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Pfizer’s CEO Sold Shares Same Day as COVID-19 Vaccine Announcement — Is It Legal?

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Pfizer’s CEO, Albert Bourla, has come under increased scrutiny for selling stock the same day as the company announced positive results for its COVID-19 vaccine. This news sent the company’s stock price soaring. 

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But was this trade by Albert Bourla legal? Here's why he's being criticized, plus some background on his history with the company, salary, and net worth.

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Pfizer CEO Albert Bourla sold more than half his stock on Nov. 9

Albert Bourla filed to sell Pfizer stock worth millions of dollars on November 9. His sale of 62 percent of his stake in the company netted him $5.6 million. Incidentally, it was on the same day Pfizer announced early data suggests the COVID-19 vaccine they are developing alongside European drug company BioNTech could be more than 90 percent effective. 

This news sent the share price of Pfizer soaring, which closed the day nearly 8 percent higher. Bourla, however, was not the only top Pfizer executive selling stock. Sally Susman, Pfizer’s executive vice president, also sold shares on November 9. 

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Is this stock sale at Pfizer an instance of insider trading?

The moves from Bourla and Susman came under increased scrutiny by Pfizer investors and other market participants. They accused the executives of cashing in on the good news. However, a spokesperson from Pfizer clarified to CNN that the sale of shares took place as a part of predetermined arrangement (under SEC rule 10b5-1) wherein share sales take place automatically after the stock hits a particular price or on a predetermined date. This was per a plan approved by Bourla on August 19. 

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This is not the first time executives have been accused of selling shares soon after positive news spurred a boost in stock prices. In the last few months, Moderna executives have also been selling large amounts of stock. Notably, Moderna also released promising trial results for its COVID-19 vaccine. Moderna’s stock has seen gains in excess of 300 percent this year. 

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The criticism isn't just over executives selling their stock soon after positive news. The fact execs are selling their shares calls into doubt their confidence in the company’s future and the vaccine’s efficacy. However, there is another side to the story. 

Top executives get a large part of their compensation in the form of shares and they often set periodic or pre-determined share price levels that trigger a stock sale. These trading plans are pre-authorized to absolve the executives of insider trading accusations. While critics might question the morality of these sales, there is no question about their legality.

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What is Pfizer CEO Albert Bourla's salary?

Albert Bourla became CEO of Pfizer on January 1, 2019. He has, however, worked in various roles throughout his 25 years at the company. The company’s 2019 proxy report indicates he had a base salary of $1.65 million starting April 1. In 2019, his compensation package rose by 82 percent to about $18 million. This package includes cash, equity, and other perks. 

Fierce Pharma also notes that the rise in his salary was not only because of his elevation to the CEO job but also because the company beat all three financial goals used to evaluate an executive’s cash bonus. Bourla has other positives to his credit, such as the successful completion of the merger with GlaxoSmithKline’s counterpart unit ahead of schedule. According to Wallmine, the estimated net worth of Albert Bourla is at least $26.9 million as of February 28, 2020. 

Albert Bourla family

Albert Bourla was born in Greece on October 21, 1961. He has graduated with a Ph.D. in veterinary medicine and worked as a veterinarian for some time. He joined Pfizer in 1993. He has a wife and a daughter. According to the National Journal, “Spending time with his family has been a silver lining for Bourla during the COVID -19 pandemic.”

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