December 5, 2022

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Why the leaders of big companies sell their shares in historical figures

(ID) Addition of stock photos featuring meta founder (new Facebook name), Mark Zuckerberg; Amazon founder Jeff Bezos; Satya Nadella, CEO of Microsoft and Elon Musk, founder of Tesla. EFE / Eric Lesser / Britta Peterson / Christophe Petit / Pool

The founders and leaders of the company have been selling their shares in historic numbers, Trading them for the first time in a few years Rising market ratings And before that Possible changes in the tax laws of the United States and some states North American country.

So far in 2021, The 48 top executives each earned more than $ 200 million through share salesAccording to one analysis, that is almost four times higher than the average number from 2016 to 2020 The Wall Street Journal Data from a research firm called InsiderScore.

Cosmetic billionaires are among the merchants who have agreed to sell their shares Ronald Lauder And co-founders of Google, Larry Page and Sergey Brin, Who marketed them for the first time in four years or more. The Walton family, Walmart Inc. Heir of fortune, and Mark Zuckerberg, Facebook parent Meta Platforms Inc. ‘S CEO has accelerated sales and is on track to break recent records in the number of shares sold.

Across the S&P 500, Insiders have sold a record $ 63.5 billion worth of shares as of November, 50% increase compared to the whole of 2020, both driven Stock market gains such as increased sales of some large holders. The technology sector is at the forefront $ 41 billion in sales Across the market, an increase of more than a third, with a small amount but still a large increase in financial services.

Daniel Taylor, professor of accounting at the University of Pennsylvania’s Warden School, told The Wall Street Journal. 2021 is the best-selling year by locals in a decade, Which resembles waves during the dot-com boom of the early 2000s.

File photo.  EFE / Justin Lane
File photo. EFE / Justin Lane

Investors are sometimes concerned that large internal sales may not lead to further increases in stock prices, and that large, unexpected sales may weigh on stock prices. Companies often require senior executives to hold several times more shares than their annual salary, but many top executives easily violate those limits even after being sold.

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Executives do not have to say what they sold for. The biggest sale came as Washington lawmakers discussed possible tax increases as part of the Democratic legislative package. Built Back Better (Better recreate), sometimes assuming the possibility Increase the tax rate for long-term capital gains. In November, investors sold $ 15,590 million.

The law, pending approval in the Senate, imposes a 5% tax on adjusted total income over $ 10 million in 2022 and another 3% tax on income over $ 25 million, Including profits from the sale of shares. Congress’s revenue estimates suggest that taxpayers will accelerate capital gains in 2021. Wealthy taxpayers can save up to $ 8 million in taxes on every $ 100 million of shares sold before the effective dateTaylor told The Wall Street Journal. He added that these potential tax savings were “a powerful incentive to sell this year”.

Elon Musk gestures while visiting the Tesla plant in Groenheid, Berlin (Patrick Pleul / Pool via Routers)
Elon Musk gestures while visiting the Tesla plant in Groenheid, Berlin (Patrick Pleul / Pool via Routers)

CEO of Tesla Inc. Elon MuskWith a net worth of about $ 270,000 million, he is considered the world’s richest man. Tesla sold $ 10 billion worth of shares in about a month – on its first-selling company shares since 2010 – including about $ 4 billion to tax on optional training.

For his part, the CEO of Microsoft Corporation, Satya Nadella, Sold last month Half of its total shares, approximately $ 374 million Before the lines.

About a dozen top founders and CEOs sold out, according to The Wall Street Journal Millions of dollars in shares of the company this year, with no sales by 2020.

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According to InsiderScore, Page and Brin are the last Google parent Alphabet Inc. ‘S shares were sold for $ 800 a share. When they returned to the market in May, stocks soared $ 2,200. This year, almost every one of them has gone on sale 600,000 shares for about $ 1.5 billion Before the lines. According to FactSet, they each hold 6% more characters.

Larry Page and Sergey Brin
Larry Page and Sergey Brin

Sales of both also occurred when the company reported Record revenue and profits more than doubled from the previous year, And seven months later the Department of Justice and the State Attorney General filed a civil no-confidence motion against Google. On November 19, the company’s share price hit an all-time high of $ 3,019.33 and then plummeted to about $ 2,950.

Lauder, son of SD Lauder Gas founders, sold Two million shares this year, more than $ 600 million Before tax on your first sale since 2016.

The Walton family quadrupled the number of shares its members sold and received $ 6.5 billion Before taxes so far in 2021, from $ 1.5 billion in 2020. The sale took place within a year Walmart’s share price is higher than ever, And the company recorded the highest sales in three quarters.

Zuckerberg nearly quadrupled the number of meta shares he sold a year ago. $ 4.5 billion Before the lines. Its sales occurred when the company reported Sales and profit registration.

Mark Zuckerberg, Instagram.  (Photo: El Heraldo de Mexico)
Mark Zuckerberg, Instagram. (Photo: El Heraldo de Mexico)

Entrepreneurs often sell their shares under Advance trading arrangements, also known as 10b5-1 schemes, stimulate sales within a fixed table or price range to avoid conflicts with internal trading rules.. These schemes were used in nearly two-thirds of share sales last year – up from 30% in 2004 – but some investors and regulators say they could be misused, says The Wall Street Journal. The Securities and Exchange Commission plans to vote next Wednesday, which will change the rules governing trading plans.

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That means stock prices are rising Some executives raised the same amount or more by selling fewer shares. Snap Inc. CEO of Evan SpiegelSet a price target to sell Gets $ 60 to $ 80, totaling $ 710 million Pre-tax tax on 10 million shares – twice as much as it raised despite selling three million fewer shares in 2020.

Founder of Amazon.com Inc., Jeff Bezos, He usually sells some $ 10 billion a year in stocks to fund your space effort, Blue Origin LLC. This year, he has sold 25% less shares when raising approximately the same amount Before taxes, the company’s share price has doubled in the last two years.

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