Form 4: RXO CFO James Harris Reports Significant Equity Activity

RXO's Chief Financial Officer, James E. Harris, reported the vesting of restricted stock units and a new performance-based equity award.

Summary

• James E. Harris, Chief Financial Officer of RXO, Inc. (RXO), reported transactions related to his beneficial ownership.
• On February 23, 2026, 21,834 Restricted Stock Units (RSUs) vested and settled, resulting in the acquisition of 21,834 shares of Common Stock.
• Concurrently, 9,808 shares of Common Stock were disposed of at a price of $14.66 per share to cover tax liabilities associated with the RSU vesting, not through a sale by the reporting person.
• Following these transactions, Harris's direct beneficial ownership of Common Stock was 115,417 shares.
• On February 24, 2026, Harris was awarded an additional 53,908 Restricted Stock Units (RSUs).
• The RSUs generally vest in three equal annual installments on the first, second, and third anniversaries of the grant date, subject to continued employment.
• Harris was also awarded 53,908 Performance Based Restricted Stock Units at a target level, which will vest based on the achievement of total shareholder return relative to companies in the S&P Transportation Select Industry Index.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a routine disclosure of executive compensation, reflecting standard equity incentive practices and continued alignment of the CFO with shareholder interests. The new performance-based award is a positive for long-term alignment.

Positives

• The vesting of 21,834 Restricted Stock Units (RSUs) indicates a realization of previously granted equity compensation for the CFO.
• A new award of 53,908 Restricted Stock Units (RSUs) and an additional 53,908 Performance Based Restricted Stock Units aligns the CFO's long-term incentives with the company's future performance and shareholder value creation.

Negatives

• No significant negatives identified; the disposition of shares for tax withholding is a standard procedure upon RSU vesting and not a discretionary sale by the executive.

Risks

• The 53,908 Performance Based Restricted Stock Units are subject to vesting conditions tied to the achievement of total shareholder return relative to companies in the S&P Transportation Select Industry Index, meaning the actual number of shares earned could be lower or zero if performance targets are not met.

Future Outlook

The newly awarded Restricted Stock Units (RSUs) are scheduled to vest in three equal annual installments on the first, second, and third anniversaries of the grant date, contingent on the Reporting Person's continued employment. The Performance Based Restricted Stock Units will be eligible to vest depending on the achievement of total shareholder return relative to the S&P Transportation Select Industry Index, with the number of shares earned to be determined at a future date.

Management Comments

• The transactions reported reflect the vesting and settlement of previously granted equity awards and the grant of new equity incentives, aligning the Chief Financial Officer's interests with long-term shareholder value.

Industry Context

StockSavvy.ai notes that the inclusion of performance-based Restricted Stock Units tied to the S&P Transportation Select Industry Index is a common practice in executive compensation. This structure aims to align the Chief Financial Officer's incentives with the company's performance relative to its industry peers, encouraging competitive growth and shareholder returns within the transportation sector.

Comparison to Industry Standards

• The use of Restricted Stock Units (RSUs) with time-based vesting is a standard component of executive compensation packages across various industries, including transportation, to promote retention and long-term alignment.
• Performance-based RSUs, particularly those tied to relative Total Shareholder Return (TSR) against a relevant industry index like the S&P Transportation Select Industry Index, are a best practice in corporate governance. This ensures executives are rewarded for outperforming their peer group, a structure seen in leading companies such as FedEx (FDX) and UPS (UPS) in the logistics and transportation space, which often link executive pay to similar performance metrics.

Stakeholder Impact

• Shareholders: The equity awards align the Chief Financial Officer's interests with shareholder value creation, particularly through performance-based incentives.
• Employees: The filing details compensation for a key executive, which can set a precedent or reflect the company's overall compensation philosophy.

Next Steps

• Future vesting of the newly awarded Restricted Stock Units (RSUs) on their respective anniversaries.
• Determination of the number of shares earned from the Performance Based Restricted Stock Units based on future total shareholder return relative to the S&P Transportation Select Industry Index.

Key Dates

Keywords

RXO, Restricted Stock Units, RSU vesting, executive compensation, insider transaction, Form 4, equity award, CFO, performance-based compensation, S&P Transportation Select Industry Index