Microsoft CEO Nadella Makes Biggest Stock Sale Since Becoming CEO

In a regulatory filing on Friday, Microsoft CEO Satya Nadella disclosed the sale of a nearly one-third of his common shares in the software company. Netting Nadella more than $35 million, he sold 328,000 shares (in multiple trades with prices that range from $109.08 to $109.68) as Microsoft stock trades approached an all-time high.  Of course, Microsoft share prices have continued to rise over the past year:  up 53 percent.  While share prices reached $109 by the weekend, this week, the record closing price was only a few weeks ago:  $110.83 on July 25th.

Now, it may sound like 328,000 shares but 50-year-old Nadella still retains 778,596 shares of common stock.  And, according to the latest proxy statement (dated September 29), he also still has 2.28 million underlying shares or stock units.  The shares in this sale represent roughly 30 percent of Nadella’s common Microsoft stock; is contract requires him to have 15 times his base salary in stock. And that base salary, in 2017, was $1.45 million; with total compensation upwards of $20 million.

In a recent statement, a Microsoft spokesperson reported, “The stock divestitures made today were for personal financial planning and diversification reasons.  Satya is committed to the continued success of the company and his holdings significantly exceed the holding requirements set by the Microsoft board of directors.”

With that in mind, it should be more clear that this move is just the first of many in a new trading play where Nadella will continue to regularly sell portions of his Microsoft equity. The trading plan will follow more share of sales on a fixed calendar.

Obviously, Microsoft shares have increased in value since Nadella took over: when Steve Ballmer retired from the CEO role in February of 2014. As such, Nadella sold 143,000 shares in 2016, which were worth about $58 per share at the time (for a total of $8.3 million). Since 2014, then, share prices appear to have tripled.

Microsoft stock bumped up 7 cents (to $109.07) in after-hours trading on Friday after falling 67 cents during the day’s regular trading session.

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