DEF 14A of AVITA Medical, Inc., Apr 22, 2025

DEF 14A of AVITA Medical, Inc.

Filed Apr 22, 2025 · FY20240000950170-25-056785

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Company’s Board of Directors has one class of directors, with each director elected annually in accordance with the Company’s Bylaws for a term of one year or until his or her successor is duly elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. Unless specified to be voted otherwise, the persons named in the following Proposal of this Proxy, each of whom are presently members of the Board of Directors, will vote to approve the reelection of these persons as directors to hold office for the terms set forth below or until their respective successors have been elected and qualified. Each of the nominees has consented to serve as a director if elected. The Board of Directors recommends that you vote FOR the nominees identified below.

  2. ELECTION OF DIRECTORS

    | Name | Age | Position with the Company | Director Since | Board Term Expires | | Lou Panaccio(1) | 67 | Chairman of the Board of Directors | July 2014 | June 2025 | | Professor Suzanne Crowe(1) | 74 | Non-Executive Director | January 2016 | June 2025 | | Jeremy Curnock Cook(1) | 75 | Non-Executive Director | October 2012 | June 2025 | | Robert McNamara | 68 | Non-Executive Director | June 2023 | June 2025 | | Jan Stern Reed | 65 | Non-Executive Director | July 2021 | June 2025 | | Cary Vance | 59 | Non-Executive Director | June 2023 | June 2025 | | James Corbett | 66 | Executive Director and Chief Executive Officer | July 2021 | June 2025 |

  3. ELECTION OF DIRECTORS

    (1) Each of Mr. Panaccio, Mr. Cook, and Professor Crowe served on the Board of Directors prior to June 30, 2020, as a member of the board of AVITA Medical Pty Limited, the Company’s predecessor company.

  4. Business Experience

    Business Experience Lou Panaccio has served as Chairman of the Board of Directors since July 2014. Mr. Panaccio is a successful healthcare businessman with extensive experience leading companies from concept to commercialization. Mr. Panaccio possesses more than 35 years of executive leadership experience in healthcare services and life sciences, including more than 25 years of board-level experience. Mr. Panaccio was recently appointed Chairman of Unison Housing Limited, and as a Director of Mecwacare Limited. In addition, Mr. Pannacio is Chairman of Adherium Limited, and a Director of Rhythm Biosciences Limited, both of which are publicly listed (ASX) development-stage medical diagnostics/devices companies, and is Chairman of Magellan Stem Cells Pty Ltd, a private company. Mr. Panaccio recently retired as a Director of ASX50 company and one of the world’s largest medical diagnostics companies, Sonic Healthcare Limited, where he served since 2005 until November 2024, and previously served as Chairman of Genera Biosystems Limited. We believe Mr. Panaccio is qualified to serve on our Board of Directors based on his extensive experience in the healthcare services and life sciences sectors and his experience in serving on boards. James Corbett was appointed as President and CEO of the Company effective as of September 28, 2022. Mr. Corbett served as a Non-Executive Director from July 2021 to September 28, 2022. He has approximately 40 years of leadership experience in the medical device field, most recently, as CEO of CathWorks Ltd., a software-based medical technology company. Mr. Corbett has extensive global commercial and operating experience, serving as an expatriate General Manager of Baxter Japan and later as General Manager of International at Scimed Life Systems Inc. (“Scimed”) then, following the purchase of Scimed by Boston Scientific International (“BSI”), as President of BSI. During his career he has served as CEO of three publicly-listed companies: Microtherapeutics Inc (MTIX), ev3 Inc (evvv), Alphatec Spine (ATEC). Mr. Corbett has also led two privately funded companies as CEO: Home Diagnostics Inc. and Vertos Medical. Mr. Corbett has extensive capital market and governance experience from both public and private environments. Mr. Corbett holds a Bachelor of Science in Business Administration from the University of Kansas. Mr. Corbett is a board member of two privately held medical device companies. We believe Mr. Corbett is qualified to serve on our Board of Directors based on his global commercial and operating expertise in supporting life sciences companies to execute their medical and scientific strategies, as well as his executive expertise in leading the commercial, manufacturing, and operational efforts of high-growth companies. Professor Suzanne Crowe AO has served as a Director since January 2016. Australian-based, she is a physician-scientist and ASX/Nasdaq-listed company director with expertise in supporting companies with their medical and scientific strategies. A Fellow of the Australian Institute of Company Directors, and Emeritus Professor, Monash University Melbourne, she is currently a Director of Sonic Healthcare Ltd, a large global medical diagnostics company. Past board positions include St. Vincent’s Health Australia Ltd (2012-2021), the country’s largest not-for-profit health and aged care provider. After 35 years at both, she has recently retired from the Burnet Institute, having served as Associate Director Clinical Research, and The Alfred Hospital Melbourne, where she held the appointment of Senior Specialist Physician in Infectious Diseases. She was appointed as Officer of the Order of Australia in June 2020 in recognition of her distinguished services to health, clinical governance, biomedical research, and education. We believe Professor Crowe is qualified to serve on our Board of Directors based on her technical experience and extensive expertise in supporting companies with their medical and scientific strategies. Jeremy Curnock Cook has served as a Director since October 2012. He is a veteran in the life sciences/healthcare industry and has been actively supporting the commercialization of healthcare innovations and helping entrepreneurs build their international businesses over the past 45 years. Founder and Managing Director of BioScience Managers, Mr. Curnock Cook brings his decades of international experience to our Board of Directors. Over his career, Mr. Curnock Cook has successfully managed in excess of U.S. $1 billion in equity investments. He launched the first dedicated biotechnology fund for the Australian market and is a former head of the life science private equity team at Rothschild Asset Management, an early pioneer and significant investor in the sector. In his early career he founded the International Biochemicals Group which he successfully sold to Royal Dutch Shell. Mr. Curnock Cook founded a European-focused seed fund with Johnson & Johnson and built the International Biotechnology Trust. Mr. Curnock Cook has served on more than 40 boards of directors in the life science sector in the UK, Europe, USA, Canada, Japan and Australia. In addition to serving on our Board of Directors, Mr. Curnock Cook currently serves on the following boards: International BioScience Managers Ltd appointed March 2000, Bioscience Managers Pty Ltd appointed January 2003, REX Bionics Pty Ltd appointed February 2012, Sheldon LTD (formerly Sea Dragon) appointed October 2012, Adherium Ltd appointed April 2015, Bioscience Managers UK Ltd appointed August 2017, Marine Department Ltd, appointed January 2019, JLCC Ltd appointed December 2019, Tidal Sense LTD (formally CRiL) appointed November 2020 and Humanetix Ltd appointed September 2021. We believe Mr. Curnock Cook is qualified to serve on our Board of Directors based on his extensive experience in the life sciences sector. Robert McNamara has served as a Director since April 2023. He is an accomplished senior executive with over 25 years of leadership experience in public and privately held companies in the medical device and technology industries. His extensive experience in operations and financial management spans across early stage, high growth, and mature companies. He is a former member of the Board of Directors and Chair of Audit Committee for Axonics, Inc. Additionally, Mr. McNamara is a member of the Board of Directors, Chair of the Compensation Committee, and member of the Audit Committee for Xtant Medical Holdings. Prior to these appointments, Mr. McNamara served as Executive Vice President, Chief Financial Officer of LDR Holding/Spine. Prior to this role, he served as the Chief Financial Officer of three publicly traded medical device companies including Accuray, Somnus Medical Technologies, and Target Therapeutics. Mr. McNamara holds a Bachelor of Science in Accounting from the University of San Francisco and an MBA from The Wharton School, University of Pennsylvania. We believe Mr. McNamara is qualified to serve on our Board of Directors because of his experience with financial management and other requirements of U.S. public and private companies, and considerable expertise in the medical device and technology industries.

  5. Business Experience

    Jan Stern Reed has served as a Director since July 2021. She has more than 35 years of legal, management and business leadership experience primarily within the healthcare industry, and brings significant expertise in corporate governance, compliance, and risk management. Ms. Stern Reed served as Senior Vice President, General Counsel and Corporate Secretary at Walgreens Boots Alliance, Inc., a global health and wellbeing company. Prior to Walgreens, Ms. Stern Reed was Executive Vice President, Human Resources, General Counsel and Corporate Secretary of Solo Cup Company, where she was responsible for the legal, human resources, internal audit, corporate communications, and compliance functions. Prior to Solo Cup Company, she was Associate General Counsel, Corporate Secretary and Chief Corporate Governance Officer at Baxter International, Inc. Ms. Stern Reed holds a Bachelor of Arts degree from the University of Michigan and a Juris Doctor from the Northwestern University Pritzker School of Law. Ms. Reed currently serves as a board member of Stepan Co. (NYSE: SCL), a major manufacturer of specialty and intermediate chemicals used in a broad range of industries, and AngioDynamics, Inc. (NASDAQ: ANGO), an industry-leading and transformative medical technology company focused on restoring healthy blood flow in the body’s vascular system, expanding cancer treatment options, and improving quality of life for patients. We believe Ms. Stern Reed is qualified to serve on our Board of Directors based on her extensive experience in legal, corporate governance, compliance, human resources, enterprise risk management, and general business management and executive leadership. Cary Vance has served as a Director since April 2023. Mr. Vance has over 25 years of extensive leadership experience with commercial and operational expertise in the healthcare industry. He was most recently the Chairman, President and Chief Executive Officer of PhotoniCare, Inc. Prior to this appointment, he was President and CEO of Titan Medical, and he served as an independent director for its Board of Directors as well. Previously, Mr. Vance served as President and CEO of XCath, a privately held neurovascular robotics company, having also served in similar roles at OptiScan Biomedical, Myoscience, and Hansen Medical. He strategically transformed and commercialized these businesses and markets with disruptive, enabling, and game-changing novel technologies. Mr. Vance has also executed on equity and debt financing strategies as an integral step to successful value creation and M&A events. Prior to his role at Hansen Medical, he served in various global executive leadership roles at Teleflex, Covidien, and GE HealthCare. Mr. Vance is Lean/Six Sigma Black Belt Certified, NACD Certified, and holds both a Bachelor of Arts degree in Economics and an MBA from Marquette University. We believe Mr. Vance is qualified to serve on our Board of Directors based on his leadership experience and extensive expertise in commercial and operations in the healthcare industry. There are no family relationships between any of our directors or executive officers. There are no legal proceedings related to any of the directors or executive officers that must be disclosed pursuant to Items 103(c)(2) or 401(f) of Regulation S-K.

  6. Director Compensation

    Director Compensation The following table sets forth certain information regarding the compensation earned by or awarded to each non-employee director who served on the Company’s Board of Directors during the fiscal year ended December 31, 2024 (in U.S. dollars). The Company does not provide separate compensation to its executive director, James Corbett, who, while a member of the Board of Directors, served as the Company’s CEO for the fiscal year ended December 31, 2024. Mr. Corbett’s compensation for his services as CEO is provided in the executive compensation disclosures below.

  7. Director Compensation

    | | Fees earned in cash (1) | Stock awards (2) | Option awards (3) | Total | | Non-Executive Directors | | | | | | Lou Panaccio - Chairman | $123,278 | $87,492 | $24,482 | $235,252 | | Suzanne Crowe | 84,055 | 87,492 | 24,482 | 204,474 | | Jeremy Curnock Cook | 84,055 | 87,492 | 24,482 | 204,474 | | Robert McNamara | 91,167 | 87,492 | 24,482 | 214,474 | | Jan Stern Reed | 97,500 | 87,492 | 24,482 | 209,474 | | Cary Vance | 95,778 | 87,492 | 24,482 | 207,752 | | Total Non-Executive Directors | $575,833 | $524,952 | $146,893 | $1,275,901 |

  8. Director Compensation

    Amounts are composed of the following: $70,000 for fees as a Board Member, $35,000 for Chair of the Board, $20,000 for Audit Committee Chair, $15,000 for Human Capital and Compensation Committee Chair, $10,000 for Nominating and Corporate Governance Committee Chair, $10,000 for Audit Committee member, $7,500 for Human Capital and Compensation Committee member, and $5,000 for Nominating and Corporate Governance Committee member. As the Board modified the composition of its Committees at its November 5, 2024 meeting, with such Committees to be comprised of all independent, non-executive directors, certain amounts represent pro rata compensation for each such director’s participation on those Committees through December 31, 2024. Amounts in this column represent grants of restricted stock units (“RSUs”) with the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, the fair value amount determined at the date of grant in accordance with U.S. GAAP based on the closing price of our Common Stock on the grant date. These RSU grants vest 12 months following the grant date, subject to continued participation as Board members through such vesting date. Amounts in this column represent grants of stock options with the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Amounts in this column represent option grants issued to the individuals noted, based on the fair value determined at the date of grant in accordance with U.S. GAAP. These option grants vest 12 months following the grant date, subject to continued participation as Board members. Directors are elected by a plurality of votes cast at the Annual Meeting, which means that the seven director nominees receiving the highest number of “FOR” votes will be elected as directors of the Company. Abstentions and broker non-votes are not counted as votes cast with respect to each director, and therefore, will have no direct effect on the outcome of the election of directors.

  9. Compensation Principles

    Compensation Principles The Human Capital and Compensation Committee is governed by a Human Capital and Compensation Committee Charter (the “Charter”) which it reviews, and updates as necessary, on an annual basis. The Charter outlines responsibilities of the members, which include the following: reviewing the Company’s overall compensation policies and practices; reviewing, and recommending for Board approval, the executive compensation program for the Company’s executive management team, including the CEO; and reviewing, and recommending for Board approval, the Company’s independent compensation consultant on an annual basis. Human Capital and Compensation Committee Upon review of benchmarking data and recommendations provided by the Company’s independent compensation consultant, Compensia, the Human Capital and Compensation Committee reviews compensation for the Board, and makes recommendations regarding the same for Board approval, on an annual basis. In addition, the Human Capital and Compensation Committee reviews, and recommends for Board approval, the compensation for the Company’s executive leadership team based on industry benchmarking data and guidance provided by Compensia, as follows: (a) the compensation of the CEO; and (b) based on the performance evaluations of, and suggested compensation recommendations for, each member of the Company’s executive leadership team provided by the CEO, the compensation of the members of the Company’s executive leadership team, as necessary and no less than annually. Specifically, the CEO makes recommendations to the Human Capital and Compensation Committee for review and modification (if applicable) regarding the base salary, bonuses, and equity incentive awards for each member of the Company’s executive leadership team. The Human Capital and Compensation Committee undertakes its review of the compensation of each of the Board and the Company’s executive leadership team (including the compensation of the CEO) with the objectives to align such compensation with the Company’s short-term and long-term goals in order to ensure maximum stakeholder benefit from the recruitment and retention of a high-quality Board and executive leadership team. Additionally, the Human Capital and Compensation Committee, upon input from the CEO (as assisted by certain members of the executive leadership team), reviews and recommends for Board approval, the overall bonus and equity incentive awards for employees of the Company. Resignation, Retirement, or Termination for Cause, or Resignation without Good Reason Arrangements Except as discussed below under “Former General Counsel Retirement,” the Company does not have any agreements or plans that would provide additional compensation in connection with a retirement for any named executive officer of the Company. Potential Payments upon Involuntary Termination, Resignation without Good Reason The Company’s standard employment contract for its named executive officer provides for the following severance payments upon termination by the Company without cause or by the employee for good reason (as defined in the particular employment agreement): (i) payment of the employee’s then-current base salary for a period of 18 months for the CEO and 12 months for the CFO or CLCO, following termination; (ii) a pro-rated target bonus for the period during which the employee was employed in the year of termination; (iii) continued coverage under our group health and benefits plan consistent with the term of the base salary; and (iv) immediate acceleration of unvested stock options and restricted stock unit awards.

  10. Summary Compensation Table

    Summary Compensation Table The following table presents information regarding the compensation paid to, our earned by, our named executive officers, Mr. Corbett, Mr. O'Toole, Ms. Kelsey, and Ms. Shiroma for the fiscal years ended December 31, 2024 and 2023.

  11. Summary Compensation Table

    | Name and Position | Year | Salary | Bonus | Option Awards (1) | All Other Compensation (2) | Total | | Named Executive Officers: | | ($) | ($) | ($) | ($) | ($) | | James Corbett | 2024 | 684,231 | 459,000 | 2,080,166 | 20,487 | 3,243,885 | | Chief Executive Officer | 2023 | 625,000 | 491,188 | 912,500 | 39,987(3) | 2,068,675 | | David O'Toole | 2024 | 459,253 | 195,500 | 1,068,666 | 54,109(4) | 1,777,528 | | Chief Financial Officer | 2023 | 245,048 | 146,753 | 1,607,150 | 7,875 | 2,006,826 | | Nicole Kelsey * | 2024 | 228,475 | 95,625 | 784,700 | 179,390(5) | 1,288,190 | | Chief Legal and Compliance Officer | 2023 | - | - | - | - | - | | Donna Shiroma ** | 2024 | 229,072 | 113,250 | 854,933 | 491,541(6) | 1,688,796 | | Former General Counsel | 2023 | 431,526 | 209,829 | 547,500 | 47,249(7) | 1,236,104 |

  12. Summary Compensation Table

    * Ms. Kelsey joined the Company on July 1, 2024. ** Ms. Shiroma retired on June 28, 2024 and entered into a Separation Agreement and Release (the “Separation Agreement”) with the Company, effective as of July 6, 2024 (the “Effective Date”). Pursuant to the Separation Agreement, Ms. Shiroma received (i) a lump sum payment of $453,000, less applicable withholdings, representing one year of her base annual salary on the retirement date, (ii) a lump sum payment of $113,250, less applicable withholdings, representing a prorated bonus for 2024 assuming 100% of achievement, (iii) 12 months of medical, dental and vision insurance premiums and (iv) accelerated vesting of unvested options and RSUs on the Effective Date. On July 1, 2024, Ms. Shiroma and the Company entered into a one-month Consulting Agreement (the “Consulting Agreement”), pursuant to which Ms. Shiroma was to provide transition services to her successor. In consideration for the services provided under the Consulting Agreement, Ms. Shiroma received compensation of $40,000. (1) Amounts in this column represent awards of stock options with the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Amounts in this column represent option awards issued to the individuals noted, based on the fair value determined at the date of grant in accordance with U.S. GAAP. The vesting of these option awards are subject to various performance or tenure related criteria. (2) Amounts in this column represent all other compensation for the covered fiscal year that the smaller reporting company could not properly report in any other column of the Summary Compensation Table. This may include the non-qualified deferred compensation employer match, 401(k) match, and fringe benefits such as car allowance, accommodations and medical benefits, along with related taxes on grossed-up fringe benefits, as further detailed in the footnotes below. (3) Amounts represent accommodation costs associated with the CEO’s commute from his home to our offices in Valencia, California (including an amount necessary to gross up these costs for income tax purposes under U.S. federal and California State laws), and the Company’s 401(k) employer match contribution. (4) Amounts primarily relate to $27,550 of non-qualified deferred compensation employer match and the Company’s 401(k) employer match contribution. (5) Amount primarily relates to relocation assistance of $175,112. (6) Amounts primarily relate to $453,000 related to the Separation Agreement, $14,597 in non-qualified deferred compensation employer match and the Company’s 401(k) employer match contribution. Amounts primarily relate to $28,045 in non-qualified deferred compensation employer match and the Company’s 401(k) employer match contribution.

  13. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table presents information regarding outstanding equity awards held by the Company’s named executive officers, as of December 31, 2024.

  14. Outstanding Equity Awards at Fiscal Year End

    | | Option awards(1) | | | | | Name | Number of securities underlying unexercised options exercisable | Number of securities underlying unexercised unearned options | Option exercise price | Option expiration date | | James Corbett, Chief Executive Officer | - | 350,000(2) | $12.64 | 6/5/2034 | | | 113,148 | 113,148(3) | $5.64 | 9/28/2032 | | | 33,334 | 66,666(4) | $14.17 | 6/6/2033 | | David O'Toole, Chief Financial Officer | - | 125,000(2) | $12.64 | 1/3/2034 | | | 50,000 | 100,000(5) | $17.00 | 6/15/2033 | | Nicole Kelsey, Chief Legal and Compliance Officer | - | 150,000(6) | $7.72 | 7/1/2034 | | Donna Shiroma, Former General Counsel | - | - | $- | - |

  15. Outstanding Equity Awards at Fiscal Year End

    (1) For each of our named executive officers, the option awards vest over a three-year period in equal installments. (2) Vests annually beginning on January 3, 2025. (3) Vests annually beginning on September 28, 2023. (4) Vests annually beginning on June 6, 2024. (5) Vests annually beginning on June 15, 2024. (6) Vests annually beginning on July 1, 2025. Annual Incentive Bonuses Monetary incentive bonuses are generally paid annually, and are designed to reward our executive officers based on the performance of the Company and their individual results. The target incentive bonus amount and the performance measures and targets for each executive officer are provided and calculated in accordance with our Company’s annual bonus compensation plan, following its review, and recommendation to the Board of Directors for approval, by the Company’s Human Capital and Compensation Committee at the beginning of each fiscal year for which such bonus is paid. The Human Capital and Compensation Committee considers our CEO’s recommendations, together with recommendations from Compensia, and independently reviews and recommends the total percentage achievement level for each member of the Company’s executive leadership team to the Board of Directors for approval. The performance measures and targets for receiving the annual incentive bonus are intended to be measurable and quantifiable and may include (but are not limited to) objectives such as (i) the Company meeting annual commercial revenue targets, new product launch targets, and clinical testing goals, together with achieving cashflow and profitability levels; and (ii) individual key performance indicators, determined for each member of the executive leadership team, according to the executive officer’s position. The annual incentive bonuses are intended to encourage the named executive officers to promote the sustainable growth and long-term success of the Company’s business. Retirement Benefits Each of our eligible employees is offered the opportunity to participate in the Company’s 401(k) retirement savings plan (the “401(k) Plan”). Pursuant to our 401(k) Plan, all eligible employees (including our named executive officers) are provided with a means of saving for their retirement. We currently match all participating employee contributions up to a maximum of 6% of the participating employee’s annual compensation. The Company’s contribution vests over a two-year period following the participant employee’s first contribution, and annually thereafter. In addition, the Company provides a deferred compensation plan (the “Deferred Compensation Plan”) to its eligible employees (including the Company’s named executive officers). Each participant employee may elect to defer a portion of his/her compensation (up to a maximum of 85% of base salary and 100% of bonus and equity awards). Participant employees elect the form and timing of distribution of the deferred compensation at the time that the participant employee enrolls in the Deferred Compensation Plan. Participant employees are always 100% vested in their deferral accounts and the Company matches any eligible employee contribution at a percentage scaled to such employee’s position with the Company.