DEF: O-I Glass Details Strong 2025 Performance, Executive Pay

Sentiment:

Proxy Statement 31 March 2026 4:30 PM

O-I Glass, Inc. reports strong 2025 financial results, exceeding cost reduction goals and reaffirming its commitment to sustainable growth and shareholder value through its Value Creation Roadmap.

Summary

The 2026 Annual Meeting of Share Owners will be held virtually on May 13, 2026.
The company delivered strong results in 2025 despite a challenging business environment, leveraging its workforce, global presence, and customer relationships.
The Horizon 1: Fit to Win initiative delivered approximately $300 million in benefits in 2025, significantly exceeding original goals and driving meaningful performance improvement.
The company is laying groundwork for Horizon 2: Profitable Growth and Horizon 3: Strategic Optionality, focusing on leveraging competitive position, customer growth, geographical expansion, M&A, and strategic partnerships.
The 2025 Short-Term Incentive (STI) program achieved a 109.8% payout, driven by EBIT of $707 million (above target) and Free Cash Flow (FCF) of $120 million (slightly above threshold).
The 2023-2025 Long-Term Incentive (LTI) Performance Stock Unit (PSU) program resulted in a 116.7% payout, based on EPS and ROIC performance, modified by a relative Total Shareholder Return (r-TSR) of 0.94 (43rd percentile).
The Board recommends the election of 10 directors, ratification of Ernst & Young LLP as the independent auditor for 2026, and advisory approval of 2025 named executive officer compensation.
The 2025 Say on Pay vote received approximately 66% support, a decline from prior years, primarily due to shareholder concerns regarding legacy payments to the former CEO upon his voluntary retirement.
The company reaffirmed that legacy plans for the former CEO are closed to new entrants, no current Named Executive Officers (NEOs) participate, and no tax gross-ups for executive perquisites or severance benefits are provided.
Significant progress was made on sustainability goals, including a 30% reduction in Scope 1 and 2 GHG emissions from 2017 to 2024 (towards a 47% target by 2030), 51% global renewable electricity use in 2024 (towards an 80% target by 2030), and a 48% decrease in Total Recordable Incident Rate (TRIR) from 2019 to 2024 (towards a 50% improvement target by 2030).
The CEO's total annual compensation for 2025 was $11,462,530, resulting in a CEO pay ratio of approximately 256 to 1 compared to the median employee's total annual compensation of $44,852.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive update, highlighting strong operational execution and significant cost savings from the "Fit to Win" initiative, which exceeded expectations. While the Say on Pay vote declined and relative TSR lagged, the company's proactive engagement with shareholders and reaffirmation of compensation practices, coupled with solid financial and sustainability progress, indicates a stable outlook.

Positives

Delivered strong results in 2025 despite a challenging business environment.
The Horizon 1: Fit to Win initiative delivered approximately $300 million in benefits in 2025, significantly exceeding original goals.
The 2025 Short-Term Incentive (STI) program achieved a 109.8% payout, with EBIT of $707 million exceeding target performance.
The 2023-2025 Long-Term Incentive (LTI) Performance Stock Unit (PSU) program achieved a 116.7% payout, reflecting strong performance in 2023 and 2025.
Achieved a 30% reduction in Scope 1 and 2 GHG emissions from 2017 to 2024, progressing towards the 47% target by 2030.
Global renewable electricity volume reached 51% in 2024, advancing towards the 80% target by 2030.
The Total Recordable Incident Rate (TRIR) for O-I employees decreased by 48% from 2019 to 2024, nearing the 50% improvement target by 2030.
Executive compensation programs are aligned with shareholder interests, with 89% of the CEO's target total direct compensation and an average of 70% for other NEOs being at risk.
The company maintains robust corporate governance practices, including a Clawback Policy, double-trigger change-in-control vesting for equity awards, and anti-hedging and pledging policies.
All Named Executive Officers (NEOs) met or exceeded their stock ownership guidelines, with the exception of two new Senior Vice Presidents who are within their five-year attainment timeframe.

Negatives

The 2025 Say on Pay vote received approximately 66% support, a decline from 97-98% in prior years, primarily due to concerns over legacy payments to the former CEO.
Free Cash Flow (FCF) of $120 million in 2025 was only slightly above the threshold performance level for the Short-Term Incentive (STI) program.
The 2023-2025 Long-Term Incentive (LTI) Performance Stock Unit (PSU) program had no payout earned for 2024 performance.
The three-year relative Total Shareholder Return (r-TSR) for 2023-2025 was -10.9%, placing the company at the 43rd percentile of its peer group and resulting in a negative modifier (0.94) to PSU payouts.
The company's market capitalization and enterprise value percentile ranks are low compared to its peer group (4% for market cap, 21% for enterprise value).

Risks

Ability to achieve expected benefits from cost management, efficiency improvements, and profitability initiatives, such as the Fit to Win initiative.
General credit, financial, political, economic, legal, and competitive conditions in markets and countries where the company operates, including uncertainties related to economic and social conditions, trade policies, supply chain disruptions, inflation or deflation, changes in tax rates, legal proceedings, war, civil disturbance, acts of terrorism, natural disasters, public health issues, and weather.
Cost and availability of raw materials, labor, energy, and transportation, including impacts related to current geopolitical conflicts (Ukraine-Russia and Israel-Hamas) and transportation delays.
Competitive pressures from other glass container producers and alternative forms of packaging or consolidation among competitors and customers.
Changes in consumer preferences or customer inventory management practices.
The continuing consolidation of the company's customer base.
Risks related to the development, deployment, and use of artificial intelligence technologies.
Inability to improve glass melting technology in a cost-effective manner and introduce productivity, process, and network optimization actions.
Unanticipated supply chain and operational disruptions, including higher capital spending.
Seasonality of customer demand.
The failure of joint venture partners to meet their obligations or commit additional capital to the joint venture.
Labor shortages, labor cost increases, or strikes.
Ability to acquire or divest businesses, acquire and expand plants, integrate operations of acquired businesses, and achieve expected benefits from acquisitions, divestitures, or expansions.
Inability to generate sufficient future cash flows to ensure the company's goodwill is not impaired.
Any increases in the underfunded status of the company's pension plans.
Any failure or disruption of the company's information technology, or those of third parties on which the company relies, or any cybersecurity or data privacy incidents.
Risks related to the company's indebtedness or changes in capital availability or cost, including interest rate fluctuations and the ability to generate cash to service indebtedness and refinance debt on favorable terms.
Risks associated with operating in foreign countries.
Foreign currency fluctuations relative to the U.S. dollar.
Changes in tax laws or global trade policies.
Ability to comply with various environmental legal requirements.
Risks related to recycling and recycled content laws and regulations.
Risks related to climate-change and air emissions, including related laws or regulations and increased ESG scrutiny and changing expectations from stakeholders.

Future Outlook

The company remains confident in its journey to improve earnings, enhance economic profit, strengthen free cash flow, and deliver sustainable, long-term value to share owners, guided by its Value Creation Roadmap. It expects to leverage its improved competitive position to drive growth with key customers in core markets and attractive categories (Horizon 2: Profitable Growth) and explore new growth opportunities such as geographical expansion, mergers and acquisitions, joint ventures, and strategic partnerships (Horizon 3: Strategic Optionality).

Management Comments

"Throughout 2025, I have been continually impressed by the resilience, passion, and deep glassmaking expertise of our team. Despite a challenging business environment during the year, we leveraged our strengths – a talented and dedicated workforce, a global presence, and privileged relationships with some of the most iconic food and beverage companies in the world – to deliver strong results in 2025." Gordon J. Hardie, President and CEO.
"These efforts delivered approximately $300 million in benefits in 2025 – significantly exceeding our original goal – and drove meaningful performance improvement." Gordon J. Hardie, President and CEO, referring to the Fit to Win initiative.
"Our transformation, however, is about more than just cost reduction – it is about instilling a new mindset for sustainable growth. We have embedded an economic profit framework across O-I, aligning decisions and investments with value creation." Gordon J. Hardie, President and CEO.
"With our purpose at the forefront and our Value Creation Roadmap in action, we remain confident in our journey ahead to improve earnings, enhance economic profit, strengthen free cash flow, and deliver sustainable, long-term value to share owners." Gordon J. Hardie, President and CEO.

Industry Context

StockSavvy.ai notes that O-I Glass operates within the mature yet evolving glass packaging industry, which is increasingly influenced by global sustainability trends and consumer demand for eco-friendly materials. The company's focus on its "Value Creation Roadmap," particularly "Horizon 1: Fit to Win" for cost structure improvement and "Horizon 2: Profitable Growth" for market expansion, aligns with broader industry efforts to optimize operations and capture growth in competitive markets. The emphasis on increasing recycled content and renewable electricity use reflects a sector-wide push towards circular economy principles and reduced carbon footprints, driven by regulatory pressures and consumer preferences for sustainable packaging. The company's peer group, including Ball Corporation, Crown Holdings, Inc., and other packaging and industrial manufacturing firms, indicates a competitive landscape where efficiency and innovation are critical for maintaining market position and shareholder value.

Comparison to Industry Standards

O-I Glass's 2025 EBIT of $707 million and FCF of $120 million, alongside an adjusted EPS of $1.60 and ROIC of 7.26%, demonstrate solid operational performance within the packaging sector.
The company's 30% GHG reduction from 2017 to 2024 and 51% renewable electricity use in 2024 position it favorably against industry peers striving for ambitious environmental targets, such as Ardagh Group S.A. and Ball Corporation, which also report significant investments in decarbonization and renewable energy.
The 41% average recycled content in 2024 indicates progress towards its 60% target by 2030, a goal that is competitive with leading glass manufacturers in Europe, where recycled content rates can be higher due to established collection infrastructure.
The 2023-2025 LTI PSU payout of 116.7% and a three-year r-TSR of -10.9% (43rd percentile against S&P 1500 Materials Sector) suggest that while internal performance metrics were met, the company's stock performance lagged the median of its broader materials sector peers over the period. This contrasts with companies like Crown Holdings, Inc. which often demonstrate stronger relative TSR in periods of market stability.
The CEO pay ratio of 256 to 1 for 2025 is within the typical range for large, global manufacturing companies, though it is higher than some industry averages, reflecting the compensation structure and global workforce distribution.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
President and Chief Executive Officer	Andres A. Lopez	Gordon J. Hardie	May 2024	Voluntary retirement of previous CEO.
Senior Vice President, Business Operations Americas	Giancarlo Currarino	Eduardo Restrepo	February 18, 2025	Promotion of Eduardo Restrepo; termination of Giancarlo Currarino's employment on March 8, 2025.
Director	Eric J. Foss	NA	November 7, 2025	Resignation.
Director	Alan J. Murray	NA	2025 Annual Meeting	Retirement.
Director	NA	Eugenio Garza y Garza	2025	New appointment.
Director	NA	Iain J. Mackay	2025	New appointment.
Director	NA	Cheri Phyfer	2024	New appointment.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Leadership Structure	The roles of the Board Chair and CEO were separated as of January 1, 2016. John Humphrey has served as the Independent Board Chair (IBC) since 2024, responsible for leading Board effectiveness, setting agendas, chairing executive sessions, and communicating feedback to the CEO. The Corporate Governance Guidelines provide flexibility to appoint a Lead Director if an executive chairman is in place.	January 1, 2016 (separation), 2024 (Humphrey as IBC)	Enhances independent and effective oversight of management.
Executive Sessions	Non-employee directors meet regularly in executive sessions, both with and without the CEO, to promote open and candid discussions. The IBC presides over sessions without management.	Ongoing	Complements the Board leadership structure and fosters independent discussion.
Risk Oversight	The Board primarily oversees risks through its committees, particularly the Audit Committee, and engages with the internal risk management function twice yearly for enterprise risk management assessment and planning.	Ongoing	Ensures proactive oversight of management actions and risk management.
Board Independence	The vast majority of Board members are independent in accordance with New York Stock Exchange listing standards, with nine out of ten director nominees identified as independent.	Ongoing	Promotes objective decision-making and strong shareholder representation.
Stock Ownership Guidelines for Directors	Non-employee directors are required to own shares of common stock with a value equal to five times their annual cash retainer. New directors have four years to attain this ownership level and must retain 100% of net profit shares until the guidelines are met.	Ongoing	Aligns directors' financial interests with those of shareholders.
Corporate Governance Guidelines	A copy of the company's Corporate Governance Guidelines is available in the Investors section of its website and in print upon request.	Ongoing	Provides transparency and outlines the company's governance principles.
Code of Business Conduct and Ethics	The company has a Code of Conduct applicable to all directors, officers, and employees, available on its website.	Ongoing	Establishes ethical standards and compliance requirements across the organization.
Audit Committee Responsibilities	The Audit Committee's oversight responsibilities have been expanded to include cybersecurity, information security, information technology, and artificial intelligence risks, along with related policies and procedures.	Ongoing	Addresses evolving technological risks and strengthens the company's overall risk management framework.
Compensation and Talent Development Committee Responsibilities	The committee oversees and reviews management succession planning and development for key executive positions (excluding the CEO), ensuring the availability of qualified replacements and planning for contingencies.	Ongoing	Enhances talent management and leadership continuity planning.
Nominating/Corporate Governance Committee Responsibilities	The committee oversees CEO succession planning and development, as well as the company's efforts regarding environmental, social, and governance (ESG) matters and the Ethics and Compliance function.	Ongoing	Strengthens strategic leadership planning and integrates ESG considerations into governance.
Director Compensation	The value of the Annual Equity Grant for non-employee directors was increased by $10,000 to $160,000, effective beginning in 2025. The annual cash retainer was increased by $10,000 to $102,500, effective January 1, 2026.	2025 (equity), January 1, 2026 (cash)	Maintains the competitive position of director pay at the market median.
Clawback Policy	A new Clawback Policy was adopted, effective October 2, 2023, in accordance with new SEC rules and NYSE listing standards. It requires the recovery of erroneously paid incentive-based compensation in the event of an accounting restatement.	October 2, 2023	Strengthens accountability for executive compensation and aligns with regulatory requirements.
Anti-Hedging and Pledging Policy	The company's Insider Trading Policy prohibits directors, executive officers, and other covered personnel from hedging their ownership of company securities or pledging them as collateral for a loan.	Ongoing	Prevents conflicts of interest and promotes long-term ownership alignment with shareholders.

Stakeholder Impact

Shareholders: Positive impact from strong 2025 results, exceeding cost reduction goals, and commitment to long-term value creation. The company's proactive engagement on Say on Pay concerns and reaffirmation of compensation practices aim to address shareholder feedback. However, the negative r-TSR for 2023-2025 and lower market cap/enterprise value percentile rank compared to peers could be a concern.
Employees: Positive impact from the "Fit to Win" initiative's focus on efficiency and optimization, potentially leading to a more competitive and sustainable company. The company's commitment to human rights, diversity, inclusion, and safety (48% TRIR decrease) benefits employees. Executive compensation programs are designed to attract and retain top talent.
Customers: Benefits from the company's focus on "Profitable Growth" and "Strategic Optionality," aiming to leverage an improved competitive position to drive growth with key customers and explore new opportunities.
Suppliers: The company's commitment to sustainable and environmentally sound practices, including increasing recycled content, may influence supplier relationships and demand for sustainable materials. The Code of Conduct applies to suppliers, encouraging high ethical standards.
Creditors: Strengthened free cash flow and a strong balance sheet, as targeted by the Value Creation Roadmap, would positively impact creditors by improving the company's financial health and ability to service debt.

Next Steps

Hold the 2026 Annual Meeting of Share Owners on May 13, 2026, for voting on director elections, auditor ratification, and executive compensation.
Continue disciplined execution of the three-horizon Value Creation Roadmap, focusing on Horizon 1 (Fit to Win), laying groundwork for Horizon 2 (Profitable Growth), and exploring Horizon 3 (Strategic Optionality).
Maintain ongoing monitoring of shareholder feedback and open dialogue with investors regarding executive compensation and governance matters.
Conduct annual reviews of executive compensation practices and the relationship between program design and organizational risk.
Perform an annual assessment of the competitiveness of the non-employee director pay program.
The next advisory vote to approve Named Executive Officer compensation is expected to occur at the 2027 annual meeting of share owners.

Key Dates

Date	Description
January 1, 2016	Separation of the roles of Board Chair and CEO became effective.
January 1, 2023	Commencement of the three-year performance cycle for 2023 Performance Stock Units (PSUs).
October 2, 2023	Effective date of the new Clawback Policy, superseding the prior policy for compensation received on or after this date.
2024	John Humphrey began serving as the Independent Board Chair (IBC).
February 18, 2025	Eduardo Restrepo assumed the role of Senior Vice President, Business Operations Americas.
March 8, 2025	Giancarlo Currarino's employment with the company ended.
January 1, 2025	Commencement of the three-year performance cycle for 2025 Performance Stock Units (PSUs).
December 31, 2025	End of the fiscal year for which the Annual Report on Form 10-K was filed and compensation is reported.
March 18, 2026	Record date for share owners entitled to notice of, and to vote at, the 2026 Annual Meeting.
March 31, 2026	Date of the Proxy Statement and 2025 Annual Report to share owners distribution.
May 10, 2026	Deadline for voting shares held in the Owens-Illinois, Inc. Stock Purchase and Savings Program or Long-Term Savings Plan (by Internet, phone, or mail).
May 12, 2026	Deadline for submitting a proxy by Internet or telephone (for directly held shares) or by mail.
May 13, 2026	Date of the 2026 Annual Meeting of Share Owners at 9:00 AM ET.
August 2025	Eugenio Garza y Garza joined the board of Regional S.A.B. de C.V.
January 1, 2026	Increase to the annual cash retainer for non-employee directors to $102,500 became effective.
December 1, 2026	Deadline for shareholder proposals for inclusion in the company's Proxy Statement for the 2027 Annual Meeting (Rule 14a-8).
January 13, 2027	Earliest date for shareholder proposals or director nominations outside of Rule 14a-8 for the 2027 Annual Meeting.
February 12, 2027	Latest date for shareholder proposals or director nominations outside of Rule 14a-8 for the 2027 Annual Meeting.
2027	Expected next advisory vote to approve Named Executive Officer compensation.

Recommendation

hold

The filing presents a mixed but generally stable picture. O-I Glass demonstrated strong operational execution in 2025, exceeding cost reduction targets and achieving solid STI and LTI payouts based on internal financial metrics (EBIT, EPS, ROIC). This indicates effective management and a clear strategic roadmap. However, the decline in Say on Pay support, even with management's proactive response, and the negative relative Total Shareholder Return over the 2023-2025 period suggest that the market's perception of value creation has lagged some peers. While the company is addressing governance concerns and making progress on sustainability, the overall financial performance, particularly relative to the broader market and peer group TSR, does not yet warrant a "buy" recommendation for aggressive growth. The identified risks, common in a global manufacturing business, also suggest a degree of caution. Therefore, a "hold" recommendation is appropriate, awaiting further evidence of sustained outperformance in TSR and continued positive momentum from strategic initiatives translating into stronger market valuation.

Keywords

Glass packaging, SEC filing, Proxy statement, Executive compensation, Corporate governance, Sustainability, ESG, Financial performance, Shareholder value, Cost reduction, Manufacturing, Recycling, GHG emissions, Renewable energy, Risk management

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