Form 4: Butterfly Network Executive Granted RSUs, Sells Shares for Tax

Butterfly Network's CAO and SVP of Finance, Megan Carlson, received a grant of 97,883 Restricted Stock Units and subsequently sold 41,978 shares to cover tax obligations.

Summary

• Megan Carlson, Chief Accounting Officer and Senior Vice President of Finance at Butterfly Network, Inc. (BFLY), was granted 97,883 Restricted Stock Units (RSUs) on March 2, 2026.
• Each RSU represents the right to receive one share of Class A Common Stock upon vesting, with vesting occurring in three equal annual installments beginning on March 1, 2027.
• Following the RSU grant, Carlson's direct beneficial ownership of Class A Common Stock totaled 659,609 shares, which includes 14,282 shares acquired through the company's employee stock purchase plan on December 31, 2025.
• On March 3, 2026, Carlson disposed of 41,978 shares of Class A Common Stock at a weighted average price of $3.712 per share.
• This sale was an automatic 'sell-to-cover' transaction to satisfy tax withholding obligations related to the vesting of restricted stock units, not a discretionary sale.
• After the sale, Carlson's direct beneficial ownership of Class A Common Stock decreased to 617,631 shares.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as slightly positive due to the RSU grant, which aligns executive incentives with long-term company performance, despite the routine tax-related share sale.

Positives

• The grant of 97,883 Restricted Stock Units (RSUs) to a key executive aligns her interests with long-term shareholder value.
• The RSUs vest over three years, indicating a commitment to retaining key management.

Negatives

• A disposition of 41,978 shares, even for tax purposes, reduces the executive's direct equity stake in the company.

Future Outlook

The granted Restricted Stock Units (RSUs) are scheduled to vest in three equal annual installments, commencing on March 1, 2027, contingent upon the reporting person's continued service.

Management Comments

• The Issuer has adopted a 'sell-to-cover' policy to satisfy the tax withholding obligations of the Reporting Person.
• The sales reported on this Form 4 represent the number of shares required to be sold by the Reporting Person to cover tax withholding obligations in connection with the vesting of restricted stock units.
• Such sales were automatic and not at the discretion of the Reporting Person.

Industry Context

StockSavvy.ai notes that RSU grants are a common form of executive compensation in the technology and medical device industries, aiming to incentivize long-term performance and retention. 'Sell-to-cover' transactions are standard practice for managing tax liabilities associated with equity vesting.

Comparison to Industry Standards

• The use of Restricted Stock Units (RSUs) for executive compensation is a widely adopted practice across industries, including medical technology, aligning with compensation structures seen at companies like Intuitive Surgical (ISRG) or Medtronic (MDT).
• The 'sell-to-cover' mechanism for tax withholding is a standard and efficient method for executives to manage tax obligations upon equity vesting, comparable to policies at most publicly traded companies with equity compensation plans.

Corporate Governance

Stakeholder Impact

• Shareholders: The RSU grant aligns executive interests with long-term shareholder value. The tax-related sale is a routine event and not indicative of a change in executive confidence.
• Employees: The RSU grant and ESPP participation (as noted in the filing) indicate ongoing equity compensation programs, which can be a positive for employee retention and motivation.

Next Steps

• The granted RSUs will begin vesting in three equal annual installments starting March 1, 2027.

Key Dates

Keywords

Butterfly Network, BFLY, SEC Form 4, Insider Transaction, Restricted Stock Units, RSU Grant, Stock Sale, Tax Withholding, Executive Compensation, Corporate Officer