Falabella’s incentive plan leads its executives to buy about $4 billion in shares

Corrected article*

During the last week, a mandatory comment among stockbrokers was the share purchases made by senior Falabella executives with the role of the retailer. Since Thursday, May 30, 17 transactions were carried out by seven executives of the holding company, which total more than $3 billion.

One of the managers who bought shares It was the new CEO of the retailer, Alejandro González Dale, who acquired papers for an estimated amount of $1 billion.

In addition to the general manager, the corporate general manager of home improvement, Alejandro Arze, also acquired company titles; the country manager of Colombia, Rodrigo Fajardo; the general manager of Falabella Financiero, Juan Matheu; his counterpart from Falabella retail, Francisco Irarrázaval; the corporate general manager of transformation, Benoit de Grave; and the CFO, Juan Pablo Harrison.

From the market, they stated that tAll of these transactions respond to the long-term incentive plan that Grupo Falabella provides to its senior executives, with the intention of retaining them.

When consulted by DF, the company stated that “for many years, Falabella has had long-term incentive plans, always based on the company’s results. This plan considers the possibility of each eligible executive investing in Falabella shares, through a loan granted by the company exclusively for this purpose, which must be partially repaid over a period of four years.

In addition, they added that “senior executives who are part of these plans must inform the CMF about the shares acquired in their name.”

positive signal

Market agents highlighted that the purchases made by the managers correspond to acquisitions (shares that are already in circulation) made on the stock market, which means that they are not first issue subscriptions.

The studio manager of Renta 4, Guillermo Araya, said that ““The signal that the market receives is that these executives are seeing that the company is doing things well and for this reason, investing in the same company where they work is a good investment.”

Meanwhile, market operators maintained that, despite the fact that these transactions respond to a company incentive plan, the share prices estimated by the brokerages are established, by the expectations of a company, among several factors.

Thus, they agreed that the purchase of shares by executives can positively impact the company’s outlook.

Stock performance

The transactions carried out by internal agents of the retailer occur in a context where Falabella’s stock shows good performance. So far this year, it has a profitability of 27%.

Although Falabella has already exceeded the analysts’ target price, several of them foresee an upward revision of its “fair value.” In fact, different stock brokerages keep the company in their recommended portfolios.

For example, Bci Corredor de Bolsa published this Monday that “the stock has shown upward catalysts such as a recovery in consumption, better margins and the delivery of its plan to deleverage the company through the sale of assets.”

* The original version of this article was modified because it erroneously indicated that the general manager of Falabella, Alejandro González, carried out six transactions for $2,000 million, when the correct thing is three transactions for a total of $1,000 million.