Form 4: Terex CFO's Equity Changes: RSU Grants & Tax Withholding

Terex CFO Jennifer Kong-Picarello reported equity transactions including the withholding of shares for tax purposes and significant grants of performance-based and time-based restricted stock units.

Summary

• CFO Jennifer Kong-Picarello reported transactions on March 15, 2026, including the disposition of shares for tax and the acquisition of restricted stock units (RSUs).
• 1,843 shares of common stock were withheld for payment of tax liability associated with the scheduled vesting of previously granted restricted stock, at a price of $59.41 per share.
• Received a grant of 9,426 restricted stock units (RSUs) that will vest in three equal annual installments: 1/3 on March 15, 2027; 1/3 on March 15, 2028; and 1/3 on March 15, 2029, contingent on continued employment.
• Received a grant of 8,753 RSUs contingent on the company achieving a targeted Return on Invested Capital (ROIC) in each of 2026, 2027, and 2028, with vesting in the first quarter of 2029.
• Received a grant of 8,753 RSUs contingent on the company achieving a targeted percentile rank against a peer group for three-year annualized Total Shareholder Return (TSR) for the period January 1, 2026 December 31, 2028, with vesting in the first quarter of 2029.
• The number of performance-based RSUs (ROIC and TSR) is subject to adjustment based on attainment above or below the targeted metrics.
• Total beneficial ownership of common stock, including previously reported restricted stock units, increased to 87,483 shares following these transactions.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive filing, reflecting routine executive compensation that aligns management incentives with long-term company performance through performance-based RSUs, which is generally favorable for shareholder interests.

Positives

• Significant grants of restricted stock units (RSUs) align management incentives with long-term shareholder value creation.
• The inclusion of performance-based RSUs tied to Return on Invested Capital (ROIC) and Total Shareholder Return (TSR) targets demonstrates a focus on key financial and shareholder return metrics.

Negatives

• 1,843 shares were disposed of to cover tax liabilities, which, while routine, represents a reduction in direct share ownership.

Risks

• The actual number of shares received from performance-based RSU grants (ROIC and TSR) could be lower than the initial grant if the company does not meet the specified targets.
• Vesting of all RSU grants is contingent on the Reporting Person's continued employment with the Issuer on each vesting date.

Future Outlook

The grants of performance-based RSUs indicate a future focus on achieving specific financial targets, namely Return on Invested Capital (ROIC) and Total Shareholder Return (TSR) over the 2026-2028 period. The vesting of these units in Q1 2029 is directly tied to the company's success in these areas, suggesting a strategic emphasis on long-term value creation.

Management Comments

• The shares represent restricted stock units issued by Issuer pursuant to one of its long-term incentive plans.

Industry Context

StockSavvy.ai notes that linking executive compensation to performance metrics like ROIC and TSR is a common practice in the industrial machinery sector, aiming to align executive interests with long-term shareholder value creation and operational efficiency. This structure is typical for companies seeking to drive sustainable growth and competitive returns within a capital-intensive industry.

Comparison to Industry Standards

• The use of ROIC as a performance metric is a strong indicator of capital efficiency, a critical factor in capital-intensive industries like heavy equipment manufacturing (e.g., Caterpillar, Deere & Company). Achieving targeted ROIC suggests effective asset utilization and profitability, aligning with best practices for driving operational excellence.
• TSR-based compensation, benchmarked against a peer group, is a standard practice to ensure executive pay reflects relative market performance. Companies like Komatsu or Volvo Construction Equipment often employ similar long-term incentive structures to foster competitive shareholder returns and maintain market relevance.
• The mix of time-based and performance-based RSUs provides a balanced approach, offering both retention incentives and motivation for achieving strategic goals, consistent with robust executive compensation frameworks observed in large industrial corporations.

Stakeholder Impact

• Shareholders: The RSU grants, particularly those tied to ROIC and TSR, aim to align executive incentives with shareholder value creation, potentially leading to improved long-term performance and strategic focus.
• Employees: The filing pertains to executive compensation and does not directly impact the broader employee base, though it reflects the company's overall compensation philosophy for its leadership.

Next Steps

• Vesting of 9,426 time-based RSUs: 1/3 on March 15, 2027; 1/3 on March 15, 2028; and 1/3 on March 15, 2029.
• Assessment of ROIC targets for 2026, 2027, and 2028 for the 8,753 ROIC-based RSUs.
• Assessment of three-year annualized TSR against a peer group for January 1, 2026 December 31, 2028, for the 8,753 TSR-based RSUs.
• Vesting of performance-based RSUs (ROIC and TSR) in the first quarter of 2029, subject to target attainment.

Key Dates

Recommendation

This Form 4 filing details routine executive compensation, including RSU grants tied to performance metrics and tax-related share withholding. While the alignment of executive incentives with long-term performance is positive, these are standard transactions and do not present new information that would fundamentally alter the investment thesis for Terex. Therefore, a 'hold' recommendation is appropriate as it suggests no immediate catalyst for a significant re-evaluation of the stock based solely on this filing.

Keywords

Terex, TEX, Form 4, insider trading, restricted stock units, RSU, executive compensation, ROIC, TSR, stock grant, beneficial ownership