Form 4: Brown-Forman Director Tracy L. Skeans Reports Changes in Beneficial Ownership

Director Tracy L. Skeans reports acquisition of deferred stock units in Brown-Forman Corporation.

Summary

• On July 25, 2024, Tracy L. Skeans, a director of Brown-Forman Corporation, acquired 3,370.2979 deferred stock units (DSUs) under the company's Non-Employee Director Deferred Stock Unit Program.
• These DSUs represent the right to receive one share of Brown-Forman's Class A stock each.
• The grant was based on the closing price of Class A common stock on July 25, 2024, which was $45.99.
• As of the report, Skeans directly owns 24,761.4121 DSUs.
• The DSUs vest annually and are paid out in Class A common stock on the first February 1 that is at least six months following the director's termination from Board service.
• Skeans has also granted power of attorney to several individuals to handle SEC filings on her behalf.

Sentiment

Score: 7

Explanation: The document is a routine regulatory filing indicating standard director compensation practices, suggesting a neutral to slightly positive sentiment due to alignment of interests.

Positives

• The acquisition of DSUs aligns the director's interests with those of the shareholders.
• The deferred nature of the stock units encourages long-term commitment to the company's success.

Future Outlook

DSUs are paid out in Class A common stock on the first February 1 that is at least six months following the director's termination from Board service.

Industry Context

Directors often receive stock-based compensation to align their interests with shareholders, a common practice in publicly traded companies.

Comparison to Industry Standards

• Stock-based compensation for directors is a common practice among publicly traded companies like Brown-Forman.
• Companies such as Diageo and Pernod Ricard, which are direct competitors of Brown-Forman, also utilize stock options and restricted stock units as part of their director compensation packages.
• The vesting schedules and payout terms are generally structured to incentivize long-term value creation and retention of board members.

Stakeholder Impact

• The acquisition of DSUs by a director can positively influence shareholder confidence by aligning management's interests with those of the shareholders.

Key Dates