All of a sudden, Marc Benioff has been cashing out of hundreds of thousands of Salesforce.com shares.
Since June 9, he’s sold over 420,000 shares for nearly $US24 million, according to insider trading forms filed with the SEC.
We should note: All of these transactions were prescheduled, meaning they were planned in advance and are not in reaction to something going on at Salesforce.com.
Plus, Benioff still owns plenty of shares, nearly 40.6 million shares, the second-largest shareholder after institutional investor Fidelity.
But the volume of transactions in one month is highly unusual for Benioff. He’s not a Sheryl Sandberg. She routinely sells $US17 million to $US20 million chunks of Facebook stock. (She’s sold a good $US152 million since February.).
Benioff’s almost three dozen transactions in June, all stock sales, represent all of his trading in 2014, according to records kept by Insidertrading.org.
Most of the sales were in the $US57-per-share range. That represents a tidy profit from his 2013 stock options, when he was granted nearly 1.85 million options at $US52.30.
He’s likely just cashing in on Salesforce.com’s hot stock price lately. It’s been on a steady climb since mid-June. But he missed out on the real bonanza. The stock hit an all-time high back in March: $US67. He didn’t sell any stock at that time.
Timing of theses sale is also a little interesting. They began shortly after Salesforce.com’s annual meeting on June 2, in which investors let the company know that they were less than pleased with how much money the company was spending on stock options.
Salesforce.com is growing and hiring like crazy and is using stock options as incentives for everyone from Benioff to rank-and-file employees. The company said in May that it plans on spending $US578 million on option awards for employees in its current fiscal year and this will be the biggest contributing factor to the $US0.47 to $US0.49 per share loss it expects to post, it said.
So at the June meeting, shareholders got to cast an advisory “Say on Pay” vote. While the majority, 77%, were good with the plan, that’s still a relative slap on the wrist.
Say on Pay is when shareholders get to approve a company’s compensation plans; the results of the vote are nonbinding. At most companies, shareholders overwhelmingly approve Say on Pay. It commonly gets over 90% “yes” votes, according to the Say on Pay research project by Semler Brossy consulting. Salesforce.com is among only 16% of companies to receive such a low rate of approval.
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