Deon Stander
Avery DennisonAbout Deon Stander
President & CEO of Avery Dennison since September 2023; age 56; director since September 2023; serves on the Board’s Finance Committee; not independent given executive status . 2024 performance under his first full year as CEO: net sales $8.8B (+4.7% YoY), adjusted EPS $9.43 (+19.4% YoY), adjusted free cash flow $699.5M (+18.2% YoY), ROTC 15.8% . Longer-term, AVY’s 5-year TSR is 55%; 2021-2024 ex-currency sales CAGR 7.0% and adjusted EBITDA CAGR 7.6% versus a framework targeting 5%+ sales CAGR and 16%+ adjusted EBITDA margin (2024 reached 16.4%) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Avery Dennison | President & CEO | 2023–Present | Leads portfolio across Materials and Solutions; sustainability and digital focus; Board Finance Committee member . |
| Avery Dennison | President & COO | 2022–2023 | Oversaw Materials Group and Solutions Group operations globally . |
| Avery Dennison (RBIS, now Solutions Group) | VP/GM, RBIS | 2015–2022 | Led Solutions (branding, RFID/Intelligent Labels), strengthening digital and materials capabilities . |
| Avery Dennison (RBIS) | VP/GM, Global Commercial & Innovation | 2013–2015 | Advanced commercial strategy and innovation pipeline . |
| Avery Dennison (RBIS) | VP/GM, Global Commercial | 2010–2012 | Drove global go-to-market execution . |
External Roles
| Type | Role | Years | Notes |
|---|---|---|---|
| Public company boards | None | — | No current or prior U.S. public company boards in past five years . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual AIP/Bonus Paid ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 664,706 | n/a | 304,500 | 125,982 | 4,549,821 |
| 2023 | 844,231 | n/a | 0 | 155,337 | 6,070,962 |
| 2024 | 1,100,000 | 135% | 1,960,200 | 149,817 | 9,853,372 |
Perquisites (2024): $70,000 executive benefit allowance; $25,000 financial planning cap (CEO max – utilized $3,024); company contributions to retirement/EVDRP of $22,425 and $44,123; insurance and other small items (no tax gross-ups) .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 (Corporate CEO weighting)
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Modifier | Weighted Contribution |
|---|---|---|---|---|---|---|---|
| Adjusted Sales Growth | 20% | $8,565M | $8,710M | $9,000M | $8,874M | 157% | 31% |
| Adjusted EPS | 60% | $8.35 | $9.25 | $10.00 | $9.35 | 111% | 67% |
| Adjusted Free Cash Flow | 20% | $630M | $700M | $780M | $757M | 172% | 34% |
| Financial Modifier | — | — | — | — | — | — | 132% |
| Individual Modifier | — | — | — | — | — | — | 100% |
| Payout ($) | — | — | — | — | — | — | 1,960,200 |
AIP objective design and rationale (CEO): Adjusted Sales Growth (20%), Adjusted EPS (60%), Adjusted Free Cash Flow (20%); targets aligned to long-term framework and annual guidance .
Long-Term Incentives – 2024 Grants
| Instrument | Grant Date | Target Units (#) | Performance Objective | Weight | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|---|
| PUs | 03/01/2024 | 14,497 | Company Cumulative EVA | 50% | Cliff after 3 years | 3,343,201 |
| PUs | 03/01/2024 | 14,497 | Relative TSR vs. designated peer group | 50% | Cliff after 3 years; capped at 100% if absolute TSR negative | 3,343,201 |
| MSUs | 03/01/2024 | 12,705 | Absolute TSR | 100% | Four tranches (1-,2-,3-,4-year) | 3,300,154 |
MSU payout schedule and curve:
- Tranches: 1-year, 2-year, 3-year, 4-year; average performance period 2.5 years .
- Payout scale: Cancelled < -15% TSR; 85% at -15%; 100% at 10%; up to 200% at 75% TSR .
Vesting results (most recent):
- 2022–2024 PUs: Company EVA below threshold; relative TSR at 56th percentile but capped at 100% due to negative absolute TSR; Corporate NEO payout 50% of target .
- MSUs eligible at YE 2024: 2021 (4th tranche) paid 128%; 2022 (3rd tranche) 92%; 2023 (2nd tranche) 96%; 2024 (1st tranche) 93% .
Target LTI mix and at-risk pay: CEO had 600% of base salary target LTI; 88% of target TDC at risk .
2024 Grants of Plan-Based Awards – CEO Detail
| Type | Threshold | Target | Maximum |
|---|---|---|---|
| AIP Award ($) | 297,000 | 1,485,000 | 2,970,000 |
| MSUs (#) | — | 12,705 | 25,410 |
| PUs (#) | — | 14,497 | 28,994 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 54,406 common + 18,900 rights exercisable/vesting within 60 days = 73,306 total; <1% of 78,965,996 shares outstanding . |
| Unvested RSUs | 8,793 units; $1,657,568 market value at $188.51 (12/27/2024 close) . |
| Unvested PUs/MSUs | 65,555 units combined; $12,357,773 market/payout value at $188.51 (per proxy methodology) . |
| Stock options | 62,955 options @ $190.54 expiring 09/01/2033; not in the money at $188.51 YE price . |
| Ownership guidelines | CEO must own ≥6x base salary; 50%+ must be vested shares; unvested PUs/options excluded; 50% of unvested MSUs counted at target . |
| Compliance | Requirement $6.6M; ownership 64,945 counted; status achieved; “Requirement Multiple Achieved” 2x . |
| Pledging/hedging | Prohibited; no shares pledged by directors/executives . |
| Trading controls | Preclearance, blackout windows, 10b5-1 plan restrictions; company can suspend plan transactions . |
Employment Terms
| Topic | Terms / Values |
|---|---|
| Severance Plan (no CoC) | CEO: 2x (base salary + target AIP) cash severance; 12 months medical/dental cash value; up to $25k outplacement; others: 1x; no tax gross-ups . |
| Change-of-Control (double-trigger) | CEO: 2.99x (reduced from 3.00x effective Jan 31, 2025) of (base + target AIP) plus prorated target AIP, 2.99x 12-month medical/dental cash value, up to $25k outplacement; no excise tax gross-up (cut-back if optimal) . |
| Potential payments (as of 12/28/2024) | Invol. termination (not for cause): $9,150,489 total; CoC termination: $18,522,236 total (includes equity treatment; excise tax “elimination” adjustment of $(2,733,453)) . |
| Equity on termination | Retirement-eligible (age ≥55 and ≥10 yrs); all unvested RSUs vest; PUs/MSUs vest pro rata post-performance based on actuals . |
| Clawbacks | Mandatory recoupment for executive officers in accounting restatements; broader clawback for AIP/LTI recipients on fraud/misconduct restatement . |
| Deferred comp (EVDRP) | 2024 contributions: Executive $110,000; Company $44,123; 2024 earnings $204,730; YE balance $1,972,037 . |
Board Governance (Director Service)
- Board service and roles: Director since September 2023; Finance Committee member; not independent under NYSE (executive) .
- Board structure: Non-independent Chairman (Butier) elected for a 1-year term ending 2026 meeting; robust Lead Independent Director (Siewert) elected for a 1-year term; separation of CEO/Chair roles maintained; independent committee chairs .
- Independence/attendance: 7 of 9 nominees independent; Board met 5 times in 2024 with 27 committee meetings; all directors ≥75% attendance, average 98% .
- Director compensation for executives: Employee directors (Butier, Stander) received no additional Board fees in 2024 .
- Executive sessions: Independent directors held three executive sessions; Board also held sessions with Executive Chairman and CEO .
Director Compensation (context for dual role)
- Non-employee director annual retainers: $115k cash + $185k RSUs; LID +$45k; committee chair retainers $25k–$35k; charitable match $10k .
- Non-employee director equity vests in one year; acceleration on death/disability/retirement or CoC; cancellations otherwise .
Performance & Track Record
| Measure | Result |
|---|---|
| 2024 Key Results | Net sales $8.8B; adjusted EPS $9.43; adjusted FCF $699.5M; ROTC 15.8% . |
| 5-Year TSR | 55%; vs S&P 500 97%, S&P 500 Industrials 76%, Dow U.S. Containers & Packaging 36% . |
| 2021–2024 Progress | Sales ex-currency CAGR 7.0%; adjusted EBITDA growth 7.6%; adjusted EBITDA margin 16.4% in 2024 vs 16%+ 2025 target . |
| Pay vs. Performance alignment | CEO target TDC 88% at risk; use of absolute/relative TSR and EVA; 2022–2024 PUs paid 50% (Corporate) due to EVA miss and capped TSR . |
| Say-on-Pay | 94% approval at 2024 Annual Meeting . |
Compensation Structure Analysis
- Mix shifts: CEO LTI fully performance-based (PUs 50% on company EVA; PUs 50% on relative TSR; MSUs 100% on absolute TSR); no time-based CEO RSUs, indicating higher performance leverage vs guaranteed equity .
- Risk mitigants: Double-trigger CoC vesting; clawbacks; prohibitions on hedging/pledging; no option repricing; no excise tax gross-ups; strong ownership policy requiring pre-transaction certification and retention until compliance .
- Targets rigor: 2024 corporate AIP targets required EPS of $9.25 (midpoint of guidance, +17.1% vs 2023), FCF $700M (+18.2% vs 2023), and sales ex-FX growth of 4.1% amid post-destock normalization .
Risk Indicators & Red Flags
- CoC multiple: CEO 2.99x (reduced from 3.00x) of salary+target bonus; market-consistent but sizable .
- Retirement eligibility accelerates equity vesting (pro-rata for PUs/MSUs), reducing retention “golden handcuffs” vs non-eligible executives .
- EVA underperformance for 2022–2024 PUs (no payout on EVA component) highlights execution risk on EVA goals despite TSR component paying at capped 100% .
- Governance mitigants: Robust LID, independent committees, frequent executive sessions; no pledging/hedging by insiders .
Compensation Peer Group (Relative TSR for PUs)
- 2024–2026 PUs peer set includes 30 U.S.-listed materials/packaging/chemicals names (e.g., Amcor, Ball, Berry, Celanese, Crown, Ecolab, Greif, IP, PPG, Sealed Air, Sonoco, Sherwin-Williams, IFF) .
- Threshold/Target/Max relative TSR percentiles: 40th/50th/80th; capped at 100% if AVY absolute TSR negative .
Equity Overhang and Plan Capacity
- At 12/28/2024: 598,082 securities outstanding under plans (including 171,652 MSUs, 214,547 PUs, 94,895 RSUs/54,033 DSUs, 62,955 options); 2,287,561 shares remain available; options’ weighted-average exercise $190.54 .
Employment & Contracts
- No individual employment contract disclosed; severance governed by plan policies; new policy caps cash severance >2.99x without shareholder approval (effective Jan 31, 2025) .
- Non-compete/non-solicit specifics not disclosed in proxy; standard releases and restrictive covenants required for severance .
Board Governance (Independence and Dual-Role Implications)
- Stander serves concurrently as CEO and director (not independent), with non-independent Chair role held by Butier and a strong Lead Independent Director to balance oversight; 7/9 nominees independent; committees chaired by independents .
- Board and committees met frequently with high attendance; executive sessions reinforce independent oversight .
Investment Implications
- Pay-for-performance alignment is strong: 88% of CEO TDC at risk with heavy use of EVA and TSR; 2024 corporate AIP outperformance drove a 132% financial modifier, signaling near-term momentum under Stander’s first full year .
- Retention risk is moderate: retirement eligibility means prorated vesting of performance equity post-termination, reducing forfeiture risk, but ownership compliance and trading/pledging restrictions temper near-term sell pressure; options were OTM at YE 2024, limiting exercise-driven selling .
- Change-of-control economics (2.99x) are within market but material; no excise tax gross-up and double-trigger vesting reduce shareholder-unfriendly optics .
- Execution focus: EVA miss on 2022–2024 PUs underscores the bar to deliver capital-efficient earnings growth; however, 2024 saw EPS/FCF strength and clear 2028 targets (17%+ adj. EBITDA margin), offering upside if delivery continues .
- Governance structure (separate CEO/Chair, robust LID, high attendance, 94% say-on-pay) supports continuity during leadership handoff, lowering governance risk premiums .