Form 4: Hackett Group COO Dungan Vests 137,705 Shares

Hackett Group's Vice Chairman and COO, David N. Dungan, acquired 137,705 shares of common stock through the vesting of performance restricted stock units and subsequently disposed of 61,609 shares for tax obligations.

Summary

• David N. Dungan, Vice Chairman and COO, and a Director of The Hackett Group, Inc. (HCKT), reported transactions on September 16, 2025.
• Dungan acquired 137,705 shares of common stock upon the vesting of performance restricted stock units (PRSUs) at a price of $0.
• These PRSUs were granted on September 16, 2024, and vested upon the achievement of the first of three pre-established stock price hurdles within a performance period from September 16, 2024, to December 31, 2028, along with the satisfaction of a time-based vesting condition.
• Following the acquisition, Dungan disposed of 61,609 shares of common stock at a price of $0 to satisfy tax withholding obligations related to the vesting.
• After these transactions, Dungan directly beneficially owns 807,658 shares of common stock, which includes 69,255 unvested Restricted Stock Units (RSUs).
• Additionally, Dungan indirectly beneficially owns 92,652 shares of common stock through the DND Family Trust.
• Dungan holds 275,410 remaining performance restricted stock units (PRSUs) that are contingent on future stock price hurdles and continued service.

Sentiment

Score: 7

Explanation: The vesting of performance-based equity is generally positive as it indicates the achievement of performance targets, aligning executive interests with shareholder value. The subsequent sale for tax purposes is a neutral, common event and does not detract from the underlying positive performance indicator.

Positives

• The vesting of 137,705 performance restricted stock units indicates the achievement of a pre-established stock price hurdle, signaling positive company performance.
• The transaction aligns executive compensation with shareholder value creation through performance-based equity.

Negatives

• A portion of the vested shares (61,609) was disposed of to cover tax withholding obligations, reducing the direct beneficial ownership.

Risks

• The vesting of the remaining 275,410 performance restricted stock units is contingent upon the achievement of additional pre-established stock price hurdles during the performance period.
• Continued service through the second and third anniversaries of the grant date is required for the PRSUs subject to the second and third stock price hurdles to vest, posing a risk if service is not maintained.

Future Outlook

Future vesting of the remaining 275,410 performance restricted stock units is contingent upon the achievement of additional pre-established stock price hurdles during the performance period ending December 31, 2028, and requires continued service through the second and third anniversaries of the grant date for subsequent hurdles.

Management Comments

• David N. Dungan, Vice Chairman and COO, acquired 137,705 shares of common stock through the vesting of performance stock units, indicating the achievement of a pre-established stock price hurdle and time-based vesting condition.

Industry Context

This transaction represents a standard executive compensation event, where performance-based equity awards vest upon the achievement of specific company performance targets and continued service. Such compensation structures are common across publicly traded companies to align executive incentives with long-term shareholder value creation.

Comparison to Industry Standards

• The use of performance restricted stock units (PRSUs) as a component of executive compensation is a common practice across various industries, including professional services and technology, aligning executive incentives with company performance metrics such as stock price hurdles.
• The subsequent sale of shares to cover tax withholding obligations upon vesting is a standard and expected procedure for equity compensation, consistent with practices observed at comparable companies.

Stakeholder Impact

• Shareholders: The vesting of performance-based equity indicates that management is meeting pre-established performance targets, which can be viewed positively as it aligns executive incentives with shareholder returns.
• Employees: The compensation structure reflects a commitment to performance-based rewards, which can influence overall employee motivation and retention strategies.

Next Steps

• Achievement of the second and third pre-established stock price hurdles for the remaining 275,410 performance restricted stock units.
• Continued service by David N. Dungan through the second and third anniversaries of the grant date (September 16, 2024) for the vesting of subsequent PRSU tranches.

Key Dates

Recommendation

This Form 4 details a routine executive compensation event, specifically the vesting of performance stock units and the subsequent sale of shares for tax withholding. While the vesting indicates the achievement of pre-established stock price hurdles, which is a positive sign of company performance, it is an expected transaction often pre-planned under a Rule 10b5-1 plan. The filing does not introduce new fundamental information or unexpected events that would warrant a change in investment recommendation. Therefore, a 'hold' recommendation is appropriate as it reflects the status quo without new catalysts for significant price movement.

Keywords

Hackett Group, HCKT, SEC Form 4, Insider Transaction, Stock Vesting, Performance Stock Units, Executive Compensation, Share Ownership, David Dungan, Corporate Governance