Form 4: Paycom CEO Chad Richison Sells Shares Under 10b5-1 Trading Plan

Paycom's CEO, Chad Richison, executed sales of company stock on October 15, 2024, under a pre-arranged 10b5-1 trading plan.

Summary

• Chad Richison, CEO, President, and Chairman of Paycom Software, Inc., sold shares of common stock on October 15, 2024.
• The sales were executed under a pre-arranged Rule 10b5-1 trading plan adopted on February 16, 2024.
• The transactions involved multiple sales at varying prices, ranging from $164.55 to $168.95 per share.
• A total of 1,949 shares were sold directly by Richison.
• Additionally, 1,949 shares held by Ernest Group, Inc., where Richison is the sole director, were also sold.
• Richison also indirectly owns shares through various irrevocable trusts for his children and grandchildren, as well as a trust for his spouse.
• Following the reported transactions, Richison directly owns 2,772,360 shares and indirectly owns 3,468,199 shares through Ernest Group, Inc.

Sentiment

Score: 6

Explanation: The sentiment is neutral. It's a routine transaction under a pre-existing plan, but insider sales can sometimes create slight uncertainty among investors.

Industry Context

Sales by insiders are a common occurrence, especially when executed under pre-arranged trading plans like Rule 10b5-1. These plans allow insiders to sell shares over a period of time without being accused of trading on non-public information. The market typically views these sales based on the overall volume and the context of the company's performance.

Comparison to Industry Standards

• Comparing Richison's sales to other CEOs in the software industry, the volume appears relatively small as a percentage of his total holdings.
• For example, CEOs at companies like Workday or Salesforce often have similar 10b5-1 plans, and their sales are usually a small fraction of their overall equity.
• The key difference is the size of the company and the CEO's overall stake; Richison's significant ownership means even small sales can be noteworthy.

Stakeholder Impact

• The stock sale could have a minor impact on shareholders, potentially creating slight downward pressure on the stock price in the short term.
• Employees may perceive the sale as a lack of confidence, although the existence of a 10b5-1 plan mitigates this concern.

Key Dates