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Caterpillar CEO Joseph Creed cashes out $26.2 million after exercising options early
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News EditorProtos reports that Caterpillar CEO Joseph Creed disclosed a $26.2 million stock sale after exercising an option package about four and a half years before its March 2031 expiration. Creed sold 32,401 shares on the New York Stock Exchange on Aug. 28 and used 12,002 shares to cover the exercise price or tax liability.
The filing shows a $219.76 strike price for the old grant, while the weighted average sale price was $808.98 per share. Creed still held 34,555 shares of Caterpillar stock and another 11,839 shares in his 401(k) account, according to the proxy filing.
The sales came weeks after Caterpillar’s quarterly earnings report. Creed had said the company generated more than $20 billion in sales and revenue in a single quarter for the first time in its history, but shares have fallen 16% from the $935 high reached on the day of that earnings release.
Protos also notes that Creed’s filing did not mark the trades as part of a predetermined Rule 10b5-1(c) plan. Since 2023, SEC rules have required insiders to indicate that status on Form 4 filings, although some pre-2023 plans are grandfathered.
Protos says Caterpillar CEO Joseph Creed disclosed a $26.2 million stock sale after exercising an option package four and a half years before its March 2031 expiration.
Creed sold 32,401 shares on the New York Stock Exchange on Aug. 28, according to the report, emptying his oldest outstanding tranche of options. The grant carried a $219.76 strike price. Protos said that allowed him to exercise at a level 72% below the price regular investors would pay today.
The filing shows proceeds of $26.2 million, with a weighted average sale price of $808.98 per share. That was slightly below the filing’s $812.98 valuation for shares surrendered to cover the exercise price or tax liability. Creed also disposed of 12,002 shares under a filing code used for paying an exercise price or tax liability, and Protos said those shares almost exactly matched the grant’s $9.76 million exercise cost.
Even after the sale, Creed’s Aug. 28 transaction only reduced his 2021-vintage options grant to zero. Caterpillar’s proxy filing also lists another 110,651 option grants from 2022 through 2025, including vested and unvested compensation. Creed still held 34,555 shares of Caterpillar stock, plus another 11,839 shares in his 401(k) retirement account.
The sales came a few weeks after Caterpillar’s quarterly earnings report. Before the $26.2 million sale, Creed said: “This is the first time in company history that we have generated over $20 billion in sales and revenues in a single quarter.” Shares of Caterpillar have since fallen 16% from the $935 high reached on the day the company reported those earnings.
Protos noted that Creed’s filing did not classify the option exercise and related stock sales under a predetermined Rule 10b5-1(c) trading plan. Since 2023, the SEC has required insiders of public companies to check a box on Form 4 filings for transactions carried out under a predetermined trading plan, along with that plan’s adoption date. Some pre-2023 grandfathered plans are exempt.
Because Creed left the checkbox blank, investors may read more discretion into the sales rather than treating them as an unremarkable predetermined transaction.
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