DEF 14A of Rhythm Pharmaceuticals, Inc., Apr 26, 2024

DEF 14A of Rhythm Pharmaceuticals, Inc.

Filed Apr 26, 2024 · FY20230001104659-24-052915

Open on EDGAR

  1. PROPOSAL NO. 1—ELECTION OF DIRECTORS

    PROPOSAL NO. 1—ELECTION OF DIRECTORS In accordance with Rhythm’s certificate of incorporation and bylaws, each as currently amended and in effect, the Board is divided into three classes of directors of approximately equal size. The members of each class of directors are elected to serve a three-year term with the term of office of each class ending in successive years. Stuart A. Arbuckle, Christophe R. Jean, and Lynn A. Tetrault are the Class I directors whose terms expire at the Annual Meeting. Each of Stuart A. Arbuckle, Christophe R. Jean, and Lynn A. Tetrault has been nominated for, and has agreed to stand for, election to the Board to serve as a Class I director of Rhythm for three years until the 2027 Annual Meeting of Stockholders and until her or his successor is duly elected and qualified or until her or his earlier death, incapacity, resignation or removal. It is intended that, unless you give contrary instructions, shares represented by proxies will be voted for the election of each of the three nominees listed above as director nominees. Rhythm has no reason to believe that any nominee will be unable to serve. In the event that one or more nominees is unexpectedly not available to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors to be elected at the Annual Meeting. Information relating to each nominee for election as director and for each continuing director, including his or her period of service as a director of Rhythm, principal occupation and other biographical material, is included under “Director Biographies” below.

  2. BOARD OF DIRECTORS

    BOARD OF DIRECTORS

  3. Board Composition and Structure

    Board Composition and Structure Our certificate of incorporation and bylaws, each as currently amended and in effect, state that our Board shall consist of a number of directors that shall be fixed exclusively by the Board from time to time in accordance with the bylaws of the Company. Each director holds office until his or her successor is duly elected and qualified or until his or her death, incapacity, resignation or removal. Our certificate of incorporation provides that our directors may be removed only for cause by the affirmative vote of the holders of at least 75% of the voting power of the outstanding shares of capital stock of Rhythm entitled to vote in the election of directors, voting together as a single class, at a meeting of the stockholders called for that purpose. Any vacancy in the Board, including a vacancy that results from an increase in the number of directors, may be filled only by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining director. Our certificate of incorporation, as currently amended and in effect, provides that our Board is divided into three classes of directors, with the classes as nearly equal in number as possible. Each of our directors identified below serves in the class indicated. Subject to any earlier resignation or removal in accordance with the terms of our certificate of incorporation and bylaws, our current Class I directors, if elected at the Annual Meeting, will serve until the 2027 Annual Meeting of Stockholders; our current Class II directors will serve until the 2025 Annual Meeting of Stockholders; and our current Class III directors will serve until the 2026 Annual Meeting of Stockholders. Any additional directorships resulting from an increase in the number of directors will be apportioned by our Board among the three classes as equally as possible. The current size of our Board is fixed at nine directors. Below is a list of the names, ages as of April 26, 2024 and classification of the individuals who currently serve as our directors, three of whom are also nominees to be re-elected at the Annual Meeting.

  4. Board Composition and Structure

    | Name | Age | Position(s) | Class | Term Expires | | Stuart A. Arbuckle(1) | 58 | Director | I | 2024 | | Camille L. Bedrosian, M.D.(1)(3) | 71 | Director | III | 2026 | | Jennifer Good(2) | 59 | Director | II | 2025 | | Christophe R. Jean(2) | 68 | Director | I | 2024 | | Edward T. Mathers(3) | 64 | Lead Director | II | 2025 | | David W. J. McGirr(2)(3) | 69 | Director | III | 2026 | | David P. Meeker, M.D. | 69 | Director, Chairman of the Board | III | 2026 | | Lynn A. Tetrault, J.D.(1) | 61 | Director | I | 2024 |

  5. Board Composition and Structure

    (1) Member of the Compensation & Management Development Committee. (2) Member of the Audit Committee. (3) Member of the Governance and Nominating Committee. In consultation with the Governance and Nominating Committee, the Board has determined that the classified board structure remains appropriate for us at this time. A classified board provides for stability, continuity and experience among our Board. Further, the Board believes that building a cohesive board is an important goal. In our industry in particular, long-term focus is critical. The time horizon required for successful development of pharmaceuticals makes it vital that we have a board that understands the implications of this process and has the ability to develop and implement long-term strategies while benefiting from an in-depth knowledge of Rhythm’s business and operations. A classified board structure helps to ensure that there will be the continuity and stability of leadership required to navigate a challenging economic environment while resisting the pressure to focus on short-term results at the expense of our long-term value and success. The future success of Rhythm depends in significant part on the ability to attract and retain capable and experienced directors. In this regard, we believe that longer terms for our directors will enhance director independence from both management and stockholder special interest groups.

  6. Director Biographies

    Director Biographies Information concerning our continuing directors and director nominees is set forth below. The biographical description of each continuing director and director nominee includes the specific experience, qualifications, attributes and skills that led the Board to conclude that such person should serve as a director.

  7. Class I Directors (Nominees Standing for Re-Election)

    Class I Directors (Nominees Standing for Re-Election) Stuart A. Arbuckle Mr. Arbuckle has served as a member of our Board since July 2019. He currently serves as Executive Vice President and Chief Operating Officer at Vertex Pharmaceuticals Incorporated, a biopharmaceutical company, a role he has held since August 2021, where he is responsible for the company’s global commercial team, including reimbursement and access, sales, marketing, patient support, market research and other activities that support the approved use of Vertex’s cystic fibrosis medicines. Mr. Arbuckle also oversees the Human Resources, Corporate Communications and Program and Portfolio Management functions. Prior to assuming his current role, he served as Executive Vice President and Chief Commercial Officer at Vertex from September 2012 to March 2021. Prior to joining Vertex, Mr. Arbuckle held several commercial leadership positions at Amgen Inc., including leading sales and marketing efforts for Amgen Inc.’s portfolio of cancer medicines, such as Aranesp®, Neulasta® injection and NEUPOGEN®, and leading the successful launches of XGEVA® injection and Nplate® injection. Most recently, he served as Vice President and Regional General Manager at Amgen Inc., where he led efforts to expand the company’s presence in Asia, the Middle East, and Africa. Prior to these roles, Mr. Arbuckle spent 15 years at GlaxoSmithKline plc, where he held sales and marketing roles for medicines aimed at treating metabolic, respiratory, musculoskeletal, cardiovascular and other diseases. Mr. Arbuckle served as a board member of ImmunoGen, Inc. from 2018 to February 2024. Mr. Arbuckle holds a BSc in Pharmacology and Physiology from the University of Leeds in the United Kingdom. The Board considered Mr. Arbuckle’s senior executive roles at publicly-held life sciences companies, as well as his service on the boards of directors of biotechnology companies and organizations, in concluding that he is qualified to serve as a director. Christophe R. Jean Mr. Jean has served as a member of our Board since 2015. He is currently a Strategic Advisor for Oraxys S.A., a private equity firm, a role he has held since June 2019. Mr. Jean also served as a Senior Advisor for JSB Partners, LLC, a specialized biotechnology and pharmaceutical investment banking and advisory services firm, from November 2018 until December 2019. Previously, Mr. Jean served as Executive Vice President of Corporate Strategy, Business Development, Alliances and M&A for Ipsen S.A., a pharmaceutical company, from 2013 until his retirement in July 2018, after serving for 11 years in the position of Executive Vice President, Chief Operating Officer, with responsibility for all commercial operations and medical affairs worldwide as well as Ipsen S.A.’s therapeutic area franchises. Prior to joining Ipsen S.A., Mr. Jean was President and CEO for the pharmaceutical activities of the Pierre Fabre Group and President of Europe, Middle East, and Africa for Novartis Pharma AG’s Pharmaceutical Division. Prior to the merger of Ciba-Geigy AG and Sandoz Inc. that formed Novartis Pharma AG, he held a number of marketing and management positions in Europe and Latin America for Ciba-Geigy AG, culminating as Head of Finance and IT Worldwide and Member of the Pharma Executive Committee. Mr. Jean also serves on the boards of directors of private companies. He holds an M.B.A. from Harvard Business School. The Board considered Mr. Jean’s international business experience and executive leadership at several of the world’s leading pharmaceutical companies and his long career in commercial leadership roles in concluding that he is qualified to serve as a director. The Board also considered Mr. Jean’s extensive experience in commercializing therapeutics outside of the United States. Lynn A. Tetrault, J.D. Ms. Tetrault has served as a member of our Board since December 2020. Ms. Tetrault currently serves as a board member and Independent Chairperson of NeoGenomics, Inc., a publicly held oncology diagnostics company, and served as Interim Chief Executive Officer of NeoGenomics from March 2022 to August 2022. She joined the board of NeoGenomics in 2015. Ms. Tetrault has served on the board of directors of Acelyrin, Inc., a publicly held biotechnology company, since December 2023. Ms. Tetrault spent most of her career at AstraZeneca PLC serving in a variety of senior positions, including most recently as Executive Vice President of Human Resources and Corporate Affairs from May 2007 to March 2014. In May 2017, Ms. Tetrault founded Anahata Leadership, Inc., an advisory firm focused on supporting the leadership and development of executive women, and she continues to serve as its principal. Ms. Tetrault began her career as a lawyer in private healthcare practice in Boston. Ms. Tetrault holds a B.A. from Princeton University and a J.D. from the University of Virginia. In connection with her nomination to the Board, the Board considered Ms. Tetrault’s significant experience as a senior executive at a global biopharmaceutical company, her strong background in executive leadership, and her service on the boards of several publicly held healthcare companies.

  8. Continuing Directors Not Standing for Re-Election at the 2024 Annual Meeting

    Continuing Directors Not Standing for Re-Election at the 2024 Annual Meeting Camille L. Bedrosian, M.D. Dr. Bedrosian has served as a member of our Board since December 2020. Since November 2023, Dr. Bedrosian has served as Chief Medical Officer of Amylyx Pharmaceuticals, Inc., a biotechnology company. From May 2023 to November 2023, Dr. Bedrosian served as Strategic Development Advisor at Ultragenyx Pharmaceutical Inc., a rare disease company with a diverse portfolio of approved therapies and product candidates, where she provided strategic guidance to the clinical development and translational research programs. From January 2018 to May 2023, Dr. Bedrosian served as Executive Vice President and Chief Medical Officer at Ultragenyx. Previously, Dr. Bedrosian served as Senior Vice President and Chief Medical Officer at Alexion Pharmaceuticals, Inc., a biopharmaceutical company, from May 2008 to December 2017, where she provided leadership for the development of drugs and drug candidates including those designed to address devastating rare diseases such as Soliris(r) (eculizumab). Prior to this, she served as Chief Medical Officer at ARIAD Pharmaceuticals, as well as in the Clinical Research and Development Department of Genetics Institute, Inc. Dr. Bedrosian currently serves on the board of directors of Crinetics Pharmaceuticals, Inc. Before transitioning to the biotechnology industry, Dr. Bedrosian was an Assistant Professor of Medicine at Duke University Medical Center where she was a member of the Duke Comprehensive Cancer Center. Dr. Bedrosian holds an A.B. from Harvard University, M.D. from Harvard Medical School, and M.S. in Biophysics from the Massachusetts Institute of Technology. The Board considered Dr. Bedrosian’s scientific expertise and extensive experience serving as a Chief Medical Officer at companies engaged in the development of drugs for the treatment of rare diseases in concluding that she is qualified to serve as a director. Jennifer Good Ms. Good has served as a member of our Board since June 2019. She is a co-founder of Trevi Therapeutics, Inc., a clinical-stage biopharmaceutical company, and has served as a member of the board of directors and as the President and Chief Executive Officer of Trevi Therapeutics, Inc. since its inception in 2011. Previously, Ms. Good served at Penwest Pharmaceuticals Co. from 1997 to 2010, where she held various positions including President and Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. Ms. Good served on the board of Juniper Pharmaceuticals, Inc. from September 2017 until it was acquired by Catalent, Inc. in August 2018. Ms. Good received a Bachelor of Business Administration degree with a concentration in accounting from Pacific Lutheran University in 1987 and is a Certified Public Accountant (inactive). The Board considered the role Ms. Good played in the founding and growth of Trevi Therapeutics, Inc. and her senior executive roles at publicly traded life sciences companies, as well as her service on the boards of directors of biotechnology companies and organizations, in concluding that she is qualified to serve as a director. David W.J. McGirr Mr. McGirr has served as a member of our Board since 2015. Mr. McGirr serves as a director of X4 Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company focused on the discovery and development of novel therapeutics designed to improve immune cell trafficking to treat rare diseases and cancer, and Insmed Incorporated, a pharmaceutical company devoted to the treatment of rare diseases. Mr. McGirr previously served on the boards of directors of Menlo Therapeutics, Inc. until March 2020, Roka Bioscience until January 2018 and Relypsa Inc. until September 2016. Previously, Mr. McGirr held various roles at Cubist Pharmaceuticals, including Senior Advisor to the chief executive officer and Senior Vice President and Chief Financial Officer. Prior to joining Cubist, Mr. McGirr was the President and Chief Operating Officer of Hippo Inc., an internet technology, venture-financed company. Before that, he held roles of increasing responsibility at GAB Robins North America, Inc., a risk management company, including as Chief Executive Officer. Earlier in his career, Mr. McGirr served in various positions within the S.G. Warburg Group, ultimately as Chief Financial Officer, Chief Administrative Officer and Managing Director of S.G. Warburg & Co., Inc. Mr. McGirr received a B.Sc. in Civil Engineering from the University of Glasgow and received an M.B.A. from The Wharton School at the University of Pennsylvania. Mr. McGirr has been designated an audit committee financial expert as defined in applicable SEC rules. In concluding that he is qualified to serve as a director, the Board considered Mr. McGirr’s deep experience in corporate finance and financial reporting, as well as his knowledge, perspective and corporate governance expertise. The Board also considered that his expertise in financial and accounting matters, his prior experience as Chief Financial Officer of a leading biotechnology company, and his service on other public company boards and committees would significantly benefit the Company. Edward T. Mathers Mr. Mathers has served as a member of our Board since 2013 and as Lead Director since December 2020. Mr. Mathers joined New Enterprise Associates, Inc., a venture capital firm focusing on technology and healthcare investments, in 2008 and is currently a Partner at the firm. Mr. Mathers currently serves on the boards of directors of Inozyme Pharma, Inc., Trevi Therapeutics, Inc., Reneo Pharmaceuticals, Inc., Senti Biosciences, Inc., and Synlogic, Inc. Mr. Mathers also serves on the boards of directors of numerous private companies. Mr. Mathers previously served on the board of directors of Akouos, Inc. from October 2017 to December 2022, Mirum Pharmaceuticals from November 2019 to September 2022, Ra Pharmaceuticals, Inc. until its acquisition by UCB in April 2020 and Liquidia Technologies, Inc. until May 2019. Prior to joining New Enterprise Associates, Mr. Mathers served in various corporate development roles at MedImmune, Inc., a biotechnology company that was acquired by AstraZeneca PLC in 2007, culminating in the position of Executive Vice President, Corporate Development and Venture. In this role, he also led the company’s venture capital subsidiary, MedImmune Ventures, Inc. Prior to that, Mr. Mathers was Vice President, Marketing and Corporate Licensing and Acquisitions at Inhale Therapeutic Systems, Inc., a biopharmaceutical company, which is now known as Nektar Therapeutics, Inc. Previously, for 15 years, Mr. Mathers was at Glaxo Wellcome, Inc., where he held sales and marketing positions of increasing responsibility. Mr. Mathers received a B.S. in chemistry from North Carolina State University. The Board considered Mr. Mathers’ senior executive roles in publicly traded life sciences companies, his extensive experience as a venture capitalist, as well as his service on the boards of directors of numerous biotechnology companies, in concluding that he is qualified to serve as a director. David P. Meeker, M.D.

  9. Continuing Directors Not Standing for Re-Election at the 2024 Annual Meeting

    Dr. Meeker has served as a member of our Board since 2015 and became Chairman of the Board in April 2017. Dr. Meeker has served as our President and Chief Executive Officer since July 2020. From October 2011 until June 2017, Dr. Meeker served as President and CEO of Genzyme Corporation and subsequently as EVP, Head Sanofi Genzyme, a unit of Sanofi S.A., a global pharmaceutical company. Dr. Meeker oversaw the company’s specialty business units-Rare Diseases, Multiple Sclerosis, Oncology and Immunology. As an Executive Vice President of Sanofi S.A., he was a member of Sanofi S.A.’s Executive Committee. Dr. Meeker joined Genzyme Corporation in 1994 as Medical Director to work on the Cystic Fibrosis Gene Therapy program. Subsequently, as Vice President, Medical Affairs, he was responsible for the development of rare disease therapies that today represent transformative and life-saving advancements in medicine for patients. Prior to Genzyme Corporation’s merger with Sanofi S.A. in 2011, Dr. Meeker was Genzyme Corporation’s Chief Operating Officer, responsible for its commercial organization, overseeing its business units, country management organization and global market access functions. He played an important role in the integration with Sanofi S.A. Prior to joining Genzyme Corporation, Dr. Meeker was the director of the Pulmonary Critical Care Fellowship at the Cleveland Clinic and an assistant professor of medicine at Ohio State University. Previously, Dr. Meeker served as CEO of KSQ Therapeutics, Inc., a biotechnology company, from October 2017 to July 2020. Dr. Meeker is currently Chairman of the board of directors of Pharvaris GmbH and the Chairman of the board of directors of Trevi Therapeutics, Inc. He has authored more than 40 articles and multiple book chapters. Dr. Meeker received his M.D. from the University of Vermont Medical School. He completed the Advanced Management Program at Harvard Business School in 2000. In concluding that he is qualified to serve as a director, the Board considered Dr. Meeker’s deep experience as a senior executive at leading global pharmaceutical companies, including his experience serving as our President and Chief Executive Officer, and his involvement in the development and commercialization of pharmaceutical product candidates for the treatment of rare and ultra-rare diseases. The Board also considered the integral role he played in the growth of Genzyme during its period of rapid growth. The Board also noted Dr. Meeker’s extensive scientific and clinical experience, both in academia and as part of one of the world’s leading medical institutions.

  10. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION We maintain a non-employee director compensation program that is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders. Our Compensation & Management Development Committee periodically reviews the compensation of our non-employee directors and, as applicable, makes recommendations to the Board for its consideration of changes to our non-employee director compensation program. Our Compensation & Management Development Committee compares the compensation of our Board to compensation paid to non-employee directors of similarly sized public companies. Our Compensation & Management Development Committee also considers the responsibilities we ask of the members of our Board along with the amount of time required to perform those responsibilities. Under our director compensation program, we provide our non-employee directors with cash retainers and stock options. We do not pay any compensation to our President and Chief Executive Officer in connection with his service on our Board. The compensation that we pay to our President and Chief Executive Officer is discussed in the “Executive Compensation” section of this Proxy Statement. For 2023, each non-employee director received an annual retainer fee of $50,000 paid in arrears. In addition, in 2023 non-employee directors received the following, as applicable:

  11. DIRECTOR COMPENSATION

    | Non-Employee Director | Annual Fee | | Lead Director | $35,000 | | Non-Executive Chair | $30,000 | | Chair of the Audit Committee | $20,000 | | Member of the Audit Committee (other than chair) | $10,000 | | Chair of the Compensation & Management Development Committee | $15,000 | | Member of the Compensation & Management Development Committee (other than chair) | $7,500 | | Chair of the Governance and Nominating Committee | $10,000 | | Member of the Governance and Nominating Committee (other than chair) | $5,000 |

  12. DIRECTOR COMPENSATION

    We also reimburse our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending Board and committee meetings. In addition, each individual who is initially appointed or elected to the Board as a non-employee director is eligible to receive an initial option award to purchase up to 34,000 shares of our common stock under our 2017 Equity Incentive Plan on the date he or she first becomes a non-employee director. These option grants vest annually over a three-year period from the date of grant, subject to continued service as a non-employee director through the vesting date. In addition, on the date of the annual meeting of stockholders, each continuing non-employee director who has served on the Board for a minimum of six months is eligible to receive an option to purchase 14,000 shares of our common stock and 3,000 restricted stock units (“RSUs”), both of which will vest in full upon the earlier of the first anniversary of the date of grant or the date of the next annual meeting of stockholders. The exercise price for each of the option grants is equal to the fair market value of our common stock on the date of grant. The initial grants of options and annual grants of options are subject to approval by our Board at the time of grant.

  13. 2023 Director Compensation Table

    2023 Director Compensation Table The following table sets forth information regarding compensation earned by our non-employee directors during fiscal year 2023. Dr. Meeker did not receive any compensation for his service on our Board while employed as our President and Chief Executive Officer during 2023.

  14. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($)(2) | Total ($) | | Stuart Arbuckle | 67,500 | 55,410 | 178,360 | 301,270 | | Camille Bedrosian, M.D. | 62,500 | 55,410 | 178,360 | 296,270 | | Jennifer Good | 50,000 | 55,410 | 178,360 | 283,770 | | Christophe R. Jean | 60,000 | 55,410 | 178,360 | 293,770 | | Edward T. Mathers | 95,000 | 55,410 | 178,360 | 328,770 | | David W. J. McGirr | 75,000 | 55,410 | 178,360 | 308,770 | | Lynn A. Tetrault | 65,000 | 55,410 | 178,360 | 298,770 |

  15. 2023 Director Compensation Table

    (1) Amounts represent annual cash compensation earned for services rendered by each member of the Board. (2) Amounts reflect the full grant-date fair value of stock options and RSUs granted during 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of option and stock awards made to our directors in Note 9 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. The following table sets forth, as of December 31, 2023, the aggregate numbers of option awards (exercisable and unexercisable) and unvested stock awards held by each non-employee director at that time.

  16. 2023 Director Compensation Table

    | Name | Option Awards Outstanding at 2023 Fiscal Year End | Unvested Stock Awards Outstanding at 2023 Fiscal Year End | | Stuart Arbuckle | 97,500 | 3,000 | | Camille Bedrosian, M.D. | 86,000 | 3,000 | | Jennifer Good | 97,500 | 3,000 | | Christophe R. Jean | 92,500 | 3,000 | | Edward T. Mathers | 92,500 | 3,000 | | David W. J. McGirr | 179,741 | 3,000 | | Lynn A. Tetrault | 86,000 | 3,000 |

  17. Compensation Governance and Best Practices

    | What We Do | | What We Do Not Do | | ✓ | Emphasize performance-based, at-risk compensation.X | Do not grant guaranteed salary, bonus or equity compensation. | | ✓ | Emphasize the use of equity compensation to promote executive alignment with shareholders and reward long-term value creation.X | Do not provide excessive perquisites. | | ✓ | Weight the overall pay mix towards incentive compensation for senior executives.X | Do not provide any tax gross-ups for change-in-control payments. | | ✓ | Engage an independent compensation consultant to advise our Compensation & Management Development Committee.X | Do not reprice stock option awards issued under our 2017 Equity Incentive Plan without stockholder approval. | | ✓ | Engage with shareholders to understand views on executive compensation | | | ✓ | Maintain a NASDAQ-compliant clawback policy.X | Do not provide excessive severance payments. | | ✓ | Maintain an Insider Trading policy, including anti-hedging and anti-pledging provisions.X | Do not provide supplemental executive retirement plans. | | ✓ | Maintain an independent Compensation & Management Development Committee. | | | ✓ | Set challenging corporate performance goals. Maintain an industry-specific and size-appropriate compensation peer group for benchmarking compensation. | | | ✓ | Conduct annual compensation risk assessment | | | ✓ | Utilize an annual incentive plan with pre-set corporate goals and capped payouts | | | ✓ | Maintain an annual say-on-pay vote frequency | |

  18. 2023 Shareholder Engagement and Stockholder Advisory Vote on Executive Compensation

    2023 Shareholder Engagement and Stockholder Advisory Vote on Executive Compensation As Rhythm grows and evolves as a company, it is important that its compensation programs both incentivize and engage executives and employees while ensuring continued alignment with shareholders. At our 2023 annual meeting of stockholders, our stockholders voted in a non-binding, advisory vote to approve the compensation of our NEOs. While shareholders did approve the compensation of our NEOs, the support level of 95.2% of the votes cast indicated that there was an opportunity to re-engage with our shareholders to understand their perspective on how our programs could better align with shareholder expectations. During 2023, our Compensation & Management Committee Chair spoke with investors whose aggregate holdings represented more than 50% of Rhythm’s outstanding shares to hear their feedback regarding both executive compensation program design and quantum. What we heard was general support of the company and its continued strong market growth and performance. Within that context, shareholders were interested in seeing defined financial goals incorporated into the long-term incentive plan, in addition to strategic company non-financial objectives. Based on the valuable feedback we received from our shareholders, the Compensation & Management Development Committee granted performance share units for the CEO and executive team in 2024 which have defined financial, commercial and strategic performance goals that will be measured over a three-year period. At our 2021 annual meeting of stockholders, our stockholders voted in a non-binding, advisory vote in favor of having a non—binding stockholder vote on executive compensation once every year. Consistent with the stated preference of a majority of our stockholders, our next advisory vote on our NEOs’ compensation will be held at this 2024 annual meeting, pursuant to Proposal No. 3.

  19. Role of Compensation Consultant

    Role of Compensation Consultant In order to design a competitive executive compensation program that will continue to attract top executive talent and reflect our compensation philosophy, our Compensation & Management Development Committee retains an independent compensation consultant to provide executive compensation advisory services, help evaluate our compensation philosophy and objectives and provide guidance in designing and administering our executive compensation program. In August 2023, following a robust request for proposal and interview process, the Compensation & Management Development Committee selected Pay Governance LLC (“Pay Governance”) as the new executive compensation advisor, replacing AON Radford (“Radford”). The Compensation & Management Development Committee has evaluated the independence of Pay Governance pursuant to the requirements of Nasdaq and SEC rules and has determined that Pay Governance does not have any conflicts of interest in advising the Compensation & Management Development Committee. Pay Governance, as an independent executive advisory firm, did not provide any other services to the Company in 2023 for which the amount of fees exceeded $120,000. In October 2022, with the success of our commercial launch, we reviewed and updated our peer group to ensure it remained aligned with our company size and stage of development. At that time, Radford proposed a group of peer companies based on the following parameters: • Operates in the biopharmaceutical industry and, to the degree possible, having a rare disease focus; • Comparable in terms of market capitalization, clinical stage of development, headcount, and revenue; • Allows for sufficient room to grow without over-or under-extending; and • Considers the criteria proxy advisors will apply when determining their own comparator groups for purposes of pay for performance and Say on Pay analyses. Based on these criteria, the following companies were removed from the peer group due to such companies no longer being reporting companies as a result of acquisitions or due to their market value relative to Rhythm being significantly below the targeted range.

  20. Role of Compensation Consultant

    | Akebia Therapeutics | Radius Health | | | Epizyme | Verastem | Zogenix |

  21. Role of Compensation Consultant

    The following companies were added to the peer group to ensure Rhythm remains within a reasonable range of peer median in terms of market value and revenue.

  22. Role of Compensation Consultant

    | Amicus Therapeutics | BioCryst Pharmaceuticals | Ultragenyx Pharmaceuticals |

  23. Role of Compensation Consultant

    The peer group below reflecting these changes was approved by our Compensation & Management Development Committee and utilized to make 2023 compensation decisions.

  24. Role of Compensation Consultant

    | Agios Pharmaceuticals | Cara Therapeutics | Global Blood Therapeutics | Rigel Pharmaceuticals | | Albireo Pharma | ChemoCentryx | Insmed | TG Therapeutics | | Amicus Therapeutics | Deciphera Pharmaceuticals | Intra-Cellular Therapies | Travere Therapeutics | | Apellis Pharmaceuticals | Esperion Therapeutics | Karyopharm Therapeutics | Ultragenyx Pharmaceutical | | BioCryst Pharmaceuticals | G1 Therapeutics | Ocular Therapeutix | Vericel |

  25. Role of Compensation Consultant

    In December 2022, Radford provided an analysis of data derived from (i) members of our peer group and (ii) the Radford Global Life Sciences survey, the constituent companies of which were not provided to the Compensation & Management Development Committee. For 2023, the Compensation & Management Development Committee used Radford’s analysis to help structure a competitive executive compensation program, position executive compensation by considering market data, and make individual compensation decisions based on comparable positions at companies with which we compete for talent. While the Compensation & Management Development Committee does not establish compensation levels solely based on a review of competitive data or benchmark to any particular level, it believes such data is a useful tool in its deliberations as our compensation policies and practices must be competitive in the marketplace for us to be able to attract, motivate and retain qualified executive officers.

  26. Cash Incentive Compensation

    Cash Incentive Compensation We consider annual cash incentive bonuses to be an important component of our total compensation program that provides incentives necessary to retain executive officers and drive company performance in alignment with short and long-term strategic goals. Each NEO is eligible to receive an annual performance-based cash bonus based on a specified target annual bonus award amount expressed as a percentage of the named NEO’s base salary. Actual bonuses are calculated based on these target bonus amounts multiplied by a weighted achievement score determined by the Compensation & Management Development Committee and the Board based on overall achievement of the annual corporate goals and each named executive officer’s achievement of his or her individual goals. In 2023, achievement of the corporate goals accounted for 70% of the overall achievement score and achievement of each named executive officer’s individual goals accounted for 30% of the overall achievement score. At the beginning of each year, the Compensation & Management Development Committee and the Board review and approve the annual corporate goals. There is no minimum bonus percentage or amount established for the named executive officers and, as a result, the bonus amounts vary from year to year based on corporate and individual performance. The Committee and the Board retain discretion to increase or decrease individual awards in their discretion. For the 2023 annual bonus program, the corporate goals were designed to measure our commercial growth and the development of our product candidates, including the progression and enrollment of our clinical programs, announcement of clinical trial results, achievement of product candidate development and regulatory milestones, expansion of genetic disease and patient identification programs, and progression of our commercial capabilities through establishment of infrastructure and facilities. The individual goals were designed to measure each officer’s individual contribution to the corporate goals and his or her individual performance. For 2023, the corporate performance goals as well as their relative weightings and levels of actual achievement are set out in the table below. For each of these metrics, there was an opportunity to achieve between 25% to 250% of the target bonus opportunity depending on the importance of the metric and key milestones. Maximum opportunities are listed in the chart below by category. The maximum payout opportunity for the 2023 corporate bonus program was capped at 185%. Actual achievement for the 2023 corporate bonus program was 130%. The 2023 individual goals for each NEO were aligned with and based on each NEO’s ability to influence the company’s attainment of the corporate objectives. Individual goals represent 30% of each NEOs annual target bonus opportunity. Our NEOs’ 2023 target bonuses as a percentage of base salary were as follows:

  27. Cash Incentive Compensation

    | Name | 2023 Target Bonus (as a percentage of base salary) | | David P. Meeker | 65% | | Hunter C. Smith | 40% | | Jennifer Lee | 40% | | Yann Mazabraud | 40% | | Joseph Shulman | 40% |

  28. Cash Incentive Compensation

    After the end of 2023, the Compensation & Management Development Committee and the Board determined that the Company had achieved the 2023 corporate goals at 130% of target, reflecting the significant progress on key objectives made during 2023. In addition, based on its review of the executives’ individual performance in 2023, the Compensation & Management Development Committee approved individual performance modifiers for 2023. The average individual performance modifier for the NEOs for 2023 was 138%. The table also shows each executive’s target award and actual payout under the 2023 annual bonus program.

  29. Cash Incentive Compensation

    | Named Executive Officer | 2023 Target Bonus | Actual 2023 Bonus Payout | | David P. Meeker | $466,216 | $634,053 | | Hunter C. Smith | $192,000 | $261,000 | | Jennifer Lee | $189,200 | $246,000 | | Yann Mazabraud(1) | $185,330 | $238,688 | | Joseph Shulman | $174,000 | $226,000 |

  30. Cash Incentive Compensation

    (1) This amount was converted from Euros to U.S. dollars based on an exchange rate of 1.0792 as of March 31, 2024.

  31. Equity-Based Long-Term Incentive Awards

    Equity-Based Long-Term Incentive Awards We maintain the 2017 Equity Incentive Plan (the “2017 Plan”), under which we may grant equity incentive awards to directors, employees and consultants of our Company and our affiliates, to enable us to attract and retain services, skills and experience of these individuals, which we believe are essential to our long-term success. We do not currently have any formal policy for determining the number of equity-based awards to grant to NEOs. In March 2023, the Compensation & Management Development Committee approved rules under the 2017 Plan for grants of stock options and RSUs to participants in France (the “French Sub-Plan”). The implementation of the French Sub-Plan is intended to provide both French employee and employer tax benefits in connection with the grant of long-term incentive awards.

  32. February 2023 Awards

    February 2023 Awards In February 2023, our Compensation & Management Development Committee approved grants of stock options and RSUs to our NEOs. With the exception of Mr. Mazabraud who was awarded 100% of his equity awards in RSUs to address differences in the tax treatment of stock options prior to the adoption of the French Sub-Plan, our NEOs were awarded a blend of stock options and RSUs similar to other commercial stage life sciences companies in the market. Annual equity awards are designed as long-term incentive and retention tools, determined by the Compensation & Management Development Committee and based on a number of factors including equity value, equity as a portion of total direct compensation, and relevant external market data and recommendations provided by Compensation & Management Development Committee’s independent compensation consultant. The stock options are scheduled to vest and become exercisable in sixteen substantially equal quarterly installments following the applicable vesting commencement date. The RSUs are scheduled to vest in four equal annual installments following the applicable vesting commencement date. Vesting of the stock options and RSUs is subject to continued service through each applicable vesting date. The following table contains a summary of grants of stock options and RSUs to our NEOs in 2023:

  33. February 2023 Awards

    | Name | Number of Shares Underlying Stock Options | Number of RSUs | | David P. Meeker | 229,600 | 56,500 | | Hunter C. Smith | 53,600 | 19,700 | | Jennifer Lee | 46,900 | 18,050 | | Yann Mazabraud | — | 41,500 | | Joseph Shulman | 33,500 | 15,750 |

  34. Settlement of 2021 PSU Awards

    Settlement of 2021 PSU Awards In November 2021, our Compensation & Management Development Committee approved grants of performance stock units (“PSUs”) to all employees, including our NEOs (collectively, the “2021 PSU Awards”). Forty percent (40%) of the 2021 PSU Awards were eligible to vest based on the achievement of certain specific clinical development, regulatory and commercial performance events, as determined by our Compensation & Management Development Committee, during the performance period beginning on January 1, 2022 and ending on December 31, 2022. The remaining 60% of the 2021 PSU Awards were eligible to vest based on the achievement of certain specific clinical development, regulatory and commercial performance events, as determined by our Compensation & Management Development Committee, during the performance period beginning on January 1, 2023 and ending on December 31, 2023. Based on the plan design and corporate performance results during 2022 and 2023, in February 2024, the Compensation & Management Development Committee approved payouts for the 2021 PSU Awards equal to 90% of the target amount. The following tables summarize the relevant performance milestones and their relative weightings and achievement levels, as well as the number of the resulting PSUs held by our NEOs that vested in early 2024.

  35. Settlement of 2021 PSU Awards

    | Name | Number of Vested PSUs | | David P. Meeker | 99,000 | | Hunter C. Smith | 33,750 | | Jennifer Lee | 33,750 | | Yann Mazabraud | 33,750 | | Joseph Shulman | 33,750 |

  36. Changes to Long-Term Incentives for 2024

    Changes to Long-Term Incentives for 2024 In the context of shareholder outreach discussions and upon conclusion of the 2021 PSU Award performance period, the Committee determined to grant new PSU awards to the Executive Leadership Team with long-term performance criteria designed to drive shareholder value and align executive pay with compensation performance. The 2024-2026 Critical Milestone Performance PSUs were granted to executives in February 2024 based on the following performance criteria. Shares will vest, if any, following the conclusion of the performance period based on the Committee’s certification of performance results relative to the original goals. Payouts may range from 0% to 200% of target depending on performance.

  37. Severance and Change in Control Arrangements

    Severance and Change in Control Arrangements We are party to employment letter agreements with each of our NEOs. The employment letter agreements for our NEOs that are based in the United States provide for severance benefits and payments upon a termination without cause or for good reason, whereas Mr. Mazabraud ‘s employment letter agreement provides for a three-month notice period in the event of a termination of his employment other than a termination due to serious or gross misconduct plus severance benefits and payments per French law and mandatory industry-wide collective bargaining agreement provisions for the pharmaceutical industry in France. Our Compensation & Management Development Committee believes that these types of arrangements are necessary to attract and retain executive talent and are a customary component of executive compensation. In particular, such arrangements can mitigate a potential disincentive for our NEOs when they are evaluating a potential acquisition of the Company and can encourage retention through the conclusion of the transaction. The payments and benefits provided under our severance and change in control arrangements are designed to be competitive with market practices. A description of these arrangements, as well as information on the estimated payments and benefits that our NEOs would have been eligible to receive as of December 31, 2023, are set forth in “Potential Payments Upon Termination or Change in Control” below.

  38. “Golden Parachute” Payments

    “Golden Parachute” Payments Sections 280G and 4999 of the Code provide that certain executive officers and other service providers who are highly compensated or hold significant equity interests may be subject to an excise tax if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we, or a successor, may forfeit a tax deduction on the amounts subject to this additional tax. While the Compensation & Management Development Committee may take the potential forfeiture of such tax deduction into account when making compensation decisions, it will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not deductible by us. We do not provide any tax gross-ups to cover excise taxes under Section 4999 in connection with a change in control.

  39. Accounting for Share-Based Compensation

    Accounting for Share-Based Compensation We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), for our share-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options and RSUs, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our NEOs may never realize any value from their awards.

  40. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table contains information about the compensation earned by each of our NEOs during the fiscal years indicated.

  41. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | David P. Meeker Chief Executive Officer | 2023 | 704,715 | 1,545,275 | 4,334,521 | 634,053 | 11,893 | 7,230,457 | | | 2022 | 652,050 | — | 2,157,300 | 505,420 | 10,988 | 3,325,758 | | | 2021 | 630,000 | 1,164,842 | 4,204,200 | 450,954 | 8,364 | 6,458,360 | | Hunter C. Smith Chief Financial Officer | 2023 | 476,154 | 538,795 | 1,011,892 | 261,000 | 20,166 | 2,308,007 | | | 2022 | 460,000 | 110,500 | 412,425 | 217,000 | 15,200 | 1,215,125 | | | 2021 | 435,957 | 576,264 | 1,074,938 | 210,654 | 11,600 | 2,309,413 | | Jennifer Lee Executive Vice President, Head of North America | 2023 | 464,731 | 493,668 | 885,405 | 246,000 | 16,406 | 2,106,210 | | | 2022 | 430,000 | 93,500 | 348,975 | 202,000 | 12,200 | 1,086,675 | | | 2021 | 395,000 | 552,376 | 931,613 | 190,864 | 11,600 | 2,081,453 | | Yann Mazabraud(5) Executive Vice President, Head of International | 2023 | 448,848 | 805,100 | — | 238,688 | 249,373(6) | 1,742,009 | | | 2022 | 380,643 | 93,500 | 348,975 | 202,697 | 164,090 | 1,189,905 | | | 2021 | 384,250 | 552,376 | 931,613 | 190,864 | 118,502 | 2,177,605 | | Joseph Shulman Chief Technical Officer | 2023 | 430,192 | 430,763 | 632,432 | 226,000 | 21,081 | 1,740,468 | | | 2022 | 410,000 | 72,250 | 269,663 | 186,000 | 12,200 | 950,113 | | | 2021 | 386,250 | 516,545 | 716,625 | 157,223 | 11,600 | 1,788,243 |

  42. 2023 Summary Compensation Table

    (1) Amounts reflect the full grant-date fair value of stock awards granted during fiscal 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock awards made to our NEOs in Note 9 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. (2) Amounts reflect the full grant-date fair value of stock options granted during fiscal 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock options granted to our NEOs in Note 9 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. (3) Amounts for fiscal 2023 represent payments earned by our NEOs based upon the achievement of certain company and individual performance objectives for fiscal 2023. Please see the description of the annual bonus program under “Cash Incentive Compensation” in the CD&A above. (4) Other than for Mr. Mazabraud, amounts for fiscal 2023 represent employer matching contributions to our 401(k) plan. (5) Amounts for 2023 shown for Mr. Mazabraud other than the Non-Equity Plan Incentive Compensation column have been converted from Euros to U.S. dollars based on an average exchange rate of 1.0822 for 2023. The amount for 2023 shown for Mr. Mazabraud in the Non-Equity Plan Incentive Compensation column has been converted from Euros to U.S. dollars based on an exchange rate of 1.0792 as of March 31, 2024. Amount includes the aggregate amount of payments made in respect of Mr. Mazabraud’s work-from-home allowance of $8,640 and employer contributions to statutory pension and social security schemes on his behalf of $240,733. Grants of Plan-Based Awards in Fiscal 2023 The following table provides supplemental information relating to grants of plan-based awards made during fiscal 2023 to help explain information provided above in our Summary Compensation Table. This table presents information regarding all grants of plan-based awards occurring during fiscal year 2023.

  43. 2023 Summary Compensation Table

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units(#) | All Other Option Awards: Number of Securities Underlying Options(#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | David P. Meeker | — | — | 466,216 | 819,025 | — | — | — | — | — | — | — | | | 2/1/2023 | — | — | — | | | | — | 229,600 | $27.35 | $4,334,521 | | | 2/1/2023 | — | — | — | — | — | — | 56,500 | — | — | $1,545,275 | | Hunter C. Smith | — | — | 192,000 | 337,296 | — | — | — | — | — | — | — | | | 2/1/2023 | — | — | — | — | — | — | — | 53,600 | $27.35 | $1,011,892 | | | 2/1/2023 | — | — | — | — | — | — | 19,700 | — | — | $538,795 | | Jennifer Lee | — | — | 189,200 | 332,377 | — | — | — | — | — | — | — | | | 2/1/2023 | — | — | — | — | — | — | — | 46,900 | $27.35 | $885,405 | | | 2/1/2023 | — | — | — | — | — | — | 18,050 | — | — | $493,668 | | Yann Mazabraud | — | — | 185,330 | 325,578 | — | — | — | — | — | — | — | | | 2/1/2023 | — | — | — | | | | 41,500 | — | — | $805,100 | | Joseph Shulman | — | — | 174,000 | 305,675 | — | — | — | — | 33,500 | $27.35 | $632,432 | | | 2/1/2023 | — | — | — | — | — | — | 15,750 | — | — | $430,763 |

  44. 2023 Summary Compensation Table

    (1) Amounts reflect potential payouts under our 2023 annual bonus program. The target amount is based on a percentage of the individual’s fiscal year 2023 base salary. Please see the description of the annual bonus program under “Cash Incentive Compensation” in the CD&A above. The maximum amount reflects the maximum corporate achievement opportunity of 165.25% for 2023 for the corporate achievement component and assumes a 200% cap on the individual achievement component. (2) Amounts reflect the full grant-date fair value of stock options and RSUs granted during fiscal year 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock awards made to our NEOs in Note 9 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.

  45. NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE

    NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE

  46. Outstanding Equity Awards at 2023 Fiscal Year-End Table

    Outstanding Equity Awards at 2023 Fiscal Year-End Table The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each NEO as of December 31, 2023.

  47. Outstanding Equity Awards at 2023 Fiscal Year-End Table

    | | Option Awards(2) | | | | | Stock Awards | | | Name | Vesting Commencement Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | David P. Meeker, M.D. | 11/17/2015(2) | 43,620 | — | $4.59 | 11/16/2025 | | | | | 1/6/2017(2) | 65,430 | — | $6.05 | 02/07/2027 | | | | | 6/6/2018(3) | 10,000 | — | $34.89 | 06/05/2028 | | | | | 6/19/2019(3) | 15,000 | — | $22.93 | 06/18/2029 | | | | | 6/17/2020(3) | 18,500 | — | $21.37 | 06/16/2030 | | | | | 7/20/2020(8) | 731,250 | 168,750 | $22.53 | 07/19/2030 | | | | | 2/11/2021(5) | 151,250 | 68,750 | $30.66 | 02/10/2031 | | | | | 11/9/2021(6) | | | | | 99,000 | 4,551,030 | | | 2/9/2022(5) | 223,125 | 286,875 | $6.80 | 02/08/2032 | | | | | 2/1/2023(5) | 43,050 | 186,550 | $27.35 | 2/1/2033 | | | | | 2/1/2023(7) | | | | | 56,500 | 2,597,305 | | Hunter C. Smith | 7/31/2017(4) | 201,744 | — | $6.88 | 08/08/2027 | | | | | 2/14/2018(5) | 61,000 | — | $25.79 | 02/13/2028 | | | | | 2/13/2019(5) | 70,000 | — | $29.78 | 02/12/2029 | | | | | 2/14/2020(5) | 76,875 | 5,125 | $17.87 | 02/13/2030 | | | | | 7/20/2020(5) | 20,312 | 4,688 | $22.53 | 07/19/2030 | | | | | 2/11/2021(5) | 38,672 | 17,578 | $30.66 | 02/10/2031 | | | | | 2/11/2021(7) | | | — | — | 4,687 | 215,461 | | | 11/9/2021(6) | | | | | 33,750 | 1,551,488 | | | 2/9/2022(5) | 42,656 | 54,844 | $6.80 | 02/08/2032 | | | | | 2/9/2022(7) | | | — | — | 12,187 | 560,236 | | | 2/1/2023(5) | 10,050 | 43,550 | $27.35 | 2/1/2033 | | | | | 2/1/2023(7) | | | | | 19,700 | 905,609 | | Yann Mazabraud | 10/5/2020(8) | 75,000 | 25,000 | $22.28 | 10/04/2030 | | | | | 2/11/2021(5) | 33,515 | 15,235 | $30.66 | 02/10/2031 | | | | | 2/11/2021(7) | | | — | — | 4,062 | 186,730 | | | 11/9/2021(6) | | | | | 33,750 | 1,551,488 | | | 2/9/2022(5) | 36,094 | 46,406 | $6.80 | 02/08/2032 | | | | | 2/9/2022(7) | | | — | — | 10,312 | 474,043 | | | 4/14/2023(7) | | | | | 41,500 | 1,907,755 | | Jennifer Lee | 11/9/2020(8) | 75,000 | 25,000 | $24.29 | 11/08/2030 | | | | | 2/11/2021(5) | 33,515 | 15,235 | $30.66 | 02/10/2031 | | | | | 2/11/2021(7) | | | — | — | 4,062 | 186,730 | | | 11/9/2021(6) | | | | | 33,750 | 1,551,488 | | | 2/9/2022(5) | 36,094 | 46,406 | $6.80 | 02/08/2032 | | | | | 2/9/2022(7) | | | — | — | 10,312 | 474,043 | | | 2/1/2023(5) | 8,794 | 38,106 | 27.35 | 2/1/2033 | | | | | 2/1/2023(7) | | | | | 18,050 | 829,759 | | Joseph Shulman | 7/27/2020(8) | 69,063 | 15,937 | $21.38 | 07/26/2030 | | | | | 2/11/2021(5) | 25,781 | 11,719 | $30.66 | 02/10/2031 | | | | | 2/11/2021(7) | | | — | — | 3,124 | 143,610 | | | 11/9/2021(6) | | | | | 33,750 | 1,551,488 | | | 2/9/2022(5) | 27,890 | 35,860 | $6.80 | 02/08/2032 | | | | | 2/9/2022(7) | | | — | — | 7,968 | 366,289 | | | 2/1/2023(5) | 6,281 | 27,219 | 27.35 | 2/1/2033 | | | | | 2/1/2023(7) | | | | | 15,750 | 724,028 |

  48. Outstanding Equity Awards at 2023 Fiscal Year-End Table

    Amounts are calculated based on multiplying the number of shares shown in the table by the per share closing price of our common stock on December 29, 2023 (the last trading day of 2023), which was $45.97. (2) These options vest in 3 equal annual installments following the vesting commencement date, except that the last installment, if necessary, may be smaller. (3) These options vest in full upon the earlier of the first anniversary of the date of grant or the date of the next annual meeting of stockholders. (4) 25% of the shares subject to these options vest on the first anniversary of the vesting commencement date, and the remaining shares vest in 36 monthly installments thereafter, except that the last installment, if necessary, may be smaller. (5) These options vest in 16 equal quarterly installments following the vesting commencement date, except that the last installment, if necessary, may be smaller. (6) The amounts shown represent the PSUs that were earned based on attainment of performance goals over performance periods ending on December 31, 2022 and December 31, 2023, subject to continued service through the determination date for the second performance period. In February 2022, the Board of Directors determined that the performance conditions had been met for the performance period ending December 31, 2022, and in February 2024, the Board of Directors determined that a portion of the performance conditions had been met for the performance period ending December 31, 2023, resulting in an overall achievement percentage of 90% of the target number of PSUs awarded. Accordingly, the PSUs shown in this column became vested in February 2024. Refer to the “Settlement of 2021 PSU Awards” section of our CD&A above for more information. (7) These RSUs will vest in 4 equal annual installments beginning on the first anniversary of the vesting commencement date, except that the last installment, if necessary, may be smaller. (8) 25% of the shares subject to this option vests on the first anniversary of the vesting commencement date, and the remaining shares vest in 12 quarterly installments thereafter, except that the last installment, if necessary, may be smaller.

  49. Option Exercises and Stock Vested in Fiscal 2023

    Option Exercises and Stock Vested in Fiscal 2023 The following table shows the stock options exercised and the stock awards vested during 2023.

  50. Option Exercises and Stock Vested in Fiscal 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(2) ($) | | David P. Meeker | — | — | — | — | | Hunter C. Smith | 62,500 | $1,884,726 | 6,407 | $177,475 | | Jennifer Lee | 36,088 | $779,081 | 5,469 | $151,496 | | Yann Mazabraud | — | — | 5,469 | $151,496 | | Joe Shulman | 37,090 | $968,126 | 4,220 | $116,897 |

  51. Option Exercises and Stock Vested in Fiscal 2023

    (1) Calculated by multiplying (i) the number of shares exercised by (ii) the difference between the closing price of the Company’s common stock on the date of exercise and the exercise price of the option. (2) Calculated by multiplying the shares vested by the closing prices of the Company’s common stock on the applicable dates of vesting.

  52. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control In accordance with SEC rules, the following table summarizes the payments that would be made to certain of our NEOs upon the occurrence of certain qualifying terminations of employment, assuming such NEO’s termination of employment with the Company occurred on December 31, 2023 and, where relevant, that a change in control of the Company occurred on December 31, 2023. Amounts shown in the table below do not include (1) accrued but unpaid salary and (2) other benefits earned or accrued by the named executive officers during his employment that are available to all salaried employees, such as accrued vacation. We have entered into certain letter agreements with each of our NEOs that provide our NEOs with severance protections. The letter agreements provide that the NEOs will be eligible for severance benefits in certain circumstances following a termination of employment without cause or with good reason, whether or not in connection with a change in control. Under the employment letter agreements for the NEOs, other than Mr. Mazabraud, in the event that such executive’s employment is terminated by the Company without “cause,” or by the executive for “good reason” (each, as defined in the applicable agreement, and referred to herein as a qualifying termination), then such executive will be entitled to the severance payments and benefits described below. If Dr. Meeker experiences a qualifying termination of employment, then, in addition to any accrued amounts, he will be entitled to receive 12 months of continued base salary, paid in substantially equal installments over a period of 12 months, and reimbursement for continued healthcare benefits for up to 12 months following the date of termination. However, in the event that Dr. Meeker experiences a qualifying termination of employment within three months prior to, or within 12 months following a change in control of the Company (referred to herein as the change in control protection period), then Dr. Meeker will be entitled to receive (i) a cash severance amount equal to (A) 18 months of his then-current base salary and (B) 150% of his then-current target annual bonus, paid in substantially equal installments over a period of 18 months (unless the Company elects to pay such amount in lump sum), (ii) reimbursement for continued healthcare benefits for up to 18 months following the date of termination and (iii) accelerated vesting of each outstanding and unvested equity award held by him. If Messrs. Smith or Shulman or Ms. Lee experiences a qualifying termination of employment, then, in addition to any accrued amounts, such individual will be entitled to receive 9 months of continued base salary, paid in substantially equal installments over a period of 9 months, and reimbursement for continued healthcare benefits for up to 9 months following the date of termination. However, in the event that Messrs. Smith or Shulman or Ms. Lee experiences a qualifying termination of employment within the change in control period, such individual will be entitled to receive (i) a cash severance amount equal to (A) 12 months of his then-current base salary and (B) 100% of such individual’s then-current target bonus, payable over 12 months following such termination, (ii) reimbursement for continued healthcare benefits for up to 12 months following the date of termination and (iii) accelerated vesting of each outstanding and unvested equity award held by such individual. If Mr. Mazabraud experiences a termination of employment that is not due to serious misconduct (“faute grave”) or gross misconduct (“faute lourde”), Mr. Mazabraud is entitled to a three-month notice period or three months’ compensation in lieu of notice. All severance payments and benefits under the letter agreements are subject to the NEO’s execution of a release of claims against us and continued compliance with certain restrictive covenants. The letter agreements also include a Section 280G “best pay” provision, which provides that if any amount received by the NEO pursuant to the agreement or otherwise that would be subject to the excise tax imposed by Section 4999 of the Code, the NEO would receive the full amount of the payments and benefits or an amount reduced so that no portion would be subject to the excise tax, whichever would result in the largest payment to the NEO on an after-tax basis.

  53. Estimated Potential Payments

    Estimated Potential Payments

  54. Estimated Potential Payments

    | Name | Benefit | Termination Without Cause or for Good Reason / Cause (no Change in Control) ($) | Change in Control (no Termination) ($)(1) | Termination Without Cause or for Good Reason / Cause in Connection with a Change in Control ($)(2) | | David P. Meeker | Cash | 717,254 | — | 1,775,207 | | | Equity Acceleration | — | 4,551,030 | 28,383,494 | | | Continued Healthcare | 26,679 | — | 40,019 | | | Total(3) | 743,933 | 4,551,030 | 30,198,720 | | Hunter C. Smith | Cash | 360,000 | — | 672,000 | | | Equity Acceleration | — | 1,551,488 | 7,262,176 | | | Continued Healthcare | 18,933 | — | 25,244 | | | Total(3) | 378,933 | 1,551,488 | 7,959,420 | | Jennifer Lee | Cash | 354,750 | — | 662,200 | | | Equity Acceleration | — | 1,551,488 | 6,861,599 | | | Continued Healthcare | — | — | — | | | Total(3) | 354,750 | 1,551,488 | 7,523,799 | | Yann Mazabraud | Cash | 98,750 | — | 98,750 | | | Equity Acceleration | — | 1,551,488 | 7,280,307 | | | All Other Payments or Benefits | — | — | — | | | Total(3) | 98,750 | 1,551,488 | 7,379,057 | | Joseph Shulman | Cash | 326,250 | — | 609,000 | | | Equity Acceleration | — | 1,551,488 | 5,785,261 | | | Continued Healthcare | 20,010 | — | 26,679 | | | Total(3) | 346,260 | 1,551,488 | 6,420,940 |

  55. Estimated Potential Payments

    (1) Under our 2017 Plan and award agreements for the 2021 PSU Awards, 100% of the outstanding PSUs would have vested upon a change in control occurring on December 31, 2023. In addition, under our 2017 Plan, to the extent the surviving entity declined to continue, convert, assume or replace outstanding awards in the change in control, all outstanding options and RSU would have vested upon the change in control. The amounts shown in this column assume that outstanding options and RSUs would be continued by the surviving entity and, accordingly, no value has been included for them in this column. For PSUs, the amount shown was calculated by multiplying the number of outstanding PSUs by $45.97, the closing trading price of our common stock on December 29, 2023. (2) With respect to options, the value of equity acceleration was calculated by multiplying (i) the number of accelerated shares of common stock underlying the options by (ii) the excess, if any, of $45.97, the closing trading price of our common stock on December 29, 2023, over the exercise price for the options. With respect to RSUs and outstanding PSUs, the value of equity acceleration was calculated by multiplying the number of accelerated RSUs and/or PSUs, as applicable, by $45.97, the closing trading price of our common stock on December 29, 2023. Amounts shown are the maximum potential payment the NEO would have received as of December 31, 2023. Amounts of any reduction pursuant to the 280G best pay provision, if any, would be calculated upon actual termination of employment.

  56. CEO Pay Ratio

    CEO 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 providing the following information regarding the ratio of our Chief Executive Officer’s annual total compensation to the annual total compensation of our median employee. The annual total compensation for 2023 for our Chief Executive Officer was $7,230,457, as reported in the Summary Compensation Table. The annual total compensation for 2023 for our median employee, identified as discussed below, was $320,380, calculated using the methodology below. Based on this information, for 2023, the ratio of the annual total cash compensation of our Chief Executive Officer to the median of the annual total compensation of our other employees was approximately 23 to 1.

  57. Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure

    Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure We identified the median employee from our entire employee population (other than our Chief Executive Officer), whether employed on a full-time or part-time basis, as of December 31, 2023, which consisted of 223 employees. Within this group, the median employee was identified using a consistently applied compensation measure (“CACM”) of actual cash compensation received, which we calculated by aggregating cash compensation received during the fiscal year ending December 31, 2023, for each employee: (1) base pay, (2) bonuses, and (3) commissions. In identifying the median employee, we converted compensation amounts paid in foreign currencies based on the applicable year-to-date average exchange rate as of December 31, 2023 and annualized the compensation values of individuals that joined our Company during 2023. We did not exclude workers in non-U.S. countries and did not make any cost-of-living adjustments. Once the median employee was identified, we calculated the median employee’s annual target total direct compensation in accordance with the requirements of the Summary Compensation Table. This information is being provided for compliance purposes and should be viewed as a reasonable estimate calculated in a manner consistent with the SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow 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. Accordingly, 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 use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Neither the Compensation & Management Development Committee nor management of the Company used the CEO Pay Ratio measure in making compensation decisions for 2023.

  58. Pay Versus Performance

    Pay Versus Performance In accordance with the SEC’s disclosure requirements regarding pay versus performance, this section presents the SEC-defined “Compensation Actually Paid,” or CAP. Also required by the SEC, this section compares CAP to various measures used to gauge our performance. CAP is a supplemental measure to be viewed alongside performance measures as an addition to the philosophy and strategy of compensation-setting discussed elsewhere in this proxy statement, not in replacement.

  59. 2023 Pay Versus Performance Table

    2023 Pay Versus Performance Table The following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2021, 2022 and 2023, and our financial performance for each such fiscal year:

  60. 2023 Pay Versus Performance Table

    | Year | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO ($)(1) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($)(1) | Value of Initial Fixed $100 Investment Based on: | | | | | | | | Total Shareholder Return ($) | Net Income ($) | | 2023 | 7,230,457 | 19,005,711 | 1,974,174 | 4,813,432 | 154.61 | (184,678) | | 2022 | 3,325,758 | 24,142,912 | 1,110,455 | 4,805,393 | -97.94 | (181,119) | | 2021 | 6,458,360 | (10,017,699) | 2,069,493 | (775,040) | -33.57 | (69,612) |

  61. 2023 Pay Versus Performance Table

    (1) Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year:

  62. 2023 Pay Versus Performance Table

    | Year | PEO | Non-PEO NEOs | | 2023 | David P. Meeker | Hunter C. Smith, Jennifer Lee, Yann Mazabraud and Joseph Shulman | | 2022 | David P. Meeker | Hunter C. Smith, Jennifer Lee, Yann Mazabraud and Joseph Shulman | | 2021 | David P. Meeker | Hunter C. Smith, Murray Stewart, Jennifer Lee, Yann Mazabraud and Joseph Shulman |

  63. 2023 Pay Versus Performance Table

    The 2023 Summary Compensation Table totals reported for the PEO and the average of the Other NEOs for each year were subject to the following adjustments per Item 402(v)(2)(iii) of Regulation S-K to calculate “compensation actually paid”:

  64. 2023 Pay Versus Performance Table

    | | 2023 | | | | PEO | Average for Other NEO’s | | Summary Compensation Table Total | 7,230,457 | 1,974,174 | | ADJUSTMENTS(a): | | | | Deduction for Amounts reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table(a) | (5,879,796) | (1,199,513) | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | 8,977,366 | 2,036,531 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | 573,865 | 78,330 | | Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | 10,292,892 | 2,225,371 | | Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | (2,189,073) | (301,461) | | Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | — | — | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | — | — | | Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | — | — |

  65. 2023 Pay Versus Performance Table

    | | 2023 | | | | PEO | Average for Other NEO’s | | Adjustments Related to Defined Benefit and Actuarial Pension Plans | — | — | | Compensation Actually Paid | 19,005,711 | 4,813,432 |

  66. Narrative Disclosure to Pay Versus Performance Table

    Narrative Disclosure to Pay Versus Performance Table