Form 4: Farmer Brothers Co. Principal Accounting Officer Receives 40,000 Cash-Settled Restricted Stock Units

Matthew Coffman, Principal Accounting Officer at Farmer Brothers Co., was granted 40,000 cash-settled restricted stock units (CRSUs) on November 8, 2024, which will vest over three years.

Summary

• Matthew Coffman, the Principal Accounting Officer of Farmer Brothers Co., received a grant of 40,000 cash-settled restricted stock units (CRSUs) on November 8, 2024.
• These CRSUs were granted under the company's 2017 Long-Term Incentive Plan.
• The CRSUs will vest in three equal installments, with the first vesting on November 8, 2025, and subsequent vestings on the following two anniversaries.
• Upon vesting, the CRSUs will be settled in cash, not in shares of common stock.
• Each CRSU is economically equivalent to one share of Farmer Brothers Co. common stock.
• Vesting is contingent upon Mr. Coffman's continued employment with the company and is subject to acceleration provisions as outlined in the 2017 Plan and the CRSU grant agreement.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, which is generally viewed positively as it aligns management interests with company performance. There are no indications of negative sentiment.

Positives

• The grant of CRSUs aligns the Principal Accounting Officer's interests with the company's long-term performance.
• The vesting schedule encourages continued service and commitment from Mr. Coffman.

Risks

• The value of the cash settlement will depend on the company's stock price at the time of vesting.
• If Mr. Coffman leaves the company before the vesting dates, he may forfeit the unvested CRSUs.

Future Outlook

The CRSUs will vest over the next three years, contingent on continued service, and will be settled in cash.

Industry Context

The use of cash-settled restricted stock units is a common practice in executive compensation to align management interests with shareholder value and to provide a cash-based incentive.

Comparison to Industry Standards

• Many companies in the food and beverage industry use similar long-term incentive plans, including restricted stock units, to retain and motivate key executives.
• Companies like Starbucks and Keurig Dr Pepper also use a mix of stock options and restricted stock units as part of their compensation packages.
• The vesting schedule of three years is fairly standard for these types of grants.

Stakeholder Impact

• Shareholders may view this as a positive incentive for the Principal Accounting Officer.
• Employees may see this as a standard practice for executive compensation.

Next Steps

• The CRSUs will vest annually over the next three years, subject to Mr. Coffman's continued employment.
• The company will likely report on the vesting of these units in future filings.

Key Dates

Keywords

cash-settled restricted stock units, CRSU, equity compensation, executive compensation, stock options, Farmer Brothers Co, Matthew Coffman, incentive plan