When a company executive sells off shares in their own business, it can often raise some eyebrows with investors. Those chosen few who manage the finances and operations of an ASX 200 company are well paid for the privilege.
So it understandably causes some consternation when those people reduce the skin they have in the game they are running.
That is especially so when it comes to a company CEO.
This is the situation that is confronting shareholders of the ASX 200 energy giant Woodside Energy Group Ltd (ASX: WDS) this week. Yesterday, just before market open, Woodside released an ASX announcement detailing some share sales that were initiated by its CEO Meg O'Neill.
Woodside CEO offloads shares, should investors be worried?
According to the release, O'Neill sold 6,761 shares of Woodside on 1 March for a sum of $244,774.34. That works out at an average selling price of $36.20 per share.
However, this wasn't an ordinary share sale. O'Neill, alongside other Woodside executives, is entitled to receive what are known as 'restricted shares' under the company's remuneration policy.
Restricted shares are awarded to executives based on corporate performance criteria. They are ordinary shares that are issued on a deferred basis, typically for three or five years.
So O'Neill clearly received these shares and now she is able to sell them. Which she has.
But should investors be worried?
Well, that's up to every individual shareholder. Some might like to see management figures like O'Neill accumulate every share they can, giving them the highest level of shareholder alignment when it comes to financial interests.
But good wealth management principles don't suspend for company executives, even CEOs. Most investors would agree that putting all of your eggs in one basket is a poor way to run a share portfolio.
Diversification is important, even for CEOs. So perhaps other shareholders won't mind that O'Neill invests in other assets outside Woodside shares. Perhaps she needs the money for a new house, or a holiday.
Even so, it's not like O'Neill doesn't have skin in the Woodside game. After this sale, O'Neill still owns (directly and indirectly) 155,727 Woodside shares, with a value of just over $5.85 million. She also owns another 165,147 restricted shares, and 106,488 performance rights.
So perhaps considering this, the sale of just over $244,000 worth of Woodside shares might not seem so significant. Investors don't seem to think so anyway, considering they have sent the Woodside share price up more than 5% in the past week alone:
