Form 4: Kontoor Brands Director Defers Fees into Phantom Stock

Kontoor Brands Director Robert K. Shearer acquired 628.9506 phantom stock units by deferring director fees, increasing his beneficial ownership to 38,483.5484 units.

Summary

• Director Robert K. Shearer acquired 628.9506 phantom stock units (PSUs) of Kontoor Brands, Inc. (KTB).
• The acquisition occurred on September 26, 2025, as a deferral of director fees.
• Each PSU was acquired by deferring $79.4975 of director fees.
• These PSUs are accrued under the Kontoor Brands Deferred Savings Plan for Non-Employee Directors.
• The PSUs will be settled 100% in cash upon Mr. Shearer's retirement.
• Following this transaction, Mr. Shearer beneficially owns a total of 38,483.5484 PSUs.
• The transaction was made pursuant to a Rule 10b5-1(c) plan, indicating a pre-arranged trading plan.

Sentiment

Score: 7

Explanation: The filing indicates a routine, pre-planned deferral of director compensation into phantom stock units, which aligns the director's long-term interests with the company's performance. This is a standard corporate governance practice and does not suggest any immediate positive or negative operational news.

Positives

• Director Robert K. Shearer continues to defer director fees into phantom stock units, aligning his long-term financial interests with the company's performance.
• The transaction was executed under a Rule 10b5-1(c) plan, indicating a pre-arranged and systematic approach to compensation deferral, which can enhance transparency and reduce concerns about opportunistic insider trading.

Future Outlook

The phantom stock units will be settled 100% in cash upon the reporting person's retirement. The number of PSUs beneficially owned may vary over time due to deemed reinvestment of dividends.

Management Comments

• Director Robert K. Shearer elected to defer director fees into phantom stock units under the company's Deferred Savings Plan for Non-Employee Directors.

Industry Context

Deferred compensation plans for non-employee directors are a common practice in publicly traded companies across various sectors, including the apparel industry. These plans aim to align director interests with long-term shareholder value and provide tax-efficient compensation, reflecting standard corporate governance practices.

Comparison to Industry Standards

• Deferred compensation plans for non-employee directors, utilizing phantom stock units, are a standard practice across many industries, including apparel and retail, to attract and retain qualified board members.
• The mechanism of deferring fees into phantom stock units, settled in cash upon retirement, is comparable to plans offered by other major apparel companies such as Levi Strauss & Co. (LEVI) or VF Corporation (VFC) for their non-employee directors, promoting long-term alignment without direct equity ownership.

Corporate Governance

Stakeholder Impact

• Shareholders: The deferral of director fees into phantom stock units aligns the director's long-term interests with shareholder value, as the value of the phantom units is tied to the company's stock performance.

Next Steps

• The phantom stock units will be settled in cash upon the reporting person's retirement.

Key Dates

Recommendation

This Form 4 filing details a routine, pre-planned deferral of director compensation into phantom stock units, which is a standard practice for aligning director interests with long-term company performance. It does not provide any new material information regarding the company's operational performance, financial health, or strategic direction that would warrant a change in investment recommendation. Therefore, a 'hold' recommendation is appropriate as this filing alone does not present a catalyst for significant price movement.

Keywords

Kontoor Brands, KTB, insider transaction, Form 4, phantom stock, director compensation, deferred compensation, Robert K. Shearer, Rule 10b5-1