Form 4: DuPont CEO's Equity Award Modified Post-Spin-Off

DuPont de Nemours CEO Lori Koch's performance share units were converted to restricted stock units following the company's Electronics business spin-off, preserving award value.

Summary

• Lori Koch, CEO and Director of DuPont de Nemours, Inc. (DD), reported a change in beneficial ownership.
• On October 31, 2025, 98,613.4695 shares of Common Stock were acquired at a price of $0.
• This acquisition resulted from a modification of previously granted performance share units (PSUs) into time-based restricted stock units (RSUs).
• The modification was approved by the People and Compensation Committee of the Board of Directors in connection with the spin-off of DuPont's Electronics business.
• The conversion aimed to preserve the underlying value of the outstanding PSU awards.
• The number of converted RSUs was determined based on performance achievement up to the completion of the spin-off.
• These converted RSUs are subject to the same time-based vesting conditions as the original PSU awards.
• The reported amount also includes dividend equivalent units associated with the converted RSUs.
• Following this transaction, Lori Koch directly beneficially owns 288,325.6878 shares of Common Stock.
• An additional 260.9988 shares are indirectly owned through a Retirement Savings Plan, including shares acquired via dividend reinvestment.

Sentiment

Score: 7

Explanation: The modification of executive equity awards to preserve value post-spin-off is a positive for executive retention and stability during a period of corporate change, though the shift from performance-based to time-based vesting could be seen as a slight negative for direct performance alignment.

Positives

• The modification of PSUs to RSUs aims to preserve the underlying value of executive equity awards following the spin-off, ensuring executive compensation stability.
• The conversion to RSUs ensures continued retention and alignment of executive interests with long-term company performance, albeit on a time-based rather than performance-based vesting schedule post-spin-off.
• The increase in direct beneficial ownership for the CEO demonstrates a continued stake in the company's future.

Negatives

• The conversion from performance-based units (PSUs) to time-based units (RSUs) means future vesting for these specific awards is no longer tied to specific performance metrics post-spin-off, potentially reducing the direct link between this portion of executive compensation and future operational achievements.

Future Outlook

The converted restricted stock units (RSUs) remain subject to their original time-based vesting conditions, indicating a continued long-term incentive structure for the CEO.

Management Comments

• The People and Compensation Committee of the Board of Directors approved a modification of the award to preserve the underlying value of outstanding PSU awards in connection with the spin-off.

Industry Context

This is a standard practice for executive compensation adjustments following significant corporate restructuring events like spin-offs, aiming to maintain executive incentives and retention during periods of change.

Comparison to Industry Standards

• The conversion of performance-based equity awards to time-based awards post-spin-off is a common mechanism used by companies like General Electric (GE) during its multi-business separations or Johnson & Johnson (JNJ) after its Kenvue spin-off. This approach aims to stabilize executive compensation value and ensure retention during periods of significant corporate change, rather than re-evaluating new performance metrics immediately after a complex transaction.
• The practice of granting dividend equivalent units (DEUs) on unvested RSUs is also standard across many large-cap companies, ensuring executives receive the full economic benefit of their equity awards as if they held the underlying shares.

Corporate Governance

Stakeholder Impact

• Shareholders: The modification aims to retain key executive talent (CEO) during a significant corporate restructuring (spin-off), which is generally positive for stability. However, the shift from performance-based to time-based vesting for these specific awards might slightly alter the direct alignment of this portion of compensation with future performance metrics.

Next Steps

• The converted restricted stock units (RSUs) will continue to vest according to their original time-based vesting conditions.

Key Dates

Recommendation

This Form 4 details a routine executive compensation adjustment following a corporate spin-off, designed to preserve the value of existing equity awards and retain key management. It does not provide new information regarding the company's operational performance, financial health, or strategic direction that would warrant a change in investment recommendation. The shift from performance-based to time-based vesting for these specific awards is a common practice in such scenarios and does not significantly alter the investment thesis for DuPont.

Keywords

DuPont, DD, Form 4, beneficial ownership, CEO, equity compensation, restricted stock units, performance share units, spin-off, executive compensation