Form 4: Conduent CFO Giles Goodburn Awarded Significant Equity Compensation, Aligning Interests with Shareholder Returns

Conduent Inc.'s Executive Vice President and Chief Financial Officer, Giles Andrew Goodburn, was granted 75,962 shares of common stock through Restricted Stock Units (RSUs) and Performance Restricted Stock Units (PRSUs) on June 1, 2025, valued at $2.24 per share.

Summary

• Giles Andrew Goodburn, EVP and Chief Financial Officer of Conduent Inc. (CNDT), was granted equity awards on June 1, 2025.
• The awards consist of 43,750 Restricted Stock Units (RSUs) and 32,212 Performance Restricted Stock Units (PRSUs), totaling 75,962 shares.
• The value per share for these awards was $2.24.
• The RSUs will vest in equal amounts on June 1, 2026, June 1, 2027, and June 1, 2028, with each RSU converting to one share of common stock upon vesting.
• The PRSUs will cliff vest on June 1, 2028, contingent on Conduent Incorporated's total shareholder return (rTSR) relative to its proxy peer group.
• The PRSU performance period is from April 1, 2025, through December 31, 2027.
• PRSU payout percentages are: 50% for 25th percentile rTSR, 100% for median rTSR, and 150% for 75th percentile rTSR, with linear interpolation between points.
• PRSU payout is capped at 100% if Conduent's total shareholder return is negative, and at 4x the fair market value of the target PRSUs on the grant date.
• Following these transactions, Mr. Goodburn beneficially owns a total of 407,130 shares of Conduent common stock.
• The awards are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

Sentiment

Score: 7

Explanation: The document reports a standard executive equity grant, which is generally positive as it aligns management incentives with shareholder interests. There are no negative surprises or significant risks disclosed beyond the inherent nature of performance-based compensation.

Positives

• The equity awards align the interests of a key executive, the CFO, directly with shareholder returns, particularly through the performance-based RSUs.
• The vesting schedule for RSUs provides a retention incentive for the executive over a three-year period.
• The PRSU structure incentivizes strong relative total shareholder return, potentially driving long-term value creation for shareholders.
• The grant of equity compensation is a standard practice for executive remuneration, indicating a structured approach to talent retention and motivation.

Negatives

• The value of the awards is dependent on the future stock price of Conduent, which carries inherent market risk.
• The PRSU vesting is subject to performance conditions that may not be met, potentially resulting in a lower or no payout for the executive.

Risks

• The actual number of shares received from PRSUs is subject to Conduent's total shareholder return performance relative to its peer group, which may not meet the required thresholds.
• Market fluctuations could impact the value of the vested shares at the time of payout.
• The cap on PRSU payout if Conduent's total shareholder return is negative, or at 4x the fair market value, limits potential upside for the executive under certain scenarios.

Future Outlook

The future payout of the Performance Restricted Stock Units (PRSUs) is directly tied to Conduent's total shareholder return (rTSR) performance relative to its proxy peer group between April 1, 2025, and December 31, 2027. The RSUs are set to vest annually over the next three years, providing a clear future schedule for equity distribution.

Management Comments

• The transaction was made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

Industry Context

The grant of performance-based equity awards to a Chief Financial Officer is a common practice in the technology and business process services industry. It reflects a broader trend of linking executive compensation to company performance metrics, particularly total shareholder return, to align management incentives with long-term shareholder value creation. This type of compensation structure is prevalent among publicly traded companies seeking to attract and retain top executive talent.

Comparison to Industry Standards

• The use of both time-based Restricted Stock Units (RSUs) and performance-based Restricted Stock Units (PRSUs) is a standard approach in executive compensation packages across various industries, including business process outsourcing and IT services.
• Tying PRSU vesting to relative Total Shareholder Return (rTSR) against a proxy peer group is a widely adopted best practice, as it measures performance against direct competitors and mitigates the impact of broader market movements.
• The payout structure for PRSUs (50% for 25th percentile, 100% for median, 150% for 75th percentile) is typical for incentivizing above-average performance, with linear interpolation providing granularity.
• The caps on PRSU payouts (100% if rTSR is negative, 4x fair market value) are common risk mitigation features in executive compensation plans, preventing excessive payouts in certain scenarios and aligning with responsible corporate governance.

Stakeholder Impact

• Shareholders: The equity awards, particularly the performance-based PRSUs, are designed to align the CFO's financial incentives with the company's total shareholder return, potentially benefiting shareholders through improved performance.
• Employees: While not directly impacted, a well-incentivized leadership team can contribute to overall company success, which indirectly benefits employees through a stable and growing work environment.

Next Steps

• Conduent's total shareholder return will be measured against its proxy peer group from April 1, 2025, through December 31, 2027, to determine PRSU vesting.
• Portions of the RSU awards are scheduled to vest on June 1, 2026, June 1, 2027, and June 1, 2028.
• The PRSU award will cliff vest on June 1, 2028, subject to performance conditions.

Key Dates

Recommendation

Keywords

Conduent Inc., CNDT, SEC Form 4, Insider Transaction, Equity Compensation, Restricted Stock Units, RSUs, Performance Restricted Stock Units, PRSUs, Executive Compensation, Giles Andrew Goodburn, Chief Financial Officer, CFO, Shareholder Return, Vesting Schedule, Corporate Governance