Form 4: Rapid7 CEO Corey E. Thomas Reports Changes in Beneficial Ownership

Corey E. Thomas, CEO of Rapid7, reports transactions involving common stock, including acquisitions of restricted stock units and performance-based restricted stock units, as well as shares withheld for tax obligations.

Summary

• Corey E. Thomas, CEO of Rapid7, filed a Form 4 detailing changes in his beneficial ownership of Rapid7's common stock.
• On February 14, 2025, Thomas acquired 129,333 restricted stock units and 9,216 shares as an annual bonus payment.
• Also on February 14, 2025, 4,455 shares were disposed of to cover tax obligations at a price of $35.55.
• On February 15, 2025, Thomas acquired 75,545 performance-based restricted stock units (PSUs).
• Additionally on February 15, 2025, 22,396 shares were disposed of to cover tax obligations at a price of $35.55.
• Following these transactions, Thomas directly owns 618,712 shares of Rapid7 common stock.
• Thomas also indirectly owns 218,748 shares through Thomas Family Holdings LLC and 30,000 shares through a trust.
• The restricted stock units vest in twelve quarterly installments starting May 15, 2025.
• The PSUs will vest in equal installments on February 15, 2025, February 15, 2026, and February 15, 2027.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The transactions reflect standard executive compensation practices and alignment with shareholder interests. The acquisition of PSUs based on performance suggests confidence in the company's future.

Positives

• The acquisition of restricted stock units and PSUs indicates confidence in Rapid7's future performance.
• The annual bonus payment in the form of restricted stock units aligns executive compensation with shareholder value.
• The vesting schedule of the restricted stock units and PSUs incentivizes continued service with the company.

Negatives

• The disposal of shares to cover tax obligations reduces Thomas's direct ownership, although this is a common practice.

Risks

• The value of the restricted stock units and PSUs is contingent on Rapid7's stock price and performance.
• Changes in tax laws could affect the attractiveness of equity-based compensation.

Future Outlook

The vesting schedules of the restricted stock units and PSUs suggest a long-term commitment by the CEO to Rapid7's success.

Industry Context

This filing is a routine disclosure of executive stock transactions, common in publicly traded companies. It reflects standard practices for executive compensation and alignment with shareholder interests.

Comparison to Industry Standards

• Executive compensation packages including restricted stock units and performance-based awards are common among publicly traded technology companies such as CrowdStrike, Okta, and Palo Alto Networks.
• Vesting schedules and tax withholding practices are also standard across the industry.
• The size of the equity grants is typical for a CEO of a company with Rapid7's market capitalization.

Stakeholder Impact

• Shareholders: The transactions provide transparency into executive compensation and ownership.
• Employees: The vesting of equity awards can motivate employees and align their interests with the company's success.
• Management: The equity awards incentivize management to achieve performance targets and increase shareholder value.

Next Steps

• Continued monitoring of executive stock transactions for insights into management's confidence in the company.
• Tracking the vesting of restricted stock units and PSUs to assess long-term alignment of interests.

Key Dates

Keywords

Rapid7, Corey E. Thomas, Form 4, Beneficial Ownership, Restricted Stock Units, Performance-Based Restricted Stock Units, PSUs, Executive Compensation, Tax Withholding