Elon Musk, Other Leaders Sell Stock at Historic Levels
Insiders like the Waltons, Mark Zuckerberg and Google’s co-founders have sold $63.5 billion.
5 min
Company founders and leaders are unloading their stock at historic levels, with some selling shares in their businesses for the first time in years, amid soaring market valuations and ahead of possible changes in U.S. and some state tax laws.
So far this year, 48 top executives have collected more than $200 million each from stock sales, nearly four times the average number of insiders from 2016 through 2020, according to a Wall Street Journal analysis of data from the research firm InsiderScore.
The wave has included super sellers such as cosmetics billionaire Ronald Lauder and Google co-founders Larry Page and Sergey Brin, who have sold shares for the first time in four years or more as the economic recovery fueled strong growth in sales and profit. Other high-profile insiders—including the Walton family, heirs to the Walmart Inc. fortune, and Mark Zuckerberg, chief executive of Facebook parent Meta Platforms Inc.—have accelerated sales and are on track to break recent records for the number of shares they have sold.
Across the S&P 500, insiders have sold a record $63.5 billion in shares through November, a 50% increase from all of 2020, driven both by stock-market gains and an increase in sales by some big holders. The technology sector has led with $41 billion in sales across the entire market, up by more than a third, with a smaller amount but an even bigger increase in financial services.
“What you’re seeing is unprecedented” in recent years, said Daniel Taylor, an accounting professor at the University of Pennsylvania’s Wharton School who studies trading by executives and directors. He said 2021 marks the most sales he can recall by insiders in a decade, resembling waves of sales during the twilight of the early 2000s dot-com boom.
Insiders have a long history of selling at peaks and buying in troughs, Mr. Taylor said.
Investors sometimes worry that large sales by insiders mean they don’t expect significant further share-price increases, and big, unexpected sales can weigh on share prices. Companies often require top executives to hold stakes equivalent to several times their annual salary, but many high-profile executives easily exceed those thresholds even after selling.
Executives aren’t required to say why they sold, and few do. The heaviest selling came as lawmakers in Washington hashed out potential tax increases as part of the Democrats’ Build Back Better legislative package, at times considering raising the long-term capital-gains tax rate. In November, insiders unloaded a collective $15.59 billion.
The legislation, pending in the Senate, imposes a 5% tax on adjusted gross income above $10 million beginning in 2022, and another 3% on income over $25 million, including capital gains from stock sales. Congressional revenue estimates assume taxpayers will accelerate capital gains in 2021. Wealthy taxpayers could save up to $8 million in taxes on every $100 million of shares sold ahead of the effective date, Mr. Taylor said. Such potential tax savings have been “a powerful incentive to sell this year,” he said.
Tesla Inc. CEO Elon Musk, considered the world’s richest person, with a net worth of about $270 billion, ridiculed a proposed tax on billionaires’ unrealised capital gains, saying on Twitter that eventually the government runs “out of other people’s money and then they come for you.” He has moved to sell more than $10 billion in Tesla stock over about a month—including roughly $4 billion to cover tax withholding on option exercises—in his first sale of company shares since 2010, other than sales designated as made solely to satisfy tax-withholding obligations.
Microsoft Corp. CEO Satya Nadella last month sold half his total stake, for about $374 million before taxes. Analysts said the move could be related to Washington state instituting a 7% tax for long-term capital gains next year. A Microsoft spokesman said at the time that the sale was for “personal financial planning and diversification reasons.”
Another spike in insider-stock sales occurred in May when company leaders sold off $13.12 billion in shares, following strong corporate earnings reports.
The Journal examined data on company leaders’ stock transactions through Dec. 3, drawn from regulatory filings by InsiderScore. Sales marked as made solely to satisfy tax withholding requirements were excluded. Aggregate figures, through Nov. 30, exclude sales by major shareholders who aren’t also executives or directors.
About a dozen high-profile founders and CEOs sold millions of dollars in company shares this year after selling none in all of 2020, in several cases selling for the first time in five or 10 years.
Messrs. Page and Brin last sold stock in Google parent Alphabet Inc. at about $800 a share in 2017, according to InsiderScore. When they returned to the market in May, shares had risen to $2,200. This year, they have each sold nearly 600,000 shares for about $1.5 billion before taxes. Each still owns about 6% of Alphabet, according to FactSet.
The duo’s sales came as the company reported record revenues and profits more than doubled from a year earlier, and seven months after the Justice Department and state attorneys general filed a civil antitrust lawsuit against Google. The company’s share price reached an all-time high of $3,019.33 on Nov. 19, and has since pulled back to about $2,950.
An Alphabet spokesman declined to comment. Messrs. Brin and Page didn’t respond to a request for comment.
Mr. Lauder, the son of Estée Lauder Cos.’ founders, has shed just over two million shares this year, for more than $600 million before taxes in his first sales since 2016.
Dell Technologies Inc.’s Michael Dell and the Carlyle Group’s David Rubenstein also came off the sidelines over the past year. Mr. Dell sold five million shares for nearly $253 million before taxes, his first since taking Dell public again in 2018. Mr. Rubenstein sold 11 million shares this year for $495 million before taxes, after making his first-ever sale in November 2020. His sales have followed him stepping aside as co-CEO and transitioning into a role as co-chairman.
A spokesman for Mr. Lauder declined to comment. Spokespeople for Mr. Dell didn’t respond to requests for comment.
Other insiders continued selling but at a faster clip this year. The Walton family quadrupled the number of shares its members sold, receiving $6.5 billion before taxes so far in 2021, from $1.5 billion in 2020. The sales came in a year when Walmart’s share price flirted with all-time highs, and the company posted higher sales in three quarters.
Mr. Zuckerberg increased the number of Meta shares he sold nearly sevenfold from a year ago, collecting nearly $4.5 billion before taxes. His selling came as the company reported record sales and earnings, despite challenges presented by iPhone privacy changes and congressional hearings over harms from its platforms following the Journal’s Facebook Files series.
Walmart and Meta spokespeople said the sales are generally governed by preset trading plans. They said the Walton family’s proceeds help fund nonprofit initiatives, and Mr. Zuckerberg’s fund the Chan Zuckerberg Initiative LLC, his family’s for-profit philanthropic company.
Executives often sell shares under advance trading arrangements, dubbed 10b5-1 plans, that trigger sales on a fixed schedule or at price thresholds to avoid running afoul of insider-trading rules. The plans were used in almost two-thirds of stock sales last year—up from 30% in 2004—but some investors and regulators worry they can be abused. The Securities and Exchange Commission on Wednesday is scheduled to vote on a proposal that would change the rules governing the trading plans.
Finance executive Charles Schwab sold the most shares since 2015 in the company he founded, Charles Schwab Corp.: 5.3 million shares for $361 million.
“People are clearly being opportunistic,” said Ben Silverman, InsiderScore’s director of research. “These guys have been telling you all year that the market is overheated.”
Soaring stock prices mean some executives raised the same amount of money, or more, selling fewer shares. Snap Inc. CEO Evan Spiegel set a price target to sell between $60 and $80, receiving a total of $710 million before taxes on 10 million shares—more than doubling his 2020 proceeds despite selling three million fewer shares.
Amazon.com Inc. founder Jeff Bezos typically sells about $10 billion in stock annually to help fund his space venture, Blue Origin LLC. This year, he has sold 25% fewer shares while collecting roughly the same amount of money before taxes because the company’s share price has doubled over the past two years.
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Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
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U.S. employees are more dissatisfied than they were in the thick of the pandemic
5 min
Americans, by many measures, are unhappier at work than they have been in years.
Despite wage increases, more paid time off and greater control over where they work, the number of U.S. workers who say they are angry, stressed and disengaged is climbing, according to Gallup’s 2023 workplace report. Meanwhile, a BambooHR analysis of data from more than 57,000 workers shows job-satisfaction scores have fallen to their lowest point since early 2020, after a 10% drop this year alone.
In interviews with workers around the country, it is clear the unhappiness is part of a rethinking of work life that began in 2020. The sources of workers’ discontent range from inflation, which is erasing much of recent pay gains, to the still-unsettled nature of the workday. People chafe against being micromanaged back to offices, yet they also find isolating aspects of hybrid and remote work. A cooling job market—especially in white-collar roles—is leaving many professionals feeling stuck.
Companies have largely moved on from pandemic operating mode, cutting costs and renewing a focus on productivity. The disconnect with workers has managers frustrated, and no quick fix seems to be at hand. Those in charge said they have given staff more money, flexibility and support, only to come up short.
The experiences of workers like Lindsey Leesmann suggest how expectations have shifted from just a few years ago. Leesmann, 38 years old, said she soured on a philanthropy job after having to return to the office two days a week earlier this year.
Prepandemic, she would have been happy working three days a week at home. “It would have been a dream come true.” Still, her team’s in-office requirements seemed like going backward, and made her feel that her professionalism and work quality were in doubt. Instead of collaborating more, she and others rarely left their desks, except for meetings or lunch, she said. Negative feelings followed her home on her hourlong commute, leaving her short-tempered with her kids.
“You try to keep work and home separate, but that sort of stuff is just impacting your mental health so much,” said Leesmann, who recently moved to a new job that requires five in-office days a month.
No more honeymoon
The discontent has business leaders struggling for answers, said Stephan Scholl, chief executive of Alight Solutions, a technology company focused on benefits and payroll administration. Many of the Fortune 100 companies on Alight’s client list boosted spending on employee benefits such as mental health, child care and well-being bonuses by 20% over the pandemic years.
“All that extra spend has not translated into happier employees,” Scholl said. In an Alight survey of 2,000 U.S. employees this year, 34% said they often dread starting their workday—an 11-percentage-point rise since 2020. Corporate clients have told him mental-health claims and costs from employee turnover are rising.
One factor is the share of workers who are relatively new to their roles after record levels of job-switching, said Benjamin Granger, chief workplace psychologist at software company Qualtrics. Many employers have focused more on hiring than situating new employees well, leaving many newbies feeling adrift. In other cases, workers discovered shiny-seeming new jobs weren’t a great fit.
The upshot is that the newest workers are among the least satisfied, Qualtrics data show—a reversal of the higher levels of enthusiasm that fresh hires typically voice. In its study of nearly 37,000 workers published last month, people less than six months into a job reported lower levels of engagement, feelings of inclusion and intent to stay than longer-tenured workers. They also scored lower on those metrics than new workers in 2022, suggesting the pay raises that lured many people to new jobs might not be as satisfying as they were a year or two ago.
“What happened to that honeymoon phase?” Granger said.
John Shurr, a 66-year-old former manufacturing engineer, took a job as an inventory manager at a heavy-equipment retailer in the spring in Missoula, Mont., after being laid off during the pandemic.
“It was a nice job title on a pretty rotten job,” said Shurr, who learned soon after starting that his duties would also include sales to walk-in customers.
When Shurr broached the subject, his boss asked him to give it a chance and said he was really needed on the showroom floor. Shurr, who describes himself as more of a computer guy, quit about a month later.
“I feel kind of trapped at the moment,” said Shurr, who has since taken a part-time job as a parts manager as he tries to find full-time work.
Bridging the distance
Long-distance relationships between bosses and staff might also be an issue. Nearly a third of workers at large firms don’t work in the same metro area as their managers, up from about 23% in February 2020, according to data from payroll provider ADP.
Distance has weakened ties among co-workers and heightened conflict, said Moshe Cohen, a mediator and negotiation coach who teaches conflict resolution at Boston University’s Questrom School of Business. He has noticed more employees calling co-workers or bosses toxic or impossible, signs that trust is thin.
Cohen’s corporate clients said their employees are increasingly transactional with one another. Some are coaching workers in the finer points of dialogue, such as saying hello first before jumping into the substance of a conversation.
“The idea of slowing down, taking the time, being genuine, trying to actually establish some sort of connection with the other person—that’s really missing,” Cohen said.
One Los Angeles-based consultant in his 20s, who asked to remain anonymous because he is seeking another job, said that when he started his job at a large company last year, his largely remote colleagues were focused on their own work, unwilling to show a new hire the ropes or invite him for coffee. Many leave cameras off for video calls and few people show up at the office, making it hard to build relationships.
“There’s zero humanity,” he said, noting that he is seeking another job with a strong office culture.
The share of U.S. companies mandating office attendance five days a week has fallen this year—to 38% in October from 49% at the start of the year—according to Scoop Technologies, a software firm that developed an index to monitor workplace policies of nearly 4,500 companies.
Some companies have reversed flexible remote-work policies—in large part, they said, to boost employee engagement and productivity—only to face worker backlash.
Not all the data point downward. A Conference Board survey in November 2022 of U.S. adults showed workers were more satisfied with their jobs than they had been in years. Key contingents among the happiest employees: people who voluntarily switched roles during the pandemic and those working a mix of in-person and remote days. But that poll was taken before a spate of layoffs at high-profile companies and big declines in the number of knowledge-worker and professional jobs advertised.
At Farmers Group, workers posted thousands of mostly negative comments on the insurer’s internal social-media platform after its new CEO nixed the company’s previous policy allowing most workers to be remote.
Employees like Kandy Mimande said they felt betrayed. “We couldn’t get the ‘why,’” said the 43-year-old, who had sold her car and spent thousands of dollars to redo her home office under the remote-work policy. She shelled out $10,000 for a used car for the commute. A company spokesperson said that not all employees will support every business decision and that Farmers hasn’t seen a significant impact on staff retention.
During a brief leave, Mimande realised she no longer felt a sense of purpose from her product-management job. She resigned last month after she and her wife decided they could live on one salary.
She now helps promote a band and pet-sits. “It’s so much easier for me to report to myself,” she said.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
