Form 4: Avery Dennison Executive Francisco Melo Reports Stock Transactions

Francisco Melo, President of Solutions Group at Avery Dennison, reports the acquisition and disposal of common stock and derivative securities related to performance and market-leveraged stock units.

Summary

• On March 1, 2024, Francisco Melo, President of Solutions Group at Avery Dennison, reported transactions involving Avery Dennison common stock and derivative securities.
• These transactions included the acquisition of common stock through the vesting of market-leveraged stock units (MSUs) and performance units (PUs).
• Melo also disposed of shares to cover tax obligations related to the vesting of these units.
• The reported transactions resulted in Melo holding 18,980 shares of common stock directly.
• Additionally, Melo holds derivative securities including 1,796 2024 MSU Awards, 2,178 2024 PU Awards, 266 2021 MSU Awards, 832 2022 MSU Awards and 1,733 2023 MSU Awards.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The transactions reflect standard executive compensation practices and the vesting of performance-based awards suggests the achievement of certain company goals.

Positives

• The vesting of MSUs and PUs indicates that performance targets were met, reflecting positively on Melo's performance and the company's results.
• The vesting of the fourth tranche of MSUs granted in February 2020 occurred at 180% of target based on the company's absolute total stockholder return in excess of 10% during the 2020-2023 performance period.

Future Outlook

The 2024 MSU Awards vest 25% over one-, two-, threeand four-year performance periods, with the number of shares paid on each vesting date based on Avery Dennison's absolute total stockholder return. The 2024 PU Awards vest at the end of fiscal year 2026, provided certain performance objectives are met as determined by the Compensation Committee in February 2027.

Industry Context

Executive stock transactions are a common occurrence in publicly traded companies and are closely monitored by investors for insights into management's confidence in the company's future performance.

Comparison to Industry Standards

• Executive compensation packages often include stock options, restricted stock units, and performance-based awards to align management's interests with those of shareholders.
• The vesting schedules and performance metrics used by Avery Dennison are typical of those found in similar companies.
• Comparing Avery Dennison's executive compensation structure and stock ownership with peers like CCL Industries, Multi-Color Corporation, and 3M would provide a more comprehensive assessment.

Stakeholder Impact

• The vesting of stock awards aligns executive interests with shareholder value.
• The transactions have a minor impact on the overall shareholding structure of the company.

Key Dates