Form 4: Terex Corp: CEO Simon Meester Reports Changes in Beneficial Ownership

CEO Simon Meester reports acquisition and disposal of Terex Corp common stock due to tax withholding and long-term incentive plan grants.

Summary

• On March 15, 2024, Simon Meester, President and CEO of Terex Corp, reported changes in his beneficial ownership of the company's common stock.
• Meester disposed of 894 shares to cover tax liabilities at a price of $58.35 per share.
• He also acquired 25,859 shares granted under the company's long-term incentive plan, contingent on achieving a targeted total shareholder return (TSR) by the first quarter of 2027.
• An additional 25,859 shares were granted based on achieving a targeted return on invested capital (ROIC) in each of 2024, 2025, and 2026, vesting in the first quarter of 2027.
• Furthermore, 27,848 shares were granted with a vesting schedule of one-third on March 15 of 2025, 2026, and 2027.
• On March 18, 2024, Meester disposed of 978 shares to cover tax liabilities at a price of $59.07 per share.
• Following these transactions, Meester directly owns 137,326 shares of Terex Corp common stock.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The granting of shares under long-term incentive plans is a positive sign, aligning management's interests with shareholders. The disposal of shares for tax liabilities is a routine transaction.

Positives

• The granting of shares under long-term incentive plans aligns management's interests with those of shareholders, incentivizing performance based on TSR and ROIC.
• The vesting schedules of the grants encourage long-term commitment from the CEO.

Risks

• The number of shares granted under the long-term incentive plans is subject to adjustment based on the company's performance against TSR and ROIC targets, which introduces uncertainty.
• Failure to meet the performance targets could result in a lower number of shares vesting.

Future Outlook

The document outlines future vesting dates and performance targets related to the long-term incentive plans, indicating a focus on long-term shareholder value and return on invested capital.

Industry Context

Executive compensation and stock ownership are standard practices in publicly traded companies to align management's interests with those of shareholders. The use of TSR and ROIC as performance metrics is common in the capital goods industry to drive long-term value creation.

Comparison to Industry Standards

• Many companies in the industrial sector, such as Caterpillar, Deere, and Komatsu, utilize long-term incentive plans with performance-based vesting conditions tied to metrics like TSR and ROIC.
• The specific targets and vesting schedules vary depending on the company's strategic goals and industry benchmarks.
• The vesting schedule of one-third annually over three years is a common practice to retain executives and incentivize sustained performance.

Stakeholder Impact

• Shareholders: The incentive plan aims to align management's interests with shareholder value creation.
• Employees: The incentive plan may motivate employees through the achievement of company-wide goals.
• Management: The incentive plan provides a financial incentive for achieving performance targets.

Key Dates