Form 4: Paycom's Chad Richison Sells Shares Under 10b5-1 Plan, Voluntarily Disgorges Potential Profits

Chad Richison, Co-CEO, President, and Chairman of Paycom Software, Inc., sold shares of common stock on May 24, 2024, under a pre-arranged 10b5-1 trading plan and will voluntarily disgorge any potential profits from matchable transactions.

Summary

• On May 24, 2024, Chad R. Richison, Co-CEO, President, and Chairman of Paycom Software, Inc. (PAYC), sold shares of Paycom common stock.
• The sales were executed under a joint Rule 10b5-1 trading plan adopted on February 16, 2024, by Richison and Ernest Group, Inc.
• Richison sold shares at various prices ranging from $168.51 to $174.34.
• The total number of directly held shares decreased from 3,083,975 to 3,082,208.
• Shares held by Ernest Group, Inc., also decreased from 3,661,066 to 3,659,299.
• Richison also indirectly owns shares through various irrevocable trusts for his children and grandchildren, as well as a trust for his spouse.
• Richison has agreed to voluntarily disgorge any profits realized from matchable transactions occurring within six months of a previous purchase on December 14, 2023, at $201.86 per share, as the purchase price exceeded the sale prices.

Sentiment

Score: 6

Explanation: Neutral sentiment as the filing reflects routine transactions under a pre-arranged trading plan, with a slight positive due to the voluntary disgorgement of potential profits.

Positives

• Richison's voluntary disgorgement of potential profits demonstrates a commitment to ethical trading practices.

Risks

• The sale of shares by a key executive could be perceived negatively by the market, although it is occurring under a pre-arranged trading plan.

Future Outlook

The filing indicates ongoing sales under a pre-arranged trading plan, suggesting continued transactions in the near term.

Industry Context

Insider trading activity is closely monitored in the software industry, and compliance with Rule 10b5-1 is a common practice for executives to avoid accusations of trading on non-public information.

Comparison to Industry Standards

• Sales under 10b5-1 plans are common among executives at publicly traded companies, including those in the software industry like Workday and Salesforce.
• The voluntary disgorgement of potential profits is a less common but commendable practice, exceeding standard compliance measures.

Stakeholder Impact

• The stock sales could have a minor impact on shareholder sentiment, but the pre-arranged nature of the sales should mitigate concerns.
• The voluntary disgorgement of potential profits could enhance the company's reputation among stakeholders.

Key Dates