As Compass makes financial cuts to weather a rough-and-tumble housing market, Compass Chief Technology Officer Joseph Sirosh and Customer Success President Danielle Wilkie have decided to make cuts of their own.
Securities and Exchange Commission filings on Aug. 19 revealed that Sirosh and Wilkie have sold a sizeable chunk of their Class A shares, which afford both executives voting privileges. Both leaders have been an integral part of Compass’ growth over the past several years, with Sirosh and Wilkie using their extensive technology backgrounds to spearhead the brokerage’s quest to build the industry’s best end-to-end agent and consumer platforms.
Sirosh sold 220,000 for approximately $870,000, with each share selling between $3.66 and $4.04 in three different transactions on Aug. 17, 18 and 19. Wilkie sold 99 percent of her 33,302 Class A shares in a single transaction on Aug. 19 for $135,000, which amounts to an average price of $4.03 per share.
Sirosh’s remaining 330,000 shares are roughly worth $1.2 million, while Wilkie’s remaining shares are worth a little under $1,000, The Real Deal explained in an article published Sunday afternoon.
Investing platform Investopedia explained shareholders cannot sell Class A shares to the public. However, they are allowed to sell their shares through a 10b5-1, which allows insiders to plan trades in advance in compliance with SEC laws.
A Compass spokesperson said both sales are not a surprise to the company, as Sirosh and Wilkie filed their 10b5-1 forms on May 27, 2022. “These stock sales were not unexpected — they are part of a schedule,” the spokesperson clarified in an email to Inman on Monday.
Although Sirosh and Wilkie’s transactions were planned months ago, the completion of their sales comes at a precarious time for Compass as they — and their competitors — navigate a major slowdown from the past two years’ fever-pitch pace.
Compass’ second-quarter 2022 earnings saw losses balloon 1,325 percent year over year from $7.1 million to $101 million due to “higher expenses related to strategic business initiatives, noncash stock compensation, depreciation and amortization as well as restructuring costs.”
Compass CEO Robert Reffkin also announced the company eliminated equity and financial incentives for new agents and has enacted strict cost-cutting measures that will save the company $320 million over the next year.
“Never in my time at Compass have we seen such a big downturn in such a short time,” he said according to a previous Inman article.
The company’s stock tumbled after its earnings call with the price per share landing at $4.68 in after-hours trading on Aug. 15. Its stocks have continued to decline over the past week, with the price per share opening at $3.59 on Monday and falling another 6 percent to $3.40 as of 1:30 p.m. EST.
Overall, Compass shares are down about 62 percent this year, TRD said.