Albert Bourla’s sale of $5.5m of stock on the announcement of Pfizer’s Covid-19 vaccine success generated significant headlines as it represented 62% of his equity holding. When ranking stocks a key point we look at is the sale relative to their total holding. In the US executives typically have options that are exercisable to become the underlying stock at the executive’s choice. In Bourla’s case, based upon the most recent proxy filing, he had 684,000 options that he could exercise and sell the underlying equity today (and a further 1.2 million that will become exercisable in the future). Therefore Borla in our view “only” sold 15% of his available investment (equity + exercisable options). This is notable but not sufficiently material or unusual for us to negatively rate the stock. The other point worth considering is that the sale was made under a 10b5-1 trading plan that was established on 19th August 2020 and therefore was not a decision that was triggered by the positive news on their Covid-19 vaccine.
