Frank Bisignano’s great(ish) escape
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Frank Bisignano, the new ‘CEO’ of the IRS, should know the value of a good tax break.
Bisignano — also head of the Social Security Administration — made a fortune running Fiserv, a data and payments company, after top jobs at JPMorgan Chase and Citigroup.
In order to comply with his ethics agreement to enter the US government in May, he was forced to sell hundreds of millions of dollars’ worth of shares in Fiserv — deferring taxes on the sale — and move his assets into diversified mutual funds, exchange traded funds or Treasuries.
Of course, no one joins the US government to make money*. But the timing may have been fortuitous for Bisignano: It’s been a really, really bad year for Fiserv and a much better one for diversified funds. Let’s take a look at how lucky he was.
Bisignano held 3,321,496 Fiserv shares as of 7 May, according to company filings, giving his stake a cocktail-napkin-maths valuation of $605mn.
Between 16 May and 1 July, he sold between $244mn and $617mn worth of those shares (temporarily saving anywhere from $49mn to $123mn on the sale because he was allowed to defer the 20 per cent capital gains tax). Given the sales stopped in July, we would assume the stake is now fully divested as pledged.
All of which prompted us to wonder — was this a good time to sell?
The answer is somewhat nuanced. That’s because selling Fiserv stock this year has been like trying to choose when to jump from the fourth floor of a burning building.
Bisignano began selling a day after the stock had sunk 16 per cent, following Fiserv’s disclosure on 15 May that revenue growth from its Clover point-of-sale payment processing system disappointed Wall Street. It had also slumped in February and April.
But Fiserv stock fell another 14 per cent on July 14, when it cut its revenue growth forecast, and the stock has slid another 7 per cent over the past month.
There are quite a few moving factors in any counterfactual here, but it seems a fair ballpark estimate to say that an earlier confirmation might have saved Bisignano an eight-figure sum — and that a few more weeks of delay could have cost him a similar amount.
There’s also the question of what he has put the money into since. The US government permits government employees like Bisignano to invest the cash in mutual funds, broad ETFs or Treasuries, meaning he may have diversified his holdings at an opportune time.
Fiserv stock has fallen almost 34 per cent since he was confirmed to lead the social security administration on May 6, while the S&P 500 is up nearly 18 per cent. The 10-year Treasury yield is over 4 per cent.
Now, we don’t know what Bisignano invested in after his sales. The Social Security Administration press officer told us:
Commissioner Bisignano has fully complied with the obligations required under his federal government ethics agreement as a Senate-confirmed presidential appointee.
But as things played out, he’s probably happy that he entered July not holding his ex-employer. Let’s look at how things have panned out since 8 June, roughly halfway through Bisignano’s divestment:
In the long-run, however, sticking at Fiserv probably would have been more lucrative. In 2024, Bisignano’s base salary at the company was $1.4mn. His total compensation, including equity awards, was $27mn, and even that was a big drop from earlier years.
Comments