Form 4: Zscaler CEO Reports Future Share Gift Under 10b5-1 Plan

Zscaler's CEO and Chairman, Jagtar Singh Chaudhry, reported a future gift of 21,861 common shares, scheduled for September 25, 2025, executed under a Rule 10b5-1 plan.

Summary

• Jagtar Singh Chaudhry, Zscaler's CEO and Chairman, a Director, and a 10% Owner, reported a disposition of 21,861 shares of Zscaler Common Stock.
• The transaction, a gift ('G' code), occurred on September 25, 2025, with a price of $0 per share.
• The transaction was made pursuant to a contract, instruction, or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).
• Following this transaction, Jagtar Singh Chaudhry directly beneficially owns 350,700 shares of Common Stock.
• Jagtar Singh Chaudhry also indirectly beneficially owns 24,341,267 shares held by Jyoti Chaudhry TTEE The RSP Trust U/A DTD 06/07/2017, and P. Jyoti Chaudhry indirectly beneficially owns 2,177,994 shares held by Jagtar S Chaudhry TTEE The RSJ Trust U/A DTD 06/07/2017, and 6,666 shares held by The P. Jyoti Chaudhry Family Trust dated March 1, 2000.

Sentiment

Score: 5

Explanation: The filing reports a routine insider transaction (a gift of shares) executed under a 10b5-1 plan. While the future transaction date is unusual, the event itself is generally neutral for market sentiment as it does not reflect a change in the company's operational or financial fundamentals.

Positives

• The transaction was executed under a Rule 10b5-1 plan, indicating pre-planning and adherence to insider trading regulations, which is a positive for corporate governance.

Negatives

• The reported transaction represents a future disposition of shares by a key insider, which will reduce their direct beneficial ownership in the company.
• The transaction date of September 25, 2025, is in the future relative to the filing date of September 29, 2025, which is an unusual aspect for a Form 4 reporting a 'change' in beneficial ownership.

Risks

• The unusual future transaction date (September 25, 2025) for a Form 4 filing (September 29, 2025) could lead to questions regarding the timing and nature of the disclosure, despite being stated as executed under a 10b5-1 plan.

Future Outlook

The filing does not contain any forward-looking statements or guidance regarding the company's future financial performance or strategic direction.

Industry Context

Insider transactions, such as gifts of shares, are a routine aspect of executive compensation and estate planning across all industries, particularly within the technology sector where equity forms a significant portion of executive compensation. The use of a 10b5-1 plan is a common practice to manage these transactions in compliance with securities laws.

Corporate Governance

Related Party Transactions

• The gift of shares by Jagtar Singh Chaudhry to trusts associated with P. Jyoti Chaudhry (who is also a Director and 10% Owner) constitutes a related party transaction.

Stakeholder Impact

• Shareholders: Minimal direct impact as this is a pre-planned gift and not a market sale. The overall beneficial ownership structure of key insiders remains substantial.
• Employees, Customers, Suppliers, Creditors: No direct impact from this insider transaction.

Key Dates

Recommendation

The filing details a routine insider transaction (a gift of shares) executed under a Rule 10b5-1 plan. This type of transaction is generally not considered a significant indicator for investment decisions and does not alter the fundamental investment thesis for Zscaler. While the future transaction date is unusual, it does not provide new information warranting a change in investment stance. Therefore, a 'hold' recommendation is appropriate.

Keywords

Zscaler, ZS, Form 4, insider transaction, beneficial ownership, Jagtar Singh Chaudhry, P. Jyoti Chaudhry, stock gift, 10b5-1 plan, corporate governance