Form 4: TDS Vice Chair Carlson Awarded Performance Share Units Based on Key Metrics

Leroy T. Carlson Jr., Vice Chair of Telephone & Data Systems Inc., was granted performance share units based on the company's performance against key metrics, with a portion of the units now certified and vesting in 2027.

Summary

• On June 11, 2024, Leroy T. Carlson Jr., Vice Chair of Telephone & Data Systems Inc., received performance share units.
• These units are based on the performance of three key metrics.
• The payout can range from 0% to 192% of the target based on the achievement of these metrics.
• As of December 31, 2024, the Compensation Human Resources Committee certified one of the three metrics at 145.9% on March 12, 2025.
• The performance shares related to this metric are now adjusted for performance and will vest on June 11, 2027.
• The remaining two metrics will be measured at the end of 2025 and 2026, respectively.
• The performance share units accumulate quarterly dividend equivalents and each unit represents the right to receive one common share.
• The total number of performance share units beneficially owned following the reported transaction is 92,835.

Sentiment

Score: 7

Explanation: The document indicates positive performance in one area, but the ultimate value of the award is contingent on future performance. The sentiment is moderately positive.

Positives

• The performance share units provide an incentive for management to achieve key performance metrics.
• The certification of one metric at 145.9% suggests positive performance in that area.
• The accumulation of quarterly dividend equivalents enhances the value of the performance share units.

Risks

• The ultimate value of the performance share units depends on the achievement of the remaining two key metrics.
• The payout could be reduced to 0% if the metrics are not met.
• The vesting of the certified performance shares is not until June 11, 2027, creating a long-term incentive.

Future Outlook

The value of the performance share units is contingent on the company's performance against the remaining two key metrics, which will be measured at the end of 2025 and 2026.

Industry Context

This type of equity compensation is common in publicly traded companies to align management's interests with those of shareholders.

Stakeholder Impact

• Shareholders: The performance share units are designed to align management's interests with shareholder value.
• Employees: The performance share units may motivate employees to achieve company goals.
• Management: The performance share units provide an incentive for management to improve company performance.

Next Steps

• Measurement of the second key metric at the end of 2025.
• Measurement of the final key metric at the end of 2026.
• Vesting of the certified performance shares on June 11, 2027.

Key Dates