NOW Form 4: McDermott converts RSUs and forfeits shares for tax withholding
Rhea-AI Filing Summary
William R. McDermott, Chairman & CEO of ServiceNow (NOW), reported multiple restricted stock unit vesting events and related share transactions on August 15, 2025. He had 11,586, 832 and 1,255 restricted stock units convert to common stock (reported as acquisition code M) at a $0 per-share conversion, and the filing shows he relinquished 6,228, 448 and 675 shares in separate dispositions to satisfy federal and state tax withholding obligations at a price of $867.24 per share. The Form 4 also reports 4,881 shares indirectly owned by a trust. The RSUs included performance- and time-based awards with specified vesting schedules and a performance adjustment tied to 3-year relative total stockholder return versus the S&P 500.
Positive
- Material vesting of RSUs: 11,586, 832 and 1,255 restricted stock units converted to common stock, reflecting executed compensation awards
- Performance-based award achievement: A portion of the RSUs were performance-based and determined achieved by the Compensation Committee
Negative
- Share dispositions to cover taxes: Relinquished 6,228, 448 and 675 shares via withholding at $867.24 per share, reducing net newly acquired shares
Insights
TL;DR: CEO vesting-generated share increases offset by tax-withholding sales; net shareholding changed but no new open-market buy/sell signal.
The filing documents routine vesting of performance- and service-based restricted stock units that converted to shares on August 15, 2025, and contemporaneous share transfers to cover tax withholding at an identified price of $867.24 per share. These are compensatory transactions rather than discretionary open-market trades, indicating compensation realization rather than active portfolio rebalancing. The reported indirect trust ownership of 4,881 shares remains a small, noted position. Overall, this is a standard executive equity compensation settlement with quantifiable share movements.
TL;DR: Transactions reflect standard executive equity governance: performance/time-based vesting and tax withholding mechanics.
The Form 4 discloses multiple RSU vesting events tied to time- and performance-based conditions established under the company plan and confirmed by the Compensation Committee. The reporting includes use of share withholding to satisfy tax obligations consistent with Rule 16b-3 practices. No departures, option grants, or discretionary open-market sales by the reporting person are disclosed. From a governance perspective, documentation and timing appear consistent with standard equity award administration.
Insider Trade Summary
| Type | Security | Shares | Price | Value |
|---|---|---|---|---|
| Exercise | Restricted Stock Units | 11,586 | $0.00 | -- |
| Exercise | Restricted Stock Units | 832 | $0.00 | -- |
| Exercise | Restricted Stock Units | 1,255 | $0.00 | -- |
| Exercise | Common Stock | 11,586 | $0.00 | -- |
| Tax Withholding | Common Stock | 6,228 | $867.24 | $5.40M |
| Exercise | Common Stock | 832 | $0.00 | -- |
| Tax Withholding | Common Stock | 448 | $867.24 | $389K |
| Exercise | Common Stock | 1,255 | $0.00 | -- |
| Tax Withholding | Common Stock | 675 | $867.24 | $585K |
| holding | Common Stock | -- | -- | -- |
Footnotes (1)
- Represents shares relinquished by the Reporting Person in exchange for the Issuer's payment of federal and state tax withholding obligations of the Reporting Person resulting from the vesting of RSUs, in accordance with Rule 16b-3. Each restricted stock unit represents a contingent right to receive one share of Issuer's common stock. 30% of the shares subject to the restricted stock units vested on February 17, 2024, 15% of the shares subject to the restricted stock units vested on each of August 17, 2024 and February 17, 2025, 20% of the shares subject to the restricted stock units vested on August 17, 2025, and the final vest on February 17, 2026 of 20% of the shares subject to the restricted stock units is subject to adjustment based on the Issuer's 3-year relative total stockholder return performance against the S&P 500 index for the period from January 1, 2023 to December 31, 2025, subject to the reporting person's continued service to the Issuer on each vesting date. Acquired upon achievement of certain performance criteria pursuant to the performance-based restricted stock units granted February 15, 2023 under the Issuer's 2021 Equity Incentive Plan. The performance period for the restricted stock units was January 1, 2023 until December 31, 2023, with achievement of the applicable performance criteria subject to determination by the Issuer's Compensation Committee. This determination was obtained on January 22, 2024. The restricted stock units vest as to 1/16th of the total shares quarterly, with the first vesting having occurred on May 17, 2023, and subject to the Reporting Person's continued service to the Issuer on each vesting date. The restricted stock units vest as to 1/12th of the total shares quarterly, with the first vesting having occurred on May 15, 2025, and subject to the Reporting Person's continued service to the Issuer on each vesting date.
