Form 4: Okta CEO Sells $2.95M in Stock Under 10b5-1 Plan

Okta CEO Todd McKinnon executed pre-planned sales of Class A Common Stock totaling approximately $2.95 million and engaged in option exercises and stock gifts.

Summary

• Okta, Inc. CEO Todd McKinnon reported transactions involving the company's Class A and Class B Common Stock on September 22, 2025.
• McKinnon sold a total of 31,968 shares of Class A Common Stock through multiple transactions at weighted average prices ranging from $91.8091 to $93.7219 per share.
• The total value of Class A Common Stock sold amounted to approximately $2,951,568.61.
• These sales were conducted pursuant to a Rule 10b5-1 trading plan adopted on April 15, 2025.
• McKinnon exercised options to acquire 17,109 shares of Class B Common Stock at an exercise price of $8.97 per share, which were then converted to Class A Common Stock.
• A total of 34,218 shares of Class B Common Stock were disposed of by gift, with 17,109 shares from direct holdings and another 17,109 shares impacting indirect holdings by a trust.
• Following these transactions, McKinnon directly holds 0 Class A Common Stock from the reported sales blocks, and indirectly holds 6,383,887 Class B Common Stock through a trust.
• McKinnon retains significant derivative holdings, including various employee stock options for Class A Common Stock and Restricted Stock Units (RSUs) with staggered vesting schedules.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While insider selling can be perceived negatively, these transactions were pre-planned under a 10b5-1 plan, mitigating concerns about opportunistic selling. The CEO also exercised options and retains substantial indirect holdings and future equity awards.

Positives

• The sales were executed under a pre-arranged Rule 10b5-1 trading plan, indicating a planned disposition rather than a reaction to new, non-public information.
• McKinnon exercised options to acquire 17,109 shares at a significantly lower price ($8.97) compared to the current market prices, demonstrating value realization.
• Significant indirect holdings of 6,383,887 Class B Common Stock by a trust indicate continued substantial ownership and alignment with shareholder interests.
• The reporting person holds a substantial number of unexercised employee stock options and unvested Restricted Stock Units, representing future equity upside.

Negatives

• The CEO sold a notable amount of Class A Common Stock, totaling 31,968 shares, which reduces his direct equity stake in the company.
• The total value of shares sold, approximately $2.95 million, represents a significant disposition of personal holdings.

Risks

• No specific risks were mentioned in this Form 4 filing, as it primarily reports insider transactions.

Future Outlook

The filing does not contain forward-looking statements or guidance, as it is a report of past insider transactions.

Management Comments

• The reported price in Column 4 is a weighted average price. These shares were sold in multiple transactions at prices ranging from $91.40 to $92.395 per share, inclusive. The Reporting Person undertakes to provide to the Issuer, any security holder of the Issuer, or to the staff of the U.S. Securities and Exchange Commission (the 'SEC'), upon request, full information regarding the number of shares sold at each separate price within the range set forth in this footnote.

Industry Context

This Form 4 filing reports routine insider transactions by a key executive at a leading identity and access management company. Such transactions are common among executives for liquidity, diversification, and tax planning, and do not inherently reflect specific industry trends.

Comparison to Industry Standards

• NA

Stakeholder Impact

• Shareholders: The sale of shares by the CEO could be interpreted as a slight reduction in direct alignment, though mitigated by the 10b5-1 plan and continued significant holdings.
• Employees: The vesting of RSUs and exercise of options are standard compensation practices, indicating ongoing executive compensation structures.

Next Steps

• Remaining shares underlying Restricted Stock Units will vest in 11 equal quarterly installments, subject to continuous employment.

Key Dates

Recommendation

The filing details routine insider transactions, including sales under a pre-arranged 10b5-1 plan, option exercises, and gifts. While the CEO sold a notable amount of stock, this was planned and not indicative of new negative information. The CEO retains significant equity exposure through indirect holdings and unvested awards. These transactions do not fundamentally alter the investment thesis for Okta, warranting a 'hold' recommendation as they are largely expected and part of standard executive compensation and financial planning.

Keywords

Okta, OKTA, Todd McKinnon, Insider Trading, Form 4, Stock Sale, Option Exercise, Rule 10b5-1, CEO, Equity Compensation, Restricted Stock Units, Class A Common Stock, Class B Common Stock