Insider Trading Policy: Hedging and Pledging
Cooley is committed to providing public companies and their boards with relevant, on-demand resources. As a part of that effort, we are excited to be conducting a multipart survey series designed to provide insights and best practices on key corporate governance topics, practices and market trends.
Here are the results and key takeaways from Part 3 of the survey series, which focused on policies and procedures related to hedging and pledging of company securities.
The vast majority of company respondents address hedging and pledging of company securities in their insider trading policy or a separate policy. Notably, the companies with policies that address hedging only – or do not address hedging or pledging – have less than five years of maturity as a public company and a market cap below $500 million.
Almost three-quarters of company respondents prohibit hedging of company shares for all employees and directors.
The hedging policies of nearly all company respondents cover all company securities, regardless of how they were acquired.
Company respondents were largely aligned in never permitting hedging of company securities.
There was more variation in the coverage of the pledging policies among...
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