UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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| CROWN HOLDINGS, INC. | |||||
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Crown Holdings, Inc.
770 Township Line Road
Yardley, Pennsylvania 19067
________________________
iNOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS
________________________
| Date: | April 22,2021 | |
| Time: | Online check-in begins: | 9:15 a.m. Eastern Time |
| Online Meeting begins: | 9:30 a.m. Eastern Time | |
| Place: | Meeting via the Internet – please visit: www.virtualshareholdermeeting.com/CCK2021 | |
| Purposes: | · | Elect Directors |
| · | Ratify the appointment of independent auditors for the fiscal year ending December 31, 2021 | |
| · | Vote on an advisory resolution to approve executive compensation for the Named Executive Officers as disclosed in this Proxy Statement | |
| · | Conduct such other business as may properly come before the Annual Meeting | |
All Shareholders are cordially invited to attend our virtual Annual Meeting of Shareholders, conducted via the Internet. Due to the ongoing public health impact of the COVID-19 pandemic and the travel and public gathering restrictions that have been imposed throughout Pennsylvania as a result thereof, the Annual Meeting will be held in a virtual meeting format to support the health and well-being of the Company’s Shareholders, employees and their families. Shareholders will not be able to attend the Annual Meeting in person this year.
Only Shareholders as of the close of business on March 2, 2021, the record date for the Annual Meeting, may participate and vote at the meeting. During the virtual Meeting, you may submit questions and will be able to vote your shares electronically. To participate, you will need the 16-digit control number included on your proxy card or voting instruction form. We encourage you to allow ample time for online check-in, which will begin at 9:15 a.m. Eastern Time on April 22, 2021.
This Proxy Statement, the Proxy Card relating to the Annual Meeting of Shareholders and the Annual Report to Shareholders are available electronically at: www.crowncork.com/investors/proxy-online.
| By Order of the Board of Directors | ||||||
| | ||||||
| ADAM J. DICKSTEIN | ||||||
| Corporate Secretary | ||||||
| Yardley, Pennsylvania | ||||||
| March 15, 2021 | ||||||
ADDITIONAL INFORMATION ABOUT THE 2021 VIRTUAL ANNUAL MEETING
Attendance and Participation
Only Shareholders as of the close of business on March 2, 2021, which is the record date for the Annual Meeting, will be entitled to participate online, vote their shares electronically and submit questions during the Annual Meeting. You will be able to access the meeting at www.virtualshareholdermeeting.com/CCK2021 using your 16-digit control number.
We encourage you to access the virtual Annual Meeting before the start time of 9:30 a.m., Eastern Time, on April 22, 2021. Please allow ample time for online check-in, which will begin at 9:15 a.m., Eastern Time, on April 22, 2021. The decision to have a virtual Annual Meeting again this year due to the ongoing public health impact of the COVID-19 pandemic does not represent a change in our Shareholder engagement philosophy. The Company expects to return to an in person meeting next year.
The virtual Annual Meeting platform is fully supported across browsers (Internet Explorer, Microsoft Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong Internet connection wherever they intend to participate in the Annual Meeting. Participants should also allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Annual Meeting.
Shareholder Lists
A list of the Shareholders entitled to vote at the meeting will be open to examination by any Shareholder during the meeting.
Questions
Shareholders may submit questions during the Annual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CCK2021, typing your question into the “Ask a Question” field, and clicking “Submit.” Questions pertinent to the Annual Meeting will be answered during the Annual Meeting, subject to time constraints.
Technical Support
If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call 844-986-0822 (Toll Free) or 303-562-9302 for assistance. Technical support will be available beginning at 9:15 a.m. Eastern Time on April 22, 2021 through the conclusion of the Annual Meeting.
TABLE OF CONTENTS
| 2021 Proxy Statement Summary | 1 | |
| Questions & Answers about the 2020 Annual Meeting | 11 | |
| Proposal 1: Election of Directors | 17 | |
| Director Compensation | 21 | |
| Common Stock Ownership of Certain Beneficial Owners, Directors and Executive Officers | 23 | |
| Corporate Governance | 25 | |
| Compensation Discussion and Analysis | 31 | |
| 2020 Say-On-Pay Vote Results | 31 | |
| At-Risk Compensation | 32 | |
| Pay-for-Performance Alignment - Performance-Based Shares | 33 | |
| Role of the Compensation Committee | 33 | |
| Compensation Philosophy and Objectives | 33 | |
| Committee Process | 34 | |
| Role of Executive Officers in Compensation Decisions | 35 | |
| Executive Compensation Consultant | 35 | |
| Use of Benchmarking | 35 | |
| Peer Group Composition | 35 | |
| Compensation Strategy for CEO | 36 | |
| Compensation Strategy for NEOs other than the CEO | 37 | |
| Components of Compensation | 37 | |
| Base Salary | 37 | |
| Annual Incentive Bonus | 38 | |
| Long-Term Equity Incentives | 41 | |
| Retirement Benefits | 45 | |
| Perquisites | 46 | |
| Severance | 46 | |
| Tax Deductibility of Executive Compensation | 46 | |
| Compensation Committee Report | 47 | |
| Executive Compensation | 49 | |
| Summary Compensation Table | 49 | |
| Grants of Plan-Based Awards | 51 | |
| Outstanding Equity Awards at Fiscal | ||
| Year-End | 53 | |
| Option Exercises and Stock Vested | 55 | |
| Pension Benefits | 56 | |
| Employment Agreements and Potential | ||
| Payments upon Termination | 57 | |
| Pay Ratio Disclosure | 60 | |
| Principal Accountant Fees and Services | 61 | |
| Audit Committee Report | 62 | |
| Proposal 2: Ratification of Appointment of Independent Auditors | 63 | |
| Proposal 3: Advisory Vote to Approve Executive Compensation | 64 | |
| Other Matters | 65 |
| i |
2021 PROXY STATEMENT SUMMARY
This is a summary only and does not contain all of the information that you should consider. We urge you to carefully read the entire Proxy Statement before voting.
Crown Holdings, Inc. - 20192021 Virtual Annual Meeting
Time and Date: | 9:30 a.m. |
Place: | |
Record | March |
2021 Annual Meeting Proposals
| Agenda Item | Board Recommendation | Page |
| 1. Election of Directors | FOR EACH DIRECTOR NOMINEE | |
| 2. Ratification of appointment of Independent Auditors | FOR | |
| 3. Advisory vote to approve executive compensation | FOR | |
How to Cast Your Vote
You can vote by any of the following methods:
| Internet | Phone | |||||
  |  |   | |   | ||
www.proxyvote.com Deadline for voting online is 11:59 p.m. | 1-800-690-6903 Deadline for voting by phone is 11:59 p.m. | 21, 2021. | Mark, sign and date your proxy card and return it in the postage-paid envelope provided. Your proxy card must be received before the Annual Meeting. | You may vote online during the Annual Meeting at meeting.com/CCK2021 | ||
| 1 |
1
There are eleventhirteen nominees for election to the Board of Directors. AdditionalThis year’s Board nominees include one new Director – Dwayne Wilson. Six of the Company’s independent Directors have joined the Board in the last five years as a result of a Board refreshment process where Director candidates were identified through Board, Shareholder and third-party search firm input. Our Board refreshment strategy has further strengthened and diversified the skills and experiences of the Board. Each Director nominee is listed below, and you can find additional information onabout each nominee may be found under Proposal 1: Election of Directors, beginning on
| Director | Committee Memberships | |||||||||||||
| Name and Primary Occupation | Age | Since | Independent | A | C | NCG | E | |||||||
John W. Conway Chairman of the Board of the Company | 75 | 1997 | Yes | Chair | ||||||||||
Timothy J. Donahue President and Chief Executive Officer of the Company | 58 | 2015 | No | ✓ | ||||||||||
Richard H. Fearon Vice Chairman and Chief Financial and Planning Officer of Eaton Corporation[1] | 64 | 2019 | Yes | |||||||||||
Andrea J. Funk VP Finance, Americas of EnerSys | 51 | 2017 | Yes | ✓ | ✓ | |||||||||
Stephen J. Hagge Former President and Chief Executive Officer of AptarGroup | 69 | 2019 | Yes | ✓ | ||||||||||
Rose Lee President of DuPont Water & Protection | 55 | 2016 | Yes | ✓ | ||||||||||
James H. Miller Former Chairman and Chief Executive Officer of PPL Corporation | 72 | 2010 | Yes | ✓ | Chair | ✓ | ||||||||
Josef M. Müller Former Chairman and Chief Executive Officer of Nestlé in the Greater China Region | 73 | 2011 | Yes | ✓ | ✓ | |||||||||
B. Craig Owens Former Chief Financial Officer and Chief Administrative Officer of Campbell Soup Company | 66 | 2019 | Yes | ✓ | ||||||||||
Caesar F. Sweitzer Former Senior Advisor and Managing Director of Citigroup Global Markets | 70 | 2014 | Yes | Chair | ✓ | ✓ | ||||||||
Jim L. Turner Chief Executive Officer of JLT Beverages; former Chairman, President and Chief Executive Officer of Dr Pepper/Seven Up Bottling Group | 75 | 2005 | Yes | Chair | ✓ | ✓ | ||||||||
William S. Urkiel Former Senior Vice President and Chief Financial Officer of IKON Office Solutions | 75 | 2004 | Yes | ✓ | ✓ | |||||||||
Dwayne A. Wilson Former Senior Vice President of Fluor Corporation | 62 | 2020 | Yes | ✓ |
.
| Committee Memberships | ||||||||||||||||||||
Name and Primary Occupation | Age | Director Since | Independent | A | C | NCG | E | |||||||||||||
John W. Conway Chairman of the Board of the Company | 73 | 1997 | Yes | Chair | ||||||||||||||||
Timothy J. Donahue President and Chief Executive Officer of the Company | 56 | 2015 | No | ✓ | ||||||||||||||||
Andrea J. Funk VP Finance, Americas of EnerSys | 49 | 2017 | Yes | ✓ | ✓ | |||||||||||||||
Rose Lee President of DuPont Safety & Construction | 53 | 2016 | Yes | ✓ | ✓ | |||||||||||||||
William G. Little Former Chairman and Chief Executive Officer of West Pharmaceutical Services | 76 | 2003 | Yes | Chair | ✓ | |||||||||||||||
Hans J. Löliger Vice Chairman of GTF Holding | 76 | 2001 | Yes | Chair | ✓ | |||||||||||||||
James H. Miller Former Chairman and Chief Executive Officer of PPL Corporation | 70 | 2010 | Yes | ✓ | ✓ | |||||||||||||||
Josef M. Müller Former President of Swiss Association of Branded Consumer Goods “PROMARCA” | 71 | 2011 | Yes | ✓ | ✓ | |||||||||||||||
Caesar F. Sweitzer Former Senior Advisor and Managing Director of Citigroup Global Markets | 68 | 2014 | Yes | Chair | ✓ | |||||||||||||||
Jim L. Turner Principal of JLT Beverages; Chairman of Dean Foods | 73 | 2005 | Yes | ✓ | ✓ | |||||||||||||||
William S. Urkiel Former Senior Vice President and Chief Financial Officer of IKON Office Solutions | 73 | 2004 | Yes | ✓ | ✓ | |||||||||||||||
1Mr. Fearon will retire as an officer of Eaton Corporation on March 21, 2021.
| 2 |
| Less than 6 years | 6 – 10 years | More than 10 years | ||
     |  | | ||
Ongoing Board Refreshment – six new directors in five years | ||||
| Board Independence and Diversity | |
 | Board Composition · Two female directors · One African American director · One Asian American director · One non-U.S. citizen director |
The eleventhirteen Director nominees standing for reelection to the Board have diverse backgrounds, skills and experiences. We believe their varied backgrounds contribute to an effective and well-balanced Board that is able to provide valuable insight to, and effective oversight of, our senior executive team.
| 3 |
 |
3
The Board of Directors is committed to implementing and maintaining strong corporate governance.governance practices. The Board continually monitorsadopts emerging best practices in governance to bestthat enhance the effectiveness of the Board and our management and that serve the best interests of the Company’s Shareholders. The Corporate Governance section beginning on page 2625 describes our governance framework. We call your attention to the following best practices.
| Annual election of all Directors |
| Resignation policy applicable to Directors who do not receive a majority of votes cast in uncontested elections |
| Mandatory retirement policy for Directors |
| ü | Proxy access |
| Overboarding limits |
| Independent |
| Executive sessions of |
| Annual review of Committee charters and Corporate Governance Guidelines |
| ü | Robust stock ownership guidelines for Directors and Named Executive Officers |
| Prohibition on all pledging and hedging of the Company’s stock by Directors, Officers and other insiders |
| Annual advisory vote on executive compensation |
| ü | Code of Business Conduct and Ethics that applies to Directors and employees |
| No supermajority voting requirement to amend By-Laws |
| No poison pill |
| Oversight of sustainability/ |
| ü | Integration of Diversity and Inclusion in the Company’s Sustainability program, overseen by the Nominating and Corporate Governance Committee |
| ü | Board oversight of cybersecurity |
Shareholder Engagement
The Company has developed a multi-platform Shareholder engagement program that results in active dialogue with both current and prospective global Shareholders.Shareholders all over the world. Major elements of the program include individual or group investor meetings, scheduled teleconferences, participation in sponsored institutional investor conferences and investor visits to Company manufacturing or administrative facilities. In December 2018, the Company also hosted current and prospective investors at a special conference at one of the facilities of the Company’s new Transit Packaging Division. Participants also joined the conference via webcast. Subjects of discussion at these events include long-term strategy, historical and pro forma financial information, recent and pending acquisitions and divestitures, major trends and issues affecting the Company’s businesses, industry dynamics, executive compensation, sustainability and corporate governance, among other matters. In addition, since the November 2019 announcement of our ongoing Board-led review of our portfolio and capital allocation/return and our continuing Board refreshment process, our Shareholder engagement has included the receipt of Shareholder perspectives on our businesses and capital allocation as well as our Board composition. During last year’s engagement cycle we estimate that we had personal contact with investors owning well over 50% of the Company’s outstanding shares.
| 4 |
4
Sustainability
The Company issued its most recent biennial Sustainability Report in 2017.February 2020. The report uses the Global Reporting Initiative’s G4 guidelines and is available in full at sustainability.crowncork.com. The Company’s next Sustainability Report will be a supplement report published in the Spring of 2021 to close out our 2020 goals and transition to our Twentyby30 program.
https://sustainability.crowncork.com.
| · | We participate in |
| · | For 2020 Crown achieved a top score for CDP Supplier Engagement, scoring in the top 7% of all 8,033 companies reporting to CDP. The supplier engagement score provides a rating for how effectively companies engage their suppliers on climate change. |
| · | The Company expects to report under the SASB methodology in its next Sustainability Report, which will be published in the Spring of 2021. |
| · | We established a goal to reduce energy consumption by 5% per billion standard units of production (our unit of measure for metal packaging defined in the report) from 2015 levels by the end of 2020. As of December 31, |
1We arecontinue actively working to integrate our new Transit Packaging Division, which has a much more diverse set of product offerings and manufacturing formats than our metal packaging business, into our sustainability measurement methodology. The data above do not include Transit Packaging. Nevertheless, we note that a large percentage of the products sold fromby the Transit Packaging Division are themselves made from recycled materials and that the Transit Packaging Division itself recycles millions of pounds of material to manufacture its products. We expect that our Transit Packaging Division will be integrated into all future Sustainability Reports.
| 5 |
| · | We established a goal to reduce Scope 1 and Scope 2 greenhouse gas emissions by 10% per billion standard units of production from 2015 levels by the end of 2020. As of December 31, 2019, we exceeded this goal, with greenhouse gas emissions reduced by 10.8% per billion standard units. Absolute emissions have decreased by 1.1% even as production has increased by 13.9%. | |
| · | During the reporting period, the Company won numerous awards in multiple U.S. states and in all three of our global geographic divisions in areas such as safety, recycling, pollution prevention and green manufacturing. |
The Company has taken many additional steps in our sustainability efforts, including the following:
| · | We signed one of the largest non-investment grade “sustainability-linked loans” in history. The interest rate on the Company’s revolving credit facility will increase or decrease, in part, based on the annual environmental, social and governance scores received by the Company from one of the major third-party sustainability ratings agencies. |
| · | We announced plans to reduce water usage in our global operations by 20% from 2019 levels by the end of 2025. These efforts will decrease the Company’s water usage by over 500 million gallons annually. |
| · | We joined RE100, pledging a total transition to 100% renewable electricity by 2050, with interim targets of 60% by 2030, and 90% by 2040. |
| · | We committed to the Science-Based Targets initiative (“SBTi”), which requires the Company to set specific goals for reducing GHG emissions. These targets, which have been accepted by the SBTi, align with global temperature increase limits of 1.5° C set by the Paris Agreement of 2015. The Company established a Scope 1 and 2 emissions reduction goal of 50% by 2030. Additionally, the Company established a Scope 3 goal of 16% emissions reduction by 2030. |
| · | In July 2020, the Company introduced its next phase of Sustainability with the launch of its Twentyby30 program. This ambitious and aggressive program commits to twenty measurable goals to be achieved by 2030 or sooner and is available at www.crowncork.com/sustainability/twentyby30-overview. |
| · | We launched our new Supplier Code of Conduct, available at www.crowncork.com/investors/corporate-governance/supplier-code-conduct, to align supplier conduct with the Company’s core values. |
| · | In the past year, we have issued public policy statements on Environmental Sustainability, Human Rights, Responsible and Ethical Sourcing, Tax Strategy and Conflict Minerals, all of which are available at www.crowncork.com. |
| 6 |
5
As a matter of good corporate governance, we are asking you to ratify the selection by the Audit Committee of PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for 2019.2021. The following table summarizes the fees PwC billed to the Company for 2018.
Audit Fees | Audit-Related Fees | Tax Compliance Fees | Tax Advisory Services Fees | All Other Fees |
| $10,065,000 | $711,000 | $426,000 | $1,757,000 | $71,000 |
| Audit Fees | Audit-Related Fees | Tax Compliance Fees | Tax Advisory Services Fees | All Other Fees |
| $9,408,000 | $6,315,000 | $320,000 | $1,148,000 | $21,000 |
Additional information in the section titled “Principal Accountant Fees and Services” and the Audit Committee Report may be found on
pages.
At the 20182020 Annual Meeting, the say-on-pay resolution with respect to 2018 Named Executive Officer (“NEO”) compensation received a favorable vote of over 95%96%. Accordingly, the general approach to the compensation of theour NEOs, including the Chief Executive Officer (“CEO”), remained largely unchanged. See Compensation and Discussion Analysis (“CD&A”) that begins on page 30.31. Below is a summary of the CEO’s compensation for 2016, 20172018, 2019 and 2018.2020. Compensation of Mr. Donahue and the other NEOs is more fully described in the Summary Compensation Table on page 46.
| Name and Position | Year | Salary | Grant Date Projected Value of Unvested Restricted Stock Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value | All Other Compensation | Total Compensation | Total Compensation Net of Certain Retirement-Related Benefits |
Timothy Donahue President and Chief Executive Officer | 2020 | $1,200,000 | $6,239,951 | $2,880,000 | $5,714,297 | $1,486,791 | $17,521,039 | $10,324,226 |
| 2019 | 1,155,000 | 6,005,970 | 1,711,710 | 4,056,957 | 1,081,053 | 14,010,690 | 8,876,880 | |
| 2018 | 1,100,000 | 5,720,055 | 1,735,800 | 1,183,618 | 77,268 | 9,816,741 | 8,566,727 |
The last column above shows Total Compensation net of certain retirement-related benefits (i.e., the Change in Pension Value column and certain retirement-related elements of All Other Compensation). The lump-sum present value calculations required to be included for all of our NEOs in this Proxy Statement for certain components of Total Compensation continue to be inflated by historically-low interest rates. Not all of the pension benefits payable to our NEOs will be paid in a lump sum. Future increases in interest rates could cause a significant reduction in the lump-sum value of such benefits. See page 56, footnote 4, for more information about interest rate sensitivity.
| Name and Position | Year | Salary | Grant Date Projected Value of Unvested Restricted Stock Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value | All Other Compensation | Total Realizable Compensation(1) | Total Actual Realized Compensation(2) |
Timothy Donahue President and Chief Executive Officer | 2018 | $1,100,000 | $5,720,055 | $1,735,800 | $1,183,618 | $ 77,268 | $ 9,816,741 | $5,498,602 |
| 2017 | 1,000,000 | 5,200,004 | 2,295,600 | 2,810,148 | 634,208 | 11,939,960 | 8,500,616 | |
| 2016 | 915,000 | 5,051,113 | 2,594,849 | 1,994,476 | 419,188 | 10,974,626 | 6,974,883 |
| 7 |
6
The Company has developed an executive compensation program that is ownership-oriented and that rewards the attainment of specific annual and long-term goals that will result in improvement in Shareholder value. Two-thirds of our NEOs’ share awards are performance-based, andperformance-based. Beginning with 2017 grants, which vested in early 2020, vesting has beenis based on two performance metrics: the Company’s relative total shareholder return (“TSR”) against a peer group (and beginning with 2017 grants, also on(the Dow Jones U.S. Containers & Packaging Index) and the Company’s return on invested capital as a second metric)(“ROIC”).
Based on the Company’s TSR under-performance versus its peer groupperformance for the measurement periodsperiod related to the vesting of performance-based shares in 2018 and 2019,2020, the Company’s NEOs, including the CEO, received awards that were 21.3% above the target grants established in 2017. However, due to the Company’s under-performance for the measurement periods related to the performance-based shares vesting in 2018 and 2019, the NEOs forfeited 100% of the performance-based shares awarded to them.granted in 2015 and 2016. Such additional awards and forfeitures display a clear and direct correlation between pay-for-performance and our executives’ compensation. This performance-based vesting history illustrates a strong pay-for-performance alignment.
| 8 |
7
The allocation of 20182020 total direct compensation for our CEO and for our other NEOs among the various components of compensation is set forth in the following charts that highlight the Company’s emphasis on “at risk” and equity-based compensation.
|
|
| 9 |
 |  |
8
WHAT WE DO
Benchmark our NEOs’ total direct compensation at the 50th percentile of our peer group |
| Review pay and performance alignment annually |
| ü | Provide a majority of the direct compensation paid to our NEOs in performance-based compensation |
| Allocate two-thirds of compensation under the Company’s long-term incentive plan to performance-based share awards and one-third to time-based share awards |
| Vest performance-based shares on the basis of two metrics (total shareholder return and return on invested capital) |
| Base payouts under the Company’s Annual Incentive Bonus Plan on the achievement of specified levels of economic profit and modified operating cash flow |
| “Clawback” non-equity incentive bonus payments |
| Engage an independent compensation consultant for our Compensation Committee |
| Annually review the independence of the compensation consultant retained by the Compensation Committee |
| ü | Utilize tally sheets to review total compensation, compensation mix, internal pay equity, payouts under certain potential termination scenarios and the aggregate value of retirement benefits and interest rate sensitivity on retirement benefits |
| Hold annual |
WHAT WE DON’T DO
| Allow carry-forward or banking of economic profit or modified operating cash flow achievement in |
| Use subjective individual qualitative factors in determining executives’ annual bonuses |
| Include tax gross-up provisions in any new or revised executive employment agreements |
| Provide excessive perquisites |
| Permit any form of hedging or pledging of Company stock |
Please read the CD&A, beginning on page 30,31, for a more detailed description of the Company’s executive compensation program.
| 10 |
QUESTIONS & ANSWERS ABOUT THE 20192021 ANNUAL MEETING
Why am I receiving these materials?
The Company is providing you this Proxy Statement, the accompanying Proxy Card and a copy of our Annual Report for the year ended December 31, 2018,2020, containing audited financial statements, in connection with our Annual Meeting of Shareholders or any adjournments or postponements of the Annual Meeting. The Meeting will be heldconducted via the Internet on April 25, 201922, 2021 at 9:30 a.m. local time at the Company’s Corporate Headquarters located at 770 Township Line Road, Yardley, Pennsylvania. As a ShareholderEastern Time. All Shareholders of the Company you are cordially invited to attend theour virtual Annual Meeting and are entitled and requested to vote on the matters described in this Proxy Statement. The accompanying Proxy is solicited on behalf of the Board of Directors of the Company. We are mailing this Proxy Statement and the accompanying Proxy Card and Annual Report to our Shareholders on or about March 18, 2019.
What is a Proxy?
A Proxy is your legal designation of another person to vote the shares that you own in accordance with your instructions. The person you appoint to vote your shares is also called a Proxy.Proxy Holder. On the Proxy Card you will find the names of the persons designated by the Company to act as ProxiesProxy Holders to vote your shares at the Annual Meeting. The Board is asking you to allow any of the persons named as ProxiesProxy Holders on the Proxy Card (all of whom are Officers of the Company) to vote your shares at the Annual Meeting. The ProxiesProxy Holders must vote your shares in the manner you instruct.
Who is entitled to vote?
Only Shareholders as of the close of business on March 5, 20192, 2021 (“Record Date”) are entitled to receive notice of, to attend and to vote at the Annual
Meeting or any adjournment or postponement of the Annual Meeting. Each Shareholder has one vote per share on all matters to be voted on. As of the Record Date, there were 135,328,379134,912,097 shares of Common Stock outstanding.
What is the difference between a “record owner” and a “beneficial owner”?
Record Owners: If your shares are registered directly in your name with EQ Shareowner Services, the Company’s stock transfer agent, you are considered the “Shareholder of record” or “record owner” with respect to those shares. You vote your shares directly and may vote in-person atonline directly during the Annual Meeting with no prior authorizations required.
Beneficial Owners: If your shares are held in an account at a brokerage firm, bank or trust as custodian on your behalf, you are considered the “beneficial owner” of those shares. Your shares are registered on the Company’s books in the name of the brokerage firm, bank or trust, or its nominee. Shares held in this manner are commonly referred to as being held in “street name.” As the beneficial owner of the shares, you have the right to direct your broker, bank or trustee how to vote your shares by using the votevoting instruction cardform sent to you along with this Proxy Statement. You also are invited to attend the virtual Annual Meeting. However, because a beneficial owner is not the Shareholder of record,Meeting and you may not vote these shares in person atonline during the Annual Meeting or participate inby following the Annual Meeting, unless you obtain a legal proxy from theinstructions provided by your broker, bank or trust who is the Shareholder of record, or holds a legal proxy from the Shareholder of record, giving you the right to vote the shares at the Annual Meeting.with your voting instruction form.
| 11 |
12
Shareholders will vote on fourthree proposals at the Annual Meeting:
| · | the election of Directors |
| · | the ratification of the appointment of the Company’s independent auditors for the fiscal year ending December 31, |
| · | an advisory resolution to approve the compensation of the Named Executive Officers as disclosed in this Proxy Statement (the “Say-on-Pay” vote) |
The Company also will consider any other business that properly comes before the Annual Meeting in accordance with Pennsylvania law and the Company’s By-Laws.
How does the Board of Directors recommend that I vote?
The Board of Directors recommends that you vote your shares:
· | “FOR”each of the nominees for election to the Board |
· | “FOR”the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for |
· | “FOR”the advisory resolution to approve the compensation of the Named Executive Officers as disclosed in this Proxy Statement |
What happens if additional matters are presented at the Annual Meeting?
Other than the items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a Proxy to the personsProxy Holders named on the Proxy Card, they will have the discretion to vote your
shares in their best judgment with respect to any additional matters properly brought before the Annual Meeting in accordance with Pennsylvania law and the Company’s By-Laws. Also, if for any reason any of our nominees are not available as candidates for Director, the persons named as ProxiesProxy Holders will vote the Proxies for any other candidate or candidates who may be nominated by the Board.
How do I vote my shares?
You may vote your shares by Proxy or in person.during the virtual meeting. You may vote by Proxy by:
· | by the Internet, at the web address provided on page 1 of this Proxy Statement or on your Proxy Card or voting instruction form; or |
| · | by telephone, using the toll-free number listed on page 1 of this Proxy Statement or on your Proxy Card or |
by mail, by marking, signing, dating and mailing your Proxy Card or |
| · | during the Meeting, by using the unique 16-digit control number which appears on the proxy card, if you are a record owner; if you are a beneficial owner, your 16-digit control number will be contained on the voting instruction form provided by your bank or broker. |
The deadline for voting by telephone or electronically through the Internet is 11:59 p.m. CentralEastern Time, April 24, 2019.21, 2021.
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Will my shares be voted if I do not provide my Proxy?
It depends on whether you are a record owner or beneficial owner. If you are a record owner, your shares will NOT be voted unless you provide a Proxy or attend and vote in persononline at the Annual Meeting. For beneficial owners who hold shares in street name through brokerage firms, those firms generally have the authority to vote their clients’ unvoted shares in their discretion on certain routine matters. For example, if you are a beneficial owner and you do not provide voting instructions, your brokerage firm may vote your shares with respect to the ratification of the appointment of independent auditors (Proposal 2), as this matter is considered routine under the applicable New York Stock Exchange (“NYSE”) rules. All other matters to be voted on at this year’s Annual Meeting are not considered routine, and your broker voting on a routine matter cannot vote your shares on those non-routine matters without your instruction (“broker non-votes”).
Beneficial Owners: The Company urges you to instruct your broker, bank or trust on how to vote your shares.
What constitutes a quorum?
The presence, in personby attendance at the virtual Annual Meeting or by Proxy, of Shareholders entitled to cast a majority of votes will be necessary to constitute a quorum for the transaction of business at the Annual Meeting. WITHHOLD votes with respect to Director nominees and ABSTAINabstain votes will be counted in determining the presence of a quorum as well as shares subject to broker non-votes if the broker votes the shares on a routine matter, such as the ratification of the appointment of the Company’s independent auditors (Proposal 2). Under Pennsylvania law and the Company’s By-Laws, ABSTAIN votes and broker non-votes are not considered to be “votes cast” and, therefore, although they will be counted for purposes of determining a quorum, they will not be given effect either as FOR or WITHHOLD / AGAINST votes.
What vote is needed for the election of Directors, and what is the policy with respect to the resignation of Directors who do not receive a majority of the votes?
With regard to Proposal 1, Shareholders may vote FOR or WITHHOLD with respect to the election of Directors. Directors are elected by a plurality of the votes cast, by those in personattendance at the virtual Annual Meeting or by Proxy, subject to the Company’s By-Law provision described below. The Company’s By-Laws set forth the procedures if a Director nominee does not receive at least a majority of votes cast in an uncontested election of Directors where a quorum is present. In an uncontested election, an incumbent Director nominee who receives the support of less than a majority of the votes cast at an Annual Meeting, although deemed to have been elected to the Board by plurality vote, must promptly tender his or her resignation to the Board. In an uncontested election, if a nominee who is not an incumbent does not receive the vote of at least a majority of the votes cast, the nominee will be deemed to have been elected to the Board by plurality vote and to have immediately resigned.
For this purpose, “majority of votes cast” means the number of shares voted FOR a Director’s election exceeds 50% of the total number of votes cast with respect to the Director’s election. “Votes cast” includes only FOR and WITHHOLD votes. Under Pennsylvania law and the Company’s By-Laws, broker non-votes are not considered to be “votes” and, therefore, will not be given effect either as FOR or WITHHOLD votes in the context of Proposal 1.
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The Nominating and Corporate Governance Committee will evaluate the tendered resignation of an incumbent Director who does not receive a majority vote in an uncontested election and make a recommendation to the Board as to whether the
What vote is needed to approve all other proposals?
Proposals 2 3 and 43 require a FOR vote of a majority of the votes cast, by those in personattendance at the virtual Annual Meeting or by Proxy, in order to be approved.
ABSTAIN votes and broker non-votes will not be considered as votes cast and will have no effect on the outcome of the votes on these proposals.
Can I change or revoke my vote after I have delivered my Proxy?
Yes. If you are a record owner, prior to the Annual Meeting you may change your vote by submitting a later-dated Proxy in one of the manners authorized and described in this Proxy Statement (by Proxy Card, via the Internet or by telephone). You also may give a written notice of revocation to the Company’s Corporate Secretary, so long as it is delivered to the Corporate Secretary at the Company’s principal executive offices prior to the beginning of the Annual Meeting, or given to the Corporate Secretary at the Annual Meeting prior to the time your Proxy is voted at the Annual Meeting. You also may revoke any Proxy given pursuant to this solicitation by attendingvoting your shares electronically during the Annual Meeting and voting in person by ballot.Meeting. If you are a beneficial owner, please follow the instructions provided by your broker, bank or trust as to how you may changewith your vote or obtain a legal proxy to vote your sharesvoting instruction form if you wish to cast your vote in personelectronically at the Annual Meeting.
Who can attend the Annual Meeting?
Our virtual Annual Meeting will be conducted on the Internet via webcast. Shareholders of record on March 2, 2021 will be able to participate online, vote their shares electronically and Shareholders as of the March 5, 2019 Record Date may attendsubmit questions during the Annual Meeting. Record owners may attend without any prior authorization. If you are a beneficial owner, to be admitted toMeeting by visiting:
www.virtualshareholdingmeeting.com/CCK2021
To participate in the Annual Meeting, you will need proof of beneficial ownership satisfactorythe 16-digit control number included on your proxy card or your voting instruction form. The Annual Meeting will begin promptly at 9:30 a.m. Eastern Time. We encourage you to access the Annual Meeting prior to the Company in the form of a statement from the brokerage firm, bank or trust or a legal proxy from that institution showing you as a beneficial owner of Company shares or as the sole legal proxy of a beneficial owner. Allstart time. Online access will begin at 9:15 a.m. Eastern Time.
The virtual Annual Meeting attendees may be askedplatform is fully supported across browsers (Internet Explorer, Microsoft Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong Internet connection wherever they intend to present valid, government-issued photo identification, such as a driver’s license or passport, before enteringparticipate in the Annual Meeting. Attendees will be subjectParticipants also should allow plenty of time to security inspectionslog in and will be requiredensure that they can hear streaming audio prior to comply with other security and procedural measures in place atthe start of the Annual Meeting. Representatives of
Shareholders may submit questions during the Company will beAnnual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at
www.virtualshareholdingmeeting.com/CCK2021
and typing your question into the entrance“Ask a Question” field, and clicking “Submit.” Questions pertinent to the Annual Meeting and these representatives will be authorized onanswered during the Company’s behalfAnnual Meeting, subject to determine whethertime constraints.
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If you encounter any difficulties accessing the admission policies and procedures are being followed and whether youvirtual Annual Meeting during the check-in or meeting time, please call 844-986-0822 (Toll Free) or 303-562-9302 for assistance. Technical support will be granted admission toavailable beginning at 9:15 a.m. Eastern Time on April 22, 2021 through the conclusion of the Annual Meeting.
Additional information regarding matters addressing technical and logistical issues, including technical support during the Annual Meeting, will be available at
www.virtualshareholdingmeeting.com/CCK2021
Where can I find voting results of the Annual Meeting?
The Company will announce the preliminary voting results at the Annual Meeting and publish the final results in a Form 8-K or Form 10-Q filed with the Securities and Exchange Commission (“SEC”) within four business days after the date of the Annual Meeting.
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The Company has engaged D.F. King to assist in the solicitation of Proxies for a fee of $10,000 plus reimbursement for out-of-pocket expenses and certain additional fees for services rendered in connection with such solicitation. Certain Officers and employees of the Company may also solicit Proxies by mail, telephone, internetInternet or facsimile or in person without any extra compensation. The Company bears the cost of soliciting Proxies.
What is the deadline for proposals for consideration or for nominations of individuals to serve as Directors at the 20202022 Annual Meeting of Shareholders?
Proposals to be Considered for Inclusion in the Company’s Proxy Materials:
In order to be considered for inclusion in the Proxy Statement for the Company’s 20202022 Annual Meeting
of Shareholders, any Shareholder proposal intended to be presented at that meeting, in addition to meeting the shareholder eligibility and other requirements of the SEC rules governing such proposals, must be received in writing, via Certified Mail – Return Receipt Requested, by the Office of the Corporate Secretary, Crown Holdings, Inc., 770 Township Line Road, Yardley, PA 19067 not later than November 18, 2019.
Director Nominations for Inclusion in the Company’s Proxy Materials (Proxy Access):
Under certain circumstances, Shareholders may submit nominations for Directors for inclusion in the Company’s proxy materials by complying with the proxy access requirements in the Company’s By-Laws, which require nominations to be submitted in writing, via Certified Mail – Return Receipt Requested, and received at the above address not before October 17, 201916, 2021 nor after November 18, 2019.
Other Business and Director Nominations to Be Brought Before the 20202022 Annual Meeting of Shareholders:
The Company’s By-Laws currently provide that a Shareholder of record at the time that notice is given to the Company and who is entitled to vote at an annual meeting may bring business before the meeting or nominate a person for election to the Board of Directors if the Shareholder gives timely notice of such business or nomination. To be timely, and subject to certain exceptions, notice in writing to the Corporate Secretary must be delivered or mailed, via Certified Mail – Return Receipt Requested, and received at the above address not before October 17, 201916, 2021 nor after November 18, 2019.15, 2021. The notice must describe various matters regarding the nominee or proposed business. Any Shareholder desiring a copy of the Company’s By-Laws will be furnished one copy without charge upon written request to the Corporate Secretary.
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How can I access the Proxy materials overon the Internet?
The Company has made available copies of the following materials at the Company’s website at:
https://www.crowncork.com/investors/proxy-online
| this Proxy Statement |
| the Proxy Card relating to the Annual Meeting of Shareholders |
| the Annual Report to Shareholders |
Information included on the Company’s website, other than this Proxy Statement, the Proxy Card and the Annual Report to Shareholders, is not part of the Proxy soliciting materials.
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The Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 20182020 with the SEC on February 28, 2019.26, 2021. A copy of the Company’s Annual Report on Form 10-K was included as part of the Annual Report to Shareholders that you received along with the proxy materials. Any Shareholder can obtain a copy of the Annual Report, including the financial statements and schedules thereto and a list describing all the exhibits not contained therein, without charge. Requests for copies of the Annual Report should be sent to: Investor Relations Department, Crown Holdings, Inc., 770 Township Line Road, Yardley, PA 19067 or you may call toll free 888-400-7789. Copies in electronic format of the Company’s Annual Report and filings with the SEC are available at the Company’s website at www.crowncork.com in the “For Investors” section.
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PROPOSAL 1: ELECTION OF DIRECTORS
The persons named in the Proxy Holders shall vote the shares with respect to the nominees listed below, all of whom are now Directors of the Company, to serve as Directors for the ensuing year or until their successors shall be elected. None of the persons named as a nominee for Director has indicated that he or she will be unable or will decline to serve. In the event that any of the nominees are unable or decline to serve, which the Nominating and Corporate Governance Committee of the Board of Directors does not believe will happen, the persons named in the Proxy Holders will vote with respect to the remaining nominees and others who may be nominated by the Board of Directors.
The By-Laws of the Company provide for a Board of Directors consisting of between 10 and 18 Directors, as determined by the Board of Directors. The Board of Directors has fixed the number of Directors at 11.13. It is intended that the Proxies will be voted for the election of the 1113 nominees named below as Directors, and no more than 1113 will be nominated by the Board.
The Board is committed to regular review of the Board’sits composition to ensure that the Board continues to have the right mix of skills, background and tenure. This year’s Board nominees include one new Director – Dwayne Wilson. Six of the Company’s independent Directors have joined the Board in the last five years as a result of a Board refreshment process where Director candidates were identified through Board, Shareholder and third-party search firm input. Our ongoing Board refreshment strategy has further strengthened and diversified the skills and experiences of the Board. The Board believes that the collective combination of backgrounds, skills and experiences of its members has produced a Board that is well-equipped to exercise oversight responsibilities for the Company’s Shareholders and to help guide the Company to achieve its long-term strategic objectives.
Under the Company’s Corporate Governance Guidelines, no Director will commence a term of Board service if the Director is over 75 years old unless the Board determines that an additional term of Board service would be in the best interests of the Company. Mr. Little, the Board’s Independent Presiding Director, and Mr. Löliger will both be 76 as of the date of the 2019 Annual Meeting. The Board has requested both of these Directors to serve one additional year prior to their expected retirement, subject to Shareholder approval of election of Directors at the 2019 Annual Meeting. The Board made this request in order to retain the executive experience of these two Directors in running international packaging companies outside of the metal container sector as the Company continues to integrate last year’s acquisition of global transit-packaging company Signode. Each has stepped down from one of the two Board Committees on which he previously served so that other Board members can join.
The names of the nominees and information concerning them and their associations as of March 5, 2019,2, 2021, as furnished by the nominees, follow. The principal occupations and the directorships stated include the nominees’ occupations and directorships with any U.S. publicly traded companies or registered investment companies during the last five years.
The Board of Directors Recommends that Shareholders Vote FOR Election
of Each of the Nominees Named Below.
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| Name | Age | Principal Occupation | Year Became Director | |
John W. Conway (a) | 75
| Chairman of the Board and former Chief Executive Officer of the Company; also a Director of PPL Corporation | 1997 | |
Timothy J. Donahue (a) | 58 | President and Chief Executive Officer of the Company | 2015 | |
Richard H. Fearon
| 64 | Vice Chairman and Chief Financial and Planning Officer and Director of Eaton Corporation[1]; also a Director of Avient Corporation and CRH plc | 2019 | |
Andrea J. Funk (b) (c) | 51 | VP Finance, Americas of EnerSys; former Chief Executive Officer of Cambridge-Lee Industries; former Director of Destination Maternity Corporation | 2017 | |
Stephen J. Hagge (c) | 69 | Former President, Chief Executive Officer and Director of AptarGroup; also a Director of CF Industries Holdings | 2019 | |
Rose Lee (d) | 55 | President of DuPont Water & Protection | 2016 | |
James H. Miller (a) (c) (d) | 72 | Former Chairman and Chief Executive Officer of PPL Corporation; also a Director of AES Corporation | 2010 | |
Josef M. Müller (b) (c) | 73 | Former Chairman and Chief Executive Officer of Nestlé in the Greater China Region | 2011 | |
B. Craig Owens (b) | 66 | Former Chief Financial Officer and Chief Administrative Officer of Campbell Soup Company; also a Director of AptarGroup; former Director of J.C. Penney Company | 2019 | |
Caesar F. Sweitzer (a) (b) (d) | 70 | Former Senior Advisor and Managing Director of Citigroup Global Markets | 2014 | |
Jim L. Turner (a) (c) (d) | 75 | Chief Executive Officer of JLT Beverages; former Chairman, President and Chief Executive Officer of Dr Pepper/Seven Up Bottling Group; also a Director of Comstock Resources | 2005 | |
William S. Urkiel (b) (d) | 75 | Former Senior Vice President and Chief Financial Officer of IKON Office Solutions; former Director of Roadrunner Transportation Systems | 2004 | |
Dwayne A. Wilson (b) | 62 | Former Senior Vice President of Fluor Corporation; Director of Sterling Construction Company and Ingredion Incorporated; former Director of AK Steel Holding Corporation | 2020 | |
| (a) Member of the Executive Committee | (c) Member of the Compensation Committee | |||
| (b) Member of the Audit Committee | (d) Member of the Nominating and Corporate Governance Committee | |||
[1] Mr. Fearon will retire as a director and officer of Eaton Corporation on March 31, 2021.
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| Name | Age | Principal Occupation | Year Became Director | |
John W. Conway (a) | 73 | Chairman of the Board and former Chief Executive Officer of the Company; also a Director of PPL Corporation | 1997 | |
Timothy J. Donahue (a) | 56 | President and Chief Executive Officer of the Company | 2015 | |
Andrea J. Funk (b) (c) | 49 | VP Finance, Americas of EnerSys; former Chief Executive Officer of Cambridge-Lee Industries; also a Director of Destination Maternity Corporation | 2017 | |
Rose Lee (b) (d) | 53 | President of DuPont Safety & Construction; former officer of several Saint-Gobain companies | 2016 | |
William G. Little (a) (d) | 76 | Former Chairman and Chief Executive Officer of West Pharmaceutical Services | 2003 | |
Hans J. Löliger (a) (c) | 76 | Vice Chairman of GTF Holding; former Chief Executive Officer of SICPA Group | 2001 | |
James H. Miller (c) (d) | 70 | Former Chairman and Chief Executive Officer of PPL Corporation; also a Director of AES Corporation and McDermott International; former Director of Rayonier Advanced Materials | 2010 | |
Josef M. Müller (b) (c) | 71 | Former President of Swiss Association of Branded Consumer Goods “PROMARCA”; former Chairman and Chief Executive Officer of Nestlé in the Greater China Region | 2011 | |
Caesar F. Sweitzer (b) (d) | 68 | Former Senior Advisor and Managing Director of Citigroup Global Markets | 2014 | |
Jim L. Turner (c) (d) | 73 | Principal of JLT Beverages; former Chairman, President and Chief Executive Officer of Dr Pepper/Seven Up Bottling Group; also Chairman of Dean Foods and a Director of Comstock Resources | 2005 | |
William S. Urkiel (b) (d) | 73 | Former Senior Vice President and Chief Financial Officer of IKON Office Solutions; also a Director of Roadrunner Transportation Systems | 2004 | |
| (a) Member of the Executive Committee | (c) Member of the Compensation Committee | |||
| (b) Member of the Audit Committee | (d) Member of the Nominating and Corporate Governance Committee | |||
The Nominating and Corporate Governance Committee is responsible for leading the search for individuals qualified to become members of the Board of Directors and recommending candidates to the Board as Director nominees. The Board desires a diverse membership, including with respect to race, gender, nationality and ethnicity as well as professional background and geographic and industry experience. The Nominating and Corporate Governance Committee assesses each potential nominee’s overall mix of experiences, qualifications, perspectives, talents, education and skills as well as each potential nominee’s ability to contribute to the Board and to enhance the Board’s decision-making process. Independence is a key factor when considering the Director nominees, as are critical thinking skills, practical wisdom and mature judgment in the decision-making process. For a description of the identifying and evaluating procedures of the Nominating and Corporate Governance Committee, see “Corporate Governance – Nominating and Corporate Governance Committee.” The Board believes that each of the nominees listed above has the sound character, integrity, judgment and record of achievement necessary to be a member of the Board and is independent of the influence of any particular Shareholder or group of Shareholders whose interests may diverge from the interests of the Company’s Shareholders as a whole. In addition, each of the nominees has exhibited during his or her prior service as a Director, the ability to operate cohesivelyconstructively with the other members of the Board and to challenge and question management in a constructiveproductive way.
The Board believes, moreover, that each nominee brings a strong and unique background and skill set to the Board, giving the Board as a whole competence and experience in diverse areas. These areas include organizational leadership; public company board service; manufacturing; finance; management in the packaging, food and beverage sectors and other relevant industries; and international business and markets. The Board believes that the following specific experiences, qualifications and skills, together with the aforementioned attributes, qualify each of the nominees listed above to serve as a Director.
John Conway. Mr. Conway, the Company’s independent non-executive Chairman of the Board, served as the CEO of the Company for over 15 years until his retirement at year-end 2015, as a member of the Board since 1997 and in other positions, both domestic and international, with the Company and its predecessors for over 40 years. He gives the Board seasoned leadership and an in-depth knowledge of the Company, especially its international business. Mr. Conway also serves as lead directorLead Director of another NYSE-listed company.
Timothy Donahue. Mr. Donahue assumed the position of CEO of the Company in 2016. He has served as a member of the Board since 2015 and in other executive positions with the Company for over 2830 years. He brings to the Board an intimate understanding of the operations and finances of the Company from his prior experience as the Company’s Chief Operating Officer and Chief Financial Officer.
Richard Fearon. Mr. Fearon’s experience as a CFO of an NYSE-listed global, diversified manufacturing company brings to the Board comprehensive knowledge of financial accounting and extensive experience in financial reporting, corporate finance and capital markets, corporate development, strategic planning, mergers and acquisitions, risk management and investor relations. In addition, his service as a Lead Director of an NYSE-listed global provider of specialized polymers also provides significant governance experience. Mr. Fearon also serves as a director of another publicly-listed company. Mr. Fearon will retire as a director and officer of Eaton Corporation on March 31, 2021.
Andrea Funk. Ms. Funk’s experience as VP Finance of the AmericanAmericas division of an NYSE-listed international manufacturing company and as former CEO and CFO of an international manufacturing and distribution business brings to the Board significant experienceexpertise in the areas of finance, operations and strategy. This, along with Ms. Funk’s prior experience in public accounting, enhanceenhances her contributions to the Audit Committee and qualifies her as an “audit committee financial expert” within the meaning of SEC regulations. Ms. Funk
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Stephen Hagge. Mr. Hagge brings to the Board substantial leadership and management experience in public company governance, operations, international business, strategic initiatives and risk management from his role as former CEO, CFO and COO of an NYSE-listed global packaging manufacturer. Mr. Hagge also serves as a director of a Nasdaq-listedanother NYSE-listed company.
Rose Lee. Ms. Lee brings to the Board a deep knowledge of operations, engineering and technology from her experience in engineering and information technology. She also brings senior management experience and a broad global perspectiveto the Board from her role as president of a global business segment of an NYSE-listed international manufacturing company. She also brings a deep knowledge of operations, engineering and technology matters that enhances her contribution to the Nominating and Corporate Governance Committee’s oversight of the Company’s sustainability efforts.
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Josef Müller. Mr. Müller, a European national, has over 35 years of senior management experience at a global food and beverage company, including as the CEO of that company’s greater China region. Mr. Müller brings to the Board significant emerging market business development and management experience.
B. Craig Owens. Mr. Owens’ extensive experience in the consumer food and beverage industries, including his former service as the CFO of a leading NYSE-listed international consumer food company, brings to the Board significant financial expertise, including all aspects of financial reporting, accounting, corporate finance and capital markets, as well as significant experience in strategic planning, business integration and operations, and in managing supply chain organizations. He also has considerable knowledge of the retail industry having served as CFO of a leading international grocery retailer. Mr. Owens also serves as a director of another NYSE-listed company.
Caesar Sweitzer. Mr. Sweitzer spent over 35 years in finance, primarily as an investment banker focusing on industrial companies. Mr. Sweitzer brings to the Board significant knowledge of the global packaging industry as well as finance and investment matters, such as acquisitions, dispositions and corporate finance. Mr. Sweitzer’s experience qualifies him as an “audit committee financial expert” within the meaning of SEC regulations, and he chairs the Audit Committee.
Jim Turner. Mr. Turner’s extensive experience in the soft drink industry, and in particular his experience as owner and CEO of the largest independent soft drink bottler in the U.S., gives the Board deep insight into the industry of many of the Company’s significant customers. Mr. Turner has valuable experience in business development, finance and mergers and acquisitions. Mr. Turner also chairs the boardCompensation Committee and also serves as a director of aanother NYSE-listed food and beverage company.
William Urkiel. Mr. Urkiel’s experience as CFO of a NYSE-listed provider of innovative document management systems and services brings to the Board both leadership skills and comprehensive knowledge of accounting, finance and capital markets and corporate governance matters. Mr. Urkiel’s accounting and finance experience qualify him as an “audit committee financial expert” within the meaning of SEC regulations, and he serves on the Audit Committee.
Dwayne Wilson. Mr. UrkielWilson brings to the Board over 36 years of senior management experience at a leading NYSE-listed construction and engineering company. Mr. Wilson has gained a broad range of experience and exposure to a number of diverse end markets, and the Company will benefit from his knowledge and perspective, particularly in the areas of manufacturing, technology, operational excellence and engineering. Mr. Wilson also serves as a director of another NYSE-listed company.two other publicly-listed companies.
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DIRECTOR COMPENSATION
The following table lists 20182020 Director compensation for all Non-Employeeindependent Directors who servedreceived compensation as Directors in 2018.2020. Compensation for Mr. Donahue, the Company’s Chief Executive Officer, is reported in the Summary Compensation Table included in the Executive Compensation section below. Mr. Donahue does not earn additional compensation for his service as Director.
Name | Fees Earned or Paid in Cash (1) |
Stock Awards (2) |
Total |
| John Conway | $180,000 | $145,000 | $325,000 |
| Richard Fearon | 100,000 | 145,000 | 245,000 |
| Andrea Funk | 125,000 | 145,000 | 270,000 |
| Stephen Hagge | 110,000 | 145,000 | 255,000 |
| Rose Lee | 117,500 | 145,000 | 262,500 |
| William Little (3) | 52,500 | 72,500 | 125,000 |
| Hans Löliger (3) | 52,500 | 72,500 | 125,000 |
| James Miller | 155,000 | 145,000 | 300,000 |
| Josef Müller | 125,000 | 145,000 | 270,000 |
| B. Craig Owens | 111,250 | 145,000 | 256,250 |
| Caesar Sweitzer | 135,000 | 145,000 | 280,000 |
| Jim Turner | 130,000 | 145,000 | 275,000 |
| William Urkiel | 125,000 | 145,000 | 270,000 |
| (1) | Each Director may defer receipt of all, or any part, of his or her cash compensation until termination of service as a Director. At the election of the Director, deferred cash compensation amounts are paid in either a lump sum or installments over a period not to exceed 10 years after departure from the Board and are credited with interest at the prime rate until distributed. |
| (2) | The annual grant of Company Common Stock for 2020 consisted of $145,000 of Company Common Stock under the Stock Compensation Plan for Non-Employee Directors and was paid on a quarterly basis. The number of shares paid each quarter is determined based on the average of the closing market price of the Company’s Common Stock on each of the second through sixth business days following the date on which the Company publicly released its quarterly results. |
| (3) | Messrs. Little and Löliger retired as Directors of the Company pursuant to the Company’s mandatory retirement rules and did not stand for re-election in April 2020. |
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Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Total |
| John Conway | $180,000 | $135,000 | $315,000 |
Arnold Donald (3) | 107,000 | 135,000 | 242,000 |
| Andrea Funk | 110,000 | 135,000 | 245,000 |
| Rose Lee | 110,000 | 135,000 | 245,000 |
| William Little | 152,000 | 135,000 | 287,000 |
| Hans Löliger | 127,000 | 135,000 | 262,000 |
| James Miller | 107,000 | 135,000 | 242,000 |
| Josef Müller | 117,000 | 135,000 | 252,000 |
| Caesar Sweitzer | 125,000 | 135,000 | 260,000 |
| Jim Turner | 114,000 | 135,000 | 249,000 |
| William Urkiel | 117,000 | 135,000 | 252,000 |
(1) Each Director may defer receipt of all, or any part, of his or her cash compensation until termination of service as a Director. At the election of the Director, deferred cash compensation amounts are paid in either a lump sum or installments over a period not to exceed 10 years after departure from the Board and are credited with interest at the prime rate until distributed. (2) The annual grant of Company Common Stock for 2018 consisted of $135,000 of Company Common Stock under the Stock Compensation Plan for Non-Employee Directors and was paid on a quarterly basis. The number of shares paid each quarter is determined based on the average of the closing market price of the Company’s Common Stock on each of the second through sixth business days following the date on which the Company publicly released its quarterly results. (3) Mr. Donald is not standing for re-election to the Board at the Company’s 2019 Annual Meeting of Shareholders due to competing commitments. | |||
The Board periodically receives benchmarking data regarding director compensation from Pay Governance the Board’sLLC, an executive compensation consulting firm, and uses the 50thpercentile of its peer group’s target total cash compensation and target total direct compensation as a market check in determining director compensation. In 2019,For 2021, Directors who are not employees of the Company will receive annual cash base fees, grants of Company Common Stock and cash committee fees in the amounts set forth as follows, which are unchanged from 2018.follows.
Cash Base Fee | $100,000 |
| Equity Grant | |
| Supplemental Cash Committee Fees: | |
· · · | 25,000 15,000 20,000 10,000 |
| Non-Executive Board Chairman Fee | 80,000 |
| Independent | 25,000 |
Directors do not receive any additional fees for their service on the Executive Committee. There are no Board or committee meeting attendance fees. Directors are reimbursed by the Company for travel and related expenses they incur in connection with their service on the Board and its committees.
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COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
The following table shows, as of March 5, 2019,2, 2021, the number of shares of Company Common Stock beneficially owned by each person or group that is known to the Company to be the beneficial owner of more than 5% of the Company’s outstanding Common Stock.
Name and Address
| Amount of Common Stock of the Company Owned Beneficially, Directly or Indirectly | Percentage of Outstanding Shares (1)
|
The Vanguard Group (2) 100 Vanguard Blvd. Malvern, PA 19355 | 11,968,559 | 8.9% |
JP Morgan Chase & Co. (3) 383 Madison Avenue New York, NY 10179 | 8,518,556 | 6.3% |
Janus Henderson Group plc (4) 201 Bishopsgate EC2M 3AE United Kingdom | 7,323,332 | 5.4% |
BlackRock, Inc. (5) 55 East 52nd Street New York, NY 10055 | 6,812,394 | 5.0% |
(1) Percentages are derived based upon 134,912,097 shares of Common Stock outstanding as of March 2, 2021. (2) The Vanguard Group, an investment advisor, reported that it may be deemed to be the beneficial owner of 11,968,559 shares of the Company’s Common Stock. The Vanguard Group reported that it had sole dispositive power with respect to 11,745,103 shares, including 117,151 shares for which it had shared voting power, and shared dispositive power with respect to 223,456 shares. (3) JP Morgan Chase & Co., a parent holding company, reported that it may be deemed to be the beneficial owner of 8,518,556 shares of the Company’s Common Stock. JP Morgan Chase & Co. reported that it had sole dispositive power with respect to 8,487,669 shares, including 7,778,630 shares for which it had sole voting power and 28,950 shares for which it had shared voting power, and shared dispositive power with respect to 29 shares. (4) Janus Henderson Group plc, a parent holding company, reported that it may be deemed to be the beneficial owner of 7,323,332 shares of the Company’s Common Stock. Janus Henderson Group plc reported that it had shared voting power and shared dispositive power with respect to 7,323,332 shares. (5) BlackRock, Inc., a parent holding company, reported that it may be deemed to be the beneficial owner of 6,812,394 shares of the Company’s Common Stock. BlackRock, Inc. reported that it had sole dispositive power with respect to 6,812,394 shares, including 6,068,303 shares for which it had sole voting power. | ||
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Name and Address | Amount of Common Stock of the Company Owned Beneficially, Directly or Indirectly | Percentage of Outstanding Shares (1) |
The Vanguard Group (2) 100 Vanguard Blvd. Malvern, PA 19355 | 12,421,565 | 9.2% |
FMR LLC (3) 245 Summer Street Boston, MA 02210 | 8,692,721 | 6.4% |
BlackRock, Inc. (4) 55 East 52nd Street New York, NY 10055 | 7,654,289 | 5.7% |
JPMorgan Chase & Co. (5) 270 Park Avenue New York, NY 10017 | 7,462,106 | 5.5% |
Janus Henderson Group plc (6) 201 Bishopsgate EC2M 3AE United Kingdom | 7,256,215 | 5.4% |
(1) Percentages are derived based upon 135,328,379 shares of Common Stock outstanding as of March 5, 2019. (2) The Vanguard Group, an investment advisor, reported that it may be deemed to be the beneficial owner of 12,421,565 shares of the Company’s Common Stock. The Vanguard Group reported that it had sole dispositive power with respect to 12,297,152 shares, including 99,877 shares for which it had sole voting power and 30,555 shares for which it had shared voting power, and shared dispositive power with respect to 124,413 shares. (3) FMR LLC, a parent holding company, reported that it may be deemed to be the beneficial owner of 8,692,721 shares of the Company’s Common Stock. FMR LLC reported that it had sole dispositive power with respect to 8,692,721 shares, including 1,761,164 shares for which it had sole voting power. (4) BlackRock, Inc., a parent holding company, reported that it may be deemed to be the beneficial owner of 7,654,289 shares of the Company’s Common Stock. BlackRock, Inc. reported that it had sole dispositive power with respect to 7,654,289 shares, including 6,869,389 shares for which it had sole voting power. (5) JPMorgan Chase & Co., a parent holding company, reported that it may be deemed to be the beneficial owner of 7,462,106 shares of the Company’s Common Stock. JPMorgan Chase & Co. reported that it had sole dispositive power with respect to 7,459,671 shares, including 6,285,309 shares for which it had sole voting power and 1,575 shares for which it had shared voting power, and shared dispositive power with respect to 2,435 shares. (6) Janus Henderson Group plc, a parent holding company, reported that it may be deemed to be the beneficial owner of 7,256,215 shares of the Company’s Common Stock. Janus Henderson Group plc reported that it had shared voting power and shared dispositive power with respect to 7,256,215 shares. | ||
The following table shows, as of March 5, 2019,2, 2021, the number of shares of Common Stock beneficially owned by each Director; the Company’s Chief Executive Officer, Chief Financial Officer and the three other Executive Officers who were the highest paid during 2018;2020; and all Directors and Executive Officers as a group. The Directors and Executive Officers of the Company have sole voting and dispositive power with respect to the securities of the Company listed in the table below.
Name | Amount of Common Stock of the Company Owned Beneficially, Directly or Indirectly | Percentage of Outstanding Shares (1) |
| John Conway | 1,031,933 | * |
| Timothy Donahue (2) | 637,682 | * |
| Richard Fearon (3) | 3,531 | * |
| Andrea Funk | 8,564 | * |
| Gerard Gifford | 161,896 | * |
| Stephen Hagge | 2,338 | * |
| Thomas Kelly (2) | 133,172 | * |
| Rose Lee | 10,134 | * |
| James Miller | 25,001 | * |
| Josef Müller | 24,314 | * |
| Djalma Novaes | 77,473 | * |
| B. Craig Owens | 2,338 | * |
| Didier Sourisseau | 91,760 | * |
| Caesar Sweitzer | 15,914 | * |
| Jim Turner | 92,725 | * |
| William Urkiel | 51,944 | * |
| Dwayne Wilson | 368 | * |
| Directors and Executive | ||
| Officers as a Group of 20 | 2,499,081 | 1.9% |
| * Less than 1% | ||
(1) Percentages are derived based upon 134,912,097 shares of Common Stock outstanding as of March 2, 2021. (2) Excludes 3,000,000 shares of Common Stock held in the Crown Cork & Seal Company, Inc. Master Retirement Trust on behalf of various Company pension plans (“Trust Shares”). Messrs. Donahue and Kelly are members of the Benefits Plan Investment Committee of the trust that has sole voting and dispositive power with respect to the Trust Shares, but they disclaim beneficial ownership of the Trust Shares. (3) Includes 16 shares of Common Stock held by the Fearon Family Trust, of which Mr. Fearon is a trustee and a beneficiary. | ||
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Name | Amount of Common Stock of the Company Owned Beneficially, Directly or Indirectly | Percentage of Outstanding Shares (1) |
| Robert Bourque | 47,485 | * |
| John Conway | 1,157,064 | * |
| Timothy Donahue (2) | 548,867 | * |
Arnold Donald (3) | 23,268 | * |
| Andrea Funk | 4,618 | * |
| Gerard Gifford (4) | 178,140 | * |
| Thomas Kelly (2) | 115,417 | * |
| Rose Lee | 6,188 | * |
| William Little | 52,565 | * |
| Hans Löliger | 75,684 | * |
| James Miller | 21,055 | * |
| Josef Müller | 20,368 | * |
| Didier Sourisseau | 66,863 | * |
| Caesar Sweitzer | 11,968 | * |
| Jim Turner | 88,779 | * |
| William Urkiel | 47,998 | * |
| Directors and Executive | ||
| Officers as a Group of 19 | 2,589,467 | 1.9% |
| * Less than 1% | ||
(1) Percentages are derived based upon 135,328,379 shares of Common Stock outstanding as of March 5, 2019. (2) Excludes 3,000,000 shares of Common Stock held in the Crown Cork & Seal Company, Inc. Master Retirement Trust on behalf of various Company pension plans (“Trust Shares”). Messrs. Donahue and Kelly are members of the Benefits Plan Investment Committee of the trust that has sole voting and dispositive power with respect to the Trust Shares, but they disclaim beneficial ownership of the Trust Shares. (3) Includes 6,898 shares of Common Stock held in a revocable family trust, of which Mr. Donald is trustee. (4) Includes 30,000 shares of Common Stock subject to presently exercisable options held by Mr. Gifford. | ||
CORPORATE GOVERNANCE
Meetings of the Board of Directors. In 2018,2020, there were fiveseven meetings of the Board of Directors. Each Director during his or her term of service attended at least 75% of the aggregate meetings of the Board and of the committees on which he or she served.
Attendance at the Annual Meeting. Under the Company’s Corporate Governance Guidelines, Directors are expected to attend the Company’s Annual Meeting of Shareholders. In 2018,2020, each of the Directors serving on the Board at the time attended the Annual Meeting of Shareholders.
Director Independence. The Board has determined that all Directors standing for election, with the exception of Timothy Donahue, the Company’s Chief Executive Officer, are independent under the listing standards of the NYSE. The Board made this determination based on the absence of any of the express disqualifying criteria set forth in the listing standards that require a majority of the Board nominees to be independent Directors.
In making the foregoing determinations, the Board considered the Directors’ affiliations with the Company or third parties and Company payments to such parties:parties. For Mr. Conway, –the Board considered his status prior to 2016 as the Company’s Chief Executive Officer. For Ms. Funk, the Board considered her role as an officer of EnerSys and ordinary course of business purchases by the Company of batteries and related accessories from EnerSys. The Board also considered her role as a director of Ecore International –in relation to ordinary course of business purchases of rubber matting by the Company andfrom Ecore. For Mr. Fearon, the Board considered his role as an officera Director of EnerSys – ordinary course of business purchases by the Company of batteries for forklifts. For Ms. Lee – an officer of a subsidiary of DowDuPont –Avient Corporation and ordinary course of business purchases of raw materials by the Company. For Mr. Little – employment of his son-in-lawplastisol sealing compounds by the Company infrom Avient. The Board also considered Mr. Fearon’s role as a middle management position in Europe. For Mr. Urkiel, a directorDirector and officer of Roadrunner Transportation Systems – payment forEaton Corporation (from which he will retire on March 31, 2021) and ordinary course of business shippingpurchases of energy management solutions by the Company products.from Eaton. Finally for Mr. Fearon, the Board considered his role as a Trustee of Manufacturers Alliance/MAPI, Inc., a not for profit professional society, and the payment of membership dues for Crown employees by the Company to MAPI. For Mr. Hagge, who is a Director of Transcendia Topco Holdings, the Board considered ordinary course of business purchases of high-density polyethylene by the Company from Transcendia. For Mr. Wilson, the Board considered his role as a Director of Ingredion Incorporated and ordinary course of business purchases of dry bag material for making adhesive used in corrugated paper by the Company from Ingredion. None of these relationships or transactions fell within the NYSE listing standards disqualifying criteria.
Board Leadership and Risk Oversight. Mr. Conway is the independent, non-executive Chairman of the Board. The role of the non-executive Chairman of the Board has been defined to include,a range of duties, including, among other things:
· | creating and maintaining an effective working relationship among the Chief Executive Officer and other members of management and the other members of the Board; |
· | providing the Chief Executive Officer ongoing direction as to Board needs, interests and opinions; and |
· | assuring that the Board agenda is appropriately directed to the matters of greater importance to the Company. |
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Mr. Little, as Chair of the Nominating and Corporate Governance Committee,Miller serves as the Independent PresidingLead Director of the Board. The Independent PresidingLead Director is an independent Director designated by the other independent Directors of the Board and has a range of duties, including:
| presiding at all meetings of the Board in the Chairman’s absence; |
| presiding at all executive sessions of the Board’s independent directors; |
| · | serving as a liaison between the Chairman of the Board and the |
| · | providing the Chairman with input on and approving the agendas and schedules for meetings of the Board and its committees; |
| · | advising the Chairman as to the quality, quantity and timeliness of the flow of information from senior management that is necessary for the independent Directors to effectively and responsibly perform their duties, including specifically requesting the inclusion of certain information in the materials provided for the Board by senior management when appropriate; |
| · | calling executive sessions of the Board’s independent Directors when appropriate; |
| · | being available for consultation with the Chief Executive Officer regarding the concerns of the other directors; |
| · | being available for consultation with members of senior management regarding the concerns of any members of senior management; |
| · | being available for consultation and direct communication with Shareholders and other interested parties when appropriate; |
| · | interviewing Director candidates and making recommendations to the Nominating and Corporate Governance Committee |
| · | leading the Board’s evaluation of the Chairman of the Board; and |
| serving a leading role in the |
The Board’s current leadership structure includes Audit, Compensation and Nominating and Corporate Governance Committees that are each chaired by and composed solely of independent Directors.
The roles of Chairman of the Board and Chief Executive Officer are held by two different individuals. The independent Chairman of the Board, Mr. Conway, presides over meetings of the Board and acts as liaison between the Board and Mr. Donahue, the Chief Executive Officer, who is responsible for the day-to-day management of the Company. Moreover, the Board believes that its other structural features, including tentwelve independent Directors among the slate of eleventhirteen Directors standing for election at the Company’s Annual Meeting, regular meetings of Non-Managementindependent Directors in executive session, key committees consisting wholly of independent Directors and an Independent PresidingLead Director with a wide range of duties, provide for substantial independent oversight of the Company’s management.
The Board is responsible for providing oversight of the Company’s Executive Officers’ responsibilities to assess and manage the Company’s risk, including its credit risk, liquidity risk, reputational risk and risk from adverse fluctuations in foreign exchange and interest rates and commodity prices. The Board periodically meets in person with the Executive Officers regarding the Company’s risks and ways to mitigate such risks. In addition, the Audit Committee periodically reviews with management, internal audit and independent auditors the adequacy and effectiveness of the Company’s policies for assessing and managing risk.
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Director Stock Ownership, Anti-Pledging and Anti-Hedging. Under the Company’s Corporate Governance Guidelines, after five years of service on the Board, Non-Employeeindependent Directors are expected to holdown Company Common Stock having a market value of at least five times the cash base annual Director’s fee. As of March 5, 2019,2, 2021, each Director with five or more years of service on the Board owned the required minimum level of Common Stock. The Company’s Corporate Governance Guidelines prohibit Directors, Officers and other insiders from all forms of pledging or hedging transactions relating to Company Common Stock.
Board Committees. The Board has an Executive Committee, an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee and an Executive Committee. The Board has approved written charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee that can be found at https://www.crowncork.com/investors/corporate-governance. Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee conducts a self-evaluation and review of its charter annually.
Audit Committee. In 2018,2020, the Audit Committee had nineten meetings. The Audit Committee provides assistance to the Board in discharging its responsibilities in connection with the oversight of the financial accounting practices and internal controls of the Company and represents the Board in connection with the services rendered by the Company’s independent auditors. The current members of the Audit Committee are Ms. Funk and Ms. Lee and Messrs. Müller, Owens, Sweitzer, Urkiel and Urkiel.Wilson. Mr. Sweitzer serves as Chair of the Audit Committee. The Board has determined that the Directors who serve on the Audit Committee are all independent under the listing standards of the NYSE and that Messrs. Sweitzer and Urkiel and Ms. Funk are “audit committee financial experts” within the meaning of SEC regulations.
Compensation Committee. In 2018,2020, the Compensation Committee had foursix meetings. The Compensation Committee is responsible for the review of the executive compensation program. On March 1, 2019, Messrs. Little and Donald were replaced as Committee members by Ms. Funk and Mr. Miller. The current members of the Compensation Committee are Ms. Funk and Messrs. Löliger,Hagge, Miller, Müller and Turner, and Ms. Funk, each of whom is independent under the listing standards of the NYSE. Mr. LöligerTurner serves as Chair of the Compensation Committee. For further discussion regarding the Compensation Committee’s processes and procedures for the consideration of executive compensation, see the CD&A beginning on page 30.31.
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Consistent with the Company’s Corporate Governance Guidelines, the Nominating and Corporate Governance Committee seeks Director nominees committed to upholding the highest standards of personal and professional integrity and representing the interests of all Shareholders, not particular Shareholder constituencies. The Committee identifies nominees for Director by first evaluating the current members of the Board willing to continue in service. In addition, the Committee regularly assesses the appropriate size of the Board, whether any vacancies on the Board are expected because of retirement or otherwise and whether the Board needs Directors with particular skills or experience. To identify and evaluate potential candidates for the Board, the Committee solicits ideas for possible nominees from a number of sources, which may include current Board members, senior-level Company executives and professional search firms. The Committee will also consider candidates properly submitted by Company Shareholders. Candidates for the Board are evaluated through a process that may include background and reference checks, personal interviews with members of the Committee and a review of each candidate’s qualifications and other relevant characteristics. The same identifying and evaluating procedures apply to all candidates for Director, whether submitted by Shareholders or otherwise. The Nominating and Corporate Governance Committee and the Board desire to maintain the Board’s diversity and consider factors such as race, gender, nationality and ethnicity, as well as professional backgrounds and geographic and industry experiences. The Committee does not intend to nominate representational Directors but instead considers diversity given the characteristics of the Board in its entirety.
The Company is committed to thoughtful board refreshment and ongoing board succession planning. TwoSix new independent directors recently have been added to the Company’s Board of Directors: RoseMs. Lee who was elected in 2016, and Andrea Funk, who was elected in 2017. Ms. Lee and Ms. Funk were identified byin 2017, Messrs. Fearon, Hagge and Owens in 2019 and Mr. Wilson in 2020. During the refreshment process, the Nominating & Corporate Governance Committee with the assistance ofwas assisted by an independent search firm.
Shareholders who wish to suggest qualified candidates may write, via Certified Mail – Return Receipt Requested, to the Office of the Corporate Secretary, Crown Holdings, Inc., 770 Township Line Road, Yardley, PA 19067 stating in detail the qualifications of the persons they recommend. Shareholders must include a letter from each person recommended affirming that he or she agrees to serve as a Director of the Company if elected by Shareholders. However, through its own resources, the Committee expects to be able to identify an ample number of qualified candidates. See “Questions and Answers about the 20192021 Annual Meeting” for information on bringing nominations for the Board of Directors at the 20202022 Annual Meeting.
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Proxy Access. The Company’s proxy access By-Law permits Shareholders owning 3% or more of the Company’s Common Stock for a period of at least three years to nominate up to the greater of 20% of the Board of Directors or two Directors and include these nominations in the Company’s proxy materials. The number of Shareholders who may aggregate their shares to meet the 3% ownership threshold is limited to 20.
Code of Business Conduct and Ethics. The Company has a Code of Business Conduct and Ethics that applies to all Directors and employees. The Code of Business Conduct and Ethics is available on the Company’s website at https://www.crowncork.com/investors/corporate-governance/code-business-conduct-and-ethics. The Company intends to disclose updates to, and waivers of, the Code of Business Conduct and Ethics on the Company’s website.
Corporate ResponsibilitySustainability. See “Sustainability – Environmental and Sustainability. See “Corporate Responsibility and Sustainability”Social Responsibility” on page 5 in the Proxy Statement Summary.
Transactions with Related Persons. The Nominating and Corporate Governance Committee is charged with reviewing and approving or ratifying all transactions with related persons by Directors and Executive Officers required to be disclosed under Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended (“Regulation S-K”). The written Company policy pertaining to related party transactions is included in the Company’s Corporate Governance Guidelines.
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Human Capital Resources. The Company’s global workforce is the backbone of its sustainability and business success and is the focus of the Working Together pillar of the Company’s Twentyby30 sustainability program. The Company has built a Total Safety Culture that provides the framework for all health and safety initiatives across the Company and empowers employees to take a proactive role in their safety and that of their peers. For more information, see “Human Capital” on page 6 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Shareholder Engagement. See “Shareholder Engagement” on page 4 in the Proxy Statement Summary.
Communications with the Board of Directors. Shareholders and other interested parties who wish to send communications on any topic to the Chairman, the Independent PresidingLead Director, the independent Directors or the Board as a whole may do so by writing c/o Office of the Corporate Secretary, Crown Holdings, Inc., 770 Township Line Road, Yardley, PA 19067. Communications will be forwarded to the Directors if they relate to substantive matters and include information, suggestions or comments that the Chairman or Independent PresidingLead Director, with the assistance of the Corporate Secretary, deems appropriate for consideration by the Directors.
Company Website. The Company’s Corporate Governance Guidelines and the Charters of the Audit, Compensation and Nominating and Corporate Governance Committees are available on the Company’s website at https://www.crowncork.com/investors/corporate-governance.
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) provides an overview of the Company’s executive compensation program together with a description of the material factors underlying the decisions that resulted in the compensation provided for 20182020 to the Company’s Chief Executive Officer (“CEO”), the Company’s Chief Financial Officer and the other three Executive Officers who were the highest paid during 20182020 (collectively, “Named Executive Officers” or “NEOs”). The names of the Company’s 20182020 NEOs and their titles at year-end are:
· | Timothy J. Donahue – President and Chief Executive Officer |
· | Thomas A. Kelly – Senior Vice President and Chief Financial Officer |
· | Gerard H. Gifford – Executive Vice President and Chief Operating Officer |
| Didier Sourisseau– President – European Division |
| Djalma Novaes, Jr. – President – |
The following discussion and analysis contains statements regarding individual and Company performance targets and goals. These targets and goals are disclosed in the limited context of the Company’s compensation programs and should not be understood to be statements of management’s expectations or estimates of financial results or other guidance. The Company specifically cautions investors not to apply these statements to other contexts.
20182020 Say-on-Pay Vote Results. At our Annual Meeting of Shareholders held in April 2018,2020, we held an advisory Shareholder Say-on-Pay vote on the 20172019 compensation of our NEOs. Over 95%96% of the shares voted at last year’s Annual Meeting voted FOR our Say-on-Pay resolution, approving the compensation of our NEOs. The Board’s Compensation Committee (the “Committee”) believes the results of the Say-on-Pay vote show strong support for the performance-based and ownership-oriented compensation philosophy that the Committee has utilized.utilizes. Accordingly, the Committee did not change its general approach to executive compensation in 2018.2020. Although the advisory Shareholder vote on executive compensation is non-binding, the Committee will continue to take the outcome of this annual vote into consideration when making compensation decisions for our NEOs.
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Compensation Element | Basis for Measurement | Alignment with |
Annual Cash Compensation | ||
Base Salary | Individual performance based on primary duties and responsibilities and market competitiveness. | Competitive compensation required to attract and retain highly qualified executives. |
Annual Incentive Bonus | Economic profit and modified operating cash flow. | Use of economic profit and modified operating cash flow metrics drives long-term operating performance and long-term increase in Shareholder value. |
Long-Term Equity Compensation | ||
Performance-Based Restricted Stock Awards (approximately two-thirds of total long-term equity compensation) | Total shareholder return relative to industry peer group and return on invested capital versus a target, in each case over a three-year performance period. | Provides incentive to outperform and deliver superior Shareholder returns relative to peers and to efficiently utilize the Company’s capital. Aligns NEOs with interests of Shareholders and promotes commitment to the long-term performance of the Company. |
Time-Based Restricted Stock Awards (approximately one-third of total long-term equity compensation) | Long-term stock price appreciation. | Aligns NEOs with interests of Shareholders and promotes commitment to the long-term performance of the Company. |
The allocation of 20182020 total direct compensation for our CEO and for our other NEOs among these various components is set forth in the materials on page 89 in the Proxy Statement Summary that highlight the Company’s emphasis on “at risk” and equity-based compensation.
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Role of the Compensation Committee. The Committee currently comprises five Directors, all of whom are independent under the NYSE listing standards. During 2018,2020, the Committee members were Andrea Funk, Stephen Hagge, Hans Löliger, (Chair), Arnold Donald, William Little,James Miller, Josef Müller and Jim Turner. On March 1, 2019, Messrs. LittleIn February 2020, Mr. Löliger retired from the Committee and Donald werewas replaced as Committee members by Ms. Funk and Mr. Miller.Hagge. The Committee has responsibility for determining and implementing the Company’s philosophy with respect to executive compensation. To implement this philosophy, the Committee oversees the establishment and administration of the Company’s executive compensation program. The Committee operates under a written charter adopted by the Board of Directors. A copy of this charter is available on the Company’s website at https://www.crowncork.com/investors/corporate-governance/compensation-committee-charter.
Compensation Philosophy and Objectives. The Committee maintains a “pay-for-performance” philosophy toward executive compensation. One of the guiding principles of this “pay-for-performance” philosophy is that the executive compensation program should enable the Company to attract, retain and motivate a team of highly qualified executives who will create long-term value for the Shareholders. To achieve this objective, the Committee has developed an executive compensation program that is ownership-oriented and that rewards the attainment of specific annual and long-term goals that will result in improvement in total shareholder return. To that end, the Committee believes that the executive compensation program should include both cash and equity-based compensation that rewards specific performance by the Company. In addition, the Committee continually monitors the effectiveness of the program to ensure that the compensation provided to executives remains competitive relative to the compensation paid to executives in a peer group comprising select companies in the container and packaging industry and other manufacturing companies.
The Committee annually evaluates the components of the compensation program as well as the desired mix of compensation among these components. The Committee believes that a substantial portion of the direct compensation paid to the Company’s NEOs should be at risk, contingent on the Company’s operating and stock market performance. Consistent with this philosophy, the Committee will continue to place significant emphasis on stock-based and performance-based compensation in an effort to more closely align compensation with Shareholder interests and increase executives’ focus on the Company’s long-term performance. Accordingly, the annual incentive bonus is determined by operating metrics that drive long-term growth and Shareholder value, and approximately two-thirds of the value of the restricted stock granted in 20182020 under the Company’s long-term incentive plan is tied to performance of the Company’s total shareholder return versus that of a peer group and return on invested capital versus the Company’s projected three-year average of return on invested capital.
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| Stock Ownership Guidelines Applicable to NEOs | |
| Position | Multiple of Base Salary |
| CEO | 6x |
| All other NEOs | 3x |
Until the ownership requirement is satisfied, an NEO is required to retain 50% of the after-tax valuenumber of shares of any Common Stock received as the result of an option exercise, or vesting of restricted shares or issuance of deferred shares. At year-end, all the NEOs either owned more than the minimum level of Common Stock or were otherwise in compliance with the stock ownership guidelines.
Prohibition of Hedging and Pledging. Under the Company’s Corporate Governance Guidelines, the Company’s Directors, Officers and other insiders may not engage in any form of hedging or pledging transactions with respect to Company securities and may not pledge Company securities as collateral for a loan or otherwise use Company securities to secure a debt.securities.
Committee Process. The Committee meets as often as necessary to perform its duties and responsibilities. During 2018,2020, the Committee met foursix times. The Committee usually meets with the CEO and, when appropriate, with other Company Officers and outside advisors. In addition, the Committee periodically meets in executive session without management present.
Setting of Meeting Agenda. The Committee’s meeting agenda is normally established by the Committee Chair in consultation with the CEO and the Vice President of Human Resources. Committee members receive and review materials in advance of each meeting. Depending on the meeting’s agenda, such materials may include: financial reports regarding the Company’s performance, reports on achievement of corporate objectives, reports detailing executives’ stock ownership and stock awards and information regarding the compensation programs and compensation levels of certain peer group companies.
Use of Tally Sheets. The Committee reviews tally sheets when setting annual compensation for the NEOs. These tally sheets allow the Committee to review each NEO’s compensation on an aggregate basis and to see how a change in any one component affects each NEO’s total compensation. For 2018,2020, the Committee used the tally sheet information to review total compensation, the current mix of compensation (e.g., cash versus equity), issues of internal pay equity, total value of Company stock held by each NEO, payouts under certain potential termination scenarios, and the aggregate value of retirement benefits and interest rate sensitivity on retirement benefits.
Retention of Compensation Consultants. The Committee’s charter authorizes the Committee, in its sole discretion, to retain, oversee and terminate consultants to assist it in the evaluation of compensation for the NEOs. The Committee has sole authority to approve the fees and other retention terms of any such consultant.consultants.
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Executive Compensation Consultant. Pursuant to its authority under its charter to retain compensation consultants, the Committee engaged Pay Governance LLC, an executive compensation consulting firm, to act as its independent advisor with respect to 20182020 compensation decisions.
Consultant Independence. All services provided by Pay Governance to the Committee are conducted under the direction and authority of the Committee, and all work performed by Pay Governance must be pre-approved by the Committee. Pay Governance does not provide any other services to the Company, and neither Pay Governance nor the individuals affiliated with Pay Governance who provide services to the Company own any shares of the Company’s stock. There are no personal or business relationships between the Pay Governance consultants and any executive of the Company. In addition, there are no personal relationships between the Pay Governance consultants and any member of the Committee. Pay Governance maintains a detailed conflict of interest policy in order to ensure that compensation committees receive conflict-free advice.
Use of Benchmarking. In advising the Committee regarding 20182020 compensation for our NEOs, Pay Governance developed competitive compensation levels by establishing a benchmark match for each NEO position in the competitive market. Competitive levels were developed for the following elements of pay:
| base salary |
| target annual incentive |
| target total cash compensation (base salary plus target annual incentive) |
| long-term equity incentives |
| target total direct compensation (target total cash compensation plus the target value of long-term equity incentives) |
| annualized value of retirement benefits |
target total remuneration (target total direct compensation plus the annualized value of retirement benefits) |
Peer Group Composition. In establishing its benchmarks for each of the NEOs, Pay Governance gathered data for 17 public companies, or divisions of public companies, defined as the “Peer Group.” Members of the Peer Group are manufacturing companies of similar scope and are generally from the following three categories: (i) other container and packaging industry companies, (ii) current or potential suppliers to the Company and (iii) current or potential customers of the Company. The Peer Group comprises the following companies:
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Specific benchmark levels were developed using regression analysis to size-adjust the market data to reflect the Company’s corporate revenue or the individual business unit revenue, when appropriate. To provide a broader frame of reference, Pay Governance also analyzed each NEO position against general industry data.
Compensation Strategy for CEO. The evaluation of the CEO’s performance and the setting of his compensation is one of the fundamental duties of the Committee. In determining the CEO’s compensation for 2018,2020, the Committee evaluated the CEO’s performance and the Company’sCompany’s performance in the prior year and since Mr. Donahue became CEO in 2016. In evaluating the CEO’s performance, the Committee considered the Company’s overall financial, operational and strategic results. In addition, the Committee continued to focus on the Company’s development during Mr. Donahue’sDonahue’s tenure in several key areas that the Committee believes are essential to increase Shareholder value, including:
Strong earnings and cash flow generation. For the year, net income was |
· | Investment in growth markets. In response to increasing global demand for beverage cans, during 2020 the Company |
· | Deleveraging of the balance sheet. Following the Signode (Transit Packaging) acquisition, the Company’s deleveraging goal is on plan. At the end of 2020, net leverage (net debt over EBITDA) declined to 3.9 times. |
· | Sustainability.Under Mr. Donahue’s leadership, the Company has continued its commitment to efficiently manage and conserve resources and bring innovations to market to support the sustainability efforts of |
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CEO Target Compensation. The Committee uses the 50th percentile of the Peer Group’s target total direct compensation as a guidepost in determining CEO compensation.
The specific components of Mr. Donahue’s 20182020 compensation were set as follows:
| Base Salary | $ |
| Target Annual Incentive | |
| Target Long-Term Equity Incentive | |
| Target Total Direct Compensation |
In conjunction with the Committee’s emphasis on stock-based compensation, a majority of the CEO’s 20182020 target total direct compensation was in the form of Company Common Stock.
Compensation Strategy for NEOs other than the CEO. For 2018,2020, the Committee generally continued following its market-based compensation strategy for the NEOs other than the CEO:
| Pay levels were evaluated relative to the Peer Group as the primary market reference point. In addition, general industry data was reviewed as an additional market reference and to ensure robust competitive data. |
Target total cash compensation and target total direct compensation levels were set towards the middle range of the Peer Group. The Committee used the 50th percentile of the Peer Group’s target total cash compensation and target total direct compensation as a market check in determining compensation. However, the 50th percentile is a guidepost and not an absolute target. |
Components of Compensation. For 2018,2020, the principal components of compensation for NEOs were base salary, annual incentive bonus, long-term equity incentives, retirement benefits and perquisites.
Base Salary. The Company provides NEOs with base salaries to compensate them for services rendered during the year. The Committee recognizes that competitive salaries must be paid in order to attract and retain high-quality executives. Normally, the Committee reviews NEO salaries at the end of each year, with any adjustments to base salary becoming effective on January 1 of the succeeding year. However, in special circumstances, such as a promotion or increased responsibilities, the Committee may act to increase an NEO’s salary during the year.
20182020 Base Salaries. The Committee has determined that base salary levels for the NEOs should be targeted towards the middle range of the Peer Group. Consistent with this market-based pay strategy, the Committee approved increases in the base salaries of the NEOs in order to move them in line with the middle range of the Peer Group. Mr. Bourque was promoted to President – Transit Packaging Division in 2018. In light of his new role and greater responsibility, the Committee increased Mr. Bourque’s annual base salary by $50,000. Base salaries for each of the NEOs for 20182020 were as set forth in the following table.
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| Name | |
| Timothy Donahue | $ |
| Thomas Kelly | |
| Gerard Gifford | |
__________________________
| Mr. Sourisseau’s base salary for |
Annual Incentive Bonus. Annual cash bonuses are included as part of the executive compensation program because, consistent with our “pay-for-performance” philosophy, the Committee believes that a significant portion of each NEO’s compensation should be contingent on success in achieving annual goals that drive the long-term operating performance of the Company. NEOs are eligible for annual cash bonuses under our AnnualEconomic Profit Incentive Bonus Plan (the “AIB“EP Plan”). For 2018,2020, our NEOs were eligible to receive annual incentive bonuses under the AIBEP Plan upon the achievement of specified levels of economic profit and modified operating cash flow. The Committee believes the use of economic profit and modified operating cash flow as key performance measures under the AIBEP Plan drives the Company’s long-term operating performance and is closely correlated with long-term increase in Shareholder value. The maximum payout under the AIBEP Plan is limited to two times the target bonus.bonus, with no excess carried forward into subsequent years.
20182020 Bonus Opportunities and Results. For 2018,2020, the Committee assigned each NEO an annual target level under the AIBEP Plan together with a maximum annual bonus opportunity as a percentage of each NEO’s base salary. Based upon the Peer Group information provided by Pay Governance and the consideration of OfficerNEO performance and internal equity, the Committee determined that the target and maximum bonus opportunities for the NEOs for 20182020 should be the same as in 2017.2019. The 20182020 minimum, maximum and target bonus opportunities together with actual bonuses paid to the NEOs were as follows:
Name | Minimum Bonus as a Percentage of Base Salary | Maximum Bonus as a Percentage of Base Salary | Target Bonus as a Percentage of Base Salary | Target Bonus Amount | Actual Bonus Amount |
| Timothy Donahue | 0% | 240% | 120% | $1,440,000 | $2,880,000 |
| Thomas Kelly | 0% | 160% | 80% | 568,000 | 1,136,000 |
| Gerard Gifford | 0% | 190% | 95% | 707,750 | 1,415,500 |
| Didier Sourisseau | 0% | 160% | 80% | 511,712 | 1,023,424 |
| Djalma Novaes | 0% | 160% | 80% | 480,000 | 960,000 |
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Name | Minimum Bonus as a Percentage of Base Salary | Maximum Bonus as a Percentage of Base Salary | Target Bonus as a Percentage of Base Salary | Target Bonus Amount | Actual Bonus Amount |
| Timothy Donahue | 0% | 240% | 120% | $1,320,000 | $1,735,800 |
| Thomas Kelly | 0% | 160% | 80% | 520,000 | 683,800 |
| Gerard Gifford | 0% | 190% | 95% | 646,000 | 849,490 |
| Robert Bourque | 0% | 160% | 80% | 376,666 | 753,333 |
| Didier Sourisseau | 0% | 160% | 80% | 454,212 | 573,670 |
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economic profit – defined generally as net operating profit after tax less cost of capital employed as adjusted for certain items, including currency exchange rates and acquisitions/divestitures |
modified operating cash flow – defined generally as earnings before interest, taxes, depreciation and amortization reduced by capital spending and adjusted for certain items, including changes in year-end trade working capital |
Cost of Capital. For purposes of calculating economic profit under the AIBEP Plan, cost of capital employed was defined as the average capital employed multiplied by the average cost of capital. Capital employed was generally defined as total assets less non-interest bearing liabilities and is adjusted for certain items. The following items were excluded from capital employed: investments, net goodwill and intangibles, pension and post-employment assets and liabilities and deferred tax assets and liabilities. Invested capital may also be adjusted for additional capital employed at the direction of the Company’s corporate office or in accordance with overall corporate objectives. For 2018,2020, the AIBEP Plan used a cost of capital of 9%9.0%, which is higher than the Company’s actual cost of capital.
Weighting of Performance Measures. At the beginning of 2018, theThe Committee determinedestablished target levels of performance for each performance measure. At year-end,In determining the weighting of performance targets for 2020, the Committee assessedconsidered the actual results versuspotential impact of the original goalsCOVID-19 pandemic but ultimately determined that there should be no change in determining awards.the weighting of such targets. The Committee must approve all awards, and all awards are subject to review and downward discretionary adjustment by the Committee.
An NEO’s actual bonus amount was determined by: (i) multiplying the NEO’s target bonus amount by the actual percentage earned for each of the two performance measures, (ii) weighting each performance measure in accordance with a pre-specified formula, (iii) adding the results together to determine the overall payout factor and (iv) if applicable, reducing the overall payout to the maximum of 200% of the target bonus amount.
As the achievement of each of economic profit and modified operating cash flow increases in excess of respective performance targets, the percentage of each NEO’s target bonus payable with respect to such performance measure also increases. In the case of modified operating cash flow, up to 125% of the target bonus amount will be paid, in incremental increases, as the achievement level increases from 100% to 110% of the performance target. Conversely, the percentage of the target bonus amount payable with respect to modified operating cash flow decreases as achievement falls below 100% of the applicable performance target, with no amount being payable for achievement levels below the threshold of 80% of the applicable performance target. The modified operating cash flow component of the AIBEP Plan was determined based upon actual performance compared to a budgeted modified operating cash flow amount.
The economic profit component of the AIBEP Plan was determined by relating current-year economic profit to prior years economic profit, adjusted for currency fluctuations. In the case of economic profit, up to 125% of the target bonus amount will be paid, in incremental increases, as the achievement level increases from 100% to 110% of the performance target. Conversely, the percentage of the target bonus amount payable with respect to economic profit decreases as achievement falls below 100% of the applicable performance target, with no amount being payable for achievement levels below the threshold of 80% of the applicable performance target. No portion of the target bonus amount will be paid for economic profit arising from accounting changes or similar non-cash items.
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Notwithstanding the ability to earn up to 125% of the target bonus amount under each of the two tests (modified operating cash flow and economic profit), the maximum aggregate bonus opportunity is capped at 200% of the target bonus amount for all NEOs.
Setting of Target Performance Levels. Generally, the Committee attempts to set the target performance levels so that the relative difficulty of achieving the targets is consistent among the NEOs in any one year and for each NEO from year to year. In making this determination the Committee may consider specific circumstances experienced by the Company in prior years or that the Company expects to face in the coming year. For example, with respect to modified operating cash flow, targets may be set below prior year actual results due to the forecasted increases in capital investment (property, plant and equipment and working capital) required for the Company’s capacity expansion, in growth markets, forecasted increases in working capital, higher input costs due to price increases by suppliers and variances in average trade working capital. Establishing targets for 2020 was particularly challenging because of the onset of the COVID-19 pandemic. However, the Committee ultimately determined that the targets for the NEOs would be set consistent with historical practice. For 2020, the Committee recognized that increasing global product demand would require significant capital spending, with the 2020 budget for capital spending being approximately $200 million greater than the actual capital spending for 2019. Accordingly, the Committee believed that it was appropriate to establish modified operating cash flow targets which reflected this additional investment in the long-term success of the Company, and that would continue to incentivize investment for growth. The Committee also determined that the modified operating cash flow targets for one of its operating divisions should be adjusted slightly from the budget that was established before the COVID-19 pandemic, but the targets and bonuses earned with respect to 2020 for all NEOs were unaffected by that adjustment. In addition, targetthe Committee determined that the economic profit performance levels are subject to adjustment for special circumstances such as currency exchange rate fluctuations, acquisitions and divestitures.measure should be set in the normal manner without any adjustment.
The economic profit and modified operating cash flow thresholds and targets for 20182020 were set at the Company level for the CEO, Chief Operating Officer and Chief Financial Officer. For division-level NEOs (Messrs. BourqueSourisseau and Sourisseau)Novaes), economic profit and modified operating cash flow thresholds and targets include both division-level and Company levelCompany-level metrics. In addition, the Committee made adjustments to the application of economic profit and modified operating cash flow to account for the 2018 acquisition of the Transit Packaging Division. The applicable thresholds, targets and actual achievement levels for 20182020 are set forth for each NEO in the following table.
Name | Economic Profit (in millions) | Modified Operating Cash Flow (in millions) | ||||
| Threshold | Target | Actual | Threshold | Target | Actual | |
| Timothy Donahue | $507.8 | $634.8 | $575.5 | $710.4 | $888.0 | $952.8 |
| Thomas Kelly | 507.8 | 634.8 | 575.5 | 710.4 | 888.0 | 952.8 |
| Gerard Gifford | 507.8 | 634.8 | 575.5 | 710.4 | 888.0 | 952.8 |
Robert Bourque (1) | 38.4 | 48.0 | 55.7 | 16.8 | 21.0 | 79.2 |
Didier Sourisseau (1) | 201.5 | 251.9 | 183.8 | 282.0 | 352.5 | 408.9 |
Name | Economic Profit (in millions) | Modified Operating Cash Flow (in millions) | ||||
| Threshold | Target | Actual | Threshold | Target | Actual | |
| Timothy Donahue | $478.1 | $597.6 | $668.0 | $743.0 | $928.8 | $1,113.0 |
| Thomas Kelly | 478.1 | 597.6 | 668.0 | 743.0 | 928.8 | 1,113.0 |
| Gerard Gifford | 478.1 | 597.6 | 668.0 | 743.0 | 928.8 | 1,113.0 |
| Didier Sourisseau (1) | 124.9 | 156.1 | 162.4 | 236.2 | 295.3 | 393.4 |
| Djalma Novaes (1) | 164.1 | 205.1 | 296.4 | 261.4 | 326.7 | 363.1 |
____________________
| (1) | The threshold and target numbers for Messrs. |
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Long-Term Equity Incentives. The Committee believes that equity-based incentives, delivered through annual grants of time-based restricted stock and performance-based restricted stock, are an important link between executive and Shareholder interests. Because the Committee believes that a significant portion of the benefits realized from long-term equity-based incentive grants should require continuous improvement in value created for the Shareholders, approximately two-thirds of the targeted value of stock awards to NEOs is performance-based. Beginning in 2017, in response to Shareholder feedback regarding the Company’s use of a single metric and a market trend away from a single metric, the Committee approved the use of return on invested capital as a second performance metric to determine vesting of performance-based shares. In the 20182020 grants, the Company used total shareholder return (“TSR”) and return on invested capital (“ROIC”) as the two performance metrics for purposes of vesting performance-based shares. The Committee believes that the use of TSR and ROIC aligns the Company’s long-term incentive plan with its peers and with current market practice. Although the Committee may vary the size of annual grants based on the Company’s and executive’s performance, the total annual equity award granted to each NEO is generally determined based upon the difference between the total direct compensation target established by the Committee, using the competitive market benchmarking and internal factors described above, and the sum of the NEO’s base salary and target annual incentive bonus. See “Compensation Strategy for CEO” and “Compensation Strategy for NEOs other than the CEO.”
Equity awards to NEOs are generally made by the Committee each year in the form of restricted stock as part of the normal annual compensation review cycle. The awards for a particular year generally occur in January or February. In addition, the Committee may approve equity awards for newly hirednewly-hired executives or in recognition of an executive’s promotion or expansion of responsibilities.
The Committee approved the following award structure for 2018:
Target Award Levels. Award levels were generally set to deliver target total direct compensation (sum of base salary, annual and long-term equity incentives) in the middle range of the Peer Group after taking into account the competitive positioning of the executives’ target total cash compensation. |
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Performance-Based Restricted Stock. Approximately two-thirds of an NEO’s targeted long-term equity incentive was delivered in performance-based restricted stock, approximately half of which may be earned based on the Company’s TSR relative to a group of industry peers over a three-year performance period and approximately half of which may be earned based on ROIC over the same three-year performance period relative to the Company’s projected three-year average of return on invested capital. A target number of shares was established for |
Time-Based Restricted Stock. Approximately one-third of an NEO’s targeted long-term equity incentive was delivered in time-based restricted stock that vests in equal annual installments over three years from the date of the award in the amounts set forth in the “Grants of Plan-Based Awards” table in the Executive Compensation section below. |
Industry Peer Group Composition. The Committee believes that for purposes of comparing TSR it is appropriate to utilize a recognized publicly available index of container and packaging industry companies as the peer group. As a result, with respect to determining shareholder return for 20182020 grants, the Committee will use the Dow Jones U.S. Containers & Packaging Index, currently comprising the Company and the following other companies:
| ·O-I Glass | ||
| ·Packaging Corporation of America | ||
| ·Silgan Holdings | ||
Performance Vesting Schedule for TSR-Based Awards. The Committee determined that, for the portion of performance-based shares vesting on the basis of TSR, such shares would vest based on the following schedule.
TSR Percentile Ranking Versus Peers | Percentage of Shares Vesting |
90th or Above | 200% |
75th – 89th | 150-199% |
50th – 74th | 100-149% |
40th – 49th | 50-99% |
25th – 39th | 25-49% |
Below 25th | 0% |
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Calculation of TSR. TSR is calculated by dividing the closing share price of a company’s common stock on the ending date of the applicable three-year calendar period plus cumulative dividends during such period, if any, by the closing share price of such company’s common stock on the beginning date of the applicable period. In the event that the Company’s TSR percentile ranking is between the specified percentiles, the vesting percentage is pro-rated on a straight-line basis.
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| ROIC | Percentage of Shares Vesting |
| 13.7% or Above | 200% |
| 12.7% | 100% |
| 11.7% | 25% |
| Below 11.7% | 0% |
| ROIC | Percentage of Shares Vesting |
| 11.7% or Above | 200% |
| 10.7% | 100% |
| 9.7% | 25% |
| Below 9.7% | 0% |
Calculation of ROIC. ROIC is calculated by dividing the Company’s after-tax segment income from continuing operations, adjusted for pension and post-retirement expenses, by the average invested capital. ROIC is subject to adjustment for foreign exchange, acquisitions and divestitures, and non-recurring and other significant non-operational items. The target is equal to the Company’s projection of its three-year average of ROIC of 12.7%10.7%. The overall range and associated payouts are described below. In the event that the Company’s ROIC is between the specified percentiles, the vesting percentage is pro-rated on a straight-line basis.
20182020 Long-Term Equity Incentive Awards. The following tables setfirst table below sets forth the number of time-based restricted shares granted to the NEOs for 2020. The second table below sets forth the target number of time-based and performance-based restricted shares granted to the NEOs for 20182020 as well as the minimum and maximum number of performance-based shares that may vestvest. Vesting of performance-based share awards is based on two criteria: the Company’s TSR relative to the industry peer group over the applicable performance period and the Company’s ROIC over the same three-year performance period relative to the Company’s projected three-year average of ROIC. The tables also set forth the fair value of the shares on the date of grant. With respect to the normal annual 20182020 grants awarded to the NEOs, fair value on the date of grant was based on a share price of $57.09$70.31 on the date immediately preceding the date of grant for time-based restricted stock and the portion of the performance-based restricted stock that vests on the basis of ROIC and $60.56$75.68 for the portion of the performance-based restricted stock that vests on the basis of TSR (based on a Monte Carlo valuation model). Mr. Bourque received an additional grant when he was promoted to President – Transit Packaging Division in August 2018. With respect to those shares, the fair value on the date of grant was $45.20 per share for time-based shares and ROIC performance-based shares and $22.20 per share for TSR performance-based shares.
| Name | Time-Based Restricted Stock | |
| Shares | Award Value | |
| Timothy Donahue | 29,583 | $2,079,981 |
| Thomas Kelly | 6,059 | 426,008 |
| Gerard Gifford | 8,655 | 608,533 |
| Didier Sourisseau | 5,028 | 353,519 |
| Djalma Novaes | 4,978 | 350,003 |
| Name | Time-Based Restricted Stock | |
| Shares | Award Value | |
| Timothy Donahue | 33,398 | $1,906,692 |
| Thomas Kelly | 6,831 | 389,982 |
| Gerard Gifford | 9,926 | 566,675 |
| Robert Bourque | 4,267 | 234,412 |
| Didier Sourisseau | 5,671 | 323,757 |
| Name | Performance-Based Restricted Stock | |||||||
| TSR-Based Award | ROIC-Based Award | |||||||
| Target Shares | Award Value | Minimum Shares | Maximum Shares | Target Shares | Award Value | Minimum Shares | Maximum Shares | |
| Timothy Donahue | 31,484 | $1,906,671 | 0 | 62,968 | 33,398 | $1,906,692 | 0 | 66,796 |
| Thomas Kelly | 6,440 | 390,006 | 0 | 12,880 | 6,831 | 389,982 | 0 | 13,662 |
| Gerard Gifford | 9,357 | 566,660 | 0 | 18,714 | 9,926 | 566,675 | 0 | 19,852 |
| Robert Bourque | 4,867 | 234,405 | 0 | 9,734 | 4,267 | 234,412 | 0 | 8,534 |
| Didier Sourisseau (1) | 5,346 | 323,754 | 0 | 10,692 | 5,671 | 323,757 | 0 | 11,342 |
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| Name | Performance-Based Restricted Stock | |||||||
| TSR-Based Award | ROIC-Based Award | |||||||
| Target Shares | Award Value | Minimum Shares | Maximum Shares | Target Shares | Award Value | Minimum Shares | Maximum Shares | |
| Timothy Donahue | 27,484 | $2,079,989 | 0 | 54,968 | 29,583 | $2,079,981 | 0 | 59,166 |
| Thomas Kelly | 5,629 | 426,003 | 0 | 11,258 | 6,059 | 426,008 | 0 | 12,118 |
| Gerard Gifford | 8,040 | 608,467 | 0 | 16,080 | 8,655 | 608,533 | 0 | 17,310 |
| Didier Sourisseau (1) | 4,671 | 353,501 | 0 | 9,342 | 5,028 | 353,519 | 0 | 10,056 |
| Djalma Novaes | 4,625 | 350,020 | 0 | 9,250 | 4,978 | 350,003 | 0 | 9,956 |
____________________
| (1) | The shares awarded to Messrs. Donahue, Kelly, Gifford and |
Pay-for-Performance Alignment - NEO Forfeiture of– Performance-Based Shares. In 2021, based on the Company’s strong performance for the three-year measurement period ending December 31, 2020, 48.5% more performance shares vested above the target established for the Company’s NEOs, including the CEO, at the time they were awarded in 2018. The additional performance-based shares were attributable to over-achievement on the TSR metric that resulted in an award of 100% over the target established in 2018 and achievement of the ROIC target that resulted in an award equal to the target established in 2018. In 2020, 21.3% more performance shares vested above the target established for the Company’s NEOs, including the CEO, at the time they were awarded in 2017. Based on the Company’s TSR under-performance versus its peer group for the measurement periods related to the vesting of performance-based shares in 2018 and 2019, the Company’s NEOs, including the CEO, forfeited 100% of the performance-based shares awarded to them that were scheduled to vesttargeted for vesting in 2018 and 2019. The Committee views thisthese outcomes as demonstrative of the Company’s “pay-for-performance” philosophy.
Clawback Policy. Beginning with 2021 grants, the Company adopted a new clawback policy applicable to performance-based equity awards. Under the clawback policy, if the Company is required to restate its financial statements resulting in the Company’s financial results being reduced such that an equity award (or any portion thereof) would not have been awarded (or would have been awarded with respect to a smaller number of shares), the Committee may reduce such equity award and recoup from the recipient shares or cash if the Committee determines, in its sole discretion, that the recipient engaged in intentional misconduct or fraud that resulted in the financial restatement. The Company previously established a similar policy with respect to its annual non-equity incentive bonus plan.
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Retirement Benefits. To attract and retain highly qualified senior executives and as an incentive for long-term employment, the Company maintains a number of retirement plans.
U.S. Pension Plan. In the United States, the Company maintains a defined benefit pension plan (the “U.S. Pension Plan”) for certain eligible employees in which all NEOs except Mr. Sourisseau participate. The U.S. Pension Plan is designed and administered to qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”). The U.S. Pension Plan provides normal retirement benefits at age 65 based on the average of the five highest consecutive years of earnings in the last ten years prior to employment termination. For purposes of the U.S. Pension Plan, earnings consist of salary excluding any bonus. These average earnings are multiplied by 1.25% and by years of service, which yields the annual Company-funded pension benefit. Under U.S. federal law for 2018,2020, benefits from the U.S. Pension Plan are limited to $220,000$230,000 per year and may be based only on the first $275,000$285,000 of an employee’s annual earnings.
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All benefits earned under the SERP are paid in a lump sum. If an NEO with a vested retirement benefit under the SERP dies prior to termination of employment, the NEO’s surviving spouse (but not other named beneficiaries) will be entitled to a 50% survivor benefit. The SERP also provides a lump-sum death benefit of five times the annual retirement benefit.
SERP participants vest in their benefits at the earliest of five years of participation, specified retirement dates, total disability or upon a “change in control” of the Company. Messrs. Donahue, Kelly, Gifford and GiffordNovaes are vested.
Restoration Plan. Prior to participating in the SERP, Mr. Gifford became a participant in the Company’s Restoration Plan. Participants in the Restoration Plan receive supplemental retirement benefits equal to the difference between (i) the benefits that they would have accrued under the U.S. Pension Plan if their target bonus amounts were included in compensation for purposes of calculating their benefits under that plan and if certain statutory benefit limits did not apply and (ii) the benefits that they actually accrue under the U.S. Pension Plan. As described above, the benefits to which Mr. Gifford is entitled under the SERP will be offset by the benefits to which he is entitled under the Restoration Plan.
U.S. Defined Contribution Plan. The Company also maintains a tax-qualified 401(k) Retirement Savings Plan to which all U.S. salaried employees, including all NEOs except forother than Mr. Sourisseau, are able to contribute a portion of their salaries on a pre-tax basis. Subject to certain Code limits, the Company will match 50% of the first 3% of salary that is contributed to this 401(k) plan.
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Swiss Defined Contribution Pension Plan. Mr. Sourisseau participates in a defined contribution pension plan maintained for the benefit of certain Company employees in Switzerland (the “Swiss Pension Plan”). For each year Mr. Sourisseau participates in the Swiss Pension Plan, the Company will contribute an amount on Mr. Sourisseau’s behalf equal to 10%12% times the sum of (i) the lesser of his target bonus and his actual bonus for such year and (ii) his base salary for such year (in each case, reduced in coordination with certain statutory limits). For employees age 55 and older, which age Mr. Sourisseau will reach in 2020, the Company increases its contribution to 12%.
Perquisites. The Company provides the NEOs with a limited number of perquisites and other personal benefits that the Committee believes are reasonable and consistent with its overall compensation program to better enable the Company to attract and retain key executives. An item is a perquisite if it confers a direct or indirect benefit that has a personal aspect, without regard to whether it may be provided for some business reason or for the convenience of the Company, unless it is generally available on a non-discriminatory basis to all employees. An item is not a perquisite if it is integrally and directly related to the performance of the
Severance.The Company has employment agreements with all of the NEOs. In addition to the compensation components listed above, these contracts provide for post-employment severance payments and benefits in the event of employment termination under certain circumstances. For more information regarding these potential severance payments and benefits, see “Employment Agreements and Potential Payments upon Termination” in the Executive Compensation section below. The Committee believes that these contracts provide an incentive to the NEOs to remain with the Company and serve to align the interests of the NEOs and Shareholders, including in the event of a potential acquisition of the Company.
Tax Deductibility of Executive Compensation. The Tax Cuts and Jobs Act, which was passed in December 2017, eliminated the “performance-based” compensation exemption under Section 162(m) of the Code and made several other significant changes to Section 162(m). ForConsequently, since 2018, and going forward, compensation paid or accrued by the Company for U.S. federal income tax purposes in excess of $1 million with respect to each of our CEO, our Chief Financial Officer and our other NEOs willis not be tax deductible regardless of whether such compensation would have qualified for the “performance-based” exemption under prior law. Any individual who was a “covered employee” (as defined in Section 162(m) of the Code) in 2017 or becomes a covered employee thereafter will remain subject to the annual $1 million tax deductibility limit regardless of loss of status as an NEO or termination of employment. The Committee believes that Shareholder interests are best served by not restricting the Committee’s discretion and flexibility in structuring compensation programs, even if such compensation results in non-deductible expenses under applicable law. However, consistent with our compensation philosophy of linking pay to performance and aligning executive interests with those of our Shareholders, we currently expect that we will continue to structure our executive compensation program so that a significant portion of total executive compensation is performance-based.
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COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
This report is respectfully submitted on February 27, 201924, 2021 by the members of the Compensation Committee.
| Jim Turner, Chair | |
| Andrea Funk | |
| Stephen Hagge | |
| James Miller | |
| Josef Müller |
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table lists certain information regarding compensation earned during the Company’s last three fiscal years by the Company’s Chief Executive Officer, Chief Financial Officer and other three Executive Officers who were the highest paid during 2018.
Name and Principal Position | Year | Salary | Stock Awards (1) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings (2) | All Other Compensation (3) | Total Compensation |
| Timothy Donahue | 2018 | $1,100,000 | $5,720,055 | $1,735,800 | $1,183,618 | $ 77,268 | $9,816,741 |
President and Chief Executive Officer | 2017 | 1,000,000 | 5,200,004 | 2,295,600 | 2,810,148 | 634,208 | 11,939,960 |
| 2016 | 915,000 | 5,051,113 | 2,594,849 | 1,994,476 | 419,188 | 10,974,626 | |
| Thomas Kelly | 2018 | 650,000 | 1,169,970 | 683,800 | 532,453 | 135,353 | 3,171,576 |
Senior Vice President and Chief Financial Officer | 2017 | 605,000 | 1,088,964 | 925,892 | 1,532,894 | 307,844 | 4,460,594 |
| 2016 | 575,000 | 1,035,302 | 1,134,360 | 1,263,055 | 222,240 | 4,229,957 | |
| Gerard Gifford | 2018 | 680,000 | 1,700,010 | 849,490 | 1,048,496 | 63,572 | 4,341,568 |
| Executive Vice President and Chief Operating Officer | 2017 | 640,000 | 1,625,030 | 1,129,958 | 2,482,355 | 995,275 | 6,872,618 |
| 2016 | 600,000 | 1,308,274 | 1,292,640 | 2,051,731 | 868,177 | 6,120,822 | |
| Robert H. Bourque | 2018 | 470,833 | 703,229 | 753,333 | 434,745 | 1,136,480 | 3,498,620 |
| President-Transit Packaging Division | 2017 | 420,000 | 558,572 | 672,000 | 681,040 | 479,716 | 2,811,328 |
| 2016 | 302,413 | 310,387 | 539,081 | 747,977 | 669,710 | 2,569,568 | |
| Didier Sourisseau (4) | 2018 | 567,765 | 971,268 | 573,670 | 329,461 | 116,908 | 2,559,072 |
President-European Division | 2017 | 501,633 | 874,978 | 699,726 | 2,760,727 | 617,628 | 5,454,692 |
Name and Principal Position | Year | Salary | Stock Awards (1) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings (2) | All Other Compensation (3) | Total Compensation(4) |
| Timothy Donahue | 2020 | $1,200,000 | $6,239,951 | $2,880,000 | $5,714,297 | $1,486,791 | $17,521,039 |
President and Chief Executive Officer | 2019 | 1,155,000 | 6,005,970 | 1,711,710 | 4,056,957 | 1,081,053 | 14,010,690 |
| 2018 | 1,100,000 | 5,720,055 | 1,735,800 | 1,183,618 | 77,268 | 9,816,741 | |
| Thomas Kelly | 2020 | 710,000 | 1,278,019 | 1,136,000 | 2.109,946 | 546,439 | 5,780,404 |
Senior Vice President and Chief Financial Officer | 2019 | 685,000 | 1,233,018 | 676,780 | 1,666,986 | 443,939 | 4,705,723 |
| 2018 | 650,000 | 1,169,970 | 683,800 | 532,453 | 135,353 | 3,171,576 | |
| Gerard Gifford | 2020 | 745,000 | 1,825,533 | 1,415,500 | 1,230,335 | 436,704 | 5,653,072 |
| Executive Vice President and Chief Operating Officer | 2019 | 715,000 | 1,787,478 | 838,874 | 1,825,676 | 465,581 | 5,632,609 |
| 2018 | 680,000 | 1,700,010 | 849,490 | 1,048,496 | 63,572 | 4,341,568 | |
| Didier Sourisseau (5) | 2020 | 639,640 | 1,060,539 | 1,023,424 | 1,579,272 | 479,026 | 4,781,901 |
| President – European Division | 2019 | 588,750 | 1,032,906 | 178,509 | 1,005,730 | 358,871 | 3,164,766 |
| 2018 | 567,765 | 971,268 | 573,670 | 329,461 | 116,908 | 2,559,072 | |
| Djalma Novaes | 2020 | 600,000 | 1,050,026 | 960,000 | 1,516,241 | 401,094 | 4,527,361 |
| President – Americas Division | 2019 | 575,000 | 1,006,293 | 887,340 | 1,567,452 | 480,606 | 4,516,691 |
| 2018 | 555,000 | 971,269 | 312,132 | 419,423 | 14,271 | 2,272,095 | |
| (1) | The amounts in this column, computed in accordance with current Financial Accounting |
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and $1,515,283 for 2018; Mr. Gifford: $2,347,651 for 2020, $2,227,667 for 2019 and $2,201,733 for 2018; Mr. Sourisseau: $1,363,873 for 2020, $1,287,276 for 2019 and $1,257,921 for 2018 and Mr. Novaes: $1,350,374 for 2020, $1,254,112 for 2019 and $1,257,921 for 2018. If the minimum level of performance conditions were not to be achieved, the value of the performance-based restricted stock awards would be $0 in all cases. Further detail surrounding the shares awarded, the method of valuation and the assumptions made are set forth in Note V, “Stock-Based Compensation” to the financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.2020. There can be no assurance that the amounts related to performance-based shares will ever be realized by the NEOs.
| (2) | The amounts in this column reflect the increase in actuarial lump-sum present value of defined benefit retirement plans, including supplemental plans, for the respective fiscal years. Actuarial valuations were based on assumptions that were in accordance with the guidelines of FASB ASC Topic 715 and that are discussed in Note |
| (3) | The amounts in this column for |
| T. Donahue | T. Kelly | G. Gifford | R. Bourque | D. Sourisseau | |
| Change in Value of SERP Life Insurance | $32,035 | $ 1,624 | $40,552 | $ 56,884 | $ 10,053 |
| FICA on Change in SERP Valuation | 34,361 | 120,854 | 18,895 | 0 | 0 |
| Automobile Allowance | 6,747 | 8,750 | 0 | 38,071 | 36,091 |
| Defined Contribution Plan Company Contributions * | 4,125 | 4,125 | 4,125 | 4,125 | 70,764 |
| Overseas Housing Allowance | 0 | 0 | 0 | 93,900 | 0 |
| Third Country National Expat Benefits ** | 0 | 0 | 0 | 943,500 | 0 |
| Total | $77,268 | $135,353 | $63,572 | $1,136,480 | $116,908 |
| T. Donahue | T. Kelly | G. Gifford | D. Sourisseau | D. Novaes | |
| Change in Value of SERP Life Insurance | $1,421,763 | $525,009 | $426,506 | $404,921 | $378,544 |
| FICA on Change in SERP Valuation | 60,753 | 17,155 | 5,923 | 0 | 18,275 |
| Defined Contribution Plan Company Contributions * |
4,275 |
4,275 |
4,275 |
56,195 |
4,275 |
| Automobile Allowance | 0 | 0 | 0 | 17,910 | 0 |
| Total | $1,486,791 | $546,439 | $436,704 | $479,026 | $401,094 |
| * | See the |
| See the Proxy Summary – Proposal 3 (page 7) for a description of |
| (5) | Certain components of Mr. Sourisseau’s |
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Grants of Plan-Based Awards
The following table provides information about the annual incentive bonuses that the Company’s NEOs were eligible to receive for 20182020 under the Company’s AnnualEconomic Profit Incentive Bonus Plan and stock-based awards granted in 20182020 to each of the Company’s NEOs under the Company’s Stock-Based Incentive Compensation Plan. There can be no assurance that the fair value of the performance-based stock awarded to the Company’s NEOs in 20182020 will ever be realized by the NEOs. For further information and the assumptions made in determining the grant-date fair values of the stock awards, see Notes A and V to the Company’s financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
Name | Grant Dates of Equity Awards | Estimated Future Payouts under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock or Units (3) | 2018 Grant Date Fair Value of Stock and Option Awards (4) ($) | ||||
| Minimum ($) | Target ($) | Maximum ($) | Minimum (Shares) | Target (Shares) | Maximum (Shares) | ||||
| Timothy Donahue | 1/4/2018 (5) | 0 | 1,320,000 | 2,640,000 | 0 | 64,882 | 129,764 | 33,398 | 5,720,055 |
Thomas Kelly | 1/4/2018 (6) | 0 | 520,000 | 1,040,000 | 0 | 13,271 | 26,542 | 6,831 | 1,169,970 |
Gerard Gifford | 1/4/2018 (7) | 0 | 646,000 | 1,292,000 | 0 | 19,283 | 38,566 | 9,926 | 1,700,010 |
Robert Bourque | 1/4/2018 and 8/7/2018 (8) | 0 | 376,666 | 753,333 | 0 | 9,134 | 18,268 | 4,267 | 703,229 |
| Didier Sourisseau | 1/4/2018 (9) | 0 | 454,212 | 908,424 | 0 | 11,017 | 22,034 | 5,671 | 971,268 |
Name
| Grant Dates of Equity Awards | Estimated Future Payouts under Non-Equity Incentive Plan Awards (1)
| Estimated Future Payouts under Equity Incentive Plan Awards (2)
| All Other Stock Awards: Number of Shares of Stock or Units (3) | 2020 Grant Date Fair Value of Stock and Option Awards (4) ($) | ||||
| Minimum ($) | Target ($) | Maximum ($) | Minimum (Shares) | Target (Shares) | Maximum (Shares) | ||||
| Timothy Donahue | 1/9/2020 (5) | 0 | 1,440,000 | 2,880,000 | 0 | 57,067 | 114,134 | 29,583 | 6,239,951 |
| Thomas Kelly | 1/9/2020 (6) | 0 | 568,000 | 1,136,000 | 0 | 11,688 | 23,376 | 6,059 | 1,278,019 |
| Gerard Gifford | 1/9/2020 (7) | 0 | 707,750 | 1,415,500 | 0 | 16,695 | 33,390 | 8,655 | 1,825,533 |
| Didier Sourisseau | 1/9/2020 (8) | 0 | 511,712 | 1,023,424 | 0 | 9,699 | 19,398 | 5,028 | 1,060,539 |
| Djalma Novaes | 1/9/2020 (9) | 0 | 480,000 | 960,000 | 0 | 9,603 | 19,206 | 4,978 | 1,050,026 |
| (1) | These amounts represent the range of annual non-equity incentive bonuses for which the NEOs were eligible in |
| (2) | These amounts represent the range of stock-based compensation that might be realized under the |
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| (3) | These amounts represent time-based restricted stock awarded in |
| (4) | These amounts represent the grant-date fair value of time-based restricted stock and performance-based restricted stock awarded in |
| (5) | Represents grant to Mr. Donahue of |
| (6) | Represents grant to Mr. Kelly of |
| (7) | Represents grant to Mr. Gifford of |
| (8) | Represents grant to Mr. |
| (9) | Represents grant to Mr. |
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Outstanding Equity Awards at Fiscal Year-End
The following table shows the number of shares covered by exercisable and unexercisable options (under “Option Awards”) and unvested time-based restricted Common Stock and unvested performance-based restricted Common Stock (under “Stock Awards”) held by the Company’s NEOs on December 31, 2018.2020. There are no outstanding options. These outstanding equity awards have been granted to the Company’s NEOs under the Company’s 2006 and 2013 stock-based incentive compensation plans.
| Option Awards | Stock Awards | |||||||
Name | Number of Securities Underlying Unexercised Exercisable Options (Shares) | Number of Securities Underlying Unexercisable Options (Shares) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (1) (Shares) | Market Value of Shares or Units of Stock That Have Not Vested (2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (3) (Shares) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (2) ($) |
Timothy Donahue | 66,637 | 2,770,100 | 197,631 | 8,215,521 | ||||
| Thomas Kelly | 13,740 | 571,172 | 40,777 | 1,695,100 | ||||
| Gerard Gifford | 30,000 | 39.77 | 5/25/2021 | 19,702 | 819,012 | 57,244 | 2,379,633 | |
| Robert Bourque | 7,234 | 300,717 | 20,006 | 831,649 | ||||
Didier Sourisseau (4) | 9,343 | 388,389 | 22,269 | 925,722 | ||||
| Stock Awards | ||||
Name
| Number of Shares or Units of Stock That Have Not Vested (1) (Shares) | Market Value of Shares or Units of Stock That Have Not Vested (2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (3) (Shares) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (2) ($) |
| Timothy Donahue | 71,703 | 7,184,641 | 208,843 | 20,926,069 |
| Thomas Kelly | 14,698 | 1,472,740 | 42,798 | 4,288,360 |
| Gerard Gifford | 21,185 | 2,122,737 | 61,839 | 6,196,268 |
| Didier Sourisseau (4) | 12,247 | 1,227,149 | 35,660 | 3,573,132 |
| Djalma Novaes | 12,060 | 1,208,412 | 35,179 | 3,524,936 |
| (1) | These amounts represent outstanding unvested time-based restricted stock awards (right to deferred shares in the case of Mr. Sourisseau). Time-based restricted stock vests annually over three years from the date of the award. Accordingly, with respect to awards made in |
| (2) | Computed as of December 31, |
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| (3) | These amounts represent outstanding unvested performance-based restricted stock at target levels. The range of shares to be vested is 0 to 200% of the target based on the levels of performance achieved under the |
| (4) | All shares listed for Mr. Sourisseau are deferred shares. With respect to Mr. Sourisseau, all references to “vesting” above actually mean issuance of deferred shares. See note (1) on page |
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Option Exercises and Stock Vested
The following table shows the number of shares of the Company’s Common Stock acquired and the actual value received during 20182020 upon the exercise of stock options or vesting of stock awards.
| Option Awards | Stock Awards | |||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (1) | Value Realized on Vesting (2) ($) |
| Timothy Donahue | 26,006 | 1,401,916 | ||
| Thomas Kelly | 6,643 | 361,581 | ||
| Gerard Gifford | 9,200 | 499,538 | ||
| Robert Bourque | 4,304 | 206,672 | ||
| Didier Sourisseau | 4,961 | 233,405 | ||
| Stock Awards | ||
Name
| Number of Shares Acquired on Vesting (1) | Value Realized on Vesting (2) |
| Timothy Donahue | 118,444 | 8,364,126 |
| Thomas Kelly | 24,686 | 1,743,191 |
| Gerard Gifford | 36,624 | 2,492,941 |
| Didier Sourisseau | 20,035 | 1,138,652 |
| Djalma Novaes | 21,172 | 1,494,972 |
| (1) | Amounts in this column are time-based and performance-based restricted stock that vested in |
| (2) | The amounts in this column are the aggregate dollar amount realized upon vesting, calculated by multiplying the number of shares of stock times the market value of the Company Common Stock at the |
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Pension Benefits
The following table shows the present value of estimated benefits payable upon retirement to the NEOs under the Company’s U.S. Pension Plan, Senior Executive Retirement Plan and Restoration Plan, which are the defined-benefit pension plans maintained by the Company in which the NEOs participate.
| Name | Plan Name (1)(2) | Number of Years Credited Service (3) | Present Value of Accumulated Benefit (4)(5) ($) |
Timothy Donahue | Pension Plan SERP | 28 28 | 803,689 11,150,880 |
| Thomas Kelly | Pension Plan SERP | 27 27 | 852,860 5,544,626 |
Gerard Gifford | Pension Plan SERP/Restoration Plan (6) | 36 36 | 1,338,365 11,021,469 |
Robert Bourque | Pension Plan SERP | 25 25 | 439,756 1,702,069 |
| Didier Sourisseau | SERP | 28 | 3,090,188 |
| Name | Plan Name (1)(2) | Number of Years Credited Service (3) | Present Value of Accumulated Benefit (4)(5) ($) |
Timothy Donahue |
Pension Plan |
30 30 |
1,294,731 20,431,092 |
| Thomas Kelly | Pension Plan SERP |
29 29 |
1,313,293 8,861,125 |
Gerard Gifford |
Pension Plan |
38 38 |
1,774,756 13,641,089 |
| Didier Sourisseau | SERP | 30 | 5,675,190 |
| Djalma Novaes | Pension Plan SERP |
10 21 |
460,619 5,929,348 |
| (1) | The U.S. Pension Plan in which all NEOs except Mr. Sourisseau participate is designed and administered to qualify under Section 401(a) of the Code. For further information, see “Compensation Discussion and Analysis – Retirement Benefits.” |
| (2) | The annual benefit for the NEOs under the SERP is based upon a formula equal to (i) 2.0% of the average of the five highest consecutive years of earnings during the last 10 years of service (consisting of salary and bonus, but excluding stock compensation, and determined without regard to the limits imposed on tax-qualified plans) times years of service up to twenty years plus (ii) 1.45% of such average earnings for the next fifteen years of service plus (iii) at the discretion of the Compensation Committee, 1% of such average earnings for years of service beyond thirty-five years less (iv) Social Security old-age benefits (and similar benefits provided in foreign jurisdictions) attributable to employment with the Company and the Company-funded portion of the executive’s Pension Plan benefits. In the |
| (3) | Years of service are rounded to the nearest full year. |
| (4) | The calculation of the lump-sum present value is based on assumptions that were in accordance with the guidelines of FASB ASC Topic 715 and that are discussed in Note |
| (5) | All of the benefits are vested with respect to the NEOs with exception of the SERP benefits for |
| (6) | The annual supplemental retirement benefit for Mr. Gifford under the Restoration Plan is equal to the difference between (i) the annual benefit he would have accrued under the U.S. Pension Plan if his target bonus amount were included in compensation for purposes of calculating his benefit under such Plan and if certain statutory limitations on benefit accrual did not apply and (ii) the annual benefit he actually accrued under the U.S. Pension Plan. |
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53
The Company has employment agreements with all of its NEOs. In addition to the compensation and benefits described above, these contracts provide for certain post-employment severance payments in the event of employment termination under certain circumstances. The Committee believes that these contracts provide an incentive to the NEOs to remain with the Company and serve to align the interests of the NEOs and Shareholders, including in the event of a potential acquisition of the Company.
Under his employment agreement, Mr. Donahue has agreed that, during his employment and for two years thereafter, he will not compete with the Company or solicit Company employees to terminate employment with the Company. All other NEOs are subject to a similar non-competition provision that is limited to a one-year post-employment period prior to a change in control and two years following a change in control.
Under the agreement for each of the NEOs, if the executive’s employment is terminated because of a voluntary termination or retirement, the Company will pay the executive his base salary through the date of termination or retirement, a pro-rated bonus payment and any vested retirement, incentive or other benefits. The pro-rated bonus payment is based on the actual bonus for all NEOs except for Mr. Gifford, whose pro-rated payment is based on his target bonus in the event of his voluntary termination or retirement, and Mr. Sourisseau, whose pro-rated payment is based on his target bonus in the event of his voluntary termination and his actual bonus in the event of his retirement. In the event of death, the compensation is identical to the above except that the pro-rated bonus payment is based on the actual bonus for Messrs. Donahue Bourque and Sourisseau, but on the target bonus for Messrs. Kelly, Gifford and Gifford.Novaes. All payments will be made to the executive’s estate in the event of death. In the case of a termination of employment due to a disability, each of the NEOs other than Mr. Donahue will be entitled to his base salary through the date of disability, a pro-rated bonus payment and any vested retirement, incentive or other benefits, plus an annual disability benefit equal to 75% of his base salary. The pro-rated bonus payment is based on the target bonus for Messrs. Kelly, Gifford and GiffordNovaes and the actual bonus for Messrs. Bourque andMr. Sourisseau. In the case of Mr. Donahue’s disability, he will be entitled to his base salary through the date of disability, an annual disability benefit equal to 100% of his base salary plus a bonus equal to the average annual bonus paid or payable to him for the three most recently completed years, and any vested retirement, incentive or other benefits. If the employment of any of the NEOs is terminated for “Cause,” the Company will pay to the executive only the base salary owed through his date of termination and his vested retirement, incentive or other benefits.
Under the agreement for Mr. Donahue, if the employment of the executive is terminated by the Company without Cause or by the executive for “Good Reason” other than within the 12-month period following a “Change in Control,” in addition to the executive’s base salary through the date of termination, the Company will pay to the executive (i) a pro-rated actual bonus payment and (ii) a lump-sum payment equal to three times the sum of the executive’s base salary and his target bonus for the year of termination. Under the agreement for each of the other NEOs, upon the termination of the executive’s employment by the Company without Cause other than within the 12-month period following a Change in Control, the Company will pay to the executive (i) his base salary through the date of termination, (ii) a pro-rated actual (but, for Mr. Gifford, a pro-rated target) bonus payment and (iii) a lump-sum payment equal to the executive’s annual base salary. In all such cases, the Company will also pay to the executive any vested retirement, incentive or other benefits.
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Under the agreement for each of the NEOs, if the executive’s employment is terminated by the Company without Cause or by the executive for Good Reason, during the 12-month period following a Change in Control, the Company will pay him (i) his base salary through the date of termination plus, (ii) a lump-sum payment equal to three times the sum of the executive’s base salary and his average bonus over the three completed years prior to the year of termination. On a Change in Control, all stock options and time-based restricted stock granted to the executive by the Company will become fully vested and, in the case of stock options, immediately exercisable. In addition, on a Change in Control, performance-based restricted stock will vest based upon the Company’s performance as compared to the applicable performance goals between the relevant grant date(s)start of the measurement period and the date of the Change in Control. In all such cases, the Company will also pay to the executive any vested retirement, incentive or other benefits. To the extent that the executive would be subject to the excise tax under Code Section 4999 on the amounts and benefits received on a Change in Control for purposes of Code Section 280G, either (i) such amounts and benefits will be reduced or delayed by the minimum amount necessary such that no portion of the amount or benefits is subject to the excise tax or (ii) the full amount and benefits shall be paid, whichever, after taking into account all applicable taxes, including the excise tax, results in the executive’s receipt, or an after-tax basis, of the greater amount and benefits.
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The following table provides estimates of the potential severance and other post-termination benefits each NEO would receive assuming his employment was terminated as of December 31, 2018.
Name | Benefit | Termination upon Retirement, Disability or Death (2) ($) | Resignation for Good Reason prior to a Change in Control ($) | Termination without Cause prior to a Change in Control ($) | Termination without Cause or Resignation for Good Reason after a Change in Control (3) ($) |
| Timothy Donahue | Salary: | 3,300,000 | 3,300,000 | 3,300,000 | |
| Bonus: | 1,735,800 | 6,943,200 | 6,943,200 | 6,363,684 | |
| Accelerated Restricted Stock Vesting: (1) | 2,770,100 | 10,985,621 | |||
| Total: | 4,505,900 | 10,243,200 | 10,243,200 | 20,649,305 | |
| Thomas Kelly | Salary: | 650,000 | 1,950,000 | ||
| Bonus: | 683,800 | 683,800 | 2,821,704 | ||
| Accelerated Restricted Stock Vesting:(1) | 571,172 | 2,266,272 | |||
| Total: | 1,254,972 | 1,333,800 | 7,037,976 | ||
| Gerard Gifford | Salary: | 680,000 | 2,040,000 | ||
| Bonus: | 646,000 | 646,000 | 3,809,798 | ||
| Accelerated Restricted Stock Vesting: (1) | 819,012 | 3,198,645 | |||
| Total: | 1,465,012 | 1,326,000 | 9,048,443 | ||
| Robert Bourque | Salary: | 500,000 | 1,500,000 | ||
| Bonus: | 753,333 | 753,333 | 1,440,219 | ||
| Accelerated Restricted Stock Vesting: (1) | 300,717 | 1,132,366 | |||
| Total: | 1,054,050 | 1,253,333 | 4,072,585 | ||
| Didier Sourisseau | Salary: | 567,765 | 1,703,295 | ||
| Bonus: | 573,670 | 573,670 | 1,818,422 | ||
| Accelerated Restricted Stock Vesting: (1) | 388,389 | 1,314,111 | |||
| Total: | 962,059 | 1,141,435 | 4,835,828 |
Name
| Benefit
| Termination upon Retirement, Disability or Death (1) ($) | Resignation for Good Reason prior to a Change in Control ($) | Termination without Cause prior to a Change in Control ($) | Termination without Cause or Resignation for Good Reason after a Change in Control (2) ($) |
| Timothy Donahue | Salary: | 3,600,000 | 3,600,000 | 3,600,000 | |
| Bonus: | 2,880,000 | 7,200,000 | 7,200,000 | 5,743,110 | |
| Accelerated Restricted Stock Vesting: (3) | 7,184,641 | 28,110,709 | |||
| Total: | 10,064,641 | 10,800,000 | 10,800,000 | 37,453,819 | |
| Thomas Kelly | Salary: | 710,000 | 2,130,000 | ||
| Bonus: | 1,136,000 | 1,136,000 | 2,286,472 | ||
| Accelerated Restricted Stock Vesting (3) |
1,472,470 | 5,761,098 | |||
| Total: | 2,608,470 | 1,846,000 | 10,177,570 | ||
| Gerard Gifford | Salary: | 745,000 | 2,235,000 | ||
| Bonus: | 707,750 | 707,750 | 2,818,322 | ||
| Accelerated Restricted Stock Vesting: (3) |
2,122,737 | 8,319,004 | |||
| Total: | 2,830,487 | 1,452,750 | 13,372,326 | ||
| Didier Sourisseau | Salary: | 639,640 | 1,918,921 | ||
| Bonus: | 1,023,424 | 1,023,424 | 1,451,905 | ||
Accelerated Restricted Stock Vesting: (3) | 987,269 | 3,686,700 | |||
| Total: | 2,010,693 | 1,663,064 | 7,057,526 | ||
| Djalma Novaes | Salary: | 600,000 | 1,800,000 | ||
| Bonus: | 960,000 | 960,000 | 1,835,376 | ||
| Accelerated Restricted Stock Vesting: (3) | 1,208,142 | 4,733,348 | |||
| Total: | 2,168,142 | 1,560,000 | 8,368,724 |
| (1) | The bonus amounts in this column assume a retirement scenario. In death or disability scenarios, the amounts for some of the NEOs would be lower because, in these cases, bonus calculations are based on target, and not actual, bonus amounts. |
| (2) | In addition, as indicated in the Pension Benefits table, each of our NEOs is a participant in the Company’s SERP. Currently, the SERP benefits of Messrs. Donahue, Gifford, Kelly and Novaes are vested, and the SERP benefits of Mr. Sourisseau are unvested. However, under the terms of the SERP, in the event of a change in control, each NEO shall become 100% vested in his SERP benefit. In addition, as soon as administratively practicable but in no event more than 10 business days after a change in control, all benefits under the SERP will be paid to each NEO in a cash lump sum. |
| (3) | In the case of retirement with Committee approval, disability or death, the vesting of time-based restricted stock awards (or issuance of deferred stock, in Mr. Sourisseau’s case) accelerates and the performance-based shares remain outstanding, subject to performance conditions until the performance period ends. Accordingly, no performance share compensation has been provided for terminations upon retirement, disability or death because payout cannot be assured. On a Change in Control, all time-based restricted stock will become vested, and performance-based restricted stock will vest |
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56
Federal law requires that wethe Company disclose the ratio of ourits CEO’s total compensation to the total compensation of ourits median employee (excluding the CEO). To determine this ratio we utilized our global workforce consisting of all U.S., non-U.S., full-time, part-time and temporary employees of the Company and its consolidated subsidiaries employed assubsidiaries. As the result of December 31, 2017.strong global growth together with the Signode (Transit Packaging) acquisition in 2018, approximately 80% of the Company’s employees now are located outside of the U.S. No assumptions, cost-of-living adjustments or other estimates with respect to compensation were made, except that the compensation was annualized for all full-time employees who began employment during 2017.2020. The Company identified its median employee (the “original median employee”) by using total compensation from the Company’s payroll records as of December 31, 2017.2019. The originalCompany’s median employee is no longer employed bywas based outside of the Company. Therefore, in accordance with SEC guidance, the Company has substituted another employee (the “substitute median employee”) whose 2017 compensation was substantially similar to the original median employee based on the compensation measure used to select the original median employee.U.S. The substitute median employee’s total compensation was calculated using the same methodology used to calculate the Total Compensation of the CEO as set forth in the Summary Compensation Table included in the Executive Compensation section of this Proxy Statement. The median employee’s total compensation was $42,023,$31,565, and the total compensation of the CEO was $9,816,741.$17,521,039. Accordingly, the ratio of the annual total compensation of the CEO to the median of the annual total compensation of all employees of the Company, except the CEO, is 234:555:1.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
The firm of PricewaterhouseCoopers LLP, an independent registered public accounting firm, were the independent auditors for the most recently completed fiscal year. The Audit Committee has appointed PricewaterhouseCoopers as independent auditors to audit and report on the Company’s financial statements for 2019.2021. PricewaterhouseCoopers perform annual audits of the Company’s financial statements and assist the Company in the preparation of various tax returns around the world. A representative or representatives of PricewaterhouseCoopers are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. Such representatives are also expected to be available to respond to questions raised orallyusing the “Ask a Question” field at the virtual Annual Meeting or submitted in writing to the Office of the Corporate Secretary of the Company before the Annual Meeting.
The Audit Committee reviewed the fees of PricewaterhouseCoopers for the fiscal years ended December 31, 20182020 and December 31, 2017.2019. The Company paid fees in the following categories:
(1) Audit Fees were for professional services rendered for the audits of effectiveness of the internal control over financial reporting and consolidated financial statements of the Company, including the U.S. integrated financial statement and internal controls audit, statutory audits, issuance of comfort letters, consents and assistance with and review of documents filed with the SEC.
(2) Audit-Related Fees were for fees for due diligence in connection with mergers and acquisitions and other assurance-related services performed in connection with statutory requirements in various countries. In 2020, Audit-Related Fees consisted largely of accounting services performed in connection with the Company’s ongoing strategic review, specifically carve-out audits of certain of the Company’s business units.
(3) Tax Compliance Fees were for services rendered for tax compliance, including the preparation of tax returns and claims for refunds.
(4) Tax Advisory Services Fees were for tax planning and advice.
(5) All Other Fees were for services rendered for assistance provided primarily to non-U.S. subsidiaries.
The amount of fees for each category in 20182020 and 20172019 are set forth below.
| 2018 | 2017 | |
| Audit Fees | $10,065,000 | $6,204,000 |
| Audit-Related Fees | 711,000 | 830,000 |
| Tax Compliance Fees | 426,000 | 290,000 |
| Tax Advisory Services Fees | 1,757,000 | 1,599,000 |
| All Other Fees | 71,000 | 102,000 |
| 2020 | 2019 | |
| Audit Fees | $9,408,000 | $10,148,000 |
| Audit-Related Fees | 6,315,000 | 714,000 |
| Tax Compliance Fees | 320,000 | 388,000 |
| Tax Advisory Services Fees | 1,148,000 | 1,307,000 |
| All Other Fees | 21,000 | 40,000 |
All of the services described above were approved by the Audit Committee. The Audit Committee also evaluated whether the non-audit fees paid to PricewaterhouseCoopers are compatible with maintaining their independence as auditors. The Audit Committee reviews each year the level of Audit and Audit-Related Fees in relation to all other fees paid to the independent auditors. In carrying out this responsibility, the Audit Committee may obtain input from Company management on the general level of fees. The Audit Committee pre-approves all audit and permitted non-audit services, and related fees, to be performed by the Company’s independent auditors. In addition to the Audit Committee’s annual pre-approval, under the Audit Committee Charter the Chair of the Audit Committee has the authority to review and approve other services that may arise during the year with proposed fees up to $250,000 per transaction and reports back any such approvals to the full Audit Committee. Pursuant to this authority, during 20182020 the Chair reviewed and approved no$350,000 of such services.
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AUDIT COMMITTEE REPORT
The Audit Committee provides assistance to the Board of Directors by its oversight of the financial accounting practices and the internal controls of the Company and represents the Board in connection with the services rendered by the Company’s independent auditors, who report directly to the Audit Committee.
In fulfilling its responsibilities, the Audit Committee has reviewed and discussed with the Company’s management and its independent auditors the audited financial statements for the fiscal year ended December 31, 20182020 and the Company’s system of internal controls and its effectiveness. Management is responsible for the financial statements and the reporting process, including the system of internal controls, and has represented to the Audit Committee that such financial statements were prepared in accordance with generally accepted accounting principles. The Company’s independent auditors, PricewaterhouseCoopers LLP, are responsible for expressing an opinion as to whether the financial statements fairly present in all material respects the financial position, results of operations and cash flows of the Company in accordance with generally accepted accounting principles in the United States. PricewaterhouseCoopers have informed the Audit Committee that they have given such an opinion with respect to the audited financial statements for the fiscal year ended December 31, 2018.
The Audit Committee discussed with the independent auditors the matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee discussed with the independent auditors the auditors’ independence from the Company and its management, including the matters in the written disclosures and letter which were received by the Audit Committee from the independent auditors as required by applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee regarding independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
This report is respectfully submitted on February 27, 201924, 2021 by the members of the Audit Committee.
| Caesar Sweitzer, Chair | |
| Andrea Funk | |
| Josef Müller | |
| B. Craig Owens | |
| William Urkiel | |
| Dwayne Wilson |
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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has appointed the firm of PricewaterhouseCoopers LLP, an independent registered public accounting firm, as independent auditors to audit and report on the Company’s financial statements for 2019.
Although the submission to Shareholders of the appointment of PricewaterhouseCoopers is not required by law or the Company’s By-Laws, the Audit Committee believes it is appropriate to submit this matter to Shareholders to allow a forum for Shareholders to express their views with regard to the Audit Committee’s selection. In the event Shareholders do not ratify the appointment, the Audit Committee may reconsider the appointment of PricewaterhouseCoopers.
The Board of Directors Recommends a Vote FOR the Ratification of the
Appointment of PricewaterhouseCoopers LLP as Independent Auditors.
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PROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
At the Annual Meeting, the Company will conduct a Shareholder vote on an advisory resolution to approve executive compensation, commonly referred to as a “Say-on-Pay” vote. The Company currently conducts advisorySay-on-Pay votes on executive compensation on an annual basis, and it expects to conduct the next advisorySay-on-Pay vote at the Company’s 20202022 Annual Meeting of Shareholders.
The Board of Directors encourages Shareholders, in deciding whether to vote in favor of the advisory resolution below, to review the compensation-related elements of this Proxy Statement, including those in the Proxy Statement Summary, the CD&A and the tables and related narrative in the Executive Compensation section, for details regarding the Company’s executive compensation program and 20182020 compensation of Named Executive Officers.
The Board of Directors believes that the executive compensation program aligns the compensation of the Company’s executive management with the long-term interests of Shareholders. To align these interests, the Company compensates executive management with time-based and performance-based restricted stock and also ties a significant portion of executive cash compensation to performance-based metrics that drive Shareholder value.
RESOLVED, that the Shareholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion & Analysis, the compensation tables and the related disclosure contained in the Company’s Proxy Statement for its 20192021 Annual Meeting.
Although the vote is non-binding, the Board of Directors and the Compensation Committee expect to take into account the outcome of the vote when considering future executive compensation.
The Company has been advised that John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, who advises that he holds at least 100 shares of stock in the Company, intends to submit the following proposal at the Annual Meeting. The Company is not responsible for the contents of this proposal. If the following proposal is properly presented at the Annual Meeting, the Board of Directors unanimously recommendsRecommends a vote AGAINSTVote FOR the proposal.
Approval of this proposal our stock fell from $60 to $48. Adoption of this proposal will cost Crown Holdings virtually nothing – yet it can improve board independence and company performance.
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OTHER MATTERS
The Board of Directors knows of no other matter that may be presented for Shareholder action at the Annual Meeting, but if other matters do properly come before the Annual Meeting, or if any of the persons named above to serve as Directors are unable or decline to serve, it is intended that the persons named in the Proxy or their substitutes will vote on such matters and for other nominees in accordance with their best judgment.
| ADAM J. DICKSTEIN | |
| Corporate Secretary | |
 |
 | |
 | Yardley, Pennsylvania 19067 |
| March 15, 2021 | |
CROWN HOLDINGS, INC. 770 TOWNSHIP LINE ROAD YARDLEY, PENNSYLVANIA 19067 | VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use April 21, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. |
| During The Meeting - Go to www.virtualshareholdermeeting.com/CCK2021 | |
 | You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. |
| VOTE BY PHONE - 1-800-690-6903 | |
| Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on April 21, 2021. Have your proxy card in hand when you call and then follow the instructions. | |
| VOTE BY MAIL | |
| Mark, sign and date your proxy card and return it in the postage-paid envelope | |
Please detach here | D33408-P49191 | KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CROWN HOLDINGS, INC. The Board of Directors Recommends a Vote FOR the Election of all Nominees. | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. | ||||||||
| 1. | Election of Directors
Nominees: | □ | □ | □ | ||||||||
| 01) | John W. Conway | 08) | Josef M. Müller | |||||||||
| 02) | Timothy J. Donahue | 09) | B. Craig Owens | |||||||||
| 03) | Richard H. Fearon | 10) | Caesar F. Sweitzer | |||||||||
| 04) | Andrea J. Funk | 11) | Jim L. Turner | |||||||||
| 05) | Stephen J. Hagge | 12) | William S. Urkiel | |||||||||
| 06) | Rose Lee | 13) | Dwayne A. Wilson | |||||||||
| 07) | James H. Miller | |||||||||||
| The Board of Directors Recommends a Vote FOR Items 2 and 3. | For | Against | |||||
| Abstain | |||||||||
| 2. | Ratification of the appointment of independent auditors for the fiscal year ending December 31, 2020 | □ | □ | □ | |||||
| 3. | Approval by advisory vote of the resolution on executive compensation as described in the Proxy Statement. | □ | □ | □ | |||||
| THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR ITEMS 1 THROUGH 3. | |||||||||
Please sign exactly as your name(s) | |||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | ||
CROWN HOLDINGS, INC.
The
on April
Important Notice Regarding the Availability of Proxy Materials for the following materials are available at
The Proxy Statement relating to the Annual Meeting of Shareholders,
Shareholders
D33409-P49191
 | Crown Holdings, Inc.
| PROXY |
Proxy for Annual Meeting of Shareholders to be held on April 25, 2019
This Proxyproxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Timothy J. Donahue, Thomas A. Kelly and Adam J. Dickstein as Proxy Holders, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side, all the shares of stock of Crown Holdings, Inc. held of record by the undersigned on March 2, 2021 at the Annual Meeting of Shareholders to be held at www.virtualshareholdermeeting.com/CCK2021 on April 22, 2021 at 9:30 a.m., or any adjournments thereof, for the items shown on the reverse side and, in the discretion of the Proxy Holders, on any other matter that may properly come before the meeting or any adjournments thereof. |
You are encouraged to specify your choices by marking the appropriate boxes (SEE REVERSE SIDE), but you need not mark any boxes if you wish to vote in accordance with the Board of Directors' recommendations. The Proxy Holders cannot vote your shares unless you sign and return this card or you elect to vote your shares electronically by telephone or via the Internet. |
| See reverse for voting instructions. |