It's rarely a good look to see an ASX CEO sell shares of their company, let alone $700,000 worth of shares. Yet that is the situation that Brainchip Holdings Ltd (ASX: BRN) investors appear to find themselves in.
Last week, ASX investors were treated to not one but two ASX notices regarding Brainchip CEO Sean Hehir.
The first, which dropped on 30 November, revealed that Hehir had received 2 million fully paid ordinary shares. Those resulted from the vestiture of 2 million restricted stock units. These are issued to management under Brainchip's employee share plan trust.
That left Hehir with 2 million ordinary shares and another 5.01 million in restricted stock units. But that wasn't to last.
On 2 December, another ASX notice revealed that Hehir had gone on to sell 917,025 of those ordinary shares he had just received. This was executed at a share price of between 72.5 cents and 76.5 cents, meaning it would have netted Hehir between $664,843 and $701,524.
So why has the CEO immediately sold out of almost half of his total ordinary shareholding?
Why is the Brainchip CEO selling his shares?
Well, the Brainchip release stated that the on-market sale was "for the purpose of meeting taxation obligation as a result of previous vesting of RSUs [restricted stock units]".
It leaves Hehir with a total of approximately 1.08 million Brainchip shares. Those would have a value of just over $812,000 today.
Earlier last month, another Brainchip director, Antonio Viana, sold 125,000 ordinary shares for an average price of 63 cents each. That left him with 561,66 shares. The reasons given for the sale were identical to that of Hehir.
Shareholders don't typically like to see these kinds of trades. Investors feel more confident when the well-payed executives running their company have some skin in the game, that their fortunes ride or die alongside those of ordinary shareholders.
So no doubt the news of these sales has delighted few. But CEOs have bills to pay, just like everyone else. So it's up to investors to decide whether these sales are justified or if they leave Brainchip's management conveniently unexposed to the fortunes of the company they are running.
The Brainchip share price is now down 6.3% year to date in 2022.
