Form 4: Tutor Perini CEO Gary Smalley Reports Acquisition and Disposition of Shares and Phantom Stock Units

CEO Gary G. Smalley reports transactions involving common stock and phantom stock units, including grants and vesting of cash-settled performance stock units.

Summary

• Gary G. Smalley, CEO and President of Tutor Perini Corporation, reported changes in beneficial ownership.
• On March 13, 2025, Smalley acquired 57,349 shares of common stock and disposed of 57,349 shares at $24.65.
• Following the reported transactions, Smalley directly owns 113,075 shares of common stock.
• Smalley was granted 172,048 cash-settled phantom stock units on March 13, 2024, vesting in installments through March 13, 2027, contingent upon continued employment.
• On March 12, 2025, Smalley was granted 77,754 cash-settled phantom stock units, vesting in installments through March 12, 2028, contingent upon continued employment.
• Smalley also holds 172,048 cash-settled performance stock units (CPSUs) granted on March 13, 2024, scheduled to vest on December 31, 2026, based on stock price growth goals.
• Additionally, Smalley holds 238,727 cash-settled performance stock units (CPSUs) granted on January 1, 2023, scheduled to vest on December 31, 2025, based on stock price growth goals.
• The reporting of the March 13, 2024 and January 1, 2023 awards were filed late due to an administrative error by the Company.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the executive is receiving compensation, there are also late filing issues.

Positives

• The grant of phantom stock units and performance stock units aligns management's interests with those of shareholders by incentivizing stock price appreciation.

Negatives

• The late filing of the March 13, 2024 and January 1, 2023 awards indicates a potential weakness in the company's internal controls or reporting procedures.

Risks

• The vesting of phantom stock units and performance stock units is contingent upon continued employment, creating a risk of forfeiture if the executive leaves the company.
• The value of the cash-settled performance stock units is dependent on the achievement of stock price growth goals, which may not be realized.

Future Outlook

The vesting of phantom stock units and performance stock units is contingent upon continued employment and the achievement of stock price growth goals over specified performance periods.

Industry Context

Executive compensation packages often include a mix of salary, stock options, and performance-based incentives to align management's interests with those of shareholders. The use of cash-settled phantom stock units and performance stock units is a common practice in the construction industry to incentivize long-term value creation.

Comparison to Industry Standards

• Comparing Tutor Perini's executive compensation structure to that of competitors such as Fluor Corporation, Jacobs Engineering Group, and AECOM reveals similar trends in utilizing equity-based incentives.
• These companies also employ performance-based metrics, such as stock price appreciation and return on invested capital, to determine the vesting of executive stock options and restricted stock units.
• The specific terms and conditions of these awards, such as vesting schedules and performance targets, vary depending on the company's size, financial performance, and strategic objectives.

Stakeholder Impact

• The grant of equity-based compensation may be viewed positively by shareholders as it aligns management's interests with those of shareholders.
• The vesting of these awards is contingent upon continued employment, which may incentivize key executives to remain with the company.
• The achievement of stock price growth goals will benefit both executives and shareholders.

Key Dates