Dive Brief:
- Walmart CFO John David Rainey has a new pre-arranged plan for selling some of his stock in the retailer under which, as part of his own long-term financial planning strategy, he is scheduled to sell 20,000 shares of company’s stock on two dates, Feb. 2 and March 2, at market prices, according to a securities filing Friday.
- The plan, designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, follows Rainey’s existing plan entered into on Sept. 6, 2024, which expires when the last trade proscribed in it is set to occur on Dec. 1, according the the filing. The maximum to be sold under his new plan is 40,000, lower than the 95,800 maximum total scheduled under the old plan.
- “Mr. Rainey continues to be subject to the Company’s stock ownership guidelines, under which he is required to hold Company stock equal in value to at least five times his base salary,” the filing states. “Upon the conclusion of each sale transaction under the Plan, Mr. Rainey will continue to satisfy the requirements of the Company’s stock ownership guidelines.”
Dive Insight:
Rainey joined Bentonville, Arkansas-based Walmart in 2022 from San Jose, California-based payment processor PayPal. In the fiscal year ended Jan. 31, 2025, Rainey’s compensation totaled about $13.5 million, including a $1 million salary and $9.96 million in stock awards, according to the company’s April proxy filing. His compensation totaled $13.2 million in the year earlier period.
Walmart declined to comment beyond the filing on Rainey’s trading plan.
An increasing number of public companies reported using such trading plans, according to a Morgan Stanley report this year. Nearly all (97%) of companies surveyed in January and February said they used the plans in the most recent fiscal year compared to 74% in 2021, the report found, noting that the uptick follows 2022 amendments to the rules that introduced stricter requirements and greater transparency.
“For companies, requiring or encouraging 10b5-1 plan use as part of an overall insider trading policy can signal to investors and regulators that the company takes compliance seriously and that insider sales will be disciplined,” the report states. “For executives, these plans provide a structured approach to diversifying concentrated stock positions over time…In addition, their preset nature protects insiders from ‘emotional’ selling and mitigates potential negative signaling from liquidating their holdings.”
A 10b5-1 plan is a written agreement between a corporate insider — officers, directors and individuals who own more than 10% of a company stock are considered insiders — and a broker that sets up predetermined trading plans for company stock, according to a description on Charles Schwab website. The plan gives executives and officers an affirmative defense for making an advantageous trade because it was planned ahead.
