Gregory Lovins

About Gregory Lovins

Gregory S. Lovins is Senior Vice President and Chief Financial Officer of Avery Dennison; he has served as an executive officer since March 2017 and previously held multiple senior finance roles in the company . As of the 2025 proxy, he was on medical leave beginning November 2024 . Under his finance leadership, AVY delivered FY2024 net sales of $8.8B (+4.7% y/y), adjusted EPS of $9.43 (+19.4% y/y), adjusted free cash flow of ~$700M, and ROTC of 15.8% . Over the last five years, AVY’s TSR was 55%, outperforming the Dow Jones U.S. Container & Packaging Index but below the S&P 500 and S&P 500 Industrials .

Past Roles

External Roles

Fixed Compensation

Multi-year compensation detail (SEC Summary Compensation Table):

Additional fixed pay details:

• YE2024 base salary rate: $806,250; increased 8% in April 2024 to align with market data .
• Target annual bonus (AIP) opportunity: 75% of base salary for 2024 .
• Perquisites/benefits (2024): Executive benefit allowance $65,000; 401(k) contributions $22,425; company deferred comp contribution $35,806; charitable match $5,000; long-term disability $2,619; life insurance $4,295; liability insurance $900 .
• Deferred compensation (EVDRP) 2024: company contribution $35,806; aggregate balance $969,497 .
• Pension (Benefit Restoration Plan) present value at FY2024: $32,175 .

Performance Compensation

2024 Annual Incentive Plan (Corporate NEOs: includes CFO):

• Metrics and weights: Adjusted EPS (60%), Adjusted Sales Growth (20%), Adjusted Free Cash Flow (20%) .
• 2024 targets vs actuals and payout modifiers:

• 2024 AIP payout (CFO): $665,130; noted as prorated 83% due to medical leave beginning Nov 2024 .

2024 Long-Term Incentive (fully performance-based for CFO):

• Vehicles: 50% Performance Units (PUs), 50% Market-leveraged Stock Units (MSUs) .
• 2024 grant (3/1/2024):
  • PUs: 4,119 target units; grant-date fair value $949,906; metrics: Company cumulative EVA (50%) and Relative TSR vs peer group (50%); 3-year performance period; payout 0–200% (relative TSR capped at 100% if absolute TSR negative) .
  • MSUs: 3,609 target units; grant-date fair value $937,468; absolute TSR over 1-, 2-, 3-, 4-year periods; per-tranche payout 0–200% (threshold at -15% TSR = 85%; target at +10% TSR = 100%; max at +75% TSR = 200%) .
• Illustrative vesting outcomes on awards eligible at YE2024 (company-wide): 2021 MSUs 4th tranche paid 128%; 2022 MSUs 3rd tranche 92%; 2023 MSUs 2nd tranche 96%; 2024 MSUs 1st tranche 93% .
• 2022–2024 PU cycle payout: 50% of target for Corporate NEOs (relative TSR 100% capped; cumulative EVA below threshold) .

2024 Option Exercises and Stock Vested (realized):

• Shares acquired on vesting by CFO in 2024: 13,914; value $3,011,685 .
• No stock option exercises by CFO in 2024 .

Equity Ownership & Alignment

Ownership and awards (as of dates shown):

• Beneficial ownership (record date Feb 24, 2025): 76,761 shares (69,653 common + 7,108 rights exercisable/vesting within 60 days); <1% of class .
• Outstanding unvested equity at FY2024 end (Dec 27, 2024):
  • Unvested RSUs: 8,230 shares (market value $1,551,437) .
  • Unearned PUs/MSUs: 28,469 shares/units (market or payout value $5,366,691) .
  • Stock options: none outstanding for CFO .
• Stock ownership guidelines: Level 2 executives must hold ≥3x salary; CFO minimum $2,418,750. CFO ownership counted at 83,297 units; status: achieved; requirement multiple achieved: 7x .
• Insider trading/pledging: Policy prohibits short sales, options/derivatives, hedging, and pledging; officers and directors complied in 2024; no shares pledged by any such person .
• 10b5-1 plans and limited trading windows: policy-enforced preclearance and blackout periods; company may suspend transactions under a 10b5-1 plan if necessary .

Employment Terms

• Employment agreements: No individual NEO employment contracts (unless required by local laws/market); compensation structured via plans/policies; WTW is independent consultant to the committee .
• Severance (involuntary not for cause): CFO eligible under Executive Severance Plan for cash severance equal to 1x (base salary + target AIP), plus cash value of 12 months of medical/dental premiums (1x) and up to $25,000 outplacement; payments offset by statutory obligations .
• Change-in-control (double trigger within 24 months): CFO eligible for 2x (base salary + target AIP), plus 2x medical/dental premiums’ 12-month cash value and up to $25,000 outplacement; no excise tax gross-ups; equity generally vests upon termination post-CoC (PUs/MSUs based on actual or target if not determinable) .
• Representative potential payouts as of FY2024 year-end:
  • Involuntary not for cause: Severance payment $1,410,938; medical/dental $30,183; outplacement $25,000; total with unvested equity and other items $1,466,121 or $4,186,806 including death/disability calculations as shown .
  • Termination within 24 months post-CoC: Severance payment $2,821,875; medical/dental $60,366; outplacement $25,000; unvested RSUs $1,551,437; unvested PUs $2,541,869; unvested MSUs $2,112,685; total $9,113,232 (with equity treatment described) .
• Clawbacks: Section 16 Clawback (restatement-based recovery regardless of misconduct) plus broader misconduct-related clawback across AIP/LTI in award agreements .
• Cash severance policy cap: New policy (effective Jan 31, 2025) prohibits new severance arrangements >2.99x (base + target AIP) without shareholder ratification .
• Restrictive covenants: Severance benefits conditioned on release of claims and restrictive covenants; violations may result in recovery of benefits .

Say-on-Pay, Peer Group, and Shareholder Feedback

• 2024 say-on-pay support: 94% approval .
• Relative TSR peer group used for PUs: chemicals/packaging comparables; criteria updated in 2023; representative peer lists disclosed (e.g., 30–38 companies including Ball, Crown, Sealed Air, Sonoco, etc.) .
• Market positioning: 2024 target LTI opportunity for CFO set at 250% of base salary; committee benchmarks to WTW market data; CEO positioned at ~40th percentile; committee uses regression vs $10B revenue for corporate roles .

Performance & Track Record

• 2024 CFO deliverables: ~100% adjusted FCF conversion; $700M adjusted FCF; balance sheet strength while returning $525M to shareholders via dividends and buybacks; debt refinancing and extended revolver; enhanced forecasting and sustainability reporting; ERP standardization .
• Company performance 2024: Net sales $8.8B (+4.7% y/y), adjusted EPS $9.43 (+19.4%), net cash from operations $938.8M, ROTC 15.8% .
• Long-term shareholder returns: 5-year TSR 55% (vs 36% DJ U.S. Containers & Packaging, 76% S&P 500 Industrials, 97% S&P 500) .

Equity Vesting & Potential Selling Pressure

• 2024 vesting activity: CFO had 13,914 shares vest in 2024 (value $3,011,685); no option exercises reported for CFO in 2024 .
• Policy mitigants: Preclearance, blackout windows, and 10b5-1 governance; prohibition on hedging/pledging; ownership guideline compliance (7x multiple) reduces misalignment risk .

Compensation Structure Analysis

• At-risk pay emphasis: For Corporate NEOs, 2024 LTI fully performance-based (PUs/MSUs); annual bonus driven 60% by EPS with FCF and sales growth balance .
• Alignment levers: Double-trigger CoC equity vesting; no excise tax gross-ups; clawbacks (restatement/misconduct) .
• Year-over-year mix: CFO 2024 saw normalized LTI value vs 2023 and AIP increase reflecting strong 2024 results (AIP $665k vs $0 in 2023) .
• Peer targeting and risk controls: WTW independent advice; no options granted in 2024; burn rate 0.45% (25th–50th percentile S&P 500); ownership policy including 50% vested shares requirement .

Equity Ownership & Alignment (Detail)

Employment Terms (Detail)

Investment Implications

• Pay-for-performance: CFO’s incentives are tightly linked to EPS, FCF, and TSR/EVA; 2024 AIP paid at 132% financial modifier (100% individual), reflecting operational outperformance; LTI remains fully performance-based for CFO, supporting alignment with long-term TSR and capital efficiency .
• Retention risk: Competitive severance (1x) and CoC (2x, double trigger) with robust ownership (7x multiple achieved) and no hedging/pledging reduce misalignment; medical leave status in late 2024 is a monitoring point for continuity and coverage (Interim CFO in place) .
• Trading signals: 2024 vesting of 13,914 shares (no option exercises) suggests routine vest-driven flows; governance controls (blackouts/10b5-1) limit opportunistic trading; lack of pledging/hedging is positive .
• Execution track record: Finance function delivered ~100% FCF conversion, debt refinancing, and disciplined capital returns amid recovery, underpinning credibility of EPS/FCF-linked incentives going forward .