Form 4: CHEMED VP Acquires Shares, New PSUs After Performance Vesting

CHEMED Corp's VP and Chief Legal Officer, Brian C. Judkins, acquired shares from vested performance stock units and received a new grant of PSUs, while also having shares withheld for taxes.

Summary

• Brian C. Judkins, VP and Chief Legal Officer of CHEMED Corp, reported transactions related to performance stock units (PSUs).
• On February 13, 2026, 351 shares of Capital Stock were acquired due to the vesting of PSUs tied to the company's cumulative adjusted earnings per share (EPS).
• The company's EPS performance ($67.67) exceeded the maximum payout threshold ($66.46) for the period January 1, 2023, through December 31, 2025, resulting in an award of 124.1% of the target, including reinvested dividends.
• An additional 0 shares were acquired from PSUs tied to relative total shareholder returns for the same period, as the company's performance ranked in the 7th percentile of its peer group, yielding 0% of the target.
• 102 shares were disposed of to satisfy tax obligations related to the PSU vesting.
• Judkins also received a new grant of 908 performance stock units, which will vest based on performance targets from January 1, 2026, to December 31, 2028, with performance determination by March 15, 2029.
• Following these transactions, Judkins beneficially owns 2,436 shares of Capital Stock and 2,306 derivative Performance Stock Units.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed but overall stable report. While the company demonstrated strong internal financial performance by exceeding EPS targets, its relative total shareholder return significantly lagged peers, indicating market perception challenges. The executive's compensation structure reflects these varied outcomes.

Positives

• The company's cumulative adjusted earnings per share performance ($67.67) for the 2023-2025 period exceeded the maximum payout threshold ($66.46), leading to a 124.1% target achievement for related PSUs.
• A new grant of 908 performance stock units was awarded, aligning executive incentives with future company performance.

Negatives

• The company's relative total shareholder returns for the 2023-2025 period ranked in the 7th percentile of its peer group, resulting in a 0% payout for PSUs tied to this metric.
• 102 shares were withheld to cover tax obligations, reducing the net shares received by the executive.

Future Outlook

The filing indicates future performance periods for newly granted PSUs, with targets set for January 1, 2026, to December 31, 2028, and performance determination by March 15, 2029. This suggests a continued focus on long-term executive incentives tied to future company performance.

Management Comments

• The number of performance stock units ("PSUs") that vested was based on the Company's cumulative adjusted earnings per share for the period January 1, 2023 through December 31, 2025. The actual performance of $67.67 exceeded the maximum payout threshold of $66.46 and therefore yielded an award of 123% of target; including the reinvestment of dividends paid during such period, the award is 124.1% of target.
• The number of PSUs that vested was based on the Company's achieving relative total shareholder returns for the period January 1, 2023 through December 31, 2025, compared to a defined peer group of companies. The Company's performance ranked in the 7th percentile of that group, yielding an award of 0%; including the reinvestment of dividends paid during such period, the award is 0% of target.

Industry Context

StockSavvy.ai notes that executive compensation structures, particularly those involving performance stock units, are common across industries to align management incentives with shareholder value. The dual metrics (EPS and relative TSR) reflect a balanced approach, though the low TSR performance suggests challenges in outperforming peers despite strong internal financial results.

Comparison to Industry Standards

• The achievement of 124.1% of target for EPS-based PSUs indicates strong internal financial performance, potentially outperforming many companies that struggle to meet even target goals. For example, in the healthcare services sector, companies like Encompass Health (EHC) or LHC Group (LHCG) often set ambitious EPS targets, and exceeding maximum thresholds is a strong indicator of operational efficiency and profitability.
• The 7th percentile ranking for relative Total Shareholder Return (TSR) is significantly below industry averages and peer performance. This contrasts sharply with companies that consistently rank in the top quartiles for TSR, such as UnitedHealth Group (UNH) or Elevance Health (ELV) in the broader healthcare space, which often demonstrate superior market perception and investor returns. This suggests that while internal financial metrics were strong, the market's valuation of CHEMED relative to its peers was weak during the 2023-2025 period.

Stakeholder Impact

• Shareholders: The strong EPS performance could be viewed positively, indicating operational efficiency. However, the poor relative TSR performance might raise concerns about market valuation and competitiveness. Executive compensation is tied to performance, aligning interests.

Next Steps

• Determination of performance level for PSUs awarded February 17, 2023, by March 15, 2026.
• Performance period for newly acquired PSUs from January 1, 2026, to December 31, 2028.
• Determination of performance level for newly acquired PSUs by March 15, 2029, with earned shares delivered thereafter.

Key Dates

Recommendation

The filing details routine executive compensation events, including the vesting of performance stock units based on mixed company performance metrics. While the company exceeded its EPS targets, its relative total shareholder return lagged significantly. This mixed performance, coupled with the nature of the transactions as compensation, does not present a compelling reason for a strong buy or sell recommendation. A "hold" position is warranted as investors await further clarity on future performance and market positioning.

Keywords

CHEMED Corp, CHE, Form 4, Insider Trading, Performance Stock Units, PSUs, Executive Compensation, Stock Vesting, Share Acquisition, Tax Withholding, Brian C. Judkins, Corporate Governance