Form 4: TMC CDO Granted 1M RSUs with Performance Vesting

TMC's Chief Development Officer, Anthony O'Sullivan, was granted 1 million restricted stock units tied to significant share price performance targets and a long-term retention period.

Summary

• Anthony O'Sullivan, Chief Development Officer of TMC the metals Co Inc. (TMC), was granted 1,000,000 restricted stock units (RSUs) on September 23, 2025.
• Each RSU represents the right to receive one common share upon vesting, with a transaction price of $0.00.
• Following this transaction, Mr. O'Sullivan beneficially owns 2,125,667 common shares.
• The RSUs are part of the Issuer's long-term retention plan and are subject to Mr. O'Sullivan's continued employment through September 1, 2028 (the 'Retention Date').
• Vesting occurs in two tranches: 50% upon the trailing 30-day average closing price of shares reaching $10.00 by April 16, 2029, and the remaining 50% upon the average share price reaching $12.50 by April 16, 2029.
• Shares received from the settlement of these RSUs cannot be sold or transferred prior to the Retention Date of September 1, 2028.

Sentiment

Score: 7

Explanation: The RSU grant is a positive development as it aligns executive incentives with shareholder value creation through ambitious performance targets and promotes long-term retention. However, the high share price hurdles introduce a degree of risk regarding vesting achievement.

Positives

• The RSU grant aligns management's long-term incentives with shareholder value creation through ambitious share price targets of $10.00 and $12.50.
• The long vesting period and retention date (September 1, 2028) promote executive retention and commitment to the company's strategic goals.
• The performance-based vesting conditions demonstrate a focus on achieving significant market capitalization growth.

Negatives

• The share price targets of $10.00 and $12.50 represent substantial increases from current levels, indicating a high hurdle for vesting.
• Failure to meet the specified share price targets by April 16, 2029, would result in the forfeiture of the RSUs, potentially impacting executive compensation and morale.

Risks

• Market volatility and broader economic conditions could hinder the achievement of the $10.00 and $12.50 average share price targets by April 16, 2029.
• The Chief Development Officer's departure before September 1, 2028, would result in the forfeiture of the unvested RSUs.
• The company's operational performance and strategic execution must be robust to drive the necessary share price appreciation for vesting.

Future Outlook

The RSU grant indicates a long-term strategic focus by TMC, with significant share price appreciation targeted by April 2029. The company anticipates that its Chief Development Officer will play a crucial role in achieving these ambitious growth objectives, supported by a compensation structure designed for retention and performance alignment.

Management Comments

• The RSUs were granted pursuant to the Issuer's long-term retention plan, emphasizing the company's commitment to retaining key executives.
• The vesting conditions, tied to specific share price targets, reflect management's belief in the company's potential for substantial future growth and value creation for shareholders.

Industry Context

In the metals and mining sector, particularly for companies involved in emerging deep-sea mineral resources like TMC, long-term incentive plans with performance-based vesting are common. These plans aim to align executive compensation with the successful development and commercialization of projects, which often involve significant capital expenditure and extended timelines. The ambitious share price targets suggest management's confidence in the future value of its projects within the evolving critical minerals market.

Comparison to Industry Standards

• The use of performance-based Restricted Stock Units (RSUs) with multi-year vesting schedules and share price targets is a standard practice in the resource and technology sectors for executive compensation, similar to companies like DeepGreen Metals (prior to TMC merger) or other deep-sea mining exploration firms.
• The specific share price targets of $10.00 and $12.50 are aggressive, indicating a high growth expectation, which is not uncommon for early-stage or high-potential companies in disruptive industries, but would require substantial operational milestones and market acceptance to achieve, comparable to the growth trajectories seen in successful junior miners transitioning to production or innovative tech companies.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if the ambitious share price targets are met, as executive compensation is directly tied to this outcome. Also, potential for dilution if new shares are issued upon vesting.
• Employees (specifically Anthony O'Sullivan): Strong incentive for long-term performance and retention, with significant potential compensation tied to company success.
• Management Team: Reinforces a culture of performance and long-term strategic focus within the executive team.

Next Steps

• Anthony O'Sullivan's continued employment with TMC until September 1, 2028.
• TMC's share price reaching a trailing 30-day average closing price of $10.00 by April 16, 2029, for 50% RSU vesting.
• TMC's share price reaching a trailing 30-day average closing price of $12.50 by April 16, 2029, for the remaining 50% RSU vesting.

Key Dates

Keywords

TMC, Restricted Stock Units, RSUs, Executive Compensation, Insider Transaction, Performance Vesting, Long-Term Incentive, Chief Development Officer, Share Price Target, SEC Form 4