Form 4: Zimmer Biomet Director Robert Hagemann Reports Acquisition of Over 2,200 Equity Units

Zimmer Biomet Holdings, Inc. Director Robert Hagemann reported the acquisition of 810.46 phantom stock units and 1,404.798 restricted stock units on May 29, 2025, as part of his compensation.

Summary

• Robert Hagemann, a Director of Zimmer Biomet Holdings, Inc. (ZBH), reported changes in his beneficial ownership of company securities.
• On May 29, 2025, Mr. Hagemann acquired 810.46 Phantom Stock Units. These units were accrued under the company's Deferred Compensation Plan for Non-Employee Directors and are to be settled in cash in five annual installments after his service as a Director ceases. The conversion price for these units is $92.54.
• Following this transaction, Mr. Hagemann beneficially owns a total of 30,477.633 Phantom Stock Units, which includes 69.485 units accrued on April 30, 2025, through dividend reinvestment.
• Additionally, on May 29, 2025, Mr. Hagemann acquired 1,404.798 Restricted Stock Units. These units are immediately 100% vested but are subject to mandatory deferral until the later of his termination of service as a Director or three years after the grant date.
• After this acquisition, Mr. Hagemann beneficially owns a total of 24,409.726 Restricted Stock Units, which includes units granted in prior years with different deferral periods.

Sentiment

Score: 7

Explanation: The filing is a routine disclosure of director compensation, indicating standard corporate governance and compensation practices. It's neutral to slightly positive as it shows a director increasing their stake, aligning interests with shareholders, but it's not a market-moving event.

Positives

• Director Robert Hagemann increased his beneficial ownership in Zimmer Biomet Holdings, Inc. through the acquisition of phantom stock units and restricted stock units, aligning his interests with shareholders.
• The acquisition of these units is part of a structured deferred compensation plan for non-employee directors, indicating a standard and expected compensation practice.

Risks

• The value of the phantom stock units and restricted stock units is tied to the performance of Zimmer Biomet Holdings, Inc. common stock, exposing the holder to market fluctuations.
• Phantom stock units are settled in cash, not shares, which means the director will not directly hold common stock from these specific units upon settlement.

Future Outlook

The phantom stock units are scheduled to be settled in cash in five annual installments commencing within sixty days after the end of the calendar year in which the reporting person's service as a Director ceases. The restricted stock units are subject to mandatory deferral until the later of the reporting person's termination of service as a Director or three years after the grant date.

Industry Context

This Form 4 filing is a routine disclosure of insider equity compensation within the medical device industry. It reflects standard corporate governance practices where non-employee directors receive equity-based compensation to align their interests with shareholders. Such filings are common across publicly traded companies, including peers like Stryker, Johnson & Johnson (DePuy Synthes), and Medtronic, which also utilize similar equity compensation structures for their directors.

Comparison to Industry Standards

• The use of phantom stock units and restricted stock units for non-employee director compensation is a common practice across the medical device industry and broader public markets, aligning with corporate governance best practices to incentivize long-term performance and align director interests with shareholders.
• Companies such as Stryker Corporation (SYK), Medtronic plc (MDT), and Johnson & Johnson (JNJ), which also operate in the medical technology and healthcare sectors, frequently utilize similar equity-based compensation vehicles for their non-executive directors, including deferred stock units or restricted stock awards, often with vesting and deferral schedules tied to service or performance.
• The immediate vesting of Restricted Stock Units (RSUs) for directors, coupled with a mandatory deferral period, is a common structure designed to ensure directors maintain a long-term stake in the company while providing immediate ownership rights.

Corporate Governance

Stakeholder Impact

• Shareholders: The acquisition of equity units by a director aligns their interests with those of shareholders, potentially fostering long-term value creation.

Next Steps

• Phantom stock units will be settled in cash in five annual installments commencing within sixty days after the end of the calendar year in which Robert Hagemann's service as a Director ceases.
• Restricted stock units will be subject to mandatory deferral until the later of Robert Hagemann's termination of service as a Director or three years after the grant date.

Key Dates

Recommendation

Keywords

Zimmer Biomet Holdings, ZBH, SEC Form 4, Insider Transaction, Beneficial Ownership, Phantom Stock Units, Restricted Stock Units, Director Compensation, Equity Compensation, Corporate Governance