Form 4: Zscaler CRO Sells Shares for Tax Obligations

Zscaler's CRO and President of WW Sales, Michael J. Rich, sold 11,718 shares of common stock to cover tax withholding obligations following the vesting of restricted stock units.

Summary

• Michael J. Rich, Zscaler's CRO and President of WW Sales, reported changes in his beneficial ownership of Zscaler common stock.
• On September 15, 2025, Mr. Rich acquired 14,337 shares of common stock at a price of $0, which represents the vesting of performance-based restricted stock units (RSUs) granted on December 1, 2023.
• Following this acquisition, Mr. Rich's beneficial ownership increased to 112,540 shares.
• On September 16, 2025, Mr. Rich sold 11,718 shares of common stock at a weighted average price of $280.6977 per share.
• This sale was explicitly for covering tax withholding obligations related to the RSU vesting and was not a discretionary trade by Mr. Rich.
• After these transactions, Mr. Rich's direct beneficial ownership stands at 100,822 shares of Zscaler common stock.

Sentiment

Score: 6

Explanation: The vesting of performance-based restricted stock units suggests the achievement of company or individual performance targets. The subsequent sale was non-discretionary, solely for tax withholding, which is a routine event and does not signal a lack of confidence from the insider.

Positives

• The vesting of 14,337 performance-based restricted stock units indicates the achievement of certain performance metrics by the company and/or the executive.
• The acquisition of shares at a $0 price reflects the conversion of RSUs into common stock, increasing the executive's direct ownership before the tax-related sale.

Negatives

• No discretionary sale of shares by the executive, as the reported disposition was solely to cover mandatory tax withholding obligations.

Risks

• No specific risks are mentioned in this Form 4 filing.

Future Outlook

The filing does not contain any forward-looking statements or guidance.

Management Comments

• The sale of shares by the Reporting Person was to cover tax withholding obligations in connection with the vesting of restricted stock units as mandated by the Issuer's election under its equity incentive plans and does not represent a discretionary trade by the Reporting Person.

Industry Context

This Form 4 filing details a routine insider transaction involving the vesting of restricted stock units and a subsequent non-discretionary sale of shares to cover tax obligations. Such transactions are common across the technology sector and are a standard component of executive compensation plans, reflecting the realization of equity awards.

Comparison to Industry Standards

• The vesting of performance-based restricted stock units (RSUs) is a common compensation practice across the technology and broader corporate sectors, aligning executive incentives with company performance.
• The sale of shares to cover tax withholding obligations upon RSU vesting is a standard and routine procedure for executives in publicly traded companies, consistent with practices observed at peers like CrowdStrike Holdings, Inc. (CRWD) or Palo Alto Networks, Inc. (PANW) when their executives' equity awards vest.
• The reported weighted average price for the tax-related sale is typical for such transactions, where shares are sold in multiple small lots within a narrow price range.

Stakeholder Impact

• Shareholders: The transaction is a routine insider event and does not indicate a change in management's confidence or strategic direction. The sale for tax purposes is not a discretionary divestment.
• Employees: The vesting of performance-based RSUs could be seen as a positive indicator of company performance, potentially boosting morale.

Next Steps

• No specific future actions, events, or milestones are mentioned in this filing beyond the reported transactions.

Key Dates

Recommendation

This Form 4 filing details a routine insider transaction involving the vesting of performance-based restricted stock units and a subsequent non-discretionary sale of shares to cover tax obligations. Such events are common and do not typically signal a change in the company's fundamental outlook or the executive's confidence. Therefore, it does not warrant a change in investment recommendation based solely on this filing.

Keywords

Zscaler, ZS, Form 4, Insider Transaction, RSU Vesting, Stock Sale, Tax Withholding, Michael J. Rich, Corporate Officer