Form 4: Fortive Legal Officer Adds Phantom Shares

Fortive's SVP and Chief Legal Officer, Peter C. Underwood, acquired 15.643 phantom shares through dividend accruals in the company's Executive Deferred Incentive Program.

Summary

• Peter C. Underwood, Fortive Corp's SVP Chief Legal Officer and Director, reported a transaction on September 26, 2025.
• The transaction involved the acquisition of 15.643 notional dividend accruals on phantom shares in the Fortive stock fund under the Executive Deferred Incentive Program (EDIP).
• The phantom shares were acquired at a price of $48.53 per share, based on the NYSE closing price on the transaction date.
• Following this transaction, Mr. Underwood beneficially owns 12,667.96 phantom shares.
• The total number of phantom shares reflects an anti-dilution adjustment from the spin-off of Ralliant Corporation on June 28, 2025.
• Notional shares convert on a one-to-one basis to common stock upon settlement.
• Voluntary contributions to the EDIP Stock Fund vest immediately at 100%.
• Issuer contributions vest 100% upon the earlier of the reporting person's death, or retirement (following at least 5 years of service and reaching age 55), or one-tenth per year of participation after five years of participation, 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 sentiment is moderately positive. While not a direct cash purchase, the increase in phantom share holdings by a key executive indicates continued alignment with the company's long-term performance and is a routine, positive aspect of executive compensation and retention.

Positives

• The transaction represents an increase in the reporting person's beneficial ownership of phantom shares, aligning executive interests with long-term shareholder value.
• The Executive Deferred Incentive Program (EDIP) encourages executive retention through its vesting schedule tied to service and retirement conditions.

Negatives

• The acquisition is of phantom shares through dividend accruals, not a direct open market purchase with personal capital, which typically signals stronger conviction.

Future Outlook

The future outlook for these phantom shares is tied to the vesting schedule of the EDIP, with full vesting for issuer contributions contingent on factors such as death, retirement after specific service and age criteria, or a pro-rata schedule after five years of participation. Upon termination of employment, the vested portion will be settled in Fortive's common stock.

Industry Context

This transaction reflects a standard component of executive compensation packages, common in the industrial technology sector, where deferred incentive programs are used to align management's long-term interests with company performance and shareholder value. The anti-dilution adjustment related to a spin-off is also a routine corporate action in such contexts.

Comparison to Industry Standards

• Executive Deferred Incentive Programs (EDIPs) with phantom shares and service-based vesting are a common form of executive compensation.
• This structure is consistent with practices observed in many publicly traded companies, particularly in the industrial technology sector, designed to align executive incentives with long-term company performance and retention.

Stakeholder Impact

• Shareholders: The transaction enhances the alignment of a key executive's financial interests with the long-term performance of Fortive, potentially fostering more shareholder-centric decision-making.

Next Steps

• Continued vesting of the phantom shares according to the EDIP's schedule.
• Eventual settlement of vested phantom shares into Fortive common stock upon the reporting person's termination of employment.

Key Dates

Recommendation

This Form 4 reports a routine accrual of phantom shares as part of an executive deferred incentive program, which is a standard component of executive compensation. It does not indicate a significant change in the company's fundamentals or a direct open market purchase that would typically signal a strong buy or sell opportunity. The transaction aligns executive interests with long-term shareholder value but is not a catalyst for a change in investment recommendation.

Keywords

Fortive, FTV, Insider Transaction, Executive Compensation, Form 4, Phantom Shares, Deferred Incentive Program, Corporate Governance