Form 4: Conduent Inc. Executive Louis Edward Keyes Reports Acquisition of Restricted Stock Units

EVP and Chief Revenue Officer of Conduent Inc., Louis Edward Keyes, reports the acquisition of restricted stock units and performance restricted stock units.

Summary

• Louis Edward Keyes, EVP and Chief Revenue Officer of Conduent Inc., filed a Form 4 on April 3, 2024, reporting transactions on April 1, 2024.
• Keyes acquired 53,516 restricted stock units (RSUs) at a price of $3.27.
• These RSUs vest in equal amounts on December 31, 2024, December 31, 2025, and December 31, 2026, and each RSU converts to one share of Conduent common stock upon vesting.
• Keyes also acquired 31,238 performance restricted stock units (PRSUs) at a price of $3.27.
• The PRSUs will cliff vest on December 31, 2026, subject to Conduent's total shareholder return (rTSR) compared to its proxy peer group meeting certain thresholds.
• The payout percentage for the PRSUs ranges from 50% at the 25th percentile to 150% at the 75th percentile, with linear interpolation between these points.
• The PRSU award adjustment is capped at 100% if Conduent's total shareholder return is negative, and at 6x the fair market value of the target number of PRSUs on the date of grant.
• Following these transactions, Keyes beneficially owns 517,720 shares of Conduent common stock.

Sentiment

Score: 6

Explanation: The document is a routine regulatory filing related to executive compensation. It doesn't contain any particularly positive or negative information about the company's performance or prospects. The sentiment is neutral to slightly positive, as it indicates the company is using standard compensation practices to incentivize its executives.

Positives

• The acquisition of RSUs and PRSUs by a top executive signals confidence in the company's future performance.
• The vesting schedule of the RSUs provides a long-term incentive for the executive.
• The performance-based vesting of the PRSUs aligns executive compensation with shareholder value creation.

Risks

• The value of the RSUs and PRSUs is subject to the price volatility of Conduent's common stock.
• The vesting of the PRSUs is contingent on Conduent's total shareholder return, which may not meet the required thresholds.
• The PRSU award adjustment is capped at 100% if Conduent's total shareholder return is negative.

Future Outlook

The vesting of the RSUs and PRSUs is tied to future dates and, in the case of the PRSUs, to Conduent's future performance relative to its peers.

Industry Context

Executive compensation packages often include stock-based awards like RSUs and PRSUs to align management's interests with those of shareholders. The specific terms of these awards, such as vesting schedules and performance metrics, vary depending on the company and industry.

Comparison to Industry Standards

• RSUs are a fairly standard component of executive compensation packages across various industries, including technology and business services, which is the industry Conduent operates in.
• PRSUs are also common, particularly when companies want to incentivize specific performance goals, such as total shareholder return (TSR).
• The vesting schedules (annual for RSUs, cliff vesting for PRSUs) are typical.
• The performance metrics tied to TSR are also frequently used in PRSU grants.
• Companies like Xerox (a spin-off of Conduent), IBM, and Accenture often use similar compensation structures for their executives.

Stakeholder Impact

• Shareholders may view the stock-based compensation as a positive sign that management's interests are aligned with theirs.
• Employees may see the executive's acquisition of RSUs and PRSUs as a sign of confidence in the company's future.

Key Dates