Form 4: Intuitive Surgical Director Executes Pre-Planned Stock Sale

Intuitive Surgical Director Craig H. Barratt executed a pre-planned sale of 2,193 common shares after exercising stock options.

Summary

• Craig H. Barratt, a Director at Intuitive Surgical Inc. (ISRG), engaged in a series of transactions on October 24, 2025.
• Barratt acquired 2,193 shares of common stock by exercising non-qualified stock options at a price of $71.3233 per share.
• Immediately following the option exercise, Barratt disposed of 2,193 shares of common stock through a sale at a price of $548.01 per share.
• These transactions were conducted in accordance with a Rule 10b5-1 trading plan, which is set to expire on April 29, 2026.
• After these transactions, Barratt directly holds 0 shares of common stock.
• Barratt indirectly holds 27,198 shares of common stock through a Trust.
• Barratt retains 750 non-qualified stock options following the reported transactions, which were granted under the Non-Employee Directors' Stock Option Plan and vest 100% one year after the grant date or at the next Shareholders Meeting, whichever occurs first, provided service continues.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While it involves insider selling, the transaction was pre-planned under a 10b5-1 plan, which reduces any negative implications. The exercise of options also indicates the director realizing value from their compensation.

Positives

• The transactions were executed under a pre-arranged Rule 10b5-1 trading plan, indicating a structured and transparent approach to insider stock sales.
• The exercise of stock options at a lower price ($71.3233) and subsequent sale at a significantly higher price ($548.01) demonstrates the value realized by the director from their equity compensation.

Negatives

• The sale of shares by a director, even if pre-planned, can sometimes be perceived by the market as a lack of confidence, although this is mitigated by the 10b5-1 plan.

Future Outlook

The Rule 10b5-1 trading plan under which these transactions occurred is scheduled to expire on April 29, 2026. Remaining non-statutory stock options will vest 100% one year after their grant date or at the next Shareholders Meeting, whichever is earlier, contingent on the director's continued service to the company.

Management Comments

• The transaction was executed in accordance with a Trading Plan that complies with SEC Rule 10b5-1 and is set to expire on April 29, 2026.
• The non-statutory stock option was granted pursuant to the Non-Employee Directors' Stock Option Plan, with vesting contingent on continued service.

Industry Context

Insider transactions, such as option exercises and subsequent stock sales, are a routine aspect of executive and director compensation in publicly traded companies across all industries, including the medical technology sector. The use of Rule 10b5-1 trading plans is a common and accepted practice for corporate insiders to manage their equity holdings in a pre-arranged and compliant manner, mitigating concerns about trading on material non-public information.

Comparison to Industry Standards

• The use of a Rule 10b5-1 trading plan for insider stock transactions is a standard corporate governance practice widely adopted by executives and directors across various industries, including medical device companies like Intuitive Surgical, to ensure compliance with insider trading regulations.
• The structure of non-qualified stock options, including vesting schedules tied to service, is a common component of non-employee director compensation packages in publicly traded companies, aligning director interests with long-term shareholder value.

Stakeholder Impact

• Shareholders: The sale of shares by a director, even if pre-planned, could be viewed with slight caution, though the 10b5-1 plan mitigates concerns about opportunistic selling. The director's continued indirect ownership through a trust and remaining options still aligns their interests with shareholders.
• Employees: No direct impact on employees is indicated by this filing.

Next Steps

• The remaining 750 non-qualified stock options will continue to vest based on the terms of the Non-Employee Directors' Stock Option Plan.
• The Rule 10b5-1 trading plan will remain active until its expiration on April 29, 2026, potentially facilitating further pre-planned transactions.

Key Dates

Keywords

Intuitive Surgical, ISRG, Form 4, Insider Trading, Stock Option Exercise, Stock Sale, 10b5-1 Plan, Director Transactions, Equity Compensation