DEF 14A of Inspire Medical Systems, Inc.
Filed Mar 20, 2026 · FY20250001140361-26-010490
Election of Directors
Election of Directors Board Size, Structure, and Election Process Our certificate of incorporation as currently in effect (“Certificate of Incorporation”) provides that the number of directors shall be established from time to time by our Board of Directors. Our Board of Directors has fixed the number of directors at nine, and we currently have nine directors serving on the Board (see “Current Directors and Terms” below). Our Certificate of Incorporation currently provides that the Board be divided into three classes, designated as Class I, Class II, and Class III, serving staggered three-year terms, provided that the term of each director will continue until the election and qualification of his or her successor and is subject to his or her earlier death, resignation, or removal. Under the current structure, at each annual meeting of stockholders, the Board proposes a slate of nominees to the stockholders for election of directors in the class whose term is expiring. Between annual meetings, the Board may elect directors to fill vacancies with new directors allocated among classes and each class should consist, as nearly as may be possible, of one-third of the total number of directors.
Election of Directors
| | As described further in Proposal No. 5 below, the Board recommends that the Company’s stockholders approve at the Annual Meeting an amendment to the Company’s Certificate of Incorporation to phase out the classified Board structure and provide for the annual election of all directors beginning with our 2029 annual meeting of stockholders. |
Election of Directors
Our Corporate Governance Guidelines provide that in an uncontested election of directors, any nominee for director who does not receive a majority of the votes cast for his or her election shall offer to resign from the Board. The Nominating and Corporate Governance Committee shall promptly consider the resignation offer and recommend to the full Board whether to accept it. The Board will act on the Nominating and Corporate Governance Committee’s recommendation within 90 days following the certification of the stockholder vote by the inspector of elections, and will disclose its decision and the reasons for rejecting the offer, if applicable, in a Current Report on Form 8-K. Any director who tenders his or her offer to resign from the Board pursuant to the Corporate Governance Guidelines may not participate in the Nominating and Corporate Governance Committee or Board deliberations regarding whether to accept the offer of resignation. The Board believes that this process provides accountability to stockholders and responsiveness to stockholders’ votes, while allowing the Board appropriate discretion in considering whether a particular director’s resignation would be in the best interests of the Company and its stockholders. Current Directors and Terms As of the date of this Proxy Statement, the Class II directors with a term ending at the Annual Meeting are Gary L. Ellis, Georgia Melenikiotou, and Dana G. Mead, Jr.; the Class III directors with a term ending at the 2027 annual meeting of stockholders are Shelley G. Broader, Myriam J. Curet, M.D., and Casey M. Tansey; and the Class I directors with a term ending at the 2028 annual meeting of stockholders are Cynthia B. Burks, Timothy P. Herbert, and Shawn T McCormick. Nominees for Director Gary L. Ellis, Georgia Melenikiotou, and Dana G. Mead, Jr. have been nominated by the Board to stand for election at the Annual Meeting. If elected by the stockholders at the Annual Meeting, Mr. Ellis, Ms. Melenikiotou and Mr. Mead will each serve for a term expiring at the annual meeting to be held in 2029 (the “2029 Annual Meeting”) and until the election and qualification of her or his successor, or until her or his earlier death, resignation, or removal.
Election of Directors
| Inspire Medical Systems, Inc. | 6 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
Each person nominated for election has agreed to serve if elected, and management and the Board have no reason to believe that any nominee will be unable to serve. If, however, prior to the Annual Meeting, the Board of Directors should learn that any nominee will be unable to serve for any reason, the proxies that otherwise would have been voted for this nominee will be voted for a substitute nominee selected by the Board. Alternatively, the proxies, at the Board’s discretion, may be voted for that fewer number of nominees as results from the inability of any nominee to serve.
Election of Directors
| | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF GARY L. ELLIS, GEORGIA MELENIKIOTOU, AND DANA G. MEAD, JR. AS CLASS II DIRECTORS TO HOLD OFFICE UNTIL THE 2029 ANNUAL MEETING AND UNTIL THEIR RESPECTIVE SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED. |
Election of Directors
| Inspire Medical Systems, Inc. | 7 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
Information About Board Nominees and Continuing Directors The following pages contain certain biographical information as of March 20, 2026 for each nominee for director and each director whose term as a director will continue after the Annual Meeting, including all positions she or he holds, her or his principal occupation and business experience for the past five years, and the names of other publicly held companies of which the director or nominee currently serves as a director or has served as a director during the past five years. We believe that all of our directors and nominees have or display: personal and professional integrity; satisfactory levels of education and/or business experience; broad-based business acumen; an appropriate level of understanding of our business and its industry and other industries relevant to our business; the ability and willingness to devote adequate time to the work of our Board and its committees; skills and personality that complement those of our other directors and that help build a board of directors that is effective, collegial and responsive to the needs of our company; strategic thinking and a willingness to share ideas; a broad range of professional experiences, expertise and background; and the ability to represent the interests of all of our stockholders. The information presented below in the matrix and director biographies sets forth specific experience, qualifications, attributes and skills that led our Board to the conclusion that each individual should serve as a director in light of our business and structure.
Election of Directors
| | Broader | Burks | Curet | Ellis | Melenikiotou | Herbert | McCormick | Mead | Tansey | | Consumer Marketing / Brand Mgmt. | • | | | | • | | | | | | Financial / Capital Markets | | | | • | • | • | • | | • | | Industry and Technology | | | • | • | | • | • | • | • | | International / Global | • | • | | • | • | | | • | | | Legal / Compliance | | • | • | | | | | | | | Mfg. / Operations / Supply Chain | | | | | | | • | | | | Medical Professional | | | • | | | | | | | | Talent / Human Capital Mgmt. | | • | | | | | | | | | Chief Executive Officer | • | | | | | • | | • | • |
Election of Directors
| Consumer Marketing / Brand Mgmt. includes direct-to-consumer, brand management, and segment marketing | Financial / Capital Markets includes expertise relating to finance and capital formation strategies, familiarity with complex financial and accounting concepts, and deep understanding of financial statements | Industry and Technology includes development of medical devices, digital, and other emerging technologies, particularly those impactful to medical device development | | International / Global includes knowledge of local markets outside the U.S. and insights regarding global business and cultural perspectives | Legal / Compliance includes knowledge of quality and other regulatory requirements relevant to medical device companies | Manufacturing (Mfg.) / Operations / Supply Chain includes responsibility for oversight of the manufacturing process and management of suppliers | | Medical Professional includes time as a practicing physician and experience as an active member of a medical community | Talent / Human Capital Mgmt. includes expertise with talent strategies, organization health and culture, compensation programs, and organizational design | Chief Executive Officer includes an understanding of the complexities inherent in running a public company that helps the Board independently oversee management |
Election of Directors
| Inspire Medical Systems, Inc. | 8 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
CLASS II DIRECTOR NOMINEES FOR ELECTION TO THREE-YEAR TERMS EXPIRING AT THE 2029 ANNUAL MEETING OF STOCKHOLDERS
Election of Directors
| Gary L. Ellis Age: 69 Lead Independent Director Independent Director since: 2019 Committee(s): • Nominating and Corporate Governance, Chair • Organization and Compensation Other Public Boards: • The Toro Company (since 2006) • Hill-Rom Holdings, Inc. (2017 – 2021) Education: • B.S., Accounting, University of S. Dakota • Certified Public Accountant (inactive) | Qualifications: • Financial / Capital Markets expertise acquired through an extensive career in accounting and finance, including as CFO of Medtronic for more than 10 years and before that as a Senior Audit Manager for PwC, helps Mr. Ellis bring valuable knowledge of financial oversight and reporting to our Board. • Industry and Technology experience gained during his almost two decades at Medtronic helps him bring deep knowledge of our Industry to the Board. • International / Global experience developed during his tenure at Medtronic, including his service as EVP, Global Operations, allow him to bring a global operations perspective to our Board. | | | Experience: • Medtronic plc and its subsidiary, Medtronic, Inc., a global medical technology company: Executive Vice President, Global Operations, Information Technology and Facilities & Real Estate (June 2016 – December 2016); Executive Vice President and Chief Financial Officer, Medtronic, Inc. (2014 – 2016); Senior Vice President and Chief Financial Officer, Medtronic, Inc. (2005 – 2014); Vice President, Corporate Controller and Treasurer, Medtronic, Inc. (1999 – 2005) |
Election of Directors
| Georgia Melenikiotou Age: 66 Independent Director since: 2020 Committee(s): • Audit • Nominating and Corporate Governance Other Public Boards: • Pulmonx Corporation (since 2020) • Almirall, S.A. (2015 – 2022) • Douglas Group (since 2024) • Natura & Co (2021 – 2024) Education: • B.S. and M.S., Engineering, National Technical University of Athens • MBA, Sloan School of Mgmt. at M.I.T. | Qualifications: • International / Global experience gained through Ms. Melenikiotou’s leadership roles at multinational companies, including roles in Belgium, France, Greece, Italy, Switzerland, and the United Kingdom, allow her to add a global business perspective to our Board. • Consumer Marketing expertise developed while serving in senior roles overseeing marketing initiatives at Estée Lauder, help her bring to the Board extensive knowledge of consumer perspectives and trends. • Financial / Capital Markets experience gained establishing and executing corporate finance strategies in senior-level roles enable her to offer invaluable insights and perspectives regarding the Company’s capital and finance strategies. | | | Experience: • The Estée Lauder Companies, a global beauty products company: Executive Vice President, Corporate Marketing (2015 – 2020); Senior Vice President, Corporate Marketing (2010 – 2014) • Had a 27-year career including several senior leadership positions at Johnson & Johnson, a global manufacturer of medical devices, pharmaceutical products, and consumer packaged goods (1983 – 2010), including serving as President, J&J Consumer France, President, Global Business Unit Strategy and New Growth, and Global President, Beauty |
Election of Directors
| Inspire Medical Systems, Inc. | 9 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
| Dana G. Mead, Jr. Age: 66 Independent Director since: 2008 Committee(s): • Audit • Quality, Product Supply, and Technology, Chair Other Public Boards: • Pulmonx Corporation, (since 2010), Chairman since 2019 • Inari Medical Inc. (2021 – 2025) • Intersect ENT, Inc., (2007 – 2022) • HeartFlow (2019 – 2021) Education: • B.A., Lafayette College • M.B.A., University of Southern California | Qualifications: • Industry and Technology experience developed through Mr. Mead’s roles as CEO of a surgical device developer and manufacturer and at a digital health company, help him add valuable experience in our industry to the Board. He also brings technology expertise gained as CEO and President of HeartFlow, a company focused on the transformation of the diagnosis and treatment of heart disease, enable him to bring to the Board valuable insights in the emerging field of digitization, which is an important aspect of the Company’s strategy. • International / Global experience gained in various senior-level leadership roles with global responsibilities, including President, Asia Pacific Operations for Guidant Corporation, enables Mr. Mead to bring value to our Board in guiding our global strategy. • Chief Executive Officer experience acquired through his CEO roles with HeartFlow and Beaver-Visitec allows him to provide the Board with valuable senior leadership and governance perspective. | | | Experience: • Chief Executive Officer and President, HeartFlow, Inc., a digital health company transforming how heart disease is diagnosed and treated (2019 – 2021) • Chief Executive Officer and President, Beaver-Visitec International, Inc., a surgical device developer and manufacturer (2016 – 2019) • Partner, Kleiner Perkins Caufield & Byers, a venture capital investment firm (2005 – 2016) |
Election of Directors
| Inspire Medical Systems, Inc. | 10 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
CLASS I DIRECTORS WHOSE TERMS EXPIRE AT THE 2028 ANNUAL MEETING OF STOCKHOLDERS
Election of Directors
| Cynthia B. Burks Age: 60 Independent Director since: 2022 Committee(s): • Organization and Compensation • Audit Other Public Boards: • WD-40 Company (since 2022) Education: • B.S., Finance, Marquette University • M.B.A., Thunderbird School of Global Management at Arizona State University • J.D., Univ. of San Francisco School of Law | Qualifications: • Talent Management / Human Capital Strategy expertise gained through her significant career in human resources, enables Ms. Burks to help advise the Company on its human capital strategy in areas critical to our business, including talent management, succession planning, compensation strategy, designing employee culture to increase competitive advantage, engagement and organizational design. • International / Global experience gained in service in various senior-level leadership roles with global responsibility at Genentech enables Ms. Burks to bring value to our Board in guiding our global strategy. • Legal / Compliance expertise acquired through her education as an attorney and service in various senior-level human resources roles at Genentech where she was responsible for successfully executing strategies and other initiatives subject to complex rules and regulatory requirements, enables her to share perspectives that are relevant to the Board’s oversight responsibilities. | | | Experience: • Genentech, Inc., a biotechnology company that is a member of the Roche Group: Senior Vice President and Chief People and Culture Officer (2019 – 2021); Vice President, Head of Human Resources, Genentech Research and Early Development (2015 – 2019); held various human resource management roles (2011 – 2015) • Held human resource and organizational development positions in industries including media, consumer goods and technology (1999 – 2011) |
Election of Directors
| Timothy P. Herbert Chairman, President & Chief Executive Officer Age: 63 Chairman since: 2024 Director since: 2007 Education: • B.S., Electrical Engineering, North Dakota State University • M.B.A., University of St. Thomas | Qualifications: • Industry and Technology experience gained through an extensive career in the healthcare and medical device industry, including founding Inspire, enables Mr. Herbert to bring deep knowledge of our business, products and industry to the Board. Additionally, his experience obtained through his time at Medtronic and Inspire, where he was instrumental to successfully developing the technology at the Company’s foundation, strengthens his ongoing Board contributions. • Financial / Capital Markets experience and expertise gained leading capital formation strategies and initiatives, including equity financing and stock offerings, enable Mr. Herbert to offer invaluable insights and perspectives regarding financial and capital markets. • Chief Executive Officer experience gained through his tenure leading Inspire make him well suited to help our Board with governance oversight and strategy setting. | | | Experience: • President and Chief Executive Officer, Inspire Medical Systems, Inc. (since 2007 when he founded the Company) • Held management positions in product development, clinical research, sales, marketing, and healthcare reimbursement at Medtronic plc, a medical equipment development company (1996 – 2007) |
Election of Directors
| Inspire Medical Systems, Inc. | 11 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
| Shawn T McCormick Age: 61 Independent Director since: 2017 Committee(s): • Audit, Chair • Quality, Product Supply, and Technology Other Public Boards: • Nevro Corp. (2014-2025) • Surmodics, Inc. (2015 – 2020) • Entellus Medical, Inc. (2014-2018) Education: • B.S., Accounting, Arizona State University • M.B.A., University of Minnesota’s Carlson School of Management • Certified Public Accountant (inactive) | Qualifications: • Financial / Capital Markets expertise developed through his experience in finance leadership roles, including service as CFO for several public companies, helps Mr. McCormick bring valuable knowledge of financial oversight and reporting to our Board. • Industry and Technology experience gained through more than three decades working in the healthcare and medical device industries adds valuable industry perspective to our Board. Additionally, his significant career in the medical sector and with medical device companies have given him a deep understanding of technologies in our industry that are core to the Company’s business and strategy. • Manufacturing / Operations / Supply Chain experience gained as COO of Lutonix, enable Mr. McCormick to offer invaluable insights and perspectives regarding the Company’s manufacturing, operations and supply chain strategies and related initiatives. | | | Experience: • Chief Financial Officer, Aldevron, LLC, a technology company specializing in the manufacture of plasmid DNA, mRNA and proteins (2020 – 2022, several months after Aldevron was acquired by Danaher Corporation) • Held executive management roles at various public and private medical device companies (2009 – 2015), including as Chief Financial Officer, Tornier N.V., a global orthopedic company (2012 – 2015 when Tornier merged with Wright Medical Group, Inc.) • Held various management positions at Medtronic plc, including in corporate development and finance (1992 - 2009) |
Election of Directors
| Inspire Medical Systems, Inc. | 12 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
CLASS III DIRECTOR NOMINEES WHOSE TERMS EXPIRE AT THE 2027 ANNUAL MEETING OF STOCKHOLDERS
Election of Directors
| Shelley G. Broader Age: 61 Independent director since: 2020 Committee(s): • Organization and Compensation, Chair • Nominating and Corporate Governance Other Public Boards: • Loblaw Companies Limited (since 2022) • The Vita Coco Company (since 2026) • Dutch Bros Inc. (2021 – 2023) • Chico’s FAS, Inc. (2015 – 2019) • Raymond James Financial, Inc. (2008 – 2020) Education: • B.A., Washington State University | Qualifications: • International / Global experience gained through leadership of multinational brands helps Ms. Broader bring value to our Board in guiding our global strategy. • Consumer Marketing / Brand Management expertise acquired through her career in retail enables her to contribute extensive insights regarding consumer perspectives. • Chief Executive Officer experience gained through her service as CEO and President of Chico’s enables her to share strategies and perspectives that are relevant to the Board’s oversight responsibilities. | | | Experience: • Chief Executive Officer and President, Chico’s FAS, Inc., a fashion retailer (2015 – 2019) • Walmart Inc., a multinational retail company (2009 – 2015): President and Chief Executive Officer, Walmart Europe, Middle East and Sub-Saharan Africa region (2014 – 2015); President and Chief Executive Officer, Walmart Canada Corp. (2011 – 2014); Chief Merchandising Officer, Walmart Canada Corp. (2010 – 2011); Senior Vice President, Sam’s Club, a division of Walmart (2009 – 2010) |
Election of Directors
| Myriam J. Curet, M.D. Age: 69 Independent director since: 2023 Committee(s): • Nominating and Corporate Governance • Quality, Product Supply, and Technology Other Public Boards: • Stereotaxis (since 2021) • Nektar Therapeutics (2019 – 2024) Education: • B.A., Bryn Mawr College • M.D., Harvard Medical School • Residency, University of Chicago • Fellowship, surgical endoscopy, University of New Mexico | Qualifications: • Medical Professional experience developed through three decades working in healthcare and academia allows Dr. Curet to provide valuable insights into how to educate and work with medical professionals. • Industry and Technology experience gained through her service on the boards of medical device and biopharma companies and her various senior-level roles at Intuitive Surgical has resulted in a deep knowledge of our industry and technology. • Legal / Compliance expertise acquired through her leadership at Intuitive Surgical, including overseeing the development of clinical evidence, physician education, and reimbursement and regulatory activities, is a core competency for Board oversight of the Company. | | | Experience: • Intuitive Surgical, a global technology leader in minimally invasive care and the pioneer of robotic-assisted surgery: Executive Vice President and Chief Medical Officer (since 2017); Senior Vice President and Chief Medical Officer (2014 – 2017); Chief Medical Advisor (2005 – 2014) • Stanford University: Clinical Professor of Surgery (since 2015); Professor (2000 – 2015) • Associate Professor of Surgery, University of New Mexico (1994 – 2000) • Held various positions, Indian Health Service, an agency within the Department of Health and Human Services • Medical Deputy Director, Gallup Indian Medical Center in New Mexico |
Election of Directors
| Inspire Medical Systems, Inc. | 13 | 2026 Proxy Statement |
Election of Directors
| | PROPOSAL NO. 1 |
Election of Directors
| Casey M. Tansey Age: 68 Independent Director since: 2008 Committee(s): • Organization and Compensation • Quality, Product Supply, and Technology Other Public Boards: • Shoulder Innovations (since 2020) • Intersect ENT, Inc. (2006 – 2017) Education: • B.S. and M.B.A., College of Notre Dame | Qualifications: • Industry and Technology expertise gained through more than three decades in the medical device industry holding roles at companies such as Epicor Medical, Heartport, Inc., a public company that helped pioneer minimally-invasive cardiac surgery, and Baxter Edward enables Mr. Tansey to bring valuable industry knowledge to our Board. Additionally, his years of experience supporting early-stage medical device companies, including at Epicor Medical, Baxter Edward, and now at U.S. Venture Partners, where his focuses include the development of minimally invasive technologies, helps him contribute deep knowledge of technologies critical to our business. • Chief Executive Officer experience gained through his service as CEO of Heartport enables him to share perspectives that are relevant to the Board’s oversight responsibilities. • Financial / Capital Markets expertise acquired through extensive experience at his current firm investing in the medical device, biotechnology and healthcare information technology sectors enable him to offer invaluable insights and perspectives regarding financial and capital markets. | | | Experience: • U.S. Venture Partners, a venture capital investment firm: Managing Partner (since 2014); Managing Member (2005 – 2014) • Epicor Medical, a medical device company specializing in minimally invasive treatments for atrial fibrillation: President and Chief Executive Officer (2002-2004) • Heartport, a medical device company that pioneered minimally invasive cardiac surgery technologies: President and Chief Executive Officer (1999-2001) • Current and former director of many early-stage and private medical device and life science companies |
Election of Directors
| Inspire Medical Systems, Inc. | 14 | 2026 Proxy Statement |
Corporate Governance
| • | Board size, independence, and qualifications | • | Director compensation | | • | Classes of directors and election process | • | Stock ownership | | • | Executive sessions of independent directors | • | Board access to senior management | | • | Board leadership structure | • | Board access to independent advisors | | • | Selection of new directors | • | Board self-evaluations | | • | Director orientation and continuing education | • | Board meetings | | • | Limits on board service | • | Meeting attendance by directors and non-directors | | • | Change of principal occupation of directors | • | Meeting materials | | • | Term limits | • | Board committees, responsibilities, and independence | | • | Director responsibilities | • | Succession planning |
Corporate Governance
| • | reviewing and making recommendations to our Board of Directors regarding director compensation; |
Director Compensation
Director Compensation Non-Employee Director Compensation Policy We maintain a compensation policy that provides cash and equity compensation to our non-employee directors for their service on the Board and its committees as discussed below. On a periodic basis, the Organization and Compensation Committee reviews the policy to ensure that the level of compensation is appropriate to attract and retain a wide-ranging group of directors with the breadth of experience necessary to perform our Board’s duties and to compensate our directors fairly for their services, and to determine whether any recommendations for adjustment should be made to the Board. The review includes the consideration of qualitative and comparative factors. To ensure directors are compensated relative to the scope of their responsibilities, the Organization and Compensation Committee considers: (1) the time and effort involved in preparing for Board and committee meetings and the additional duties assumed by committee chairs and our chair; (2) the risks associated with fulfilling fiduciary duties; and (3) the compensation paid to directors at the same peer group of companies used to assess the competitiveness of our executive compensation programs. All cash and equity awards granted under the non-employee director compensation policy are granted under, and subject to the limits of, the Inspire Medical Systems, Inc. 2018 Incentive Award Plan (“2018 Plan”). Cash Compensation. In May 2025, the Board approved changes to the Non-Employee Director Compensation Policy for our non-employee directors upon the recommendation of the Organization and Compensation Committee and our independent compensation consultant. Under the amended policy, each of our non-employee directors is eligible to receive an annual retainer of $55,000 for their fiscal 2025 service. Our non-employee directors are also eligible to receive additional annual retainers for their fiscal 2025 service as follows:
Director Compensation
| • | the chair of the Board receives an additional annual cash retainer of $50,000 when the chair is a non-employee director; |
Director Compensation
| • | the lead director of the Board received an additional annual cash retainer of $40,000; |
Director Compensation
| • | the chair of the Audit Committee receives an additional annual cash retainer of $20,000, and the non-chair members of that committee receive an additional annual cash retainer of $10,000; |
Director Compensation
| • | the chair of the Organization and Compensation Committee receives an additional annual cash retainer of $15,000, and the non-chair members of that committee receive an additional annual cash retainer of $7,500; |
Director Compensation
| • | the chair of the Nominating and Corporate Governance Committee receives an additional annual cash retainer of $15,000, and the non-chair members of that committee receive an additional annual cash retainer of $7,500; and |
Director Compensation
| • | the chair of the Quality, Product Supply and Technology Committee receives an additional annual cash retainer of $15,000, and the non-chair members of that committee receive an additional annual cash retainer of $7,500. |
Director Compensation
The cash retainers are paid quarterly following the completion of each calendar quarter. The Board may, in its discretion, permit a non-employee director to elect to receive any portion of the annual cash retainer in the form of fully vested and unrestricted shares of common stock in lieu of cash. Equity Compensation. In addition to the cash compensation described above, under the amended policy each of our non-employee directors is eligible to receive an award of restricted stock units (“RSUs”) as compensation for his or her service on the Board. Upon a director’s initial election or appointment to the Board, such director will receive an award of RSUs having a grant date fair value of $300,000, which award will vest in three equal annual installments following the grant date. On an annual basis thereafter, on the date of the annual meeting, each non-employee director is eligible to receive an award of RSUs having a grant date fair value of $200,000, which award will vest on the first anniversary of the grant date. The initial and annual awards will be subject to the director’s continuing service through the applicable vesting dates. All initial and annual awards will vest in full immediately prior to the occurrence of a Change in Control (as defined in the 2018 Plan).
Director Compensation
| Inspire Medical Systems, Inc. | 27 | 2026 Proxy Statement |
Director Compensation
| | DIRECTOR COMPENSATION |
Director Compensation
Director Compensation Table for Fiscal 2025 The following table sets forth information concerning the compensation of our non-employee directors for the fiscal year ended December 31, 2025:
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2)(3) | Total ($) | | Shelley G. Broader | 75,088(1) | 199,901 | 274,989 | | Cynthia B. Burks | 69,838 | 199,901 | 269,739 | | Myriam J. Curet, M.D. | 67,588 | 199,901 | 267,489 | | Gary L. Ellis | 112,429 (1) | 199,901 | 312,330 | | Shawn T McCormick | 80,088 | 199,901 | 279,989 | | Dana G. Mead, Jr. | 77,588 | 199,901 | 277,489 | | Georgia Melenikiotou | 70,088 (1) | 199,901 | 269,989 | | Casey M. Tansey | 67,588 (1) | 199,901 | 267,489 |
Director Compensation
| (1) Each of Ms. Broader, Mr. Ellis, Ms. Melenikiotou, and Mr. Tansey elected to receive such amounts, or a portion of such amounts, in the form of fully vested shares of our common stock in lieu of cash payment, which resulted in the issuance of 709 shares of our common stock to Ms. Broader, 1,066 shares of our common stock to Mr. Ellis, 642 shares of our common stock to Ms. Melenikiotou, and 638 shares of our common stock to Mr. Tansey. |
Director Compensation
| (2) Amounts reflect the full grant date fair value of RSUs granted during fiscal 2025 computed in accordance with ASC 718, rather than the amounts paid to or realized by the named director. We provide information regarding the assumptions used to calculate the value of all RSUs in Note 6 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The table below shows the aggregate numbers of unvested RSUs held as of December 31, 2025 by each director who was serving as of December 31, 2025. |
Director Compensation
| Name | Unvested Restricted Stock Units | | Shelley G. Broader | 1,266 | | Cynthia B. Burks | 1,266 | | Myriam J. Curet, M.D. | 1,727 | | Gary L. Ellis | 1,266 | | Shawn T McCormick | 1,266 | | Dana G. Mead, Jr. | 1,266 | | Georgia Melenikiotou | 1,266 | | Casey M. Tansey | 1,266 |
Director Compensation
| (3) No stock options were granted to our non-employee directors during 2025. The table below shows the aggregate numbers of stock option awards (exercisable and unexercisable) held as of December 31, 2025 by each director who was serving as of December 31, 2025. |
Director Compensation
| Name | Number of Shares of Common Stock Underlying Options Outstanding at Fiscal Year End | | Shelley G. Broader | 5,531 | | Cynthia B. Burks | 1,823 | | Myriam J. Curet, M.D. | — | | Gary L. Ellis | 11,180 | | Shawn T McCormick | 23,784 | | Dana G. Mead, Jr. | 27,784 | | Georgia Melenikiotou | 4,974 | | Casey M. Tansey | 27,784 |
Director Compensation
| Inspire Medical Systems, Inc. | 28 | 2026 Proxy Statement |
Executive Compensation
| (1) The total direct compensation of our NEOs as reflected in the above graphic differs from the total in the “Summary Compensation Table” because it (a) reflects base salaries approved by the Organization and Compensation Committee, (b) only includes cash incentive opportunity at “target”, rather than actual payout, and (c) includes the aggregate grant date value of RSUs and PSUs granted during fiscal 2025, as discussed in the section entitled “Long-term Incentives” below, and excludes all other amounts. The Organization and Compensation Committee views target total direct compensation as a useful measure of pay because it reflects the intended aggregate value of key elements of pay at the time the pay decision is made. |
Executive Compensation
The performance-based metrics and the proportion of total compensation that was variable and at-risk further enhanced the link between pay and performance for the CEO and other NEOs and strengthened the alignment of the interests of our NEOs with those of our stockholders. See the following pages for more details on the elements of our compensation program. Evolution of Executive Compensation Program Consistent with the market practice of similar public companies in our industry, and in order to focus executives on stockholder value growth, our long-term incentive (“LTI”) program historically consisted solely of stock options, before changes in recent years to remove stock options and introduce other equity awards. Performance Stock Units. As the Company has continued to evolve and mature following its IPO in 2018, the Organization and Compensation Committee has correspondingly sought to evolve the executive compensation program as appropriate for a company of our stage of development and size. In this regard, beginning in 2022, the Organization and Compensation Committee introduced performance stock units (“PSUs”) as a component of our LTI program. The performance-based metrics associated with these awards, in conjunction with the proportion of total compensation that was variable and at-risk, further enhanced the link between pay and performance for our executive officers, as well as strengthened the alignment of their interests with those of our stockholders. Restricted Stock Units. In consultation with Aon, the Organization and Compensation Committee most recently added grants of restricted stock units (“RSUs”) to the equity mix commencing in 2024 for the CEO and other NEOs (aside
Executive Compensation
| • | attract, motivate, reward, and retain employees at the executive level who contribute to our long-term success; |
Executive Compensation
| • | effectively align our executives’ interests with those of our stockholders, in part by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders; |
Executive Compensation
| • | align our performance metrics with our corporate strategy and the achievement of our business objectives; and |
Executive Compensation
II. PROCESS FOR DETERMINATION OF COMPENSATION Role of Organization and Compensation Committee The Organization and Compensation Committee establishes our compensation philosophy and objectives, determines the structure, components, and other elements of executive compensation, and reviews and approves the compensation of the NEOs or recommends it for approval by the Board. The Organization and Compensation Committee structures the executive compensation program to accomplish its articulated objectives in light of the compensation philosophy described above. The Organization and Compensation Committee obtains input from executive officers regarding the annual operating plan, including the range of financial and operating results and the potential opportunities and risks that could impact those results. Based on this information, the Organization and Compensation Committee establishes the performance-based metrics and targets used in connection with our performance-based annual cash incentives and our performance-based equity grants (as discussed below). For each metric, the Organization and Compensation Committee sets appropriate threshold, target, and maximum levels of performance designed to motivate achievement without incentivizing excessive risk-taking. The Organization and Compensation Committee reviews the elements of our executive compensation program to verify the alignment of the program with our business strategy and with the items that we believe drive the creation of stockholder value, and to determine whether any changes would be appropriate. After the end of the annual or long-term performance period, the Organization and Compensation Committee evaluates achievement relative to the performance targets, and determines corresponding payouts earned. With the input of the CEO and Chief People Officer (the “CPO”), the Organization and Compensation Committee also establishes the compensation for all the other executive officers. Role of the Executive Officers The Organization and Compensation Committee works with our CEO and CPO to set the target total direct compensation of each of our NEOs other than with respect to the CEO’s and CPO’s own respective compensation. As part of this process, our CEO and CPO evaluate each other NEO, determine their recommendations about the target compensation of each such NEO, and deliver their evaluations and compensation recommendations to the Organization and Compensation Committee. The Organization and Compensation Committee makes the ultimate determination regarding the compensation of the NEOs. When the Organization and Compensation Committee discusses and formulates the compensation recommendation for our CEO and CPO, the CEO and CPO do not play any role with respect to any matter affecting his or her own compensation and neither officer is present during any discussion of his or her own compensation. To design and develop the compensation program, the Organization and Compensation Committee coordinates with the CPO, and collaborates with the finance and legal teams as appropriate. This group supports the Organization and Compensation Committee through the preparation of analyses of financial data, peer comparisons, and other materials, and helps to implement the Organization and Compensation Committee’s decisions. Role of Compensation Consultant The Organization and Compensation Committee recognizes that there is value in procuring independent, objective expertise and counsel in connection with fulfilling its duties and has the authority to retain an independent compensation consultant to assist it in carrying out its responsibilities and duties. Since 2017, the Organization and Compensation Committee has engaged Aon as its independent compensation consultant for compensation decisions. Aon has reported directly to the Organization and Compensation Committee, and the Organization and Compensation Committee has the sole authority to retain, terminate, and obtain the advice of Aon at the Company’s expense.
Executive Compensation
The Organization and Compensation Committee has worked with Aon to develop a peer group, provide a competitive market analysis of the base salary, annual cash incentive awards, and long-term incentive compensation of our NEOs compared against the compensation peer group, report on share utilization, and review other market practices and trends. Although the Organization and Compensation Committee took into consideration the review and recommendations of Aon when making decisions about our executive compensation program, ultimately, the Organization and Compensation Committee makes its own independent decisions in determining our executives’ compensation. The Organization and Compensation Committee assessed the independence of Aon pursuant to SEC and NYSE rules. In doing so, the Organization and Compensation Committee considered each of the factors set forth by the SEC and NYSE with respect to a compensation consultant’s independence. The Organization and Compensation Committee also considered the nature and amount of work performed for the Organization and Compensation Committee and the fees paid for those services in relation to the firm’s total revenues. On the basis of its consideration of the foregoing and other relevant factors, the Organization and Compensation Committee concluded that Aon was independent and that there were no conflicts of interest. Compensation Peer Group and Peer Selection Process The Organization and Compensation Committee believes that obtaining relevant market and benchmark data is of paramount importance in its executive compensation determinations. Such information provides helpful context and a solid reference point when making compensation decisions, though unique aspects of the Company and our business may ultimately drive compensation decisions that differ from our peers. The Organization and Compensation Committee takes into consideration the structure and components of, and the amounts paid under, the executive compensation programs of other comparable peer companies. This information is derived from public filings and other sources when making decisions about the structure and component mix of our executive compensation program. The Organization and Compensation Committee, with the assistance of Aon, developed a peer group using criteria designed to identify companies that reflect our size (measured by revenue, market capitalization, number of employees, and other size measures) and business profile (generally medical device and health equipment companies). Based on these criteria, the Organization and Compensation Committee approved the following peer group for 2025:
Executive Compensation
| (1) Axonics Modulation Technologies Inc. and Shockwave Medical, Inc. were removed from our peer group after their respective acquisitions and CONMED Corporation was added to peer group for 2025 as compared to 2024 given its financial profile and business focus. |
Executive Compensation
The following table summarizes our scale relative to our peer group based on financial data that reflects data available as of June 2024, except as otherwise noted. We were also in the 95th percentile against the peer group for year over year revenue growth, reflecting the second highest revenue growth among the group, as of the date of this information. The Organization and Compensation Committee reviewed this data when it approved the peer group for 2025.
Executive Compensation
| | Peer Group Comparison | | | | | Revenue | Market Cap | Employees | | 25th Percentile | $464 | $2,320 | 1,211 | | 50th Percentile | $1,012 | $3,909 | 2,520 | | Average | $2,675 | $4,929 | 2,678 | | 75th Percentile | $1,323 | $6,122 | 3,837 | | Inspire | $661 | $4,498 | 1,105 |
Executive Compensation
| (1) Dollar amounts are in millions. Revenue reflects trailing-twelve months. Market cap is 30-day average using market data available as of July 5, 2024. |
Executive Compensation
Consistent with best practices for corporate governance, the Organization and Compensation Committee reviews our peer group at least annually. In addition to the selected peer group, as discussed above, the Organization and Compensation Committee references general and specific industry surveys from other sources. With the assistance of Aon, the Organization and Compensation Committee uses data from the peer group to establish a market reference for each executive position. For fiscal 2025, the Organization and Compensation Committee determined that the appropriate market reference continues to be the market 50th percentile, and that an NEO’s target and actual total direct compensation may be above or below this reference depending on individual factors and performance. We do not formally set total compensation, or any specific element of compensation, at a specific percentile of the peer group for that position. Instead, the market data is used as a reference point to provide information on the range of competitive pay levels and current compensation practices in our industry. Stockholder Input on Executive Compensation At last year’s annual meeting, 93% of the votes cast on the 2025 “say-on-pay vote” were voted in favor of the proposal. The Organization and Compensation Committee considered the 2025 say-on-pay vote and believes that the overwhelming support of our stockholders for the 2025 say-on-pay vote proposal indicates that our stockholders are generally supportive of our approach to executive compensation. We are committed to ongoing engagement with our investors on all appropriate matters, including executive compensation and governance. Following the advisory vote at the 2025 annual meeting of stockholders, the Organization and Compensation Committee has considered stockholder input in evaluating the design of our 2026 executive compensation and the compensation decisions for each of the NEOs. III. ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM In order to achieve our objectives, the Organization and Compensation Committee utilizes the components of compensation set forth below. The Organization and Compensation Committee regularly reviews all components of the program in order to verify that each component is aligned with our strategy and ensure that each NEO’s total compensation is consistent with our compensation philosophy. The primary elements of our NEOs’ compensation and the main objectives of each are:
Executive Compensation
| • | Annual Performance-Based Incentive Compensation. Performance-based cash bonuses promote short-term performance objectives and reward executives for their contributions toward achieving those objectives; and |
Executive Compensation
| • | Equity-Based Long-Term Incentive Compensation. Equity compensation, provided in the form of RSUs and PSUs, aligns executives’ interests with our stockholders’ interests and emphasizes long-term financial performance. |
Executive Compensation
Annual Incentive Cash Compensation All of our employees, including our NEOs, are eligible to receive performance-based cash incentive compensation. We believe that performance-based cash incentives motivate our employees, including our NEOs, to achieve both short and long-term goals. This approach is critical to the execution of our overall business strategy which, if achieved, has the potential to significantly enhance stockholder value. In fiscal 2025, the performance-based cash incentive opportunity available to each of our NEOs was provided pursuant to the terms of our MIP. Management Incentive Program Short-Term Annual Cash Incentive: Rigorous, Pre-Set Financial, Operating, and Regulatory/Product Development Goals, Strong Performance Achievement, and Annual Incentive Plan Payouts Reflecting Pay for Performance Alignment At the outset of fiscal 2025, we established goals for revenue, operating income or loss, patient flow, product development and quality/compliance objectives, and operations objectives metrics under our annual cash Management Incentive Program (“MIP”). These objectives were rigorous, aggressive, and challenging, attainable only with strong performance, and took into account the relevant opportunities and risks. The revenue target represented an approximately 17% increase over the prior fiscal year’s actual results, reflecting our ambitious business and operational plans for the year. In order to earn any payout with respect to the most heavily weighted goal, revenue, a minimum of $900 million in revenue had to be achieved. The Organization and Compensation Committee also set similarly challenging targets and threshold levels for the other performance metrics and evaluated performance achievement relative to the goals.
Executive Compensation
The performance range for each metric defines threshold and above-target levels of performance. The threshold payout for each of the performance metrics is 75% of the target incentive opportunity. The maximum payout for each metric is 200% of the target incentive opportunity for each of those metrics. The table below sets forth the weight, threshold, target, above-target, maximum and actual performance for each performance metric:
Executive Compensation
| (2) For purposes of the 2025 MIP, operating income was defined as income (loss) from operations, calculated in accordance with generally accepted accounting principles, excluding certain non-recurring expenses (such as expenses incurred in connection with extraordinary legal or regulatory matters, expenses associated with completed business development transactions) and reflecting adjustments for impacts from other one-time special events). |
Executive Compensation
| Name | Eligible Earnings ($) | Target Opportunity (%) | Target Opportunity ($) | MIP Achievement (%) | Actual MIP Payout ($)(1) | | Timothy P. Herbert | 750,572 | 115% | 863,157 | 111.4% | 961,557 | | Randall A. Ban | 490,794 | 60% | 294,476 | 111.4% | 328,047 | | Richard J. Buchholz | 477,989 | 60% | 286,793 | 111.4% | 319,488 | | Bryan K. Phillips | 475,182 | 60% | 285,109 | 111.4% | 317,612 | | Carlton W. Weatherby | 506,250 | 70% | 385,000 | 111.4% | 428,890 |
Executive Compensation
| (1) Amounts shown are calculated by multiplying each executive’s base salary in 2025 by their target incentive opportunity and the MIP achievement percentage. |
Executive Compensation
The actual cash incentives earned by each NEO for fiscal year 2025 are set forth below in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation” (for amounts paid under the MIP). LONG-TERM INCENTIVES As described above, the third and largest primary component of our executive compensation program is long-term equity incentives. The Organization and Compensation Committee designed this long-term incentive opportunity to motivate our executive officers to achieve multi-year strategic goals and to deliver sustained, long-term value to stockholders. Our long-term incentives create a strong link between payouts and performance and align our executive officers’ interests with the interests of our stockholders. Long-term equity incentives promote retention, as executive officers will only receive value if they remain employed by us over the required term, and they foster an ownership culture among our executive officers by making executive officers stockholders with a personal stake in the value they intend to create. The Organization and Compensation Committee intends to make grants of long-term incentive awards annually. Special, one-time awards are used in limited circumstances, including, as may be necessary to attract, retain, and motivate experienced and well-qualified executive officers, and as recognition of an increase in the scope of an executive’s responsibilities or major accomplishments. Target Opportunities. The Organization and Compensation Committee established target long-term incentive opportunities for each of the NEOs in December 2024, with approval for the awards and grants in February 2025. The grant date value of the long-term incentive compensation granted to our NEOs in February 2025 was as follows:
Executive Compensation
| Name | Restricted Stock Units ($) | Performance Stock Units ($)(1) | Target Total LTI Compensation ($) | | Timothy P. Herbert | 3,000,000 | 3,000,000 | 6,000,000 | | Randall A. Ban | 950,000 | 950,000 | 1,900,000 | | Richard J. Buchholz | 950,000 | 950,000 | 1,900,000 | | Bryan K. Phillips | 950,000 | 950,000 | 1,900,000 | | Carlton W. Weatherby | 950,000 | 950,000 | 1,900,000 |
Executive Compensation
| (1) PSUs are reflected at target payout. |
Executive Compensation
Equity Vehicles and Mix. Consistent with the market practice of similar, newly public companies in our industry, our long-term incentive compensation historically consisted solely of stock options. Beginning with fiscal 2022, the Organization and Compensation Committee approved a change in the mix of long-term incentive compensation to be granted to executives to include PSUs. In 2024, the Organization and Compensation Committee further evolved the
Executive Compensation
Company’s long-term incentive compensation program by adding grants of RSUs to the total equity mix for executive officers. And for 2025, the Organization and Compensation Committee stopped granting stock options as part of the annual mix. The Organization and Compensation Committee determined that this equity mix was appropriate to more closely align with peers, maintain market competitiveness, and to further evolve the Company’s executive compensation program given the current stage of our business. As our business continues to mature, we evaluate our long-term incentive strategy annually to ensure we are competitive with the market and align our practices accordingly. Going forward, we expect that we will further align our long-term incentive compensation practices, including through adjusting target equity award opportunities and eligibility, to ensure our programs are sustainable long term while still incentivizing our employees.
Executive Compensation
| Equity Vehicle | 2025 Allocation | Vesting Period | How Value is Delivered | Rationale for Use | | PSUs | 50% | 3-year cliff | 2025-2027 Cumulative Revenue (75% weight) and Operating Income (25% weight) | Cumulative Revenue aligns with the critical strategic priority of top line growth Operating income reflects the importance of profitable growth as a measure of increasing stockholder value Promotes long-term focus and retention | | RSUs | 50% | 3 years: one-third on each of the first, second, and third anniversaries of the grant date | Share price appreciation | Aligns executive’s financial interests with increasing stockholder value Promotes long-term focus and retention |
Executive Compensation
PSUs. The Organization and Compensation Committee believes that PSUs reinforce the pay-for-performance nature of the long-term incentive grants and the executive compensation program overall, encourage focus on long-term stockholder value creation through growth and increase in stock price over time, align compensation with key indicators of the success of our strategy, and promote retention through long-term performance achievement and vesting requirements. Our PSUs have a three-year performance period and are settled in stock. The actual number of PSUs that vest is based on the Company’s achievement of certain performance objectives over the applicable three-year performance period, with the number of PSUs eligible to vest between 0 – 200% of the target number of PSUs awarded. In the case of the PSUs granted in 2025, the performance objectives are cumulative revenue (weighted at 75%) and operating income (weighted at 25%). We believe that disclosing the individual targets incorporated in the revenue and operating income objectives would result in competitive harm to the Company. Such disclosure could provide our competitors with insight regarding confidential business strategies without meaningfully adding to our shareholders’ understanding of the metric. In addition, the components of the metric were presented to and cross validated by the Organization and Compensation Committee. The Organization and Compensation Committee selected these metrics, and targets that represent meaningful growth or improvement over previous years, because they are the best indicators of our ability to continue to grow and reflect the increasing importance of operating income as a measure of stockholder value creation.
Executive Compensation
Performance Results Under the 2023-2025 PSUs. The three-year performance period for the PSUs granted to our NEOs in 2023 ended on December 31, 2025. The performance objectives for the PSUs granted in 2023 were cumulative revenue (weighted at 75%) and cumulative operating income (weighted at 25%). The Organization and Compensation Committee selected cumulative revenue because it was considered the best indicator of our ability to continue to grow and added operating income for the first time because of the importance of profitable growth as a measure of increasing stockholder value. In January 2026, the Organization and Compensation Committee reviewed and approved the Company’s actual performance for cumulative revenue over the performance period and approved 79% payout under the 2023-2025 PSUs as reflected in the table below – this represented 18% of the initial target grant value after considering the change in market value of Inspire’s common stock over the performance period (reflecting our pay for performance philosophy).
Executive Compensation
| Performance Objective / Payout | Below Minimum | Minimum | Target | Maximum | Actual Achievement | | Cumulative Revenue(1) | <$2,000 | $2,000 | $2,500 | $3,000 | $2,340 | | Cumulative Operating Income(2) | <$50 | $50 | $100 | $400 | $65 | | Payout (as a % of Target) | 0% | 50% | 100% | 200% | 79%(3) |
Executive Compensation
| (3) The shares of our common stock that were awarded to each of our NEOs in connection with the vesting of the 2023-2025 PSUs are reflected in the table below. The amounts include shares of our common stock that were withheld in connection with the satisfaction of tax withholding obligations arising out of the vesting of the PSUs. |
Executive Compensation
| Name | Vested PSUs (#) | | Timothy P. Herbert | 9,005 | | Randall A. Ban | 2,400 | | Richard J. Buchholz | 2,400 | | Bryan K. Phillips | 2,400 | | Carlton W. Weatherby | 2,196 |
Executive Compensation
RSUs. In 2024, the Organization and Compensation Committee added RSUs to the mix of long-term incentives provided to executives. RSUs reward our NEOs for increasing stockholder value over the long term. RSUs also provide a retention incentive for executives even during periods of stock price volatility. In future years, the Organization and Compensation Committee will continue to evaluate and select the form and mix of long-term incentive compensation (which may include stock options, restricted shares, RSUs, PSUs, or other long-term incentives) provided to our executive officers that it believes best accomplishes the goals discussed above. Equity Acceleration. In the event of a holder’s termination due to death or disability, all outstanding unvested stock options and RSUs will accelerate and vest in full and, to the extent such termination occurs after the first twelve months of the performance period applicable to any outstanding and unvested PSUs, a prorated number of PSUs based on target performance will accelerate and vest. In the event of a holder’s qualifying retirement, all outstanding unvested stock options will accelerate and vest, all outstanding unvested RSUs will remain outstanding and vest in accordance with the original vesting and payment terms contained in the applicable award agreement and, to the extent such termination occurs after the first twelve months of the performance period applicable to any outstanding and unvested PSUs, such PSUs shall remain outstanding, and a prorated number of PSUs will be eligible to be earned and vest based on actual performance achievement. Grant Timing. Since 2021, the Organization and Compensation Committee has generally approved our annual equity grants in the first quarter of a new fiscal year. This grant timing allows for consideration of full-year financial results for
Executive Compensation
Tax and Accounting Considerations COMPENSATION DEDUCTIBILITY / SECTION 162(M) OF THE INTERNAL REVENUE CODE Section 162(m) of the Code, as amended by the Tax Cuts and Jobs Act of 2017, generally prohibits executive compensation in excess of $1 million per year to be deducted by us as a compensation expense. The Organization and Compensation Committee has approved, and may continue to approve, compensation exceeding the $1 million limitation, including with respect to a portion of base salary, annual bonus, and long-term incentives. For any taxable year beginning after December 31, 2026, the American Rescue Plan Act of 2021 updated Section 162(m) to include an additional five highest paid employees to the definition of “covered employees.” While compensation tax deductions are relevant issues to consider, the Organization and Compensation Committee believes that stockholder interests are best served by not restricting flexibility in designing compensation programs, even though such programs may result in nondeductible compensation expenses for tax purposes. Accounting Standards. Accounting Standards Codification Topic 718 (“ASC 718”) requires us to calculate the grant date “fair value” of our stock-based awards using a variety of assumptions. ASC 718 also requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options, restricted stock, RSUs and PSUs under our equity incentive award plans are accounted for under ASC 718. The Organization and Compensation Committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align the accounting expense of our equity awards with our overall executive compensation philosophy and objectives. Recovery of Erroneously Awarded Compensation Policy The Company has adopted a Recovery of Erroneously Awarded Compensation Policy to comply with final SEC and NYSE rules that require the clawback of certain erroneously awarded compensation. In conformance with these rules, our policy requires the clawback by the Company of certain incentive-based compensation paid to current and former executive officers in the event that the Company is required to prepare an accounting restatement. A copy of our Recovery of Erroneously Awarded Compensation Policy is included as Exhibit 97.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Organization and Compensation Committee Report This Organization and Compensation Committee Report shall not be deemed to be incorporated by reference into any filing made by the Company under the Securities Act of 1933 or the Exchange Act, notwithstanding any general statement contained in any such filing incorporating this proxy statement by reference, except to the extent the Company incorporates this report by specific reference. The Organization and Compensation Committee reviewed and discussed the Compensation Discussion and Analysis with the management of the Company. Based on this review and these discussions, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and the Company’s proxy statement. The preceding report has been furnished by the following members of the Organization and Compensation Committee: Shelley G. Broader, Chair Cynthia B. Burks Gary L. Ellis Casey M. Tansey
Executive Compensation
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Other ($)(5) | Total ($) | | Timothy P. Herbert President and Chief Executive Officer | 2025 | 750,572 | — | 5,999,655 | — | 961,557 | — | 7,711,784 | | | 2024 | 725,190 | — | 4,949,893 | 1,610,435 | 820,625 | — | 8,106,143 | | | 2023 | 690,000 | 33,396 | 2,999,761 | 3,133,094 | 634,524 | — | 7,490,775 | | Randall A. Ban Chief Commercial Officer(6) | 2025 | 490,794 | — | 1,899,947 | — | 328,047 | 10,500 | 2,729,287 | | | 2024 | 474,197 | — | 1,574,939 | 512,342 | 279,966 | 10,350 | 2,851,794 | | | 2023 | 370,466 | — | 799,743 | 835,431 | 253,980 | 9,900 | 2,269,520 | | Richard J. Buchholz Chief Financial Officer(6) | 2025 | 477,989 | — | 1,899,947 | — | 319,488 | 10,260 | 2,707,684 | | | 2024 | 457,844 | — | 1,574,939 | 512,342 | 270,311 | 9,189 | 2,824,625 | | | 2023 | 447,243 | 10,810 | 799,743 | 835,431 | 205,382 | 9,900 | 2,308,509 | | Bryan K. Phillips SVP, General Counsel, CCO and Corporate Secretary | 2025 | 475,182 | — | 1,899,947 | — | 317,612 | 9,744 | 2,702,484 | | | 2024 | 431,983 | 50,000 | 1,574,939 | 512,342 | 255,043 | 9,744 | 2,834,051 | | Carlton W. Weatherby Chief Strategy Officer(6) | 2025 | 506,250 | — | 1,899,947 | — | 428,890 | — | 2,835,087 | | | 2024 | 465,189 | — | 1,574,939 | 512,342 | 344,400 | — | 2,896,870 | | | 2023 | 200,083 | 4,795 | 800,112 | 742,683 | 91,107 | 436,167 | 2,274,947 |
Pay Versus Performance
Pay Versus Performance The following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2021, 2022, 2023, 2024, and 2025 and our financial performance for each such fiscal year:
Pay Versus Performance
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO ($)(1) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($)(1) | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(2) | Net Income ($) | Revenue ($)(3) | | 2025 | 7,711,784 | (869,713) | 2,743,636 | (469,691) | 49.04 | 77.53 | 145,422,000 | 911,981,000 | | 2024 | 8,106,143 | 2,500,749 | 2,851,835 | 1,727,650 | 98.56 | 78.05 | 53,509,000 | 802,804,000 | | 2023 | 7,490,775 | 876,350 | 2,184,323 | (488,837) | 108.16 | 74.29 | (21,153,000) | 624,799,000 | | 2022 | 5,675,394 | 8,351,516 | 2,140,038 | 3,119,563 | 133.91 | 79.00 | (44,881,000) | 407,856,000 | | 2021 | 1,272,916 | 10,637,336 | 1,132,482 | 3,925,220 | 122.41 | 103.32 | (42,042,000) | 233,394,000 |
Pay Versus Performance
| (1) Amounts represent compensation “actually paid” to our principal executive officer, or PEO, and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year: |
Pay Versus Performance
| Year | PEO | Non-PEO NEOs | | 2025 | Timothy P. Herbert | Randall A. Ban, Richard J. Buchholz, Bryan K. Phillips, and Carlton W. Weatherby | | 2024 | Timothy P. Herbert | Randall A. Ban, Richard J. Buchholz, Bryan K. Phillips, and Carlton W. Weatherby | | 2023 | Timothy P. Herbert | Randall A. Ban, Richard J. Buchholz, Philip J. Ebling, and Carlton W. Weatherby | | 2022 | Timothy P. Herbert | Randall A. Ban, Richard J. Buchholz, Philip J. Ebeling, and John C. Rondoni | | 2021 | Timothy P. Herbert | Randall A. Ban, Richard J. Buchholz, Philip J. Ebeling, and Bryan K. Phillips |
Pay Versus Performance
Compensation actually paid (CAP) to our NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted as reflected below. The fair values of PSUs and stock options included in the CAP to our PEO and the Average CAP to our non-PEO NEOs are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in Note 6 of our Annual Report on Form 10-K for the year ended December 31, 2025. Any changes to the PSU fair values from the grant date are based on our updated stock price at the respective measurement dates and updated performance metric projections. Changes to the stock option fair values are based on the updated stock price at the respective measurement dates, in addition to updated expected option term, implied volatility of our stock over the updated expected option term, risk-free rate assumptions, and changes to our non-PEO NEOs.
Pay Versus Performance
| | 2025 | | | Adjustments | PEO | Average non-PEO NEOs | | Decrease for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | (5,999,655) | (1,899,947) | | Add the Fair Value (based on ASC 718) of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | — | — | | Add the Fair Value (based on ASC 718) of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | — | — |
Pay Versus Performance
| Inspire Medical Systems, Inc. | 55 | 2026 Proxy Statement |
Pay Versus Performance
| | PAY VERSUS PERFORMANCE |
Pay Versus Performance
| | 2025 | | | Adjustments | PEO | Average non-PEO NEOs | | Increase/decrease for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | (2,503,048) | (1,178,376) | | Increase/decrease for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | (78,794) | (135,004) | | Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | — | — | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | — | — | | Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | — | — | | Deduction for Change in the Actuarial Present Values reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the Summary Compensation Table for Applicable FY | — | — | | Increase for Service Cost and, if applicable, Prior Service Cost for Pension Plans | — | — | | TOTAL ADJUSTMENTS | (8,581,497) | (3,213,327) |
Pay Versus Performance
| (2) For the relevant fiscal year, represents the cumulative TSR (the “Peer Group TSR”) of the S&P Healthcare Equipment Select Industry Index (the “Peer Group”). |
Pay Versus Performance
| (3) We have selected Revenue as our company-selected measure, which is a GAAP measure. |
Pay Versus Performance
| Inspire Medical Systems, Inc. | 56 | 2026 Proxy Statement |
Pay Versus Performance
| | PAY VERSUS PERFORMANCE |
Pay Versus Performance
Narrative Disclosure to Pay Versus Performance Table
Relationship Between Financial Performance Measures
| | PAY VERSUS PERFORMANCE |
Pay Versus Performance Tabular List
Pay Versus Performance Tabular List We believe that revenue, adjusted operating income (loss), and insurance reimbursement approvals, given the Company’s stage of development and market opportunity, represent the most important financial performance measures used by us to link compensation actually paid to our NEOs for the fiscal year ended December 31, 2025.
Pay Versus Performance Tabular List
| Inspire Medical Systems, Inc. | 58 | 2026 Proxy Statement |
CEO Pay Ratio
CEO Pay Ratio As required by Item 402(u) of Regulation S-K, we are providing pay ratio information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Herbert, our CEO. For 2025, our last completed fiscal year:
CEO Pay Ratio
| • | the median of the annual total compensation of all employees of our Company (other than our CEO) was $222,549; and |
CEO Pay Ratio
| • | the annual total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this Proxy Statement was $7,711,784. |
CEO Pay Ratio
Based on this information, the ratio of the CEO’s fiscal 2025 annual total compensation to that of the median employee was 35 to 1. Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure In determining the pay ratio calculation, we used the methodology, assumptions, and estimates set forth below in determining the median employee.
CEO Pay Ratio
| 1. | We selected October 1, 2025, which is within the last three months of fiscal 2025, as the date upon which we would identify the median employee. |
CEO Pay Ratio
| 2. | We determined that, as of October 1, 2025, our employee population consisted of 1,348 individuals working at the Company. |
CEO Pay Ratio
| 3. | For purposes of measuring the compensation of our employee population, we selected a “consistently applied compensation measure” (“CACM”). We chose a CACM that closely approximates the annual target total direct compensation of our employees. Specifically, we identified the median employee by aggregating, for each employee as of October 1, 2025: (1) annual base pay, (2) the actual cash incentive opportunity using the payout under the 2025 MIP, and (3) the grant date fair value for equity awards granted through December 31, 2025. In identifying the median employee, we annualized the compensation values of permanent employees that joined our Company during fiscal 2025. Amounts paid in foreign currencies were converted to U.S. Dollars based on the average annual exchange rate as of October 1, 2025. |
CEO Pay Ratio
| 4. | After applying our CACM methodology, we identified the median employee. Once the median employee was identified, we calculated the median employee’s annual target total direct compensation in accordance with the requirements of the Summary Compensation Table. |
CEO Pay Ratio
| 5. | Once we identified the median employee, we identified and calculated the elements of such employee’s compensation for fiscal 2025 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $222,549. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our Summary Compensation Table included elsewhere in this document. |
CEO Pay Ratio
We believe the pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
CEO Pay Ratio
| Inspire Medical Systems, Inc. | 59 | 2026 Proxy Statement |