Securities delivered or withheld to pay an exercise price or tax liability incident to receiving, exercising, or vesting a security.
Definition
Form 4 transaction code F reports payment of an exercise price or tax liability by delivering or withholding securities incident to the receipt, exercise, or vesting of a security. RSU tax withholding is common, but it is not the code's only permitted context.
Code F is broader than the shorthand “tax withholding.” It reports payment of an exercise price or tax liability by delivering or withholding securities incident to receiving, exercising, or vesting a security. It is generally a compensation or settlement mechanic, but the footnote must establish the specific purpose.
Related Form 4 codes
What Code F Means
The SEC defines F as payment of an exercise price or tax liability by delivering or withholding securities incident to the receipt, exercise, or vesting of a security. The company may retain shares that otherwise would have been delivered to the insider. Economically, that differs from selling shares to a market buyer under Code S.
A common RSU sequence is an acquisition or vesting event paired with Code F. An option sequence may combine Code M with F when shares cover the exercise price or tax. The reported price is often the issuer's valuation method for the withholding event, not evidence of an exchange execution at that exact price.
How It Appears in InsiderAlpha Data
Filter Type = F, then read Notes to determine whether the record covers taxes, an exercise price, or both. acquired_disposed = D reflects shares disposed to the issuer; Shares, Price, and Total_Value quantify the withholding; shares_owned_after shows the reported remaining position. Pair records by filing, date, security, and transaction_sequence rather than assuming every F row stands alone.
For sentiment analysis, Code F should not be mixed into Code S sale volume. It can reduce reported holdings, but it normally describes how compensation was settled—not a discretionary decision to sell to a market or private buyer.
Real Filing Example
Lazard director Ashish Bhutani reported 1,368 Class A shares under Code F on August 18, 2017 at $42.42, a reported value of $58,030.56. The footnote says the company retained the shares to cover taxes required upon RSU settlement and explains that the price was the prior trading day's NYSE close. The record reports 49,627 directly owned shares afterward. SEC accession 0001209191-17-049852 supplies the filing-level evidence.
Common Analytical Errors
Error 1: labeling F as a market sale. Code S, not F, identifies an open-market or private sale.
Error 2: saying every F event is mandatory or automatic. The code identifies the payment mechanism; plan terms and footnotes determine how it was initiated.
Error 3: assuming F always involves RSUs. It can also relate to an option exercise or another reportable security event.
Error 4: using the F price as proof of market proceeds. No cash proceeds to the insider should be inferred without supporting disclosure.
Code F in Transaction Context
| Code | Typical Role | Net-Flow Treatment |
|---|---|---|
| F | Shares delivered or withheld for exercise price or tax | Exclude from open-market sell volume; inspect footnotes and paired transactions. |
| A | Grant, award, or other acquisition | May accompany vesting, but is not a market purchase. |
| M | Exercise or conversion | May be paired with F when shares fund an exercise or related tax. |
| S | Open-market or private sale | Separate economic category; only S belongs in gross reported sale flow. |
Primary Sources & Filing References
- SEC Form 4 General Instructions
Primary SEC definition of Code F and the other transaction codes used for comparison.
- SEC Investor Bulletin: Forms 3, 4, and 5
SEC overview explaining Code F as payment using securities received or exercised.
- SEC filing: Lazard, accession 0001209191-17-049852
Source filing for the RSU tax-withholding example and price footnote.
Live Insider Data
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Why it matters for Whale Tracking
Code F is a disposition but not an open-market sale. Separating it from Code S prevents compensation and settlement mechanics from being presented as discretionary insider selling.
Technical Nuance
Read the footnote and paired transactions before classifying the event. Code F can accompany an award or option exercise, and its reported price may be a valuation used for withholding rather than market proceeds received by the insider.
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Real-World Example
"A 2017 Lazard Form 4 reported 1,368 shares under Code F at $42.42. The footnote says the company retained them to cover taxes due on RSU settlement and used the previous trading day's NYSE close for valuation."
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