Form 4: Elanco Director Lawrence Kurzius Reports Acquisition of Deferred Stock Units

Director Lawrence Kurzius reports acquisition of deferred stock units through Elanco's Directors' Deferral Plan.

Summary

• On September 30, 2024, Lawrence Kurzius, a director of Elanco Animal Health Inc., acquired 4,084.4112 deferred stock units (DSUs) through the company's Directors' Deferral Plan.
• These DSUs are the economic equivalent of Elanco common stock.
• The acquisition occurred because Mr. Kurzius elected to defer his director cash retainer fees, which were then credited to the Elanco Deferred Stock Account under the Plan.
• The price per share used to calculate the number of DSUs was $14.69, the closing price of Elanco common stock on September 30, 2024.
• Following the transaction, Mr. Kurzius directly owns 33,612.5583 Deferred Stock Units.
• The DSUs will be settled in stock following Mr. Kurzius's separation of service from the Company's Board of Directors.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. It reflects a routine transaction related to director compensation, indicating alignment of interests between the director and shareholders. There are no red flags or negative implications.

Positives

• The acquisition of deferred stock units by a director signals confidence in the company's future performance.
• The Directors' Deferral Plan aligns the interests of directors with those of shareholders.

Future Outlook

The deferred stock units will be settled in stock following the reporting person's separation of service from the Company's Board of Directors pursuant to the Plan.

Management Comments

• Mr. Kurzius elected to defer his director cash retainer fees pursuant to the Company's Directors' Deferral Plan (the 'Plan') and such deferred fees were credited to the Elanco Deferred Stock Account under the Plan.

Industry Context

Directors often receive stock-based compensation to align their interests with shareholders. Deferred stock units are a common form of this compensation, allowing directors to defer income and receive stock at a later date.

Comparison to Industry Standards

• Deferred stock unit plans are a fairly standard compensation practice for directors in publicly traded companies, including those in the animal health industry.
• Companies like Zoetis and Merck Animal Health also utilize similar stock-based compensation plans for their board members.

Stakeholder Impact

• The acquisition of deferred stock units by a director can positively influence shareholder confidence.

Key Dates