April 4, 2018

Dear Shareholders:

It is my pleasure to invite you to join me, the Board of Directors, senior leaders, and current and former employees at the 2018 Annual Meeting of Shareholders in White Plains, New York. Details regarding admission to the meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement.

We hope that you will join us in person, but whether or not you plan to attend the Annual Meeting, your vote is important. I encourage you to vote by telephone, by internet or by signing, dating, and returning your proxy card by mail. Voting instructions are found on page 5 of the Proxy Statement.

On behalf of the Board of Directors and Avon management, thank you for your investment and interest in Avon.

		Sincerely yours,
		Jan Zijderveld
		Chief Executive Officer

AVON PRODUCTS, INC.

Building 6, Chiswick Park

London W4 5HR

United Kingdom

YOUR VOTE IS IMPORTANT – YOU CAN VOTE IN ONE OF FOUR WAYS:

VIA THE INTERNET Visit the website listed on your proxy card		BY TELEPHONE Call the telephone number on your proxy card		BY MAIL Sign, date and return your proxy card in the enclosed envelope		IN PERSON Attend the Annual Meeting
If your shares are held in a stock brokerage account or by a bank or other record holder, follow the voting instructions on the form that you receive from them. The availability of telephone and internet voting will depend on their voting process.

    Meeting Agenda

TABLE OF CONTENTS

PROXY SUMMARY

This summary highlights information contained elsewhere in the Proxy Statement and in Avon Products, Inc.’s (“Avon,” the “Company,” “we,” “us,” or “our”) Annual Report on Form 10-K for the year ended December 31, 2017. This summary is not a complete description and you should read the entire Proxy Statement carefully before voting. Proxy materials were first sent to shareholders on or about April 4, 2018.

Meeting Agenda

Board and Governance Highlights

BOARD INDEPENDENCE Independent 10 Non-Independent 1 BOARD GENDER Women 3 27% Men 8 73% BOARD RACE, ETHNICITY & GEOGRAPHIC DIVERSITY Diverse 3 27% Other 8 73% BOARD TENURE 0-2 Years 3-5 Years 6+ Years

Board Nominees and Designees

The following table provides summary information about each director nominated for election by our Board of Directors (the “Board”) to the Board at the 2018 Annual Meeting (collectively, the “Director Nominees”) and each director elected to the Board by holders of our Series C Preferred Stock (collectively, the “Series C Designees”). Director Nominees are elected annually by a majority of the votes cast by our shareholders, voting together as a single class. The Series C Designees have been elected by the holders of our Series C Preferred Stock, voting separately as a class.

Nominees and Designees								Committee Membership
Names		Director Since		Independent1		Other Public Boards		Audit Committee		Compensation and Management Development Committee		Finance Committee		Nominating   and   Corporate   Governance   Committee
Jose Armario		2016		I		1
W. Don Cornwell2		2002		I		2
Chan W. Galbato3,4		2016		I		1
Nancy Killefer		2013		I		2
Susan J. Kropf		2015		I		3
Helen McCluskey		2014		I		2
Andrew G. McMaster, Jr. 5		-----		I		0
James A. Mitarotonda5		-----		I		3
Michael F. Sanford4		2016		I		0
Lenard B. Tessler4		2018		I		1
Jan Zijderveld6		2018				0

*Charles H. Noski advised the Company on March 24, 2018 that he had chosen not to stand for re-election at the 2018 Annual Meeting. The Company had previously been advised by Cathy D. Ross that she preferred not to stand for election as well.

Attendance

Each Director Nominee and each Series C Designee other than Messrs. McMaster and Mitarotonda are current directors of the Company and each Director Nominee and Series C Designee that served on the Board in 2017 attended at least 75% of the aggregate number of 2017 meetings of the Board and each Board Committee on which he or she served.

Business and Strategy Highlights

At its core, Avon is an organization with a clear and compelling purpose with a rich 130-year history, operating in the beauty and personal care categories across the globe skewed toward developing and growing markets. Through our 6 million direct selling Representatives, we empower millions of micro-entrepreneurs globally. Avon’s opportunity to modernize and enable them to be more competitive and to service their consumers better is powerful, and is at the heart of Avon’s value proposition.

During 2017, Avon continued to face ongoing revenue growth challenges while continuing to make progress against key initiatives such as cost savings and cash generation. Our focus on profitability and exceeding our cost savings target contributed to improved operating margin as we ended the year. For 2017 cash flow from operations increased $143 million compared with the prior year, primarily due to improvements in working capital.

Avon ended the year with $882 million of cash, ahead of our 2017 expectations. This represents substantial improvement in our cash conversion metric during 2017, and we expect this rate of conversion to continue. We have further supported our financial flexibility by renegotiating the covenant levels in our $400 million secured credit facility. In addition, in 2018, we expect to repay the $238 million remaining due on our 2019 bonds and retain the financial flexibility to fund investments.

Total revenue was disappointing in 2017, relatively unchanged but down 2% in constant dollars as compared to the prior year, driven by declines in Brazil, Russia and the UK. Overall Avon did not keep pace with industry growth in the global beauty category which grew by roughly 3-4% in 2017. The number of active Representatives declined more than anticipated, largely due to a decrease in Brazil as we tightened credit policies. The competitive environment continues to intensify in many of our key markets. The revenue shortfall highlights the need and urgency to sharpen our focus on sales forecasting, data and analytics, and to deepen Avon’s insights from our Representatives to inform pricing as well as promotional and discount strategies locally.

Throughout the year the Board of Directors (the “Board”) has focused on strengthening Avon’s leadership team, recruiting seasoned and skilled senior executives. The process of putting in place the leadership team to accelerate change and grow profits sustainably culminated with the recruitment of a new Chief Executive Officer (“CEO”), Jan Zijderveld, who joined Avon in February 2018. Mr. Zijderveld was selected following an extensive search and assessment of a strong list of seasoned global executives. Mr. Zijderveld emerged as the clear choice that Avon needs to accelerate our transformation and growth. In addition, Mr. Zijderveld’s focus on strategic and operational excellence, while putting our direct selling Representatives and consumers front and center, make him ideally suited to lead Avon. Before joining Avon, Mr. Zijderveld was a senior executive and 30-year veteran of Unilever N.V./PLC with a track record as a proven global leader driving profitable growth in large, multi-channel, complex consumer businesses across emerging, developing and developed markets.

Avon is operating in a dramatically changing consumer and competitive environment. Business as usual is not an option. The Board has given Mr. Zijderveld a clear mandate to lead a deep and comprehensive strategic and operating review of all facets of the business and evaluate ways to significantly accelerate Avon’s path to profitable growth, taking a critical look with a high sense of urgency.

Shareholder Engagement & 2017 Compensation Highlights

We remain focused on shareholder engagement and value shareholder insights. During recent years, the Chair of the Compensation and Management Development Committee (the “Committee”) conducted significant shareholder outreach to ensure shareholder perspectives and concerns were heard and well understood. During this time, we reviewed our compensation program changes, and discussed the Company’s transformation status and financial and strategic priorities. These discussions culminated in the changes we have made to our compensation programs since 2016.

During 2017, we continued our practice of deeply engaging with our shareholders and soliciting feedback. We reached out to our top 25 shareholders who collectively own over 65% of our common shares outstanding as of December 31, 2017. Of the top 25 shareholders, 36% are passive investors and therefore do not generally engage and 64% are actively managed. We directly interacted with over 65% of the active top 25 shareholders of our stock.

The feedback received from our shareholders continues to be tremendously valuable and was incorporated into the Committee’s determination of compensation program changes in recent years. In 2018, we will continue to ensure the alignment of our compensation programs with our shareholders’ interests with a strong pay for performance alignment and payouts of incentive plans based on business performance and stock price appreciation.

As a result of disappointing operating results, the 2017 annual incentive plan paid out at 37.5% of target, and the 2015-2017 Performance RSUs delivered a realized value of approximately only 16% of the targeted award value. The low performance results and loss of value for shareholders is reflected in very low annual and long-term incentive payouts and thus low realized pay for our executives and managers. In addition, the Committee continued to demonstrate a commitment to dynamic, shareholder-aligned pay plans through:

Our Say on Pay Proposal is found on page 73 and our Board recommends that our shareholders vote “For” this proposal. The following factors support this recommendation:

2018 Compensation Highlights

For 2018, the Committee has maintained its commitment to the strong alignment of our executive pay programs with our shareholders’ interests, while ensuring we can attract and retain key talent in the organization. As such, the Committee believes the 2017 design remains appropriate as it has strong performance elements that support our externally communicated business goals and requires significant stock price appreciation for executives to realize target compensation. As a result, the details of our compensation programs for 2018 are not significantly different from 2017, as shown on page 38. The Committee has also redefined the peer group for 2018 against which we benchmark executive pay to reflect our current lower revenues and geographic footprint (see page 46).

In addition, in recruiting a new CEO in 2018, we are providing him with a compensation opportunity in line with our newly developed peer group. His total target compensation is below our former CEO’s 2017 compensation target consistent with our reduced scale, and he has the opportunity for a significant upside wealth creation tied to company and share price performance. (see page 44)

Governance and Related Materials

The Company has established strong policies, practices and procedures which provide a framework for effective governance. Our Corporate Governance Guidelines describe our Board of Directors’ governance policies and practices, including standards for director independence, qualifications for Board and Board Committee membership, Board and Board Committee responsibilities, and Board and CEO evaluations. Highlighted below are some of our key governance and related materials:

The Corporate Governance Guidelines, charters of each Board Committee, and Corporate Responsibility Report are available on our investor website (www.avoninvestor.com) and may be accessed by clicking on “Corporate Governance” or, in the case of our Corporate Responsibility Report, by clicking on “Corporate Responsibility.” The Code of Conduct is available at www.avoncompany.com and may be accessed by clicking on “Ethics & Compliance” under the “About Avon” heading.

VOTING AND MEETING INFORMATION

PROPOSAL 1—ELECTION OF DIRECTORS

The Board of Directors has fixed the number of directors at 11. The Board has nominated Jose Armario, W. Don Cornwell, Nancy Killefer, Susan J. Kropf, Helen McCluskey, Andrew G. McMaster, Jr., James A. Mitarotonda, and Jan Zijderveld (the “Director Nominees”) for election to the Board and Cerberus Investor, as the holder of the Company’s Series C Preferred Stock, has elected Chan W. Galbato, Michael F. Sanford and Lenard B. Tessler, (the “Series C Designees”) to serve as directors commencing immediately upon the conclusion of the 2018 Annual Meeting. All nominees other than Messrs. McMaster and Mitarotonda are current members of our Board. There are no family relationships among our directors or executive officers.

As set forth in further detail on page 19, on March 26, 2018, the Company entered into an agreement with certain shareholders (the “Nomination Agreement”), pursuant to which the Company agreed to nominate Mr. Mitarotonda for election to the Board at the 2018 Annual Meeting.

Each of the Series C Designees will hold office until the next succeeding Annual Meeting or until his successor is elected and qualified. Each of the Director Nominees, if elected as a director at the 2018 Annual Meeting, will generally hold office until the next succeeding Annual Meeting or until his or her successor is elected and qualified. As set forth in further detail on page 30, Cerberus Investor is required to vote its shares in favor of each Director Nominee. Each Director Nominee has consented to being named as a nominee in our proxy materials and to serve as a director, if elected. We have no reason to believe that any of the Director Nominees will be unable or unwilling to serve as a director.

Each Director Nominee who receives a majority of the votes cast will be elected to the Board. If a Director Nominee is an incumbent director and he or she receives a greater number of votes “withheld” from his or her election than votes “for” such election, he or she is required to tender his or her resignation in accordance with our Corporate Governance Guidelines, as described under “Information Concerning The Board Of Directors—Board Policy Regarding Voting for Directors” on page 18.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Having served in a variety of key leadership positions in nearly two decades with McDonald’s Corporation, Mr. Armario brings to the Board substantial experience leading large complex operations in global marketing, branding, supply chain, franchising and strategic planning. His first-hand consumer experience and global responsibilities with McDonald’s Corporation, particularly in Latin America, provide him with valuable insights to guide Avon in its key geographies.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Through Mr. Cornwell’s career as an entrepreneur driving the growth of a consumer focused-media company, an executive in the investment banking industry and as a director of several significant consumer product and health care companies, he has accumulated valuable business, leadership, and management experience and brings important perspectives on the issues facing the Company. Mr. Cornwell founded and built Granite Broadcasting Corporation, a consumer-focused media company, through acquisitions and operating growth, enabling him to provide insight and guidance on the Company’s strategic direction and growth. Mr. Cornwell’s strong financial background, including his work at Goldman Sachs prior to co-founding Granite and his service on the audit and investment committees of other companies’ boards, also provides financial expertise to the Board, including an understanding of financial statements, corporate finance, accounting, and capital markets.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Having served in key leadership positions in both the public and private sectors and having provided strategic counsel to consumer-based companies during her 30 years with McKinsey & Partners, Ms. Killefer brings to the Board substantial experience in the areas of strategic planning, including sales, marketing and brand building. Her experience as a partner of a global management consulting firm and as Chief Financial Officer and Chief Operating Officer of a government agency provides valuable expertise in the areas of executive leadership and finance. Ms. Killefer’s corporate governance experience as a director of other public companies, including as chair of the board of directors of CSRA, are also highly valuable to the Board.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Having held various senior management positions during the course of her 37-year career at Avon, including full profit-and-loss responsibility for all of Avon’s worldwide operations as its President and Chief Operating Officer, Ms. Kropf has extensive operational skills, a deep understanding of direct selling, and significant experience in marketing, research and development, product development, customer service, supply chain operations and manufacturing. Ms. Kropf has a strong financial background gained through her career at Avon and from her service on the boards of various public companies, including their compensation, audit, and corporate governance committees.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Ms. McCluskey has a broad background in strategy, business planning and operations derived from a career spanning over 30 years with leading consumer goods companies. Having built women’s brands globally for sale through all channels of distribution worldwide, she brings a valuable blend of branding, merchandising, marketing and international expertise to the Board. Ms. McCluskey’s experience as a Chief Executive Officer of a global public company provides her with significant expertise in global business matters, corporate leadership and management which enables her to make important contributions to the oversight of the Company’s strategic direction and growth, and management development.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Mr. McMaster has substantial experience in the areas of finance, audit and accounting, having served as a senior executive during a 39-year career with Deloitte & Touche LLP, as the current Chair of the audit committees of Black & Veatch Holding Company and UBS Americas Holding LLC, and as the current Chairman of the Financial Accounting Standards Advisory Council. He also gained experience in a variety of operational, client service and firm leadership roles at Deloitte, serving many of the firm’s largest, most complex global clients as both a Lead Engagement partner and an Advisory Partner across diverse industries.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Through his over twenty-five years as Chairman of the Board, President and Chief Executive Officer of Barington Capital Group, L.P., Mr. Mitarotonda brings to the Board extensive financial, investment banking and executive leadership experience. He also has significant board of director and corporate governance experience through his service on numerous public company boards across diverse industries, including consumer-focused companies such as The Jones Group and Pep Boys-Manny, Moe & Jack.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Having spent 30 years with Unilever, a transnational consumer goods company, during which time he lived and worked in seven countries across three continents, Mr. Zijderveld possesses deep operating experience in multi-channel, complex consumer businesses across emerging, developing and developed markets. His particular experience in Europe, the Middle East and Asia enable him to provide insights and understanding into these areas and help guide the Company’s strategic decisions in these markets. His leadership positions at Unilever provide him with vast experience in marketing, sales and distribution, and make him uniquely qualified in making necessary decisions for the Company’s long-term growth, business goals and managing challenging market conditions.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Through his 30 years of experience as an executive at public and private companies across a range of industries, including consumer products, Mr. Galbato has broad operational and business strategy expertise and significant skills in corporate leadership including as a Chief Executive Officer. Mr. Galbato is recognized for his experience in corporate turnarounds, which enables him to help guide the Company’s strategic direction and growth.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Through his career in various roles with finance and private equity firms, Mr. Sanford has extensive experience in financing matters and private equity investments. Mr. Sanford’s insights into capital management, restructuring, and capital markets are highly valuable to the Board.

SKILLS & EXPERIENCE OF PARTICULAR RELEVANCE TO AVON:

Through his senior executive positions held during the course of over 30 years at private investment firms and his service on boards of directors of operating companies, Mr. Tessler has an extensive background in financing and private equity investments, which provides critical skills to the Board in its oversight of strategic planning and operations.

INFORMATION CONCERNING THE BOARD OF DIRECTORS

2017 Board Meetings

Our Board of Directors held seven meetings in 2017. Directors are expected to attend all meetings of the Board and the Board Committees on which they serve and to attend the Annual Meeting of Shareholders. In 2017, all directors then serving on the Board attended at least 75% of the aggregate number of 2017 meetings of the Board and of each Board Committee on which he or she served. All directors then serving on the Board attended the 2017 Annual Meeting. In addition to participation at Board and Committee meetings and the Annual Meeting of Shareholders, our directors discharge their duties throughout the year through communications with senior management.

Non-employee directors meet in regularly scheduled executive sessions, as needed, without the CEO or other members of management.

Board Leadership Structure

The Board currently separates the positions of Chairman, Lead Independent Director and CEO. Mr. Galbato serves as our non-executive Chairman of the Board, Mr. Cornwell serves as our Lead Independent Director and Mr. Zijderveld serves as our CEO.

The Board evaluates its leadership structure periodically and believes that separating the Chairman, Lead Independent Director and CEO roles is important as the Company focuses on its transformation and growth efforts. Per the Company’s By-Laws, the Chairman presides at all meetings of the Board, including executive sessions, at which the Chairman is present, and the Lead Independent Director presides at all meetings of the Board at which the Chairman is not present. Additional rights, duties and responsibilities of the Chairman and the Lead Independent Director are set forth in the By-Laws and the Corporate Governance Guidelines. Pursuant to the Investor Rights Agreement, so long as Cerberus Investor maintains a certain ownership level in the Company (as described in more detail on page 30 of this Proxy Statement), Cerberus Investor has the right to select the director to be appointed as our Chairman.

Risk Oversight

The Board administers its risk oversight function primarily through the Audit Committee, which oversees the Company’s risk management practices. The Audit Committee is responsible for, among other things, discussing with management on a regular basis the Company’s guidelines and policies that govern the process for risk assessment and risk management. Management is responsible for assessing and managing the Company’s various risk exposures on a day-to-day basis. In connection with this, the Audit Committee has oversight of the Company’s enterprise risk management (“ERM”) program, which includes a risk management committee composed of certain key executives. The cross-functional group of key executives who comprise the risk management committee identify, on a periodic basis, the top current and future risks facing the Company, including, but not limited to, strategic, operational, financial and compliance risks, and the associated risk owners are responsible for managing and mitigating these risks. The Board may assign certain ERM risks to a specific Board Committee to examine in detail if such Board Committee is in the best position to review and assess the risk. In line with this, the Company provides regular ERM updates to the Audit Committee on several risks, including cybersecurity and data privacy, and to other Board Committees, as appropriate. The Audit Committee also periodically reports to the full Board on the Company’s ERM program.

While the Board has overall responsibility for overseeing risk management, Board Committees oversee risk within their areas of responsibility, as appropriate. For example, as set forth in further detail on page 55, our Compensation and Management Development Committee, with support and advice from its independent consultant, reviews the risk and reward structure of executive compensation plans, policies and practices at least annually to confirm that there are no compensation-related risks that are reasonably likely to have a material adverse effect on the Company. As set forth in its charter, the Finance Committee is responsible for, among other things, reviewing periodically the Company’s strategy for and use of derivatives for hedging risks such as interest rate and foreign exchange risks.

For certain risks, oversight is conducted by the full Board, such as during the Board’s annual review of the Company’s strategic goals and initiatives and other significant issues that are expected to affect the Company in the future. We believe that the Chairman, Lead Independent Director, CEO, and roles of the Board and the Board Committees provide the appropriate leadership to help ensure effective risk oversight.

Board Committees

The Board has the following regular standing committees: Audit Committee, Compensation and Management Development Committee, Nominating and Corporate Governance Committee, and Finance Committee. The charters of each Committee and our Corporate Governance Guidelines are available on our investor website (www.avoninvestor.com). Our Code of Conduct (which applies to the Company’s directors, officers and employees) is available at www.avoncompany.com.

Director Independence

The Board has concluded that each non-employee director, Director Nominee and Series C Designee is independent.

The Board assesses the independence of its non-employee members at least annually in accordance with the listing standards of the New York Stock Exchange, the regulations of the Securities and Exchange Commission, and our Corporate Governance Guidelines. As part of its assessment, the Board determines whether or not any such director has a material relationship with the Company, either directly or indirectly as a partner, shareholder or officer of an organization that has a relationship with the Company. The Board broadly considers all relevant facts and circumstances and considers this issue not merely from the standpoint of the director, but also from that of persons or organizations with which the director has an affiliation. This consideration includes:

In assessing the independence of directors and the materiality of any relationship with Avon and the other organization, the Board has determined that a relationship in the ordinary course of business involving the sale, purchase or leasing of property or services will not be deemed material if the amounts involved, on an annual basis, do not exceed the greater of (i) $1,000,000 or (ii) one percent (1%) of Avon’s revenues or one percent (1%) of the revenues of the other organization involved.

In the ordinary course of business, the Company has business relationships with certain companies on which Avon directors also serve on the board of directors, including for example, advertising arrangements, software services, and insurance coverage. The Company also has ongoing business relationships with affiliates of Cerberus Investor, of which the Series C Designees serve as directors, officers or employees, as described in “Transactions with Related Persons” on page 28. Based on the standards described above, the Board has determined that none of these transactions or relationships, nor the associated amounts paid to the parties, was material such that it would impede the exercise of independent judgment.

Board Policy Regarding Voting for Directors

Our Corporate Governance Guidelines provide that any incumbent director who receives a greater number of votes “withheld” than votes “for” his or her election in an uncontested election of directors will promptly tender his or her resignation. The Nominating and Corporate Governance Committee (the “Committee”) will recommend to the Board whether to accept or reject the tendered resignation, or whether other action should be taken. The Committee will consider any factors or other information that it considers appropriate or relevant. The Board, taking into account the Committee’s recommendation, will act on the tendered resignation and publicly disclose its decision and the rationale within 90 days from the date of the certification of the election results.

Board and Committee Self-Evaluations

Pursuant to the Company’s Corporate Governance Guidelines and each committee’s charter, the Board and each of its committees annually conducts a self-assessment. The Nominating and Corporate Governance Committee oversees the process. In recent years, the Board has used the Corporate Secretary or a third-party facilitator to interview each Director to obtain his or her feedback regarding the Board’s and each committee’s effectiveness, as well as feedback on each individual Director and the Chairman, Lead Independent Director and each committee chair in their respective roles. Self-evaluation topics generally include, among other matters, Board and committee composition and structure; effectiveness of the Board and committees; meeting topics and process; and Board interaction with management. The Board discusses the results of each annual self-evaluation and, based on the results, implements enhancements and other modifications as appropriate. Similarly, the results of each committee evaluation are discussed at subsequent committee meetings for the relevant committee. Individual feedback is provided to Directors by the Chairman and the Lead Independent Director.

Director Nomination Process & Shareholder Nominations

The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become Board members, consistent with criteria approved by the Board, and for making recommendations to the Board regarding: (i) nominees for Board membership to fill vacancies and newly created positions, and (ii) the persons to be nominated by the Board for election at the Company’s annual meeting of shareholders. The Committee actively considers potential director candidates on an ongoing basis as part of its director succession planning efforts.

The Committee’s process for considering all candidates for election as directors, including shareholder-recommended candidates, is designed to ensure that the Committee fulfills its responsibility to recommend candidates that are properly qualified and are not serving any special interest groups, but rather the best interest of all of the shareholders.

In making its recommendations, the Committee evaluates each candidate based on the independence standards described above and other qualification standards described below. For example, our Corporate Governance Guidelines and the charter of the Nominating and Corporate Governance Committee require that our directors possess the highest standards of personal and professional ethics, character and integrity and meet the standards set forth in our Corporate Governance Guidelines. In identifying candidates for membership on the Board, the Committee takes into account all factors it considers appropriate, consistent with criteria approved by the Board, which may include professional experience, knowledge, independence, diversity of backgrounds, and the extent to which the candidate would fill a present or evolving need on the Board. There is not a formal diversity policy; however, the Board values diversity in its broadest sense, including differences of viewpoint, personal and professional experience, skill, gender, race, ethnicity, geography, and other individual characteristics, and the Committee endeavors to include women, minority, and geographically diverse candidates in the qualified pool from which Board candidates are chosen.

The Board takes an active and thoughtful approach to refreshment and strives to maintain a balance of longer-tenured directors and newer directors with fresh ideas and viewpoints to achieve an appropriate balance of continuity and refreshment. The Board does not believe in limiting the number of terms that a director may serve, as term limits could deprive the Company and its shareholders of valuable director experience and familiarity with the Company and its operations, however, the re-nomination of incumbent directors is not automatic. In accordance with the Company’s Corporate Governance Guidelines, all directors serve one-year terms and any non-employee director who will be age 72 or older at the time of the election may not stand for reelection unless requested by the Board. The composition of our Board, as contemplated by our current slate of nominees, includes six new independent directors since 2016. In addition, in 2018, Jan Zijderveld joined the Board in connection with his appointment as the Company’s Chief Executive Officer. As a result of these Board changes, tenure on the Board currently ranges from less than one year to 16 years, with an average Board tenure of 3 years.

The Committee has retained a third-party search firm to locate candidates who may meet the needs of the Board. The firm typically provides information on a number of candidates for review and discussion by the Committee. As appropriate, the Committee chair and other members of the Committee and the Board interview potential candidates. If the Committee determines that a potential candidate meets the needs of the Board, possesses the relevant qualifications, and meets the standards set forth in our Corporate Governance Guidelines, the Committee will vote to recommend to the Board the election of the candidate as a director. Following the completion of this process with respect to Mr. McMaster, members of the Committee determined that Mr. McMaster met these standards and, therefore, recommended to the Board the election of this candidate as a director.

On March 26, 2018, the Company and certain of its shareholders entered into an agreement (the “Nomination Agreement”), pursuant to which the Company agreed to nominate Mr. Mitarotonda for election to the Board at the 2018 Annual Meeting. The shareholders party to the Nomination Agreement consist of Shah Capital Management, Inc., NuOrion Advisors, LLC, Barington Capital Group, L.P. and certain of their respective affiliates (collectively, the “Barington Group”). In connection with the Nomination Agreement, the Barington Group withdrew its notice of nomination for the 2018 Annual Meeting. The Nomination Agreement requires each member of the Barington Group to abide by certain customary voting and standstill provisions, subject to certain exceptions, through Mr. Mitarotonda’s service on the Board, including that at the 2018 Annual Meeting it will vote all of its shares of the Company’s common stock that it or its affiliates have the right to vote in favor of the election of directors nominated by the Board and refrain from soliciting proxies or participating in any “withhold” or similar campaign. The foregoing is not a complete description of the terms of the Nomination Agreement and the associated Confidentiality Agreement. For copies of, and more information concerning, the Nomination Agreement and the Confidentiality Agreement, please see the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2018 and Exhibits 10.1 and 10.2 thereto.

The Committee will consider director candidates recommended by shareholders if properly submitted to the Committee in accordance with our By-Laws and our Corporate Governance Guidelines. Shareholders wishing to recommend persons for consideration by the Committee as nominees for election to the Board can do so by writing to the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Avon Products, Inc., 601 Midland Avenue, Rye, NY 10580. Recommendations must include the proposed nominee’s name, detailed biographical data, work history, qualifications and corporate and charitable affiliations. A written statement from the proposed nominee consenting to be named as a nominee and, if nominated and elected, to serve as a director is also required. The Committee will then consider the candidate and the candidate’s qualifications using the criteria as set forth above. The Committee may discuss with the shareholder making the nomination the reasons for making the nomination and the qualifications of the candidate. The Committee may then interview the candidate and may also use the services of a search firm to provide additional information about the candidate prior to making a recommendation to the Board.

Shareholders of record may also nominate candidates for election to the Board by following the procedures set forth in our By-Laws. The Company’s By-laws include proxy access provisions whereby a shareholder, or a group of up to 20 shareholders, who owns 3% or more of the Company’s common stock continuously for at least three years, may nominate and include in the Company’s proxy materials candidates for election as directors of the Company. Such shareholder(s) or group(s) of shareholders may nominate up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the By-Laws and comply with the other procedural requirements of our Corporate Governance Guidelines. Please also see Section 14(a) of Article 3 of our By-Laws for details regarding the nomination of a Director candidate through the Advance Notice Process which is separate from a proxy access nomination. Information regarding these procedures for nominations by shareholders will be provided upon request to our Corporate Secretary.

Communications with Directors

A shareholder or other interested person who wishes to contact the Chairman, the Lead Independent Director or the non-employee or independent directors as a group may do so by addressing his or her correspondence to the Chairman, the Lead Independent Director or such directors, c/o Corporate Secretary, Avon Products, Inc., 601 Midland Avenue, Rye, NY 10580. All correspondence addressed to a director or group of directors will be forwarded to that director or group of directors.

Certain Legal Proceedings

There are no material legal proceedings to which any of our directors, executive officers, or beneficial owners of more than 5% of the outstanding shares of Avon common stock, or any affiliate thereof, is a party adverse to us or has a material interest adverse to us.

Compensation and Management Development Committee Interlocks and Insider Participation

No member of our Board’s Compensation and Management Development Committee has served as one of our officers or employees at any time. None of our executive officers served during 2017 as a member of the board of directors or as a member of a compensation committee of any other company that has an executive officer serving as a member of our Board of Directors or Compensation and Management Development Committee.

DIRECTOR COMPENSATION

The following table discloses compensation received by our non-employee directors during 2017.

Annual Retainer Fees

Directors who are employees of Avon Products, Inc., or any of our subsidiaries, receive no remuneration for services as a director. As in prior years, in 2017 each non-employee director was entitled to an annual retainer of $190,000, consisting of $75,000 in cash plus an annual grant of RSUs having a market value as of the date of grant of approximately $115,000 based on the closing price of our common stock on the date of grant. Pursuant to the Avon Products, Inc. Compensation Plan for Non-Employee Directors (the “Plan”), annual RSU awards are granted on the same date as the Annual Meeting of Shareholders and vest on the date of the next Annual Meeting of Shareholders, provided that such non-employee director has served as a member of the Board of Directors for the entirety of his or her annual term. Vested RSUs are settled upon a director’s departure from the Board. A non-employee director is entitled to regular dividend equivalent payments (to the extent any dividends on common stock are declared and paid) on RSUs but does not have the right to vote RSUs until settlement.

In 2016, we amended the Plan to provide that the Board can accelerate vesting of the annual RSU grant in the event a non-employee director’s Board service ceases involuntarily and without cause or in the event of a similar cessation of Board service. Additionally, directors elected by Cerberus Investor pursuant to the terms of the Series C Preferred Stock and the Investor Rights Agreement are entitled to be compensated for their services in the same amounts described above. However, each of these directors’ compensation that would otherwise be in the form of an annual RSU award will instead be in the form of phantom stock units (i.e., a contractual right to cash of the value of such units as of the date of vesting) in an amount equal to the value of the other non-employee directors’ RSU awards as of the date of vesting, to be paid upon vesting.

In addition to the annual Board retainer, during 2017 the non-executive Chairman and Lead Independent Director received additional fees of $150,000 and $100,000, respectively. Furthermore, the Company paid a $10,000 retainer for service on the Audit Committee and a $6,000 retainer for service on each of the other Board committees. In 2017, the chair of the Audit Committee received an additional fee of $30,000, the chair of the Compensation and Management Development Committee received an additional fee of $9,000, and the chair of each other Committee received an additional fee of $6,000. At certain times, we provide directors with complimentary Avon products, such as samples of new product launches.

Pursuant to the Board of Directors of Avon Products, Inc. Deferred Compensation Plan, non-employee directors may elect to defer all or a portion of their cash retainer fees into a stock account or cash account. The amounts deferred into the stock account increase or decrease in value proportionately with the price of Avon’s common stock. In line with this, the amounts deferred into the cash account, inclusive of accumulated interest, earn interest equal to the prime rate.

Stock Ownership Guideline

The Board of Directors has adopted a stock ownership guideline which requires non-employee directors to own shares of our common stock having a value equal to or greater than $350,000 within five years from the date of their election to the Board. The Board may waive this stock ownership guideline for any director if the receipt of equity awards or the ownership of Company common stock by such director would violate any policies or procedures to which such director is subject in connection with his or her employment. In line with this, the stock ownership guideline has been waived for Messrs. Galbato, Mayer and Sanford. All other current directors were in compliance with this guideline for 2017 or are on track to satisfy it within the period allowed to satisfy the guideline.

Role of the Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee (the “Committee”) is responsible for periodically reviewing and making recommendations to the full Board regarding the compensation of non-employee directors. In making its recommendations, the Committee typically considers:

Pay Governance LLC (“Pay Governance”) provided independent compensation consulting services during 2017 to the Committee on various director compensation matters including, but not limited to, retainers, chair fees, equity-based compensation, non-employee chairperson and lead director compensation, and stock ownership guidelines. Pay Governance conducts analysis and presentations to the Committee regarding current and prospective director compensation matters. Pay Governance is engaged by and reports directly to the Committee for the services regarding director compensation and consults directly with the Chair of the Committee. The Committee has the sole authority to retain and terminate Pay Governance for these services and to review and approve Pay Governance’s fees for these services and other terms of the engagement. See page 45 for information regarding Pay Governance’s independence.

EXECUTIVE OFFICERS

The executive officers of the Company as of the date hereof are listed below. Executive officers are generally designated by the Board of Directors at its first meeting following the Annual Meeting of Shareholders or in connection with the appointment to his or her role. Each executive officer holds office until the first meeting of the Board of Directors following the next Annual Meeting of Shareholders or until his or her successor is elected, except in the event of death, resignation, removal or the earlier termination of his or her term of office.

Jan Zijderveld joined Avon as Chief Executive Officer and was appointed to the Board of Directors in February 2018. He joined Avon after 30 years with Unilever N.V./PLC, where he rose to serve as a member of the Executive Committee and President of Unilever’s European business in 2011. In this position, Mr. Zijderveld oversaw 25,000 employees and operations in 34 countries. Prior to that, he served in a number of leadership roles, including Executive Vice President of Unilever, South East Asia & Australasia from 2008 to 2011 while also acting as Non-Executive Chairman of Unilever’s listed Indonesian business, and CEO of Unilever, Middle East and North Africa (MENA) from 2005 to 2008. Earlier in his career, he served in numerous leadership positions across Europe, Australia and New Zealand in general management, marketing, sales and distribution.

James (Jamie) Wilson has been Avon’s Executive Vice President, Chief Financial Officer since January 2017. Prior to joining Avon, he served as CFO of SABMiller, an international brewing and beverage Company headquartered in London from 2011 to 2015. He joined SABMiller in 2005 as Director of Strategic Projects and held numerous roles over his ten years at the company, including Managing Director in Russia as well as Managing Director of Central Europe. Prior to joining SABMiller, Mr. Wilson was Strategy and Projects Director at Scottish & Newcastle. He also spent several years at Highland Distillers where he held a variety of positions, including Group Finance Director. Mr. Wilson began his professional career at Deloitte Haskins & Sells.

Jonathan Myers has been Avon’s Executive Vice President, Chief Operating Officer since September 2017. Prior to joining Avon, Mr. Myers served as Vice President, Western European Markets and Managing Director, UK and Ireland for Kellogg Company from January 2012 to July 2016. Prior to joining Kellogg, Mr. Myers spent twenty years at Procter & Gamble (P&G) serving in various leadership roles for businesses spanning Europe, Asia and Latin America, including General Manager, Oral Care and Feminine Care, Greater China.

Miguel Fernandez has been Avon’s Global President since August 2017. Prior to joining Avon, Mr. Fernandez spent nearly 10 years at Herbalife, Ltd., where he advanced through a series of senior operating positions with increasing responsibility. He served as Executive Vice President for the Americas and Worldwide Member Operations from December 2013 to June 2017. From July 2009 to November 2013, he was Senior Vice President and Managing Director Mexico and prior to that he was Vice President Finance and Distributor Operations. Prior to joining Herbalife, Mr. Fernandez was Chief Financial Officer at OCC Mundial and also served as Business Controller and Business Development for Microsoft in Mexico. His earlier career included roles in investment banking at JPMorgan Chase and financial management at Procter & Gamble (P&G).

James E. Thompson has been Avon’s Senior Vice President, General Counsel and Chief Ethics & Compliance Officer since August 2017. Prior to joining Avon, Mr. Thompson spent nine years at Chiquita Brands International, Inc. as Executive Vice President, General Counsel and Secretary from 2006 to 2015. Prior to that, he was Group Vice President and General Counsel to McLeodUSA from 2003 to 2006 and prior to that he served as Director, International Legal to Alticor Inc., the parent company of Amway Corporation from 1995 to 2002. Mr. Thompson began his career as an attorney at Jones Day where he gained significant experience working on U.S. and international antitrust and corporate law matters.

Susan Ormiston has been Avon’s Senior Vice President, Human Resources and Chief Human Resources Officer since July 2013. Prior to that, Ms. Ormiston served as Group Vice President, Global Functions & HR Operational Excellence from November 2012 to July 2013 and prior to that she held the position of Vice President, Human Resources, Global Brand Marketing since joining Avon in August 2010. Prior to joining Avon, Ms. Ormiston was Senior Vice President, Human Resources, at global life insurer New York Life International from June 2007 to July 2010. Earlier in her career, she spent 15 years at IBM, progressing through human resources management roles of increasing responsibility in the U.S. and U.K.

Laura Barbrook has been Avon’s Vice President, Corporate Controller since September 2017 and was elected the Company’s Principal Accounting Officer in January 2018. Prior to joining Avon, Dr. Barbrook was Group Financial Controller at Travelex beginning in 2013. Earlier in her career, she worked for Rio Tinto and Ernst & Young in finance and control roles.

OWNERSHIP OF SHARES

The following table shows information for beneficial owners of more than 5% of the outstanding shares of Avon common stock, as set forth in recent filings with the Securities and Exchange Commission (“SEC”). Beneficial ownership is determined in accordance with SEC rules. In computing a person’s percentage ownership of common stock, shares of common stock into which shares of Avon’s Series C Preferred Stock are convertible are deemed to be outstanding and beneficially owned only with respect to the person exercising voting and dispositive power over such shares of Series C Preferred Stock, as described in more detail in footnote 1 to the following table.

The following table sets forth certain information as of March 1, 2018 regarding the beneficial ownership of our common stock by each director, Director Nominee, named executive officer (“NEO”—those officers listed in the Summary Compensation Table), and all of our directors and executive officers as a group. Total shares beneficially owned by directors, Director Nominees, NEOs and executive officers individually, and directors, NEOs and executive officers as a group, represent less than 1% of Avon’s outstanding shares of common stock.

TRANSACTIONS WITH RELATED PERSONS

Policies and Procedures

We have policies and procedures for the review, approval and ratification of “related person” transactions as defined under the rules and regulations of the Securities Exchange Act of 1934, as amended.

Under the written charter of the Audit Committee, related person transactions are subject to the review, evaluation and, as appropriate, approval or ratification of the transaction by the Committee. The Committee considers any such related person transactions in a manner that best serves the interests of the Company and the interests of our shareholders.

In addition, our Code of Conduct (the “Code”), which is available on our Company website (www.avoncompany.com), prohibits all conflicts of interest. Under the Code, conflicts of interest occur when personal, private or family interests interfere in any way, or even appear to interfere, with the interests of the Company. The Company also has a written global conflicts of interest policy for employees, including executive officers, which provides procedures and guidelines for addressing such matters. Under the policy, actual conflicts of interest are prohibited and the appearance of a conflict necessitates the review and prior approval, as appropriate, by certain members of management.

We have multiple processes for identifying related person transactions and conflicts of interest. We annually distribute a questionnaire to our executive officers and members of the Board of Directors requesting certain information regarding, among other things, their immediate family members and employment and beneficial ownership interests, which information is then reviewed for any related person transactions and conflicts of interest. In addition, we periodically survey our global finance function, including accounts payable, for any amounts paid to any of our directors, executive officers or 5% shareholders, and certain of such persons’ affiliates. The global ethics & compliance function undertakes a regular survey of employees, including executive officers, which asks specific questions regarding conflicts of interest, and requires certification of compliance with the Code.

We also have other policies and procedures regarding related person transactions and conflicts of interest. For example, our Corporate Governance Guidelines, which are available on our investor website (www.avoninvestor.com), require that the Board of Directors assess the independence of its non-employee directors at least annually, including a requirement that it determine whether or not any such directors have a material relationship with us, either directly or indirectly, as defined therein and as further described under “Information Concerning the Board of Directors—Director Independence” on page 17. In addition, we maintain a number of controls and procedures, including a written global policy, for the proper review and approval of contracts and other financial commitments.

Transactions with Related Persons

Upon the completion of the Series C Preferred Stock investment in Avon on March 1, 2016 (as further described below), Cerberus Investor, an affiliate of Cerberus Capital Management, L.P., became a related person by virtue of obtaining beneficial ownership of approximately 16.6% of the voting rights of the Company’s common stock on an as-converted basis at the time of the investment. In connection with the Series C Preferred Stock investment, we participated in several other transactions with Cerberus Investor and one or more of Cerberus’ affiliates, all of which were reviewed and approved by the Board as in the best interests of the Company and its shareholders. The Audit Committee determined that no further action was required by it with respect to these transactions under its written charter, since these transactions were previously reviewed and approved by the Board prior to the completion of such transactions and prior to the time any of the Cerberus Investor-designated directors (including Mr. Mayer, who has an indirect material interest in such transactions) joined the Board. Since March 1, 2016, the Audit Committee has reviewed, evaluated and, as appropriate, approved or ratified any new related party transactions or modifications to previously disclosed related party transactions between the Company and Cerberus Investor or one or more of its affiliates. The Company may participate in additional transactions with Cerberus Investor or one or more of Cerberus’s affiliates in the future, which would be subject to the policies and procedures described above, as appropriate.

Separation of North America Business

On March 1, 2016, Cleveland NA Investor LLC (an affiliate of Cerberus) contributed $170 million of cash into New Avon LLC (“New Avon”) in exchange for 80.1% of its membership interests, and we contributed (i) assets primarily related to our North America business (including approximately $100 million of cash, subject to certain adjustments), (ii) certain assumed liabilities of our North America business and (iii) the employees of our North America business into New Avon and retained 19.9% of New Avon’s membership interests. The Company and certain of its subsidiaries entered into the following agreements with New Avon in connection with the closing of the Series C Preferred Stock investment and the separation of our North America business on March 1, 2016 and the establishment of New Avon as a standalone North America operating entity.

Preferred Stock Investment

On March 1, 2016, we issued and sold to Cerberus Investor 435,000 shares of newly issued Series C Preferred Stock for an aggregate purchase price of $435 million pursuant to an Investment Agreement among the Company, New Avon and Cerberus Investor. The Series C Preferred Stock ranks senior to the shares of our common stock with respect to dividend rights and rights on the distribution of assets on any liquidation, dissolution or winding up of our affairs. The Series C Preferred Stock has a liquidation preference of $1,000 per share, representing an aggregate liquidation preference of $435 million upon issuance. Holders of Series C Preferred Stock are entitled to participate on an as-converted basis in any cash dividends paid to the holders of shares of the Company’s common stock. In addition, cumulative preferred dividends accrue daily on the Series C Preferred Stock and are payable at a rate of 1.25% per quarter (net of any dividends on the Company’s common stock and subject to increase up to a maximum rate of 5.00% per quarter if the Company breaches certain obligations). Except to the extent not otherwise previously paid by the Company, preferred dividends are payable on the seventh anniversary of the issuance date of the Series C Preferred Stock as and when declared by the Board of Directors and at the end of each quarter thereafter. Accrued and unpaid preferred dividends may be paid, at the Company’s option, (i) in cash, (ii) subject to certain conditions, in shares of the Company’s common stock or (iii) upon conversion of shares of Series C Preferred Stock, in shares of the Company’s non-voting, non-convertible Series D Preferred Stock, par value $1.00 per share (the “Series D Preferred Stock”). Any such shares of Series D Preferred Stock issued would have similar preferential rights.

Series C Preferred Stock is convertible at the option of the holders at any time into shares of the Company’s common stock at an initial conversion price of $5.00 per share, which equals an initial conversion rate of 200 shares of the Company’s common stock per share of Series C Preferred Stock, subject to certain anti-dilution adjustments. If at any time the volume weighted average price of the common stock exceeds $10.00 per share (subject to certain anti-dilution adjustments) for a period of 30 consecutive trading days, the Company may cause all of the Series C Preferred Stock to be converted into shares of common stock based on the then applicable conversion price.

Holders of Series C Preferred Stock are entitled to vote generally with the holders of common stock on an as-converted basis. Holders of Series C Preferred Stock will also be entitled to a separate class vote with respect to (i) amendments to the Company’s organizational documents that have an adverse effect on the Series C Preferred Stock, (ii) issuances by the Company of securities that are senior to, or equal in priority with, the Series C Preferred Stock or (iii) the delisting of the Company’s common stock, other than in connection with a change of control event.

Upon certain change of control events involving the Company, holders of Series C Preferred Stock can require the Company to repurchase the Series C Preferred Stock for an amount equal to the greater of (i) an amount in cash equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends or (ii) the consideration the holders would have received if they had converted their shares of Series C Preferred Stock into common stock immediately prior to the change of control event.

Pursuant to an Investor Rights Agreement between the Company and Cerberus Investor, the Company reduced the size of the Board from twelve directors to eleven directors and granted Cerberus Investor certain minority rights relating to Board representation and other matters. Pursuant to the amendment to the Company’s Certificate of Incorporation classifying the Series C Preferred Stock and the Investor Rights Agreement, Cerberus Investor will continue to be entitled to elect: (i) three directors to the Board, so long as Cerberus Investor continues to beneficially own shares of Series C Preferred Stock and/or shares of common stock that represent, on an as-converted basis, at least 75% of Cerberus Investor’s initial shares of Series C Preferred Stock on an as-converted basis, (ii) two directors to the Board, so long as Cerberus Investor continues to beneficially own shares of Series C Preferred Stock and/or common stock that represent, on an as-converted basis, at least 50% but less than 75% of Cerberus Investor’s initial shares of Series C Preferred Stock on an as-converted basis (the “50% Ownership Requirement”) and (iii) one director to the Board, so long as Cerberus Investor continues to beneficially own shares of Series C Preferred Stock and/or common stock that represent, on an as-converted basis, at least 25% but less than 50% of Cerberus Investor’s initial shares of Series C Preferred Stock on an as-converted basis (the “25% Ownership Requirement”). Until Cerberus Investor no longer meets the 50% Ownership Requirement, Cerberus Investor has the right to select the director to be appointed as the Chairman of the Board. Until Cerberus Investor no longer meets the 25% Ownership Requirement, subject to certain exceptions and to satisfaction by such director designees of independence and other customary qualifications, Cerberus Investor has the right to have one of its director designees serve on each committee of the Board. The Investor Rights Agreement also contemplated the creation of the new Lead Independent Director of the Board, which role has certain customary rights and responsibilities identified in our By-Laws.

Subject to maintaining certain levels of beneficial ownership of Series C Preferred Stock and/or common stock, Cerberus Investor has consent rights over certain actions taken by the Company, including increasing the size of the Board, reinstating the Company’s quarterly common stock dividend and incurring indebtedness in excess of certain thresholds. Subject to maintaining certain levels of beneficial ownership of Series C Preferred Stock and/or common stock and certain other factors, Cerberus Investor is required to vote its shares in favor of (i) each director nominated to the Board by the Board, (ii) the Company’s “say-on-pay” proposal and any other equity compensation proposals approved by the Compensation and Management Development Committee of the Board and (iii) ratification of the Company’s independent registered public accounting firm.

Cerberus Investor and its affiliates are subject to certain standstill restrictions, including that Cerberus Investor and its affiliates are restricted from acquiring additional securities of the Company in excess of a certain percentage, subject to certain exceptions. The standstill restrictions will terminate upon the occurrence of certain events, including upon the earlier of the date on which (i) Cerberus Investor no longer meets the 25% Ownership Requirement and (ii) the 25% Ownership Requirement remains satisfied (and the 50% Ownership Requirement is not satisfied), no Cerberus Investor designee serves on the Board and Cerberus Investor has irrevocably waived its director nomination and consent rights. Subject to certain exceptions, Cerberus Investor is restricted from transferring the Series C Preferred Stock, Series D Preferred Stock or shares of common stock issued upon conversion of the Series C Preferred Stock (“Conversion Common Stock”) until March 1, 2018.

Pursuant to the Investor Rights Agreement, Cerberus Investor and its affiliates have (i) certain customary registration rights with respect to Series C Preferred Stock, Series D Preferred Stock, Conversion Common Stock and shares of common stock issued pursuant to the terms of the Series C Preferred Stock, Series D Preferred Stock or the Investor Rights Agreement and (ii) certain customary preemptive rights with respect to the issuance of equity securities by the Company. On October 11, 2016, the Company filed a registration statement on Form S-3ASR with the Securities and Exchange Commission registering for sale by Cerberus Investor 435,000 shares of Series C Preferred Stock, 142,800 shares of Series D Preferred Stock and 113,311,940 shares (plus an additional unspecified number) of common stock. As of the date of this filing, Cerberus Investor had not made any sales in reliance on such Form S-3ASR. In accordance with the Company’s policies, due to potential conflicts of interest, the Series C Designees recused themselves from Board and committee votes concerning this Form S-3ASR.

Other Agreements

On June 29, 2016, and over the course of 2017, the Company entered into agreements with an affiliate of Cerberus Investor, which provide for the secondment of up to six Cerberus Investor affiliate personnel to the Company’s project management team responsible for assisting with the execution of the Transformation Plan announced in January 2016. For fiscal year 2017, the Company paid approximately $2.6 million under these agreements to an affiliate of Cerberus Investor and for fiscal year 2018, the Company expects to pay approximately $1.8 million.

Our employment arrangements with Laura Barbrook between the time she first joined the Company as our Vice President & Corporate Controller (September 4, 2017) until her appointment as an executive officer (January 8, 2018) are deemed to be a related person transaction, as her compensation prior to her appointment as an executive officer had not been approved by the Compensation and Management Development Committee given she was not an executive officer at the time. As previously disclosed in our Report on Form 8-K filed on January 12, 2018 announcing her appointment as principal accounting officer, Ms. Barbrook was paid an annual base salary of £205,000 for her services as Vice President & Corporate Controller in accordance with the terms and conditions of her employment at the Company.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and greater than 10% shareholders to file certain reports with respect to beneficial ownership of our equity securities. Based solely on a review of copies of reports furnished to us, or written representations that no reports were required, we believe that during 2017 all Section 16 reports that were required to be filed were filed on a timely basis, except for a Form 4 for Mr. Scully in connection with the vesting of certain Restricted Stock Units, which was filed one day after the deadline.

EXECUTIVE COMPENSATION

The Compensation Discussion and Analysis will be organized as follows:

LETTER FROM THE COMMITTEE CHAIR

Dear Fellow Shareholders,

Avon’s Compensation and Management Development Committee (the “Committee”) remains committed to working with the Board of Directors (the “Board”) and shareholders to ensure compensation plans are motivational for our executives while driving business objectives and creating shareholder alignment.

In our shareholder outreach efforts, the feedback provided to us was focused on the continued improvement of the business and certain issues in executive compensation that we addressed. In 2017, the business continued to face a number of challenges, and the Board, Management and shareholders are disappointed with our financial and operating performance. As a result, the Board and the Committee, alongside Management, have made a number of changes to strengthen Avon’s leadership team by recruiting seasoned and highly skilled senior executives. This process of putting in place a leadership team to accelerate change and grow profits sustainably culminated with the recruitment of a new Chief Executive Officer (“CEO”), Jan Zijderveld, in February 2018.

In line with these changes, the Committee has successfully:

In addition, the Committee continues to demonstrate a commitment to dynamic, shareholder-aligned pay plans through:

We believe that our executive compensation structure remains highly motivational with strong shareholder alignment and thus we kept the design largely the same for 2018. While we are pleased with the achievements we have made in realizing transformation savings since 2016, this measure will not be part of the annual incentive program in 2018 as we focus going-forward on sustainable and profitable growth.

Our 2018 long-term incentive program continues to be exceptionally aligned with shareholders’ interests by (i) determining equity award amounts pursuant to a methodology designed to minimize dilution (consisting of using a $5.00 stock price divisor to determine equity award amount), (ii) utilizing relative total shareholder return (TSR) to determine the achievement of performance-based restricted stock units (“Performance RSUs”), and (iii) providing our CEO with annual grants of long-term incentive opportunities that are 100% performance-based.

As a result of disappointing operating results, the 2017 annual incentive plan paid out at 37.5% of target, and the 2015-2017 Performance RSUs delivered a realized value of approximately only 16% of the targeted award value. The low performance results and loss of value for shareholders is reflected in very low annual and long-term incentive payouts and thus low realized pay for our executives and managers.

Our Say on Pay Proposal is found on page 73 of this proxy statement, and the Board recommends that you vote ‘FOR’ this proposal. We also invite you to consider additional information on our compensation philosophy and decisions in the Compensation Discussion and Analysis (“CD&A”) which can be found on the following pages. I am confident that our programs are designed to motivate our executives and pay for performance that is aligned with shareholder interests.

Sincerely,

Helen McCluskey

Chair, Compensation and Management Development Committee

COMPENSATION DISCUSSION AND ANALYSIS

In this section, we describe our executive compensation program for Named Executive Officers (“NEOs”). Our NEOs for 2017 were the following individuals:

* Ms. McCoy ceased to be Chief Executive Officer effective February 4, 2018, and her last day of employment with the Company was March 31, 2018.

** Mr. Scully’s last day of employment with the Company was October 1, 2017.

*** Mr. Acosta’s last day of employment with the Company was November 1, 2017.

This Compensation Discussion and Analysis (“CD&A”) is divided into the following sections:

EXECUTIVE SUMMARY

BUSINESS AND STRATEGY UPDATE

Few companies have the brand recognition, extensive global reach or market-leading positions in beauty and direct selling that Avon has. In a world where trust in companies is becoming a scarce commodity, a Representative’s relationship with her consumers has never been more relevant.

At its core, Avon is an organization with a clear and compelling purpose with a rich 130-year history, operating in the beauty and personal care categories across the globe skewed toward developing and growing markets. Through our 6 million direct selling Representatives, we empower millions of micro-entrepreneurs globally. Avon’s opportunity to modernize and enable them to be more competitive and to service their consumers better is powerful, and is at the heart of Avon’s value proposition.

During 2017, Avon continued to face ongoing revenue growth challenges while continuing to make progress against key initiatives such as cost savings and cash generation. Our focus on profitability and exceeding our cost savings target contributed to improved operating margin as we ended the year. For 2017 cash flow from operations increased $143 million compared with the prior year, primarily due to improvements in working capital.

Avon ended the year with $882 million of cash, ahead of our 2017 expectations. This represents substantial improvement in our cash conversion metric during 2017, and we expect this rate of conversion to continue. We have further supported our financial flexibility by renegotiating the covenant levels in our $400 million secured credit facility. In addition, in 2018, we expect to repay the $238 million remaining due on our 2019 bonds and retain the financial flexibility to fund investments.

Total revenue was disappointing in 2017, relatively unchanged but down 2% in constant dollars as compared to the prior year, driven by declines in Brazil, Russia and the UK. Overall Avon did not keep pace with industry growth in the global beauty category which grew by roughly 3-4% in 2017. The number of active Representatives declined more than anticipated, largely due to a decrease in Brazil as we tightened credit policies. The competitive environment continues to intensify in many of our key markets, thereby limiting our ability to increase prices. The revenue shortfall highlights the need and urgency to sharpen our focus on sales forecasting, data and analytics, and to deepen Avon’s insights from our Representatives to inform pricing as well as promotional and discount strategies locally.

Throughout the year the Board of Directors (the “Board”) has focused on strengthening Avon’s leadership team, recruiting seasoned and skilled senior executives. Key appointments include:

The process of putting in place the leadership team to accelerate change and grow profits sustainably culminated with the recruitment of a new CEO, Jan Zijderveld, who joined Avon in February 2018. Mr. Zijderveld was selected following an extensive search and assessment of a strong list of seasoned global executives. Mr. Zijderveld emerged as the clear choice that Avon needs to accelerate our transformation and growth. In addition, Mr. Zijderveld’s focus on strategic and operational excellence, while putting our direct selling Representatives and consumers front and center, make him ideally suited to lead Avon. Before joining Avon, Mr. Zijderveld was a senior executive and 30-year veteran of Unilever N.V./PLC with a track record as a proven global leader driving profitable growth in large, multi-channel, complex consumer businesses across emerging, developing and developed markets.

Avon is operating in a dramatically changing consumer and competitive environment. Business as usual is not an option. The Board has given Mr. Zijderveld a clear mandate to lead a deep and comprehensive strategic and operating review of all facets of the business and evaluate ways to significantly accelerate Avon’s path to profitable growth, taking a critical look with a high sense of urgency.

SHAREHOLDER ENGAGEMENT

We remain focused on shareholder engagement and value shareholder insights. During recent years, the Chair of the Compensation and Management Development Committee (the “Committee”) conducted significant shareholder outreach to ensure shareholder perspectives and concerns were heard and well understood. During this time, we reviewed our compensation program changes, and discussed the Company’s transformation status and financial and strategic priorities. These discussions culminated in the changes we have made to our compensation programs since 2016.

During 2017, we continued our practice of deeply engaging with our shareholders and soliciting feedback. We reached out to our top 25 shareholders who collectively own over 65% of our common shares outstanding as of December 31, 2017. Of the top 25 shareholders, 36% are passive investors and therefore do not generally engage and 64% are actively managed. We directly interacted with over 65% of the active top 25 shareholders of our stock.

The feedback received from our shareholders continues to be tremendously valuable and was incorporated into the Committee’s determination of compensation program changes in recent years. In 2018, we will continue to ensure the alignment of our compensation programs with our shareholders’ interests with a strong pay for performance alignment and payouts of incentive plans based on business performance and stock price appreciation.

KEY 2017 COMPENSATION HIGHLIGHTS AND SAY ON PAY

Our Say on Pay Proposal is found on page 73 and our Board recommends that our shareholders vote “For” this proposal. The following factors support this recommendation:

Highlights of recent changes to our compensation programs and the primary reasons for each change are described below:

As a result of the changes described above, grant date fair value for NEOs, including our CEO, decreased and required significant stock price improvement to realize target value under the compensation plans.

2018 COMPENSATION HIGHLIGHTS

For 2018, the Committee has maintained its commitment to the strong alignment of our executive pay programs with our shareholders’ interests, while ensuring we can attract and retain key talent in the organization. As such, the Committee believes the 2017 design remains appropriate, as it has strong performance elements that support our externally communicated business goals and requires significant stock price appreciation for executives to realize target compensation. As a result, the details of our compensation programs for 2018, which are not significantly different from 2017, are as follows:

2018 Annual Incentive Program

2018 Long-Term Incentive Program

New CEO Hired Effective February 5, 2018

New Peer Group

STRONG COMPENSATION GOVERNANCE PRACTICES

We maintain several best practices in compensation governance. A more detailed discussion of these practices is on page 52.

PAY-FOR-PERFORMANCE

Our strategic and financial goals influenced the design and development of our 2017 compensation programs. The Committee believes that aligning payouts with our performance outcomes is critical for shareholders, as is securing the right talent to lead our business. Accordingly, the targets under our annual and long-term incentive programs represent rigorous performance expectations and are aligned with our immediate and long-term financial and strategic goals.

We seek to promote the following in our incentive compensation program design:

Performance-based structure. Target total compensation for our CEO in 2017 was 86% “at risk”, meaning that it is contingent upon and based on Company performance and stock price performance, and target total compensation for our other NEOs was on average 74% “at risk”.

*Incentive compensation for these purposes is based on “at target” compensation, which reflects approximate compensation that would be realized if we achieve the financial and strategic goals set within our incentive plans.

Our Committee continues to believe that despite external challenges to achieving our goals, a high percentage of our executives’ compensation should remain “at risk” and based on Company and stock price performance.

Demonstrated rigor of incentive plans. Despite our management team’s focus on key strategic and financial goals, our financial results have fallen short of the performance targets set by the Committee over the past several years and our executives’ incentive pay has been reflective of these results.

86% Equity / Annual Incentive 14% 21% 65% Base Salary Annual Incentive Long-Term Incentive 60% Performance-based RSUs 40% Premium-priced Stock Options CEO Pay Elements 26% 22% 52% Base Salary Annual Incentive Long-Term Incentive 1/3 Performance-based RSUs 1/3 Premium-priced Stock Options 1/3 Service-based RSUs Other NEOs Pay Elements (average) 74% Equity / Annual Incentive

The tables below illustrate the strong link between our financial performance and incentive opportunity value realized by our executives. The funding score continues to be strongly aligned with our financial and stock price performance.

Annual Incentive Plan
Plan Year				Financial Performance Measures* = Funding Achieved            = Not Achieved				Plan Funding Score** (% of Target)
2017				Cash flow from operations  Adjusted Operating profit  Revenue Growth  Active Representative Growth  Transformation Savings
2016				Cash flow from operations  Adjusted Operating profit  Revenue Growth  Active Representative Growth  Transformation Savings
2015				Cash flow from operations  Adjusted Operating profit  Revenue Growth

* Measured in constant dollars. For details on how constant dollars and other adjusted metrics are calculated, please see the Annual Incentive Compensation Section below and the “Non-GAAP Financial Measures” paragraph of the Management’s Discussion and Analysis section of our Annual Report filed on Form 10-K.

** See page 49 for actual 2017 annual incentive plan payouts for NEOs.

* The realized value shown is a percentage of target and reflects the closing stock price on the last trading day of the final fiscal year in each performance period.

CEO compensation aligns with performance

Former CEO

As shown in the table below, Ms. McCoy’s (our former CEO) total target compensation significantly decreased from 2015 to 2016, and remained unchanged from 2016 to 2017. The long-term incentive (“LTI”) amounts for 2016 and 2017 are the target values prior to the reduction in grant date fair value due to the methodology used to determine number of LTI shares granted described on page 37 and, therefore, differ from the amounts shown elsewhere in the proxy statement. The difference shown in the Summary Compensation Table found on page 57 between Ms. McCoy’s 2017 total compensation compared to 2016 includes the payout in 2017 of a deferred cash sign-on award granted in 2012 when she joined the Company, which is not reflected in the table below.

On August 3, 2017 Avon announced that Ms. McCoy would retire as Chief Executive Officer and as a director effective as of March 31, 2018 (or such earlier date as the Board appointed her successor). In February 2018, we announced Ms. McCoy’s successor, Jan Zijderveld, and that Ms. McCoy would retire as CEO effective as of February 4, 2018 but remain employed as an advisor to the Board and the new CEO during a transition period through March 31, 2018. She will be eligible to receive termination benefits in accordance with the Company’s plans and arrangements with no incremental benefits provided. For more information on the former CEO’s retirement package, please refer to the discussion under “Departure of CEO” in the “Potential Payments Upon Termination of Employment, Including After a Change in Control” section beginning on page 66.

As illustrated in the table that follows, the realizable and realized compensation for Ms. McCoy over the last three years (2015-2017) is significantly less than the amounts disclosed in the Summary Compensation Table and demonstrates the pay and performance alignment of our program. Given our performance over the last three years, Ms. McCoy has earned her base salary and annual incentives of 76%, 53% and 50% of target in 2015, 2016 and 2017, respectively. In addition, Ms. McCoy has earned only a fraction of her Performance RSUs to date and at lower stock prices than at grant.

The charts below show the differences in Ms. McCoy’s grant-date compensation, potentially realizable pay and actual realized pay reflect the unearned Performance RSUs, payout of cash incentive awards at less than target, and the current stock price.

3-Year Aggregate CEO Pay ($MM)

(2015 – 2017)

New CEO

Mr. Zijderveld’s compensation terms reflect the Board’s focus on performance and his annual total direct compensation opportunity is summarized below.

ROLES IN EXECUTIVE COMPENSATION

The following parties are responsible for the development and oversight of our executive compensation program for our NEOs:

See “Information Concerning the Board of Directors—Compensation and Management Development Committee” on page 16 for additional Committee responsibilities.