Form 4: UL Solutions Executive Lynn H. Hancock Reports Accrual of Restricted Stock Unit Dividend Equivalent Rights

UL Solutions Inc. Executive Vice President & Chief Transformation Officer, Lynn H. Hancock, reported the routine accrual of dividend equivalent rights on existing Restricted Stock Units.

Summary

• Lynn H. Hancock, Executive Vice President & Chief Transformation Officer of UL Solutions Inc., filed a Form 4 reporting changes in beneficial ownership.
• On June 9, 2025, Hancock acquired a total of 13 dividend equivalent rights (4, 5, and 4 units respectively) associated with previously granted Restricted Stock Units (RSUs).
• Each dividend equivalent right represents a contingent right to receive one share of UL Solutions' Class A Common Stock.
• These rights accrued on existing RSUs and vest proportionately with the underlying RSUs.
• The underlying RSUs have various vesting schedules: one batch vests on the anniversaries of May 1, 2024; another on the anniversaries of January 1, 2025; and a third on the anniversaries of April 1, 2025.
• Following these transactions, Hancock's beneficial ownership includes 2,584, 3,019, and 2,308 Restricted Stock Units, which now aggregate the previously reported dividend equivalent rights for simplified future reporting.

Sentiment

Score: 7

Explanation: The document reports a routine accrual of compensation for an executive, which is a positive for the executive's personal holdings and a neutral, expected event for the company. It indicates ongoing executive compensation practices.

Positives

• Increased beneficial ownership for a key executive, Lynn H. Hancock, through the routine accrual of dividend equivalent rights on Restricted Stock Units, aligning executive interests with shareholder returns.
• The company has streamlined its reporting by aggregating dividend equivalent rights with underlying RSUs, which simplifies future disclosures.

Future Outlook

The accrued dividend equivalent rights will vest proportionately with the underlying Restricted Stock Units (RSUs). The RSUs themselves are scheduled to vest in three equal installments on the first, second, and third anniversaries of their respective grant dates (May 1, 2024; January 1, 2025; and April 1, 2025).

Management Comments

• "Each dividend equivalent right represents a contingent right to receive one share of the Issuer's Class A Common Stock."
• "Represents accrual of dividend equivalent rights on restricted stock units held by the Reporting Person."
• "The dividend equivalent rights have historically been reported as a separate security on Table II, but have been aggregated with the underlying restricted stock units in this Form 4 and will continue to be reported together with the underlying equity award in the future."
• "The dividend equivalent rights accrued on restricted stock units held by the Reporting Person and vest proportionately with the restricted stock units to which they relate."

Industry Context

This filing is a standard Form 4, which reports changes in beneficial ownership by company insiders. The accrual of dividend equivalent rights on Restricted Stock Units (RSUs) is a common component of executive compensation packages across various industries, designed to align executive interests with shareholder returns by providing equity-based incentives. It does not reflect broader industry trends or competitive dynamics.

Comparison to Industry Standards

• The structure of equity compensation, including Restricted Stock Units (RSUs) and dividend equivalent rights, is a common practice in publicly traded companies across various sectors, including those in the testing, inspection, and certification (TIC) industry where UL Solutions operates.
• While specific grant sizes and vesting schedules vary by company and executive role, the use of such instruments is standard for attracting and retaining executive talent and aligning their long-term incentives with company performance.
• No specific comparable companies or projects are mentioned in this filing to allow for a direct quantitative comparison.

Corporate Governance

Related Party Transactions

• The transaction involves the accrual of equity compensation (dividend equivalent rights on Restricted Stock Units) to an executive (Lynn H. Hancock) by the company (UL Solutions Inc.). This is a standard compensation arrangement between a related party and the issuer.

Stakeholder Impact

• Shareholders: Neutral impact. This is a routine compensation event and does not indicate any significant change in company strategy or financial performance. It represents a minor dilution over time as RSUs vest, which is typical for equity compensation plans.
• Employees: Neutral impact. This filing pertains to executive compensation and does not directly affect the broader employee base.
• Executive (Lynn H. Hancock): Positive impact. The accrual of dividend equivalent rights increases their beneficial ownership and future potential equity value in the company.

Next Steps

• Future vesting of the underlying Restricted Stock Units (RSUs) and the associated dividend equivalent rights on the first, second, and third anniversaries of May 1, 2024, January 1, 2025, and April 1, 2025, respectively.

Key Dates

Keywords

UL Solutions, ULS, Form 4, SEC filing, insider transaction, restricted stock units, RSU, dividend equivalent rights, executive compensation, Lynn H. Hancock, beneficial ownership