This is Why Microsoft’s CEO Just Sold Half His Stake in the Company

Ahead of a new state capital gains tax, Microsoft’s CEO Satya Nadella has decided to sell half of his stake in the tech giant company.

Nadella sold 838,584 shares between Nov. 23 and Nov. 24., in a move that comes a month before Washington state’s capital gains tax goes into effect.

The Chief Executive sold 838,584 shares on Nov. 22-23, according to company filings with the federal Securities and Exchange Commission.

In a statement on Tuesday, a Microsoft spokesperson said Nadella sold the shares “for personal financial planning and diversification reasons,” and added that Nadella, who is also company chairman, “is committed to the continued success of the company and his holdings significantly exceed the holding requirements set by the Microsoft Board of Directors.”

This appears to be the largest sale of stock for Nadella since he became CEO of the company back in 2014.

Washington’s new 7% capital gains tax goes into effect Jan. 1. This also includes any new federal taxes now under discussion in Congress, said Ben Silverman, director of research at InsiderScore/Verity.

“Whether that was a motivator or not, I can’t speak to that,” Silverman said. But “it’s worth pointing out that the timing, coming about six weeks before the implementation of that [tax], is curious for a sale of this size.”

About half the shares were sold Nov. 22, at an average price of $344.84 and a top price of $349.22, according to company filings with the SEC. That’s just a few cents away from the stock’s all-time high of $349.67, which came on Nov. 22, Silverman said. Shares closed Tuesday at $330.59.

“I think a sale like this is partially an acknowledgment of stock prices across the market being very high, relative to some of the things going on in the economy,” added Silverman.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.