Form 4: Crown Holdings Grants Restricted Stock to Americas President

Crown Holdings, Inc. granted 12,727 restricted common shares to its President of the Americas Division, Gary M. Gavin, under its 2022 Stock-Based Compensation Plan.

Summary

• Gary M. Gavin, President Americas Division of Crown Holdings, Inc. (CCK), was granted 12,727 shares of Restricted Common Stock.
• The grant occurred on January 5, 2026, as part of the company's 2022 Stock-Based Compensation Plan.
• Following this transaction, Gavin beneficially owns 38,943 shares of common stock.
• The 12,727 shares are comprised of both time-vested and performance-based restricted shares.
• 4,382 time-vested restricted shares will vest over three years: 1,461 shares on January 5, 2027, 1,461 shares on January 3, 2028, and 1,460 shares on January 3, 2029.
• 3,915 performance-based restricted shares are targeted to vest on January 3, 2029, contingent on the company's Total Shareholder Return (TSR) versus a defined peer group, with the final number varying from 0% to 200% of the target.
• 4,430 performance-based restricted shares are targeted to vest on January 3, 2029, based on the Return on Invested Capital (ROIC) achieved by the company compared to its ROIC target, with the final number varying from 0% to 200% of the target.

Sentiment

Score: 7

Explanation: The grant of restricted stock to a key executive is a positive development as it aligns management's long-term interests with those of shareholders through both time-based and performance-based vesting conditions. This incentivizes the executive to drive company performance and shareholder value.

Positives

• The grant of restricted stock aligns the executive's interests with those of shareholders, incentivizing long-term performance and value creation.
• The compensation structure includes both time-based and performance-based vesting components, providing a balanced incentive approach.
• Performance-based vesting tied to Total Shareholder Return (TSR) and Return on Invested Capital (ROIC) directly links executive compensation to key financial and market performance metrics.

Negatives

• The shares are restricted and do not provide immediate liquidity or full ownership to the executive until specific vesting conditions are met.
• The performance-based components carry a risk of not fully vesting if the company does not meet its TSR or ROIC targets, potentially resulting in lower actual compensation.

Risks

• Performance-based Vesting Risk: The actual number of performance-based shares that vest (3,915 shares tied to TSR and 4,430 shares tied to ROIC) can vary from 0% to 200% of the target, meaning the executive may receive fewer shares or no shares if performance targets are not met.
• Market Risk: The value of the vested shares will be subject to the market price of Crown Holdings, Inc. common stock at the time of vesting, which can fluctuate.

Future Outlook

The future outlook for this compensation is tied to the company's performance in Total Shareholder Return (TSR) against a peer group and Return on Invested Capital (ROIC) against a target, which will determine the final number of performance-based shares vesting on January 3, 2029. Time-vested shares will vest annually through January 3, 2029.

Industry Context

The grant of restricted stock, including both time-based and performance-based components, is a common practice in executive compensation across various industries, including manufacturing and packaging. This structure is designed to attract, retain, and motivate key executives by aligning their long-term financial interests with the company's strategic goals and shareholder value creation. Companies like Crown Holdings often use such plans to ensure executives are incentivized to achieve specific operational and market performance metrics.

Comparison to Industry Standards

• The use of restricted stock units (RSUs) with both time-based and performance-based vesting is a standard compensation practice for senior executives in large industrial companies, comparable to peers such as Ball Corporation, Ardagh Group, and Silgan Holdings.
• Tying performance-based vesting to metrics like Total Shareholder Return (TSR) relative to a peer group and Return on Invested Capital (ROIC) is a widely adopted best practice to ensure executive incentives are aligned with shareholder value creation and efficient capital allocation, mirroring compensation structures seen in leading global manufacturing firms.
• The vesting schedule, spanning three years, is typical for long-term incentive plans, providing sustained motivation and retention for key management personnel.

Corporate Governance

Stakeholder Impact

• Shareholders: The grant aims to align executive incentives with shareholder value creation through performance-based vesting tied to TSR and ROIC, potentially leading to improved company performance.
• Employees: While specific to one executive, such compensation plans can signal a commitment to rewarding performance at senior levels, potentially influencing broader employee motivation and retention strategies.

Next Steps

• Vesting of 1,461 time-vested restricted shares on January 5, 2027.
• Vesting of 1,461 time-vested restricted shares on January 3, 2028.
• Targeted vesting of 1,460 time-vested restricted shares on January 3, 2029.
• Targeted vesting of performance-based restricted shares (TSR and ROIC) on January 3, 2029, contingent on company performance.

Key Dates

Keywords

Crown Holdings, CCK, Restricted Stock Grant, Executive Compensation, Insider Transaction, Form 4, Equity Award, Performance-Based Vesting, Total Shareholder Return, Return on Invested Capital