Form 4: Revolution Medicines CEO Sells Shares to Cover Tax Obligations

Mark A. Goldsmith, CEO of Revolution Medicines, sold shares of common stock to cover tax withholding obligations upon the vesting of restricted stock units.

Summary

• Mark A. Goldsmith, the President and CEO of Revolution Medicines, sold 5,788 shares of common stock on March 18, 2024.
• The sale was executed at a price of $31.5832 per share.
• This transaction was made pursuant to a Rule 10b5-1 trading plan adopted on May 31, 2023, to cover tax obligations related to the vesting of restricted stock units (RSUs).
• The shares were sold automatically to cover applicable withholding taxes as per the terms of the RSU award.
• Following the transaction, Goldsmith directly owns 460,379 shares of common stock, which includes 232,000 RSUs.
• Goldsmith also indirectly owns shares through several trusts: Jonathan Henry Goldsmith Trust (35,424 shares), Rebecca Eve Goldsmith Trust (35,424 shares), and Mark A. Goldsmith and Anne E. Midler 2002 Revocable Living Trust (327,547 shares).

Sentiment

Score: 6

Explanation: The sentiment is neutral. The transaction is a routine sale of shares to cover tax obligations, executed under a pre-arranged trading plan. It doesn't indicate any fundamental change in the company's prospects or management's confidence.

Positives

• The sale was executed under a pre-arranged Rule 10b5-1 trading plan, indicating transparency and avoiding concerns about insider trading based on non-public information.

Risks

• While the sale is for tax obligations, any significant insider selling, even under a 10b5-1 plan, could be perceived negatively by the market.

Industry Context

Sales of shares to cover tax obligations are a routine part of executive compensation, particularly when a significant portion of compensation is delivered via equity. The use of a 10b5-1 plan is a common practice to ensure compliance with insider trading regulations.

Comparison to Industry Standards

• The use of Rule 10b5-1 trading plans is a standard practice among publicly traded companies to allow insiders to sell shares without being accused of acting on non-public information.
• Many biotech and pharmaceutical companies use equity-based compensation, making RSU vesting and subsequent tax-related sales common events.
• Comparable companies like Amgen, Gilead Sciences, and Vertex Pharmaceuticals also see similar patterns of insider sales related to equity compensation.

Stakeholder Impact

• The sale of shares could have a minor negative impact on shareholders if it creates downward pressure on the stock price, although this is likely to be minimal given the pre-planned nature of the sale.

Key Dates