Slide 1: Corporate Governance and Executive Compensation Update April 2015
Corporate Governance and Executive Compensation Update April 2015
Slide 2: Overview of Our Business
Overview of Our Business Pressure-Sensitive Materials The Pressure-sensitive Materials businesses enhance brands’ shelf, store and street appeal; inform shoppers of ingredients; protect brand security; improve operating efficiency; and provide visual information that enhances safety Vancive Medical
Slide 3: FY 2014 Performance Highlights and Long-Term Financial Targets
FY 2014 was another year of solid progress for our company Net Sales and Adjusted EPS continued to increase Free cash flow decreased as a result of currency fluctuations and actions we took to reduce the volatility of our working capital at year-end In May 2012, we communicated long-term financial t
Slide 4: Capital Return to Stockholders
Capital Return to Stockholders Annual dividends and amount of capital used to repurchase shares have grown consistently over the past four years We Have a Strong Track Record of Stockholder Value Creation 2012 2013 2014 3-Year TSR AVY 26.2% 47.5% 6.2% 97.7% S&P 500 16.0% 32.4% 13.7% 74.6% S&P Indust
Slide 5: Our Independent Directors have Diverse Skills and Experience
Our Independent Directors have Diverse Skills and Experience Independent and Diverse Perspectives Balanced Board Nominee Tenure Qualification Value to Our Board and Stockholders # (%) of Nominees Leadership Experience Provides us valuable external perspectives with which to assess our operations, ex
Slide 6: Stockholder Engagement Informs Our Strong Governance Profile
Stockholder Engagement Informs Our Strong Governance Profile Best practices in corporate governance Annually elected directors Majority voting in director elections All directors are independent (except Chairman/CEO) Strong Lead Independent Director role Majority vote standard to amend charter/bylaw
Slide 7: Bylaw Amendments Would Protect Stockholders' Interests
Bylaw Amendments Would Protect Stockholders’ Interests Management Proposal: Our Board proposes amending our company’s bylaws to, among other things, designate the Delaware Court of Chancery as the sole and exclusive forum for adjudicating certain stockholder disputes Our Board considers the exclusiv
Slide 8: 2014 CEO Compensation Structure Overview
2014 CEO Compensation Structure Overview Annual Incentive Award 100% performance-based Performance metrics: Financial Performance Adjusted EPS (60%), Adjusted Sales Growth (20%), Free Cash Flow (20%) Individual Performance Pre-Set, Measurable Strategic Objectives Long-term Equity Incentive Award (50
Slide 9: CEO Pay Aligns Strongly with Company Strategy and Performance
CEO Pay Aligns Strongly with Company Strategy and Performance 2014 performance targets were consistent with the aggressive long-term (four-year) targets we communicated in May 2012 2014 CEO Performance Evaluation History of Strong CEO Pay and TSR Alignment Strategic Objective Weighting Execute Mater
Slide 10: Our Compensation Program Reflects Stockholder Feedback
Our Compensation Program Reflects Stockholder Feedback Changes Made in 2014 Pay Element Actions Taken by the Committee PU Performance Criteria Capped the payout for the component of PUs tied to relative TSR at 100% of target for any three-year performance period in which absolute TSR is negative MSU
Slide 11: Market-Leveraged Stock Units (MSUs) Vesting and 2015 Changes
First 25% Second 25% Third 25% Last 25% Market-Leveraged Stock Units (MSUs) MSUs replaced options and time-based RSUs beginning in 2013 to more strongly link the long-term incentive program with performance MSU Vesting Schedule Key Changes to 2015 MSU Awards Absolute TSR Payout Cancelled >30% decrea
Slide 12: Our Strong Compensation Governance Practices
Our Strong Compensation Governance Practices What We Do Pay for performance – 85% of our CEO’s, and an average of 73% of our other NEOs’, 2014 compensation was performance based Use long-term incentive awards that are fully performance based Emphasize long-term performance – 66% of our CEO’s target
Slide 13: Appendix – Use of Non-GAAP Financial Measures
Appendix – Use of Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures as defined by SEC rules. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. Definitions and li
Slide 14: Appendix – Reconciliation of Non-GAAP Financial Measures
Appendix – Reconciliation of Non-GAAP Financial Measures ($ in millions) 2011 2012 2013 2014 3- YR CAGR(1) Net sales $5,844.9 $5,863.5 $6,140.0 $6,330.3 Organic sales change 3.8% 4.8% 3.1% 3.9% Foreign currency translation (3.4)% 0.1% (1.1)% Impact of extra week 1.2% Reported sales change* 0.3% 4.7%
Slide 15: Appendix – Reconciliation of Non-GAAP Financial Measures: Free Cash Flow
Appendix – Reconciliation of Non-GAAP Financial Measures ($ in millions) 2014 2013 2012 3-YR Average Net cash provided by operating activities $374.2 $320.1 $513.4 Purchases of property, plant and equipment (147.9) (129.2) (99.2) Purchases of software and other deferred charges (27.1) (52.2) (59.1)