Top leaders of Jeep- and Chrysler-parent Stellantis either sold or signaled their intent to sell stock in the company valued at more than $22.5 million in the last few months.
The automaker indicated the sales were tied to tax obligations.
The information comes from a series of filings with the U.S. Securities and Exchange Commission, which regulates corporate market dealings. Most of the transactions happened in May, although two sales occurred in March. Some of the sales are listed as having already occurred; others indicate the shares were to be sold on approximate dates in May.
Six top leaders — Mark Stewart, chief operating officer for North America; Antonio Filosa, chief operating officer for South America; Carl Smiley, chief operating officer for India and Asia Pacific; Giorgio Fossati, general counsel; John Elkann, chairman, and Richard Palmer, chief financial officer — were listed. The filings place the total number of shares involved at more than 1.35 million.
Stewart topped the sales list with 684,087 shares, valued at more than $11.2 million, followed by Palmer (305,630 shares/$5.4 million); Elkann (187,853 shares/$3.1 million); Smiley (80,619 shares/$1.3 million); Fossati (54,957 shares/$903,000) and Filosa (37,000 shares/$602,944), according to the filings, which indicated that a number of the shares were acquired as awards or compensation.
The company, in a statement provided Thursday by spokeswoman Shawn Morgan, tied the reasons for the stock sales and the timing to taxes.
“As a common practice for executives in public companies, most stock sales are to pay taxes which become due upon vesting of awards during company’s defined and regulated black out period. Importantly, each executive continues to hold significant holdings,” the statement said.
Morgan described Stewart’s stock sales as a personal matter when asked previously about those.
Palmer, after a 20-year career with Stellantis and its predecessor companies, had planned to leave the company at the end of June after his retirement was announced in April. Two of his three stock sales occurred in March. All of the other sales for the executives were listed from May 10 to May 23.
The May sales would have occurred after shareholders were set to receive a $4.6 billion (4.2 billion euros) dividend distribution payment scheduled for May 4.
Stock prices and the value they generate from sales would vary, of course. On Wednesday, Stellantis stock was trading at $16.91 per share just before 4 p.m. On May 11, the date listed for one of the sales, the adjusted close price was $16.29 per share, according to Yahoo! Finance.
Erik Gordon, of the University of Michigan’s Ross School of Business, said stock sales by company insiders are notable in the investment world because of what they potentially represent. Insiders are in the best position to know about a company’s prospects and it’s unlikely they can put their money in investments that they understand better than their company.
“If you are an investor, you don’t like the looks of it because you jump to the conclusion that people who know more about the company than you know about the company are selling,” Gordon said. “It’s a signal that’s followed by a lot of professional investors. It doesn’t mean that it’s always a valid signal, but it’s a signal that is followed.”
Gordon characterized the sales as a “big number.” But he also said it’s fair to acknowledge that such insider stock sales might not be any kind of signal, such as when shares are sold for tax purposes related to stock options that have been granted.
In its recent earnings reports, Stellantis, which also owns the Ram, Dodge, Fiat, Alfa Romeo and Maserati brands, has touted solid financial returns. The company, when it reported prior year earnings in February, said its net profit jumped 26% in 2022 — to almost $18 billion (16.8 billion euros) — compared with its 2021 results.
The company, which has its headquarters in the Netherlands, is scheduled to release its earnings for the first half of 2023 on July 26. The company only releases a full earnings report for each half year.
Contact Eric D. Lawrence: elawrence@freepress.com. Become a subscriber.