Form 4: Farmer Brothers Grants VP Coffman 50,000 Cash-Settled RSUs

Farmer Brothers Co. granted Matthew Coffman, VP and Controller, 50,000 cash-settled restricted stock units as part of its long-term incentive plan.

Summary

• Matthew Coffman, VP and Controller of Farmer Brothers Co. (FARM), was granted 50,000 cash-settled restricted stock units (CRSUs).
• The CRSUs were granted effective September 15, 2025, under the company's 2017 Long-Term Incentive Plan.
• These units will vest in three equal installments on September 15, 2026, September 15, 2027, and September 15, 2028.
• Upon vesting, the CRSUs will settle in cash, contingent on Mr. Coffman's continued service to the company.
• Each CRSU is the economic equivalent of one share of Farmer Brothers Co. common stock.
• Following this transaction, Mr. Coffman directly owns 58,079 shares of common stock and indirectly owns 5,848.18 shares through the company's 401(k) Plan.
• The total number of derivative securities beneficially owned by Mr. Coffman after this transaction is 119,271.

Sentiment

Score: 7

Explanation: The grant of cash-settled restricted stock units is a positive development for the executive, indicating continued incentive and retention. For the company, it represents a standard compensation practice aimed at aligning management interests with long-term performance, which is generally viewed as neutral to slightly positive.

Positives

• The grant of cash-settled restricted stock units serves as an incentive for Matthew Coffman, a key executive, to remain with Farmer Brothers Co., promoting executive retention.
• The vesting schedule over three years aligns the executive's long-term interests with the company's performance and stability.
• The CRSUs are economically equivalent to common stock, providing an equity-linked incentive without direct share dilution upon settlement, as they are cash-settled.

Future Outlook

The granted cash-settled restricted stock units are scheduled to vest in three equal annual installments, beginning September 15, 2026, and concluding September 15, 2028, subject to continued service.

Management Comments

• The grant of cash-settled restricted stock units to Matthew Coffman is part of the company's 2017 Long-Term Incentive Plan, designed to incentivize and retain key personnel.

Industry Context

Executive compensation, particularly through equity-linked incentives like restricted stock units, is a standard practice across various industries to align management interests with shareholder value and ensure long-term retention. The use of cash-settled units can be a strategy to manage share dilution while still providing performance-based incentives.

Comparison to Industry Standards

• The grant of restricted stock units to a Vice President and Controller is a common form of executive compensation, comparable to practices at other publicly traded companies in the food and beverage or consumer goods sectors, such as Starbucks Corporation or Keurig Dr Pepper Inc., which also utilize long-term incentive plans to reward and retain key executives.
• The three-year vesting schedule is a typical duration for such grants, aiming to foster long-term commitment and performance, consistent with industry benchmarks for executive retention programs.

Stakeholder Impact

• Shareholders: The grant of cash-settled RSUs represents a future compensation expense for the company, which will impact earnings. However, as they are cash-settled, there is no direct share dilution from this specific grant.
• Employees: This grant to a key executive may signal the company's commitment to retaining talent and its long-term incentive programs.

Next Steps

• Matthew Coffman's cash-settled restricted stock units will vest in three equal installments on September 15, 2026, September 15, 2027, and September 15, 2028.

Key Dates

Keywords

Farmer Brothers Co., FARM, Matthew Coffman, Restricted Stock Units, RSUs, Cash-Settled, Executive Compensation, Insider Transaction, SEC Form 4, Long-Term Incentive Plan, Corporate Governance