Most of the activities involved Krzanich training employee stock options these opportunities allowed Krzanich to obtain Intel shares at prices significantly under where they are currently trading and then quickly selling those shares that he purchased at a discount on the open market.
There’s zero wrong with, or even uncomfortable about, such matters. Company executives, and even some workers, often receive either stock alternatives and or restricted stock units (RSUs) as part of their benefits packages, and at some point, the objects of such damages are going to want to turn it into cash.
Indeed, as described here, insider selling isn’t always a red flag.
However, there were two events that Krzanich reported in that Form 4 filing that I thought were more distinguished than typical stock option exercises and following share sales. Let’s take a closer look.
Krzanich is putting the bare minimum
Intel’s corporate bylaws mandate a definite amount of stock ownership by managers and board members by the time they’ve been with the company for five years.
Since Krzanich was selected Intel CEO in May of 2013, he’ll need to have 250,000 shares by May 2018 or about five periods from now.
What’s impressive, then, is that before Krzanich made any of the activities that he reported in his most recently filed Form 4, he held 495,743 shares.
After the options applications and subsequent sales which left Krzanich’s position unchanged at 495,743 shares, Krzanich then made two major transactions: a sale of 242,830 shares and a sale of 2,913 shares, with each event happening at an average price of $44.555, per the filing.
Those two events left Krzanich with precisely 250,000 shares the bare point that he’s required to hold as CEO.
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