Form 4: Franklin Electric Director Jennifer L. Sherman Acquires Stock Units Through Deferred Compensation Plan

Director Jennifer L. Sherman acquired stock units in Franklin Electric Co. Inc. through the company's deferred compensation plan.

Summary

• On May 2, 2024, Jennifer L. Sherman, a director at Franklin Electric Co. Inc., acquired 2,517.22 stock units under the Nonemployee Directors' Deferred Compensation Plan.
• These stock units were credited to her account as part of her 2024 Board of Directors retainer, stock award, lead independent director fee, and committee member fees.
• The price per stock unit was $98.72.
• Following the transaction, Ms. Sherman beneficially owns 43,080.13 shares of Franklin Electric Co. Inc. common stock.
• The distribution of these shares will be deferred until January 1 of the year following Ms. Sherman's departure from the Board, and will be paid in five annual installments.
• At distribution, Ms. Sherman may elect to receive her deferred compensation either in shares of Franklin common stock or in cash.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The transaction reflects a director's continued investment in the company through a standard deferred compensation plan.

Positives

• The acquisition of stock units demonstrates Ms. Sherman's continued investment and alignment with the company's success.
• The deferred compensation plan allows directors to accumulate company stock, potentially incentivizing long-term value creation.

Future Outlook

The distribution of the acquired stock units is deferred until January 1 of the year following Ms. Sherman's departure from the Board, and will be paid in five annual installments. At distribution, Ms. Sherman may elect to receive her deferred compensation either in shares of Franklin common stock or in cash.

Industry Context

Deferred compensation plans are a common practice for compensating board members, aligning their interests with those of shareholders by providing them with equity in the company.

Comparison to Industry Standards

• Many companies, such as Pentair, Xylem, and ITT, in the industrial sector use similar deferred compensation plans for their non-employee directors.
• These plans often allow directors to defer receipt of cash compensation into stock units, aligning their interests with long-term shareholder value.
• The specific terms of these plans, such as the deferral period and payout options, can vary from company to company.

Stakeholder Impact

• The transaction has a minor positive impact on shareholders as it aligns the director's interests with the company's long-term performance.
• There is no significant impact on employees, customers, suppliers, or creditors.

Key Dates