Form 4: Caterpillar Inc. Executive Joseph E. Creed Reports Changes in Beneficial Ownership

Chief Operating Officer Joseph E. Creed reports acquisition of phantom stock units in Caterpillar Inc.'s deferred compensation plan.

Summary

• Joseph E. Creed, Chief Operating Officer of Caterpillar Inc., filed a Form 4 on May 28, 2024, reporting changes in beneficial ownership.
• The report details the acquisition of 32 phantom stock units under the company's non-qualified deferred compensation plans on May 24, 2024.
• These units are economically equivalent to shares of Caterpillar Inc. common stock.
• 16 shares were credited to Creed's account under the Supplemental Deferred Compensation Plan at $348.90 per share, and 16 shares were contributed with no consideration.
• Creed's total holdings following the transaction include 9,043 phantom stock units, inclusive of accrued dividends.
• The phantom stock units will be settled in cash upon Creed's retirement or separation from service.

Sentiment

Score: 7

Explanation: The document reflects a routine executive compensation transaction, which is generally viewed neutrally. The acquisition of phantom stock units is a positive sign of alignment between management and shareholders.

Positives

• The acquisition of phantom stock units aligns the executive's interests with the company's performance.
• The deferred compensation plan provides a long-term incentive for the executive.

Future Outlook

The phantom stock units will be settled for 100% in cash upon the reporting person's retirement or separation from service.

Industry Context

Executive compensation through stock and phantom stock units is a common practice in publicly traded companies to align management's interests with shareholder value.

Comparison to Industry Standards

• Caterpillar's executive compensation practices, including the use of phantom stock units, are generally in line with those of its peers in the industrial sector, 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 and conditions of these compensation plans can vary widely, but the overall goal is to align executive compensation with company performance and shareholder returns.

Stakeholder Impact

• The acquisition of phantom stock units aligns the executive's interests with shareholders, potentially driving long-term value creation.

Key Dates