Form 4: Fortive CEO James Lico Reports Acquisition of Phantom Shares Through Executive Incentive Program

Fortive Corp's President and CEO, James A. Lico, reported the acquisition of 170.251 notional dividend accruals on phantom shares under the company's Executive Deferred Incentive Program.

Summary

• James A. Lico, President and CEO of Fortive Corp (FTV), acquired 170.251 notional dividend accruals on phantom shares.
• These shares are part of the Executive Deferred Incentive Program (EDIP) Stock Fund.
• The transaction date for these accruals was June 27, 2025.
• The notional shares were valued at $71.6 per share.
• Following this transaction, Mr. Lico beneficially owns 152,544.927 derivative securities in the EDIP Stock Fund.
• The phantom shares convert on a one-to-one basis to common stock.
• Vesting for voluntary contributions is immediate (100%).
• Vesting for issuer contributions occurs 100% upon the earlier of death, retirement (after 5 years of service and age 55), or one-tenth per year after five years of participation.
• Vested portions of the EDIP Stock Fund are settled in Fortive's common stock upon termination of employment.

Sentiment

Score: 7

Explanation: The filing indicates a routine executive compensation event, specifically the accrual of notional dividends on phantom shares, which is a positive for executive alignment but not a significant market-moving event on its own. It reflects ongoing participation in a long-term incentive plan.

Positives

• Acquisition of additional phantom shares indicates continued participation and alignment of executive interests with shareholder value through the EDIP.
• The program provides a mechanism for executives to defer compensation and accumulate equity-linked interests.

Future Outlook

The document details the vesting schedule for phantom shares under the Executive Deferred Incentive Program, indicating future conversion to common stock upon specific conditions such as retirement or termination of employment.

Management Comments

• The reported securities are notional dividend accruals on phantom shares in the Fortive stock fund (the 'EDIP Stock Fund') under Fortive's Executive Deferred Incentive Program (the 'EDIP').
• The number of phantom shares accrued as a result of such notional dividend accruals is based on the closing price of the Issuer's common stock as reported on the NYSE on the date such dividend accruals are credited to the EDIP Stock Fund, which is the price shown in Table II, Column 8 above.
• The notional shares convert on a one-to-one basis.
• The Reporting Person immediately vests in 100% of each voluntary contribution to the EDIP Stock Fund.
• The Reporting Person will vest in all contributions to the EDIP Stock Fund by the Issuer as follows: 100% upon the earlier of the Reporting Person's death, or upon retirement following at least 5 years of service with the Issuer and reaching the age of 55, or, if earlier, one-tenth per year of participation following five years of participation, in each case in accordance with the EDIP.
• Upon termination of employment, the vested portion of the EDIP Stock Fund is settled in the Issuer's common stock.

Industry Context

This Form 4 filing reflects a routine executive compensation event, specifically the accrual of notional dividends on phantom shares, which is a common practice in executive deferred compensation plans across various industries to align executive interests with long-term shareholder value.

Comparison to Industry Standards

• Executive deferred incentive programs, including those with phantom stock components and dividend accruals, are standard compensation practices for senior executives in publicly traded companies.
• While specific program details vary, the structure of Fortive's EDIP, which links executive compensation to company stock performance and includes vesting schedules, is consistent with typical industry benchmarks for executive retention and incentive alignment.

Stakeholder Impact

• Shareholders: The transaction aligns executive incentives with shareholder interests through equity-linked compensation, potentially fostering long-term value creation.

Next Steps

• Continued participation in the Executive Deferred Incentive Program (EDIP).
• Future conversion of vested phantom shares into Fortive common stock upon specific conditions such as retirement or termination of employment.

Key Dates

Recommendation

Keywords

Fortive Corp, FTV, SEC Form 4, Insider Trading, Executive Compensation, Phantom Shares, Deferred Compensation, Executive Deferred Incentive Program, James A. Lico, Director, CEO, Stock Fund