Form 4: QuickLogic CEO Brian Faith Rectifies Tax Liability with Stock Transactions

QuickLogic's CEO, Brian Faith, sold shares to cover a miscalculated tax liability, while also receiving a grant of restricted stock units to compensate for the error.

Summary

• Brian Faith, the President and CEO of QuickLogic Corp, reported transactions involving the company's common stock.
• On August 26, 2024, he received a one-time grant of 16,865 restricted stock units that vested immediately, intended to compensate for a previous miscalculation by the issuer regarding shares required to cover his tax liability.
• On August 27, 2024, he sold 27,866 shares of common stock at a weighted average price of $8.8323 per share to satisfy the tax liability.
• These sales occurred at prices ranging from $8.75 to $9.02.
• Following these transactions, Faith directly owns 215,849 shares of QuickLogic Corp.
• The miscalculation of the withholding amount occurred over 2022, 2023 and the first half of 2024.
• The reporting person's percentage ownership will remain relatively constant as a result of the vesting of additional shares on August 24, 2024 previously issued to the Reporting Person and the one-time grant of restricted stock units that vested on August 26, 2024.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While there was a miscalculation requiring correction, the company addressed it with a stock grant. The CEO's ownership remains relatively constant.

Positives

• The one-time grant of restricted stock units aims to rectify a previous error in tax withholding, ensuring fair compensation for the CEO.
• The reporting person's percentage ownership will remain relatively constant as a result of the vesting of additional shares on August 24, 2024 previously issued to the Reporting Person and the one-time grant of restricted stock units that vested on August 26, 2024.

Negatives

• The need to sell shares to cover a miscalculated tax liability may be viewed negatively, indicating internal control weaknesses.
• The issuer miscalculated the withholding amount due and failed to withhold a sufficient number of shares to properly cover the tax liability owed by the Reporting Person in 2022, 2023 and the first half of 2024.

Risks

• Continued errors in tax withholding could lead to further complications and potential reputational damage.
• Fluctuations in the stock price could impact the value of the remaining shares held by the CEO.

Future Outlook

The reporting person's percentage ownership will remain relatively constant as a result of the vesting of additional shares on August 24, 2024 previously issued to the Reporting Person and the one-time grant of restricted stock units that vested on August 26, 2024.

Industry Context

This Form 4 filing is a routine disclosure required by the SEC for corporate insiders, providing transparency into their transactions in the company's stock. It's common for executives to receive stock-based compensation and subsequently sell shares to cover tax obligations.

Comparison to Industry Standards

• Stock-based compensation is a common practice across the technology industry, used to align executive incentives with shareholder value.
• Companies like Xilinx (now part of AMD) and Lattice Semiconductor also utilize stock options and restricted stock units as part of their executive compensation packages.
• The sale of shares to cover tax liabilities is a standard practice among executives receiving stock-based compensation.

Stakeholder Impact

• Shareholders may be concerned about the initial tax withholding miscalculation, but the corrective actions should reassure them.
• Employees may be interested in the details of executive compensation and tax handling.

Key Dates