Form 4: Sempra Director James C. Yardley Reports Acquisition of Restricted Phantom Shares

Director James C. Yardley reports acquisition of 1,641.07 restricted phantom shares of Sempra Common Stock on May 9, 2024.

Summary

• On May 9, 2024, James C. Yardley, a director of Sempra, acquired 1,641.07 restricted phantom shares of Sempra Common Stock.
• These shares are subject to forfeiture if Yardley's service as a director terminates before the 2025 Annual Meeting of Sempra Shareholders, unless due to death, disability, or removal without cause.
• Vested shares, along with reinvested dividend equivalents, will be paid to Yardley in cash following separation of service.
• Following the transaction, Yardley directly owns 1,641.07 restricted phantom shares.

Sentiment

Score: 7

Explanation: The document is a routine regulatory filing indicating standard compensation practices. The acquisition of restricted phantom shares is generally viewed positively as it aligns director interests with shareholder value. There are no overtly negative aspects presented.

Positives

• The acquisition of restricted phantom shares aligns the director's interests with those of the shareholders, incentivizing continued service and performance.

Risks

• The forfeiture clause could be seen as a risk if Yardley's service is terminated before the 2025 Annual Meeting for reasons other than death, disability, or removal without cause.

Future Outlook

The director's compensation structure includes restricted phantom shares, suggesting a continued focus on aligning management incentives with shareholder value.

Industry Context

The use of restricted stock and phantom stock is a common practice in executive compensation to align the interests of management with those of shareholders. This encourages long-term value creation.

Comparison to Industry Standards

• Many companies in the energy sector, such as NextEra Energy and Duke Energy, utilize similar equity-based compensation plans for their directors and executives.
• These plans often include restricted stock units (RSUs) or phantom stock, which vest over time and are subject to performance-based conditions.
• The specific terms of these plans, such as the vesting schedule and forfeiture provisions, can vary depending on the company's compensation philosophy and industry practices.

Stakeholder Impact

• The acquisition of restricted phantom shares aligns the director's interests with those of the shareholders, potentially leading to better long-term performance.
• Employees may view this as a positive sign, indicating that management is incentivized to create value for the company.

Key Dates