Form 4: Terex Executive Carroll Boosts Equity Holdings

Patrick S. Carroll, President of Environmental Solutions at Terex Corp, increased his beneficial ownership through new restricted stock unit grants despite shares withheld for tax.

Summary

• Patrick S. Carroll, President of Environmental Solutions at Terex Corp, reported transactions on March 15, 2026.
• 9,219 shares of common stock were withheld for tax liability associated with the vesting of previously granted restricted stock, at a price of $59.41 per share.
• Carroll was granted 6,480 restricted stock units (RSUs) which will vest in three equal annual installments on March 15, 2027, 2028, and 2029, contingent on continued employment.
• An additional 6,018 RSUs were granted, vesting in Q1 2029, contingent on Terex achieving targeted Return on Invested Capital (ROIC) for 2026, 2027, and 2028.
• A further 6,018 RSUs were granted, vesting in Q1 2029, contingent on Terex achieving a targeted percentile rank for three-year annualized Total Shareholder Return (TSR) against a peer group for the period January 1, 2026, to December 31, 2028.
• Following these transactions, Carroll's total beneficial ownership of common stock, including previously reported restricted stock units, increased to 101,950 shares.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, reflecting ongoing executive incentive alignment and increased beneficial ownership, which is a standard and healthy sign of management commitment.

Positives

• Patrick S. Carroll received new grants of 18,516 restricted stock units (RSUs), indicating continued incentive alignment with company performance.
• The RSU grants are tied to both time-based vesting (6,480 units) and performance-based metrics (12,036 units linked to ROIC and TSR), aligning executive compensation with long-term shareholder value creation.
• Total beneficial ownership increased to 101,950 shares after the grants, demonstrating a higher stake in the company.

Negatives

• 9,219 shares were disposed of (withheld) to cover tax liabilities related to the vesting of previously granted restricted stock, reducing direct share ownership.

Risks

• The vesting of 12,036 restricted stock units is contingent on the company achieving specific Return on Invested Capital (ROIC) and Total Shareholder Return (TSR) targets, meaning these units may not fully vest if performance goals are not met.
• The time-based vesting of 6,480 restricted stock units is subject to the reporting person's continued employment, posing a risk of forfeiture if employment ceases.

Future Outlook

The filing indicates future vesting events for restricted stock units tied to both continued employment and the achievement of specific company performance targets, including Return on Invested Capital (ROIC) for 2026-2028 and Total Shareholder Return (TSR) against a peer group for the period January 1, 2026, to December 31, 2028.

Industry Context

StockSavvy.ai notes that executive compensation structures, particularly those incorporating performance-based restricted stock units tied to metrics like ROIC and TSR, are common across various industries to align executive incentives with long-term shareholder value creation. This filing reflects a standard practice for incentivizing key management within the industrial sector.

Comparison to Industry Standards

• The use of restricted stock units (RSUs) with both time-based and performance-based vesting conditions is a widely adopted practice in executive compensation across large-cap industrial companies, similar to peers like Caterpillar Inc. or Deere & Company.
• Tying a portion of executive compensation to Return on Invested Capital (ROIC) is a common strategy to encourage efficient capital allocation, a metric frequently used by companies such as Honeywell International Inc. to measure operational effectiveness.
• Including Total Shareholder Return (TSR) relative to a peer group as a vesting condition aligns with best practices for linking executive pay to market performance, a strategy employed by many S&P 500 companies to ensure competitive performance.

Stakeholder Impact

• Shareholders: The new RSU grants align executive incentives with shareholder interests through performance-based vesting conditions (ROIC and TSR), potentially leading to improved long-term value creation.
• Employees: The continued employment condition for time-based RSUs reinforces executive retention.

Next Steps

• Vesting of 6,480 time-based RSUs on March 15, 2027, March 15, 2028, and March 15, 2029, subject to continued employment.
• Vesting of 12,036 performance-based RSUs in Q1 2029, contingent on achieving ROIC targets for 2026-2028 and TSR targets for January 1, 2026 December 31, 2028.

Key Dates

Recommendation

This Form 4 filing details routine executive compensation transactions, including the grant of new restricted stock units and shares withheld for tax. While the new grants align executive incentives with long-term performance, these are standard occurrences and do not present new information that would significantly alter the fundamental investment thesis for Terex Corp. Therefore, a "hold" recommendation is appropriate as this filing alone does not warrant a change in investment position.

Keywords

Terex Corp, TEX, Form 4, Insider Trading, Restricted Stock Units, RSU, Executive Compensation, Patrick S. Carroll, Beneficial Ownership, ROIC, TSR, Performance-based compensation