Form 4: Element Solutions Executive Reports Routine Equity Transactions

Element Solutions' President of Electronics, Richard L. Fricke, reported the vesting of equity awards, tax-related share dispositions, and new long-term incentive grants.

Summary

• Richard L. Fricke, President, Electronics at Element Solutions Inc (ESI), reported multiple transactions on February 10 and 11, 2026.
• On February 10, 2026, Fricke acquired a total of 21,965 shares of common stock from the settlement of previously granted performance and restricted stock units (13,582 shares from 2023 PRSUs, 1,677 shares from 2023 RSUs, 3,477 shares from 2024 RSUs, and 3,229 shares from 2025 RSUs).
• On February 11, 2026, a total of 9,023 shares were disposed of at a price of $31.99 per share to cover tax withholdings due upon the vesting of these awards, totaling approximately $288,645.77.
• New equity awards were granted on February 10, 2026, consisting of 23,726 Performance Stock Units (PRSUs) and 11,862 Restricted Stock Units (RSUs).
• The new PRSUs are contingent on achieving adjusted EBITDA compound annual growth, adjusted earnings per share goals for the performance period ending December 31, 2028, and a relative total shareholder return (TSR) modifier, with a potential payout ranging from zero to 71,178 shares.
• The new RSUs will vest in 1/3 increments over the next three years.
• Following these transactions, Fricke's direct beneficial ownership of common stock is 52,771 shares, in addition to 3,477 remaining Restricted Stock Units from a 2024 award, 6,457 remaining Restricted Stock Units from a 2025 award, 23,726 newly granted Performance Stock Units, and 11,862 newly granted Restricted Stock Units.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a routine but positive development, reflecting ongoing executive compensation practices that align management incentives with long-term company performance and shareholder value, despite the necessary tax-related share dispositions.

Positives

• Vesting of previously granted equity awards indicates the successful achievement of past performance conditions or time-based vesting, reflecting prior company performance.
• New grants of 23,726 Performance Stock Units and 11,862 Restricted Stock Units align executive incentives with future company performance and long-term shareholder value.
• The potential for the new PRSUs to convert into up to 71,178 shares provides significant upside for the executive if challenging performance targets are met.

Negatives

• Disposition of 9,023 shares at $31.99 per share, totaling approximately $288,645.77, to cover tax withholdings, which reduces the executive's direct common stock ownership.

Future Outlook

New Performance Stock Units are subject to specific adjusted EBITDA compound annual growth, adjusted earnings per share goals, and a relative total shareholder return modifier for a performance period ending December 31, 2028. New Restricted Stock Units will vest in 1/3 increments over the next three years.

Industry Context

StockSavvy.ai notes that equity-based compensation, particularly through performance and restricted stock units, is a standard practice across industries to align executive interests with long-term shareholder value. The structure of these awards, tied to financial metrics like adjusted EBITDA and EPS, along with relative TSR, reflects common corporate governance trends aimed at incentivizing robust financial performance and competitive market positioning.

Comparison to Industry Standards

• Equity compensation structures, including PRSUs tied to financial performance (EBITDA, EPS) and relative TSR, are common in the specialty chemicals and materials industry, similar to practices seen at companies like DuPont, PPG Industries, or Sherwin-Williams.
• The vesting schedule for RSUs (1/3 increments over three years) is a standard approach to executive retention and long-term incentive plans.
• The potential multiplier for PRSUs (up to three shares per unit) is a strong incentive mechanism, often used to drive aggressive performance targets, comparable to high-performance incentive plans at industry peers.

Related Party Transactions

• The settlement of previously granted equity awards and the grant of new Performance Stock Units and Restricted Stock Units constitute related party transactions between Element Solutions Inc and its President, Electronics, Richard L. Fricke, as part of his executive compensation.

Stakeholder Impact

• Shareholders: The new equity grants align executive incentives with shareholder interests, potentially leading to improved long-term performance. The tax-related share dispositions are a routine part of executive compensation and do not indicate a change in sentiment.

Next Steps

• Achievement of adjusted EBITDA compound annual growth and adjusted earnings per share goals for the performance period ending December 31, 2028, for the new Performance Stock Units.
• Vesting of new Restricted Stock Units in 1/3 increments over the next three years.

Key Dates

Recommendation

This Form 4 filing details routine executive compensation activities, including the vesting of prior awards, tax-related share dispositions, and new equity grants. While the new grants align executive incentives with future performance, these are standard events and do not present new information that would significantly alter the fundamental investment thesis for Element Solutions Inc. Therefore, a 'Hold' recommendation is appropriate, maintaining current positions based on broader company fundamentals rather than these specific insider transactions.

Keywords

Element Solutions Inc, ESI, Form 4, Insider Trading, Executive Compensation, Stock Units, Restricted Stock Units, Performance Stock Units, Equity Awards, Richard L. Fricke, Share Ownership, Vesting, Tax Withholding