Form 4: Terex Executive Boosts Stake with New RSU Grants

Terex Corporation's President of Materials Processing, Kieran Hegarty, increased his beneficial ownership through new restricted stock unit grants, despite a tax-related share withholding.

Summary

• Kieran Hegarty, President, Materials Processing at Terex Corp (TEX), reported transactions on March 15, 2026.
• 9,785 shares of common stock were withheld at a price of $59.41 per share to cover tax liabilities associated with the scheduled vesting of previously granted restricted stock.
• Received 6,186 Restricted Stock Units (RSUs) which will vest in three equal annual installments on March 15, 2027, March 15, 2028, and March 15, 2029, contingent on continued employment.
• Received 5,744 RSUs that will vest in the first quarter of 2029, contingent on the company achieving a targeted Return on Invested Capital (ROIC) in each of 2026, 2027, and 2028.
• Received an additional 5,744 RSUs that will vest in the first quarter of 2029, 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, to December 31, 2028.
• The total beneficial ownership, including common stock and restricted stock units, increased from 161,152 shares (after the tax withholding) to 178,826 shares (after all new RSU grants).

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as it reflects ongoing executive compensation practices that align management incentives with long-term company performance and shareholder value, without indicating any unusual or concerning activity.

Positives

• A significant grant of 17,674 Restricted Stock Units (RSUs) to a key executive, increasing their overall beneficial ownership and aligning their interests with the company's long-term success.
• The vesting of 11,488 RSUs is tied to specific long-term performance metrics (Return on Invested Capital and Total Shareholder Return), which incentivizes management to drive shareholder value and operational efficiency.
• The time-based vesting of 6,186 RSUs promotes executive retention and stability within the leadership team.

Negatives

• 9,785 shares were disposed of to cover tax liabilities, representing a reduction in direct common stock holdings, although this is a routine event for RSU vesting.

Risks

• Vesting of 11,488 RSUs (5,744 ROIC-based + 5,744 TSR-based) is contingent on the company achieving specific performance targets (ROIC and TSR) over a multi-year period, meaning these shares are not guaranteed if targets are not met.
• Vesting of 6,186 RSUs is contingent on the reporting person's continued employment with the Issuer on each vesting date.

Future Outlook

The company is setting long-term performance targets for Return on Invested Capital (ROIC) and Total Shareholder Return (TSR) for the periods leading up to 2029, indicating a strategic focus on these key financial and shareholder value metrics to drive future growth and profitability.

Industry Context

StockSavvy.ai notes that tying executive compensation to long-term performance metrics like ROIC and TSR is a common and effective practice in the industrial machinery sector to align management incentives with shareholder value creation. This structure encourages sustainable growth and competitive performance, reflecting a commitment to long-term strategic objectives.

Comparison to Industry Standards

• The use of performance-based Restricted Stock Units (RSUs) tied to metrics like ROIC and TSR is a standard practice in executive compensation across industrial and manufacturing sectors, including companies like Caterpillar Inc. (CAT) and Deere & Company (DE).
• Tying a portion of executive compensation to ROIC targets is a common strategy to incentivize efficient capital allocation and operational excellence, similar to practices seen in leading industrial companies.
• Linking compensation to relative TSR performance against a peer group is a robust method to ensure executives are rewarded for outperforming competitors, a strategy employed by many S&P 500 companies to drive competitive advantage and shareholder alignment.

Stakeholder Impact

• Shareholders: Executive compensation tied to ROIC and TSR aims to align management's interests with shareholder value creation and long-term company performance.
• Employees: The RSU grants are part of the company's long-term incentive plans, which can motivate key personnel and contribute to talent retention.

Next Steps

• Vesting of 6,186 RSUs on March 15, 2027, March 15, 2028, and March 15, 2029, contingent on continued employment.
• Assessment of ROIC performance for 2026, 2027, and 2028 for the vesting of 5,744 RSUs in Q1 2029.
• Assessment of three-year annualized TSR performance against a peer group for 2026-2028 for the vesting of 5,744 RSUs in Q1 2029.

Key Dates

Recommendation

This Form 4 details routine executive compensation, including RSU grants tied to performance metrics and tax-related share withholding. While the grants align executive interests with long-term shareholder value, the filing does not present new information significant enough to alter an investment thesis or warrant a change from a 'hold' position. It confirms ongoing compensation strategies.

Keywords

Terex, TEX, Form 4, Insider Transaction, Executive Compensation, Restricted Stock Units, RSU, Beneficial Ownership, Kieran Hegarty, Corporate Governance