"10b5-1 trading plans were once offered mainly to the C-Suite and Board, designed to provide them with a structured and compliant framework for trading their company stock under the Securities and Exchange Commission's (SEC) Rule 10b5-1. Now, many companies are adopting a broader view of risk management that includes democratizing access to 10b5-1 trading plans. This is anchored in the reality that senior executives are not the only employee segment with access to sensitive information and equity compensation: Other roles often require working with MNPI."
"In fact, a recent Morgan Stanley survey found that 39% of companies now require or encourage trading plans for insiders other than directors and the C-suite, a significant rise from just 11% in 2021. This can provide added value for employees rising through the ranks, as well as a more organized approach for companies managing a growing population of equity holders. Here are a few key points that can help organizations better understand and make the most of this tool."
Equity compensation is increasingly popular, with 84% of employees expressing interest and 97% noting that companies view 10b5-1 plans as part of overall equity strategy. 10b5-1 plans provide preset trading frameworks that can serve as an affirmative defense against insider trading claims. Companies are broadening risk management by offering trading plans to employees beyond the C-suite and Board, recognizing that many roles involve access to material non-public information (MNPI). A Morgan Stanley survey shows that 39% of companies now require or encourage such plans for nonexecutive insiders, up from 11% in 2021, supporting organized equity-holder management.
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