Form 4: Director Susan C. Schwab Acquires Phantom Stock Units in Caterpillar Inc.

Director Susan C. Schwab acquired 103 phantom stock units of Caterpillar Inc. on March 28, 2024, under the company's Director's Deferred Compensation Plan.

Summary

• On March 28, 2024, Susan C. Schwab, a director of Caterpillar Inc., acquired 103 phantom stock units.
• The acquisition was made under the Caterpillar Inc. Director's Deferred Compensation Plan.
• These phantom stock units are the economic equivalent of one share of Caterpillar Inc. common stock each.
• The price of the phantom stock units was $365.38.
• Following the transaction, Schwab beneficially owns 18,630 derivative securities.
• The phantom stock units will be settled 100% in cash upon Schwab's retirement or separation from service.
• The reported holdings include adjustments for accrued dividends.

Sentiment

Score: 7

Explanation: The document reflects a routine transaction related to director compensation, indicating a neutral to slightly positive sentiment as it aligns director interests with shareholder value.

Future Outlook

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

Industry Context

This filing reflects standard executive compensation practices, where directors receive stock-based compensation to align their interests with those of the shareholders. Phantom stock units are a common form of deferred compensation.

Comparison to Industry Standards

• Director compensation packages often include a mix of cash and equity, with equity components like phantom stock units used to incentivize long-term value creation.
• Companies like Deere & Company (DE) and Komatsu (KMTUY) also utilize similar deferred compensation plans for their executives and directors.
• The specific amount and type of equity compensation vary based on company size, performance, and industry benchmarks.

Stakeholder Impact

• The acquisition of phantom stock units aligns the director's interests with those of the shareholders, incentivizing long-term value creation.
• The compensation structure can impact employee morale and perception of fairness.

Key Dates