Form 4: Ralliant SVP Accrues Phantom Shares in Deferred Plan

Ralliant Corp's SVP Chief People Officer, Karen M. Bick, reported the acquisition of 3.8 notional dividend accruals on phantom shares under the company's Executive Deferred Incentive Program.

Summary

• Karen M. Bick, SVP Chief People Officer of Ralliant Corp (RAL), reported a transaction on December 23, 2025.
• The transaction involved the acquisition of 3.8 notional dividend accruals on phantom shares in the Executive Deferred Incentive Program (EDIP) Stock Fund.
• These phantom shares are based on the closing price of Ralliant's common stock on the NYSE, which was $51.6 on the transaction date.
• Following this transaction, the reporting person beneficially owns 3,881.4 derivative securities (phantom shares) in the EDIP Stock Fund.
• The notional shares settle in shares of Ralliant's common stock on a one-to-one basis.
• Voluntary contributions to the EDIP Stock Fund vest immediately at 100%.
• Contributions made by the Issuer vest 100% upon the earlier of the reporting person's death, retirement (after at least five years of service and reaching age 55), or one-tenth per year of participation after five years of participation, in accordance with the EDIP.
• Upon termination of employment, the vested portion of the EDIP Stock Fund is settled in the Issuer's common stock.

Sentiment

Score: 7

Explanation: The filing reports a routine executive compensation event, indicating the ongoing operation of a deferred incentive program designed to align management interests with shareholders. This is generally a positive aspect of corporate governance and executive retention.

Positives

• The Executive Deferred Incentive Program (EDIP) aligns the interests of the SVP Chief People Officer with those of shareholders by linking compensation to the company's stock performance.
• The accrual of phantom shares through notional dividends is a standard mechanism for executive retention and long-term incentive.

Risks

• The value of the deferred compensation is tied to the future performance of Ralliant Corp's common stock, exposing the executive to market fluctuations.
• Vesting conditions for issuer contributions mean the full benefit is not immediately realized and is contingent on continued service or specific life events.

Future Outlook

The Executive Deferred Incentive Program (EDIP) is designed to provide long-term incentives for executives, aligning their financial interests with the sustained growth and performance of Ralliant Corp's common stock.

Management Comments

• The reported securities are notional dividend accruals on phantom shares in the Issuer stock fund (the 'EDIP Stock Fund') under the Issuer's Executive Deferred Incentive Program (the 'EDIP').
• The number of phantom shares accrued as a result of such notional dividend accruals is based on the closing price of the Issuer's common stock as reported on the NYSE on the date such dividend accruals are credited to the EDIP Stock Fund.
• The notional shares settle in shares of the Issuer's common stock on a one-to-one basis.
• The Reporting Person immediately vests in 100% of each voluntary contribution to the EDIP Stock Fund.
• The Reporting Person will vest in all contributions to the EDIP Stock Fund by the Issuer as follows: 100% upon the earlier of the Reporting Person's death, or upon retirement following at least five years of service with the Issuer and reaching the age of 55, or, if earlier, one-tenth per year of participation following five years of participation, in each case in accordance with the EDIP.
• Upon termination of employment, the vested portion of the EDIP Stock Fund is settled in the Issuer's common stock.

Industry Context

Executive deferred incentive programs, often involving phantom stock or stock funds, are a common practice across various industries. They serve as a key component of executive compensation packages, aiming to retain talent and align management's long-term financial interests with shareholder value creation.

Comparison to Industry Standards

• The structure of Ralliant Corp's Executive Deferred Incentive Program (EDIP), including the use of phantom shares and performance-based vesting, is consistent with common executive compensation practices observed in publicly traded companies across various sectors.
• Many companies, such as Microsoft, Apple, and Google, utilize similar long-term incentive plans to retain key executives and motivate them to achieve strategic objectives, often tying payouts to stock performance or specific service periods.
• The one-to-one settlement of notional shares into common stock is a straightforward and transparent approach, comparable to plans at companies like IBM or General Electric, which also use equity-settled deferred compensation.

Corporate Governance

Related Party Transactions

• The Executive Deferred Incentive Program (EDIP) represents a related party transaction between Ralliant Corp and its SVP Chief People Officer, Karen M. Bick, as it involves compensation and equity-linked benefits provided by the company to an executive.

Stakeholder Impact

• Shareholders: The EDIP aligns executive interests with shareholder value creation, potentially leading to better long-term company performance.
• Employees (Executives): The program provides a significant long-term incentive and deferred compensation benefit, aiding in executive retention and motivation.

Next Steps

• Continued participation of the SVP Chief People Officer in the Executive Deferred Incentive Program (EDIP).
• Future accruals of notional dividends and vesting of phantom shares will occur according to the EDIP terms.

Key Dates

Recommendation

This Form 4 reports a routine executive compensation event involving the accrual of phantom shares under a deferred incentive program. Such transactions are standard practice for aligning executive interests with long-term shareholder value and do not typically indicate a change in the company's fundamental performance or outlook, thus warranting a 'hold' recommendation. It provides transparency into executive incentives but does not present new information that would alter an investment thesis.

Keywords

Ralliant Corp, RAL, SEC Form 4, Insider Transaction, Executive Compensation, Phantom Shares, Deferred Incentive Program, Karen M. Bick, Stock Fund, Corporate Governance