006 to October 2012 Nestlé Brands Company, an operating unit of Nestlé USA • President & CEO from 2003 to December 2005 BOARD ROLES Compensation Committee Chair Governance Committee Member OTHER PUBLIC COMPANY BOARDS Current: Perrigo Company PLC Past Five Years: None | SELECT SKILLS AND QUALIFICATIONS U.S. public company board experience • Concurrent service on one other board and prior service on other boards Industry experience • Technical expertise in consumer goods industry into which our Solutions Group sells with 40+ years in roles of increasing responsibility, as well as extensive experience in packaging, primarily focused on consumer goods Functional experience • Technical expertise in marketing, as well as supervisory experience in finance, M&A and R&D as regional CEO Works/Has Worked Outside the U.S. • Work assignments in Oceania |
2025 DIRECTOR NOMINEES
| MITCHELL R. BUTIER |
2025 DIRECTOR NOMINEES
| Age 53 Director since April 2016 Not Independent | RECENT BUSINESS EXPERIENCE Avery Dennison Corporation • Executive Chairman from September 2023 to April 2025 • Chairman & CEO from March 2022 to August 2023 • Chairman, President & CEO from April 2019 to February 2022 • President & CEO from May 2016 to April 2019 • President & COO from November 2014 to April 2016 • SVP & CFO from June 2010 to October 2014; continued serving as CFO until March 2015 • VP, Global Finance, & CAO from March 2007 to May 2010 BOARD ROLES Executive Chairman Finance Committee Chair OTHER PUBLIC COMPANY BOARDS Current: None Past Five Years: None | SELECT SKILLS AND QUALIFICATIONS U.S. public company leadership experience • Held roles of increasing responsibility at our company, including CFO, COO and CEO Industry experience • Served in positions of increasing responsibility in what is now our Materials Group, gaining packaging industry expertise and extensive materials science and industrial goods experience Functional experience • Technical finance expertise having served as CAO and CFO and environmental sustainability expertise from advancing our sustainability goals and value-creation opportunities • Supervisory experience in marketing, M&A, cybersecurity and R&D as CEO Works/Has Worked Outside the U.S. • Work assignments in Europe |
2025 DIRECTOR NOMINEES
| WARD H. DICKSON |
2025 DIRECTOR NOMINEES
| Age 62 Director since June 2024 Independent | RECENT BUSINESS EXPERIENCE WestRock Company, a paper and packaging solutions company (including predecessor Rock-Tenn Company) • Executive Vice President & CFO from September 2013 to November 2021 BOARD ROLES Audit Committee Chair Finance Committee Member OTHER PUBLIC COMPANY BOARDS Current: Ameren Corporation Past Five Years: None | SELECT SKILLS AND QUALIFICATIONS U.S. public company leadership experience • Served as CFO of company then with $18 billion in annual revenues and ~50K employees U.S. public company board experience • Concurrent service on one other board Industry experience • Technical expertise in packaging industry served by our Materials Group, as well as extensive experience in materials science and industrial goods Functional experience • Technical finance expertise having served as CFO for 8 years and supervisory experience in M&A • Substantial knowledge of cybersecurity and environmental sustainability |
2025 DIRECTOR NOMINEES
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2025 DIRECTOR NOMINEES
| ANDRES A. LOPEZ |
2025 DIRECTOR NOMINEES
| Age 62 Director since February 2017 Independent | RECENT BUSINESS EXPERIENCE O-I Glass, Inc., a glass container manufacturer and supplier • President & CEO from January 2016 to May 2024 • COO & President, Glass Containers, from January 2015 to December 2015 • President, O-I Americas, from July 2014 to July 2015 • President, O-I Latin America, from April 2009 to July 2014 BOARD ROLES Compensation Committee Member OTHER PUBLIC COMPANY BOARDS Current: None Past Five Years: O-I Glass, Inc. | SELECT SKILLS AND QUALIFICATIONS U.S. public company leadership experience • Led company with $6.5 billion in revenues and ~21K employees in 2024 Industry and functional experience • Brings packaging industry expertise, as well as extensive experience in materials science and industrial goods, as former leader of global glass company, in each case complementing our Materials Group • Given impact of waste and recycling in glass value chain, technical expertise in environmental sustainability, as well as supervisory experience in finance, marketing, M&A, cybersecurity and R&D as CEO Works/Has Worked Outside the U.S. • Work assignments in Latin America |
2025 DIRECTOR NOMINEES
| MARIA FERNANDA MEJIA |
2025 DIRECTOR NOMINEES
| Age 61 Director since February 2024 Independent | RECENT BUSINESS EXPERIENCE Newell Brands Inc., a consumer goods company • CEO, International, from February 2022 to February 2023 Kellogg Company, a food manufacturing company • SVP and President, Latin America, from November 2011 to February 2020 BOARD ROLES Audit Committee Member OTHER PUBLIC COMPANY BOARDS Current: None Past Five Years: Grocery Outlet, Inc. | SELECT SKILLS AND QUALIFICATIONS U.S. public company board experience • Prior service on other boards Industry experience • 35+ years of consumer goods industry expertise into which our Solutions Group sells, as well as extensive experience in packaging, focused primarily on consumer goods Functional experience • Technical expertise in marketing, supervisory experience in M&A, environmental sustainability and R&D as regional CEO, and substantial knowledge of cybersecurity Works/Has Worked Outside the U.S. • Work assignments in Latin America, Europe and Asia Pacific |
2025 DIRECTOR NOMINEES
| FRANCESCA REVERBERI |
2025 DIRECTOR NOMINEES
| Age 53 Director since February 2023 Independent | RECENT BUSINESS EXPERIENCE Trinseo PLC, a specialty materials solutions provider • SVP, Engineered Materials and Plastics Solutions, since October 2024 • SVP, Engineered Materials & Chief Sustainability Officer, from August 2023 to September 2024 • SVP, Sustainable Plastics & Chief Sustainability Officer, from July 2021 to July 2023 • SVP, Engineered Materials & Synthetic Rubber, from March 2020 to December 2021 • General Manager, Engineered Materials, from October 2019 to May 2021 BOARD ROLES Compensation Committee Member OTHER PUBLIC COMPANY BOARDS Current: None Past Five Years: None | SELECT SKILLS AND QUALIFICATIONS Industry experience • Technical materials science expertise focused on applied science in plastics, as well as extensive experience in industrial goods, in each case complementing our Materials Group Functional experience • Technical expertise in environmental sustainability as former enterprise sustainability leader • Advanced educational and professional science/engineering expertise, with supervisory experience in marketing as divisional leader Works/Has Worked Outside the U.S. • Works in Europe, region leading expansion in sustainability-related requirements |
2025 DIRECTOR NOMINEES
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2025 DIRECTOR NOMINEES
| PATRICK T. SIEWERT |
2025 DIRECTOR NOMINEES
| Age 69 Director since April 2005 Independent | RECENT BUSINESS EXPERIENCE Restaurant Brands International Inc., a fast food holding company • Advisory Chairman, Asia, since May 2024 The Carlyle Group, a diversified investment firm • Managing Director, Partner and Head of Consumer, Media and Retail, Asia, from April 2007 to June 2023 The Coca-Cola Company, a beverage company • Executive Committee member and Group President, Asia, from August 2001 to March 2007 BOARD ROLES Lead Independent Director Audit Committee Member Finance Committee Member Governance Committee Member OTHER PUBLIC COMPANY BOARDS Current: Mondelēz International, Inc. Past Five Years: None | SELECT SKILLS AND QUALIFICATIONS U.S. public company board experience • Concurrent service on one other board Industry experience • Consumer goods industry expertise having led regional division of global beverage company into which our Solutions Group sells and extensive experience in materials science and industrial goods, complementing our Materials Group Functional experience • Finance and 15+ years of M&A expertise leading consumer, medial and retail investment practices and advising on investments in consumer goods businesses, as well as supervisory experience in marketing and R&D as regional business leader Works/Has Worked Outside the U.S. • Has worked in Asia Pacific for 30 years |
2025 DIRECTOR NOMINEES
| DEON M. STANDER |
2025 DIRECTOR NOMINEES
| Age 56 Director since September 2023 Not Independent | RECENT BUSINESS EXPERIENCE Avery Dennison Corporation • President & CEO since September 2023 • President & COO from March 2022 to August 2023 • VP/GM, RBIS (now Solutions Group), from June 2015 to February 2022 • VP/GM, Global Commercial and Innovation, RBIS, from January 2013 to May 2015 • VP/GM, Global Commercial, RBIS, from October 2010 to December 2012 BOARD ROLES Finance Committee Member OTHER PUBLIC COMPANY BOARDS Current: None Past Five Years: None | SELECT SKILLS AND QUALIFICATIONS U.S. public company leadership experience • Held roles of increasing responsibility at our company, including COO and CEO Industry experience • Led our Solutions Group business and oversaw our Materials Group as COO, with packaging industry expertise and extensive experience in digital, materials science and industrial goods Functional experience • Technical environmental sustainability expertise having led our Sustainability Council, with supervisory experience in finance, marketing, M&A, cybersecurity and R&D as CEO Works/Has Worked Outside the U.S. • Work assignments in Europe and Asia Pacific |
2025 DIRECTOR NOMINEES
| WILLIAM R. WAGNER |
2025 DIRECTOR NOMINEES
| Age 58 Director since October 2022 Independent | RECENT BUSINESS EXPERIENCE Semrush Holdings, Inc., an online visibility management software as a service company • CEO effective March 2025 GoTo Group, Inc. (formerly LogMeIn, Inc.), a provider of software as a service and cloud-based tools • President & CEO from December 2015 to January 2022 • President & COO from January 2015 to December 2015 • COO from May 2013 to December 2014 BOARD ROLES Governance Committee Chair Audit Committee Member OTHER PUBLIC COMPANY BOARDS Current: Semrush Holdings, Inc. BlackLine, Inc. (until May 2025) Past Five Years: Akamai Technologies, Inc. LogMeIn, Inc. | SELECT SKILLS AND QUALIFICATIONS U.S. public company leadership experience • Led company then with $1+ billion in annual revenues and ~4K employees U.S. public company board experience • Concurrent service on one other board after May 2025 Industry experience • 25+ years of digital/technology industry expertise, as well as extensive experience in technology-based consumer goods, in each case complementing our Solutions Group Functional experience • Technical cybersecurity expertise, as well as marketing expertise as functional leader at two technology companies; supervisory experience in finance, M&A and R&D as CEO |
2025 DIRECTOR NOMINEES
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION In recommending non-employee director compensation to our Board, the Compensation Committee seeks to target compensation around the median of similar-size companies with which we compete for director talent. The majority of compensation is delivered in equity to align director interests with those of our stockholders.
Annual Compensation
| NON-EMPLOYEE DIRECTOR COMPENSATION | | | | Target Grant Date Fair Value of RSUs | $185K | | | Board Retainer | $115K | | | Match of Charitable/Educational Contributions | $10K | | | Additional Retainers* | | | | Lead Independent Director | $45K | | | Audit Committee Chair | $35K | | | Compensation Committee Chair | $25K | | | Governance Committee Chair | $25K | | | * There is no additional Finance Committee Chair retainer at this time because our Executive Chairman currently serves in that capacity. | | |
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE
| Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | All Other Compensation ($)(4) | Total ($) | | Bradley A. Alford | $115,000 | $182,043 | $10,000 | $307,043 | | Ward H. Dickson | $137,500 | $167,030 | – | $304,530 | | Ken C. Hicks(2) | $70,000 | $182,043 | $10,000 | $262,043 | | Andres A. Lopez | $115,000 | $182,043 | – | $297,043 | | Maria Fernanda Mejia | $131,667 | $209,859 | $10,000 | $351,526 | | Francesca Reverberi | $115,000 | $182,043 | – | $297,043 | | Patrick T. Siewert | $160,000 | $182,043 | $5,000 | $347,043 | | Julia A. Stewart(2) | – | – | $10,000 | $10,000 | | Martha N. Sullivan(2) | $79,584 | $182,043 | $10,000 | $271,627 | | William R. Wagner | $140,000 | $182,043 | $10,000 | $332,043 |
DIRECTOR COMPENSATION TABLE
| (1) Messrs. Butier and Stander are not included in the table because they served as Executive Chairman and CEO of our company, respectively, in 2024 and received no additional compensation to serve on our Board. |
DIRECTOR COMPENSATION TABLE
| (2) Amounts represent retainers earned as shown in the table below, prorated for the applicable months of service. Since fees are paid semiannually for the new term to which a director is elected, Ms. Stewart received no fees during the year as she did not stand for reelection at the 2024 Annual Meeting. Messrs. Alford and Lopez had, for one or more years during their service, deferred compensation through the DDECP, with 23,319 and 1,841 DSUs, respectively, in their accounts on the last day of our 2024 fiscal year. Following their departure from our Board in April, November and December 2024, Ms. Stewart, Mr. Hicks and Ms. Sullivan were issued 43,365, 15,512 and 14,470 shares of our common stock, respectively, reflecting their separation date DDECP account balance. |
DIRECTOR COMPENSATION TABLE
| Director | Board Leadership Roles | Board Retainer | Committee Chair Retainer | Lead Director Retainer | | Alford | | $115,000 | – | – | | Dickson | Audit Committee Chair | $105,417 | $32,083 | – | | Hicks | Former Compensation Committee Chair | $57,500 | $12,500 | – | | Lopez | | $115,000 | – | – | | Mejia | | $131,667 | – | – | | Reverberi | | $115,000 | – | – | | Siewert | Lead Independent Director | $115,000 | – | $45,000 | | Sullivan | Former Audit Committee Chair | $76,667 | $2,917 | – | | Wagner | Governance Committee Chair | $115,000 | $25,000 | – |
DIRECTOR COMPENSATION TABLE
| (3) Amounts reflect the grant date fair values of RSUs in accordance with Accounting Standards Codification Topic 718, Compensation, Stock Compensation (ASC 718). Fair values were determined based on the fair market value of our common stock on the respective grant date, adjusted for foregone dividends. Each non-employee director serving at year-end 2024 held 844 unvested RSUs, except that Ms. Mejia and Mr. Dickson held 976 and 753 unvested RSUs, respectively. |
DIRECTOR COMPENSATION TABLE
| (4) Amounts reflect our match of documented contributions made to charitable organizations or educational institutions. |
DIRECTOR COMPENSATION TABLE
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COMPENSATION DISCUSSION AND ANALYSIS (CD&A)
| Executive Summary | 50 | | Progress Toward Long-Term Financial Targets | 50 | | 2024 Financial Performance | 51 | | Effective Capital Allocation | 52 | | TSR Performance | 52 | | 2024 Say-on-Pay Vote and Feedback During Stockholder Engagement | 53 | | 2024 NEOs | 53 | | Overview of Pay Philosophy and Executive Compensation Components | 54 | | Pay for Performance | 55 | | Strong Compensation Governance Practices | 55 | | Summary of 2024 Compensation Decisions | 56 | | Discussion of 2024 Compensation Decisions | 58 | | Base Salaries | 58 | | AIP Awards | 59 | | LTI Awards | 64 | | Vesting of Previously Granted LTI Awards | 67 | | Perquisites | 68 | | General Benefits | 68 | | Termination Benefits | 69 | | Compensation-Setting Tools | 70 | | Independent Oversight and Expertise | 72 | | Compensation Clawback Policies | 73 | | Equity Grant Practices | 74 |
Progress Toward Long-Term Financial Targets
Progress Toward Long-Term Financial Targets In March 2021, we announced financial targets through 2025, making significant progress toward their achievement in 2024. Our performance during the first four years of this period reflects the strength and durability of our portfolio, the resilience of our market positions, our agile and talented global team, and the consistent execution of our strategies, which together enable us to deliver strong results and compound earnings in various scenarios across cycles.
Progress Toward Long-Term Financial Targets
| * This CD&A contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from the expected results, performance or achievements expressed or implied thereby. For a detailed discussion of these risks, see Part I, Item 1a, “Risk Factors” and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2024 Annual Report. Statements contained in this CD&A regarding our company and business performance targets and goals should not be interpreted as management’s expectations, estimates of future results or other guidance. |
Progress Toward Long-Term Financial Targets
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Progress Toward Long-Term Financial Targets
In 2021-2024, on a four-year compound annual basis (with 2020 as the base period), GAAP reported net sales, operating income, net income and EPS increased by 5.9%, 6.6%, 6.1% and 7.2%, respectively. GAAP reported operating margin in 2024 was 11.9%. Our non-GAAP targets and results are shown below.
Progress Toward Long-Term Financial Targets
| | 2021-2025 TARGETS | 2021-2024 RESULTS | | Sales Change Ex. Currency(1)(2) | 5%+ | 7.0% | | Adjusted EBITDA Growth(1)(2)(3) | 6.5% | 7.6% | | Adjusted EBITDA Margin(1) | 16%+ in 2025 | 16.4% in 2024 | | Adjusted EPS Growth(1)(2) | 10% | 7.4% | | ROTC(1) | 18%+ | 15.8% in 2024 |
Progress Toward Long-Term Financial Targets
| (1) Results for non-GAAP measures are reconciled from GAAP in Appendix A of this proxy statement. |
Progress Toward Long-Term Financial Targets
| (2) Percentages for targets and results reflect five- and four-year compound annual growth rates, respectively, with 2020 as the base period. |
Progress Toward Long-Term Financial Targets
| (3) Although adjusted EBITDA growth was not one of our original targets, it was implied by the sales change ex. currency and adjusted EBITDA margin targets. The foreign currency translation impact to EBITDA was a benefit of approximately $38 million in 2021 and a headwind of approximately $81 million, $20 million and $7 million in 2022, 2023 and 2024, respectively. |
Progress Toward Long-Term Financial Targets
Our financial targets through 2028 focus on continuing to deliver value creation using the long-term financial framework we announced in September 2024, which reflects our overriding objective to deliver GDP+ growth, margin expansion and top-quartile returns on capital.
Progress Toward Long-Term Financial Targets
| | 2024-2028 TARGETS | | Sales Change Ex. Currency(1) | 5%+ | | Adjusted EBITDA Margin | 17%+ in 2028 | | Adjusted EPS Growth(1) | 10% | | ROTC | Top Quartile(2) |
Progress Toward Long-Term Financial Targets
| (1) Percentages reflect five-year compound annual growth rates, with 2023 as the base period. |
Progress Toward Long-Term Financial Targets
| (2) Relative to peer group for 2024-2026 PUs listed on page 71 of this proxy statement. |
Overview of Pay Philosophy and Executive Compensation Components
| • | Aligning annual incentives with our business and/or company financial goals for the year |
Overview of Pay Philosophy and Executive Compensation Components
| • | Rewarding long-term performance using absolute and relative TSR, as well as cumulative EVA, to incent delivery of stockholder value creation |
Overview of Pay Philosophy and Executive Compensation Components
| NEO TARGET TDC MIX AND ELEMENTS* | | | | | | | CEO | Average of Other NEOs | | | Target TDC Mix | | | | | | 88% at Risk | 71% at Risk | | | Long-Term Incentive Compensation | | | | | PUs | Corporate NEOs | Business NEOs | | | | • 50% of LTI with payout = 0% to 200% of target award • 3-year performance period - Company EVA (50%) - Company Relative TSR (50%) | • 50% of LTI with payout = 0% to 200% of target award • 3-year performance period - Business EVA (75%) - Company Relative TSR (25%) | | | | • Relative TSR payout capped at 100% if absolute TSR is negative | | | | MSUs | • 50% of LTI with payout = 0% to 200% of target award • 1-, 2-, 3- and 4-year performance periods - 100% Company Absolute TSR | | | | Annual Incentive Compensation | | | | | | Corporate NEOs | Business NEOs | | | AIP Award | | | | | | • Drives performance to deliver annual company/business financial goals • Individual performance modifier based on achievement of strategic objectives (generally capped at 100% for NEOs) | | | | Base Salary | • Annual fixed-cash compensation generally set around market median | |
Strong Compensation Governance Practices
| PAY FOR PERFORMANCE | | | Compensation Primarily Performance-Based | ✓ 88% of CEO’s annualized target TDC and 71% of average 2024 target TDC of other NEOs (excluding Mr. Butier) | | Capped Annual Incentive Consistent with Annual Financial Goals | ✓ AIP award for participating NEOs based on achieving adjusted EPS at or above midpoint of annual guidance and other performance objectives consistent with annual financial goals, subject to limited upward and unlimited downward discretion based on Committee’s assessment of performance of CEO against predetermined strategic objectives and other NEOs’ individual contributions; awards capped at 200% of target | | Majority Long-Term Equity Incentive Compensation | ✓ LTI awards for NEOs (excluding Mr. Butier) prioritize longer-term stockholder value creation, with PUs cliff-vesting at end of 3-year period and MSUs vesting over 1-, 2-, 3- and 4-year performance periods | | Strategic Targeting | ✓ Target TDC (base salary + target AIP opportunity + target LTI opportunity) set to incent strong performance and value creation, giving consideration to pay at similar-size companies, role responsibilities, experience, performance, retention and succession |
Strong Compensation Governance Practices
| COMPENSATION BEST PRACTICES | | | No Employment Contracts | ✓ NEOs employed without contract unless required by laws or market practices of home country | | Rigorous Stock Ownership Policy | ✓ CEO required to maintain ownership of 6x his base salary and owned 2x this requirement at YE 2024; Executive Chairman, Level 2 NEOs and Level 3 NEO required to maintain ownership of 6x, 3x and 2x of base salary, respectively | | No Hedging or Pledging | ✓ Insider trading policy prohibits officers from engaging in short sale, option, hedging and pledging transactions in our common stock and all NEOs complied during 2024 | | Limited Trading Windows | ✓ NEOs may only transact in company stock during approved trading windows after satisfying preclearance requirements, including certifying continued compliance with our stock ownership policy | | Below Median Burn Rate | ✓ Three-year average burn rate of 0.45% at YE 2024, between 25th and 50th percentiles of S&P 500 companies | | Compensation Clawback | ✓ Clawback policy requires recoupment of certain incentive-based compensation to executive officers if we are required to prepare accounting restatement to correct material noncompliance with any financial reporting requirement; in addition, all AIP and LTI recipients are subject to compensation clawback in connection with financial restatement indicating fraud or misconduct | | No Excise Tax Gross Ups | ✓ No gross-up payments for excise taxes for termination following change of control | | Double Trigger Equity Vesting | ✓ Equity awards not accelerated upon change of control unless NEO terminated without cause or NEO terminates employment for good reason within 24 months of change of control | | Limited Perquisites | ✓ Other than capped financial planning reimbursement only for CEO and Level 2 NEOs and payment for annual physical examinations, certain NEOs receive flat taxable executive benefit allowance not subject to tax gross-up | | STRONG GOVERNANCE | | | Independent Oversight | ✓ Committee comprising independent directors with executive compensation decisions | | Expert Compensation Consultant | ✓ WTW provides Committee with expert executive compensation advice |
SUMMARY OF 2024 COMPENSATION DECISIONS
| • | Annual Company Performance – For Corporate NEOs participating in the AIP, our company’s 2024 adjusted sales growth, adjusted EPS and adjusted free cash flow; for Business NEOs, primarily the adjusted net income, adjusted free cash flow and adjusted sales growth of their respective business and secondarily adjusted EPS |
SUMMARY OF 2024 COMPENSATION DECISIONS
| • | Stockholder Returns – Our TSR on an absolute basis, as well as relative to a designated group of peer companies, and company/business cumulative EVA |
SUMMARY OF 2024 COMPENSATION DECISIONS
| 2024 EXECUTIVE COMPENSATION SUMMARY | | | Component | Decisions Impacting 2024 Compensation | | BASE SALARY 12% of CEO TDC; Avg. 29% of Other NEO TDC (excl. Butier) | The base salaries of Messrs. Stander and Butier did not change. In April, (i) Mr. Melo received a base salary increase of 4% consistent with the average merit increase for all employees and (ii) Messrs. Allouche and Lovins received base salary increases of 5% and 8%, respectively, to more closely align with market data for similar roles. Mr. Yost’s base salary increased by 31% when he was promoted to Materials President in March. | | AIP AWARD 16% of CEO TDC; Avg. 18% of Other NEO TDC (excl. Butier) | Mr. Butier was not a participant in the 2024 AIP. Mr. Yost’s target AIP opportunity increased from 40% of base salary to 60% of base salary in connection with his promotion to Materials President. There were no other changes to NEO target AIP award opportunities in 2024. Company and/or business performance resulted in financial modifiers of 132% for participating Corporate NEOs, 44% for Mr. Melo and 150% for Mr. Yost. Individual modifiers for all NEOs were 100%. Mr. Lovins’ 2024 AIP award was prorated at 83% due to his medical leave, which began in November 2024. | | LTI AWARDS 72% of CEO TDC; Avg. 53% of Other NEO TDC (excl. Butier) | Annual LTI Awards Granted in 2024 • The Committee increased Mr. Stander’s target LTI opportunity from 550% of base salary to 600% of base salary, positioning his target TDC at the 40th percentile of market data at companies with annual revenues of $10 billion, which was modestly below the median given that it would be his first full year as CEO. The Committee decreased Mr. Butier’s target LTI opportunity from 700% of base salary to 500% of base salary, positioning his target TDC at the 60th percentile of market data at companies with annual revenues of $10 billion, which was modestly above the median in acknowledgment of his effective transition from CEO to Executive Chairman and strong performance in the role. In connection with his promotion to Materials President, Mr. Yost’s target LTI opportunity increased from 65% of base salary to 180% of base salary. There were no other changes to NEO target LTI opportunities in 2024. • Mr. Butier’s LTI award was in the form of RSUs that cliff-vest on the first anniversary of the grant date, consistent with the one-year vesting of RSUs awarded annually to our non-employee directors. • For all other NEOs, LTI awards were fully performance-based and delivered with the following vehicles, performance objectives and vesting: • 50% in PUs that cliff-vest at the end of three-year period with payouts ranging from zero to 200% based on the achievement of the respective cumulative EVA and relative TSR performance objectives. Payout for the TSR component is capped at 100% of target for any performance period in which absolute TSR is negative. There were no changes to the PU performance objectives or weightings in 2024. • 50% in MSUs that vest based on absolute TSR over 1-, 2-, 3- and 4-year performance periods, with an average performance period of 2.5 years, based on the following performance levels and criteria: (i) threshold performance level, which results in payout of 85%, is TSR of (15)%; (ii) target performance level, which results in a payout of 100%, requires TSR of 10%; and (iii) maximum performance level, which results in payout of 200%, requires TSR of 75%. There were no changes to MSU performance criteria in 2024. Special LTI Awards Granted in 2024 • In connection with his promotion to Materials President, Mr. Yost was granted special one-time LTI awards of (i) RSUs with a grant date fair value of approximately $700,000 that cliff-vest on the third anniversary of the grant date and (ii) PUs with a target grant date fair value of approximately $300,000 with the same terms and conditions as the annual award of 2024-2026 PUs to participating Corporate NEOs. |
SUMMARY OF 2024 COMPENSATION DECISIONS
| 2024 EXECUTIVE COMPENSATION SUMMARY | | | Component | Decisions Impacting 2024 Compensation | | LTI AWARDS | LTI Awards Vesting at YE 2024 • 2022-2024 PUs • Our 2022-2024 TSR was at the 56th percentile relative to the designated peer group, which was 121% of target. However, because absolute TSR for the period was negative, the payout for this performance objective was capped at 100%. • Company cumulative EVA of $1,140 million was less than the threshold level, resulting in no payout on that performance objective for Corporate NEOs. Cumulative EVA for what is now Solutions was also less than the threshold level, resulting in no payout on that performance objective for Messrs. Melo and Yost, whose PUs were tied to that business at the time of grant. • The 2022-2024 PUs paid out at 50% of target for Corporate NEOs and 25% of target for Business NEOs. | | | • MSUs • 4th Tranche of MSUs granted in 2021 2021-2024 Absolute TSR of 28% Payout of 128% of target • 3rd Tranche of MSUs granted in 2022 2022-2024 Absolute TSR of (4%) Payout of 92% of target • 2nd Tranche of MSUs granted in 2023 2023-2024 Absolute TSR of 4% Payout of 96% of target • 1st Tranche of MSUs granted in 2024 2024 Absolute TSR of (3%) Payout of 93% of target |
AIP Awards
AIP Awards The 2024 AIP was designed to incent management to achieve our financial goals for the year. Participating NEOs are not eligible for guaranteed AIP awards. AIP awards, which are capped at 200%, are determined for each fiscal year using the formula below. Individual modifiers for participating NEOs are generally capped at 100%, although the Committee retains the discretion to determine higher individual modifiers to reward exceptional performance, up to the cap of 150% for all AIP participants. As Executive Chairman, Mr. Butier did not participate in the 2024 AIP; he has therefore been excluded from the discussion in this AIP Awards section.
Target AIP Opportunities
Target AIP Opportunities Changes to NEO target AIP opportunities approved by the Committee are described in the 2024 Executive Compensation Summary.
Target AIP Opportunities
| NEO TARGET AIP OPPORTUNITIES | | | NEO | 2024 Opportunity (% of Base Salary) | | Stander | 135% | | Allouche | 50% | | Lovins | 75% | | Melo | 60% | | Yost | 60% |
AIP Performance Objectives; Target-Setting Principles
AIP Performance Objectives; Target-Setting Principles The performance objectives and weightings for the 2024 AIP for participating Corporate NEOs, which were consistent with the prior year, were established by the Committee to continue incenting them to grow sales, deliver stockholder value through profitable growth, and generate strong cash flow.
AIP Performance Objectives; Target-Setting Principles
| 2024 CORPORATE AIP PERFORMANCE OBJECTIVES | | | Objective | Description | | Adjusted Sales Growth (20%) | Focuses management on top-line growth, a key contributor to long-term value creation | | Adjusted EPS (60%) | Primary driver of stockholder value creation and measure we use to provide annual guidance; focuses management on profitable growth and expense control | | Adjusted Free Cash Flow (20%) | Cash available after investment in our business, which we can deploy for dividends, share repurchases, acquisitions and venture investments; focuses management on improving capital efficiency, including working capital |
AIP Performance Objectives; Target-Setting Principles
The AIP performance objectives for Business NEOs were tied primarily to their respective business’ results based 20% on adjusted sales growth, 45% on adjusted net income and 20% on adjusted free cash flow; the remaining 15% was tied to adjusted EPS. Target payouts were designed to be achievable only if their respective business improved upon its 2023 performance and achieved its 2024 financial goals.
AIP Performance Objectives; Target-Setting Principles
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AIP Performance Objectives; Target-Setting Principles
The threshold payout level for the adjusted EPS performance objective for participating NEOs was set at 0%. The threshold payout level for the other two performance objectives for participating Corporate NEOs was set at 50%. For Business NEOs, the threshold payout level for the adjusted net income performance objective was set at 0% and the threshold payout level for the adjusted sales growth and adjusted free cash flow performance objectives was set at 50%. For all performance objectives, the target payout level was 100% and the maximum payout level was 200%. In setting 2024 corporate AIP targets, the Committee aimed to ensure consistency with our 2021-2025 financial targets, giving consideration to the factors described below.
AIP Performance Objectives; Target-Setting Principles
| • | Target adjusted sales growth, reflecting sales growth ex. currency excluding the impact of acquisitions completed after our long-term targets were set, of 4.1% ($8,710M) was less than our 2021-2025 sales growth ex. currency target of 5%+ and substantially higher than our 2023 sales change ex. currency result. Our financial results had been largely impacted by our customers building up inventory when supply chains were constrained in 2021 and 2022 and the pricing actions we took to address significant inflation, followed by downstream inventory destocking in 2023. For 2024, we expected that volume would grow as industry volumes normalized and that we would pass some of the benefit from anticipated deflation to our customers. |
AIP Performance Objectives; Target-Setting Principles
| • | Target adjusted EPS of $9.25 was set at the midpoint of the annual guidance we provided in January 2024 and substantially higher than our 2021-2025 compound annual growth target of 10% and 2023 result of $7.90. |
AIP Performance Objectives; Target-Setting Principles
| • | Although we did not externally communicate a 2021-2025 adjusted free cash flow target, our plan for 2024 was to deliver adjusted free cash flow of $700 million and 100% adjusted free cash flow conversion, with solid net income growth while maintaining our working capital productivity benefits. The target for adjusted free cash flow was 18.2% higher than the $592 million we delivered in 2023. |
AIP Performance Objectives; Target-Setting Principles
| 2024 CORPORATE AIP TARGETS VS. LONG-TERM TARGETS AND 2023 RESULTS | | | | | | 2021-2025 Target | 2023 Results | 2024 AIP Target | | Sales Growth Ex. Currency | 5%+ | (6.9)% | 4.1% ($8,710M)* | | Adjusted EPS Growth | 10% | $7.90 | $9.25 (17.1% above 2023 result) | | Adjusted Free Cash Flow | N/A | $592M | $700M (18.2% above 2023 result) | | * Represents AIP target for adjusted sales growth | | | |
Financial Modifiers
| 2024 AIP FINANCIAL MODIFIERS | | | | | | | | | | | Performance Objective | Weighting | Threshold(1) | Target (100%) | Maximum (200%) | 2024 Actual | Modifier | Weighted Average Modifier | | Mr. Stander Mr. Allouche Mr. Lovins | Adjusted Sales Growth(2) | 20% | $8,565M | $8,710M | $9,000M | $8,874M | 157% | 31% | | | Adjusted EPS(3) | 60% | $8.35 | $9.25 | $10.00 | $9.35 | 111% | 67% | | | Adjusted Free Cash Flow(4) | 20% | $630M | $700M | $780M | $757M | 172% | 34% | | Participating Corporate NEO Financial Modifier | | | | | | | | 132% | | Mr. Melo | Solutions Adjusted Sales Growth(2) | 20% | $2,782M | $2,853M | $2,996M | $2,763M | 0% | 0% | | | Solutions Adjusted Net Income(5) | 45% | $206.4M | $229.3M | $252.3M | $180.9M | 0% | 0% | | | Solutions Adjusted Free Cash Flow(5) | 20% | $149M | $179M | $219M | $193M | 135% | 27% | | | Adjusted EPS(3) | 15% | $8.35 | $9.25 | $10.00 | $9.35 | 111% | 17% | | Solutions NEO Financial Modifier | | | | | | | | 44% | | Mr. Yost | Materials Adjusted Sales Growth(2) | 20% | $5,687M | $5,783M | $5,976M | $5,879M | 150% | 30% | | | Materials Adjusted Net Income(5) | 45% | $548.1M | $609.1M | $670.0M | $638.4M | 148% | 66% | | | Materials Adjusted Free Cash Flow(5) | 20% | $518M | $553M | $603M | $596M | 186% | 37% | | | Adjusted EPS(3) | 15% | $8.35 | $9.25 | $10.00 | $9.35 | 111% | 17% | | Materials NEO Financial Modifier | | | | | | | | 150% |
Financial Modifiers
| (1) Adjusted EPS and adjusted net income thresholds set at 0%; thresholds for all other performance objectives set at 50%. |
Mr. Allouche
| • | Drove long-term strategic planning, building next chapter of leadership at intersection of physical and digital |
Mr. Allouche
| • | Advanced scenario planning to ensure achievement of long-term financial targets in uncertain macroeconomic and geopolitical environment |
Mr. Lovins
| • | Ensured effective capital allocation to deliver strong returns and EVA growth over long term |
Mr. Lovins
| • | Refinanced long-term debt and extended revolving credit facility with favorable financing terms |
Mr. Lovins
| • | Advanced scenario planning to ensure achievement of long-term financial targets, employing enhanced macroeconomic environment analytics and forecasting processes |
Mr. Yost
| • | Successfully transitioned to Materials President, advancing long-term strategies and improving cross-business collaboration |
AIP Awards
AIP Awards Our participating NEOs received the AIP awards for 2024 shown below.
AIP Awards
| 2024 AIP AWARDS | | | | | | | | | YE 2024 Base Salary | Target AIP Opportunity | Target AIP Award | Financial Modifier | Individual Modifier | AIP Award | | Stander | $1,100,000 | 135% | $1,485,000 | 132% | 100% | $1,960,200 | | Allouche(1) | $452,903 | 50% | $226,452 | 132% | 100% | $298,916 | | Lovins(2) | $806,250 | 75% | $604,688 | 132% | 100% | $665,130 | | Melo(1) | $517,539 | 60% | $310,523 | 44% | 100% | $136,630 | | Yost | $525,000 | 60% | $315,000 | 150% | 100% | $472,500 |
AIP Awards
| (1) Amounts for Messrs. Allouche and Melo were converted from Israeli shekels and euros, respectively, using the average monthly exchange rates for December 2024. |
AIP Awards
| (2) Mr. Lovins’ 2024 AIP award was prorated at 83% due to his medical leave, which began in November 2024. |
LTI Awards
LTI Awards Our LTI program provides variable incentive compensation to enhance alignment of executive interests with stockholder interests and drive long-term value creation. The 2024 LTI awards granted to all NEOs other than Mr. Butier were fully performance based and delivered through the equity vehicles described below.
LTI Awards
| • | 50% in PUs that cliff-vest at the end of a three-year period subject to the achievement of the respective cumulative EVA and relative TSR performance objectives established for the award |
LTI Awards
| • | 50% in MSUs that vest at the end of the 1-, 2-, 3- and 4-year performance periods, with an average performance period of 2.5 years, based on our absolute TSR |
LTI Awards
Amounts, if any, realized from the vesting of these LTI awards will be based on our performance and stock price at the time of vesting. The Committee does not offset the loss or gain of prior year grants in determining current year grants, as doing so would compromise the intended risk/reward nature of these incentives. Special LTI awards may be granted by the Committee for hiring, promotion, retention and other incentive purposes, with the awards granted on the first day of March, June, September or December.
Target LTI Opportunity
Target LTI Opportunity Changes to NEO target LTI award opportunities approved by the Committee are described in the 2024 Executive Compensation Summary.
Target LTI Opportunity
| NEO 2024 TARGET LTI OPPORTUNITIES | | | NEO | LTI Opportunity | | Stander | 600% | | Allouche | 120% | | Lovins | 250% | | Butier | 500% | | Melo | 180% | | Yost | 180% |
Restricted Stock Units (RSUs)
Restricted Stock Units (RSUs) Mr. Butier’s 2024 LTI award was in the form of RSUs that cliff-vest on the first anniversary of the grant date, consistent with the one-year vesting of RSUs awarded annually to our non-employee directors.
Restricted Stock Units (RSUs)
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Performance Units (PUs)
Performance Units (PUs) PUs cliff-vest in shares of our common stock after the end of a three-year period at threshold (50% payout), target (100% payout) and maximum (200% payout) levels based on our achievement of the performance objectives established for the award. PUs do not accrue dividend equivalents and are not counted for purposes of our stock ownership policy. The Committee established the following performance objectives for the 2024-2026 PUs. The Committee believes that these objectives align executive compensation with the long-term interests of our stockholders because delivering cumulative EVA and strong TSR relative to peer companies reflects the value we create for our investors.
Performance Units (PUs)
| • | Cumulative EVA, weighted 50% for participating Corporate NEOs (based on company EVA) and 75% for Business NEOs (based on business EVA). EVA is calculated by deducting the economic cost associated with the use of capital (weighted average cost of capital multiplied by average invested capital) from after-tax operating profit, with the cost of capital fixed over the performance period. For company cumulative EVA, the target payout was based on sales growth, adjusted EBITDA growth and adjusted EBITDA margin in excess of our goals, with the maximum payout based on achievement of our 2021-2025 targets giving consideration to the impact of inventory destocking in 2023. EVA targets for Business NEOs focused on the respective business EVA change compared to the prior three-year period. Whether linked to company or business results, achievement of 2024-2026 cumulative EVA targets requires significant improvement in financial performance. |
Performance Units (PUs)
| • | Relative TSR compared to an objectively determined peer group, weighted 50% for participating Corporate NEOs and 25% for Business NEOs. The Committee designed the TSR objective to provide realized compensation only if our stockholder value creation compares favorably relative to the designated peer group, the names of which are listed under Peer Groups later in this CD&A. The Committee set the threshold payout at TSR at the 40th percentile, target payout at TSR at the 50th percentile and maximum payout at TSR at the 80th percentile, which were the same levels used for the 2023-2025 PUs. Payouts for the relative TSR component of PUs are capped at 100% of target if our absolute TSR is negative. In assessing the rigor of the TSR objectives, the Committee noted that performing at the median relative to peers over the 2024-2026 period would represent solid performance in light of anticipated headwinds from foreign currency fluctuations, the unknown timing of label and apparel industry recovery, and the rollout of new Intelligent Labels platforms. |
Performance Units (PUs)
| 2024-2026 PUs | | | | | | NEOs | Performance Objectives | Weighting | | | Stander Allouche Lovins | Company Cumulative EVA Relative TSR | 50% 50% | | | Melo | Solutions Cumulative EVA Relative TSR | 75% 25% | | | Yost | Materials Cumulative EVA Relative TSR | 75% 25% |
Market-leveraged Stock Units (MSUs)
Market-leveraged Stock Units (MSUs) MSUs are performance-based LTI awards tied to our absolute TSR. MSUs vest based on the performance periods shown below, with the number of shares paid out at vesting based on our absolute TSR and the value realized reflecting both the number of shares paid out as well as our stock price. Although dividend equivalents accrue on MSUs during the performance period, they are earned and paid only at vesting; if the threshold level of performance is not achieved, any dividend equivalents accrued during the performance period are cancelled with the tranche of awards subject to vesting.
Market-leveraged Stock Units (MSUs)
| MSU PERFORMANCE CRITERIA | | | | | Absolute TSR | Unit Payout | | Cancelled | <(15)% | 0% | | Threshold | (15)% | 85% | | Target | 10% | 100% | | Above Target | >10% | >100% | | Maximum | 75% | 200% |
Annual LTI Awards
Annual LTI Awards Our NEOs were granted the annual LTI awards shown in the table below in March 2024. The number of awards granted was generally based on the respective NEO’s 2023 year-end base salary and target LTI opportunity. The number of PUs granted for the EVA component was based on the average closing price for shares of our common stock during the first 10 trading days of February 2024; the numbers of PUs granted for the relative TSR component and MSUs granted were based on grant date fair value using the Monte-Carlo simulation method described in footnote (2) of the 2024 Summary Compensation Table; and the number of RSUs granted was determined based on the closing price of our common stock on the grant date, adjusted for foregone dividends.
Annual LTI Awards
| 2024 ANNUAL LTI AWARDS | | | | | | | | | | | | YE 2023 Base Salary | Target LTI Opportunity | PUs (#) | PUs ($) | MSUs (#) | MSUs ($) | RSUs (#) | RSUs ($) | LTI Value | | Stander | $1,100,000 | 600% | 14,497 | $3,343,201 | 12,705 | $3,300,154 | – | – | $6,643,355 | | Allouche(1) | $428,220 | 120% | 1,129 | $260,360 | 989 | $256,923 | – | – | $517,283 | | Lovins | $750,000 | 250% | 4,119 | $949,906 | 3,609 | $937,468 | – | – | $1,887,374 | | Butier | $1,000,000 | 500% | – | – | – | – | 23,101 | $4,926,903 | $4,926,903 | | Melo(1) | $518,219 | 180% | 2,178 | $475,410 | 1,796 | $466,511 | – | – | $941,921 | | Yost(2) | $525,000 | 180% | 2,207 | $481,743 | 1,819 | $472,577 | – | – | $954,320 |
Annual LTI Awards
| (1) Base salaries of Messrs. Allouche and Melo were converted from Israeli shekels and euros, respectively, using the average monthly exchange rates for December 2023. |
Annual LTI Awards
| (2) Mr. Yost’s LTI award was based on his base salary on the grant date shown in the table rather than his base salary at year-end 2023. |
Special LTI Awards
Special LTI Awards In connection with his promotion to Materials President, Mr. Yost was granted one-time special promotion awards of (i) PUs with a grant date fair value of approximately $300,000 with the same terms and conditions as the 2024-2026 PUs to participating Corporate NEOs and (ii) RSUs with a grant date fair value of approximately $700,000 that cliff-vest on the third anniversary of the grant date. The numbers of PUs and RSUs granted to Mr. Yost were determined using the same methods as the annual awards described above.
Special LTI Awards
| 2024 SPECIAL LTI AWARDS | | | | | | | | PUs (#) | PUs ($) | RSUs (#) | RSUs ($) | LTI Value | | Yost | 1,318 | $303,970 | 3,234 | $670,543 | $974,513 |
Special LTI Awards
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Vesting of Previously Granted LTI Awards
Vesting of Previously Granted LTI Awards
2022-2024 PUs
| 2022-2024 PUs: COMPANY CUMULATIVE EVA | 2022-2024 PUs: RELATIVE TSR | | | |
MSUs Eligible for Vesting at YE 2024
MSUs Eligible for Vesting at YE 2024 Four tranches of MSUs were eligible for vesting at the end of 2024 based on our absolute TSR for the four-, three-, two- and one-year performance periods shown below, with the number of shares paid out at vesting determined in accordance with the formula shown below.
Nonqualified Deferred Compensation Benefits
Nonqualified Deferred Compensation Benefits Our U.S. NEOs are eligible to participate in our nonqualified deferred compensation plan, which allows eligible U.S. employees to defer up to 75% of their base salary and up to 90% of their AIP award. The plan provides participants with a long-term capital accumulation opportunity because deferred amounts accumulate on a pre-tax basis. Participants may select from a number of investment options, with deferrals 100% vested. Our deferred compensation plan does not offer above-market interest rates. Our company made a contribution effective as of the first business day of 2024 to the deferred compensation accounts of eligible participants for (i) 401(k) eligible pay in 2023 in excess of the Internal Revenue Code of 1986, as amended (the “Code”) compensation limit and (ii) their respective deferred compensation deferrals. This annual contribution, which is designed to supplement 401(k) contributions that are limited under the Code, provides an automatic contribution of 3% of deferred and eligible pay and a matching contribution of up to 50% of the first 7% of deferrable and eligible pay above the Code compensation limit. For additional information regarding our deferred compensation plan and accrued NEO benefits thereunder, see 2024 Nonqualified Deferred Compensation in Executive Compensation Tables.
Nonqualified Deferred Compensation Benefits
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Executive Long-Term Disability Insurance Benefits
Executive Long-Term Disability Insurance Benefits If they elect to enroll in executive long-term disability coverage, our U.S. executives have long-term disability benefits equal to 65% of their eligible pre-disability monthly earnings up to a maximum of $25,000 per month. Coverage is available only for the individual; dependents are not covered.
Termination Benefits
Termination Benefits Consistent with market practices, the Committee believes that providing our executives with termination benefits helps ensure that they act in the best interests of our company and stockholders, even if doing so may be contrary to their personal interests, such as where it could lead to a change of control of our company. The compensation of our participating NEOs in the event of termination not for cause is governed by our Amended and Restated Executive Severance Plan (the “Severance Plan”) and, as applicable, our Amended and Restated Key Employee Change of Control Severance Plan (the “COC Severance Plan”). We use these plans rather than individually negotiated agreements to allow us to change the termination benefits for which applicable NEOs are eligible to reflect market practices without the need to obtain their individual consent. In addition, this plan-based approach eliminates the need to individually negotiate arrangements and ensures that eligible NEOs receive severance and other benefits on the same terms and conditions as employees with similar levels of responsibility. Receipt of benefits under these plans is conditioned on the executive signing a waiver and general release of claims against our company, as well as agreeing to certain restrictive covenants in favor of our company. Any violation of these covenants could result in our company
Benefits Following Involuntary Termination Not for Cause
Benefits Following Involuntary Termination Not for Cause Our participating NEOs are eligible to receive severance and other benefits upon involuntary termination not for “cause,” in accordance with the terms and conditions of the Severance Plan. In the event of a qualifying termination, our CEO would receive severance of two times the sum of his annual salary and target AIP award; our other eligible NEOs would receive severance of one time their respective sum of these amounts. In addition, they would receive non-severance benefits of (i) two times and one time, respectively, of the cash value of 12 months of their qualified medical and dental insurance premiums and (ii) up to $25,000 in outplacement services for one year following termination of employment. Any payments made under the Severance Plan would be offset by any payments received by the NEO under any statutory, legislative and regulatory requirement or, if applicable, the COC Severance Plan.
Benefits Following Change of Control
Benefits Following Change of Control Only our CEO and Level 2 NEOs are eligible to receive enhanced severance and other benefits upon termination not for cause or by the executive for good reason within 24 months of a change of control of our company, in accordance with the terms and conditions of the COC Severance Plan. In the event of a qualifying termination following a change of control, our CEO would receive severance of 2.99 times (reduced from 3.00 times effective January 31, 2025) the sum of his annual salary and target AIP award; our Level 2 NEOs would receive severance of two times their respective sum of these amounts. In addition, they would receive non-severance benefits of (i) a prorated target AIP award for the year of termination, (ii) 2.99 (reduced from 3.00 times effective January 31, 2025) and two times, respectively, of the cash value of 12 months of their qualified medical and dental insurance premiums and (iii) up to $25,000 in outplacement services for one year following termination of employment. Any payments under the COC Severance Plan would be offset by any payments received by the NEO under the Severance Plan and any other statutory, legislative and regulatory requirement. In the event of termination following a change of control, our Level 3 NEO would be entitled to receive benefits under the Severance Plan described above. Participating NEOs are not eligible to receive any excise tax gross-up on amounts payable under the COC Severance Plan. If the NEO would otherwise incur excise taxes under Section 4999 of the Code, payments under the COC Severance Plan would be reduced so that no excise taxes would be due if the reduction results in a greater after-tax benefit to the NEO. Under our equity incentive plan, unvested awards would generally vest if our NEOs are terminated without cause or resign for good reason within 24 months after the change of control. Outstanding PUs and MSUs vest based on actual performance, if determinable, and otherwise based on target performance.
Market Data
Market Data The Committee annually considers market survey data of base salary, incentive compensation and target TDC, considering companies of similar size based on annual revenues across all industries to reflect the broad talent market across which we seek our executives. The Committee reviews results from a third-party survey to understand market compensation practices and assess our competitiveness, narrowing the scope of the results to account for variations caused by company size. The Committee reviews the data on an aggregated basis, with no consideration of the survey’s component companies, which are not determined or known by the Committee.
Market Data
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Market Data
In February 2024, the Committee utilized industry-wide data from the most recent WTW General Industry Executive Compensation Survey for companies with annual revenues between $6 billion and $10 billion. In addition, recognizing our company’s growth trajectory and top quartile performance in recent years, the Committee requested WTW to perform regression analysis to project market rates for corporate roles at companies with annual revenues of $10 billion. In assessing market competitiveness to determine target TDC, the Committee benchmarked CEO and Executive Chairman against the regression analysis data; both the industry-wide and regression analysis data for our other Corporate NEOs; industry-wide data for European-based leaders of businesses with annual revenues between $665 million and $4.75 billion for Mr. Melo; and industry-wide data for U.S.-based leaders of businesses with annual revenues of up to $5 billion for Mr. Yost.
Tally Sheets
| • | Cash compensation (base salary and AIP awards), LTI awards, value of vested LTI awards, and cost of benefits and perquisites |
Tally Sheets
| • | Value of annual compensation, including base salary, AIP award and grant date fair value of LTI awards |
Tally Sheets
| • | Accumulated value of compensation, including outstanding LTI awards and accumulated benefit values under pension and deferred compensation plans |
Tally Sheets
| • | Potential payments under various termination scenarios |
Peer Groups
Peer Groups Prior to 2023 and for purposes of identifying the peer group to determine relative TSR for the 2022-2024 PUs, the Committee used the following objective criteria: public companies headquartered in the U.S. (i) in similar industries based on their classification in one of five Global Industry Classification Standard (GICS) groups (diversified chemicals, specialty chemicals, metal and glass containers, paper and plastic packaging products, and paper products), (ii) with revenues during the last 12 months of $1 billion to $20 billion and (iii) no bankruptcies in the last three years. Beginning in 2023 and for purposes of identifying the peer group to determine relative TSR for the 2024-2026 PUs, the Committee used the following objective criteria: public companies primarily listed on a U.S. stock exchange (i) in similar industries based on their classification in the five GICS groups named above, (ii) with market capitalization of at least $1.5 billion and revenues during the last 12 months of $3 billion to $30 billion and (iii) no bankruptcies in the last three years.
Peer Groups
| PEER GROUP FOR DETERMINING RELATIVE TSR FOR PUs | | | | | 2022-2024 PUs AT TIME OF PAYOUT (38 companies) | | 2024-2026 PUs AT YE 2024 (30 companies) | | | Albermarle Corporation AptarGroup, Inc. Ashland Global Holdings Inc. Avient Corporation Axalta Coating Systems Ltd. Ball Corporation Berry Global Group, Inc. Celanese Corporation Clearwater Paper Corporation Crown Holdings, Inc. Eastman Chemical Company Ecolab Inc. Ecovyst Inc. Element Solutions Inc. Graphic Packaging International, LLC Greif, Inc. H.B. Fuller Company Huntsman Corporation Ingevity Corporation | Innospec Inc. International Flavors & Fragrances, Inc. Minerals Technologies Inc. NewMarket Corporation O-I Glass, Inc. Packaging Corporation of America Pactiv Evergreen Inc. PPG Industries, Inc. Quaker Chemical Corporation Rayonier Inc. RPM International Inc. Sealed Air Corporation Sensient Technologies Corporation Silgan Holdings Inc. Sonoco Products Company Stepan Company The Chemours Company The Sherwin-Williams Company Valhi, Inc. | Albermarle Corporation Amcor plc AptarGroup, Inc. Ardagh Metal Packaging S.A. Avient Corporation Axalta Coating Systems Ltd. Ball Corporation Berry Global Group, Inc. Celanese Corporation Crown Holdings, Inc. Dupont de Nemours, Inc. Eastman Chemical Company Ecolab Inc. Graphic Packaging International, LLC Greif, Inc. | H.B. Fuller Company Huntsman Corporation International Flavors & Fragrances Inc. International Paper Company O-I Glass, Inc. Packaging Corporation of America Pactiv Evergreen Inc. PPG Industries, Inc. RPM International Inc. Sealed Air Corporation Silgan Holdings Inc. Sonoco Products Company Sylvamo Corporation The Chemours Company The Sherwin-Williams Company |
Peer Groups
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INDEPENDENT OVERSIGHT AND EXPERTISE
| 2024 WTW SERVICES | | • Benchmarked CEO and Executive Chairman compensation and provided data to benchmark compensation of other corporate functional leaders | | • Assessed non-employee director compensation | | • Conducted compensation pay-risk assessment | | • Provided incentive compensation advice (including recommending criteria used to determine peer group for measuring relative TSR component of PUs) | | • Conducted analyses of share utilization and stockholder value transfer related to LTI compensation | | • Commented on CD&A and certain other 2024 proxy statement disclosures | | • Analyzed proxy advisory firm’s projected pay-for-performance analysis | | • Advised on executive compensation trends and regulatory updates | | • Prepared for, attended and reviewed documentation for Committee meetings |
EQUITY GRANT PRACTICES
EQUITY GRANT PRACTICES We do not grant equity awards in anticipation of the release of material nonpublic information or time the release of material nonpublic information for the purpose of affecting the value of executive compensation. In the event material nonpublic information were to become known to the Committee before the grant of an equity award, the Committee would consider the information and use its business judgment to determine whether to delay the grant to avoid any appearance of impropriety. Our policy is to grant our annual LTI awards on March 1 st and grant special LTI awards on the first day of March, June, September and December. In 2024, we did not grant any stock options, stock appreciation rights or similar option-like instruments to our NEOs.
EQUITY GRANT PRACTICES
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2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | Change In Pension Value and NQDC Earnings ($) | All Other Compensation ($)(4) | Total ($) | | Deon M. Stander | | | | | | | | | | President & | 2024 | $1,100,000 | $6,643,355 | – | $1,960,200 | – | $149,817 | $9,853,372 | | Chief Executive Officer | 2023 | $844,231 | $2,071,369 | $3,000,025 | $0 | – | $155,337 | $6,070,962 | | | 2022 | $664,706 | $3,454,633 | – | $304,500 | – | $125,982 | $4,549,821 | | Danny G. Allouche(5) (6) | | | | | | | | | | Senior Vice President, | 2024 | $448,530 | $517,283 | – | $298,916 | – | $125,422 | $1,390,151 | | Chief Strategy and Corporate Development Officer & | | | | | | | | | | Interim Chief Financial Officer | | | | | | | | | | Gregory S. Lovins(5) | | | | | | | | | | Senior Vice President & | 2024 | $730,056 | $1,887,374 | – | $665,130 | $1,721 | $136,045 | $3,420,326 | | Chief Financial Officer | 2023 | $736,539 | $3,156,886 | – | $0 | $821 | $156,649 | $4,050,895 | | | 2022 | $690,315 | $1,594,295 | – | $304,500 | – | $136,184 | $2,725,294 | | Mitchell R. Butier | | | | | | | | | | Executive Chairman | 2024 | $1,000,000 | $4,926,903 | – | – | $14,319 | $110,447 | $6,051,669 | | | 2023 | $1,180,769 | $8,285,412 | – | $0 | $5,812 | $228,115 | $9,700,108 | | | 2022 | $1,176,923 | $6,769,541 | – | $974,400 | – | $186,875 | $9,107,739 | | Francisco Melo(5) (6) | | | | | | | | | | President, Solutions Group | 2024 | $530,295 | $941,921 | – | $136,631 | – | $40,959 | $1,649,806 | | | 2023 | $492,075 | $871,680 | – | $0 | – | $21,169 | $1,384,924 | | Ryan D. Yost(5) | | | | | | | | | | President, Materials Group | 2024 | $501,442 | $1,928,833 | – | $472,500 | – | $97,710 | $3,000,485 |
2024 SUMMARY COMPENSATION TABLE
| (1) Salary adjustments, if any, generally become effective in April unless a change in role leads to an adjustment at a different time of year. |
2024 SUMMARY COMPENSATION TABLE
| (2) Amounts in 2024 for all NEOs other than Mr. Butier include the grant date fair value of PUs, which are eligible for vesting at the end of a three-year period based on the achievement of the designated performance objectives as of the end of the period. The number of shares vesting can range from 0% to 200% of the target units on the grant date. The performance objectives that determine the number of shares that may be earned for the PUs granted to participating Corporate NEOs (Messrs. Stander, Allouche and Lovins) are (i) company cumulative EVA (weighted 50%), which is a performance condition under ASC 718, and (ii) relative TSR (weighted 50%), compared to a designated peer group, which is a market condition under ASC 718, in each case calculated over the 2024-2026 performance period. For Business NEOs (Messrs. Melo and Yost), the performance objectives are cumulative EVA for their respective business (weighted 75%) and relative TSR (weighted 25%), in each case calculated over the 2024-2026 performance period. For Mr. Yost, amount also includes the grant date fair value of a special award of PUs with the same performance objectives and weightings as the 2024-2026 PUs granted to participating Corporate NEOs. Fair values of the performance condition component were determined based on the fair market value of our common stock on the grant date, adjusted for foregone dividends during the performance period. Maximum grant date fair values of the performance condition component of PUs were $3,386,305, $263,739, $962,065, $717,817 and $727,355 for Messrs. Stander, Allouche, Lovins, Melo and Yost, respectively. The maximum grant date fair value of the performance condition component of the special award of PUs granted to Mr. Yost was $307,695. Fair values of the market condition component were determined using the Monte-Carlo simulation method, which utilizes multiple input variables to estimate the probability of achieving the performance objectives established for the award, including the expected volatility of our stock price relative to the designated peer group at the end of the three-year performance period and a risk-free interest rate of 4.29% derived from linear interpolation of the term structure of Treasury Constant Maturities yield rates for the period. Based on the Monte-Carlo simulation method, grant date fair values of the market condition component of PUs were 120.77% of our average stock price on the grant date. Target grant date fair values of the market condition component of PUs were $1,650,049, $128,491, $468,873, $116,502 and $150,123 for Messrs. Stander, Allouche, Lovins, Melo and Yost, respectively. The target grant date fair value of the market condition component of the special award of PUs granted to Mr. Yost was $118,065. |
2024 SUMMARY COMPENSATION TABLE
| Amounts in 2024 for all NEOs other than Mr. Butier also include the grant date fair value of MSUs, which are eligible for vesting over 1-, 2-, 3- and 4-year performance periods provided that the designated performance objective is achieved as of the end of each period. The number of shares vesting can range from 0% to 200% of one-quarter of the target units on the grant date. The sole performance objective that determines the number of units that may be earned for MSUs is absolute TSR, which is a market condition under ASC 718. The grant date fair value of MSUs was 120.36% of our average stock price on the grant date determined using the Monte-Carlo simulation method based on risk-free interest rates of 4.90%, 4.51%, 4.29% and 4.21% for the first, second, third and fourth MSU tranches, respectively. Target grant date fair values of MSUs were $3,300,154, $256,923, $937,468, $466,511 and $472,577 for Messrs. Stander, Allouche, Lovins, Melo and Yost, respectively. Maximum grant date fair values were the same as target grant date fair values. |
2024 SUMMARY COMPENSATION TABLE
| Amounts in 2024 for Messrs. Butier and Yost include the grant date fair values of RSUs, without adjustment for forfeitures. RSUs awarded to Mr. Butier cliff-vest on the first anniversary of the grant date and RSUs awarded to Mr. Yost cliff-vest on the third anniversary of the grant date. Grant date fair values of these RSUs were $4,926,903 and $670,543, respectively, determined based on the closing price of our common stock on the grant date, adjusted for foregone dividends. |
2024 SUMMARY COMPENSATION TABLE
| (3) Amounts reflect AIP awards for the applicable year, which are determined in February and paid in March of the following year. |
2024 SUMMARY COMPENSATION TABLE
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2024 SUMMARY COMPENSATION TABLE
| (4) The table below shows the components of these amounts for 2024. |
2024 SUMMARY COMPENSATION TABLE
| | Perquisites | | | Benefits | | | | | | | | Name | Executive Benefit Allowance | Financial Planning | Company Automobile | Company Contributions/ Match, 401(k) Retirement Plans | Company Contributions, Deferred Comp. Plan | Company Match, Charitable Contribution | Executive Long-Term Disability Insurance | Executive Life Insurance | Executive Liability Insurance | Total | | Stander | $70,000 | $3,024 | – | $22,425 | $44,123 | – | $2,619 | $6,726 | $900 | $149,817 | | Allouche | – | – | $20,265 | $100,157* | – | $5,000 | – | – | – | $125,422 | | Lovins | $65,000 | – | – | $22,425 | $35,806 | $5,000 | $2,619 | $4,295 | $900 | $136,045 | | Butier | – | – | – | $22,425 | $70,057 | $10,000 | $2,619 | $4,446 | $900 | $110,447 | | Melo | $16,270 | $6,796 | $16,261 | – | – | $1,632 | – | – | – | $40,959 | | Yost | $58,404 | – | – | $22,425 | $10,881 | $1,000 | $533 | $3,567 | $900 | $97,710 |
2024 SUMMARY COMPENSATION TABLE
| * Amounts represents company contributions into retirement funds as required by Israeli law. |
2024 SUMMARY COMPENSATION TABLE
| (5) Messrs. Allouche and Yost became NEOs in 2024 and Mr. Melo became an NEO in 2023. As permitted by SEC rules, the table shows their compensation beginning in the year in which they became NEOs. Mr. Lovins went on medical leave in November 2024. |
2024 SUMMARY COMPENSATION TABLE
| (6) Amounts for Messrs. Allouche and Melo were converted from Israeli shekels and euros, respectively, using the average monthly exchange rates for 2024. |
2024 SUMMARY COMPENSATION TABLE
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2024 GRANTS OF PLAN-BASED AWARDS
2024 GRANTS OF PLAN-BASED AWARDS
2024 GRANTS OF PLAN-BASED AWARDS
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Exercise or Base Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards ($)(4) | | Name | Award Type | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | Deon M. Stander | | | | | | | | | | | | | | MSUs | 03/01/24 | – | – | – | 10,799 | 12,705 | 25,410 | – | – | $3,300,154 | | | PUs | 03/01/24 | – | – | – | 7,249 | 14,497 | 28,994 | – | – | $3,343,201 | | | AIP Award | – | $297,000 | $1,485,000 | $2,970,000 | – | – | – | – | – | – | | Danny G. Allouche | | | | | | | | | | | | | | MSUs | 03/01/24 | – | – | – | 841 | 989 | 1,978 | – | – | $256,923 | | | PUs | 03/01/24 | – | – | – | 565 | 1,129 | 2,258 | – | – | $260,360 | | | AIP Award | – | $45,290 | $226,452 | $452,904 | – | – | – | – | – | – | | Gregory S. Lovins | | | | | | | | | | | | | | MSUs | 03/01/24 | – | – | – | 3,068 | 3,609 | 7,218 | – | – | $937,468 | | | PUs | 03/01/24 | – | – | – | 2,060 | 4,119 | 8,238 | – | – | $949,906 | | | AIP Award | – | $120,938 | $604,688 | $1,209,376 | – | – | – | – | – | – | | Mitchell R. Butier | | | | | | | | | | | | | | RSUs | 03/01/24 | – | – | – | – | – | – | 23,101 | – | $4,926,903 | | Francisco Melo | | | | | | | | | | | | | | MSUs | 03/01/24 | – | – | – | 1,527 | 1,796 | 3,592 | – | – | $466,511 | | | PUs | 03/01/24 | – | – | – | 1,089 | 2,178 | 4,356 | – | – | $475,410 | | | AIP Award | – | $62,105 | $310,523 | $621,046 | – | – | – | – | – | – | | Ryan D. Yost | | | | | | | | | | | | | | MSUs | 03/01/24 | – | – | – | 1,546 | 1,819 | 3,638 | – | – | $472,577 | | | PUs | 03/01/24 | – | – | – | 1,104 | 2,207 | 4,414 | – | – | $481,743 | | | Special PUs | 03/01/24 | – | – | – | 659 | 1,318 | 2,636 | – | – | $303,970 | | | Special RSUs | 03/01/24 | – | – | – | – | – | – | 3,234 | – | $670,543 | | | AIP Award | – | $63,000 | $315,000 | $630,000 | – | – | – | – | – | – |
2024 GRANTS OF PLAN-BASED AWARDS
| (1) Amounts represent threshold, target and maximum opportunities under the 2024 AIP. Target AIP awards were determined by multiplying each NEO’s 2023 year-end base salary, except for Mr. Yost whose award was based on his base salary in March 2024, by the following target opportunities: 135% for Mr. Stander; 50% for Mr. Allouche; 75% for Mr. Lovins; and 60% for Messrs. Melo and Yost. Mr. Butier was not a participant in the 2024 AIP. The AIP payout for participating Corporate NEOs (Messrs. Stander, Allouche and Lovins) ranges from zero for below-threshold performance with respect to each of the performance objectives; 20% for threshold performance based on a threshold of 0% for the adjusted EPS performance objective and a threshold of 50% for the adjusted sales growth and adjusted free cash flow performance objectives; 100% for target performance with respect to each of the performance objectives; and 200% for maximum performance with respect to each of the performance objectives. The AIP payout for Business NEOs (Messrs. Melo and Yost) ranges from zero for below-threshold performance with respect to each of the performance objectives; 20% for threshold performance based on thresholds of 0% for the adjusted EPS and adjusted net income performance objectives and 50% for the adjusted sales growth and adjusted free cash flow performance objectives; 100% for target performance with respect to each of the performance objectives; and 200% for maximum performance with respect to each of the performance objectives. Amounts for Messrs. Allouche and Melo were converted from Israeli shekels and euros, respectively, using the average monthly exchange rates for December 2024. |
2024 GRANTS OF PLAN-BASED AWARDS
| (2) Amounts for MSUs represent threshold, target and maximum opportunities, which are paid out in shares of our common stock over 1-, 2-, 3- and 4-year performance periods provided that the absolute TSR performance objective is achieved as of the end of each period. The number of shares eligible for vesting at each vesting date ranges from 0% to 200% of one-quarter of the target number of units on the grant date, with a threshold payout of 85%. MSUs accrue dividend equivalents during the performance period, which are earned only at vesting. |
2024 GRANTS OF PLAN-BASED AWARDS
| Amounts for PUs represent threshold, target and maximum opportunities, which are paid out in shares of our common stock at the end of the three-year performance period provided that the respective cumulative EVA and relative TSR performance objectives are achieved at the end of the period. Cumulative EVA is weighted 50% for participating Corporate NEOs (based on company EVA) and 75% for Business NEOs (based on business EVA); relative TSR is weighted 50% for participating Corporate NEOs and 25% for Business NEOs. The number of shares eligible for vesting ranges from 0% to 200% of the target number of units on the grant date, with a payout of 50% if threshold performance is achieved with respect to each of the performance objectives. |
2024 GRANTS OF PLAN-BASED AWARDS
| (3) RSUs awarded to Mr. Butier cliff-vest on the first anniversary of the grant date and RSUs awarded to Mr. Yost cliff-vest on the third anniversary of the grant date. |
2024 GRANTS OF PLAN-BASED AWARDS
| (4) For more information on how we determine grant date fair values, see footnote (2) of the 2024 Summary Compensation Table. Additional information regarding the assumptions we use for stock-based compensation can be found in Note 12, “Long-Term Incentive Compensation,” to the consolidated financial statements contained in our 2024 Annual Report. |
2024 GRANTS OF PLAN-BASED AWARDS
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2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options – Exercisable (#) | Number of Securities Underlying Unexercised Options – Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Deon M. Stander | 03/01/21 | – | – | – | – | – | – | 776(2) | $146,284 | | | 03/01/22 | – | – | – | – | – | – | 3,174(3) | $598,331 | | | 03/01/22 | – | – | – | – | – | – | 3,745(2) | $705,970 | | | 03/01/22 | – | – | – | – | 8,793(4) | $1,657,568 | – | – | | | 03/01/23 | – | – | – | – | – | – | 5,623(3) | $1,059,992 | | | 03/01/23 | – | – | – | – | – | – | 4,177(2) | $787,406 | | | 09/01/23 | – | 62,955 | $190.54 | 09/01/33 | – | – | – | – | | | 03/01/24 | – | – | – | – | – | – | 22,663(3) | $4,272,202 | | | 03/01/24 | – | – | – | – | – | – | 25,397(2) | $4,787,588 | | | | – | 62,955 | | | 8,793 | $1,657,568 | 65,555 | $12,357,773 | | Danny G. Allouche | 03/01/21 | – | – | – | – | – | – | 372(2) | $70,126 | | | 03/01/22 | – | – | – | – | – | – | 811(3) | $152,881 | | | 03/01/22 | – | – | – | – | – | – | 957(2) | $180,404 | | | 03/01/23 | – | – | – | – | – | – | 1,434(3) | $270,323 | | | 03/01/23 | – | – | – | – | – | – | 1,066(2) | $200,952 | | | 03/01/23 | – | – | – | – | 3,292(4) | $620,575 | – | – | | | 03/01/24 | – | – | – | – | – | – | 1,765(3) | $332,720 | | | 03/01/24 | – | – | – | – | – | – | 988(2) | $186,248 | | | | – | – | | | 3,292 | $620,575 | 7,393 | $1,393,654 | | Gregory S. Lovins | 03/01/21 | – | – | – | – | – | – | 1,202(2) | $226,589 | | | 03/01/22 | – | – | – | – | – | – | 2,499(3) | $471,086 | | | 03/01/22 | – | – | – | – | – | – | 2,948(2) | $555,728 | | | 03/01/23 | – | – | – | – | – | – | 4,686(3) | $883,358 | | | 03/01/23 | – | – | – | – | – | – | 3,481(2) | $656,203 | | | 03/01/23 | – | – | – | – | 8,230(4) | $1,551,437 | – | – | | | 03/01/24 | – | – | – | – | – | – | 6,439(3) | $1,213,816 | | | 03/01/24 | – | – | – | – | – | – | 7,214(2) | $1,359,911 | | | | – | – | | | 8,230 | $1,551,437 | 28,469 | $5,366,691 | | Mitchell R. Butier | 03/01/21 | – | – | – | – | – | – | 5,454(2) | $1,028,134 | | | 03/01/22 | – | – | – | – | – | – | 10,611(3) | $2,000,280 | | | 03/01/22 | – | – | – | – | – | – | 12,516(2) | $2,359,391 | | | 03/01/23 | – | – | – | – | – | – | 22,493(3) | $4,240,155 | | | 03/01/23 | – | – | – | – | – | – | 16,708(2) | $3,149,625 | | | 03/01/24 | – | – | – | – | 23,101(4) | $4,354,770 | – | – | | | | – | – | | | 23,101 | $4,354,770 | 67,782 | $12,777,585 | | Francisco Melo | 03/01/21 | – | – | – | – | – | – | 358(2) | $67,487 | | | 03/01/22 | – | – | – | – | – | – | 26,726(3) | $5,038,118 | | | 03/01/22 | – | – | – | – | – | – | 841(2) | $158,537 | | | 03/01/23 | – | – | – | – | – | – | 2,401(3) | $452,612 | | | 03/01/23 | – | – | – | – | – | – | 1,771(2) | $333,851 | | | 03/01/24 | – | – | – | – | – | – | 2,178(3) | $410,575 | | | 03/01/24 | – | – | – | – | – | – | 3,590(2) | $676,751 | | | | – | – | | | – | – | 37,865 | $7,137,931 | | Ryan D. Yost | 03/01/21 | – | – | – | – | – | – | 138(2) | $26,015 | | | 03/01/22 | – | – | – | – | – | – | 5,419(3) | $1,021,536 | | | 03/01/22 | – | – | – | – | – | – | 341(2) | $64,282 | | | 03/01/22 | – | – | – | – | 2,931(4) | $552,523 | – | – | | | 03/01/23 | – | – | – | – | – | – | 912(3) | $171,921 | | | 03/01/23 | – | – | – | – | – | – | 673(2) | $126,867 | | | 03/01/24 | – | – | – | – | – | – | 3,961(3) | $746,688 | | | 03/01/24 | – | – | – | – | – | – | 2,060(3) | $388,331 | | | 03/01/24 | – | – | – | – | – | – | 3,636(2) | $685,422 | | | 03/01/24 | – | – | – | – | 3,234(4) | $609,641 | – | – | | | | – | – | | | 6,165 | $1,162,164 | 17,140 | $3,231,062 |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) Market value calculated using the $188.51 closing price of our common stock on December 27, 2024, the last trading day of our fiscal year. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (2) MSUs are eligible for vesting over 1-, 2-, 3- and 4-year performance periods, subject to achievement of the absolute TSR performance objective. Amounts are shown at (i) 128%, 92%, 96% and 93% of target for the vesting tranches of the MSUs granted in 2021, 2022, 2023 and 2024, respectively, which were the payouts based on performance as determined by the Compensation Committee in February 2025; (ii) the maximum level of performance for the remaining tranches of the MSUs granted in 2022, as performance through fiscal-year end would result in above-target payouts; and (iii) the target level of performance for the remaining tranches of the MSUs granted in 2023 and 2024, as performance through fiscal-year end would result in below-target payouts. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (3) PUs are eligible for vesting at the end of a three-year performance period, subject to achievement of the respective cumulative EVA and relative TSR performance objectives. Amounts for the respective cumulative EVA component of 2022-2024 PUs reflect 0% of target for all NEOs, which was the payout based on performance determined by the Compensation Committee in February 2025. Amounts for the respective cumulative EVA component of (i) 2023-2025 PUs reflect the target level of performance, as performance through fiscal-year end would result in below-target payouts, and (ii) 2024-2026 PUs reflect the maximum level of performance for participating Corporate NEOs and Materials NEO, as performance through fiscal-year end would result in above-target payouts, and the target level of performance for Solutions NEO, as performance through fiscal-year end would result in a below-target payout. Amounts for the relative component of TSR component of 2022-2024 PUs reflect 100% of target for all NEOs, which was the capped payout based on performance determined by the Compensation Committee in February 2025. Amounts for the relative TSR component of 2023-2025 PUs, 2024-2026 PUs and Mr. Yost’s special award of 2024-2026 PUs reflect the target level of performance, as performance through fiscal year-end would result in at or below-target payouts. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (4) RSUs of Messrs. Stander, Lovins and Yost cliff-vest on the third anniversary of the grant date, RSUs of Mr. Allouche cliff-vest on the 25-month anniversary of the grant date, and RSUs of Mr. Butier cliff-vest on the first anniversary of the grant date. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Avery Dennison Corporation | 2025 Proxy Statement | 79 |
2024 OPTION EXERCISES AND STOCK VESTED
2024 OPTION EXERCISES AND STOCK VESTED The table below provides information regarding the number of shares acquired and the value realized by our NEOs upon the exercise of option awards and vesting of stock awards during 2024.
2024 OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Deon M. Stander | – | – | 13,730 | $2,971,859 | | Danny G. Allouche | – | – | 4,459 | $965,151 | | Gregory S. Lovins | – | – | 13,914 | $3,011,685 | | Mitchell R. Butier | 141,108 | $19,544,725 | 59,889 | $12,962,974 | | Francisco Melo | – | – | 3,429 | $742,207 | | Ryan D. Yost | – | – | 3,069 | $664,285 |
2024 OPTION EXERCISES AND STOCK VESTED
| (1) Amounts reflect the number of shares acquired on vesting multiplied by the fair market value of our common stock on the vesting date. For vesting MSUs, amounts include the payout of accrued dividend equivalents. |
2024 PENSION BENEFITS
2024 PENSION BENEFITS The present value of accumulated pension benefits shown in the table below was calculated based on the assumptions we used to calculate our pension benefit obligations in the consolidated financial statements contained in our 2024 Annual Report. Amounts shown reflect the lump-sum present value of the pension benefits accumulated as of December 27, 2024, the last trading day of our fiscal year. Messrs. Stander, Allouche, Melo and Yost are not included in the table because they have no accumulated pension benefits.
2024 PENSION BENEFITS
| Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(1) | Payments During Last Fiscal Year ($)(1) | | Mitchell R. Butier | Benefit Restoration Plan | 9.33 | $244,394 | – | | Gregory S. Lovins | Benefit Restoration Plan | 15.58 | $32,175 | – |
2024 PENSION BENEFITS
| (1) The Benefit Restoration Plan allows for lump-sum payment. For information regarding the assumptions we use to determine the present value of accumulated pension plan benefits, see Note 6, “Pension and Other Postretirement Benefits,” to the consolidated financial statements contained in our 2024 Annual Report. |
2024 NONQUALIFIED DEFERRED COMPENSATION
2024 NONQUALIFIED DEFERRED COMPENSATION The table below provides information regarding executive and company contributions to our Executive Variable Deferred Retirement Plan (EVDRP). Under the EVDRP, participants may choose among publicly available funds ranging from money market and bond funds to index and other equity/mutual funds. Their rate of return depends on the funds they select. As non-U.S. NEOs, Messrs. Allouche and Melo are not currently eligible to participate in the EVDRP. However, Mr. Allouche has a balance from when he was a participant in the plan and has therefore been included in the table whereas Mr. Melo was never a participant in the plan and has therefore been excluded from the table.
2024 NONQUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($)(1) | Aggregate Earnings in Last FY ($)(2) | Aggregate Balance at Last FYE ($) | | Deon M. Stander | $110,000 | $44,123 | $204,730 | $1,972,037 | | Danny G. Allouche | – | – | $8,341 | $157,403 | | Gregory S. Lovins | – | $35,806 | $205,459 | $969,497 | | Mitchell R. Butier | $20,000 | $70,057 | $904,646 | $4,712,147 | | Ryan D. Yost | $27,255 | $10,881 | $7,148 | $101,642 |
2024 NONQUALIFIED DEFERRED COMPENSATION
| (1) Company contributions to the EVDRP are included in the All Other Compensation column of the 2024 Summary Compensation Table. |
2024 NONQUALIFIED DEFERRED COMPENSATION
| (2) Amounts reflect EVDRP vested account balances as of December 27, 2024, the last trading day of our fiscal year. Because the amounts do not represent above-market earnings, they are not reported in the 2024 Summary Compensation Table. The amounts shown below were reported in the All Other Compensation column of Summary Compensation Tables in previous proxy statements. Messrs. Allouche and Yost became NEOs in 2024; as such, they had no previously reported amounts. |
2024 NONQUALIFIED DEFERRED COMPENSATION
| Name | Aggregate Company Contributions Previously Reported ($) | | Stander | $228,077 | | Lovins | $274,086 | | Butier | $1,045,935 |
PAYMENTS UPON TERMINATION AS OF DECEMBER 28, 2024
PAYMENTS UPON TERMINATION AS OF DECEMBER 28, 2024 The table below shows the potential benefits that would have been payable to our NEOs had they been terminated on the last day of our 2024 fiscal year.
PAYMENTS UPON TERMINATION AS OF DECEMBER 28, 2024
| | | Termination Scenarios as of End of Fiscal Year 2024 | | | | | | Name | Benefit | Death | Qualifying Disability | Qualifying Retirement(2) | Involuntary Termination Not for Cause | Involuntary Termination within 24 Months of Change of Control | | Deon M. Stander | | | | | | | | | Severance Payment | – | – | – | $5,170,000 | $7,755,000 | | | Medical/Dental Payment | – | – | – | $60,366 | $90,549 | | | Outplacement | – | – | – | $25,000 | $25,000 | | | Unvested Stock Options(1) | – | – | – | – | – | | | Unvested RSUs(1) | $1,657,568 | $1,657,568 | $1,657,568 | $1,657,568 | $1,657,568 | | | Unvested PUs(1) | $1,826,976 | $1,826,976 | $946,195 | $946,195 | $4,913,136 | | | Unvested MSUs(1) | $1,333,355 | $1,333,355 | $1,291,360 | $1,291,360 | $4,080,983 | | | Total | $4,817,899 | $4,817,899 | $3,895,123 | $9,150,489 | $18,522,236 | | | Elimination of Excise Tax Liability | – | – | – | – | $(2,733,453) | | | Forfeited Equity(1) | $(5,833,788) | $(5,833,788) | $(6,756,564) | $(6,756,564) | – | | Danny G. Allouche | | | | | | | | | Severance Payment | – | – | – | $679,355 | $679,355 | | | Medical/Dental Payment | – | – | – | $8,900 | $8,900 | | | Outplacement | – | – | – | $25,000 | $25,000 | | | Unvested RSUs(1) | $620,575 | $620,575 | – | – | $620,575 | | | Unvested PUs(1) | $466,562 | $466,562 | – | – | $769,498 | | | Unvested MSUs(1) | $366,249 | $366,249 | – | – | $635,802 | | | Total | $1,453,386 | $1,453,386 | – | $713,255 | $2,739,130 | | | Forfeited Equity(1) | $(572,489) | $(572,489) | $(2,025,874) | $(2,025,874) | – | | Gregory S. Lovins | | | | | | | | | Severance Payment | – | – | – | $1,410,938 | $2,821,875 | | | Medical/Dental Payment | – | – | – | $30,183 | $60,366 | | | Outplacement | – | – | – | $25,000 | $25,000 | | | Unvested RSUs(1) | $1,551,437 | $1,551,437 | – | – | $1,551,437 | | | Unvested PUs(1) | $1,470,944 | $1,470,944 | – | – | $2,541,869 | | | Unvested MSUs(1) | $1,164,425 | $1,164,425 | – | – | $2,112,685 | | | Total | $4,186,806 | $4,186,806 | – | $1,466,121 | $9,113,232 | | | Forfeited Equity(1) | $(2,019,185) | $(2,019,185) | $(6,205,991) | $(6,205,991) | – | | Mitchell R. Butier | | | | | | | | | Unvested RSUs(1) | – | – | – | – | $4,354,770 | | | Unvested PUs(1) | $6,571,710 | $6,571,710 | – | – | $7,985,095 | | | Unvested MSUs(1) | $5,261,748 | $5,261,748 | – | – | $6,453,779 | | | Total | $11,833,458 | $11,833,458 | – | – | $18,793,644 | | | Forfeited Equity(1) | $(6,960,186) | $(6,960,186) | $(18,793,644) | $(18,793,644) | – | | Francisco Melo | | | | | | | | | Severance Payment | – | – | – | $828,062 | $1,656,124 | | | Medical/Dental Payment | – | – | – | $769 | $1,538 | | | Outplacement | – | – | – | $25,000 | $25,000 | | | Unvested PUs(1) | $4,273,035 | $4,273,035 | – | – | $6,077,185 | | | Unvested MSUs(1) | $441,673 | $441,673 | – | – | $900,420 | | | Total | $4,714,708 | $4,714,708 | – | $853,831 | $8,660,267 | | | Elimination of Excise Tax Liability | – | – | – | – | $(1,613,878) | | | Forfeited Equity(1) | $(2,262,897) | $(2,262,897) | $(6,977,605) | $(6,977,605) | – | | Ryan D. Yost | | | | | | | | | Severance Payment | – | – | – | $840,000 | $1,680,000 | | | Medical/Dental Payment | – | – | – | $30,183 | $60,366 | | | Outplacement | – | – | – | $25,000 | $25,000 | | | Unvested RSUs(1) | $552,523 | $552,523 | – | – | $1,162,164 | | | Unvested PUs(1) | $876,383 | $876,383 | – | – | $1,929,588 | | | Unvested MSUs(1) | $171,815 | $171,815 | – | – | $564,509 | | | Total | $1,600,721 | $1,600,721 | – | $895,183 | $5,421,627 | | | Elimination of Excise Tax Liability | – | – | – | – | $(763,560) | | | Forfeited Equity(1) | $(2,055,540) | $(2,055,540) | $(3,656,262) | $(3,656,262) | – |
PAYMENTS UPON TERMINATION AS OF DECEMBER 28, 2024
| (1) Values for equity awards were determined as follows: (i) for stock options, the number of shares that would have been exercisable multiplied by the difference between the $188.51 closing price of our common stock on December 27, 2024, the last trading day of our fiscal year, and the applicable exercise price; and (ii) for RSUs, PUs and MSUs, the number of shares that would have been acquired or forfeited on vesting multiplied by $188.51. Because Mr. Stander’s stock options were not in the money as of December 28, 2024, they have been excluded from the table. |
PAYMENTS UPON TERMINATION AS OF DECEMBER 28, 2024
| (2) Mr. Stander was the only NEO that had reached the age of 55 and had over 10 years of service with our company at the end of fiscal year 2024. Because he therefore qualified as retirement eligible, in every termination scenario, all of his unvested equity awards would vest, with PUs and MSUs vesting on a prorated basis after the end of their respective performance period based on actual performance. |
PAYMENTS UPON TERMINATION AS OF DECEMBER 28, 2024
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PAYMENTS UPON TERMINATION AS OF DECEMBER 28, 2024
In the event of termination, our NEOs would be entitled to receive any accrued balance under the EVDRP, subject to Section 409A of the Code. These amounts would be distributed in accordance with the participant’s distribution election and the terms and conditions of the plan, and are not included in the table. See 2024 Nonqualified Deferred Compensation for more information. The other potential payments upon termination are described below.
PAY VS. PERFORMANCE DISCLOSURE
PAY VS. PERFORMANCE DISCLOSURE The table below reflects information regarding the compensation of our NEOs and our financial performance for the last five fiscal years in accordance with SEC rules.
PAY VS. PERFORMANCE DISCLOSURE
| Year | Summary Compensation Table Total for Stander ($) (1) | Compensation Actually Paid to Stander ($) (2) | Summary Compensation Table Total for Butier ($) (1) | Compensation Actually Paid to Butier ($) (2) | Average Summary Compensation Table Total for Non-CEO NEOs ($) (1) | Average Compensation Actually Paid to Non-CEO NEOs ($) (2) | Value of Initial Fixed $100 Investments Based on: | | Net Income ($) | Adjusted EPS ($) (4) | | | | | | | | | Total Stockholder Return ($) | Peer Group Total Stockholder Return ($) (3) | | | | 2024 | $9,853,372 | $7,425,336 | – | – | $3,102,488 | $1,321,463 | $155.20 | $136.22 | $704,936,000 | $9.43 | | 2023 | $6,070,962 | $7,216,077 | $9,700,108 | $10,879,032 | $2,107,852 | $351,353 | $165.02 | $118.91 | $502,988,000 | $7.90 | | 2022 | – | – | $9,107,739 | $7,588,568 | $2,405,277 | $2,220,289 | $145.19 | $110.49 | $757,092,000 | $9.15 | | 2021 | – | – | $12,433,721 | $31,508,041 | $2,342,467 | $5,263,092 | $170.89 | $134.41 | $740,087,000 | $8.91 | | 2020 | – | – | $8,709,348 | $13,337,289 | $2,248,966 | $2,725,777 | $120.83 | $121.14 | $555,863,000 | $7.10 |
PAY VS. PERFORMANCE DISCLOSURE
| (1) For each fiscal year, represents amount reported for our CEO(s) and average amount reported for our non-CEO NEOs, in each case in the Total column of the Summary Compensation Table. Our NEOs for each of these fiscal years are shown below. |
PAY VS. PERFORMANCE DISCLOSURE
| Year | CEO(s) | Non-CEO NEOs | | 2024 | Deon Stander | Danny Allouche, Gregory Lovins, Mitchell Butier, Francisco Melo and Ryan Yost | | 2023 | Deon Stande r/Mitchell Butier | Gregory Lovins, Francisco Melo, Deena Baker-Nel and Nicholas Colisto | | 2022 | Mitchell Butier | Deon Stander, Gregory Lovins, Deena Baker-Nel and Ignacio Walker | | 2021 | Mitchell Butier | Deon Stander, Gregory Lovins, Deena Baker-Nel and Ignacio Walker | | 2020 | Mitchell Butier | Deon Stander, Gregory Lovins, Anne Hill and Susan Miller |
PAY VS. PERFORMANCE DISCLOSURE
| (2) Amounts represent Compensation Actually Paid to our CEO(s) or the average Compensation Actually Paid to our non-CEO NEOs, in each case which represents amounts reported in the Total column of the Summary Compensation Table for the applicable fiscal year. For 2024, amounts were adjusted as shown below. Fair value or change in fair value, as applicable, of equity awards in the Compensation Actually Paid columns was determined as follows: (i) for RSUs, the closing price of our common stock on the fiscal year-end date, or, in the case of vesting RSUs, the closing price of our common stock on the applicable vesting date; (ii) for the performance condition component of PUs, the same valuation methodology as RSUs except that year-end values were multiplied by a factor reflecting achievement of the probable outcome of the respective cumulative EVA performance objective as of the applicable measurement date; (iii) for the market condition component of PUs and for MSUs, using the Monte-Carlo simulation method to estimate the probability of achieving the respective relative and absolute TSR performance objective, respectively, as of the applicable measurement date; and (iv) for stock options, using the Black-Scholes pricing model as of the applicable measurement date. For information on the inputs to our Monte-Carlo simulations, see footnote (2) to our 2024 Summary Compensation Table. For purposes of these adjustments, awards to retirement-eligible NEOs are considered vested only at the time of retirement. |
PAY VS. PERFORMANCE DISCLOSURE
| | 2024 | | | Adjustments | Stander | Average of Non-CEO NEOs | | Decrease for amounts reported under Stock Awards and Option Awards columns in 2024 Summary Compensation Table | $(6,643,355) | $(2,040,463) | | Increase based on ASC 718 fair value of awards granted during fiscal year 2024 that remained unvested as of fiscal year-end 2024, determined as of fiscal year-end 2024 | 6,166,731 | 1,832,833 | | Increase/Decrease based on ASC 718 fair value of awards granted during fiscal year 2024 that vested during fiscal year, determined as of vesting date | – | – | | Decrease for awards granted during prior fiscal years that were outstanding and unvested as of fiscal year-end 2024, determined based on change in ASC 718 fair value from prior fiscal year-end to fiscal year-end 2024 | (1,677,949) | (1,272,523) | | Decrease for awards granted during prior fiscal years that vested during fiscal year 2024, determined based on change in ASC 718 fair value from prior fiscal year-end to vesting date | (273,463) | (297,664) | | Decrease for change in the actuarial present values reported under Change in Pension Value and NQDC Earnings column of 2024 Summary Compensation Table | – | (3,208) | | Increase/Decrease for service cost and, if applicable, prior service cost, for pension plans | – | – | | Total Adjustments | $(2,428,036) | $(1,781,025) |
PAY VS. PERFORMANCE DISCLOSURE
| (3) Peer Group represents the Dow Jones U.S. Containers and Packaging Index. |
PAY VS. PERFORMANCE DISCLOSURE
| (4) Adjusted EPS is a non-GAAP financial measure reconciled from GAAP in Appendix A of this proxy statement. |
PAY VS. PERFORMANCE DISCLOSURE
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Pay vs. Performance Financial Performance Measures
Pay vs. Performance Financial Performance Measures We believe the financial performance measures shown below, all of which are performance objectives used in our executive compensation program, were the most important in linking CAP to our NEOs for 2024. For additional information regarding these measures, including reconciliations of non-GAAP financial measures from GAAP, see the Compensation and Discussion Analysis and Appendix A sections of this proxy statement.
Pay vs. Performance Financial Performance Measures
| • | Absolute and Relative TSR |
Pay vs. Performance Financial Performance Measures
| • | Adjusted EPS |
Pay vs. Performance Financial Performance Measures
| • | Cumulative EVA |
Pay vs. Performance Financial Performance Measures
| • | Adjusted Sales Growth |
Pay vs. Performance Financial Performance Measures
| • | Adjusted Free Cash Flow |
Pay vs. Performance Financial Performance Measures
| Avery Dennison Corporation | 2025 Proxy Statement | 87 |
CEO PAY RATIO
CEO PAY RATIO With 70% of our 2024 revenues originating outside the U.S. and 40% of our revenues originating in emerging markets (Latin America, Eastern Europe, Middle East/Northern Africa and most countries in Asia Pacific), our employees are located in more than 50 countries to best serve our customers. At year-end 2024, 83% of our employees were located outside the U.S. and 66% were located in emerging markets, where median compensation is substantially lower than it is in the U.S. The charts below show the demographics of our global workforce by region and function. At year-end 2024, more than 19,000 of our approximately 35,000 employees were in Asia Pacific, serving our customers in the region. In addition, more than 22,000 employees at that time worked in the operations of our manufacturing facilities or in positions directly supporting them from other locations. We offer market-based, competitive wages and benefits in the markets where we compete for talent. All of our employees were paid at least the applicable legal minimum wage, and 99% of our employees were paid above the applicable legal minimum wage at year-end 2024.
2024 PAY RATIO
2024 PAY RATIO
2024 PAY RATIO
| • | The 2024 total compensation of our median employee (among all employees except our CEO) was $17,126. |
2024 PAY RATIO
| • | The 2024 total compensation of our CEO, as reported in the Total column of the 2024 Summary Compensation Table, was $9,853,372. |
2024 PAY RATIO
| • | Based on this information, a reasonable estimate of the 2024 ratio of the annual total compensation of our CEO to the annual total compensation of our median employee was approximately 575 to 1. |
2024 PAY RATIO
We calculated this ratio based on SEC rules and guidance, which allow for companies to use varying methodologies to identify their median employee. Other companies may have different workforce demographics and employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions. As a result, their CEO pay ratios may not meaningfully compare to ours.