DEF 14A of Halozyme Therapeutics, Inc.
Filed Mar 15, 2024 · FY20230001159036-24-000024
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS We have a classified Board of Directors that currently consists of three Class I directors, two Class II directors and three Class III directors. Our directors are elected for a term of three years, with one class of directors up for election every year. At the 2024 Annual Meeting of Stockholders, we will be electing two Class II directors, while the Class III directors will be elected at the 2025 Annual Meeting of Stockholders and the Class I directors will be elected at the 2026 Annual Meeting of Stockholders. The Class II nominees recommended by the Board of Directors for election at the 2024 Annual Meeting are: Barbara Duncan and Mahesh Krishnan, M.D. Ms. Duncan is a current member of our Board of Directors and Dr. Krishnan is a new director nominee who, if elected, will join the Board of Directors following the 2024 Annual Meeting of Stockholders. Dr. Bizzari is not standing for re-election and his term will expire as of the meeting date. Based on Dr. Bizzari not standing for re-election, a vacancy is created with his Board seat. Dr. Krishnan was recommended to the chair of the Nominating and Corporate Governance Committee by Dr. Torley as a possible replacement candidate. He subsequently met with members of the Nominating and Corporate Governance Committee and then met with the other members of the Board of Directors. Based upon the Board’s assessment of his extensive industry experience as further described in this proxy statement, the Board recommended his nomination for election at the Annual Meeting. If elected, Ms. Duncan and Dr. Krishnan will serve as directors until our Annual Meeting in 2027 or until their successors are elected and qualified. If any nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as our Board of Directors may designate.
Directors Nominated for Election at the 2024 Annual Meeting
Directors Nominated for Election at the 2024 Annual Meeting Barbara Duncan (age 59) Director Since: 2023 Board Committees: Audit Committee and Compensation Committee Key Skills: Pharma Business Leadership and Operations, International Business, Finance and Capital Markets, M&A Other Current Public Company Boards: Atea Pharmaceuticals, Inc. Fusion Pharmaceuticals, Inc. Ovid Therapeutics, Inc. Recent Past Public Company Board Experience: Aevi Genomics Medicine, Inc., Adaptimmune Therapeutics, plc, Immunomedics, Inc., Innoviva, Inc., Jounce Therapeutics, Inc., ObsEva S.A. Ms. Duncan brings over 16 years of pharmaceutical and biotechnology industry experience to the Board of Directors. She retired from Intercept Pharmaceuticals, Inc., a biopharmaceutical company, where she served as Chief Financial Officer and Treasurer from May 2009 to June 2016. From 2001 to 2009, Ms. Duncan held various senior leadership roles of increasing responsibility at DOV Pharmaceutical, Inc., a biotechnology company, including Chief Financial Officer and ultimately serving as Chief Executive Officer prior to DOV’s sale in 2010 to Euthymics Bioscience, Inc. Prior to joining DOV, Ms. Duncan served as Vice President of Corporate Finance - Global Healthcare at Lehman Brothers Inc. from 1998 to 2001, and as Director of Corporate Finance at SBC Warburg Dillon Read Inc. from 1994 to 1998. She also worked for PepsiCo, Inc. from 1989 to 1992 in its international audit division, and was a certified public accountant in the audit division of Deloitte & Touche LLP from 1986 to 1989. Ms. Duncan received her BBA from Louisiana State University and her MBA from the Wharton School of the University of Pennsylvania. As Chief Financial Officer and Treasurer at Intercept Pharmaceuticals, Ms. Duncan helped lead the operational and strategic plans of this biopharmaceutical company, including managing the buildout of international operations and preparing financial teams for commercial product launch. At DOV Pharmaceutical, Ms. Duncan developed and lead in the execution of strategic plans, restructured several of the company’s partnerships and led negotiations on licensing transactions. Finance and Capital Markets Ms. Duncan’s gained extensive financing experience serving as Chief Financial Officer for two public biopharmaceutical companies. Through the successful execution of both private and public financings, Ms. Duncan’s leadership supported operations and strategic plans. Ms. Duncan managed all phases of Intercept’s initial public offering and following on offerings. Further, while serving as Chief Financial Officer at both Intercept and DOV Pharmaceutical, Ms. Duncan managed the investor relations function and research analyst and investment banking relationships. M&A Ms. Duncan gained extensive M&A experience in her role as Vice President at Lehman Brothers with an emphasis in the healthcare space. While at Lehman, Ms. Duncan reviewed potential merger opportunities, reviewed valuation work product and authored advisory presentations to assist clients in formulating strategic corporate structuring strategies. While serving as Chief Executive Officer of DOV Pharmaceutical, she led the execution of the company’s sale to Euthymics. Board Service Selection Criteria: As further described in Ms. Duncan’s biography, the Nominating and Corporate Governance Committee believes that Ms. Duncan has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) pharma business leadership and operations, (ii) finance and capital markets, (iii) international business and (iv) M&A. Ms. Duncan’s extensive industry and financial experience, including her experience as chief financial officer at public biopharmaceutical companies, combined with her business acumen and experience serving on other public biopharmaceutical boards, provide our Board with valuable expertise, leading the Nominating and Corporate Governance Committee to determine that Ms. Duncan should serve as one of our directors. Mahesh Krishnan (age 53)
Director Candidate
Director Candidate Board Committees: N/A Key Skills: Medicine and Science, Pharma Business Leadership & Operations, Complimentary Business/Industry Segment Experience, International Business, Finance & Capital Markets, M&A Recent Past Public Company Board Experience: Chinook Therapeutics, Inc. Mahesh Krishnan, M.D., brings more than 20 years of health care practitioner and biotechnology and health service industry experience to the Board of Directors. Since 2009, Dr. Krishnan has served in various roles at DaVita, Inc., a provider of kidney dialysis services, including service as the co-lead of DaVita Venture Group, the external innovation arm of DaVita, Inc., where he is responsible for strategic partnerships in technology and research and development at DaVita, as well as medical policy in Washington, D.C. Since May 2019, Dr. Krishnan has also served as DaVita’s Group Vice President of Research and Development and prior to that role, Dr. Krishnan served as DaVita’s first international Chief Medical Officer from 2015 to May 2019. From 2004 to 2009, Dr. Krishnan served in various roles at Amgen Inc., a multinational biopharmaceutical company, including serving as the Global Development Leader for Epogen® and as Executive Director, Medical Policy for all of Amgen’s domestic products. From 2000 to 2004, Dr. Krishnan was a practicing nephrologist at Virginia Nephrology Group. He earned his M.D. from Jefferson Medical College at Thomas Jefferson University and his B.S. in pre-medicine from The Pennsylvania State University. He also holds an M.P.H. from Johns Hopkins University and an M.B.A. in health care management from the Johns Hopkins Carey School of Business. Key Skills and Experience: Medicine and Science; and Complementary Business/Industry Segment Expertise Dr. Krishnan served as a practicing nephrologist at Virginia Nephrology Group where he managed daily operations. While at Amgen, he oversaw clinical trial execution for Epogen® and served as the executive director for medical policy and as the executive director for medical affairs. He also served as Vice President, Clinical Research and Publishing, Vice President Clinical Innovation and Public Policy and as Founding International Chief Medical Officer for DaVita during which time he was involved in a wide variety of operational and commercial functions for a premier nephrology health services company. As a Chief Medical Officer for DaVita he gained extensive experience in multi-site and international medical services delivery. Dr. Krishan gained extensive experience in pharma business leadership and operations in his role as executive director, medical affairs at Amgen. While at Amgen, he developed and executed on the medical affairs and marketing plan for Epogen® and negotiated multiple label iterations with the United States (“U.S.”) Food and Drug Administration (“FDA”). As global development leader for Epogen® he also oversaw multiple aspects of the FDA regulatory advisory committee meetings and successfully implemented a large molecule manufacturing change clinical program. At DaVita, Dr. Krishnan served as the international chief medical officer and oversaw clinical, operational and safety performance for DaVita’s clinical healthcare operations in eleven countries. Dr. Krishnan has also authored two books on pharmaceutical sales training. Finance and Capital Markets and M&A Dr. Krishnan currently serves as group vice president of DaVita Venture Group. In this capacity, he oversees corporate development and mergers and acquisitions. He has executed multiple industry partnerships including through the use of joint ventures, corporate spinouts and the founding of health care services, pharma, medical device and diagnostic companies. He has also overseen fundraising, venture capital investments in industry related companies and worked closely with corporate investor relations for capital market presentations. Board Service Selection Criteria: As further described in Dr. Krishnan’s biography, the Nominating and Corporate Governance Committee believes that Dr. Krishnan has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) medicine and science, (ii) pharma business leadership and operations, (iii) complimentary business and industry experience, (iv) international business, (v) finance and capital markets, and (vi) M&A. Dr. Krishnan’s extensive industry, financial and M&A experience, including his experience in senior management positions in the biopharmaceutical industry, combined with his experience as a healthcare professional and his business acumen, provide our Board with valuable expertise, leading the Nominating and Corporate Governance Committee to determine that Dr. Krishnan should serve as one of our directors.
Directors Continuing in Office Until the 2025 Annual Meeting
Directors Continuing in Office Until the 2025 Annual Meeting Jeffrey W. Henderson (age 59) Director Since: 2015
Board Chair
Board Chair Board Committees: Audit Committee (Chair) Key Skills: Pharma Business Leadership and Operations, Complementary Business/Industry Segment Experience, International Business, Human Capital Management, Finance and Capital Markets, M&A, Risk Management Other Current Public Company Boards: Becton Dickinson and Company, a medical technology company Fibrogen, Inc., a biotechnology company Qualcomm, Inc., a wireless communications and semiconductor company Mr. Henderson brings nearly 30 years of financial, commercial and pharmaceutical industry expertise to the Board of Directors. He has served as President of JWH Consulting LLC, an investment and business advisory firm, since January 2018. From 2015 to 2019, he served as a Healthcare Advisory Director to Berkshire Partners LLC. Mr. Henderson previously served as the Chief Financial Officer of Cardinal Health, Inc., a multinational health care services company, from May 2005 to November 2014, and in an executive capacity until his retirement from Cardinal in August 2015. From 1998 to 2005, Mr. Henderson held various senior management positions at Eli Lilly and Company, a multinational pharmaceutical company, including President and General Manager, Eli Lilly Canada, Inc. and Controller and Treasurer of Eli Lilly, Inc. He received his BS in electrical engineering from Kettering University, Flint, Mich., and his MBA from Harvard Graduate School of Business Administration. Key Skills and Experience: Mr. Henderson gained deep experience in a broad range of business and operational topics during his nearly 10-year tenure as Chief Financial Officer for Cardinal Health, a $100 billion health care products and services company. During a portion of this tenure he was also responsible for commercial operations in China and Canada. These experiences built on prior expertise, specifically gained in pharmaceuticals, when he served as general manager of Eli Lilly Canada and Controller/Treasurer of Eli Lilly Inc. Complementary Business/Industry Segment Experience As a member of the board of directors of Becton Dickinson, a leading global medical technology company, and during his time as an executive at Cardinal Health, Mr. Henderson has gained a deep exposure to, and experience in, key aspects of the medical device business and market. Finance and Capital Markets and M&A In his almost 15 years experience as Chief Financial Officer at Cardinal Health and Controller/Treasurer at Eli Lilly, Mr. Henderson gained extensive experience in finance and capital markets. During his tenure at Cardinal Health, the company acquired more than 30 companies, spun-off or sold multi-billion-dollar businesses and expanded into new geographic locations and market segments. During his time with the PE firm of Berkshire Partners, he was involved in the identification, evaluation and execution of multiple acquisition opportunities in the healthcare sector. Risk Management In his positions as a Chief Financial Officer for Cardinal Health and Controller/Treasurer at Eli Lilly, Mr. Henderson played a key role in risk identification and risk mitigation. Further, Mr. Henderson has been operationally accountable for commercial operations in both China (Cardinal Health) and Canada (Eli Lilly and Cardinal Health). These unique experiences in both staff and line roles enable a broad perspective on identifying potential risks and risk management. Human Capital Management Mr. Henderson has substantial experience leading organizations with multi-thousands of employees, including related aspects of organizational and compensation/incentive design. Board Service Selection Criteria: As further described in Mr. Henderson’s biography, the Nominating and Corporate Governance Committee believes Mr. Henderson has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) pharma business leadership and operations, (ii) complementary business and industry segment experience, (iii) international business, (iv) human capital management, (v) finance and capital markets, (vi) M&A and (vii) risk management. Mr. Henderson’s extensive experience serving in executive leadership positions, including as Chief Financial Officer, with large publicly-traded healthcare and pharmaceutical corporations, combined with his business acumen and judgment, including his qualifications as an audit committee financial expert, provide our Board with valuable financial, strategic and operational expertise and leadership skills, leading the Nominating and Corporate Governance Committee to determine that Mr. Henderson should serve as one of our directors. Connie L. Matsui (age 70) Director Since: 2006 Board Committees: Compensation Committee Key Skills: Pharma Business Leadership and Operations, International Business, Human Capital Management, Risk Management, M&A Other Current Public Company Boards: Artelo Biosciences, Inc., a biopharmaceutical company Sutro Biopharma, Inc., a biopharmaceutical company Ms. Matsui brings 30 years of pharmaceutical and biotech industry expertise to the Board of Directors. She retired from Biogen Idec Inc., a biotechnology company, in January 2009 as the Executive Vice President, Knowledge and Innovation Networks. She served as an Executive Committee member at both Biogen Idec and IDEC Pharmaceuticals, a predecessor of Biogen Idec. Among the many major roles she played after joining IDEC Pharmaceuticals in November 1992 was Senior Vice President, overseeing investor relations, corporate communications, human resources, project management and strategic planning. Prior to entering the biotechnology industry, Ms. Matsui worked for Wells Fargo Bank in general management, marketing and human resources. She received her BA and MBA from Stanford University. Ms. Matsui gained deep experience in a broad range of business and operational topics during her tenure at IDEC Pharmaceuticals and then Biogen Idec, overseeing human resources, alliance management, investor relations, corporate communications, project management and strategic planning. In addition, she served as Collaboration Chair for the late stage development and commercialization of rituximab (tradenames: Rituxan®, MabThera®) in partnership with Roche and Genentech, a position requiring strong alliance management and business expertise. She also served as project team leader for the late stage development and commercialization of Zevalin, the first FDA-approved radioimmunoconguate for the treatment of cancer. International Business In her Collaboration Chair position for rituximab, Ms. Matsui served as the IDEC member of the collaboration oversight team with counterparts from Roche, Genentech and Zenyaku Kogyo, responsible for progress on all aspects of late stage development, manufacturing, regulatory approval and global commercialization. In addition, as IDEC’s Project Leader for Zevalin, she worked with leadership at global partner Schering AG based in Germany and radioisotope supplier Nordion, which had nuclear facilities in Canada and Belgium. At Biogen Idec, she was directly responsible for staff teams based in the U.S. and Europe. Human Capital Management Ms. Matsui also led Human Resources at IDEC Pharmaceuticals and Biogen Idec, where key experiences included the growth of IDEC from a 100-employee R&D entity to a 1,000-employee fully integrated biotech company and, ultimately, to 4,000 employees worldwide following the merger of equals between IDEC and Biogen. Prior to this position, Ms. Matsui also held various operating positions, including a senior Human Resources position in the banking industry, where experiences were gained in the area of human capital management and integration of merged and acquired entities. M&A
Board Chair
As Co-Integration lead for the Biogen IDEC merger of equals, Ms. Matsui was engaged in assessing merger feasibility and strategic acceleration potential and had a leading role in communication and implementation of merger plans. This experience included the divestiture of IDEC’s large scale manufacturing plant and successful integration by Genentech and, later on, assimilation of a small-molecule company in San Diego. Ms. Matsui has also guided multiple nonprofit mergers to optimization and facilitated the rapid assimilation of acquired banks and savings & loans while at Wells Fargo. Risk Management In her more than 30 years in the biotech industry, initially as an executive officer and then while serving on the board of directors for biotechnology and pharmaceutical companies, Ms. Matsui has provided guidance to companies in a highly regulated industry in managing and mitigating risks in the following areas: corporate restructuring, financing transactions, data communication, employee retention and ESG. Board Service Selection Criteria: As further described in Ms. Matsui’s biography, the Nominating and Corporate Governance Committee believes Ms. Matsui has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) pharma business leadership and operations, (ii) international business, (iii) human capital management, (iv) risk management and (v) M&A. Ms. Matsui’s operational experience, including her extensive knowledge of the biotechnology industry, her service in other public company management teams and her prior business experience, combined with her business acumen and judgment, provide our Board with valuable management and operational expertise and leadership skills, leading the Nominating and Corporate Governance Committee to determine that Ms. Matsui should serve as one of our directors. Helen I. Torley, M.B. Ch.B., M.R.C.P. (age 61) Director Since: 2014 President and Chief Executive Officer Key Skills: Medicine and Science, Pharma Business Leadership and Operations, Human Capital Management, Finance and Capital Markets, Risk Management Recent Past Public Company Board Experience: Quest Diagnostics Incorporated, a diagnostic information services company Dr Torley brings over 30 years of drug development, drug commercialization and general management expertise in pharmaceutical and biotechnology to the Board of Directors. She has served as Chief Executive Officer (“CEO”) of Halozyme since 2014, successfully leading the company through a critical strategic transition in 2019. Dr Torley previously served as Chief Commercial Officer at Onyx Pharmaceuticals from 2011-2013, leading the successful US launch for Kyprolis ® (Carfilzomib), until the acquisition of Onyx by Amgen in 2013. From 2002-2011 Dr Torley held several senior commercial positions at Amgen including Vice President and General Manager US Bone Health and Vice President and General Manager US Nephrology. In these positions she led the successful launches of Prolia® (denosumab) and Sensipar® (cinacalcet) and significantly grew Epogen® (Epoetin alfa) and Aranesp® (darbepoetin alfa) revenue. From 1997-2002 she held a range of senior sales and marketing leadership positions at Bristol Myers Squib. She began her industry career at Sandoz, which merged with Ciba-Geigy to become Novartis in 1996, where she held a range of positions of increasing responsibility in Clinical Development, culminating in the position of Vice President of Medical Affairs, responsible for overseeing the design and conduct of a broad portfolio of clinical studies across nephrology, rheumatology, oncology and CNS indications. She received her M.B.Ch.B. degree (US equivalent to MD) from the University of Glasgow, Scotland and her M.R.C.P from the Royal College of Physicians, Glasgow, Scotland. Medicine and Science Dr. Torley is a trained physician who while in clinical practice specialized in Internal Medicine and Rheumatology. She served in leadership positions at Sandoz/Novartis from1990 to 1997, most recently as Vice President, Medical Affairs where she oversaw the design and conduct of Phase 1 through 4 clinical studies across multiple disease areas. While at Sandoz/Novartis she led clinical development programs for new products being evaluated in organ transplantation and rheumatoid arthritis and wrote and submitted New Drug Application filings. She has led and played key strategic positions in multiple successful FDA Advisory Committee meetings including for Neoral® (cyclosporin) in Rheumatoid Arthritis, Neoral (cyclosporin) in Organ Transplantation, Epogen® (Epoetin alfa) in anemia in chronic renal failure and HyQvia (immune Globulin infusion 10% with Recombinant Human Hyaluronidase) in Primary Immune Deficiency. Pharma Business Leadership and Operations Dr. Torley gained deep experience in a broad range of business and operational topics in her commercial positions. In particular, as General Manager of Bone Health and Nephrology at Amgen and as Chief Commercial Officer at Onyx, she was responsible for hiring and leading sales and marketing organizations, including hiring and training a more than 650-person team for a new drug launch, working on policy topics related to her products and leading three successful new product launches. Human Capital Management Dr. Torley has substantial experience leading large organizations, ranging from 120 to approximately 700 people. Her human capital management experiences include hiring and successfully onboarding large new sales teams into an established culture and effective reorganizations as dictated by changes in strategy. She has a strong focus on and understanding of the important role organizational culture, diverse teams, talent development and accountability play in driving results and success. Finance and Capital Markets As CEO of Halozyme, Dr. Torley has gained experience in Finance and Capital Markets including direct experience with raising over $1.5 billion through follow-on offerings and through three convertible debt offerings, and executing two share repurchase programs resulting in approximately $1.3 billion in capital returned to stockholders to date. Risk Management In her position as CEO of Halozyme, Dr. Torley plays a key role in risk identification and mitigation. In addition, in her previous positions with other organizations as Chief Commercial Officer and General Manager in which she was accountable for commercial launches, a key accountability was risk identification and mitigation. This wide range of experiences enable a broad perspective on identifying potential risks and executing appropriate mitigations strategies. Board Service Selection Criteria: As further described in her biography, the Nominating and Corporate Governance Committee believes Dr. Torley has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) medicine and science, (ii) pharma business leadership and operations, (iii) human capital management, (iv) finance and capital markets and (v) risk management. Dr. Torley’s extensive commercial and operational experience, including successful launches of products, and her deep knowledge of the biotechnology industry and the competitive environment, her service as our Chief Executive Officer, combined with her business acumen and judgment, provide our Board with valuable commercial and operational expertise and leadership skills, leading the Nominating and Corporate Governance Committee to determine that Dr. Torley should serve as one of our directors.
Directors Continuing in Office Until the 2026 Annual Meeting
Directors Continuing in Office Until the 2026 Annual Meeting Bernadette Connaughton (age 65) Director Since: 2018 Board Committees: Compensation Committee (Chair) Key Skills: Pharma Business Leadership and Operations, International Business, Human Capital Management Other Current Public Company Boards: Editas Medicine, Inc., a clinical stage biotechnology company Zealand Pharma A/S, a biotechnology company Recent Past Public Company Board Experience: Syneos Health Inc., a biopharmaceutical services company Ms. Connaughton brings more than 30 years of global strategic, commercial and biopharmaceutical industry expertise to the Board of Directors. From 2004 to October, 2017, she served in senior management position at Bristol-Myers Squibb Pharmaceutical Company, most recently served as president, China, Latin America, Central and Eastern Europe and Middle East. In this position, she developed the multi-year strategy for the successful commercialization of a number of oncology, virology and immunology products, including Opdivo®, Yervoy®, Sprycel®, Daklinza® and Orencia®. Prior to serving in that role, Ms. Connaughton served as Bristol-Myers Squibb’s president, European Markets, Canada and Australia; president, Intercontinental; and president, Japan, Pacific Rim, Australia and Canada; senior vice president, Cardiovascular and Metabolic Business Unit, U.S.; and senior vice president, Primary Care Marketing, U.S. Ms. Connaughton also served on the European Federation of Pharmaceutical Industry Association, Patient Access and European Markets Committees from 2014 to 2016. She received her Bachelor of Arts from Johns Hopkins University and her Master of Business Administration from The Wharton School, University of Pennsylvania. Key Skills and Experience: Pharma Business Leadership and Operations Ms. Connaughton’s extensive experience in business and operations was developed during her 30-year career at Bristol-Myers Squibb where she built a consistent track record of achieving sales growth, improving profitability and transforming operational models in U.S. and international markets. She built expertise and demonstrated success across a wide range of therapeutic areas, including cardiovascular, metabolic diseases, virology and oncology. International Business Through her positions leading large global business regions for Bristol Myers Squibb, Ms. Connaughton brings deep experience in international markets. Specific achievements include developing and leading execution of the multi-year strategy for the successful commercialization of Opdivo®, Yervoy®, Sprycel®, Daklinza® and Orencia®. She most recently served as President Intercontinental Region, which included China, Latin America, Central and Eastern Europe and Middle East. Other positions included President, European Markets, Canada and Australia; President, Intercontinental Region; and President, Japan, Pacific Rim, Australia and Canada. Human Capital Management In each of her senior management positions, Ms. Connaughton led diverse, cross-functional teams, building the capabilities to successfully develop and commercialize pharmaceutical products. She has broad experience selecting and developing talent and building high performance teams with the skills, motivation and culture to achieve sustainable results. Board Service Selection Criteria: As further described in Ms. Connaughton’s biography, the Nominating and Corporate Governance Committee believes Ms. Connaughton has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) pharma business leadership and operations, (ii) international business and (iii) human capital management. Ms. Connaughton’s extensive operations and commercialization experience in the pharmaceutical industry including the development of successful commercialization strategies for a number of oncology products and her consistent track record of achieving sales growth provides valuable experience and perspective to our Board, leading the Nominating and Corporate Governance Committee to determine that Ms. Connaughton should serve as one of our directors. Moni Miyashita (age 68) Board Committees: Nominating and Corporate Governance Committee Key Skills: Complementary Business/Industry Segment Expertise, International Business, M&A, Risk Management Ms. Miyashita brings over 25 years of global experience leading business transformations and building new businesses through strategy, new business models, and mergers & acquisitions. Since May 2019, she has served as the Chief Strategy Officer of Valo Health, LLC, a technology company built to transform the drug discovery and development process using human-centric data and artificial intelligence computation. Prior to Valo Health, from August 2015 to May 2019, she was a Partner at Innosight Consulting, where she provided growth strategy consulting services for businesses in the biotech, healthcare and technology industries. From 2011 to 2015, she was a Senior Advisor at McKinsey where she advised senior executive leadership teams on executing strategic M&A. Prior to McKinsey, she served as Vice President, Corporate Development at IBM Corporation, an information technology company, from 1998 to 2011. She received her BS degree in marketing from the University of Colorado and her MBA from the University of Denver. Key Skills and Experience: Complementary Business/Industry Segment Expertise In 2019, Ms. Miyashita joined Valo Health as Chief Strategy Officer where she develops and drives complex business models, building a disruptive technology platform, and applying it to drug discovery, clinical development, and strategic partnerships across a regulated pharmaceutical ecosystem. While serving as Partner at Innosight Consulting, she advised and supported CEOs and their executive leadership teams on disruptive growth strategies in the biotech and healthcare industries. While serving as Senior Advisor at McKinsey, Ms. Miyashita provided global advisory services on M&A to executive and senior leadership teams across the pharmaceutical, biotech, and healthcare industries. International Business and M&A During her tenure as Vice President at IBM, Ms. Miyashita was a key architect in developing and executing M&A globally, anchored on strategy, with successful deal flow, transaction execution and post-merger integration. This strategy and effort resulted in over 40 quarters of double-digit earnings per share growth and creating the highest revenue and market capitalization in IBM’s history. Prior to this position, Ms. Miyashita had executive positions in IBM Asia. While serving as Senior Advisor at McKinsey, Ms. Miyashita helped build McKinsey’s M&A practice and provided global advisory services to executive and senior leadership teams in the Americas, Europe, and Asia on transforming and growing their businesses through M&A. Human Capital Management Ms. Miyashita has extensive human capital management experience having led human capital integration efforts in over 100 acquisitions during her tenure as Vice President at IBM. In her prior roles at McKinsey and Innosight, she advised chief executive officers and executive leadership teams on human capital management matters as they transitioned their companies when executing transformational M&A transactions or when transforming their core business. In her current role at Valo Health, she influences the human capital management needed to build a novel platform to accelerate drug discovery and development. Risk Management
Directors Continuing in Office Until the 2026 Annual Meeting
During her tenure as Vice President at IBM, Ms. Miyashita was involved in over 100 acquisitions or transactions and multiple business carve outs for divestiture from IBM to other companies which included developing cross functional processes and approaches to manage risk. Under her leadership, cross functional teams prepared for and passed multiple business audits to ensure risk was identified, mitigated and managed for executing all acquisitions. Board Service Selection Criteria: As further described in Ms. Miyashita’s biography, the Nominating and Corporate Governance Committee believes Ms. Miyashita has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) complementary business and industry experience, (ii) international business, (iii) human capital management, (iv) M&A and (v) risk management. Ms. Miyashita’s extensive experience in developing and executing complex corporate transactions and her experience providing strategy execution advice to senior leadership teams provide our Board with valuable strategic and operational expertise, leading the Nominating and Corporate Governance Committee to determine that Ms. Miyashita should serve as one of our directors. Matthew L. Posard (age 56) Board Committees: Nominating and Corporate Governance Committee (Chair) Key Skills: Medicine and Science, Complementary Business/Industry Segment Expertise, International Business, Human Capital Management, M&A Other Current Public Company Boards: DermTech, Inc. (Chairman), a precision dermatology company Nautilus Biotechnology, Inc., (Chairman) a development stage life sciences company Talis Biomedical, a developer of diagnostic tests for infectious diseases Mr. Posard brings over 30 years of general management and commercialization experience in the biotechnology and diagnostics industry to the Board of Directors. He is Founding Principal of Explore DNA, a life sciences executive consulting firm, a position he has held since March 2016. Since 2017, he has provided advisory services to CEOs for several emerging life sciences companies. From February 2017 to April 2018, Mr. Posard served as President and Chief Commercial Officer of GenePeeks, Inc., a genetic research company. From March 2015 to April 2016, he served as Chief Commercial Officer of Trovagene, Inc., a molecular diagnostic biotechnology company. From February 2006 to February 2015, he held various commercial and general management positions at Illumina, Inc., a genomics company focusing on DNA sequencing, including senior executive positions overseeing Global Sales, Marketing, and General Manager of Clinical and Consumer Genomics as well as New and Emerging Markets. Mr. Posard holds a BA degree in Management Science from the University of San Diego. Key Skills and Experience: Medicine and Science Mr. Posard has deep expertise introducing novel and transformative products to medical and research markets while scaling organizations efficiently. He is a Founding Principal of Explore DNA and provides advisory services to executive officers of several emerging life sciences companies. Complementary Business/Industry Segment Expertise Mr. Posard adds to his biotech expertise with deep knowledge in the diagnostics area, having served in senior positions at Illumina, Biosite, Inc. and Gen-Probe, Inc. At Illumina he was part of the executive management team that led the company to its first $1 billion in revenue. At Biosite he was instrumental in the successful introduction of the company’s BNP congestive heart failure biomarker and its BNP co-marketing collaboration with Beckman Coulter. At Gen-Probe, Mr. Posard helped the company attain leading market positions in DNA probe-based infectious disease diagnostics and blood banking. International Business Mr. Posard has extensive international business experience, having served as the Vice President of Global Sales for Illumina where he led an international commercial sales team. He also served as Senior Vice President and General Manager of Illumina’s Translational and Consumer Genomics and New and Emerging Markets business units and was responsible for over $100 million of sales growth in his first year in this position. This experience provided substantial exposure to commercial markets around the world. Human Capital Management In his senior commercial marketing positions with various companies, Mr. Posard has managed and led a number of large and diverse marketing teams. A seasoned executive in the genomics and life science space, Mr. Posard has extensive background in effectively scaling organizations. M&A Mr. Posard has served on the board of directors and in senior leadership positions at a variety of startup and emerging companies and has extensive experience in the area of mergers and acquisitions in the biotech and diagnostics space. In his position as advisor to senior executives of life science companies, he has provided guidance and effective consultation in the execution of strategic acquisitions. Board Service Selection Criteria: As further described in his biography, the Nominating and Corporate Governance Committee believes Mr. Posard has the relevant background in the following areas which the committee believes are important to service on the Company’s Board of Directors: (i) medicine and science, (ii) complementary business and industry segment expertise, (iii) international business, (iv) human capital management and (v) M&A. Mr. Posard’s general management, sales and marketing experience including the successful launch of products and management of sales operations provides valuable experience and perspective to our Board, leading the Nominating and Corporate Governance Committee to determine that Mr. Posard should serve as one of our directors.
Executive Summary
Executive Compensation Highlights Our executive compensation program ties a substantial portion of each executive’s overall compensation to the achievement of key strategic, financial and operational goals and aligns the interests of executive officers with stockholders by annually awarding long-term equity-based incentives, in the form of time-vesting restricted stock units (“RSUs”), performance-vesting stock units (“PSUs”) and stock options. Consistent with this approach, the compensation of our NEOs for 2023 featured: •revenue and Adjusted EBITDA1 growth performance goals were established for the threshold, base and maximum targets under our 2023 annual cash incentive program. Actual revenue attainment was $829.3 million, a 26% increase over prior year which was 97.5% to target and Adjusted EBITDA was $426.2 million a 19% increase over prior year, which was 87.2% to target. Actual cash payouts under the 2023 annual cash incentive program ranged from 106.7% to 128% of target, with the cash payouts driven by a corporate performance factor under the program of 106.7%. •a compensation package more heavily weighted toward long-term equity-based incentive compensation than salary and shorter-term annual cash incentives in order to emphasize the focus on our long-term performance and stockholder value, •long-term equity-based incentives that were heavily weighted toward performance – in addition to the value of all awards being dependent on our stock price, the awards granted in 2023 included PSUs which are subject to performance-based vesting conditions and stock options which have value only if our stock price increases after the date of grant of the awards, •stock ownership and stock retention guidelines, encouraging executives to maintain a meaningful ownership position in the Company, focus on our long-term performance and discourage unreasonable risk-taking, •a recoupment (or “claw back”) policy covering certain compensation elements in the event of an accounting restatement due to material noncompliance with any financial reporting requirements, •a practice of not including tax gross-ups in ongoing compensation arrangements, •no “single trigger” provisions in executive and employee change-in-control agreements and arrangements (i.e., payout or vesting is not triggered automatically upon a change-in-control), and •no material perquisites. Stockholder Engagement The Board and the Compensation Committee value the input of our stockholders regarding the Company’s governance practices and the design and effectiveness of our executive compensation program. Halozyme conducts regular outreach to our stockholders to build relationships and solicit feedback on these topics. In addition, our stockholders are provided with an opportunity to cast an advisory vote on our executive compensation program every year through the “say-on-pay” proposal. At our 2023 annual meeting of stockholders, our stockholders approved, on a non-binding, advisory basis, the compensation paid to our NEOs described in our 2023 proxy statement. Approximately 95.9% of the votes cast on the matter were voted in favor of this “say-on-pay” proposal. The Compensation Committee considered the voting results and 1 We use “EBITDA” to refer to the Company’s earnings excluding interest, taxes, depreciation and amortization, and “Adjusted EBITDA” means the Company’s EBITDA excluding one time items such as changes in contingent liabilities and impairment charges, and transaction costs for business combinations. high level of stockholder support when establishing our executive compensation programs for fiscal 2024 and, given the high level of stockholder support on our last “say-on-pay” proposal, established executive compensation programs for fiscal 2024 that are similar to those that were in place for fiscal 2023. When making future compensation decisions for our executive officers, the Compensation Committee will continue to consider the opinions that stockholders express through our stockholder engagement program and through our annual “say-on-pay” advisory votes. 2023 Business Highlights Halozyme’s strong financial and operating performance in 2023 was supported by internal corporate developments and significant growth and advancements with our ENHANZE® collaboration partners. The key developments and achievements in 2023 include: •Reported record total revenues of $829.3 million, which increased 26% from $660.1 million in 2022. •Increased revenues from royalties 24% year-over-year to $447.9 million driven primarily by continued strong sales from partnered products utilizing our ENHANZE® technology including the subcutaneous formulations of DARZALEX® (daratumumab) and Roche’s Phesgo® (pertuzumab/trastuzumab/hyaluronidase-zzxf). •Continued our commitment to returning value to shareholders and repurchased 4.2 million shares of common stock for $150 million at an average price per share of $36.01 and announced an acceleration of the remaining $250 million under the current approved $750 million share repurchase plan authorized in 2021. The Company executed the $250 million share repurchase by entering into an accelerated share repurchase transaction with a financial institution. •Strengthened our balance sheet and redeemed all of the outstanding 1.25% convertible senior notes due 2024 in exchange for $13.5 million in cash and 288,886 shares of common stock. •Announced positive results of a clinical study with our proprietary high-volume auto-injector demonstrating subcutaneous (“SC”) administration of 10 mL of a representative biologic product co-formulated with our ENHANZE® drug delivery technology in approximately 30 seconds. •Entered into a global collaboration and non-exclusive license agreement with Acumen Pharmaceuticals that provides Acumen access to ENHANZE® for a single target. Acumen intends to explore the potential use of ENHANZE® for ACU193, a clinical stage monoclonal antibody candidate to target Amyloid-β Oligomers for the treatment of early Alzheimer’s disease. •ENHANZE® Partner Regulatory Submissions/Approvals ◦argenx announced that the FDA had accepted for priority review a supplemental Biologics License Application (“sBLA”) for VYVGART Hytrulo for the treatment of CIDP. The application has been granted a Prescription Drug User Fee Act action date of June 21, 2024. ◦Takeda submitted a New Drug Application in Japan seeking approval for TAK-771, subcutaneous 10% human immunoglobulin with ENHANZE®, for treatment of primary immunodeficiency. ◦Takeda announced that the FDA approved a sBLA to expand the use of HYQVIA® to treat primary immunodeficiency in children. ◦argenx received FDA approval for VYVGART® Hytrulo injection with ENHANZE® for SC use for the treatment of generalized myasthenia gravis (“gMG”) in adult patients who are anti-acetylcholine receptor (“AChR”) antibody positive. VYVGART® Hytrulo was made available to patients, resulting in $33.0 million in milestone payments and the right to receive royalties on net product sales. ◦Roche announced the approval of Tecentriq® SC with ENHANZE® by the Medicines and Healthcare products Regulatory Agency in Great Britain, resulting in an $8.0 million milestone payment to Halozyme and the right to receive royalties on net product sales. ◦Chugai Pharmaceuticals, a member of the Roche Group, obtained regulatory approval for Phesgo® from the Ministry of Health, Labour and Welfare in Japan. Halozyme is entitled to receive royalties for Phesgo® sales in Japan under its agreement with Roche. ◦argenx received European Commission (“EC”) approval for SC injectable VYVGART® co-formulated with ENHANZE® as an add-on to standard therapy for the treatment of gMG in adult patients who are AChR antibody positive.
Executive Summary
| | What We Do | | What We Do Not Do | | ✓ | Pay annual bonus based on the achievement of Company financial and strategic goals, and in the case of NEOs other than the CEO, individual performance, and contribution in achieving those goals | × | No guaranteed annual bonus payouts | | ✓ | Grant PSUs as significant portion of annual LTI awards for all executive officers | × | No severance payments or benefits for executives who voluntarily terminate their employment | | ✓ | Cap the annual bonus plan payout | × | No buyback of stock awards or repricing of stock options without shareholder approval | | ✓ | Prohibit executive officer hedging and pledging of Company stock | × | No executive single-trigger change in control benefits | | ✓ | Maintain an executive officer recoupment (“claw back”) policy | × | No material perquisites | | ✓ | Maintain robust stock ownership and retention guidelines for all executive officers | × | No supplemental executive benefits | | ✓ | Conduct an annual comprehensive compensation program risk assessment | x | No excise tax gross-ups |
Executive Total Rewards Philosophy
| Compensation Element | Purpose | | Base Salary | • Provides a fixed amount of cash compensation for services rendered based on individual performance, job scope, experience and competitive market for talent | | Annual Cash Incentive | • Motivates and rewards fiscal year contribution to company performance against pre-established financial and operational goals and objectives | | Long-term Incentives (“LTI”) | • Align compensation with the creation of stockholder value (in the case of stock options) and changes in stock price (in the case of RSUs) and relative total shareholder return performance (in the case of PSUs) • Increases executive stock ownership and aligns with stockholder interests. • Serves as a key retention device |
Executive Total Rewards Philosophy
In addition, our NEOs are eligible to receive severance payments and benefits in connection with a qualifying termination of employment under our executive Change-in-Control Agreements and our severance policy for covered terminations unrelated to a change in control, each as described in more detail below. We also provide our NEOs with the same package of benefits that are provided to substantially all our full-time employees, including Company matching contributions to a 401(k) plan, health insurance, group term life insurance, and disability income insurance. From time to time, we may also provide relocation assistance in connection with the recruitment of an officer or employee with needed skills and experience. No material perquisites or supplemental executive benefits were provided to our NEOs in 2023. As shown below, the majority of our NEOs’ target total direct compensation for 2023 (base salary, target annual cash incentive, and LTI awards, taken into account at their fair value on the grant date) was variable (target annual cash incentive and LTI awards), with the single largest component (LTI awards) based on Halozyme’s stock price performance. Base Salary The Compensation Committee determines base salaries for NEOs each year based upon the following factors (with no specific weight applied to each factor): •the scope and complexity of the NEO’s responsibilities, •a review of external market practices (a more detailed description of the methodology used to assess external market practices is provided below), •the NEO’s experience, •internal pay equity, and •the CEO’s evaluation of the NEO’s performance and contribution to the short- and long-term success of Halozyme (in the case of the CEO, the evaluation is done in executive session by the Compensation Committee with input from the other independent members of the Board of Directors). As reflected in the table below, 2023 annual base salary levels were increased by 5.5% for the CEO, 12.5% for Ms. LaBrosse (to bring her salary closer to the peer median for her position and to recognize her growth in the role since being promoted at the start of 2022), and 4.0% and 3.5%, respectively, for Mr. Snyder and Dr. LaBarre. The base salary increases for our NEOs were approved by the Compensation Committee after taking into account the base salaries paid to peer group executives holding similar positions and other factors described above.
Executive Total Rewards Philosophy
Annual Cash Incentive NEOs participate each year in the Employee Bonus Plan (“EBP”). The actual cash incentive paid to each NEO with respect to 2023 was determined based on each NEO’s target annual cash incentive opportunity and based on the performance of Halozyme as measured by the level of achievement of six metrics, of which two are tied to financial performance and have a combined 70% weighting and four are tied to operational performance and have a combined 30% weighting (“Corporate Performance”). As CEO, Dr. Torley is responsible for overall corporate performance, and accordingly, her EBP incentive opportunity is based entirely on the attainment of objective, pre-established corporate performance goals without applying an individual performance adjustment. For the other NEOs, the Compensation Committee may modify final payouts based on individual performance during the year relative to the level of achievement of personal goals (“Individual Performance Factor”), and the NEO must achieve at least 60% of his/her individual performance objectives in order to be eligible for a cash incentive payment. In all events, an NEO’s total payout cannot exceed two times the target cash annual incentive opportunity for the NEO. The Compensation Committee sets each NEO’s target annual cash incentive opportunity as a percentage of the NEO’s base salary taking into account the same factors as are considered in NEO base salary determinations. As shown below, the 2023 target annual cash incentive opportunities for the NEOs (as a percentage of base salary) were increased over their 2022 target opportunities. These increases were approved by the Compensation Committee and set each NEO’s target opportunity at approximately the median for peer group executives holding similar positions.
Executive Total Rewards Philosophy
| Executive Officer | 2022 Target Bonus (% Salary) | 2023 Target Bonus (% Salary) | 2023 Target Bonus ($) | | Helen I. Torley | 80% | 90% | 828,000 | | Nicole LaBrosse | 45% | 50% | 273,094 | | Mark Snyder | 45% | 50% | 273,000 | | Michael J. LaBarre | 45% | 50% | 269,100 |
Executive Total Rewards Philosophy
________________ (1)As noted above, Dr. Torley’s payout is based entirely on the attainment of objective, pre-established corporate performance goals without applying an individual performance factor. LTI Compensation All grants of LTI compensation are made under our stockholder-approved equity incentive plan. The Compensation Committee utilized three vehicles to deliver LTI awards to NEOs during 2023: Stock Options are strongly aligned with stockholder interests because they deliver value to the NEO only if the value of our stock at the time of exercise exceeds the stock price on the day of grant. As a result, the Compensation Committee believes stock options encourage executives to focus on the decisions and behaviors required to support long-term sustainable increases in our stock price. To ease the transition to retirement for long-serving employees, the Compensation Committee provided in 2023 that employees who retire from Halozyme at age 60 or older with at least seven years of service to Halozyme will have three years from the date of their termination of service to exercise their Halozyme options that are vested at the time of their separation (subject to the applicable maximum option term and subject to earlier termination in connection with certain change in control events). Time-vesting RSUs provide a counterbalance to the more uncertain value associated with stock options and PSUs while still maintaining alignment with the interests of our long-term stockholders, as the value of RSUs fluctuates (up or down) with changes in our stock price. As a result, the Compensation Committee believes time-vesting RSUs encourage executives to make decisions consistent with the long-term interests of our stockholders and help support retention. Stock options and time-vesting RSUs granted to our NEOs in 2023 generally vest over a four-year period subject to continued employment. PSUs help link our equity incentive program to achievement of specific performance goals established by the Compensation Committee. The Compensation Committee believes that the grant of PSUs furthers our executive compensation philosophy to tie achievement of company performance with executive compensation, aligns the interests of executive officers with our stockholders and encourages long-term performance. The PSUs granted to the NEOs in 2023 are eligible to cliff vest after a three-year period provided they are earned based on our relative TSR measured against the applicable subset of component companies of the NASDAQ Biotechnology Index (excluding companies that had not been listed or traded on a national securities exchange for at least three consecutive years as of October 31, 2022, those that had gross revenue of less than $100 million dollars for the period of four consecutive calendar quarters ending with the last fiscal quarter for which there were publicly disclosed financial results as of October 31, 2022, and those that cease to be publicly-traded during the applicable performance period other than due to insolvency). One-third of the target PSUs are earned based on three discrete performance periods each beginning on the grant date of the awards, with one performance period ending December 31, 2023, one performance period ending December 31, 2024, and one performance period ending December 31, 2025. For purposes of these awards, TSR for Halozyme and the applicable subset of component companies is based on a 20-trading day average trading price beginning on the PSU grant date and a 20-trading day average trading price ending on the last day of the applicable performance period. Dividend equivalents, if any, will be accrued as additional stock units and delivered with earned shares at vesting. The potential vesting percentages for the 2023 PSUs are as follows (with the percentage determined by linear interpolation for performance between the 25th and 75th percentiles):
Executive Total Rewards Philosophy
| Maximum | 75th Percentile or Higher | 150% | | Target | 50th Percentile | 100% | | Threshold | 25th Percentile | 50% | | Below Threshold | < 25th Percentile | 0% |
Executive Total Rewards Philosophy
PSUs eligible to vest based on performance become vested on the third anniversary of the grant date of the awards following certification of performance results and assuming continued employment. The three-year cliff vesting schedule serves as additional retention and incentive for stock price performance to support long-term alignment with our stockholders. 2023 Annual LTI Awards For 2023, the Compensation Committee awarded annual LTI compensation for the NEOs based on the grant date value the Committee determined appropriate considering their assessment of annual equity award grants to peer group executives holding similar positions, and taking into account their assessment of the executive’s experience, expected contribution to the long-term success of the Company, and skill-set relative to industry peers at biopharmaceutical companies (with no specific weight applied to each factor). The Compensation Committee also determined that the award value for each NEO would be allocated 25% PSUs (at target), 40% stock options and 35% RSUs (or 28.75%, 38% and 33.25%, respectively, for Dr. Torley). A greater weight was placed on PSUs in the equity award mix for Dr. Torley to increase the performance-based portion of her overall LTI award. Accordingly, the Compensation Committee awarded the following LTI values to our NEOs in 2023:
Executive Total Rewards Philosophy
| Name | Option Awards ($) | RSUs ($) | PSUs ($) | Total ($) | | Helen I. Torley | 3,800,000 | 3,325,000 | 2,875,000 | 10,000,000 | | Nicole LaBrosse | 1,200,000 | 1,050,000 | 750,000 | 3,000,000 | | Mark Snyder | 1,080,000 | 945,000 | 675,000 | 2,700,000 | | Michael J. LaBarre | 960,000 | 840,000 | 600,000 | 2,400,000 |
Executive Total Rewards Philosophy
For each NEO, the LTI value allocated to an award was converted into a number of shares based on (i) in the case of RSUs, the closing price of our stock on the grant date, and (ii) in the case of options and PSUs. the per share fair value of the award on the grant date awards as determined under applicable accounting rules, and rounding up to a whole share. The grant date fair value of the options was determined using the Black-Scholes option valuation methodology. The grant date fair value of the PSUs was determined using a Monte Carlo simulation. Differences between the LTI values approved by the Compensation Committee, as shown above, and the actual grant date fair values of the awards as included in the executive compensation tables following the CD&A are due to the rounding of fractional share interests in accordance with the methodology approved by the Compensation Committee. PSU Award Vesting The Compensation Committee has determined that, as to the one-third of the PSUs awarded in 2023 that correspond to a performance period ended December 31, 2023, 70.45% of such PSUs are eligible to vest based on our relative TSR measured against the applicable subset of component companies of the NASDAQ Biotechnology Index for that period (our TSR for that period was -14.7% and this placed us at the 35.2nd percentile against the comparison group of companies for that period). These PSUs remain unvested, with vesting subject to continued employment through the third anniversary of the grant date of the awards. We awarded PSUs in 2021 to Dr. Torley and Dr. LaBarre and awarded PSUs in 2022 to each of the NEOs that are similar to the PSUs awarded in 2023. The Compensation Committee has determined that, as to the one-third of the PSUs awarded in 2021 that correspond to a performance period ended December 31, 2023, 150% of such PSUs are eligible to vest based on our relative TSR measured against the applicable subset of component companies of the NASDAQ Biotechnology Index for that period (our TSR for that period was -14.2% and this placed us at the 77.5th percentile against the comparison group of companies for that period). The PSUs vested on the third anniversary of the grant date of the awards. The Compensation Committee has also determined that, as to the one-third of the PSUs awarded in 2022 that correspond to a performance period ended December 31, 2023, 131.58% of such PSUs are eligible to vest based on our relative TSR measured against the applicable subset of component companies of the NASDAQ Biotechnology Index for that period (our TSR for that period was 11.7% and this placed us at the 65.8th percentile against the comparison group of companies for that period). These PSUs remain unvested, with vesting subject to continued employment through the third anniversary of the grant date of the awards. 2024 Annual LTI Awards As discussed above, the 2023 annual LTI award mix for Dr. Torley was 28.75% PSUs (at target), 38% stock options and 33.25% RSUs, and the 2023 annual LTI award mix for our other NEOs was 25% PSUs (at target), 40% stock options and 35% RSUs. The Company granted its 2024 annual LTI awards in February 2024, with a mix for all NEOs, including Dr. Torley, that was 50% PSUs (at target), 15% stock options and 35% RSUs. Two types of PSUs were awarded in 2024. Half of the target PSU value is earned based on our relative TSR performance against a subset of the Nasdaq Biotech Index, consistent with the design of our 2023 PSUs. One-third of these PSUs are eligible to be earned based on our relative TSR performance over three measurement periods, each beginning on the date of grant and ending at the end of 2024, 2025, and 2026, with 0%-150% of the one-third portion of the award allocated to each performance period eligible to be earned based on actual performance for that period. Earned shares, if any, cliff vest on the third anniversary of grant. The other half of the target PSU value is earned based on new target nominations by partners and new collaborations in 2024 related to ENHANZE® and our Auto-Injectors, aligned with our strategic goals. These PSUs are earned from 0%-200% of the target number of shares. Earned shares, if any, cliff vest on the third anniversary of grant. Competitive Peer Group The Compensation Committee annually selects a group of peer companies against which Halozyme benchmarks the competitiveness of executive pay levels and program design (referred to in this CD&A as our “peer group” or “peer companies”). The peer group companies are identified based upon the Compensation Committee’s assessment of each company’s similarity with Halozyme with respect to science/business model, revenue, and market capitalization. The peer group is reviewed annually by the Compensation Committee. For 2023 compensation decisions, the Compensation Committee utilized proxy data from the following companies, listed below. The Compensation Committee’s objective in selecting this peer group was to include a group of similar-sized public companies in the life sciences sector, with an emphasis on pharmaceutical and biotechnology companies with commercialized products. Targeted companies generally had revenues and market capitalization between 0.25x to 4.0x Halozyme’s size at the time of the analysis with Halozyme near the median on both measures.
Executive Total Rewards Philosophy
| 2023 Peer Group | | | | Acadia Pharmaceuticals Agios Pharmaceuticals Alkermes Alnylam Pharmaceuticals Amicus Therapeutics | BioMarin Pharmaceutical Blueprint Medicines Exelixis Ionis Pharmaceuticals Ironwood Pharmaceuticals | Ligand Pharmaceuticals Neurocrine Biosciences Sarepta Therapeutics Ultragenyx Pharmaceuticals United Therapeutics |
Executive Total Rewards Philosophy
The following changes to the peer group were made for 2023: •Alkermes, BioMarin Pharmaceutical and United Therapeutics were added to the group based on the Compensation Committee’s assessment of the criteria noted above. •Acceleron Pharmaceuticals, FibroGen, Heron Therapeutics, and Nektar Therapeutics were removed from the group based on the Compensation Committee’s assessment of the criteria noted above and, in the case of Acceleron Pharmaceuticals, because it was no longer publicly-traded. Independent Compensation Consultant The Compensation Committee retains F.W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant to provide advice and counsel on matters related to our executive and non-employee director compensation program and FW Cook provides no other services to Halozyme. In 2023, FW Cook provided recommendations regarding the composition and selection of Halozyme’s peer group companies to be used with respect to 2023 and 2024 executive compensation decisions, performed a review of compensation levels and practices for similar executive positions at the peer group companies, advised regarding the compensation mix and levels for the NEOs, advised on the design and implementation of our annual LTI awards, reported on executive compensation trends and developments, and advised on the compensation arrangements for our non-employee directors. FW Cook reports directly to the Compensation Committee and regularly attends meetings of the Compensation Committee, as requested. The Compensation Committee assessed the independence of FW Cook pursuant to applicable rules and regulations of the SEC and NASDAQ and concluded that the engagement of FW Cook did not raise any conflicts of interest during fiscal 2023 and currently does not raise any conflicts of interest.
Compensation Risk Assessment
Compensation Risk Assessment Our Compensation Committee, with assistance from its independent compensation consultant and with input from members of management, annually reviews our compensation programs, policies and practices to determine whether they encourage risk-taking that could have a material adverse effect on the Company. As part of this review, the Company evaluates the primary components of its compensations plans to identify whether those components properly balance compensation opportunities and risk. Our Compensation Committee considers various factors, including the following: •The Company’s pay philosophy provides an effective balance in cash and equity award mix, short- and long-term performance periods, financial and non-financial performance, formulas and discretion. •The Company’s compensation programs include an appropriate mix of short- and long-term goals and incentives. •The Compensation Committee has the discretion to make positive and negative adjustments to payouts under the Company’s compensation plans. •Policies are in place to manage or mitigate risk, such as stock ownership guidelines, vesting periods on equity awards, insider-trading prohibitions that also restrict hedging and pledging, recoupment policy and provisions, and independent Compensation Committee oversight. •The Company’s design and oversight principles also apply to its broad-based employee compensation plans. Based on this review, the Compensation Committee, based in part on the input from its compensation consultants, concluded that the risks arising from the Company’s compensation policies and practices, for both our executive officers and our other employees, are not reasonably likely to have a material adverse effect on Halozyme.
Other Compensation Matters
Other Compensation Matters Stock Ownership and Retention Guidelines We maintain stock ownership guidelines for our executive officers which stipulate that the CEO is required to own shares of Halozyme common stock with value equal to no less than six times the CEO’s current base salary and that all other executive officers are required to own shares of Halozyme common stock with value equal to no less than two times the officer’s current base salary. Certain other officers designated by the Compensation Committee are expected to own shares of Halozyme common stock with value no less than one times the officer’s current base salary. Each executive officer is expected to comply with the guidelines within five years of appointment as an executive officer, and has three years to comply with any incremental ownership required as a result of a promotion or other increase in applicable ownership multiple. Share ownership that counts for purposes of satisfying the applicable guideline level of ownership includes fully-owned shares (including shares held in trust and by immediate family members), vested but deferred shares, shares held in retirement accounts, and unvested stock units that are subject to time-based vesting only. Stock units subject to unsatisfied performance-based vesting conditions and unexercised stock options are not counted when evaluating compliance. Each executive officer is required to: (i) hold at least 50% of all net shares (after shares withheld or sold to pay tax obligations) of RSUs and PSUs that vest; and (ii) hold at least 50% of the underlying net gain (i.e., not including shares sold to pay the exercise price or to satisfy tax obligations) in shares of the Company’s common stock as a result of stock option exercises, until the executive officer comes into compliance with the stock ownership guidelines. The Compensation Committee annually reviews progress executive officers are making toward achieving compliance with these guidelines and has determined that all of our NEOs have achieved their specific ownership levels as of February 1, 2024. Tax Deductibility of Executive Compensation Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation in excess of $1 million paid to a company’s chief executive officer and certain current and former executive officers. As a result, we expect that compensation paid per year to our NEOs and certain former executive officers in excess of $1 million generally will not be deductible, subject to limited exceptions. The Compensation Committee generally seeks to preserve tax deductions for executive compensation where available but may make compensation decisions based on other factors when it believes doing so is in the best interest of the Company and its stockholders. Change in Control Agreements We have entered into Change in Control Agreements with our executive officers. We believe that the occurrence or potential occurrence of a change in control transaction creates uncertainty regarding the continued employment of our executive officers. This uncertainty results from the fact that many change in control transactions are common in our industry and often result in significant organizational changes, particularly at the senior executive level. We provide additional severance protections under the Change in Control Agreements to help ensure that executives can objectively evaluate change in control transactions that may be in the best interest of stockholders despite the potential negative consequences such transactions may have on them personally and to encourage executives to remain employed with the Company during an important time when their prospects for continued employment following the transaction are often uncertain. Non-Change in Control Severance Policy The Compensation Committee has approved a Company-wide severance policy, outside of a change in control context, that is also applicable to our executive officers. We believe that such severance protections are only appropriate in the event an executive is involuntarily terminated without cause and that these severance benefits are appropriate in light of severance protections available to executives at our peer group companies, and are an important component of each executive’s overall compensation as they help us to attract and retain our key executives who could have other job alternatives that may appear to them to be more attractive absent these protections. The Compensation Committee amended the severance policy in December 2023 to better align the severance benefit level for our CEO with peer group practices. Despite the establishment of the severance policy, however, the Board of Directors or Compensation Committee retains the right to amend, alter or terminate the severance policy at any time. Incentive Compensation Recoupment (“Clawback Policy”) In accordance with SEC and NASDAQ requirements, the Board has adopted an executive compensation recovery policy regarding the adjustment or recovery of certain incentive awards or payments made to current or former executive officers in the event that we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. In general, the policy provides that, unless an exception applies, we will seek to recover compensation that is awarded to an executive officer based on the Company’s attainment of a financial metric during the three-year period prior to the fiscal year in which the restatement occurs, to the extent such compensation exceeds the amount that would have been awarded based on the restated financial results. Hedging and Pledging Restrictions The Company’s Insider Trading Policy prohibits the pledging of Company securities as collateral and entering into transactions to hedge the value of Company securities owned by executives subject to the policy. Under the policy all directors and employees (including officers), or their designees, are prohibited from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Halozyme’s equity securities that are either (i) granted to the employee or director by Halozyme as part of the compensation of the employee or director or (ii) held, directly or indirectly, by the employee or director.
2023 Summary Compensation Table
2023 Summary Compensation Table The following table sets forth information concerning the compensation earned during the fiscal years ended December 31, 2023, 2022 and 2021 by each individual who acted as our principal executive officer, our principal financial officer, and our other most highly compensated executive officers during the fiscal year ended December 31, 2023.
2023 Summary Compensation Table
| 2023 SUMMARY COMPENSATION TABLE | | | | | | | | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(3) | Option Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Helen I. Torley | 2023 | 920,000 | — | 6,200,011 | 3,800,007 | 883,476 | 17,364 | 11,820,858 | | President and Chief Executive Officer | 2022 | 871,732 | — | 4,950,040 | 3,300,008 | 557,909 | 17,289 | 9,696,978 | | | 2021 | 830,221 | — | 4,060,081 | 1,740,001 | 807,619 | 15,372 | 7,453,294 | | Nicole LaBrosse(6) | 2023 | 546,188 | — | 1,800,055 | 1,200,001 | 291,391 | 11,784 | 3,849,419 | | Senior Vice President, Chief Financial Officer | 2022 | 467,836 | — | 1,200,030 | 800,012 | 200,997 | 14,228 | 2,683,103 | | Mark Snyder(7) | 2023 | 546,000 | —(9) | 1,620,053 | 1,080,003 | 349,549 | 17,322 | 3,612,927 | | Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary | 2022 | 525,000 | — | 1,750,044 | 1,250,007 | 198,450 | 16,701 | 3,740,202 | | Michael J. LaBarre | 2023 | 538,200 | — | 1,440,042 | 960,005 | 287,130 | 18,564 | 3,243,941 | | Senior Vice President, Chief Technical Officer | 2022 | 520,000 | — | 1,440,041 | 960,002 | 187,200 | 16,037 | 3,123,280 | | | 2021 | 494,000 | | 1,050,040 | 450,010 | 270,217 | 15,333 | 2,279,600 |
2023 Summary Compensation Table
________________ (1)This column represents the grant date fair value of stock awards granted to the NEOs in fiscal years 2023, 2022 and 2021, in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeiture related to service-based vesting conditions. For additional information on the valuation assumptions used by us in calculating these amounts refer to Note 9 of the Notes to Consolidated Financial Statements, filed as part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 20, 2024. Stock awards granted to executive officers consist of RSUs and PSUs. A portion of the amounts reported in this column for each NEO for 2022 and 2021 reflect the grant-date fair value of PSUs granted to the executives during that fiscal year. In accordance with applicable SEC rules, these amounts were determined based on the probable outcome (determined as of the date of grant of the awards) of the performance-based conditions applicable to the awards. For these purposes, the grant date fair value for the PSU awards granted to each of the NEOs was determined based on a Monte Carlo simulation pricing model (which probability weights multiple potential outcomes) as of such grant date. The significant assumptions used in the Monte Carlo simulation pricing model were as follows:
2023 Summary Compensation Table
| | 2023 | 2022 | 2021 | | Expected volatility | 39.38% | 40.52% | 40.96% | | Risk-free interest rate | 4.27% | 1.71% | 0.20% | | Expected dividend yield | — | — | — |
2023 Summary Compensation Table
The following table presents the aggregate grant-date fair value of these performance-based awards granted in fiscal 2023 and 2022 included in the “Stock Awards” column for those years and the aggregate grant-date fair value of these awards assuming that the highest level of performance conditions was achieved.
2023 Summary Compensation Table
| | Aggregate Grant Date Fair Value of Performance Awards (Fiscal 2023) | | Aggregate Grant Date Fair Value of Performance Awards (Fiscal 2022) | | | Name | Based on Probable Outcome as of the Grant Date ($) | Based on Maximum Performance ($) | Based on Probable Outcome as of the Grant Date ($) | Based on Maximum Performance ($) | | Helen I. Torley | 2,875,010 | 4,312,515 | 2,062,529 | 3,093,794 | | Nicole LaBrosse | 750,028 | 1,125,043 | 500,013 | 750,020 | | Mark Snyder | 675,049 | 1,012,574 | 500,013 | 750,020 | | Michael J. LaBarre | 600,011 | 900,016 | 600,008 | 900,012 |
2023 Summary Compensation Table
(2)This column represents the grant date fair value of stock options granted to the NEOs in fiscal years 2023, 2022 and 2021, in accordance with FASB ASC Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeiture related to service-based vesting conditions. For additional information on the valuation assumptions used by us in calculating these amounts refer to Note 9 of the Notes to Consolidated Financial Statements, filed as part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 20, 2024. (3)The amounts reported in the Summary Compensation Table for stock awards and option awards may not represent the amounts that the NEOs will actually realize from the awards. Whether, and to what extent, an NEO realizes value will depend on stock price fluctuations and the NEO’s continued employment. To see the exact share amounts and the value of awards made to the NEOs in fiscal 2023, see the 2023 Grants of Plan-Based Awards table below. Additional information on all outstanding awards is reflected in the Outstanding Equity Awards at December 31, 2023 table. (4)Performance-based bonuses are generally paid pursuant to our annual incentive plans and reported as Non-Equity Incentive Plan Compensation. The performance-based bonuses represent amounts earned during each respective fiscal year based on applicable performance levels for such fiscal year, regardless of whether part or all of such amounts were paid in a subsequent fiscal year. (5)The table below lists the amounts set forth in this column which consist of other compensation including (i) Company contributions to Halozyme Therapeutics, Inc. 401(k) plan, and (ii) Company payments for group term insurance premiums.
2023 Summary Compensation Table
| Name | 401(k) Plan Company Matching Contributions ($) | Payout of Accrued Paid Time Off ($) | Other Compensation ($) | Total ($) | | Helen I. Torley | 13,800 | — | 3,564 | 17,364 | | Nicole LaBrosse | 11,250 | — | 534 | 11,784 | | Mark Snyder | 15,000 | — | 2,322 | 17,322 | | Michael J. LaBarre | 15,000 | — | 3,564 | 18,564 |
2023 Summary Compensation Table
(6)Ms. LaBrosse was appointed as Chief Financial Officer on February 2, 2022. (7)Mr. Snyder commenced employment with Halozyme on January 3, 2022.
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table sets forth certain summary information with respect to plan-based awards granted during the fiscal year ended December 31, 2023 to our NEOs:
2023 Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares or Units(#) (3) | All Other Option Awards: Number of Securities Underlying Options(#) (4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards($) (5) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Helen I. Torley | n/a | — | 828,000 | 1,656,000 | | | | | | | | | | 2/16/2023 | | | | | | | 67,499 | | | 3,325,001 | | | 2/16/2023 | | | | 24,176 | 48,352 | 72,528 | | | | 2,875,010 | | | 2/16/2023 | | | | | | | | 193,360 | 49.26 | 3,800,007 | | Nicole LaBrosse | n/a | — | 273,094 | 546,188 | | | | | | | | | | 2/16/2023 | | | | | | | 21,316 | | | 1,050,026 | | | 2/16/2023 | | | | 6,307 | 12,614 | 18,921 | | | | 750,028 | | | 2/16/2023 | | | | | | | | 61,061 | 49.26 | 1,200,001 | | | | | | | | — | | | | | — | | Mark Snyder | n/a | — | 273,000 | 546,000 | | | | | | | | | | 2/16/2023 | | | | | | | 19,184 | | | 945,004 | | | 2/16/2023 | | | | 5,677 | 11,353 | 17,030 | | | | 675,049 | | | 2/16/2023 | | | | | | | | 54,955 | 49.26 | 1,080,003 | | Michael J. LaBarre | n/a | — | 269,100 | 538,200 | | | | | | | | | | 2/16/2023 | | | | | | | 17,053 | | | 840,031 | | | 2/16/2023 | | | | 5,046 | 10,091 | 15,137 | | | | 600,011 | | | 2/16/2023 | | | | | | | | 48,849 | 49.26 | 960,005 |
2023 Grants of Plan-Based Awards
________________ (1)For a description of the elements of the annual incentive plan applicable to our NEOs, refer to “Compensation Discussion and Analysis - Elements of Executive Compensation for 2023” in this proxy statement. The actual amount of cash paid to each NEO pursuant to the incentive plan established for 2023 is set forth in the Summary Compensation Table under the heading, “Non-Equity Incentive Plan Compensation.” (2)The PSU awards to our NEOs were granted on February 16, 2023 and vest based on our relative TSR measured against the applicable subset of component companies in the NASDAQ Biotechnology Index over a three-year performance period, subject to the NEO’s continued employment through the third anniversary of the grant date. (3)The RSU awards to our NEOs were granted on February 16, 2023 and vest one-fourth on each anniversary of the date of grant. (4)The option awards to our NEOs were granted on February 16, 2023 and vest one-fourth on the first anniversary of the date of grant and then 1/48 of the shares monthly over the three-year period thereafter. (5)These amounts represent the grant date fair value of stock awards granted to our NEOs in fiscal year 2023 in accordance with the FASB ASC Topic 718. For information on the assumptions used in the accounting fair value computations, see footnotes (1) through (3) to the Summary Compensation Table above.
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table sets forth certain information with respect to the value of all unexercised options and unvested stock awards previously awarded to our NEOs as of December 31, 2023:
Outstanding Equity Awards at December 31, 2023
| OUTSTANDING EQUITY AWARDS AT December 31, 2023 | | | | | | | | | | | | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) | | Helen I. Torley | 2/6/2015 | 110,000 | — | 13.87 | 2/6/2025 | — | — | — | | | | 2/3/2016 | 376,569 | — | 8.11 | 2/3/2026 | — | — | — | — | | | 2/22/2017 | 251,923 | — | 12.07 | 2/22/2027 | — | — | — | — | | | 2/14/2018 | 201,552 | — | 18.41 | 2/14/2028 | — | — | — | — | | | 2/12/2019 | 250,218 | — | 16.65 | 2/12/2029 | — | — | — | — | | | 2/10/2020 | 254,965 | 11,086 | 19.98 | 2/10/2030 | 31,281 | 1,156,146 | — | — | | | 2/15/2021 | 63,844 | 26,290 | 49.84 | 2/15/2031 | 26,184 | 967,761 | 32,781(4) | 1,211,586 | | | 2/16/2022 | 117,811 | 139,235 | 34.36 | 2/16/2032 | 63,027 | 2,329,478 | 46,853(5) | 1,731,687 | | | 2/16/2022 | — | — | — | — | — | — | 21,892(6) | 809,139 | | | 2/16/2023 | — | 193,360 | 49.26 | 2/16/2033 | 67,499 | 2,494,763 | 11,356(7) | 419,718 | | | 2/16/2023 | — | — | — | — | — | — | 22,709(8) | 839,319 | | Nicole LaBrosse | 7/1/2015 | 35,000 | — | 22.50 | 7/1/2025 | — | — | — | — | | | 2/22/2017 | 11,271 | — | 12.07 | 2/22/2027 | — | — | — | — | | | 8/1/2017 | 1,947 | — | 12.49 | 8/1/2027 | — | — | — | — | | | 2/14/2018 | 8,813 | — | 18.41 | 2/14/2028 | | — | — | — | | | 2/12/2019 | 10,597 | — | 16.65 | 2/12/2029 | — | — | — | — | | | 2/10/2020 | 20,398 | 887 | 19.98 | 2/10/2030 | 2,502 | 92,474 | — | — | | | 2/15/2021 | 9,173 | 3,778 | 49.84 | 2/15/2031 | 2,508 | 92,696 | — | — | | | 2/16/2022 | 28,560 | 33,755 | 34.36 | 2/16/2032 | 15,279 | 564,712 | 11,359(5) | 419,829 | | | 2/16/2022 | — | — | — | — | — | — | 5,307(6) | 196,133 | | | 2/16/2023 | — | 61,061 | 49.26 | 2/16/2033 | 21,316 | 787,839 | 2,963(7) | 109,512 | | | 2/16/2023 | — | — | — | — | — | — | 5,924(8) | 218,956 | | Mark Snyder | 1/3/2022 | 39,837 | 43,305 | 41.06 | 1/3/2032 | 22,833 | 843,908 | — | — | | | 2/16/2022 | — | — | — | — | — | — | 11,359(5) | 419,829 | | | 2/16/2022 | — | — | — | — | — | — | 5,307(6) | 196,133 | | | 2/16/2023 | — | 54,955 | 49.26 | 2/16/2033 | 19,184 | 709,041 | 2,667(7) | 98,572 | | | 2/16/2023 | — | — | — | — | — | — | 5,332(8) | 197,058 | | Michael J. LaBarre | 2/3/2016 | 75,627 | — | 8.11 | 2/3/2026 | — | — | — | — | | | 2/22/2017 | 44,885 | — | 12.07 | 2/22/2027 | — | — | — | — | | | 2/14/2018 | 5,580 | — | 18.41 | 2/14/2028 | — | — | — | — | | | 7/2/2018 | 292 | — | 16.78 | 7/2/2028 | — | — | — | — | | | 2/12/2019 | 60,146 | — | 16.65 | 2/12/2029 | — | — | — | — | | | 2/10/2020 | 38,216 | 2,883 | 19.98 | 2/10/2030 | 8,133 | 300,596 | — | — | | | 2/15/2021 | 16,511 | 6,800 | 49.84 | 2/15/2031 | 6,772 | 250,293 | 8,479(4) | 313,384 | | | 2/16/2022 | 34,272 | 40,505 | 34.36 | 2/16/2032 | 18,336 | 677,699 | 13,631(5) | 503,802 | | | 2/16/2022 | — | — | — | — | — | — | 6,368(6) | 235,879 | | | 2/16/2023 | — | 48,849 | 49.26 | 2/16/2033 | 17,053 | 630,279 | 2,370(7) | 87,595 | | | 2/16/2023 | — | — | — | — | — | — | 4,739(8) | 175,160 |
Outstanding Equity Awards at December 31, 2023
(1)Each option grant vests at the rate of one-fourth of the underlying shares on the first anniversary of the date of grant and one-forty-eighth of the shares each month thereafter. (2)Each RSU grant vests at the rate of one-fourth of the total number of stock units subject to the award on each of the first four anniversaries of the grant date. Reflects the number of outstanding and unvested RSUs subject to the award. (3)These values are computed by multiplying the closing trading price of our common stock on NASDAQ on December 31, 2023, the last trading date in fiscal year 2023, of $36.96 by the number of shares or stock units, as applicable, set forth in this table. (4)These are the portions of the 2021 PSU awards corresponding to the performance periods ending in 2021, 2022 and 2023. Reflects the number of stock units subject to the awards that are eligible to vest on the third anniversary of the grant date based on actual performance for the completed performance periods. (5)These are the portions of the 2022 PSU awards corresponding to the performance periods ending in 2022 and 2023. Reflects the number of stock units subject to the awards that are eligible to vest on the third anniversary of the grant date based on actual performance for the completed performance periods. (6)These are the portions of the 2022 PSU awards corresponding to the performance period ending in 2024. Reflects the maximum number of stock units (131.58% of the target number of stock units) corresponding to this portion of the award that are eligible to vest on the third anniversary of the grant date because, had the performance period ended at the end of 2023, the performance level would have exceeded the target level. (7)These are the portions of the 2023 PSU awards corresponding to the performance period ending in 2023. Reflects the number of stock units subject to the awards that are eligible to vest on the third anniversary of the grant date based on actual performance for the completed performance period. (8)These are the portions of the 2023 PSU awards corresponding to the performance periods ending in 2024 and 2025. Reflects the maximum number of stock units (70.45% of the target number of stock units) corresponding to this portion of the award that are eligible to vest on the third anniversary of the grant date because, had the performance period ended at the end of 2023, the performance level would have exceeded the target level.
Option Exercises and Stock Awards Vested
Option Exercises and Stock Awards Vested The following table sets forth certain information with respect to the exercise of stock options and vesting of stock awards by our NEOs during the fiscal year ended December 31, 2023:
Option Exercises and Stock Awards Vested
| OPTION EXERCISES AND STOCK AWARDS VESTED DURING FISCAL YEAR 2023 | | | | | | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | | Helen I. Torley | 180,000 | 5,694,443 | 98,177 | 4,813,628 | | Nicole LaBrosse | — | — | 10,240 | 503,024 | | Mark Snyder | — | — | 7,611 | 419,594 | | Michael J. LaBarre | 112,984 | 2,595,191 | 25,514 | 1,251,171 |
Option Exercises and Stock Awards Vested
________________ (1)The value realized on exercise is based on the difference between the closing trading price of Halozyme common stock on the date of exercise and the exercise price of each option. (2)The amounts in this column represent the number of RSU or PSU shares that vested. The actual number of shares issued was the number of shares vested reduced by the number of shares withheld to satisfy applicable tax withholding obligations. (3)The value realized on vesting is based on the closing trading price of Halozyme common stock NASDAQ on the vest date.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control This section describes the benefits that may be provided to our NEOs upon certain terminations of their employment with the Company. Termination Prior to Change in Control Under our severance policy, if an executive officer’s employment is terminated by the Company without cause, the executive officer is entitled to receive cash severance equal to one times the executive officer’s then-current annual base salary (in the case of the CEO, one and one-half times the sum of (a) the CEO’s then-current base salary plus (b) the CEO’s target annual cash incentive amount), plus a pro-rated portion of the executive’s target annual cash incentive for the year of termination. Cash payments under the severance policy will normally be made in a lump sum payment, and will be conditioned upon the receipt of a release of claims from the executive officer. In addition to cash severance payments, the Company will also pay certain costs for the executive to continue healthcare coverage over the applicable severance period, and the executive’s vested options will remain exercisable for one year following the termination date (or, if earlier, until the expiration date of the option). The PSU awards granted to our NEOs since 2021 provide that if the executive’s employment is terminated by the Company without cause or by the executive for good reason and the executive provides a release of claims, any PSUs credited based on performance during a performance period that has already been completed will fully vest on the executive’s termination, and PSUs subject to a performance period that has not yet been completed will remain outstanding and eligible to vest based on performance during that period, subject to pro-ration to reflect the executive’s employment during the performance period. If the executive’s employment terminates due to the executive’s death or disability, any PSUs credited based on performance during a performance period that has already been completed will fully vest on the executive’s termination, and the target number of PSUs for the next performance period scheduled to be completed after the termination date will vest pro-rata based on the executive’s employment during that performance period. The table below presents the benefits that would be provided to each of the NEOs assuming the NEO was terminated by us without cause (prior to a change in control of the Company) on December 31, 2023 and executed a release of claims in a form satisfactory to the Company:
2023 Potential Payments Upon Termination Without Cause Prior to Change in Control
2023 Potential Payments Upon Termination Without Cause Prior to Change in Control
2023 Potential Payments Upon Termination Without Cause Prior to Change in Control
| Name | Lump Sum Severance Payment ($) | Post- Termination Healthcare ($) | Equity Awards ($) (1) | Total | | Helen I. Torley | 2,208,000 | 29,939 | 3,362,991 | 5,600,930 | | Nicole LaBrosse | 546,188 | 34,651 | 529,342 | 1,110,181 | | Mark Snyder | 524,252 | 42,570 | 518,402 | 1,085,224 | | Michael J. LaBarre | 538,200 | 1,395 | 904,782 | 1,444,377 |
2023 Potential Payments Upon Termination Without Cause Prior to Change in Control
(1)Amounts shown in this column reflect the market value of unvested PSUs that would have accelerated if the NEO was terminated without cause (or resigned for good reason) as described above on December 31, 2023. Values were derived using the closing trading price of our common stock on NASDAQ on December 31, 2023, the last trading date in fiscal year 2023, of $36.96. The number of accelerated PSUs for the 2023 performance period was determined based on our relative TSR through December 31, 2023. We did not include any amount for the PSUs allocated to the 2023-2024, or the 2023-2025 performance periods because the number of PSUs that will vest with respect to those periods is not known as it will depend on our future performance (the maximum value of those PSUs at December 31, 2023 was $850,081 for Dr. Torley, $212,040 for Ms. LaBrosse, $203,613 for Mr. Snyder, and $220,764 for Mr. LaBarre. These amounts were calculated solely for purposes of this disclosure, and there can be no assurance that the value actually realized by the executive for these awards (if any) will be equal to the value shown in this column. The table below presents the benefits that would be provided to each of the NEOs assuming the NEO’s employment terminated due to death or disability (prior to a change in control of the Company) on December 31, 2023:
2023 Potential Payments Upon Termination Due to Death/Disability Prior to Change in Control
2023 Potential Payments Upon Termination Due to Death/Disability Prior to Change in Control
2023 Potential Payments Upon Termination Due to Death/Disability Prior to Change in Control
| Name | Equity Awards ($) (1) | | Helen I. Torley | 4,041,023 | | Nicole LaBrosse | 698,878 | | Mark Snyder | 680,693 | | Michael J. LaBarre | 1,079,233 |
2023 Potential Payments Upon Termination Due to Death/Disability Prior to Change in Control
________________ (1)Amounts shown in this column reflect the spread value of unvested equity awards that would have accelerated if the NEO’s employment terminated due to death or disability on December 31, 2023. Please see the note to the 2023 Potential Payments Upon Termination Without Cause Prior to Change in Control table above for the calculation of these amounts. The number of accelerated PSUs for the 2023 performance period was determined based on our relative TSR through December 31, 2023, and the number of accelerated PSUs for the 2023-2024 and the 2023-2025 performance periods represents the target number of PSUs allocated to each such period (pro-rated for the executive’s period of employment). These amounts were calculated solely for purposes of this disclosure, and there can be no assurance that the value actually realized by the executive for these awards (if any) will be equal to the value shown in this column. Change in Control We have entered into Change in Control Agreements with each of our executive officers. The Change in Control Agreements provide for cash severance, continued healthcare coverage and accelerated vesting of equity awards if the executive is terminated without cause, resigns for good reason, or is terminated due to death or disability (as such terms are defined in the Change in Control Agreements), in each case on or within 12 months following a change in control transaction. The cash severance, to be made in a lump sum payment, will equal: a multiple (two times for the CEO and one-and-one-half times for the other executive officers) of the sum of (i) the executive’s then-current annual base salary; and (ii) the amount of the executive’s target annual cash incentive opportunity (based on the target percentage of annual base salary) in respect of the year the termination of employment occurs. The Company will also make a cash lump sum payment intended to provide the executive officer sufficient amounts to pay expected heath care premiums under the Company’s group health plans for 18 months after termination of employment (24 months in the case of the CEO). In addition, the Change in Control Agreement provides that the executive’s outstanding and unvested equity awards granted by the Company will be fully vested upon the executive’s termination (with equity awards that are subject to performance-based vesting to accelerate based on the greater of (x) the target performance level for the applicable portion of the award and (y) the actual performance level achieved for the applicable portion of the award through the executive’s termination date). However, the PSU awards granted to the NEOs in 2021, 2022 and 2023 provide that if a change in control occurs any performance period then in progress will terminate and the number of PSUs to be credited under the award will be determined based on performance through the change in control. Such credited PSUs will remain subject to time-based vesting through the third anniversary of the grant date, subject to accelerated vesting if the credited PSUs are not assumed by the acquiring company or if within two years after the change in control the executive’s employment is terminated by the Company without cause, by the executive for good reason, or due to the executive’s death or disability. An executive officer will not be entitled to severance benefits under our severance policy described above if the executive is entitled to severance benefits under the executive’s Change in Control Agreement. The Change in Control Agreements also provide that if an executive officer’s severance benefits would be subject to the parachute payment taxes of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, and a reduction in benefits to avoid such taxes would put the executive in a better after-tax position, then the executive’s benefits will be reduced to the extent necessary to avoid such taxes. Assuming a change in control took place on December 31, 2023 and each of the NEOs was terminated without cause, resigned for good reason or was terminated due to death or disability in each case on December 31, 2023, the NEOs would have received the following benefits as a result of such terminations:
2023 Potential Payments Upon Change in Control Termination
2023 Potential Payments Upon Change in Control Termination
2023 Potential Payments Upon Change in Control Termination
| Name | Equity Awards ($) (1) | Lump Sum Cash Severance ($) | Post- Termination Healthcare ($) | Total ($) | | Helen I. Torley | 10,861,389 | 3,496,000 | 89,807 | 14,447,196 | | Nicole LaBrosse | 2,169,886 | 882,189 | 77,962 | 3,130,037 | | Mark Snyder | 2,071,349 | 542,927 | 95,791 | 2,710,067 | | Michael J. LaBarre | 2,917,913 | 1,210,950 | 3,142 | 4,132,005 |
2023 Potential Payments Upon Change in Control Termination
________________ (1)Amounts shown in this column reflect the value of the unvested equity awards that would have accelerated if the NEO’s employment terminated in the circumstances described above on December 31, 2023 in connection with a change in control. Please see the note to the 2023 Potential Payments Upon Termination Without Cause Prior to Change in Control table above for the calculation of these amounts. The number of accelerated PSUs was determined based on our relative TSR through December 31, 2023. These amounts were calculated solely for purposes of this disclosure and there can be no assurance that the value actually realized by the executive for these awards (if any) will be equal to the value shown in this column. CEO Pay Ratio For 2023, Dr. Torley’s total compensation was $11,820,858, as shown in the Summary Compensation Table above. The total compensation for our median employee (excluding the CEO) in 2023 was $201,360. Therefore, Dr. Torley’s total compensation for 2023 was 59 times that of the median employee’s total compensation in 2023. The Company believes the pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records, as well as the methodology described below. The compensation elements that were considered in the identification of the median employee were annualized base pay, target cash bonus opportunity and target long-term incentive award grant date fair value for 2023 for all employees, excluding the CEO, as of December 31, 2023. The total number of our employees as of December 31, 2023 (excluding the CEO) was 382. We used this population to determine the median employee. The total compensation for the median employee was calculated according to the requirements of the Summary Compensation Table.
Pay Versus Performance
Pay Versus Performance The following summarizes the relationship between our CEO’s, and our other Named Executive Officers’, total compensation paid and our financial performance for the years shown in the table (in this discussion, our CEO is also referred to as our principal executive officer or “PEO”, and our Named Executive Officers other than our CEO are referred to as our “Non-PEO NEOs”):
Pay Versus Performance
| 2023 Pay-Versus-Performance Table | | | | | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | | Year (1) | Summary of Compensation Table for PEO ($) (2) | Compensation Actually Paid to PEO ($) (3) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (2) | Average Compensation Actually Paid to Non-PEO NEOs ($) (3) | Total Shareholder Return ($) (4) | Peer Group Total Shareholder Return ($) (4) | Net Income (Millions) ($) (5) | Revenue (Millions) ($) (6) | | | 2023 | 11,820,858 | (3,608,264) | 3,568,762 | 160,639 | 208.46 | 118.87 | 281.6 | 829.3 | | | 2022 | 9,696,978 | 22,817,187 | 2,415,581 | 3,154,512 | 320.93 | 113.65 | 202.1 | 660.1 | | | 2021 | 7,453,294 | 5,992,078 | 2,398,657 | 591,581 | 226.79 | 126.45 | 402.7 | 443.3 | | | 2020 | 6,518,876 | 24,374,731 | 1,812,287 | 4,356,681 | 240.89 | 126.42 | 129.0 | 268.0 |
Pay Versus Performance
(1)Helen I Torley was our CEO for each of the four years included in the table above. For 2020, our Non-PEO NEOs were Elaine D. Sun, Laurie D. Stelzer, Masaru Matsuda, and Michael J. LaBarre. For 2021, our Non-PEO NEOs were Elaine D. Sun, Masaru Matsuda, and Michael J. LaBarre. For 2022, our Non-PEO NEOs were Nicole LaBrosse, Elaine D. Sun, Mark Snyder, and Michael J. LaBarre. For 2023, our Non-PEO NEOs were Nicole LaBrosse, Mark Snyder, and Michael J. LaBarre. Ms. Sun commenced employment with Halozyme on March 2, 2020 and separated employment from Halozyme on February 2, 2022. Mr. Matsuda separated employment from Halozyme on December 31, 2021. Ms. LaBrosse was appointed to Halozyme’s Chief Financial Officer on February 2, 2022 and Mr. Snyder commenced employment with Halozyme on January 3, 2022. (2)See the Summary Compensation Table above for detail on the Summary Compensation Table total compensation for our CEO for fiscal year 2023, 2022 and 2021. The 2020 total compensation for our CEO is disclosed in our proxy statement filed with the SEC in calendar year 2021. The average compensation for the Non-PEO NEOs for 2023 was calculated in the Summary Compensation Table above. The average compensation for the Non-PEO NEOs for each of 2022, 2021 and 2020 was calculated from the Summary Compensation Table as disclosed in our proxy statement filed with the SEC in calendar year 2023, 2022 and 2021, respectively. (3)For purposes of this table, the compensation actually paid (“Compensation Actually Paid”, or “CAP”) to each of our Named Executive Officers (including for purposes of this table, former named executive officers who are included in the Non-PEO NEO group for the applicable year) means the Named Executive Officer’s total compensation as reflected in the Summary Compensation Table for the applicable year less the grant date fair values of stock awards and option awards included in the “Stock Awards” and “Option Awards” columns of the Summary Compensation Table for the Named Executive Officer for the applicable year, and adjusted for the following with respect to Halozyme’s LTI awards granted to the Named Executive Officer: •Plus the year-end value of awards granted in the covered fiscal year which were outstanding and unvested at the end of the covered fiscal year, •Plus/(less) the change in value as of the end of the covered fiscal year as compared to the end of the prior fiscal year for awards which were granted in prior years and were outstanding and unvested at the end of the covered fiscal year, •Plus the vesting date value of awards which were granted and vested during the same covered fiscal year, •Plus/(less) the change in value as of the vesting date as compared to the end of the prior fiscal year for awards which were granted in prior years and vested in the covered fiscal year, •Less, as to any awards which were granted in prior fiscal years and were forfeited during the covered fiscal year, the value of such awards as of the end of the prior fiscal year, •Plus the dollar value of any dividends or other earnings paid during the covered fiscal year on outstanding and unvested awards (no dividends or other earnings were paid by Halozyme on any Named Executive Officer’s Halozyme LTI awards during the fiscal years covered by the table), •Plus, as to an award that is materially modified during the covered fiscal year, the amount by which the value of the award as of the date of the modification exceeds the value of the original award on the modification date (none of the Halozyme LTI awards held by the Named Executive Officers were materially modified during the fiscal years covered by the table). In making each of these adjustments, the “value” of an award is the fair value of the award on the applicable date determined in accordance with FASB’s ASC Topic 718 using the valuation assumptions we then use to calculate the fair value of our equity awards. For more information on the valuation of our equity awards, please see the notes to our financial statements that appear in our Annual Report on Form 10-K each year and the footnotes to the Summary Compensation Table that appears in our annual proxy statement. The table reflects the CAP (determined as noted above) for our CEO and, for our Non-PEO NEOs, the average of the CAPs determined for the Non-PEO NEOs. The following table provides a reconciliation of the Summary Compensation Table Total to Compensation Actually Paid for our CEO for the fiscal year 2023.
Pay Versus Performance
| Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for CEO | Fiscal Year 2023 ($) | | Summary Compensation Table Total | 11,820,858 | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | 10,000,018 | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 6,462,883 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (8,088,804) | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | — | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (3,803,183) | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | | Compensation Actually Paid | (3,608,264) |
Pay Versus Performance
The following table provides a reconciliation of the average of the Summary Compensation Table Total for the Non-PEO NEOs for fiscal year 2023 to the average of the Compensation Actually Paid for the Non-PEO NEOs for fiscal year 2023.
Pay Versus Performance
| Reconciliation of Average Summary Compensation Table Total to Average Compensation Actually Paid for Non-PEO NEOs | Fiscal Year 2023 ($) | | Summary Compensation Table Total | 3,568,762 | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | 2,700,053 | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 1,755,631 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (1,806,488) | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | — | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (657,214) | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | | Compensation Actually Paid | 160,639 |
Pay Versus Performance
(4)Total Shareholder Return represents the return on a fixed investment of $100 in Halozyme’s stock for the period beginning on the last trading day of 2019 through the end of the applicable fiscal year. Peer Group Total Shareholder Return represents the return on a fixed investment of $100 in the NASDAQ Biotechnology Index for the period beginning on the last trading day of 2019 through the end of the applicable fiscal year, and is calculated assuming the reinvestment of dividends. The following chart illustrates the CAP for our CEO and the average CAP for our Non-PEO NEOs for each of the last three years against our total shareholder return and the total shareholder return for the NASDAQ Biotechnology Index (each calculated as described above) over that period of time. (5)This column shows Halozyme’s net income for each fiscal year covered by the table. The following chart illustrates the CAP for our CEO and the average CAP for our Non-PEO NEOs for each of the last four years against our net income for each of those years. (6)This column shows Halozyme’s revenue for each fiscal year covered by the table. We consider revenue to be a the most important financial performance metric in our 2023 executive compensation program because it is used in determining each of our NEO’s annual 2023 cash incentive. The following chart illustrates the CAP for our CEO and the average CAP for our Non-PEO NEOs for each of the last four years against our revenue for each of those years. The following is an unranked list of the Halozyme financial performance measures we consider most important in linking the compensation actually paid to our Named Executive Officers for 2023 with Halozyme performance. •Revenue (as used in our 2023 EBP) •Adjusted EBITDA (as used in our 2023 EBP) •Stock Price (including relative TSR, as used in our PSUs awarded in 2021, 2022 and 2023 and as described in the Compensation Discussion and Analysis above) In addition to the financial performance measures listed above, we view our stock price, upon which the value of all of our equity awards is dependent, as a key performance-based component of our executive compensation program in order to further align the interests of our senior management with the interests of our stockholders.
Compensation of Directors
Compensation of Directors The following table sets forth information concerning the compensation earned during the fiscal year ended December 31, 2023 by each individual who served as a non-employee director at any time during the fiscal year:
Compensation of Directors
| 2023 DIRECTOR COMPENSATION | | | | | | Name | Fees Earned or Paid in Cash ($) | Stock Options ($)(1)(3) | Stock Awards ($)(1)(3) | Total ($) | | Jean-Pierre Bizzari | 58,462 | 150,002 | 250,015 | 458,479 | | Bernadette Connaughton | 70,000 | 150,002 | 250,015 | 470,017 | | Barbara Duncan (2) | 65,580 | 150,002 | 312,563 | 528,145 | | James M. Daly(2) | 65,000 | 150,002 | 250,015 | 465,017 | | Jeffrey W. Henderson | 155,000 | 150,002 | 250,015 | 555,017 | | Connie L. Matsui | 60,000 | 150,002 | 250,015 | 460,017 | | Moni Miyashita | 55,000 | 150,002 | 250,015 | 455,017 | | Matthew L. Posard | 71,808 | 150,002 | 250,015 | 471,825 |
Compensation of Directors
________________ (1)Represents the grant date fair value of restricted stock unit awards granted in fiscal year 2023 in accordance with FASB ASC Topic 718. (2)Ms. Duncan was elected to the Board on February 3, 2023 and Mr. Daly resigned from the Board effective December 31, 2023. (3)The aggregate numbers of shares subject to unvested outstanding stock options, unvested restricted stock unit awards and vested stock units deferred under the Equity Deferral Plan (discussed below), held by the non-employee directors as of December 31, 2023 were as follows:
Compensation of Directors
| Name | Aggregate Number of Option Awards Outstanding (#) | Aggregate Number of Unvested Stock Awards Outstanding (#) | Aggregate Number of Vested Deferred Stock Awards Outstanding (#) | | Jean-Pierre Bizzari | 11,371 | 8,065 | — | | Bernadette Connaughton | 11,371 | 8,065 | 6,206 | | James M. Daly | — | — | — | | Barbara Duncan | 11,371 | 9,253 | — | | Jeffrey W. Henderson | 11,371 | 8,065 | — | | Connie L. Matsui | 11,371 | 8,065 | — | | Moni Miyashita | 11,371 | 8,065 | — | | Matthew L. Posard | 11,371 | 8,065 | 6,206 |
Compensation of Directors
Directors’ Compensation The compensation program for our non-employee directors is as follows: (1) Annual award - Immediately following each Annual Meeting, each non-employee director then in office automatically receives (i) an annual restricted stock unit grant having a value of approximately $250,000 (with the number of shares of Company common stock subject to the award equal to $250,000 divided by the closing trading price of the Company’s common stock on NASDAQ on the date of grant, with any fraction rounded up to the nearest whole share) and (ii) an annual stock option grant with a value of approximately $150,000 (with the number of shares of Company common stock subject to the award equal to $150,000 divided by the per-share value of Company stock options determined based on the valuation method and assumptions then generally used by the Company in valuing its options for financial statement purposes). Subject to acceleration in the event of a change of control of the Company, these annual awards will vest in full on the earlier of (i) the first anniversary of the date of grant or (ii) the date of the next Annual Meeting following the date of the annual grants. All awards granted after our 2021 annual meeting are granted under our 2021 Stock Plan. Vested options granted to our non-employee directors (including the initial option grants described below) generally remain exercisable for three years following the termination of the director’s service (subject to earlier termination at the end of the term of the option or in connection with a change in control). (2) Initial award - each non-employee director receives an initial restricted stock unit grant and stock option grant upon joining the Board (with the number of shares of Company common stock subject to each award determined in the same manner as for the annual award grants described above); provided that, the grant date value of each award for a director first elected or appointed between Annual Meetings shall be prorated based on the number of full quarters the individual is scheduled to serve as a non-employee director from the date of election or appointment until the next Annual Meeting of the Stockholders such that the recipient will receive a grant of restricted stock units valued at $187,500 and a stock option grant valued at $112,500 for a period of service exceeding three quarters, a grant of restricted stock units valued at $125,000 and a stock option grant valued at $75,000 for a period of service exceeding two-quarters (but no more than three quarters), a grant of restricted stock units valued at $62,500 and a stock option grant valued at $37,500 for a period of service exceeding one quarter (but no more than two quarters), and no award for a period of service of one quarter or less. Subject to acceleration in the event of a change of control of the Company, these initial grants will vest upon the date of the next Annual Meeting following the date of grant. Our non-employee directors also receive an annual retainer of $50,000 for service on the Board (provided that our Chair of the Board of Directors receives an annual retainer of $125,000), as well as an additional annual retainer for service on any committee of the Board. Non-employee directors who serve on the Audit Committee receive an annual retainer of $15,000, provided that the Chair of that committee receives an annual retainer of $30,000. Non-employee directors who serve on the Compensation Committee receive an annual retainer of $10,000, provided that the Chair of that committee receives an annual retainer of $20,000. Non-employee directors who serve on the Nominating and Corporate Governance Committee receive an annual retainer of $5,000, provided that the Chair of that committee receives an annual retainer of $10,000. Employee directors (including our CEO) do not receive any compensation for service on the Board of Directors. We also maintain stock ownership guidelines for our non-employee directors which stipulate that each non-employee director is expected to own shares of Halozyme common stock with value equal to no less than five times the non-employee director’s base annual retainer for service on the Board of Directors. Each non-employee director is expected to comply with the guidelines within five years of election or appointment to the Board of Directors. Share ownership that counts for purposes of satisfying the applicable guideline level of ownership is the same as under our executive stock ownership guidelines, as described in the CD&A above. The same retention requirements apply to a non-employee director whose level of stock ownership does not satisfy the applicable guideline level of ownership as under our executive stock ownership guidelines, as described in the CD&A above. The Company also maintains the Halozyme Nonqualified Deferred Compensation Plan (the “Cash Deferral Plan”) and the Halozyme Therapeutics, Inc. Directors Deferred Equity Compensation Plan (the “Equity Deferral Plan”). Under the Cash Deferral Plan, a non-employee director may elect to defer payment of all or a portion of the director’s annual cash compensation, deferrals are credited with earnings or losses based on investment fund elections made by the director, and the deferred amounts (as adjusted for such earnings or losses) will be paid to the director (in a lump sum or annual installments over up to five years, as elected by the director) when the director no longer serves on the Board of Directors or an earlier distribution date elected by the director in accordance with the plan. Under the Equity Deferral Plan, a non-employee director may elect (1) to convert all or a portion of the director’s annual cash compensation into Company restricted stock units awarded under our 2021 Stock Plan and/or (2) to defer the payment of the director’s annual restricted stock unit award from the Company. If a non-employee director elects to convert all or a portion of the director’s cash retainers into restricted stock units, the director will be credited with additional restricted stock units on the date the retainers would have otherwise been paid to the director equal to (1) the amount being deferred to the Equity Deferral Plan that would have otherwise been paid to the director on that date, divided by (2) the average closing price for a share of Company common stock over the period of ten consecutive trading days ending with the last trading day prior to the crediting date. Deferred restricted stock units will be credited with dividend equivalents to preserve the value of the awards if/when the Company were to ever pay a dividend. A non-employee director’s deferred restricted stock units will be paid in Company common stock (in a lump sum or annual installments over up to five years as elected by the director) when the director no longer serves on the Board of Directors or, if earlier, upon a change in control of the Company.