DEF 14A of Staar Surgical Co
Filed Apr 24, 2024 · FY20230000950170-24-047635
Director Nominees
Director Nominees
Director Nominees
| | | Director Since | Other Public Boards | Committee Service | | | | | Age | | | Audit | Compensation | Nominating/Governance | | Arthur C. Butcher | 53 | 2024 | 1 | — | Member | — | | Stephen C. Farrell* | 59 | 2016 | — | Chair | — | Member | | Thomas G. Frinzi** | 68 | 2020 | — | — | — | — | | Wei Jiang | 60 | 2024 | 1 | Member | — | Chair | | Aimee S. Weisner | 55 | 2022 | 2 | — | Chair | Member | | Elizabeth Yeu, M.D. | 45 | 2021 | 1 | Member | Member | — | | Lilian Zhou | 41 | 2023 | — | Member | — | Member | | * Independent Lead Director ** All directors are independent, except for Mr. Frinzi, STAAR’s President and CEO | | | | | | |
Director Nominees
| 2024 Proxy Statement | – 1 – | |
Director Nominees
Corporate Governance Highlights
Director Nominees
| Our Board of Directors is elected annually by our shareholders at the Annual Meeting | | | Board Refreshment and Tenure | • 3 new director nominees joined within the last year • 3 director nominees with tenure of 1-5 years • 1 director nominee with tenure of 5+ years | | Independence and Diversity | • Independent Lead Director • 6 of 7 director nominees are independent • 3 of 7 director nominees are female • 3 of 7 director nominees self-identify as ethnically diverse |
Director Nominees
Executive Compensation Highlights
Director Nominees
| Our “say-on-pay” vote received over 95% support from shareholders at the 2023 Annual Meeting | | | Compensation Best Practices | • 2023 long-term incentive awards for our executives were granted in a combination of stock options, restricted stock units, and performance stock units. • In connection with the hiring of new executives in 2023, including Mr. Frinzi as President and Chief Executive Officer, the Compensation Committee conducted benchmarking and used the services of its independent compensation consultant, Aon Human Capital Solutions (formerly Radford Consulting) to structure market-based compensation packages to attract and retain each executive. | | Pay for Performance | • Given macroeconomic and other factors that impacted our business and industry in 2023, our performance fell short of goals that we set at the beginning of 2023. As a result, our annual bonus plan was funded at 50% of target, and performance stock units granted to members of our management team in 2023 did not vest and were forfeited. |
Director Nominees
Equity Incentive Plan Highlights
Director Nominees
| We are seeking shareholder approval of a 2.6 million increase in the shares available for grant | | | Equity Plan and Amendment | • Our shareholders last approved the Amended and Restated Omnibus Equity Incentive Plan (the “Plan”) at the 2023 Annual Meeting. • The Plan includes governance best practices, including prohibitions on option repricing and cash buyouts of underwater options, limitations on share recycling, and award amount limits, including for director awards. • The Plan amendment would increase the shares available for grant by 2.6 million shares, to an aggregate total of 22,805,000 shares. | | Responsible Share Usage | • The Company has thoughtfully managed its equity award burn rate, with a three-year average unadjusted burn rate of 1.6%. • The Company’s 2023 unadjusted burn rate was 2.6%, driven primarily by equity awards for new executives, including Mr. Frinzi as President and Chief Executive Officer. |
Director Nominees
| 2024 Proxy Statement | – 2 – | |
Director Nominees
ELECTION OF DIRECTORS Proposal No. 1 is for the election of seven directors nominated for re-election to the Board. Each of Arthur C. Butcher, Stephen C. Farrell, Thomas G. Frinzi, Wei Jiang, Aimee S. Weisner, Elizabeth Yeu, M.D., and Lilian Zhou currently serve as directors, and each has been nominated for re-election as a director to serve until STAAR’s 2025 Annual Meeting of Shareholders and until his or her successor has been duly elected and qualified, or until his or her earlier death, removal or retirement. Our Board currently consists of eight directors, and the term of service for each of our directors will expire at the Annual Meeting. All of our current directors, with the exception of K. Peony Yu, M.D., are standing for re-election at the Annual Meeting. As Dr. Yu is not standing for re-election, our Board has voted to reduce the size of the Board from eight directors to seven directors upon the expiration of Dr. Yu’s term as a director. The Board of Directors has nominated Arthur C. Butcher, Stephen C. Farrell, Thomas G. Frinzi, Wei Jiang Aimee S. Weisner, Elizabeth Yeu, M.D., and Lilian Zhou for re-election to the Board. Each of these nominees has indicated his or her willingness to serve and, unless otherwise instructed, the Proxy holders will vote the Proxies received by them for those seven nominees. If a nominee is unable or unwilling to serve as a director at the time of the Annual Meeting or any continuation, postponement or adjournment of the meeting, the Proxy holders will vote the Proxies for another nominee, if the current Board of Directors designates a nominee to fill the vacancy. The qualifications of the individual directors upon which the Board of Directors based its nominations are described along with the biography of each nominee below.
Director Nominees
| The Board of Directors recommends a vote “FOR” the election of the Board of Directors’ nominees. | |
Director Nominees
| 2024 Proxy Statement | – 3 – | |
Director Nominees
INFORMATION REGARDING DIRECTOR NOMINEES The table below sets forth certain information regarding the seven directors nominated for re-election to the Board, as of April 24, 2024:
Director Nominees
| Director Nominees | | | | | | | | | | Director Since | Other Public Boards | Committee Service | | | | | Age | | | Audit | Compensation | Nominating/Governance | | Arthur C. Butcher | 53 | 2024 | 1 | — | Member | — | | Stephen C. Farrell* | 59 | 2016 | — | Chair | — | Member | | Thomas G. Frinzi** | 68 | 2020 | — | — | — | — | | Wei Jiang | 60 | 2024 | 1 | Member | — | Chair | | Aimee S. Weisner | 55 | 2022 | 2 | — | Chair | Member | | Elizabeth Yeu, M.D. | 45 | 2021 | 1 | Member | Member | — | | Lilian Zhou | 41 | 2023 | — | Member | — | Member | | * Independent Lead Director ** All directors are independent, except for Mr. Frinzi, STAAR’s President and CEO | | | | | | |
Director Nominees
Director Nominee Highlights
Director Nominees
| 2024 Proxy Statement | – 4 – | |
Director Nominees
Each of our seven director nominees’ skills and experiences are summarized in the following table and described more fully in their individual profiles below. Even though a particular skill may not be indicated in the table, our directors often have some level of experience in many of the areas listed.
Director Nominee Skills and Experience
Director Nominee Skills and Experience
Director Nominee Skills and Experience
| Director Nominee Gender and Diversity | | | | Total Number of Directors* | 7 | | | | Female | Male | | Part I: Gender Identity | | | | Directors | 3 | 4 | | Part II: Demographic Background | | | | Asian | 2 | 1 | | White | 1 | 3 |
Director Nominee Skills and Experience
*As of April 22, 2024. The chart only includes information for directors nominated for re-election at the Annual Meeting.
Director Nominee Skills and Experience
| 2024 Proxy Statement | – 5 – | |
Director Nominee Skills and Experience
Director Nominee Profiles
Director Nominee Skills and Experience
| | Arthur C. Butcher Director since March 2024 Age 53 | | Qualifications. The Board of Directors concluded that Mr. Butcher should serve on the Board of Directors because he brings to the Board extensive medical device marketing, strategy and product development experience, including significant business experience in Asia. In addition, the Board believes that it can benefit from Mr. Butcher’s experience and perspective from serving on the board of Acotec Scientific, a public company listed on the Hong Kong Stock Exchange. Experience. Mr. Butcher currently serves as Executive Vice President and Group President, MedSurg and Asia Pacific for Boston Scientific, a medical device company, a position he has held since May 2022. Prior to his current role, Mr. Butcher served as Boston Scientific’s Executive Vice President and President, Asia Pacific, from February 2020 to May 2022, and was responsible for commercialization of the company’s full portfolio of products across all divisions in the Asia Pacific region. Mr. Butcher joined Boston Scientific in 1997, and he has held management roles with increasing responsibility and has deep experience across the company’s divisions. He serves as a member of the Board of Directors of Acotec Scientific Holdings Limited, listed publicly on the Hong Kong Stock Exchange. Education. Mr. Butcher earned a B.A. in International Relations from the University of Pennsylvania and an M.B.A. from Columbia University. | |
Director Nominee Skills and Experience
| | Stephen C. Farrell Director since January 2016 Age 59 | | Qualifications. The Board of Directors concluded that Mr. Farrell should serve on the Board of Directors because he brings to the Board significant operating, financial and board experience, as well as a strong knowledge of healthcare, having led PolyMedica and Convey Health Solutions. Mr. Farrell also has significant audit committee experience, having served as Chair of the Audit and Corporate Citizenship Committees for Questcor Pharmaceuticals and Lineage Cell Therapeutics, and also would qualify as a financial expert. In addition, the Board believes his expertise in healthcare distribution, accounting and financial stewardship brings a valuable skill set and strategic perspective to our Board. Experience. Mr. Farrell most recently served as the Chief Executive Officer and a member of the Board of Directors of Convey Health Solutions, a private equity sponsored technology-enabled healthcare business process outsourcer, from February 2011 to February 2024. Also, from 2012 to 2020 he served as a member of the Board of Directors of Lineage Cell Therapeutics, formerly known as BioTime, Inc., a clinical stage biotechnology company focused in the field of regenerative medicine. From 2008 to 2009, Mr. Farrell served as the Executive Vice President and Chief Financial Officer for Stream Global Services, a business process outsourcer. From 1999 to 2007, Mr. Farrell served as President of PolyMedica Corporation, a publicly traded provider of diabetes supplies that was acquired by Medco Health Solutions in 2007. From 2007 to 2014, he served as a member of the Board of Directors of Questcor Pharmaceuticals, a biopharmaceutical company that was acquired by Mallinckrodt PLC in 2014. Mr. | |
Director Nominee Skills and Experience
| 2024 Proxy Statement | – 6 – | |
Director Nominee Skills and Experience
| Farrell spent five years as a Senior Manager at PricewaterhouseCoopers auditing leading public companies from 1994 to 1999. Education. Mr. Farrell earned a B.A. from Harvard University and an M.B.A. at the University of Virginia, Darden School of Business. |
Director Nominee Skills and Experience
| | Thomas G. Frinzi Director since June 2020 President and Chief Executive Officer since January 2023 Age 68 | | Qualifications. Mr. Frinzi’s extensive experience in the ophthalmic and medical device industries encompasses both large, well-established companies and innovative start-ups. The Board of Directors concluded that Mr. Frinzi should serve on the Board of Directors because of his familiarity with relevant international sales and marketing aspects of the ophthalmic industry, experience with regulatory and governance aspects of the ophthalmic industry, executive leadership experience, and familiarity with the challenges faced by growth-oriented companies in the ophthalmic industry. Experience. In June 2022, the Board of Directors appointed Mr. Frinzi to serve as Chair of the Board. In December 2022, the Board of Directors appointed Mr. Frinzi to serve as President and Chief Executive Officer of STAAR, effective January 1, 2023. From February 2017 through December 2019, Mr. Frinzi served as Worldwide President, Surgical, Johnson & Johnson Vision business, which includes a broad ophthalmology portfolio across the areas of refractive and cataract surgery. Mr. Frinzi served as Senior Vice President of Abbott Laboratories and President, Abbott Medical Optics (AMO) from January 2016 until February 2017 when Johnson & Johnson acquired AMO. Prior to joining Abbott, Mr. Frinzi held a number of leadership positions in ophthalmology and medical device companies. He served as President and CEO of WaveTec Vision, a developer of surgical systems for eye surgery from September 2010 through September 2014 when it was acquired by Alcon. Thereafter, he served as Alcon’s Head of WaveTec Vision until July 2015. He also held senior positions in commercial operations, business development, and sales and marketing at Bausch & Lomb Surgical, Refractec, Chiron Vision, and Johnson & Johnson. In August 2020, he joined as Executive Chair of the Board of Directors of Cornea Gen, a private company developing therapeutics for the prevention and treatment of corneal disease. Education. Mr. Frinzi earned a B.A. from the University of Tampa. | |
Director Nominee Skills and Experience
| | Wei Jiang Director since March 2024 Age 60 | | Qualifications. The Board of Directors concluded that Mr. Jiang should serve on the Board of Directors because of his more than 25 years’ experience in the pharmaceutical and medical device industries, with particular focus in China and the Asia/Pacific region. In addition, the Board believes that it can benefit from Mr. Jiang’s experience and perspective from serving on the board of Waters Corporation, a public company listed on the New York Stock Exchange. Experience. Mr. Jiang most recently served as Executive Vice President and President, Bayer Pharmaceuticals Region China & APAC, and President, Bayer Group Greater China Region, until his retirement in 2021. Prior to joining Bayer in 2012, he held various senior positions at AstraZeneca, | |
Director Nominee Skills and Experience
| 2024 Proxy Statement | – 7 – | |
Director Nominee Skills and Experience
| culminating in his role as Senior Vice President, China operations. Prior to that, Mr. Jiang served as Managing Director, China operations at Guidant Corporation and in various roles at Eli Lilly & Company including Marketing Director, China Operations. Mr. Jiang has served as a member of the Board of Directors of Waters Corporation (NYSE: WAT) since 2021, including as a member of its science and technology committee. Education. Mr. Jiang earned a B.BA. in business administration from Campbell University in North Carolina and an M.A. in economics from Indiana State University. |
Director Nominee Skills and Experience
| | Aimee S. Weisner Director since June 2022 Age 55 | | Qualifications. The Board of Directors concluded that Ms. Weisner should serve on the Board of Directors because she brings to the Board extensive in-house legal and compliance experience with different medical device companies, including an in-depth understanding of regulatory issues, corporate governance, risk management, intellectual property, corporate transactions, human resources, and internal audit, as well as significant experience in the ophthalmic industry. In addition, the Board believes that it can benefit from Ms. Weisner’s experience and perspective from her prior service on the boards of several U.S. public companies in the medical device and pharmaceutical fields. Experience. Ms. Weisner most recently served as Corporate Vice President, General Counsel of Edwards Lifesciences Corporation, a medical technology company, from 2011 until her retirement in 2019. From 2009 to 2010, she was engaged in private practice and served as legal advisor to public pharmaceutical and medical device companies located in Southern California. Prior to this, from 2002 to 2009, Ms. Weisner served in a number of positions at Advanced Medical Optics, Inc. (acquired by Abbott Laboratories), including Executive Vice President, Administration and Secretary. From 1998 to 2002, Ms. Weisner served in a number of positions at Allergan, Inc., including Vice President, Assistant General Counsel and Assistant Secretary. Ms. Weisner began her legal career as an associate at the law firm of O’Melveny & Myers LLP. Ms. Weisner has served on the Board of Directors of Glaukos Corporation (NYSE: GKOS) since 2014, including as a member of its audit committee, and on the Board of Directors of Lensar, Inc. (NASDAQ: LNSR), including as a member of its compensation committee, since February 2021. Ms. Weisner previously served on the Board of Directors of Oyster Point Pharma (NASDAQ: OYST) from 2019 to 2023. Education. Ms. Weisner earned a B.A. from California State University, Fullerton, and a J.D. from Loyola Law School, Los Angeles. | |
Director Nominee Skills and Experience
| | Elizabeth Yeu, M.D. Director since January 2021 Age 45 | | Qualifications. The Board of Directors concluded that Dr. Yeu should serve on the Board of Directors because of her experience as a practicing and nationally recognized ophthalmologist and educator, and her deep understanding of the clinical needs of refractive surgeons and patients seeking visual freedom. | |
Director Nominee Skills and Experience
| 2024 Proxy Statement | – 8 – | |
Director Nominee Skills and Experience
| In addition, the Board believes that it can benefit from Dr. Yeu’s experience and perspective from her prior service on the boards of several companies in the medical device and pharmaceutical fields. Experience. Dr. Elizabeth Yeu has been a Partner at Virginia Eye Consultants since 2014. She has served as an Assistant Professor of Ophthalmology at the Eastern Virginia Medical School since 2012. Dr. Yeu is currently the President of the American Society of Cataract and Refractive Surgery (ASCRS), and she serves on the ASCRS Executive Board. Dr. Yeu has authored hundreds of articles and is a frequent lecturer nationally and internationally in the areas of refractive cataract surgery, anterior segment reconstruction, ocular surface disease management and the surgical management of astigmatism. Dr. Yeu was voted to The Ophthalmologist's Global Power List as follows: Global Top 100 Power List 2022 and 2020, Top 100 Women in Ophthalmology in 2021, Emerging Leader in 2019, Rising Stars in 2017 and Top 40 Under 40 in 2015. Dr. Yeu received the Women in Medicine’s Top Ophthalmologist Award in 2021, the inaugural Clinical Rising Star award in 2018 by the Ophthalmic Innovations Summit (OIS), was recognized as a Castle Connelly Top Doc 2016-2022 and received their Exceptional Women in Medicine Award in 2017-2018, earned the Best Doctors Award by her peers from 2013-2016, the Millennial Eye Award in 2015, and was recognized as Top 40 Under 40 through Virginia’s Inside Business Journal. Dr. Yeu has served on the board of directors of Tarsus Pharmaceuticals, Inc. (NASDAQ: TARS), a biopharmaceutical company focused on the development and commercialization of therapeutic candidates to address the prevalent disease with limited treatment options, since December 2021. Since January 2022, Dr. Yeu has also served on the board of directors of Avellino Lab USA, Inc., a global leader in genetic molecular diagnostics at the forefront of precision medicine for eye care. Education. Dr. Yeu earned her medical degree through an accelerated and combined undergraduate/ medical school program at the University of Florida College of Medicine. She completed her Ophthalmology residency at Rush University Medical Center in Chicago, where she served as Chief Resident (2006-2007). Dr. Yeu completed a fellowship in cornea, anterior segment and refractive surgery at Baylor College of Medicine’s Cullen Eye Institute from 2007-2008, and she served as an Assistant Professor after her fellowship training. |
Director Nominee Skills and Experience
| | Lilian Zhou Director since December 2023 Age 41 | | Qualifications. The Board of Directors concluded that Ms. Zhou should serve on the Board of Directors because she brings to the Board more than two decades of capital markets and investment experience, with particular focus on China and the Asia/Pacific region. Ms. Zhou also adds deep understanding of corporate governance, corporate strategy and corporate finance from a shareholder's perspective. In addition, the Board believes that it can benefit from Ms. Zhou’s experience as a Chartered Financial Analyst. Experience. Ms. Zhou most recently served as Founder, Chief Investment Officer and Managing Partner of Yulan Capital Management, an investment advisory firm backed by Tiger Management, L.L.C. (a Tiger Seed), which operated out of New York and Shanghai from 2013 through June 2023. Yulan Capital Management primarily focused on researching and investing in companies in the Asia region and its institutional investor base consisted of leading endowments, pension funds and insurance companies. Prior to Yulan Capital, Ms. Zhou worked at Citadel, Kelusa Capital and Bear Stearns & Co. in investing and research roles. Ms. Zhou began her career as an investment banking analyst at Credit Suisse in 2004. Education. Ms. Zhou earned a B.A., Economics and Mathematics-Statistics, from Columbia University, and an M.B.A. from The Wharton School, University of Pennsylvania. She is a Chartered Financial Analyst (CFA). | |
Director Nominee Skills and Experience
| 2024 Proxy Statement | – 9 – | |
Director Nominee Skills and Experience
CORPORATE GOVERNANCE Since our 2023 Annual Meeting of Shareholders, we have had ongoing dialogue with a number of our investors, representing over 50% of shares outstanding, to build relationships and receive feedback on a variety of topics important to them, including governance and operations. The feedback received through our shareholder outreach efforts is communicated to and considered by the Board, and has helped inform our decisions, when appropriate. At the 2023 Annual Meeting of Shareholders, we received over 95% support from shareholders on our “say-on-pay” advisory vote.
Director Nominee Skills and Experience
| Corporate Governance Highlights | | | | | Our Board governance structure includes a Lead Independent Director | Our Board conducts annual evaluations to improve processes and effectiveness | Our Board has a resignation policy for uncontested elections of directors | Other than our CEO, all of our Board members are independent under SEC and NASDAQ rules |
Corporate Governance Guidelines
Corporate Governance Guidelines Our Board has adopted corporate governance guidelines to memorialize its governance practices, which serve as a framework within which our Board of Directors and our Board Committees operate. These guidelines cover a number of areas, including the role and functioning of the Board and Board Committees, Board composition and leadership structure, director selection and qualification, succession planning, and shareholder engagement, among other things. A copy of our Guidelines on Significant Corporate Governance Issues is available on our website at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.”
Director Independence
Director Independence Our Board has reviewed its composition, the composition of our Board Committees and the independence of each director. Based upon information provided by each director, our Board has determined that none of our current directors, with the exception of Thomas G. Frinzi who serves as President and Chief Executive Officer, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each is independent under applicable SEC and NASDAQ rules. The Board also determined that Gilbert H. Kliman, M.D. was independent during the period he served on the Board during fiscal 2023. In making these determinations, our Board considered the current and prior relationships that each non-employee director has with the Company and all other facts and circumstances our Board deemed relevant in determining their independence.
Board Leadership Structure
Board Leadership Structure The Board annually reviews its leadership structure to evaluate whether the structure remains appropriate for us. We have no policy requiring either that the positions of the Chair of the Board and Chief Executive Officer be separate or that they be occupied by the same individual. Our Board believes that it is important to retain flexibility to allocate the responsibilities of both offices in a way that is in our best interests and the best interests of our shareholders at the time it elects a new Chief Executive Officer or Chair of the Board, or at other times when consideration is warranted by circumstances. Our Chair of the Board, Thomas G. Frinzi, was appointed Chief Executive Officer upon the retirement of our prior Chief Executive Officer, Caren Mason, effective January 1, 2023. Pursuant to our Guidelines on
Board Leadership Structure
| 2024 Proxy Statement | – 10 – | |
Board Leadership Structure
Significant Corporate Governance Issues, in the event the Chair of the Board is not an independent director, the independent directors will annually appoint from amongst themselves a Lead Independent Director with such responsibilities as the Board shall determine from time to time. Effective January 1, 2023, the independent members of the Board appointed Stephen C. Farrell as Lead Independent Director. The Lead Independent Director has the following responsibilities: • Preside at meetings of the Board at which the Chair is not present, including executive sessions of the independent, non-management directors; • Approve information sent to the Board; • Approve the agenda and schedule for Board meetings to provide that there is sufficient time for discussion of all agenda items; • Serve as liaison between the Chair and the independent directors; • Be available for consultation and communication with major shareholders upon request; and • Call executive sessions of the independent directors. We believe the combined Chair and CEO leadership role along with a Lead Independent Director streamlines our Board’s processes to provide support and direction on corporate initiatives and, at the same time, promotes effective and independent oversight of management and our business.
Evaluation of Board Effectiveness
Evaluation of Board Effectiveness The Board, under the direction of the Nominating and Governance Committee, conducts an annual self-evaluation and assessment process. The Board believes that an annual evaluation process is an important component of strong corporate governance practices and promoting ongoing Board effectiveness. The process involves each director annually completing an evaluation of the full Board. The evaluation is intended to provide each director with an opportunity to evaluate performance for the purpose of improving Board and Board Committee processes and effectiveness. The detailed evaluation questionnaire, which is administered by our General Counsel, seeks quantitative ratings and qualitative comments in key areas of Board practice, and asks each director to evaluate how well our Board and our Board Committees operate and to make suggestions for improvements. These key areas include Board composition and director participation, meeting procedures, materials and format, allocation and delegation of responsibilities among our Board and its committees and adequacy and availability of resources. The General Counsel compiles the directors’ feedback and presents the results to the full Board, on an anonymous basis, for candid discussion and feedback. After receiving feedback from the Board discussion of these results, the Nominating and Governance Committee recommends improvements for the Board to consider implementing, as needed. As part of the process for the 2023 annual evaluation, the Board also engaged in a peer evaluation, supported by our General Counsel. Our General Counsel conducted interviews with each Board member to discuss the individual director’s performance and obtain feedback on the effectiveness of other directors.
Director Resignation Policy for Uncontested Election of Directors
Director Resignation Policy for Uncontested Election of Directors In an uncontested election of directors (i.e., an election where the only nominees are those recommended by the Board), any director nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation to the Board of Directors following certification of the election results. For additional details, the Director Resignation Policy is published on our website, at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.”
Director Resignation Policy for Uncontested Election of Directors
| 2024 Proxy Statement | – 11 – | |
Shareholder Communications with Directors
| Non-Employee Director Compensation Program | | | Annual Cash Retainers | | | Board Member Base Annual Cash Retainer | $50,000 | | Audit Committee Chair Additional Retainer | $15,000 | | Compensation Committee Chair Additional Retainer | $15,000 | | Nominating and Governance Committee Chair Additional Retainer | $15,000 | | Members of the Audit Committee, Compensation Committee, or Nominating and Governance Committee Additional Retainer | $10,000 | | Lead Independent Director Additional Retainer | $40,000 |
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–– Compensation of Directors ––
2023 Director Compensation
2023 Director Compensation The table below summarizes the fiscal 2023 compensation of each non-employee director who served as a director during 2023, including fees earned or paid in cash, Option Awards and Stock Awards.
2023 Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | Stock Awards ($)(1) | Total ($) | | Stephen C. Farrell | 114,890(2) | 89,966(3) | 90,013(3) | 294,869 | | Gilbert H. Kliman, M.D.(4) | 64,615(5) | — | 179,973(6) | 244,588 | | Aimee S. Weisner | 79,986(7) | — | 179,973(8) | 259,959 | | Elizabeth Yeu, M.D. | 70,000 | 179,989(9) | — | 249,989 | | K. Peony Yu, M.D. | 70,000 | 89,966(10) | 90,013(10) | 249,979 | | Lilian Y. Zhou(11) | 4,286(12) | 47,708(13) | 47,692(13) | 99,686 |
2023 Director Compensation
(1) Dollar amounts in the Option Awards and Stock Awards columns reflect the grant date fair value of equity awards granted during fiscal year 2023, calculated in accordance with Financial Accounting Standards Board Codification Topic 718 (“FASB ASC Topic 718”). The fair value of each Option Award was estimated using a Black-Scholes option valuation model, and the fair value of each Stock Award was based on the closing price of our common stock on the date of grant. Assumptions used in the calculation of these amounts are included in Note 12 to STAAR’s audited consolidated financial statements for the fiscal year ended December 29, 2023, included in STAAR’s Annual Report on Form 10-K. (2) Mr. Farrell elected to receive a portion of his cash retainer in the form of restricted stock. In lieu of such cash retainer, Mr. Farrell received (i) a grant of 715 shares of restricted stock on September 29, 2023 with a grant date fair value of $28,728 and (ii) a grant of 921 shares on December 29, 2023 with a grant date fair value of $28,744. (3) Represents (i) an award of 1,709 shares of restricted stock and (ii) an option to purchase up to 3,127 shares of common stock, each granted on June 15, 2023. As of the end of fiscal year 2023, the aggregate number of restricted stock and option awards outstanding for Mr. Farrell were 1,709 and 59,325, respectively. (4) Dr. Kliman tendered his resignation from the Board effective December 1, 2023. (5) Dr. Kliman elected to receive a portion of his cash retainer in the form of restricted stock. In lieu of such a cash retainer, Dr. Kliman received (i) a grant of 435 shares of restricted stock on September 29, 2023 with a grant date fair value of $17,478 and (ii) a grant of 366 shares of restricted stock on December 1, 2023 with a grant date fair value of $12,074. (6) Represents an award of 3,417 shares of restricted stock, granted on June 15, 2023. As of the end of fiscal year 2023, the aggregate number of option awards outstanding for Dr. Kliman was 850. (7) Ms. Weisner elected to receive a portion of her cash retainer in the form of restricted stock. In lieu of such cash retainer, Ms. Weisner received (i) a grant of 497 shares of restricted stock on September 29, 2023 with a grant date fair value of $19,969 and (ii) a grant of 640 shares of restricted stock on December 29, 2023 with a grant date fair value of $19,974. (8) Represents an award of 3,417 shares of restricted stock, granted on June 15, 2023. Ms. Weisner elected to defer delivery of all shares of restricted stock awarded in fiscal year 2023. As of the end of fiscal year 2023, the aggregate number of restricted stock and option awards outstanding for Ms. Weisner were 4,554 (of which 1,137 have been deferred) and 5,765, respectively. (9) Represents an award of an option to purchase up to 6,256 shares of common stock, granted on June 15, 2023. As of the end of fiscal year 2023, the aggregate number of option awards outstanding for Dr. Yeu were 15,091. (10) Represents (i) an award of 1,709 shares of restricted stock, and (ii) an option to purchase up to 3,127 shares of common stock, each granted on June 15, 2023. As of the end of fiscal year 2023, the aggregate number of restricted stock and option awards outstanding for Dr. Yu were 1,709 and 10,426, respectively. (11) Ms. Zhou was elected to the Board, effective December 4, 2023. (12) Represents fees paid through December 29, 2023 following Ms. Zhou’s election to the Board. Represents (i) an award of 1,477 shares of restricted stock and (ii) an award of an option to purchase up to 2,686 shares of common stock, each granted on December 4, 2023. As of the end of fiscal 2023, the aggregate number of restricted stock and option awards outstanding for Ms. Zhou were 1,477 and 2,686, respectively.
2023 Director Compensation
| 2024 Proxy Statement | – 20 – | |
2023 Director Compensation
INFORMATION REGARDING EXECUTIVE OFFICERS The table below sets forth certain information regarding our executive officers as of April 24, 2024:
2023 Director Compensation
| Executive Officers | | | | Executive | Age | Position | | Thomas G. Frinzi | 68 | President and Chief Executive Officer | | Scott Barnes, M.D. | 62 | Chief Medical Officer | | Warren Foust | 48 | Chief Operating Officer | | Keith Holliday, PhD | 61 | Chief Technology Officer | | Magda Michna, PhD | 48 | Chief Clinical, Regulatory and Medical Affairs Officer | | Nathaniel B. Sisitsky, Esq. | 50 | General Counsel and Corporate Secretary | | Patrick F. Williams | 51 | Chief Financial Officer |
2023 Director Compensation
| | Thomas G. Frinzi Director President and Chief Executive Officer Age 68 | | Mr. Frinzi has served as a member of the Board since June 2020. In June 2022, the Board appointed Mr. Frinzi to serve as Chair of the Board. In December 2022, the Board of Directors appointed Mr. Frinzi to serve as President and Chief Executive Officer of STAAR, effective January 1, 2023. Information regarding Mr. Frinzi can be found above under the caption “Information Regarding Director Nominees.” | |
2023 Director Compensation
| | Scott Barnes, M.D. Chief Medical Officer Age 62 | | Dr. Barnes joined STAAR in October 2017 as Chief Medical Officer. Dr. Barnes joined STAAR after a distinguished 30-year career with the military, retiring at the rank of Colonel in September 2017. From 2004 to 2017, Dr. Barnes served as Chief of Ophthalmology Services, Womack Army Medical Center, Fort Bragg, North Carolina. Soon after he joined Womack, he was asked to serve as the theater ophthalmology consultant and surgeon in Iraq and Afghanistan during 2005. In 2008, Colonel Barnes was | |
2023 Director Compensation
| 2024 Proxy Statement | – 21 – | |
2023 Director Compensation
| awarded the Army Surgeon General's A designator, similar to the level of professor at a civilian institution. Dr. Barnes began his medical career in 1986 as a research assistant in the Department of Genetics, Harvard Medical School/Children's Hospital in Boston and in 1991 became a general surgery intern at William Beaumont Army Medical Center. He went on to become a Special Forces (“Green Beret”) Battalion and Group Surgeon as well as the Deputy Surgeon for the US Army Special Operations Command. He completed an ophthalmology residency at the Wilford Hall/Brooke Army Medical Center in San Antonio, Texas in 1998. Colonel Barnes held numerous ophthalmology positions at a number of military bases and was asked to serve as the Deputy Commander for Clinical Services for all combat trauma, medical, veterinary, and dental care in Afghanistan during a 13-month deployment from 2011 to 2012. Dr. Barnes has given more than 200 presentations and lectures as well as led over 30 ophthalmology or refractive surgery research projects. He has been awarded Speaker of the Day at the Royal Hawaiian Eye Meeting ten times as well as numerous other awards and honors at industry meetings. In addition to earning his Bachelor of Arts degree from Wheaton College, and his doctorate degree from Northwestern University Medical School in Chicago, Dr. Barnes' post-doctoral training includes a Cornea Fellowship at the Massachusetts Eye and Ear Infirmary/Harvard Medical School in Boston. |
2023 Director Compensation
| | Warren Foust Chief Operating Officer Age 48 | | Mr. Foust joined STAAR in April 2023 as Chief Operating Officer. Prior to joining STAAR, Mr. Foust served as Worldwide President, Johnson & Johnson Vision, Surgical, since December 2019. Prior to Johnson & Johnson Vision, Surgical, he served as Worldwide President of Mentor, a leading breast reconstruction and aesthetics business unit of Johnson & Johnson from 2018 to 2019, and Vice President, U.S. Sales and Marketing from 2015 to 2018. Prior to Mentor, Mr. Foust held various sales leadership roles at DePuy Synthes, also a company of Johnson & Johnson. He started his career at Roche Pharmaceuticals as a sales representative in 1999. Mr. Foust holds a Master’s Degree of Marketing and bachelor’s degree from the University of Alabama. | |
2023 Director Compensation
| | Keith Holliday, PhD Chief Technology Officer Age 61 | | Dr. Keith Holliday joined STAAR in August 2015 as Vice President of Research and Development. In March 2017, he assumed the role of the Chief Technology Officer. From 2007 to his arrival at STAAR, he served as Vice President, Research and Development at ReVision Optics where he oversaw the development of their corneal inlay technology that includes a hydrogel inlay for presbyopia correction, delivery devices and clinical methodologies as well as managing first-in-man clinical studies. Previously, Dr. Holliday was Director of Laser Technology at Advanced Medical Optics (AMO) and Staff Laser Scientist at VISX. Prior to joining VISX, Dr. Holliday worked primarily in academia. He spent three years at the Swiss Federal Institute of Technology, where he was primarily involved with the utilization of optically active polymers and crystals, to develop materials and techniques for very high density, holographic optical storage and computational systems. Dr. Holliday holds patents in excimer laser beam | |
2023 Director Compensation
| 2024 Proxy Statement | – 22 – | |
2023 Director Compensation
| detection, control and profiling, and methods to correct presbyopia that synergistically take into account the epithelium’s response to corneal inlays, and he has also authored 37 peer reviewed publications in the scientific literature plus two book chapters and one single-authored book. He is considered an expert on presbyopia and served as a committee member for the International Society of Presbyopia. He obtained his first degree in Physics and Electronics from the University of Saint Andrews in Scotland and a Ph.D. from the Laser Physics Centre at the Australian National University. |
2023 Director Compensation
| | Magda Michna, PhD Chief Clinical, Regulatory and Medical Affairs Officer Age 48 | | Dr. Michna joined STAAR in April 2023 as Chief Clinical, Regulatory and Medical Affairs Officer. Prior to joining STAAR, Dr. Michna served as Chief Global Clinical, Medical and Regulatory Affairs Officer for AcuFocus, Inc., an ophthalmic medical device company, since April 2018. AcuFocus was acquired by Bausch & Lomb in January 2023. Prior to AcuFocus, Dr. Michna served as Chief Clinical Officer at Presbia. From 2012 to 2017, Dr. Michna led clinical development for many premium intraocular lens and other surgical device technologies supporting the Alcon Surgical franchise. Her industry career began as a Vision Scientist at VISTAKON®, a division of Johnson & Johnson Vision from 2008 to 2012, which she joined following an academic Research Fellowship with the Vision Research Group at McGill University’s Department of Ophthalmology from 2005 to 2008. Dr. Michna holds a Doctor of Philosophy degree in optical physics and a bachelor’s degree from the University of Melbourne, Australia. | |
2023 Director Compensation
| | Nathaniel B. Sisitsky, Esq. General Counsel and Corporate Secretary Age 50 | | Mr. Sisitsky joined STAAR in December 2023 as Senior Vice President, General Counsel and Corporate Secretary. Prior to joining STAAR, Mr. Sisitsky served as Senior Vice President, General Counsel and Corporate Secretary of NuVasive, Inc., a medical device company, from June 2018 until NuVasive’s merger with Globus Medical in September 2023. Previously, he served as NuVasive’s Vice President and Associate General Counsel, Corporate Affairs, from July 2015 to June 2018. Prior to joining NuVasive, Mr. Sisitsky was Vice President and Associate General Counsel at CareFusion Corporation, a global medical technology company, from 2009 to 2015. From 2004 to 2009, Mr. Sisitsky served as Vice President, Legal – Corporate Finance at American Tower Corporation, a global owner and operator of wireless communication sites. Prior to joining American Tower, Mr. Sisitsky was a Junior Partner in the Corporate Department of Wilmer Cutler Pickering Hale and Dorr (WilmerHale), based in Boston, MA. He holds a B.A. in Political Science and Economics from Emory University and a J.D. from New York University School of Law. | |
2023 Director Compensation
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2023 Director Compensation
| | Patrick F. Williams Chief Financial Officer Age 51 | | Mr. Williams joined STAAR in July 2020 as Chief Financial Officer. He brings over 20 years of financial and operational management experience with public companies. Mr. Williams was most recently at Sientra, Inc., a medical aesthetics company where he initially served as the Chief Financial Officer, and then served as the General Manager of the miraDry® business unit, from 2018 to 2019. Prior to Sientra, Mr. Williams was Chief Financial Officer of ZELTIQ Aesthetics, Inc., a publicly-traded medical device company that was acquired in 2017. Mr. Williams has also served as Vice President at NuVasive, Inc., a San Diego-based medical device company, in strategy, finance and investor relations roles. Mr. Williams received a MBA in Finance and Management from San Diego State University and a Bachelor of Arts in Economics from the University of California, San Diego. | |
2023 Director Compensation
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2023 Director Compensation
COMPENSATION DISCUSSION AND ANALYSIS Overview and Highlights The following Compensation Discussion and Analysis describes the objectives of our executive compensation program and provides disclosure about the elements of compensation earned by and awarded to each of the executive officers identified in the “Summary Compensation Table,” whom we refer to in this section as our “named executive officers” or “NEOs.” It also discusses our executive compensation philosophy and programs, including the decisions made by the Compensation Committee of our Board of Directors (which we refer to in this Compensation Discussion and Analysis as the “Committee”) under those programs, and the factors considered in making those decisions for the Company’s named executive officers in 2023.
2023 Executive Compensation Highlights
2023 Executive Compensation Highlights • Given macroeconomic and other factors that impacted our business and industry in 2023, our performance fell short of goals that we set at the beginning of 2023. As a result, our annual bonus plan was funded at 50% of target, and performance stock units granted to members of our management team in 2023 did not vest and were forfeited. • Our named executive officers who served on the management team at the end of fiscal year 2022 received merit-based salary increases of 6%, consistent with company-wide base salary increases. • 2023 long-term incentive awards for our named executive officers were comprised of stock options, restricted stock units, and performance stock units. • In connection with the hiring of new executives in 2023, including Messrs. Frinzi and Foust, and Dr. Michna, the Committee considered benchmarking and engaged an independent consultant, Aon Human Capital Solutions (formerly Radford Consulting) to structure market-based compensation packages designed to attract and retain each executive.
Say-on-Pay Results and Shareholder Engagement
Compensation Program Philosophy and Process The Company is dedicated to pursuing a mix of near, medium, and longer-term business objectives designed to build and increase shareholder value. Our Board and Compensation Committee have sought to establish a compensation program that incentivizes and rewards our management team for achieving or exceeding corporate financial and non-financial goals and also individual objectives. The Committee and management periodically review the Radford Global Life Sciences Surveys as well as benchmark data regarding our peer group. This data is used to assess the general competitiveness of our recruiting and compensation programs, and to assist the Committee and the Board of Directors in making compensation decisions. In 2023, the Compensation Committee engaged Aon Human Capital Solutions (formerly Radford Consulting) to review non-employee director and executive officer compensation and provide benchmark data and recommendations. In January 2023, Aon proposed updates to the peer group for the Company based on the Company’s revenue, market capitalization, and headcount, among
Say-on-Pay Results and Shareholder Engagement
other metrics. Based on Aon’s recommendations, we removed from our peer group Abiomed, and we added iRhythm Technologies. As a result, the peer group was comprised of the 17 companies reflected in the table below. Such peer group was selected from U.S. based medical device companies with market capitalizations between $900 million and $8.1 billion and revenue generally between $140 million and $840 million. The Committee accepted Aon’s recommended revised peer group and the Board of Directors approved the Committee’s recommendation. Our peer group, which we used as one element for setting 2023 compensation, consisted of the following companies:
Say-on-Pay Results and Shareholder Engagement
We additionally use peer group data as part of reviewing the overall appropriateness and competitiveness of our executive compensation program. In 2021, retention and recruitment challenges for high-performing executives suggested that our compensation structure was not sufficiently competitive. The Committee assessed benchmark data and recommendations from Aon in 2021 and determined that it was in the Company’s best interests to adjust the compensation program mid-year to support retention and recruitment efforts. In 2022, similar to the second half of 2021, the Committee determined, after assessing Aon’s benchmark data and recommendations, to target base salary at or near the 75th percentile of our peer companies and total target compensation between the 50th — 75th percentile based on an analysis of our peers’ compensation levels, which reflected the experience, leadership, specialized skill sets and sustained performance of our executive team. The Committee took a similar approach in 2023, including for recruiting new executives. At our 2023 Annual Meeting held on June 15, 2023, shareholders representing approximately 95% of the votes cast on the proposal approved the compensation of our named executive officers. Given the strong support shown, we did not make any changes to our executive compensation program as a result of this vote. Elements of Compensation The elements of compensation that may be earned by our named executive officers include base salary, annual cash bonus, and equity-based awards. All components of each named executive officer’s compensation are annually reviewed in the context of Company performance and individual performance. The Committee is responsible for reviewing and approving compensation for the Company’s executive leadership, except for the Chief Executive Officer. The Board is responsible for reviewing and approving compensation for the Chief Executive Officer, based on the recommendation of the Committee. The Chief Executive Officer does not participate in the determination of her/his own compensation. Base Salaries. The Committee, with input from the Chief Executive Officer, reviews, considers and approves base salaries at a level intended to attract and retain the Company’s executives. The Committee generally reviews base salaries in the first quarter of each year and approves any changes based upon company performance, market data, executive performance, scope of responsibility, and past and potential contributions to our business. In March 2023, named executive officer salaries increased 6.0% over 2022 levels as follows, consistent with base salary increases company wide.
Say-on-Pay Results and Shareholder Engagement
Mr. Frinzi became President and Chief Executive Officer on January 1, 2023. (2) Mr. Foust because Chief Operating Officer on April 24, 2023. Annual Cash Bonuses. A material element of each named executive officer’s compensation is the opportunity to earn an annual performance-based cash bonus, with payout determined based on achievement of specific corporate financial objectives as well as personal performance. The Committee reviews, considers and approves bonus targets for named executive officers based on market data and also considers changes in the scope of responsibility and overall performance of individual named executive officers when establishing these targets. The Committee generally approves bonus targets for each named executive officer as a percentage of base salary in the first quarter of each year, and it establishes performance metrics and targets for funding of the overall bonus plan. For 2023, the Committee approved a bonus plan (the “2023 Bonus Plan”) that was designed to be funded based on STAAR meeting or exceeding specific targets for revenue and Adjusted EBITDA per share*. The table below reflects base salary and target bonus amounts for each named executive officer in 2023:
Say-on-Pay Results and Shareholder Engagement
| Named Executive Officer | Base Salary ($) | Target Bonus Amount ($) | Target Bonus Percentage(1) | | Thomas G. Frinzi | 820,000 | 861,000 | 105% | | Patrick F. Williams | 548,550 | 356,558 | 65% | | Warren Foust(2) | 550,000 | 385,000 | 70% | | Scott Barnes | 543,065 | 244,379 | 45% | | Keith Holliday | 524,414 | 262,207 | 50% |
Say-on-Pay Results and Shareholder Engagement
(1) Target Bonus Percentage represents the potential bonus payable to an executive as a percentage of base salary in the event the Company achieves pre-established target financial metrics and thereby funds the bonus plan at 100% and the executive has fully met the individual performance criteria. There is no minimum or maximum bonus potential for each executive, and the overall bonus pool is capped at 200% of target. (2) Mr. Foust became Chief Operating Officer on April 24, 2023. Amounts reflect his annual base salary rate and annual bonus opportunity. His actual bonus opportunity for 2023 was pro-rated for the portion of the year that he was employed by the Company. The Committee is responsible for determining the level of funding for the bonus pool based on the Company’s financial results and performance against the pre-established financial metrics and targets for the annual bonus plan. Then, based on such bonus pool funding, the Committee approves the individual bonus payments to the named executive officers, taking into account individual performance. For the bonus payout to Chief Executive Officer, the Committee makes a recommendation to the Board, which is then subject to Board approval. The determination of annual bonuses for 2023 performance are described further below under the section entitled “2023 Bonus Awards.” ________________ * Adjusted EBITDA per share is a non-GAAP financial measure. Information and reconciliations are provided in Appendix 3.
Say-on-Pay Results and Shareholder Engagement
Long-Term Equity Compensation. The Committee believes that long-term equity incentive awards serve to align the interests of the executive officers with the interests of our shareholders. Long-term equity incentive awards may be granted in the form of stock options, restricted shares, restricted stock units (“RSUs”), performance stock units (“PSUs”), or other types of equity or equity-linked compensation. In determining the size of equity grants to our executives, the Committee considers recommendations of the Chief Executive Officer, peer group data, individual performance, and level of responsibility in the Company. For the Chief Executive Officer’s equity grant, the Committee and Board consider Company and individual performance as well as peer group data. The Committee generally approves long-term equity incentive awards for each named executive officer as a percentage of base salary in the first quarter of each year. The Committee also considers and approves the structure of our long-term equity compensation program, including the types of awards to be granted, the mix of awards, as well as award terms. For 2023, the Committee approved an equity award program for our executives comprised of stock options, RSUs and PSUs. The Committee used the Black-Scholes value for stock options and the grant date market value of RSUs and PSUs on the date of grant. The equity grants made in 2023 are described further below under the section entitled “2023 Equity Awards.” Stock Options. The exercise price of a stock option is the closing price of the Company’s common stock on the NASDAQ Stock Market on the date of grant. Under the Company’s Amended and Restated Omnibus Equity Incentive Plan (“Plan”), STAAR may not grant stock options with an exercise price below the fair market value of its common stock on the date of grant. STAAR does not grant stock options with a so-called “reload” feature. To encourage retention by providing a long-term incentive, the options typically vest ratably over a three-year period, and have a ten-year life. Restricted shares/Restricted stock units/Performance stock units. Restricted shares are shares of common stock that STAAR grants subject to restrictions that lapse over time as the award vests. RSUs and PSUs represent the right to receive shares of the Company’s common stock in the future, which vest based on service (RSUs) or following achievement of pre-established performance metrics (PSUs). Restricted shares and RSUs are time-based awards that typically vest ratably over a three-year period. PSUs are performance-based awards that only vest if the Company meets or exceeds the performance metrics established for such awards. Subject to such performance conditions, PSUs typically vest ratably over a three-year period. 2023 Equity Awards In 2023, the Committee approved the grant of long-term equity incentive awards to the named executive officers, consistent with the Company’s compensation philosophy and based upon the individual’s performance and benchmark data, in the form of stock options, RSUs, and PSUs. Based on data and analysis from Aon, the Committee granted 2023 long-term equity incentive awards to our named executive officers as follows: (i) one third of the value in the form of stock options, (ii) one third of the value in the form of RSUs, and (iii) one third of the value in the form of PSUs. Messrs. Frinzi and Foust, who joined the Company in 2023, received equity awards granted one half of the value in the form of stock options and one half of the value in form of RSUs. For the 2023 PSU awards, the Committee established a financial target of $355 million in 2023 revenue. If this target is achieved, the PSUs would fund at 100%, with the total potential PSU payout capped at 150% of the target. If the performance criteria is achieved, the PSUs vest annually over three years, commencing one year from the date of grant. Based on the Company achieving $322.4 million in revenue for 2023, the Committee determined to fund the PSUs at 0% of the target, and accordingly the 2023 PSUs did not vest and were forfeited.
Say-on-Pay Results and Shareholder Engagement
| Named Executive Officer | Grant Date | Stock Options(1) | Restricted Stock Units(3) | Performance Stock Units(4) | | Thomas G. Frinzi(2) | January 3, 2023 | 160,637 | 87,805 | - | | Patrick F. Williams | March 10, 2023 | 22,281 | 12,184 | 12,184 | | Warren Foust(2) | May 8, 2023 | 37,567 | 20,331 | - | | Scott Barnes | March 10, 2023 | 19,301 | 10,555 | 10,555 | | Keith Holliday | March 10, 2023 | 18,638 | 10,192 | 10,192 |
Say-on-Pay Results and Shareholder Engagement
(1) The options granted have a 10-year term and become exercisable as follows: one-third on the 1-year anniversary of the grant date and the remaining two-thirds over the following 24 months in equal amounts on a monthly basis. In the event the options do not evenly divide into 24 months, the remaining balance of options become exercisable on the final month of vesting. The exercise price was $51.25 for those options granted on January 3, 2023, $56.63 for those options granted on March 10, 2023, and $67.63 for those options granted on May 8, 2023, which was the closing price on the NASDAQ Stock Market on the respective date of the grants. (2) Mr. Frinzi became President and Chief Executive Officer on January 1, 2023. Mr. Foust became Chief Operating Officer on April 24, 2023. In each case, amounts reflect new-hire equity awards that were granted half in options and half in RSUs. (3) The RSUs have a three-year vesting schedule, with one-third vesting on the first three anniversaries of the date of grant, subject to continued service through each vesting date. (4) As discussed above, the 2023 PSUs funded at 0% of target, and accordingly, they did not vest and were forfeited. While the 2023 PSUs did not vest and were forfeited, the Committee believes that PSU awards are an effective tool to align executive compensation with shareholder interests. For 2024, the Committee modified the mix of awards granted to our named executive officers to increase the percentage of awards granted in the form of PSUs. For 2024, the Committee approved an equity award program for our named executive officers as follows: (i) 20% of the value in the form of stock options, (ii) 40% of the value in the form of RSUs, and (iii) 40% of the value in the form of PSUs. 2023 Bonus Awards As described above, the Committee is responsible for determining the level of funding for the bonus pool based on the Company’s financial results and performance against the pre-established financial metrics and targets for the annual bonus plan. For 2023, the Committee approved financial performance metrics for the 2023 Bonus Plan consisting of fiscal 2023 revenue (with a target set at $355 million) and Adjusted EBITDA per share* (with a target set at $1.30). The 2023 Bonus Plan was structured such that the bonus pool would fund at 100% if both of these targets were achieved, with total potential bonus pool funding capped at 200% of target. In 2023, the Company fell short of the targets for revenue and Adjusted EBITDA per share* for the 2023 Bonus Plan. The Company faced macroeconomic challenges and a global decline in refractive industry procedures in 2023, which required the Company to update its forecast and outlook during 2023. The Company did not change the performance targets for the 2023 Bonus Plan mid-year, and accordingly, we did not achieve our original targets. While we grew our net sales in 2023 by 13% to $322.4 million, with ICL sales growth of 18% compared to 2022, our performance for the year was below expectations. In a challenging year, we still generated net cash from operating activities of $14.6 million in 2023, and we ended the year with cash, cash equivalents and investments available for sale of $232.4 million, with no debt. Further, we increased capacity at our primary manufacturing facility in Monrovia, California and continued to advance the build-out of our manufacturing facility in Nidau, Switzerland, which will support anticipated future growth and create additional manufacturing flexibility and redundancy. Based on the Company achieving $322.4 million in revenue and Adjusted EBITDA per share* of $1.15, the Committee determined to fund the bonus pool at 50% of the target amount for 2023. The Committee and the Board greed that this level of pool funding aligns management’s compensation with shareholder interests. ________________ * Adjusted EBITDA per share is a non-GAAP financial measure. Information and reconciliations are provided in Appendix 3.
Say-on-Pay Results and Shareholder Engagement
| Named Executive Officer | Target Bonus Amount ($) | 2023 Earned Bonus Payment ($) | Bonus Payment as a Percent of Target Bonus | | Thomas G. Frinzi | 861,000 | 430,500 | 50% | | Patrick F. Williams | 356,558 | 178,279 | 50% | | Warren Foust(1) | 256,667 | 128,333 | 50% | | Scott Barnes | 244,379 | 122,190 | 50% | | Keith Holliday | 262,207 | 131,103 | 50% |
Say-on-Pay Results and Shareholder Engagement
(1) Mr. Foust became Chief Operating Officer on April 24, 2023, and his bonus opportunity was pro-rated for the portion of the year that he was employed by the Company. The Target Bonus Amount reflects the pro-rated bonus opportunity for 2023. Change-in-Control and Other Benefits
Change-in-Control Benefits
Change-in-Control Benefits Our named executive officers will receive certain cash severance and other benefits from STAAR or a successor company if they experience a qualifying termination following a change in control of STAAR. Payments and benefits of this nature are often termed “double trigger” change-in-control benefits. In addition, the Plan provides that, if STAAR has a change in control, unvested equity-based awards will vest immediately unless the surviving company assumes or replaces the awards. STAAR provides these benefits to help it compete with larger, better-capitalized companies in attracting employees. STAAR also recognizes the retention value of equity-based awards. Change-in-control benefits are intended to do the following: • Reinforce the alignment of employee interest with shareholder interest by providing that, if a major transaction occurs, vesting and exercisability of stock options will accelerate or continue, so the potential equity value of unvested or unexercised options will not be lost; and • Encourage employees to remain with STAAR despite uncertainties while a transaction is under consideration or pending by assuring them that, if they are terminated as a result of a change in control, they will receive continued pay and benefits to cover the disruption in employment. The specific change-in-control benefits to which each named executive officer is entitled are discussed below under “Employment Agreements.”
Severance Arrangements
Severance Arrangements Each of our named executive officers is entitled to limited continuation of salary and benefits if the officer is terminated under specified circumstances. These arrangements are provided to maintain STAAR’s competitive position in attracting and retaining executive talent and are described further in the section “Employment and Other Agreements” below.
Employment Agreement with Thomas G. Frinzi
Employment Agreement with Thomas G. Frinzi Thomas G. Frinzi succeeded Caren Mason as our President and Chief Executive Officer, effective January 1, 2023. In connection with his appointment as our Chief Executive Officer, Mr. Frinzi and the Board entered into an employment agreement (the “Frinzi Agreement”) which provides for the following: (i) base salary at an annual rate of $820,000, (ii) participation in the Company’s annual cash bonus program with a target bonus of 105% of his base salary, (iii) a new hire initial grant of equity with a grant date value of $9,000,000, (x) half of which consists of stock options and a third of which will vest on the one year anniversary of employment and the remainder of which will vest at the rate of 1/24 per month over the following two years, and (y) half of which consists of RSUs, a third of which will vest on each of the first, second and third anniversaries of employment. The Board evaluated benchmark data provided by Aon in establishing a competitive compensation program for Mr. Frinzi. Mr. Frinzi is also eligible to participate in all other elements of the Company’s executive compensation and benefits plans. Mr. Frinzi will not receive any compensation as a director during his tenure as our Chief Executive Officer. If STAAR terminates Mr. Frinzi’s employment for reasons other than cause (as defined in the Frinzi Agreement) or Mr. Frinzi resigns for good reason (as defined in the Frinzi Agreement), he will be entitled to 18 months of base salary from the date of termination payable in 18 monthly installments. Mr. Frinzi will also be entitled to reimbursement of 18 months of COBRA premiums for continued group health coverage for himself and his eligible dependents. In the event of a change in control, if Mr. Frinzi resigns within 18 months after the change in control due to a successor company’s failure to offer or maintain him in the position of Chief Executive Officer of the successor company or if he is terminated for reasons other than cause within 12 months of the change in control, then he will receive the severance benefits described above plus an amount equal to his bonus, if any, for the year prior to his termination and an amount equal to his target bonus for the year in which the termination occurs. In addition, all of Mr. Frinzi’s outstanding and unvested equity awards will vest in full. The severance payment and benefits described above are subject to Mr. Frinzi’s execution and delivery of a general release of claims against the Company. The employment agreement also provides that if any payment or benefit to Mr. Frinzi would result in a parachute payment under Section 280G of the Internal
Employment Agreement with Thomas G. Frinzi
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Employment Agreement with Thomas G. Frinzi
Revenue Code, such payments and benefits will either be reduced to the extent necessary so no portion is subject to an excise tax or will be paid in full (whichever generates the better result for Mr. Frinzi). The agreement also includes customary confidentiality, intellectual property assignment, and employee non-solicitation provisions.
Executive Change-in Control Agreements
Executive Change-in Control Agreements STAAR has entered into executive change-in-control retention agreements with certain executive officers and other key employees that provide cash and other severance benefits if there is a change in control of the Company. The Executive Change in Control Agreements with Drs. Barnes and Holliday and Messrs. Williams and Foust provide that if the officer’s employment is terminated by the Company without cause within 12 months after a change in control of STAAR, or if the officer resigns for good reason within 15 months after a change in control of STAAR, the officer will receive the following, subject to the execution of a release of claims: • One year of base salary at the greater of the rate applicable at the time of termination or the rate applicable immediately prior to the announcement of the change in control, payable in a lump sum; • One year’s target cash bonus amount, plus the greater of the amount of any bonus accrued in the year of termination and the amount of the previous year’s bonus, prorated for the length of the executive’s service during the year of termination, payable in a lump sum; and • One year’s continuation of group health and dental benefits at no greater cost to the executive than the cost in effect prior to the termination date. In addition, pursuant to the Executive Change in Control Agreements, if any payments or benefits would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and benefits will be payable in full or reduced so that no portion is subject to the excise tax, whichever results in the greater net after-tax benefit to the executive.
Executive Severance Agreements
Executive Severance Agreements STAAR has entered into executive severance agreements with its executive officers and certain other key employees, including Drs. Barnes and Holliday and Messrs. Williams and Foust, that provide cash and other severance benefits if the officer’s employment is terminated without cause or the officer resigns for good reason (except in connection with a change in control of STAAR). The Executive Severance Agreements provide that they will be eligible to receive the following, subject to the execution of a release of claims: • One year of base salary at the rate applicable at the time of termination, payable in a lump sum; and One year’s continuation of group health and dental benefits at no greater cost to the executive than the cost in effect prior to the termination date.
Executive Severance Agreements
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Executive Severance Agreements
In the context of the Executive Change in Control Agreements and Executive Severance Agreements, resignation “for good reason” generally means that an employer has adversely changed the officer’s salary, location or other terms and conditions of employment to such a degree that the executive is entitled to voluntarily resign and to receive severance benefits. Compensation Committee Report The Compensation Committee has reviewed and discussed with management this Compensation Discussion and Analysis. Based on its review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for the STAAR Surgical 2024 Annual Meeting of Shareholders. The Compensation Committee Aimee Weisner (Chair) Elizabeth Yeu, M.D. April 24, 2024 Compensation Committee Interlocks and Insider Participation During the fiscal year ended December 29, 2023, the following individuals served as members of the Compensation Committee: Aimee Weisner, Dr. Elizabeth Yeu, and Dr. Gilbert Kliman. At the time of their service as a member of the Compensation Committee, each of the foregoing individuals was a non-employee director. No member of the Compensation Committee had a relationship that would constitute an interlocking relationship as defined by SEC rules for the fiscal year ended December 29, 2023.
Executive Severance Agreements
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Executive Severance Agreements
COMPENSATION TABLES Summary Compensation Table The following table summarizes the compensation of the named executive officers for each of the three fiscal years ended December 29, 2023, December 30, 2022 and December 31, 2021, respectively.
Executive Severance Agreements
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1)(2) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Thomas G. Frinzi | 2023 | 788,462 | 4,499,989 | 4,500,006 | 430,500 | 1,624 | 10,220,581 | | President and Chief | | | | | | | | | Executive Officer | | | | | | | | | Patrick F. Williams | 2023 | 541,385 | 1,379,960 | 689,991 | 178,279 | 27,254 | 2,816,869 | | Chief Financial Officer | 2022 | 513,462 | 1,380,060 | 690,010 | 420,469 | 26,054 | 3,030,055 | | | 2021 | 432,060 | 227,125 | 227,108 | 477,569 | 25,190 | 1,389,052 | | Warren Foust | 2023 | 359,615 | 1,374,986 | 1,374,997 | 128,333 | 12,361 | 3,250,292 | | Chief Operating Officer | | | | | | | | | Scott Barnes | 2023 | 535,971 | 1,195,459 | 597,708 | 122,190 | 32,988 | 2,484,316 | | Chief Medical Officer | 2022 | 508,327 | 1,195,454 | 597,699 | 288,183 | 31,788 | 2,621,451 | | | 2021 | 478,041 | 265,356 | 265,372 | 365,351 | 31,068 | 1,405,188 | | Keith Holliday | 2023 | 517,564 | 1,154,346 | 577,176 | 131,103 | 30,628 | 2,410,817 | | Chief Technology Officer | 2022 | 490,869 | 1,154,314 | 577,202 | 309,206 | 29,014 | 2,560,605 | | | 2021 | 420,690 | 223,329 | 223,303 | 373,990 | 28,294 | 1,269,606 |
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to the Company’s PEO, the average of Compensation Actually Paid to the Company’s Non-PEO NEOs, and the Company’s net income over the three most recently completed fiscal years:
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
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Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Revenue
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Revenue The following chart sets forth the relationship between Compensation Actually Paid to the Company’s PEO, the average of Compensation Actually Paid to the Company’s Non-PEO NEOs, and the Company’s revenue over the three most recently completed fiscal years: