DEF 14A of Ionis Pharmaceuticals Inc
Filed Apr 25, 2024 · FY20230001140361-24-022103
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Information about our Board
Information about our Board The Board is divided into three classes. Presently, the Board has ten members with two classes consisting of four Directors each and one class consisting of two Directors. Each class serves a three-year term and we hold elections each year at the Annual Meeting to elect the Directors whose terms are expiring. Our Nominating, Governance and Review Committee of the Board reviews the Company’s classified Board structure every year to evaluate whether it continues to be the appropriate structure for the Company. Following such evaluation, we believe maintaining this structure is critical at this time given the Company’s recent Chief Executive Officer transition and to enable us to execute on our new commercial strategy, which we believe will generate long-term sustainable value for stockholders. In addition, the Board may elect a new Director to fill any vacant spot, including a vacancy caused by an increase in the size of the Board. However, the Board believes it is important for our stockholders to ratify any member of the Board whom the Board appoints. As a result, whenever the Board appoints a new member, the Board will submit such new member’s directorship for ratification or election at the next regularly scheduled Annual Meeting of Stockholders. The Board represents the interests of our stockholders by overseeing the Chief Executive Officer and other executive officers in our operations. The Board’s goal is to optimize long-term value by providing guidance and strategic oversight to Ionis’ management on our stockholders’ behalf.
Information about the 2024 Elections
Information about the 2024 Elections The Board has nominated two individuals for election at the Annual Meeting. Each of the nominees currently serves as one of our Directors. Brett P. Monia and Michael Yang have each served as a Director for the periods set forth in the table below.
Information about the 2024 Elections
| Name | Commencement of Ionis Directorship | | Brett P. Monia | March 2019 | | Michael Yang | December 2023 |
Information about the 2024 Elections
Mr. Yang was appointed by the Board in December 2023 upon the recommendation of our Chief Executive Officer. Dr. Monia has been previously re-elected by our stockholders. If elected or re-elected, Mr. Yang and Dr. Monia will serve until the 2027 Annual Meeting or, in each case, until his respective successor is elected and has qualified, or until his earlier death, resignation or removal. Our bylaws provide a majority vote standard for the election of directors in uncontested elections. In an uncontested election, the majority vote standard means that to be elected, a Director nominee must receive a majority of the votes cast in the election such that the number of shares voted “For” the nominee must exceed 50% of the votes cast with respect to that Director. The number of votes cast with respect to a Director’s election excludes abstentions and broker non-votes. In contested elections where the number of nominees exceeds the number of Directors to be elected, the vote standard will be a plurality of the shares present or represented by proxy and entitled to vote. If a nominee who already serves as a Director is not elected, and no successor is elected, the Director will offer to tender his or her resignation to the Board. The Nominating, Governance and Review Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether to take other action. The Board will act on the Nominating, Governance and Review Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The Director who tenders his or her resignation will not participate in the recommendation of the Nominating, Governance and Review Committee or in the Board’s decision. If a nominee’s failure to be elected at the Annual Meeting results in a vacancy on the Board, then the Board can fill the vacancy. On March 13, 2024, the Nominating, Governance and Review Committee provided its recommendations to the Board for Director nominees to stand for election at the Annual Meeting. Following such recommendations, the Board determined it would be in the best interests of Ionis and its stockholders to nominate Dr. Monia and Mr. Yang to be elected as Directors at the Annual Meeting. We provide below a short biography for each nominee. Dr. Monia and Mr. Yang have agreed to serve if elected, and we have no reason to believe that they cannot serve. However, if they cannot serve, we may vote your proxy for another nominee proposed by the Board, or the Board may reduce the number of authorized Directors.
Information about the 2024 Elections
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Board Skills Matrix
Board Skills Matrix The following tables illustrate (i) the core skills the Nominating, Governance and Review Committee considers to be the most relevant to the Board’s oversight role with respect to our business, and (ii) each of our Director’s skills in such areas indicated by check mark. The lack of a check mark for a particular item for a Director does not mean the Director lacks that skill; rather, a check mark indicates a specific area of focus or expertise for which the Board relies on such Director. Additional information about each Director’s background, business experience and other matters, including a description of how each individual’s experience qualifies the Director to serve on the Board, is provided below beginning on the following page of this Proxy Statement.
Board Skills Matrix
| Industry Experience | Relevant to an industry understanding and oversight of and contribution to our business and strategy | | Executive/Leadership Experience | Allows our Directors to successfully advise on and oversee the Company’s performance and represent stockholders’ interests | | Corporate Governance and Public Company Board Experience | Ensures Directors have the background and knowledge to perform oversight and governance roles | | Accounting, Financial or Investment Experience | Enables our Directors to analyze our financial statements, oversee our capital structure and consider financial transactions | | Scientific, Research or Development Experience | Facilitates the constant improvement of our science and technology to enable us to continue to drive innovation in RNA therapies | | Commercial, Marketing, Reimbursement or Sales Experience | Ensures we have appropriate Board expertise to advance our commercial strategy |
Board Skills Matrix
| Director Skills and Qualifications | Spencer R. Berthelsen | Allene M. Diaz | Michael Hayden | Joan E. Herman | Joseph Klein III | Joseph Loscalzo | Brett P. Monia | B. Lynne Parshall | Joseph H. Wender | Michael Yang | | Industry Experience | | | | | | | | | | | | Executive/Leadership Experience | | | | | | | | | | | | Corporate Governance and Public Company Board Experience | | | | | | | | | | | | Accounting, Financial or Investment Experience | | | | | | | | | | | | Scientific, Research or Development Experience | | | | | | | | | | | | Commercial, Marketing, Reimbursement or Sales Experience | | | | | | | | | | |
Board Skills Matrix
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Biographies of the Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting
Biographies of the Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting Brett P. Monia, Ph.D., age 62(2), has served as a Director of Ionis since March 2019. Dr. Monia was promoted to Chief Executive Officer in January 2020. From January 2018 to December 2019, Dr. Monia served as our Chief Operating Officer, from January 2012 to January 2018, as our Senior Vice President, Drug Discovery, from February 2009 to January 2012, as our Vice President, Drug Discovery, and from October 2000 to February 2009, as our Vice President, Preclinical Drug Discovery. From October 1989 to October 2000, he held various positions within our Molecular Pharmacology department. Dr. Monia has served on the board of directors of Cognition Therapeutics, Inc., a public clinical stage neuroscience company, since October 2020. The Board believes Dr. Monia is uniquely suited to serve on the Board primarily because, as an executive officer of the Company since 2012 and a founder of Ionis, he has dedicated more than 33 years to discovering and developing antisense-based drugs. Dr. Monia is the inventor on over 100 issued patents and has directly supervised programs resulting in the clinical development of more than 40 antisense-based drugs across a broad range of therapeutic areas. Michael Yang, age 62, has served as a Director of Ionis since December 2023. Mr. Yang has been President and Chief Executive Officer of ViaCyte, Inc., a regenerative medicine company focused on the discovery, development, and commercialization of novel cell replacement therapies to treat human diseases, since February 2021 until it was acquired by Vertex Pharmaceuticals in October 2022. From March 2017 to February 2021, Mr. Yang served as Executive Vice President and Chief Commercial Officer of Acadia Pharmaceuticals Inc. Mr. Yang joined Acadia from Janssen Pharmaceutical Companies of Johnson & Johnson, where he served as President of Janssen Biotech Inc. and was responsible for building Janssen’s U.S. Immunology business. Mr. Yang began his career at Johnson & Johnson in 1997 and held numerous senior commercial positions such as President, CNS where he was responsible for growing the anti-psychotic long-acting therapy portfolio. His broad background of commercialization and general management experience also includes roles as the Worldwide General Manager of the medical device companies of Therakos, Inc and Veridex, LLC, where he launched new platforms, expanded global revenues and diversified the product lines. Prior to that, Mr. Yang was Vice President of Sales and Marketing, Oncology at Ortho Biotech Inc. Mr. Yang currently serves on the board of directors of Pacira Pharmaceuticals, Inc. and previously served on the board of ViaCyte as well as Akcea Therapeutics, Inc. from September 2019 until the completion of the Company’s merger with Akcea Therapeutics, Inc. (the “Akcea Merger”), The Board believes Mr. Yang is uniquely suited to serve on the Board because of his extensive strategic and operational experience in the pharmaceutical, medical device and diagnostic markets and his broad commercial and general management experience across multiple therapeutic categories, lifecycle stages and commercial environments. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE ABOVE NOMINEES.
Biographies of the Directors Whose Terms Expire at the 2025 Annual Meeting
Biographies of the Directors Whose Terms Expire at the 2025 Annual Meeting Allene M. Diaz, age 59, has served as a Director of Ionis since June 2021. Since 2022 Ms. Diaz has served as a Senior Advisor to Bain Capital Life Sciences, a venture capital firm based in Boston, Massachusetts, and she has led AMD Consulting, a new product strategy and portfolio management consulting practice based in Boston, MA since 2020. Previously, Ms. Diaz served as Senior Vice President, Research and Development Portfolio Management at GlaxoSmithKline, a global pharmaceutical company based in Brentwood, UK, from September 2019 through June 2020 and as Senior Vice President, Global Commercial Development and Program Strategy at TESARO Inc., a biotechnology company based in Waltham, MA, from May 2015 through August 2019. Prior to that she held a variety of commercial leadership roles in the Merck Serono and EMD Serono divisions of Merck KGaA. Earlier in her career, Ms. Diaz held management, operating, sales, and medical affairs roles at various biopharmaceutical companies, including Pfizer, Parke-Davis, Biogen, and Amylin Pharmaceuticals. She has contributed to the global development, launch or commercialization of multiple transformative products across several therapeutic areas. Ms. Diaz has served on the board of directors of Mersana Therapeutics since March 2021. Ms. Diaz served on the board of directors of Allena Pharmaceuticals from April 2019 to September 2022, BCLS Acquisition Corporation from October 2020 to October 2022, and Erytech Pharma SA from September 2016 to September 2019. The Board believes Ms. Diaz is uniquely suited to serve on the Board primarily because of her deep expertise in product development, commercial strategy, market access, and portfolio management. Michael Hayden, CM, OBC, MB, ChB, Ph.D., FRCP(C), FRSC, age 72, has served as a Director of Ionis since September 2018. Dr. Hayden has been Chief Executive Officer and Director of Prilenia Therapeutics, a private clinical stage biotech company, since September 2018. Dr. Hayden is also a Killam Professor at the University of British Columbia (“UBC”), the highest honor UBC can confer on any faculty member. In addition, he is an accomplished scientist and physician. He was the President of Global R&D and Chief Scientific Officer at Teva Pharmaceuticals from 2012 to 2017. During this time approximately 35 new products were approved in major markets with many for diseases of the central nervous system. In 2015 Teva R&D was recognized as one of the 100 most exciting innovators in the pharmaceutical industry by IDEA Pharma and in 2017 Teva R&D ranked top of the industry for central nervous system development and clinical trial success rate by Pharma Intelligence. Dr. Hayden has founded five biotechnology companies and has been the recipient of numerous prestigious honors and awards, including being inducted into the Canadian Medical Hall of Fame and receiving 2 The ages of all our Directors are as of March 1, 2024.
Biographies of the Directors Whose Terms Expire at the 2025 Annual Meeting
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Biographies of the Directors Whose Terms Expire at the 2025 Annual Meeting
the July 2012 Diamond Jubilee Medal on behalf of HRH Queen Elisabeth II. He has also received the Canada Gairdner Wightman award. Dr. Hayden was awarded the Order of Canada, the Order of British Columbia, named Canada’s Health Researcher of the Year by Canadian Institutes of Health Research, and received the Prix Galien Award in 2007. Dr. Hayden has also been awarded honorary degrees of science and medicine from the University of Alberta in 2009, University Gottingen in 2014, and University of Cape Town in 2023. Dr. Hayden served on the board of Aurinia Pharmaceuticals, Inc. until August 2021 and Xenon Pharmaceuticals until June 2022, and currently serves on the boards of 89Bio, AbCellera Biologics and Oxford Biomedica. The Board believes Dr. Hayden is uniquely suited to serve on the Board because he has significant expertise in pharmaceutical research and development, both in academia and in commercial settings. In addition, Dr. Hayden has made substantial research contributions to advance treatments for brain diseases, which is particularly valuable as we grow our neurologic disease franchise, a key focus of ours. Dr. Hayden also serves as the Chair of our Medical and Science Committee, providing invaluable guidance on the key scientific and development issues facing our technology and medicines in development. Joseph “Skip” Klein, III, age 62, has served as a Director of Ionis since December 2005 and is Chairman of the Audit Committee. Mr. Klein is currently Managing Director of Gauss Capital Advisors, LLC, a financial consulting and investment advisory firm focused on biopharmaceuticals, which he founded in March 1998. From September 2003 to December 2008, Mr. Klein also served as a Venture Partner of Red Abbey Venture Partners, L.P., a life science private equity fund. From September 2001 to September 2002, Mr. Klein was a Venture Partner of MPM Capital, a healthcare venture capital firm. From June 1999 to September 2000 when it merged with WebMD Corporation, Mr. Klein served as Vice President, Strategy, for Medical Manager Corporation, a leading developer of physician office management information systems. For over nine years from 1989 to 1998, Mr. Klein was a health care investment analyst at T. Rowe Price Associates, Inc., where he was the founding portfolio manager of the T. Rowe Price Health Sciences Fund. Mr. Klein has served on the boards of directors of The Prospector Funds, Inc., an SEC Registered Investment Company that manages two no-load mutual funds, since September 2007, and Akcea Therapeutics, Inc., from September 2019 until the completion of the Akcea Merger. Mr. Klein also serves on the boards of private and non-profit entities. The Board believes Mr. Klein is uniquely suited to serve on the Board and as Chairman of the Audit Committee because he is a Chartered Financial Analyst and has extensive public company, venture investment, board, and financial advisory expertise in the life sciences industry, including previously serving as Chairman of the Audit Committee at several public biopharmaceutical companies. Joseph Loscalzo, M.D., Ph.D., age 72, has served as a Director of Ionis since February 2014 and as Chairman of the Board since June 2021. Dr. Loscalzo is the Hersey Distinguished Professor of the Theory and Practice of Medicine, the Samuel A. Levine Professor of Medicine at Harvard Medical School and Physician-in-Chief Emeritus at Brigham and Women’s Hospital. Dr. Loscalzo is also a co-founder and member of the Scientific Advisory Board of Scipher Medicine, a private network medicine-based company matching patients with their most effective therapy. Dr. Loscalzo received his A.B. degree, summa cum laude, his Ph.D. in biochemistry, and his M.D. from the University of Pennsylvania. He completed his clinical training at Brigham and Women’s Hospital and Harvard Medical School, where he served as Resident and Chief Resident in medicine and Fellow in cardiovascular medicine. Post-training, Dr. Loscalzo joined the Harvard faculty and staff at Brigham and Women’s Hospital in 1984. He rose to the rank of Associate Professor of Medicine, Chief of Cardiology at the West Roxbury Veterans Administration Medical Center, and Director of the Center for Research in Thrombolysis at Brigham and Women’s Hospital. He joined the faculty of Boston University in 1994, first as Chief of Cardiology and, in 1997, Wade Professor and Chair of Medicine, Professor of Biochemistry, and Director of the Whitaker Cardiovascular Institute. He returned to Harvard and Brigham and Women’s Hospital in 2005. Since January 2016, Dr. Loscalzo has served on the board of directors of Leap Therapeutics, Inc., a public biopharmaceutical company. The Board believes Dr. Loscalzo is uniquely suited to serve on the Board and as our Chairman primarily because of his extensive scientific expertise, including 32 years of research in the areas of vascular biology, thrombosis, and atherosclerosis, and practical knowledge as a practicing physician. Dr. Loscalzo’s expertise and role as a leading cardiologist is particularly valuable as we advance and grow our cardiovascular franchise.
Biographies of the Directors Whose Terms Expire at the 2026 Annual Meeting
Biographies of the Directors Whose Terms Expire at the 2026 Annual Meeting Spencer R. Berthelsen, M.D., age 71, has served as a Director of Ionis since May 2002. Dr. Berthelsen practiced Internal Medicine with the Kelsey Seybold Clinic, a 400-physician medical group based in the Texas Medical Center in Houston, until March 2017. Dr. Berthelsen began at Kelsey Seybold in 1980 and served in various senior leadership positions throughout his nearly four-decade career at the clinic, including Chairman of the Department of Internal Medicine, Medical Director and Managing Director. He also served as Chairman of its board of directors from October 2001 through April 2016. He has served as Clinical Professor of Medicine at both Baylor College of Medicine and The University of Texas Health Science Center. Previously, Dr. Berthelsen served on the boards of the Texas Academy of Internal Medicine and the Caremark National Pharmacy and Therapeutics Committee from 1999 through 2005. The Board believes Dr. Berthelsen is uniquely suited to serve on the Board because of his experience advising a large multispecialty group practice and almost 40 years of experience as a practicing physician. Joan E. Herman, age 70, has served as a Director of Ionis since June 2019. Since 2008, Ms. Herman has served as President and Chief Executive Officer of Herman & Associates, a management consulting firm that specializes in advising private equity firms investing in
Biographies of the Directors Whose Terms Expire at the 2026 Annual Meeting
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Biographies of the Directors Whose Terms Expire at the 2026 Annual Meeting
healthcare. She has experience leading healthcare and payor companies, serving in several executive positions at Elevance (formerly Anthem, which was formerly WellPoint), including as President and Chief Executive Officer of several different business units. Ms. Herman also served as a Senior Vice President of Phoenix Life Insurance Company. Since January 2013, Ms. Herman has served on the board of directors of Encompass Health (formerly HealthSouth). Ms. Herman also serves on the board of managers of Fifth Avenue Private Equity 17. She previously served on the boards of both Convergys and AARP Services, Inc. The Board believes Ms. Herman is uniquely suited to serve on the Board because of her experience leading healthcare and payor companies. Ms. Herman also brings valuable cybersecurity experience to the Board through her cybersecurity certification from the National Association of Corporate Directors (“NACD”). B. Lynne Parshall, age 69, has served as a Director of Ionis since September 2000. Ms. Parshall is CEO of Lyme Pinnacle Consulting, which provides strategic advisory services to biotechnology companies. Ms. Parshall was a Senior Strategic Advisor to Ionis from January 2018 to December 2022. Previously she served as our Chief Operating Officer from December 2007 through January 2018 and as our Chief Financial Officer from June 1994 through December 2012. She also served as our Corporate Secretary through 2014 and has served with the Company in various executive roles since November 1991. Prior to joining Ionis, Ms. Parshall practiced law at Cooley LLP, outside counsel to Ionis, where she was a partner from 1986 to 1991. Ms. Parshall is a member of the American and California bar associations. Ms. Parshall has served on the boards of directors of Foghorn Therapeutics Inc, a public biopharmaceutical company, since August 2022, Cytokinetics, Inc., a public biopharmaceutical company, since February 2013, and Akcea Therapeutics, Inc., from January 2015 until the completion of the Akcea Merger. Ms. Parshall also serves on the Board of Directors of several private biotechnology companies. The Board believes Ms. Parshall is uniquely suited to serve on the Board primarily because, as the former Chief Operating Officer and former executive of the Company for over 26 years, she has valuable Company-specific experience and expertise. In addition, Ms. Parshall has over 35 years of experience structuring and negotiating strategic licensing and financing transactions in the life sciences field. She has also sat on the Boards of Directors of numerous biotechnology companies. Ms. Parshall recently received a directorship certification from the NACD for completion of a director education program designed as a framework for continuous learning. Ms. Parshall also brings valuable cybersecurity experience to the Board through her cybersecurity certification from the NACD. Joseph H. Wender, age 79, has served as a Director of Ionis since January 1994 and our Independent Lead Director since December 2020. Mr. Wender began with Goldman, Sachs & Co. in 1971 and became a General Partner of that firm in 1982, where he headed the Financial Institutions Group for over a decade. Since January 2022 he has been a Senior Consultant to Goldman Sachs & Co., from January 2019 to December 2021 he was an Advisory Director to Goldman Sachs & Co. and from January 2008 to December 2018 was a Senior Consultant to Goldman Sachs & Co. He is a former Independent Trustee of the Schwab Family of Funds and Director of Grandpoint Capital, a bank holding company. Mr. Wender also is co-CEO and partner of Colgin Cellars. Since March 2014, Mr. Wender has been a Director of Outfront Media, a lessor of advertising space on out-of-home advertising structures, and has served as its Lead Independent Director since 2016. The Board believes Mr. Wender is uniquely suited to serve on the Board and as our Independent Lead Director primarily because, with over 50 years of experience as an investment banker with Goldman, Sachs & Co., he provides Ionis important advice regarding our financial reporting, corporate finance, strategic transactions, and compensation matters. He also has a deep understanding of our Company due to his tenure on the Board and provides invaluable advice as we grow and diversify our business.
Biographies of the Directors Whose Terms Expire at the 2026 Annual Meeting
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INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE
Independence of the Board of Directors
Independence of the Board of Directors As required under Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as evaluated by our Nominating, Governance and Review Committee and affirmatively determined by our Board. Our Nominating, Governance and Review Committee consults with our legal counsel to ensure that the Committee’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in the applicable Nasdaq listing standards and applicable SEC rules and regulations, as in effect from time to time. Consistent with these considerations, after review of all relevant transactions or relationships between each Director, or any of his or her family members, and Ionis, its executive officers and its independent auditors, the Board affirmatively has determined that all of our Directors are independent Directors within the meaning of the applicable Nasdaq listing standards and SEC rules and regulations, except for Ms. Parshall and Dr. Monia, our former Chief Operating Officer, and current Chief Executive Officer, respectively. In making this determination, the Board found that none of these independent Directors has a material or other disqualifying relationship with us. Notably, although the Company does business with Goldman Sachs & Co. and Brigham and Women’s Hospital, neither Mr. Wender nor Dr. Loscalzo, respectively, receives any personal compensation directly from revenue received from Ionis.
Information Regarding the Board and its Committees
Information Regarding the Board and its Committees Leadership Structure Mr. Wender has served as our Independent Lead Director since December 2020 and Dr. Loscalzo has served as Chairman of our Board since June 2021. The Board believes that the appointment of an Independent Lead Director and the separated roles of Chairman of the Board and Chief Executive Officer reinforce the independence of the Board in its oversight of the business and affairs of the Company. In addition, Mr. Wender, Dr. Loscalzo and Dr. Monia work together to set the agenda for each Board meeting. We will continue to rely on our Chairman of the Board, Independent Lead Director and CEO to set the agendas for future Board meetings and believe this is the appropriate structure to ensure the Board focuses on the most important matters facing our business at each meeting. Risk Oversight Our Board administers its risk oversight function directly and through all of its current committees. We provide a complete description of each committee and its respective roles and responsibilities on pages 19 through 25 of this Proxy Statement. While each of these committees is responsible for evaluating certain risks and overseeing how we manage risk, these committees inform the entire Board about such risks through committee reports. The Audit Committee oversees management of financial risks. In 2019, the Audit Committee authorized the formation of an internal audit function known as “Advisory Services” that reports to the Audit Committee. Advisory Services strives to accomplish its mission of adding value to and improving the Company’s operations through sustaining a systematic, disciplined, and transparent approach to evaluating the effectiveness of governance, risk management, and control processes. The scope of Advisory Services is to determine if the control environment and internal control structure, as designed and represented by Company management, are adequate and functioning in a manner to enable the Company to meet its business objectives and satisfy its responsibilities. The Audit Committee is also responsible for reviewing and discussing the Company’s cybersecurity risks. The Nominating, Governance and Review Committee manages risks associated with the independence of the Board and potential conflicts of interests at the Board level, including review of related party transactions. The Nominating, Governance and Review Committee also periodically reviews our policies and procedures and makes recommendations when appropriate. In addition, the Nominating, Governance and Review Committee oversees our ESG matters. The Compensation Committee reviews risks to the Company related to our executive compensation program and our general compensation philosophies. The Finance Committee evaluates risks to the Company associated with our corporate finance matters. The Medical and Science Committee identifies risks to the Company related to our technology platform. The Compliance Committee is responsible for evaluating risks to the Company in connection with the commercialization of our medicines and good practice guidelines and regulations. The Company maintains an enterprise risk management program that the Board oversees with specific risk categories assigned to the appropriate Board committee. In addition to the formal enterprise risk management program, the Board and its committees encourage management to promote a corporate culture that understands risk management and incorporates it into the overall corporate strategy and day-to-day business operations. Our risk management structure also includes an ongoing effort to assess and analyze the most likely areas of future risk for Ionis. As a result, the Board and most of its committees periodically ask our executives to discuss the most likely sources of material future risks and how we are addressing any significant potential vulnerability.
Information Regarding the Board and its Committees
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Information Regarding the Board and its Committees
Board Committees The Board has six committees: an Audit Committee, a Compensation Committee, a Nominating, Governance and Review Committee, a Medical and Science Committee, a Finance Committee, and a Compliance Committee. Below is a description of each committee of our Board. Each of the committees has authority to engage legal counsel or other experts or consultants as it deems appropriate to carry out its responsibilities. The Board has determined that each member of our Audit Committee, Compensation Committee, and Nominating, Governance and Review Committee:
Information Regarding the Board and its Committees
| • | meets the applicable rules and regulations regarding “independence,” including, but not limited to, Rule 5605(a)(2) of the Nasdaq listing standards and applicable SEC rules and regulations; |
Information Regarding the Board and its Committees
| • | is not an officer or employee of Ionis; and |
Information Regarding the Board and its Committees
| • | is free of any relationship that would interfere with his or her individual exercise of independent judgment with regard to Ionis. |
Meetings and Attendance; Committee Members
Meetings and Attendance; Committee Members The Board met five times in 2023. Each Director serving as of December 31, 2023 attended 75% or more of the aggregate number of meetings of the Board and the committees on which such Director served during 2023. We encourage each member of the Board to attend the Annual Meeting of Stockholders. Executive sessions, which are meetings at which only independent directors are present, are regularly scheduled throughout the year, typically at the time of each regular Board meeting and as frequently as such independent directors deem appropriate. Our Board met in executive session four times in 2023.
Board Committee Members
Board Committee Members The table below provides membership and meeting information for each of the Board committees through March 13, 2024.
Board Committee Members
| Name | Audit | Compensation | Compliance | Finance | Nominating, Governance and Review | Medical and Science** | Attended 2023 Annual Meeting | | Dr. Spencer R. Berthelsen | — | X* | — | — | X | X | X | | Ms. Allene M. Diaz | X | — | X | — | — | — | — | | Dr. Michael Hayden | — | — | — | — | — | X* | — | | Ms. Joan E. Herman | X | X | X | — | — | — | X | | Mr. Joseph Klein, III | X* | — | — | X | — | — | — | | Dr. Joseph Loscalzo | — | — | — | — | X | X | — | | Dr. Brett P. Monia | — | — | — | — | — | — | X | | Ms. B. Lynne Parshall | — | — | X* | X | — | — | X | | Mr. Joseph H. Wender | — | X | — | X* | X* | — | X | | Mr. Michael Yang*** | — | — | — | — | — | — | — | | Total meetings in fiscal year 2023 | 8 | 8 | 7 | 7 | 3 | 3 | |
Board Committee Members
| * Committee Chairperson |
Board Committee Members
| ** Dr. Frank Bennett, the Company’s EVP and Chief Scientific Officer, is the executive sponsor of the committee. |
Board Committee Members
| *** Mr. Yang joined the Board as of December 14, 2023. |
Board Committee Members
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Board Committee Members
The table below identifies our current Board and committee members as of March 14, 2024.
Board Committee Members
| Name | Audit | Compensation | Compliance | Finance | Nominating, Governance and Review | Medical and Science** | | Dr. Spencer R. Berthelsen | — | X* | — | — | X | X | | Ms. Allene M. Diaz | X | — | X | — | — | — | | Dr. Michael Hayden | — | — | — | — | — | X* | | Ms. Joan E. Herman | X | X | X | — | — | — | | Mr. Joseph Klein, III | X* | — | — | X | — | — | | Dr. Joseph Loscalzo | — | — | — | — | X | X | | Dr. Brett P. Monia | — | — | — | — | — | — | | Ms. B. Lynne Parshall | — | — | X* | X | — | — | | Mr. Joseph H. Wender | — | X | — | X* | X* | — | | Mr. Michael Yang | — | — | X | — | — | — |
Board Committee Members
| * Committee Chairperson |
Board Committee Members
| ** Dr. Frank Bennett, the Company’s EVP and Chief Scientific Officer, is the executive sponsor of the committee. |
Nominating, Governance and Review Committee
Nominating, Governance and Review Committee The Nominating, Governance and Review Committee of the Board is responsible for:
Nominating, Governance and Review Committee
| • | interviewing, evaluating, nominating, and recommending individuals for membership on our Board, and considering proposed changes to the Board for approval; |
Nominating, Governance and Review Committee
| • | managing risks associated with the independence of the Board and potential conflicts of interests at the Board and executive level, including reviewing and, if appropriate, approving related party transactions; |
Nominating, Governance and Review Committee
| • | periodically reviewing our policies and procedures and making recommendations when appropriate; |
Nominating, Governance and Review Committee
| • | overseeing ESG matters; and |
Nominating, Governance and Review Committee
| • | performing such other functions as may be necessary or convenient for the efficient discharge of the foregoing. |
Nominating, Governance and Review Committee
The Nominating, Governance and Review Committee met three times during 2023. You can find our Nominating, Governance and Review Committee charter on our corporate website at www.ionispharma.com.(5) Director Nominations - Minimum Qualifications The Nominating, Governance and Review Committee believes that candidates for Director should have certain minimum qualifications. As a result, the Board adopted membership standards (that may be revised from time to time) and believes that the Board members should meet the minimum membership requirements listed below. The minimum membership requirements are as follows:
Nominating, Governance and Review Committee
| • | members must be able to read and understand basic financial statements; |
Nominating, Governance and Review Committee
| • | members must demonstrate high personal integrity and ethics; |
Nominating, Governance and Review Committee
| • | members cannot serve as a director on the boards of more than five total publicly traded companies (including Ionis); |
Nominating, Governance and Review Committee
| • | members cannot serve more than ten consecutive three-year terms on the Board; and |
Nominating, Governance and Review Committee
| • | members cannot run for re-election to the Board once they have reached the age of 80. |
Nominating, Governance and Review Committee
In addition to these minimum standards, the Nominating, Governance and Review Committee will consider such factors as:
Nominating, Governance and Review Committee
| • | possessing relevant expertise to offer advice and guidance to management; |
Nominating, Governance and Review Committee
| • | having sufficient time to devote to Ionis’ affairs; |
Nominating, Governance and Review Committee
| • | demonstrating excellence in his or her field; |
Nominating, Governance and Review Committee
| • | having sound business judgment; |
Nominating, Governance and Review Committee
| • | being committed to vigorously representing the long-term interests of our stockholders; and |
Nominating, Governance and Review Committee
| • | contributing to the diversity of the Board. |
Nominating, Governance and Review Committee
5 Any information that is included on or linked to our website is not part of this Proxy Statement or any registration statement or report that incorporates this Proxy Statement by reference.
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Nominating, Governance and Review Committee
Director Nominations - Diversity In considering Director nominations, the Nominating, Governance and Review Committee considers the total mix of competencies represented on the Board as a whole, as well as the competencies each member, or nominee, brings to the Board. In general, our Board members’ experience falls into three large categories: (1) investment banking, financial accounting, and corporate governance experience; (2) medical and scientific expertise; and (3) experience with the commercialization of pharmaceutical products. By selecting individuals who have investment banking, financial accounting, and corporate governance backgrounds, we gain valuable experience that ensures we are managing our financial resources appropriately, reporting our financial results fairly and accurately, and generally running our business consistent with current good corporate practices. As a cutting-edge drug discovery and development company, we also greatly benefit from Board members who themselves are scientists and medical doctors and can help set and adjust our strategy and objectives based on the results we generate from our research and development efforts. In addition, as we advance our commercial strategy, we will benefit from Board members with backgrounds in the commercialization of pharmaceutical products. In different ways, these categories allow us to effectively manage our cash and make prudent investments in our technology to achieve the greatest likelihood of success. We have an even balance of Board members across these three categories of experience. We also value diversity on our Board and do not discriminate against nominees on the basis of gender, race, religion, national origin, sexual orientation, disability, or any other protected basis. Recognizing the importance of diversity on our Board, in December 2020, the Nominating, Governance and Review Committee approved authorizing the Company to begin a search for qualified Director candidates who are diverse and have commercial experience. As a result of such search, Ms. Allene Diaz joined our Board in June 2021. In addition, Mr. Michael Yang joined our Board in December 2023, bringing additional diversity and relevant experience to our Board. As vacancies on our Board become available, we will continue to strive to add Directors who will provide relevant and valuable expertise while contributing to the diversity of the Board. Board Diversity Matrix
Nominating, Governance and Review Committee
| Board Diversity Matrix (as of February 7, 2024) | | | | Total Number of Directors | 10 | | | | Female | Male | | Part I: Gender Identity | | | | Directors | 3 | 7 | | Part II: Demographic Self-Identification* | | | | Asian | — | 1 | | Hispanic or Latinx | 1 | — | | Native Hawaiian or Pacific Islander | — | — | | White | 3 | 6 | | Two or More Races/Ethnicities | 1 | — | | LGBTQ+ | 1 | |
Nominating, Governance and Review Committee
* The numbers in the “Female” column of this section of the matrix total more than three as one of our female Board members self-identifies as two or more races/ethnicities. Director Nominations – Tenure Our drug technology is a “platform technology,” which means the more knowledge and experience an individual has with our technology platform, the better equipped that individual is to create value at Ionis. This is no different for our non-employee Directors. While we believe it’s important to add new non-employee Directors that will bring fresh ideas and perspectives, given the uniqueness and complexity of our technology, it is also critical to retain the knowledge and experience of an appropriate number of outstanding long service non-employee Directors who can contribute to our future business decisions while understanding our history. Director Nominations - Process The Nominating, Governance and Review Committee will consider Director candidates our stockholders recommend. The Nominating, Governance and Review Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not a stockholder recommended the candidate.
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Nominating, Governance and Review Committee
The Nominating, Governance and Review Committee reviews new candidates for Director in the context of the Board’s composition, our operating requirements, and our stockholders’ long-term interests. In conducting this assessment, the Nominating, Governance and Review Committee considers diversity, maturity, skills, the minimum membership requirements discussed above, and such other factors as it deems appropriate given the current needs of the Board and Ionis, to maintain a balance of knowledge, experience and capability. The Nominating, Governance and Review Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a paid professional search firm. The Nominating, Governance and Review Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. In the case of incumbent Directors whose terms of office are set to expire, the Nominating, Governance and Review Committee reviews such Directors’ overall service to Ionis during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such Directors’ independence. The Nominating, Governance and Review Committee meets to discuss and consider the candidates’ qualifications and determines whether each candidate is independent based upon applicable Nasdaq listing standards, SEC rules and regulations, and the advice of counsel, if necessary. Finally, the Nominating, Governance and Review Committee then selects a nominee for recommendation to the Board by majority vote. Stockholder Recommendations for Directors Stockholders who wish to recommend individuals for consideration by the Nominating, Governance and Review Committee to become nominees for election to the Board may do so by delivering a written recommendation to Ionis’ corporate secretary at the following address: 2855 Gazelle Court, Carlsbad, California 92010. Submissions must include:
Nominating, Governance and Review Committee
| • | the name, age, business address and residence address of the nominee; |
Nominating, Governance and Review Committee
| • | the principal occupation or employment of the nominee; |
Nominating, Governance and Review Committee
| • | the stock ownership in Ionis of the nominee; |
Nominating, Governance and Review Committee
| • | the stock ownership in Ionis of the stockholder making the nomination, including any trading in derivative securities that may disguise ownership occurring within the last 12 months; |
Nominating, Governance and Review Committee
| • | the information relating to the nominee that is required to be disclosed in solicitations of proxies under applicable securities laws; |
Nominating, Governance and Review Committee
| • | the nominee’s written consent to being named in the Proxy Statement as a nominee and to serving as a Director if elected; |
Nominating, Governance and Review Committee
| • | other information as we may reasonably require to determine the eligibility of the proposed nominee to serve as an independent Director or that could be material to a reasonable stockholder’s understanding of the independence of the proposed nominee; and |
Nominating, Governance and Review Committee
| • | any voting commitments the nominee has to third parties. |
Nominating, Governance and Review Committee
In addition, the nominee will need to complete a written questionnaire regarding the background and qualifications of the nominee, and the background of any other person or entity on whose behalf the nomination is being made. The nominee must also agree to comply with all of our applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines. The description of the requirements for Director nomination set forth above is qualified in its entirety by reference to our full and complete bylaws, which is an exhibit to our Current Report on Form 8-K filed with the SEC on March 29, 2021, a copy of which is available by contacting our corporate secretary. To date, the Board has not received or rejected a timely Director nominee for election at the upcoming stockholder meeting from a stockholder or stockholders holding more than 5% of our voting stock.
2023 NEOs, 2023 “Say on Pay” Vote and Summary of Recent Compensation and Governance Changes
| • | implemented performance-based equity awards for our CEO in 2020, and beginning in 2022, increased the allocation of such awards from 20% to 33% of his total equity awards; |
2023 NEOs, 2023 “Say on Pay” Vote and Summary of Recent Compensation and Governance Changes
| • | implemented performance-based equity awards for our other executive officers in 2022, accounting for 20% of their total equity awards; |
2023 NEOs, 2023 “Say on Pay” Vote and Summary of Recent Compensation and Governance Changes
| • | revised the structure of our performance-based equity awards such that they have a single vesting period at the end of three years and require a higher relative TSR percentile rank for maximum payout of the awards (increased from the 75th percentile to the 90th percentile); |
2023 NEOs, 2023 “Say on Pay” Vote and Summary of Recent Compensation and Governance Changes
| • | reduced the size of the annual equity awards for non-employee Directors, and at the 2020 Annual Meeting of Stockholders had our stockholders approve such reduced equity awards as part of the Non-Employee Directors’ Stock Option Plan; |
2023 NEOs, 2023 “Say on Pay” Vote and Summary of Recent Compensation and Governance Changes
| • | adopted a policy for equity awards granted to non-employee Directors in 2021 whereby the Compensation Committee, with input from its independent compensation consultant, may reduce the number of shares to be automatically issued on a grant date for each such award, and in 2023 revised the policy such that (1) incumbent non-employee Directors will receive no more than $450,000 in annual equity compensation per year based on the aggregate grant date fair value, and (2) newly appointed non-employee Directors will receive no more than $675,000 in initial equity compensation based on the aggregate grant date fair value; and |
2023 NEOs, 2023 “Say on Pay” Vote and Summary of Recent Compensation and Governance Changes
| • | increased the vesting term of initial equity awards granted to our non-employee Directors upon joining the Board beginning June 2, 2023, such that all initial awards vest equally over three years instead of vesting in one year. |
Summary of Compensation Practices
| | General compensation principles | We design our compensation structure to drive the creation of long-term stockholder value and mitigate unnecessary or imprudent business risk taking. Specifically, we: • Use a combination of compensation vehicles that provide a balanced mix of fixed and variable cash incentives, and long-term stock incentives; • Require a 12-month minimum vesting period for equity awards; • Set explicit and demanding objectives at the beginning of each year from which we measure performance for the year; • Set a strict budget for equity awards and salary increases; • Do not provide perquisites for any employees; and • Do not provide “gross-up” payments, other than for relocation. | | | Align executive compensation with Company performance and design performance based awards to drive creation of long-term stockholder value | We tie a significant portion of our executive officers’ compensation to Company performance and design performance-based awards to drive the creation of long-term stockholder value. For example, we: • Allocated approximately 65% of our Chief Executive Officer’s 2023 compensation in the form of performance-based compensation, which we consider to consist of cash bonuses, stock options and PRSUs; • Grant 33% of our Chief Executive Officer’s annual total equity awards in the form of PRSUs and 20% of our other executive officers’ annual total equity awards in the form of PRSUs; • Revised our PRSU structure for grants made in 2023 and going forward such that: ○ awards will have a single vesting period at the end of three years; and ○ the relative TSR percentile rank for maximum payout of the awards increased from the 75th percentile to the 90th percentile. • Place a maximum limit on cash bonuses and do not guarantee a cash bonus – cash bonuses can be, and have been, zero; and • Empower our Compensation Committee with the ability to exercise downward discretion with respect to the Company Performance Factor (used to determine cash bonuses) for our executive officers based on Company performance, which occurred in 2021. | | | Stock ownership and holding guidelines | We maintain stock ownership and holding guidelines that require our executive officers and non-employee Directors to meet certain ownership thresholds. We increased such ownership requirements for our non-employee Directors in 2023. | | | Clawback policy | We use an executive “clawback” policy that applies to all Section 16 officers and is consistent with the clawback policy rules adopted by the SEC and Nasdaq in 2023. | | | Disallow hedging and pledging | We do not allow pledging, shorting, or hedging against our stock by Directors or employees. | | | No option re-pricing or cash buyouts | We do not reprice or “cash-out” stock options without stockholder approval. | | | Engage an independent compensation consultant | The Compensation Committee has retained a compensation consultant whose relationship with the Company was confirmed to be independent for 2023. The compensation consultant, among other things, assists us in selecting an appropriate peer group and annually reviews our compensation levels, policies, practices, and procedures for our employees and non-employee Directors compared to our peer group. | | | Use a “double trigger” for change of control for our executive officers | We use a “double trigger” for cash payments and equity acceleration for change of control for our executive officers. |
Summary of Compensation Practices
| • | reviewing and approving corporate performance goals and objectives relevant to the compensation of our executive officers; |
Summary of Compensation Practices
| • | selecting and retaining a qualified, independent compensation consultant; |
Summary of Compensation Practices
| • | assessing Board of Directors compensation; |
Summary of Compensation Practices
| • | selecting the 2023 Peer Group used to assess officer and non-employee director compensation; |
Summary of Compensation Practices
| • | reviewing the mix of stock options and RSUs for all employees, including for new hires and employees receiving promotions; |
Summary of Compensation Practices
| • | assessing executive officer compensation, including base salary, bonus and equity grants; |
Summary of Compensation Practices
| • | performing the valuation calculations for equity awards granted in 2020, 2021, 2022, and 2023 to calculate compensation actually paid pursuant to Item 402(v) of Regulation S-K. |
Summary of Compensation Practices
Compensation Consultant Fees As described above, the Compensation Committee has engaged Aon to provide the committee with peer company and industry compensation data and advice regarding executive officers’ compensation. In 2023, we paid Aon approximately $215,000 for Aon’s consulting services directly related to Compensation Committee support. In addition, management of the Company engaged affiliates of Aon for other services in 2023 that were not related to Aon’s Compensation Committee consulting services. Our Human Resources department obtained general benchmarking survey data and field incentive team compensation development services from an affiliate of Aon, for which we paid approximately $78,000 in the aggregate
Summary of Compensation Practices
Based on stockholder feedback, beginning in 2020, we added PRSU awards to our Chief Executive Officer’s compensation, and increased the proportion of such awards for our CEO’s total equity awards beginning in 2022. Additionally, in 2022, we added PRSU awards to the compensation of our other executive officers. These PRSU awards provide our executive officers the opportunity to earn a defined number of shares of our common stock if we achieve pre-determined performance goals. Beginning in 2022, at target level of achievement, the PRSU awards represent 33% of our CEO’s total equity awards and 20% of each other executive officer’s total equity awards. We structured the PRSU awards to pay out based on relative TSR, which we believe is the best way to directly tie performance that positively impacts stockholders with the payout that the executive officers receive at the end of the performance period.
Summary of Compensation Practices
| At target level of achievement, the PRSU awards represent 33% of our CEO’s total equity awards and 20% of each other executive officer’s total equity awards. |
Summary of Compensation Practices
| Relative TSR Percentile Rank | TSR Performance Multiplier | | <25th percentile | 0% | | 25th percentile (Threshold) | 50% | | 50th percentile (Target) | 100% | | 60th percentile | 125% | | 75th percentile | 150% | | 90th percentile (Maximum) | 200% |
Summary of Compensation Practices
| • | If the Company’s TSR is negative over the performance period, the payout will not exceed 100% of the target number even if the percentile rank exceeds the 50th percentile. |
Summary of Compensation Practices
| Performance Period | Ionis’ TSR | Relative TSR Percentile Ranking | Percent of Target Number | Total Shares Earned | | 2 of 3 | 61.84% | 89th | 150% | Dr. Monia: 25,372 Ms. Hougen: 4,140 Ms. Cadoret-Manier: 4,140 Dr. Geary: 3,820 Dr. Swayze: 3,715 |
Summary of Compensation Practices
| Grant | Performance Period | Ionis’ TSR | Relative TSR Percentile Ranking | Percent of Target Number | Total Shares Earned | | 2021 | 3 of 3 | -15.28% | 77th | 100% | 20,416(1)(2) |
Summary of Compensation Practices
| (2) Despite greater than 50th percentile performance, payout was capped at 100% due to negative TSR. |
2023 NEO Compensation: Performance Based vs. Non-Performance Based
2023 NEO Compensation: Performance Based vs. Non-Performance Based We are committed to ensuring that a significant portion of our NEOs’ compensation is tied to Company performance. The charts below illustrate the proportion of our CEO’s and average NEOs’ (excluding the CEO) 2023 total compensation that was allocated among performance based compensation and non-performance based compensation. We consider cash bonuses, stock options and PRSUs to be performance based compensation, as the realization of the amount of such bonuses, and value of such options and PRSUs, are directly related to one or more measures of Company performance. 2023 CEO Compensation: Performance Based vs. Non-Performance Based The performance based compensation reflected below includes the CEO’s cash bonus for 2023 performance ($1,405,250), fair value of stock options granted in 2023 ($2,259,883), and fair value of PRSU awards granted in 2023 ($4,310,045). The non-performance based compensation reflected below includes the CEO’s 2023 base salary ($960,855) and fair value of RSU awards granted in 2023 ($3,546,849).
2023 NEO Compensation: Performance Based vs. Non-Performance Based
2023 Average NEO Compensation: Performance Based vs. Non-Performance Based The performance based compensation reflected below includes the NEOs’ (excluding the CEO) average cash bonus for 2023 performance ($460,076), average fair value of stock options granted in 2023 ($465,485), and average fair value of PRSU awards granted in 2023 ($450,595). The non-performance based compensation reflected below includes the NEOs’ (excluding the CEO) average 2023 base salary ($562,968) and fair value of RSU awards granted in 2023 ($730,590). Internal Pay Equity An executive officer’s salary plus bonus represents the officer’s total cash compensation. Our philosophy has been to have the CEO’s total cash compensation be between 20-30 times the lowest levels of compensation received by an employee. Our CEO’s total cash compensation over the last three years was on average approximately 21 times greater than the average cash compensation for our lowest level employees, and 1.86 times greater than the average of that of our other executive officers. We cover the specific elements of our compensation structure in more detail below.
Overview of Our Compensation Program
| • | competitive compensation practices; |
Overview of Our Compensation Program
| • | the advice of the Compensation Committee’s independent compensation consultant. |
Overview of Our Compensation Program
We do not have specific weightings assigned to these factors, as the importance of each factor can vary among the executive officers and from year to year. Peer Group The Compensation Committee considers relevant market pay practices when setting executive compensation to ensure our ability to recruit and retain high performing talent. The Compensation Committee, in consultation with its independent compensation consultant, evaluated and selected a peer group of 18 life sciences companies for evaluating Ionis’ 2023 compensation (the “Peer Group”). On an annual basis, the Compensation Committee compares the compensation opportunity for our executive officers to similarly situated executives at the 25th, 50th and 75th percentiles of the Peer Group as a “market check” to ensure, in its judgment, that the executive officers’ compensation remains appropriate. The Compensation Committee also reviews our compensation policies, practices, and
Overview of Our Compensation Program
procedures compared to the Peer Group to benchmark compensation for both our executive officers and non-employee Directors. While the Compensation Committee uses these data to inform and shape decision-making, it does not strictly adhere to quantitative benchmarks. The Peer Group data is just one factor considered in the annual compensation approval process, in addition to the factors described above under “Elements of Executive Compensation.” The Peer Group, which the Compensation Committee reviews on an annual basis, consists of companies that generally:
Overview of Our Compensation Program
The Peer Group generally does not include companies headquartered outside the United States (because compensation and benefit practices are generally different outside the United States, the comparable compensation data for the named executive officers and non-employee Directors is not available and cost of living is different) or companies in industries whose compensation programs are not comparable to our programs, such as non-life sciences companies. In May 2023, the Compensation Committee reviewed the Peer Group using the criteria listed above and publicly available data as of April 2023. The Compensation Committee noted Ionis’ 30-day average market capitalization was approximately $5 billion and trailing 12-month revenue was approximately $587 million. As part of this process, the Compensation Committee looked at companies in Ionis’ industry with an emphasis on companies with 30-day average market capitalizations of between $1.5 billion and $15 billion and trailing 12-month revenue between $375 million and $2 billion. The Compensation Committee also looked at companies that identified Ionis as a peer, so called “reverse peers.” Based on this evaluation, the Compensation Committee added Blueprint Medicines, Halozyme Therapeutics, and Insmed to the Peer Group because they fell within the target market capitalization and revenue ranges and are in Ionis’ sector. The Compensation Committee retained Alnylam Pharmaceuticals, BioMarin Pharmaceuticals and Incyte Corporation in the Peer Group despite their annual revenues and/or market capitalizations being slightly above the selection criteria because these companies have been within the selection criteria we have used in recent years and retaining them as peers this year helps to preserve consistency in our benchmarking. The Compensation Committee removed Agios Pharmaceuticals and Nektar Therapeutics from the Peer Group because they both fell below the target market capitalization and revenue ranges. The Compensation Committee also removed Horizon Therapeutics because it was to be acquired by another company.
Overview of Our Compensation Program
The following table lists the companies in the 2023 Peer Group, along with Ionis’ rankings among these companies, based on market capitalization and financial data reported by each company at the time the Compensation Committee selected the Peer Group in May 2023.
Overview of Our Compensation Program
| • | More of total compensation is long-term equity. The Compensation Committee structures the total pay mix for our CEO and other executive officers such that more of their compensation is in the form of long-term equity compensation; and |
Overview of Our Compensation Program
| • | Meaningful portions of annual equity awards are performance-based. The Compensation Committee aims to award a meaningful portion of our CEO’s and other executive officers’ annual equity in the form of PRSUs. |
Overview of Our Compensation Program
| Name | Year | Base Salary | | Annual MBO Award | | Time-Vested Equity | | Performance Based Restricted Stock Units | | | Brett P. Monia CEO | 2023 | $960,855 | 8% | $1,405,250 | 11% | $5,806,732 | 46% | $4,310,045 | 35% | | Elizabeth L. Hougen EVP, Finance and CFO | 2023 | $612,243 | 21% | $514,284 | 18% | $1,269,568 | 44% | $478,291 | 17% | | Onaiza Cadoret-Manier EVP, Chief Global Product Strategy and Operations Officer | 2023 | $556,148 | 20% | $467,164 | 17% | $1,269,568 | 46% | $478,291 | 17% | | Richard S. Geary EVP, Chief Development Officer | 2023 | $569,655 | 22% | $427,241 | 17% | $1,122,581 | 44% | $422,899 | 17% | | Eric Swayze EVP, Research | 2023 | $513,828 | 21% | $431,616 | 17% | $1,122,581 | 45% | $422,899 | 17% |
2023 Compensation Decisions and Results
2023 Compensation Decisions and Results Base Salary We determine base compensation levels for all our employees primarily by market forces. Accordingly, the Compensation Committee and Board believe that it is important when making compensation decisions to be informed as to the current practices of comparable publicly held companies with which we compete for top talent. To this end, the Compensation Committee and Board review market and peer company data, which includes competitive information relating to the mix and levels of compensation for executives in the life sciences industry. We obtain this information for the Peer Group based on recent public filings with the SEC. In addition, we also review data from the Radford Global Life Sciences Survey, which is a summary of compensation data submitted by over 1,700 life sciences companies. The Compensation Committee and Board use these data to inform and shape their decision-making but do not strictly adhere to quantitative benchmarks. In addition, we assess whether the scope of job responsibilities and internal equity warrant a given base salary.
2023 Compensation Decisions and Results
Stock Compensation We use stock options and RSUs to give all employees, including Ionis’ executive officers, an economic interest in the long-term appreciation of our common stock. We believe awarding a combination of stock options and RSUs provides several benefits. Stock
2023 Compensation Decisions and Results
options provide a way to align employee interests with those of upper management and the stockholders because as our stock price increases, so too does the employee’s compensation. In 2012, we started granting RSUs as part of the annual merit equity awards. RSUs are a strong retention vehicle for employees as the RSUs vest in annual installments over four years and have value upon vesting, but at the same time, require fewer shares than stock option awards. We grant existing employees new stock options and RSUs annually to provide a continuing incentive in Ionis’ long-term success. Each year, the Compensation Committee sets a budget of option equivalents for our executive officers and a budget of option equivalents for all other employees. From these budgets, we set a target number of option equivalents for each employee level in the Company. The actual award for each employee can be higher or lower than the target for their level depending on individual performance, but the total awards cannot exceed the budget set by the Compensation Committee. In 2023, we allocated 40% of option equivalents to stock options and 60% to RSUs. For our executive officers’ 2023 awards, we allocated 33% (for our CEO) or 20% (for all of our other executive officers) of their total equity awards in the form of PRSUs, with the remaining option equivalents allocated 40% to stock options and 60% to RSUs.
2023 Compensation Decisions and Results
| We use stock options and RSUs to give all employees, including Ionis’ executive officers, an economic interest in the long term appreciation of our common stock. |
2023 Compensation Decisions and Results
Performance-Based Stock Awards In response to stockholder feedback, beginning in 2020, we implemented PRSU awards for our CEO’s compensation, and increased the proportion of such awards for our CEO’s total equity awards beginning in 2022. Additionally, in 2022, we implemented PRSU awards for our other executive officers. These PRSU awards provide our executive officers the opportunity to earn a defined number of shares of our common stock if we achieve pre-determined performance goals. At target level of achievement, the PRSU awards represent 33% of our CEO’s total equity awards and 20% of each of our other executive officer’s total equity awards. The PRSU awards pay out based on our relative stock price performance compared to a peer group. Measuring our stock performance relative to peers mitigates the impact of macroeconomic factors, both positive and negative, that affect the industry and stock price performance and that are beyond the control of management. Measuring our performance in this way also provides rewards that are more directly aligned with performance through different economic cycles. We believe these PRSU awards provide a challenging incentive to the executive officers to deliver stockholder value.
2023 Compensation Decisions and Results
| Relative TSR Percentile Rank | TSR Performance Multiplier | | <25th percentile | 0% | | 25th percentile (Threshold) | 50% | | 50th percentile (Target) | 100% | | 60th percentile | 125% | | 75th percentile | 150% | | 90th percentile (Maximum) | 200% |
2023 Compensation Decisions and Results
| • | If the Company’s TSR is negative over the performance period, the payout will not exceed 100% of the target number even if the percentile rank exceeds the 50th percentile. |
2023 Compensation Decisions and Results
For 2022 performance, in January 2023, Dr. Monia received 118,673 time-vested stock options, 89,005 time-vested RSUs and 146,127 PRSUs (target payout of 73,064, multiplied by 200% to account for potential upside). For 2023 performance, in January 2024, Dr. Monia received 116,580 time-vested stock options, 87,435 time-vested RSUs and 143,550 PRSUs (target payout of 71,775, multiplied by 200% to account for potential upside). Vesting of Stock Awards Vesting schedules reward long-term performance and incentivize long-term stock appreciation and increased stockholder returns. For each stock option and RSU granted (except PRSUs), the Compensation Committee sets a vesting schedule over four years, with no vesting during the first year. Therefore, the stock options and RSUs granted to our executive officers directly align the interests of our executive officers with the interests of our stockholders and Ionis’ long-term success. The actual economic value of stock option awards depends directly on the performance of our stock price over the period during which the awards vest and the period during which the stock options may be exercised. In other words, our executive officers will only realize economic value when our stock price, and consequently stockholder value, increases, which aligns pay with performance and fosters accountability for Ionis’ long-term success. Conversely, the stock options are not worth anything if our stock price does not increase above the exercise price. For example, a total of 200,193 stock options expired underwater for our executive officers in the first quarter of 2023 and a total of 30,982 stock options expired underwater for our executive officers in the first quarter of 2024. Similarly, in the same way our stockholder returns increase and decrease based on our stock’s performance, the value to our employees of the RSUs increases and decreases based on our stock’s performance. In addition, RSUs promote retention and reinforce an ownership culture, and provide value even during periods of stock price or market underperformance. With the exception of PRSUs awarded to our executive officers, we do not tie vesting to the achievement of specific events, such as annual metrics, because we do not want to encourage our employees to deviate from our company objectives, which we believe optimizes sustained stockholder value; nor do we want our employees to take unnecessary risks just to meet a short-term metric.
2023 Compensation Decisions and Results
| Each year the Compensation Committee approves a stock option RSU and PRSU budget for annual employee merit awards. We do not grant options RSUs or PRSUs in excess of this budget without Compensation Committee approval. |
2023 Compensation Decisions and Results
The stock option vesting schedule is typically over a four-year period at the rate of 25% at the end of the first year and then at the rate of 2.08% per month for 36 months thereafter during the optionee’s employment. The RSU vesting schedule is typically over a four-year period at the rate of 25% per year. In addition, as further described below, our executive officers must hold shares received upon vesting of their RSUs until they meet certain ownership thresholds or no longer serve the Company. These practices align our employee compensation with our stockholders’ interests because if stockholder value declines over time, so too will the value of the equity compensation provided to all employees. We have historically had low employee turnover, particularly in our management team, and the members of our management have traditionally held their stock options for a long period of time before exercise. Our historically low turnover is indicative of our employees’ commitment to Ionis and its technology and reflects our executive officers’ belief in the long-term value of our stock.
2023 Compensation Decisions and Results
Our stock compensation budget minimizes dilution. Each year the Compensation Committee approves a budget that sets the number of stock options, RSUs and PRSUs we can grant our employees for annual merit awards. We do not grant stock options, RSUs or PRSUs that exceed this budget without the Compensation Committee’s approval. Over the past three years, the average merit award stock budget set by the Compensation Committee has been approximately 2.3% of our outstanding common stock on an issued and outstanding basis. This stock compensation budget, and therefore our equity compensation burn rate, is well below the Peer Group average of 3.1% from 2020 through 2022. We believe this stock budget is an important tool to balance our compensation objectives with stockholder interests. For 2023 performance, the Compensation Committee set a merit stock award budget that resulted in approximately 1.8 million stock options, approximately 1.4 million RSUs and a target number of approximately 160,000 PRSUs awarded to our employees (as applicable), including the executive officers. Together these shares represent approximately 2.3% of our outstanding common stock on an issued and outstanding basis for that year. This budget, as well as each employee’s position level and performance in the previous year, ultimately determines the size of the individual annual stock grants.
Corporate Governance
The incentive compensation subject to this amended clawback policy is compensation that is granted, earned or vested based wholly or in part upon the attainment of a measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures derived wholly or in part from such measures, received by an officer during the three completed fiscal years immediately preceding the date of the accounting restatement that exceeds the amount of compensation such officer would have received had such amount been determined based on the accounting restatement, computed without regard to any taxes paid. Under our amended clawback policy, recoupment is required regardless of whether the officer engaged in any misconduct and regardless of fault, and the Company’s obligation to recoup the applicable compensation is not dependent on whether or when any restated financial statements are filed. The Company is not required to recoup compensation if the Compensation Committee of the Board determines recoupment would be impractical, as further set forth under the terms of the amended policy. Anti-Hedging Policy and Anti-Pledging Policy We explicitly prohibit employees from “shorting” and hedging against our stock and from pledging our stock. To help avoid situations in which our employees may benefit from transactions that harm our stockholders, or that remove economic risk from their holdings of our securities, our policies specifically prohibit all employees, including our executive officers, from taking a “short” position in our stock and otherwise hedging their position in our stock against a future drop in our stock price including short sales and derivatives such as put or call options, swaps, forwards, and futures, or other inherently speculative transactions with respect to Ionis’ securities at any time. In addition, we also prohibit all directors and employees, including our named executive officers, from pledging our stock as collateral. Rule 10b5-1 Trading Program 10b5-1 plan required for executive officers and vice presidents. We have a Rule 10b5-1 trading program. Our Rule 10b5-1 trading program allows our executive officers, vice presidents and other employees to establish plans that permit prearranged future sales of the employee’s stock, which plans may be established when the individual is not in possession of material non-public information. We do not allow our executive officers or vice presidents to buy or sell our stock outside of the Rule 10b5-1 trading program except for purchases of our stock under our ESPP (but not subsequent sales of the stock) and transactions that are automatically effected by Ionis’ stock administrator in connection with the vesting and release of RSUs and PRSUs. In early 2023, we modified our Rule 10b5-1 trading program to comply with the SEC’s final rules released in December 2022 that impose new conditions on the availability of the Rule 10b5-1 affirmative defense to insider trading and require enhanced disclosures regarding the adoption, modification and termination of Rule 10b5-1 plans and other trading arrangements. Perquisites We are committed to using stockholder money responsibly, to building stockholder value and ensuring our processes are transparent. As a result, Ionis’ policies do not provide for perquisites for any employees, including our executive officers. Retirement & Other Benefits We maintain a highly competitive position regarding the benefits offered to all regular employees, including our executive officers. These benefits include medical, dental and vision insurance, employee assistance program, basic life insurance, short-term disability/sick pay, long-term disability, vacation, holidays, a 401(k) plan with employer match, Accidental Death & Dismemberment (“AD&D”) insurance, and for U.S. employees, an ESPP. Retention and Change of Control Agreements As part of our normal course of business, we engage in discussions with other biotechnology and pharmaceutical companies about possible collaborations, licensing and/or other ways in which the companies may work together to further our respective long-term objectives. In addition, many larger established pharmaceutical companies consider companies at similar stages of development to ours as potential acquisition targets. Occasionally, a transaction in the biotech/biopharmaceutical industry may start as a licensing transaction, but ultimately result in an acquisition. In certain scenarios, the potential for merger or being acquired may be in the best interests of our stockholders. As further described on page 80, we adopted a Change in Control and Severance Benefit Plan to provide certain economic benefits to our employees at or above the level of Vice President if their employment is terminated in certain circumstances, including because of a transaction that results in a change in control of the Company.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards(2) | | Option Awards(5) ($) | All Other Compensation ($) | Total ($) | | | | | | RSUs(3) ($) | PRSUs(4) (S) | | | | | Brett P. Monia, President, Chief Executive Officer | 2023 | $960,855 | $1,405,250 | $3,546,849 | $4,310,045 | $2,259,883 | $17,141(6) | $12,500,023 | | | 2022 | $824,800 | $837,688 | $1,678,645 | $2,145,668 | $1,761,806 | $15,889 | $7,264,796 | | | 2021 | $800,000 | $469,300 | $4,081,860 | $3,984,360 | $3,919,810 | $20,683 | $13,276,013 | | Elizabeth L. Hougen, Executive Vice President, Finance and Chief Financial Officer | 2023 | $612,243 | $514,284 | $775,481 | $478,291 | $494,087 | $17,141(6) | $2,891,527 | | | 2022 | $584,480 | $379,912 | $547,772 | $350,061 | $574,914 | $15,889 | $2,453,028 | | | 2021 | $557,541 | $262,713 | $1,662,465 | — | $1,596,488 | $20,683 | $4,099,890 | | Onaiza Cadoret-Manier, Executive Vice President, Chief Global Product Strategy and Operations Officer | 2023 | $556,148 | $467,164 | $775,481 | $478,291 | $494,087 | $17,141(6) | $2,788,312 | | | 2022 | $530,929 | $345,104 | $547,772 | $350,061 | $574,914 | $15,889 | $2,364,669 | | | 2021 | $482,000 | $227,118 | $1,484,692 | — | $1,425,753 | $18,751 | $3,638,314 | | Richard S. Geary, Executive Vice President, Chief Development Officer | 2023 | $569,655 | $427,241 | $685,699 | $422,899 | $436,882 | $16,917(7) | $2,559,293 | | | 2022 | $546,694 | $341,684 | $505,595 | $323,127 | $530,630 | $27,247 | $2,274,977 | | | 2021 | $527,697 | $240,630 | $1,391,914 | — | $1,336,671 | $13,713 | $3,510,625 | | Eric Swayze, Executive Vice President, Research | 2023 | $513,828 | $431,616 | $685,699 | $422,899 | $436,882 | $67,141(8) | $2,558,065 | | | 2022 | $493,117 | $308,198 | $491,536 | $314,162 | $515,892 | $28,389 | $2,151,294 | | | 2021 | $476,442 | $217,258 | $1,469,249 | — | $1,410,898 | $18,751 | $3,592,598 |
Summary Compensation Table
| (1) We present bonuses in the years they were earned, not in the year paid. Bonuses represent cash compensation for achievements as a result of our MBO program and are not necessarily paid in the year they are earned; for example, in January 2024 we paid bonuses for 2023 performance. As a result of the discretionary nature of our MBO program, we have concluded the entire amount of cash compensation resulting from that program is properly disclosed under the “Bonus” column to this Summary Compensation Table. For more information, please see the section titled “MBO Program – Performance-Based, At-Risk Cash Compensation.” |
Summary Compensation Table
| (2) We present stock awards in the years they were awarded, not in the year earned. For example, in January 2024 we granted stock awards for 2023 performance. |
Summary Compensation Table
| (3) Amounts represent the aggregate expense recognized for financial statement reporting purposes in accordance with ASC 718 for RSU and option awards granted to our named executive officers. The fair value of RSUs is based on the market price of our common stock on the date of grant. For more information, please see Note 8, Stockholders’ Equity, of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 regarding assumptions underlying valuation of equity awards. |
Summary Compensation Table
| (4) Amounts represent the values of the PRSUs at target level of achievement. At maximum level of achievement, the values of the PRSUs awarded in 2023 are as follows: Dr. Monia: $8,620,091; Ms. Hougen: $956,582; Ms. Cadoret-Manier: $956,582; Dr. Geary: $845,799; and Dr. Swayze: $845,799. |
Summary Compensation Table
| (5) Amounts represent the aggregate expense recognized for financial statement reporting purposes in accordance with ASC 718 for stock and option awards granted to our named executive officers. ASC 718 expense for the option awards is based on the fair value of the awards on the date of grant using an option-pricing model. For more information, please see Note 8, Stockholders’ Equity, of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 regarding assumptions underlying valuation of equity awards. |
Summary Compensation Table
| (6) Includes AD&D ($126), basic life ($515), and 401(k) matching contributions ($16,500) which are available to all employees. |
Summary Compensation Table
| (7) Includes AD&D ($82), basic life ($335), and 401(k) matching contributions ($16,500) which are available to all employees. |
Summary Compensation Table
| (8) Includes AD&D ($126), basic life ($515), and 401(k) matching contributions ($16,500) which are available to all employees. In addition, Dr. Swayze received a Career Achievement Award ($50,000). |
Summary Compensation Table
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Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table shows for the fiscal year ended December 31, 2023, certain information regarding grants of plan-based awards to our named executive officers:
Grants of Plan-Based Awards in Fiscal 2023
Grants of Plan-Based Awards in Fiscal 2023
Grants of Plan-Based Awards in Fiscal 2023
| Name | Grant Date | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(1) | | | | Threshold (#) | Target (#) | Maximum (#) | | | | | | Brett P. Monia | 1/3/23 | — | — | — | — | 118,673 | $37.58 | $2,259,883 | | | 1/15/23 | — | — | — | 89,005 | — | — | $3,546,849 | | | 1/15/23 | 36,532 | 73,064 | 146,128 | — | — | — | $4,310,045 | | Elizabeth L. Hougen | 1/3/23 | — | — | — | — | 25,946 | $37.58 | $494,087 | | | 1/15/23 | — | — | — | 19,460 | — | — | $775,481 | | | 1/15/23 | 4,054 | 8,108 | 16,216 | — | — | — | $478,291 | | Onaiza Cadoret-Manier | 1/3/23 | — | — | — | — | 25,946 | $37.58 | $494,087 | | | 1/15/23 | — | — | — | 19,460 | — | — | $775,481 | | | 1/15/23 | 4,054 | 8,108 | 16,216 | — | — | — | $478,291 | | Richard S. Geary | 1/3/23 | — | — | — | — | 22,942 | $37.58 | $436,882 | | | 1/15/23 | — | — | — | 17,207 | — | — | $685,699 | | | 1/15/23 | 3,585 | 7,169 | 14,338 | — | — | — | $422,899 | | Eric Swayze | 1/3/23 | — | — | — | — | 22,942 | $37.58 | $436,882 | | | 1/15/23 | — | — | — | 17,207 | — | — | $685,699 | | | 1/15/23 | 3,585 | 7,169 | 14,338 | — | — | — | $422,899 |
Grants of Plan-Based Awards in Fiscal 2023
| (1) Amounts represent the aggregate expense recognized for financial statement reporting purposes in accordance with ASC 718 for RSU, PRSU and option awards granted to our named executive officers. ASC 718 expense for the option awards is based on the fair value of the awards on the date of grant using an option-pricing model. The fair value of RSUs is based on the market price of our common stock on the date of grant. The fair value of PRSUs is based upon the then-probable outcome of the performance conditions underlying such awards and calculated using a Monte Carlo simulation because the performance target is based on our relative TSR, which represents a market condition. For more information, please see Note 8, Stockholders’ Equity, of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 regarding assumptions underlying valuation of equity awards. |
Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table The Compensation Committee granted merit non-statutory stock options to the executive officers on January 3, 2023 for their 2022 performance. All of these stock options were granted out of our 2011 Plan. The options have a term of ten years and vest at the rate of 25% for the first year and then at the rate of 2.08% per month for 36 months thereafter during the optionee’s employment. The Compensation Committee granted RSUs to the executive officers on January 15, 2023 for their 2022 performance. All of these RSUs were granted out of our 2011 Plan. The RSUs vest at the rate of 25% per year over four years with a vesting commencement date of January 15, 2024. In 2023, Dr. Monia received 33% of his total equity awards in the form of PRSUs, and all other named executive officers received 20% of their total equity awards in the form of PRSUs. These PRSU awards vest at the end of the three-year performance period following the date of grant based on the Company’s TSR as compared to a peer group of companies as measured at the end of the performance period. No number of PRSUs is guaranteed to vest and the actual number of PRSUs that will vest at the end of the performance period may be anywhere from zero to 200% of the target number depending on the Company’s relative TSR. Performance
Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table
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Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table
below the threshold level results in a payout of 0 shares, performance at the threshold level (25th percentile) results in a payout of 50% of target shares, performance at the target level (50th percentile) results in a payout of 100% of target shares, and performance at the maximum level (90th percentile) results in a payout of 200% of target shares.
Pay Versus Performance
Pay Versus Performance Pay Versus Performance Table As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K (“Item 402(v)”), we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. The amounts set forth below under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to non-PEO NEOs” have been calculated in a manner consistent with Item 402(v). Use of the term “compensation actually paid” is required by the SEC’s rules and as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in the CD&A section of this Proxy Statement. For further information concerning the Company’s pay-for-performance philosophy and how the Company seeks to align executive compensation with the Company’s performance, refer to the CD&A section of this Proxy Statement.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss)(7) | One-Year Relative Total Shareholder Return Versus the NBI(8) | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | | | | 2023 | $12,500,023 | $14,224,215 | $2,699,299 | $3,119,211 | $83.74 | $118.87 | ($366,286,000) | 89th percentile | | 2022 | $7,299,077 | $9,570,917 | $2,803,964 | $2,735,368 | $62.52 | $113.65 | ($269,722,000) | 81st percentile | | 2021 | $13,305,673 | ($2,596,842) | $3,834,223 | $713,811 | $50.37 | $126.45 | ($28,597,000) | 41st percentile | | 2020 | $10,963,040 | $3,439,140 | $5,450,933 | $1,822,613 | $93.59 | $126.42 | ($479,743,000) | 35th percentile |
Pay Versus Performance
| (1) The dollar amounts reported are the amounts of total compensation reported for Dr. Monia (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table on page 70 of this Proxy Statement. |
Pay Versus Performance
| (2) The dollar amounts represent the amount of compensation actually paid to Dr. Monia, as computed in accordance with Item 402(v). The dollar amounts shown in this column differ from the amounts shown in the proxy statement filed in 2023, for the years ended 2022 and 2021, due to a correction in the methodology used to calculate the value of PRSU awards. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Dr. Monia during the applicable year. In accordance with the requirements of Item 402(v), the following adjustments were made to Dr. Monia’s total compensation for each year to determine the compensation actually paid: |
Pay Versus Performance
| Year | Reported Summary Compensation Table Total for PEO | Deduct: Reported Value of Equity Awards(a) | Add: Equity Award Adjustments(b) | Add: Reported Change in the Actuarial Present Value of Pension Benefits(c) | Add: Pension Benefit Adjustments(c) | Compensation Actually Paid to PEO | | 2023 | $12,500,023 | ($10,116,777) | $11,840,969 | $— | $— | $14,224,215 | | 2022 | $7,299,077 | ($5,586,119) | $7,857,959 | $— | $— | $9,570,917 | | 2021 | $13,305,673 | ($11,986,030) | ($3,916,485) | $— | $— | ($2,596,842) | | 2020 | $10,963,040 | ($9,620,555) | $2,096,655 | $— | $— | $3,439,140 |
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
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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, a deduction for 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 | Change in Fair Value of Outstanding and Unvested Equity Awards as of the end of the Year | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year(i) | Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation(ii) | Total Equity Award Adjustments | | 2023 | $13,634,223 | ($3,371,063) | $— | $1,577,809 | $— | $— | $11,840,969 | | 2022 | $5,731,326 | $1,810,281 | $— | $503,613 | ($187,261) | $— | $7,857,959 | | 2021 | $4,655,272 | ($7,885,945) | $— | ($621,017) | ($64,795) | $— | ($3,916,485) | | 2020 | $7,071,074 | ($4,319,642) | $— | ($654,778) | $— | $— | $2,096,655 |
Pay Versus Performance
| (i) We do not grant any equity awards that vest in the same year as grant. |
Pay Versus Performance
| (ii) We do not pay dividends or other earnings on stock or option awards. |
Pay Versus Performance
| (c) We do not provide pension benefits to any employees of the Company. |
Pay Versus Performance
| (3) The dollar amounts reported represent the average of the amounts reported for the Company’s NEOs as a group (excluding Dr. Monia) in the “Total” column of the Summary Compensation Table of the Proxy Statement for each applicable year. The names of each of the NEOs (excluding Dr. Monia) included for purposes of calculating the average amounts in each applicable year are as follows: |
Pay Versus Performance
| (i) For 2023, Elizabeth L. Hougen (EVP & CFO), Onaiza Cadoret-Manier (EVP, Chief Global Product Strategy and Operations Officer), Richard S. Geary (EVP, Chief Development Officer), and Eric Swayze (EVP, Research); |
Pay Versus Performance
| (ii) For 2022, Elizabeth L. Hougen (EVP & CFO), Joseph T. Baroldi (EVP, Chief Business Officer), Onaiza Cadoret-Manier (EVP, Chief Global Product Strategy and Operations Officer) and Richard S. Geary (EVP, Chief Development Officer); |
Pay Versus Performance
| (iii) | For 2021, Elizabeth L. Hougen (EVP & CFO), Patrick R. O’Neil (EVP, Chief Legal Officer and General Counsel), Onaiza Cadoret-Manier (EVP, Chief Global Product Strategy and Operations Officer) and Eric Swayze (EVP, Research). |
Pay Versus Performance
| (iv) For 2020, Elizabeth L. Hougen (EVP & CFO), Stanley Crooke (Executive Chairman of the Board), Richard S. Geary (EVP, Chief Development Officer) and Patrick R. O’Neil (EVP, Legal and General Counsel). |
Pay Versus Performance
| (4) The dollar amounts reported represent the average amount of compensation actually paid to the NEOs as a group (excluding Dr. Monia), as computed in accordance with Item 402(v). The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Dr. Monia) during the applicable year. In accordance with the requirements of Item 402(v), the following adjustments were made to average total compensation for the NEOs as a group (excluding Dr. Monia) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |
Pay Versus Performance
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Deduct: Average Reported Value of Equity Awards | Add: Average Award Adjustments(a) | Add: Average Reported Change in the Actuarial Present Value of Pension Benefits(b) | Add: Average Pension Benefit Adjustments(b) | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $2,699,299 | ($1,646,670) | $2,066,581 | $— | $— | $3,119,211 | | 2022 | $2,803,964 | ($1,887,231) | $1,818,634 | $— | $— | $2,735,368 | | 2021 | $3,834,223 | ($3,039,250) | ($81,162) | $— | $— | $713,811 | | 2020 | $5,450,933 | ($4,484,784) | $856,465 | $— | $— | $1,822,613 |
Pay Versus Performance
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Pay Versus Performance
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Pay Versus Performance
| Year | Year End Fair Value of Equity Awards | Change in Fair Value of Outstanding and Unvested Equity Awards as of the end of the Year | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year(i) | Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation(ii) | Total Equity Award Adjustments | | 2023 | $2,202,507 | ($211,215) | $— | $75,289 | $— | $— | $2,066,581 | | 2022 | $1,962,339 | ($164,642) | $— | $20,938 | $— | $— | $1,818,634 | | 2021 | $1,171,440 | ($1,216,952) | $— | ($35,650) | $— | $— | ($81,162) | | 2020 | $3,366,846 | ($2,476,142) | $— | ($34,239) | $— | $— | $856,465 |
Pay Versus Performance
| (i) We do not grant any equity awards that vest in the same year as grant. |
Pay Versus Performance
| (ii) We do not pay dividends or other earnings on stock or option awards. |
Pay Versus Performance
| (b) We do not provide pension benefits to any employees of the Company. |
Pay Versus Performance
| (5) Cumulative 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 stock price at the end and the beginning of the measurement period by the Company’s stock price at the beginning of the measurement period. |
Pay Versus Performance
| (6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the Nasdaq Biotechnology Index. |
Pay Versus Performance
| (7) The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. |
Pay Versus Performance
| (8) One-year relative TSR shown is the percentile rank of the Company’s TSR as compared to the TSRs of all members of the Nasdaq Biotechnology Index, ranked in descending order, for the one-year period commencing on January 15th of the applicable year and ending January 15th of the following year, which time period is consistent with the one-year measurement period used in the PRSUs awarded in 2020-2023. |
Pay Versus Performance
Analysis of the Information Presented in the Pay Versus Performance Table While the Company utilizes several performance measures as it seeks to align executive compensation with Company performance, all of those Company measures are not presented in the Pay Versus Performance Table (“PVP Table”). Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v)) for a particular year. In accordance with Item 402(v), the Company is providing the descriptions and graphs below regarding the relationships between certain information presented in the PVP Table.
Pay Versus Performance
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Pay Versus Performance
Compensation Actually Paid and Cumulative TSR The graph below shows the amount of compensation actually paid to Dr. Monia and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Dr. Monia) against the Company’s cumulative TSR over the four years presented in the table. Cumulative TSR of the Company and Cumulative TSR of the NBI The graph below shows the Company’s cumulative TSR over the four-year period against the cumulative TSR of the peer group presented for this purpose, the Nasdaq Biotechnology Index.
Pay Versus Performance
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Pay Versus Performance
Compensation Actually Paid and Net Income The graph below shows the amount of compensation actually paid to Dr. Monia and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Dr. Monia) and the Company’s net income over the four years presented in the table. As noted above, the Company does not use compensation actually paid to set executive compensation. Compensation Actually Paid and One-Year Relative Total Shareholder Return (our Company-Selected Measure) The graph below shows the amount of compensation actually paid to Dr. Monia and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Dr. Monia) and the Company’s one-year relative total shareholder return shown as a percentile rank of the Company’s TSR as compared to the TSRs of all members of the Nasdaq Biotechnology Index for each of the four years presented in the table.
Pay Versus Performance
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Pay Versus Performance
Financial Performance Measures As described in greater detail in the CD&A, we design our executive compensation program to drive the creation of long-term stockholder value and mitigate unnecessary or imprudent business risk taking. To that end, we seek to structure our executive compensation program to align executive compensation with Company performance. The most important financial performance measures used by the Company in fiscal year 2023 to link executive compensation actually paid to the Company’s NEOs to the Company’s performance are listed in the table to the right.
Pay Versus Performance
| Most Important Financial Performance Measures | | Revenue | | One-Year Relative TSR Versus the NBI | | Whether We Met Our Non-GAAP Net Operating Loss Guidance |
Pay Versus Performance
All information provided above under the “Item 402(v) 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 Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.
Outstanding Equity Awards at Fiscal Year-End – Executive Officers
Outstanding Equity Awards at Fiscal Year-End – Executive Officers The following table shows for the fiscal year ended December 31, 2023, certain information regarding outstanding equity awards at fiscal year-end for our named executive officers. Other than the equity awards described in the table below, there were no equity incentive plan awards outstanding for our named executive officers at December 31, 2023.
Outstanding Equity Awards as of December 31, 2023
Outstanding Equity Awards as of December 31, 2023
Outstanding Equity Awards as of December 31, 2023
| | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested(2) | Market Value of Shares or Units of Stock that Have Not Vested(3) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(4) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(5) | | Brett P. Monia | 1/2/2018 | 58,125 | — | $49.25 | 1/1/2025 | — | — | — | — | | | 1/14/2018 | 30,000 | — | $53.22 | 1/13/2025 | — | — | — | — | | | 1/2/2019 | 102,900 | — | $53.77 | 1/1/2026 | — | — | — | — | | | 1/2/2020 | 105,389 | 2,243 | $60.89 | 1/1/2027 | — | — | — | — | | | 1/2/2020 | 39,971 | 851 | $60.89 | 1/1/2027 | — | — | — | — | | | 1/4/2021 | 109,281 | 40,591 | $56.78 | 1/3/2028 | — | — | — | — | | | 1/3/2022 | 48,630 | 52,859 | $32.60 | 1/2/2032 | — | — | — | — | | | 1/3/2023 | — | 118,673 | $37.58 | 1/2/2033 | — | — | — | — | | | 1/15/2020 | — | — | — | — | 11,959 | $605,005.81 | — | — | | | 1/15/2020 | — | — | — | — | 4,535 | $229,425.65 | — | — | | | 1/15/2021 | — | — | — | — | 33,304 | $1,684,849.36 | — | — | | | 1/15/2022 | — | — | — | — | 38,058 | $1,925,354.22 | — | — | | | 1/15/2023 | — | — | — | — | 89,005 | $4,502,762.95 | — | — | | | 1/15/2021 | — | — | — | — | — | — | 8,605 | $435,327 | | | 1/15/2022 | — | — | — | — | — | — | 16,915 | $855,730 | | | 1/15/2023 | — | — | — | — | — | — | 36,532 | $1,848,154 |
Outstanding Equity Awards as of December 31, 2023
| | 77 |
Outstanding Equity Awards as of December 31, 2023
| | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested(2) | Market Value of Shares or Units of Stock that Have Not Vested(3) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(4) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(5) | | Elizabeth L. Hougen | 1/2/2018 | 54,619 | — | $49.25 | 1/1/2025 | — | — | — | — | | | 1/2/2019 | 49,800 | — | $53.77 | 1/1/2026 | — | — | — | — | | | 1/2/2020 | 59,042 | 1,257 | $60.89 | 1/1/2027 | — | — | — | — | | | 1/4/2021 | 44,509 | 16,532 | $56.78 | 1/3/2028 | — | — | — | — | | | 1/3/2022 | 15,870 | 17,248 | $32.60 | 1/2/2032 | — | — | — | — | | | 1/3/2023 | — | 25,946 | $37.58 | 1/2/2033 | — | — | — | — | | | 1/15/2020 | — | — | — | — | 6,700 | $338,953.00 | — | — | | | 1/15/2021 | — | — | — | — | 13,564 | $686,202.76 | — | — | | | 1/15/2022 | — | — | — | — | 12,419 | $628,277.21 | — | — | | | 1/15/2023 | — | — | — | — | 19,460 | $984,481.40 | — | — | | | 1/15/2022 | — | — | — | — | — | — | 2,760 | $139,628 | | | 1/15/2023 | — | — | — | — | — | — | 4,054 | $205,092 | | Onaiza Cadoret-Manier | 1/9/2020 | 49,937 | 1,063 | $63.27 | 1/8/2027 | — | — | — | — | | | 1/4/2021 | 39,749 | 14,764 | $56.78 | 1/3/2028 | — | — | — | — | | | 1/3/2022 | 15,870 | 17,248 | $32.60 | 1/2/2032 | — | — | — | — | | | 1/3/2023 | — | 25,946 | $37.58 | 1/2/2033 | — | — | — | — | | | 4/15/2020 | — | — | — | — | 5,666 | $286,642.94 | — | — | | | 1/15/2021 | — | — | — | — | 12,114 | $612,847.26 | — | — | | | 1/15/2022 | — | — | — | — | 12,419 | $628,277.21 | — | — | | | 1/15/2023 | — | — | — | — | 19,460 | $984,481.40 | — | — | | | 1/15/2022 | — | — | — | — | — | — | 2,760 | $139,628 | | | 1/15/2023 | — | — | — | — | — | — | 4,054 | $205,092 | | Richard S. Geary | 1/2/2018 | 58,125 | — | $49.25 | 1/3/2023 | — | — | — | — | | | 1/2/2019 | 57,900 | — | $53.77 | 1/2/2024 | — | — | — | — | | | 1/2/2020 | 53,326 | 1,135 | $60.89 | 1/1/2025 | — | — | — | — | | | 1/4/2021 | 37,266 | 13,841 | $56.78 | 1/1/2026 | — | — | — | — | | | 1/3/2022 | 14,647 | 15,920 | $32.60 | 1/1/2027 | — | — | — | — | | | 1/3/2023 | — | 22,942 | $37.58 | 1/3/2028 | — | — | — | — | | | 1/15/2022 | — | — | — | — | 6,051 | $306,120.09 | — | — | | | 1/15/2023 | — | — | — | — | 11,356 | $574,500.04 | — | — | | | 1/15/2020 | — | — | — | — | 11,463 | $579,913.17 | — | — | | | 1/15/2021 | — | — | — | — | 17,207 | $870,502.13 | — | — | | | 1/15/2022 | — | — | — | — | — | — | 2,547 | $128,853 | | | 1/15/2023 | — | — | — | — | — | — | 3,585 | $181,365 |
Outstanding Equity Awards as of December 31, 2023
| | 78 |
Outstanding Equity Awards as of December 31, 2023
| | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested(2) | Market Value of Shares or Units of Stock that Have Not Vested(3) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(4) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(5) | | Eric Swayze | 1/2/2018 | 31,400 | — | $49.25 | 1/1/2025 | — | — | — | — | | | 1/2/2019 | 27,114 | — | $53.77 | 1/1/2026 | — | — | — | — | | | 1/2/2020 | 21,079 | 449 | $60.89 | 1/1/2027 | — | — | — | — | | | 1/2/2020 | 5,875 | 125 | $60.89 | 1/1/2027 | — | — | — | — | | | 1/4/2021 | 39,335 | 14,610 | $56.78 | 1/3/2028 | — | — | — | — | | | 1/3/2022 | 14,240 | 15,478 | $32.60 | 1/2/2032 | — | — | — | — | | | 1/3/2023 | — | 22,942 | $37.58 | 1/2/2033 | — | — | — | — | | | 1/15/2020 | — | — | — | — | 2,392 | $121,011.28 | — | — | | | 1/15/2020 | — | — | — | — | 666 | $33,692.94 | — | — | | | 1/15/2021 | — | — | — | — | 11,988 | $606,472.92 | — | — | | | 1/15/2022 | — | — | — | — | 11,144 | $563,774.96 | — | — | | | 1/15/2023 | — | — | — | — | 17,207 | $870,502.13 | — | — | | | 1/15/2022 | — | — | — | — | — | — | 2,477 | $125,311 | | | 1/15/2023 | — | — | — | — | — | — | 3,585 | $181,365 |
Outstanding Equity Awards as of December 31, 2023
| (1) The options granted to our employees were granted out of our 2011 Plan and vest at the rate of 25% for the first year and then at the rate of 2.08% per month for 36 months thereafter during the optionee’s employment. Options granted to our employees before January 1, 2022 have a term of seven years and options granted to our employees beginning January 1, 2022 have a term of ten years. |
Outstanding Equity Awards as of December 31, 2023
| (2) The RSUs granted to our employees were granted out of our 2011 Plan. The RSUs vest at the rate of 25% per year over four years. |
Outstanding Equity Awards as of December 31, 2023
| (3) Market value of stock awards was determined by multiplying the number of unvested shares by $50.59, which was the closing market price of our common stock on the Nasdaq Global Select Market on December 29, 2023, the last trading day of fiscal 2023. |
Outstanding Equity Awards as of December 31, 2023
| (4) Represents the threshold payout of shares under the PRSU awards granted to our NEOs out of our 2011 Plan. |
Outstanding Equity Awards as of December 31, 2023
| (5) Market value of PRSUs was determined by multiplying the threshold payout of shares by $50.59, which was the closing market price of our common stock on the Nasdaq Global Select Market on December 29, 2023, the last trading day of fiscal 2023. |
Outstanding Equity Awards as of December 31, 2023
| | 79 |
Option Exercises and Stock Vested – Executive Officers
Option Exercises and Stock Vested – Executive Officers The following table shows for the fiscal year ended December 31, 2023, certain information regarding option exercises and stock awards vesting during the last fiscal year with respect to our named executive officers:
Option Exercises and Stock Vested – Executive Officers
| Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Brett P. Monia | 48,000 | $2,375,238 | 106,360 | $4,288,112 | | Elizabeth L. Hougen | 45,225 | $2,283,863 | 27,294 | $1,090,938 | | Onaiza Cadoret-Manier | — | — | 20,004 | $789,349 | | Richard S. Geary | 21,225 | $1,051,560 | 25,805 | $1,031,320 | | Eric Swayze | 27,100 | $1,360,081 | 19,495 | $780,062 |
Option Exercises and Stock Vested – Executive Officers
| (1) The value realized on exercise was calculated using the closing price of our common stock on the Nasdaq Global Select Market at exercise less the applicable option exercise price. |
Option Exercises and Stock Vested – Executive Officers
| (2) The value realized on vesting of RSUs was calculated using the closing price of a share of our common stock on the Nasdaq Global Select Market on the vesting date multiplied by the number of shares vested. |
Potential Payments Upon Termination or Change-of-Control
Potential Payments Upon Termination or Change-of-Control Severance and Change of Control Arrangements On October 18, 2018, the Company implemented a Change of Control and Severance Benefit Plan, which was amended and restated on March 17, 2022 (the “Plan”) that provides for change of control and severance benefits to the Company’s executive officers, including but not limited to the Chief Executive Officer and the Chief Financial Officer, and vice presidents (each, a “Covered Employee”). The Plan provides that if a Covered Employee is terminated without “cause” (as defined in the Plan) or resigns for “good reason” (as defined in the Plan), except in connection with a “change in control” of the Company (as defined in the Plan), the Covered Employee will generally be entitled to receive (i) a lump sum payment of the Covered Employee’s then-current monthly base salary, (ii) accelerated vesting of stock options and restricted stock units previously granted to the Covered Employee by the Compensation Committee and outstanding as of the termination date that otherwise would have vested during the periods noted below, and (iii) continued medical group health and dental plan coverage, in each case for the following durations:
Potential Payments Upon Termination or Change-of-Control
| • | Chief Executive Officer: 18 months; |
Potential Payments Upon Termination or Change-of-Control
| • | Executive Vice Presidents: 12 months; |
Potential Payments Upon Termination or Change-of-Control
| • | Senior Vice Presidents: 9 months; and |
Potential Payments Upon Termination or Change-of-Control
| • | Vice Presidents: 6 months. |
Potential Payments Upon Termination or Change-of-Control
| | 80 |
Potential Payments Upon Termination or Change-of-Control
In addition, for the Chief Executive Officer only, payment of the then-current target bonus, prorated for time served during such calendar year. The Plan also provides that if a Covered Employee’s termination or resignation occurs during the period that begins three months before and ends twelve months following a change in control (as defined in the Plan), the Covered Employee will generally be entitled to receive (i) a lump sum payment of the Covered Employee’s then-current monthly base salary, (ii) payment of the then-current target bonus, (iii) accelerated vesting of all stock options and restricted stock units previously granted to the Covered Employee by the Compensation Committee and outstanding as of the termination date, and (iv) continued medical group health and dental plan coverage, in each of (i), (ii) and (iv) for the following durations:
Potential Payments Upon Termination or Change-of-Control
| • | Chief Executive Officer: 24 months; |
Potential Payments Upon Termination or Change-of-Control
| • | Executive Vice Presidents: 18 months; |
Potential Payments Upon Termination or Change-of-Control
| • | Senior Vice Presidents: 12 months; and |
Potential Payments Upon Termination or Change-of-Control
| • | Vice Presidents: 9 months. |
Potential Payments Upon Termination or Change-of-Control
Payments under the Plan will be subject to all required taxes. The Plan includes provisions for adjustment to the timing of payments to minimize accelerated or additional tax pursuant to Section 409A of the Internal Revenue Code. The Plan does not include any tax gross-up or other tax indemnity related to payments made to Covered Employees under the Plan; however, payments, benefits or distributions to or for the benefit of the Covered Employee under the Plan may be reduced if doing so would result in a more favorable after-tax position for the Covered Employee. Conditions As a condition to receiving benefits under the Plan, the Covered Employee is required to execute and not revoke a release in favor of the Company, which release will contain a standard release from liability, non-solicitation and non-disparagement provisions, and a reaffirmation of the Covered Employee’s confidentiality obligations to the Company. Estimate of Benefits under Change of Control and Severance Benefit Plan The following table estimates the lump sum payments and health benefits that would be required to be paid to our named executive officers under the Plan as of December 31, 2023. This table estimates the lump sum payments based upon either a termination without cause, a resignation with good reason or a termination in connection with a change of control, assuming such event occurred on December 31, 2023. The estimates in this table are forward-looking statements. Please see the special note regarding forward-looking statements on page 92 of this Proxy Statement.
Potential Payments Upon Termination or Change-of-Control
| Name | Total – Change of Control Event | Total – Non-Change of Control Event | | Brett P. Monia | $3,407,997 | $2,228,106 | | Elizabeth L. Hougen | $1,528,975 | $739,317 | | Onaiza Cadoret-Manier | $1,423,975 | $689,317 | | Richard S. Geary | $1,287,329 | $620,673 | | Eric Swayze | $1,228,339 | $592,893 |
Potential Payments Upon Termination or Change-of-Control
In addition, in the case of a termination or resignation with good reason in connection with a change of control (as defined in the Plan), stock options and restricted stock units previously granted by the Compensation Committee and outstanding as of the termination date will accelerate as described above.
Potential Payments Upon Termination or Change-of-Control
| | 81 |
Director Compensation
Director Compensation For the fiscal year ending December 31, 2023, we paid our non-employee Directors a base cash retainer of $60,000 with additional role-based compensation as noted below:
Director Compensation
| Role | 2023 Cash Compensation | | Board Member (Base) | $60,000(1) | | Non-Executive Chairman of the Board | $40,000 | | Independent Lead Director | $40,000 | | Committee Chairs (Additional) | | | Audit | $24,000 | | Compliance | $20,000 | | Compensation | $20,000 | | Finance | $20,000 | | Nominating, Governance and Review | $20,000 | | Medical and Science | $20,000 | | Committee Member (Additional) | | | Audit | $12,000 | | Compliance | $10,000 | | Compensation | $10,000 | | Finance | $10,000 | | Nominating, Governance and Review | $10,000 | | Medical and Science | $10,000 |
Director Compensation
| (1) Before March 31, 2024 this annual base cash retainer for each non-employee Director (not including fees for Non-Executive Chairman, Independent Lead Director, Committee Chair or Committee Member) was limited to a maximum of $70,000 per year. |
Director Compensation
If the Board creates new committees, we anticipate that the non-employee members of such new committees will receive additional compensation for their role on those committees. We do not pay Board members additional compensation for attending Board meetings, but we do reimburse them for the expenses they incur to attend the meetings. In 2023, each non-employee Director also received automatic stock award grants under our Non-Employee Directors’ Stock Option Plan. On July 2, 2023, under the Non-Employee Directors’ Stock Option Plan, each of our non-employee Directors serving at that time received an option to purchase 10,321 shares of our common stock, at an exercise price of $41.08 per share, the fair market value of the common stock on the date of the grant, based on the closing sales price reported on the Nasdaq Global Select Market, and an RSU award for 4,677 shares. The options and RSUs vest on either (1) the annual anniversary of the date of grant, or (2) the next regularly scheduled annual meeting of stockholders, whichever occurs earlier. Upon his appointment to the Board in December 2023, Mr. Yang received an option to purchase 12,356 shares of our common stock at an exercise price of $49.82, the fair market value of our common stock on the date of the grant, based on the closing price as reported on the Nasdaq Global Select Market. The options vest over a three-year period in equal installments. On January 15, 2024, Mr. Yang received an award of 5,791 restricted stock units. In March 2021, the Compensation Committee and Board adopted a policy governing compensation the Company pays to its non-employee Directors, which policy the Compensation Committee and Board have amended on several occasions (the “Director Compensation Policy”). In addition to stating the cash compensation amounts set forth above and the equity grants each non-employee Director will receive upon joining the Board and annually thereafter pursuant to the Non-Employee Directors’ Stock Option Plan, the Director Compensation Policy also includes an annual equity cap, which is currently $450,000 for annual awards to incumbent non-employee Directors and $675,000 for initial awards to newly appointed non-employee Directors, both of which are based on the aggregate grant date fair value (as determined in accordance with FASB Topic ASC 718 or its successor). The grant date fair value of annual awards to be automatically granted in July 2023 would have exceeded $450,000; thus, for 2023, each non-employee Director received a reduced annual award of 10,321 stock options and 4,677 RSUs such that the awards did not exceed the $450,000 cap. Similarly, because the grant date fair value of Mr. Yang’s initial awards would have exceeded the $675,000 cap, he received reduced awards of 12,356 stock options upon joining the Board and 5,791 RSUs on January 15, 2024.
Director Compensation
| | 82 |
Director Compensation
The Compensation Committee reviews pay levels for non-employee Directors every year, with assistance from Aon, which prepares a comprehensive assessment of Ionis’ non-employee Director compensation program. That assessment includes benchmarking of director compensation against the same peer group used for executive compensation purposes, an update on recent trends in director compensation, and a review of related corporate governance best practices. The Compensation Committee reviews these assessments prior to making recommendations to the Board regarding non-employee Director compensation. In March 2023 the Compensation Committee reviewed Aon’s assessment in which Aon did not recommend any changes to our non-employee Director compensation program for 2023. Following review and discussion of such report the Compensation Committee did not recommend any changes to the Board regarding our non-employee Director compensation program for 2023. We will continue to assess our non-employee Director compensation program annually with the assistance of Aon. In December 2022 the Company adopted a deferral program for annual RSUs granted to non-employee Directors beginning in January 2023 and going forward. Such deferral program allows non-employee Directors to defer receipt of shares that may vest under future RSU grants until (1) separation from service to Ionis, or (2) the earlier to occur of five years following the vesting date of the RSUs and separation from service to Ionis, subject in all cases to earlier delivery of deferred RSUs upon a change in control of the Company. The following table shows for the fiscal year ended December 31, 2023 certain information with respect to the compensation of our non-employee Directors:
Director Compensation for Fiscal 2023
Director Compensation for Fiscal 2023
Director Compensation for Fiscal 2023
| Name | Cash Compensation Earned or Paid ($) | Stock Awards ($)(1) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) | | Spencer R. Berthelsen | $100,000 | $192,131 | $255,907 | — | $548,038 | | Allene M. Diaz | $82,000 | $192,131 | $255,907 | — | $530,038 | | Michael Hayden | $80,000 | $192,131(2) | $255,907 | — | $528,038 | | Joan E. Herman | $92,000 | $192,131 | $255,907 | — | $540,038 | | Joseph Klein, III | $94,000 | $192,131(2) | $255,907 | — | $542,038 | | Joseph Loscalzo | $120,000 | $192,131 | $255,907 | — | $568,038 | | B. Lynne Parshall | $90,000 | $192,131 | $255,907 | — | $538,038 | | Joseph H. Wender | $150,000 | $192,131 | $255,907 | — | $598,038 | | Michael Yang | $2,308 | —(3) | $360,743 | — | $363,051 |
Director Compensation for Fiscal 2023
| (1) Amounts represent the aggregate expense recognized for financial statement reporting purposes in accordance with ASC 718 for stock and option awards granted to the Directors. ASC 718 expense for the option awards is based on the fair value of the awards on the date of grant using an option-pricing model. The fair value of RSUs is based on the market price of our common stock on the date of grant. For more information, please see Note 8, Stockholders’ Equity, of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 regarding assumptions underlying valuation of equity awards. |
Director Compensation for Fiscal 2023
| (2) Dr. Hayden and Mr. Klein elected to defer the release of these shares until 30 days following their separation from service to Ionis. |
Director Compensation for Fiscal 2023
| (3) Mr. Yang received an initial award of 5,791 restricted stock units on January 15, 2024. |
Director Compensation for Fiscal 2023
| | 83 |
Outstanding Equity Awards at Fiscal Year-End – Directors
Outstanding Equity Awards at Fiscal Year-End – Directors The following table shows for the fiscal year ended December 31, 2023, certain information regarding outstanding awards at fiscal year-end of all our non-employee Directors:
Outstanding Equity Awards as of December 31, 2023
Outstanding Equity Awards as of December 31, 2023
Outstanding Equity Awards as of December 31, 2023
| Name | Option Awards | | | | Stock Awards | | | | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested(2)(3) | Market Value of Shares or Units of Stock that Have Not Vested(4) | | Spencer R. Berthelsen | 16,000 | — | $35.53 | 6/30/2024 | 4,677 | $236,609 | | | 16,000 | — | $57.16 | 6/30/2025 | | | | | 16,000 | — | $24.42 | 6/30/2026 | | | | | 16,000 | — | $52.22 | 7/2/2027 | | | | | 16,000 | — | $42.88 | 7/1/2028 | | | | | 16,000 | — | $64.80 | 6/30/2029 | | | | | 12,000 | — | $60.20 | 6/30/2030 | | | | | 12,000 | — | $40.05 | 6/30/2031 | | | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | | | Joseph Klein, III | 16,000 | — | $57.16 | 6/30/2025 | 4,677 | $236,609 | | | 12,000 | — | $24.42 | 6/30/2026 | | | | | 16,000 | — | $52.22 | 7/2/2027 | | | | | 16,000 | — | $42.88 | 7/1/2028 | | | | | 16,000 | — | $64.80 | 6/30/2029 | | | | | 12,000 | — | $60.20 | 6/30/2030 | | | | | 12,000 | — | $40.05 | 6/30/2031 | | | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | | | Joseph Loscalzo | 22,500 | — | $49.09 | 2/2/2024 | 4,677 | $236,609 | | | 16,000 | — | $35.53 | 6/30/2024 | | | | | 16,000 | — | $57.16 | 6/30/2025 | | | | | 16,000 | — | $24.42 | 6/30/2026 | | | | | 16,000 | — | $52.22 | 7/2/2027 | | | | | 16,000 | — | $42.88 | 7/1/2028 | | | | | 16,000 | — | $64.80 | 6/30/2029 | | | | | 12,000 | — | $60.20 | 6/30/2030 | | | | | 12,000 | — | $40.05 | 6/30/2031 | | | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | |
Outstanding Equity Awards as of December 31, 2023
| | 84 |
Outstanding Equity Awards as of December 31, 2023
| Name | Option Awards | | | | Stock Awards | | | | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested(2)(3) | Market Value of Shares or Units of Stock that Have Not Vested(4) | | Joseph H. Wender | 16,000 | — | $35.53 | 6/30/2024 | 4,677 | $236,609 | | | 16,000 | — | $57.16 | 6/30/2025 | | | | | 16,000 | — | $24.42 | 6/30/2026 | | | | | 16,000 | — | $52.22 | 7/2/2027 | | | | | 16,000 | — | $42.88 | 7/1/2028 | | | | | 16,000 | — | $64.80 | 6/30/2029 | | | | | 12,000 | — | $60.20 | 6/30/2030 | | | | | 12,000 | — | $40.05 | 6/30/2031 | | | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | | | B. Lynne Parshall(5) | 103,575 | — | $49.25 | 1/1/2025 | 4,677 | $236,609 | | | 16,000 | — | $42.88 | 7/1/2028 | | | | | 16,000 | — | $64.80 | 6/30/2029 | | | | | 12,000 | — | $60.20 | 6/30/2030 | | | | | 12,000 | — | $40.05 | 6/30/2031 | | | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | | | Michael R. Hayden | 32,000 | — | $50.80 | 9/19/2028 | 4,677 | $236,609 | | | 16,000 | — | $64.80 | 6/30/2029 | | | | | 12,000 | — | $60.20 | 6/30/2030 | | | | | 12,000 | — | $40.05 | 6/30/2031 | | | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | | | Joan E. Herman | 32,000 | — | $63.90 | 6/8/2029 | 4,677 | $236,609 | | | 16,000 | — | $64.80 | 6/30/2029 | | | | | 12,000 | — | $60.20 | 6/30/2030 | | | | | 12,000 | — | $40.05 | 6/30/2031 | | | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | | | Allene M. Diaz | 18,000 | — | $40.05 | 6/30/2031 | 4,677 | $236,609 | | | 12,000 | — | $38.06 | 6/30/2032 | | | | | — | 10,321 | $41.08 | 7/2/2033 | | | | Michael Yang | — | 12,356 | $49.82 | 12/14/2023 | — | — |
Outstanding Equity Awards as of December 31, 2023
| (1) Except for the awards Ms. Parshall received when she was an employee, the options have a term of ten years and were granted out of the Non-Employee Directors’ Stock Option Plan. Initial options granted upon commencement of Board service prior to June 4, 2020 vest at the rate of 25% per year over four years, those granted June 4, 2020 through June 1, 2023 vest 100% on the first anniversary of the date of grant, and those granted after June 1, 2023 vest 33.3% per year for each of the three years following the anniversary of the grant date. Annual options that were granted prior to June 4, 2020 vest equally over four years on each anniversary of the date of grant or the next regularly scheduled annual meeting of stockholders, whichever occurs earlier. Annual options that were granted on or after June 4, 2020 vest 100% on either (1) the annual anniversary of the date of |
Outstanding Equity Awards as of December 31, 2023
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Outstanding Equity Awards as of December 31, 2023
grant, or (2) the next regularly scheduled annual meeting of stockholders, whichever occurs earlier. The options Ms. Parshall received as an employee vest at the rate of 25% for the first year and then at the rate of 2.08% per month for 36 months thereafter.
Outstanding Equity Awards as of December 31, 2023
| (2) Except for the awards Ms. Parshall received as an employee, the RSUs were granted out of our Non-Employee Directors’ Stock Option Plan. Initial RSUs granted upon commencement of Board service prior to June 4, 2020 vest at the rate of 25% per year over four years, those granted June 4, 2020 through June 1, 2023 vest 100% on the first anniversary of the date of grant, and those granted after June 1, 2023 vest 33.3% per year for each of the three years following the anniversary of the grant date. Annual RSUs that were granted prior to June 4, 2020 vest equally over four years on each anniversary of the date of grant or the next regularly scheduled annual meeting of stockholders, whichever occurs earlier. Annual RSUs that were granted on or after June 4, 2020 vest 100% on either (1) the annual anniversary of the date of grant, or (2) the next regularly scheduled annual meeting of stockholders, whichever occurs earlier. |
Outstanding Equity Awards as of December 31, 2023
| (3) All of our non-employee Directors are subject to our Stock Holding and Ownership Guidelines for RSU Shares, which requires each non-employee Director to accumulate and maintain shares of common stock equal to five times such non-employee Director’s base annual cash retainer for service as a Director (but not for service on a Board committee or as a chair or lead independent director), or until the Director’s termination of service. |
Outstanding Equity Awards as of December 31, 2023
| (4) Market value of stock awards was determined by multiplying the number of unvested shares by $50.59, which was the closing market price of our common stock on the Nasdaq Global Select Market on December 29, 2023, the last trading day of fiscal year 2023. |
Outstanding Equity Awards as of December 31, 2023
| (5) Includes awards received by Ms. Parshall during her tenure as an executive officer of the Company. |
Option Exercises and Stock Vested - Directors
Option Exercises and Stock Vested - Directors The following table shows for the fiscal year ended December 31, 2023, certain information regarding option exercises and stock awards vested during the last fiscal year with respect to our non-employee Directors:
Option Exercises and Stock Vested in Fiscal 2023
Option Exercises and Stock Vested in Fiscal 2023
Option Exercises and Stock Vested in Fiscal 2023
| Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Spencer R. Berthelsen | 11,250 | $462,038 | 7,110 | $300,042 | | Joseph Klein, III | — | — | 7,110 | $300,042 | | Joseph Loscalzo | — | — | 7,110 | $300,042 | | Joseph H. Wender | — | — | 7,110 | $300,042 | | B. Lynne Parshall(3) | 117,638 | $5,938,129 | 7,110 | $300,042 | | Michael R. Hayden | — | — | 7,110 | $300,042 | | Joan E. Herman | — | — | 10,665 | $448,037 | | Allene M. Diaz | — | — | 5,333 | $225,053 | | Michael Yang | — | — | — | — |
Option Exercises and Stock Vested in Fiscal 2023
| (1) The value realized on exercise was calculated using the closing price of our common stock on the Nasdaq Global Select Market at exercise less the applicable option exercise price. |
Option Exercises and Stock Vested in Fiscal 2023
| (2) The value realized on vesting of RSUs was calculated using the closing price of a share of our common stock on the Nasdaq Global Select Market on the vesting date multiplied by the number of shares vested. |
Option Exercises and Stock Vested in Fiscal 2023
| (3) Includes shares received by Ms. Parshall pursuant to awards granted during her tenure as an executive officer of the Company. |
Certain Relationships and Related Transactions
| Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards(2) ($) | Option Awards(2)(3) ($) | All Other Compensation(4) ($) | Total ($) | | Mariana Baroldi, Executive Director | 2023 | $218,200 | $104,175 | $71,730 | $99,816 | $20,028 | $513,949 |
CEO Pay Ratio
CEO Pay Ratio Under SEC rules, we disclose below the annual total compensation of our median employee, and the ratio of the annual total compensation of our CEO compared to the annual total compensation of our median employee (“CEO Pay Ratio”). We identified our median employee for 2023 using the following methodology:
CEO Pay Ratio
| • | We included all employees of Ionis who were employed by us on December 31, 2023. |
CEO Pay Ratio
| • | We identified our median employee from this employee population based on the W-2 income for 2023. We did not annualize any of these amounts. |
CEO Pay Ratio
Using this approach, we determined our median employee for 2023 and calculated the annual total compensation of this employee for 2023 in accordance with the requirements of the Summary Compensation Table. For 2023, the median of the annual total compensation of our employees (other than our CEO) was $318,112 and the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $12,500,023. Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was approximately 39 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. Currently, neither the Compensation Committee nor our management used the CEO Pay Ratio described above to make compensation decisions. The Compensation Committee does, however, consider the internal pay equity ratios described on page 51 of this Proxy Statement when making compensation decisions.
CEO Pay Ratio
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