Satya Nadella, the CEO of Microsoft, is now selling half his stake in the company which is worth almost $300 million. As revealed by an SEC filing, Nadella sold 840,000 shares for the price of over $285 million.
Microsoft CEO Satya Nadella
According to the article by Yahoo Finance, Nadella, the CEO of Microsoft, sold off his stake in the company in a series of transactions, which resulted in the digestion of around 840,000 shares for over $285 million.
Microsoft revealed that Nadella sold shares for the purpose of personal financial planning and diversification reasons. With that, the publication said that he is committed to the continued success of the company and his holdings which significantly exceeded the required holdings which were set by the Microsoft Board of Directors.
New Washington State Implementation of Capital Gains Tax
Nadella's move to sell his shares comes before the new Washington state implementation of a brand new capital gains tax which was passed by lawmakers in April. To expand, the tax law primarily targets stock and business ownership sales with a new 7% tax on long-term capital gains that result in over $250,000.
The new tax is set to start on January 1, 2022. In relation to this, Microsoft's statement regarding the Nadella stock sale did not directly address whether the impending capital gains tax was factored into the personal financial planning of Nadella.
Capital Gains Tax of $550 Million Annually
An article by the Wall Street Journal report cited certain analysts who pointed out the possible connection of the new law to Nadell's decision to sell half of his stake in Microsoft. Regarding the new law, Washington's brand new state capital gains tax is estimated to bring in around $550 million annually starting in 2023. With this, a major chunk of the funds is now slated to go towards childcare and early education.
The company's shares went up by over 2% on Monday at the price of $336.63. In relation to this, Microsoft's shares traded at about $36.35 when Nadella initially landed the title of CEO in February 2014, which is now about a tenth of the company's current value.
Nadella Shares Sold on Nov 22 and 23
Nadella sold his shares on both Nov 22 and 23 at the average price ranging from $334 to over $349 as per Microsoft's Securities and Exchange Commission filing. To fill in the missing gaps, Microsoft will be holding its annual shareholders meeting on Tuesday morning.
According to the article by The Hill, Nadella was first named CEO in February of 2014 after holding leadership roles in both consumer and enterprise businesses across the company. Ever since taking over the company's helm, the Journal reported that the company traded at a massive $2.53 trillion market capitalization which is up about 780% ever since his appointment as CEO of Microsoft.
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Written by Urian B.