Form 4: TDS Executive Vice President & CFO Vicki Villacrez Reports Vesting of Restricted Stock Units

Telephone & Data Systems Inc. (TDS) Executive Vice President and CFO Vicki L. Villacrez reported the vesting and settlement of 10,170 restricted stock units, with a portion withheld for tax obligations.

Summary

• Vicki L. Villacrez, Executive Vice President & CFO and Director of Telephone & Data Systems Inc. (TDS), reported transactions related to her beneficial ownership.
• On June 11, 2025, 10,170 restricted stock units (RSUs) vested and were settled, representing the first vesting tranche of RSUs awarded on June 11, 2024, under the 2022 Long Term Incentive Plan.
• Each RSU represents the right to receive one common share of TDS upon vesting.
• Following the vesting, 10,170 common shares were acquired by Ms. Villacrez.
• Concurrently, 4,780 common shares were disposed of at a price of $34.17 per share to cover tax liabilities associated with the RSU vesting.
• After these transactions, Ms. Villacrez directly beneficially owns 99,973 common shares.
• Additionally, she directly beneficially owns 20,340 derivative securities in the form of Restricted Stock Units, which are yet to vest.

Sentiment

Score: 6

Explanation: The sentiment is slightly positive as it reflects routine executive compensation and retention, indicating stability in management incentives. It's not highly impactful on its own but is a normal course of business.

Positives

• The vesting of restricted stock units represents a component of executive compensation, aligning management's interests with shareholder value.
• The transaction indicates the successful execution of the company's 2022 Long Term Incentive Plan, which aims to retain and incentivize key executives.

Negatives

• A portion of the vested shares (4,780 shares) was withheld to cover tax obligations, which is a standard practice but results in a reduction of the net shares received by the executive.

Future Outlook

The remaining 20,340 Restricted Stock Units held by Ms. Villacrez are expected to vest in two equal annual tranches on the second and third anniversaries of the June 11, 2024 grant date.

Industry Context

The vesting and settlement of Restricted Stock Units (RSUs) is a common form of long-term incentive compensation for executives across various industries, including telecommunications. This practice aims to align executive performance with shareholder interests by tying a portion of compensation to the company's stock performance and executive retention.

Comparison to Industry Standards

• The use of Restricted Stock Units (RSUs) as a long-term incentive is a standard practice in executive compensation across publicly traded companies, including those in the telecommunications sector like Verizon, AT&T, and T-Mobile, which frequently utilize equity awards to incentivize and retain key personnel.
• The vesting schedule of one-third annually over three years is a common structure for RSU awards, balancing immediate reward with long-term retention goals.
• The withholding of shares to cover tax obligations upon vesting is a standard and efficient method for executives to manage their tax liabilities related to equity compensation, widely adopted by companies to simplify the process for their employees.

Corporate Governance

Stakeholder Impact

• Shareholders: The vesting of RSUs aligns the interests of the Executive Vice President & CFO with shareholders by tying a portion of her compensation to the company's stock performance.
• Employees: Demonstrates the company's commitment to its long-term incentive plans, which can positively influence employee morale and retention strategies.

Next Steps

• The remaining two-thirds of the Restricted Stock Units (20,340 units) are expected to vest on the second and third annual anniversaries of the June 11, 2024 grant date.

Key Dates

Keywords

SEC Form 4, Insider Transaction, Restricted Stock Units, Executive Compensation, TDS, Telephone & Data Systems Inc., Stock Vesting, Share Ownership, Corporate Governance