Djalma Novaes Jr.
CROWN HOLDINGSAbout Djalma Novaes Jr.
Djalma Novaes Jr. is President – Americas Division at Crown Holdings (CCK), serving in this role since 2015; he is 64 years old per the company’s most recent 10-K executive officer table . As a Named Executive Officer (NEO), his annual incentive pay is tied to economic profit (EP) and modified operating cash flow (MOCF), with division-level and company-level metrics applied to his bonus formula . Company performance context: for 2024, Crown reported ROIC of 13.2%, net income of $560 million, and a $100 investment value of $118.70 vs $136.68 for the peer TSR index; Say‑on‑Pay support exceeded 96% in 2024, and the long‑term plan emphasizes ROIC and relative TSR .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Crown Holdings (CCK) | President – Americas Division | 2015–present | Division-level EP and MOCF metrics drive his bonus under the EP Plan |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 650,000 | 680,000 | 725,000 |
| Target Bonus (% of Salary) | 80% | 80% | 80% |
| Target Bonus ($) | 520,000 | 544,000 | 580,000 |
| Actual Bonus Paid ($) | 557,960 | 680,544 | 1,160,000 |
| Stock Awards ($, grant-date fair value) | 1,137,547 | 1,224,028 | 1,449,949 |
| Change in Pension Value ($) | 0 | 0 | 319,008 |
| All Other Compensation ($) | 46,141 | 8,250 | 26,842 |
| Total Compensation ($) | 2,391,648 | 2,592,822 | 3,680,799 |
- 2024 “All Other Compensation” detail for Novaes: FICA on change in SERP valuation $21,667 and defined contribution plan company contribution $5,175; total $26,842 .
Performance Compensation
Annual cash bonus under the EP Plan is based on two measures: economic profit and modified operating cash flow; each can pay up to 125% of target with a plan cap at 200% of target . For Novaes (division-level NEO), thresholds/targets include both division and company metrics; the applicable divisional targets and actuals are below, with realized payout as disclosed.
| Year | Metric | Threshold | Target | Actual | Payout vs Target |
|---|---|---|---|---|---|
| 2022 | Economic Profit ($mm) | 245.7 | 307.1 | 351.8 | 107.3% |
| 2022 | Modified Operating Cash Flow ($mm) | 431.3 | 539.1 | 154.8 | 107.3% (overall; 0% MOCF; 107.3% EP) |
| 2023 | Economic Profit ($mm) | 253.7 | 317.1 | 305.1 | 125.1% (37.9% EP; 87.2% MOCF) |
| 2023 | Modified Operating Cash Flow ($mm) | 662.8 | 828.5 | 859.5 | 125.1% (37.9% EP; 87.2% MOCF) |
| 2024 | Economic Profit ($mm) | 262.9 | 328.6 | 382.1 | 200% (cap) |
| 2024 | Modified Operating Cash Flow ($mm) | 697.4 | 871.8 | 1,007.5 | 200% (cap) |
Long-term incentives are delivered approximately one-third time-based RS and two-thirds performance-based RS, with the performance portion split between ROIC and relative TSR; the 2024 grants use a three-year performance window (2024–2026) . Grant details:
| Grant Year | Grant Date | Time-Based RS (shares) | Time-Based Fair Value ($) | PSU Target (TSR) (shares) | TSR Fair Value ($) | PSU Target (ROIC) (shares) | ROIC Fair Value ($) | Vest Schedule |
|---|---|---|---|---|---|---|---|---|
| 2023 | 1/4/2023 | 5,035 | 408,036 | 4,372 | 407,995 | 5,079 | 407,996 | Time-based: 1/4/24, 1/6/25, 1/5/26; PSUs: 1/5/2026 (0–200% of target) |
| 2024 | 1/3/2024 | 5,388 | 483,357 | 4,833 | 483,300 | 5,448 | 483,292 | Time-based: 1/6/25, 1/5/26, 1/4/27; PSUs: 1/4/2027 (0–200% of target) |
Additional vesting outcomes:
- 2024 vesting: Novaes had 12,765 stock awards vest with $1,071,807 realized value .
- For 2022-cycle PSUs, TSR-based shares vested at 0% (3,263 forfeited for Novaes), while ROIC-based shares vested at 2,455 for Novaes on Feb 27, 2025 (values based on 12/31/24 stock price) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 114,513 shares; less than 1% of outstanding as of March 11, 2025 |
| Unvested Time-Based RS (12/31/2024) | 9,913 shares; $819,706 market value at $82.69 close |
| Unearned PSUs at Target (12/31/2024) | 26,502 shares; $2,191,450 market/payout value at $82.69 |
| Hedging/Pledging | Prohibited for Directors and Officers |
| Holding/Ownership Guidelines | Must retain 50% of after-tax shares for two years after vest; NEOs at year-end were in compliance with guidelines |
Vesting calendar relevant for supply/timing:
- Time-based tranches: 1,678 (2023 grant) on 1/6/2025 and 1,678 on 1/5/2026; 1,796 (2024 grant) on 1/6/2025, 1/5/2026, and 1/4/2027 .
- PSU endpoints: 2023 grant vests 1/5/2026 (0–200%); 2024 grant vests 1/4/2027 (0–200%) .
Employment Terms
- Severance (no CIC): Upon termination without Cause, Novaes receives 1x base salary (=$725,000), pro‑rated actual bonus, plus vested benefits .
- Change-in-Control (CIC) severance (within 12 months post‑CIC upon qualifying termination): 3x base salary (=$2,175,000) plus 3-year average bonus (table value $2,186,856), accelerated equity treatment, and vested benefits; total estimated at $7,373,012 as of 12/31/2024 .
- Equity on CIC: Time-based RS becomes fully vested; performance RS vests based on performance versus targets measured from the start of the period to the CIC date .
- Restrictive covenants: Non-compete of one year post-employment pre‑CIC and two years post‑CIC; non-solicit also applies .
- Clawbacks: Compensation Recovery Policy effective Oct 2, 2023; recovery of incentive comp in case of accounting restatement regardless of misconduct; complements existing clawback policies .
- Tax gross-ups: Company states no tax gross-ups in executive employment agreements .
Retirement Benefits
| Plan | Years Credited | Present Value of Accumulated Benefit ($) |
|---|---|---|
| U.S. Pension Plan | 14 | 623,629 |
| Senior Executive Retirement Plan (SERP) | 25 | 6,320,311 |
Notes:
- SERP vests upon earliest of five years of participation, specified retirement dates, total disability, or a change in control; benefits are lump-sum; amounts are interest-rate sensitive .
- 2024 “All Other Compensation” includes FICA tied to SERP valuation changes ($21,667) and 401(k) plan contributions ($5,175) .
Compensation Structure Analysis
- Mix shift and risk: No stock options granted; equity delivered via time-based and performance-based restricted stock, with ~two‑thirds performance-based (ROIC and relative TSR), increasing alignment but reducing optionality versus options .
- Annual incentives consistently formulaic: EP and MOCF drive payouts; 2024 paid at plan cap (200% of target) given strong performance on both measures at company and division levels .
- CIC equity treatment: Acceleration of time-based awards and performance‑to‑date vesting of PSUs on CIC can be shareholder‑unfriendly vs strict double‑trigger equity; however, company also highlights double‑trigger vesting principles in summary materials .
Performance & Track Record
- Company-level results highlight ROIC at 13.2% in 2024 (up from 12.4% in 2023) and net income of $560 million (down from $587 million in 2023) .
- Pay-for-performance calibration: For awards vesting in 2025, TSR-based PSUs paid 0% while ROIC-based PSUs were ~30% below target; prior 2024 vestings saw TSR at ~45.6% below target and ROIC at 200% of target, indicating balanced sensitivity to market-relative and internal capital efficiency metrics .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay received over 96% approval at the 2024 Annual Meeting; compensation approach remained largely unchanged, with emphasis on performance-based equity and EP/MOCF annual incentives .
- Independent compensation consultant (Pay Governance) advises the committee; target pay levels benchmarked around the 50th percentile of the peer group .
Investment Implications
- Alignment: High proportion of performance-based equity (ROIC and relative TSR) and strict hedging/pledging prohibitions support alignment and reduce risk of forced selling; Novaes beneficially owns 114,513 shares, with additional unvested/uneamed equity creating ongoing exposure to Crown’s results .
- Incentive levers: Annual bonuses are tightly linked to EP and MOCF; 2024 paid at 200% cap, indicating strong execution on cash flow and capital returns in his purview (Americas Division plus company‑level overlays) .
- Retention vs. overhang: Near‑dated vesting from 2023/2024 time‑based RS and multi‑year PSUs (2026/2027 endpoints) create retention hooks; 2024 vested shares (12,765) and 2025 ROIC vesting from 2022 cycle (2,455) suggest episodic, manageable supply events rather than structural selling pressure; hedging/pledging prohibitions further mitigate overhang risk .
- Change-in-control economics: Post‑CIC severance (3x base plus average bonus) and equity acceleration could be material but are in line with market practice; investors should weigh equity vesting on CIC (including time-based acceleration and performance-to-date PSU vesting) when assessing potential transaction scenarios .