Form 4: TDS Executive Hanley Receives Stock and Performance Share Units

Joseph R. Hanley, SVP of Strategy & Corporate Development at Telephone & Data Systems Inc, reports acquisition of restricted stock units and performance share units.

Summary

• On May 21, 2025, Joseph R. Hanley, SVP of Strategy & Corporate Development at Telephone & Data Systems Inc (TDS), was granted restricted stock units and performance share units.
• He received 9,795 restricted stock units under the 2022 Long Term Incentive Plan, vesting in equal installments over three years.
• Hanley also received 2,329 financial-based performance share units tied to three key metrics.
• One metric, representing 32% of the total award, is based on UScellular performance and has a 75% floor, potentially increasing to 100% if the UScellular transaction with T-Mobile closes in 2025.
• The reported performance share units reflect the 75% floor, representing 24% of the target award.
• Additional filings will reflect any increase in the floor if the UScellular transaction with T-Mobile closes in 2025.
• Performance share units accumulate dividend equivalents, which are forfeitable if performance metrics are not achieved.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating alignment of management interests with company performance. The potential upside related to the UScellular transaction adds a slightly positive element.

Positives

• The grant of restricted stock units and performance share units aligns executive compensation with company performance and shareholder value.
• The vesting schedule of the restricted stock units encourages long-term commitment from the executive.
• The performance-based component incentivizes the achievement of key financial and strategic goals.

Risks

• The value of the performance share units is contingent on achieving specific performance metrics, which may not be realized.
• The UScellular transaction with T-Mobile is subject to regulatory approvals and other conditions, and may not close as anticipated, impacting the value of a portion of the performance share units.

Future Outlook

Future Form 4 filings will reflect any increase in the floor of the performance share units to the extent the UScellular transaction with T-Mobile closes in 2025.

Industry Context

Executive compensation packages often include a mix of salary, stock options, restricted stock units, and performance-based incentives to align management interests with shareholder value. The use of performance share units tied to specific strategic initiatives, such as the UScellular transaction, is a common practice to incentivize key objectives.

Comparison to Industry Standards

• Executive compensation structures vary across the telecommunications industry, but typically include a mix of base salary, short-term incentives (annual bonuses), and long-term incentives (stock options, restricted stock, and performance shares).
• Companies like Verizon and AT&T also utilize performance-based equity awards tied to metrics such as revenue growth, subscriber acquisition, and cost reduction.
• The vesting schedules for restricted stock units are generally between three to five years, which is consistent with the three-year vesting schedule for the TDS restricted stock units.
• Performance metrics for performance share units often include financial targets (revenue, EBITDA, EPS) and strategic goals (subscriber growth, market share gains, successful integration of acquisitions).

Stakeholder Impact

• The grant of equity-based compensation aims to align management's interests with those of shareholders, potentially driving long-term value creation.
• Employees may view the executive compensation package as a reflection of the company's commitment to rewarding performance and incentivizing key personnel.

Key Dates

Keywords

restricted stock units, performance share units, executive compensation, TDS, UScellular, T-Mobile, Hanley, incentive plan, stock options