Form 4: Lincoln Educational Services CEO Scott M. Shaw Receives Stock Grants Under Incentive Plan

Scott M. Shaw, CEO of Lincoln Educational Services, was granted restricted common stock under the company's 2020 Long-Term Incentive Plan, subject to both time-based and performance-based vesting conditions.

Summary

• Scott M. Shaw, CEO of Lincoln Educational Services, received grants of restricted common stock on February 19, 2025, under the company's 2020 Long-Term Incentive Plan.
• The first grant consists of 83,426 shares, with 50% subject to time-based vesting and 50% subject to performance-based vesting.
• The time-based shares will vest in equal annual tranches over three years, starting March 1, 2026.
• The performance-based shares will vest in annual tranches over three years, contingent on the company's achievement of specific metrics, with the potential for up to 200% of the performance-based shares to be issued if targets are exceeded.
• The second grant consists of 38,932 shares, entirely subject to performance-based vesting based on the company's achievement of metrics set for 2027.
• These shares will vest, if at all, on March 1, 2028, with the number of shares vesting determined by the percentage of the target achieved; the reported number represents the maximum possible shares that could vest.
• Following these transactions, Shaw beneficially owns 1,176,005 shares of Lincoln Educational Services common stock.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating a positive alignment of management interests with company performance. The use of performance-based vesting suggests confidence in future growth.

Positives

• The grants of restricted stock align the CEO's interests with the long-term performance of the company.
• The performance-based vesting encourages the achievement of company goals and metrics.
• The potential for exceeding performance targets could lead to a larger share grant for the CEO, incentivizing strong performance.

Risks

• The performance-based shares may not vest if the company fails to meet the set metrics.
• The value of the restricted stock is subject to the market fluctuations of Lincoln Educational Services' stock price.

Future Outlook

The vesting of the restricted stock is contingent on future performance and continued employment, aligning the CEO's incentives with the company's long-term success.

Industry Context

Granting stock options and restricted stock is a common practice in corporate compensation to incentivize executives and align their interests with shareholders. The specific terms of the vesting schedule and performance metrics are tailored to the company's strategic goals.

Comparison to Industry Standards

• Stock grants are a typical component of executive compensation packages across various industries, including the education sector.
• Companies like Adtalem Global Education and Strategic Education, Inc. also utilize stock-based compensation to incentivize their executives.
• The vesting schedules and performance metrics often vary based on company-specific goals and industry benchmarks.

Stakeholder Impact

• Shareholders: The stock grants aim to align management's interests with shareholder value.
• Employees: The incentive plan may motivate employees through the achievement of company-wide goals.
• Management: The CEO is incentivized to drive company performance to maximize the value of the stock grants.

Next Steps

• Monitor the company's performance against the set metrics to determine the vesting of the performance-based shares.
• Track the vesting of the time-based shares over the next three years.

Key Dates

Keywords

Lincoln Educational Services, Scott M. Shaw, restricted stock, incentive plan, vesting, performance-based, time-based, CEO, LINC, stock grant