Form 4: Franklin Electric Director Jennifer Sherman Increases Deferred Stock Unit Holdings

Franklin Electric Co. Inc. Director Jennifer L. Sherman was credited with an additional 145.57 stock units on May 22, 2025, representing dividends on her deferred compensation, bringing her total beneficial ownership of derivative securities to 47,578.94 units.

Summary

• Jennifer L. Sherman, a Director of Franklin Electric Co. Inc. (FELE), acquired 145.57 stock units on May 22, 2025.
• These stock units were credited as dividends that would have been paid on previously deferred shares.
• The transaction was conducted under the Nonemployee Directors' Deferred Compensation Plan, which was approved on February 11, 2000, and subsequently amended and restated on May 6, 2020.
• Ms. Sherman has deferred various compensation components, including stock awards, meeting fees, retainers, and lead independent director/chairperson fees, from 2014 through 2025.
• Following this transaction, Ms. Sherman's total beneficial ownership of derivative securities (stock units) stands at 47,578.94 units.
• Each stock unit is valued at $86.35.
• At the time of distribution (upon retirement, leaving the board, or as per plan terms), Ms. Sherman has the option to receive her deferred compensation in either Franklin common stock or cash.

Sentiment

Score: 7

Explanation: The filing indicates a routine, positive event where a director's equity-linked compensation increases, aligning her interests with shareholders. There are no negative implications or risks disclosed within this specific document.

Positives

• The director's continued accumulation of equity-linked compensation aligns her financial interests with those of the company's shareholders.
• The Nonemployee Directors' Deferred Compensation Plan serves as a mechanism for long-term retention and incentivization of non-employee directors, promoting stable governance.

Future Outlook

The stock units acquired by Ms. Sherman are part of her deferred compensation, which will be distributed upon her retirement, departure from the Board of Directors, or election to receive payment according to the plan's terms. At the time of distribution, she retains the option to receive her deferred compensation in either Franklin common stock or cash.

Industry Context

This Form 4 filing details a routine insider transaction related to director compensation, which is a common practice across publicly traded companies. Deferred compensation plans, especially those with equity-linked components like stock units, are widely used to align the long-term interests of non-employee directors with the company's performance and shareholder value creation.

Comparison to Industry Standards

• Deferred compensation plans for non-employee directors, often incorporating equity-linked components such as stock units, are a standard corporate governance practice across various industries.
• The specific value of the stock units ($86.35) and the number of units credited are unique to Franklin Electric and Ms. Sherman's compensation structure. These figures would typically be benchmarked against compensation practices for non-employee directors at peer companies within the industrial sector, particularly those involved in manufacturing pumps, motors, and water systems, to ensure competitive and appropriate remuneration. However, this document does not provide specific peer company data for direct comparison.

Corporate Governance

Stakeholder Impact

• Shareholders: The increase in the director's equity-linked holdings further aligns her interests with the long-term value creation for shareholders.

Next Steps

• Ms. Sherman's deferred compensation, including these stock units, will be distributed upon her retirement, departure from the Board, or election per the plan's terms.
• At the time of distribution, Ms. Sherman will elect to receive her deferred compensation in either Franklin common stock or cash.

Key Dates

Recommendation

Keywords

Franklin Electric, FELE, Form 4, Insider Transaction, Director Compensation, Stock Units, Deferred Compensation, Beneficial Ownership