With equity compensation firmly established as a competitive differentiator and rising in interest among employees, there is a growing need to make sure that essential employees with access to material non-public information (MNPI) are equipped with the tools to trade responsibly.
This becomes especially important in workplace benefits strategies to support leaders and employees who receive company stock, a form of reward that is increasing in popularity: in fact, 84% of employees overall say they would be interested in receiving equity compensation. What’s more, 97% say their company views 10b5-1 plans as an integrated component of overall equity compensation strategy.
10b5-1 trading plans were once offered mainly to the C-Suite and Board, designed to provide them with a structured and compliant framework for trading their company stock under the Securities and Exchange Commission’s (SEC) Rule 10b5-1.
Now, many companies are adopting a broader view of risk management that includes democratizing access to 10b5-1 trading plans. This is anchored in the reality that senior executives are not the only employee segment with access to sensitive information and equity compensation: Other roles often require working with MNPI.
In fact, a recent Morgan Stanley survey found that 39% of companies now require or encourage trading plans for insiders other than directors and the C-suite, a significant rise from just 11% in 2021. This can provide added value for employees rising through the ranks, as well as a more organized approach for companies managing a growing population of equity holders. Here are a few key points that can help organizations better understand and make the most of this tool.
From exclusive benefit to inclusive strategy: Enhancing corporate risk management
One of the key benefits of a 10b5-1 plan is the ability to establish a preset trading plan that offers an affirmative defense against possible claims of insider trading. Given their preset nature, these plans can be customized to an individual’s particular objectives, down to specific amounts and timing, allowing trades to occur during closed window periods.
For companies, encouraging or requiring the use of 10b5-1 plans along with equity compensation signals to investors and regulators a commitment to compliance and disciplined company stock sales, while also enhancing the company’s overall governance framework. For executives and other employees, 10b5-1 plans provide a structured approach to diversifying their stock positions, addressing liquidity and financial planning needs while protecting against emotional selling.
Empowering a wider swath of employees with access to structured trading frameworks can help align the financial planning needs of the company with those of individual employees, for a more holistic approach to personal financial well-being and corporate growth. This can also help certain companies foster a more inclusive environment where all employees and Board members adhere to the same standards of compliance and ethical trading practices—promoting transparency and accountability across the organization.
Addressing broader needs for structured trading: Key considerations for plan sponsors
Ultimately, 10b5-1 plans can help bridge workplace financial benefits and risk management best practices. This may be partly why nearly all public companies in a recent Morgan Stanley survey (97%, up 23% since 2021) reported they use 10b5-1 plans—highlighting their growing importance.
HR professionals and plan sponsors can make a real difference in supporting their organizations and employee populations in leveraging this tool. Providing education, resources, and guidance on best practices can help employees navigate complexities and ultimately contribute to a more compliant and financially savvy workforce. Almost half (48%) of public company respondents strongly agree that training and education are essential, and two-thirds (65%) already offer holistic planning services to their executives. Comprehensive education and strategic guidance can enhance 10b5-1 plan effectiveness for both the organization and its employees.
As you work with plan providers, prioritize keeping employees well informed about any new rules and make sure they fully understand the importance of acting in good faith when establishing a 10b5-1 plan. For example, your company may impose additional requirements beyond SEC rules, such as limitations on trading outside of a plan, and restrictions on terminations and modifications, which need to be communicated clearly. Many workplaces and providers also now offer the option of working with financial advisors or equity compensation professionals, who can help employees develop a more comprehensive, personalized strategy.
Since the details of 10b5-1 plans can be tailored to help employees meet their individual financial objectives—including the number of shares to be sold, the frequency of sales, and the duration of the plan—personalized advice and support can be especially important. It’s key for organizations and individuals alike to find competent collaborators, from plan providers to financial advisors to legal and tax experts, to optimize plan implementation and management.
Embracing a New Era of 10b5-1 Trading Plans
Expanding 10b5-1 plan access to other non-C-suite employees who receive equity benefits is a growing trend that could reflect a broader understanding of risk management, equity ownership, compliance, and financial well-being across the employee base. As the democratization of 10b5-1 plans continues, it may help to shape the future of corporate governance and risk management practices—not to mention workplace benefits.
Dispersing these trading plans more broadly can help certain companies not only safeguard their own interests, but also support many employees in navigating financial planning and compliance. It may be helpful to reframe 10b5-1 plans as a forward-thinking strategy that companies can leverage to enhance internal compliance, employee engagement, and market perception.
The 2021 survey was designed by Morgan Stanley in partnership with Wilson Sonsini Goodrich & Rosati and the Society for Corporate Governance and in consultation with Steve Giove of Ebullience.com. The 2021 survey was conducted with members of the Society and asked questions similar to those in the 2025 survey about 10b5-1 plan usage and policies. Any overlap in respondent groups between the two surveys is unintentional. This article and the 2025 survey are not in any way attributable to the Society except for the inclusion of results from the 2021 survey as noted above. A link to the 2021 survey can be found here.
Important Disclosures
Individuals executing a 10b5-1 trading plan should keep the following important considerations in mind:
(1) 10b5-1 trading plans should be reviewed and approved by the legal and compliance department of the individual’s company.
(2) Most companies will permit 10b5-1 trading plans to be entered into only during open window periods.
(3) Recent rule changes will require a mandatory cooling-off period between the execution of a 10b5-1 trading plan (or a modification) and the first sale pursuant to the plan (or the first sale following such modification).
(4) 10b5-1 trading plans do not alter the nature of restricted and/or control stock or regulatory requirements that may otherwise be applicable (e.g., Section 16, Section 13).
(5) 10b5-1 trading plans that are terminated early may weaken or cause the individual to lose the benefit of the affirmative defense.
(6) 10b5-1 trading plans may require a cessation of trading activities at times when lockups may be required at the company (e.g., secondary offerings).
(7) Recent rule changes will require companies to publicly disclose material terms of Section 16 director and officer 10b5-1 trading plans, and the early termination of such plans.
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