Form 4: Silver Lake Partners Receive Restricted Stock Units in SolarWinds Corp (SWI)

Silver Lake executives and related entities received restricted stock units in SolarWinds Corp as part of the company's non-employee director compensation policy.

Summary

• This Form 4 filing details changes in beneficial ownership of SolarWinds Corp (SWI) stock by several entities and individuals associated with Silver Lake.
• Kenneth Y. Hao and Michael Widmann, directors of SolarWinds and executives at Silver Lake Group, L.L.C., were granted restricted stock units (RSUs) as part of the annual equity grant under the company's non-employee director compensation policy.
• On May 23, 2024, each received 35,146 RSUs, which convert to common stock upon vesting.
• The RSUs vest 100% on the one-year anniversary of the grant date, contingent upon continued service.
• The filing also reflects indirect ownership of SolarWinds common stock by various Silver Lake entities, including Silver Lake Partners IV, L.P., Silver Lake Technology Investors IV, L.P., SLP Aurora Co-Invest, L.P., and Silver Lake Technology Associates IV, L.P.
• These entities hold significant amounts of common stock, with Silver Lake Partners IV, L.P. holding 43,338,406 shares, SLP Aurora Co-Invest, L.P. holding 17,323,319 shares, and other entities holding smaller amounts.
• The filing clarifies that the reporting persons disclaim beneficial ownership of the securities beyond their pecuniary interests.
• The filing also notes that outstanding restricted stock units were adjusted due to a special cash dividend declared by SolarWinds on March 15, 2024, resulting in a conversion factor of 1.0854 RSUs per original unit.

Sentiment

Score: 7

Explanation: The document reflects standard equity compensation practices and ongoing investment by a major shareholder, suggesting a neutral to slightly positive outlook.

Positives

• The grant of restricted stock units to directors aligns their interests with the company's performance.
• Continued significant ownership by Silver Lake entities demonstrates their ongoing investment in SolarWinds.

Future Outlook

The document does not contain specific forward-looking statements beyond the vesting of the restricted stock units.

Industry Context

This filing is a routine disclosure related to equity compensation and ownership changes, common in publicly traded companies. Silver Lake's continued involvement as a major shareholder is noteworthy.

Comparison to Industry Standards

• Equity compensation for directors is a standard practice in publicly traded companies like SolarWinds.
• Companies such as Microsoft, Oracle, and Salesforce also utilize RSUs as part of their director compensation packages.
• The vesting schedule of one year is fairly typical for RSU grants.
• Silver Lake's ownership stake is comparable to other private equity firms holding significant positions in publicly traded technology companies.

Stakeholder Impact

• Shareholders: The equity grants dilute ownership slightly but align director interests with company performance.
• Employees: The filing doesn't directly impact employees.
• Customers: The filing doesn't directly impact customers.
• Suppliers: The filing doesn't directly impact suppliers.
• Creditors: The filing doesn't directly impact creditors.

Key Dates