DEF 14A of Lyell Immunopharma, Inc.
Filed Apr 22, 2024 · FY20230001140361-24-021008
Election of Directors
Election of Directors Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term, the terms of office of the respective classes expiring in successive years. Vacancies on the Board of Directors may be filled by the affirmative vote of a majority of the directors then in office. A director elected by the Board of Directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The Board of Directors presently has eight members. There are two directors in Class III whose term of office expires in 2024. Drs. Nabel and Seely were elected as members of our Board of Directors prior to our initial public offering, and Dr. Nabel was elected pursuant to a voting agreement entered into with certain of our stockholders that terminated upon completion of our initial public offering in June 2021. Each of the nominees listed below is a current director who was nominated by the Board of Directors at the recommendation of the Nominating and Corporate Governance Committee. If elected at the Annual Meeting, each of these nominees would serve until the 2027 annual meeting and until her successor has been duly elected and qualified or, if sooner, until the director’s death, resignation or removal. It is our policy to encourage directors and nominees for director to attend the Annual Meeting. All directors attended our annual meeting of stockholders in 2023. Directors are elected by a plurality of the votes of the holders of shares present in person, by remote communication or represented by proxy and entitled to vote on the election of directors. Accordingly, the two nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the two nominees named below. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by us. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee will be unable to serve.
Nominees to the Board of Directors
Nominees to the Board of Directors The nominees and their ages as of March 31, 2024, the class in which they are being nominated, positions and length of board service are provided in the table below. Additional biographical descriptions of each nominee are set forth in the text below the table. These descriptions include the primary individual experience, qualifications, qualities and skills of each of our nominees that led to the conclusion that each director should serve as a member of our Board of Directors at this time.
Nominees to the Board of Directors
| Name of Director Nominee | Class | Age | Position | Director Since | | Elizabeth Nabel, M.D.(1)(2) | III | 72 | Director | April 2021 | | Lynn Seely, M.D. | III | 65 | President, Chief Executive Officer and Director | May 2021 |
Nominees to the Board of Directors
| (1) Member of the Audit Committee |
Nominees to the Board of Directors
| (2) Member of the Nominating and Corporate Governance Committee |
Nominees to the Board of Directors
Elizabeth Nabel, M.D., has served as a member of our board of directors since April 2021 and brings a unique perspective to health care based on her experience as a physician, research scientist, academic medicine leader and wellness advocate. She also serves on the board of directors of Moderna, Medtronic and Accolade. Dr. Nabel is the Chair of the Advisory Board of OPKO Health. Since March 2021, Dr. Nabel has served as Executive Vice President of Strategy of ModeX Therapeutics, a new biotechnology company focused on developing innovative immunotherapies for cancer and viral diseases. Following OPKO’s acquisition of ModeX, she served as Chief Medical Officer (part-time) of OPKO Health until June 2023. Through February 2021, Dr. Nabel was President of Brigham Health, which includes Brigham and Women’s Hospital, Brigham and Women’s Faulkner Hospital, and the Brigham and Women’s Physician Organization, a position she held from 2010. Simultaneous with her service as President of Brigham Health, Dr. Nabel was also a Professor of Medicine from 2010 to 2021 at Harvard Medical School, where she is currently a Professor of Medicine emeritus. Prior to joining Brigham Health, she held a variety of roles, including Director, at the National Heart, Lung and Blood Institute at the National Institutes of Health, a federal agency funding research, training and education programs to promote the prevention and treatment of heart, lung and blood diseases, from 1999 to 2009. Her colleagues have elected her to the American Academy of the Arts and Sciences, the National Academy of Medicine, the Association of American Physicians, the American Society of Clinical Investigation, and she is a Fellow of the American Association for the Advancement of Science. A native of St. Paul, Minnesota, Dr. Nabel received an M.D. from Weill Cornell Medical College and a B.A. in psychology from St. Olaf College, and she completed her internal medicine and cardiology training at Brigham and Women’s Hospital. We believe that Dr. Nabel’s education and work in medicine makes her an appropriate member of our Board of Directors. Lynn Seely, M.D., has served as our President and Chief Executive Officer since December 2022 and has been a member of our board of directors since May 2021. She was formerly President and Chief Executive Officer and a member of the board of directors of Myovant Sciences, Inc., a biopharmaceutical company that gained marketing approval and launched ORGOVYX for men with advanced prostate cancer and MYFEMBREE for women with uterine fibroids and endometriosis. Prior to joining Myovant, Dr. Seely served as the Chief Medical Officer of Medivation, Inc. from 2005 to 2015. In this role, Dr. Seely oversaw the development and marketing approval of the blockbuster medicine XTANDI for men with castration-resistant prostate cancer and held leadership roles in drug development collaborations with Pfizer Inc. and Astellas Pharma US, Inc. Prior to joining Medivation, Dr. Seely served as Vice President of Clinical Development at Corgentech Inc., at Cytyc Health Corporation, and at ProDuct Health, Inc., a medical device company acquired by Cytyc Corporation. Dr. Seely began her industry career in clinical development at Chiron Corporation in 1996. In addition to serving on the Lyell Board, Dr. Seely serves as the lead independent director for Blueprint Medicines, is an independent director for TORL Biotherapeutics and is on the Board of Managers for Life Science Cares Bay Area. Dr. Seely received a B.A. in journalism from the University of Oklahoma and an M.D. from the University of Oklahoma College of Medicine. She completed her residency and served as Chief Resident in internal medicine at Yale-New Haven Hospital, and she completed her Fellowship in endocrinology and metabolism at the University of California, San Diego, where she was on faculty before joining industry. We believe that Dr. Seely’s education and work in healthcare and life sciences makes her an appropriate member of our Board of Directors.
A Vote “FOR” Each Named Nominee
A Vote “FOR” Each Named Nominee
Continuing Directors
Continuing Directors Continuing directors and their ages as of March 31, 2024, the class in which they belong, positions and length of board service are provided in the table below. Additional biographical descriptions of each director are set forth in the text below the table.
Continuing Directors
| Name of Director | Class | Age | Position | Director Since | | Hans Bishop(1) | I | 59 | Director | August 2018 | | Otis Brawley, M.D.(2) | II | 64 | Director | April 2021 | | Catherine Friedman(3)(4) | I | 63 | Director | August 2018 | | Richard Klausner, M.D. | II | 72 | Chair of the Board of Directors | September 2018 | | Robert Nelsen(5) | I | 60 | Director | September 2018 | | William Rieflin(5)(6) | II | 64 | Director | May 2020 |
Continuing Directors
| (1) Member of the Nominating and Corporate Governance Committee |
Continuing Directors
| (2) Chair of the Nominating and Corporate Governance Committee |
Continuing Directors
| (3) Member of the Audit Committee |
Continuing Directors
| (4) Chair of the Compensation Committee and Lead Independent Director |
Continuing Directors
| (5) Member of the Compensation Committee |
Continuing Directors
| (6) Chair of the Audit Committee |
Continuing Directors
Hans Bishop has served as a member of our board of directors since August 2018. Since December 2021, Mr. Bishop has also served as the Board Co-Chair and President of Altos Labs, Inc., a private life sciences company. From July 2019 to September 2021, Mr. Bishop served as the Chief Executive Officer of GRAIL, a private life sciences company. From July 2013 to March 2018, Mr. Bishop served as President and Chief Executive Officer at Juno Therapeutics, a company that he co-founded and that was acquired by Celgene. From February 2012 through July 2013, Mr. Bishop served as Executive in Residence at Warburg Pincus, a multinational private equity firm. From January 2010 to September 2011, Mr. Bishop served as Executive Vice President and Chief Operating Officer at Dendreon, Inc., a publicly traded cancer immunotherapy company. From December 2006 to January 2010, Mr. Bishop served as President of Specialty Medicine at Bayer Healthcare, a publicly traded company. From January 2004 to August 2006, he served in multiple leadership positions at Chiron Corporation, a multinational biotechnology company, including as Senior Vice President of Global Commercial Operations and Vice President and General Manager of European Biopharmaceuticals. He currently serves as the Chairman of the Board of Sana Biotechnology and as a director of Agilent Technologies, both of which are publicly traded companies, and he previously served as a director of JW Therapeutics, Juno Therapeutics and Celgene. Mr. Bishop received a B.A. in Chemistry from Brunel University in London. We believe that Mr. Bishop’s more than 30 years of experience in the biotechnology industry and chemistry studies make him an appropriate member of our Board of Directors. Otis Brawley, M.D., has served as a member of our board of directors since April 2021. Dr. Brawley has served as a Bloomberg Distinguished Professor of Oncology and Epidemiology at Johns Hopkins University since January 2019 and a member of the board of directors of PDS Biotechnology Corporation, a publicly traded biotechnology company, since November 2020, Incyte Corporation since September 2021 and Agilent Technologies since November 2021. From April 2007 to December 2018, he served as the Chief Medical and Scientific Officer of American Cancer Society. From January 2002 to August 2007, he was director of the Georgia Cancer Center at Grady Memorial Hospital. From April 2001 to December 2018, he served as a professor of hematology, oncology, medicine and epidemiology at Emory University. Dr. Brawley received an M.D. from the University of Chicago, Pritzker School of Medicine and a B.S. in Chemistry from the University of Chicago. He completed an internal medicine residency at Case-Western Reserve University and a fellowship in medical oncology at the National Cancer Institute. He is board certified in internal medicine and medical oncology. We believe that Dr. Brawley’s education and expertise in the field of oncology, as well as his experience on public company and non-profit boards, make him an appropriate member of our Board of Directors. Catherine Friedman has served as a member of our board of directors since August 2018. Ms. Friedman is a business executive with nearly 40 years of experience across finance, technology and healthcare. Ms. Friedman is an Executive Venture Partner at GV Management Company, LLC, where she is a senior member of the investing team and advises the life sciences portfolio. Ms. Friedman has spent 15 years on the boards of leading public and private life sciences and technology companies. She has previously served as an independent director at Seer, Inc., Altaba Inc. (formerly Yahoo!), Revolution Healthcare Acquisition Corp., GRAIL, Vividion Therapeutics (acquired by Bayer) and Radius Health. Earlier in her career, Ms. Friedman spent nearly 24 years with Morgan Stanley. She held several executive positions, including Managing Director, Head of West Coast Healthcare, and co-head of Morgan Stanley's biotechnology practice. Ms. Friedman holds a B.A. in economics from Harvard University and an M.B.A. from The University of Virginia's Darden School of Business. She is a foundation trustee at the University of Virginia's Darden School of Business. We believe that Ms. Friedman’s extensive financial experience and work for biotechnology companies make her an appropriate member of our Board of Directors. Richard Klausner, M.D., is our founder and current Board Chair and was previously our Chief Executive Officer from September 2018 to July 2020 and Executive Chairman from August 2020 to October 2021. Dr. Klausner is the founder and Chief Scientist of Altos Labs, a private life sciences company. He is the President of the Milky Way Research Foundation and founder and Managing Partner of Milky Way Investments. He was the founder and Director of Juno Therapeutics and the founder and Director of GRAIL. He is the Board Chair of Sonoma Biotherapeutics and Co-Founder and Chairman of LifeMine Therapeutics. He is the former Senior Vice President, Chief Medical Officer, and Chief Opportunity Officer of Illumina Corporation. Previously, he was Executive Director for Global Health of the Bill and Melinda Gates Foundation. Dr. Klausner was appointed by Presidents Clinton and Bush as the eleventh Director of the U.S. National Cancer Institute between 1995 and 2001. Dr. Klausner served as chief of the Cell Biology and Metabolism Branch of the National Institute of Child Health and Human Development and a past president of the American Society of Clinical Investigation. He is a member of the National Academy of Sciences, the American Academy of Arts and Sciences, and the National Academy of Medicine. He has served in senior advisory roles to the U.S., Norwegian, Qatari, and Indian governments. Dr. Klausner earned an M.D. from Duke Medical School and a B.S. from Yale University. We believe that Dr. Klausner’s scientific and medical expertise, particularly in cell biology, molecular biology and cancer, as well as his industry, academic and public service leadership roles, make him an appropriate member of our Board of Directors. Robert Nelsen has served as a member of our board of directors since September 2018. Since January 2022, Mr. Nelsen has also served as a member of the board of directors of Altos Labs, Inc., a private life sciences company. Since 1986, Mr. Nelsen has served as co-founder and Managing Director of ARCH Venture Partners, a venture capital firm focused on early-stage technology companies. Mr. Nelsen is a member of the board of directors of Brii Biosciences, Prime Medicine, Sana Biotechnology and Vir Biotechnology, all of which are publicly traded companies, and serves as Chairman of Hua Medicine. Previously, Mr. Nelsen served on the boards of several public biotechnology and biopharmaceutical companies, including Adolor Corporation, Agios Pharmaceuticals, Inc., Beam Therapeutics Inc., Bellerophon Therapeutics, Inc., Denali Therapeutics Inc., Fate Therapeutics, Inc., Gossamer Bio, Inc., Illumina, Juno Therapeutics, Karuna Therapeutics, Inc., Kythera Biopharmaceuticals, Inc., NeurogesX, Inc., Receptos, Inc., Revolution Healthcare Acquisition Corp., Sage Therapeutics, Inc., Sienna Biopharmaceuticals, Inc., Syros Pharmaceuticals, Inc. and Unity Biotechnology, Inc. Mr. Nelsen previously served as a trustee of the Fred Hutchinson Cancer Research Center and the Institute for Systems Biology and as a director of the National Venture Capital Association. Mr. Nelsen received an M.B.A. from the University of Chicago and a B.S. from the University of Puget Sound with majors in Economics and Biology. We believe that Mr. Nelsen’s extensive experience building and serving on the boards of many public and private emerging companies, including multiple life sciences, biotechnology and pharmaceutical companies, makes him an appropriate member of our Board of Directors.
Continuing Directors
William Rieflin has served as a member of our board of directors since May 2020. From September 2010 to September 2018, he served as the Chief Executive Officer of NGM Biopharmaceuticals, Inc. Since April 2015, Mr. Rieflin has served on the board of directors and has been Chairman of the Board since June 2019 at RAPT Therapeutics, Inc., a publicly traded biopharmaceutical company, and since July 2022, he has served as Chairman of the Board at NGM Biopharmaceuticals, Inc., a private biotechnology company. Mr. Rieflin also previously served as Executive Chairman since September 2018 and a member of the board since 2010 for NGM Biopharmaceuticals. Mr. Rieflin previously served on the board of directors of Anacor Pharmaceuticals, Inc., a pharmaceutical company, from April 2011 to June 2016 and of XenoPort, Inc. from September 2010 to July 2016. Mr. Rieflin also served as a board member of Flexus Biosciences until its acquisition in 2015. He currently serves on the board of directors of Kallyope, Inc. and Lycia Therapeutics, Inc., both privately held companies. Mr. Rieflin received an M.B.A. from the University of Chicago Booth Graduate School of Business, a J.D. from Stanford Law School and a B.S. in Industrial and Labor Relations from Cornell University. We believe that Mr. Rieflin’s extensive experience in the biopharmaceutical industry, his industry expertise and financial knowledge and his experience as a member of the board of directors of other public companies make him an appropriate member of our Board of Directors.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Non-Employee Director Compensation
Non-Employee Director Compensation The following table shows for the fiscal year ended December 31, 2023 certain information with respect to the compensation of all of our non-employee directors:
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2)(3) | Total ($) | | Hans Bishop | 55,000 | 230,745 | 285,745 | | Otis Brawley, M.D. | 60,000 | 230,745 | 290,745 | | Catherine Friedman | 99,500 | 230,745 | 330,245 | | Richard Klausner, M.D. | 80,000 | 230,745 | 310,745 | | Elizabeth Nabel, M.D. | 62,500 | 230,745 | 293,245 | | Robert Nelsen | 56,000 | 230,745 | 286,745 | | William Rieflin | 71,000 | 230,745 | 301,745 |
Non-Employee Director Compensation
| (1) All of the option awards were granted under our 2021 Equity Incentive Plan. The amounts shown represent the grant date fair values of option awards granted in 2023 as computed in accordance with FASB ASC Topic 718. See Note 12, Stock-based Compensation, to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the assumptions used in the calculation. |
Non-Employee Director Compensation
| (2) As of December 31, 2023, our non-employee directors held options to purchase shares of our common stock as set forth below: |
Non-Employee Director Compensation
| Name | Number of Option Awards (#) | | Hans Bishop | 209,230 | | Otis Brawley, M.D. | 585,000 | | Catherine Friedman | 835,000 | | Richard Klausner, M.D. | 8,224,148 | | Elizabeth Nabel, M.D. | 585,000 | | Robert Nelsen | 185,000 | | William Rieflin | 585,000 |
Non-Employee Director Compensation
No other options were held by non-employee directors as of December 31, 2023.
Non-Employee Director Compensation
| (3) The amount shown corresponds to the annual grant to each of our directors of (i) an option to purchase 65,000 shares of our common stock on June 16, 2023 pursuant to the then-current Non-Employee Director Compensation Policy and (ii) a supplemental option to purchase an additional 55,000 shares of our common stock on September 8, 2023 to align with the Non-Employee Director Compensation Policy, as amended in September 2023, discussed below. |
Non-Employee Director Compensation
Dr. Seely also served on our Board of Directors during 2023, but did not receive any additional compensation for her service as a director. For information regarding her compensation as our President and Chief Executive Officer, see the section titled “Executive Compensation.” We have reimbursed and will continue to reimburse all of our non-employee directors for their reasonable out-of-pocket expenses incurred in attending Board of Directors and committee meetings. Non-Employee Director Compensation Policy Our Board of Directors adopted the Non-Employee Director Compensation Policy (the “Director Compensation Policy”) for our non-employee directors, as amended and restated in April 2021 and April 2022. In September 2023, to bring the non-employee director compensation program in line with the practices of our peer group, our Compensation Committee approved updates to the policy to increase both the initial appointment and the annual equity grants to our non-employee directors (such updated policy, the “Updated Director Compensation Policy”). No changes were made to the cash compensation in connection with the September 2023 updates. The Updated Director Compensation Policy provides that our non-employee directors receive the following compensation for service on our Board of Directors:
Non-Employee Director Compensation
| • | an annual cash retainer of $50,000 for all non-employee directors other than the lead director/Chair of our Board of Directors; |
Non-Employee Director Compensation
| • | an annual cash retainer of $80,000 for lead director/the Chair of our Board of Directors; |
Non-Employee Director Compensation
| • | an additional annual cash retainer of $15,000, $12,000, and $10,000 for service as Chair of the Audit Committee, Compensation Committee and the Nominating and Corporate Governance Committee, respectively; |
Non-Employee Director Compensation
| • | an additional annual cash retainer of $7,500, $6,000 and $5,000 for service as a member of the Audit Committee, Compensation Committee and the Nominating and Corporate Governance Committee, respectively (other than for as the chair for any such committee); |
Non-Employee Director Compensation
| • | an appointment option grant, upon the date a new non-employee director is first elected or appointed to our Board of Directors, to purchase the lesser of (i) shares of common stock calculated to have a Black-Scholes value of $500,000 on the date of grant, rounded to the nearest whole number; and (ii) 260,000 shares of common stock, such grant vesting in 36 equal monthly installments measured from the date the non-employee director is first elected or appointed to our Board of Directors, subject to the non-employee director’s continued service on each applicable vesting date; and |
Non-Employee Director Compensation
| • | an annual option grant, upon the date of each of our annual meeting of stockholders, to purchase the lesser of (i) shares of common stock calculated to have a Black-Scholes value of $300,000 on the date of grant, rounded to the nearest whole number; and (ii) 130,000 shares of common stock, all of which shares vest on the earlier of (a) the date of the next annual meeting (or the date immediately prior to such date if the non-employee director’s service as a director ends at such annual meeting due to the director’s failure to be re-elected or the director not standing for re-election) or (b) the first anniversary of the date of grant, in each case subject to the non-employee director’s continued service on each applicable vesting date. |
Non-Employee Director Compensation
Prior to the September 2023 amendments, the Director Compensation Policy provided that our non-employee directors receive an appointment option grant to purchase 130,000 shares of common stock and an annual option grant to purchase 65,000 shares of common stock. In June 2023, on the date of the 2023 annual meeting of stockholders, each non-employee director was granted an option to purchase 65,000 shares in accordance with the Director Compensation Policy in effect at the time. In connection with the approval of the Updated Director Compensation Policy, in September 2023, the Compensation Committee approved a supplemental option grant to each non-employee director to purchase an additional 55,000 shares of our common stock to align the 2023 total grants with the Updated Director Compensation Policy. No changes were made to the vesting schedules. Each appointment option grant and annual option grant is granted under our 2021 Equity Incentive Plan (the “2021 Plan”). In the event of our Change in Control (as defined in the 2021 Plan), each non-employee director’s then-outstanding equity awards will become fully vested immediately prior to the closing of the Change in Control, provided that he or she remains in continuous service until immediately prior to the date of such Change in Control.
Features of Our Executive Compensation Program
| What We Do | What We Do Not Do | | ☒ Independent Directors: Our Compensation Committee consists solely of independent members of our Board of Directors. ☒ Compensation Consultant: Our Compensation Committee has retained an independent third-party compensation consultant for guidance in making compensation decisions. The compensation consultant advises the Compensation Committee on market practices, including identifying a peer group of companies and their compensation practices, so that our Compensation Committee can regularly assess the Company's individual and total compensation programs against these peer companies, the general marketplace and other industry data points. ☒ Bonus Tied to Performance: Our annual performance-based incentive bonus opportunities for all of our named executive officers are dependent on our achievement of annual corporate goals established each year. ☒ Long-Term Equity: Equity awards with multi-year vesting are an integral part of our executive compensation program and comprise the primary at-risk portion of our named executive officer compensation. These awards strongly align our executive officers’ interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value of our stockholders and by encouraging our executive officers to remain in our long-term employ. Beginning in 2024, a significant portion of equity awards granted to our named executive officers and other senior executives are performance-based to further align executive interests with our stockholders and to encourage retention. ☒ Clawback Policy: We adopted a clawback policy in September 2023 for the recoupment of certain incentive compensation from our executive officers in the event of an accounting restatement. A copy of the policy was filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 28, 2024. | ☒ No Single-Trigger Acceleration: We do not provide single-trigger vesting acceleration of equity awards upon a change in control. ☒ No Guaranteed Bonuses: We do not provide guaranteed minimum bonus amounts. ☒ No Perquisites: We generally do not provide to our executive officers perquisites or personal benefits. ☒ No Hedging: We prohibit hedging and pledging of Lyell stock. ☒ No Discounted Options/SARs: We do not provide discounted stock options or stock appreciation rights. ☒ No Tax Gross-Ups: We do not provide tax gross-ups for “excess parachute payments.” ☒ No Service-Based Defined Benefit Pension Plan or Other Similar Benefits: We do not maintain a defined benefit pension plan or provide other similar benefits. |
Objectives
Objectives We have designed our executive compensation program to reward our executive officers, including our named executive officers, at a level consistent with our overall strategic performance and to provide remuneration sufficient to attract, retain and motivate them to exert their best efforts in the highly competitive environment in which we operate. We believe in providing a competitive compensation package to each of our executive officers, including our named executive officers, consisting of a combination of base salary, annual cash bonus opportunity and long-term incentive opportunities in the form of equity awards that are earned over a multi-year period. We believe the approach that has been adopted by our Compensation Committee, with an emphasis on variable cash compensation and equity awards, enables us to attract top talent, motivate successful short-term and long-term performance, satisfy our retention objectives and align the compensation of our executive officers with our performance and long-term value creation for our stockholders. In 2023, the Compensation Committee reviewed, and will continue to review, evaluate and modify, our executive compensation program to support the Company’s business strategies and align our compensation program with executive compensation best practices, market trends and the success of our business.
Elements of Executive Compensation
| Element of Compensation | Objectives | Key Features | | Base Salary (fixed cash) | Provides financial stability and security through a fixed amount of cash for performing job responsibilities. Enables us to attract and retain skilled and experienced executives and to provide a level of economic security for executives from year to year. | Generally, base salaries are reviewed annually and determined based on a number of factors (including individual performance and the overall performance of our Company) and by reference, in part, to market data provided by our independent compensation consultant. Annual base salary increases are not guaranteed. In 2023, none of our named executive officers received increases to their base salaries (except for Dr. Albertson, who received a modest adjustment). | | Performance-Based Bonus (at-risk cash) | Motivates and rewards for attaining key annual corporate performance goals that relate to our key business objectives. | Target bonus amounts are generally reviewed annually and determined based upon positions that have similar impact on the organization and competitive bonus opportunities in our market. |
Elements of Executive Compensation
| Element of Compensation | Objectives | Key Features | | | | Bonus opportunities are dependent upon achievement of specific corporate performance objectives consistent with our long-term strategic plan. Actual bonus amounts earned are determined after the end of the year, taking into account corporate performance objectives. | | Long-Term Incentive (at-risk equity) | Motivates and rewards for long-term Company performance; aligns executives’ interests with stockholder interests and changes in stockholder value. Attracts highly qualified executives and encourages their continued employment over the long-term. | Equity opportunities are generally reviewed annually and may be granted during the first half of the year and as appropriate during the year for new hires, promotions or other special circumstances, such as to encourage retention, or as a reward for significant achievement. For executives, equity opportunities have generally been in the form of stock options, which are “at risk” because the realized value is dependent on our stock price. Beginning in 2024, we started granting performance-based stock units (PSUs) to our executives, with such PSUs comprising a significant portion of each executive’s overall equity award value (100% for our chief executive officer, and 50% for the other executive officers). Individual awards are determined based on a number of factors, including current corporate and individual performance and market data provided by our independent compensation consultant. |
Elements of Executive Compensation
We focus on providing a competitive compensation package to our executive officers that provides significant short and long-term incentives for the achievement of measurable corporate objectives. We believe that this approach provides an appropriate blend of short-term and long-term incentives to maximize stockholder value.
Mix of Executive Compensation
Mix of Executive Compensation We do not have any formal policies for allocating compensation among salary, performance-based bonus awards and equity grants, short-term and long-term compensation or among cash and non-cash compensation. Instead, the Compensation Committee uses its judgment to establish a total compensation program for each named executive officer that is a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. However, historically we have structured a significant portion of the named executive officers’ total target compensation so that it is comprised of performance-based bonus opportunities and long-term equity awards, in order to align the executive officers’ incentives with the interests of our stockholders and our corporate goals.
Factors Used in Determining Executive Compensation
| • | a range of market data reference points, as described above under “Use of Competitive Market Compensation Data”; and |
2023 Executive Compensation Program
In December 2023, our Board of Directors reviewed the Company’s performance against these pre-determined objectives. After deliberation during a closed session without the presence of management, our Board of Directors determined the Company’s level of achievement against the 2023 corporate goals to be 75%. In February 2024, the Compensation Committee approved a bonus pool for our named executive officers at 75% of their targeted bonuses. The target bonus opportunity and amounts for the named executive officers, as well as the actual bonus amounts paid, are set forth below:
2023 Executive Compensation Program
| Named Executive Officer | Target Bonus Opportunity (% of Base Salary) | Target Bonus Opportunity ($) | Actual Bonus Earned ($) | | Lynn Seely, M.D. | 60% | 390,000 | 292,500 | | Charles Newton | 50% | 249,600 | 187,200 | | Stephen Hill | 55% | 277,420 | 208,065 | | Matthew Lang, J.D.(1) | 50% | 126,027 | 94,521 | | Gary Lee, Ph.D. | 50% | 240,000 | 180,000 | | Tina Albertson, M.D., Ph.D.(2) | 50% | 240,652 | — |
2023 Executive Compensation Program
| (1) Mr. Lang’s target bonus opportunity and actual bonus amount earned were both pro-rated based on the number of days he was employed by us during 2023. |
2023 Executive Compensation Program
| (2) Dr. Albertson ceased serving as our Chief Medical Officer and Head of Development on November 10, 2023 and, as such, was not eligible for any bonus payouts. |
2023 Executive Compensation Program
Equity Awards We have historically granted equity compensation to our executive officers primarily in the form of stock options, and the Compensation Committee determined that our 2023 equity grants for the named executive officers would continue to be stock options. The Compensation Committee believes that stock options are a key tool in serving to align the interests of our executive officers and our stockholders: stock options are inherently performance-based and automatically link executive pay to stockholder return, as any value realized by the executive from an award of stock options is dependent upon, and directly proportionate to, appreciation in stock price. In general, executives will only receive value from the stock option awards if the price of the stock increases above the price at time of grant and remains above as the stock options continue to vest. Stock options also do not have downside protection, and the awards will not provide value to the holder if the stock price is below the exercise price. In February 2023, the Compensation Committee approved stock option grants to Mr. Newton, Mr. Hill, Dr. Lee and Dr. Albertson as part of the Company’s 2023 equity grants, taking into consideration competitive market analysis prepared by Aon and the recommendations of Dr. Seely (in her capacity as our Chief Executive Officer) for such named executive officers other than herself, as well as the other factors described in the section above. Dr. Seely received an initial equity award in December 2022 at the commencement of her employment, so she did not receive an equity grant as part of the February 2023 process. In addition, the Compensation Committee approved an initial option grant for Mr. Lang in connection with his commencement of employment in July 2023. The stock option grants made in 2023 to the named executive officers are set forth below:
2023 Executive Compensation Program
| Named Executive Officer | Stock Option Grant (# shares) | | Lynn Seely, M.D.(1) | — | | Charles Newton(2)(3) | 700,000 | | Stephen Hill(2)(3) | 900,000 | | Matthew Lang, J.D.(3)(4) | 2,250,000 | | Gary Lee, Ph.D.(2)(3) | 600,000 | | Tina Albertson, M.D., Ph.D.(2)(5) | 700,000 |
2023 Executive Compensation Program
| (1) Dr. Seely did not receive an equity grant in 2023, given that she received a stock option grant in December 2022 in connection with her appointment as our President and Chief Executive Officer. |
2023 Executive Compensation Program
| (2) Represents the 2023 equity grant made to the applicable named executive officer. The option vests as to 12.5% of the total number of shares subject to the option six months after the vesting commencement date of February 9, 2023, and as to 1/48th of the total number of shares subject to the option each month thereafter on the same day of the month as the vesting commencement (or if there is no corresponding day, on the last day of the month), subject to the applicable named executive officer’s continued service to the Company through the applicable vesting date. |
2023 Executive Compensation Program
| (3) The option is subject to vesting acceleration, as described in more detail below under the section titled “Employment Contracts and Change in Control Arrangements.” |
2023 Executive Compensation Program
| (4) Represents the initial stock option grant to Mr. Lang in connection with his commencement of employment with us as Chief Business Officer in July 2023. The option vests as to 25% of the shares initially underlying the option on the first anniversary of the vesting commencement date of July 1, 2023, and as to 1/48th of the shares initially underlying the option each month thereafter on the same day of the month as the vesting commencement date (or if there is no corresponding day, on the last day of the month) until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. |
2023 Executive Compensation Program
The initial and all subsequent equity grants to our named executive officers are evaluated and approved by the Compensation Committee in the context of each named executive officer’s total compensation and take into account the market data provided by compensation consultants in addition to the individual officer’s responsibilities and performance. The Compensation Committee also takes into account the recommendations of the Chief Executive Officer with respect to appropriate grants and any particular individual circumstances for named executive officers other than the Chief Executive Officer. In November 2023, the Board of Directors approved, effective November 16, 2023, a one-time repricing of certain stock options that had been granted to date under the 2021 Plan and 2018 Plan. The repricing impacted stock options with exercise prices greater than $2.37, and each stock option was repriced to have a per share exercise price of $1.87 (the “Repricing”). To be eligible to exercise the option at the new exercise price, option holders must remain employed with us through November 15, 2024. Any exercise of the option prior to that date will require payment of the original, higher exercise price. Additionally, as a condition of receiving the repricing, the vesting schedule for the unvested shares underlying repriced stock options held by executives at the level of senior vice president and above, including our named executive officers, was extended for an additional year. No changes were made to the expiration dates of or number of shares underlying the repriced stock options. The incremental fair values from the Repricing to the impacted stock options for the named executive officers are included in the “Option Awards” column in the Summary Compensation Table below.
Other Features of Our Executive Compensation Program
Other Features of Our Executive Compensation Program Employment Offer Letters We maintain employee offer letters with each of our named executive officers (other than Dr. Albertson, who is no longer employed by the Company) that set forth the initial terms and conditions of their employment, including position, base salary, target bonus, signing bonus (in the case of Messrs. Newton, Hill and Lang and Dr. Lee) and eligibility for severance benefits, as described below under the section titled “Employment Contracts and Change in Control Arrangements – Offer Letters.” Severance and Change in Control Benefits Each of our named executive officers, other than Dr. Seely and Dr. Albertson, is eligible for severance benefits under our officer severance plan, which was last amended in February 2022. Dr. Seely is eligible for severance benefits under her offer letter with us. In November 2023, Dr. Albertson terminated her employment with us, in connection with which we provided her the Albertson Severance Payments pursuant to the Albertson Separation Agreement (each as defined and described below in the Summary Compensation Table). The severance arrangements with our named executive officers (other than Dr. Albertson) are described in more detail below under the “Employment Contracts and Change in Control Arrangements” section under the subsections titled “Offer Letters,” “Officer Severance Plan” and “Potential Payments and Benefits Upon Termination or Change in Control.” Sign-On Bonuses Mr. Lang received a sign-on bonus in the amount of $400,000 in connection with his commencement of employment with us in July 2023, subject to certain repayment conditions. In each of January 2023 and January 2024, Dr. Lee earned a $175,000 signing bonus, for a total of $350,000, that he received in November 2021 in connection with his commencement of employment with us, by completing two years of employment with us. These sign on bonuses are described in more detail below under the section titled “Employment Contracts and Change in Control Arrangements – Offer Letters.” Health and Welfare Benefits; Perquisites All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental and vision plans, in each case on the same basis as all of our other employees. We pay the premiums for the short- and long-term disability, life and accidental death and dismemberment insurance for all of our employees, including our named executive officers. We generally do not provide perquisites or personal benefits to our named executive officers. 401(k) Plan Our named executive officers are eligible to participate in our defined contribution retirement plan (“401(k) Plan”) that provides eligible employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may elect to defer up to 90% of their eligible compensation into the 401(k) Plan on a pretax or after tax basis, up to annual limits prescribed by the U.S. Internal Revenue Code of 1986, as amended. For 2023, we matched 50% of each participant’s deferral contributions to the 401(k) Plan, up to 6% of the participant’s eligible compensation on a per payroll period basis but not to exceed $4,750 for the plan year, and after the end of each quarter in the 401(k) Plan year, we also trued up our matching contributions such that each participant in the 401(k) Plan receives the total amount of our matching contributions that the participant would otherwise have been able to receive based on the participant’s total elective contributions and eligible compensation for the applicable plan year if our matching contributions had been determined on annual basis instead of pay period by pay period basis. Effective January 1, 2024, we match 50% of each participant’s deferral contributions to the 401(k) Plan, up to $4,750 for the plan year, and we no longer true up our matching contributions. For all plan years, our matching contributions are immediately 100% vested.
Summary Compensation Table
Summary Compensation Table The following table shows for the fiscal years ended 2023, 2022 and 2021 compensation awarded to, earned by or paid to our named executive officers.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | | Lynn Seely, M.D. President, Chief Executive Officer and Director(4) | 2023 | 650,000 | — | 1,685,250 | 292,500 | 19,726(6) | 2,647,476 | | | 2022 | 30,000 | — | 18,640,500(5) | — | 15,689 | 18,686,189 | | | 2021 | — | — | — | — | — | — | | Charles Newton Chief Financial Officer(7) | 2023 | 499,200 | 49,920 | 3,572,687 | 187,200 | 8,417(8) | 4,317,424 | | | 2022 | 496,172 | 1,000,000 | 2,159,500 | 212,160 | 7,636 | 3,875,468 | | | 2021 | 426,461 | 65,096 | 18,410,845 | 216,986 | 5,404 | 19,124,792 | | Stephen Hill Chief Operating Officer | 2023 | 504,400 | 55,484 | 2,332,161 | 208,065 | 8,018(9) | 3,108,128 | | | 2022 | 501,341 | 300,000 | 3,023,300 | 235,807 | 7,578 | 4,068,026 | | | 2021 | 457,180 | 80,025 | 1,443,807 | 266,750 | 136,356 | 2,384,118 | | Matthew Lang, J.D. Chief Business Officer(10) | 2023 | 250,000 | — | 3,662,100 | 94,521 | 1,732(11) | 4,008,353 | | | 2022 | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — | | Gary Lee, Ph.D. Chief Scientific Officer(12) | 2023 | 480,000 | 223,000 | 1,336,680 | 180,000 | 6,676(13) | 2,226,356 | | | 2022 | 443,077 | — | 3,488,560 | 187,233 | 9,602 | 4,128,472 | | | 2021 | — | — | — | — | — | — | | Tina Albertson, M.D., Ph.D. Former Chief Medical Officer and Head of Development(14)(15) | 2023 | 473,444 | 42,097 | 1,149,820 | — | 726,042(16) | 2,391,403 | | | 2022 | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — |
Summary Compensation Table
| (1) The amounts shown represent (a) discretionary bonuses earned by Mr. Newton and Mr. Hill in the years 2023 and 2021 and Drs. Lee and Albertson in 2023 as recognition for certain achievements and (b) sign-on bonuses received by (i) Mr. Newton in connection with his commencement of employment with us in 2021 in the amount of $1,000,000, which was earned in February 2022 upon his completing one year of employment with us, (ii) Mr. Hill in connection with his commencement of employment with us in 2019 in the amount of $300,000, which was earned in June 2022 upon his completing three years of employment with us, and (iii) Dr. Lee in connection with his commencement of employment with us in 2022 in the amount of $175,000, which was earned in January 2023 upon his completing one year of employment with us, each of the foregoing as further described in detail below under the section titled “Employment Contracts and Change in Control Arrangements – Offer Letters.” |
Summary Compensation Table
| (2) Except as otherwise noted below, the amounts shown represent the sum of (a) the grant date fair values of option awards granted in 2023, 2022 and 2021, as computed in accordance with FASB ASC Topic 718 and (b) for 2023, the incremental fair values to the option awards resulting from the Repricing. See Note 12, Stock-Based Compensation, to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the assumptions used in the calculation. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by the named executive officers. |
Summary Compensation Table
| (3) The amounts shown represent the annual performance-based cash bonus earned by our named executive officers based on the achievement of certain corporate performance objectives during 2023, 2022 and 2021. For more information about the 2023 annual incentive bonus program, see the subsection above titled “2023 Executive Compensation Program — Annual Performance Bonus – Non-Equity Incentive Plan Compensation” under “Compensation Discussion and Analysis.” These amounts were paid in early 2024, 2023 and 2022, respectively. |
Summary Compensation Table
| (4) Dr. Seely transitioned from a non-employee director of the Company to its President and Chief Executive Officer in December 2022, and her 2022 salary amount was pro-rated for the period of time she was employed in 2022. She does not have compensation for employment with the Company for the year 2021. The amounts shown also exclude any compensation Dr. Seely received in connection her service as a member of our Board of Directors. |
Summary Compensation Table
| (5) Excludes an option grant of 65,000 shares Dr. Seely received in June 2022 in connection with her service as a non-employee member of our Board of Directors. |
Summary Compensation Table
| (6) For Dr. Seely, the amount shown represents $8,474 of life insurance premiums paid by us on her behalf, including $2,930 for associated taxes, $4,750 in 401(k) matching contributions and $6,502 for taxes paid on her behalf for the reimbursement for legal fees incurred in 2022 in connection with the negotiation of her offer of employment letter. |
Summary Compensation Table
| (7) Mr. Newton joined the Company in February 2021, and his 2021 salary amount was pro-rated for the period of time he was employed in 2021. |
Summary Compensation Table
| (8) For Mr. Newton, the amount shown represents $2,953 of life insurance premiums paid by us on his behalf, including $1,021 for associated taxes, $714 of imputed income on long-term care insurance and $4,750 in 401(k) matching contributions. |
Summary Compensation Table
| (9) For Mr. Hill, the amount shown represents $2,554 of life insurance premiums paid by us on his behalf, including $622 for associated taxes, $714 of imputed income on long term care insurance and $4,750 in 401(k) matching contributions. |
Summary Compensation Table
| (10) Mr. Lang joined the Company in July 2023 and his 2023 salary amount was pro-rated for the period of time he was employed in 2023. He does not have compensation from the Company for the years 2022 and 2021. |
Summary Compensation Table
| (11) For Mr. Lang, the amount shown represents $963 of life insurance premiums paid by us on his behalf, including $333 for associated taxes, and $769 in 401(k) matching contributions. |
Summary Compensation Table
| (12) Dr. Lee joined the Company in January 2022, and his 2022 salary amount was pro-rated for the period of time he was employed in 2022. He does not have compensation from the Company for the year 2021. |
Summary Compensation Table
| (13) For Dr. Lee, the amount shown represents $1,926 of life insurance premiums paid by us on his behalf, including $666 for associated taxes, and $4,750 in 401(k) matching contributions. |
Summary Compensation Table
| (14) On November 10, 2023, Dr. Albertson terminated her employment and ceased serving as our Chief Medical Officer and Head of Development. Her 2023 salary amount reflects compensation for the period of time she was employed in 2023. In connection with her voluntary termination of employment, Dr. Albertson entered into a Release and Separation Agreement with the Company, effective November 18, 2023 (the “Albertson Separation Agreement”), pursuant to which she became entitled to receive, as part of her severance benefits (i) $481,304, equal to twelve (12) months of her 2023 annual base salary, (ii) $207,027, equal to her 2023 target bonus amount, pro-rated for the percentage of the year in which she was employed by the Company and (iii) $29,761, equal to the estimated amount of the portion of the premiums to be paid by the Company for twelve (12) months of continuation of healthcare coverage under COBRA for her and her dependents, each paid or that may become payable at the time(s) specified in the Albertson Separation Agreement (collectively, the “Albertson Severance Payments”). As a condition to receiving the Albertson Severance Payments, Dr. Albertson was required to timely sign and not revoke the Albertson Separation Agreement. |
Summary Compensation Table
| (15) Dr. Albertson was not a “named executive officer” of the Company for any portion of 2021 and 2022, and as such, we are not including her compensation for the years 2021 and 2022 in the Summary Compensation Table. |
Summary Compensation Table
| (16) For Dr. Albertson, the amount shown represents the Albertson Severance Payments, $2,657 of life insurance premiums paid by us on her behalf, including $886 for associated taxes, $543 of imputed income on long term care insurance and $4,750 in 401(k) matching contributions. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table shows for the fiscal year ended December 31, 2023, certain information regarding grants of plan-based awards to the named executive officers:
Grants of Plan-Based Awards
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Share) | Grant Date Fair Value of Stock and Option Awards ($)(2) | | | | Threshold ($) | Target ($) | Maximum ($) | | | | | Lynn Seely, M.D. | | | 390,000 | | | | | | | | | | | 7,500,000(3) | 1.87(4) | 1,685,250(3) | | Charles Newton | | | 249,600 | | | | | | | 2/24/2023 | | | | 700,000 | 2.13 | 1,149,820 | | | | | | | 4,818,000(3) | 1.87(4) | 2,422,867(3) | | Stephen Hill | | | 277,420 | | | | | | | 2/24/2023 | | | | 900,000 | 2.13 | 1,478,340 | | | | | | | 2,000,000(3) | 1.87(4) | 853,821(3) | | Matthew Lang, J.D.(5) | | | 126,027 | | | | | | | 8/10/2023 | | | | 2,250,000 | 2.31 | 3,662,100 | | Gary Lee, Ph.D. | | | 240,000 | | | | | | | 2/24/2023 | | | | 600,000 | 2.13 | 985,560 | | | | | | | 800,000(3) | 1.87(4) | 351,120(3) | | Tina Albertson, M.D., Ph.D.(6) | | | 240,652 | | | | | | | 2/24/2023 | | | | 700,000 | 2.13 | 1,149,820 |
Grants of Plan-Based Awards
| (1) There are no thresholds or maximum levels for these awards, which are the cash awards each applicable named executive officer was eligible to receive under our 2023 annual incentive bonus program. The amounts actually earned by each named executive officer are included in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table. For more information about the 2023 annual incentive bonus program, see the subsection above titled “2023 Executive Compensation Program — Annual Performance Bonus – Non-Equity Incentive Plan Compensation” under “Compensation Discussion and Analysis.” |
Grants of Plan-Based Awards
| (2) Except as otherwise noted below, the amounts shown represent the grant date fair values of option awards granted in 2023, as computed in accordance with FASB ASC Topic 718. See Note 12, Stock-Based Compensation, to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the assumptions used in the calculation. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by the named executive officers. |
Grants of Plan-Based Awards
| (3) The number of option awards and related grant date fair value represent the awards that were modified to account for the incremental fair value from the Repricing. For Dr. Seely, the Repricing excluded the stock options granted to her in May 2021 and June 2022 in connection with her service as a member of our Board of Directors. See Note 12, Stock-Based Compensation, to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the assumptions used in the calculation. These amounts do not necessarily correspond to the actual value recognized or that may be recognized by the named executive officers. |
Grants of Plan-Based Awards
| (4) Pursuant to the Repricing, the exercise price of the repriced options has been modified to be $1.87 per share, the closing price of our common stock on the repricing date, November 16, 2023. However, if an employee exercises a repriced option before the end of a retention period of one year (subject to earlier termination in certain circumstances), such employee will be required to pay the original exercise price per share of such repriced option. In addition, the vesting schedule for the unvested shares underlying repriced options held by the named executive officers was extended for an additional year. There is no change to the expiration dates of or number of shares underlying the repriced options. |
Grants of Plan-Based Awards
| (5) Mr. Lang’s target bonus amount was pro-rated based on the number of days he was employed by us during 2023. |
Grants of Plan-Based Awards
| (6) Dr. Albertson ceased serving as our Chief Medical Officer and Head of Development on November 10, 2023 and, as such, all of her options have since expired following the three-month post-termination exercise period. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table presents the outstanding equity awards held by each named executive officer as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year End
| | Option Awards(1) | | | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price Per Share ($) | Vesting Commencement Date | Option Expiration Date | | Lynn Seely, M.D.(2) | 5/20/2021 | 400,000(3) | —(4) | 14.40 | 5/20/2021(5) | 5/19/2031 | | | 6/8/2022 | 65,000 | — | 5.31 | 6/8/2022(6) | 6/7/2032 | | | 12/15/2022 | 1,500,000 | 6,000,000 | 3.28(7) | 12/15/2022(7)(8) | 12/14/2032 | | Charles Newton | 2/5/2021 | 2,657,879 | 1,144,121 | 6.24(7) | 2/5/2021(7)(8) | 2/4/2031 | | | 2/5/2021 | 318,338 | 197,662 | 6.24(7) | 6/16/2021(7)(9) | 2/4/2031 | | | 3/16/2022 | 225,961 | 274,039 | 5.98(7) | 2/9/2022(7)(10) | 3/15/2032 | | | 2/24/2023 | 145,833 | 554,167 | 2.13 | 2/9/2023(11) | 2/23/2033 | | Stephen Hill | 7/10/2019 | 500,000 | — | 3.65(7) | 6/19/2019(7)(8) | 7/9/2029 | | | 1/16/2020 | 155,375 | 9,625 | 3.65(7) | 2/1/2020(7)(12) | 1/15/2030 | | | 11/17/2020 | 333,000 | 117,000 | 5.96(7) | 12/1/2020(7)(12) | 11/16/2030 | | | 2/12/2021 | 67,857 | 32,143 | 6.24(7) | 3/1/2021(7)(12) | 2/11/2031 | | | 4/14/2021 | 55,934 | 29,066 | 12.67(7) | 4/14/2021(7)(12) | 4/13/2031 | | | 3/16/2022 | 316,346 | 383,654 | 5.98(7) | 2/9/2022(7)(10) | 3/15/2032 | | | 2/24/2023 | 187,500 | 712,500 | 2.13 | 2/9/2023(11) | 2/23/2033 | | Matthew Lang, J.D. | 8/10/2023 | — | 2,250,000 | 2.31 | 7/1/2023(13) | 8/9/2033 | | Gary Lee, Ph.D. | 2/11/2022 | 373,076 | 426,924 | 6.04(7) | 1/31/2022(7)(8) | 2/10/2032 | | | 2/24/2023 | 125,000 | 475,000 | 2.13 | 2/9/2023(11) | 2/23/2033 | | Tina Albertson, M.D., Ph.D.(14) | 8/10/2020 | 416,667 | — | 5.81 | 7/1/2020(13) | 2/10/2024 | | | 11/17/2020 | 291,667 | — | 5.96 | 12/1/2020(15) | 2/10/2024 | | | 3/16/2022 | 262,500 | — | 5.98 | 2/9/2022(11) | 2/10/2024 | | | 2/24/2023 | 131,250 | — | 2.13 | 2/9/2023(11) | 2/10/2024 |
Outstanding Equity Awards at Fiscal Year End
| (1) All of the option awards with grant dates prior to June 16, 2021 were granted under the 2018 Plan. Option awards with grant dates on or after June 16, 2021 were granted under the 2021 Plan. |
Outstanding Equity Awards at Fiscal Year End
| (2) The option awards granted to Dr. Seely on May 20, 2021 and June 8, 2022 were in connection with her service as a member of our Board of Directors. The option award granted on December 15, 2022 was in connection with her commencement of employment with us as our President and Chief Executive Officer. |
Outstanding Equity Awards at Fiscal Year End
| (3) The option is early-exercisable, meaning that it can be exercised before it vests for shares of our common stock, subject to a repurchase right in favor of the Company that lapses in accordance with the same vesting provisions as the underlying options. Accordingly, the number of shares shown for the option in this column represents the number of shares that are early exercisable, regardless of vesting status. |
Outstanding Equity Awards at Fiscal Year End
| (4) The option is early-exercisable, meaning that it can be exercised before it vests for shares of our common stock, subject to a repurchase right in favor of the Company that lapses in accordance with the same vesting provisions as the underlying options. Accordingly, there are no shares shown for the option in this column as all shares underlying the options are early-exercisable, regardless of vesting status. |
Outstanding Equity Awards at Fiscal Year End
| (5) The option vests as to 1/36th of the shares initially underlying the option each month until fully vested on the third anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year End
| (6) The option fully vests as to 100% of the shares initially underlying the option on the first anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year End
| (7) Pursuant to the Repricing, the exercise price of the repriced options has been modified to be $1.87 per share, the closing price of our common stock on the repricing date, November 16, 2023. However, if an employee exercises a repriced option before the end of a retention period of one year (subject to earlier termination in certain circumstances), such employee will be required to pay the original exercise price per share of such repriced option. All vested shares as of the repricing date remain vested. Pursuant to the Repricing, the vesting schedules for the unvested shares underlying repriced options held by the named executive officers on the repricing date were extended for an additional year, and all unvested shares as of the repricing date will vest in equal monthly installments over the updated vesting schedule. There is no change to the expiration dates of or number of shares underlying the repriced options. |
Outstanding Equity Awards at Fiscal Year End
| (8) Under the original vesting schedule in effect prior to the Repricing, the options vest as to 25% of the shares initially underlying the option on the first anniversary of the vesting commencement date and as to 1/48th of the shares initially underlying the option each month until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. The original vesting schedule has since been modified pursuant to the Repricing, as described under footnote 7 above. |
Outstanding Equity Awards at Fiscal Year End
| (9) Under the original vesting schedule in effect prior to the Repricing, the option commenced vesting upon the consummation of the initial public offering of our common stock, then vests as to 1/48th of the shares initially underlying the option each month until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. The original vesting schedule has since been modified pursuant to the Repricing, as described under footnote 7 above. |
Outstanding Equity Awards at Fiscal Year End
| (10) Under the original vesting schedule in effect prior to the Repricing, the option vests as to 12.5% of the shares initially underlying the option on the date that is six (6) months after the vesting commencement date and as to 1/48th of the shares initially underlying the option each month thereafter until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. The original vesting schedule has since been modified pursuant to the Repricing, as described under footnote 7 above. |
Outstanding Equity Awards at Fiscal Year End
| (11) The option vests as to 12.5% of the shares initially underlying the option on the date that is six (6) months after the vesting commencement date and as to 1/48th of the shares initially underlying the option each month thereafter until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year End
| (12) Under the original vesting schedule in effect prior to the Repricing, the option vests as to 1/48th of the shares initially underlying the option each month until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. The original vesting schedule has since been modified pursuant to the Repricing, as described under footnote 7 above. |
Outstanding Equity Awards at Fiscal Year End
| (13) The option vests as to 25% of the shares initially underlying the option on the first anniversary of the vesting commencement date and as to 1/48th of the shares initially underlying the option each month until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year End
| (14) Dr. Albertson ceased serving as our Chief Medical Officer and Head of Development on November 10, 2023 and, as such, all of her options have since expired following the three-month post-termination exercise period. |
Outstanding Equity Awards at Fiscal Year End
| (15) The option vests as to 1/48th of the shares initially underlying the option each month until fully vested on the fourth anniversary of the vesting commencement date, subject to continued service to us through the applicable vesting date. |
Outstanding Equity Awards at Fiscal Year End
Each of the options included in the table above for the named executive officers is eligible for vesting acceleration as described below under the subsection titled “Employment Contracts and Change in Control Arrangements.”
Option Exercises and Stock Vested
Option Exercises and Stock Vested For the fiscal year ended December 31, 2023, none of the named executive officers exercised any option awards nor acquired any shares of common stock upon the vesting of stock awards.
Pension Benefits
Pension Benefits We do not have a defined benefit plan. Our named executive officers did not participate in, or otherwise receive, any special benefits under, any pension or defined benefit retirement plan sponsored by us during 2023.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Our named executive officers did not participate in, or earn any benefits under, a non-qualified deferred compensation plan sponsored by us during the fiscal year ended December 31, 2023.
Offer Letters
Offer Letters Lynn Seely, M.D. In December 2022, we and Dr. Seely entered into an offer of employment letter that governs the current terms of her employment with us as our President and Chief Executive Officer. The offer of employment letter provides that Dr. Seely’s initial annual base salary is $650,000. Dr. Seely is eligible to earn an annual incentive bonus of up to 60% of her base salary, based on the achievement of performance objectives to be determined by our Board of Directors. In addition, the offer of employment letter provides that we will reimburse Dr. Seely up to $25,000 for her reasonable attorney’s fees incurred in connection the review and negotiation of her offer of employment letter. We reimbursed Dr. Seely $12,300 of her legal fees incurred in 2022. Dr. Seely’s offer of employment letter provides for severance benefits upon certain qualifying terminations of her employment. In the event of a termination of her employment by us without Cause (as defined below) or her resignation for Good Reason (as defined below), Dr. Seely will be eligible to receive (i) a lump-sum severance payment equal to the sum of (a) 18 months of her then-current base salary and (b) 1.5 times her annual incentive bonus at the target level for the year in which termination occurs, (ii) up to 18 months of payments of COBRA premiums for Dr. Seely and her eligible dependents or, at our discretion, a monthly cash payment equal to the monthly premium cost for such benefits and (iii) an additional 18 months of vesting credit for any then outstanding equity awards and the post-termination exercise period of her then outstanding vested stock options shall be exercisable until the earliest of the 12 month anniversary of her termination of employment, the expiration date of any such options’ term or a Change in Control. In addition, if either (a) in a Change in Control her then outstanding equity awards are not assumed, substituted or replaced with awards of similar or equal value or (b) her employment is terminated by the Company without Cause or by her for Good Reason during the period beginning on the date that is 3 months prior to the effective date of a Change in Control and ending on the date that is 24 months following the effective date of such Change in Control, then 100% of any then outstanding equity awards shall become fully vested. These severance benefits are conditioned upon Dr. Seely timely executing and not revoking a general release and waiver of all claims against us. For the purposes of Dr. Seely’s offer of employment letter, the following definitions of “Cause” and “Good Reason,” as set forth in the letter, apply: “Cause” means (a) Dr. Seely is indicted for, convicted of or plead guilty or nolo contendere to a felony or crime involving moral turpitude; (b) Dr. Seely engages in conduct that constitutes willful gross negligence or willful misconduct in carrying out her duties; (c) Dr. Seely breaches any covenant or any material provision of any agreement with the Company, including, among other things, a willful and material breach of written Company policy; (d) Dr. Seely materially violates a federal law or state law that the Board of Directors reasonably determines has had, or is reasonably likely to have, a material detrimental effect on the Company’s reputation or business; or (e) Dr. Seely commits an act of fraud or dishonesty in the performance of her job duties; except in the case of (b) or (c) above, if any such conduct or breach is curable and Dr. Seely fails to cure such conduct or breach to the reasonable satisfaction of the Board of Directors within 15 days following the date the Company delivers written notice of such conduct or breach to her. “Good Reason” means that Dr. Seely, without her express, written consent, (a) has incurred a material reduction in authority, title, duties or responsibilities at the Company or a successor employer (with respect to a termination in connection with a Change in Control, relative to the her authority, title, duties or responsibilities immediately prior to the Change in Control); (b) has suffered a material breach of her offer of employment letter or any other material agreement by the Company or a successor employer; (c) has been required to relocate or travel more than 35 miles from her then current place of employment in order to continue to perform the duties and responsibilities of her position (not including customary travel as may be required by the nature of her position); or (d) has been directed by the Board of Directors to knowingly and intentionally violate any material state, federal or foreign law, rule or regulation applicable to the Company. Termination of employment by Dr. Seely will not be for Good Reason unless (1) she notifies the Company in writing within 30 days of the initial existence of such condition (which notice specifically identifies such condition), (2) the Company fails to remedy such condition within 30 days after the date on which it receives such notice (the “Remedial Period”) and (3) she actually terminates employment immediately after the expiration of the Remedial Period and before the Company remedies such condition. If she terminates employment before the expiration of the Remedial Period or after the Company remedies the condition (even if after the end of the Remedial Period), then the termination will not be considered to be for Good Reason. Charles Newton In February 2021, we and Mr. Newton entered into an offer of employment letter that governs the current terms of his employment with us as our Chief Financial Officer. The offer of employment letter provides that Mr. Newton’s initial annual base salary was $480,000. Mr. Newton’s annual base salary was increased to $499,200, effective March 1, 2022. Pursuant to the terms of the offer of employment letter, Mr. Newton received an advance signing bonus of $1,000,000, all of which was considered earned in February 2022 upon his completion of one year of employment with us. Mr. Newton is also eligible to earn an annual incentive bonus of up to 50% of his base salary, based on the achievement of performance objectives to be determined by our Board of Directors. Mr. Newton is eligible for severance benefits in the event of certain qualifying terminations of his employment under the Amended Severance Plan (as defined below), as further described below under the subsection titled “Officer Severance Plan.” Stephen Hill In May 2019, we and Mr. Hill entered into an offer of employment letter governing the terms of his employment as our Chief Technical Operations Officer. The offer of employment letter provides that Mr. Hill’s initial annual base salary was $425,000. Mr. Hill’s annual base salary was increased to $455,271 and $504,400, effective March 1, 2021 and March 1, 2022, respectively. Pursuant to his offer of employment letter, Mr. Hill is eligible to earn an annual incentive bonus of up to 50% of his base salary, based on the achievement of performance objectives to be determined by our Board of Directors, which was subsequently increased to up to 55% of his base salary in connection with his promotion to Chief Operating Officer in November 2021. In 2019, Mr. Hill received an advance signing bonus of $300,000, all of which was considered earned in May 2022 upon his completion of three years of employment with us, and in 2019 and 2022, he received relocation reimbursements totaling $132,188, all of which was considered earned in May 2021 upon his completion of two years of employment with us.
Offer Letters
In April 2022, Mr. Hill entered into an agreement with us pursuant to which he waived his right to receive severance benefits provided for in his offer of employment letter upon certain qualifying terminations of his employment in order to participate in our Amended Severance Plan (as defined below) and is eligible thereunder for severance benefits upon certain qualifying terminations of his employment, as further described below under the subsection titled “Officer Severance Plan.” Matthew Lang, J.D. In May 2023, we and Mr. Lang entered into an offer of employment letter governing the terms of his employment as our Chief Business Officer. The offer of employment letter provides that Mr. Lang’s initial annual base salary is $500,000. Pursuant to the terms of his offer of employment letter, Mr. Lang received an advance signing bonus of $400,000, which will be earned in July 2024 upon his completion of one year of employment with us. Mr. Lang must repay the unearned portion of his signing bonus to us if he resigns his employment (except for Good Reason) or we terminate his employment without Cause before the signing bonus is earned. Mr. Lang is eligible to earn an annual incentive bonus of up to 50% of his base salary, based on the achievement of performance objectives to be determined by our Board of Directors. The offer of employment letter provides that Mr. Lang’s annual incentive bonus for 2023 was to be prorated based upon his salary and target bonus level provided for in the offer of employment letter and the length of his employment from July 1, 2023 through the end of the 2023 fiscal year. Mr. Lang is eligible to participate in our Amended Severance Plan and is eligible thereunder for severance benefits upon certain qualifying terminations of his employment, as further described below under the subsection titled “Officer Severance Plan.” Notwithstanding his participation in the Amended Severance Plan, the terms and definitions in Mr. Lang’s offer of employment letter related to severance and/or accelerated vesting benefits supersede (without duplication) the corresponding terms and definitions provided in the Amended Severance Plan. Mr. Lang’s offer of employment letter provides for severance benefits upon certain qualifying terminations of his employment. In the event his employment is terminated by the Company without Cause or by him for Good Reason (each as defined below), (i) the Company will pay him a lump-sum payment equal to the sum of (a) twelve (12) months of his base salary and (b) one (1) times his annual bonus paid at target level (the “Lang Cash Severance Payments”); and (ii) he will receive an additional twelve (12) months of vesting credit for any then outstanding equity awards and the post-termination exercise period of his then outstanding vested stock options shall end on the earliest of the twelve (12) month anniversary of his termination of employment, the expiration date of any such option’s term or a Change in Control (as defined in the Amended Severance Plan). In addition, provided that he is eligible for and timely elects group health plan continuation coverage under COBRA, the Company will pay the premiums for him and his dependents to continue group medical, vision and dental coverage under COBRA directly to the insurer or COBRA administrator, as applicable, consistent with terms set forth in the Amended Severance Plan. In addition, if either (a) in a Change in Control his then outstanding equity awards are not assumed, substituted or replaced with awards of similar or equal value or (b) his employment is terminated by the Company without Cause or by him for Good Reason during the period beginning on the date that is three (3) months prior to the effective date of a Change in Control and ending on the date that is twenty-four (24) months following the effective date of such Change in Control, then 100% of any then outstanding equity awards shall become fully vested. In order to receive the Lang Cash Severance Benefits or the equity acceleration described above, Mr. Lang must first execute a release in favor of the Company in substantially the same form as set forth in the Amended Severance Plan, and the Release must become effective and irrevocable within sixty (60) days following his termination date. For the purposes of Mr. Lang’s offer of employment letter, the following definitions of “Cause” and “Good Reason,” as set forth in the letter, apply: “Cause” means (a) he is indicted for, convicted of, or plead guilty or nolo contendre to a felony or crime involving moral turpitude; (b) he engages in conduct that constitutes willful gross negligence or willful misconduct in carrying out his duties; (c) he breaches any covenant or any material provision of any agreement with the Company, including, among other things, a willful and material breach of written Company policy; (d) he materially violates a federal law or state law that the Board reasonably determines has had, or is reasonably likely to have, a material detrimental effect on the Company’s reputation or business; or (e) he commits an act of fraud or dishonesty in the performance of his job duties; provided, however, in the case of (b) or (c) above, if any such conduct or breach is curable, he fails to cure such conduct or breach to the reasonable satisfaction of the Board within fifteen (15) days following the date the Company delivers written notice of such conduct or breach to him. “Good Reason” means that without his express, written consent, (a) he has incurred a material reduction in authority, duties or responsibilities at the Company or a successor employer (with respect to a termination in connection with a Change in Control, relative to the his authority, title, duties or responsibilities immediately prior to the Change in Control); (b) he has suffered a material breach of his offer of employment letter or any other material agreement by the Company or a successor employer; (c) he has been required to relocate or travel more than thirty-five (35) miles from his then current place of employment in order to continue to perform the duties and responsibilities of his position (not including customary travel as may be required by the nature of his position); or (d) he has been directed by the Board of Directors to knowingly and intentionally violate any material state, federal or foreign law, rule or regulation applicable to the Company. Termination of employment by him will not be for Good Reason unless (1) he notifies the Company in writing within thirty (30) days of the initial existence of such condition (which notice specifically identifies such condition), (2) the Company fails to remedy such condition within thirty (30) days after the date on which it receives such notice (the “Remedial Period”), and (3) he actually terminates employment immediately after the expiration of the Remedial Period and before the Company remedies such condition. If he terminates employment before the expiration of the Remedial Period or after the Company remedies the condition (even if after the end of the Remedial Period), then the termination will not be considered to be for Good Reason. Gary Lee, Ph.D. In November 2021, we and Dr. Lee entered into an offer of employment letter governing the terms of his employment as our Chief Scientific Officer. The offer of employment letter provides that Dr. Lee’s initial annual base salary is $480,000. Pursuant to the terms of his offer of employment letter, Dr. Lee received an advance signing bonus of $350,000, all of which was considered earned in January 2024 upon his completion of two years of employment with us. Dr. Lee is eligible to earn an annual incentive bonus of up to 50% of his base salary, based on the achievement of performance objectives to be determined by our Board of Directors.
Offer Letters
Dr. Lee is eligible to participate in our Amended Severance Plan and is eligible thereunder for severance benefits upon certain qualifying terminations of his employment, as further described below under the subsection titled “Officer Severance Plan.”
Potential Payments and Benefits Upon Termination or Change in Control
Potential Payments and Benefits Upon Termination or Change in Control The offer of employment letter we have entered into with Dr. Seely provides for severance and/or change in control benefits as described above under “Employment Contracts and Change in Control Arrangements – Offer Letters – Lynn Seely, M.D.” Mr. Newton, Mr. Hill, Mr. Lang and Dr. Lee are eligible for severance benefits under the Amended Severance Plan, as described above under the section titled “Employment Contracts and Change in Control Arrangements – Officer Severance Plan.” In November 2023, Dr. Albertson voluntarily terminated her employment with us, in connection with which we provided her the Albertson Severance Payments pursuant to the Albertson Separation Agreement (each as defined above in the Summary Compensation Table). The amount of compensation and benefits payable to each named executive officer (except for Dr. Albertson, whose severance benefits are described above) in various termination and change in control situations has been estimated in the table below. The value of the option vesting accelerations was calculated for the table below on the assumption that the change in control and executive’s employment termination occurred on December 31, 2023. The closing price of our common stock on December 29, 2023 (the trading day immediately preceding December 31, 2023, which was not a trading day) was $1.94 and was used as the value of our common stock in the change in control calculations. The value of the option vesting acceleration was calculated by multiplying the number of unvested option shares subject to vesting acceleration as of December 31, 2023 by the difference between the closing price of our common stock as of December 29, 2023 and the applicable exercise price. No value is attributed to unvested options subject to acceleration that have exercise prices above the closing market price of our common stock on December 29, 2023.
Potential Payments and Benefits Upon Termination or Change in Control
| Name | Benefit | Involuntary Termination Without Cause or Resignation for Good Reason Outside of Change in Control Period ($) | Involuntary Termination Without Cause or Resignation for Good Reason Within Change in Control Period ($) | | Lynn Seely, M.D. | Cash Severance | 1,560,000 | 1,560,000 | | | COBRA Payments | 74,795 | 74,795 | | | Vesting Acceleration(1) | — | — | | | Total | 1,634,795 | 1,634,795 | | Charles Newton | Cash Severance | 748,800 | 748,800 | | | COBRA Payments | 42,384 | 42,384 | | | Vesting Acceleration(1) | — | — | | | Total | 791,184 | 791,184 | | Stephen Hill | Cash Severance | 781,820 | 781,820 | | | COBRA Payments | 29,800 | 29,800 | | | Vesting Acceleration(1) | — | — | | | Total | 811,620 | 811,620 | | Matthew Lang, J.D.(2) | Cash Severance | 750,000 | 750,000 | | | COBRA Payments | — | — | | | Vesting Acceleration(1) | — | — | | | Total | 750,000 | 750,000 | | Gary Lee, Ph.D.(3) | Cash Severance | 720,000 | 720,000 | | | COBRA Payments | 14,457 | 14,457 | | | Vesting Acceleration(1) | — | — | | | Total | 734,457 | 734,457 |
Potential Payments and Benefits Upon Termination or Change in Control
| (1) The exercise prices of the options held by our named executive officers subject to the Repricing (the “Officer Repriced Options”) were modified to be $1.87 per share. However, to receive the new exercise price, option holders must remain employed with us through November 15, 2024. The original exercise prices of the Officer Repriced Options, as well as the exercise prices of the options held by our named executive officers that were not subject to the Repricing, were above the closing market price of our common stock on December 29, 2023. As a result, no value has been attributed to the vesting acceleration of any of the options held by our named executive officers. |
Potential Payments and Benefits Upon Termination or Change in Control
| (2) Pursuant to our offer of employment letter with Mr. Lang (the “Lang Offer Letter”), in the event Mr. Lang’s resigns his employment (except for Good Reason) or the Company terminates his employment without Cause (as such terms are defined in Lang Offer Letter), Mr. Lang agrees to repay, within thirty (30) days of his last day of employment, the unearned portion of his sign-on bonus of $400,000. |
Potential Payments and Benefits Upon Termination or Change in Control
| (3) Pursuant to our offer of employment letter with Dr. Lee, in the event Dr. Lee’s employment terminates for Good Reason or he is terminated without Cause, the entire sign-on bonus of $350,000 will be considered earned and will not need to be repaid. Dr. Lee’s entire sign-on bonus was fully earned as of January 2024. |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to our named executive officers (“NEOs”), including our current and former principal executive officer (“PEOs”) and certain financial performance of the Company. For further information concerning the Company’s compensation philosophy and how the Company seeks to align executive compensation with the Company’s performance, refer to “Executive Compensation—Compensation Discussion and Analysis.” As we completed our initial public offering in June 2021, we are providing information relating only to fiscal years 2021, 2022 and 2023.
PAY VERSUS PERFORMANCE
| Year (a) | Summary Compensation Table Total for First PEO(1) ($) (b) | Summary Compensation Table Total for Second PEO(1) ($) | Compensation Actually Paid to First PEO(2) ($) (c) | Compensation Actually Paid to Second PEO(2) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(3) ($) (d) | Average Compensation Actually Paid to Non-PEO NEOs(4) ($) (e) | Value of Initial Fixed $100 Investment Based On: | | Net Income (thousands) (7) ($) (h) | Company- Selected Measure (i) | | | | | | | | | Total Shareholder Return(5) ($) (f) | Peer Group Total Shareholder Return(6) ($) (g) | | | | 2023 | — | 2,647,476 | — | (7,936,183) | 3,210,333 | 1,129,554 | 11.49 | 89.20 | (234,632) | (8) | | 2022 | 12,119,604 | 18,686,189 | (7,436,043) | 18,503,089 | 3,999,156 | (278,006) | 20.54 | 85.29 | (183,118) | (8) | | 2021 | 18,643,569 | — | 23,660,025 | — | 18,291,846 | 17,482,540 | 45.83 | 94.89 | (250,219) | (8) |
PAY VERSUS PERFORMANCE
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for (i) with respect to 2023, Lynn Seely, M.D. (our Chief Executive Officer for that entire year); (ii) with respect to 2022, Elizabeth Homans (our Chief Executive Officer until December 15, 2022) as our “First PEO” and Dr. Seely (our Chief Executive Officer commencing December 15, 2022) as our “Second PEO”; and (iii) with respect to 2021, Elizabeth Homans (our Chief Executive Officer for that entire year), in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.” |
PAY VERSUS PERFORMANCE
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to (i) with respect to 2023, Dr. Seely; (ii) with respect to 2022, Ms. Homans and Dr. Seely; and (iii) with respect to 2021, Ms. Homans, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Ms. Homans and Dr. Seely during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Ms. Homans’ and Dr. Seely’s total compensation for each year to determine the compensation actually paid: |
PAY VERSUS PERFORMANCE
| Year | Reported Summary Compensation Table Total for First PEO ($) | Reported Value of Equity Awards for First PEO(a) ($) | Equity Award Adjustments for First PEO(b) ($) | Compensation Actually Paid to First PEO ($) | | 2023 | — | — | — | — | | 2022 | 12,119,604 | 10,130,622 | (9,425,025) | (7,436,043) | | 2021 | 18,643,569 | 17,654,715 | 22,671,171 | 23,660,025 |
PAY VERSUS PERFORMANCE
| Year | Reported Summary Compensation Table Total for Second PEO ($) | Reported Value of Equity Awards for Second PEO(a) ($) | Equity Award Adjustments for Second PEO(b) ($) | Compensation Actually Paid to Second PEO ($) | | 2023 | 2,647,476 | 1,685,250 | (8,898,409) | (7,936,183) | | 2022 | 18,686,189 | 18,640,500 | 18,457,400 | 18,503,089 | | 2021 | — | — | — | — |
PAY VERSUS PERFORMANCE
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
PAY VERSUS PERFORMANCE
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
PAY VERSUS PERFORMANCE
| Year | Year End Fair Value of Equity Awards for First PEO ($) | Change in Fair Value of Outstanding and Unvested Equity Awards for First PEO ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year for First PEO ($) | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year for First PEO ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year for First PEO ($) | Total Equity Award Adjustments for First PEO ($) | | 2023 | — | — | — | — | — | — | | 2022 | 1,968,553 | (9,371,423) | 1,472,587 | (3,494,742) | — | (9,425,025) | | 2021 | 6,648,436 | 3,642,284 | 1,846,719 | 10,533,733 | — | 22,671,171 |
PAY VERSUS PERFORMANCE
| Year | Year End Fair Value of Equity Awards for Second PEO ($) | Change in Fair Value of Outstanding and Unvested Equity Awards for Second PEO ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year for Second PEO ($) | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year for Second PEO ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year for Second PEO ($) | Total Equity Award Adjustments for Second PEO ($) | | 2023 | — | (7,001,445) | — | (1,896,964) | — | (8,898,409) | | 2022 | 19,133,906 | (503,729) | — | (172,776) | — | 18,457,400 | | 2021 | — | — | — | — | — | — |
PAY VERSUS PERFORMANCE
| (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group (excluding our current and former PEO) in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs (excluding our current and former PEO) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Charles Newton, Stephen Hill, Matthew Lang, J.D., Gary Lee, Ph.D. and Tina Albertson, M.D., Ph.D.; (ii) for 2022, Charles Newton, Stephen Hill, Gary Lee, Ph.D. and Rahsaan W. Thompson; and (ii) for 2021, Richard Klausner, M.D., Charles Newton and Stephen Hill. |
PAY VERSUS PERFORMANCE
| (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding our current and former PEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our current and former PEO) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding our current and former PEO) for each year to determine the compensation actually paid, using the same methodology described above in Note (2)(b): |
PAY VERSUS PERFORMANCE
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Average Reported Value of Equity Awards ($) | Average Equity Award Adjustments(a) ($) | Average Compensation Actually Paid to Non- PEO NEOs ($) | | 2023 | 3,210,333 | 2,410,690 | 329,911 | 1,129,554 | | 2022 | 3,999,156 | 3,105,152 | (1,172,011) | (278,006) | | 2021 | 18,291,846 | 17,570,372 | 16,761,065 | 17,482,540 |
PAY VERSUS PERFORMANCE
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
PAY VERSUS PERFORMANCE
| Year | Average Year End Fair Value of Equity Awards ($) | Average Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Total Average Equity Award Adjustments ($) | | 2023 | 1,043,424 | (536,147) | 172,101 | (106,209) | (243,260) | 329,911 | | 2022 | 1,470,548 | (2,108,564) | 303,056 | (837,051) | — | (1,172,011) | | 2021 | 7,567,532 | 1,925,210 | 316,359 | 6,951,965 | — | 16,761,065 |
PAY VERSUS PERFORMANCE
| (5) Cumulative total shareholder return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends 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. Each measurement period commenced on June 17, 2021, which is the first trading day after the date of the effectiveness of the registration statement filed in connection with our initial public offering. |
PAY VERSUS PERFORMANCE
| (6) Represents the peer group TSR. The peer group used for this purpose is the following published industry index: NASDAQ Biotechnology Index. |
PAY VERSUS PERFORMANCE
| (7) The dollar amounts reported represent the amount of net loss reflected in the Company’s audited financial statements for the applicable year. Due to the fact that the Company is not a commercial-stage company, the Company did not have any revenue during the periods presented, other than revenue primarily associated with an upfront payment under the Company’s license and collaboration agreement with GlaxoSmithKline (GSK). Consequently, the Company did not use net income (loss) as a performance measure in its executive compensation program. |
PAY VERSUS PERFORMANCE
| (8) While the Company uses various non-financial performance measures for the purpose of evaluating performance for its executive compensation program, for the most recently completed fiscal year, the Company did not use any financial performance measures to link compensation paid (including “compensation actually paid” as computed in accordance with Item 402(v) of Regulation S-K) to the NEOs to Company performance. See “Executive Compensation–Compensation Discussion and Analysis” for a description of the non-financial performance measures linked to executive compensation. |
Narrative To Pay Versus Performance Table
Narrative To Pay Versus Performance Table Analysis of the Information Presented in the Pay Versus Performance Table As described in more detail above in “Executive Compensation – Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a performance-driven compensation philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, those Company measures are not financial performance measures and are therefore not presented in the Pay Versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Also see footnote 8 to the table above. Compensation Actually Paid and Net Loss Because the Company is a pre-commercial stage company, we had no revenue during the periods presented, other than revenue primarily associated with an upfront payment under the Company’s license and collaboration agreement with GlaxoSmithKline Intellectual Property (No. 5) Limited and Glaxo Group Limited (together, “GSK”). Consequently, we do not use net income (loss) as a performance measure in our executive compensation program. Moreover, as a pre-commercial stage company with only limited, nonrecurring revenue associated with license and collaboration agreements, we do not believe there is any meaningful relationship between our net income (loss) and compensation actually paid to our NEOs during the periods presented. Compensation Actually Paid and Cumulative Company TSR and Cumulative Peer Group TSR The chart below shows the relationship between the compensation actually paid to our current and former PEO and the average compensation actually paid to our non-PEO NEOs, on the one hand, to the Company’s cumulative TSR and the cumulative weighted peer group TSR of the NASDAQ Biotechnology Index over the years presented in the table, on the other. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
CHIEF EXECUTIVE OFFICER PAY RATIO
CHIEF EXECUTIVE OFFICER PAY RATIO Under SEC rules, we are required to disclose the ratio between the total annual compensation of our principal executive officer (our Chief Executive Officer, or “CEO”) to the total annual compensation of our median employee (excluding our CEO). We identified the median employee by examining the 2023 total annual compensation for all individuals, excluding our Chief Executive Officer, who were employed by us on December 31, 2023 (the determination date). To identify our median employee, we used (i) annual base salary paid for 2023, (ii) annual incentive bonus compensation paid for 2023, and (iii) target annual grant value of equity awards granted in 2023, as our consistently applied compensation measure. We annualized the compensation of all permanent employees who were not employed by us for all of 2023. After identifying the median employee as described above, we calculated annual total compensation for that employee using the same methodology we use for our named executive officers as set forth in the 2023 Summary Compensation Table above. The total annual compensation of the median employee for 2023 was $236,291. The total annual compensation for our Chief Executive Officer as reported in the Summary Compensation Table for 2023 was $2,647,476. The ratio of Chief Executive Officer total annual compensation to the median employee total annual compensation for 2023 was approximately 11.2 to 1. The CEO pay ratio above represents our reasonable estimate calculated in a manner consistent with SEC rules and applicable guidance. SEC rules 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, and as explained by the SEC when it adopted these rules, 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. Neither the Compensation Committee nor our management used our CEO pay ratio measure in making compensation decisions.