Form 4: Fortive Corp Executive Reports Dividend Accrual on Phantom Shares

Edward Read Simmons, SVP of Strategy at Fortive Corp, reports the acquisition of notional dividend accruals on phantom shares in the company's Executive Deferred Incentive Program.

Summary

• On June 28, 2024, Edward Read Simmons, SVP of Strategy at Fortive Corp, reported a transaction involving the Executive Deferred Incentive Program (EDIP).
• The transaction involved notional dividend accruals on phantom shares in the Fortive stock fund under the EDIP.
• Simmons acquired 4.24 phantom shares at a price of $74.1, resulting in a total holding of 3,932.75 shares.
• 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.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating a stable and well-managed company. The sentiment is neutral to positive as it shows alignment of executive interests with shareholder value.

Positives

• The acquisition of phantom shares through the EDIP aligns the executive's interests with the company's performance.
• Immediate vesting of voluntary contributions to the EDIP Stock Fund provides an incentive for personal investment in the company.

Future Outlook

The EDIP provides a mechanism for executives to accumulate company stock over time, aligning their interests with long-term shareholder value.

Industry Context

Executive compensation programs like the EDIP are common in publicly traded companies to incentivize and retain key personnel. Phantom stock plans are a type of equity compensation that provides executives with the benefits of stock ownership without actually issuing shares.

Comparison to Industry Standards

• Many companies in the industrial sector, such as Danaher (DHR) and Honeywell (HON), utilize deferred compensation plans and equity-based awards to align executive compensation with company performance.
• The vesting schedules and terms of these plans often vary, but the general goal is to incentivize long-term value creation.
• The specifics of Fortive's EDIP, such as the vesting schedule and the use of phantom shares, are typical components of executive compensation packages in similar companies.

Stakeholder Impact

• The EDIP aligns executive interests with shareholder value, potentially leading to better company performance.
• Employees may view the EDIP as a positive aspect of the company's compensation structure.

Key Dates