Form 4: RXO Inc. Executive Jeffrey D. Firestone Reports Acquisition of Restricted Stock Units

Jeffrey D. Firestone, Chief Legal Officer of RXO, Inc., reports the acquisition of performance-based and time-based restricted stock units.

Summary

• On February 28, 2025, Jeffrey D. Firestone, Chief Legal Officer of RXO, Inc., reported the acquisition of 16,717 performance-based restricted stock units (PSUs) and 26,869 restricted stock units (RSUs).
• The PSUs were granted in March 2024 and are based on performance over three separate one-year periods (2024, 2025, and 2026), with vesting contingent on continued employment and achievement of pre-determined performance goals related to Total Shareholder Return compared to the S&P Transportation Select Industry Index.
• The 16,717 PSUs reflect the amount earned over the first one-year performance period (January 1, 2024 December 31, 2024).
• The RSUs vest in three equal annual installments, subject to continued employment.
• Firestone also holds 26,869 PSUs at target level, which will be eligible to vest depending on the achievement of total shareholder return relative to companies in the S&P Transportation Select Industry Index and will be reported when the number of shares earned is determined.
• Following the reported transactions, Firestone directly owns 172,767 derivative securities.

Sentiment

Score: 6

Explanation: The document is a neutral disclosure of executive compensation. The sentiment is moderately positive due to the alignment of management incentives with shareholder value through performance-based equity.

Positives

• The vesting of PSUs is tied to the company's performance relative to its industry peers, incentivizing management to improve shareholder value.
• The vesting schedule of the RSUs provides a retention incentive for the executive.

Risks

• The value of the PSUs is dependent on RXO's performance relative to the S&P Transportation Select Industry Index, which is subject to market fluctuations and industry-specific risks.
• The vesting of both PSUs and RSUs is contingent on continued employment, creating a potential risk if the executive leaves the company.

Future Outlook

The number of shares earned from the 26,869 PSUs at target level will be reported when the achievement of total shareholder return relative to companies in the S&P Transportation Select Industry Index is determined.

Industry Context

This filing is a routine disclosure of executive compensation in the form of equity awards, which is a common practice in publicly traded companies to align management's interests with those of shareholders. The use of performance-based units tied to relative TSR is a standard method for incentivizing outperformance within the transportation sector.

Comparison to Industry Standards

• Equity compensation is a standard practice among publicly traded companies, particularly for executive roles.
• Using TSR relative to an industry index (like the S&P Transportation Select Industry Index) is a common performance metric for PSUs in the transportation and logistics sector.
• Companies like C.H. Robinson, J.B. Hunt, and Knight-Swift Transportation also utilize equity-based compensation, often with similar performance metrics tied to financial performance and shareholder return.

Stakeholder Impact

• Shareholders: The equity awards align management's interests with shareholder value.
• Employees: The equity awards can serve as a retention tool for key personnel.

Key Dates