COMPENSATION PHILOSOPHY AND STOCKHOLDER ENGAGEMENT GOVERNANCE HIGHLIGHTS

        Our governance program reflects our company values and facilitates our Board's independent oversight of our company. The highlights of our program, which we believe is consistent and aligned with the Investor Stewardship Group's Corporate Governance Principles for U.S. Listed Companies, are shown below.

APPROVAL OF EXECUTIVE COMPENSATION (ITEM 2)

COMPENSATION DESIGN

        The Compensation and Executive Personnel Committee (the "Compensation Committee") designs our executive compensation program to motivate our executives to execute our business strategies and deliver long-term stockholder value. The program delivers pay for performance, with realized compensation dependent on our company achieving annual and long-term financial performance and value creation performance objectives that advance the interests of our stockholders.

        We value stockholder feedback on our executive compensation practices, and we actively solicit input through our stockholder engagement program. Our Board and management continued their long-standing practice of open dialogue with stockholders in 2015. In advance of the 2015 Annual Meeting, we proactively contacted our thirty largest institutional stockholders, representing over 60% of our then-outstanding shares, to solicit their views on our executive compensation program and make directors and management available to answer questions or address concerns. As a result of this effort, we engaged in telephonic discussions with stockholders representing approximately 35% of our then-outstanding shares. In addition, after one of our directors and members of management met in person with four of our largest stockholders and the two leading proxy advisory firms in the fall of 2014, we followed up on these meetings with as-needed engagement during 2015.

PERFORMANCE-BASED COMPENSATION TARGETED AT MARKET MEDIAN

        Target total direct compensation (TDC) tofor our executives is comprised of the following three components:

•

Base salary;



•

Performance-based annual cash incentive award under our Annual Incentive Plan (AIP); and



•

Long-term incentives (LTI) delivered in performance-based equity awards, consisting 50% of performance units (PUs) and 50% of market-leveraged stock units (MSUs).

Elements of Total Direct Compensation

        The Compensation Committee targetsestablishes the target TDC of our Named Executive Officers' (NEOs') TDCOfficers (NEOs) to incent economic and the components thereof atstockholder value creation, giving consideration to the market median, giving consideration torole responsibilities, individual performance, tenure, retention succession and market factors.succession. The majority of this compensation is at risk,performance-based, meaning that our executives ultimately may not realize some of these components of TDC if we fail to achieve our financial objectives and create stockholder value, our executives may ultimately not realize some or all of these performance-based components of compensation. In 2015, 85%, 79% and 67% of our CEO's, President's and average of other current NEOs' TDC, respectively, was performance-based.objectives.

        As shown in the charts shown below, in 2018, approximately 86% and 70% of the TDC of our CEO and average of our other NEOs, respectively, was performance-based.

20152018 Target Total Direct Compensation Mix

CEO TRANSITION

        In October 2014, Mr. Butier was elected by our Board as President and Chief Operating Officer (COO) effective November 1, 2014. Mr. Butier served in these capacities throughout 2015, resigning from the additional position of Chief Financial Officer (CFO) in March 2015 in connection with the appointment of Anne Bramman as our Senior Vice President and CFO. In February 2016, after having discussed CEO transition matters during executive session at all but the first meeting held during 2015, our Board determined to elect Mr. Butier as President and CEO effective May 1, 2016, replacing Mr. Scarborough in the CEO role at that time. The independent directors of our Board determined to elect, subject to his election by our stockholders, Mr. Scarborough as Executive Chairman of our Board also effective May 1, 2016. In recognition of responsibilities in these respective roles, as well as the advice of its independent compensation consultant, Willis Towers Watson, the Compensation Committee made the following decisions:

•

For Mr. Butier, increase his base salary from $765,000 to $1,100,000 effective May 1, 2016; raise his 2016 target AIP and LTI opportunities from 90% and 300%, respectively, to 125% and 400%, respectively (the AIP opportunity will be prorated based on the portion of the year for which he serves as President and COO and the portion for which he serves as President and CEO); and, consistent with similar promotion grants to CEOs in the market, grant him an option to purchase shares of our common stock with a grant date fair value of approximately $2,000,000 on June 1, 2016, which will vest 50% on each of the third and fourth anniversaries of the date of grant. This equity grant provides for realizable gains that align directly with the long-term appreciation of our common stock and intentionally differs from our annual LTI awards to underscore its special purpose and one-time nature. Mr. Butier's new target TDC of $6,875,000 is less than the market median; the Compensation Committee believes that positioning his compensation at the 40^th percentile acknowledges that he will be new to the CEO role yet compensates him within a reasonable CEO market range.



•

For Mr. Scarborough, decrease his base salary from $1,125,000 to $875,000 effective May 1, 2016 and decrease his 2016 target AIP and LTI opportunities from 125% and 450%, respectively, to 100% and 300%, respectively (the AIP opportunity will be prorated based on the portion of the year for which he serves as Chairman and CEO and the portion for which he serves as Executive Chairman). Mr. Scarborough's 2016 target TDC of $4,375,000 is at (i) the market median for an executive chairman role and (ii) represents a 45% decrease from his current target TDC of $7,593,750. The Compensation Committee believes that in his new role as Executive Chairman, Mr. Scarborough will provide critical leadership experience and mentorship to facilitate a smooth CEO transition.



For 2017, Mr. Scarborough's base salary is expected to be further reduced to $230,000; he is not expected to be eligible to participate in the AIP; and his annual LTI opportunity is expected to be valued at approximately $140,000, the same as that of our non-employee directors. Mr. Scarborough's anticipated 2017 target TDC of $370,000 is expected to be at the market median for a non-executive chairman.

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PAY-FOR-PERFORMANCE

        Over the past five years, our cumulative TSR has increased over 70%by 100% while the total compensation of our CEO'sCEO decreased by approximately 28%. In the graph below, CEO pay reflects the compensation has increased only 18%. Seeof our former CEO, Mr. Scarborough, for 2014 and 2015, and theSummary Compensation Table in this proxy statement for more information. compensation of our current CEO, Mr. Butier, from 2016 to 2018.

Five-Year CEO Pay and Cumulative TSR

COMPENSATION BEST PRACTICES

        As summarized below and described in further detail in theCompensation Discussion and Analysis section of this proxy statement, we believe that our executive compensation program aligns with our goals and strategies and reflects best practices.

RATIFICATION OF APPOINTMENT OF PwC (ITEM 3)

        Our Board's Audit and Finance Committee has appointed PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for fiscal year 2016,2019, and our Board is seeking stockholder ratification of the appointment. PwC is knowledgeable about our operations and accounting practices, and isvery well qualified to act as our independent registered public accounting firm.firm and has a deep understanding of our operations and accounting practices. The Audit and Finance Committee considered the qualifications, performance, and independence of PwC, the quality of its discussions with PwC, and the fees charged by PwC for the level and quality of services provided during 2015,2018, and determined that the reappointment of PwC is in the best interest of our company and its stockholders.

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TABLE OF CONTENTS FOR PROXY STATEMENT FOR
2016 ANNUAL MEETING OF STOCKHOLDERS

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PROXY STATEMENT

        We develop identificationproduce pressure-sensitive materials and decorative solutions primarily for businesses worldwide. Oura variety of tickets, tags, labels and other converted products. We sell most of our pressure-sensitive materials to label printers and converters that convert the materials into labels and other products includethrough embossing, printing, stamping and die-cutting. We sell other pressure-sensitive labeling technology and materials; films for graphicmaterials in converted form as tapes and reflective applications; performance tapes; brandsheeting. We also manufacture and pricesell a variety of other converted products and items not involving pressure-sensitive components, such as fasteners, tickets, tags, and labels (including radio-frequency identification inlays);(RFID) inlays and pressure-sensitive adhesive products for surgical, wound care, ostomy,tags, and electromedical applications. Weimprinting equipment and related solutions, which serve our customers with insightsthe apparel and innovations that help make brands more inspiring and the world more intelligent.other end markets.

CORPORATE GOVERNANCE

        Under the oversight of our Board of Directors (our "Board"), we have designed our corporate governance program to ensure continued compliancecomply with applicable laws and regulations — including the rules of the Securities and Exchange Commission (SEC) and the listing standards of the New York Stock Exchange (NYSE) — and to reflect best practices as informed by the policiespractices of other large public companies, recommendations from our outside advisors, the voting guidelines of our stockholders and the policies of proxy advisory firms. The key features of our program and the related benefits to our stockholders are describednoted in theCorporate Governance Highlights section of ourthe Proxy Summary (see page iv).Summary; together they form a program that we believe is consistent and aligned with the Investor Stewardship Group's Corporate Governance Principles for U.S. Listed Companies.

        We encourage stockholdersyou to visit the Corporate Governance section of our website atwww.averydennison.com/corporategovernance, where you can review and download the following corporate governance documents can be found:documents:

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CodeAmended and Restated Certificate of Ethics for the Chief Executive Officer (CEO) and Senior Financial Officers;Incorporation;



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Code of Conduct;



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Audit Committee Complaint Procedures for AccountingAmended and Auditing Matters;Restated Bylaws (our "Bylaws");



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Corporate Governance Guidelines (our "Governance Guidelines"); and



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Charters for our Board's Audit and Finance Committee (the "Audit Committee"), Compensation and Executive Personnel Committee (the "Compensation Committee"), and Governance and Social Responsibility Committee (the "Governance Committee").;



•

Code of Conduct;



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Code of Ethics for the Chief Executive Officer (CEO) and Senior Financial Officers; and



•

Audit Committee Complaint Procedures for Accounting and Auditing Matters.

        Our website also includes copies of our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws ("Bylaws").        You can access these documents on our website using the links contained in this proxy statement, but should note that information on our website is not and should not be considered part of, nor is it incorporated by reference into, this proxy statement. You can also receive copies of these documents, without charge, by written request mailedwriting to our Corporate Secretary at Avery Dennison Corporation, 207 Goode Avenue, Glendale, California 91203.

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CODE OF ETHICS

        We have adopted a Code of Ethics that requires our Chief Executive Officer (CEO),CEO, Chief Financial Officer (CFO) and ControllerChief Accounting Officer (CAO) to act professionally and ethically in fulfilling their responsibilities. These individuals are expected to

        Supporting the principles ofreflected in our Code of Ethics, our controllership and internal audit functions ensure that we maintain a robust internal control environment, with the leaders of these functions regularly reporting to, and regularly report toperiodically meeting in executive session with, the Audit Committee.

        Our Code of Ethics is available on our website atwww.averydennison.com/codeofethics. Only the Audit Committee or the Governance Committee can amend or waive the provisions of the Code of Ethics, and any amendments or waivers must be posted promptly on our website or timely filed with the SEC on a Current Report on Form 8-K. Since we first adoptedWe last amended our Code of Ethics in February 2004, no amendments have been made and no waivers have been granted.

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CODE OF CONDUCT

        Our Code of Conduct — which is built on our core values of Integrity, Service, Teamwork, Innovation, Excellence and Community — applies to all of our directors, officers and employees and is available on our website at www.averydennison.com/codeofconduct. Our Code of Conductemployees. It has been translated into over 30 languages and our leaders are trained on it and affirm their commitment to complycomplying with it when they first join our company and annually thereafter. The coreWe train employees on the Code of Conduct at least biannually, in addition to our online training program consisting of four courses per year covering specific risk areas from the Code of Conduct that designated computer-based employees are required to complete. To ensure that the policies and principles encompassed in our Code of Conduct reach all our employees, we develop and launch three "Talkabout" toolkits (also in over 30 languages) globally each year, which managers are required to use to engage in meaningful discussion with their teams regarding topics from the Code of Conduct. These toolkits consist of presentation slides, a leader discussion guide and an introductory subtitled video, which includes messages from our Chief Compliance Officer and other company leadership.

Recent Code Updates

        In 2017, we refreshed our Code of Conduct, which is available on our website atwww.averydennison.com/codeofconduct, with updated leadership messages, additional guidance on certain higher risk areas, and case studies to provide additional guidance on more complex ethical situations. We introduced the updated Code of Conduct with manager and employee communications and created a pocket version for distribution to all employees. In 2018, we further updated our Code of Conduct to reflect our updated values of Integrity, Courage, External Focus, Diversity, Sustainability, Innovation, Teamwork and Excellence. These values will shape our culture and guide our behavior as we continue to grow. Our "Values in Action" campaign during the year provided our employees around the world the opportunity to demonstrate how they are living our values and helping maintain our values-based culture.

        Reflecting the culture of our company since its inception, the ethics-based corporate policies and other matters discussed in our Code of Conduct are shown below. Our global supplier standards extend our commitment to many of these principles to our third party service providers, establishing our expectation that they also do business in an ethical manner.

Business Conduct GuideLine

        The GuideLine may be reached by (i) calling 888.567.4387800.461.9330 toll-free in the United States; 704.731.0166 collectStates, 720.514.4400 direct with applicable charges from any location, or toll-free outside of the United States; 10.800.711.0729States using the country-specific toll-free numbers found in North China; or 10.800.110.0672 toll-free in South Chinaour Code of Conduct or (ii) visitingwww.integrity-helpline.com/AveryDennison.jspaverydennison.com/guidelinereport (www.financial-integrity.com/AveryDennison.jspaverydennison.com/guidelinereport-eu in Europe). The hotline is operated by an independent third party and accepts reports in any language to accommodate the needs of our global workforce and customer/supplier base. All reports are investigated under the direction of our Chief Compliance Officer, in consultation with theour law department and senior management and with oversight from the Governance Committee. Our policiesWe prohibit retaliation for good-faith reporting.

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COMPLAINT PROCEDURES FOR ACCOUNTING AND AUDITING MATTERS

        These procedures relate to complaints forof (i) fraud or deliberate error in the preparation, evaluation, review or audit of our financial statements or other financial reports; (ii) fraud or deliberate error in the recording or maintenance of our financial records; (iii) deficiencies in, or noncompliance with, our internal accounting controls; (iv) misrepresentation or false statement to or by a senior officer or accountant regarding aany matter contained in our financial records, statements, or other reports; or (v) deviation from full and fair reporting of our financial condition. Any person, including third parties, may submit a good faith complaint regarding accounting and auditing matters;matters and employees may do so without fear of dismissal or other retaliation. The Audit Committee oversees these procedures, which are available on our website atwww.averydennison.com/auditprocedures. Investigations are conducted under the direction of our internal audit department in consultation with theour Chief Compliance Officer, law department and members of senior management to the extent appropriate under the circumstances.

        Stockholders and other interested parties interested in communicating regarding these matters may make a confidential, anonymous report by (i) reporting tocontacting the Business Conduct GuideLine as described above,on the previous page or (ii) writing to the Audit and Finance Committee Chair, c/o Corporate Secretary, Avery Dennison Corporation, 207 Goode Avenue, Glendale, California 91203.

STOCK OWNERSHIP POLICY

Our stock ownership policy requires that non-employee directors acquire and maintain a minimum ownership interest in our company equal to $500,000 and our CEO and other NEOs acquire and maintain a minimum ownership interest in our company equal to 6x and 3x their annual base salary, respectively.

        The values of the following shares/units are considered in measuring compliance with our stock ownership policy: (i) shares beneficially owned or deemed to be beneficially owned, directly or indirectly, under federal securities laws; (ii) shares or units held in qualified and non-qualified employee benefit plans; (iii) unvested RSUs subject only to time-based vesting; and (iv) 50% of the value of unvested MSUs at the target payout level. Neither unvested PUs nor stock options are considered in measuring compliance.

        The Compensation Committee and the Governance Committee reviewed the stock ownership of our non-employee directors in December 2018 and February 2019, respectively. Both Committees noted thatall of our non-employee directors have exceeded the minimum ownership level required by the policy, except for Messrs. Barrenechea and Lopez who became directors in September 2018 and February 2017, respectively, and have five years to reach the minimum ownership level. The Committee noted that, because they had made reasonable progress towards meeting the applicable level, Messrs. Barrenechea and Lopez were also in compliance with the policy. On average, the ownership of our non-employee directors was approximately 6x the minimum ownership level, aligning their interests with those of our stockholders and further incenting their focus on long-term stockholder value creation.

The Compensation Committee reviewed officer stock ownership in December 2018 and determined that all of our NEOs were in compliance with our stock ownership policy.

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COMPLIANCE WITH STOCK OWNERSHIP POLICY
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		SHARES AS OF 2018 FYE (#)			MINIMUM GUIDELINE		% OF GUIDELINE			COMPLIANCE
NON-EMPLOYEE DIRECTORS		​	​		$   500,000		​	​		​	​
Bradley Alford			35,020					625%
Anthony Anderson			14,246					254%
Peter Barker			58,666					1047%
Mark Barrenechea			880					16%
Ken Hicks			38,609					689%
Andres Lopez			4,050					72%
David Pyott			67,165					1199%
Dean Scarborough			47,177					842%
Patrick Siewert			14,640					261%
Julia Stewart			55,321					988%
Martha Sullivan			13,933					249%
PRESIDENT & CEO		​	​		6x Base Salary		​	​		​	​
Mitchell Butier			189,312		$6,798,000			249%
OTHER NEOs		​	​		3x Base Salary*		​	​		​	​
Gregory Lovins			25,239		$1,800,000			125%
Georges Gravanis			21,746		$1,883,907			103%
Susan Miller			37,467		$1,692,374			198%
Deon Stander			20,175		$1,077,920			167%

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*

Mr. Stander's minimum guideline in 2018 was 2x base salary. As an NEO, his guideline increased to 3x base salary for 2019, which he exceeded at year-end 2018.

INSIDER TRADING POLICY

        Our insider trading policy prohibits our directors, officers and employees from (i) engaging in transactions in our company's stock while in the possession of material non-public information; (ii) engaging in transactions in the stock of other companies while in possession of material non-public information that they become aware of in performing their duties; and (iii) disclosing material non-public information to unauthorized persons outside our company.

Limited Trading Windows

        Our insider trading policy restricts trading for directors and officers (including all NEOs) during blackout periods, which generally begin two weeks before the end of each fiscal quarter and end two business days after the release of earnings for the quarter.

Prohibition on Hedging and Pledging

        Our insider trading policy expressly prohibits our directors, officers and employees from purchasing financial instruments (such as prepaid variable forward contracts, equity swaps, collars and exchange funds) designed to hedge or offset any decrease in the market value of shares of our common stock they hold, directly or indirectly. In addition, directors and officers are expressly prohibited from — and our non-officer employees are strongly discouraged from — pledging any of their shares of common stock to secure personal loans or other obligations, including by holding such shares in a margin account.

        To our knowledge, based on our review of their written representations in our annual director and officer questionnaire, all of our directors and executive officers complied with our insider trading policy during 2018, and none of them has hedged or pledged shares of our common stock.

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SUSTAINABILITY

        Sustainability is rooted inone of our core values and has long been part of our approach to doing business. It drivesbusiness, driving us to work collaboratively across our entire value chain to address the environmental and social impacts of our packaging, labeling, retail branding and graphics materials. products.Our aim is to continually improve the sustainability of our products and processes while helping to create shared value for all our stakeholders. Management leads the execution of our stakeholders.

        In 2018, leadership over ensuring meaningful progress towards achieving our 2025 sustainability promise through our Sustainability Council, which is chaired by Mitchellgoals transitioned from Mitch Butier, our President and Chief Operating Officer (COO),CEO, to Deon Stander, Vice President and General Manager of our Retail Branding and Information Solutions (RBIS) business. Our Sustainability Council, now led by Mr. Stander and comprised of other corporatean expanded group of functional and business leaders withto help drive broad accountability and accelerate our progress, meets bimonthly and updates our executive leadership team quarterly. The Council has the following four work streams to help focus its efforts, each of which is led by an internal leader from one of our businesses: operations; technology and innovation; products and solutions; and social impact and transparency. Board oversight fromover sustainability is primarily conducted by the Governance Committee.Committee, which receives a report from management at least once a year. In addition, our full Board hears from our business leaders on our sustainability initiatives during its regular review of our business strategies.

ENGAGING OUR STAKEHOLDERS

        We seek to ensure that our sustainability efforts are consistent with the expectations of our stakeholders, as shown below. We regularly communicate with individuals and organizations interested in how we do business generally and our sustainability efforts in particular, and also conduct stakeholder interviews as part of our regular sustainability materiality assessments. These assessments help set our sustainability agenda, allowing us to focus on the areas in which we can have the most impact.

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ADVANCEMENTS TOWARDS 2025 SUSTAINABILITY GOALS

        We publicly report on our sustainability progress every two years. In September 2015,2017, we issued our second2014-2016 Sustainability Report, coveringsummarizing our achievements against our 2015 sustainability goals and providing details on the 2013-2014 period2025 sustainability goals we set in 2015. In the first three years of the 10-year horizon for our new goals, we have made meaningful progress, the key to which has been integrating sustainability into our underlying business strategies and reporting onengaging employees at all levels. We expect to issue our 2016-2018 Sustainability Report in the fall of 2019, describing our continued progress towards achieving our 2025 sustainability goals. We encourage you to review these reports, which contain greater information on the 2015 sustainability goals we announced in 2009. Each ofhighlights summarized on the following page, on our goals was grounded in a vision for the future of our company, and we were proud to report that, as of the end of fiscal year 2014, we were on track to meet or exceed each of these goals by the end of 2015. Details of our accomplishments may be found in the Sustainability Report posted in the "Sustainability" section of our company website at www.averydennison.com/sustainability.

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VISION						2015 GOAL		YE 2014 STATUS2025 SUSTAINABILITY GOALS
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FOCUS AREA		GOAL(S)		HIGHLIGHTS OF PROGRESS THROUGH 2018
Industry leadership inGreenhouse sustainable solutionsGas Emissions		Create market-leading sustainable materialsAchieve at least a 3% absolute reduction year-over-year and solutionsat least a 26% overall reduction, compared to our 2015 baseline, by 2025.		Several sustainableReduced our absolute GHG emissions by over 5% in 2018 and over 25% through 2018 compared to our 2015 baseline. solutions developed
Responsibly sourced materialsPaper		Our strategic suppliers achieve a preferred environmental performance ratingSource 100% certified paper, of which at least 70% will be Forest Stewardship Council®-certified.		On track		Over 90% of the total volume of paper we procured in 2018 was certified, with at least 45% of the volume Forest Stewardship Council®-certified.
ReduceFilms		Ensure that 70% of the films we buy conform to, or enable end products to conform to, our carbon footprintenvironmental and social guiding principles.		Reduce greenhouse gas emissions indexedSharpened the focus of our films goal on recyclable content. Our RBIS business partnered with Plastic Bank, a Canada-based organization focused on eliminating ocean plastics, to net sales by 15% from 2005 levelsestablish collection and recycling centers in key supply chain locations.
Chemicals		ExceededEnsure that 70% of the chemicals we buy conform to, or enable end products to conform to, our environmental and social guiding principles.		Completed pilots of the bluesign® system, a solution for sustainable textile production used by many of the apparel customers of our RBIS business.
Zero wasteProducts and Solutions		Through innovation, deliver above-average growth in sales from sustainability-driven products and services. Ensure that 70% of our products and solutions conform to, landfillor enable end products to conform to, our environmental and social guiding principles.		Determined that at least 30% and 20% of our LGM and RBIS business' revenues, respectively, were from sustainability-driven products in 2018. Developed our ClearIntent™ portfolio of products in our LGM and RBIS businesses made with materials that are responsibly sourced, use less material with the same functionality, contain recycled content and/or enable recycling. Continued to enable customers in our RBIS business to replace conventional packaging and brand elements with more environmentally friendly alternatives.
Waste		Reduce manufacturingBe 95% landfill-free, with at least 75% of our waste sent to landfill to 15%reused, repurposed or recycled. Eliminate 70% of totalthe matrix and liner waste generatedfrom our value chain.		ExceededAs of the end of 2018, diverted over 90% of our solid waste from landfills with at least 90 of our sites worldwide over 95% landfill-free, and recycled over 60% of diverted waste.		Continued our goal of reducing plastic waste by working to build systems and infrastructure to allow label converters and brand owners to cost-effectively recycle label waste.
​Transparency		Commit to goals publicly and be transparent in reporting our progress.		Achieve a world-class safety incident rateWorked with third parties to develop tools to better measure our progress towards achieving our sustainability goals. Began preparing our 2016-2018 Sustainability Report, partnering with Business for Social Responsibility to update our sustainability materiality assessment to ensure continued alignment with the sustainable practices and goals of 0.40our customers and the industries we serve.
People		ExceededContinue to cultivate a diverse (40%+ female at the level of manager and above), engaged, safe (recordable incident rate of <0.25), productive and healthy workforce. Continue to invest in our employees and the communities in which they live and work.		Expanded our flexible work arrangements, female employee leadership program and unconscious bias training across our company. In addition, evaluated our gender pay equity with positive results, developing plans to make identified adjustments to compensation for 2019. While we have made significant progress with our gender diversity efforts, our female representation at the level of manager and above was 33% at the end of 2018.
Safe and fair labor practices
		Report on social compliance performanceContinued our world class safety record, with a recordable incident rate of key suppliers		On track
Invest0.25 in our global communities		Triple our community investment2018, far surpassing the manufacturing industry average of 3.5 in emerging markets		On track		2017 (the most recently available industry average).

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CORPORATE SOCIAL RESPONSIBILITY

AVERY DENNISON FOUNDATION

        With Board oversight from the Governance Committee, our social responsibility efforts reflect our spirit of community and help strengthen the places around the world in which we do business. We make most of our community investments through the Avery Dennison Foundation leads our community outreach efforts and is built on our company's leadership principle(the "Foundation"), which annually invests at least 5% of model integrity and social responsibility. Our vision isits assets from the prior year to inspire human promise toward a more intelligent and sustainable world — a vision that drives us to advance women's empowerment, education and sustainability, initiativesand encourages employee engagement with a spirit of invention and innovation.The Foundation invests in communities by making grants to community-based organizations, promoting employee volunteerism and engagement, and awarding scholarships.

GLOBAL GRANTMAKING

        The Foundation's global grantmaking initiative is its primary means of giving. Grantmaking is also aided by our employees worldwide who help identify qualified NGOs. Grant decisions are guided by the priorities shown below, which are targeted to the communities in which our employees live learn and work. In cooperation with not-for-profit organizations, non-governmental organizations

EMPLOYEE ENGAGEMENT

        As the hands and schools, we encourage our employees to volunteer their time to improve quality of life in their communities and identify organizations that provide needed services with the same spirit of invention and innovation found at the heart of our company's success. In recent years,company, our employees are critical to advancing the Foundation's efforts. Because they often have the best understanding of the needs of their communities, more than 150 employee teams coordinate volunteerism locally at our global givinglocations. Nearly 50% of the Foundation's grants are enhanced with volunteer time from our employees.

        The Foundation also engages employees through the Granting Wishes program, has expanded into China, India and Brazilwhich allows employees globally to measurably improve the lives of students and families in these nations where werecommend one-time grants to local NGOs. Employees often have a significant presence.connection to the organizations they nominate through volunteerism or service on the organization's board. In the eight years since the Foundation launched Granting Wishes, more than 1,000 of our employees have taken part, enabling grants to more than 280 organizations.

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SCHOLARSHIPS         The Foundation provides scholarships to the children of our employees in the U.S. More than 620 scholarships have been awarded to U.S. college students.         In China and India, the Foundation's InvEnt Scholarships have for more than a decade supported the next generation of innovators in science, technology, engineering and mathematics. By providing undergraduates with tuition assistance, an invention competition and professional development opportunities, the Foundation inspires the spirit of innovation in future engineers and technology workers. As part of their application, students submit ideas for an invention they then design during their scholarship year. Over 186 scholarships have been awarded to Chinese and Indian students who have demonstrated outstanding innovative spirit and strong practical competence. ​ Avery Dennison Corporation| 2019 Proxy Statement |9 ​|2016 Proxy Statement|3

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OUR BOARD OF DIRECTORS

OVERVIEW

        Our Board is responsible for overseeing, counselingoversees, counsels and directingensures management inis serving the long-termbest interests of our company and stockholders, with the goal of building long-term value and ensuringmaximizing the vitalityperformance of our businesses for our customers, employees and other stakeholders.to deliver long-term value.

        Our Board's primary responsibilities include establishing an effective corporatethe following:

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Establishing astrong governance program, with a Board and Committee structure that ensures independent oversight; overseeing



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Conductingdirector succession planning to ensure we maintain an engaged and diverse Board with the skills and backgrounds to effectively oversee our company;



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Approving ourannual operating plan and significant strategic and operational actions, includingsignificant capital expenditures and acquisitions;



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Overseeing ourbusinesses, strategies and risks; maintainingrisks;



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Maintaining theintegrity of our financial statements; evaluatingstatements;



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Evaluating the performance of our senior executivesleaders and determining their compensation; undertaking executive compensation; and



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Conductingsuccession planning for our CEO and other senior executives;executives, and reviewingensuring we have ahuman capital management program that is effectively developing our annual operating plan and significant strategic and operational actions.

leaders.

BOARD COMPOSITION2019 DIRECTOR NOMINEES

        Our Bylaws currently provide that our Board be comprised of between eight and 12 directors, with the exact number fixed from time to time by Board resolution. Effective immediately before our Annual Meeting, ourOur Board has fixed the current number of directors at ten.12, but plans to reduce the number of directors to 11 when Mr. Scarborough leaves the Board in April 2019. The nominees for election at the Annual Meeting — and the year of their tenure,initial appointment or election, current or most recent principal occupation, independence status, and committee memberships (if applicable) during 2015  — are as follows:shown in the chart below.

NAME		DIRECTOR SINCE		CURRENT PRINCIPAL OCCUPATION		INDEPENDENT		AC		CC		GC
​	​	​	​	​	​	​	​	​	​	​	​	​
Bradley A. Alford		2010		Retired Chairman & CEO, Nestlé USA				​		M		M
Anthony K. Anderson		2012		Retired Vice Chair & Managing Partner, Ernst & Young LLP				M
Peter K. Barker		2003		Retired Chairman of California, JPMorgan Chase & Co.				C		​		​
Mitchell R. Butier		—		President & COO, Avery Dennison Corporation		No
Ken C. Hicks		2007		Retired Chairman, Foot Locker, Inc.				M		​		M
David E. I. Pyott (LID)		1999		Retired Chairman & CEO, Allergan, Inc.						C		M
Dean A. Scarborough		2000		Chairman & CEO, Avery Dennison Corporation		No		​		​		​
Patrick T. Siewert		2005		Managing Director and Partner, The Carlyle Group				M
Julia A. Stewart		2003		Chairman & CEO, DineEquity, Inc.				​		M		C
Martha N. Sullivan		2013		President & CEO, Sensata Technologies Holding N.V.						M

NAME		AGE		DIRECTOR SINCE		PRINCIPAL OCCUPATION		INDEPENDENT		AC		CC		GC
Bradley A. Alford		62		2010		Retired Chairman & CEO, Nestlé USA						M		M
Anthony K. Anderson		63		2012		Retired Vice Chair & Managing Partner, Ernst & Young LLP				M				M
Peter K. Barker		70		2003		Retired Chairman of California, JPMorgan Chase & Co.				M		​		C
Mark J. Barrenechea		54		2018		Vice Chair, CEO & CTO, OpenText Corporation
Mitchell R. Butier		47		2016		Chairman-Elect, President & CEO, Avery Dennison Corporation				​		​		​
Ken C. Hicks		66		2007		Chairman & CEO, Academy Sports + Outdoors				M		M
Andres A. Lopez		56		2017		President & CEO, Owens-Illinois, Inc.				M		​		​
David E. I. Pyott (LID)		65		1999		Retired Chairman & CEO, Allergan, Inc.						M		M
Patrick T. Siewert		63		2005		Managing Director & Partner, The Carlyle Group				C		​		​
Julia A. Stewart		63		2003		Former Chairman & CEO, Dine Brands Global, Inc.						C		M
Martha N. Sullivan		62		2013		President & CEO, Sensata Technologies Holding PLC				M		M		​

AC = Audit & Finance Committee    CC = Compensation & Executive Personnel Committee    GC = Governance & Social Responsibility Committee
M = Member    C = Chair    LID = Lead Independent Director

        The ages of our director nominees range from 4447 to 67,70, with an average age of 59.61. Their lengths of service range from zeroless than one to 1619 years, with an average tenure on our Board of approximately nine years. None of our directors serves on more than two other boards of SEC-reporting companies, except for Messrs. Anderson and Pyott, each of whom iswho are both retired and servesserve on three such other boards.

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APPOINTMENT OF NEW INDEPENDENT DIRECTOR

        As part of its efforts to ensure regular Board refreshment, the Governance Committee oversaw our Board's search for a new independent director during 2018. The Committee engaged Spencer Stuart, an executive search firm, to assist it in identifying and evaluating potential candidates. Spencer Stuart identified a number of potential candidates (including Mark Barrenechea) who were initially evaluated by the Governance Committee and our Chairman, with input from other Board members and senior management.

        The Governance Committee and other members of our Board interviewed Mr. Barrenechea, uniformly supporting his candidacy based on the deep technology industry expertise he could bring to our Board as we continue refining our go-to market strategies in our high value product category of Intelligent Labels. Upon the recommendation of the Governance Committee, our Board unanimously appointed Mr. Barrenechea to our Board effective September 10, 2018, recognizing his senior leadership experience, technology experience, global exposure and public company board experience.

DEPARTURE OF CURRENT CHAIRMAN

        In February 2019, our Chairman, Dean Scarborough, notified our Board of his intention not to stand for reelection at the Annual Meeting so that he may focus on other endeavors. Mr. Scarborough's membership on, and chairmanship of, our Board will end on the date of the Annual Meeting. For information on our Board's leadership structure following Mr. Scarborough's departure, see theBoard Leadership Structure section of this proxy statement.

BOARD MEETINGS AND ATTENDANCE

        Our Board met five times and acted twice by unanimous written consent during 2015.2018. There were 2221 Committee meetings and one action by written consent of the Committees of our Board during the year. EachAll of our directors attended at least 75%82% of the aggregate number of meetings of our Board and CommitteesCommittee meetings of which he or she was a member held during 2015;2018; the average attendance of all directors was 98%97%. Directors are strongly encouraged to attend our annual stockholder meetings under our Governance Guidelines andall of the then-servingour directors attended the 20152018 Annual Meeting except for Rolf Börjesson who retired from the Board on that day..

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CORPORATE GOVERNANCE GUIDELINES

        Our Governance Guidelines which were most recently amended in February 2016, provide the corporate governance framework for our company and reflect the beliefsvalues of our Board, with respect to the matters describedas highlighted below. They are reviewed at least annually and amended from time to time to reflect changes in regulatory requirements, evolving market practices, and recommendations from our stockholdersadvisors and advisors.feedback from our stockholders. Our Governance Guidelines were most recently amended in December 2018.

Governance Guidelines Highlights

Board Composition

✓

Reasonable Board size of 12 directors in 2018

✓

Mandatory retirement after age 72, with no term limits

Director Independence

✓

Current directors and director nominees 83% and 91% independent, respectively

✓

Executive sessions of non-management directors at every 2018 Board meeting, as well as one executive session for independent directors only

Board Leadership Structure

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Annual review of Board leadership structure by the Governance Committee

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Robust Lead Independent Director role and independent Committee Chairs

Board Committees

✓

100% independent

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Act under charters delineating Committee responsibilities

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Directors required to attend Board and Committee meetings

Board Duties

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Directors entitled to rely on independent legal, financial or other advisors at our expense

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Regular review of long-term strategic plans, including major risks and mitigating strategies

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Regular succession planning for our CEO and other senior leaders through the Compensation Committee

Continuous Board Improvement

✓

All new directors participate in an initial orientation to familiarize themselves with our company and after joining a Committee to understand its responsibilities

✓

Directors continue their education through meetings with management, visits to our facilities and attendance at director education programs

✓

The Governance Committee oversees an annual evaluation process to ensure our Board, Committees, Chairman and Lead Independent Director are functioning effectively

Director Qualifications

✓

The Governance Committee reviews the skills and characteristics of our Board members and recommends director nominees

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MATTER		DESCRIPTION
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Board Composition		Reasonable Size. Our Board should consist of between eight and 12 directors. No Over-Boarded Directors. Our directors should sit on four or fewer other public company boards. Mandatory Retirement. Directors should retire on the date of our annual stockholder meeting occurring after they reach age 72, with no established term limits on service.
Director Independence		Majority Independent. A majority of our directors should satisfy NYSE independence standards. Regular Executive Sessions. Our independent directors should meet in executive session at each regular meeting of our Board.
Board Leadership Structure		Frequent Review. Our Governance Committee should periodically consider the appropriateness of our Board leadership structure, with the independent directors on our Board retaining the authority to separate or combine the positions of Chairman and CEO. Robust Lead Independent Director Role. Since our current CEO is also Chairman, our independent directors should annually select one of themselves to serve as Lead Independent Director.
Board Committees		Independence. Board Committees should be comprised only of independent directors. Governance. Board Committees should act under charters setting forth their purposes and responsibilities. Attendance. Directors should attend all meetings of our Board and its Committees on which they serve, and are strongly encouraged to attend all annual stockholder meetings.
Board Duties		Management and Expert Access. Directors should exercise their reasonable business judgment and are entitled to rely on our senior executives, to whom they have full and free access, and any independent legal, financial or other advisors they deem necessary or appropriate, which they may engage at our expense. Strategic and Risk Oversight. Our Board should regularly review our long-term strategic plans, including the major risks facing our company. Succession Planning. Our Board should periodically conduct succession planning through the Compensation Committee.
Continuous Board Improvement		New Director Orientation. All new directors should participate in an orientation program after joining our Board to familiarize themselves with our company. Continuing Education. Directors should continue their education through meetings with management, visits to our facilities and attendance at accredited director education programs and institutes. Annual Performance Evaluations. The Governance Committee should oversee an annual evaluation process to ensure our Board, Committees, Chairman and Lead Independent Director are functioning effectively.
Director Qualifications		Diverse and Relevant Experience. The Governance Committee should review the skills and characteristics of Board members, as well as the composition of the Board as a whole, and recommend director nominees.

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DIRECTOR INDEPENDENCE

        Our Governance Guidelines require that our Board be comprised of a majority of directors who satisfy the criteria for independence under NYSE listing standards. These standards also require that our audit, compensation and nominating committees be comprised entirely of independent directors. An independent director is one who meets the independence requirements of the NYSE and who our Board affirmatively determines has no material relationship with our company, directly or indirectly as a partner, stockholder or officer of an entity with which we have a relationship.

        Each year, our directors complete a questionnaire designed to solicit information that may have a bearing on the annual independence determination, including all relevant relationships they have with our company, directly or indirectly through our company's sale or purchase of products or services to or from the companies or firms withby which they are affiliated.employed. The Governance Committee reviews with our Senior Vice President, General Counsel and Corporate Secretary any relevant disclosures made in the questionnaires with our General Counsel/Corporate Secretary, as well as any transactions our company has with director-affiliated entities. In February 2016,2019, the Governance Committee reviewed the followingtwo relationships impacting the independence of our director nominees — (i) Mr. Scarborough's service as our Chairman and CEO and (ii)directors, namely Mr. Butier's service as our President and COO.CEO and Mr. Scarborough's former service as our President and CEO.

        After review and discussion of the relevant facts and circumstances, the Governance Committee concluded that only Messrs. Butier and Scarborough had relationships that were disqualifying under NYSE listing standards, otherwise material or impairing of director independence. Upon recommendation of the Governance Committee, our Board affirmatively determined the ten directors named below to be independent, representing 83% of our current directors and 91% of our director nominees.

        For a discussion of the potential impact of tenure on director independence, see theBoard Refreshment and Director Succession Planning. of this proxy statement.

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        After review and discussion of the relevant facts and circumstances, the Governance Committee concluded that only Messrs. Scarborough and Butier had relationships that were disqualifying under NYSE listing standards, otherwise material or impairing of director independence. Upon recommendation of the Governance Committee, our Board affirmatively determined the following eight director nominees to be independent, representing 80% of our nominees.

BOARD LEADERSHIP STRUCTURE

        We currently have a combined Chairman/CEO and a Lead Independent Director. Our Board understands that there are various views on the most appropriate Board leadership structure, particularly on whether it is advisable for a company's CEO also to serve as its Chairman.        Our Governance Guidelines give our Board — acting through its independent directors — the discretion to separate or combine or separate thesethe roles of Chairman and CEO as it deems appropriate based on the needs of our company at any given time; totime. To facilitate this decision-making, the Governance Committee annually discussesreviews our Board leadership structure, providing its recommendation on the appropriate structure for the following one-year term to our independent directors. Our independent directors do not view any particular Board leadership structure as generally preferred;necessarily preferable; rather, they make an informed annual determination taking into account, company circumstances,among other things, our financial and operationalposition, business strategies and any feedback received from our stockholders.

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        In February 2016, subject to his election by our stockholders, our independent directors elected Mr. Scarborough as Executive Chairman effective May 1, 2016, based on their belief that his leadership will optimize the executionAvery Dennison Corporation| 2019 Proxy Statement |13

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Table of our strategic priorities in the coming year as he mentors and oversees the transition of Mr. Butier in his new role as CEO. The Chairman and CEO roles will be separated, each filled by individuals with deep industry knowledge who developed and executed our strategies effectively to deliver superior total stockholder return in recent years. Because Mr. Scarborough will remain our employee, we will continue to have a Lead Independent Director to ensure independent oversight of our Board. The Governance Committee and our independent directors plan to discuss and determine the Lead Independent Director in April 2016.Contents

        Our independent directors believe that the current structure was appropriate because it allowed for one individual to lead our company with a cohesive vision, the industry expertise and intimate company knowledge to execute that vision, and the understanding of the significant enterprise risks that need to be mitigated or overcome to achieve that vision. Combined leadership at the top has provided the flexibility for us to address the rapidly changing needs of our businesses. Mr. Scarborough serves as Chairman/CEO at the pleasure of our independent directors because he does not have an employment agreement.ROBUST LEAD INDEPENDENT DIRECTOR ROLE

        Our Lead Independent Director balanced our combined Chairman/CEO. Mr. Pyott currently serves as our Lead Independent Director,non-independent Chairman and CEO roles in 2018, exercising critical duties in the boardroom to ensure effective and independent Board decision-making. Our Governance Guidelines clearly delineate these responsibilities, which are summarizedshown below. Mr. Pyott currently serves as our Lead Independent Director.

Lead Independent DirectorLEAD INDEPENDENT DIRECTOR		Primary ResponsibilitiesPRIMARY RESPONSIBILITIES
​	​	​
Current Selectee:     David E. I. Pyott Executive Sessions Led in 2015: 5 Lead Independent Director is selectedSelected annually by our independent directors.		• Preside over executive sessions of independent directorsand meetings of our Board at which the non-independent Chairman is not present • Serve as liaison between the non-independent Chairman and our independent directors • Approve meeting agendas and schedules and other information sent to our Board to ensure that appropriate items are discussed, with sufficient time for discussion of all items • Call meetings of our independent directors when necessary or appropriate • If requested, by major stockholders, consult and directly communicatemeet with our stockholders

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