Form 4: LivaNova PLC: Chief Innovation Officer Receives Stock Grants

Ahmet Tezel, Chief Innovation Officer of LivaNova PLC, was granted restricted stock units, performance stock units, and stock appreciation rights on March 30, 2025, under the company's 2022 Incentive Award Plan.

Summary

• On March 30, 2025, Ahmet Tezel, the Chief Innovation Officer of LivaNova PLC, received grants of restricted stock units (RSUs), performance stock units (PSUs), and stock appreciation rights (SARs).
• The RSUs represent a contingent right to receive one ordinary share of the company and vest in equal annual installments over three years, starting March 30, 2026, with 10,222 units granted.
• Three separate PSU grants were awarded, each tied to different performance metrics: free cash flow (FCF), return on invested capital (ROIC), and total shareholder return (TSR), with 5,111 units granted for FCF and ROIC, and 10,222 units granted for TSR.
• The PSUs will vest or lapse on March 30, 2028, based on the company's performance against targets set by the Plan Administrator for the period 2025-2027.
• The SARs, numbering 22,378, have a strike price of $39.13 and vest in equal annual installments over four years, beginning March 30, 2026, expiring on March 30, 2035.
• All grants are subject to the terms of the company's 2022 Incentive Award Plan and the respective award agreements, including forfeiture provisions prior to vesting.

Sentiment

Score: 7

Explanation: The document is neutral to slightly positive. It details standard executive compensation practices, which are generally viewed favorably as they align management interests with shareholder value. The performance-based vesting adds a positive element, incentivizing achievement of key financial metrics.

Positives

• The grants of RSUs, PSUs, and SARs align the Chief Innovation Officer's interests with those of the shareholders.
• The performance-based vesting of PSUs incentivizes achievement of key financial metrics such as free cash flow, return on invested capital, and total shareholder return.
• The long-term vesting schedules of the RSUs and SARs encourage continued service and commitment to the company.

Risks

• The PSUs may not vest if the company fails to meet the performance targets for free cash flow, return on invested capital, and total shareholder return.
• The RSUs and SARs are subject to forfeiture prior to vesting if the reporting person's employment is terminated.
• The value of the stock appreciation rights is dependent on the future stock price of LivaNova PLC, which is subject to market fluctuations.

Future Outlook

The vesting of the PSUs is contingent upon the company's performance in achieving targets for free cash flow, return on invested capital, and total shareholder return over the performance period from 2025 to 2027.

Industry Context

Stock grants are a common practice in the medical device industry to incentivize key executives and align their interests with those of shareholders. The use of performance-based vesting criteria is also a common practice to drive specific financial and operational goals.

Comparison to Industry Standards

• Stock grants to executives are a standard practice across publicly traded companies, including those in the medical device industry like Medtronic, Boston Scientific, and Abbott.
• The vesting schedules and performance metrics used by LivaNova are generally consistent with industry norms, with a mix of time-based and performance-based vesting.
• The specific targets for free cash flow, return on invested capital, and total shareholder return would need to be compared to those of peer companies to assess their relative difficulty.

Stakeholder Impact

• Shareholders may view the stock grants positively as they align management's interests with the company's performance.
• Employees may be motivated by the potential for future stock grants based on company performance.
• The grants have no immediate impact on customers, suppliers, or creditors.

Key Dates

Keywords

LivaNova PLC, Ahmet Tezel, Chief Innovation Officer, restricted stock units, performance stock units, stock appreciation rights, incentive award plan, free cash flow, return on invested capital, total shareholder return, stock grants, vesting