Form 4: Fortive VP-Chief Accounting Officer Accrues Notional Shares in Deferred Incentive Plan

Fortive Corp's VP-Chief Accounting Officer, Christopher M. Mulhall, acquired additional notional shares through the company's Executive Deferred Incentive Program on June 27, 2025.

Summary

• Christopher M. Mulhall, VP Chief Accounting Officer of Fortive Corp (FTV), acquired notional shares in the company's Executive Deferred Incentive Program (EDIP) on June 27, 2025.
• A direct acquisition of 4.363 notional shares occurred as notional dividend accruals on phantom shares in the EDIP Stock Fund.
• An indirect acquisition of 0.838 notional shares by spouse occurred, representing compensation deferred or contributed into the EDIP Stock Fund.
• Both acquisitions were based on a closing price of $71.6 per notional share.
• Following these transactions, Mulhall beneficially owns 3,909.583 direct notional shares and 750.529 indirect notional shares (by spouse).
• Notional shares convert on a one-to-one basis to Fortive Common Stock.
• Voluntary contributions to the EDIP Stock Fund vest immediately at 100%.
• Issuer contributions vest 100% upon the earlier of death, retirement (after 5 years of service and age 55), or one-tenth per year of participation after five years of participation.
• Vested portions of the EDIP Stock Fund are settled in the Issuer's common stock upon termination of employment.

Sentiment

Score: 7

Explanation: The document reports a routine insider transaction related to executive compensation, indicating continued participation and alignment of interests. There are no negative surprises or significant positive catalysts, but the ongoing executive investment is a mild positive.

Positives

• Continued participation by a key executive in the company's deferred incentive program, aligning executive interests with shareholder value.
• The accrual of notional shares through dividend reinvestment and deferred compensation indicates a long-term commitment to the company.

Risks

• The value of the notional shares is tied to the future performance of Fortive's common stock, exposing the executive to market fluctuations.
• Vesting conditions for issuer contributions mean the full benefit is not immediately realized and depends on continued employment or specific milestones.

Future Outlook

The document details the vesting schedule for notional shares under the Executive Deferred Incentive Program, indicating that issuer contributions vest over time or upon specific events like retirement, aligning future executive compensation with long-term company performance.

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.
• 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.
• Compensation deferred or contributed into the EDIP Stock Fund under the EDIP is deemed to be invested in a number of unfunded, notional shares of the Issuer's common stock based on the closing price of such common stock as reported on the NYSE on the date such compensation is credited to the EDIP Stock Fund.

Industry Context

This Form 4 filing reflects a standard practice in corporate executive compensation, where deferred incentive programs are used to align management's long-term interests with shareholder value. Such programs are common across various industries for publicly traded companies.

Comparison to Industry Standards

• The use of an Executive Deferred Incentive Program (EDIP) with notional shares is a common executive compensation structure, similar to those seen at companies like Danaher Corporation (DHR) or Roper Technologies (ROP), which also utilize long-term incentive plans tied to stock performance.
• The vesting schedule, including immediate vesting for voluntary contributions and time/performance-based vesting for issuer contributions, aligns with typical industry practices designed to retain key talent and incentivize long-term performance.
• The settlement of vested portions in common stock upon termination is a standard feature of such plans, ensuring executives receive equity-based compensation.

Corporate Governance

Related Party Transactions

• The transactions under the Executive Deferred Incentive Program (EDIP) are related party transactions, as they involve the company providing compensation to a key executive (Christopher M. Mulhall) in the form of notional shares tied to the company's stock.

Stakeholder Impact

• Shareholders: The EDIP aims to align executive incentives with shareholder interests by tying compensation to stock performance.
• Employees: The program specifically impacts the executive participant, Christopher M. Mulhall, as part of his compensation package.

Next Steps

• Continued accrual of notional shares through dividend reinvestment and deferred compensation as per the EDIP terms.
• Vesting of issuer contributions based on the specified schedule (death, retirement, or annual participation milestones).
• Settlement of vested EDIP Stock Fund portions in Fortive common stock upon termination of employment.

Key Dates

Keywords

Fortive Corp, FTV, SEC Form 4, Insider Trading, Beneficial Ownership, Executive Compensation, Deferred Incentive Program, Notional Shares, Stock Fund, Christopher M. Mulhall