Form 4: STRATTEC CEO Granted 10,170 Shares and RSUs

STRATTEC Security Corp's President and CEO, Jennifer Lynn Slater, was granted 10,170 shares of restricted stock and 10,170 performance restricted stock units.

Summary

• Jennifer Lynn Slater, President & CEO and Director of STRATTEC SECURITY CORP (STRT), was granted 10,170 shares of common stock on August 22, 2025.
• These restricted shares will vest pro rata over three years, with one-third vesting on August 22, 2026, August 22, 2027, and August 22, 2028, respectively.
• Following this transaction, Ms. Slater beneficially owns 64,902 shares of common stock directly.
• Additionally, Ms. Slater was granted 10,170 performance restricted stock units (RSUs) on August 22, 2025.
• These RSUs represent contingent rights to receive shares of the Issuer's Common Stock based on the Issuer's EBITDA percentage over a three-year performance period ending July 2, 2028.
• The RSUs have an expiration date of September 30, 2028.
• Following this transaction, Ms. Slater beneficially owns 27,048 performance restricted stock units directly.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive as it reflects standard executive compensation practices, aligning management incentives with company performance and shareholder value. There are no negative disclosures, but it's a routine filing rather than a significant positive operational announcement.

Positives

• The grant of restricted stock and performance RSUs aligns the executive's interests with long-term shareholder value through multi-year vesting and performance-based incentives.
• The compensation structure, including performance-based RSUs tied to EBITDA percentage, encourages strong financial performance.

Risks

• The value of the performance restricted stock units is contingent on the Issuer's EBITDA percentage over a three-year period, meaning the actual number of shares received could vary or be zero if performance targets are not met.
• The restricted stock's value is subject to the future market price of STRATTEC's common stock.

Future Outlook

The grants establish a future vesting schedule for restricted stock through August 2028 and a performance period for RSUs ending July 2, 2028, linking executive compensation to the company's performance and stock value over the next three years.

Industry Context

Executive compensation packages, particularly those involving equity grants and performance-based incentives, are standard practice across various industries to align management's interests with shareholder returns. The use of EBITDA percentage as a performance metric is common in manufacturing and automotive supply sectors, where STRATTEC operates, to measure operational profitability.

Comparison to Industry Standards

• The structure of granting restricted stock with a multi-year vesting schedule is a common practice for executive retention and long-term incentive plans, comparable to practices at automotive suppliers like Magna International or Aptiv.
• The inclusion of performance-based restricted stock units tied to a specific financial metric like EBITDA percentage is also a standard component of executive compensation, similar to programs seen at companies such as BorgWarner or Lear Corporation, aiming to incentivize operational efficiency and profitability.

Stakeholder Impact

• Shareholders: The grants align the President & CEO's interests with long-term shareholder value through equity ownership and performance-based incentives.
• Employees: No direct impact on general employees is indicated by this filing, but executive compensation practices can influence overall company culture and morale.
• Management: The President & CEO receives significant equity compensation, incentivizing her to drive company performance.

Next Steps

• The restricted stock will vest in three equal installments on August 22, 2026, August 22, 2027, and August 22, 2028.
• The performance restricted stock units will be evaluated based on the Issuer's EBITDA percentage over the performance period ending July 2, 2028, with shares potentially issued thereafter.

Key Dates

Keywords

STRATTEC SECURITY CORP, STRT, Jennifer Lynn Slater, Restricted Stock, Performance Restricted Stock Units, Executive Compensation, Insider Transaction, EBITDA, Corporate Governance