Form 4: Guidewire CEO's Stock Activity: Grant & 10b5-1 Sale

Guidewire Software CEO Michael Rosenbaum reported the acquisition of 28,958 performance shares and the sale of 1,400 common shares under a pre-arranged trading plan.

Summary

• Michael George Rosenbaum, CEO and Director of Guidewire Software, Inc. (GWRE), reported changes in his beneficial ownership.
• On September 11, 2025, I acquired 28,958 shares of common stock at a price of $0, associated with a grant of performance shares.
• These performance shares cliff vest at the end of a three-year performance period, based on average performance of three one-year periods and continued employment through September 15, 2028.
• On September 15, 2025, I disposed of 1,400 shares of common stock at a price of $252.83 per share.
• This sale was an automatic transaction executed pursuant to a Rule 10b5-1 trading plan adopted on October 15, 2024.
• Following these transactions, I beneficially own 249,426 shares of common stock directly.
• I also beneficially own 28,958 performance shares, which are derivative securities.

Sentiment

Score: 6

Explanation: The grant of performance shares aligns the CEO's incentives with long-term company performance, which is generally viewed positively. The sale of shares was pre-planned under a 10b5-1 plan, making it a routine transaction rather than a signal of negative sentiment.

Positives

• The grant of 28,958 performance shares to the CEO aligns management's incentives with long-term company performance.
• The performance shares have a vesting period tied to financial targets over three one-year periods, demonstrating a commitment to sustained results.

Negatives

• The sale of 1,400 shares of common stock by the CEO, even if pre-planned, reduces my direct equity stake.

Risks

• The performance shares are subject to vesting conditions, meaning I may not ultimately receive all 28,958 shares if financial targets are not met or if employment ceases before September 15, 2028.

Future Outlook

My future compensation includes 28,958 performance shares that are subject to cliff vesting at the end of a three-year performance period, based on average performance against one-year financial targets and continued employment through September 15, 2028.

Management Comments

• The automatic sale was pursuant to a 10b5-1 Trading Plan adopted by the Reporting Person on October 15, 2024.
• Performance Shares cliff vest at the end of the three-year performance period based on the average performance of the three one-year performance periods and continued employment through September 15, 2028. One-year financial targets for each of the three performance measurement periods are set up front at the time of the grant.

Industry Context

This filing is a standard disclosure of insider trading activity, common across all publicly traded companies. The use of a 10b5-1 plan for stock sales is a common practice among executives to avoid accusations of trading on material non-public information. The grant of performance shares is a typical form of executive compensation in the software industry, linking pay to company performance.

Comparison to Industry Standards

• The use of Rule 10b5-1 trading plans for executive stock sales is a widely adopted best practice in corporate governance across U.S. public companies, including those in the software sector like Salesforce, Oracle, and Microsoft, to manage insider trading compliance.
• Performance share grants with multi-year vesting periods tied to financial targets are a standard component of executive compensation packages in the technology industry, similar to practices at companies such as Adobe, Workday, and ServiceNow, aiming to align executive incentives with long-term shareholder value creation.

Corporate Governance

Related Party Transactions

• The acquisition of 28,958 performance shares and the sale of 1,400 common shares by Michael George Rosenbaum, the CEO and a Director, constitute related party transactions as they involve an executive and the company's securities.

Stakeholder Impact

• Shareholders: The grant of performance shares ties executive compensation to company performance, potentially benefiting shareholders through improved long-term results. The 10b5-1 sale provides transparency regarding insider transactions.
• Employees: The CEO's compensation structure, including performance shares, sets a precedent for executive incentives within the company.

Next Steps

• Continued employment of Michael George Rosenbaum through September 15, 2028, for performance share vesting.
• Achievement of one-year financial targets over the three-year performance period for the performance shares to vest.

Key Dates

Keywords

Guidewire Software, GWRE, Michael Rosenbaum, CEO, Director, Form 4, Insider Trading, Stock Grant, Stock Sale, 10b5-1 Plan, Performance Shares, Equity Compensation