Form 4: Bread Financial Holdings Executive Receives Stock Grants and Settles Tax Obligations

Joseph L. Motes III, an executive at Bread Financial Holdings, received new grants of time-based and performance-based restricted stock units and had shares withheld to cover tax obligations upon vesting of previous units.

Summary

• Joseph L. Motes III, EVP, CAO, Gen Counsel & Secy of Bread Financial Holdings, reported changes in beneficial ownership on February 18, 2025.
• Motes received a grant of 9,259 time-based restricted stock units (RSUs) that will vest over three years.
• He also received a grant of 13,888 performance-based RSUs, which may be adjusted based on performance targets at the end of a three-year period.
• An additional 2,026 units were earned from a previous performance-based RSU grant due to the company achieving 120.2% of the annual return on equity (ROE) performance metric goal for 2022, 2023 and 2024.
• 11,936 shares were withheld by the company to cover Motes' tax obligations upon the vesting of restricted stock units at a price of $62.1 per share.
• Following these transactions, Motes beneficially owns 124,080 shares of common stock.

Sentiment

Score: 6

Explanation: The document primarily reports routine transactions related to executive compensation. The achievement of the ROE target is a positive sign, but the overall sentiment is neutral as it reflects standard business operations.

Positives

• The granting of RSUs to executives can be seen as a positive sign, aligning their interests with the long-term performance of the company.
• The achievement of 120.2% of the ROE performance metric goal suggests strong company performance during the evaluation period.

Negatives

• The withholding of shares to cover tax obligations reduces the number of shares directly held by the executive.

Risks

• The vesting of performance-based RSUs is contingent on meeting predetermined performance measures, which may not be achieved.
• The value of the RSUs is subject to the market price of Bread Financial Holdings' common stock, which can fluctuate.

Future Outlook

The document outlines the vesting schedule for the granted RSUs, with time-based RSUs vesting annually over three years and performance-based RSUs potentially vesting in three years contingent on meeting performance measures.

Industry Context

Stock grants are a common form of executive compensation in the financial services industry, aligning executive incentives with shareholder value. The vesting schedules and performance metrics are designed to encourage long-term growth and profitability.

Comparison to Industry Standards

• Companies like American Express, Capital One, and Discover Financial Services also utilize stock-based compensation for their executives.
• The vesting schedules and performance metrics used by Bread Financial Holdings are generally in line with industry practices, with a mix of time-based and performance-based vesting requirements.
• The specific ROE target of 120.2% is a company-specific metric and would need to be compared to the actual ROE performance of Bread Financial Holdings relative to its peers to assess its competitiveness.

Stakeholder Impact

• Shareholders may view the stock grants as a way to align executive interests with company performance.
• Employees may see the executive compensation as a reflection of the company's commitment to rewarding leadership.

Key Dates

Keywords

restricted stock units, performance-based RSUs, time-based RSUs, beneficial ownership, Form 4, Bread Financial Holdings, insider trading, stock grants, tax withholding, ROE