Form 4: Franklin Electric Director Thomas VerHage Acquires Stock Units Through Deferred Compensation Plan

Director Thomas VerHage acquired stock units in Franklin Electric Co., Inc. through the company's deferred compensation plan.

Summary

• Thomas R. VerHage, a director at Franklin Electric Co., Inc., acquired stock units on May 2, 2024, through the company's Nonemployee Directors' Deferred Compensation Plan.
• Mr. VerHage elected to receive his 2024 Board of Directors retainer, stock award, and committee member fees in Franklin Electric Co., Inc. common stock.
• The issuance of these shares is deferred until January 3, 2028, and will be paid in four annual installments.
• On May 2, 2024, Mr. VerHage was credited with 861.02 stock units for the annual retainer, 1,367.50 stock units for the annual stock award, and 187.40 stock units for committee member fees.
• The price per stock unit was $98.72.
• Following the transaction, Mr. VerHage beneficially owns 60,317.6 shares of Franklin Electric Co., Inc. common stock.
• At distribution, Mr. VerHage may elect to receive his deferred compensation either in shares of Franklin common stock or in cash.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. It reflects a routine transaction related to director compensation, indicating alignment of interests. There are no negative implications.

Positives

• Director's participation in the deferred compensation plan demonstrates confidence in the company's future performance.

Future Outlook

The distribution of the deferred compensation will occur in four annual installments starting on January 3, 2028. Mr. VerHage can elect to receive the compensation in shares or cash.

Industry Context

This filing is a routine disclosure of insider transactions, specifically related to director compensation. It reflects standard practices for aligning director interests with shareholder value through equity-based compensation.

Comparison to Industry Standards

• Deferred compensation plans for directors are common among publicly traded companies, including comparables such as A. O. Smith (AOS) and Pentair (PNR).
• These plans typically allow directors to defer receipt of cash or stock awards until a later date, often retirement.
• The specific terms of Franklin Electric's plan, such as the deferral period and distribution options, are consistent with industry norms.

Stakeholder Impact

• The transaction has a minor positive impact on shareholders as it aligns director interests with the long-term performance of the company.

Key Dates