Form 4: Caterpillar CEO Acquires Phantom Stock Units

Caterpillar's Chief Executive Officer, Joseph E. Creed, acquired 26 phantom stock units, increasing his beneficial ownership to 10,699 units.

Summary

• Joseph E. Creed, Chief Executive Officer of Caterpillar Inc. (CAT), acquired 26 phantom stock units on December 26, 2025.
• These units were acquired under the company's non-qualified deferred compensation plan.
• 13 of the acquired units were credited to the reporting person's account at a price of $583.00 per share.
• The remaining 13 units were contributed to the account pursuant to the plan terms for no consideration.
• Following this transaction, Joseph E. Creed beneficially owns a total of 10,699 phantom stock units.
• Each phantom stock unit is generally the economic equivalent of one share of Caterpillar Inc. common stock.
• The phantom stock units are to be settled 100% in cash upon the reporting person's retirement or separation from service.
• The total number of phantom stock units beneficially owned includes adjustments for accrued dividends.

Sentiment

Score: 6

Explanation: The filing indicates a routine executive compensation transaction where the CEO increased his beneficial ownership of phantom stock units. This is generally viewed as a positive for aligning management and shareholder interests, though phantom units are cash-settled and not direct equity. It does not suggest any significant change in company fundamentals.

Positives

• The acquisition of additional phantom stock units by the CEO demonstrates continued alignment of management's interests with shareholder value.
• The transaction is part of a structured deferred compensation plan, indicating a long-term commitment to the company.

Risks

• Phantom stock units are settled in cash, not actual shares, meaning the holder does not have direct equity ownership or voting rights.
• The number of phantom stock units deemed owned can change due to differences in the percentages of cash and stock in the unitized fund, introducing variability.

Future Outlook

The phantom stock units are scheduled to be settled 100% in cash upon the reporting person's retirement or separation from service. The number of units may fluctuate due to changes in the composition of the underlying unitized company stock fund.

Industry Context

This transaction represents a routine executive compensation event, common across publicly traded companies, where executives receive performance-based or deferred compensation in the form of phantom stock units to align their interests with long-term company performance without immediate equity transfer.

Comparison to Industry Standards

• The use of phantom stock units as part of a non-qualified deferred compensation plan is a standard practice in executive compensation across various industries, including heavy machinery manufacturing.
• This mechanism is comparable to similar plans at companies like Deere & Company or Komatsu, which also utilize various forms of equity-linked compensation to incentivize executives.

Related Party Transactions

• The acquisition of phantom stock units by the Chief Executive Officer is part of the company's Supplemental Deferred Compensation Plan, which is a form of executive compensation involving a related party (the CEO).

Stakeholder Impact

• Shareholders: The transaction reinforces the alignment of the CEO's financial interests with the company's long-term performance, which can be viewed positively.
• Employees: No direct impact on general employees is indicated by this specific filing.

Next Steps

• The phantom stock units will be settled in cash upon Joseph E. Creed's retirement or separation from service.

Key Dates

Recommendation

This Form 4 reports a routine acquisition of phantom stock units by the CEO as part of a deferred compensation plan. While it indicates continued alignment of management interests with shareholders, it does not provide new fundamental information to alter an investment thesis for Caterpillar Inc. Therefore, a 'hold' recommendation is appropriate based solely on this filing.

Keywords

Caterpillar, CAT, Joseph E. Creed, Phantom Stock Units, SEC Form 4, Insider Transaction, Executive Compensation, Deferred Compensation