Form 4: Schrodinger Exec Sells Shares for Tax Obligation

Kenneth Patrick Lorton, EVP, CTO & COO of Software at Schrodinger, Inc., sold 1,222 shares of common stock to cover tax liabilities from RSU vesting.

Summary

• Kenneth Patrick Lorton, EVP, CTO & COO, Software of Schrodinger, Inc. (SDGR), reported a sale of common stock.
• The transaction involved the disposition of 1,222 shares of common stock on March 5, 2026.
• The shares were sold at a weighted average price of $12.898 per share, with prices ranging from $12.75 to $12.98.
• This sale was executed under a Rule 10b5-1 plan adopted on March 9, 2023, specifically to satisfy withholding tax liability incurred from the vesting of restricted stock units (RSUs).
• The transaction is explicitly stated as not a discretionary trade by the reporting person.
• Following this transaction, Kenneth Patrick Lorton beneficially owns 89,241 shares of common stock, which includes 49,230 unvested RSUs.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral to slightly positive event. While shares were sold, it was a non-discretionary transaction for tax purposes, not a signal of lack of confidence in the company.

Positives

• The sale was non-discretionary, executed under a pre-arranged Rule 10b5-1 plan to cover tax obligations from RSU vesting, indicating no change in management's investment sentiment.

Negatives

• No direct negatives are identified as the sale was for tax purposes and not a discretionary divestment.

Risks

• NA

Future Outlook

NA

Management Comments

• This sale was effected pursuant to a durable automatic sale instruction under Rule 10b5-1 adopted by the reporting person on March 9, 2023, represents a broker-assisted sale of shares to satisfy the payment of withholding tax liability incurred upon the vesting of restricted stock units ('RSUs').
• The sale does not represent a discretionary trade by the reporting person.

Industry Context

StockSavvy.ai notes that sales by executives to cover tax liabilities upon RSU vesting are a common and routine occurrence across all industries, particularly in high-growth technology and biotech sectors like Schrodinger's, and typically do not signal a change in management's outlook on the company's prospects.

Comparison to Industry Standards

• Sales to cover tax obligations from RSU vesting are standard practice for executive compensation in publicly traded companies, aligning with common industry benchmarks for equity compensation plans.
• The use of a Rule 10b5-1 plan for such sales is a widely adopted corporate governance practice to mitigate concerns about insider trading, consistent with best practices observed at companies like Microsoft, Apple, and Google.

Management Changes

Corporate Governance

Legal Proceedings

• NA

Related Party Transactions

• NA

Stakeholder Impact

• Shareholders: Minimal direct impact as it's a routine, non-discretionary tax-related sale, not indicative of a change in executive sentiment.
• Employees: No direct impact.

Next Steps

• NA

Key Dates

Recommendation

The transaction is a routine, non-discretionary sale by an executive to cover tax obligations arising from RSU vesting, executed under a Rule 10b5-1 plan. This type of transaction does not typically signal a change in the executive's confidence in the company's future prospects and therefore does not warrant a change in investment recommendation based solely on this filing.

Keywords

Schrodinger, SDGR, Form 4, Insider Trading, Stock Sale, Executive Compensation, RSU Vesting, Tax Withholding, Rule 10b5-1