Form 4: Fathom Holdings CEO Gifts Shares, Discloses Performance Rights

Fathom Holdings Inc. CEO Marco Fregenal reported gifting 60,000 common shares and disclosed significant performance-based equity awards.

Summary

• Fathom Holdings Inc. CEO Marco Fregenal disposed of 60,000 shares of common stock via a gift on August 28, 2025.
• Following this transaction, Mr. Fregenal directly owns 1,559,353 common shares, with an additional 5,056 shares indirectly owned by his wife and 150,000 shares indirectly by the Fregenal 2020 Irrevocable Trust for his children.
• The filing also details 250,000 performance rights, contingent on the company's common stock achieving specified price targets, with expiration dates in August 2028 and November 2034.
• Certain directly held shares include 54,499 restricted shares vesting on September 1, 2025, and 200,000 restricted shares vesting over three years from their grant date of November 15, 2024.
• The reported transaction was made pursuant to a Rule 10b5-1(c) plan.

Sentiment

Score: 7

Explanation: The gift reduces direct ownership but is offset by significant performance-based awards and substantial remaining holdings, indicating continued alignment with company success. The 10b5-1 plan suggests pre-planned, not reactive, transactions.

Positives

• Disclosure of 250,000 performance rights aligns management incentives directly with shareholder value creation through specific stock price targets.
• The CEO retains a substantial direct and indirect beneficial ownership of 1,714,409 shares (1,559,353 direct + 5,056 indirect by wife + 150,000 indirect by trust), demonstrating continued significant stake in the company.
• The transaction was conducted under a Rule 10b5-1(c) plan, indicating a pre-arranged, non-discretionary disposition.

Negatives

• A disposition of 60,000 shares, even as a gift, reduces the CEO's direct ownership in the company.

Future Outlook

The vesting of 250,000 performance rights is contingent on Fathom Holdings Inc. common stock achieving specified price targets, indicating a future-oriented incentive structure tied to stock performance. Additionally, 54,499 restricted shares will vest on September 1, 2025, and 200,000 restricted shares will vest over three years from November 15, 2024.

Industry Context

This filing is a routine insider transaction report and does not provide specific industry context or trends.

Corporate Governance

Related Party Transactions

• The gift of 60,000 common shares by Marco Fregenal to an unspecified recipient.
• The indirect beneficial ownership of 150,000 shares held by the Fregenal 2020 Irrevocable Trust for the benefit of the reporting person's children, with the reporting person's spouse as trustee.

Stakeholder Impact

• Shareholders: The CEO's continued significant ownership and performance-based incentives align his interests with long-term shareholder value. The gift transaction represents a minor reduction in direct ownership but does not impact the overall share count.

Next Steps

• Vesting of 54,499 restricted shares on September 1, 2025.
• Continued vesting of 200,000 restricted shares over three years from November 15, 2024.
• Achievement of specified stock price targets for the 250,000 performance rights to vest.

Key Dates

Recommendation

The filing indicates a routine insider transaction (gift) under a 10b5-1 plan, alongside the disclosure of significant performance-based equity awards. While a disposition, the gift is not a sale for cash, and the CEO retains substantial direct and indirect holdings, including new performance rights tied to stock price appreciation. This suggests continued alignment with the company's long-term success rather than a negative signal. Therefore, a 'hold' recommendation is appropriate as this filing does not present new information that would fundamentally alter the investment thesis.

Keywords

Fathom Holdings, FTHM, Marco Fregenal, CEO, insider transaction, Form 4, beneficial ownership, stock gift, performance rights, equity compensation, Rule 10b5-1