Form 4: Director Liu Xia Reports Acquisition of Phantom Stock Units in Badger Meter Inc.

Director Liu Xia acquired phantom stock units in Badger Meter Inc. as part of director compensation.

Summary

• On April 1, 2024, Xia Liu, a director of Badger Meter Inc., reported the acquisition of 98.88 phantom stock units.
• These units were accrued as payment for the 2024 Quarter 2 retainer, valued at $16,000, paid to non-employee directors.
• The phantom stock units were computed based on a price of $161.81 per unit, which was the closing price of Badger Meter's common stock on March 28, 2024.
• Following the transaction, Ms. Liu beneficially owns 1,617.55 phantom stock units directly.
• Each phantom stock unit is equivalent to one share of common stock and becomes payable in cash upon termination of service as a director.

Sentiment

Score: 7

Explanation: The document reflects a routine transaction related to director compensation, which is generally viewed neutrally. The acquisition of phantom stock units can be seen as a positive sign of alignment between the director and shareholders.

Positives

• The acquisition of phantom stock units aligns the director's interests with those of the shareholders.
• The compensation plan provides a mechanism for rewarding non-employee directors.

Future Outlook

The phantom stock units will be payable in cash upon the reporting person's termination of service as a director.

Industry Context

Director compensation in the form of stock or phantom stock units is a common practice among publicly traded companies to align the interests of directors with those of shareholders.

Comparison to Industry Standards

• Many companies in the industrial sector, such as Roper Technologies and Fortive, use similar equity-based compensation plans for their directors.
• The value of phantom stock units is typically tied to the company's stock price, which is a standard practice.
• The vesting and payout terms (upon termination of service) are also common features in director compensation plans.

Stakeholder Impact

• The transaction has a minor positive impact on shareholders by aligning director incentives with company performance.

Key Dates