DEF 14A of Cytokinetics Inc
Filed Apr 8, 2024 · FY20230001140361-24-018628
Election of Two Class II Directors
Election of Two Class II Directors
Board of Directors
Board of Directors Our Board of Directors is composed of individuals whose knowledge, background, experience and judgment we believe to be valuable to us. The primary functions of our Board of Directors are to:
Board of Directors
| • | Review and approve our strategic direction and annual operating plan and monitor our performance; |
Board of Directors
| • | Evaluate the President and Chief Executive Officer (“CEO”); |
Board of Directors
| • | Review management performance and compensation; |
Board of Directors
| • | Review management succession planning; |
Board of Directors
| • | Advise and counsel management; |
Board of Directors
| • | Monitor and manage potential conflicts of interests of management, members of the Board of Directors and stockholders; |
Board of Directors
| • | Oversee the integrity of financial information; and |
Board of Directors
| • | Monitor the effectiveness of the governance practices under which the Board of Directors operates and make changes as needed. |
Board of Directors
We do not have a formal diversity policy for selecting Board of Directors members. However, we believe it is important that the members of our Board of Directors collectively bring the experiences and skills appropriate to effectively carry out the Board of Directors’ responsibilities both as our business exists today and as we plan to develop an organization capable of successfully conducting late-stage clinical development and commercialization of our products. We therefore seek as members of our Board of Directors individuals with a variety of perspectives and the expertise and ability to provide advice and oversight in one or more of these areas: accounting controls, business strategy, risk management, strategic partnering, financial strategies, legal and regulatory compliance and compensation and retention practices. The following table sets forth the names of each member of our Board of Directors, their age, position, director class and committee membership as of April 8, 2024.
Board of Directors
| Director | Age | Position/ Class | Audit Committee | Compliance Committee | Compensation and Talent Committee | Nominating and Governance Committee | Science and Technology Committee | | Robert I. Blum | 60 | CEO, Class II | | | | | | | Muna Bhanji | 61 | Class III | | ■ | | ■ | | | Santo J. Costa, Esq. | 78 | Class III | | ■ | Chair | ■ | | | John T. Henderson, M.B., Ch.B. | 79 | Chair, Class III | ■ | | | Chair | ■ | | Robert A. Harrington, M.D. | 63 | Class II | | | | | ■ | | Edward M. Kaye, M.D. | 74 | Class I | ■ | | | | ■ | | B. Lynne Parshall, Esq. | 70 | Class III | Chair | ■ | | ■ | | | Sandford D. Smith(1) | 77 | Class II | ■ | ■ | ■ | | | | Wendell Wierenga, Ph.D. | 76 | Class I | | | ■ | | Chair | | Nancy J. Wysenski | 66 | Class I | | Chair | ■ | | |
Board of Directors
| (1) Mr. Smith's term of office as a director will expire at the Annual Meeting. |
Compensation Discussion and Analysis
| • | an annual cash payment under our non-equity incentive plan (“NEIP”) designed to reward individuals for achieving corporate goals and, except for our CEO, individual goals in their functional area; and |
Compensation Discussion and Analysis
| • | stock options and RSUs to our named executive officers in recognition of their performance in 2022 and to incentivize our named executive officers to achieve multi-year strategic goals articulated in our Vision 2025, to deliver sustained long-term value to stockholders, and to reward them for doing so. |
Compensation Discussion and Analysis
| ✔ WHAT WE DO | | ✘ WHAT WE DON’T DO | | | ✔ | Conduct an Annual Stockholder Advisory Vote (“Say-on-Pay”) on Named Executive Officer Compensation. We conduct an annual stockholder advisory vote on the compensation of our Named Executive Officers, and were commend that our stockholders vote in favor of an advisory “say-on-frequency” vote requiring us to conduct a “say-on-pay” vote every year. | ✘ | No Stock Option Re-pricing. Our Amended and Restated 2004 Equity Incentive plan does not permit options to purchase shares of our Common Stock to be repriced to a lower exercise or strike price. | | ✔ | Use a Pay-for-Performance Philosophy. The majority of our CEO and our other Named Executive Officers’ compensation is directly linked to the achievement of milestones designed to benefit our stockholders. We also structure target total compensation opportunities with a significant long-term equity component, thus aligning the interests of our executive officers with our stockholders. | ✘ | Executive Officers and Directors May Not Trade Except Pursuant to 10b5-1 Plans. Our stock trading policy prohibits the trading of Company equity securities by our executive officers and directors except pursuant to 10b5-1 Plans adopted in accordance with SEC Rule 10b5-1(c). | | ✔ | “Double Trigger” Feature for Acceleration of Equity Awards for our Named Executive Officers. The outstanding equity awards granted to our Named Executive Officers pursuant to our Amended and Restated 2004 Equity Incentive Plan are subject accelerated vesting only in the event of both a change in control of the Company and a subsequent involuntary termination of employment. | | |
Compensation Discussion and Analysis
| • | compensation levels paid to similarly situated executives by our Peer Companies, to attract and retain executives in a competitive market for talent; |
Compensation Discussion and Analysis
| • | the potential dilutive effect of equity awards on our stockholders. |
Compensation Discussion and Analysis
| • | reviewed and provided recommendations on the composition of our 2023 Peer Companies; |
Compensation Discussion and Analysis
| • | provided compensation-related data related to executives and directors at our 2023 Peer Companies based on data from SEC filings and the Radford Global Life Sciences Survey; |
Compensation Discussion and Analysis
| • | prepared compensation market trends and an analysis of our share usage under the Company's Amended and Restated 2004 Equity Incentive Plan (“2004 EIP”) in comparison to our 2023 Peer Companies based on data from SEC filings. |
Compensation Discussion and Analysis
Aon did not provide any other executive compensation services to us in 2023. We separately engaged Aon to provide our management with survey data and advice regarding compensation and equity awards for our broader employee base. The total fees payable to Aon in 2023 for services other than those related to executive and director compensation were less than $120,000. The Compensation and Talent Committee approved the engagement of, and fees payable to, Aon for these other services, and determined that these other services did not constitute a conflict of interest or prevent Aon from objectively performing its work for the Compensation and Talent Committee. Role of Executive Officers in Compensation Decisions For compensation decisions in 2023, our CEO aided the Compensation and Talent Committee by providing recommendations regarding the compensation of the named executive officers other than himself. Each of those named executive officers participated in an annual performance review with our CEO to provide input about his or her contributions to our goals and objectives in 2023, which guided, along with other factors, 2023 compensation actions. Our CEO participated in a review process, with respect to his own performance, with the Chairman of the Board of Directors who, at the time, was also a member of the Compensation and Talent Committee. The Compensation and Talent Committee assessed the recommendations of our CEO (and, with respect to our CEO, the recommendations of the Chairman of the Board of Directors at the time) in the context of each named executive officer’s performance. No named executive officer participated directly in the Compensation and Talent Committee’s final determinations regarding the amount of any component of his or her own 2023 compensation. Our Human Resources, Finance and Legal departments work with our CEO to design and develop compensation programs for our named executive officers, to recommend changes to existing compensation programs, to establish corporate and individual performance goals, to prepare and/or review peer data comparisons and other Compensation and Talent Committee briefing materials and ultimately to implement the Compensation and Talent Committee’s decisions. Our Vice President, Human Resources and our CEO meet separately with Aon to convey information on proposals that management may make to the Compensation and Talent Committee, as well as to assist Aon in collecting information about us to perform its duties for the Compensation and Talent Committee. Benchmarking The Compensation and Talent Committee believes it is important when making its compensation-related decisions to be informed as to current compensation practices of comparable publicly held companies in the life sciences industry. The Compensation and Talent Committee engaged Aon to analyze the executive compensation practices of a number of comparable publicly held companies in the life sciences industry. The Compensation and Talent Committee, in consultation with Aon, reviews and adjusts the list of Peer Companies annually to ensure that the list provides a current and useful comparison of companies for use as a means of comparing our executive compensation levels relative to the market. Companies are evaluated and adjusted as appropriate for inclusion in these analyses based on business characteristics similar to ours. Potential companies are selected based on criteria that include business model, stage of development, market capitalization, years since its initial public offering, employee headcount, research and development expenditures, cash reserves and revenue. When the 2022 peer group was established in November 2021, the Company’s market capitalization was approximately $3 billion and headcount was less than 400 employees. Accordingly, in November 2022, the Compensation and Talent Committee made meaningful changes to the peer group selection criteria and resulting peer companies to account for the advancement of the Company’s clinical assets, significant growth in the Company’s market capitalization relative to the prior year, and meaningful year-over-year increase in headcount. The Compensation and Talent Committee approved the following Peer Companies for use in making compensation decisions in 2023:
Compensation Discussion and Analysis
At the time of the determination, these companies each had a market capitalization generally between $1.5 billion and $15 billion, had an employee head count greater than 200 but less than 750, annual revenues of less than $500 million and were generally at a comparable stage to us in the development of their lead drug candidate. The Compensation and Talent Committee determined that the foregoing selection criteria were appropriate for selecting the Peer Companies for 2023 because at such time, we were a late-stage biopharmaceutical company with a market capitalization of approximately $5 billion and approximately 365 employees, which placed us within the range of the Peer Companies. Aon prepared an analysis of the compensation levels and practices of the Peer Companies as reported in their proxy statements and offered additional analysis based on the compensation practices of a comparable group of life science companies (a subset of what is included in the broader Radford Global Life Sciences Survey). The Compensation and Talent Committee reviewed the cash and equity components from these analyses in setting a total compensation package for each executive officer as well as reviewing each executive officer’s past and anticipated contributions to the Company, current compensation package, compensation market trends for competitive positions, overall performance and retention risks. The Compensation and Talent Committee believes considering this benchmark information to be important in compensation-related decisions and uses it as a reference point in formulating decisions. Other factors, such as economic conditions and internal pay equity may play a role with respect to the compensation offered to an executive in any given year. The Compensation and Talent Committee aims to provide target total cash and long-term equity compensation at or around the median of the compensation paid to similarly situated executives employed by the Peer Companies for target level performance, with compensation above this level possible for exceptional performance. To achieve this positioning for target levels of compensation, the Compensation and Talent Committee generally sets the various compensation elements as follows:
Compensation Discussion and Analysis
| • | target long-term equity compensation at a level such that, when combined with target total cash compensation, target total cash and equity compensation is between the 50th and 75th percentile for comparable positions as compared to the Peer Companies’ data. |
Compensation Discussion and Analysis
Compensation Components Base Salary. We provide base salary as the fixed source of compensation for our executive officers for the services they provide to us during the year and to balance the impact of having the bulk of the remainder of their compensation “at risk” in the form of annual cash bonuses and equity-based incentive compensation. The Compensation and Talent Committee recognizes the importance of base salaries as an element of compensation that helps to attract and retain talented executives. Non-Equity Incentive Plan. We structured our NEIP to provide incentives for our named executive officers to achieve our annual corporate and, except for the CEO, individual performance objectives. Annual cash awards under our NEIP are based on a thorough quantitative and qualitative review of facts and circumstances related to Company, department, function and individual performance, as compared to the corporate goals approved by the Compensation and Talent Committee during the first part of the performance year. Each named executive officer’s annual target NEIP award is expressed as a percentage of his or her base salary and is set at a level that, upon 100% achievement of our corporate goals and the named executive officer’s individual performance goals, and when combined with the executive officers’ base salaries, falls at the median level for a similar executive position as compared to the Peer Companies’ data. In determining the split of the target award as between corporate and individual performance, the Compensation and Talent Committee believes that the more senior position and operational responsibilities, the greater the percentage of his or her award that should be weighted to our corporate rather than individual achievement. For example, our CEO’s NEIP award is based entirely on corporate achievement and not on individual achievement. In the first quarter of each year, the Compensation and Talent Committee reviews and approves corporate goals presented by senior management. Upon completion of the year, the Compensation and Talent Committee assesses achievement relative to the predetermined milestones and measurements as well as other factors the Compensation and Talent Committee determines, in its discretion, are material. The minimum NEIP award amount is zero, and the maximum is 120% of the target NEIP award amount. If the Compensation and Talent Committee determines that NEIP awards should not be awarded for corporate achievement for any reason, NEIP awards will not be paid even if the individual goals and objectives were met. We believe this incentive structure allows the Compensation and Talent Committee to be responsive to the uncertainties and lack of predictability associated with being a biotechnology company dedicated to the discovery, development and commercialization of first-in-class therapeutics with novel mechanisms of action. Equity Awards. The Compensation and Talent Committee believes that providing a material portion of our executive officers’ total compensation in equity awards aligns the interests of our executive officers with our stockholders, by linking the value of compensation to the value of the Common Stock. In determining the form and size of equity awards, the Compensation and Talent Committee considers information provided by Aon as to whether the complete compensation packages provided to each named executive officer, including prior equity awards, are sufficient to retain, motivate and adequately reward the executive for his or her contributions. In addition, in determining the size of equity awards, the Compensation and Talent Committee considers the anticipated value of the named executive officer’s contributions going forward. We make new-hire and subsequent equity awards on pre-determined dates as follows:
Compensation Discussion and Analysis
| • | Before an offer is made, the Compensation and Talent Committee approves the terms of new-hire equity awards as inducement awards. Decisions in respect of the granting of inducement awards in accordance with Nasdaq Listing Rule 5635(c)(4) are made exclusively by the Compensation and Talent Committee. |
Compensation Discussion and Analysis
| • | We generally grant subsequent annual equity awards to all eligible employees during the first quarter of each fiscal year. |
Compensation Discussion and Analysis
We do not purposely accelerate or delay the public release of material information in consideration of pending equity awards. The grant of annual equity awards to our named executive officers and other employees typically occurs in early to mid-March after the filing of our Annual Report on Form 10-K. Stock Options. We grant stock options to our named executive officers when they join us and annually, on a discretionary basis, as part of our performance review and rewards process. All options have an exercise price equal to the fair market value of the Common Stock on the date of grant, and generally vest monthly based on continued service over a four-year period (with the exception of initial hire grants which cliff vest 25% at the end of the first anniversary from the grant date and then in monthly installment over the remaining three years). Options provide a return to the executive officer only if the executive officer remains a service provider to us except in limited circumstance described in the 2004 EIP, and then only if the market price of the Common Stock appreciates relative to the option exercise price over the period in which the option vests and beyond. Restricted Stock Units. We grant RSUs to our named executive officers annually, on a discretionary basis, as part of our performance review and rewards process. RSUs generally vest over a three-year period, with 40% vesting on the one-year anniversary of the grant date, an additional 40% on the two-year anniversary of the grant date, and the final 20% on the three-year anniversary of the grant date. Upon vesting RSUs are converted on a 1-to-1 basis for shares of Common Stock, but only if the executive officer remains a service provider to us except in limited circumstances described in the 2004 EIP. In March 2023, the Compensation and Talent Committee granted a blend of stock options and RSUs to our named executive officers. We believe this blended approach will enable us to deliver competitive equity awards, enhances the retention of key talent, and motivates shareholder value creation. In determining the size and mix of equity awards to named executive officers in a given year, the Compensation and Talent Committee considered:
Compensation Discussion and Analysis
| • | for each named executive officer, the value of equity awards granted to executives in similar positions at our Peer Companies, targeting long-term equity compensation at a level such that, when combined with target total cash compensation, the officer’s target total compensation opportunity is at or around the median for comparable positions; |
Compensation Discussion and Analysis
| • | the retention and motivation value of equity awards that have been previously granted to each named executive officer; |
Compensation Discussion and Analysis
Broad-based employee benefits with limited perquisites. Our named executive officers are eligible to participate in our employee benefit plans, including medical, dental, life insurance, employee stock purchase and 401(k) plans. These benefits are available on the same terms and conditions as to our other employees. Our named executive officers do not receive any perquisites other than those provided to all employees. Severance Benefits and Employment Agreements. We have executive employment agreements with each of our named executive officers that provide for salary and benefit continuation, bonus payments and accelerated vesting of equity awards upon the termination of their employment either by us without cause, or by the executive for good reason following a loss of position in connection with a change of control of the Company. The terms of these agreements are described in the section below entitled “Potential Payments Upon Termination or Change of Control.” The Compensation and Talent Committee believes these agreements are an essential element of our executive compensation program and assists the Compensation and Talent Committee in recruiting and retaining talented executives. The Compensation and Talent Committee also believes these benefits serve to minimize the distractions to the executive, reduce the risk that the executive will depart the Company before an acquisition is consummated, and allow the executive to focus on continuing normal business operations and the success of a potential business combination, rather than worrying about how business decisions that may be in our best interests and the interest of our stockholders will impact his or her own financial security. That is, these change of control arrangements help ensure stability among our executive ranks and will enable our executives to maintain a balanced perspective in making overall business decisions during periods of uncertainty. Further, these agreements are in line with customary practices at an executive level at the Peer Companies. Corporate and Individual Achievement Assessment Impacting Compensation Components Corporate Achievement. Before the start of each calendar year, management prepares a set of corporate goals covering our expected operating and financial performance for the fiscal year. Our corporate goals are focused on corporate metrics and objectives that are intended to provide both near- and long-term stockholder value. The Compensation and Talent Committee then reviews and approves these corporate goals. For 2023, the Compensation and Talent Committee approved corporate goals that included:
Compensation Discussion and Analysis
| Named Executive Officer | Target Bonus % of Salary | Corporate Goal Weighting | Individual Goal Weighting | | Robert I. Blum | 75% | 100% | 0% | | Andrew M. Callos | 45% | 75% | 25% | | Ching W. Jaw | 45% | 75% | 25% | | Fady I. Malik, M.D., Ph.D. | 45% | 75% | 25% | | Robert C. Wong | 30% | 75% | 25% |
Compensation Discussion and Analysis
| Named Executive Officer | 2023 Base Salary | Option Grants (# of Shares) | RSU Grants (# of Units) | 2023 Non-Equity Incentive Plan Compensation Target as % of Salary | | Robert I. Blum | $790,000 | 165,000 | 82,500 | 75% | | Andrew M. Callos | $523,640 | 50,000 | 30,000 | 45% | | Ching W. Jaw | $525,971 | 50,000 | 30,000 | 45% | | Fady I. Malik, M.D., Ph.D. | $586,023 | 80,000 | 30,000 | 45% | | Robert C. Wong | $379,578 | 12,000 | 6,000 | 30% |
Compensation Discussion and Analysis
| Named Executive Officer | Non-Equity Incentive Plan Compensation for 2023 Performance | | Robert I. Blum | $533,250 | | Andrew M. Callos | $220,911 | | Fady I. Malik, M.D., Ph.D. | $240,636 | | Robert C. Wong | $103,625 |
Compensation Discussion and Analysis
Tax Deductibility of Executive Compensation Under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), publicly held companies may generally not deduct compensation paid to certain executive officers to the extent such compensation exceeds $1 million per officer in any year. In determining the form and amount of compensation for our named executive officers, the Compensation and Talent Committee may consider all elements of the cost of such compensation, including the potential impact of deduction limitations. While the Compensation and Talent Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation and Talent Committee also look at other factors in making its decisions and retains the flexibility to award compensation to the Company’s named executive officers that it determines to be consistent with the goals of our executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m). Accounting Considerations In determining the size and type of equity awards, the Compensation and Talent Committee considers the potential impact of the accounting guidance for stock-based compensation. We do not set a specific budget for equity compensation based on the accounting cost. Compensation Recovery Policy In order to ensure that our executive officers, including our named executive officers, take full account of risks to us and our stockholders in their decision-making, and to reduce such risks wherever practicable, in October 2023 our Compensation and Talent Committee adopted a policy (the “Incentive Compensation Recoupment Policy”) designed to comply with Section 10D of the Securities Exchange Act of 1934, Rule 10D-1 promulgated thereunder and Nasdaq Listing Rule 5608. This policy provides that if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Company must reasonably promptly recoup the full amount of recoverable incentive compensation paid to current and former executive officers unless such recovery is deemed impracticable for reasons stipulated in the policy. The Incentive Compensation Recoupment Policy applies to compensation received on or after October 2, 2023. A copy of the Incentive Compensation Recoupment Policy is available as Exhibit 97.1 to our Annual Report on Form 10-K for the year ending December 31, 2023. Stock Ownership and Retention Guidelines Our stock ownership guidelines require our executives and directors to hold a meaningful amount of our Common Stock to promote a long-term perspective in managing the Company, further aligning the interests of our executives and stockholders and mitigating potential compensation-related risk. Our guidelines require that our CEO maintain at all times Common Stock and/or RSUs in the amount of 3 times his annual base salary, our other named executive officers maintain at all times Common Stock and/or RSUs in the amount of 1.0-1.5 times their respective annual salaries (depending on seniority), and our non-executive directors maintain at all times Common Stock and/or RSUs in the amount of 3 times their respective annual cash retainer (committee retainers excluded). Our guidelines generally require that each officer or non-executive director who has not met their ownership requirements retain 100% of the shares of our Common Stock acquired through the vesting of RSUs and the exercise of stock options awarded (net of shares retained by us to satisfy tax withholding requirements and exercise price amounts) until such officer has reached his or her required stock ownership level (with exceptions for pre-committed trading instructions under plans adopted in accordance with Rule 10b5-1(c) under the Exchange Act). Hedging & Pledging Policy We have a policy that prohibits our officers, directors and our employees from engaging in short sales, transactions in put or call options (other than stock options granted by the Company pursuant to our equity incentive plans), hedging transactions or other inherently speculative transactions with respect to our Common Stock. We also have a policy that prohibits our officers, directors and employees from granting any security interests or otherwise encumbering their shares or other securities issued by Cytokinetics.
Executive Summary Compensation Table for 2023
| Name and Principal Position | Year | Salary(1) | Stock Awards(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | | Robert I. Blum, Principal Executive Officer | 2023 | $790,000 | $3,228,225 | $4,196,775 | $533,250 | $2,807 | $8,751,057 | | | 2022 | $742,410 | $3,198,550 | $4,210,200 | $395,705 | $960 | $8,547,825 | | | 2021 | $709,280 | $3,319,700 | $1,956,900 | $428,314 | $805 | $6,414,999 | | Andrew M. Callos, Executive Vice President, Chief Commercial Officer | 2023 | $523,640 | $1,173,900 | $1,271,750 | $220,911 | $8,287 | $3,198,488 | | | 2022 | $494,000 | $752,600 | $1,052,550 | $189,511 | $61,887 | $2,550,548 | | | 2021 | $376,042 | $630,750 | $2,131,500 | $149,340 | $35,806 | $3,323,438 | | Ching W. Jaw, Former Principal Financial Officer(5) | 2023 | $525,971 | $1,173,900 | $1,271,750 | $— | $11,388 | $2,983,009 | | | 2022 | $496,199 | $752,600 | $1,169,500 | $193,145 | $9,150 | $2,620,594 | | | 2021 | $472,613 | $1,116,250 | $533,700 | $188,937 | $8,700 | $2,320,200 | | Fady I. Malik, Executive Vice President, Research and Development | 2023 | $586,023 | $1,565,200 | $2,034,800 | $240,636 | $13,006 | $4,439,665 | | | 2022 | $558,117 | $1,128,900 | $1,637,300 | $207,829 | $11,048 | $3,543,194 | | | 2021 | $533,211 | $1,562,750 | $711,600 | $209,831 | $10,497 | $3,027,889 | | Robert C. Wong, Vice President, Chief Accounting Officer | 2023 | $379,578 | $234,780 | $305,220 | $103,625 | $12,513 | $1,035,716 | | | 2022 | $361,503 | $282,225 | $327,460 | $91,370 | $10,874 | $1,073,432 |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table sets forth information regarding plan-based awards each named executive officer during 2023.
Grants of Plan-Based Awards in 2023
| | | | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options(2) (#) | Exercise Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards(3) ($) | | Name | Compensation and Talent Committee Decision Date | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | | | | | Robert I. Blum | | | — | $592,500 | $711,000 | | | | | | | 2/22/2023 | 3/6/2023 | | | | 82,500 | | | $3,228,225 | | | 2/22/2023 | 3/6/2023 | | | | | 165,000 | $39.13 | $4,196,775 | | Andrew M. Callos | | | — | $235,638 | $282,766 | | | | | | | 2/22/2023 | 3/6/2023 | | | | 30,000 | | | $1,173,900 | | | 2/22/2023 | 3/6/2023 | | | | | 50,000 | $39.13 | $1,271,750 | | Ching W. Jaw | | | — | $236,687 | $284,024 | | | | | | | 2/22/2023 | 3/6/2023 | | | | 30,000 | | | $1,173,900 | | | 2/22/2023 | 3/6/2023 | | | | | 50,000 | $39.13 | $1,271,750 | | Fady I. Malik, M.D., Ph.D. | | | — | $263,710 | $316,452 | | | | | | | 2/22/2023 | 3/6/2023 | | | | 40,000 | | | $1,565,200 | | | 2/22/2023 | 3/6/2023 | | | | | 80,000 | $39.13 | $2,034,800 | | Robert C. Wong | | | — | $113,873 | $136,648 | | | | | | | 2/22/2023 | 3/6/2023 | | | | 6,000 | | | $234,780 | | | 2/22/2023 | 3/6/2023 | | | | | 12,000 | $39.13 | $305,220 |
Grants of Plan-Based Awards in 2023
| 1. | Reflects each named executive officer’s participation in our NEIP, calculated based on each officer’s respective base salary and position. Amounts actually earned under this plan are reflected in the Executive Summary Compensation Table above. There is no minimum threshold amount. |
Grants of Plan-Based Awards in 2023
| 2. | Options granted under the 2004 EIP that vest over a four-year period beginning on the grant date. |
Grants of Plan-Based Awards in 2023
| 3. | Reflects the grant date fair value of RSUs and stock options granted, calculated in accordance with Topic 718. Assumptions used for the valuation of these grants are set forth in Note 8 of our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table sets forth information regarding outstanding equity awards held by each named executive officer as of December 31, 2023.
Outstanding Equity Awards at December 31, 2023
| | | Option Awards | | | | Stock Awards | | | Name | Grant 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 Sharesor Units of Stock That Have Not Vested | | Robert I. Blum | 2/23/2016(1) | 185,000 | — | $6.67 | 2/23/2026 | | | | | 2/28/2017(1) | 205,000 | — | $10.60 | 2/28/2027 | | | | | 2/27/2018(1) | 200,000 | — | $7.80 | 2/27/2028 | | | | | 2/26/2019(1) | 240,000 | — | $7.14 | 2/26/2029 | | | | | 3/6/2020(2) | 224,999 | 15,001 | $14.40 | 3/6/2030 | | | | | 3/2/2021(3) | 113,437 | 51,563 | $19.42 | 3/2/2031 | | | | | 3/2/2022(4) | 78,750 | 101,250 | $37.63 | 3/2/2032 | | | | | 3/6/2023(5) | 30,937 | 134,063 | $39.13 | 3/6/2033 | | | | | 3/2/2021(7) | | | | | 16,000 | $1,335,840 | | | 3/2/2022(8) | | | | | 51,000 | $4,257,990 | | | 3/6/2023(9) | | | | | 82,500 | $6,887,925 | | Andrew M. Callos | 3/31/2021(6) | 103,125 | 46,875 | $23.26 | 3/31/2031 | | | | | 3/2/2022(4) | 19,687 | 25,313 | $37.63 | 3/2/2032 | | | | | 3/6/2023(5) | 9,375 | 40,625 | $39.13 | 3/6/2033 | | | | | 3/2/2022(8) | | | | | 12,000 | $1,001,880 | | | 3/6/2023(9) | | | | | 30,000 | $2,504,700 | | Ching W. Jaw | 6/30/2017(1) | 5,000 | — | $12.10 | 6/30/2027 | | | | | 2/27/2018(1) | 17,500 | — | $7.80 | 2/27/2028 | | | | | 2/26/2019(1) | 35,000 | — | $7.14 | 2/26/2029 | | | | | 3/6/2020(2) | 56,249 | 3,751 | $14.40 | 3/6/2030 | | | | | 3/2/2021(3) | 30,937 | 14,063 | $19.42 | 3/2/2031 | | | | | 3/2/2022(4) | 21,875 | 28,125 | $37.63 | 3/2/2032 | | | | | 3/6/2023(5) | 9,375 | 40,625 | $39.13 | 3/6/2033 | | | | | 3/2/2021(7) | | | | | 5,000 | $417,450 | | | 3/2/2022(8) | | | | | 12,000 | $1,001,880 | | | 3/6/2023(9) | | | | | 30,000 | $2,504,700 |
Outstanding Equity Awards at December 31, 2023
| | | Option Awards | | | | Stock Awards | | | Name | Grant 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 Sharesor Units of Stock That Have Not Vested | | Fady I. Malik, M.D., Ph.D. | 2/26/2015(1) | 86,000 | — | $7.96 | 2/26/2025 | | | | | 2/23/2016(1) | 100,000 | — | $6.67 | 2/23/2026 | | | | | 2/28/2017(1) | 50,000 | — | $10.60 | 2/28/2027 | | | | | 2/27/2018(1) | 75,000 | — | $7.80 | 2/27/2028 | | | | | 2/26/2019(1) | 80,000 | — | $7.14 | 2/26/2029 | | | | | 3/6/2020(2) | 84,374 | 5,626 | $14.40 | 3/6/2030 | | | | | 3/2/2021(3) | 41,250 | 18,750 | $19.42 | 3/2/2031 | | | | | 3/2/2022(4) | 30,625 | 39,375 | $37.63 | 3/2/2032 | | | | | 3/6/2023(5) | 15,000 | 65,000 | $39.13 | 3/6/2033 | | | | | 3/2/2021(7) | | | | | 7,000 | $584,430 | | | 3/2/2022(8) | | | | | 18,000 | $1,502,820 | | | 3/6/2023(9) | | | | | 40,000 | $3,339,600 | | Robert C. Wong | 4/30/2019(1) | 50,000 | — | $8.82 | 4/30/2029 | | | | | 3/6/2020(2) | 18,749 | 1,251 | $14.40 | 3/6/2030 | | | | | 3/2/2021(3) | 10,312 | 4,688 | $19.42 | 3/2/2031 | | | | | 3/2/2022(4) | 6,125 | 7,875 | $37.63 | 3/2/2032 | | | | | 3/6/2023(5) | 2,250 | 9,750 | $39.13 | 3/6/2033 | | | | | 3/2/2021(7) | | | | | 2,000 | $166,980 | | | 3/2/2022(8) | | | | | 4,500 | $375,705 | | | 3/6/2023(9) | | | | | 6,000 | $500,940 |
Outstanding Equity Awards at December 31, 2023
| 1. | The option is fully vested. |
Outstanding Equity Awards at December 31, 2023
| 2. | The option vests in equal monthly installments through 3/6/2024. |
Outstanding Equity Awards at December 31, 2023
| 3. | The option vests in equal monthly installments through 3/2/2025. |
Outstanding Equity Awards at December 31, 2023
| 4. | The option vests in equal monthly installments through 3/2/2026. |
Outstanding Equity Awards at December 31, 2023
| 5. | The option vests in equal monthly installments through 3/6/2027. |
Outstanding Equity Awards at December 31, 2023
| 6. | The option vests in equal monthly installments through 3/31/2025. |
Outstanding Equity Awards at December 31, 2023
| 7. | The unvested RSUs vest on 3/2/2024. |
Outstanding Equity Awards at December 31, 2023
| 8. | The unvested RSUs vest, as follows: 40% of the RSUs on 3/2/2024 and 20% of the RSUs on 3/2/2025. |
Outstanding Equity Awards at December 31, 2023
| 9. | The unvested RSUs vest, as follows: 40% of the RSUs on 3/6/2024, 40% of the RSUs on 3/6/2025 and 20% of the RSUs on 3/6/2026. |
Outstanding Equity Awards at December 31, 2023
The market value of the RSUs that have not yet vested is based on the closing price of $83.49 per share of our Common Stock on December 29, 2023.
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023
| | Option Awards | | Stock Awards | | | Named Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(2) ($) | | Robert I. Blum | 270,000 | 9,614,474 | 98,750 | 3,938,857 | | Andrew M. Callos | — | — | 11,125 | 454,706 | | Ching W. Jaw | 15,000 | 675,000 | 27,125 | 1,085,486 | | Fady I. Malik, M.D., Ph.D. | 14,000 | 586,170 | 40,375 | 1,613,969 | | Robert C. Wong | — | — | 10,250 | 410,622 |
Option Exercises and Stock Vested in 2023
| 1. | The amounts shown in this column represent the number of shares of Common Stock acquired on exercise multiplied by the excess of the closing price of a Cytokinetics share on the date of exercise over the option exercise price. |
Option Exercises and Stock Vested in 2023
| 2. | Equal to the closing trading price of our Common Stock on the day of vesting multiplied by the number of shares released on vesting. |
Pension Benefits
Pension Benefits We do not provide our employees, including our named executive officers, with a defined benefit pension plan or any supplemental executive retirement plans or retiree health benefits.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation We do not have a nonqualified defined contribution plan or other nonqualified deferred compensation plan.
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control We have executive employment agreements with each named executive officer that provide for such officers to remain at-will employees and to receive salary, non-equity incentive plan payments and benefits as determined at the discretion of the Board of Directors and provide for such officers to receive certain benefits if, upon or within the eighteen-month period (twelve-month period for Mr. Wong) following a change of control of the Company, they resign for good reason or are terminated by us or our successor other than for cause (a “qualifying resignation or termination”) and such officer signs a standard release of claims with us. We also have an executive severance plan, which is available for review as Exhibit 10.1 to our Annual Report on Form 10-K, which provides additional benefits to our named executive officers (other than Mr. Blum) in the event of certain qualified terminations, including following a change of control of the Company. In addition, our executives will receive accelerated vesting of equity awards upon a change of control in which the acquirer does not assume all equity awards and in the case of a qualifying resignation or termination. However, we do not have any other agreements, plans or arrangements that provide for severance or other benefits upon termination for other reasons. “Good reason” includes a material reduction in salary; a material decrease in duties or responsibilities; a material decrease in the duties or responsibilities of the supervisor to whom the executive officer is required to report; a material decrease in the budget over which the executive officer has authority; relocation of the place of employment to a location more than fifty miles from our location at the time of the change in control; or a material breach of the executive employment agreement by us or our successor. “Cause” includes failure to substantially perform the duties of the job other than due to physical or mental illness; engaging in conduct that is materially injurious to us or constitutes gross misconduct; material breach of the executive employment agreement by the executive officer; material breach of our policies that have been adopted by the Board of Directors; conviction of a felony; or fraud against us. Under their executive employment agreements and our executive severance plan, upon a qualifying resignation or termination in connection with a change of control of the Company, Mr. Callos, Dr. Malik and Mr. Wong will (and Mr. Jaw, prior to his resignation, would have) become entitled to receive: continuing severance payments at a rate equal to their base salary for a period of eighteen months (except for Mr. Wong, who is entitled to receive such payment for a period of twelve months); a lump sum payment equal to the sum of (i) any annual bonus earned by such named executive officer, as determined by the Board of Directors or the Compensation and Talent Committee (as applicable), but unpaid as of the date of the termination, with respect to the year prior to the year in which the termination occurs, (ii) 100% of such named executive officer’s target annual bonus for the year in which the termination occurs, and (iii) such named executive officer’s target annual bonus for the year in which the termination occurs, prorated based on the number of days in such year through the date of termination; acceleration in full of vesting of equity awards held by them; and continued employee benefits until the earlier of eighteen months following the date of the qualifying termination or resignation or the date they obtain employment with generally similar employee benefits. In the event that such payments constitute “parachute payments” within the meaning of Section 280G of the Code and become subject to the excise tax imposed under Section 4999 of the Code, the executive employment agreements of Mr. Callos, Dr. Malik and Mr. Wong each provide (and Mr. Jaw's provided) that the benefit amount may be reduced so that no portion of the payment is subject to the excise tax. Under his executive employment agreement, upon a qualifying resignation or termination in connection with a change of control of the Company, Mr. Blum will become entitled to receive: continuing severance payments at a rate equal to his base salary for a period of twenty-four months; a lump sum payment equal to his full target annual bonus; acceleration in full of vesting of equity awards held by him; and continued employee benefits until the earlier of twenty-four months following the date of the qualifying termination or resignation or the date he obtains employment with generally similar employee benefits. In the event that such payments constitute “parachute payments” within the meaning of Section 280G of the Code and become subject to the excise tax imposed under Section 4999 of the Code, Mr. Blum is eligible to receive a payment from us sufficient to pay the excise tax, and a tax gross-up payment, which is an additional payment sufficient to pay the excise tax and other income taxes resulting from the initial excise tax payment. This excise tax and tax gross-up payment has been in Mr. Blum’s employment agreement since May 2007, was customary at the time, and has been grandfathered for Mr. Blum. The provisions of each executive employment agreement are intended to comply with the requirements of Section 409A so that none of the severance payments or benefits to be provided under the agreements will be subject to the additional tax imposed under Section 409A. If severance payments to an executive officer at the time of termination would trigger the additional tax imposed under Section 409A, then such payments will instead become payable to the executive officer starting six months and one day after the termination date. Severance payments and benefits provided to an executive officer under an executive employment agreement following a qualifying resignation or termination are subject to certain conditions including adherence to existing confidentiality, proprietary information and invention assignment agreements, and non-competition clauses. The following table summarizes the potential benefits the named executive officers would receive upon a qualifying resignation or termination in connection with a change of control of the Company assuming their employment had been terminated on December 29, 2023:
Potential Payments Upon Termination or Change of Control
| Named Executive Officer | Salary | Bonus | Acceleration of Vesting of Equity Grants(1) | Acceleration of Vesting of Options(1) | Continuation of Employee Benefits(2) | Change in Control Reduction(3) | Total | | Robert I. Blum | $1,580,000 | $513,500 | $12,481,755 | $13,894,001 | $93,432 | $— | $28,562,688 | | Andrew M. Callos | $785,460 | $235,638 | $3,506,580 | $5,786,260 | $98,856 | $(871,040) | $9,541,754 | | Ching W. Jaw | $788,957 | $236,687 | $3,924,030 | $4,252,111 | $70,074 | $— | $9,271,858 | | Fady I. Malik, M.D., Ph.D. | $879,035 | $263,710 | $5,426,850 | $6,279,150 | $70,074 | $— | $12,918,819 | | Robert C. Wong | $379,578 | $113,873 | $1,043,625 | $1,180,449 | $65,904 | $— | $2,783,430 |
Potential Payments Upon Termination or Change of Control
| 1. | The value of the acceleration of vesting of the equity grants is calculated using the closing market price of our Common Stock at December 29, 2023 of $83.49 and the value of the acceleration of vesting of options is calculated as the amount by which that closing market price exceeds the exercise price for unvested stock options at December 29, 2023. |
Potential Payments Upon Termination or Change of Control
| 2. | Represents the cost of premiums for medical, dental, vision, life and disability insurance coverage under our group employee benefit plans based on 2024 rates. |
Potential Payments Upon Termination or Change of Control
| 3. | As described under “Potential Payments Upon Termination of Change in Control”, the total payment following a change in control will be reduced to a level below the Section 280G safe harbor amount. Under the assumptions above, Mr. Callos exceeds the 280G safe harbor amount as of December 29, 2023 and as a result his payment will be reduced below the safe harbor amount. |
Principal Executive Officer Pay Ratio
Principal Executive Officer Pay Ratio Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the related SEC rule (the “Rule”), the following table provides the ratio of the total compensation for 2023 for Mr. Blum, our principal executive officer to the total compensation for 2023 for our median employee follows:
Principal Executive Officer Pay Ratio
| PEO Compensation for 2023 | $8,751,057 | | Median Employee Compensation for 2023 | $365,039 | | Ratio of PEO Compensation to Median Employee Compensation for 2023 | 24 to 1 |
Principal Executive Officer Pay Ratio
The pay ratio above represents the Company’s reasonable estimate calculated in a manner consistent with the Rule and applicable guidance. The Rule and guidance provide significant flexibility in how companies identify the median employee, and each company may use a different methodology and make different assumptions particular to that company. As a result, as the SEC explained when it adopted the Rule, in considering the pay-ratio disclosure, stockholders should keep in mind that the Rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay-ratio disclosures. In determining the median employee, we prepared a listing of all employees (excluding Mr. Blum) using a measurement date of December 31, 2023, annualized the salaries for those employees that were not employed for all of 2023 and identified the employee at the median of the listing of annualized salaries (the “Median Employee”). We calculated the Median Employee Compensation for 2023 for the Median Employee on the same basis as the total compensation of Mr. Blum in the Executive Summary Compensation Table.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and the Company's financial performance. As described in “Financial Performance Measures” below, we do not have a Company Selected Financial Measure as described in Item 402(v)(2)(vi) of Regulation S-K to link compensation actually paid (“CAP”) to our performance.
Required Tabular Disclosure of Compensation Actually Paid Versus Performance
Required Tabular Disclosure of Compensation Actually Paid Versus Performance The following table discloses information on CAP to our principal executive officer and (on average) to our other named executive officers during the specified years alongside total shareholder return (“TSR”) and net income metrics.
Pay versus Performance Table
Pay versus Performance Table
Pay versus Performance Table
| | | | | | Value Of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for non-PEO NEOs(3) | Average Compensation Actually Paid to non-PEO NEOs(4) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Loss (thousands) | Company Selected Measure(7) | | 2023 | $8,751,057 | $20,683,738 | $2,914,219 | $6,431,731 | $787 | $115 | $522,664 | — | | 2022 | $8,547,825 | $8,693,131 | $2,325,696 | $1,321,707 | $432 | $111 | $388,955 | — | | 2021 | $6,414,999 | $19,860,766 | $2,749,683 | $6,474,352 | $430 | $125 | $215,314 | — | | 2020 | $5,128,696 | $10,988,808 | $1,796,529 | $3,291,763 | $196 | $126 | $127,290 | — |
Pay versus Performance Table
| 1. | The amounts reported in this column reflect the total compensation reported for Mr. Blum (our PEO) for each of the corresponding years in the “Total” column of the Executive Summary Compensation Table included in this Proxy Statement with respect to each of 2023, 2022, 2021, and in our proxy statement for our 2023 annual meeting of stockholders with respect to 2020. Mr. Blum was our PEO for the entirety of each of our 2023, 2022, 2021, and 2020 fiscal years. |
Pay versus Performance Table
| 2. | The amounts reported in this column represent the amount of CAP to Mr. Blum, as computed in accordance with Item 402(v)(2)(iii) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. Blum during the applicable year. In accordance with the requirements of Item 402(v)(2)(iii) of Regulation S-K, the following adjustments were made to Mr. Blum’s total compensation for each year to determine the CAP: |
Pay versus Performance Table
| Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards(a) | Aggregate Equity Award Adjustments(b) | Compensation Actually Paid to PEO | | 2023 | $8,751,057 | $(7,425,000) | $19,357,681 | $20,683,738 | | 2022 | $8,547,825 | $(7,408,750) | $7,554,056 | $8,693,131 | | 2021 | $6,414,999 | $(5,276,600) | $18,722,367 | $19,860,766 | | 2020 | $5,128,696 | $(4,075,200) | $9,935,312 | $10,988,808 |
Pay versus Performance Table
| a | Represents the reported value of equity awards as reported in the “Stock and Option Awards” column in the Executive Summary Compensation Table for the applicable year. |
Pay versus Performance Table
| b | The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant besides the difference in grant date share price and ending applicable year share price. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay versus Performance Table
| Year | Year End Fair Value of Equity Awards Granted in the Year | Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Aggregate Equity Awards Adjustment | | 2023 | $14,362,556 | $7,003,351 | $692,304 | $(2,700,530) | $— | $19,357,681 | | 2022 | $8,391,888 | $98,302 | $960,150 | $(1,098,634) | $(797,650) | $7,554,056 | | 2021 | $9,838,720 | $7,245,088 | $620,112 | $1,018,446 | $— | $18,722,367 | | 2020 | $5,159,264 | $2,710,036 | $612,092 | $1,453,920 | $— | $9,935,312 |
Pay versus Performance Table
| 3. | The amounts in this column represent the average of the amounts reported for the Company’s named executive officers as a group (excluding the Company's PEO, Mr. Blum) in the “Total” column of the Executive Summary Compensation Table included in this Proxy Statement with respect to 2023, and our proxy statement for our 2023 annual meeting of stockholders with respect to each of 2022, 2021, and 2020. For 2023, the Company’s named executive officers whose average compensation amounts are included in this figure are Mr. Jaw, Dr. Malik, Mr. Callos and Mr. Wong. For 2022, the Company's named executive officers whose average compensation amounts are included in this figure are Mr. Jaw, Dr. Malik, Mr. Callos, David W. Cragg (former Chief Administration Officer), Mark A. Schlossberg (former General Counsel and Secretary) and Mr. Wong. For 2021, the Company's named executive officers whose average compensation amounts are included in this figure are Mr. Jaw, Dr. Malik, Mr. Callos and Mr. Schlossberg. For 2020, the Company's named executive officers whose average compensation amounts are included in this figure are Mr. Jaw, Dr. Malik, Mr. Cragg and Mr. Schlossberg. |
Pay versus Performance Table
| 4. | The amounts do not reflect the actual average amount of compensation earned by or paid to the Company's named executive officers as a group during the applicable year. In accordance with the requirements of Item 402(v)(2)(iii) of Regulation S-K, the following adjustments were made to average total compensation for the Company's named executive officers as a group (excluding the Company's PEO, Mr. Blum) for each year to determine the average CAP, using the same methodology described above in footnote 2 above to the Pay versus Performance Table: |
Pay versus Performance Table
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards(a) | Average Equity Award Adjustments(b) | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $2,914,219 | $(2,257,825) | $5,775,336 | $6,431,731 | | 2022 | $2,325,696 | $(1,805,064) | $801,075 | $1,321,707 | | 2021 | $2,749,683 | $(2,084,125) | $5,808,795 | $6,474,352 | | 2020 | $1,796,529 | $(1,164,150) | $2,659,384 | $3,291,763 |
Pay versus Performance Table
| a | Represents the reported average value of equity awards as reported in the “Stock and Option Awards” column in the Executive Summary Compensation Table for the applicable year. |
Pay versus Performance Table
| b | The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant besides the difference in grant date share price and ending applicable year share price. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay versus Performance Table
| Year | Year End Fair Value of Equity Awards Granted in the Year | Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Aggregate Equity Awards Adjustment | | 2023 | $4,386,915 | $1,876,679 | $201,402 | $(689,660) | $— | $5,775,336 | | 2022 | $1,698,148 | $(451,058) | $211,375 | $(182,059) | $(475,330) | $801,075 | | 2021 | $3,875,707 | $1,580,194 | $140,931 | $211,963 | $— | $5,808,795 | | 2020 | $1,477,028 | $679,612 | $172,143 | $330,603 | $— | $2,659,384 |
Pay versus Performance Table
| 5. | Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends (if any) for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. “Measurement period” is defined as: for 2020, the one-year period from market close December 31, 2019 through December 31, 2020; for 2021, the two-year period from market close on December 31, 2019 through December 31, 2021; for 2022, the three-year period from market close December 31, 2019 through December 31, 2022, and for 2023, the four-year period from market close December 31, 2019 through December 31, 2023. |
Pay versus Performance Table
| 6. | Represents the weighted cumulative TSR or the Nasdaq Biotechnology Index for each measurement period. |
Pay versus Performance Table
| 7. | We do not have a Company Selected Financial Measure as described in Item 402(v)(2)(vi) of Regulation S-K to link CAP to our performance. |
Director Compensation
Director Compensation Our non-employee director compensation program is designed to enhance our ability to attract and retain highly qualified directors and to align their interests with the long-term interests of our stockholders. The program consists of both a cash component, designed to compensate independent directors for their service on the Board of Directors and its committees, and an equity component, designed to align the interests of independent directors and stockholders in amounts that correlate to their responsibilities and levels of participation, including service on committees. Non-employee directors are also able to elect to receive their annual base retainers in equity, as further described below. We do not compensate members of the Board of Directors or committees on a per-meeting basis. In 2022, Aon conducted a competitive review of our non-employee director compensation to ensure that our compensation practices and levels are appropriate and competitive. This analysis used the same group of Peer Companies that is used to evaluate executive compensation described above under “Compensation Discussion and Analysis.” Following this process and on the recommendation of Aon, the Compensation and Talent Committee revised the compensation mix and levels to reflect market median levels.
Director Compensation Table for 2023
Director Compensation Table for 2023 Employee directors receive no separate compensation for service as a member of the Board of Directors. The following table summarizes the total compensation for 2023 earned by our non-employee Directors.
Director Compensation Table for 2023
| Name | Fees Earned or Paid in Cash(1) | Option Awards(2) | Stock Awards(3) | Total | | Ms. Bhanji | $60,000 | $252,869 | $196,150 | $509,019 | | Mr. Costa | $75,000 | $252,869 | $196,150 | $524,019 | | Dr. Harrington | $55,000 | $252,869 | $196,150 | $504,019 | | Dr. Henderson | $110,000 | $252,869 | $196,150 | $559,019 | | Dr. Kaye | $65,000 | $252,869 | $196,150 | $514,019 | | Ms. Parshall | $80,000 | $252,869 | $196,150 | $529,019 | | Mr. Smith | $72,500 | $252,869 | $196,150 | $521,519 | | Dr. Wierenga | $80,000 | $252,869 | $196,150 | $529,019 | | Ms. Wysenski | $70,000 | $252,869 | $196,150 | $519,019 |
Director Compensation Table for 2023
| 1. | Pursuant to the Equity in Lieu of Cash Retainer Option, the following non-employee directors received shares of our Common Stock in lieu of some or all their retainers pursuant to our Equity In Lieu of Cash Retainer Option program, as follows: Dr. Harrington – 1,373; Dr. Henderson – 2,378; Dr. Kaye – 1,373; Mr. Smith – 1,373; Dr. Wierenga – 1,373; and Ms. Wysenski – 686. |
Director Compensation Table for 2023
| 2. | Automatic grants of stock options to non-employee directors were granted at the time of the 2023 annual meeting of stockholders at an exercise price of $39.23 per share, which represents the fair market value of our Common Stock on the date of the grant. The amounts in the table reflect the grant-date fair value of stock option grants calculated in accordance with Topic 718. Assumptions used for the valuation of these grants are set forth in Note 8 of our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. As of December 31, 2023, the aggregate number of stock options held by our non-employee directors at such time were as follows: Ms. Bhanji – 65,000; Mr. Costa – 70,000; Dr. Harrington – 55,000; Dr. Henderson – 224,255; Dr. Kaye – 147,380; Ms. Parshall – 72,749; Mr. Smith – 17,500; Dr. Wierenga – 170,057; and Ms. Wysenski – 65,000. |
Director Compensation Table for 2023
| 3. | Automatic grants of RSUs to non-employee directors were granted at the time fo the 2023 annual meeting of stockholders. The amounts in the table reflect the grant date fair value of the RSU awards calculated in accordance with Topic 718. Assumptions used for the valuation of these grants are set forth in Note 8 of our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. As of December 31, 2023, the aggregate number of shares of Common Stock held by our non-employee directors at such time were as follows: Ms. Bhanji – 9,031; Mr. Costa – 10,000; Dr. Harrington – 6,373; Dr. Henderson – 26,901; Dr. Kaye – 14,169; Ms. Parshall – 10,000; Mr. Smith – 13,653; Dr. Wierenga – 13,653 and Ms. Wysenski – 12,082. |
Director Compensation Table for 2023
We reimburse our non-employee directors for out-of-pocket expenses incurred in connection with service on our Board of Directors. We maintain director and officer indemnification insurance policies that covers the Company as well as directors and officers individually. The policies currently run from June 1, 2023 through June 1, 2024 at a total annual cost of $1,246,000. The primary carrier is Old Republic Insurance Company.
Indemnification of Directors and Officers
Indemnification of Directors and Officers We provide indemnification for our directors and officers so that they will be free from undue concern about personal liability in connection with their service to us. Under our bylaws, we are required to indemnify our directors and officers to the extent not prohibited under Delaware or other applicable law. We have also entered into indemnification agreements with each of our directors and officers, which require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.