Form 4: Nordstrom Executive James F. Nordstrom Jr. Reports Changes in Beneficial Ownership

James F. Nordstrom Jr., Chief Merchandising Officer of Nordstrom Inc., reports acquisition and disposal of common stock and performance share units.

Summary

• On March 7, 2024, James F. Nordstrom Jr. acquired 66,996 shares of common stock.
• Also on March 7, 2024, Nordstrom acquired 73,063 Performance Share Units (PSUs).
• On March 10, 2024, Nordstrom disposed of 2,344 shares of common stock to cover tax obligations related to vesting RSUs at a price of $17.06 per share.
• Following these transactions, Nordstrom directly owns 556,098 shares of common stock.
• Nordstrom also indirectly owns shares through a 401(k) plan (7,058 shares), his wife (429 shares directly and 2,148 shares in her 401(k) plan), the James F. Nordstrom, Jr. 2021 Annuity Trust (250,000 shares), and as trustee for three minor children (24,592, 24,592 and 24,593 shares respectively).
• The PSUs vest over a 3-year period from FY 2024 through FY 2026, contingent on achieving certain metrics related to sales and EBIT margin.
• One third of the total target number of PSUs will be allocated to three separate 1-year performance cycles.
• The minimum percentage of PSUs that can be earned at the end of each year is 0% and the maximum is 175% based on achievement against Company sales and earnings before interest and tax (EBIT) margin results at the end of each year.
• The total percentage of PSUs that can be earned at the end of the 3-year period ranges from 0%-175%.

Sentiment

Score: 6

Explanation: Neutral sentiment as it's a routine disclosure of stock transactions. The acquisition of shares and PSUs is mildly positive, while the disposal for tax obligations is neutral.

Positives

• Acquisition of 66,996 shares of common stock by a key executive signals confidence in the company.
• Award of 73,063 Performance Share Units incentivizes the executive to achieve sales and EBIT margin targets.

Negatives

• Disposal of 2,344 shares to cover tax obligations, although routine, slightly reduces the executive's direct holdings.

Risks

• The vesting of Performance Share Units is contingent on achieving specific sales and EBIT margin targets, which may not be met.
• Fluctuations in the stock price could impact the value of the acquired shares and PSUs.

Future Outlook

The vesting of RSUs and PSUs is contingent on future performance and continued employment, aligning executive compensation with company success.

Industry Context

Form 4 filings are standard practice and provide transparency into the trading activities of company insiders, which can be a signal of management's confidence in the company's prospects.

Comparison to Industry Standards

• Executive compensation packages including stock options, RSUs, and PSUs are common in the retail industry to align management incentives with shareholder value.
• Companies like Macy's (M), Kohl's (KSS), and Target (TGT) also utilize similar equity-based compensation plans for their executives.
• The vesting schedules and performance metrics tied to these awards vary by company but generally focus on revenue growth, profitability, and shareholder return.

Stakeholder Impact

• Shareholders gain insight into executive compensation and ownership.
• Employees may be indirectly affected by the performance metrics tied to PSU vesting.
• The transactions have no direct impact on customers, suppliers, or creditors.

Key Dates