DEF 14A of United Therapeutics Corp
Filed Apr 29, 2025 · FY20240001082554-25-000014
WEBSITE REFERENCES
*For a description of our compensation peer group, see Executive Compensation—Compensation Discussion and Analysis—2024 Compensation Program Design—Compensation Peer Group.
Total Shareholder Return
Total Shareholder Return The chart above shows how a $100 investment in our common stock on December 31, 2019 would have performed compared to a $100 investment on the same date in each of the Nasdaq U.S. Benchmark TR Index and the Nasdaq U.S. Benchmark Pharmaceuticals TR Index assuming the reinvestment of dividends, if any.
Manufacturing Organs and Organ Alternatives
| | | | | Target Compensation Mix | | | | | | Element | Form | CEO | Other NEOs | Metrics and Key Features | | | | Annual Salary | Fixed Cash | | | Established each year based on (1) individual performance, (2) overall company performance, (3) market rate and (4) CEO input, for the other NEOs | | | | | | | | | | | | Cash Incentive Award Program | Annual Performance- Based Plan | | | A mix of financial and operational targets, with a multiplier applicable to the financial components: Financial (50%) •Cash Profit Margin (25%) •Revenues (25%) Operational (50%) •Manufacturing (25%) •R&D (25%) | | | | | | | | | | | | Long-Term Incentive Compensation | 100% performance-based awards, with 3-year performance periods | | | | | | | | Performance Stock Options (PSOs) | | | Performance Metric: •3-Year Cash Profit Margin | | | | | Performance Stock Units (PSUs) | | | Performance Metrics: •3-Year revenue growth objectives (50%) •R&D milestones (50%) |
Manufacturing Organs and Organ Alternatives
| 3 | | | | Approval of the Amendment and Restatement of The United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan (the Plan) | | Our Board recommends a vote FOR this proposal. | See page 69 |
Recent Board Refreshment
Recent Board Refreshment
Recent Board Refreshment
| 2018 | 2020 | 2024 | | Nilda Mesa joins Board | Linda Maxwell joins Board | Jan Malcolm joins Board | | | | Katherine Klein leaves Board |
Recent Board Refreshment
Policy on Overboarding In 2020, we updated our Corporate Governance Guidelines to reduce our overboarding limit, such that directors are not permitted to serve on more than four public company boards (including our Board). This limit is below the limit of five boards contained in the guidelines of major proxy advisory firms and satisfies the proxy voting criteria of our largest shareholders. This action was taken in direct response to feedback received during our shareholder outreach process in 2019. All of our directors satisfy our current overboarding policy. Director Independence Our Board has made the following independence determinations: •General Independence: Christopher Causey, Raymond Dwek, Richard Giltner, Katherine Klein (through the date of her departure from the Board on June 26, 2024), Ray Kurzweil, Jan Malcolm, Linda Maxwell, Nilda Mesa, Judy Olian, Christopher Patusky, Louis Sullivan, and Tommy Thompson are independent in accordance with Nasdaq listing standards •Management Director: Martine Rothblatt is not independent due to her employment as our Chief Executive Officer •Audit Committee Standards: Christopher Causey, Richard Giltner, Linda Maxwell, Judy Olian, and Tommy Thompson meet the heightened independence standards for audit committee members set forth in rules promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act) •Compensation Committee Standards: Raymond Dwek, Nilda Mesa, Christopher Patusky, and Louis Sullivan meet the heightened independence standards for compensation committee members under Nasdaq listing standards •Nominating and Governance Committee Standards: Christopher Causey, Richard Giltner, Nilda Mesa, Christopher Patusky, and Louis Sullivan meet the independence standards for nominating committee members under Nasdaq listing standards
Recent Board Refreshment
| 16 | United Therapeutics, a public benefit corporation |
Recent Board Refreshment
Our Corporate Governance Board Skills We endeavor to have a Board of Directors that, as a whole, represents a range of experiences in business, government, education, and technology and in other areas that are relevant to our business activities. We also believe it is important that our Board is composed of individuals reflecting the diversity represented by our employees, our patients, and our communities. As reflected in our Corporate Governance Guidelines, our Board and our Nominating and Governance Committee seek to achieve a diversity of occupational and personal backgrounds on the Board, and actively include diverse candidates in the pool from which Board nominees are chosen and instruct any search firm the Nominating and Governance Committee engages to do so as well. Below, we provide details concerning the skill sets of our Board nominees.
Recent Board Refreshment
| | | | | | | | | | | | | | | Knowledge, Skills, and Experience | | | | | | | | | | | | | | Public Board Experience* | | ● | | ● | | ● | | ● | | | ● | ● | | Executive Management Experience | ● | ● | | ● | ● | | ● | ● | | ● | ● | ● | | Financial Acumen | ● | ● | ● | | ● | ● | ● | ● | ● | ● | ● | ● | | Legal | | | | | | | ● | | ● | ● | | ● | | Government / Regulatory Experience | | | | | ● | ● | ● | | ● | | ● | ● | | International | | ● | ● | | | ● | ● | ● | | ● | | ● | | Science / Medicine | | ● | | ● | | ● | ● | | | ● | ● | | | Healthcare Industry Experience | ● | ● | | ● | ● | ● | | | | ● | ● | ● | | Corporate Responsibility and Resilience | ● | ● | ● | | | ● | ● | ● | ● | ● | ● | ● |
Recent Board Refreshment
*Denotes experience serving on the board of directors of one or more public companies other than United Therapeutics
Recent Board Refreshment
| | Public Company Board Experience (non-UT) | | | International | | | | | 6/12 | | | 7/12 | | | Executive Management Experience | | | Science / Medicine | | | | | 9/12 | | | 6/12 | | | Financial Acumen | | | Healthcare Industry Experience | | | | | 11/12 | | | 8/12 | | | Legal | | | Corporate Responsibility and Resilience | | | | | 4/12 | | | 10/12 | | | Government / Regulatory Experience | | | | | | | | 6/12 | | | |
Recent Board Refreshment
| 2025 Proxy Statement | 17 |
Recent Board Refreshment
Our Corporate Governance
Recent Board Refreshment
| Board Skill | Why This Skill is Important to Our Board | | Public Company Board Experience | Public companies face heightened public scrutiny and legal, regulatory, and accounting requirements unlike those faced by private companies. | | Executive Management Experience | Management of large organizations such as United Therapeutics can be extremely complex and challenging, and experience with executive management can help provide the context needed for overseeing our executive officers. | | Financial Acumen | It is extremely important that we manage our company in a fiscally conservative manner, and present our financial results in a clear, accurate, and reliable manner, navigating the complexity of evolving accounting standards and regulatory requirements. | | Legal | In our business we encounter extremely complex legal issues and challenges, including threatened and actual litigation, and compliance with a myriad of laws and regulations. | | Government / Regulatory Experience | There are few industries more heavily regulated than the biopharmaceutical and medical device industries. Regulatory expertise helps ensure appropriate oversight of our compliance and regulatory functions, which are critical to our success. | | International | While most of our operations are U.S.-based, we conduct clinical trials and commercial distribution of our products worldwide. | | Science / Medicine | Our success is heavily dependent on our ability to successfully conduct insightful research and development efforts often involving cutting-edge technologies, and to manufacture our products using highly complex technologies. | | Healthcare Industry Experience | The healthcare sector presents unique challenges; given our patient-centric mission, experience in the healthcare field is extremely valuable. | | Corporate Responsibility and Resilience | We believe that oversight of corporate responsibility and resilience topics, including environmental and social topics, plays an important role in our Board's oversight of risk. We are committed to fulfilling our PBC purpose, while also delivering excellent financial performance for our shareholders. |
Recent Board Refreshment
| 18 | United Therapeutics, a public benefit corporation |
Recent Board Refreshment
Our Corporate Governance 2025 Director Nominees The following presents information concerning persons nominated for election as directors at our Annual Meeting, including their age as of the date of this Proxy Statement, membership on our Board committees, principal occupations or affiliations during the last five years or more, director qualifications, and certain other directorships held. Mr. Causey, Professor Dwek, Mr. Giltner, Mr. Kurzweil, Ms. Malcolm, Dr. Maxwell, Professor Mesa, Dr. Olian, Mr. Patusky, Dr. Rothblatt, Dr. Sullivan, and Governor Thompson were each previously elected by shareholders at our 2024 Annual Meeting to serve a one-year term. All twelve of our director-nominees have been nominated for election at our 2025 Annual Meeting to serve a one-year term.
Recent Board Refreshment
| | Christopher Causey, M.B.A. | | | | Age: 62 Director Since: 2003 | Committees: Nominating and Governance (Chair) Audit |
Background
Background Mr. Causey served as the Principal of the Causey Consortium, a professional services organization providing business strategy and marketing counsel to the healthcare industry, from 2002 until his retirement in 2021. Previously, Mr. Causey served as a senior marketing officer for a variety of healthcare companies. From 2001 to 2002, Mr. Causey served as Chief Marketing Officer for Definity Health Incorporated. He was also a member of the board of directors of Data Sciences International, Inc., a private company that develops wireless physiological monitoring solutions, from 2008 to 2013. Mr. Causey currently serves on the Board of Trustees of The College of Wooster. Mr. Causey received his bachelor's degree in psychology from The College of Wooster, and his M.B.A. from The George Washington University.
Director Qualifications
Director Qualifications Drawing upon nearly 30 years of experience in strategic planning and marketing for health care delivery, financing, and biotechnology organizations, including as Principal of Causey Consortium, Mr. Causey brings to our Board substantial experience in the health care and biotech industries. Our Board benefits from Mr. Causey’s extensive leadership experience as a senior health care marketing executive. Our Board has determined that Mr. Causey meets the financial sophistication requirements of Nasdaq’s listing standards for Audit Committee members.
Director Qualifications
| 2025 Proxy Statement | 19 |
Director Qualifications
Our Corporate Governance
Director Qualifications
| | Raymond Dwek, C.B.E., F.R.S. | | | | Age: 83 Director Since: 2002 | Committees: Compensation |
Background
Background Professor Dwek is a Fellow of the Royal Society, London, and served as Director of the Glycobiology Institute at the University of Oxford from 1988 to 2021. He also served as Professor of Glycobiology at the University of Oxford from 1988 through 2009, and currently serves as Professor Emeritus. He was President of the Institute of Biology (a professional organization) from 2008 through 2010. From 2000 to 2006, Professor Dwek served as head of the Department of Biochemistry at the University of Oxford. Professor Dwek has been serving in various positions at the University of Oxford since 1966. In 1988, Professor Dwek was the scientific founder of Oxford GlycoSciences PLC, which was publicly traded on the London Stock Exchange and Nasdaq, and he served as a member of its board of directors until its sale in 2003. The company, in collaboration with Professor Dwek's Glycobiology Institute, successfully developed an FDA-approved treatment for Gaucher disease. He was the 2007 Kluge Chair of Technology and Society at the U.S. Library of Congress. Professor Dwek is the founder of glycobiology, the study of the structure, biosynthesis, and biology of sugar chains attached to proteins. Professor Dwek studied Chemistry at Manchester University. After completing his M.Sc., he pursued a DPhil in Chemistry. He holds a D.Sc and M.A from Oxford University. He has been elected Fellow of the Royal Society (FRS), Fellow of the Royal Society of Chemistry (FRSC), and an Honorary Fellow Royal Institute of Physicians (Hon FRCP), and was awarded the Commander of the Order of the British Empire (CBE) honour, as well as the Romanian Order of Merit. He has been awarded honorary degrees from numerous universities worldwide.
Director Qualifications
Director Qualifications Professor Dwek has extensive scientific experience as both the head of the Department of Biochemistry at the University of Oxford, one of the world’s largest biochemistry departments, and as a biotechnology innovator at organizations such as the Glycobiology Institute and Oxford GlycoSciences PLC. In evaluating existing and potential new programs, our Board benefits from his scientific insight and experience in pharmaceutical research and development.
Director Qualifications
| | Richard Giltner | | | | Age: 61 Director Since: 2009 | Committees: Audit (Chair) Nominating and Governance |
Background
Background From 2009 until his retirement in 2010, Mr. Giltner was a portfolio manager at Lyxor Asset Management, an asset management group at the French bank Société Générale. From 2006 until 2009, he served as a managing director of Société Générale Asset Management, an international fund management firm, and head of the European office for its fund of hedge funds group. From 2003 to 2006, Mr. Giltner was the global head of foreign exchange options for the investment banking arm of Société Générale. He also held various other managerial positions within Société Générale from 1991 until 2003. Mr. Giltner has been a private investor since his retirement from Société Générale in 2010. Mr. Giltner received his bachelor's degree from Northwestern University.
Director Qualifications
Director Qualifications Mr. Giltner brings to our Board decades of experience in the financial sector, including international financial markets, financial derivatives, alternative investments, and asset management. As our business continues to grow and expand, our Board benefits from Mr. Giltner’s global business and financial experience and his perspective as an institutional investor, as well as his leadership experience in international finance from his service in various management roles at Société Générale. Our Board has determined that Mr. Giltner is an audit committee financial expert as defined under the rules and regulations of the SEC and meets the financial sophistication requirements of Nasdaq’s listing standards for Audit Committee members.
Director Qualifications
| 20 | United Therapeutics, a public benefit corporation |
Director Qualifications
Our Corporate Governance
Director Qualifications
| | Ray Kurzweil | | | | Age: 77 Director Since: 2002 | Committees: None |
Background
Background Mr. Kurzweil is an inventor, entrepreneur, and author, and has created several important technologies in the artificial intelligence field. He has received the National Medal of Technology, the MIT Lemelson Prize, twenty-one honorary doctorates, a Grammy award for his contributions to music technology, and honors from three U.S. Presidents. In 2002, Mr. Kurzweil was inducted into the National Inventors Hall of Fame. Since 1995, Mr. Kurzweil has served as the Chief Executive Officer of Kurzweil Technologies, Inc., a technology development firm. Since January 2013, he has also served as a Director of Engineering and currently serves as Principal Researcher and AI Visionary for Google, a global technology and Internet search company. Mr. Kurzweil previously served on the boards of directors of Inforte Corp. and Medical Manager Corporation, both of which were publicly-traded. Mr. Kurzweil has a B.S. in Computer Science and Literature from the Massachusetts Institute of Technology.
Director Qualifications
Director Qualifications Mr. Kurzweil brings to our Board extensive technological experience as an inventor and technology developer. His technical experience in the areas of artificial intelligence, telemedicine, and pharmaceutical research and development, and his experience in building businesses around his inventions, provide our Board with perspective in evaluating current and proposed technologies and business opportunities. In particular, Mr. Kurzweil has over 60 years of experience in the field of artificial intelligence, and has brought many artificial intelligence- related inventions to market. Artificial intelligence technologies are becoming increasingly important in the field of medicine, making Mr. Kurzweil's expertise highly valuable to United Therapeutics. Mr. Kurzweil also brings to our Board substantial corporate leadership experience from his role as Chief Executive Officer of Kurzweil Technologies, Inc., as well as public company governance experience through previous directorships.
Director Qualifications
| | Jan Malcolm | | | | Age: 68 Director Since: 2024 | Committees: None |
Background
Background Ms. Malcolm is an accomplished leader in health policy, public health, and health care finance and delivery. She has demonstrated a career-long dedication to improving the health of the public and the care of complex populations. Twice Minnesota’s Commissioner of Health under three governors representing two political parties (from 1999-2003 and from 2018 until her retirement in January 2023), Ms. Malcolm earned a national reputation as one of the first health care leaders to highlight health disparities and the impact of social determinants of health. As Health Commissioner during the COVID-19 pandemic, she also played an instrumental and visible role in educating the public, creating dynamic and user-friendly systems for sharing COVID-19 data with the people of Minnesota, and rapidly expanding testing capacity. Prior to the COVID-19 pandemic, the Minnesota Department of Health had a budget of over $600 million per year from all funding sources, and employed over 1,500 highly professional staff. During the pandemic the budget and staffing more than doubled with federal funds, staff re-deployments, and temporary contractors. In recognition of her many accomplishments, in February 2024 the American Medical Association (AMA) presented Ms. Malcolm with the AMA Award for Outstanding Government Service. Prior to being re-appointed Commissioner in 2018, Ms. Malcolm was an adjunct faculty member at the University of Minnesota School of Public Health, where she co-directed a national research and leadership development program funded by the Robert Wood Johnson Foundation. Ms. Malcolm also served as vice president of the Allina Health system from 1994 to 1999 and 2013 to 2016, with responsibilities spanning corporate communications, public affairs, government relations, health policy, community relations, and philanthropy. From 2005 to 2013, she served as CEO of the Courage Center, a leading provider of rehabilitation and health services for people with disabilities serving over 12,000 patients annually. Ms. Malcolm received a bachelor’s degree in philosophy and psychology from Dartmouth College.
Director Qualifications
Director Qualifications Ms. Malcolm’s deep public health and government relations experience are invaluable as we tackle the diverse array of challenges we will face in our efforts to revolutionize the treatment of end-stage organ disease through the development, commercialization, and distribution of manufactured organs and organ alternatives. Through her experiences as Commissioner of Health for the State of Minnesota and as CEO of the Courage Center, she also has hands-on operational experience managing complex organizations, which we believe gives her valuable practical insights in guiding our company. Finally, her focus on healthcare equity matters aligns with our public benefit purpose of bringing a brighter future to patients, regardless of their financial resources.
Director Qualifications
| 2025 Proxy Statement | 21 |
Director Qualifications
Our Corporate Governance
Director Qualifications
| | Linda Maxwell, M.D., M.B.A. | | | | Age: 51 Director Since: 2020 | Committees: Audit |
Background
Background Dr. Maxwell is an experienced physician-surgeon, an educator, a published scientific author, and a health technology entrepreneur and innovator. She began her professional career in 2006 as an academic ENT surgeon. Most recently in March 2021, she joined DCVC, a Silicon Valley venture capital firm, as an Operating Partner where she focuses on portfolio company governance and due diligence. From 2015 through January 2024, Dr. Maxwell was an Adjunct Professor of Surgery at the University of Toronto, a public university, Distinguished Visiting Professor at Toronto Metropolitan University (formerly known as Ryerson), a public university, and Associate Scientist at the Li Ka Shing Knowledge Institute in Toronto, a research and educational center. She served as Founding and Executive Director of the Biomedical Zone in 2015, Canada's only hospital-embedded, physician-led business incubator for emerging health technology companies. In that capacity, she guided a wide variety of startup companies through clinical development, capitalization, and commercialization. From 2013 to 2014, Dr. Maxwell managed a life sciences tech transfer portfolio at the University of Oxford and the UK National Health Service, executing patent strategy, spin-out company formation, and early-stage capital raising. She has also served as a healthcare innovation expert to various Canadian federal, provincial, and local government entities, as a member of the Department Audit Committee of the Public Health Agency of Canada, and as an advisor to the Canadian Medical Association and the Canadian Space Agency. She is a graduate of Harvard College and Yale Medical School, and holds an MBA from Oxford University. Dr. Maxwell completed surgical training at the University of Toronto and is double board certified in Otolaryngology-Head Neck Surgery and Facial Plastic Reconstructive Surgery. She holds an ICD.D designation, awarded by the Institute of Corporate Directors, University of Toronto, School of Management. She is a member of NACD and completed the Diligent Climate Leadership Certificate in 2022. She previously served as a member of the board of directors of Profound Medical Inc., a publicly-traded company.
Other Current Public Company Board
Other Current Public Company Board •ImmunityBio, Inc.
Director Qualifications
Director Qualifications Dr. Maxwell brings to our Board important expertise as a medical doctor, as a health technology entrepreneur and innovator, and as an expert in corporate governance. Her experience in guiding emerging health technology companies through clinical development and commercialization is highly valued to an entrepreneurial biotech company like United Therapeutics. In addition, our Canadian operations have become increasingly important in recent years, so Dr. Maxwell's knowledge of the Canadian regulatory environment is very valuable to us. Our Board has determined that Dr. Maxwell meets the financial sophistication requirements of Nasdaq's listing standards for Audit Committee members.
Director Qualifications
| 22 | United Therapeutics, a public benefit corporation |
Director Qualifications
Our Corporate Governance
Director Qualifications
| | Nilda Mesa, J.D. | | | | Age: 65 Director Since: 2018 | Committees: Compensation Nominating and Governance |
Background
Background Professor Mesa has had a long and innovative career in environment, energy, and sustainability at the city, state, national, and global levels, and now writes and presents extensively on climate, energy, equity, and urban systems relating to them. From 2014 to 2016, Professor Mesa served as Director of the New York City Mayor’s Office of Sustainability, where she led the pathbreaking OneNYC long-term sustainability plan for the city. As chief sustainability officer for New York City, she oversaw programs in climate, energy, sustainability, air quality and public health, waste, green buildings, transportation, public education, and other initiatives. In 2016, she returned to Columbia University, where she had previously served, as an adjunct professor at the School of International and Public Affairs, as well as Director of the Urban Sustainability and Equity Planning Program with Columbia’s Center for Sustainable Urban Development at the Earth Institute. She was also Adjunct Professor in the Graduate School of Architecture, Planning, and Preservation. In 2006, she founded Columbia’s Office of Environmental Stewardship, one of the first in the United States for a university. She also served as Chief Administrative Officer at the Columbia Journalism School from 2012 to 2014. Before joining Columbia, Professor Mesa served in environmental leadership roles at the White House Council on Environmental Quality, the U.S. Air Force, the U.S. Environmental Protection Agency, and the California Attorney General’s office, and practiced law in both the public and private sectors. Her work has involved extensive international experience, including most recently a 2018 to 2021 appointment as a visiting professor and lecturer at the Paris School of International Affairs at SciencesPo (Paris Institute of Political Studies), an international research university in France. She is the co-author of Collaborating for Climate Resilience (Routledge, 2021), and a contributor to Smarter New York City: How City Agencies Innovate (Columbia University Press, 2019). She is a graduate of Harvard Law School and Northwestern University.
Director Qualifications
Director Qualifications Professor Mesa brings to our Board extensive executive leadership experience, particularly in the area of environmental stewardship, energy, and sustainability. As we continue to operate and grow our business in an environmentally sustainable fashion, we expect Professor Mesa’s insights to be extremely valuable. In addition, our Board benefits from her experience working in a variety of scientific, academic, government, legal, and international settings.
Director Qualifications
| 2025 Proxy Statement | 23 |
Director Qualifications
Our Corporate Governance
Director Qualifications
| | Judy Olian, Ph.D. | | | | Age: 73 Director Since: 2015 | Committees: Audit |
Background
Background Dr. Olian has served as President of Quinnipiac University, a private university, since July 2018. Previously, she served as dean of the UCLA Anderson School of Management and the John E. Anderson Chair in Management from 2006 to 2018. Her research and business expertise centers on aligning organizational strategies and design with human resource systems and incentives, and managing top management teams. She began her UCLA appointment after serving as dean and professor of management at the Smeal College of Business Administration at Pennsylvania State University. Earlier, she served in various faculty and executive roles at the University of Maryland and its Robert H. Smith School of Business. Dr. Olian serves or has been a member of various advisory boards (including the U.S. Studies Centre at the University of Sydney, Peking University Business School’s International Advisory Board, the Connecticut Governor’s Workforce Council, the Business-Higher Education Forum, New Haven Promise, and Catalyst, a leading global think tank for women in business) and served as Chair of the Loeb Awards for Business Journalism. In 2024, she was appointed by the Governor of Connecticut to co-chair AdvanceCT, a public private entity that attracts and retains businesses in the state, and since 2022 she has served on the board of Hartford Healthcare, the largest healthcare system in Connecticut. Born and raised in Australia, Dr. Olian received her B.S. in Psychology from the Hebrew University, Jerusalem and her M.S. and Ph.D. in Industrial Relations from the University of Wisconsin, Madison. She was the Chair of AACSB International, the premier thought leadership and accreditation organization for leading global business schools, and currently serves on the board of directors of Ares Management, L.P., a publicly-traded global alternative asset management firm, and Mattel, Inc., a publicly-traded multinational toy manufacturing company.
Other Current Public Company Boards
Other Current Public Company Boards •Ares Management, L.P. •Mattel, Inc.
Director Qualifications
Director Qualifications As the president of a prestigious university and former dean of one of the world’s leading business schools, Dr. Olian brings valuable expertise in managing and leading a large organization. Her academic expertise, which centers on the alignment of organizational strategies with human resource systems and incentives, provides valuable insight to a growing biotech company like United Therapeutics. In addition, her service as a director of Ares Management and Mattel provides valuable public company board experience. Our Board has determined that Dr. Olian meets the financial sophistication requirements of Nasdaq’s listing standards for Audit Committee members.
Director Qualifications
| 24 | United Therapeutics, a public benefit corporation |
Director Qualifications
Our Corporate Governance
Director Qualifications
| | Christopher Patusky, J.D., M.G.A. | | | | Age: 61 Director Since: 2002 Vice Chair of the Board Lead Independent Director | Committees: Compensation (Chair) Nominating and Governance |
Background
Background Mr. Patusky has 35 years of experience in the private, public, and non-profit sectors. After graduating from Harvard Law School, he practiced law from 1988 to 2000, focusing on litigation, intellectual property, and business startups. His legal work included co-leading a team that obtained the first approval from the Federal Communications Commission and the United Nations' International Telecommunications Union of the use of stratospheric stations for delivery of telecommunication services worldwide. After receiving a master’s degree in governmental administration from the University of Pennsylvania in 2001, Mr. Patusky served from 2002 to 2007 as Executive Director and faculty member at the University of Pennsylvania’s Fels Institute of Government where he directed the implementation of an innovative performance management system for the 270 schools of the Philadelphia School District, which was recognized by the IBM Business of Government awards program. From 2007 to 2011, Mr. Patusky was the Real Estate Director for the Maryland Department of Transportation with oversight responsibility for real estate policy for all modes of transportation, service on the department's sustainability committee and implementation of the Governor's Transit Oriented Development (TOD) program, including the drafting and passage of Maryland's first of kind TOD law. Since 2012, Mr. Patusky has served as the founding principal of Patusky Associates, LLC, which serves as a personal investment vehicle, and as an executive manager of Slater Run Vineyards, LLC, his family’s farm-based vineyard and winery. Mr. Patusky received a bachelor of science in history and political science from Northwestern University.
Director Qualifications
Director Qualifications Mr. Patusky brings to our Board extensive legal, regulatory, business, governance, financial, and international experience from his varied career. Our Board has determined that Mr. Patusky meets the financial sophistication requirements of Nasdaq’s listing standards for Audit Committee members.
Director Qualifications
| | Martine Rothblatt, Ph.D., J.D., M.B.A. | | | | Age: 70 Director Since: 1996 Chairperson of the Board Chief Executive Officer | Committees: None |
Background
Background Dr. Rothblatt founded United Therapeutics in 1996 and has served as Chairperson and Chief Executive Officer since its inception. Previously, she created the satellite radio company SiriusXM. She is a co-inventor on ten U.S. patents, with additional patents pending. Her pioneering book, Your Life or Mine: How Geoethics Can Resolve the Conflict Between Private and Public Interests in Xenotransplantation, anticipated the need both for global virus bio-surveillance and a greatly expanded supply of transplantable organs. Dr. Rothblatt has also analyzed the socio-ethical issues of human-like cyber competencies, as are emerging from large language models, in her 2014 book Virtually Human.
Director Qualifications
Director Qualifications Dr. Rothblatt brings to our Board extensive leadership and business experience at technology companies, as well as in depth knowledge of our company from her service as our founder, Chairperson, and Chief Executive Officer. She also has substantial knowledge of medical ethics, having obtained her Ph.D. in medical ethics from the University of London.
Director Qualifications
| 2025 Proxy Statement | 25 |
Director Qualifications
Our Corporate Governance
Director Qualifications
| | Louis Sullivan, M.D. | | | | Age: 91 Director Since: 2002 | Committees: Compensation Nominating and Governance |
Background
Background Dr. Sullivan was the founding President of Morehouse School of Medicine, from 1981 to 1989, served as President again from 1993 to 2002, and has served as President Emeritus since 2002. Dr. Sullivan was also one of the founders and served as Chair of Medical Education for South African Blacks, Inc., a member of the National Executive Council for the Boy Scouts of America, and a member of the Board of Trustees of Little League of America. Dr. Sullivan served as Secretary of the U.S. Department of Health and Human Services from 1989 to 1993. He is a physician certified in internal medicine with a sub-specialty certification in hematology. Dr. Sullivan currently serves on the board of directors of Emergent BioSolutions, Inc. (since 2005), a publicly-traded company. He also serves as Co-Chair of the Henry Schein Cares Foundation. Dr. Sullivan previously served on the boards of directors of a wide range of public companies, including General Motors Company, BioSante Pharmaceuticals, Inc., Bristol Myers Squibb Company, Cigna Corporation, 3M Company, Henry Schein, Inc., Household International (now HSBC), Equifax, and Georgia Pacific Corporation. Dr. Sullivan received his bachelor's degree from Morehouse College, and his medical degree from Boston University.
Other Current Public Company Board
Other Current Public Company Board •Emergent BioSolutions, Inc.
Director Qualifications
Director Qualifications Dr. Sullivan brings to our Board extensive experience in the healthcare industry as a public official from his service as Secretary of the U.S. Department of Health and Human Services, a physician certified in internal medicine, and as President of Morehouse School of Medicine. He also has substantial public company board experience.
Director Qualifications
| | Tommy Thompson, J.D. | | | | Age: 83 Director Since: 2010 | Committees: Audit |
Lead Independent Director
| Compensation Committee | | | Members: | Meetings in 2024: 4 | | Christopher Patusky (Chair), Raymond Dwek, Nilda Mesa, Louis Sullivan Our Compensation Committee oversees our compensation plans and policies, reviews and approves compensation for our executive officers, oversees the administration of our equity incentive and share tracking awards plans and our Supplemental Executive Retirement Plan, and reviews and approves grants of equity awards to our executive officers and the methodology and formulae for granting stock options and restricted stock units to other employees. Our Compensation Committee may delegate its responsibilities to subcommittees of the Compensation Committee if it determines such delegation would be appropriate. Primary Responsibilities •Creating a system for awarding long-term and short-term performance-oriented incentive compensation to attract and retain senior management, and reviewing our compensation plans to confirm that they are appropriate, competitive, and properly reflect our goals and objectives while managing risk •Assisting our Board in discharging its responsibilities regarding compensation of our executive officers and non-employee members of the Board •Establishing and overseeing the administration of our clawback policy, in consultation with our Audit Committee •Evaluating our CEO and setting our CEO's compensation •Overseeing human capital management and inclusion and belonging matters For additional information regarding the processes and procedures used by our Compensation Committee, see the section entitled Compensation Discussion and Analysis below. | |
BOARD OF DIRECTORS
BOARD OF DIRECTORS •At its regularly scheduled meetings, our Board receives reports from our Chairperson and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer, and General Counsel, and may also receive reports from the Committee Chairs, outside consultants, and other members of senior management, among others. These presentations often include identification and assessment of risks our company currently faces or may face in the future. Our Board regularly receives presentations from our Chief Compliance Officer and the head of our Risk Management Department. •Our Board asks questions, discusses, and provides guidance to management on the risks presented, as well as any risks identified by our Board. •Our Board implements its risk oversight function both as a whole and through delegation to various committees. These committees meet regularly and report back to the full Board.
MANAGEMENT
Our Corporate Governance Non-Employee Director Compensation Overview In 2024, our non-employee director compensation program was comprised of three main elements: •an annual cash retainer (payable quarterly) for service as a member of our Board •additional annual cash retainers (payable quarterly) for service on Board committees and for service as Lead Independent Director •stock options or restricted stock units (RSUs) (in either case, granted initially upon joining our Board, and thereafter on an annual basis) for service as a member of our Board Directors may also be compensated for special assignments from our Board, although no such assignments occurred during 2024. Employee directors do not receive any compensation for service on our Board in addition to their regular compensation as employees. Our Compensation Committee generally reviews non-employee director compensation levels approximately once every two years, and final decisions with respect to any changes in non-employee director compensation levels are made by our Board upon the recommendation of our Compensation Committee. For 2024, our Compensation Committee’s independent consultant reviewed the market competitiveness of our non-employee director compensation program relative to our compensation peer group and did not recommend any changes in compensation levels nor in the plan structure. Our current non-employee director compensation program, including pay levels, was established by our Board in February 2016 and has not changed materially since that time. The following table outlines the non- employee director compensation levels in effect for 2024:
MANAGEMENT
(1)Compensation for service as Lead Independent Director is paid in addition to amounts paid for membership on our Board and for any committee chair or membership. (2)Committee chairs received the compensation indicated for committee chair in lieu of the compensation for committee membership. Compensation for committee chair and committee membership is paid in addition to amounts paid for Board membership. (3)Annual awards are generally granted once per year on the date of the first meeting of our Board following our Annual Meeting of Shareholders or for newly appointed directors, on or shortly following appointment to our Board. While compensation levels for non-employee directors were not changed for 2024, the Compensation Committee did approve one change to the methodology for determining the number of stock options and/or RSUs to grant, based on the target values. Previously, the average stock price over a recent time period prior to the date of grant was used in determining the number of RSUs to be granted, or as an input in the Black-Scholes methodology for determining the number of stock options to be granted. Beginning with 2024, the closing price of our common stock on the date of grant is utilized in determining the number of RSUs and/or stock options granted.
MANAGEMENT
Our Corporate Governance Equity-Based Awards In 2024, non-employee directors were eligible to receive equity-based awards under the United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan (the 2015 Plan), as follows: •Form of Awards: Initial grants and annual grants were paid in the form of stock options, RSUs, or a combination of the two. For each grant, directors could elect to receive awards in any one of the following forms: •100% stock options •100% RSUs •50% stock options / 50% RSUs •Value of Awards: The aggregate value of each director’s annual equity-based award was $400,000. The aggregate value of an initial equity-based award upon joining our Board was $400,000, plus a pro rata portion of the annual equity-based award value based on the number of months remaining in our Board service year at the date of grant. •Deferral for RSUs: For directors who elected to receive RSUs, our Compensation Committee has implemented a deferral program enabling directors to defer delivery of shares of common stock until a date of their choosing following vesting of the RSUs in accordance with the terms and conditions of the program. •Calculation Methodology: Our Compensation Committee also sets the methodology for determining the precise numbers of stock options and/or RSUs for each grant. For the annual grants, which are generally made in June or July of each year, the following applies (subject to modification by our Compensation Committee in its discretion): •Stock Options: The number of stock options was calculated by dividing the equity value ($400,000, or $200,000, if the director elected to receive 50% stock options and 50% RSUs) by the fair value of each stock option, calculated in accordance with the Black-Scholes-Merton methodology utilized in calculating share-based compensation for financial reporting purposes. Black-Scholes-Merton inputs were the same as those used in our most recent Quarterly Report on Form 10-Q, except that the stock price input was the closing price of our common stock on the date of grant, or on the preceding trading day if the award is granted on a date when the Nasdaq is not open. •RSUs: The number of RSUs was calculated by dividing the equity value ($400,000, or $200,000, if the director elected to receive 50% stock options and 50% RSUs) by the closing price of our common stock on the date of grant, or on the preceding trading day if the award is granted on a date when the Nasdaq is not open. •Rounding: The resulting number of stock options or RSUs, calculated as above, was rounded to the nearest ten shares. •Exercise Price: Stock options granted to non-employee directors have an exercise price equal to the closing price of our common stock as reported on the Nasdaq Global Select Market on the date of grant, or on the preceding trading day if the award is granted on a date when the Nasdaq is not open. •Grant Timing: •The date of grant for a new non-employee director’s initial award, consisting of the initial membership award and a prorated amount of the annual award for the remainder of the board service year, is the date of a director’s appointment or election to our Board. •The date of grant for annual awards is the date of the first meeting of our Board following our Annual Meeting of Shareholders in the year of grant. •Vesting: Non-employee director awards granted in 2024 fully vest on the one-year anniversary of the grant date. Director Stock Ownership Guidelines We have Stock Ownership Guidelines applicable to our directors in order to further align the financial interests of our directors with those of our shareholders, to foster a long-term management orientation, and to promote sound corporate governance. For non-employee members of our Board, our Stock Ownership Guidelines provide an ownership target equal to the lesser of 5,000 shares or a value equivalent to five times the annual cash Board retainer. The policy includes procedures for granting exemptions in the case of hardship. Our Nominating and Governance Committee oversees this policy and receives an annual compliance report. As of its most recent review in March 2025, all of our non-employee directors were in compliance with these guidelines.
MANAGEMENT
| Name | Fees Earned or Paid in Cash(1) | Restricted Stock Units(2) | Stock Options(2) | Total | | Christopher Causey | $100,000 | $400,280 | $— | $500,280 | | Raymond Dwek | $75,000 | $— | $363,475 | $438,475 | | Richard Giltner | $100,000 | $400,280 | $— | $500,280 | | Katherine Klein(3) | $29,341 | $— | $— | $29,341 | | Ray Kurzweil | $60,000 | $198,458 | $181,109 | $439,567 | | Jan Malcolm | $30,824 | $399,397 | $364,953 | $795,174 | | Linda Maxwell | $75,000 | $— | $363,475 | $438,475 | | Nilda Mesa | $90,000 | $198,458 | $181,109 | $469,567 | | Judy Olian | $75,000 | $400,280 | $— | $475,280 | | Christopher Patusky | $135,000 | $198,458 | $181,109 | $514,567 | | Louis Sullivan | $90,000 | $198,458 | $181,109 | $469,567 | | Tommy Thompson | $75,000 | $— | $363,475 | $438,475 |
MANAGEMENT
(1)Includes (as applicable) annual cash retainer and fees for serving on our Board and any Board committees, as a committee chair, and as Lead Independent Director. (2)On July 25, 2024, each of our non-employee directors was granted stock options and/or RSUs. Each stock option had an exercise price of $336.37 per share and a grant date fair value of $125.77 per share, and each RSU had a grant date fair value of $336.37 per share. Upon her appointment to the Board on June 26, 2024, Ms. Malcolm received an equity award consisting of stock options and RSUs. Each stock option had an exercise price of $318.95 per share and a grant date fair value of $120.95 per share, and each RSU had a grant date fair value of $318.95. Amounts shown in these columns represent the aggregate grant date fair value of the stock options and RSUs granted in 2024, which were the only awards granted to non-employee directors in 2024, computed in accordance with applicable accounting standards. For a discussion of the valuation assumptions for stock options, see Note 8—Share-Based Compensation to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. (3)Although Professor Klein did not stand for re-election at the 2024 Annual Meeting, she attended at least 75% of the regularly-scheduled Board meetings during the final year of her term, and on April 24, 2024, the Compensation Committee approved (i) allowing her unvested equity awards to remain outstanding and eligible to vest on the one-year anniversary of the date of grant notwithstanding that she will not be a member of the Board as of such date; and (ii) the extension of the term of her stock options until three years following the expiration of her term as director on June 26, 2024 (or, if earlier, the expiration of the original ten-year term of such stock options). There was no incremental accounting expense in connection with these modifications of her outstanding awards. Each non-employee director held the following number of stock options and RSUs as of December 31, 2024:
MANAGEMENT
| Name | Stock Options | RSUs | | Christopher Causey | 17,880 | 1,190 | | Raymond Dwek | 17,450 | — | | Richard Giltner | 5,000 | 1,190 | | Katherine Klein | 53,596 | — | | Ray Kurzweil | 49,650 | 590 | | Jan Malcolm | 2,960 | 1,220 | | Linda Maxwell | 37,560 | — | | Nilda Mesa | 27,470 | 590 | | Judy Olian | 2,320 | 1,190 | | Christopher Patusky | 51,670 | 590 | | Louis Sullivan | 11,720 | 590 | | Tommy Thompson(1) | 52,180 | 880 |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for our Company’s 2025 Annual Meeting of Shareholders. This advisory resolution is not binding on our Board of Directors. Although non-binding, our Board and our Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program. Based on the results of our 2023 shareholder advisory vote on the preferred frequency of holding future advisory votes to approve executive compensation, our Board of Directors has adopted a policy providing for an annual advisory resolution to approve executive compensation. Unless our Board modifies its policy on the frequency of future “Say-on-Pay” advisory votes, the next “Say-on-Pay” advisory vote will be held at our 2026 Annual Meeting of Shareholders. Approval of this proposal requires the affirmative vote of the holders of a majority of the voting power of all shares of stock entitled to vote thereon, present in person or by proxy, at our Annual Meeting. Abstentions have the same effect as an “against” vote. Broker non-votes, if any, have no impact on the vote. Our Board of Directors recommends that you vote FOR the advisory resolution to approve executive compensation.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| 2025 Proxy Statement | 37 |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Executive Compensation Compensation Discussion and Analysis This Compensation Discussion and Analysis describes the compensation objectives and policies set by our Compensation Committee for our NEOs, including executive pay decisions and processes and all elements of our executive compensation program. In this Compensation Discussion and Analysis and elsewhere in this Proxy Statement, the term Compensation Committee refers to the Compensation Committee of our Board of Directors, and the terms we and our refer to United Therapeutics. 2024 Performance Highlights
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| INDUSTRY-LEADING PROFITABILITY | | INDUSTRY-LEADING TSR | | | 42% Net income margin | 56% EBITDASO margin* | 60% 2024 total shareholder return (TSR) | Compared to 0% 2024 Nasdaq Biotechnology Total Return Index (XNBI) TSR | | INDUSTRY-LEADING PRODUCTIVITY | | | | | ~$2.2 million Revenue per employee, the second highest in our compensation peer group | | | | | CONTINUED REVENUE GROWTH TRAJECTORY | | | | | 24% Increase in revenue overall in 2024 compared to 2023 | | 31% Growth in total Tyvaso revenues in 2024 compared to 2023 | | | ROBUST SUPPLY CHAIN •Supplied patients Tyvaso DPI, which has grown to become our best-selling product •Opened the first-ever cGMP warehouse designed to approach net-zero operational carbon •Maintained two-year inventory of nebulized Tyvaso, Remodulin, and Orenitram | | PIPELINE EXECUTION •Fully enrolled our TETON 2 clinical study for IPF •Progressed our TETON 1, TETON PPF, and ADVANCE OUTCOMES studies •Submitted FDA premarket approval application for our Centralized Lung Evaluation System EVLP technology •Filed FDA investigational new drug application (IND) for our UKidney xenotransplantation clinical trial, which was cleared by the FDA in early 2025 | |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
*EBITDASO margin is a non-GAAP measure. A reconciliation of this non-GAAP measure and other information relating to this measure can be found in Annex B to this Proxy Statement.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| 38 | United Therapeutics, a public benefit corporation |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Executive Compensation Our Named Executive Officers Our 2024 Named Executive Officers (or NEOs) are:
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| | Martine Rothblatt, Ph.D., J.D., M.B.A. 70, Founder, Chairperson, Chief Executive Officer, and Director |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Dr. Rothblatt founded United Therapeutics in 1996 and has served as Chairperson and Chief Executive Officer since its inception. Previously, she created the satellite radio company SiriusXM. She is an inventor or co‑inventor on ten U.S. patents, with additional applications pending. Her pioneering book, Your Life or Mine: How Geoethics Can Resolve the Conflict Between Private and Public Interests in Xenotransplantation, anticipated the need both for global virus bio-surveillance and a greatly expanded supply of transplantable organs. Dr. Rothblatt has also analyzed the socio-ethical issues of human-like cyber competencies, as are emerging from large language models, in her 2014 book Virtually Human.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| | Michael Benkowitz 53, President and Chief Operating Officer |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Mr. Benkowitz joined United Therapeutics in 2011 as our Executive Vice President, Organizational Development, and was promoted to President and Chief Operating Officer in 2016. He is responsible for all of our sales, marketing, market access, patient relations, manufacturing, medical affairs, and corporate compliance activities, most company-wide administrative functions, including human resources and information technology, many of our business development efforts, and several of our key business alliances and partnerships.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| | James C. Edgemond 58, Chief Financial Officer and Treasurer |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Mr. Edgemond joined United Therapeutics in January 2013 as Treasurer and Vice President, Strategic Financial Planning. Mr. Edgemond was promoted to Chief Financial Officer and Treasurer in March 2015. Prior to joining United Therapeutics, he was Vice President, Corporate Controller, and Treasurer of Clark Construction Group from 2008 through January 2013. He also served in a variety of roles at The Corporate Executive Board Company from 1998 to 2008, including as Executive Director, Finance from 2005 to 2008. He began his career as a public accountant at KPMG Peat Marwick LLP, from 1990 through 1998, where he served in a variety of roles, including as a Senior Manager prior to his departure.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| | Paul A. Mahon, J.D. 61, Executive Vice President, General Counsel, and Corporate Secretary |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Mr. Mahon has served as General Counsel and Corporate Secretary of United Therapeutics since its inception in 1996. In 2001, Mr. Mahon joined United Therapeutics full-time as Senior Vice President, General Counsel and Corporate Secretary. In 2003, Mr. Mahon was promoted to Executive Vice President, General Counsel, and Corporate Secretary. Prior to 2001, he served United Therapeutics, beginning with its formation in 1996, in his capacity as principal and managing partner of a law firm specializing in technology and media law.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| 2025 Proxy Statement | 39 |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Executive Compensation Compensation Program Objectives Our executive compensation program is designed to retain and motivate our executive team, while achieving four critical objectives: pay-for-performance (with at-risk pay representing approximately 91.4% of overall Chief Executive Officer pay and approximately 84.8% of our other NEOs’ pay); incentivize alignment with shareholder interests based on delivering operating performance and stock appreciation; balancing incentives over the short-term and long-term; and market competitiveness.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| Sustainable, Long-Term Shareholder Value Creation | | | | | | | | | | Pay-for-Performance | Shareholder Alignment | Balance Short- and Long-Term Perspectives | Market Competitiveness |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| | Objective | | | | | Compensation Element | Pay-for- Performance | Shareholder Alignment | Balance Short- and Long-Term Perspectives | Market Competitiveness | | Base Salary | | | | ✓ | | Cash Incentive Awards | ✓ | ✓ | ✓ | ✓ | | Long-Term Incentives (Stock Options and Stock Units) | ✓ | ✓ | ✓ | ✓ | | Benefits / Perquisites | | | | ✓ | | Supplemental Executive Retirement Plan | | | ✓ | | | Severance / Change-of-Control Benefits | | | ✓ | ✓ | | Stock Ownership Guidelines | | ✓ | ✓ | ✓ |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Target Compensation Mix Our compensation program is comprised of three elements: base salary, annual short-term incentive (cash bonus), and a long-term incentive program. A significant portion of target total direct compensation (TDC) for our CEO and other NEOs is structured as “at risk” compensation, comprised of the annual short-term incentive cash bonus and long-term incentives. Our long-term incentive program is 100% performance based, and is delivered as a mix of performance stock options and performance stock units. The following charts illustrate the extent to which pay for our Chief Executive Officer and our other NEOs is at risk, as payout levels are based entirely on performance. For each chart, the amounts shown represent 2024 base salary (on an annualized basis, following the March 2024 salary increases), 2024 target cash bonus, and the target equity value of the long-term incentive awards granted in March 2024, which were granted 50% in the form of performance stock options and 50% in the form of performance stock units.
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
| 2015 | 2017 | 2019 | 2020 | 2021 | 2023-2024 | | Renegotiated CEO’s employment agreement to eliminate contractual rights to annual stock option grant and excise tax gross-up | Shifted to 100% performance- based equity program for all NEOs | Reduced CEO’s annualized total direct compensation to ∼ 50% of our peer group, with multiple year- over-year reductions in her compensation | Made commitment to not make any additional NEO equity awards until 2023 | Agreed that future NEO equity awards will be at least 50% performance- based Addressed shareholder feedback through responsive changes and disclosures | Awarded 100% performance- based equity awards Honored all shareholder commitments made in 2020-21 regarding design of executive compensation program |
Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and
Executive Compensation 2024 Compensation Decisions Summary of 2024 Compensation The components of our NEOs’ target total direct compensation are base salary and variable compensation, including cash incentives and long-term incentive compensation in the form of performance stock options and performance stock units.
Summary of 2024 Target Total Direct Compensation
| NEO | 2024 Base Salary(1) | % Increase Over 2023 Base Salary | 2024 Cash Incentive Bonus Target as % of Base Salary | Change in Cash Incentive Bonus Target %(2) | 2024 Long-Term Incentive Award Target(3) | 2024 Total Target Direct Compensation | | Martine Rothblatt | $1,500,000 | —% | 125% | —% | $14,000,000 | $17,375,000 | | James Edgemond | $875,000 | 9.4% | 75% | —% | $4,500,000 | $6,031,250 | | Michael Benkowitz | $1,200,000 | 6.2% | 85% | —% | $7,200,000 | $9,420,000 | | Paul Mahon | $940,000 | —% | 70% | —% | $3,500,000 | $5,098,000 |
Summary of 2024 Target Total Direct Compensation
| Base Salaryx | Target Incentive Percentage (% of Base Salary)x | Company-Wide Milestone Attainment | x | Financial Multiplier (up to 300%) | = | NEO Bonus Payout | | | | 50% | 50% | | | | | | | Financial Performance | Operational Performance | | | | | | | Cash Profits Revenue | Manufacturing R&D | | | |
Summary of 2024 Target Total Direct Compensation
Each year, our Compensation Committee establishes cash incentive award targets for each of our NEOs, taking into consideration the same factors it uses to determine base salaries. For 2024, our Compensation Committee established cash incentive award targets for our NEOs as a percentage of base salary, at the levels shown in the Summary of 2024 Target Total Direct Compensation table above. There was no change to cash incentive targets for any of our NEOs from 2023 to 2024. These stated incentive targets are comparable to those of executives holding similar roles and levels of responsibility at our peer group companies. Cash incentives are earned for achieving our Company-Wide Milestones (described below) and three of our four Milestones are subject to a threshold, or minimum, level of performance before earning credit for those Milestones. We believe that by setting a threshold level of performance as well as a maximum under the plan we have aligned these policies with market norms and have also responded to feedback from our shareholders.
Financial Performance—Cash Profit Margin
| Below Threshold 0% credit | At Threshold 50% credit | Target 100% credit | Stretch 125% credit* | Maximum 200% credit* | | | | | | |
Financial Performance—Revenues
| Below Threshold 0% credit | At Threshold 50% credit | Target 100% credit | Stretch 125% credit* | Maximum 200% credit* | | | | | | |
A word about our financial performance goals
A word about our financial performance goals •Revenue. Our revenue goal for 2024 was set well above actual 2023 revenue performance. In fact, the 2024 revenue goal threshold, set at $2.4 billion, was set above our 2023 revenue performance. As a result, our NEOs would not receive any bonus for 2024 revenue performance unless our revenues were higher in 2024 than in 2023. •Cash Profit. We have always focused on market- and peer-leading profitability, which enables us to maintain a healthy balance sheet to support long-term business continuity to endure disruptions created by pandemics and other events outside our control. Our cash profit margin is a somewhat unique metric, in that it is designed to ensure we adhere to a carefully-crafted budgeting algorithm whereby our cash budget each year is set at no more than 50 percent of the prior year’s net revenue. This algorithm helps ensure a disciplined approach to setting R&D and other priorities at our company. This correlates to our 50 percent cash profit margin goal set for 2024. For comparative purposes, we have included the chart below to show how our budget discipline translated into top-quintile profitability in 2024. Because not all companies report the same non-GAAP financial measures, the chart below shows how our cash profit performance led to top-quintile performance in 2024 based on a uniform profitability metric: EBITDASO margin, or earnings before interest, taxes, depreciation, amortization, and share-based compensation expense, divided by revenues. In 2024, we had the second highest EBITDASO margin in our peer group. The chart below shows EBITDASO margin for all companies within our compensation peer group except for three companies that were acquired or were taken private in 2024. Additionally, seven companies whose EBITDASO margin was a negative number are displayed below as 0%.
A word about our financial performance goals
| 46 | United Therapeutics, a public benefit corporation |
A word about our financial performance goals
Executive Compensation
2024 Cash Incentive Awards under our Company-Wide Milestone Program
2024 Cash Incentive Awards under our Company-Wide Milestone Program The cash incentive awards earned by our NEOs and approved by our Compensation Committee for the 2024 performance year were as follows:
2024 Cash Incentive Awards under our Company-Wide Milestone Program
| NEO | 2024 Base Salary (A) | 2024 Cash Incentive Award Target as % of Base Salary (B) | 2024 Milestone Attainment (C) | 2024 Financial Multiplier (D) | Total Cash Incentive Bonus Earned (A × B x C x D) | | Martine Rothblatt | $1,500,000 | 125% | 100% | 300% | $5,625,000 | | James Edgemond | $875,000 | 75% | 100% | 300% | $1,968,750 | | Michael Benkowitz | $1,200,000 | 85% | 100% | 300% | $3,060,000 | | Paul Mahon | $940,000 | 70% | 100% | 300% | $1,974,000 |
2024 Cash Incentive Awards under our Company-Wide Milestone Program
Long-Term Incentive Compensation Long-term incentive compensation, or equity awards, are a critical component of our NEOs' total compensation. They serve to align executive and shareholder interests, foster an ownership culture which is reinforced by our stock ownership guidelines, and provide a powerful tool in attracting and retaining our critical executive talent. These awards represent the largest proportion of compensation for our NEOs, representing 80.6% of our CEO's total target compensation, and 73.2% of average total target compensation for our other NEOs.
2024 Long-Term Incentive Equity Award Mix
2024 Long-Term Incentive Equity Award Mix As committed to shareholders in 2021, the 2024 equity award made to NEOs was comprised of a mix of both performance stock options and performance shares, with the entirety of our annual equity award delivered as "performance-based". •Performance Stock Options ("PSOs"). 50% of each NEO’s equity award for 2024 was granted as performance stock options, which will vest only if we achieve three-year cash profit margin objectives. The use of performance stock options provides our team with a strong incentive to deliver both against the performance conditions set forth, but also incentivize sustained growth that would result in stock price appreciation over the long-term. •Performance Stock Units ("PSUs"). 50% of each NEO’s equity award for 2024 was granted as performance stock units, half of which will vest based on the achievement of a three-year revenue growth objective; and the other half will vest based on the achievement of certain R&D milestones. The use of performance stock units aligns executive and shareholder interests, while balancing incentives between sustained revenue growth and achieving R&D milestones.
2024 Long-Term Incentive Equity Award Mix
| 48 | United Therapeutics, a public benefit corporation |
2024 Long-Term Incentive Equity Award Mix
Executive Compensation
2024 Equity Awards
2024 Equity Awards
2024 Equity Awards
| | | Target Value and Target # of PSOs and PSUs Granted | | | | | | | | PSOs | | PSUs | | | | Named Executive Officer | Total Target Equity Value Awarded | PSOs Target Value ($) | # of PSOs granted at target | PSUs Target Value ($) | # of PSUs - Revenue Growth granted at target | # of PSUs - R&D Milestones granted at target | | Martine Rothblatt | $14,000,000 | $7,000,000 | 82,410 | $7,000,000 | 16,105 | 16,105 | | James Edgemond | $4,500,000 | $2,250,000 | 26,490 | $2,250,000 | 5,175 | 5,175 | | Michael Benkowitz | $7,200,000 | $3,600,000 | 42,380 | $3,600,000 | 8,280 | 8,280 | | Paul Mahon | $3,500,000 | $1,750,000 | 20,600 | $1,750,000 | 4,025 | 4,025 |
2024 Equity Awards
The above represent the target equity value awarded, and the number of PSOs and PSUs granted at target performance. The actual number of PSOs and PSUs granted on March 15, 2024 were 300% of target, representing the maximum performance vesting possible against the performance conditions set over the three-year performance period, though, depending on the achievement of the performance goals, between 0% and 300% of the target award will vest. Details can be found below under Grants of Plan-Based Awards in 2024. The value displayed in this chart is the target value of the award at the time of approval; the actual grant date fair value will differ and is detailed in the Summary Compensation Table. The 2024 performance-based equity awards will vest at the end of the three-year performance period (January 1, 2024-December 31, 2026), i.e. "cliff-vest", based on the following performance conditions:
2024 Equity Awards: 2024-2026 Performance Period Goals
2024 Equity Awards: 2024-2026 Performance Period Goals Our Compensation Committee designed the 2024 equity awards to drive and reward performance across three key objectives over a three- year performance period (2024-2026), as described below: •50% of the award was granted in the form of PSOs with vesting criteria designed to incentivize top quintile profitability, measured by the average of our cash profit margin (cash profit for that year, divided by net revenue for that year) over the three-year performance period. •25% of the award was granted in the form of PSUs with vesting criteria designed to incentivize sustained, robust revenue growth, measured by the average year-over-year revenue growth across the three-year performance period. For a given year, revenue growth equals the percentage change in revenue, as compared to the prior year. •25% of the award was granted in the form of PSUs with vesting criteria designed to incentivize R&D progress, measured by specific, objective clinical development achievements by the end of the three-year performance period that are designed to lead to additional long-term revenue growth and revenue diversification. For each performance condition, threshold, target, stretch, and maximum levels of performance were set, with performance vesting ranging from 0%-300% of target to be determined at the end of the performance period. Due to competitive concerns, we have not disclosed the specific average cash profit margin, average revenue growth, or R&D target goals for the 2024-2026 performance period, but when setting the target goals the Compensation Committee believed they were challenging and will require substantial performance to achieve. The goals will be disclosed with actual performance at the end of the respective performance period.
2024 Equity Awards: 2024-2026 Performance Period Goals
| 2025 Proxy Statement | 49 |
2024 Equity Awards: 2024-2026 Performance Period Goals
Executive Compensation 2024 Compensation Program Design Roles of Management, Compensation Committee, and Compensation Consultant
Role of Independent Compensation Consultant
Role of Independent Compensation Consultant Our Compensation Committee has the authority to engage advisors to assist it in carrying out its responsibilities. In accordance with this authority, our Compensation Committee directly engaged Aon's Human Capital Solutions practice, a division of Aon plc (Aon) as its compensation consultant during 2024 to provide advice to our Compensation Committee on our executive and non-employee director compensation practices and policies. Our Compensation Committee, in its discretion, may replace its independent compensation consultant or hire additional consultants at any time. Aon performed additional services during 2024, namely consulting services for non- executive employee compensation matters and broad-based compensation survey data, and invoiced fees for these services totaling approximately $272,997. In addition, Aon affiliates (Aon plc and its related entities) performed actuarial services relating to our SERP, insurance advisory services, and retirement plan advisory services, along with risk management consulting and insurance brokerage services for United Therapeutics, for which we were invoiced approximately $548,835 in 2024. Additional insurance premiums and related fees were paid to Aon plc and passed through to insurance companies not affiliated with Aon plc. Our Compensation Committee approved these services and determined that they did not impair Aon’s independence. The decision to engage Aon for these additional services was recommended by management, and our Compensation Committee considered the independence of Aon in light of SEC rules regarding conflicts of interest involving compensation consultants and Nasdaq listing standards regarding compensation consultant independence. Based on its review, our Compensation Committee determined that Aon was independent, and that Aon's work did not raise any conflicts of interest. In making the foregoing determination, our Compensation Committee considered the following six factors, as well as other factors it deemed relevant: (1) the provision of other services to us by Aon; (2) the amount of fees Aon received from us, as a percentage of Aon's total revenue; (3) the policies and procedures of Aon that are designed to prevent conflicts of interest; (4) the absence of any business or personal relationships of the Aon consultants with any member of our Compensation Committee; (5) the absence of any United Therapeutics stock owned by the Aon consultants performing services for our Compensation Committee; and (6) the absence of any business or personal relationships of the Aon consultants or Aon itself with any of our executive officers. During 2024, Aon invoiced us $447,154 in fees for determining or recommending the amount and form of compensation to our directors and executive officers. Additionally, Aon was engaged separately by our Nominating and Governance Committee for consulting services, for which Aon invoiced us $71,065. Our Compensation Committee engaged Aon in 2024 to review and advise our Compensation Committee on all principal aspects of executive and non-employee director compensation. This included base salaries, cash incentive awards, and long-term incentive awards for our executive officers. Aon performed the following tasks for our Compensation Committee in 2024, among others: •Reviewing and advising on the structure of our compensation arrangements for our Chief Executive Officer and our other NEOs •Reviewing and advising on the structure of our compensation arrangements for our non-employee directors •Providing recommendations regarding the composition of our peer group •Analyzing publicly available proxy data for companies within our peer group and survey data relating to executive compensation •Conducting pay and performance analyses relative to our peer group •Updating our Compensation Committee on industry trends and best practices with respect to executive long-term incentive compensation program design, including types of long-term incentive compensation awards, size of long-term incentive compensation grants, and aggregate long-term incentive compensation grant usage •Reviewing our equity incentive awards against our design/cost targets and against industry norms •Reviewing the Compensation Discussion and Analysis and other compensation-related disclosures in this Proxy Statement •Advising our Compensation Committee in connection with its risk assessment relating to our compensation programs •Preparing for shareholder engagement sessions •Working on special or ad hoc projects for, or at the request of, our Compensation Committee as they arose In the course of fulfilling these responsibilities, Aon regularly communicated with our Compensation Committee Chair outside of and prior to most Compensation Committee meetings. Our Compensation Committee regularly invites its independent compensation consultant to attend its meetings. In 2024, Aon representatives attended each of our Compensation Committee’s meetings.
Role of Independent Compensation Consultant
| 50 | United Therapeutics, a public benefit corporation |
Role of Independent Compensation Consultant
Executive Compensation While our Compensation Committee considered its independent consultant’s recommendations in 2024, our Compensation Committee’s decisions, including the specific amounts paid to our executive officers and directors, were its own and may reflect factors and considerations in addition to the information and recommendations provided by its independent consultant. Compensation Peer Group On an annual basis, our Compensation Committee reviews NEO compensation levels relative to a peer group of industry and labor market competitors. Our 2024 peer group was selected in July 2023, and was used to develop market data as an input into our compensation program for 2024.
Role of Independent Compensation Consultant
| 2024 Peer Group Selection: Fully Objective Criteria •Top 25 companies other than United Therapeutics, ranked by revenue, in the Nasdaq Biotechnology Index •Consistent with the peer group selection methodology used for 2023 •Includes only companies that are U.S.-based or based in jurisdictions with similar compensation disclosure requirements as U.S. companies •Excludes companies with no product revenues (e.g., companies whose revenues consist of royalties) and companies with a business focus dissimilar from ours (e.g., companies focused on animal health products) •Our methodology results in a list of biopharmaceutical and biotechnology peers that are similar to us in terms of financial performance, shareholder value creation, and drug development and commercialization, and which generally reflects the universe of companies from which we recruit, and against which we retain, executive talent •Includes industry-leading peers that are both larger and smaller than we are because, in addition to being companies with which we compete for talent, many of these larger and smaller companies are also our business competitors. We believe this approach results in a peer group that reflects companies of similar scope and complexity to ours. |
Role of Independent Compensation Consultant
Each year, a number of peers are added or removed from the list and replaced with other companies for various reasons, including merger and acquisition activities. For our 2024 peer group, we removed CRISPR Therapeutics, Endo International, Ionis Pharmaceuticals, and Vir Biotechnology, and added Halozyme Therapeutics, Myriad Genetics, PTC Therapeutics, and Sarepta Therapeutics. The 2024 peer group was selected in 2023 and used for setting 2024 compensation policies.
Role of Independent Compensation Consultant
| 2024 PEER GROUP | | | | | Alkermes | Gilead Sciences | Moderna | Seattle Genetics | | Alnylam Pharmaceuticals | Halozyme Therapeutics | Myriad Genetics | Syneos Health | | Amgen | Horizon Therapeutics | Neurocrine Biosciences | Vertex Pharmaceuticals | | BeiGene | Illumina | Novavax | Viatris | | Biogen | Incyte | PTC Therapeutics | | | BioMarin Pharmaceuticals | Jazz Pharmaceuticals | Regeneron Pharmaceuticals | | | Exelixis | Maraval Life Sciences | Sarepta Therapeutics | |
Role of Independent Compensation Consultant
The following chart shows how United Therapeutics ranks within its 2024 peer group on a variety of metrics. These metrics were based on available data at the time the peer group was approved, generally reflecting the trailing twelve-month period ending March 31, 2023.
Role of Independent Compensation Consultant
| 2025 Proxy Statement | 51 |
Role of Independent Compensation Consultant
Executive Compensation
Role of Independent Compensation Consultant
| | United Therapeutics ($ in millions) | Percentile | Rank | | Revenue | $1,981.3 | | 15th of 26 | | Operating Income | $976.1 | | 8th of 26 | | Adjusted Operating Income(1) | $985.4 | | 9th of 26 | | Net Income | $728.3 | | 8th of 26 | | Return on Invested Capital | 13.4% | | 5th of 26 | | Return on Equity | 15.7% | | 9th of 26 | | Return on Assets(1) | 10.5% | | 5th of 26 | | Market Cap Per Employee(2) | $10.5 | | 7th of 26 | | Revenue Per Employee | $2.0 | | 2nd of 26 |
Role of Independent Compensation Consultant
(1)Adjusted Operating Income is a non-GAAP figure, which in the case of United Therapeutics was calculated by adjusting operating income (the most closely comparable GAAP figure) to (i) add back $11.2 million of property, plant, and equipment (PP&E) impairments and (ii) deduct $1.9 million of SERP-related expenses. We do not use Adjusted Operating Income for operational purposes, but we do think it provides our Compensation Committee and our shareholders useful information in evaluating the reasonableness of our peer group selection criteria. Return on Assets has been calculated using Adjusted Operating Income. (2)Market capitalization per employee as of June 26, 2023. Our Compensation Committee’s use of objective criteria results in a number of peers that are larger than United Therapeutics based on revenue as well as a number of peers that are smaller. Our goal each year is to place our company within the peer group statistics of the 25th to 75th percentile for revenue as close to the median as possible while managing changes each year due to sector volatility, industry consolidation, and differences in business and organization models.
Role of Independent Compensation Consultant
| 52 | United Therapeutics, a public benefit corporation |
Role of Independent Compensation Consultant
Executive Compensation Key Governance Features of our Executive Compensation Program Our Compensation Committee periodically assesses the effectiveness of our compensation policies and practices in achieving its pay-for-performance objective while aligning the interests of executive officers with those of shareholders, balancing short-term and long-term elements, and maintaining market competitiveness. Our Compensation Committee also reviews risk mitigation and governance items, which are designed to help ensure that our compensation programs are functioning to achieve such objectives. In conjunction with this assessment and review, we have adopted the following best practices: ✓ WHAT WE DO •Design our executive compensation program to align pay and performance •Maintain an appropriate balance between short-term and long-term compensation, which discourages short-term risk taking at the expense of long-term results •Grant performance-based long-term incentive awards with multi-year metrics •Review tally sheets for each executive to provide a holistic view of executive compensation •Maintain stock ownership guidelines to align executive officer and share ownership with that of our directors and our shareholders •Prohibit hedging and pledging by executives and directors* •Employ a compensation recovery, or clawback, policy •Conduct annual risk assessments of our compensation policies and practices •Hold Compensation Committee executive sessions without management •Engage an independent compensation consultant who reports directly to our Compensation Committee
✗ WHAT WE DON’T DO
✗ WHAT WE DON’T DO •No backdating of stock options •No repricing of stock options without shareholder approval •No liberal share recycling under 2015 Stock Incentive Plan •No vesting prior to the first anniversary of grant, subject to limited exceptions •No discounted or reloaded stock options •No excessive perquisites •No excise tax gross ups •No guaranteed bonus payments *Pursuant to our insider trading policy, directors, officers, and employees are prohibited from purchasing our securities on margin, engaging in “short” sales of our common stock, or buying or selling puts, calls, futures contracts, or other forms of derivative securities relating to our securities. In addition, our Board has adopted a policy prohibiting our directors and executive officers from pledging of shares of our common stock. Other Executive Compensation Policies and Practices Equity Incentive Awards Grant Timing Policy Our equity incentive award grant timing is designed so that equity-based awards are granted after the market has had an opportunity to react to our announcement of annual earnings. As such, as a general matter, equity-based awards to our employees and NEOs are typically granted on March 15th each calendar year (or the preceding trading day if markets are not open on March 15th). We also believe this timing helps us avoid broad internal communication of highly confidential financial results prior to public announcement of our annual financial results. Our Compensation Committee may also approve equity-based awards at other times, in connection with significant personnel events, such as new hire, promotion, new directorship, achievement of a significant corporate objective, or appointment to a Board committee. In addition, our Compensation Committee has the flexibility to grant awards on the 15th day of any month (or the preceding trading day if markets are not open on the 15th). All equity incentive awards granted to our NEOs and other employees have an exercise price equal to at least the closing price of our common stock on the Nasdaq on the date of grant or, if the award is granted on a date when the Nasdaq is not open, an exercise price equal to at least the closing price of our common stock on the Nasdaq on the preceding trading day. During 2024, our Compensation Committee did not take material nonpublic information into account when determining the timing and terms of equity-based awards, including stock options, and we did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
Stock Options and RSUs under the 2015 Plan
| Provision | Terms Applicable to Mr. Edgemond and Mr. Benkowitz | | Payments Upon Termination Following Change in Control | •Payment of a lump sum cash amount equal to 2.0 times the sum of (x) base salary plus (y) the highest of (1) the cash incentive paid to the individual for the year immediately preceding the year in which the change in control occurs; (2) the cash incentive paid to the individual for the year immediately preceding the year in which the termination of employment occurs; or (3) the individual’s annual target cash incentive award •Immediate vesting of unvested stock options and PSUs* •Acceleration of SERP benefits •Continuation of health care benefits for 24 months •Outplacement benefits for six months | | Payments Upon Change in Control without Termination | •Acceleration of SERP benefits •Immediate vesting of unvested stock options and PSUs* (if not assumed) |
Stock Options and RSUs under the 2015 Plan
| Year (a) | Summary Compensation Table Total for PEO(1) (b) | Compensation Actually Paid to PEO(2) (c) | Average Summary Compensation Table Total for Non-PEO NEOs(3) (d) | Average Compensation Actually Paid to Non-PEO NEOs(4) (e) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($ in millions)(7) (h) | Revenue ($ in millions)(8) (i) | | | | | | | Total Share- Holder Return(5) (f) | Peer Group Total Share- Holder Return(6) (g) | | | | 2024 | $23,009,609 | $120,263,142 | $10,007,082 | $43,710,298 | $400.59 | $172.62 | $1,195.1 | $2,877.4 | | 2023 | $16,958,057 | $(10,805,540) | $7,004,879 | $(2,186,013) | $249.65 | $159.01 | $984.8 | $2,327.5 | | 2022 | $5,322,204 | $41,188,180 | $2,381,140 | $15,387,032 | $315.72 | $153.08 | $727.3 | $1,936.3 | | 2021 | $3,511,071 | $50,428,496 | $1,962,289 | $18,294,614 | $245.32 | $137.47 | $475.8 | $1,685.5 | | 2020 | $4,811,672 | $49,919,731 | $4,145,541 | $17,608,882 | $172.33 | $110.52 | $514.8 | $1,483.3 |
Stock Options and RSUs under the 2015 Plan
| Compensation Actually Paid to PEO | 2024 | | Summary Compensation Table Total | $23,009,609 | | Less value of Stock Options and RSUs reported in Summary Compensation Table | $15,614,615 | | Less Change in Pension Value reported in Summary Compensation Table | $245,393 | | Plus year-end fair value of outstanding and unvested equity awards granted in the year | $73,532,621 | | Plus fair value as of vesting date of equity awards granted and vested in the year | — | | Plus (less) year over year change in fair value of outstanding and unvested equity awards granted in prior years | $39,580,920 | | Plus (less) change in fair value from prior fiscal year end to the vesting date of equity awards granted in prior years that vested in the year | — | | Less prior year-end fair value for any equity awards forfeited in the year | — | | Plus dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the Summary Compensation Table Total for the covered fiscal year | — | | Plus pension service cost for services rendered during the year | — | | Compensation Actually Paid to Martine Rothblatt, Chairperson and CEO | $120,263,142 |
Stock Options and RSUs under the 2015 Plan
| Average Compensation Actually Paid to Non-PEO NEOs | 2024 | | Average Summary Compensation Table Total | $10,007,082 | | Less average value of Stock Options and RSUs reported in Summary Compensation Table | $5,650,030 | | Less average Change in Pension Value reported in Summary Compensation Table | $993,722 | | Plus average year-end fair value of outstanding and unvested equity awards granted in the year | $26,608,087 | | Plus average fair value as of vesting date of equity awards granted and vested in the year | — | | Plus (less) average year over year change in fair value of outstanding and unvested equity awards granted in prior years | $13,192,738 | | Plus (less) average change in fair value from prior fiscal year end to the vesting date of equity awards granted in prior years that vested in the year | — | | Less prior year-end fair value for any equity awards forfeited in the year | — | | Plus dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the Summary Compensation Table Total for the covered fiscal year | — | | Plus average pension service cost for services rendered during the year | $546,143 | | Average Compensation Actually Paid to Non-PEO NEOs | $43,710,298 |
Compensation Actually Paid, Cumulative TSR, and Peer Group TSR
Compensation Actually Paid, Cumulative TSR, and Peer Group TSR
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income
Compensation Actually Paid and Company-Selected Measure (Revenue)
Compensation Actually Paid and Company-Selected Measure (Revenue)
Compensation Actually Paid and Company-Selected Measure (Revenue)
| 68 | United Therapeutics, a public benefit corporation |
Compensation Actually Paid and Company-Selected Measure (Revenue)
Executive Compensation Performance Measures The most important financial and operational performance measures we use to link executive compensation actually paid to our NEOs, for the most recently completed fiscal year, to our performance are as follows: •Revenue •Cash Profit Margin •R&D Performance •Manufacturing Performance Pay Ratio As required by Section 953(b) of the Dodd Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the ratio of the 2024 compensation of our principal executive officer to that of our median compensated employee. During 2024, our principal executive officer was our Chief Executive Officer, Dr. Martine Rothblatt. For purposes of this pay ratio disclosure, Dr. Rothblatt’s 2024 annual total compensation was $23,028,046, and the 2024 total annual compensation for our median employee, identified as discussed below, was $211,298, resulting in a pay ratio of approximately 109:1. Dr. Rothblatt’s total compensation for purposes of this disclosure differs from the total annual compensation reflected in the Summary Compensation Table because we included the value of employer paid non-discriminatory health and welfare benefits and basic life insurance premiums, which are not required to be disclosed in the Summary Compensation Table, but which we include here to give a more complete picture of our median employee’s total rewards compensation. In accordance with Item 402(u) of Regulation S-K, we identified our employee population as of October 1, 2024 and determined the median employee by (1) aggregating for each applicable employee (a) annual base salary determined as of October 1, 2024 for salaried employees (or hourly rate as of the same date, multiplied by estimated hours worked in 2024, for hourly employees); and (b) the target cash incentive, commissions, and overtime earned in 2024; and (2) ranking this compensation measure for our employees from lowest to highest. This calculation was performed for all employees except as disclosed in the following paragraph, excluding Dr. Rothblatt, whether employed on a full time, part time, or seasonal basis. For purposes of identifying the median employee, all employees located outside of the United States as of October 1, 2024, totaling 19 individuals, were excluded from the determination of the median employee pursuant to the so-called de minimis exemption, which permits us to exclude foreign employees, up to 5% of our total employee population of 1,303, on a whole country basis. As of October 1, 2024, these employees were located in the following countries: Canada (13), United Kingdom (4), Ireland (1), and the Netherlands (1). Applying this de minimis exemption, as of October 1, 2024, we considered a total of 1,284 U.S.-based employees (excluding our CEO) and no employees located outside of the United States. Irrespective of the de minimis exemption, on this same date we had 1,284 U.S.-based employees (excluding our CEO) and 19 employees located outside of the United States. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation, allows companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
Compensation Actually Paid and Company-Selected Measure (Revenue)
| 2025 Proxy Statement | 69 |
Compensation Actually Paid and Company-Selected Measure (Revenue)
Executive Compensation
Compensation Actually Paid and Company-Selected Measure (Revenue)
| 3 | Approval of The Amendment and Restatement of The United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan |
Compensation Actually Paid and Company-Selected Measure (Revenue)
We are asking our shareholders to approve an amendment and restatement (the 2025 Restatement) of the United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan (the Plan). On April 29, 2015, our Board of Directors unanimously adopted and approved the Plan. Our shareholders subsequently approved the Plan at our 2015 Annual Meeting of Shareholders. Our shareholders subsequently approved an amendment and restatement of the Plan at each of our Annual Meetings of Shareholders from 2018 through 2024. We refer to the 2024 amendment and restatement of the Plan as the 2024 Restatement. Our Board of Directors adopted and approved the Plan to stimulate the efforts of non-employee directors, officers, employees, and other service providers, in each case who are selected to be participants in the Plan, by heightening the desire of such persons to continue working toward and contributing to our success and progress. The Plan allows grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and stock awards, any of which may be performance-based, and for cash incentives. We believe that a comprehensive equity compensation program serves as a necessary and powerful tool to attract, retain, and incentivize individuals essential to our financial success and accordingly benefits all of our shareholders by allowing us to retain individuals who are expected to make significant contributions to the creation of shareholder value. The 2025 Restatement makes the following key changes to the 2024 Restatement of the Plan, in addition to certain other administrative changes: •Increases the maximum number of shares of our common stock that may be issued under the Plan by 950,000 shares •Extends the expiration date of the Plan to April 24, 2035 •Revises the non-employee director compensation program to increase the Lead Independent Director retainer by $5,000 per year