DEF 14A of Emergent BioSolutions Inc.
Filed Apr 11, 2024 · FY20230001193125-24-093400
Committee Memberships
Committee Memberships Below is a listing of each of the members of the Board of Directors, their class, term of office and committees on which they sit.
Committee Memberships
| Name | Class | Term Expires | Audit and Finance Committee | Compensation Committee | Nominating and Corporate Governance Committee | Scientific Review Committee | Quality, Compliance, Manufacturing and Risk Management Committee | Special Transactions Committee | | Zsolt Harsanyi, Ph.D. Board Chairman | II | 2026 | ✓ | | | ✓ | ✓ | | | Sujata Dayal* | II | 2026 | | | | | ✓c | ✓ | | Donald DeGolyer | III | 2024 | | ✓ | | | | ✓ | | Neal Fowler | III | 2024 | ✓ | | | ✓ | | | | Keith Katkin* | I | 2025 | | ✓ | ✓ | | | ✓c | | Joseph Papa | II | 2026 | | | | | | | | Ronald Richard* | I | 2025 | | ✓ | ✓c | | | | | Louis Sullivan, M.D.* | II | 2026 | | ✓c | ✓ | | | | | Marvin White | III | 2024 | ✓c | | | ✓ | | ✓ | | Kathryn Zoon, Ph.D.* | I | 2025 | | | ✓ | ✓c | ✓ | |
Committee Memberships
| * Ms. Dayal served on the Nominating and Corporate Governance Committee for part of 2023. |
Committee Memberships
| * Mr. Katkin served on the Compensation Committee for part of 2023. |
Committee Memberships
| * Mr. Richard served on the Audit and Finance Committee for part of 2023. |
Committee Memberships
| * Dr. Sullivan served on the Audit and Finance Committee for part of 2023 |
Committee Memberships
| * Dr. Zoon served on the Compensation Committee for part of 2023. |
Nominating and Corporate Governance Committee
| 〇 | Reviewing and making recommendations to the Board of Directors with respect to director compensation; |
PROPOSAL 1—ELECTION OF CLASS III DIRECTORS
PROPOSAL 1—ELECTION OF CLASS III DIRECTORS
Director Nominees
Director Nominees
Class III Directors—Terms to Expire at the 2024 Annual Meeting
Class III Directors—Terms to Expire at the 2024 Annual Meeting
Class III Directors—Terms to Expire at the 2024 Annual Meeting
| Skills/Attributes: Age: 63 Director Since: 2023 Committees: • Compensation • Special Transactions | DONALD DEGOLYER Background: Mr. DeGolyer’s current tenure as a director began in October 2023. Mr. DeGolyer has over 35 years of healthcare and corporate leadership experience. He was the Founder and Director of Vertice Pharma (a Warburg Pincus company) (“Vertice”), focused on specialty pharmaceuticals for U.S. institutional use, from 2015 until the sale in 2022. Prior to Vertice, he was Chief Operating Officer of Endo International, a Nasdaq listed specialty pharmaceutical company, from 2013 to 2015. Between 2009 and 2013, he served as CEO of Sandoz Inc., a generic pharmaceuticals and biosimilars company where he was responsible for leading over 3,000 associates in North America and also served on the Global Executive Committee of Sandoz AG (a Novartis company), one of the largest global generic companies. Mr. DeGolyer started his career with Pfizer, Johnson & Johnson and Novartis in commercial roles of increasing responsibility. He served on the Board of HLS Therapeutics (commercial stage CV/CNS company) and TYME Technologies (development stage cancer company), both publicly traded companies, where he was also Chairman of the Compensation Committees. He also serves on several non-profit boards including Make-a-Wish-NJ and The Strong Women Foundation. Mr. DeGolyer has an MBA from Fairleigh Dickinson University and a Bachelor of Arts from University of Rochester. Qualifications: We believe Mr. DeGolyer’s qualifications to serve on our Board of Directors include his significant experience in corporate leadership, specialty pharmaceutical and global business acumen gained from senior positions he has held throughout his career. |
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| Skills/Attributes: Age: 62 Director Since: 2023 Committees: • Audit and Finance • Scientific Review | NEAL FOWLER Background: Mr. Fowler’s current tenure as a director began in October 2023. Mr. Fowler is the Chief Executive Officer of Pathalys Pharma, Inc., a biomedicines company focused on chronic kidney disease. Mr. Fowler previously served as CEO of Liquidia Corporation (“Liquidia”), transforming the company from an early-stage research platform into a publicly traded biomedicines company. While at Liquidia, Mr. Fowler also co-founded and served as CEO of Envisia Therapeutics (acquired), an ophthalmology company focused on therapeutics. Prior to Liquidia, Mr. Fowler worked for seven years with Johnson & Johnson, serving as President of Centocor, Inc., a global multi-billion dollar subsidiary focused on biomedicines, and President of Ortho-McNeil Neurologics, a company focused on neurological disorders. Mr. Fowler started his career with Eli Lilly and Company, working for 13 years in a variety of sales, marketing and business development roles in both the pharmaceutical and medical device divisions. Mr. Fowler is the current chair of NCBIO and a past chair of the UNC Eshelman School of Pharmacy Foundation. Mr. Fowler is a native of Raleigh, NC and earned his BS degree in Pharmacy and MBA, both from the University of North Carolina at Chapel Hill. Qualifications: We believe Mr. Fowler’s qualifications to serve on our Board of Directors include his strong background in biomedicines, corporate finance and tenure as chief executive officer of Pathalys Pharma, Inc. and experience gained from senior positions he has held with throughout his career. |
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| Skills/Attributes: Age: 61 Director Since: 2020 Committees: • Audit and Finance (Chair) • Scientific Review • Special Transactions | MARVIN WHITE Background: Mr. White’s current tenure as a director began in October 2020. Mr. White has served as President and Chief Executive Officer of Aptevo Therapeutics Inc. (“Aptevo”) and as a member of its Board of Directors since August 2016. Mr. White first served as a director of Emergent in June 2010, until his resignation from the Emergent Board of Directors in May 2016. He also served as a consultant to Emergent prior to joining Aptevo. From 2008 to March 2014, Mr. White served as the Chief Financial Officer of St. Vincent Health, and was responsible for finance, materials management, accounting, patient financial services and managed care for all 19 hospitals and 36 joint ventures. Prior to joining St. Vincent Health in 2008, Mr. White was the Chief Financial Officer of Lilly USA, a subsidiary of Eli Lilly and Company, where he also held leadership positions in Treasury and Corporate Finance and Investment Banking in the Corporate Strategy Group. Mr. White is a director of OneAmerica Financial Insurance Partners, Inc., a mutual insurance and financial services company based in Indianapolis, Indiana and Delta Dental of Washington, a Seattle based dental insurance company. From June 2014 until August 2016, Mr. White served on the board of directors of Washington Prime Group, a NYSE REIT that invests in shopping centers. From July 2015 until March 2017, Mr. White served on the board of directors of CoLucid Pharmaceuticals, Inc., a public pharmaceutical company. Mr. White earned his B.S. from Wilberforce University in Accounting and his M.B.A. in finance from Indiana University. Qualifications: We believe Mr. White’s qualifications to serve on our Board of Directors include his strong financial background, tenure as chief executive officer of Aptevo and experience gained from senior positions he has held with other biopharmaceutical organizations. |
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Continuing Directors
Continuing Directors
Class I Directors—Terms to Expire at the 2025 Annual Meeting
Class I Directors—Terms to Expire at the 2025 Annual Meeting
Class I Directors—Terms to Expire at the 2025 Annual Meeting
| Skills/Attributes: Age: 52 Director Since: 2022 Committees: • Compensation • Nominating and Corporate Governance • Special Transactions (Chair) | KEITH KATKIN Background: Mr. Katkin has served as a director since April 2022. He previously served as the chief executive officer and as a member of the board of directors of Urovant Sciences Ltd. (“Urovant”), a public biopharmaceutical company, from September 2017 until March 2020. Prior to Urovant, Mr. Katkin served as the president and chief executive officer of Avanir Pharmaceuticals, Inc., a publicly traded biopharmaceutical company, from 2007 to 2016, where he led the growth and ultimate sale of Avanir to Otsuka Pharmaceutical Co., Ltd. Prior to joining Avanir, Mr. Katkin served as the vice president, commercial development for Peninsula Pharmaceuticals, Inc., a privately held biopharmaceutical company, where he played a key role in the concurrent initial public offering and ultimate sale of the company to Johnson & Johnson. Mr. Katkin currently serves on the boards of Eledon Pharmaceuticals, Inc. (chairman) and Syndax Pharmaceuticals, each of which is a publicly traded company, and as an adviser to the board of directors at Urovant. Mr. Katkin has an M.B.A. from the Anderson School at UCLA and a B.S. in business and accounting from Indiana University. Mr. Katkin is also a licensed Certified Public Accountant. Qualifications: We believe Mr. Katkin’s substantial track record of driving growth for pharmaceutical and life sciences companies is invaluable to the company’s mission. |
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| Skills/Attributes: Age: 68 Director Since: 2005 Committees: • Compensation • Nominating and Corporate Governance (Chair) | RONALD RICHARD Background: Mr. Richard has served as a director since January 2005. Mr. Richard served as the president and chief executive officer of the Cleveland Foundation from June 2003 until he retired in August 2023. From August 2002 to February 2003, Mr. Richard served as president of Stem Cell Preservation, Inc., a start-up medical research company. After leaving Stem Cell Preservation and prior to joining our Board of Directors, Mr. Richard served as a strategic business advisor for IGEN International, Inc., a biotechnology company. Mr. Richard served as chief operating officer of In-Q-Tel, a venture capital fund that provides technologies to the Central Intelligence Agency, from March 2001 to August 2002. Prior to joining In-Q-Tel, Mr. Richard served in various senior management positions at Panasonic, a consumer electronics company. Mr. Richard is a former U.S. diplomat. He served in Osaka/ Kobe, Japan and as a desk officer for North Korean, Greek and Turkish affairs at the U.S. Department of State in Washington, D.C. Mr. Richard served as chairman of the board of trustees of the International Biomedical Research Alliance, an academic joint venture among the NIH, Oxford University and Cambridge University. Mr. Richard received an M.A. in international relations from Johns Hopkins University School of Advanced International Studies and a B.A. in history from Washington University. He holds honorary doctorates in humane letters from Notre Dame College and Baldwin Wallace College and an honorary doctorate in science from the Northeast Ohio Medical College. Qualifications: We believe Mr. Richard’s qualifications to serve on our Board of Directors include his past and current industry experience, his prior senior management positions, and positions in the biotechnology industry. |
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| Skills/Attributes: Age: 75 Director Since: 2016 Committees: • Nominating and Corporate Governance • Scientific Review (Chair) • Quality, Compliance, Manufacturing and Risk Management | KATHRYN ZOON, Ph.D. Background: Dr. Zoon has served as a director since November 2016. Dr. Zoon is currently NIAID/NIH Scientist Emeritus, a position she has held since August 2016. Dr. Zoon is also on the Board of Directors of the International Biomedical Research Alliance. Dr. Zoon has been a member of the National Academy of Medicine since 2002 and was also a member of the Division on Earth and Life Studies Committee, National Research Council, from 2015 to 2020. In 2021, Dr. Zoon joined the non-profit organization, International Alliance for Biological Standardization, as a special advisor. She was also a Board member of the FDA Alumni Association from 2017 to 2020. From April 2016 to June 2016, she was Interim Director of the new NIH Office of Research Support and Compliance. She was also Chief of the Cytokine Biology Section in the Division of Intramural Research, National Institute of Allergy and Infectious Diseases (“NIAID”), NIH until July 2016, where she conducted research on human interferon alphas and developed a new cell therapy using IFNs and autologous monocytes and she is still collaborating with the National Cancer Institute on a clinical trial for ovarian cancer. She was previously the Scientific Director and the Director of the Division of Intramural Research at NIAID from 2006 to August 2015 and was the Deputy Director for Planning and Development of the Division of Intramural Research at NIAID, from 2004 to 2006. Dr. Zoon served as the Principal Deputy Director of the Center for Cancer Research at the National Cancer Institute, from 2003 to 2004. She served as the Director of the Center for Biologics Evaluation and Research (“CBER”), Food and Drug Administration (from 1992 to 2003), and a member of the NIH Scientific Directors from 1992 to 2015. Dr. Zoon was the Director of the Division of Cytokine Biology in CBER, from 1988 to 1992. She studied the production and purification of human interferon at NIH from 1975 to 1980. She received her B.S. degree, cum laude, in chemistry from Rensselaer Polytechnic Institute and was granted a Ph.D. in biochemistry from the Johns Hopkins University. Dr. Zoon was an associate editor of the Journal of Interferon Research. She was President of the International Society for Interferon and Cytokine Research from 2000 to 2001. She has served as a member of the World Health Organization’s Expert Committee on Biological Standards for almost two decades. In 2019, Dr. Zoon was honored by Women’s Inc. as one of the most influential corporate board directors. In 2021 Dr. Zoon was inducted into the Rensselaer Polytechnic Institute’s Hall of Fame. Qualifications: We believe Dr. Zoon’s expertise in regulatory matters and product development adds great depth and breadth to our Board of Directors. |
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Class II Directors—Term to Expire at the 2026 Annual Meeting
Class II Directors—Term to Expire at the 2026 Annual Meeting
Class II Directors—Term to Expire at the 2026 Annual Meeting
| Skills/Attributes: Age: 61 Director Since: 2022 Committees: • Special Transactions • Quality, Compliance, Manufacturing and Risk Management (Chair) | SUJATA DAYAL Background: Ms. Dayal was appointed to the Emergent board in July 2022. She served as vice president and global chief compliance officer of Medline Industries, Inc., from March 2020 through May 2023 and currently provides senior advisory services. Over the last two decades, Ms. Dayal has held roles of growing responsibility in compliance with a focus on healthcare compliance in the pharmaceutical and medical device industry. She previously served as a vice president, healthcare compliance at Johnson & Johnson from 2013 to 2020. Prior to that, she served in senior executive roles in ethics and compliance at Biomet, Inc., and Abbott Laboratories. Ms. Dayal is an attorney by training with expertise in transactional work, regulatory law, privacy and compliance, including healthcare compliance and anti-corruption. She earned her J.D. from Chicago-Kent College of Law, LL.M. from Columbia University School of Law, LL.B. from Rajasthan University Law School in Jaipur, India, and B.A. Honors degree in Political Science from Lady Shri Ram College in New Delhi, India. Qualifications: We believe Ms. Dayal’s expertise in transactional work as well as regulatory and compliance enables her to meaningfully contribute to our Board of Directors. |
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| Skills/Attributes: Age: 80 Director Since: 2004 Committees: • Audit and Finance • Scientific Review • Quality, Compliance, Manufacturing and Risk Management | ZSOLT HARSANYI, Ph.D. Background: Dr. Harsanyi has served as the chairman of our Board of Directors since April 2022 and as a director since August 2004. Dr. Harsanyi has also served as chairman of the board of N-Gene Research Laboratories, Inc., a privately-held biopharmaceutical company, since March 2011. Prior to that, Dr. Harsanyi served as chief executive officer and chairman of the board of directors of Exponential Biotherapies Inc., a private biotechnology company, from December 2004 to February 2011. In January 2016, Dr. Harsanyi returned to ExpoBio Inc. to serve as chairman of the board. Since August 2016, Dr. Harsanyi has been a director of Aptevo Therapeutics Inc., a publicly-traded biotech company which focuses on bringing novel oncology and hematology therapeutics to market. Dr. Harsanyi served as president of Porton International plc, a pharmaceutical and vaccine company, from January 1983 to December 2004. Dr. Harsanyi was a founder of Dynport Vaccine Company LLC in September 1996. Prior to joining Porton International, Dr. Harsanyi was vice president of corporate finance at E.F. Hutton, Inc. Previously, Dr. Harsanyi directed the first assessment of biotechnology for the U.S. Congress’ Office of Technology Assessment, served as a consultant to the President’s Commission for the Study of Ethical Problems in Medicine and Biomedical and Behavioral Research and was on the faculties of Microbiology and Genetics at Cornell Medical College. Dr. Harsanyi received a Ph.D. from Albert Einstein College of Medicine and a B.A. from Amherst College. Qualifications: We believe Dr. Harsanyi’s qualifications to serve on our Board of Directors include his industry experience, including his senior executive and financial positions. |
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| Skills/Attributes: Age: 90 Director Since: 2006 Committees: • Compensation (Chair) • Nominating and Corporate Governance | LOUIS SULLIVAN, M.D. Background: Dr. Sullivan has served as a director since June 2006. Dr. Sullivan has served as president emeritus of Morehouse School of Medicine since July 2002. Dr. Sullivan served as president of Morehouse School of Medicine from 1981 to 1989 and from 1993 to 2002. From 1989 to 1993, Dr. Sullivan was Secretary of the Department of Health and Human Services. Dr. Sullivan serves on the board of directors of United Therapeutics Corporation, a publicly-traded biotechnology company. He served on the Board of Henry Schein, Inc., a publicly-traded biotechnology company, from 2004 to 2016. He was a founder and chairman of Medical Education for South African Blacks, Inc., a trustee of Africare, a director of the National Center on Addiction and Substance Abuse at Columbia University and chairman of the board of trustees of the National Health Museum, a non-profit institution developing a museum of health sciences. Dr. Sullivan received his M.D. from Boston University and a B.S. from Morehouse College. Qualifications: We believe Dr. Sullivan’s qualifications to serve on our Board of Directors include his extensive service on various other boards and service with public institutions, as well as his medical background and prior senior positions in other organizations. |
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| Skills/Attributes: Age: 68 Director Since: 2024 | JOSEPH C. PAPA Background: Mr. Papa became President, CEO and Director of the Company in February 2024. Mr. Papa brings over 35 years of experience in the healthcare and pharmaceutical industry, having most recently served as Chief Executive Officer and Chairman at Bausch and Lomb Corporation (“Bausch and Lomb”) (NYSE: BLCO), a global eye health company. During his tenure, Papa successfully led the Company’s May 2022 initial public offering. Prior to his role at Bausch and Lomb, Papa was the Chief Executive Officer and Chairman of Bausch Health. He previously served as the Chairman and CEO of Perrigo, a private-label over-the-counter pharmaceuticals manufacturer, and led the pharmaceutical and technologies services division at Cardinal Health, a healthcare services and distribution company. Before that, Mr. Papa held the role of President and Chief Operating Officer at Watson Pharmaceuticals and worked for 14 years at Novartis Pharmaceuticals in the U.S. and Switzerland. Mr. Papa currently is the Chairman of the Board of SparingVision, a privately held genomic medicines company, and is a member of the Board of Directors of Candel Therapeutics. Qualifications: We believe Mr. Papa’s qualifications to serve on our Board of Directors include his extensive experience in the healthcare and pharmaceutical industry, and leadership experience serving as Chairman and Chief Executive Officer of other organizations. |
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The compensation of our directors is established by our Nominating and Corporate Governance Committee based on information related to market practice provided by our independent compensation consultant WTW. This compensation is periodically reviewed with respect to cash retainers, meeting fees and equity incentives. The following table sets forth information for the fiscal year ended December 31, 2023, regarding the compensation of our non-employee directors.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | All Other Compensation | Total | | Zsolt Harsanyi, Ph.D. | $250,975 | $285,000 | $— | $535,975 | | Sujata Dayal | $97,233 | $285,000 | $— | $382,233 | | Donald DeGolyer | $22,500 | $375,000 | $— | $397,500 | | Neal Fowler | $23,750 | $375,000 | $— | $398,750 | | Jerome Hauer, Ph.D.(2) | $66,372 | $285,000 | $— | $351,372 | | General Joulwan(3) | $41,826 | $— | $— | $41,826 | | Keith Katkin | $111,992 | $285,000 | $— | $396,992 | | Ronald Richard | $109,725 | $285,000 | $— | $394,725 | | Louis Sullivan, M.D. | $115,233 | $285,000 | $— | $400,233 | | Marvin White | $120,975 | $285,000 | $— | $405,975 | | Kathryn Zoon, Ph.D. | $128,476 | $285,000 | $— | $413,476 |
DIRECTOR COMPENSATION
| 1. | The amounts in the “Stock Awards” column reflect the grant date fair value of equity awards granted to the directors named in the table above for the fiscal year ended December 31, 2023, calculated in accordance with SEC rules. |
DIRECTOR COMPENSATION
| 2. | Dr. Hauer passed away in August 2023. Dr. Hauer served as a director since January 2015 and previously served on the Board of Directors from May 2004 to October 2011. The stock grants listed for Dr. Hauer were cancelled/forfeited at the time of his death. |
DIRECTOR COMPENSATION
| 3. | General Joulwan did not stand for re-election at the 2023 annual meeting of stockholders. His term concluded on the date of the meeting. |
DIRECTOR COMPENSATION
Under our director compensation program, non-employee directors receive the compensation set forth in the table below. We also reimburse our non-employee directors for out-of-pocket expenses incurred in connection with attending our Board and committee meetings.
DIRECTOR COMPENSATION
| Element | 2023 Non-Employee Director Compensation Program Amounts | 2024 Non-Employee Director Compensation Program Amounts | | Annual Retainer for Non-Employee Board Members | $70,000 | $70,000 | | Additional Annual Retainer for Non-Executive Chairman of Board of Directors | $140,000 | $140,000 | | Board Meeting Fees | None | None | | Committee Meeting Fees | None | None | | Committee Chair Additional Retainer | $25,000 – Audit and Finance | $25,000 – Audit and Finance | | | $20,000 – Compensation, Nominating and Corporate Governance, Manufacturing and Quality Operations, Quality, Compliance, Manufacturing and Risk Management, Scientific Review and Special Transactions | $20,000 – Compensation, Nominating and Corporate Governance, Quality, Compliance, Manufacturing and Risk Management, Scientific Review, and Special Transactions | | Committee Member Additional Retainer | $15,000 – Audit and Finance | $15,000 – Audit and Finance | | | $10,000 – Compensation, Nominating and Corporate Governance, Manufacturing and Quality Operations, Quality Compliance, Manufacturing and Risk Management, Scientific Review and Special Transactions | $10,000 – Compensation, Nominating and Corporate Governance, Quality, Compliance, Manufacturing and Risk Management, Scientific Review and Special Transactions | | Annual Equity Awards | $285,000 in RSUs per director | $175,000 in equity (50% RSUs and 50% stock options) | | Initial Election Equity Awards | $375,000 in RSUs per director(1) | $230,000 in equity (50% RSUs and 50% stock options)(1) |
DIRECTOR COMPENSATION
| 1. | Initial election equity award values are inclusive of the annual equity award for the applicable year. |
Executive Compensation Processes
Executive Compensation Processes The Compensation Committee has implemented an annual review program for our executive officers under which it determines annual salary increases, annual cash bonus amounts and annual equity awards granted to our executive officers. Our chief executive officer and chief human resources officer prepare compensation recommendations regarding the compensation of each of our executive officers, other than the former executive chairman of the board and the chief executive officer and present these recommendations to the Compensation Committee for approval. The Compensation Committee evaluates the overall performance of the chief executive officer and the other executive officers other than the former executive chairman based on achievement of corporate goals and objectives, achievement of individual goals, performance of job responsibilities and demonstration of behavioral competencies. The Compensation Committee then makes individual compensation decisions for the chief executive officer and the executive officers, other than the former executive chairman, based on these evaluations and competitive market data. The Compensation Committee previously evaluated the overall performance of the former executive chairman based on performance of job responsibilities and made compensation decisions for the former executive chairman based on this evaluation and competitive market data for comparable executive positions. Our chief executive officer, chief financial officer, chief operating officer and chief human resources officer have the authority to grant stock options and RSUs to employees under the Emergent BioSolutions Inc. Amended and Restated Stock Incentive Plan. However, neither our chief executive officer nor any other officer has authority to grant stock options or RSUs: (i) to himself or herself; (ii) to any other director, executive officer, officer or other person whose compensation is determined by the Compensation Committee; or (iii) to any person whom the Board or the Compensation Committee may from time to time designate in writing.
Alignment of Pay with Performance
| 〇 | Below target outcomes for annual cash incentive awards. Our corporate performance factor yielded results below target which would have resulted in a 50% payout for the year. As discussed in the following section, executive officers were ineligible for awards under the company’s 2023 Annual Bonus Plan following the approval of a Key Employee Retention Plan (“KERP”) that was implemented in July 2023. |
Alignment of Pay with Performance
| 〇 | 2021-2023 PSUs were forfeited due to not achieving the threshold performance goals. The performance stock unit (PSU) awards granted in 2021 concluded their three-year performance period on December 31, 2023. The three-year cumulative adjusted EBITDA margin for the performance period was determined to be 13.6%, resulting in a 2021 PSU payout factor of 0% of target. |
Alignment of Pay with Performance
| 〇 | Outstanding equity is valued below threshold. Reflecting our stock price at the end of 2023, recent equity awards have an economic value substantially lower than their grant date fair value, and historical stock option awards are materially underwater with no intrinsic value. The pay versus performance disclosure on page 71 of this proxy statement further illustrates the declining equity values over the past three years and the impact this has had on “compensation actually paid,” as defined in SEC rules relating to our pay versus performance disclosures. |
CEO Target Direct Compensation – $7,871,500 (unchanged vs. 2022)
| | 87% at-risk pay, subject to our compensation recoupment policy. | | | | | 13% Base Salary | 16% Annual Incentive | 71% Equity Incentives | | | | | 100% Cash | 50% PSUs | 25% Stock Options | 25% RSUs | | | Based on corporate (100%) performance | 〇 PSUs based on three-year cumulative adjusted EBITDA as a percentage of GAAP revenue and three-year cumulative total revenues. 〇 Options and RSUs vest in three equal annual installments over a three-year period. | | |
CEO Target Direct Compensation – $7,871,500 (unchanged vs. 2022)
| 〇 | No annual incentive for 2023 performance. Mr. Kramer received no annual cash incentive in respect of 2023 performance, nor did he receive an award under the KERP as described above. |
CEO Target Direct Compensation – $7,871,500 (unchanged vs. 2022)
| 〇 | Equity grant in 2023. Although Mr. Kramer received an equity incentive consistent with the targets established by the Compensation Committee, the equity was forfeited/cancelled upon his retirement from the Company in July 2023. |
CEO Target Direct Compensation – $7,871,500 (unchanged vs. 2022)
| 〇 | Severance. Mr. Kramer received a severance payment in connection with the Senior Management Severance Plan. |
Other NEO Target Direct Compensation (average) – $930,000 to $2,584,000
| | 70% at-risk pay, subject to our compensation recoupment policy. | | | | | 30% Base Salary | 16% Annual Incentive* | 54% Equity Incentives | | | | | 100% Cash | 50% PSUs | 25% Stock Options | 25% RSUs | | | Based on corporate (90%) and individual (10%) performance | 〇 PSUs based on three-year cumulative adjusted EBITDA as a percentage of GAAP revenue and three-year cumulative total revenues. 〇 Options and RSUs vest in three equal annual installments over a three-year period. | | |
Other NEO Target Direct Compensation (average) – $930,000 to $2,584,000
| * In connection with the approval of the KERP, other NEOs were not eligible to receive annual cash incentives in respect of 2023 performance. As is described more fully below, the Compensation Committee worked with its independent compensation consultant and outside counsel to implement the KERP in the second half of 2023. The intent of the plan was to retain critical members of the executive team during a period of continued uncertainty while the Board undertook a search for a new CEO. |
Looking to 2024
| 〇 | Target cash compensation. Mr. Papa will receive a base salary of $1,000,000 and will be eligible for a target annual cash incentive of 130% of salary. Mr. Papa’s annual cash incentive for 2024 will be is subject to determination by the Compensation Committee in accordance with the Company’s bonus policy and upon achievement of certain performance targets established by the Board in consultation with Mr. Papa. |
Looking to 2024
| 〇 | Equity compensation that aligns with Mr. Papa’s focus on generating value for the Company’s Stockholders. In connection with his hiring, Mr. Papa was granted stock options to purchase 750,000 shares of the Company’s common stock under the Emergent BioSolutions Inc. Inducement Plan (the “Inducement Plan”). The shares underlying this award will vest upon achievement of certain price hurdles, provided that in no event will vesting occur prior to the first anniversary of the grant date. Mr. Papa also received options under the Inducement Plan to purchase 250,000 shares of the Company’s common stock. The shares subject to this award will vest in equal installments over three years, subject to Mr. Papa’s continued service through each vesting date. Mr. Papa also received stock options to purchase up to 500,000 shares of common stock under the Emergent BioSolutions Inc. Amended and Restated Stock Incentive Plan (the “SIP”). The shares subject to this award will vest in substantially equal installments over three years, subject to Mr. Papa’s continued service through each such date. Mr. Papa also is eligible for a performance-based incentive payment equal to $8,000,000, subject to the satisfaction of a share price performance factor within five years and upon satisfaction of other terms set forth in his employment agreement. |
Looking to 2024
| 〇 | Unchanged annual cash incentive opportunities with weighting of financial measures increased. There were no changes to NEOs’ annual cash incentive opportunities for 2024. Payouts will continue to be earned based on a combination of corporate and individual performance goals weighted 90% and 10% respectively. Corporate performance will continue to reflect a combination of financial and operational priorities for the year, with the weighting of financial goals increased to formally account for equal to or greater than 50% the overall corporate performance factor. |
Looking to 2024
| 〇 | Annual equity awards will be granted solely in stock options. Reflecting share pool constraints, the Company’s stock price and the risks of setting multi-year performance goals prior to the appointment of a new CEO during a period of significant transformation, the Compensation Committee determined that executive equity awards for 2024 would be granted in stock options. Awards were approved as a consistent fixed share amount that vest over a three-year period subject to continued service, with one-third of the total grant vesting on the day prior to each of the 1st, 2nd and 3rd annual anniversaries of the date of grant. The 2024 option grants will expire the day immediately prior to the 7th annual anniversary of the date of grant. |
Compensation Philosophy
| Principle | How we achieved this in 2023 at Emergent BioSolutions for our NEOs | | | Pay should be linked to performance. | ✓ | A significant portion of compensation is variable. | | | ✓ | On average, 70%(1) of NEO target direct compensation is based on performance, delivered in the form of either annual cash bonuses or equity awards. Following approval of the KERP, NEOs were not eligible for annual cash bonuses under the incentive plan for 2023 performance. | | Equity compensation should align executive interests with those of stockholders. | ✓ | Equity compensation is awarded in a mix of PSUs, stock options and RSUs. | | | ✓ | PSUs align rewards with underlying corporate performance. | | | ✓ | Stock options align rewards with stock price performance. | | | ✓ | Overall compensation is targeted within a range of the competitive market median. | | Compensation opportunities should be competitive with relevant peer companies. | ✓ | Compensation peer groups reflect the industries we compete with for executive talent and take into account revenues, market capitalization, net income, headcount, and research & development expense. | | Supplemental benefits and perquisites should be limited and used selectively in specific circumstances to attract and retain executives. | ✓ | Executives participate in broad-based benefits that are generally available to all employees. | | | ✓ | Any supplemental benefits or perquisites are considered on a case-by-case basis. | | | ✓ | No NEO received supplemental benefits or perquisites in 2023. |
Compensation Policies and Practices
| What We Do | | What We Don’t Do | | | At Emergent We... | | At Emergent We Have... | | | ✓ | Pay-for-Performance | × | No single-trigger vesting of equity on a change in control. | | ✓ | Deliver the majority of executive compensation in at-risk performance-based pay. | × | No tax gross-ups in connection with change in control severance payments and benefits. | | ✓ | Maintain a robust compensation recoupment policy. | × | No backdating or repricing of options. | | ✓ | Require meaningful stock ownership through defined guidelines. | × | No payment of dividends or dividend equivalents unless equity awards are earned and/or vested. | | ✓ | Conduct regular market benchmarking against reasonable peers. | × | No short sales or other individual hedging transactions | | ✓ | Maintain payout caps on variable compensation. | × | No excessive perquisites or benefits. | | ✓ | Conduct an annual risk assessment of compensation programs. | × | No equity grants below 100% of fair market value. | | ✓ | Operate double-trigger change in control provisions. | | | | ✓ | Retain an independent compensation consultant. | | | | ✓ | Include a say on pay proposal in our annual proxy statement. | | |
Compensation Framework
| | Target Compensation Mix(1) | | Key Features in 2023 | | Pay Component | CEO | Other NEOs | | | Base Salary Provide compensation that is competitive. | | | ✓ Reflects an executive’s role and scope of responsibility, and the experience, time in role, expertise, and future potential of the executive. ✓ Increases consideration of individual performance as well as overall company performance more broadly. ✓ Generally, within a competitive range of the 50th percentile as compared to peer group informed by the factors noted above. | | Annual Cash Incentive Provide performance-based, short- term cash compensation relative to the achievement of pre-set objectives. | | | ✓ Based on corporate performance for the CEO, and a combination of corporate (90%) and individual (10%) performance for the other participating NEOs. ✓ Payouts can range from 0% – 150% of target. ✓ Bonus targets generally set with reference to the market 50th percentile as well as internal relativities, where appropriate. ✓ Following approval of the KERP, NEOs were not eligible for annual cash incentives in respect of 2023 performance. | | Equity Incentives Provide performance-based, shortterm cash compensation relative to the achievement of pre-set objectives. | | | ✓ Granted in a combination of PSUs (50%), stock options (25%) and RSUs (25%). ✓ PSUs based on three-year cumulative adjusted EBITDA margin and three-year cumulative total revenues. ✓ Stock options and RSUs typically vest in three equal annual installments over a three-year period. ✓ Stock options subject to a seven-year term. | | Retirement and Health and Welfare Benefits Promote healthiness and financial readiness for retirement. | — | — | ✓ Executives participate in programs on the same basis as other employees. ✓ Benefits include health insurance, life and disability insurance, dental insurance and a 401(k) plan. |
Role of the Compensation Committee
| 〇 | Overseeing our incentive plans, including approving performance goals and objectives applicable to executive officers, and the Company’s employee stock purchase plan. |
Use of Market Data
Use of Market Data
Use of Market Data
| The Compensation Committee reviews compensation levels and program design at comparable companies as part of its decision-making process so it can set total compensation levels that it believes are competitive and aligned with performance. Several peer groups are utilized to ensure high quality, relevant and reliable competitive market data that supports informed decision-making. The compensation committee generally sets NEO target total direct Compensation to be Competitive within this context, taking into consideration the scope of job responsibilities, individual performance, experience, internal pay equity and other relevant factors. | Our Compensation Peer Groups 〇 Reviewed annually 〇 Dual perspective (proxy and survey data) 〇 Relevant industry representation 〇 Appropriate relative size 〇 Inform decision-making |
Use of Market Data
| Peer Group | Overview | Selection Criteria(1) | | Proxy Peer Group | Publicly disclosed, line-by-line compensation data specific to the NEO population, limited to data reported externally by peer companies. | 〇 U.S.-based publicly traded companies; 〇 Pharmaceutical, biotechnology healthcare equipment(2) and life sciences tools and services(3) industry classifications; 〇 Relevant financial metrics: revenues between $600 million and $3.6 billion; market capitalization between $1.0 billion and $6.0 billion; positive net income; research & development expense between 5%-25% of revenue; 〇 Headcount (full-time) of 1,200 to 7,500; and 〇 Additional judgement lenses include, for example, assessing business mix relevance and international footprint. | | Peer Groups | Broader competitive data limited to survey participants from a combination of WTW’s Pharmaceutical and Health Sciences survey and Radford’s Global Life Sciences survey. | 〇 Participants in two industry-relevant surveys by reputable providers; 〇 Independent and publicly traded companies; 〇 Radford peer group comprises companies with commercial biopharma, medical devices and diagnostics, or contract research / manufacturing industry classifications, with revenues between approximately $180 million – $4.8 billion; 〇 WTW peer group comprises companies with pharmaceutical, biotechnology, and healthcare equipment and supplies industry classifications, with revenues between approximately $46 million and $4.8 billion; and 〇 Broader non-industry data may be referenced if peer specific data is not available. |
Use of Market Data
Notes. (1) Selection criteria are broadly consistent year-over-year, but financial criteria ranges are typically updated to reflect changes in Emergent’s size. (2) Healthcare equipment companies include manufacturers of health care equipment and devices, including medical instruments, drug delivery systems, cardiovascular and orthopedic devices, and diagnostic equipment. (3) Life sciences tools and services companies include companies enabling drug discovery, development, and a production continuum through the provision of analytical tools, instruments, consumables and supplies, clinical trial services and contract research services (primarily servicing the pharmaceutical and biotechnology industries). Three new companies were added in 2023 to improve Emergent’s comparability with the peer group median, and four companies were removed primarily due to revenue and market cap levels that were at the high-end of the established range given sensitivity in comparing compensation levels to outsized peers. The Compensation Committee determined that the 2023 additions combined with the remaining 14 companies provided a sufficiently robust and relevant group to reference. The following companies were included in the Proxy Peer Group to inform 2023 compensation decisions.
Use of Market Data
| New Additions for 2023 | Retained for 2023(1) | | 1. CRISPR Therapeutics AG; 2. Haemonetics Corporation; and 3. Neurocrine Biosciences, Inc. | 1. Alkermes plc; 2. Amneal Pharmaceuticals, Inc.; 3. Amphastar Pharmaceuticals, Inc.; 4. Bio-Techne Corporation; 5. Bruker Corporation; 6. Exelixis, Inc.; 7. Globus Medical, Inc. 8. Integra LifeSciences Holdings Corporation; 9. Ionis Pharmaceuticals, Inc.; 10. Jazz Pharmaceuticals plc; 11. Masimo Corporation; 12. NuVasive, Inc.; 13. OPKO Health, Inc.; and 14. United Therapeutics Corporation. | | 〇 17-company peer group to ensure sufficient robustness of data. 〇 At the time of approval in late 2022 Emergent ranked at the 53rd percentile on revenue, 9th percentile on net income, 56th percentile on R&D expense as a percentage of revenue, 4th percentile on spot market capitalization, 11th percentile on trailing 12-month market capitalization and the 50th percentile on headcount. | |
Use of Market Data
| 1. | Removals for 2023: Bio-Rad Laboratories, Inc., Catalent, Inc., Horizon Therapeutics plc. and Incyte Corporation. |
Use of Market Data
On reviewing the market data, the Compensation Committee determined that each NEO was appropriately positioned relative to the competitive market ranges following the approved changes for 2023. In November 2023, the Compensation Committee approved the Proxy Peer Group that would be used to inform 2024 compensation decisions.
Use of Market Data
| 〇 | Two companies were removed from the Proxy Peer Group. One company, NuVasive, Inc., was removed due to acquisition. The second company, Jazz Pharmaceuticals plc, was removed due to revenue levels that were at the high-end of established range given sensitivity in comparing compensation levels to outsized peers. |
Use of Market Data
| 〇 | Five companies were added to improve Emergent’s comparability with the peer group median: ACADIA Pharmaceuticals, Inc., Dynavax Technologies Corporation, Invitae Corporation, Myriad Genetics, Inc. and PTC Therapeutics, Inc. |
Use of Market Data
No other changes were made, and the revised 20-company peer group remained sufficiently robust, with a moderate degree of stability year-on-year.
Compensation Recovery Policy
| Covered Employees | 〇 An individual who is, or was during an applicable Look-back Period, an Executive Officer pursuant to Rule 10D-1(d) of the Exchange Act. | | Covered Compensation | 〇 Incentive-Based Compensation previously awarded up to three completed fiscal years preceding the date on which the Board determines that reimbursement is required. 〇 Incentive-Based Compensation means “[a]ny compensation that is granted, earned or vested based wholly or in part on stock price, total shareholder return, and/or the attainment of (i) any financial reporting measure(s) that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements and/or (ii) any other measures that are derived in whole or in part from such measures. 〇 This can include: 〇 Bonus, equity awards or incentive compensation previously awarded; 〇 Unvested, restricted, or deferred equity awards previously granted; 〇 Profits realized on the sale of certain securities; and 〇 Any other compensation covered by Section 304 of the Sarbanes-Oxley Act. | | Covered Events | 〇 “Accounting Restatements,” which means any accounting restatement due to the material noncompliance of the company with any financial reporting requirement. | | Board Authority | 〇 Administering the Policy, including seeking to recoup Excess Compensation in the case of an Accounting Restatement and determining the means of such recoupment. |
Annual Cash Incentives
Annual Cash Incentives The annual bonus plan provides the Compensation Committee with the authority to award cash incentives to executive officers that are intended to motivate and compensate for the achievement of strategic, financial, operational and, with effect for 2023, individual performance objectives during the year.
Annual Cash Incentives
| | [ | | | | ] | | | | Target Annual Cash Incentive Awardx | | Corporate Performance (90% - 100%) | + | Individual Performance (0% - 10%) | | = | Actual Annual Cash Incentive Award |
Annual Cash Incentives
The amount payable under this plan is reviewed and approved by the Compensation Committee each year. For threshold performance a bonus of 50% of target is earned, and for maximum performance a bonus of 150% of target is earned. There was no change to the target opportunities for NEOs in 2023. The following target opportunities were set and reviewed with reference to the 50th percentile of applicable market data of the proxy peer group described above, as well as internal equity considerations:
Annual Cash Incentives
| Role(1) | 2023 Target Cash Incentive (% of Base Salary) | Corporate Performance Weighting | Individual Performance Weighting | | Robert Kramer | 120% | 100% | 0% | | Haywood Miller | N/A | N/A | N/A | | Richard Lindahl | 60% | 90% | 10% | | Adam Havey | 60% | 90% | 10% | | Jennifer Fox | 60% | 90% | 10% | | Coleen Glessner | 60% | 90% | 10% | | Paul Williams | 40% | 70% | 10% |
Annual Cash Incentives
| 1 | As Interim CEO, Mr. Miller was not eligible for a 2023 Target Cash Incentive. |
Key Employee Retention Plan
| 〇 | Enhanced severance benefits on a change in control, for a period of one year. The Senior Management Severance Plan provisions were reviewed and updated during the one-year critical retention period. The only change was to the cash severance multiple on a change in control, which was increased from 0.75 - 1.5 times base plus target bonus to 1.0 - 2.5-times, varying by level. After one-year, the severance multiples will revert to their prior values. |
Key Employee Retention Plan
| (1) Please note Mr. Miller became Interim CEO on June 24, 2023 and was not eligible for bonus or retention awards. |
Key Employee Retention Plan
The first 50% of the KERP incentive was paid within 30 days of July 21, 2023, and the NEOs listed above will receive the remaining 50% of their KERP incentive on the first anniversary of the Compensation Committee’s approval in July 2024. The annual cash incentive structure set forth above will be retained in the traditional form for 2024. In accordance with SEC rules, the portion of the KERP that was paid in 2023 is reflected in the Summary Compensation Table as 2023 compensation and the remaining portion, if earned, will be reported in the future as 2024 compensation. The right of each NEO to receive and retain the KERP incentive paid in 2023 is subject to the NEO’s continued employment until the earlier of (i) one year after the date of the letter agreement with each NEO and (ii) 30 days following termination of employment without cause or resignation for good reason, a change in control transaction, or the conclusion of a bankruptcy case involving the Company.
Executive Compensation
Executive Compensation Although the named executive officers who participated in the KERP were ineligible for annual cash incentive with respect to 2023 performance, the Compensation Committee met in the first quarter of 2024 to assess corporate and individual performance in order to provide executives with feedback regarding 2023 performance. Like other companies in our industry, rather than adopting a formulaic scorecard, judgement is applied in assessing performance against a number of objectives with reference to (i) annual corporate goals, (ii) the corporate operating plan goals and (iii) other general considerations. Performance is assessed against each objective and a rating is assigned indicating the extent to which goals were or were not met. The Compensation Committee can then apply judgement, taking into account broader performance considerations in determining a final corporate factor. The following table summarizes the outcome in respect of 2023 corporate performance.
EQUITY INCENTIVES
EQUITY INCENTIVES Equity incentives are granted as a combination of PSUs, stock options and RSUs, and represent the largest proportion of an NEOs’ target compensation, other than for Mr. Miller who was not eligible for equity-based compensation in his capacity as Interim CEO. Target opportunities are determined using a combination of the survey data and peer proxy data, as applicable with reference to market median, but actual grants may be positioned above or below based on any number of factors, including role scope and criticality, individual performance, internal equity and broader market dynamics. The Compensation Committee reviews all components of each executive’s compensation when determining equity awards to ensure that an executive’s total compensation conforms to our overall philosophy and objectives. The Compensation Committee may also consider the value of previously granted equity awards although this, or existing levels of ownership, will not necessarily cause the Compensation Committee to forego making, or reducing the amount of, any future award. Each equity compensation type serves a distinct purpose with respect to our compensation philosophy and principles, as summarized below.
EQUITY INCENTIVES
| Equity Type and Weighting | Purpose | Key Features | | PSUs (50%) | 〇 Align executives’ interests with the long-term interests of our stockholders; 〇 Link pay to performance over a period of three years; and 〇 Link pay to formally articulated goals. | 〇 The eventual number of PSUs earned is based on adjusted EBITDA margin on a cumulative basis over a three-year period and three-year cumulative total revenues. 〇 Performance at threshold results in 50% of the PSUs being earned, increasing to 200% for maximum performance; no payout is awarded for performance below threshold; 〇 Subject to continued service requirements, including either active employment or continued service as a consultant on the date that the compensation committee certifies performance; and 〇 Any dividend equivalent payments are only paid after completion of the performance period and commensurate with the level of payout. | | Stock Options (25%) | 〇 Align executives’ interests with the long-term interests of our stockholders; and 〇 Reward for increases in stock price above the exercise price. | 〇 Exercise price equal to the fair market value of our common stock on the date of grant (defined as the closing sales price of our common stock on the NYSE on the trading day immediately preceding the date of grant); 〇 Seven-year term; and 〇 Vest in three equal annual installments beginning on the day prior to the one-year anniversary of the date of grant. | | RSUs (25%) | 〇 Align executives’ interests with the long-term interests of our stockholders; and 〇 Enhance retention when declines in stock price diminish the retentive or incentivizing effects of stock options. | 〇 Vest in three equal annual installments beginning on the day prior to the one-year anniversary of the date of grant. |
EQUITY INCENTIVES
We generally make an equity grant in the month following the hire date for new executives and in the month following the date of executive promotions. If circumstances warrant, we also may make equity grants at various other points throughout the year. The Compensation Committee approved all awards to executive officers in 2023. In the first quarter of 2023, the Compensation Committee determined that equity grants for the year would be made in two installments due to share pool constraints. The first installment was granted in March 2023, with the second installment granted in June 2023, following stockholder approval for our amended equity plan at the 2023 annual meeting of stockholders. To proactively manage for volatility in our stock price and effectively manage the available shares, the Committee approved the target grant value and the number of PSUs, stock options and RSUs to award each NEO on the same date. Grant date fair values are calculated utilizing a Black Scholes valuation model for stock option awards and the closing sales price of our common stock on the trading say immediately preceding the date of grant for RSU and PSU awards. This approach meant that grant date fair values were approximately 28% lower than the values approved by the Compensation Committee as a result of the share price decreasing between the date of approval and the date of grant. The Compensation Committee approved the following aggregate target opportunities related to the 2023 annual equity awards.
EQUITY INCENTIVES
| | 2023 Annual Target Opportunity March 2023 | 2023 Annual Target Opportunity June 2023 | 2023 Grant Date Fair Value(2) | | | Grant Date Fair Value as a Percentage of the $ Target Opportunity | | Role(1) | | | March 2023 | June 2023 | Total | | | Robert Kramer(3) | $1,000,000 or a maximum of 96,155 shares | $3,680,000 target or a maximum of 353,848 shares | $950,877 | $2,447,163 | $3,398,039 | 72.6% | | Richard Lindahl | $320,000 or a maximum of 30,770 shares | $1,280,000 target or a maximum of 123,078 shares | $304,285 | $851,193 | $1,155,478 | 72.2% | | Adam Havey(4) | $320,000 or a maximum of 30,770 shares | $1,280,000 target or a maximum of 123,078 shares | $304,285 | $851,193 | $1,155,478 | 72.2% | | Jennifer Fox | $320,000 or a maximum of 30,770 shares | $1,280,000 target or a maximum of 123,078 shares | $304,285 | $851,193 | $1,155,478 | 72.2% | | Coleen Glessner | $200,000 or a maximum of 19,230 shares | $800,000 target or a maximum of 76,925 shares | $190,165 | $532,004 | $722,169 | 72.2% | | Paul Williams | $60,000 or a maximum of 5,770 shares | $240,000 target or a maximum of 23,078 shares | $57,060 | $159,605 | $216,665 | 72.2% |
EQUITY INCENTIVES
| (1) As Interim CEO, Mr. Miller was not eligible for equity incentive awards. |
EQUITY INCENTIVES
| (2) As noted above, 2023 equity grants were made in two installments due to share pool constraints. The first installment was granted in March 2023 and the second installment was granted in June 2023 following stockholder approval for our amended equity plan. |
EQUITY INCENTIVES
| (3) In connection with Mr. Kramer’s retirement, all of the awarded shares were forfeited/cancelled. |
EQUITY INCENTIVES
| (4) In connection with Mr. Havey’s termination, all of the awarded shares were forfeited/cancelled. |
2021-2023 Performance Stock Units
2021-2023 Performance Stock Units Since 2017, the Compensation Committee has utilized PSUs as a means to further align executives’ long-term interests with those of our stockholders, and link pay to multi-year performance objectives of strategic importance. For awards granted between 2020 and 2022, performance goals have been based on a 3-year cumulative adjusted EBITDA as a percentage of GAAP revenue, reflecting our focus on adjusted EBITDA performance as a key profitability metric. Prior to that, performance was based on final year adjusted net income as a percentage of GAAP revenue. The table below discloses the potential range of performance objective targets under the 2021 PSUs (Threshold, Target and Maximum), the final level of achievement and the ultimate payout factor. Given cumulative adjusted EBITDA margin results fell below the threshold level, none of the PSU awards were vested in early 2023.
2021-2023 Performance Stock Units
| Performance Ranges and Final Outcome Under 2021 PSUs | | | | | | | Performance Measure | Performance Objective Targets | | | Final Level of Achievement | Final 2021 PSU Payout Factor | | | Threshold (50% Vests) | Target (100% Vests) | Maximum (150% Vests) | | | | Adjusted EBITDA Margin | 30% | 34% | 38% | 13.6% | 0% |
2021-2023 Performance Stock Units
In addition, the table below reports the original number of shares granted under the 2021 PSUs as well as the number of pre-tax shares actually issued based upon the final level of achievement of adjusted EBITDA margin.
2021-2023 Performance Stock Units
| Role(1) | Number of PSUs Originally Granted (Target) | Number of Shares Issued (Pre-Tax) | | Robert Kramer | 14,975 | 0 | | Richard Lindahl | 4,012 | 0 | | Adam Havey | 3,744 | 0 |
2021-2023 Performance Stock Units
Notes. (1) The number of PSUs originally granted for Messrs. Kramer and Havey were forfeited effective at the time of their respective departures from the Company.
Severance and Change in Control
Severance and Change in Control We provide severance and change in control arrangements to select employees, including our NEOs, which are reflected in our Senior Management Severance Plan, effective on July 16, 2015. The plan provides for payments and benefits as a result of involuntary termination without cause or termination of employment in particular circumstances in connection with a change in control. The purpose is to ensure ongoing retention of key executives when considering potential transactions that may create uncertainty as to their future employment. Severance payments are expressed as a multiple of base salary and target bonus. Multiples range from 1.25 to 2.00 depending on an executive’s role and increase to 2.00 or 2.50 for a termination on a change in control. Other entitlements are also stipulated, including payment of unpaid base salary, earned but unpaid annual bonus, accrued paid time-off and a pro-rata target annual bonus for the year of termination. There are also provisions related to benefits continuation and equity treatment. Detailed information can be found in the “Executive Compensation – Payments Upon Termination or Change in Control” section of this proxy statement.
Severance and Change in Control
| ADDITIONAL INFORMATION |
Tax and Accounting Considerations
Tax and Accounting Considerations Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) impose certain adverse tax consequences on compensation treated as excess parachute payments. An executive is treated as having received excess parachute payments if such executive receives compensatory payments or benefits that are contingent on a change in control, and the aggregate amount of such payments and benefits equals or exceeds three times the executive’s base amount (which is generally such executive’s average compensation from us over the five years prior to the change in control). The portion of the payments and benefits in excess of one-times base amount is treated as excess parachute payments and are subject to a 20% excise tax, in addition to any applicable federal income and employment taxes. Also, our compensation deduction in respect of the executive’s excess parachute payments is disallowed. If we were to undergo a change in control, certain amounts received by our executives (for example, certain severance payments and amounts attributable to the accelerated vesting of stock options, RSUs and PSUs) could be excess parachute payments under Sections 280G and 4999 of the Code. As discussed below under “Payments Upon Termination or Change in Control” of this proxy statement, we do not provide executive officers with tax gross up payments in the event that Sections 280G and 4999 apply to their compensatory payments.
2023 Summary Compensation Table
2023 Summary Compensation Table The following table sets forth information for the fiscal years ended December 31, 2023, 2022 and 2021 regarding the compensation of our chief executive officer, chief financial officer, and our three other most highly compensated executive officers in the fiscal year ended December 31, 2023. We refer to these individuals throughout this proxy statement as our “named executive officers.”
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary(1) | Bonus(4) | Stock Awards(2) | Option Awards(3) | Non-equity Incentive Plan Compensation(5) | All Other Compensation(6) | Total | | Robert Kramer Former President, Chief Executive Officer and Director | 2023 | $777,589 | $— | $2,477,042 | $920,998 | $— | $928,229 | $5,103,858 | | | 2022 | $1,030,625 | $— | $3,699,993 | $2,531,889 | $309,750 | $6,316 | $7,578,573 | | | 2021 | $1,026,924 | $— | $2,800,026 | $2,198,742 | $900,000 | $6,385 | $6,932,076 | | Haywood Miller Interim Chief Executive Officer | 2023 | $766,667 | $— | $— | $— | $— | $— | $766,667 | | Richard Lindahl Executive Vice President, Chief Financial Officer and Treasurer | 2023 | $613,850 | $399,753 | $842,228 | $313,250 | $— | $9,900 | $2,178,980 | | | 2022 | $593,878 | $— | $2,000,020 | $723,365 | $196,350 | $9,150 | $3,522,762 | | | 2021 | $577,357 | $— | $750,070 | $588,908 | $272,550 | $8,700 | $2,197,585 | | Jennifer Fox Executive Vice President, External Affairs, General Counsel and Corporate Secretary | 2023 | $585,692 | $380,250 | $842,228 | $313,250 | $— | $9,900 | $2,131,320 | | | 2022 | $473,544 | $— | $1,750,103 | $497,360 | $193,050 | $9,150 | $2,923,207 | | Coleen Glessner Executive Vice President, Quality and Ethics and Compliance | 2023 | $575,708 | $373,760 | $526,389 | $195,781 | $— | $9,900 | $1,681,538 | | Paul Williams Senior Vice President, Products Business | 2023 | $445,775 | $392,500 | $157,928 | $58,737 | $— | $8,699 | $1,063,639 | | Adam Havey(7) Executive Vice President and Chief Operating Officer | 2023 | $557,966 | $— | $842,228 | $313,250 | $— | $297,042 | $2,010,487 | | | 2022 | $574,846 | $— | $2,075,000 | $791,185 | $172,770 | $7,825 | $3,621,626 | | | 2021 | $574,270 | $— | $700,053 | $549,630 | $261,405 | $7,425 | $2,092,783 |
2023 Summary Compensation Table
| (1) Includes amounts deferred at the direction of the NEO to our 401(k) plan over 26 pay periods and amounts paid to such executive officer for accrued and unused paid time off. |
2023 Summary Compensation Table
| (2) The amounts included in the “Stock Awards” column reflect the grant date fair value of RSU awards and performance stock unit (“PSU”) awards granted to the NEOs in the fiscal years indicated, calculated in accordance with SEC rules. The maximum value that PSU grants could vest at for Mr. Kramer, Mr. Lindahl, Mr. Havey, Ms. Fox, Ms. Glessner, and Mr. Williams, respectively is: $3,302,728, $1,122,965, $1,122,965, $1,122,965, $701,852, and $210,565. For a discussion of our valuation assumptions, see Note 2 and Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
2023 Summary Compensation Table
| (3) The amounts in the “Option Awards” column reflect the grant date fair value of stock option awards granted to the NEOs in the fiscal years indicated, calculated in accordance with SEC rules. For a discussion of our valuation assumptions, see Note 2 and Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
2023 Summary Compensation Table
| (4) The 2023 KERP awards were split into two installments, with 50% paid within 30 days of July 21, 2023 and the remaining 50% payable on the first anniversary of the Compensation Committee’s approval of the KERP in July 2024. The amounts reported in this column reflect the portion each KERP award that was paid in 2023. This payment may be recoverable by the Company in the recipient does not remain employed by the Company for a period of up to 12 months. |
2023 Summary Compensation Table
| (5) The amounts reported in the “Non-Equity Incentive Plan Compensation” column reflect the amounts earned by the NEOs under the company’s Annual Bonus Plan for Executive Officers. As described in “Annual Cash Incentives” discussion in the “Compensation Discussion and Analysis” section of the proxy statement, NEOs received KERP payments in lieu of payments under the Company’s Annual Bonus Plan for 2023. |
2023 Summary Compensation Table
| (6) For 2023, 2022 and 2021, this amount represents severance payments, 401(k) plan matching contributions and life insurance premiums. Specific severance awards to Messrs. Kramer and Havey were $921,078 and $288,491, respectively. Additional detail on the payments made to departed executives can be found on page 66 of this Proxy Statement. |
2023 Summary Compensation Table
| (7) Mr. Havey left the company in September 2023 in connection with a corporate reorganization. |
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table sets forth information regarding each grant of an award made to each NEO during the fiscal year ended December 31, 2023, under any plan, contract, authorization or arrangement pursuant to which cash, securities, similar instruments or other property may be received.
2023 Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | Name* | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All other Stock Awards: Number of Shares of Stock or Units (#)(2) | All other Option Awards: Number of Securities Underlying Options (#)(3) | Exercise Price of Option Awards ($/sh)(4) | Closing Price of Option Awards on date of Grant ($/sh)(5) | Grant Date Fair Value of Stock and Option Awards(6) | | Robert Kramer | 3/2/2023 | — | — | — | — | — | — | 19,231 | — | $— | $— | $231,926 | | | 3/2/2023 | — | — | — | 19,231 | 38,462 | 76,924 | — | — | $— | $— | $463,852 | | | 3/2/2023 | — | — | — | — | — | — | — | 38,462 | $12.06 | $11.81 | $255,099 | | | 6/9/2023 | — | — | — | — | — | — | 70,769 | — | $— | $— | $593,752 | | | 6/9/2023 | — | — | — | 70,770 | 141,539 | 283,078 | — | — | $— | $— | $1,187,512 | | | 6/9/2023 | — | — | — | — | — | — | — | 141,539 | $8.39 | $8.25 | $665,899 | | | | 619,500 | 1,239,000 | 1,858,500 | — | — | — | — | — | $— | $— | $— | | Richard Lindahl | 3/2/2023 | — | — | — | — | — | — | 6,154 | — | $— | $— | $74,217 | | | 3/2/2023 | — | — | — | 6,154 | 12,308 | 24,616 | — | — | $— | $— | $148,434 | | | 3/2/2023 | — | — | — | — | — | — | — | 12,308 | $12.06 | $11.81 | $81,633 | | | 6/9/2023 | — | — | — | — | — | — | 24,616 | — | $— | $— | $206,528 | | | 6/9/2023 | — | — | — | 24,616 | 49,231 | 98,462 | — | — | $— | $— | $413,048 | | | 6/9/2023 | — | — | — | — | — | — | — | 49,231 | $8.39 | $8.25 | $231,617 | | | | 184,500 | 369,000 | 553,500 | — | — | — | — | | $— | $— | $— | | Adam Havey | 3/2/2023 | — | — | — | — | — | — | 6,154 | — | $— | $— | $74,217 | | | 3/2/2023 | — | — | — | 6,154 | 12,308 | 24,616 | — | — | $— | $— | $148,434 | | | 3/2/2023 | — | — | — | — | — | — | — | 12,308 | $12.06 | $11.81 | $81,633 | | | 6/9/2023 | — | — | — | — | — | — | 24,616 | — | $— | $— | $206,528 | | | 6/9/2023 | — | — | — | 24,616 | 49,231 | 98,462 | — | — | $— | $— | $413,048 | | | 6/9/2023 | — | — | — | — | — | — | — | 49,231 | $8.39 | $8.25 | $231,617 | | | | 175,500 | 351,000 | 526,500 | — | — | — | — | — | $— | $— | $— | | Jennifer Fox | 3/2/2023 | — | — | — | — | — | — | 6,154 | — | $— | $— | $74,217 | | | 3/2/2023 | — | — | — | 6,154 | 12,308 | 24,616 | — | — | $— | $— | $148,434 | | | 3/2/2023 | — | — | — | — | — | — | — | 12,308 | $12.06 | $11.81 | $81,633 | | | 6/9/2023 | — | — | — | — | — | — | 24,616 | — | $— | $— | $206,528 | | | 6/9/2023 | — | — | — | 24,616 | 49,231 | 98,462 | — | — | $— | $— | $413,048 | | | 6/9/2023 | — | — | — | — | — | — | — | 49,231 | $8.39 | $8.25 | $231,617 | | | | 175,500 | 351,000 | 526,500 | — | — | — | — | — | $— | $— | $— | | Coleen Glessner | 3/2/2023 | — | — | — | — | — | — | 3,846 | — | $— | $— | $46,383 | | | 3/2/2023 | — | — | — | 3,846 | 7,692 | 15,384 | — | — | $— | $— | $92,766 | | | 3/2/2023 | — | — | — | — | — | — | — | 7,692 | $12.06 | $11.81 | $51,017 | | | 6/9/2023 | — | — | — | — | — | — | 15,385 | — | $— | $— | $129,080 | | | 6/9/2023 | — | — | — | 15,385 | 30,770 | 61,540 | — | — | $— | $— | $258,160 | | | 6/9/2023 | — | — | — | — | — | — | — | 30,770 | $8.39 | $8.25 | $144,764 | | | | 172,500 | 345,000 | 517,500 | — | — | — | — | — | $— | $— | $— |
2023 Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | Name* | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All other Stock Awards: Number of Shares of Stock or Units(#)(2) | All other Option Awards: Number of Securities Underlying Options(#)(3) | Exercise Price of Option Awards ($/sh)(4) | Closing Price of Option Awards on date of Grant ($/sh)(5) | Grant Date Fair Value of Stock and Option Awards(6) | | Paul Williams | 3/2/2023 | — | — | — | — | — | — | 1,154 | — | $— | $— | $13,917 | | | 3/2/2023 | — | — | — | 1,154 | 2,308 | 4,616 | — | — | $— | $— | $27,834 | | | 3/2/2023 | — | — | — | — | — | — | — | 2,308 | $12.06 | $11.81 | $15,308 | | | 6/9/2023 | — | — | — | — | — | — | 4,616 | — | $— | $— | $38,728 | | | 6/9/2023 | — | — | — | 4,616 | 9,231 | 18,462 | — | — | $— | $— | $77,448 | | | 6/9/2023 | — | — | — | — | — | — | — | 9,231 | $8.39 | $8.25 | $43,429 | | | | 135,500 | 270,000 | 405,000 | — | — | — | — | — | $— | $— | $— |
2023 Grants of Plan-Based Awards
| 1. | Constitutes threshold, target, and maximum award opportunities for our NEOs under our Annual Bonus Plan. Please see the “Annual Cash Incentives” discussion in the “Compensation Discussion and Analysis” section of this proxy statement. The actual amounts paid with respect to these awards are included in the “Non-equity Incentive Plan Compensation” column in the Summary Compensation Table. For 2023 these amounts were zero due to our NEOs’ receipt of KERP awards in lieu of amounts under the 2023 Annual Bonus Plan. |
2023 Grants of Plan-Based Awards
| 2. | Represents shares of common stock underlying an RSU award. |
2023 Grants of Plan-Based Awards
| 3. | Represents shares of common stock issuable upon exercise of stock options. |
2023 Grants of Plan-Based Awards
| 4. | Represents the closing sales price of our common stock on the NYSE on the trading day immediately preceding the date of grant. |
2023 Grants of Plan-Based Awards
| 5. | Represents the closing sales price of our common stock on the NYSE on the date of grant. |
2023 Grants of Plan-Based Awards
| 6. | The amounts in the “Grant Date Fair Value of Stock and Option Awards” column reflect the grant date fair value of each equity award calculated in accordance with SEC rules. For a discussion of our valuation assumptions, see Note 2 and Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
2023 Grants of Plan-Based Awards
| * Mr. Miller was not eligible to receive equity awards due to his status as Interim CEO. |
2023 Grants of Plan-Based Awards
In 2023, equity awards granted to our NEOs were granted under the Emergent BioSolutions Inc. Stock Incentive Plan in two installments due to share pool constraints. The first installment was granted on March 2, 2023 and the second installment was granted on June 9, 2023, following stockholder approval of the amendment and restatement of the Emergent BioSolutions Inc. Stock Incentive Plan to, among other things, increase the number of shares available for grant under the plan. Each option and RSU grant vests in three equal installments on the day prior to the first, second and third annual anniversaries of the grant date and each option has a term of seven years. All stock options have an exercise price equal to the closing sale price per share of our common stock on the NYSE on the trading day immediately preceding the date of grant. Under the terms of the agreements governing the RSU awards granted to our NEOs in 2023, each NEO is entitled to receive, at the time of the issuance of any shares upon vesting of the applicable RSU award, an amount of cash equal to the aggregate amount of all dividends paid by us between the date of grant and the issuance of such shares, if any. The PSUs granted to NEOs in fiscal year 2023 result in the issuance of a number of shares (and cash equal to the aggregate amount of dividends paid by us between the grant date and the date of issuance of such shares, in each case with respect to the number of shares that vest under the PSUs based on the level of achievement of the performance goals) based on the level of achievement with respect to Total Revenues and Adjusted EBITDA as a percentage of GAAP revenue on a cumulative basis over the three-year performance period. Achievement of the threshold performance objective, target performance objective and maximum performance objective results in a share (and corresponding cash relating to dividends paid by the company between the grant date and the date of issuance of shares) payout of 50%, 100% and 200% of the target number of shares, respectively. Performance below the 50% threshold will result in no payout. For further details regarding our PSU grants, including those made after December 31, 2023, please see the section of this proxy statement titled “Compensation, Discussion and Analysis”.
2023 Option Exercises and Stock Awards Vested
2023 Option Exercises and Stock Awards Vested The following table sets forth information regarding the exercise of stock options and the vesting of RSU and PSU awards during the fiscal year ended December 31, 2023, for each of the NEOs on an aggregate basis.
2023 Option Exercises and Stock Awards Vested
| | Option Awards | | Stock Awards | | | Name* | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting(1) | | Robert Kramer | — | $ — | 38,792 | $511,982 | | Adam Havey | — | $ — | 12,464 | $164,265 | | Jennifer Fox | — | $ — | 5,737 | $58,655 | | Richard Lindahl | — | $ — | 12,799 | $169,122 | | Coleen Glessner | — | $ — | 1,971 | $20,814 | | Paul Williams | — | $ — | 4,680 | $33,206 |
2023 Option Exercises and Stock Awards Vested
| (1) The amounts in the “Value Realized on Vesting” column are calculated based on the closing market price per share of our common stock on the vesting date. |
2023 Option Exercises and Stock Awards Vested
| * Mr. Miller was not eligible to receive option awards and stock awards due to his status as Interim CEO. |
2023 Outstanding Equity Awards At Fiscal Year End
2023 Outstanding Equity Awards At Fiscal Year End The following table sets forth information regarding unexercised stock options, unvested RSUs and unvested PSUs outstanding as of December 31, 2023 for each of the NEOs.
2023 Outstanding Equity Awards At Fiscal Year End
| | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Equity Awards | | | | | | | | | Name | Exercisable | Unexercisable | Option Award Exercise Price | Option Award Expiration Date | Unvested Restricted Stock Unit Awards | Market Value Unvested Restricted Stock Unit Awards | Unvested Performance Stock Unit Awards | Market Value Unvested Performance Stock Unit Awards | | Richard Lindahl | 19,963 | — | $48.33 | 5/7/2025 | — | $— | — | $— | | | 20,321 | — | $61.01 | 2/25/2026 | — | $— | — | $— | | | 24,414 | — | $61.44 | 2/24/2027 | — | $— | — | $— | | | 10,696 | 5,347(1) | $93.49 | 2/23/2028 | — | $— | — | $— | | | 12,876 | 25,788(2) | $41.38 | 2/28/2029 | — | $— | — | $— | | | — | 12,308(3) | $12.06 | 3/1/2030 | — | $— | — | $— | | | — | 49,231(4) | $8.39 | 6/8/2030 | — | $— | — | $— | | | — | — | $— | — | 1,337(7) | $3,209(16) | — | $— | | | — | — | $— | — | 21,750(8) | $52,200(16) | — | $— | | | — | — | $— | — | 6,444(9) | $15,466(16) | — | $— | | | — | — | $— | — | 6,154(10) | $14,770(16) | — | $— | | | — | — | $— | — | 24,616(11) | $59,078(16) | — | $— | | | — | — | $— | — | — | $— | 4,012(17) | $9,629(20) | | | — | — | $— | — | — | $— | 9,667(18) | $23,201(20) | | | — | — | $— | — | — | $— | 7,249(18) | $17,398(20) | | | — | — | $— | — | — | $— | 12,308(19) | $29,539(20) | | | — | — | $— | — | — | $— | 49,231(19) | $118,154(20) | | Adam Havey | 20,321 | — | $61.01 | 2/25/2026 | — | $— | — | $— | | | 22,784 | — | $61.44 | 2/24/2027 | — | $— | — | $— | | | 9,982 | — | $93.49 | 2/23/2028 | — | $— | — | $— | | | 14,083 | — | $41.38 | 2/28/2029 | — | $— | — | $— | | Jennifer Fox | 1,558 | — | $64.24 | 1/10/2026 | — | $— | — | $— | | | 4,476 | — | $61.44 | 2/24/2027 | — | $— | — | $— | | | 2,674 | 1,338(1) | $93.49 | 2/23/2028 | — | $— | — | $— | | | 2,777 | 5,561(2) | $41.38 | 2/28/2029 | — | $— | — | $— | | | 6,076 | 12,170(2) | $41.38 | 2/28/2029 | — | $— | — | $— | | | — | 12,308(3) | $12.06 | 3/1/2030 | — | $— | — | $— | | | — | 49,231(4) | $8.39 | 6/8/2030 | — | $— | — | $— | | | — | — | $— | — | 668(7) | $1,603(16) | — | $— | | | — | — | $— | — | 1,411(12) | $3,386(16) | — | $— | | | — | — | $— | — | 9,063(8) | $21,751(16) | — | $— | | | — | — | $— | — | 2,779(9) | $6,670(16) | — | $— | | | — | — | $— | — | 3,041(9) | $7,298(16) | — | $— | | | — | — | $— | — | 42,135(13) | $101,124(16) | — | $— | | | — | — | $— | — | 6,154(10) | $14,770(16) | — | $— |
2023 Outstanding Equity Awards At Fiscal Year End
| | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Equity Awards | | | | | | | | | Name | Exercisable | Unexercisable | Option Award Exercise Price | Option Award Expiration Date | Unvested Restricted Stock Unit Awards | Market Value Unvested Restricted Stock Unit Awards | Unvested Performance Stock Unit Awards | Market Value Unvested Performance Stock Unit Awards | | | — | — | $— | — | 24,616(11) | $59,078(16) | — | $— | | | — | — | $— | — | — | $— | 4,562(18) | $10,949(20) | | | — | — | $— | — | — | $— | 3,021(18) | $7,250(20) | | | — | — | $— | — | — | $— | 14,045(18) | $33,708(20) | | | — | — | $— | — | — | $— | 12,308(19) | $29,539(20) | | | — | — | $— | — | — | $— | 49,231(19) | $118,154(20) | | Coleen Glessner | 7,876 | 15,775(5) | $42.28 | 4/7/2029 | — | $— | — | $— | | | — | 7,692(3) | $12.06 | 3/1/2030 | — | $— | — | $— | | | — | 30,770(4) | $8.39 | 6/8/2030 | — | $— | — | $— | | | — | — | $— | — | 3,942(14) | $9,461(16) | — | $— | | | — | — | $— | — | 72,232(13) | $173,357(16) | — | $— | | | — | — | $— | — | 3,846(10) | $9,230(16) | — | $— | | | — | — | $— | — | 15,385(11) | $36,924(16) | — | $— | | | — | — | $— | — | — | $— | 5,913(18) | $14,191(20) | | | — | — | $— | — | — | $— | 24,078(18) | $57,787(20) | | | — | — | $— | — | — | $— | 7,692(19) | $18,461(20) | | | — | — | $— | — | — | $— | 30,770(19) | $73,848(20) | | Paul Williams | 1,180 | 589(1) | $93.49 | 2/23/2028 | — | $— | — | $— | | | 1,128 | 565(6) | $59.07 | 7/8/2028 | — | $— | — | $— | | | 2,536 | 5,077(2) | $41.38 | 2/28/2029 | — | $— | — | $— | | | — | 2,308(3) | $12.06 | 3/1/2030 | — | $— | — | $— | | | — | 9,231(4) | $8.39 | 6/8/2030 | — | $— | — | $— | | | — | — | $— | — | 295(7) | $708(16) | — | $— | | | — | — | $— | — | 282(15) | $677(16) | — | $— | | | — | — | $— | — | 2,538(9) | $6,091(16) | — | $— | | | — | — | $— | — | 1,154(10) | $2,770(16) | — | $— | | | — | — | $— | — | 4,616(11) | $11,078(16) | — | $— | | | — | — | $— | — | — | $— | 2,308(19) | $5,539(20) | | | — | — | $— | — | — | $— | 9,231(19) | $22,154(20) |
2023 Outstanding Equity Awards At Fiscal Year End
| (1) The unexercisable portion of this stock option award vested on February 23, 2024. |
2023 Outstanding Equity Awards At Fiscal Year End
| (2) Approximately one half of the unexercisable portion of this stock option award vested on February 29, 2024 and the remainder will vest on February 28, 2025. |
2023 Outstanding Equity Awards At Fiscal Year End
| (3) Approximately one third of the unexercisable portion of this stock option award vested on March 1, 2024 and approximately one third of the unexercisable portion will vest on March 1, 2025 and March 1, 2026. |
2023 Outstanding Equity Awards At Fiscal Year End
| (4) Approximately one third of the unexercisable portion of this stock option award will vest on June 8, 2024, June 8, 2025 and June 8, 2026. |
2023 Outstanding Equity Awards At Fiscal Year End
| (5) Approximately one half of the uexercisable portion of this stock option award vested on April 7, 2024 and the remainder will vest on April 7, 2025. |
2023 Outstanding Equity Awards At Fiscal Year End
| (6) The unexercisable portion of this stock option award will vest on July 8, 2024. |
2023 Outstanding Equity Awards At Fiscal Year End
| (7) The unvested portion of this RSU award vested on February 23, 2024. |
2023 Outstanding Equity Awards At Fiscal Year End
| (8) The unvested portion of this RSU award vested on February 29, 2024. |
2023 Outstanding Equity Awards At Fiscal Year End
| (9) Approximately one half of the unvested portion of this RSU award vested on February 29, 2024 and the remainder will vest on February 28, 2025. |
2023 Outstanding Equity Awards At Fiscal Year End
| (10) Approximately one third of this RSU award vested on March 1, 2024 and the approximately one-third of the unvested portion will vest on March 1, 2025 and March 1, 2026. |
2023 Outstanding Equity Awards At Fiscal Year End
| (11) Approximately one third of this RSU award will vest on June 8, 2024, June 8, 2025 and June 8, 2026. |
2023 Outstanding Equity Awards At Fiscal Year End
| (12) The unvested portion of this RSU award will vest on November 11, 2024. |
2023 Outstanding Equity Awards At Fiscal Year End
| (13) The unvested portion of this RSU award will vest on December 8, 2024. |
2023 Outstanding Equity Awards At Fiscal Year End
| (14) Approximately one half of this RSU award vested on April 7, 2024 and the remainder will vest on April 7, 2025. |
2023 Outstanding Equity Awards At Fiscal Year End
| (15) The unvested portion of this RSU award will vest on July 8, 2024. |
2023 Outstanding Equity Awards At Fiscal Year End
| (16) Represents the closing price of our common stock on December 31, 2023 multiplied by the number of shares underlying the unvested portion of the RSU award as of December 31, 2023. |
2023 Outstanding Equity Awards At Fiscal Year End
| (17) This PSU award vested on February 21, 2024 at 0% of the amount awarded. |
2023 Outstanding Equity Awards At Fiscal Year End
| (18) The unvested portion of this PSU award will vest upon satisfaction of the underlying performance criteria of adjusted EBITDA as a percentage of revenue. |
2023 Outstanding Equity Awards At Fiscal Year End
| (19) The unvested portion of this PSU award will vest upon satisfaction of the underlying performance criteria of total revenues and adjusted EBITDA as a percentage of revenue. |
2023 Outstanding Equity Awards At Fiscal Year End
| (20) Represents the closing price of our common stock on December 31, 2023 multiplied by the number of shares underlying the unvested portion of the PSU award as of December 31, 2023. |
Payments Upon Termination or Change in Control
Payments Upon Termination or Change in Control
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure Pursuant to the SEC rules requiring companies to disclose their CEO and median-compensated employee pay ratio, set forth below is the ratio of compensation of our former Interim Chief Executive Officer to the median employee’s compensation.
CEO Pay Ratio Disclosure
| Annual total compensation of Haywood Miller, Interim CEO | $1,500,000 | | Annual total compensation of the median employee(1) | $118,373 | | Ratio of Chief Executive Officer to median employee compensation | 13:1 |
CEO Pay Ratio Disclosure
| (1) Annual total compensation of the median employee consisted of base pay, bonus (paid in 2024, but earned in 2023) and 401(k) match (where applicable). |
CEO Pay Ratio Disclosure
In determining the median employee, a list of all full-time and part-time employees, exclusive of Mr. Miller (who was not an employee), was prepared based on active employees included in the company’s payroll system as of December 31, 2023. Salaries and wages were annualized for those employees who were not employed for the full year of 2023. Salaries and wages were ranked from lowest to highest, and the compensation (base pay, plus bonus) of the median employee was selected from the list.
CEO Pay Ratio Disclosure
| PAY VERSUS PERFORMANCE DISCLOSURE |
CEO Pay Ratio Disclosure
The table set forth below summarizes information to show the relationship between NEO compensation and certain financial performance measures for fiscal years 2020, 2021, 2022 and 2023. This information is provided in accordance with Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K.
CEO Pay Ratio Disclosure
| Fiscal Year | Summary Compensation Table Total for PEO (Kramer) (1) | Summary Compensation Table Total for PEO (Miller) (1) | Compensation Actually Paid to CEO (Kramer) (1)(2) | Compensation Actually Paid to CEO (Miller) (1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (2) (3) | Value of Initial Fixed $100 Investment Based on | | Net Income (Loss) ( in millions ) (5) | Total Revenues ( in millions) (5) | | | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return (4) | | | | 2023 | $5,103,858 | $766,667 | $393,077 | $766,667 | $1,813,193 | $462,669 | $4.45 | $146.27 | $(760.5) | $1,049.3 | | 2022 | $7,578,573 | — | $508,270 | — | $3,393,116 | $951,561 | $21.89 | $140.85 | $(211.6) | $1,117.5 | | 2021 | $6,932,076 | — | $532,388 | — | $2,469,172 | $192,682 | $80.57 | $121.80 | $219.5 | $1,773.6 | | 2020 | $5,569,978 | — | $10,223,966 | — | $2,457,336 | $5,035,083 | $166.08 | $108.63 | $305.8 | $1,577.3 |
CEO Pay Ratio Disclosure
| (1) Mr. Kramer was our principal executive officer (PEO) for each of 2020, 2021, 2022 and until June 24, 2023. Mr. Miller was the company’s Interim CEO from June 24, 2023 until February 21, 2024. |
CEO Pay Ratio Disclosure
| (2) The dollar amounts reported in the “Compensation Actually Paid to PEO (Kramer)” column, the “Compensation Actually paid to CEO (Miller)” column and the “Average Compensation Actually Paid to Non-PEO Named Executive Officers” column represent the amount of “compensation actually paid” (“CAP”) to each of our PEOs and the “average compensation actually paid” to our non-PEO NEOs, respectively, as computed in accordance with Item 402(v) of Regulation S-K. While SEC rules require us to disclose these amounts, they do not correlate to actual amounts that will or may be paid to our NEOs. The actual amounts that will or may be paid to each NEO will be determined following the completion of the applicable service and/or performance period based upon the actual achievement over such service and/or performance period. Supplemental tables reconciling compensation reported in our summary compensation table to CAP for our PEOs is provided below. |
CEO Pay Ratio Disclosure
| (3) The non-PEO NEOs for 2023 are Mr. Lindahl, Mr. Havey, our former Chief Operating Officer, Ms. Fox, Ms. Glessner and Mr. Williams. For 2022, the non-PEO NEOS were Mr. Lindahl, Mr. Havey, Ms. Fox and Mr. Saran, our former Chief Strategy and Development Officer, and for each of 2021 and 2020 the non-PEO NEOs were Mr. El-Hibri, Mr. Lindahl, Mr. Havey and Mr. Saran. Supplemental tables reconciling compensation reported in our summary compensation table to CAP for the average of our non-PEO NEOs is provided below. |
CEO Pay Ratio Disclosure
| (4) Peer Group reflects published data for the S&P Biotechnology Index. |
CEO Pay Ratio Disclosure
| (5) Net income (loss) and Total Revenues for each year shown, as disclosed in the company’s annual report on Form 10-K for the corresponding year. Total Revenues is our “Company-Selected Measure” as set forth in Regulation S-K 402(v). Note that the restatement identified in the Company’s Form 10-K/A filed on December 11, 2023 did not require a recovery in connection with the Company’s Executive Compensation Recovery Policy. |
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure Supplemental Tables:
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure