Form 4: Cable One COO Reports Equity Grants, Tax Withholding

Cable One's Chief Operating Officer, Kenneth E. Johnson, reported the acquisition of phantom restricted stock units and performance stock units, alongside the withholding of common stock for tax obligations.

Summary

• Kenneth E. Johnson, Chief Operating Officer of Cable One, Inc., reported transactions on January 3, 2026.
• 417 shares of Cable One Common Stock were disposed of at a price of $104.16 per share to cover tax withholding liabilities related to the vesting of previously granted restricted stock awards and units.
• Following this transaction, Johnson beneficially owns 6,177 shares of Common Stock directly.
• Johnson was granted 9,216 phantom service-based restricted stock units (Phantom RSUs), which vest in three equal installments on the first three anniversaries of the grant date, contingent on continued employment.
• Johnson was also granted 13,824 phantom performance-based restricted stock units (Phantom PSUs), which vest based on target achievement of performance goals over a three-year period from January 1, 2026, to December 31, 2028, subject to committee certification and continued employment.
• Both Phantom RSUs and PSUs represent a contingent right to receive the economic value of one share of Common Stock, settled solely in cash.

Sentiment

Score: 7

Explanation: The filing reports routine executive compensation activities, including new equity grants that align executive incentives with long-term company performance and retention. The disposition of shares is for tax purposes, which is standard. Overall, it reflects stable corporate governance regarding executive incentives.

Positives

• Significant equity grants (9,216 Phantom RSUs and 13,824 Phantom PSUs) align management's interests with long-term company performance and shareholder value.
• The performance-based nature of the Phantom PSUs incentivizes the COO to achieve specific company goals over a three-year period.
• The service-based Phantom RSUs promote retention of a key executive.

Negatives

• The disposition of 417 shares of common stock, while for tax purposes, reduces direct share ownership, albeit a small amount relative to total holdings and new grants.

Risks

• Vesting of phantom units is subject to continued employment, posing a risk to the executive if employment ceases.
• Performance-based units carry the risk that target performance goals may not be fully achieved, potentially reducing the final payout.

Future Outlook

The grants of Phantom RSUs and PSUs indicate a long-term incentive structure for the Chief Operating Officer, with vesting periods extending up to three years (for RSUs) and a performance period ending December 31, 2028 (for PSUs), aligning executive compensation with future company performance and retention.

Industry Context

This filing reflects standard executive compensation practices in publicly traded companies, where equity-based incentives like RSUs and PSUs are used to align executive interests with shareholder value and ensure long-term retention. The use of phantom units settled in cash is also a common practice.

Comparison to Industry Standards

• The use of both service-based (RSUs) and performance-based (PSUs) equity awards is a common and well-regarded practice in executive compensation across various industries, including the telecommunications and media sector where Cable One operates.
• The vesting schedules (3-4 years) are typical for long-term incentive plans, comparable to those seen at companies like Comcast (CMCSA) or Charter Communications (CHTR), which also utilize multi-year vesting for executive equity awards to promote retention and long-term performance.
• The settlement of phantom units in cash, rather than shares, is a specific design choice that can be influenced by tax considerations, share dilution management, or specific compensation committee strategies, and is observed in various companies' compensation plans.

Corporate Governance

Related Party Transactions

• The grants of Phantom RSUs and PSUs to Kenneth E. Johnson, an officer of Cable One, Inc., constitute related party transactions as they are part of his executive compensation package.
• The withholding of common stock to satisfy tax liabilities related to previously vested equity awards is also a transaction between the company and a related party (executive).

Stakeholder Impact

• Shareholders: The equity grants aim to align the COO's interests with shareholder value creation through long-term performance and retention incentives. The cash settlement of phantom units avoids direct share dilution from these specific grants.
• Employees: The compensation structure for a key executive can set a precedent or reflect the company's overall approach to incentivizing its leadership team.

Next Steps

• Continued employment of Kenneth E. Johnson for vesting of Phantom RSUs and PSUs.
• Achievement of applicable performance goals for Phantom PSUs over the period January 1, 2026, to December 31, 2028.
• Certification of performance achievement by the Compensation and Talent Management Committee for Phantom PSUs.

Key Dates

Recommendation

This Form 4 filing details routine executive compensation, including new equity grants and tax-related share withholding. It does not contain information that would fundamentally alter the investment thesis for Cable One. The grants align executive incentives with long-term company performance, which is generally positive, but the filing itself is not a catalyst for a 'buy' or 'sell' recommendation. Therefore, a 'hold' recommendation is appropriate as it reflects no new material information to change an existing position.

Keywords

Cable One, CABO, SEC Form 4, Insider Transaction, Equity Grant, Restricted Stock Units, Performance Stock Units, Executive Compensation, Kenneth E. Johnson, Chief Operating Officer