ServiceNow (NOW) dips as CEO McDermott sells ~$25M in stock for property purchase

February 6, 2023 10:26 AM EST
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Price: $432.90 -1.72%

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    46 Buy, 6 Hold, 1 Sell

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    Up: 9 | Down: 10 | New: 12
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After the close Friday, it was disclosed that ServiceNow (NYSE: NOW) CEO Bill McDermott sold 53,883 shares of the company's common stock on Feb. 1, 2023, at prices from $455.03-$460.98 per share. The value of the sales was about $25 million. The news has sent NOW shares down 2.7% in early trading Monday.

This was McDermott's first sale in 2 years, and according to the company, the sale provides liquidity for a personal property purchase, Macquarie analyst Sarah Hindlian-Bowler commented after talking to the company on the sales

The analyst highlights that, according to the Company, Mr. McDermott has been eyeing the property in question for personal investment for some time, which recently became available.

Further, the analyst notes Mr. McDermott remains heavily invested in NOW and the bulk of his compensation as CEO is stock-based.

"... this year he has another ~56,000 shares subject to time vesting," the analyst highlights. "Additionally, he has the right to acquire up to ~32,000 shares over the year under performance-based options, provided the average stock price over the period exceeds $399.47. Beyond these annual vests, he has up to 555,000 in longer-term performance-based stock options, making this sale ~10% of his current ownership."

The analyst reiterated an Outperform rating and $458 price target on NOW amid the news.

By Staff

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