Form 4: Caterpillar Inc. Executive Joseph E. Creed Reports Acquisition of Phantom Stock Units

Chief Operating Officer Joseph E. Creed reports acquiring 667 phantom stock units of Caterpillar Inc. through a deferred compensation plan.

Summary

• On March 14, 2025, Joseph E. Creed, Chief Operating Officer of Caterpillar Inc., acquired 667 phantom stock units.
• These units were acquired through the company's non-qualified deferred compensation plan.
• 334 shares were credited at a price of $339.64 per share, and 333 shares were contributed with no consideration.
• Following the transaction, Creed beneficially owns 10,175 phantom stock units.
• The phantom stock units will be settled in cash upon Creed's retirement or separation from service.
• The reported holdings include accrued dividends and reflect interests in an unfunded unitized company stock fund.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. It reflects a standard executive compensation practice, aligning management interests with shareholder value. There are no immediate negative implications.

Positives

• The acquisition of phantom stock units aligns the executive's interests with the company's long-term performance.
• The deferred compensation plan provides a tax-advantaged way for the executive to accumulate wealth.
• The inclusion of accrued dividends enhances the value of the phantom stock units.

Future Outlook

The phantom stock units will be settled in cash upon the reporting person's retirement or separation from service.

Industry Context

Executive compensation through stock-based awards is a common practice in publicly traded companies to align management's interests with shareholder value. Phantom stock units are a type of equity compensation that provides executives with the benefits of stock ownership without actually granting them shares.

Comparison to Industry Standards

• Caterpillar's use of phantom stock units in executive compensation is consistent with practices at other large industrial companies such as Deere & Company (DE) and Komatsu (KMTUY).
• These companies often use a mix of salary, bonus, stock options, and restricted stock units to incentivize and retain key executives.
• The specific terms of the phantom stock unit plan, such as the vesting schedule and settlement terms, would need to be compared to industry benchmarks to assess its competitiveness.

Stakeholder Impact

• The acquisition of phantom stock units aligns the executive's interests with shareholders, potentially driving long-term value creation.
• Employees may view this as a positive sign of leadership commitment to the company's success.

Key Dates