Form 4: Crown Holdings CEO Timothy Donahue Receives Stock Grant and Sells Shares for Tax Obligations

Crown Holdings CEO Timothy Donahue received a significant stock grant and sold shares to cover tax obligations related to vesting restricted stock.

Summary

• Timothy Donahue, CEO of Crown Holdings, was granted 105,157 shares of restricted common stock on January 3, 2025, under the company's 2022 Stock-Based Compensation Plan.
• The grant includes 36,256 time-vested shares that will vest over three years, with 12,086 shares vesting on January 5, 2026, and 12,085 shares vesting on January 4, 2027, and January 3, 2028.
• Additionally, 32,215 performance-based restricted shares are targeted to vest on January 3, 2028, based on the company's Total Shareholder Return compared to a peer group, with the final number varying from 0 to 200% of the target.
• Another 36,686 performance-based restricted shares are targeted to vest on January 3, 2028, based on the company's Return on Invested Capital compared to a target, with the final number varying from 0 to 36,686.
• On January 6, 2025, Mr. Donahue sold 11,122 shares at $80.11 per share to cover tax withholding related to the vesting of restricted stock.
• He also disposed of 21,123 shares on the same day.
• As of December 31, 2024, Mr. Donahue held 770 shares of CCK Common Stock through the CCK 401(k) Plan.
• Following these transactions, Mr. Donahue beneficially owns 512,120 shares directly and 770 shares indirectly through the 401(k) plan.

Sentiment

Score: 6

Explanation: The document reflects standard executive compensation practices. While the sale of shares might raise minor concerns, the overall sentiment is neutral to slightly positive due to the long-term incentives provided by the stock grant.

Positives

• The stock grant to the CEO aligns his interests with the long-term performance of the company.
• The vesting schedule of the restricted stock encourages long-term value creation.
• The performance-based vesting criteria incentivize the CEO to achieve specific financial and shareholder return targets.

Negatives

• The sale of 11,122 shares by the CEO, while for tax purposes, could be perceived negatively by some investors.
• The disposal of 21,123 shares could be seen as a reduction in the CEO's direct stake in the company.

Risks

• The performance-based restricted shares may not fully vest if the company does not meet the specified Total Shareholder Return and Return on Invested Capital targets.
• The sale of shares by the CEO, even for tax purposes, could create short-term selling pressure on the stock.

Future Outlook

The document outlines the vesting schedule for the restricted stock, with performance-based vesting contingent on the company's future performance relative to its peers and internal targets.

Industry Context

This type of stock grant is a common practice in executive compensation, aligning management's interests with those of shareholders. The performance-based vesting is designed to incentivize long-term value creation and is typical for companies in the packaging industry.

Comparison to Industry Standards

• Stock-based compensation is a standard practice for executive compensation across various industries, including packaging.
• Companies like Ball Corporation (BLL) and Amcor (AMCR) also utilize similar stock-based compensation plans for their executives.
• The vesting schedules and performance metrics used by Crown Holdings are comparable to those used by its peers, focusing on long-term value creation and shareholder returns.
• The specific performance metrics, such as Total Shareholder Return and Return on Invested Capital, are common benchmarks used in the industry to evaluate executive performance.

Stakeholder Impact

• Shareholders may view the stock grant positively as it aligns management's interests with long-term value creation.
• Employees may see the stock grant as a sign of the company's commitment to its leadership.
• The sale of shares for tax purposes is unlikely to have a significant impact on other stakeholders.

Next Steps

• The time-vested restricted shares will vest on the specified dates in 2026, 2027, and 2028.
• The performance-based restricted shares will vest on January 3, 2028, based on the company's performance against the defined metrics.

Key Dates

Keywords

stock grant, restricted stock, insider trading, executive compensation, shareholder return, return on invested capital, vesting, tax withholding, CEO, Crown Holdings