Director dealings: Lloyds, Rolls-Royce, BP

Director dealings can indicate whether a company’s doing well. So, here are this week’s director dealings from three of the FTSE’s top firms.

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Key Points

  • A non-executive director at Lloyds purchased a rather substantial number of shares.
  • There was a huge sell-off from several directors at Rolls-Royce, but for tax purposes.
  • Despite rumours of a windfall tax, BP directors are still buying shares.

Director dealings are essentially insider transactions for shares between directors and the companies they work for. These dealings are always made public, and are often considered a good indicator of a company’s future prospects. However, they don’t get nearly as much attention as company news due to their complex nature. Nonetheless, here I’m breaking down this week’s director dealings for three of the FTSE 100‘s top firms.

Lloyds

The Lloyds share price had dived 2% when these transactions were reported. But that didn’t stop a number of insiders purchasing shares via the company’s share incentive plan (SIP).” A SIP is an employee plan for companies within the UK to award equity to employees flexibly. Publicly listed companies normally exercise this option because it’s tax-efficient for both the employer and its employees.

Breaking down the director dealings, it seems that all but Harmeen Mehta purchased shares via Lloyds’ SIP. Within certain transactions, there are partnership shares and matching shares. The former is an invitation to buy shares via deductions from salary pre-tax and National Insurance Contributions (NIC). The latter is an add-on to when partnership shares are offered, where a company matches the number of partnership shares of up to a maximum ratio of two-to-one. Matching shares must normally be held in a trust for at least three years, and held for five to get a full tax relief.

Employee Name (Position)AmountDate of TransactionNature of Transaction
Harmeen Mehta (Non-Executive Director)£8513.589/5/2022Acquisition of Shares
Antonio Lorenzo (Chief Executive, Scottish Widows and Group Director, Insurance and Wealth)£150.06 (Partnership shares) & 103 matching shares9/5/2022SIP
Janet Pope (Chief of Staff and Group Director Responsible Business & Inclusion)£124.91 (Partnership shares) & 103 matching shares9/5/2022SIP
Stephen Shelley (Chief Risk Officer)£150.06 (Partnership shares) & 103 matching shares9/5/2022SIP
Andrew Walton (Group Corporate Affairs Director)£29.93 (Partnership shares) & 102 matching shares9/5/2022SIP
Source: Lloyds Regulatory News

Rolls-Royce

Rolls-Royce had a rather eventful week. Prior to reporting its Q1 2022 trading update, the firm had a slew of director dealings that were reported on Monday and Wednesday. Most notably, a number of high profile directors and executives redeemed and offloaded a large number of shares. Under any other circumstances, this would send alarm bells ringing. Nevertheless, these sales were attributed to covering tax liabilities. As such, it shows that directors are still relatively confident in the company’s future.

Employee Name (Position)AmountDate of TransactionNature of Transaction
Warren East (Chief Executive Officer)435,426 free shares5/5/2022SIP
Chris Cholerton (President – Civil Aerospace)101,679 free shares5/5/2022SIP
Mark Gregory (General Counsel)111,849 free shares5/5/2022SIP
Andreas Schell (CEO – Rolls-Royce Power Systems AG)150,809 free shares5/5/2022SIP
Warren East (Chief Executive Officer)-£176,369.475/5/2022Cover Tax Liabilities
Chris Cholerton (President – Civil Aerospace)-£41,185.415/5/2022Cover Tax Liabilities
Mark Gregory (General Counsel)-£45,304.875/5/2022Cover Tax Liabilities
Andreas Schell (CEO – Rolls-Royce Power Systems AG)-£65,832.655/5/2022Cover Tax Liabilities
Lee Hsien Yang (Non-Executive Director)£980.859/5/2022SIP
Wendy Mars (Non-Executive Director)£1820.549/5/2022SIP
Sarah Armstrong (Chief People Officer)£150.029/5/2022SIP
Rob Watson (President – Rolls-Royce Electrical)£150.029/5/2022SIP
Source: Rolls-Royce Regulatory News

BP

After BP reported record profits last week, many were calling for a windfall tax on the oil giant. Such a tax would hinder future investment by the company as any profits would be heavily taxed, thus limiting its earnings potential. That being said, BP directors were unfazed. CEO and Director Bernard Looney, as well as Julia Emanuele, opted to purchase more shares under the firm’s ShareMatch UK Plan, albeit in small amounts.

Employee Name (Position)AmountDate of TransactionNature of Transaction
Bernard Looney (Chief Executive Officer/Director)£311.7010/5/2022SIP
Julia Emanuele (Person Closely Associated with Murray Auchincloss, Chief Financial Officer)£376.4610/5/2022SIP
Source: BP Regulatory News

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John Choong has no position in any of the shares mentioned at the time of writing. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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