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Get filing alertsDeere grants $25M in performance stock to CEO May, ties payout to 5-year profit targets
Filed March 16, 2026 · Period ending March 12, 2026 · ~1 min read
Key Changes
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CEO John May received $25 million in performance stock units, with executives Campbell and Kovar each receiving $5 million. Awards vest over five years based on achieving Shareholder Value Added targets, with potential payout ranging from 0% to 175% of target.
Item 5.02 verify on EDGAR → -
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Performance measured annually through October 2030 using Shareholder Value Added—operating profit minus cost of capital—scaled to net sales as percentage of mid-cycle revenue to account for business cyclicality.
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Awards include strict retention provisions: complete forfeiture if executives leave within first three years. After three years, prorated vesting allowed only for death, disability, termination without cause, or retirement.
Item 5.02 verify on EDGAR →
Summary
Deere's board approved substantial one-time performance stock grants to senior leadership, with CEO John May receiving $25 million in target value. Unlike typical annual equity awards, these special grants span five years and tie compensation directly to economic profit generation—specifically whether the equipment operations segments earn returns above their cost of capital. The variable payout structure (0% to 175%) and use of mid-cycle sales benchmarks aim to smooth cyclical swings in the agriculture and construction equipment markets.
For shareholders, this represents meaningful potential dilution but aligns executive incentives with long-term value creation rather than short-term metrics. The three-year cliff vesting serves as a retention mechanism for key leadership during Deere's strategic transformation period. Investors should monitor annual SVA performance disclosures in future proxy statements to gauge whether these awards are on track to pay out and whether the targets prove appropriately challenging given market conditions.
Section-by-Section Diff
Event · Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation
Deere granted one-time performance-based restricted stock units to senior executives, including $25M to CEO May, tied to 5-year SVA targets.
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On March 12, 2026, upon recommendation of the Compensation Committee, the Board of Directors of Deere & Company (the “Company”) approved grants of one-time awards of performance-based restricted stock units (“PSUs”) to the Company’s named executive officers listed below as well as certain other senior officers, under the John Deere 2020 Equity and Incentive Plan, such grants to be made on or about March 19, 2026 subject to the grantee’s continued employment through such date.
Deere's Board approved special one-time grants of performance-based restricted stock units to named executive officers and other senior officers. These grants will be made around March 19, 2026, contingent on continued employment through that date. The awards are designed to incentivize long-term business results aligned with the company's Leap Ambitions while promoting retention of senior leadership.
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The PSUs will be earned based on actual achievement relative to pre-established annual Shareholder Value Added (“SVA”) targets during a five-fiscal year period beginning on November 3, 2025 and ending on October 27, 2030 (the “Performance Period”). To reflect cyclicality inherent in the Company’s business, the annual SVA targets will use a variable scale based on the Company’s net sales during each fiscal year (a “Performance Year”) within the Performance Period measured as a percent of estimated mid-cycle net sales.
The PSUs are earned based on achieving annual Shareholder Value Added targets over a five-year period from November 2025 to October 2030. The targets use a variable scale tied to net sales as a percentage of estimated mid-cycle sales to account for business cyclicality. Payout ranges from 0% (at or below 90% of target) to 175% (at or above 125% of target), with the five-year average determining final shares received.
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SVA will be defined as the sum of (i) operating profit, less (ii) the product of (x) average assets, multiplied by (y) cost of capital, for the Company’s three equipment operations segments. SVA measures earnings of the equipment operations segments in excess of their cost of capital, or the pretax operating profit left over after subtracting the cost of capital.
Shareholder Value Added is defined as operating profit minus the cost of capital (average assets times cost of capital) for Deere's three equipment operations segments. This metric measures whether the segments generate earnings above their cost of capital, effectively measuring economic profit after accounting for the capital employed.
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If a grantee’s employment is terminated for any reason during the first three years of the Performance Period, all of the grantee’s PSUs will be forfeited. If a grantee’s employment is terminated due to death or disability, or following the completion of three full performance years, if the grantee’s employment is terminated due to a qualifying termination (which includes a termination without cause or for good reason), or retirement, the grantee will be eligible to vest in a prorated portion of the PSUs with performance determined based on actual performance for the completed period as set forth in the award agreement.
The PSUs include strict forfeiture provisions: any termination during the first three years results in complete forfeiture. After three years, executives may receive prorated vesting upon death, disability, qualifying termination (without cause or for good reason), or retirement. Additionally, a qualifying termination within 24 months following a change of control results in full service vesting with performance-based payout.
Event · Item 9.01 — Financial Statements and Exhibits
Deere filed a new Form of Performance Stock Unit Award Agreement as an exhibit; no material business event disclosed.
Show 1 minor / wording change
Added in current filing · verify on EDGAR →
Form of Performance Stock Unit Award Agreement
Deere disclosed a new form agreement for performance stock unit awards, likely used for executive or employee equity compensation. This is a routine filing of a compensation plan document with no immediate financial impact disclosed.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 4, 2026 · How we verify