these sales have nothing to do with any execs concern for the future of the company. these sales were planned prior to IPO.
the shares the Reddit execs receive are performance based compensation. the shares vest when certain criteria are met. in this case, the share price reaching $32.3. obviously, the IPO price was higher than that so those shares vested immediately at IPO.
since the shares execs receive are considered a form of compensation, they are subject to income tax as soon as they vest. (53% tax rate)
Huffman was awarded 662,447 shares that vested at IPO at $32.3 per share = $21,397,038 x 53% tax = $11,340,430.
Huffman suddenly owes $11,340,430 in taxes. he sells 500,000 of his 662,447 shares and makes $16 million. $11,340,430 of which is going to taxes.
Huffman made $4,809,570 on the sale.
