Form 4: Scholar Rock R&D President Sells Shares for Tax Cover

Scholar Rock Holding Corp's President of R&D, Akshay Vaishnaw, sold 20,438 shares of common stock at $42.7 per share to cover tax withholding obligations related to vested performance stock units.

Summary

• Akshay Vaishnaw, President of R&D and a Director at Scholar Rock Holding Corp (SRRK), reported a transaction involving the sale of company stock.
• On January 13, 2026, Mr. Vaishnaw disposed of 20,438 shares of common stock at a price of $42.7 per share.
• This sale was a 'sell to cover' transaction, mandated by the Issuer's equity incentive plans, to satisfy tax withholding obligations associated with the vesting of restricted stock units (PSUs).
• The transaction does not represent a discretionary trade by Mr. Vaishnaw.
• Following this transaction, Mr. Vaishnaw beneficially owns 595,767 securities, comprising 45,767 shares of common stock, 100,000 restricted stock units, and 450,000 performance stock units (PSUs).
• The PSUs were granted on April 27, 2025, with 50,000 shares vesting on January 12, 2026, and an additional 50,000 shares scheduled to vest on April 27, 2027.
• Remaining PSUs vest in tranches based on performance (achieving certain stock price targets) and time-based conditions over four years, contingent on continued service.
• Any PSUs not vested by April 27, 2029, will be forfeited without consideration.

Sentiment

Score: 5

Explanation: The sentiment is neutral as this is a routine, non-discretionary transaction for tax purposes related to executive compensation, not indicative of management's view on the company's future prospects or a significant change in ownership strategy.

Positives

• The transaction indicates the vesting of performance stock units (PSUs), suggesting that certain performance or time-based conditions for executive compensation have been met or are progressing.

Negatives

• No direct negatives are associated with this non-discretionary 'sell to cover' transaction, as it is a routine administrative event for tax purposes.

Future Outlook

Future vesting events for performance stock units are scheduled for April 27, 2027, and subsequent tranches tied to performance targets and continued service, with a final forfeiture date for unvested PSUs on April 27, 2029.

Management Comments

• The sale was mandated by the Issuer's election under its equity incentive plans to require the Reporting Person to fund this tax withholding obligation by completing a 'sell to cover' transaction with a brokerage firm designated by the Issuer.
• This sale does not represent a discretionary trade by the Reporting Person.

Industry Context

This Form 4 filing details a routine insider transaction common in publicly traded companies, particularly for executives receiving equity compensation. 'Sell to cover' transactions are a standard mechanism for executives to meet tax obligations upon the vesting of restricted stock units or other equity awards, without implying a discretionary decision to reduce their stake in the company.

Comparison to Industry Standards

• The 'sell to cover' mechanism for tax withholding on vested equity awards is a widely adopted practice across industries, including the biotechnology and pharmaceutical sectors, aligning with standard executive compensation and tax compliance procedures.
• This practice is comparable to similar transactions observed in companies like Amgen, Gilead Sciences, or Biogen, where executives frequently execute non-discretionary sales to cover taxes on their equity compensation.

Corporate Governance

Stakeholder Impact

• Shareholders: Minimal impact, as this is a routine, non-discretionary transaction for tax purposes and does not signal a change in management's confidence or a significant shift in beneficial ownership.
• Employees: The vesting of PSUs and the associated 'sell to cover' transaction are part of the company's standard equity compensation framework, which can be a positive for employee retention and motivation.

Next Steps

• Additional 50,000 shares of PSUs are scheduled to vest on April 27, 2027.
• Remaining PSUs will vest in tranches based on performance and time-based conditions.
• Any unvested PSUs will be forfeited on or prior to April 27, 2029.

Key Dates

Keywords

Scholar Rock Holding Corp, SRRK, Form 4, Insider Transaction, Stock Sale, Equity Compensation, Tax Withholding, Restricted Stock Units, Performance Stock Units