Form 4: Champion Homes CEO Reports Equity Transactions

Champion Homes' President and CEO, Timothy Mark Larson, reported multiple equity transactions including the forfeiture of unvested performance-based restricted stock units and the grant of new PRSUs and RSUs.

Summary

• Timothy Mark Larson, President & CEO and Director of Champion Homes, Inc. (SKY), reported several transactions involving common stock.
• On March 25, 2026, Larson forfeited 3,928 shares of common stock at $72.54 due to the partial vesting of previously granted performance-based restricted stock units (PRSUs) at 63.3% of the initial grant.
• On the same date, Larson was granted 22,517 new performance-based restricted stock units (PRSUs) at a price of $0. These PRSUs' vesting is 60% tied to total shareholder return relative to peers (March 25, 2026 March 25, 2029) and 40% to market share of single-family completions (as of January 31, 2029).
• Also on March 25, 2026, Larson received a grant of 22,517 restricted stock units (RSUs) at a price of $0, which will vest in one-third increments on each of the first three anniversaries of the grant date.
• Additional forfeitures of 2,074 shares at $72.54 and 1,928 shares at $75.62 were also reported on March 25, 2026.
• Following these transactions, Larson's direct beneficial ownership of common stock is 119,692 shares.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral to slightly positive event. While the partial vesting of previous PRSUs indicates underperformance against initial targets, the new grants align the CEO's incentives with future long-term growth and shareholder value creation.

Positives

• Grant of 22,517 new performance-based restricted stock units (PRSUs) aligns management incentives with long-term shareholder return and market share growth.
• Grant of 22,517 new restricted stock units (RSUs) provides a retention incentive for the CEO, vesting over three years.

Negatives

• Forfeiture of 3,928 shares of common stock due to PRSUs vesting at 63.3% indicates that performance goals for the previous grant were not fully met.
• Additional forfeitures of 2,074 shares and 1,928 shares also occurred.

Risks

• Future vesting of the new PRSUs is subject to achieving specific total shareholder return targets relative to peers and market share goals, meaning the actual number of shares received could be lower if performance targets are not met.
• Continued employment is a condition for vesting of both new PRSUs and RSUs, posing a risk of forfeiture if service is terminated.

Future Outlook

The new performance-based restricted stock units (PRSUs) are tied to the company's total shareholder return relative to peers and market share of single-family completions through March 2029 and January 2029, respectively, indicating a focus on long-term performance and market positioning. The restricted stock units (RSUs) vest over three years, suggesting a commitment to executive retention.

Management Comments

• The amount of securities owned reflects the forfeiture of a portion of PRSUs previously granted to the Reporting Person under the 2018 Equity Incentive Plan of Issuer and reported as owned directly at the target (100%) level. Pursuant to the terms of the award agreement evidencing the grant of the PRSUs, upon the Compensation Committee certification of the achievement of the performance goals on March 25, 2026 the PRSUs vested at 63.3% of the initial grant, and the PRSUs that did not vest were forfeited.
• New performance-based restricted stock units (PRSUs) were granted, with vesting dependent on total shareholder return relative to peers and market share of single-family completions, subject to continuous service.
• Restricted stock units (RSUs) were granted, vesting in one-third increments on each of the first three anniversaries of the grant date, subject to continued employment.

Industry Context

StockSavvy.ai notes that the use of performance-based restricted stock units (PRSUs) tied to relative total shareholder return and market share is a common practice in the homebuilding and construction materials industry to align executive incentives with competitive performance and strategic growth objectives. The multi-year vesting schedule for RSUs is also standard for executive retention in competitive sectors.

Comparison to Industry Standards

• The structure of executive compensation, including PRSUs tied to relative TSR and market share, is consistent with best practices observed in comparable companies within the homebuilding sector, such as Lennar Corporation and D.R. Horton, Inc., which often use similar long-term incentive plans to drive performance.
• The 63.3% vesting of previous PRSUs suggests a moderate achievement of performance targets, which is not uncommon in a dynamic market environment, contrasting with companies that might see full vesting during strong bull markets or minimal vesting during downturns.

Corporate Governance

Stakeholder Impact

• Shareholders: The new equity grants align the CEO's interests with shareholder value creation through performance-based vesting criteria. The partial vesting of previous PRSUs indicates that shareholder return targets were not fully met in the prior period.
• Employees: The grants are part of an equity incentive plan, which can motivate executive leadership and potentially set a precedent for broader employee incentive programs.

Next Steps

• The new performance-based restricted stock units (PRSUs) will be subject to performance evaluation based on total shareholder return relative to peers from March 25, 2026, through March 25, 2029.
• The market share of single-family completions will be assessed as of January 31, 2029, for the new PRSUs.
• The new restricted stock units (RSUs) will vest in one-third increments on each of the first three anniversaries of the grant date.

Key Dates

Recommendation

This Form 4 filing primarily details routine executive compensation events, including the grant of new equity awards and the vesting/forfeiture of prior awards. While the partial vesting of previous PRSUs suggests some underperformance against past targets, the new grants align the CEO's incentives with future long-term performance. There is no new fundamental information in this filing that would warrant a change in an investor's current position, hence a 'hold' recommendation is appropriate.

Keywords

Champion Homes, SKY, Form 4, Insider Trading, Equity Incentive Plan, Restricted Stock Units, Performance-Based Restricted Stock Units, Executive Compensation, Timothy Mark Larson, Stock Forfeiture, Stock Grant