General Motors CFO Paul Jacobson feels so good about the automaker that he did something even CEO Mary Barra has rarely done: Buy GM stock.

Jacobson spent about $1.01 million of his own money to buy 31,000 shares at $32.60 a share in a transaction dated May 19, according to a filing with the Securities and Exchange Commission. Jacobson now owns 186,847 shares of the company’s stock valued at about $6.1 million.

It is the second time Jacobson bought stock in GM since joining the automaker in December 2020.

"I’m sure he finds the stock quite undervalued and he believes in GM’s EV transformation," said David Whiston, auto analyst for Morningstar. "It’s been odd to see Ford’s cap higher than GM’s recently when GM’s margins are far higher, so he probably wants to do what he can to boost the share price."

Confidence in EVs

Whiston is referring to market cap, which is the total value of a company's outstanding shares. As of Tuesday, Ford's market cap was $46.89 billion and GM's was $46.32 billion.

GM spokesman Jim Cain said the buy signals Jacobson's confidence in GM's plan to transition to all EVs by 2035.

"Paul’s stock purchases reflect his confidence in our ability to deliver both today and into the future as we grow our EV portfolio, and scale Cruise and other growth opportunities," Cain told the Detroit Free Press in an email.

GM plans to reveal an all-electric version of its flagship Cadillac Escalade, to be called Escalade IQ, later this year. It has several other new EVs coming to market in the next 18 months including the Chevrolet Equinox EV, Blazer EV and Silverado EV.

Jacobson is an opportunist

In April 2022, Jacobson spent $1.4 million to buy GM stock at $38.79 a share, well below the all-time high of $67.21 at the start of 2022, said Ben Silverman, director of research at VerityData, a Boston investment research firm that tracks insider trading patterns and buyback activity.

GM's shares have see-sawed between $30 and $44 for the past year. Yet, with the stock again trading lower, Jacobson made this second purchase.

"Mary Barra has been CEO for over nine years now .... her only buy was $26,000 worth of stock in 2010 before she was CEO," Silverman said. "That just shows you how unusual it is" for an officer to purchase stock.

Cain confirmed Barra has not made any recent open market purchases, but emphasized that most of her compensation is at risk because it's tied to the performance of GM stock.

Large corporations such as GM pay their executives with various stock awards, so "why would you buy stock if you're getting it free for your service to the company? So this is unusual. You don't have the CEO putting any cash to work in the stock. He is."

Then again, Jacobson bought stock in Delta, where he was CFO, before joining GM. "He behaves opportunistically, he buys when the stock holds back," Silverman said.

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Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.

This article originally appeared on Detroit Free Press: GM CFO makes big stock buy and here's why