Microsoft Logo at IgniteSource: Windows Central

Updated December 1, 2021 at 7:46 AM: This article has been updated to include more details regarding the upcoming capital gains tax law in Washington state.

What you need to know

  • Microsoft CEO Satya Nadella recently sold half of his stake in Microsoft.
  • In total, Nadella sold almost 840,000 shares for more than $285 million in a series of transactions.
  • Washington state has a new capital gains tax that will go into effect on January 1, 2022.

Microsoft CEO Satya Nadella recently sold nearly 840,000 shares of Microsoft stock in a series of transactions. Those shares were sold for over $285 million and made up roughly half of Nadella's stake in the company. Details of the sales were outlined in an SEC filing last week. Transactions occurred on November 22, 2021 and November 23, 2021.

According to Microsoft, the CEO sold his shares "for personal financial planning and diversification reasons." The company's statement added that Nadella "is committed to the continued success of the company and his holdings significantly exceed the holding requirements set by the Microsoft Board of Directors."

Some, including the Wall Street Journal, speculate that the move by Nadella may be connected to Washington state's upcoming capital gains tax. The law affects business ownership sales, including a 7% tax on stock sales over $250,000. Specifically, it will tax long-term gains from the sale or exchange of capital assets. That law goes into effect on January 1, 2022, which is the start of the 2023 fiscal year. Coldstream has a complete breakdown of the upcoming law.

If Nadella sold shares of Microsoft after the new tax law went into effect, he would lose a sizeable sum of money compared to what he received through his recent transactions. Microsoft did not mention the upcoming capital gains tax in its statement.

Nadella sold 328,000 Microsoft shares back in 2018 (via CNBC). That sale earned the CEO $35 million. At the time, trade prices ranged from $109.08 to $109.68. In contrast, sale prices ranged from $334 to $349 on the most recent dates Nadella sold shares.