DEF 14A of Nektar Therapeutics
Filed Apr 25, 2025 · FY20240001140361-25-015744
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our board of directors is presently comprised of six (6) directors and is divided into three (3) classes. Class I currently consists of one director and Class II currently consists of three directors. Each class has a three (3) year term. The two (2) current directors in Class III are Diana Brainard and R. Scott Greer, whose term expires in 2025. Each of the current directors in Class III was previously elected by the stockholders at the 2022 Annual Meeting of Stockholders. Dr. Brainard and Mr. Greer have each been nominated for reelection at the Annual Meeting. Vacancies on the board, including vacancies created by an increase in the number of directors, are filled only by persons elected by a majority of the remaining directors. A director elected by the board to fill a vacancy in a class serves until the earliest of the end of the remaining term of that class, the election and qualification of his or her successor or such director’s death, resignation or removal. Directors are elected by a majority of the votes cast at the Annual Meeting on the election of directors. A majority of votes cast shall mean that the number of shares voted “For” a director’s election exceeds fifty percent (50%) of the number of votes cast with respect to that director’s election, with votes cast including votes “Against” in each case but excluding abstentions and broker non-votes with respect to that director’s election. Shares represented by executed proxies by stockholders of record will be voted for the election of the two nominees named below, unless the “Against” or “Abstain” voting selection has been marked on the proxy card. Neither abstentions nor broker non-votes will have an effect on the outcome of the vote. Following any election of directors where the number of nominees did not exceed the number of directors to be elected, any incumbent director who was a nominee and who did not receive a majority of votes cast by the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors, shall promptly tender his or her offer of resignation to our board of directors for consideration by our board of directors. A recommendation on whether or not to accept such resignation offer shall be made by the Nominating and Corporate Governance Committee or, if each member of the Nominating and Corporate Governance Committee did not receive the required majority vote or the Nominating and Corporate Governance Committee is otherwise unable to act, a majority of our board of directors shall appoint a special committee of independent directors for such purpose of making a recommendation to our board of directors (the committee with authority to act pursuant to this sentence shall be referred to herein as the “Nominating Committee”). If no independent directors received the required majority vote, our board of directors shall act on the resignation offers. Within 60 days following certification of the stockholder vote, the Nominating Committee shall consider the resignation offer and recommend to our board of directors the action to be taken with respect to such offer of resignation. Absent a compelling reason for the director to remain on our board of directors, as determined by our board of directors in its business judgment, our board of directors shall accept the resignation offer. Any director who tenders his or her resignation pursuant to this provision shall not participate in the Nominating Committee recommendation or board of directors action regarding whether to accept the resignation offer. Our board of directors shall determine whether to accept the resignation offer and publicly disclose the decision and reasons therefor, by a press release, a filing with the SEC or other broadly disseminated means of communication, within 90 days following certification of the stockholder vote. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would otherwise be voted for such nominee will be voted for the election of a substitute nominee proposed by the Nominating and Corporate Governance Committee and nominated by the board of directors. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee will be unable to serve. If elected at the Annual Meeting, each of the nominees will serve until the earliest of the 2028 annual meeting of our stockholders, the election and qualification of his or her successor or his or her death, resignation or removal. The following is a brief biography of each nominee.
Diana Brainard
Diana Brainard Diana Brainard, M.D., age 54, was appointed to our board of directors in November 2021. Dr. Brainard is an Entrepreneur Partner at MPM BioImpact, a biotechnology investment firm. She formerly served as the Chief Executive Officer and a member of the board of directors of AlloVir, Inc., a late clinical-stage cell therapy company. Prior to joining AlloVir, Inc., Dr. Brainard served as Senior Vice President and Virology Therapeutic Area Head at Gilead Sciences, Inc. from 2018 to April 2021. From 2015 to 2018, Dr. Brainard served as Vice President of Clinical Research, Liver Diseases at Gilead Sciences, Inc. Dr. Brainard obtained her B.A. degree from Brown University and her M.D. from Tulane University School of Medicine.
R. Scott Greer
R. Scott Greer R. Scott Greer, age 66, has served as our director since February 2010. Mr. Greer currently serves as Managing Director of Numenor Ventures, LLC, a venture capital firm. In 1996, Mr. Greer co-founded Abgenix, Inc., a company that specialized in the discovery, development and manufacture of human therapeutic antibodies, and from June 1996 through May 2002, he served as its Chief Executive Officer. He previously also served as a director of Abgenix from 1996 and Chairman of the board of directors from 2000 until the acquisition of Abgenix by Amgen, Inc. in April 2006. Prior to Abgenix’s formation, Mr. Greer held senior management positions at Cell Genesys, Inc., a biotechnology company, initially as Chief Financial Officer and Vice President of Corporate Development and later as Senior Vice President of Corporate Development, and various positions at Genetics Institute, Inc., a biotechnology research and development company. He previously served on the board of directors of Inogen, Inc., a medical device company that develops and markets oxygen therapy products from 2015-2021, Sientra, Inc., a medical aesthetics company from 2014-2018, Versartis, Inc., an endocrine focused biopharmaceutical company from 2014-2018, Auspex Pharmaceuticals, a biopharmaceutical company developing drugs for patients with movement disorders and other rare diseases from 2014-2015, StemCells, Inc., a biopharmaceutical company focused on stem cell therapeutics from 2010-2016, Ablexis, an antibody technology company, as its Chairman of the board of directors from 2010-2016, Sirna Therapeutics, Inc., a biotechnology company, from 2003, and as its Chairman of the board of directors from 2005, through the closing of the acquisition of Sirna by Merck & Co., Inc. in December 2006. Mr. Greer previously also served as a member of the board of directors of Illumina, Inc., a provider of integrated systems for the analysis of genetic variation and biological function from 2001-2005 and of the board of directors of CV Therapeutics, Inc., a biotechnology company from 2001-2004. Mr. Greer received a B.A. in Economics from Whitman College and an M.B.A. degree from Harvard University. He also was a certified public accountant.
Interests of Directors and Executive Officers
Interests of Directors and Executive Officers Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposal except to the extent of their ownership of shares of our Common Stock.
INFORMATION ABOUT THE BOARD OF DIRECTORS
INFORMATION ABOUT THE BOARD OF DIRECTORS The following is a brief biography of each current director, including each nominee for reelection at the Annual Meeting to a new term of office and each director whose current term of office continues through the Annual Meeting.
THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
CURRENT DIRECTORS NOMINATED FOR REELECTION TO SERVE UNTIL THE 2028 ANNUAL MEETING
CURRENT DIRECTORS NOMINATED FOR REELECTION TO SERVE UNTIL THE 2028 ANNUAL MEETING Diana Brainard, M.D., age 54, was appointed to our board of directors in November 2021. Dr. Brainard is an Entrepreneur Partner at MPM BioImpact, a biotechnology investment firm. She formerly served as the Chief Executive Officer and a member of the board of directors of AlloVir, Inc., a late clinical-stage cell therapy company. Prior to joining AlloVir, Inc., Dr. Brainard served as Senior Vice President and Virology Therapeutic Area Head at Gilead Sciences, Inc. from 2018 to April 2021. From 2015 to 2018, Dr. Brainard served as Vice President of Clinical Research, Liver Diseases at Gilead Sciences, Inc. Dr. Brainard obtained her B.A. degree from Brown University and her M.D. from Tulane University School of Medicine. R. Scott Greer, age 66, has served as our director since February 2010. Mr. Greer currently serves as Managing Director of Numenor Ventures, LLC, a venture capital firm. In 1996, Mr. Greer co-founded Abgenix, Inc., a company that specialized in the discovery, development and manufacture of human therapeutic antibodies, and from June 1996 through May 2002, he served as its Chief Executive Officer. He previously also served as a director of Abgenix from 1996 and Chairman of the board of directors from 2000 until the acquisition of Abgenix by Amgen, Inc. in April 2006. Prior to Abgenix’s formation, Mr. Greer held senior management positions at Cell Genesys, Inc., a biotechnology company, initially as Chief Financial Officer and Vice President of Corporate Development and later as Senior Vice President of Corporate Development, and various positions at Genetics Institute, Inc., a biotechnology research and development company. He previously served on the board of directors of Inogen, Inc., a medical device company that develops and markets oxygen therapy products from 2015-2021, Sientra, Inc., a medical aesthetics company from 2014-2018, Versartis, Inc., an endocrine focused biopharmaceutical company from 2014-2018, Auspex Pharmaceuticals, a biopharmaceutical company developing drugs for patients with movement disorders and other rare diseases from 2014-2015, StemCells, Inc., a biopharmaceutical company focused on stem cell therapeutics from 2010-2016, Ablexis, an antibody technology company, as its Chairman of the board of directors from 2010-2016, Sirna Therapeutics, Inc., a biotechnology company, from 2003, and as its Chairman of the board of directors from 2005, through the closing of the acquisition of Sirna by Merck & Co., Inc. in December 2006. Mr. Greer previously also served as a member of the board of directors of Illumina, Inc., a provider of integrated systems for the analysis of genetic variation and biological function from 2001-2005 and of the board of directors of CV Therapeutics, Inc., a biotechnology company from 2001-2004. Mr. Greer received a B.A. in Economics from Whitman College and an M.B.A. degree from Harvard University. He also was a certified public accountant.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING Howard W. Robin, age 72, has served as our President and Chief Executive Officer since January 2007 and has served as a member of our board of directors since February 2007. Mr. Robin has more than 40 years of successful biopharmaceutical experience managing clinical development and commercial operations. Prior to joining Nektar, Mr. Robin served as President and Chief Executive Officer of Sirna Therapeutics, a clinical-stage biotechnology company pioneering RNAi-based therapies for serious diseases and conditions, including age-related macular degeneration (AMD), hepatitis C, respiratory syncytial virus (RSV) and Huntington's disease. During his tenure at Sirna from 2001 to 2006, Mr. Robin successfully re-launched the company and created significant shareholder value that led to its acquisition by Merck. Prior to joining Sirna, Mr. Robin was Senior Vice President and General Manager of the therapeutics division of Berlex Laboratories, the U.S. pharmaceutical subsidiary of the German pharmaceutical firm Schering AG, where he was responsible for the development of drugs, such as Betaseron(R) (Interferon beta-1b), the first therapy for multiple sclerosis, and Fludara(R) (fludarabine phosphate), the first therapy for chronic lymphocytic leukemia. These drugs generated annual global sales in excess of $1.5 billion. Prior to joining Berlex, Mr. Robin was a senior associate with Arthur Andersen & Co. Mr. Robin received his B.S. in Accounting and Finance from Fairleigh Dickinson University, where he previously served as a member of its Board of Trustees.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2027 ANNUAL MEETING
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2027 ANNUAL MEETING Jeff Ajer, age 62, was appointed to the board of directors of in September 2017. Mr. Ajer was the former Executive Vice President and Chief Commercial Officer from 2014 to 2024 at BioMarin, a global biotechnology company that develops and commercializes innovative therapies for people with serious and life-threatening rare disorders. Mr. Ajer has more than 25 years of experience driving commercialization for rare diseases and specialty medicines, including leading commercial planning for late-stage pipeline programs, product marketing, reimbursement, and sales operations. After joining BioMarin in 2005 as one of the first sales and marketing employees, he held roles of increasing responsibility including Vice President, Commercial Operations, The Americas; Senior Vice President and Chief Commercial Officer; and Executive Vice President and Chief Commercial Officer. Mr. Ajer was integral in establishing BioMarin’s commercial infrastructure and global footprint and played a leadership role in the launches and growth strategies for BioMarin’s commercial brands including Brineura™, Vimizim®, Kuvan® and Naglazyme®. Prior to his time at BioMarin, Mr. Ajer served as Vice President, Global Transplant Operations at Genzyme Corporation and held positions in sales, marketing, and operations at SangStat Medical Corporation and ICN Pharmaceuticals. Mr. Ajer serves on the board of directors of Viridian Therapeutics, Inc. a publicly-traded clinical stage biopharmaceutical focused on medicines for serious and rare diseases. He also serves on the advisory board of Serna Bio, a private preclinical biotech company working in the field of RNA-targeted therapeutics. He received his B.S. degree in chemistry and MBA from the University of California, Irvine. Robert Chess, age 68, is the Chairman of our board of directors and has served as a director since May 1992. From March 2006 until January 2007, Mr. Chess served as our Acting President and Chief Executive Officer, and from April 1999 to January 2007, served as Executive Chairman. He also served as our Co-Chief Executive Officer from August 1998 to April 2000, as President from December 1991 to August 1998, and as Chief Executive Officer from May 1992 to August 1998. Mr. Chess was previously the co-founder and President of Penederm, Inc., a publicly-traded dermatological pharmaceutical company that was sold to Mylan Laboratories. He has held management positions at Intel Corporation and Metaphor Computer Systems (now part of IBM), and was a member of the first President Bush’s White House staff as a White House Fellow and Associate Director of the White House Office of Economic and Domestic Policy. Mr. Chess serves on the board of directors and is the lead director of Twist Biosciences, a publicly-traded company in the synthetic biology field. He is Chairman of two private companies: Bighat Biosciences, which does ML-guided biologics design, and Issio Solutions, which is in the labor productivity software field. From 1997 until his retirement in 2009, Mr. Chess served on the board of directors of the Biotechnology Industry Organization (“BIO”). Mr. Chess served as Chairman of BIO’s Emerging Companies Section and Co-Chairman of BIO’s Intellectual Property Committee. Mr. Chess was the initial Chairman of Bio Ventures for Global Health and served on its Board through 2022. He currently is a member of the faculty of the Stanford Graduate School of Business, where he teaches courses in the MBA program on the healthcare industry and the business opportunity created by aging demographics and increased longevity. Mr. Chess received his B.S. degree in Engineering with honors from the California Institute of Technology and an M.B.A. from Harvard University. Roy A. Whitfield, age 71, has served as our director since August 2000 and as Lead Independent Director since January 2019. Mr. Whitfield is the former Chairman of the Board and Chief Executive Officer of Incyte Corporation (“Incyte”), a drug discovery and development company he co-founded in 1991. From January 1993 to November 2001, Mr. Whitfield served as its Chief Executive Officer and from November 2001 until June 2003 as its Chairman. He also served as a director of Incyte from 1991 to January 2014. From 1984 to 1989, Mr. Whitfield held senior operating and business development positions with Technicon Instruments Corporation (“Technicon”), a medical instrumentation company, and its predecessor company, Cooper Biomedical, Inc., a biotechnology and medical diagnostics company. Prior to his work at Technicon, Mr. Whitfield spent seven years with the Boston Consulting Group’s international consulting practice. Mr. Whitfield received a B.S. in mathematics from Oxford University and an M.B.A. from Stanford University.
DIRECTOR COMPENSATION TABLE—FISCAL 2024
DIRECTOR COMPENSATION TABLE—FISCAL 2024 Each of our non-employee directors participates in our Amended and Restated Compensation Plan for Non-Employee Directors (the “Director Plan”). Only our non-employee directors are eligible to participate in the Director Plan. The following table shows the fees earned or paid to our non-employee directors for the fiscal year ended December 31, 2024.
DIRECTOR COMPENSATION TABLE—FISCAL 2024
| Name(1) (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards ($) (c) | Option Awards ($)(2) (d) | All Other Compensation ($) (e) | Total ($) (f) | | Jeff Ajer | 87,000 | — | 110,939 | — | 197,939 | | Diana Brainard, M.D. | 87,000 | — | 110,939 | — | 197,939 | | Robert Chess | 128,500 | — | 110,939 | — | 239,439 | | Myriam Curet, M.D.(3) | 38,000 | — | — | — | 38,000 | | R. Scott Greer | 113,000 | — | 110,939 | — | 223,939 | | Roy A. Whitfield | 120,000 | — | 110,939 | — | 230,939 |
DIRECTOR COMPENSATION TABLE—FISCAL 2024
| (1) Mr. Robin, our President and Chief Executive Officer, is not included in this table as he was an employee of the Company in 2024 and received no additional compensation for his services in his capacity as a director. Please see the “Summary Compensation Table – Fiscal 2022-2024” for information regarding the compensation Mr. Robin received as our President and Chief Executive Office. |
DIRECTOR COMPENSATION TABLE—FISCAL 2024
| (2) Amounts reported represent the aggregate grant date fair value of option awards computed in accordance with FASB ASC Topic 718, which excludes the effects of estimated forfeitures. For a complete description of the assumptions made in determining the valuation, please refer to Note 13 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2024. Each of our then-serving non-employee directors received a stock option for 120,000 shares for his or her annual stock option grant on September 18, 2024. As of December 31, 2024, each of our non-employee directors had the following number of stock options outstanding: Mr. Ajer: 342,750; Dr. Brainard: 262,120; Mr. Chess: 309,000; Mr. Greer: 309,000; and Mr. Whitfield: 309,000. |
DIRECTOR COMPENSATION TABLE—FISCAL 2024
| (3) Ms. Curet’s term as a director expired on June 8, 2024. As of December 31, 2024, Ms. Curet has 167,400 stock options outstanding. |
DIRECTOR COMPENSATION TABLE—FISCAL 2024
The 2024 compensation for the Company’s non-employee directors was recommended by the Organization and Compensation Committee to the Board following the receipt of a report from our independent compensation consultant, which in 2024 was Aon, which contained an analysis of prevailing market practices regarding levels and types of non-employee director compensation, including the non-employee director compensation practices of our 2024 peer group set forth below in the section entitled “Compensation Discussion and Analysis”, and a comparative assessment of our non-employee director compensation to such peers and market practices. On at least an annual basis, qualified experts deliver a presentation to the Organization and Compensation Committee about recent developments and best practices related to non-employee director compensation. Effective January 1, 2024 the annual retainer for non-employee directors was $55,000 (“Annual Retainer”). In addition to the Annual Retainer, the Chairperson of the Board of Directors received an additional annual retainer of $50,000 for a total of $105,000, and the Independent Lead Director of the Board of Directors received an additional annual retainer of $25,000 for a total of $80,000. The annual retainer amount was $25,000 for the Chair of the Audit Committee and $12,000 for members other than the Chair, $20,000 for the Chair of the Compensation Committee and $10,000 for members other than the Chair of the Compensation Committee, and $15,000 for the Chair of the Governance Committee and $8,000 for members other than the Chair of the Governance Committee. The Chair and members of any new committees would receive an additional annual retainer of $5,000, unless otherwise specified in the resolutions duly forming such new committee. In September of each year, each non-employee director is eligible to receive an equity award consisting of either all stock options or a combination of stock options and RSUs, as determined by the board of directors. These equity awards vest over a period of one year (monthly for stock options and upon the one year anniversary date for RSUs) and include a number of shares as determined annually by the board of directors. In September 2024 our then-serving non-employee directors received 120,000 stock options. No RSUs were granted. Upon initial appointment to the board of directors, each non-employee director is eligible to receive an equity award consisting of either all stock options or a combination of stock options and RSUs. These initial equity awards vest over a period of three years from the date of appointment and will be at a level based on 180% of the most recent annual equity compensation grant to non-employee directors, as determined annually by the board of directors. The exercise price of stock options granted is equal to the closing price of the Company’s common stock on the grant date. Following completion of a non-employee director’s service on the board of directors, his or her stock options will remain exercisable for a period of thirty-six months (or, if earlier, the end of the maximum term of the option). The term of stock options granted to non-employee directors is eight years. In the event of a change of control, the vesting of each option or RSU award held by each non-employee director will accelerate in full as of the closing of such transaction. In the event of death or disability, each RSU of the non-employee director will vest immediately. In the event a non-employee director ceases to continue their service on the board of directors at the Company’s annual shareholder meeting or any date thereafter, any unvested restricted stock unit award(s) of such non-employee director shall vest upon the cessation of such service on a pro rata basis calculated by the number of completed whole months of completed service during the vesting period. The Director Plan includes non-binding ownership guidelines for non-employee directors stating that each non-employee director should own shares of our common stock equal to at least three times the value of the annual board cash retainer. The minimum stock ownership level was to be achieved by each non-employee director within five years of the date of his or her first appointment to the board of directors. Each of our non-executive directors with over five years of service on the board of directors has met the ownership guidelines previously. The board of directors understands that the recent unexpected drop in the share price of our common stock has caused a temporal diminution in the value of the common stock owned by one non-executive director so as to currently equal less than three times the value of the annual board cash retainer. As allowed by our ownership guidelines, the board of directors will continue to monitor the situation and, if necessary, develop an alternative stock ownership guideline that reflects the intention of these guidelines. Our 2017 Plan also limits the aggregate value of cash compensation and the grant date fair value (computed in accordance with generally accepted accounting principles) of shares of Common Stock that may be paid or granted during any calendar year to any non-employee director with a maximum of $1,200,000 for existing non-employee directors and $2,200,000 for new non-employee directors.
Compensation Highlights
Compensation Highlights We consider the intellectual capital of our employees to be an essential driver of our business and key to the successful execution of our strategy. Accordingly, we aim to attract and retain high-performing executives, and our executive officer compensation program is designed to reward achievement of important business goals and to pay for performance. We also recognize that the biotechnology industry is characterized by high stock price volatility, uncertainty and intense competition and that the Company’s stock price at any given point in time may not be reflective of the Company’s accomplishments and performance over a sustained period. We use a variety of performance-based compensation elements, including long-term equity awards that have both time and performance-based vesting criteria and annual cash incentives that are based on both corporate performance and an individual’s performance, in order to align our NEOs’ interests with those of our stockholders. We believe this incentivizes our management team to invest in and to develop strategies that will create long-term growth and value for our stockholders. In 2024, our board of directors and Organization and Compensation Committee took the following key compensation actions:
Compensation Highlights
| • | Alignment of CEO bonus to corporate goal achievement – Beginning in 2021, to further align CEO performance with the performance of the Company, we directly align the annual cash incentive that may be earned by the CEO with the corporate achievement rating determined by the board of directors. |
Compensation Highlights
| • | Annual cash incentives for NEOs – Our NEOs, other than the CEO, may earn annual cash incentives that are based on the Company’s corporate performance (as measured against predefined corporate objectives set annually by the board of directors), which may be further adjusted based on individual performance. |
Compensation Highlights
| • | Long-term Incentives – Our long-term incentives are intended to motivate executives to deliver long-term stockholder value and to reward their achievement of specific business goals that will advance our business strategy. Consistent with our philosophy of pay for performance, in 2024 we granted our NEOs long-term equity awards in the form of stock options only, half of which have performance-based vesting criteria that will vest only if the Company achieves certain defined performance milestones within five years. |
Compensation Highlights
| • | Peer Group Alignment – In June 2024, we conducted our annual compensation peer group review, with input from our independent compensation consultant to align our peer group companies to appropriate selection criteria in light of our reorganized company and new strategic priorities. |
How Our Pay Program Works
| Base Salary | Base salaries are set to be competitive within our industry with consideration for, among other things, an individual’s responsibilities, market data and individual contribution. We have previously not awarded any merit-based increases to our NEOs’ base salaries since 2022. Our NEO’s 2024 salaries remained at the same level as 2022 salaries. For 2025, our NEO’s 2025 base salaries received a 2% increase from 2024 base salary levels to remain competitive within our peer group. | | Annual Cash Incentives | Annual incentives are intended to motivate and reward executives for the achievement of important short-term goals and milestones that we believe contribute to the creation of long-term stockholder value. In 2024, annual cash bonuses were awarded to NEOs based on the Company’s achievement of pre-established corporate goals, including clinical development, research and business development, and financial objectives, as well as any significant achievements outside the pre-established goals. Consistent with historic practice since 2021, the cash incentive award for our CEO is based solely on the performance of the Company as determined by the board of directors. | | Long-Term Equity Incentives | Our long-term incentives, which include performance-based vesting equity awards and time-based vesting equity awards, are intended to motivate executives to deliver long-term stockholder value and to retain our talented executive team. In 2024, equity grants were awarded as a mix of time-based (50%) and performance-based (50%) stock options. |
Target Pay Mix
Target Pay Mix Consistent with our pay for performance philosophy, we believe that a significant portion of our executives’ compensation should be “at-risk” and performance-based in order to motivate and align our executive officer’s interests with those of our stockholders. We emphasize performance-based compensation through two separate performance-based compensation methods: (i) our executives are eligible to receive annual cash incentives if they achieve short-term annual corporate objectives that are preapproved by the board of directors and (ii) we grant long-term equity awards that have substantial performance-based criteria designed to promote long-term growth and value creation. In 2024, 50% of the long-term equity incentives granted included performance-based vesting criteria.
COMPENSATION GOVERNANCE PRACTICES
| What We Do | What We Do Not Do | | Deliver executive compensation primarily through performance-based pay | Do not permit hedging transactions, share pledging, or short sales by employees or directors | | Utilize equity awards of which a majority are performance-based and designed to deliver long term stockholder value | Do not permit repricing of stock options without shareholder approval | | Have a clawback policy covering cash and equity incentive compensation | Do not provide excessive perquisites | | Conduct a regular peer group review with our independent consultant to align the Company’s current profile | Do not provide funded pension or retirement plans (other than a matching contribution of up to $12,000 for 401(k) plan participants that we make available to all employees) | | Have double trigger Change-in-Control (CIC) severance plan provisions | Do not provide excise tax gross-ups on CIC payments | | Have stock ownership guidelines applicable to our senior | Do not accelerate vesting of equity awards on termination |
COMPENSATION GOVERNANCE PRACTICES
| What We Do | What We Do Not Do | | executive officers | (unless in connection with a change of control of the Company) | | Utilize independent compensation consulting firm | Do not include the value of equity awards in severance calculations | | Conduct a regular review of share utilization for equity compensation | No fixed employment terms | | Design our programs to mitigate undue risk | No guaranteed bonus payments | | Conduct an annual say-on-pay vote and regular shareholder outreach | |
COMPENSATION PROGRAM OBJECTIVES AND PHILOSOPHY
| • | Incentivize and reward sustained long-term performance by aligning significant elements of executive compensation with long-term stockholder value creation; |
COMPENSATION PROGRAM OBJECTIVES AND PHILOSOPHY
| • | Alignment with Long-Term Stockholder Value Creation. Our compensation model is designed to align the economic interests of our executives with long-term stockholder value creation. Under our program, in 2024, 50% of the equity awards granted to our executive officers were performance-based equity awards that only vest if certain performance conditions are met. |
ROLE OF ORGANIZATION AND COMPENSATION COMMITTEE
ROLE OF ORGANIZATION AND COMPENSATION COMMITTEE The Organization and Compensation Committee is responsible for establishing the compensation programs of the Company’s CEO, NEOs and other executives of the Company. It also administers the Company’s equity-based and performance-based compensation plans, including plans under which restricted stock units or stock options are awarded. Accordingly, it is responsible for reviewing base salary and cash and equity incentives payable to executives, including the Company’s CEO and NEOs, and recommending to the board of directors for approval a total compensation package for each executive. The Organization and Compensation Committee also has the authority to grant restricted stock units and options to purchase shares of the Company’s Common Stock to all participants under the Company’s equity award plans, and to determine all terms and conditions of such awards.
ROLE OF COMPENSATION CONSULTANT
ROLE OF COMPENSATION CONSULTANT In 2024, the Organization and Compensation Committee continued to retain the services of Aon’s Human Capital Solutions practice, a division of Aon, plc (Aon) as its independent executive compensation consultant due to its extensive analytical and compensation expertise in our industry. In this capacity, Aon has advised the Organization and Compensation Committee on compensation matters related to the executive and director compensation programs including:
ROLE OF COMPENSATION CONSULTANT
| • | executive and director market pay analysis; |
ROLE OF COMPENSATION CONSULTANT
| • | reviewing employee equity award framework; |
ROLE OF COMPENSATION CONSULTANT
| • | reviewing and, when appropriate, suggesting changes to the compensation peer group; |
ROLE OF COMPENSATION CONSULTANT
| • | development and refinement of executive pay programs and governance practices; and |
ROLE OF COMPENSATION CONSULTANT
| • | assistance in reviewing the Compensation Discussion and Analysis and other proxy statement disclosures. |
ROLE OF COMPENSATION CONSULTANT
The Organization and Compensation Committee has the sole authority to engage and terminate Aon’s services, as well as to approve its compensation. Aon makes recommendations to the committee but has no authority to make compensation decisions on behalf of the committee or the Company. Aon reported to the Organization and Compensation Committee and had direct access to the chairperson and the other members of the committee. Beyond data and advice related to executive and director compensation matters and equity plan design and assistance with proxy statement disclosures, Aon did not provide any other consulting services to us in 2024. The Organization and Compensation Committee conducted a specific review of its relationship with Aon in 2024 and determined that Aon’s work did not raise any conflicts of interest. Aon’s work has conformed to the independence factors and guidance provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC and Nasdaq.
USE OF MARKET DATA AND PEER GROUP ANALYSIS
USE OF MARKET DATA AND PEER GROUP ANALYSIS We regularly review the compensation practices of our peers in response to the fast-moving nature of the biotechnology industry, including merger and acquisition activity, and changes in product pipeline and business stage. As a result of the Company having a combination of multiple drug candidates in diverse therapeutic areas, a mix of wholly-owned and partnered drug products, and, previously, a legacy proprietary manufacturing operation, it is very challenging to identify truly comparable companies. Historically, we conduct an annual peer group review in June of each year. In June 2023, we engaged Aon to conduct a review and assessment of our peer group. Previously, we had selected our peer group companies by considering companies in a comparable sector and stage with market capitalizations between 0.5x to 3.0x of our market capitalization at the time of review. However, a company’s market capitalization can at times be misaligned with market expectations. We believe that, due to current market conditions and in light of the fact that our market valuation has been trading below our cash value, the use of market capitalization as the primary criteria for selecting our peer group would not best capture an appropriate peer group that is comparable to our company. In consultation with Aon, we calculated and examined the ratio of market capitalization to cash value within peers to determine a median “cash value” multiple, which we applied to our cash value at the time of review to derive an implied valuation of the Company. We then considered for our peer group, companies in a comparable sector and stage with market capitalizations between 0.5x to 3.0x of our implied valuation and further selected our peer group based on comparable financial profile, business and product focus, and development stage. As a result, in June 2023 the Organization and Compensation Committee approved a selection of 19 peer group companies. In June 2024, the Organization and Compensation Committee reviewed with Aon our peer group and determined that the same metrics from 2023 should be used in setting the 2024 peer group, which peer group is utilized by the Organization and Compensation Committee in evaluating 2025 compensation. As a result, the following peer group was used approved by the Organization and Compensation Committee for evaluating 2024 - 2025 compensation decisions.
USE OF MARKET DATA AND PEER GROUP ANALYSIS
| 4D Molecular Therapeutics | BioAtla | Kezar Life Sciences | | Alector | bluebird bio, Inc.* | Kodiak Sciences | | Allakos | CytomX Therapeutics | Olema Pharmaceuticals | | ALX Oncology | Erasca | ORIC Pharmaceuticals | | Annexon | Gossamer bio | RAPT Therapeutics | | Aura Biosciences | IGM Biosciences | |
USE OF MARKET DATA AND PEER GROUP ANALYSIS
Compared to the 2023 peer group, the 2024 peer group differs in that two companies, Alpine Immune Sciences and NGM Bio, were removed on account that these two companies had either been acquired or were in the process of being acquired. Given that our peer group companies have different market capitalizations than the Company, the Organization and Compensation Committee also reviews equity and total direct compensation data for our executives against the compensation for similarly situated executives at peer companies contained in surveys. Although the Organization and Compensation Committee reviewed and discussed the compensation data for the peer group companies to help inform executive compensation decisions, it does not set compensation at any specific level or percentile based solely on the peer group data. The peer group data and general industry compensation survey data is used only as one reference point considered in making compensation decisions. Other factors considered include an assessment of individual and company performance, competitive market practices, the number of unvested stock options held by the executive and average exercise price (i.e., the retention value) of these options, the number of unvested RSUs, the individual’s overall contributions, and stockholder dilution. However, we do not use a formula or assign a particular weight to any one factor in determining cash and equity award levels.
DESIGN AND ELEMENTS OF OUR COMPENSATION PROGRAM
| • | Short-term cash incentives, based on the Company’s achievement of pre-established corporate performance objectives as well as individual performance (except for the CEO, whose short-term cash incentive is based solely on the Company’s performance); and |
DESIGN AND ELEMENTS OF OUR COMPENSATION PROGRAM
| • | Long-term incentives, awarded as an equal mix of time- and performance-based option grants. |
DESIGN AND ELEMENTS OF OUR COMPENSATION PROGRAM
Using the above three elements as a foundation, the Organization and Compensation Committee consulted with Aon, its independent executive compensation consultant, to design a compensation program that provides appropriate incentives and opportunities to the executives, aligns the vesting and performance milestones for equity awards with the Company’s strategic plan, reflects the Company’s current research and clinical developments, and remains market-aligned with industry peer groups, among others. Each element of our compensation program is discussed further below.
SHORT-TERM INCENTIVES
SHORT-TERM INCENTIVES We believe that our short-term incentive compensation program (“Incentive Compensation Plan”) rewards the achievement of important short-term objectives that advance us toward our long-term strategic objectives. Our Incentive Compensation Plan applies to all employees and all executive officers other than our Chief Executive Officer, Mr. Robin, who is subject to his own separate annual performance-based bonus compensation arrangement. Since 2021, Mr. Robin’s bonus arrangement has been based on the same corporate objectives that we established under the Incentive Compensation Plan to greater align Mr. Robin’s short-term incentive compensation with the achievement of important short-term objectives of the Company. Consistent with our compensation philosophy of paying for performance and maintaining a flexible approach, we use the Incentive Compensation Plan to incentivize the NEOs to achieve important corporate goals while at the same time encouraging and rewarding excellent individual performance by recognizing and rewarding differences in performance between individual executives.
2024 and 2025 Target Annual Incentive Opportunities
2024 and 2025 Target Annual Incentive Opportunities The NEOs were each assigned a target annual incentive for 2024 ranging from 60% to 100% of base salary. The target annual incentive opportunities are determined based on each NEO’s experience, scope of responsibilities, and potential impact on the Company’s performance and approved by the Organization and Compensation Committee. The table below shows the target annual incentive assigned by us to each NEO as a percentage of base salary for 2024 and 2025. For 2025, no changes were made to the target annual incentive opportunities for each NEO. As further discussed below, each NEO’s (excluding Mr. Robin’s) annual bonus is determined based on a combination of the corporate performance rating and individual performance. As previously indicated, we began in 2021 to directly align Mr. Robin’s, the CEO, annual bonus award with the Company’s corporate performance rating so that Mr. Robin’s annual bonus is determined based solely on the Company’s corporate performance rating approved by the board of directors. Because Mr. Robin’s annual bonus is dependent solely on the performance of the Company, his target annual incentives since 2021 have been set at 100%.
2024 and 2025 Target Annual Incentive Opportunities
| | 2024 Target Annual Incentives | 2025 Target Annual Incentives | | Name | (% of Base Salary) | (% of Base Salary) | | Howard W. Robin | 100% | 100% | | Sandra Gardiner(1) | — | — | | Mark A. Wilson | 60% | 60% | | Jonathan Zalevsky, Ph.D. | 60% | 60% |
2024 and 2025 Target Annual Incentive Opportunities
| (1) Ms. Gardiner does not participate in our Incentive Compensation Plan |
Company Performance Objectives
Company Performance Objectives The board of directors annually establishes a number of important annual corporate goals that include clinical development, research, commercial, organizational and financial goals which the board of directors believes are essential to building long-term stockholder value. These goals are then used in our Incentive Compensation Plan to assess annual corporate performance. The relative weightings of these corporate goals are based upon the board of directors and CEO’s assessment of the importance of each goal in creating long-term value for the Company and our stockholders. The board of directors endeavors to select corporate goals that, if met by management, represent significant levels of annual achievement, although we believe the long-term nature of our drug development business does not lend itself to over-weighting the importance of annual goals. Following the conclusion of the annual performance period in December of each year, the level of achievement for each corporate goal is assessed by the board of directors. The board of directors determines whether each corporate goal has been met, exceeded, or not satisfied. If we achieve the target level of performance for all of the stated goals, the overall corporate performance rating would be 100%. In addition, in assessing corporate performance, the determination of corporate performance may be adjusted upward or downward by the board of directors as deemed appropriate to factor in other significant corporate events, either negative or positive, that occurred during the performance period, but were not reflected in the corporate goals previously set by the board of directors. After taking into account the level of attainment of each corporate goal and such other corporate performance factors as the board of directors may determine appropriate in reviewing performance for a particular year, the board of directors assigns an overall corporate performance rating for the year, which may range from 0% to 200%. The Organization and Compensation Committee then confirms the corporate performance rating for purposes of the Incentive Compensation Plan. The total available bonus pool under the Incentive Compensation Plan is determined by multiplying the corporate performance rating by the aggregate target bonus of all eligible participants which includes nearly all of the Company’s full-time employees. The aggregate of all individual bonuses awarded under the plan cannot exceed the total available bonus pool so that the total cost of bonuses ultimately reflects our assessment of overall corporate performance and is not inflated by the sum of individual performance ratings. The board of directors receives input and recommendation from the CEO regarding the Company’s performance and determines the final corporate performance rating. After the corporate performance rating is determined, the individual performance of each NEO is reviewed by the Organization and Compensation Committee in consultation with Mr. Robin (other than with respect to his own performance) in order to determine the appropriate individual performance percentage rating to be assigned to the executive for the performance period. Mr. Robin’s individual performance is separately reviewed by the Organization and Compensation Committee. Each NEO’s (excluding Mr. Robin’s) actual annual bonus is based on a combination of the corporate performance rating and individual performance. The Incentive Compensation Plan does not provide for a specific allocation or weighting between corporate and individual performance. The actual annual bonus awarded for each NEO (excluding Mr. Robin) is solely determined by the Organization and Compensation Committee based on criteria that includes an assessment of individual performance (as measured by Mr. Robin’s evaluation of the performance of each NEO) and company performance, and the maximum payout for each NEO could be up to 200% of his or her cash target annual incentive (or, by the same token, an individual executive’s award could be reduced to 0% based on individual performance regardless of the corporate performance rating). Mr. Robin’s annual bonus award is directly aligned and based on the corporate performance rating that is recommended by the Organization and Compensation Committee and approved by the board of directors, which may range from 0% to 200%. Given the dynamic nature of our business, new priorities continually emerge such that the Organization and Compensation Committee wishes to retain the flexibility to tie a varying portion of annual incentive payouts to the individual achievement of a range of objectives. In December 2023, the board of directors formally approved the 2024 corporate objectives (“2024 Corporate Objectives”) set forth below. The 2024 Corporate Objectives, relative weightings assigned to each of the categories of the objectives, whether the objectives were met, each category’s raw and weighted scores were as follows:
Actual Annual Incentives Earned for 2024
Actual Annual Incentives Earned for 2024 Management prepared a report on the status of achievement of the 2024 Corporate Objectives that was reviewed by the Organization and Compensation Committee in November 2024. The Organization and Compensation Committee determined that four of the seven corporate goals identified above were met or exceeded. Each of the goals that was “met” had to achieve objective and specified measurement criteria established by the board of directors in the beginning of the year. If the measurement criteria for an objective was not fully met, partial credit was given depending on the level of achievement. As noted in the footnotes to the table, we have highlighted some of the specific achievements made within each objective category that was evaluated by the board of directors in determining whether such Corporate Objective was met. Due to the sensitivity and proprietary nature of our business and certain confidentiality obligations, we cannot specify all of the achievements made by the Company in furtherance of our 2024 Corporate Objectives. Using a raw score range for the achievement of the objectives within each category, and then calculating the weighted score for each category, the 2024 corporate performance rating was between the range of 77% to 95% of the 2024 Corporate Objectives. However, in determining the final corporate performance achievement for 2024, the Organization and Compensation Committee also considered other significant business achievements of the Company in 2024 that were important in building strategic value, but were not reflected in the 2024 Corporate Objectives because of the dynamic nature of the biotechnology industry and the volatility of the capital markets and access to financial resources. These notable achievements include:
Actual Annual Incentives Earned for 2024
| • | Completion of our $30 million PIPE financing with TCGX. In the PIPE, we sold 25 million shares of our common stock, in the form of a pre-funded warrant, at a price of $1.20 per share, which represented a premium of approximately 80% to Nektar’s 30-day volume-weighted average price at the time of sale. |
Actual Annual Incentives Earned for 2024
| • | We and HCR amended our 2020 Purchase and Sale Agreement to remove the cap on the royalties received by HCR in exchange for an additional $15.0 million payment to the Company. |
Actual Annual Incentives Earned for 2024
| • | We successfully negotiated and entered into an Amended and Restated Manufacturing and Supply Agreement with UCB Pharma to supply PEG reagent for their manufacturing of CIMZIA® and dapirolizumab pegol, which, among other things, extended the term of the agreement, committed UCB to “take or pay” minimum supply quantities and increased the selling price of the PEG reagent. |
Actual Annual Incentives Earned for 2024
| • | We completed the sale of our manufacturing facility in Huntsville, Alabama to Ampersand Capital Partners, a Boston-based private equity firm, for consideration of $64.7 million in cash, net of transaction costs, and an approximate 20% equity interest at the time of close in Gannet BioChem, a newly-created Ampersand portfolio company. |
Actual Annual Incentives Earned for 2024
In view of these significant achievements, as well as the Company having met or exceeded a substantial number of the 2024 Corporate Objectives, the Organization and Compensation Committee recommended to the board of directors (which the board of directors subsequently approved) a corporate performance achievement of 90% for 2024. In addition, in recognition of the employees of the Company who made significant contributions in 2024 to the successful completion of enrollment for the Phase 2b atopic dermatitis study and other significant business achievements, the Organization and Compensation Committee approved an additional discretionary bonus pool for Mr. Robin to allocate additional cash awards in his discretion to eligible employees. The following table shows some of the highlights of each NEO’s performance in 2024. Each NEO’s contributions were instrumental to the Company’s achievement of the above accomplishments and objectives in 2024.
Actual Annual Incentives Earned for 2024
| Name | Individual Performance Highlights | | Howard W. Robin | • Guided the Company through four significant transactions, thereby further enhancing the Company’s cash position and extending its cash runway. • Focused the Company on maintaining the development timelines of rezpegaldesleukin to ensure top-line readouts in 2025. | | Mark Wilson | • Led the Company’s litigation strategy in its lawsuit against Eli Lilly and Company. • Part of the executive leadership team involved with the negotiation, and subsequent drafting, of agreements for the $30 million PIPE, the 2020 Purchase and Sale Agreement with HCR to generate a $15 million to the Company, the amended manufacturing and supply agreement with UCB, and the sale of our manufacturing facility in Huntsville, Alabama. | | Jonathan Zalevsky, Ph.D. | • Further advanced rezpegaldesleukin’s development, including leading the Company’s effort that resulted in the Company’s February 2025 announcement that it had entered into a new clinical trial agreement to evaluate rezpegaldesleukin in patients with new onset Type 1 diabetes mellitus and maintaining on-track enrollment of our clinical trials in atopic dermatitis and alopecia areata. • Led the pre-clinical study efforts for the development of NKTR-0165, which resulted in the first preclinical data for this program, showing that NKTR-0165 demonstrated selective enhancement of Treg cell function. |
Actual Annual Incentives Earned for 2024
The table below includes the actual 2024 bonuses, including as a percentage of the target opportunity, that we awarded the NEOs for 2024. Mr. Robin’s awarded annual incentive is directly aligned to the Company’s corporate performance rating, which was 90%. In determining the annual incentive for each of our other NEOs, our Organization and Compensation Committee considers the Company’s corporate performance rating, as well as each NEO’s individual performance and accomplishments highlighted above, in particular, the significant contributions and efforts each NEO made to the Company’s successful advancement of rezpegaldesleukin in its clinical trials and the sale of the Company’s Huntsville facility. Ms. Gardiner, our Interim Chief Financial Officer, provides services as an outside consultant and is not employed or directly compensated by us, as further described under “Certain Relationships and Related Party Transactions.” Ms. Gardiner does not participate in our Incentive Compensation Plan and did not receive any bonus payment in 2024.
Actual Annual Incentives Earned for 2024
| | 2024 Target Annual Incentives | | 2024 Earned Annual Incentives | | | Name | (% of Base Salary) | ($) | (% of Target Bonus) To the nearest % | ($) | | Howard W. Robin | 100% | $1,084,590 | 90% | $976,131 | | Mark A. Wilson | 60% | $324,000 | 102% | $336,600 | | Jonathan Zalevsky, Ph.D. | 60% | $422,094 | 104% | $431,885 |
LONG-TERM INCENTIVES
LONG-TERM INCENTIVES In accordance with our objective of aligning executive compensation with our stockholders’ interests, an important component of our executive compensation program are long-term incentive opportunities. Our current long-term incentive program for the NEOs generally consists of annual awards of equity compensation that are subject to multi-year time-based vesting schedules as well as performance-based vesting schedules. In some years, we have used a value-based approach for sizing equity awards, consistent with market practices. More recently, and in 2024, we adopted a “percent of ownership” approach. Regardless of the approach, in determining the grant levels for equity awards, we generally consider a number of factors including an assessment of individual performance, competitive market practices, the number of unvested RSUs and stock options held by the executive and average exercise price (i.e., the retention value) of these stock options, the individual’s overall contributions, and stockholder dilution. However, we do not use a formula or assign a particular weight to any one factor in determining equity award levels. The Organization and Compensation Committee awards equity grants at levels it believes in its judgment are reasonably competitive and consistent with our philosophy that a substantial portion of our executives’ compensation should be performance-based and help to further link the interests of our executives with those of our stockholders, as well as to provide a retention incentive for the executive.
2024 Grants
2024 Grants We historically review our executive compensation and grant equity grants in December of each year. In 2022, in connection with our restructuring efforts, the Organization and Compensation Committee conducted its executive compensation review in July and August 2022 and “pulled forward” the timing of any annual equity grants that would have otherwise been considered in December 2022. No additional equity grants were made to our executives in 2022, which resulted in a16-month gap in grant timing between the August 2022 and December 2023 grants. The Organization and Compensation Committee conducted their annual review of executive equity grants in December 2024 and evaluated the value of the equity compensation package of our executives, noting that the Company’s depressed stock price results in a significant portion of all existing options held by our executives to be “underwater” or trading below their strike price and reduces the value of any unvested equity of our executives compared to the value of potential new equity grants (based on market data) that our executives could receive at new positions at comparable companies, which increases retention risk. The Organization and Compensation Committee also considered, among other factors, the strategic goals and resources of the Company, each executives skills, experience and scope of responsibilities, the compensation practices of the Company’s peer group, equity grants previously awarded to each executive, and the recommendation of Aon. In order to balance the Company’s interests to motivate and incentivize our executives to perform highly and achieve business objectives, to retain talented and experienced executives and to maximize stockholder value, the Organization and Compensation Committee recommended to the board of directors (which the board of directors subsequently approved) that the equity grants to our executives in 2024 remain at the same level as the 2023 grants and consist of stock options only, with 50% subject to time-based vesting and 50% subject to performance-based vesting. The following equity grants were awarded to our NEOs in 2024. Ms. Gardiner did not receive any equity grants.
2024 Grants
| | Stock Options (Number of Shares(#)) | | | Name | Time-based Awards (#) (50%) | Performance-based Awards (#) (50%) | | Howard W. Robin | 1,300,000 | 1,300,000 | | Mark A. Wilson | 325,000 | 325,000 | | Jonathan Zalevsky, Ph.D. | 375,000 | 375,000 |
2024 Grants
Time-Based Stock Options The Organization and Compensation Committee believes that the granting of time-based stock options are an important component of the equity vehicle mix. Stock options represent a direct alignment of executive interests with those of stockholders and motivate executives to achieve value-enhancing objectives for the Company. Time-based stock options also create strong retention incentives for executive officers in a competitive market. In 2024, 50% of the equity awards granted to our NEOs were time-based equity awards. The time-based stock options vest monthly over four years, subject to the executive’s continued service through the vesting date. Performance-Based Stock Options In 2024, 50% of the stock options granted to our executives were performance-based and subject to both time-based vesting and performance-based vesting. These performance-based stock options vest only upon the achievement, within a certain performance period, of defined performance criteria that are tied to our business strategy, which are set forth below. They help create an ownership culture, encourage individual contribution and provide a strong link between executive performance and the Company’s long-term value. In order to vest, within five years of grant of the performance-based stock options, the Company must achieve the following:
2024 Grants
| • | 66% of each executive’s 2024 performance-based stock options will vest at the start of a Phase 3 clinical trial for rezpegaldesleukin; and |
2024 Grants
| • | 34% of each executive’s 2024 performance-based stock options will vest upon achievement of positive Phase 3 topline clinical results for rezpegaldesleukin in any indication. |
2024 Grants
The Organization and Compensation Committee believed these performance criteria would be challenging to achieve and if achieved, would help create significant long-term stockholder value. These performance milestones were set to align the interest of our executives with those of the Company’s renewed strategic focus on advancing our lead drug candidate, rezpegaldesleukin. As in 2023, the Organization and Compensation Committee in 2024 only granted stock options as equity compensation to our NEOs. In years prior, our executive equity compensation package included additional components and vehicles such as time-based and performance-based RSUs and performance-based RSUs tied to relative total shareholder return performance. Given the business changes and current stage and size of our company, we believe that granting stock options provides the appropriate incentives for our executives to continue performing highly while maximizing stockholder and company value. The Organization and Compensation Committee will continue to evaluate our executive compensation program in light of the Company’s changing business developments and it may grant RSUs or other related awards tied to short-term stock value in the future when such approaches are believed to be in the best interests of the Company and its shareholders.
Results of Outstanding Grants of Performance-Based Equity
Results of Outstanding Grants of Performance-Based Equity 2020-2023 Grants The performance criteria associated with each of the performance stock options and RSUs granted to our senior executives and NEOs in 2020 have not been met and thus, vesting of these performance-based stock options and RSUs has not occurred. If the performance criteria associated with these performance stock options and RSUs are not satisfied within five years of grant, the equity awards will be cancelled. In 2020 the Organization and Compensation Committee introduced a new component to our equity compensation in order to increase the percentage of equity grants to our senior executives that were subject to performance-based conditions and to reflect, at the time, the Company’s maturation into a biopharmaceutical company with a potential commercialized drug. In 2020 and 2021, our senior executives were granted new performance-based RSUs (“TSR RSUs”) that vest between 0% and 200% of the target award based on relative total shareholder return (TSR) performance as measured against the Nasdaq Biotechnology index over a two-year performance period. The performance period for the 2020 TSR RSUs was measured from December 18, 2020 to December 31, 2022 (the “2020 TSR RSU Performance Period”). Following the 2020 TSR RSU Performance Period, the Organization and Compensation Committee engaged Aon to independently determine the Company’s TSR percentile rank within the Nasdaq Biotechnology Index. Aon determined that the Company’s performance measured at the 15th percentile, which pursuant to the terms of the TSR RSUs grant, corresponds to a performance multiplier of 0%. Therefore, the Organization and Compensation Committee determined that none of the 2020 TSR RSUs that were granted to our senior executives and NEOs would vest. Accordingly, all 2020 TSR RSUs granted to our executives were cancelled. In 2021, our NEOs were granted certain performance-based stock options and RSUs (the “2021 Performance Grants”) that would only vest if the Company achieved the first commercial sale to a third party of bempegaldesleukin intended for use by end-user customers within five years of the award grant date. In anticipation of the expected data readouts in the first half of 2022 for the Phase 3 registrational trials studying bempegaldesleukin in combination with nivolumab and to prioritize achievement of the success of the bempegaldesleukin programs, in 2021 our NEOs also received a one-time grant of performance-based RSUs subject to performance-based vesting conditions (the “Bempegaldesleukin Performance Grants”). In order to vest, by June 1, 2022, the Company had to achieve certain primary endpoint objectives in the Phase 3 melanoma trial studying the combination bempegaldesleukin and nivolumab, which was not achieved. Subsequently, in 2022, we and Bristol Myers Squibb discontinued all clinical development activities of bempegaldesleukin. Although the performance period for the 2021 Performance Grants has not ended yet, due to the termination of our bempegaldesleukin development program, achievement of the performance criteria for the 2021 Performance Grants is no longer realistically feasible. All RSUs granted under Bempegaldesleukin Performance Grants were cancelled. As discussed above, our NEOs were also granted TSR RSUs in 2021. The performance period for the 2021 TSR RSUs was measured from December 16, 2021 to December 31, 2023 (the “2021 TSR RSU Performance Period”). Following the 2021 TSR RSU Performance Period, the Organization and Compensation Committee engaged Aon to determine the Company’s performance mercantile. Based on Aon’s determination of the Company’s percentile performance within the Nasdaq Biotechnology Index, the Organization and Compensation Committee determined that none of the 2021 TSR RSUs that were granted to our senior executives and NEOs would vest. Accordingly, all 2021 TSR RSUs granted to our executives were cancelled. The performance criteria associated with the performance-based stock options and RSUs granted to our senior executives and NEOs in 2022 have been met. The 2022 performance-based stock options and RSUs granted on August 15, 2022 began vesting after the Organization and Compensation Committee determined on November 18, 2024, that all required performance criteria had been achieved, which included the achievement of (i) a first patient dosed in a Nektar sponsored Phase 2 comparative study of NKTR-255 in conjunction with approved autologous CD19 CAR-T therapies and (ii) a first patient dosed in a clinical collaboration for NKTR-255 in combination with cell therapy with significant co-funding support of approximately 50% of one or more clinical studies. These achievements represent important milestones in the development of our NKTR-255 program. In accordance with the terms of the 2022 grants, on December 13, 2024 approximately 3/4th of the performance-based RSUs granted vested, which will be followed by continued quarterly pro-rata vesting of the remainder until August 15, 2025 and approximately 3/4th of the performance-based stock options granted vested, which will be followed by continued monthly pro-rata vesting of the remainder until August 15, 2025. The performance criteria associated with each of the performance stock options granted to our senior executives and NEOs in 2023 have not been met and thus, vesting of these performance-based stock options has not occurred. If the performance criteria associated with these performance stock options are not satisfied within three years of grant, the equity awards will be cancelled.
OTHER COMPENSATION POLICIES AND PRACTICES
OTHER COMPENSATION POLICIES AND PRACTICES Severance and Change of Control Benefits If the employment of an NEO is terminated by us without cause or by the executive for a designated good reason outside of the context of a change of control transaction, the executive would be entitled to severance benefits under the applicable agreement he or she entered into with the Company. Generally, these severance benefits include a cash severance payment based on the executive’s then-current annual base salary and the amount of his or her target annual incentive bonus, payment of COBRA premiums for up to a maximum of eighteen (18) months, and an additional twelve-month period to exercise vested stock options (an eighteen-month period for Mr. Robin and a three-month period for Mr. Wilson and Dr. Zalevsky). In order to attract and retain these NEOs in a competitive environment for highly skilled senior executive talent in the biotechnology and pharmaceutical industry and to provide an incentive to obtain a broad release of claims in favor of the Company, we determined it was often necessary to offer severance benefits in the case of a termination without cause or constructive termination outside the context of a change of control transaction. Many companies provide severance benefits for similar types of terminations of employment, and we believe that it is important for us to offer these severance benefits in order to continue to provide a competitive total compensation program. These NEOs would also be entitled to certain termination benefits upon a termination of employment because of death or disability. We also maintain a Change of Control Severance Benefit Plan (the “CIC Plan”) that provides the NEOs with certain severance benefits if their employment is terminated in connection with a change of control. The CIC Plan was originally established in 2006, and no amendments have been made to the plan since that time that would increase the severance benefits available under the CIC Plan. Severance benefits under the CIC Plan are structured on a “double-trigger” basis, meaning that the executive must experience a termination without cause or resign for a specifically defined good reason in connection with the change of control in order for severance benefits to become payable under the CIC Plan. Like the severance benefits under the letter agreements, we believe that these change of control severance benefits are an important element of a competitive total compensation program. Additionally, we believe that providing change of control benefits should eliminate, or at least reduce, any reluctance of our NEOs and other key employees covered by the CIC Plan to diligently consider and pursue potential change of control opportunities that may be in the best interests of our stockholders. At the same time, by providing change of control benefits only upon the occurrence of an additional triggering event occurring in connection with the change of control transaction resulting in a job loss, we believe that this CIC Plan helps preserve the value of our key personnel for any potential acquiring company. Under the CIC Plan, the executive would be entitled to accelerated equity award vesting upon a termination described above. The other severance benefits under the CIC Plan are generally similar to the severance benefits described above; however, Mr. Robin’s cash severance would cover the two-year period following termination and Company-paid COBRA coverage would be eighteen months. Outplacement services received within twelve months following separation, up to a maximum of $5,000, are provided to all participants. In addition, each of the NEOs would be entitled to full equity vesting and, except for Dr. Zalevsky, a “gross up” payment for any excise taxes imposed under Section 4999 of the Internal Revenue Code once a 10% cutback threshold is exceeded. The excise tax gross-up was included in the CIC Plan as originally adopted in 2006 to make the participants whole for any adverse tax consequences to which they may become subject under Section 4999 of the Internal Revenue Code and to avoid unintended differences in net severance based on individual factors like the date of hire and past option exercise decisions, which preserves the level of change of control severance protections that we have determined to be appropriate. At the time the CIC Plan was established, we believed this excise tax gross-up protection was a reasonable part of a competitive total compensation package and generally consistent with industry practice at the time. On April 5, 2011, the board of directors amended the CIC Plan to eliminate any “gross up” payments for any excise taxes imposed under Section 4999 of the Internal Revenue Code for participants who became eligible to participate in the CIC Plan on or after January 1, 2010. The board of directors decided to eliminate this tax gross-up provision under the plan for new participants based on its review of current industry practices. The “Potential Payments Upon Termination or Change of Control” section below describes and quantifies the severance and other benefits potentially payable to the NEOs directly employed by the Company.
EQUITY AWARDS GRANT POLICY
EQUITY AWARDS GRANT POLICY As discussed above, the Organization and Compensation Committee reviews our executive compensation at its regularly scheduled meeting in December of each year and then recommends to the board of directors to approve annual equity grants for our executives in December of each year. The Organization and Compensation Committee has also delegated certain limited authority to a committee comprised of management representatives to grant equity awards under our stock incentive plan to employees who are not executive officers or directors of the Company. Historically, we have granted equity awards to non-executive employees in December of each year in connection with annual performance reviews. In addition to the annual grants, equity awards may be granted at other times during the year to new hires, employees receiving promotions, and in other circumstances. We do not have any policy or practice to grant or determine the terms of equity awards in coordination with release of material non-public information.
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($)(2)(3) (e) | Option Awards ($)(4)(5)(6)(7) (f) | Non-Equity Incentive Plan Compensation ($)(8) (g) | All Other Compensation ($) (i) | Total Compensation ($) (j) | | Howard W. Robin President and Chief Executive Officer | 2024 | 1,084,590 | — | — | 1,596,122 | 976,131 | 105,850(9) | 3,762,693 | | | 2023 | 1,084,590 | — | — | 927,160 | 1,030,361 | 93,465 | 3,135,576 | | | 2022 | 1,084,590 | — | 4,032,255 | 5,409,410 | 650,754 | 98,821 | 11,275,830 | | Sandra Gardiner(1) Interim Chief Financial Officer | 2024 | — | — | — | — | — | 460,850(10) | 460,850 | | | 2023 | — | — | — | — | — | 376,300 | 376,300 | | Mark A. Wilson Chief Legal Officer | 2024 | 540,000 | — | — | 399,030 | 336,600 | 21,697(11) | 1,297,327 | | | 2023 | 540,000 | — | — | 231,790 | 307,800 | 20,878 | 1,100,468 | | | 2022 | 527,500 | — | 1,629,478 | 2,185,994 | 194,400 | 28,093 | 4,565,465 | | Jonathan Zalevsky, Ph.D. Chief Research and Development Officer | 2024 | 703,490 | — | — | 460,420 | 431,885 | 15,825(12) | 1,611,620 | | | 2023 | 703,490 | — | — | 178,300 | 400,989 | 490,585 | 1,773,364 | | | 2022 | 703,490 | — | 1,325,673 | 1,778,436 | 253,256 | 289,625 | 4,350,480 |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (1) Ms. Gardiner was appointed our Interim Chief Financial Officer as of April 17, 2023. Ms. Gardiner is a partner at FLG Partners and provides services as Interim Chief Financial Officer as an outside consultant pursuant to a consulting agreement between the Company and FLG Partners (“Gardiner Consulting Agreement”), and is not employed or directly compensated by the Company. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (2) Amounts reported represent the aggregate grant date fair value of RSU awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”), based on the closing price of the Company’s common stock on the grant date and excluding the effects of estimated forfeitures. For a complete description of the assumptions made in determining the valuation, please refer to (i) Note 13 of our annual report on Form 10-K for the fiscal year ended December 13, 2024 and (ii) similar footnotes to our audited financial statements in our annual reports on Form 10-K for prior years when the awards were granted. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (3) 50% of the annual equity awards granted to the NEOs in 2022 were performance-based with vesting only to the extent a specified performance-based vesting condition is satisfied within three years of grant. If the performance-based vesting condition is satisfied, then the performance-based equity awards also remain subject to a time-based vesting requirement. The amounts reported in the “Stock Awards” and “Option Awards” column of the table for 2022 include the grant date fair value of performance-based RSUs and stock options, as applicable for the year, based on the probable outcome (determined as of the grant date in accordance with generally accepted accounting principles) of the performance-based conditions applicable to the awards which assumes maximum achievement of the underlying performance conditions. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (4) Amounts reported represent the aggregate grant date fair value of the stock options granted in the applicable year computed in accordance with FASB ASC Topic 718, which excludes the effects of estimated forfeitures. For a complete description of the assumptions made in determining the valuation, please refer to (i) Note 13 of our annual report on Form 10-K for the fiscal year ended December 13, 2024 and (ii) similar footnotes to our audited financial statements in our annual reports on Form 10-K for prior years when the awards were granted. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (5) 50% of the annual equity awards granted to the NEOs in 2024 were performance-based with vesting only to the extent a specified performance-based vesting condition is satisfied within five years of grant. If the performance-based vesting condition is satisfied, then the performance-based equity awards also remain subject to a time-based vesting requirement. The amounts reported in the “Option Awards” column of the table for 2024 include the grant date fair value of performance-based stock options, as applicable for the year, based on the probable outcome (determined as of the grant date in accordance with generally accepted accounting principles) of the performance-based conditions applicable to the awards. Assuming maximum achievement of the underlying performance conditions, the grant date fair value of the annual equity awards would be $1,923,039 for Mr. Robin, $480,760 for Mr. Wilson, and $554,723 for Dr. Zalevsky. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (6) 50% of the annual equity awards granted to the NEOs in 2023 were performance-based with vesting only to the extent a specified performance-based vesting condition is satisfied within three years of grant. If the performance-based vesting condition is satisfied, then the performance-based equity awards also remain subject to a time-based vesting requirement. The amounts reported in the “Option Awards” column of the table for 2023 include the grant date fair value of performance-based stock options, as applicable for the year, based on the probable outcome (determined as of the grant date in accordance with generally accepted accounting principles) of the performance-based conditions applicable to the awards which assumes maximum achievement of the underlying performance conditions. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (7) 50% of the annual equity awards granted to the NEOs in 2022 were performance-based with vesting only to the extent a specified performance-based vesting condition is satisfied within three years of grant. If the performance-based vesting condition is satisfied, then the performance-based equity awards also remain subject to a time-based vesting requirement. The amounts reported in the “Stock |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
Awards” and “Option Awards” column of the table for 2022 include the grant date fair value of performance-based RSUs and stock options, as applicable for the year, based on the probable outcome (determined as of the grant date in accordance with generally accepted accounting principles) of the performance-based conditions applicable to the awards which assumes maximum achievement of the underlying performance conditions.
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (8) Amounts reported for 2022, 2023 and 2024 represent amounts earned under the Incentive Compensation Plan for that year or, for Mr. Robin, under his amended and restated offer letter effective as of December 1, 2008. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (9) Includes (i) life insurance premiums of $42,391, (ii) group term life insurance premiums of $49,704, (iii) a $12,000 contribution to the Company’s 401(k) plan and (iv) $1,755 for long term disability post tax. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (10) Consists of consulting fees paid to FLG Partners, LLC, pursuant to the Gardiner Consulting Agreement, in connection with Ms. Gardiner’s services as Interim Chief Financial Officer. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (11) Includes (i) life insurance premiums of $1,449, (ii) group term life insurance premiums of $2,843, (iii) a $12,000 contribution to the Company’s 401(k) plan, (iv) a $3,650 contribution to the Health Savings Account, and (v) $1,755 for long term disability post tax. |
SUMMARY COMPENSATION TABLE—FISCAL 2022-2024
| (12) Includes (i) life insurance premiums of $945, (ii) group term life insurance premiums of $2,880 and (iii) a $12,000 contribution to the Company’s 401(k) plan. |
GRANTS OF PLAN BASED AWARDS IN 2024
GRANTS OF PLAN BASED AWARDS IN 2024 The following table shows, for the fiscal year ended December 31, 2024, certain information regarding grants of plan-based awards to the NEOs(1).
GRANTS OF PLAN BASED AWARDS IN 2024
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (i) | All Other Option Awards: Number of Securities Underlying Options (#)(4) (j) | Exercise or Base Price of Option Awards ($/sh)(5) (k) | Grant Date Fair Value of Stock and Option Awards ($)(6) (l) | | Name (a) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | | | | | | Howard W. Robin | | | | | | | | | | | | | Annual Incentive Award | N/A | | 1,084,590 | 2,169,180 | | | | | | | | | Stock Options | 12/13/2024 | | | | | 1,300,000 | | | | 1.01 | 961,519 | | Stock Options | 12/13/2024 | | | | | | | | 1,300,000 | 1.01 | 634,603 | | Mark A. Wilson | | | | | | | | | | | | | Annual Incentive Award | N/A | | 324,000 | 648,000 | | | | | | | | | Stock Options | 12/13/2024 | | | | | 325,000 | | | | 1.01 | 240,380 | | Stock Options | 12/13/2024 | | | | | | | | 325,000 | 1.01 | 158,650 | | Jonathan Zalevsky | | | | | | | | | | | | | Annual Incentive Award | N/A | | 422,094 | 844,188 | | | | | | | | | Stock Options | 12/13/2024 | | | | | 375,000 | | | | 1.01 | 277,361 | | Stock Options | 12/13/2024 | | | | | | | | 375,000 | 1.01 | 183,058 |
GRANTS OF PLAN BASED AWARDS IN 2024
| (1) Ms. Gardiner did not receive any equity grants in 2024 and does not participate in our Incentive Compensation Plan. |
GRANTS OF PLAN BASED AWARDS IN 2024
| (2) Amounts reported represent the potential short-term incentive compensation amounts payable for our 2024 fiscal year under our Incentive Compensation Plan (or for Mr. Robin, the potential amounts payable under his offer letter). The amounts reported represent each NEO’s target and maximum possible payments for 2024. Because actual payments to the NEOs could range from 0% to 200% of their target bonus, no threshold payment amount has been established for the NEOs. The actual short-term incentive bonus amount earned by each NEO for 2024 is reported in Column (g) (Non-Equity Incentive Plan Compensation) of the Summary Compensation Table—Fiscal 2022-2024 above. |
GRANTS OF PLAN BASED AWARDS IN 2024
| (3) The performance-based stock option grants are subject to both a five-year time-based vesting requirement (monthly pro-rata vesting) and the achievement of specified performance criteria within five years of grant. For additional information regarding these equity awards, see the Outstanding Equity Awards At Fiscal Year-End For 2024, below. |
GRANTS OF PLAN BASED AWARDS IN 2024
| (4) These stock option grants are subject to a four-year monthly pro-rata time vesting requirement. |
GRANTS OF PLAN BASED AWARDS IN 2024
| (5) The exercise price is the closing price of our common stock on the date of grant. |
GRANTS OF PLAN BASED AWARDS IN 2024
| (6) See Note 13 of our annual report on form 10-K for the fiscal year ended December 31, 2024 for the relevant assumptions used to determine the grant date fair value of the stock options granted during 2024. The amounts reflected in this column for stock options granted during 2024 that are subject to performance-based vesting conditions represent the grant date fair value of these awards based on the probable outcome (determined as of the grant date in accordance with applicable accounting rules) of the performance-based conditions applicable to the awards. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024 The following table includes certain information with respect to the value of all unexercised stock options and outstanding equity awards previously awarded to the NEOs as of December 31, 2024.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| | | Option Awards | | | | | Stock Awards | | | | | Name (a) | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date(2) (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) (j) | | Howard W. Robin | 12/15/2017 | 151,250 | | | 56.90 | 12/14/2025 | | | | | | | 12/15/2017 | 151,250 | | | 56.90 | 12/14/2025 | | | | | | | 12/14/2018 | 138,350 | | | 36.51 | 12/13/2026 | | | | | | | 12/14/2018 | 138,350 | | | 36.51 | 12/13/2026 | | | | | | | 12/12/2019 | 167,650 | | | 21.79 | 12/11/2027 | | | | | | | 12/12/2019 | 167,650 | | | 21.79 | 12/11/2027 | | | | | | | 12/12/2019 | 44,600 | | | 21.79 | 12/11/2027 | | | | | | | 12/18/2020 | 190,650 | | | 18.75 | 12/17/2028 | | | | | | | 12/18/2020 | | | 190,650(4) | 18.75 | 12/17/2028 | | | | | | | 12/18/2020 | | | | | | | | 106,650(5) | 99,185 | | | 12/16/2021 | 167,812 | 55,938(6) | | 13.22 | 12/15/2029 | | | | | | | 12/16/2021 | | | 223,750(4) | 13.22 | 12/15/2029 | | | | | | | 12/16/2021 | | | | | | | | 126,050(5) | 117,227 | | | 8/15/2022 | 638,750 | 182,500(7) | | 4.91 | 8/14/2030 | | | | | | | 8/15/2022 | 638,750 | 182,500(8) | | 4.91 | 8/14/2030 | | | | | | | 8/15/2022 | | | | | | 102,657(9) | 95,471 | | | | | 8/15/2022 | | | | | | 102,656(10) | 95,470 | | | | | 12/13/2023 | 433,333 | 866,667(7) | | 0.50 | 12/12/2031 | | | | | | | 12/13/2023 | | | 1,300,000(11) | 0.50 | 12/12/2031 | | | | | | | 12/13/2024 | | 1,300,000(6) | | 1.01 | 12/12/2032 | | | | | | | 12/13/2024 | | | 1,300,000(12) | 1.01 | 12/12/2032 | | | | | | Sandra Gardiner(1) | | | | | | | | | | | | Mark A. Wilson | 12/15/2017 | 110,000 | | | 56.90 | 12/14/2025 | | | | | | | 12/15/2017 | 42,000 | | | 56.90 | 12/14/2025 | | | | | | | 12/14/2018 | 10,225 | | | 36.51 | 12/13/2026 | | | | | | | 12/12/2019 | 35,800 | | | 21.79 | 12/11/2027 | | | | | | | 12/12/2019 | 35,800 | | | 21.79 | 12/11/2027 | | | | | | | 12/12/2019 | 11,600 | | | 21.79 | 12/11/2027 | | | | | | | 12/18/2020 | 51,000 | | | 18.75 | 12/17/2028 | | | | | | | 12/18/2020 | | | 51,000(4) | 18.75 | 12/17/2028 | | | | | | | 12/18/2020 | | | | | | | | 28,550(5) | 26,552 | | | 12/16/2021 | 50,362 | 16,788(6) | | 13.22 | 12/15/2029 | | | | | | | 12/16/2021 | | | 67,150(4) | 13.22 | 12/15/2029 | | | | | | | 12/16/2021 | | | | | | | | 37,800(5) | 35,154 | | | 8/15/2022 | 258,125 | 73,750(7) | | 4.91 | 8/14/2030 | | | | | | | 8/15/2022 | 258,125 | 73,750(8) | | 4.91 | 8/14/2030 | | | | | | | 8/15/2022 | | | | | | 41,485(9) | 38,581 | | | | | 8/15/2022 | | | | | | 41,484(10) | 38,580 | | | | | 12/13/2023 | 108,333 | 216,667(7) | | 0.50 | 12/12/2031 | | | | | | | 12/13/2023 | | | 325,000(11) | 0.50 | 12/12/2031 | | | | | | | 12/13/2024 | | 325,000(6) | | 1.01 | 12/12/2032 | | | | | | | 12/13/2024 | | | 325,000(12) | 1.01 | 12/12/2032 | | | | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| | | Option Awards | | | | | Stock Awards | | | | | Name (a) | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date(2) (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) (j) | | Jonathan Zalevsky | | | | | | | | | | | | | 3/16/2017 | 21,250 | | | 15.71 | 3/15/2025 | | | | | | | 4/18/2017 | 36,459 | | | 18.59 | 4/17/2025 | | | | | | | 6/15/2017 | 77,084 | | | 18.09 | 6/14/2025 | | | | | | | 11/15/2017 | 87,500 | | | 43.07 | 11/14/2025 | | | | | | | 12/15/2017 | 37,625 | | | 56.90 | 12/14/2025 | | | | | | | 12/14/2018 | 48,400 | | | 36.51 | 12/13/2026 | | | | | | | 12/14/2018 | 48,400 | | | 36.51 | 12/13/2026 | | | | | | | 10/1/2019 | 150,000 | | | 18.43 | 9/30/2027 | | | | | | | 12/12/2019 | 71,550 | | | 21.79 | 12/11/2027 | | | | | | | 12/12/2019 | 71,550 | | | 21.79 | 12/11/2027 | | | | | | | 12/12/2019 | 20,100 | | | 21.79 | 12/11/2027 | | | | | | | 12/18/2020 | 71,500 | | | 18.75 | 12/17/2028 | | | | | | | 12/18/2020 | | | 71,500(4) | 18.75 | 12/17/2028 | | | | | | | 12/18/2020 | | | | | | | | 40,000(5) | 37,200 | | | 12/16/2021 | 70,500 | 23,500(6) | | 13.22 | 12/15/2029 | | | | | | | 12/16/2021 | | | 94,000(4) | 13.22 | 12/15/2029 | | | | | | | 12/16/2021 | | | | | | | | 52,950(5) | 49,244 | | | 8/15/2022 | 210,000 | 60,000(7) | | 4.91 | 8/14/2030 | | | | | | | 8/15/2022 | 210,000 | 60,000(8) | | 4.91 | 8/14/2030 | | | | | | | 8/15/2022 | | | | | | 33,750(9) | 31,388 | | | | | 8/15/2022 | | | | | | 33,750(10) | 31,388 | | | | | 12/13/2023 | 83,333 | 166,667(7) | | 0.50 | 12/12/2031 | | | | | | | 12/13/2023 | | | 250,000(11) | 0.50 | 12/12/2031 | | | | | | | 12/13/2024 | | 375,000(6) | | 1.01 | 12/12/2032 | | | | | | | 12/13/2024 | | | 375,000(12) | 1.01 | 12/12/2032 | | | | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (1) Ms. Gardiner was appointed our Interim Chief Financial Officer as of April 17, 2023. Ms. Gardiner is a partner at FLG Partners and provides services as Interim Chief Financial Officer as an outside consultant pursuant to a consulting agreement between the Company and FLG Partners and is not employed or directly compensated by the Company. Ms. Gardiner has not received any equity awards. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (2) The expiration date shown is the normal expiration date occurring on the eighth anniversary of the grant date, which is the latest date that the stock options may be exercised. Stock options may terminate earlier in certain circumstances, such as in connection with an NEO’s termination of employment or in connection with certain corporate transactions, including a change of control. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (3) Restricted stock unit market value is calculated based on $0.93 per share, the closing price of our common stock on December 31, 2024 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (4) The performance-based stock options are subject to both a four-year time-based vesting requirement (monthly pro-rata vesting) and the achievement of specified performance criteria within five years of grant, subject to the executive’s continued service through each vesting date. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (5) The performance-based RSUs are subject to both a three year time-based vesting requirement (quarterly pro-rata vesting) and the achievement of specified performance criteria within five years of grant, subject to the executive’s continued service through each vesting date. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (6) The stock options vest pro-rata on a monthly basis over a period of four years from the date of grant, subject to the executive’s continued service through each vesting date. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (7) The stock options vest pro-rata on a monthly basis over a period of three years from the date of grant, subject to the executive’s continued service through each vesting date. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (8) The performance-based stock options are subject to both a three-year time-based vesting requirement (monthly pro-rata vesting) and the achievement of specified performance criteria within three years of grant, subject to the executive’s continued service through each |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
vesting date. The Organization and Compensation Committee determined on November 18, 2024 that all required performance criteria had been achieved. In accordance with the terms of the grant, on December 13, 2024 approximately 3/4th of the performance-based stock options granted vested, followed by continued monthly pro-rata vesting of the remainder until August 15, 2025.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (9) The RSUs vest pro-rata on a quarterly basis over a three-year period from the date of grant. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (10) The performance-based RSUs are subject to both a three year time-based vesting requirement (quarterly pro-rata vesting) and the achievement of specified performance criteria within three years of grant, subject to the executive’s continued service through each vesting date. The Organization and Compensation Committee determined on November 18, 2024 that all required performance criteria had been achieved. In accordance with the terms of the grant, on December 13, 2024 approximately 3/4th of the performance-based RSUs granted vested, followed by continued quarterly pro-rata vesting of the remainder until August 15, 2025. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (11) The performance-based stock options are subject to both a three-year time-based vesting requirement (monthly pro-rata vesting) and the achievement of specified performance criteria within three years of grant, subject to the executive’s continued service through each vesting date. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2024
| (12) The performance-based stock options are subject to both a five-year time-based vesting requirement (monthly pro-rata vesting) and the achievement of specified performance criteria within five years of grant, subject to the executive’s continued service through each vesting date. |
OPTION EXERCISES AND STOCK VESTED IN 2024
OPTION EXERCISES AND STOCK VESTED IN 2024 The following table includes certain information with respect to the exercise of stock options and vesting of stock awards held by the NEOs during the fiscal year ended December 31, 2024.
OPTION EXERCISES AND STOCK VESTED IN 2024
| Name (a) | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c)(1) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e)(2) | | Howard W. Robin | — | — | 486,861 | 525,301 | | Sandra Gardiner | — | — | — | — | | Mark A. Wilson | — | — | 192,367 | 207,269 | | Jonathan Zalevsky, Ph.D. | — | — | 163,900 | 177,896 |
OPTION EXERCISES AND STOCK VESTED IN 2024
| (1) The value realized upon the exercise of stock options is calculated by (a) subtracting the stock option exercise price from the market price on the date of exercise to get the realized value per share, and (b) multiplying the realized value per share by the number of shares underlying the stock options exercised. |
OPTION EXERCISES AND STOCK VESTED IN 2024
| (2) The value realized upon vesting of RSUs is calculated by multiplying the number of RSUs vested by the market price on the vest date. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL The following section describes the benefits that may become payable to the employee NEOs in connection with their termination of employment with us or in connection with a change of control. Please see “Compensation Discussion and Analysis—Severance and Change of Control Benefits” for a discussion of how the payments and benefits presented below were determined.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO1, 2, 3 ($) | Average Summary Compensation Table Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) ($) | Value of Initial Fixed $100 Investment based on:(4) | | Net Income ($ Millions) | | | | | | | TSR ($) | Peer Group TSR ($) | | | 2024 | 3,762,693 | 5,354,245 | 1,123,266 | 1,427,279 | 4.31 | 118.20 | (119) | | 2023 | 3,135,576 | (773,200) | 1,122,330 | (2,644) | 2.62 | 118.87 | (276) | | 2022 | 11,275,830 | (8,738,814) | 3,091,330 | (3,426,582) | 10.47 | 113.65 | (368) | | 2021 | 11,153,616 | 8,032,023 | 4,377,734 | 3,290,039 | 62.59 | 126.45 | (524) | | 2020 | 11,241,149 | 6,456,336 | 4,379,031 | 2,020,372 | 78.76 | 126.42 | (444) |
PAY VERSUS PERFORMANCE
| 1. | Howard Robin was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below. |
PAY VERSUS PERFORMANCE
| 2020-2021 | 2022 | 2023 | 2024 | | Gil M. Labrucherie | Gil M. Labrucherie | Jillian B. Thomsen | Sandra Gardiner | | Mark A. Wilson | Jillian Thomsen | Sandra Gardiner | Mark A. Wilson | | Jonathan Zalevsky | Mark A. Wilson | Mark A. Wilson | Jonathan Zalevsky | | John Northcott | Jonathan Zalevsky | Jonathan Zalevsky | | | | John Northcott | | |
PAY VERSUS PERFORMANCE
| 2. | The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
PAY VERSUS PERFORMANCE
| 3. | Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table. |
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO ($) | Exclusion of Stock Awards for PEO ($) | Inclusion of Equity Values for PEO ($) | Compensation Actually Paid to PEO ($) | | 2024 | 3,762,693 | (1,596,122) | 3,187,674 | 5,354,245 |
PAY VERSUS PERFORMANCE
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2024 | 1,123,266 | (286,483) | 590,496 | 1,427,279 |
PAY VERSUS PERFORMANCE
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
PAY VERSUS PERFORMANCE
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for First PEO ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for First PEO ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for First PEO ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for First PEO ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for First PEO ($) | Total - Inclusion of Equity Values for First PEO ($) | | 2024 | 1,495,265 | 917,377 | 0 | 775,032 | 0 | 3,187,674 |
PAY VERSUS PERFORMANCE
| Year | Average Year- End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non- PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non- PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2024 | 271,086 | 153,951 | 0 | 165,459 | 0 | 590,496 |
PAY VERSUS PERFORMANCE
| 4. | The Peer Group TSR set forth in this table utilizes the NASDAQ Biotechnology Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Form 10-K for the year ended December 31, 2024. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the NASDAQ Biotechnology Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
PAY VERSUS PERFORMANCE
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the cumulative TSR over the five most recently completed fiscal years for the Company and the Peer Group TSR. Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the five most recently completed fiscal years. We believe that our compensation structure supports our business strategy while successfully aligning executive focus and interests with those of the Company and our stockholders. We seek to incentivize long-term performance and achievement of milestones that are important to building sustained success for the Company. Our compensation structure includes several elements that collectively provide an effective compensation strategy that supports our philosophy of pay for performance. As discussed in the Compensation Discussion and Analysis section, the performance-based component of our NEO’s compensation is tied to the achievement of critical objective, performance milestones and annual corporate goals, which we believe provides strong performance incentives to our executives.