What Anthropic’s Mandatory Trading Plan Idea Means for Its Employees

Recently, news broke that there might be an Anthropic mandatory 10b5-1 trading plan requirement for employees, not just executives, to sell shares through 10b5-1 stock trading plans once it goes public. That reporting came from The Information and was picked up by Reuters shortly after.

Nothing is decided yet. Anthropic is still in discussions with advisers, and it’s not clear if or when this becomes policy. But given the IPO could come as soon as September, it’s worth understanding what this would mean if you’re one of the Anthropic employees this could affect.

Why Requiring This for Everyone Would Be Unusual

A 10b5-1 plan lets you schedule stock sales in advance, specifying the timing, amount, and price, so that when the trade executes, it gives you an affirmative defense against insider trading claims, even if you happen to know something material and non-public at the time the trade executes.

Historically, these plans have mainly applied to people who are routinely close to sensitive information: think your CEO, CFO, and other senior executives, sometimes extending to the board. Most employees typically sell during open trading windows, which open up for a few weeks after each quarterly earnings release. 

Anthropic reportedly wants to apply the requirement company-wide. Given how fast the company has grown (from roughly $4 billion to $965 billion in valuation over three years) and how deeply embedded information sharing is in its internal culture, this move is reportedly seen as a possible way to retain its culture of free-flowing information sharing even after it goes public. 

Regardless, applying a mandatory 10b5-1 trading plan to an entire workforce is something we haven’t seen many companies attempt.

Understand What Changes If This Happens

Once a company goes public, employees would typically be free to sell during open trading windows after each earnings release, assuming they’re no longer subject to lockups or other restrictions. They choose their own timing based on where the stock is trading.

A mandatory 10b5-1 plan would change that in a few ways:

• You’d establish the timing, amount, pricing instructions, or other trading formula in advance, before you know where the stock will be trading when those sales actually occur.
• Once the plan is in place, modifying a plan is generally treated as adopting a new one, meaning a fresh cooling-off period before trades under the revised plan can begin.
• You’d give up the ability to react in the moment, whether that’s a stock price spike you want to capture, a dip you want to avoid selling into, or a personal need for cash that changes your priorities.

How We Think About 10b5-1 Trading Plans

When it comes to financial planning, we want to have a plan in place with flexibility to execute and react to changes. We prefer to work within open trading windows after quarterly earnings calls, since that lets us adjust your plan based on how the stock is actually performing, rather than locking in decisions ahead of time. 

In our experience, clients usually begin seeing benefits from a 10b5-1 plan when they’re managing very large concentrated positions, often somewhere north of $10 million, though that threshold varies considerably based on the client’s overall financial picture. The more your equity is worth, the more likely you are to already be diversifying it over a long stretch of time. With more trades spread out, each individual sale makes a smaller impact on your overall outcome, so a preset schedule tends to work better.

If your equity is less than that, you have fewer shares to spread across fewer trades, so each one carries more weight, and you lose the flexibility to adjust sales later if your tax situation or cash needs change.

We’ve written before about when a 10b5-1 plan makes sense and when it doesn’t, including four questions worth asking yourself before you’d want one even if it were optional.

Get Ahead of Your Anthropic Equity Plan Now

Whether or not Anthropic ends up requiring a 10b5-1 plan, the bigger question is the same one every pre-IPO employee eventually faces: how and when you’ll actually turn equity into cash, and what that means for your taxes, your goals, and your flexibility. 

KB Financial Advisors works with tech professionals to build that plan well before the IPO date is even set. Our IPO & Pre-IPO hub is chock-full of guides and useful resources to help you navigate the process.

If you want help thinking through your options, we’d be happy to have a conversation.

Book a call with our team today.

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