Form 4: Avery Dennison VP Controller Reports Equity Transactions

Avery Dennison's VP Controller, Divina Fe Santiago, reported multiple equity transactions including RSU and PU awards, and the vesting of various MSU and PU tranches.

Summary

• Divina Fe Santiago, VP Controller of Avery Dennison Corp (AVY), reported several transactions on March 1, 2026.
• Transactions included the acquisition of common stock through the exercise of derivative securities and the disposition of common stock for tax liabilities, all at a price of $194.78 per share.
• Santiago acquired 523 Restricted Stock Units (RSUs) from a 2026 award, which will vest 25% annually over four years.
• Santiago also acquired 756 Performance Units (PUs) from a 2026 award, which will vest at the end of fiscal year 2028 based on performance objectives.
• The filing reported the vesting of various tranches of Market Share Units (MSUs) and Performance Units (PUs) from prior years' awards.
• This included 74 shares from the 2022 MSU award (vested at 92% of target), 58 shares from the 2023 MSU award (vested at 96% of target), 89 shares from the 2024 MSU award (vested at 92% of target), and 130 shares from the 2025 MSU award (vested at 94% of target).
• Additionally, 130 shares from the 2023 PU award vested at 56% of target, based 50% on cumulative economic value added (0% of target) and 50% on relative total stockholder return (112% of target).
• Following these transactions, Santiago holds various amounts of common stock directly and 377.1905 shares indirectly through a Savings Plan.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral filing, typical for a Form 4, reporting routine executive compensation transactions without indicating significant positive or negative operational or financial news.

Positives

• The vesting of various MSU and PU awards indicates the achievement of performance objectives, reflecting positively on the company's performance during the respective periods (e.g., 2022-2025, 2023-2025, 2024-2025, 2025).
• The grant of new RSU and PU awards for 2026 demonstrates ongoing incentive alignment between management and shareholder interests.

Negatives

• Disposition of shares for tax liabilities reduces the direct beneficial ownership of common stock, which is a common practice for equity awards.

Future Outlook

The filing indicates future vesting schedules for the 2026 RSU Award (25% annually over four years) and the 2026 PU Award (vesting at the end of fiscal year 2028 based on performance objectives determined in February 2029). These awards align management incentives with future company performance.

Industry Context

StockSavvy.ai notes that the grant and vesting of equity awards like RSUs, PUs, and MSUs are standard practices in executive compensation across various industries, including materials and manufacturing, to align management incentives with long-term shareholder value. The specific performance metrics tied to MSU and PU awards (e.g., total stockholder return, economic value added) are common in compensation structures designed to reward sustained company performance.

Comparison to Industry Standards

• The use of Restricted Stock Units (RSUs), Performance Units (PUs), and Market Share Units (MSUs) for executive compensation is a widely adopted practice, comparable to compensation structures at peer companies such as 3M Company (MMM), WestRock Company (WRK), and International Paper (IP).
• Vesting schedules, such as the 25% annual vesting for RSUs over four years, are typical for long-term incentive plans designed to promote executive retention and sustained performance.
• Performance metrics like absolute total stockholder return and relative total stockholder return, used for MSU and PU awards, are standard benchmarks for evaluating executive performance against market and industry peers. The inclusion of economic value added (EVA) as a metric for the 2023 PU award also aligns with best practices in linking compensation to internal operational efficiency and value creation, similar to approaches seen in companies focused on capital efficiency.

Related Party Transactions

• The reported transactions are related party transactions as they involve an officer of the company acquiring and disposing of company securities as part of their compensation plan.

Stakeholder Impact

• Shareholders: The vesting of performance-based awards aligns management incentives with shareholder returns, potentially fostering long-term value creation. The disposition of shares for tax purposes is a routine event and has minimal impact.
• Employees: The compensation structure for a VP Controller may reflect broader company compensation policies, potentially influencing employee morale and retention.

Next Steps

• The 2026 RSU Award will vest 25% on each of the first, second, third, and fourth anniversaries of the March 1, 2026 grant date.
• The 2026 PU Award will vest at the end of fiscal year 2028, with performance objectives determined by the Compensation Committee in February 2029.

Key Dates

Keywords

Avery Dennison, AVY, SEC Form 4, Insider Trading, Equity Awards, Restricted Stock Units, Performance Units, Market Share Units, Executive Compensation, Beneficial Ownership