Howard Coker
SONOCO PRODUCTSAbout Howard Coker
R. Howard Coker is Sonoco’s President, Chief Executive Officer, and a director; age 62, director since 2020, and a Sonoco veteran who joined the company in 1985 . Under his tenure, 2024 marked a portfolio transformation (acquisition of Eviosys; announced sale of TFP) and strong cash generation with operating cash flow of ~$834 million and free cash flow of ~$456 million, despite price/cost headwinds; the company also raised its dividend for the 41st straight year . Pay design places 88% of CEO target total direct compensation “at risk,” and long-term performance delivered a 200% payout on the 2022–2024 PCSU cycle (ROIC and BEPS above maximum) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sonoco Products Company | President, CEO and Director | 2020–Present | Led portfolio simplification; executed Eviosys acquisition and announced TFP divestiture; focus on cash generation and productivity . |
| Sonoco Products Company | SVP, Paper and Industrial Converted Products | 2019–2020 | Ran core industrial paper operations . |
| Sonoco Products Company | SVP, Global Rigid Paper & Closures and Paper/Engineered Carriers International | 2017–2018 | Global leadership across consumer and industrial packaging . |
| Sonoco Products Company | Group VP, Global Rigid Paper & Closures; VP roles; Division VP/GM (Rigid Paper & Closures) | Various prior | Built track record in growth and operational improvement in core businesses; joined Sonoco in 1985 . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| AF&PA | Director | Current | Industry advocacy and policy engagement . |
Fixed Compensation
- Base salary adjustments: +3.0% merit in 2024; CEO year-end base rose from $1,211,808 (2023) to $1,248,156 (2024) .
- Perquisites and other compensation (2024): aircraft personal-use incremental cost $49,326; executive life insurance $17,594; company contributions to qualified/DC restoration plans $116,557; DC SERP company contribution $215,889; total “All other compensation” $399,365; no tax gross-ups on aircraft or life insurance .
Multi-year CEO total compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 1,098,385 | 1,192,388 | 1,233,011 |
| Stock Awards (RSUs/PCSUs grant-date FV) | 6,205,527 | 6,876,983 | 6,829,915 |
| Non-Equity Incentive (Annual Cash) | 1,977,093 | 0 | 1,645,511 |
| Change in Pension/NQDC Earnings | 0 | 0 | 0 |
| All Other Compensation | 513,043 | 469,222 | 399,365 |
| Total | 9,794,049 | 8,538,593 | 10,107,802 |
Performance Compensation
Annual Cash Incentive (2024 design and payout)
- Target opportunity: CEO at 125% of base salary; threshold 62.5%; max 250% .
- Metrics and weights: Adjusted EBITDA (75%); Operating Cash Flow (25%) .
- 2024 targets and actuals:
| Metric | Threshold | Target | Maximum | Actual | Weight | Outcome |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($000s) | 968,649 | 1,076,276 | 1,183,904 | 1,032,335 | 75% | Between threshold and target |
| Operating Cash Flow ($000s, Adjusted) | 552,000 | 690,000 | 828,000 | 811,848 | 25% | Between target and max |
- Total plan payout: 106.8% of target (CEO cash award $1,645,511) .
- Metric changes: Replaced net working capital days with Operating Cash Flow to better reflect financial health and peer prevalence .
Long-Term Equity Incentives (granted 2024)
- Target mix: 60% PCSUs; 40% RSUs .
- CEO grant-date target values: PCSUs $4,080,044; RSUs $2,720,027; total $6,800,070 .
- CEO 2024 PCSU share targets (performance 2024–2026): threshold 40,365; target 80,729; maximum 161,458 .
- CEO 2024 RSUs: 51,899 time-vested units, vesting 1/3 annually over 3 years .
PCSU performance structure (2024–2026 cycle)
| Metric | Weight | Threshold | Target | Maximum |
|---|---|---|---|---|
| 3-year cumulative Adjusted EPS growth | 60% | -0.7% | 3.5% | 7.4% |
| 3-year average ROIC | 40% | 10.00% | 11.10% | 12.20% |
| rTSR modifier (vs S&P 1500 Materials) | +/-20% | -20% at ≤25th pct; +20% at ≥75th pct |
Recent PCSU results: 2022–2024 cycle vested at 200% of target based on 3-year average ROIC of 11.24% and cumulative BEPS of $16.17, both above maximum; no TSR modifier applied to that cycle .
Equity Ownership & Alignment
- Beneficial ownership (Feb 7, 2025): 382,773 shares directly; 61,537 deferred vested RSUs; no deferred compensation units; percent of class not shown (therefore <1%) .
- Outstanding awards snapshot (12/31/2024): 2024 RSUs 51,899 unvested (3-year ratable vesting); multiple PCSU tranches in-flight; standard RSU and PCSU vesting as described above .
- Stock-settled SARs: CEO had 97,941 vested/exercisable SSARs; 17,656 of those had intrinsic value (“with appreciation”); net shares issuable upon exercise for in-the-money SSARs: 290 .
- Near-term equity overhang/settlement: 48,506 RSUs scheduled to be issued within 60 days (as of Feb 7, 2025) .
- Ownership policy: CEO must hold stock equal to 6x base salary; hold-’til-met rule requires retaining 50% of after-tax shares from equity vestings until guideline met .
- Hedging/pledging: Strict anti-hedging and anti-pledging policies; as of Dec 31, 2024, all directors and NEOs were in compliance .
Employment Terms
Severance and Change-in-Control (CIC) economics
- Executive Severance Plan (non-CIC): If terminated without cause or resign for good reason, CEO receives 2.0x base salary paid over 24 months, pro-rated annual bonus at actual, 12 months of benefits at employee rates (life insurance at active rates for six months), outplacement up to $25,000; selected equity scheduled to vest over 12 months subject to plan rules; “best net” 280G treatment; release and restrictive covenants required .
- CIC Plan (double-trigger within 24 months of CIC): Lump sum of 2.5x (base salary + target bonus) for CEO plus pro-rated annual bonus at the greater of target or actual performance; up to 18 months COBRA; outplacement up to $25,000; equity vests per award agreements (PCSUs deemed achieved at greater of target or actual and continue with service-based vesting; full acceleration if not assumed or upon qualifying termination under 409A) .
Illustrative potential payments (as of 12/31/2024; CEO)
| Scenario | Cash Severance ($) | Unvested PCSUs ($) | Unvested RSUs ($) | Company-Paid Healthcare Premiums ($) | Executive Life Insurance Lump Sum ($) |
|---|---|---|---|---|---|
| Involuntary Not for Cause / Good Reason | 2,496,312 | 4,938,089 | 4,397,633 | 13,249 | 8,437 |
| Termination after a CIC (double-trigger) | 7,020,878 | 7,564,764 | 6,843,520 | 0 | 0 |
| Death | 0 | 3,732,139 | 6,843,520 | 0 | 3,500,000 |
| Disability | 0 | 3,732,139 | 6,843,520 | 0 | 0 |
Other terms and governance controls
- Clawback: SEC/Dodd-Frank–compliant incentive compensation recovery policy for Section 16 officers, effective for compensation received on/after Oct 2, 2023 .
- No guaranteed employment contracts; limited perquisites; no tax gross-ups for NEOs (other than broad-based relocation plan) .
Board Governance
- Board service and roles: Director since 2020; serves on the Executive Committee; employee directors receive no additional board pay .
- Leadership structure: Separate Chair (John R. Haley) and CEO (Coker); Lead Independent Director (Robert R. Hill, Jr.) presides over executive sessions and serves as liaison; committees (Audit, Executive Compensation, Corporate Governance & Nominating) comprised of independent directors .
- Attendance: All directors attended ≥75% of board/committee meetings in 2024 .
- Independence/related party: Coker is the brother-in-law of Board Chair John R. Haley; Sonoco discloses related-party oversight and policies; employment of related parties is reviewed (Coker and Haley relationship noted) .
- Say-on-Pay support: 96.5% approval at April 2024 annual meeting; active shareholder engagement covering strategy, capital allocation, and leverage .
Director Compensation (as a Director)
- Employee directors (including the CEO) receive no additional compensation for board service .
Compensation Peer Group (for benchmarking)
- Peer companies used in 2024 include: AptarGroup, Avery Dennison, Ball, Berry Global, Crown, Graphic Packaging, Greif, O-I, Packaging Corp of America, Pactiv Evergreen, Sealed Air, Silgan; pay generally targeted around median with FW Cook as independent advisor .
Investment Implications
- Alignment: High variable pay (88% at risk) with balanced short/long-term metrics, a meaningful 60% PCSU mix tied to EPS growth and ROIC, and rigorous anti-hedging/anti-pledging and ownership guidelines (6x salary for CEO) point to strong alignment with long-term value creation .
- Execution and payout signals: The 200% PCSU vesting for 2022–2024 reflects outperformance on ROIC and BEPS; 2024 annual incentive paid slightly above target (106.8%) with EBITDA below target but cash flow above target—consistent with management’s cash and productivity focus during portfolio change .
- Retention and overhang: Multi-year RSU vesting (51,899 from 2024 grant; 3-year ratable) and multiple PCSU cycles in-flight support retention; near-term share issuance (48,506 RSUs within 60 days as of Feb 7, 2025) is a modest supply consideration .
- Risk flags: Family relationship between CEO and Chair is a governance sensitivity albeit with a Lead Independent Director structure and committee independence; CIC benefits are double-trigger with a 2.5x multiple that is within common market practice, but still material in a sale scenario .
Note: All figures and descriptions above are extracted from Sonoco’s 2025 Proxy Statement (DEF 14A) filed March 14, 2025, with citations provided after each data point.