A Detroit Free Press (“the Freep”) story by Eric D. Lawrence reports that a number of Stellantis executives have sold—or marked their intent to sell—stock in the company. Stellantis told the Freep that the sales were largely due to tax rules obligations.
Executives have to pay income tax on options when they are converted to actual stock. If they do not immediately sell the stock (in the same transaction), they must pay taxes or claim credits later on the difference between the price when the stock was acquired from the options, and when it was sold. Generally executives in public companies can also only buy or sell stock during specified periods, and with permission of the company.
Sales of stock by key executives must be reported to the SEC. Stellantis’ form reported planned or actual sales from Mark Stewart, North American chief operating officer; Richard Palmer, chief financial officer; Antonio Filosa, South American chief operating officer; Carl Smiley, India/Pacifica chief operating officer; Giorgio Fossati, general counsel; and John Elkann, chair of the board and a member of the family which controlled FCA before the Stellantis deal.
The amounts sold were:
- Stewart: 684,087 shares (over $11 million)
- Palmer: 305,630 shares
- Elkann: 187,853
- Smiley: 80,619
- Fossati: 54,957
- Filosa: 37,000
Many of these shares were acquired as bonus or compensation. If they were granted as shares and not as options, taxes would be due immediately.
Richard Palmer has already announced his retirement after being with the companies for 20 years.
There has been some speculation about upcoming North American labor issues, with many analysts expecting a strike. On the other hand, executives do often sell stock both for tax reasons and to avoid having to dispose of too many shares at once later on.