[rco8786]

Sure. It's possible he decided he wanted to use a layoff as a way to make a gamble on the stock price before a scheduled sale.

However there is no actual evidence of this, so let's be careful about breaking out the pitchforks. This sale would have happened even if the stock tanked 50%.

[bradjohnson]

It's not just Spotify layoffs that have caused stock pumps this year. Plenty of other large tech companies have experienced the same pump due to layoffs. It's a pretty good gamble.

The 10b5-1 schedule is referenced often by executives as an alibi against insider trading. Let's just be realistic that it likely doesn't prevent anything of the sort.

[rco8786]

It is. At best. A gamble. There are more than enough examples of companies doing layoffs and experiencing stock losses.

Let’s be realistic that this trade was a) always going to happen no matter the stock price, b) the CEO does not have a crystal ball, and c) there is no evidence of the CEO timing layoffs as a ploy for personal gain.

It’s easy to get caught up in conspiracies that we want to be true.

Imagine if the timing were juuuust a little different, what the headlines would be. "Spotify CEO cashes in on millions before announcing layoffs". Hmmm.

[bradjohnson]

It's weird to deny that executives can comprehend the impact of their decisions on the price of their ticker, but ok.

> It’s easy to get caught up in conspiracies that we want to be true.

I'm not saying there even needs to be a conspiracy for this specific case. I'm pointing out that there is nothing in the law that would stop them from taking advantage of this timing. Also that previous layoffs have resulted in a bump in share price multiple times in a row, and what do you know, it happened again. Even if it was a gamble, how can you deny that they're able to time information drops to their personal advantage? Isn't that a problem in itself?

[rco8786]

I haven't denied any such thing. I'm literally just saying it's a gamble.

Is it a problem? It seems unsolvable if so, unless we should ban CEOs from receiving stock compensation?

[bradjohnson]

>I haven't denied any such thing. I'm literally just saying it's a gamble.

Well, you said it was "at best a gamble". I don't know how else I'm supposed to interpret that besides you saying there was "at best" a 50/50 shot of either outcome happening from the perspective of the ones that announced it. I'm going to assume this is not what you meant.

Anyway, since it's established that we're in agreement (maybe? It's not easy to figure out your point of view) that executives are generally able to know with some degree of certainty >50% that their actions will create a specific effect on their stock price. And we also can agree that it is their decision when to announce and execute these actions. It's clearly and obviously a problem that they also are aware of when the stock that they hold in large quantities will be bought and sold.

> Is it a problem? It seems unsolvable if so, unless we should ban CEOs from receiving stock compensation?

If we can agree on the previous bit, then I have no idea why we should throw up our hands and be like "well I guess this is an impossible problem to solve". It's really not. Just be more restrictive with the windows in which executives are allowed to sell. Better yet spread their entire buy/sell order over the course of the year. Or even better still, don't allow them to sell stock AT ALL until they are not in charge or aware of high level decisions at the company.

CEO pay is on average 399x their average employee(https://www.epi.org/publication/ceo-pay-in-2021/). Then, we also allow them to pump their portfolio on a whim at the expense of their employees. I would say personally I don't really care if their compensation suffers, since they've probably already 10x'd my lifetime earnings in their last year of work, and I'd happily switch places with them financially if they're so hard done by.

[rco8786]

> Just be more restrictive with the windows in which executives are allowed to sell.

I feel like I'm on crazy pills.

Executives. Do. Not. Have. Windows. To. Sell. I don't know how many times I have to repeat this.

They have exact dates with exact numbers of shares on which sales will execute with exactly zero input from them. It's literally the most restrictive thing you can imagine, short of not allowing them to engage in stock sales at all.

https://www.raymondjames.com/-/media/rj/advisor-sites/sites/...

Here is what you seem to think happened: Daniel Ek fired a bunch of people during an open trading window, saw that the stock price went up, and sold a bunch of shares.

Here is what actually happened: Daniel Ek put together a schedule of specific stock sales at the beginning of 2023 that executed automatically on his behalf throughout the year. At some point during the year, he decided to fire a bunch of people.

> Better yet spread their entire buy/sell order over the course of the year.

They do. It's on a schedule. Over the course of the year.

> Or even better still, don't allow them to sell stock AT ALL until they are not in charge or aware of high level decisions at the company.

This is effectively banning equity pay for executives. Unless you think we should make C level executives somehow not in charge of high level decisions.

> CEO pay is on average 399x their average employee

An entirely different discussion.