Chip Wilson sold nearly $83 million of his company’s Nasdaq-listed Lululemon in 2022.Fred Lum/The Globe and Mail
Canadian corporate executives and board members have managed to sell millions of dollars worth of stocks in the volatile markets of 2022, though the haul hasn’t been as big as in previous boom years.
A Globe and Mail analysis of insider stock sales, in partnership with INK Research, found that no Canadian executive or director sold $100 million or more in stock in 2022, after 10 people surpassed the century mark and four more in 2021 million shares sold than $250.
The research found that just 14 insiders out of 10 companies sold $25 million or more of stock in the past year, a sharp decrease from 37 in 2021. The sellers had total proceeds of about $550 million in 2022 -Dollar; In 2021, the top sellers achieved almost 3.6 billion US dollars.
More than a dozen company insiders sold at least $25 million
Value of company shares in 2022:
The Globe and Mail, Source: INK Research; The Globe and the Mail
More than a dozen company insiders sold at least $25 million
Value of company shares in 2022:
The Globe and Mail, Source: INK Research; The Globe and the Mail
More than a dozen company insiders sold at least $25 million worth of company stock in 2022:
The Globe and Mail, Source: INK Research; The Globe and the Mail
“Much of the insider selling that we saw was modest year-over-year, as stock prices have generally fallen outside of resource territory, so there has been less incentive for broad-based insider selling,” said INK Research Chief Executive Officer Ted Dixon, whose Company tracks insider buying and selling to generate investment ideas.
“In general, insiders have not rushed to the exits or bought up a storm over the past year. I think like a lot of us, they’re just trying to get a sense of what’s ahead,” he said.
INK Research analyzed insider selling at companies listed on the Toronto Stock Exchange. The Globe complemented INK Research’s work by looking at records of stock sales by Canadian executives at large companies listed on US stock exchanges. All US stock sales have been converted to Canadian dollars at rates prevailing on the transaction date.
Unlike 2021, when many insider sales came from company founders selling large blocks of shares they directly owned, the 2022 list is dominated by executives who acquired shares through the exercise of stock options and then quickly sold most or all of those shares openly Market.
The top sellers list is based on gross proceeds from the sale of stocks as disclosed by insiders to Canadian or US regulators and does not reflect what the executives’ earnings compared to what they originally paid. earned from the sales.
The Globe contacted any company that had an insider selling $25 million or more in stock. Some opposed their executives’ inclusion on the list, with some denying that exercising a stock option from the company’s compensation plan meant the executive had sold stock.
Others objected to The Globe’s use of gross proceeds, not net gains from stock options. Some of the companies only offered their feedback as background information, not citing how they should view the sale from their executives.
According to Canadian insider sales, Cenovus Inc. CVE-T CEO Alex Pourbaix sold $31.2 million in stock after option exercises, while executive vice president Jonathan McKenzie sold $27.2 million.
In an email statement, Cenovus said the two executives did not sell any shares they owned. Cenovus said they used a “cashless exercise mechanism” under the Cenovus stock option plan that allows participants to receive option gains in cash or as shares.
Cenovus said that when Mr Pourbaix exercised his options, he took half the profit in shares and as of last March his shareholding was 15.8 times his base salary. (The Cenovus employee who answered the questions declined to identify himself.)
Cenovus Energy appoints Jon McKenzie as new CEO
At Power Corp. of Canada, former co-CEO André Desmarais sold nearly $37.3 million worth of stock after exercising stock options. The Globe calculates that Mr. Desmarais realized a pre-tax gain of approximately $10.7 million on the options.
General Counsel Stéphane Lemay said in an email that Mr Desmarais’ transactions reflect compensation for options he held almost to expiration. Mr Lemay said they do not reflect his commitment to the company as his net ownership has not changed following this transaction.
Mr. Lemay noted that the market value of shares and units owned or controlled by Mr. Desmarais was nearly $600 million as of early February.
BCE Inc.’s Wade Oosterman, President of Bell Media, had $26.4 million in revenue from stock sales in 2022. More than $24.1 million of these sales came from the exercise of options. The option exercise prices totaled $19.9 million. Company spokeswoman Ellen Murphy said this means the “actual total value” of Mr. Oosterman’s stock transactions is the option gains plus other sales, or $6.46 million.
BN-T Brookfield Corp.’s Brian Kingston, the CEO of the company’s real estate business, had $61.9 million in revenue from stock sales in 2022. However, unlike many executives, he kept a portion of his stock from exercising options rather than selling it at the mall. During 2022, Mr. Kingston exercised 1.125 million options and retained 182,724 of the underlying shares.
The Globe calculates that Mr. Kingston made just over $32 million in profit on the options that resulted in stock sales, while he had pre-tax profit of $6.6 million on the option transactions in which he kept the underlying stock earned US dollars.
TECK-AT TECK BT Marcia Smith of Teck Resources Ltd., former senior vice president of sustainability and external affairs, sold $30.5 million of stock in 2022. Chris Stannell, spokesman for Teck, said Ms Smith announced her retirement last year. Shares in Teck hit a 10-year high and exercised options due to expire in 2023. Records of stock sales show that Ms. Smith paid approximately $11 million to exercise the options, giving her pre-tax income of approximately $19.5 million.
At Canadian Natural Resources Ltd. CNQ-T CEO and company founder Murray Edwards sold $39.2 million in stock, while board member and former president Steve Laut sold $31.9 million in stock.
A portion of Mr. Edwards’ proceeds, $14.6 million, came from the exercise of 180,000 stock options. Additional sales came from his existing holdings: at the end of 2022, Mr. Edwards held 21.2 million shares of Canadian Natural worth nearly $1.6 billion.
While longtime and retired executives occupied many spots on the sales list, company founders were also prominent sellers—although their transactions, like Mr. Edwards’s, represented only a small part of their fortunes.
The top seller of 2022 was another founder, LULU-Q Chip Wilson of Lululemon Athletica Inc., who sold nearly $83 million of his company’s Nasdaq-traded stock in 2022. His 10.7 million shares in the company were worth about $4.6 million. billion by the end of 2022.
Jay Hennick sold shares of FirstService Corp. for $51.3 million, but also bought Colliers International Group Inc. for $35.8 million, where he serves as chairman. Mr Hennick emailed The Globe that he had sold shares to make donations to charity.
“I am the founder of both companies and remain the largest single shareholder,” Mr. Hennick wrote. “Both companies are very well managed and have tremendous future growth opportunities (meaning both are great investments).”
“But as you may have noticed, my wife and I did two very big charity work this year. One named Hennick Bridgepoint Hospital and the other which is the greatest gift of all time to the Royal Ontario Museum to help revitalize ROM for future generations,” Mr. Hennick wrote. “I hope this helps you see the bigger picture, at least for us.”
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