Rule 10b5-1 plan

A Rule 10b5-1 plan is a legal arrangement that lets company insiders (like executives) sell their own stock on a predetermined schedule without worrying about insider trading accusations. Here's why it matters: insiders have access to confidential information before the public does, so the SEC has strict rules about when they can trade. A 10b5-1 plan lets them set up automatic sales in advance—say, "sell 1,000 shares every quarter"—so they're not accused of timing sales based on secret knowledge. For example, a CEO might establish a plan to gradually diversify her wealth without triggering regulatory red flags. You'll see these disclosed in SEC filings, and they're a normal part of how executives manage their compensation.