Form 4: Nordstrom CEO Erik Nordstrom Reports Acquisition of Restricted Stock Units and Performance Share Units

Erik Nordstrom, CEO of Nordstrom Inc., reports the acquisition of restricted stock units and performance share units, along with adjustments to his beneficial ownership of common stock.

Summary

• On March 7, 2024, Erik B. Nordstrom, the CEO of Nordstrom Inc., reported the acquisition of 103,760 shares of common stock through Restricted Stock Units (RSUs) at a price of $0.
• These RSUs vest in three equal annual installments starting March 10, 2025.
• The number of RSUs awarded is determined by long-term incentive award levels, an RSU long-term incentive (LTI) percentage, and the fair value of an RSU.
• Nordstrom also acquired 113,156 Performance Share Units (PSUs) on the same date, also at a price of $0.
• Each PSU represents a contingent right to receive one share of Nordstrom's common stock.
• These PSUs may be earned over a 3-year period from FY 2024 through FY 2026, based on the achievement of certain metrics related to sales and EBIT margin.
• The percentage of PSUs that can be earned ranges from 0% to 175% based on company performance.
• Following these transactions, Nordstrom directly owns 2,705,037 shares of common stock.
• He also indirectly owns 42,646 shares through his wife and 29,805 shares through a 401(k) plan as of February 29, 2024.
• He also directly owns 113,156 Performance Share Units.

Sentiment

Score: 6

Explanation: The sentiment is neutral as it's a standard disclosure of executive compensation. The acquisition of RSUs and PSUs is generally positive as it aligns management interests with shareholders, but it doesn't necessarily indicate a significant change in the company's outlook.

Positives

• The acquisition of RSUs and PSUs aligns the CEO's interests with the long-term performance of the company.
• The vesting schedule of the RSUs encourages continued service and commitment from the CEO.
• The performance-based nature of the PSUs incentivizes the achievement of sales and EBIT margin targets.

Risks

• The actual number of PSUs earned depends on the company's performance against sales and EBIT margin targets, which are subject to market conditions and other factors.
• The value of the RSUs and PSUs is tied to the company's stock price, which can fluctuate.

Future Outlook

The document outlines the potential for earning PSUs over a 3-year period based on company performance, indicating a focus on achieving sales and EBIT margin targets.

Industry Context

This filing is a routine disclosure of executive compensation and stock ownership, common in the retail industry to align management incentives with shareholder value.

Comparison to Industry Standards

• Executive compensation packages including RSUs and PSUs are standard practice among publicly traded companies, including Nordstrom's competitors like Macy's, Kohl's, and Target.
• The specific metrics used for PSU vesting (sales and EBIT margin) are common indicators of financial performance in the retail sector.
• The vesting schedules and performance targets are likely benchmarked against industry peers to attract and retain executive talent.

Stakeholder Impact

• Shareholders may view the alignment of executive compensation with company performance as a positive factor.
• Employees may see the potential for PSU payouts as an incentive to improve company sales and EBIT margin.
• The disclosure provides transparency regarding executive compensation practices.

Key Dates