Form 4: Douglas Elliman Inc. Grants Restricted Stock to Director David Chene Under 10b5-1 Plan

Douglas Elliman Inc. granted 61,983 shares of restricted Common Stock to Director David Chene, effective June 28, 2025, under a pre-arranged plan, increasing the indirect beneficial ownership of affiliated entities to 120,958 shares.

Summary

• Douglas Elliman Inc. (DOUG) granted 61,983 shares of restricted Common Stock to David Chene, a member of its Board of Directors, on June 28, 2025.
• The grant was made in respect of Mr. Chene's service on the Board and was issued under the Issuer's 2021 Management Incentive Plan.
• The transaction was made pursuant to a Rule 10b5-1(c) plan, allowing for the future-dated transaction.
• The shares vest in two equal annual installments on June 28, 2026, and June 28, 2027, contingent on Mr. Chene's continued service or earlier vesting upon death, disability, or a change-of-control.
• Mr. Chene holds these shares for the benefit of KLIM Delta HQC3 LP and KLCP Fund III (EU) Master AIV LP (the "Funds"), disclaiming direct economic interest except through his interests in the Funds.
• Following this transaction, the indirect beneficial ownership of the reporting persons (including the Funds and their controlling entities) is 120,958 shares of Common Stock.
• The acquisition price for the granted shares was $0, indicating a compensation grant rather than a purchase.

Sentiment

Score: 7

Explanation: The grant of restricted stock to a director, especially one representing significant investors, is a positive sign of alignment and commitment. It is a routine compensation method but reinforces insider interest in the company's long-term success. No negative financial implications are immediately apparent from this specific filing.

Positives

• The grant of restricted stock aligns the interests of a key director, David Chene, who represents significant investors (Kennedy Lewis affiliates), with the long-term performance of Douglas Elliman Inc.
• The two-year vesting schedule encourages continued service and commitment from a director associated with major shareholders.
• Increased insider ownership, even if indirect and through a grant, can signal confidence in the company's future prospects.

Negatives

• The shares were granted at $0, meaning there was no direct cash investment by the director for these specific shares.

Risks

• Vesting of the restricted stock is subject to David Chene's continued service through the vesting dates of June 28, 2026, and June 28, 2027; otherwise, the shares could be forfeited, unless due to death, disability, or a change-of-control.
• The ultimate value of the restricted stock to the beneficial owners is dependent on the future market price of Douglas Elliman Inc. common stock.

Future Outlook

The grant of restricted stock with a future vesting schedule indicates an expectation of continued service from Director David Chene through at least June 28, 2027, aligning his interests with the company's long-term performance and strategic objectives.

Management Comments

• David Chene, a Manager of Kennedy Lewis Investment Holdings II LLC, serves on the Board of Directors of Douglas Elliman Inc.
• By virtue of their representation on the Board of Directors of the Issuer, for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, each of the reporting persons other than Mr. Chene are deemed directors by deputization of the Issuer.
• Mr. Chene disclaims any direct beneficial ownership of the Issuer's securities to which this report relates and at no time has Mr. Chene had any economic interest in such securities except any indirect economic interest through interests in the Funds and their affiliates.
• Each of Kennedy Lewis GP III, Holdings II, David Chene and Darren Richman disclaims beneficial ownership of the securities of the Issuer held directly by the Funds except to the extent of its or his pecuniary interest therein, and this report shall not be deemed an admission that any of Kennedy Lewis GP III, Holdings II, David Chene or Darren Richman is the beneficial owner of such securities for purposes of Section 16 or any other purpose.

Industry Context

This transaction represents a standard practice in corporate governance, where companies grant equity awards to non-employee directors as a form of compensation and to align their interests with shareholders. It reflects a common method for real estate brokerage firms like Douglas Elliman to incentivize board members and retain their expertise.

Comparison to Industry Standards

• Granting restricted stock to directors is a common compensation practice across various industries, including real estate, to align director incentives with long-term shareholder value.
• The two-year vesting schedule is typical for such equity awards, providing a retention mechanism for key board members.
• The $0 acquisition price is standard for equity grants as compensation for service, rather than a direct purchase, consistent with industry norms for director compensation.

Corporate Governance

Related Party Transactions

• The grant of restricted stock to David Chene, a director, is a transaction with a related party. Mr. Chene is a Manager of Kennedy Lewis Investment Holdings II LLC, which controls entities (Kennedy Lewis GP III LLC, KLIM Delta HQC3 LP, KLCP Fund III (EU) Master AIV LP) that are 10% owners and deemed directors by deputization. The shares are held for the benefit of KLIM Delta HQC3 LP and KLCP Fund III (EU) Master AIV LP, which are affiliated with the reporting persons.

Stakeholder Impact

• Shareholders: Increased alignment of a key director's interests with shareholder value through equity ownership. This may foster increased confidence due to reinforced insider holdings.
• Management/Employees: Reinforces the use of the 2021 Management Incentive Plan for equity compensation, potentially signaling continued commitment to performance-based incentives.

Next Steps

• Monitoring the vesting of the restricted shares on June 28, 2026, and June 28, 2027.
• Observing any future Form 4 filings related to these reporting persons or Douglas Elliman Inc.

Key Dates

Recommendation

Keywords

Douglas Elliman Inc., DOUG, SEC Form 4, Insider Transaction, Restricted Stock Grant, Beneficial Ownership, Director Compensation, Management Incentive Plan, Equity Award, Kennedy Lewis, 10b5-1 Plan