Form 4: ACV Auctions Executive Corrects Stock Unit Reporting and Details Future Vesting

ACV Auctions Inc.'s CCDSO, Craig Eric Anderson, filed an amended Form 4 to correct the reporting of Performance Stock Units and disclose future tax-related share withholdings and ESPP acquisitions.

Summary

• An administrative error in a previously filed Form 4 on June 3, 2024, was corrected, reclassifying 40,102 Performance Stock Units (PSUs) from Common Stock in Table I to their correct reporting as PSUs in Table II.
• A total of 13,261 shares of Common Stock were withheld by ACV Auctions Inc. on July 1, 2025, at a price of $16.48 per share to cover tax liabilities upon the vesting of previously granted time-based restricted stock units; this was not a discretionary sale.
• The reporting person's direct beneficial ownership of Common Stock decreased from 367,981 shares to 355,799 shares following these tax-related transactions.
• The 40,102 Performance Stock Units are subject to both service-based vesting conditions and a 'Stock Price Condition,' which requires the average closing price of the company's Common Stock over a 30-trading day period ending July 1, 2027, to meet or exceed a designated level.
• PSUs are scheduled to vest in one-third installments on July 1, 2025, 2026, and 2027, contingent on the Stock Price Condition being satisfied prior to the relevant date.
• 1,079 shares were acquired through the Company's 2021 Employee Stock Purchase Plan (ESPP) for the purchase period of December 1, 2024, to May 31, 2025.
• The company's Class A Common Stock is now referred to as Common Stock following changes to the articles of incorporation, with no alteration to associated rights.

Sentiment

Score: 6

Explanation: The filing is largely administrative, correcting a previous error and detailing routine equity compensation events (tax withholding, ESPP acquisition, PSU vesting). The PSU grant is a positive long-term incentive, but the tax-related share disposal is a minor negative in terms of direct ownership. Overall, it's neutral to slightly positive due to the incentive alignment and ESPP acquisition, with no major new positive or negative news.

Positives

• Acquisition of 1,079 shares through the Employee Stock Purchase Plan (ESPP) indicates continued participation in employee ownership programs.
• The grant of 40,102 Performance Stock Units (PSUs) aligns executive incentives with long-term stock performance and shareholder value creation, subject to specific vesting conditions.

Negatives

• Disposal of 13,261 shares of Common Stock to cover tax liabilities upon vesting of restricted stock units, which, while not a discretionary sale, reduces the executive's direct shareholding.

Risks

• The vesting of 40,102 Performance Stock Units is contingent on a 'Stock Price Condition,' meaning the executive may not fully realize the value of these units if the company's stock price does not meet a designated level by July 1, 2027.

Future Outlook

The vesting of Performance Stock Units is tied to future service and the achievement of a specific stock price condition by July 1, 2027, indicating a long-term incentive structure for the executive.

Management Comments

• The company's stock previously referred to as Class A Common Stock is now referred to as Common Stock following changes made to the company's articles of incorporation. There was no change to any rights related to the stock.
• These shares were withheld by the Issuer to cover the tax liability upon the vesting of a time-based restricted stock unit previously granted, and does not represent a discretionary sale by the reporting person.
• The PSUs are subject to both service-based vesting conditions and a requirement that the average closing price of the Class A Common Stock of Company, as measured over a period of 30 trading days commencing at the grant date and ending July 1, 2027, equals or exceeds a designated level (the 'Stock Price Condition').
• The PSUs will vest in one-third installments on each of July 1, 2025, 2026 and 2027, provided that the Stock Price Condition has been satisfied prior to the relevant date. If the Stock Price Condition has not yet been satisfied prior to the relevant date, then the PSUs that otherwise would have vested on such date will remain unvested unless and until the Stock Price Condition has been satisfied, subject to the Reporting Person's continuous service through the relevant vesting date.

Industry Context

This Form 4 filing reflects standard executive compensation practices in the technology and automotive marketplace industries, where performance-based equity awards like PSUs are common to align executive incentives with long-term shareholder value and company performance. The tax withholding for RSU vesting is also a routine event for executives receiving equity compensation.

Comparison to Industry Standards

• The use of Performance Stock Units (PSUs) with both service-based and stock price-based vesting conditions is a common practice in the technology and growth-oriented sectors, similar to compensation structures seen at companies like Carvana (CVNA) or Vroom (VRM) in the online vehicle marketplace, or broader tech companies.
• The withholding of shares to cover tax liabilities upon the vesting of restricted stock units is a standard, non-discretionary event for equity compensation, consistent with practices across most publicly traded companies.
• Participation in an Employee Stock Purchase Plan (ESPP) is a common benefit offered by many companies, including those in the automotive tech space, to encourage employee ownership and alignment.

Corporate Governance

Stakeholder Impact

• Shareholders: The correction of the Form 4 ensures accurate disclosure of executive equity holdings. The PSU grant aligns executive incentives with long-term shareholder value. The tax-related share disposal is a routine event and not indicative of a lack of confidence.
• Employees: The Employee Stock Purchase Plan (ESPP) allows employees, including the reporting person, to acquire company stock, fostering employee ownership.

Next Steps

• Continued service by the reporting person to meet service-based vesting conditions for PSUs.
• Monitoring of ACV Auctions Inc.'s stock price performance to meet the 'Stock Price Condition' for PSU vesting by July 1, 2027.
• Future vesting of PSUs in one-third installments on July 1, 2025, 2026, and 2027, contingent on conditions.

Key Dates

Recommendation

Keywords

ACV Auctions, ACVA, Form 4, SEC Filing, Insider Trading, Stock Ownership, Performance Stock Units, PSU, Restricted Stock Units, RSU, Employee Stock Purchase Plan, ESPP, Executive Compensation, Corporate Governance, Share Withholding, Tax Liability