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But you have to pay the 30% tax eventually anyway. And the more you make, the more tax you have to pay. So you either pay that 30% tax now or you pay it later.

So no, it does not mean you expect a 30% decline in the market. That is false.

So no, it does not mean you expect a 30% decline in the market. That is false.

It sure doesn't mean you expect a 30% gain either.

Comments that are germane to both of yours:

NonLinear is of course correct. The anticipated decline is 30%+ of the appreciation. I should have been more specific. However, for the vast majority of corporate insiders, their stock ownership, and gain, comes via the exercise of stock options, and in that case, their cost basis is in reality, zero. It is also important to recognized that non-qualified stock options (NQSOs) which generally given to lower compensated employees, automatically trigger the gain, and tax, when exercised, whereas with ISOs (Incentive stock options) generally given to the higher paid executives; the tax can be avoided merely by holding onto the stock. The fact that these insiders are the ones doing the selling is thus most telling.

FINF is also correct, except his comments ignore two key points:

1.Once I sell, and pay the taxes, I have to "earn that back" somehow. Thus, simply put, the assumption is that if I have a $1000 gain, and pay $300 in taxes, leaving me $700, to invest elsewhere, or put under my mattress, I will end up with MORE $$ in the near future than if I leave the $1000 intact and allow it to hopefully "grow." That's the scary part of this scenario.

2. Over time, careful financial and tax planning can possibly allow one to mitigate somewhat the tax impact of a sale ( assuming of course that the underlying value remains at least the same) A rapid sale now negates that possibility.

I should also [point out that my 30% tax cut is in reality a quite conservative assumption. For many of these highly compensated individuals, some of the gains will no doubt be treated as ordinary income, and since many live in high tax blue states..NY, NJ, CT, MASS, Cal..in reality the tax bite may well EXCEED 40%+.

Which only shows again, how scary the financial markets are now...

Regards...