Form 4: Plexus CEO Awarded Performance-Based Equity

Plexus Corp. CEO Todd P. Kelsey received grants of 16,320 Restricted Stock Units and 22,950 Performance Stock Units, vesting through 2029.

Summary

• Todd P. Kelsey, President & CEO and Director of Plexus Corp., was granted equity awards on February 9, 2026.
• Received 16,320 Restricted Stock Units (RSUs), which represent a contingent right to receive one share of Plexus Corp. common stock and vest on February 9, 2029.
• Received 22,950 Performance Stock Units (PSUs) at target, representing a contingent right to receive one share of common stock if certain conditions are satisfied over a three-year performance period.
• Vesting for 6,630 PSUs is dependent on Plexus Corp.'s relative total shareholder return (TSR) compared to companies in the S&P 400 Index.
• Vesting for the remaining 16,320 PSUs is based on goals related to economic return (ER) during the three-year performance period.
• Kelsey may earn up to 150% of the targeted amount for TSR-based PSUs and up to 200% for ER-based PSUs.
• Following these transactions, Kelsey directly beneficially owns 78,598 shares of Plexus Corp. common stock.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive development, reflecting standard executive compensation practices designed to align management incentives with long-term shareholder value through performance-based equity awards.

Positives

• The equity awards, including performance-based units, align management incentives with long-term shareholder value creation.
• The potential for the CEO to earn significantly more than the target PSU amount (up to 150% for TSR, 200% for ER) incentivizes strong performance.
• The grants are part of the Plexus Corp. 2024 Omnibus Incentive Plan, indicating a structured and approved approach to executive compensation.

Negatives

• The awards are contingent and do not represent immediate cash compensation or direct stock ownership, with vesting periods extending several years into the future.
• The actual value realized from the PSUs is uncertain and dependent on meeting specific performance targets.

Risks

• The value of the Restricted Stock Units and Performance Stock Units is contingent on future stock price performance and the achievement of specific performance metrics (TSR, ER), meaning the actual value realized could be lower than the target.
• Failure to meet the defined performance targets for PSUs could result in a lower number of shares vesting, or potentially zero.

Future Outlook

The filing indicates a long-term incentive structure for the CEO, aligning future compensation with the company's stock performance and specific financial goals over a three-year performance period for PSUs and a three-year vesting period for RSUs.

Industry Context

StockSavvy.ai notes that equity-based compensation, particularly through RSUs and PSUs with performance hurdles like TSR and ER, is a standard practice in the electronics manufacturing services (EMS) industry and broader corporate landscape. This structure aims to incentivize long-term executive performance and align management interests with shareholder value creation, a common trend among publicly traded companies to attract and retain top talent.

Comparison to Industry Standards

• The use of a combination of RSUs and PSUs is a common executive compensation strategy, similar to practices at industry peers like Jabil Inc. (JBL) or Flex Ltd. (FLEX), which also utilize performance-based equity to incentivize leadership.
• Total Shareholder Return (TSR) as a performance metric is a widely adopted benchmark, often compared against relevant indices such as the S&P 400, to ensure executive pay reflects market-relative performance.
• Economic Return (ER) goals are also used by leading companies to ensure capital efficiency and profitability, aligning with best practices in financial management.

Corporate Governance

Related Party Transactions

• The grants of Restricted Stock Units and Performance Stock Units to Todd P. Kelsey, President & CEO and Director, constitute a related party transaction as part of his executive compensation under the Plexus Corp. 2024 Omnibus Incentive Plan.

Stakeholder Impact

• Shareholders: Potential for increased long-term value if performance targets are met, as CEO compensation is tied to stock performance and economic returns.
• Employees: No direct impact mentioned, but a well-incentivized leadership team can positively influence overall company performance and stability.

Next Steps

• The 16,320 Restricted Stock Units will vest on February 9, 2029.
• The 22,950 Performance Stock Units will vest based on the achievement of specific performance conditions related to relative Total Shareholder Return and Economic Return goals over a three-year performance period.

Key Dates

Recommendation

This Form 4 reports routine executive equity compensation grants, which are a standard part of a CEO's pay package. While the performance-based nature of the PSUs is a positive for aligning incentives, this filing alone does not provide new fundamental information to warrant a change in investment thesis. Investors should continue to hold based on broader company fundamentals and market conditions.

Keywords

Plexus Corp, PLXS, SEC Form 4, Equity Compensation, Restricted Stock Units, Performance Stock Units, Executive Compensation, Todd P. Kelsey, Corporate Governance, Incentive Plan, TSR, Economic Return