Form 4: AZZ Inc. Executive Tara D. Mackey Reports Acquisition of Restricted Stock Units and Performance Share Units

Chief Legal Officer Tara D. Mackey reports the acquisition of 2,791 Restricted Stock Units (RSUs) and 2,791 Performance Share Units (PSUs) in AZZ Inc. on April 25, 2024, under the company's 2023 Long Term Incentive Plan.

Summary

• On April 25, 2024, Tara D. Mackey, Chief Legal Officer of AZZ Inc., acquired 2,791 Restricted Stock Units (RSUs) and 2,791 Performance Share Units (PSUs).
• The RSUs vest over a three-year period, with one-third vesting annually on April 25, 2025, April 25, 2026, and April 25, 2027.
• Each RSU represents a contingent right to receive one share of AZZ common stock.
• The PSUs represent a contingent right to receive shares of AZZ common stock, with the actual number varying based on achieved results over a three-year performance cycle from March 1, 2024, to February 28, 2027.
• The FY2025 PSU performance metrics are AZZ's Total Shareholder Return and Return on Investment Capital relative to its executive compensation peer group, with a maximum payout not exceeding 200%.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating a positive alignment of interests between management and shareholders. The use of performance-based metrics suggests a focus on long-term value creation.

Positives

• The grant of RSUs and PSUs aligns executive compensation with the long-term performance of AZZ Inc.
• The vesting schedule of the RSUs encourages continued service by the executive.
• The PSU performance metrics (Total Shareholder Return and Return on Investment Capital) are directly linked to shareholder value.

Risks

• The actual value of the PSUs is dependent on AZZ's performance, which may be affected by various market and economic factors.
• The executive may not receive the full potential payout of the PSUs if performance targets are not met.

Future Outlook

The vesting of the RSUs and the payout of the PSUs are contingent upon future events and performance, as outlined in the 2023 Long Term Incentive Plan.

Industry Context

Equity grants are a common practice in corporate governance to align executive interests with shareholder value. The use of performance-based units is intended to incentivize executives to achieve specific financial and strategic goals.

Comparison to Industry Standards

• Many companies in the industrial sector use a combination of time-based (RSUs) and performance-based (PSUs) equity awards.
• The specific metrics used for PSUs, such as Total Shareholder Return and Return on Invested Capital, are common benchmarks for assessing executive performance relative to peers.
• The three-year vesting period for RSUs and the three-year performance cycle for PSUs are typical durations for long-term incentive plans.

Stakeholder Impact

• Shareholders: The equity grants aim to align executive interests with shareholder value.
• Employees: The grants may serve as a motivation for other employees, as they demonstrate a commitment to rewarding performance.
• Executives: The grants provide an incentive for executives to drive long-term growth and profitability.

Key Dates