DEF 14A of Amphastar Pharmaceuticals, Inc.
Filed Apr 14, 2025 · FY20240001297184-25-000018
Nominees for Director
Nominees for Director Jack Yongfeng Zhang, Ph.D. co-founded our Company in 1996 has served as our Chief Executive Officer and a member of our Board of Directors since our inception and was re-appointed as our President in April 2020, after serving as President from 1996 until June 2013. Dr. Zhang has also served as our Chief Scientific Officer since 2005. Dr. Zhang co-founded APCL, a full service chemical analytical laboratory, in May 1989, where he held the position of President until October 2002. Dr. Zhang is named as the inventor on several U.S. and foreign patents. He received a Ph.D. in chemistry from the State University of New York at Stony Brook and was a Post-Doctoral Research Associate at the California Institute of Technology. We believe Dr. Zhang’s expertise and experience in the pharmaceutical industry and as one of our founders qualifies him to serve on our Board of Directors. Richard Prins has served as our lead independent director since April 2019 and as a member of our Board of Directors since February 2002. Since 2008, Mr. Prins has been a private investor and currently serves as lead investor and Chairman of EPH4, LLC. He is also involved in various charitable organizations. Mr. Prins served in various volunteer roles at Advancing Native Missions since 2004 including as a board member, Head of Operations and Stewardship, and as interim CEO. He has also served as a director of IGC Pharma, Inc., a biopharmaceutical company, since 2007, and as chairman of its board since 2012. Mr. Prins was the Director of Investment Banking for FBW, from 1996 until June 2008 when FBW was acquired by Royal Bank of Canada. Prior to FBW, Mr. Prins was a Managing Director from July 1988 to April 1996 at Crestar Bank (now Truist Bank) in charge of mergers and acquisitions. Mr. Prins began his career in 1983 as the Assistant to the Chairman of the leverage buyout company, Tuscarora Corp., where he held various positions until July 1988. Mr. Prins received a B.A. in liberal arts from Colgate University and an M.B.A. from Oral Roberts University. We believe that Mr. Prins’ experience in corporate finance and investment banking qualifies him to serve on our Board of Directors. Diane G. Gerst has served as a member of our Board of Directors since June 2019. She previously served as our Executive Vice President of Quality Assurance and Regulatory Affairs from June 2015 until February 2018 and also served as the President of Amphastar Nanjing Pharmaceuticals Inc., one of our subsidiaries, from March 2014 until February 2018. From August 2013 to June 2015, Ms. Gerst served as our Corporate Senior Vice President of Quality Assurance. She served as Corporate Vice President of Quality Assurance from August 2003 until her promotion to Senior Vice President in August 2013 and as Vice President of Regulatory Affairs from June 2001 to July 2002. Prior to joining us, Ms. Gerst held various management level positions in regulatory and quality including eight years at Braun-McGaw and seven years at IMS. Ms. Gerst received a B.A. from the University of California, Berkeley. We believe that Ms. Gerst is qualified to serve on our Board of Directors because of her perspective, experience and leadership as a former executive of our Company.
Continuing Directors
Continuing Directors Floyd F. Petersen has served as a member of our Board of Directors since August 2004. From 1986 until his retirement in August 2014, Mr. Petersen served as an Assistant Professor of Biostatistics at Loma Linda University Schools of Public Health, Medicine, and Nursing. From 1990 to 2010, Mr. Petersen served as Director of the Loma Linda University Health Research Consulting Group, which consults on health research study design and data analysis. Mr. Petersen was a member of the Loma Linda, California City Council from 1990 to 2010 and served as the Mayor of Loma Linda from 1996 to 2006. Mr. Petersen earned an M.P.H. from Loma Linda University with concentrations in Biostatistics and Health Administration. We believe that Mr. Petersen’s years of experience in scientific academia and consulting qualifies him to serve on our Board of Directors. Jacob Liawatidewi has served as a member of our Board of Directors since August 2022, Executive Vice President of Sales and Marketing and Executive Vice President of Corporate Administration Center since May 2020, President of Amphastar France Pharmaceuticals, S.A.S. (a wholly-owned subsidiary of Amphastar) since December 2020, and Corporate Secretary since June 2013. Mr. Liawatidewi served as Senior Vice President of Corporate Administration Center and Senior Vice President of Sales and Marketing from March 2014 and December 2013, respectively, until his promotion to Executive Vice President. Mr. Liawatidewi served as Vice President of Sales and Marketing from August 2012 until his promotion to Senior Vice President. From August 2005 to August 2012, Mr. Liawatidewi was our Associate Vice President of Sales and Marketing. From joining us in June 1997 to August 2005, Mr. Liawatidewi held various roles in our business development, sales and marketing department. Mr. Liawatidewi received a B.S. in Biology from California State University of Fresno in 1996, an M.B.A. from National University in 2014, and an E.J.D. from Concord Law School in 2022. We believe that Mr. Liawatidewi’s executive experience and extensive knowledge of our business qualifies him to serve on our Board of Directors. William J. Peters has served as a member of our Board of Directors since August 2022, our Chief Financial Officer, Executive Vice President and Treasurer since May 2021 and was our Chief Financial Officer and Treasurer since April 2014, and as our President of International Medication Systems, Limited (a wholly-owned subsidiary of Amphastar) since March 2016. Mr. Peters previously served as Chief Financial Officer of Hi-Tech Pharmacal Co., Inc., or Hi-Tech, from May 2004 to April 2014. From September 2003 to May 2004 he was Vice President of Corporate Development at Hi-Tech. From 2001 to 2003 Mr. Peters was the Director, Financial Evaluations for the Medco Health Solution subsidiary of Merck & Co., Inc., or Merck & Co., and during his seven year career at Merck & Co., he also served in several positions of increasing responsibility. He began his career in General Electric’s Financial Management Program, at its Aerospace division, where he later held positions in financial analysis and internal auditing. He earned an M.B.A. from The Wharton School of Business, of the University of Pennsylvania and a B.S. in Business Administration from Bucknell University. We believe that Mr. Peters’ executive experience and expertise as a financial professional at pharmaceutical companies including as our Chief Financial Officer qualifies him to serve on our Board of Directors. Mary Z. Luo, Ph.D. co-founded our Company in 1996 and has served as our Chief Operating Officer and chairman of our Board of Directors since our inception and as Corporate Secretary from 1997 to April 2004. Dr. Luo has also served as our Chief Scientist since 2005. Dr. Luo co-founded Applied Physics & Chemistry Laboratories, Inc., or APCL, a full service chemical analytical laboratory, in May 1989, where she held the position of Chief Operating Officer. Dr. Luo is a professor emeritus of chemistry at California State Polytechnic University, Pomona and is named as the inventor on several U.S. and foreign patents. Dr. Luo received a Ph.D. in chemistry from Princeton University and was a Post-Doctoral Research Associate at the California Institute of Technology. We believe Dr. Luo’s experience in the pharmaceutical industry and as one of our founders qualifies her to serve on our Board of Directors. Howard Lee, Ph.D. has served as a member of our Board of Directors since August 2007. He previously served as a member of the board of our subsidiary, IMS, from 1998 to 2002 and on our Board of Directors from 2002 to 2004. Dr. Lee has served as the Chairman and Chief Executive Officer of TAHO Pharmaceuticals, Ltd., a drug development company with a transepithelial technology platform based in Taiwan since January 2020. Previously, Dr. Lee was the partner at the CID Group, a prominent investment group in the greater China area from March 2012 to January 2020. From 2009 to 2010 he was the Chief Investment Officer at UniMed Venture Management Inc., a biotech venture capital firm. Prior to joining UniMed in July 2009, he was a Managing Director at Silver Biotech Management, Inc. from July 2006 to June 2009. Dr. Lee served as President and CEO of CDIB Biotech USA Investment Co. Ltd. from 2000 to 2006 and as Vice President of China Development Industrial Bank, an investment bank in Taiwan, from October 1995 to June 2006. Dr. Lee earned his B.Sc. at Fu-Jen University (Taiwan), his M.Sc. and Ph.D. degrees in chemistry from the University of Southern California in Los Angeles and completed his postdoctoral research at the Loker Hydrocarbon Research Institute of the University of Southern California. We believe Dr. Lee’s experience in biotech venture capital consulting qualifies him to serve on our Board of Directors. Michael A. Zasloff, M.D., Ph.D. has served as a member of our Board of Directors since October 2005 and previously served as our lead independent director from January 2016 to April 2019. Dr. Zasloff has been the Professor of Surgery and Pediatrics at the Georgetown University School of Medicine since 2002, and currently serves as Scientific Director of the MedStar – Georgetown Transplant Institute. In 2016 Dr. Zasloff founded Enterin, Inc., a biopharmaceutical company developing therapeutics for Parkinson’s disease and other neurodegenerative disorders, where he serves as Director and Chief Scientific Officer. In 2023, Dr. Zasloff founded BAZ Therapeutics, a biopharmaceutical company developing therapeutics directed at diseases of aging, where he serves as Director. Dr. Zasloff served as the Dean of Research and Translational Science from 2002 until 2004. Between 2004 and 2007, Dr. Zasloff served as Vice President and Senior Analyst (Life Sciences) at Ferris, Baker Watts, Inc., or FBW. From 1992 to 2001 Dr. Zasloff served as Executive Vice President and Vice Chairman of Magainin Pharmaceuticals Inc., a biopharmaceutical company which he founded. From 1988 until 1992, Dr. Zasloff served as the Charles E.H. Upham Professor in the Department of Pediatrics and Genetics at the University of Pennsylvania School of Medicine, and Chief, Division of Human Genetics and Molecular Biology at The Children’s Hospital of Philadelphia. From 1982 until 1988, Dr. Zasloff was Chief of the Human Genetics Branch at the National Institutes of Child Health and Human Development, National Institutes of Health. Dr. Zasloff received a B.A. from Columbia College in biochemistry and holds an M.D., Ph.D. from the New York University School of Medicine. We believe Dr. Zasloff’s expertise and experience in the biopharmaceutical industry qualifies him to serve on our Board of Directors.
Continuing Directors
Gayle Deflin has served as a member of our Board of Directors since June 2021. Ms. Deflin has been the Chief Financial Officer of LBMB, Inc. since 2014, and its subsidiaries Plasticolor Molded Products, Inc. and Chroma Graphics, Inc., both of which are automotive accessory manufacturers and distributors, since 2006. Prior to 2006, Ms. Deflin was at Apria Healthcare, a provider of home respiratory services from 2004 to 2006 as Vice President of Strategic Planning and Budgeting and Vice President of Billing Center Operations. From 2003 to 2004 she served as President and Chief Executive Officer of Ionian Technologies, a diagnostic start-up with biotechnology developed at the Keck Graduate Institute of Applied Life Sciences. Ms. Deflin worked in various positions at International Medication Systems Limited, including as its President, from 1989 until it was sold to Amphastar in 1998, and continued with Celltech Pharmaceuticals, the former owner of International Medication Systems, Limited, as President of MD Pharmaceuticals from 1996 to 2002 and Senior Vice President, Business Support Services of Celltech Pharmaceuticals from 2000 to 2002. Ms. Deflin holds a B.S. in Business Administration (Accounting and MIS) from Bowling Green State University and an M.B.A from the Drucker School of Management at Claremont Graduate University. We believe that Ms. Deflin’s past experience and expertise in the field of pharmaceuticals and retail consumer products, as well as her operational management experience qualifies her to serve on our Board of Directors.
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating director nominees. While our Board of Directors has not established minimum qualifications for members, some of the factors that our nominating and corporate governance committee considers in assessing director nominee qualifications include, the existing size and composition of our Board of Directors, the number and qualification of candidates, the benefit of continuity on the Board of Directors and the relevance of the candidate’s background and experience to the issues we face. Our nominating and corporate governance committee relies upon various criteria for membership, which may include, without limitation, that a candidate: be of the highest ethical character; exhibit sound business judgment; preserve the confidentiality of materials given or presented to the Board of Directors and not use such materials for personal gain; has demonstrated leadership and significant experience in an area of endeavor relevant to our business; comprehend the role of a public company director (particularly the fiduciary obligations to us and our stockholders); understand our business and industry and keep informed on our operations; disclose to other directors any potential conflicts of interest (and if appropriate, refrain from voting on certain matters); dedicate sufficient time to our business, including attendance at meetings of the Board of Directors or committees on which he or she serves and stockholder meetings (and prepare for such meetings as required and appropriate); be independent of any particular constituency and not engaged in any activity adverse to us or in conflict with our interests (including, without limitation, service on the board or in the management of a competing company) and thus be able to represent all of our stockholders; and demonstrate a willingness toward free and open exchange of ideas and opinions, and exercise balance, fitness, care and due and independent deliberation in the decision-making process. Qualification and backgrounds of the directors as a whole should provide the proper breadth of knowledge, abilities and experience to appropriate composition of the Board of Directors. Our nominating and corporate governance committee considers factors such as experience, area of expertise, potential conflicts of interest and other commitments and other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on the Board of Directors. Re-nomination of existing directors will not be viewed as automatic, but rather will be based on continuing qualification using the criteria set forth above. Our nominating and corporate governance committee considers these and other factors as it oversees the annual board of director and committee evaluations. After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full Board of Directors the director nominees for selection.
Non-Employee Director Compensation
Non-Employee Director Compensation
Compensation for 2024
| Director | Fees Earned or Paid in Cash($) | Stock Awards ($)(1) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) | | Howard Lee | 73,287 | 129,961 | 130,042 | — | 333,290 | | Floyd F. Petersen | 65,000 | 129,961 | 130,042 | — | 325,003 | | Richard Prins | 115,118 | 129,961 | 130,042 | — | 375,121 | | Michael A. Zasloff | 71,000 | 129,961 | 130,042 | — | 331,003 | | Diane Gerst | 67,641 | 129,961 | 130,042 | — | 327,644 | | Gayle Deflin | 80,000 | 129,961 | 130,042 | — | 340,003 |
PROPOSAL NO. 1 ELECTION OF DIRECTORS
PROPOSAL NO. 1 ELECTION OF DIRECTORS Our Board of Directors is currently composed of ten members. In accordance with our amended and restated certificate of incorporation, our Board of Directors is divided into three staggered classes of directors. At the Annual Meeting, three Class III directors will be elected for a three-year term to succeed the same class whose term is then expiring. Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. This classification of our Board of Directors may have the effect of delaying or preventing changes in control of our Company.
Objectives and Philosophy of Our Executive Compensation Program
| Element | Reasons for Providing Element | | Base Salary | Provides compensation for our named executive officers’ services based on their knowledge, skills, experience, duties, and responsibilities | | Short-Term Incentive Compensation | Incentivizes and rewards the achievement of our annual financial and operational objectives and progress towards our long-term strategic goals | | Long-Term Incentive Compensation | Aligns the interests of our named executive officers and stockholders and incentivizes and rewards long-term performance of the Company | | Employee Benefits | Provide for our named executive officers’ health and well-being | | Change-in-Control and Severance Benefits | Minimize any distractions to our named executive officers concerning termination of employment and/or a change in control and allow them to focus on their duties and responsibilities |
Compensation-Setting Process
Compensation-Setting Process Role of Board, Compensation Committee and Chief Executive Officer The compensation committee discharges the responsibilities of the Board of Directors relating to compensation of the Company’s executives, including by designing (in consultation with management or the Board of Directors), recommending to the Board of Directors for approval, and evaluating the compensation plans, policies and programs of the Company. The compensation committee is responsible for overseeing the design of compensation programs that achieve the compensation objectives and philosophy described above. In each year, the compensation committee (i) reviews our compensation philosophy and (ii) reviews and approves the compensation of our officers. The compensation committee also reviews and approves employment agreements and severance arrangements for our executive officers. The compensation committee also periodically reviews and oversees the administration of executive compensation and equity plans of the Company and makes recommendations to the Board of Directors as to administration and amendments to such plans. The compensation committee also establishes and periodically reviews policies concerning change of control payments and perquisites. The compensation committee alternatively may recommend for approval by the Board of Directors any component of executive compensation. For example, in 2024, our Board of Directors approved the grant of equity awards to our named executive officers, as discussed further below. As part of the compensation committee’s annual review and approval of executive compensation, Mr. Peters and Mr. Liawatidewi make recommendations to the compensation committee regarding compensation for all executive officers based on individual and Company performance and prevailing market conditions. Based on its review of Mr. Peters’ and Mr. Liawatidewi’s recommendations and the input and data provided by the compensation committee’s independent compensation consultant, the compensation committee approves each component of each executive officer’s compensation. No executive officer participates in portions of any meetings during which decisions are made regarding the executive officer’s own compensation. Role of Compensation Consultant The compensation committee has the authority to retain any compensation and benefits consultants that the Committee believes to be necessary or appropriate. For 2024, the compensation committee retained Willis Towers Watson (“WTW”) to provide it with information, recommendations, and other advice relating to the compensation of our executive officers. WTW reports directly to the compensation committee. The compensation committee annually reviews the independence of its compensation consultant based on consideration of the factors specified in the SEC rules and Nasdaq listing standards, and during 2024, the compensation committee determined that its engagement of WTW did not present any conflicts of interest.
Peer Group Compensation Data
Peer Group Compensation Data In making compensation decisions for our executive officers, the compensation committee reviews and analyzes competitive market practices using data drawn from a group of peer companies. In late 2023, our compensation committee requested the assistance of WTW in reviewing the appropriate peer group and related market data for evaluating our executive compensation program. Based on recommendations by WTW, the primary determinant for adding or removing a company from the peer group is revenues. Companies are only considered for addition to the peer group when their revenues range from 1/3 to 3 times our revenues. For the compensation decisions made by the compensation committee in 2024, our compensation peer group was made up of publicly-traded companies in the biotechnology and/or pharmaceuticals industries with annual revenue between $0.2 and $1.7 billion, earnings before interest, taxes, depreciation, and amortization between -$774 million and $401 million, net income between -$1.1 billion and $234 million, a one-year total stockholder return between -73% and 44%, a three-year total stockholder return between -62% and 48%, and market capitalization between $220 million and $24.7 billion. To minimize disruption of the peer group, companies which are no longer in that range generally are replaced only when they have been outside that range for more than one year and there is a more appropriate replacement. Based on these criteria, the peer group for the compensation decisions made by the compensation committee in 2024 was approved by the compensation committee in November 2023 and consisted of the following 18 companies:
Peer Group Compensation Data
| Alnylam Pharmaceuticals, Inc. | Eagle Pharmaceuticals, Inc. | Ironwood Pharmaceuticals, Inc. | | Amarin Corporation plc. | Emergent BioSolutions Inc. | Pacira BioSciences, Inc. | | ANI Pharmaceuticals, Inc. | Exelixis, Inc. | Prestige Consumer Healthcare, Inc. | | Coherus BioSciences, Inc. | Halozyme Therapeutics, Inc. | PTC Therapeutics, Inc. | | Collegium Pharmaceuticals, Inc. | Intercept Pharmaceuticals, Inc. | Sarepta Therapeutics, Inc. | | Corcept Therapeutics Inc. | Ionis Pharmaceuticals, Inc. | Supernus Pharmaceuticals, Inc. |
Peer Group Compensation Data
The above peer group reflects the following changes to the peer group from the peer group approved by the compensation committee in 2023: (a) the removal of FibroGen Inc., Travere Therapeutics, Inc., and Vanda Pharmaceuticals, Inc., as these companies no longer fit within the revenue parameters used for determining our peer companies and (b) the addition of Alnylam Pharmaceuticals, Inc., Exelixis, Inc., Prestige Consumer Healthcare Inc., and Sarepta Therapeutics, Inc., as the compensation committee determined that these companies better fit within the revenue parameters used for determining our peer companies and were better benchmarks to our business. In February 2024, Mr. Peters and Mr. Liawatidewi presented to the compensation committee a proposal with respect to the compensation of our executive officers for 2024. Mr. Peters’ and Mr. Liawatidewi’s proposal considered the compensation provided to similarly situated executive officers of our peer group companies and/or market compensation data in WTW’s 2023 Pharmaceutical and Health Sciences Executive Compensation Survey as reviewed by WTW. Based on how the Company compared to the companies in its peer group with respect to (i) revenue, (ii) earnings before interest, taxes, depreciation, and amortization, (iii) operating income, (iv) net income, (v) total shareholder return for the previous one, three, and five years, (vi) market capitalization, (vii) number of employees; (viii) whether the company manufactures a majority of its products sold; and (ix) the number of units manufactured and sold by the company, the proposal considered the compensation provided to similarly situated executives in relation to the 75th percentile. In the cases of Dr. Zhang and Mr. Peters, such compensation was determined by averaging (i) the compensation provided to similarly situated executives of our peer group at the 75th percentile and (ii) the compensation provided to similarly situated executives of the companies in the WTW survey in relation to the 75th percentile. In the case of Dr. Luo, because the WTW survey’s sample size for similarly situated executive officers was too low, Mr. Peters’ and Mr. Liawatidewi’s proposal considered only the compensation by our peer group companies. In the cases of Messrs. Zhou and Liawatidewi, because many of our peer group members were not manufacturers and the job titles of the top five most highly compensated employees at many of our peer companies did not match to their titles, Mr. Peters and Mr. Liawatidewi proposal considered the market compensation data from the WTW survey combined with the data from the executive officers who were presented as the fourth and fifth most highly compensated executive officers for companies in the peer group. In the discussion below, references to “relevant market data” refer to the relevant compensation provided to similarly situated executive officers of our peer group companies and/or market compensation data from the WTW survey, as described above.
Components of Our Executive Compensation Program
| Named Executive Officer | 2024 Base Salary | Difference from 2023 Base Salary | Difference from Relevant Market Data (75th Percentile) | | Dr. Zhang | $915,308 | 2.0% | (5.0%) | | Mr. Peters | $625,527 | 2.0% | 8.0% | | Dr. Luo | $746,038 | 2.0% | 20.0% | | Mr. Zhou | $539,500 | 4.0% | (9.0%) | | Mr. Liawatidewi | $480,789 | 4.0% | (5.0%) |
Components of Our Executive Compensation Program
In February 2024, the compensation committee reviewed Mr. Peters’ and Mr. Liawatidewi’s proposal, and upon consideration of the proposed terms of our executive officers’ 2024 compensation, the relevant market data, and management’s performance in 2023, the compensation committee approved the base salaries for our named executive officers as recommended in Mr. Peters’ and Mr. Liawatidewi’s proposal. Short-Term Incentive Compensation We maintain an annual incentive compensation program pursuant to which our named executive officers are eligible to earn cash bonuses based on achievement of performance criteria established by the compensation committee at the beginning of the year. Mr. Peters’ and Mr. Liawatidewi’s proposed to our compensation committee a short-term incentive compensation program for 2024 consisting of the following three components: (i) a general annual bonus opportunity for 2024, (ii) performance-based bonus (“PBB”) opportunity, with the target PBB opportunities effective from March 2024 through February 2025, and (iii) a special discretionary bonus opportunity, each as discussed further below. In February 2024, the compensation committee reviewed Mr. Peters’ and Mr. Liawatidewi’s proposal, and upon consideration of the proposed terms of our executive officers’ 2024 compensation, the relevant market data, and management’s performance in 2023, the compensation committee approved the short-term incentive compensation opportunities for our named executive officers as recommended in Mr. Peters’ and Mr. Liawatidewi’s proposal. General Annual Bonuses For each of our named executive officers, the 2024 general annual bonus opportunity was based on progress towards our strategic goals and individual goals for the named executive officer. The maximum amount of the 2024 general annual bonus that each named executive officer could receive and the actual amount of the general annual bonus paid to each named executive officer are listed in the table below. General annual bonuses are paid upon approval by the compensation committee, after taking into account Dr. Zhang’s evaluation (or in the case of Dr. Zhang’s general annual bonus, the compensation committee’s evaluation) of progress that we had made on strategic goals and that the individual has made on personal goals.
Components of Our Executive Compensation Program
| Named Executive Officer | Maximum General Annual Bonus | Actual General Annual Bonus | | Dr. Zhang | $317,078 | $317,078 | | Mr. Peters | $192,616 | $192,616 | | Dr. Luo | $229,723 | $229,723 | | Mr. Zhou | $135,076 | $135,076 | | Mr. Liawatidewi | $120,375 | $120,375 |
Components of Our Executive Compensation Program
| (1) The general corporate goals were (i) sales growth % above the median compared to WTW compensation peers, (ii) earnings growth % above the median compared to WTW compensation peers, (iii) adjusted BAQSIMI® sales greater than the 2024 forecast, (iv) successful completion of Phase III/pivotal clinical trials for any one of the diabetes product pipeline with good data to support ANDA/NDA/BLA filing, and (v) adjusted net income greater than $145.0 million. |
Components of Our Executive Compensation Program
Special Discretionary Bonuses The compensation committee also established a special discretionary bonus pool of $500,000 under the short-term incentive compensation program for our named executive officers other than Dr. Zhang. The special discretionary bonuses could be awarded to such named executive officers for significant achievements not anticipated at the time the target and stretch PBB opportunities were set. Dr. Zhang was excluded because the compensation committee believed, that as the senior most executive of the Company with responsibility to lead the entire Company, Dr. Zhang should have an overall compensation package more heavily weighted toward compensation subject to pre-established performance criteria. For the other named executive officers, the compensation committee believed that the special bonuses were appropriate in order for the Company to recognize demonstrated leadership by such executive officers during the year beyond the parameters of any specific performance objective. Based on Dr. Zhang’s recommendations, the compensation committee approved the following special discretionary bonuses to the following named executive officers for 2024: (i) $100,000 for Mr. Peters, $50,000 for Mr. Zhou, and $60,000 for Mr. Liawatidewi, for their contribution towards the BAQSIMI® integration; and (ii) $85,000 for Dr. Luo, $50,000 for Mr. Zhou, and $40,000 for Mr. Liawatidewi for the advancement on our product development and pipeline candidates, improving production efficiencies and exceeding our long-term sales goal of $100 million for Primatene® MIST in 2024. The total amount of special discretionary bonuses paid to each named executive officer is as follows:
Components of Our Executive Compensation Program
| Named Executive Officer | Special Bonus Amount | | Mr. Peters | $100,000 | | Dr. Luo | $85,000 | | Mr. Zhou | $100,000 | | Mr. Liawatidewi | $100,000 | | Total: | $385,000 |
Components of Our Executive Compensation Program
| Named Executive Officer | Target Total Cash Compensation | Difference from Relevant Market Data (75th Percentile) | | Dr. Zhang | $1,735,000 | (2%) | | Mr. Peters | 1,004,000 | 19% | | Dr. Luo | 1,189,000 | 28% | | Mr. Zhou | 811,000 | (14%) | | Mr. Liawatidewi | 713,000 | (6%) |
Components of Our Executive Compensation Program
For each of the named executive officers, target total cash compensation included base salary and 70% of the target amount of the named executive officer’s PBB compensation to account for a potential to miss certain targets. Additionally, in the case of the named executive officers other than Dr. Zhang, the target total cash compensation included other cash compensation of $60,000 for Dr. Zhang, $45,000 for each of Mr. Peters and Dr. Luo, and $30,000 for each of Messrs. Zhou and Liawatidewi. Long-Term Incentive Compensation Under their proposal, Mr. Peters and Mr. Liawatidewi recommended that our named executive officers be granted an equal mix of stock options, which incentivize our named executive officers to create additional stockholder value since the stock options deliver value to them only if our stock price increases after the options are granted, and restricted stock units (“RSUs”), which help us retain our named executive officers by providing them with the certainty of receiving some value from their equity awards since the RSUs will never be out of the money. For the equity awards granted to our named executive officers, each equity award would vest annually in equal installments over a 4-year period from the date of grant, and each option would have a 10-year term and an exercise price per share equal to 100% of the fair market value of the Company’s common stock as of the date of the grant. The amounts recommended by Mr. Peters and Mr. Liawatidewi were based on approximately 105% to 112% of the value of the equity awards granted to the named executive officers for 2023. The 5% - 12% increase was recommended due to the Company’s strong operating performance the prior year and to bring the executives closer to the 75th percentile. The compensation committee considered the mix and the intended value of the equity awards recommended by Mr. Peters and Mr. Liawatidewi, and agreed with Mr. Peters’ and Mr. Liawatidewi’s proposal. The compensation committee approved the following equity awards for our named executive officers for 2024:
Components of Our Executive Compensation Program
| HIDDEN_ROW | | | | | | Named Executive Officer | Intended Value of Options(1) | Intended Value of Restricted Stock Units(1) | Total Intended Value of Equity Awards(1) | Difference from Relevant Market Data (75th percentile) | | Dr. Zhang | $3,002,025 | $3,001,991 | $6,004,016 | (4%) | | Mr. Peters | $907,546 | $907,459 | $1,815,005 | 15% | | Dr. Luo | $1,265,512 | $1,265,495 | $2,531,007 | 12% | | Mr. Zhou | $584,525 | $584,480 | $1,169,005 | (23%) | | Mr. Liawatidewi | $502,025 | $501,997 | $1,004,022 | (27%) |
Components of Our Executive Compensation Program
(1)Values shown are as set forth in the Summary Compensation Table further below The intended value of the equity awards for each named executive officer (other than Dr. Luo and Mr. Peters) was below the 75th percentile of the relevant market data because Mr. Peters and Mr. Liawatidewi and the Compensation Committee believed that a 5% - 12% increase was sufficient to reward these executives for their current performance. In February 2024, the compensation committee reviewed Mr. Peters’ and Mr. Liawatidewi’s proposal, and upon consideration of the proposed terms of our executive officers’ 2024 compensation, the relevant market data, and management’s performance in 2023, the compensation committee recommended to our Board of Directors that our named executive officers be granted the equity awards described in Mr. Peters’ and Mr. Liawatidewi’s proposal. Accordingly, our Board of Directors approved the grant of the following equity awards in March 2024.
Components of Our Executive Compensation Program
| Named Executive Officer | Number of Shares Subject to Options | Number of Shares Subject to Restricted Stock Units | | Dr. Zhang | 135,473 | 64,310 | | Mr. Peters | 40,955 | 19,440 | | Dr. Luo | 57,109 | 27,110 | | Mr. Zhou | 26,378 | 12,521 | | Mr. Liawatidewi | 22,655 | 10,754 |
Minimum Vesting
Minimum Vesting The 2015 Plan provides that at least 95% of the shares awarded under the Plan will be subject to a minimum vesting requirement of at least one year.
No Timing of Equity Awards in Relation to Disclosure of Material Nonpublic Information
No Timing of Equity Awards in Relation to Disclosure of Material Nonpublic Information Our Compensation Committee typically grants stock options during regularly scheduled compensation committee meetings during an open trading window, but may, from time to time, also grant stock options by unanimous written consent. We have not granted, nor do we intend to grant, stock options in anticipation of the release of material, nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement, and, we have not taken, nor do we intend to take, material nonpublic information into account when determining the timing or terms of stock options. Similarly, we have not timed, nor do we intend to time, the release of material, nonpublic information for the purpose of affecting the value of executive compensation or for any other purpose.
Fiscal 2024 Summary Compensation Table
Fiscal 2024 Summary Compensation Table The following table sets forth total compensation paid to our named executive officers for the fiscal years 2024, 2023, and 2022.
Fiscal 2024 Summary Compensation Table
| Name and Principal Position | Year | Salary($) | Bonus($) | Non-Equity Incentive Plan Compensation($) | Stock Awards ($)(1) | Option Awards ($)(1) | All Other Compensation ($) | Total($) | | Jack Yongfeng Zhang | 2024 | 915,308 | 317,078 | 444,000 | 3,001,991 | 3,002,025 | 54,357(2) | 7,734,759 | | Chief Executive Officer, | 2023 | 898,000 | 310,847 | 736,000 | 2,858,985 | 2,859,027 | 59,909(3) | 7,722,768 | | President, Chief Scientific Officer | 2022 | 1,113,866(4) | 293,578 | 670,000 | 2,671,992 | 2,672,017 | 56,498(5) | 7,477,951 | | and Director | | | | | | | | | | William J. Peters | 2024 | 625,527 | 292,616 | 121,000 | 907,459 | 907,546 | 56,713(6) | 2,910,861 | | Chief Financial Officer, | 2023 | 612,579 | 283,232 | 261,000 | 840,485 | 840,529 | 55,475(7) | 2,893,300 | | Executive Vice President of Finance, Treasurer, President of International Medication Systems, Limited, and Director | 2022 | 584,058 | 264,147 | 222,000 | 763,967 | 764,034 | 48,972(8) | 2,647,178 | | Mary Ziping Luo | 2024 | 746,038 | 314,723 | 163,000 | 1,265,495 | 1,265,512 | 43,930(9) | 3,798,698 | | Chief Operating Officer, Chief | 2023 | 732,002 | 309,632 | 280,000 | 1,204,994 | 1,205,010 | 43,009(10) | 3,774,647 | | Scientist and Chairman | 2022 | 907,964(11) | 309,732 | 256,000 | 1,125,993 | 1,126,017 | 56,355(12) | 3,782,061 | | Rong Zhou | 2024 | 564,476(13) | 235,076 | 116,000 | 584,480 | 584,525 | 43,361(14) | 2,127,918 | | Senior Executive Vice President | 2023 | 542,334(15) | 209,876 | 167,000 | 531,482 | 531,533 | 43,087(16) | 2,025,312 | | of Production and President of Amphastar Nanjing Pharmaceuticals, Co., Ltd | 2022 | 463,116 | 196,251 | 134,000 | 474,479 | 474,534 | 41,686(17) | 1,784,066 | | Jacob Liawatidewi | 2024 | 480,789 | 220,375 | 75,000 | 501,997 | 502,025 | 41,576(18) | 1,821,762 | | Executive Vice President of | 2023 | 495,545(19) | 195,851 | 148,000 | 447,978 | 448,023 | 40,702(20) | 1,776,099 | | Sales and Marketing, Executive Vice President of Corporate Administration Center and President of Amphastar France Pharmaceuticals, S.A.S. | 2022 | 440,348 | 190,851 | 123,000 | 399,996 | 400,017 | 39,956(21) | 1,594,168 |
Fiscal 2024 Summary Compensation Table
| (1) This amount reflects the aggregate grant fair value computed in accordance with ASC Topic 718. The assumptions that we used to calculate these amounts are discussed in Note 16 to our consolidated financial statements included in our Annual Report on Form 10-K, as filed with the SEC on March 3, 2025. |
Fiscal 2024 Summary Compensation Table
| (2) The amount includes a $10,350 Company contribution made under our 401(k) plan; $35,703 vehicle allowance; a $4,944 group life insurance benefit in excess of the standard threshold granted to all other employees; and $3,360 for additional medical expenses. |
Fiscal 2024 Summary Compensation Table
| (3) The amount includes a $9,900 Company contribution made under our 401(k) plan; a $35,243 vehicle allowance; a $4,944 group life insurance benefit in excess of the standard threshold granted to all other employees; and $9,822 for additional medical expenses. |
Fiscal 2024 Summary Compensation Table
| (4) The amount includes $215,866 in accrued paid vacation, which was elected to be taken in the form of cash. |
Fiscal 2024 Summary Compensation Table
| (5) The amount includes a $9,150 Company contribution made under our 401(k) plan; a $34,239 vehicle allowance; a $4,944 group life insurance benefit in excess of the standard threshold granted to all other employees; and $8,165 for additional medical expenses. |
Fiscal 2024 Summary Compensation Table
| (6) The amount includes a $10,350 Company contribution made under our 401(k) plan; employee health and dental insurance premiums of $11,718; $7,415 life and disability insurance premium payments; $2,651 for additional medical expenses; $22,257 for vehicle allowance; and a $2,322 group life insurance benefit in excess of the standard threshold to all other employees. |
Fiscal 2024 Summary Compensation Table
| (7) The amount includes a $9,900 Company contribution made under our 401(k) plan; employee health and dental insurance premiums of $10,967; $12,916 life and disability insurance premium payments; $4,180 for estate planning services; $15,190 for vehicle allowance; and a $2,322 group life insurance benefit in excess of the standard threshold to all other employees. |
Fiscal 2024 Summary Compensation Table
| (8) The amount includes a $9,150 Company contribution made under our 401(k) plan; employee health and dental insurance premiums of $10,652; $8,296 life and disability insurance premium payments; $6,049 for additional medical expenses; $12,503 for vehicle allowance; and a $2,322 group life insurance benefit in excess of the standard threshold to all other employees. |
Fiscal 2024 Summary Compensation Table
| (9) The amount includes a $10,350 Company contribution made under our 401(k) plan; a $28,636 vehicle allowance; and a $4,944 group life insurance benefit in excess of the standard threshold granted to all other employees. |
Fiscal 2024 Summary Compensation Table
| (10) The amount includes a $9,900 Company contribution made under our 401(k) plan; a $28,165 vehicle allowance; and a $4,944 group life insurance benefit in excess of the standard threshold granted to all other employees. |
Fiscal 2024 Summary Compensation Table
| (11) The amount includes $175,962 in accrued paid vacation, which was elected to be taken in the form of cash. |
Fiscal 2024 Summary Compensation Table
| (12) The amount includes a $9,150 Company contribution made under our 401(k) plan; a $34,096 vehicle allowance; a $4,944 group life insurance benefit in excess of the standard threshold granted to all other employees; and a $8,165 for additional medical expenses. |
Fiscal 2024 Summary Compensation Table
| (13) The amount includes $24,976 in accrued paid vacation, which was elected to be taken in the form of cash |
Fiscal 2024 Summary Compensation Table
| (14) The amount includes a $9,180 Company contribution made under our 401(k) plan; employee health and dental insurance premiums of $7,007; additional medical expenses of $6,356; $16,627 for vehicle allowance; and a $4,191 group life insurance benefit in excess of the standard threshold to all other employees. |
Fiscal 2024 Summary Compensation Table
| (15) The amount includes $24,976 in accrued paid vacation, which was elected to be taken in the form of cash. |
Fiscal 2024 Summary Compensation Table
| (16) The amount includes a $9,049 Company contribution made under our 401(k) plan; employee health and dental insurance premiums of $6,615; additional medical expenses of $5,679; $17,368 for vehicle allowance; $185 for tax preparation fees; and a $4,191 group life insurance benefit in excess of the standard threshold to all other employees. |
Fiscal 2024 Summary Compensation Table
| (17) The amount includes a $8,145 Company contribution made under our 401(k) plan; employee health and dental insurance premiums of $6,710; additional medical expenses of $5,878; $17,255 for vehicle allowance; $134 for tax preparation fees; and a $3,564 group life insurance benefit in excess of the standard threshold to all other employees. |
Fiscal 2024 Summary Compensation Table
| (18) The amount includes a $10,350 Company contribution made under our 401(k) plan; $3,589 for additional life insurance; $950 for tax preparation fees; $25,445 for vehicle allowance; and a $1,242 group life insurance benefit in excess of the standard threshold to all of our employees. |
Fiscal 2024 Summary Compensation Table
| (19) The amount includes $33,390 in accrued paid vacation, which was elected to be taken in the form of cash. |
Fiscal 2024 Summary Compensation Table
| (20) The amount includes a $9,900 Company contribution made under our 401(k) plan; $3,590 for additional life insurance; additional medical expenses of $1,050; $450 for tax preparation fees; $24,902 for vehicle allowance; and a $810 group life insurance benefit in excess of the standard threshold to all of our employees. |
Fiscal 2024 Summary Compensation Table
| (21) The amount includes a $9,150 Company contribution made under our 401(k) plan; $4,230 for additional life insurance; $275 for tax preparation fees; $25,491 for vehicle allowance; and a $810 group life insurance benefit in excess of the standard threshold to all of our employees. |
Outstanding Equity Awards at 2024 Year-End
Outstanding Equity Awards at 2024 Year-End The following table sets forth summary information regarding the outstanding equity awards for each of the named executive officers as of December 31, 2024:
Outstanding Equity Awards at 2024 Year-End
| | | Option Awards(1) | | | | Stock Awards | | | | | | | | | | Market | | | | | | | | Number of | Value of | | | | Number of | Number of | | | Shares or | Shares or | | | | Securities | Securities | | | Units of | Units of | | | | Underlying | Underlying | | | Stock | Stock That | | | | Unexercised | Unexercised | Option | Option | That | Have Not | | | Grant | Options (#) | Options (#) | Exercise | Expiration | Have Not | Vested | | Name | Date | Exercisable | Unexercisable | Price ($) (2) | Date | Vested (#) | ($) (3) | | Jack Y. Zhang | 3/16/17 | 290,477(4) | — | 14.69 | 3/16/25 | — | — | | | 3/15/18 | 273,692(4) | — | 21.77 | 3/15/26 | — | — | | | 3/15/19 | 262,182(4) | — | 22.25 | 3/15/27 | — | — | | | 3/16/20 | 405,003(4) | — | 13.03 | 3/16/28 | — | — | | | 3/17/21 | 224,016(5) | 74,672 | 17.99 | 3/17/31 | — | — | | | 3/17/21 | — | — | — | — | 31,802(6) | 1,180,808 | | | 3/15/22 | 88,731(5) | 88,730 | 34.74 | 3/15/32 | — | — | | | 3/15/22 | — | — | — | — | 38,457(7) | 1,427,908 | | | 3/6/23 | 42,872(5) | 128,616 | 35.13 | 3/6/33 | — | — | | | 3/6/23 | — | — | — | — | 61,037(8) | 2,266,304 | | | 3/4/24 | —(5) | 135,473 | 46.68 | 3/4/34 | — | — | | | 3/4/24 | — | — | — | — | 64,310(9) | 2,387,830 | | William J. Peters | 3/16/17 | 7,490(4) | — | 13.35 | 3/16/27 | — | — | | | 3/15/18 | 5,053(4) | — | 19.79 | 3/15/28 | — | — | | | 3/15/19 | 4,943(4) | — | 20.23 | 3/15/29 | — | — | | | 3/16/20 | 23,674(4) | — | 13.03 | 3/16/30 | — | — | | | 3/17/21 | 59,125(5) | 19,708 | 17.99 | 3/17/31 | — | — | | | 3/17/21 | — | — | — | — | 8,393(6) | 311,632 | | | 5/19/21 | 5,407(5) | 1,802 | 19.82 | 5/19/31 | — | — | | | 5/19/21 | — | — | — | — | 761(10) | 28,256 | | | 3/15/22 | 25,372(5) | 25,371 | 34.74 | 3/15/32 | — | — | | | 3/15/22 | — | — | — | — | 10,995(7) | 408,244 | | | 3/6/23 | 12,604(5) | 37,812 | 35.13 | 3/6/33 | — | — | | | 3/6/23 | — | — | — | — | 17,943(8) | 666,224 | | | 3/4/24 | —(5) | 40,955 | 46.68 | 3/4/34 | — | — | | | 3/4/24 | — | — | — | — | 19,440(9) | 721,807 | | Mary Z. Luo | 3/16/17 | 211,213(4) | — | 14.69 | 3/16/25 | — | — | | | 3/15/18 | 116,392(4) | — | 21.77 | 3/15/26 | — | — | | | 3/15/19 | 110,671(4) | — | 22.25 | 3/15/27 | — | — | | | 3/16/20 | 181,134(4) | — | 13.03 | 3/16/28 | — | — | | | 3/17/21 | 100,189(5) | 33,396 | 17.99 | 3/17/31 | — | — | | | 3/17/21 | — | — | — | — | 14,223(6) | 528,100 | | | 3/15/22 | 37,392(5) | 37,392 | 34.74 | 3/15/32 | — | — | | | 3/15/22 | — | — | — | — | 16,206(7) | 601,729 | | | 3/6/23 | 18,070(5) | 54,208 | 35.13 | 3/6/33 | — | — | | | 3/6/23 | — | — | — | — | 25,725(8) | 955,169 | | | 3/4/24 | —(5) | 57,109 | 46.68 | 3/4/34 | — | — | | | 3/4/24 | — | — | — | — | 27,110(9) | 1,006,594 | | Rong Zhou | 3/17/16 | 9,787(4) | — | 11.33 | 3/17/26 | — | — | | | 3/16/17 | 29,424(4) | — | 13.35 | 3/16/27 | — | — | | | 3/15/18 | 20,827(4) | — | 19.79 | 3/15/28 | — | — | | | 3/15/19 | 22,541(4) | — | 20.23 | 3/15/29 | — | — | | | 3/16/20 | 61,822(4) | — | 13.03 | 3/16/30 | — | — | | | 3/17/21 | 38,716(5) | 12,905 | 17.99 | 3/17/31 | — | — | | | 3/17/21 | — | — | — | — | 5,496(6) | 204,066 | | | 3/15/22 | 15,758(5) | 15,758 | 34.74 | 3/15/32 | — | — | | | 3/15/22 | — | — | — | — | 6,829(7) | 253,561 | | | 3/6/23 | 7,971(5) | 23,911 | 35.13 | 3/6/33 | — | — | | | 3/6/23 | — | — | — | — | 11,346(8) | 421,277 | | | 3/4/24 | —(5) | 26,378 | 46.68 | 3/4/34 | — | — | | | 3/4/24 | — | — | — | — | 12,521(9) | 464,905 | | Jacob Liawatidewi | 3/16/20 | 10,962(4) | — | 13.03 | 3/16/30 | — | — | | | 6/4/20 | 7,091(4) | — | 19.19 | 6/4/30 | — | — | | | 3/17/21 | 34,065(5) | 11,355 | 17.99 | 3/17/31 | — | — | | | 3/17/21 | — | — | — | — | 4,836(6) | 179,561 | | | 3/15/22 | 13,284(5) | 13,283 | 34.74 | 3/15/32 | — | — | | | 3/15/22 | — | — | — | — | 5,757(7) | 213,757 | | | 3/6/23 | 6,719(5) | 20,154 | 35.13 | 3/6/33 | — | — | | | 3/6/23 | — | — | — | — | 9,564(8) | 355,111 | | | 3/4/24 | —(5) | 22,655 | 46,68 | 3/4/34 | — | — | | | 3/4/24 | — | — | — | — | 10,754(9) | 399,296 |
Outstanding Equity Awards at 2024 Year-End
| (1) Information for this table is depicted on an award-by-award basis unless the exercise price and expiration date are identical. |
Outstanding Equity Awards at 2024 Year-End
| (2) This column represents the fair value of a share of our common stock on the date of grant, as determined by our Board of Directors. |
Outstanding Equity Awards at 2024 Year-End
| (3) This column represents the market value of the shares of our common stock underlying the RSUs as of December 31, 2024, based on the closing price of our common stock, as reported on the Nasdaq Global Select Market, of $37.13 per share on December 31, 2024. |
Outstanding Equity Awards at 2024 Year-End
| (4) Shares subject to the option are fully vested and immediately exercisable. |
Outstanding Equity Awards at 2024 Year-End
| (5) Shares subject to the option vest in four equal annual installments beginning on the first anniversary of the grant date, subject to continued service. |
Outstanding Equity Awards at 2024 Year-End
| (6) The RSUs set forth above, which represent the remaining portion of the applicable RSU award, vest on March 17, 2025, subject to continued service. |
Outstanding Equity Awards at 2024 Year-End
| (7) The RSUs set forth above, which represents the remaining portion of the applicable RSU award, vest in two equal annual installments beginning on March 15, 2025, subject to continued service. |
Outstanding Equity Awards at 2024 Year-End
| (8) The RSUs set forth above, which represents the remaining portion of the applicable RSU award, vest in three equal annual installments beginning on March 6, 2025, subject to continued service. |
Outstanding Equity Awards at 2024 Year-End
| (9) The RSUs set forth above, which represents the remaining portion of the applicable RSU award, vest in four equal annual installments beginning on March 4, 2025, subject to continued service. |
Outstanding Equity Awards at 2024 Year-End
| (10) The RSUs set forth above, which represents the remaining portion of the applicable RSU award, vest on May 19, 2025, subject to continued service. |
2024 Grants of Plan-Based Awards
2024 Grants of Plan-Based Awards The following table sets forth grants of plan-based awards for each of the named executive officers for the fiscal year ended December 31, 2024:
2024 Grants of Plan-Based Awards
| | | Estimated Future Payouts under Non-Equity Incentive Plan(1) | | | | | | | | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | All Other Stock Awards: Number of Securities Underlying Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($/Sh)(2) | | Grant Date Fair Value of Stock and Option Awards($)(3) | | Jack Y. Zhang | | 506,000 | 632,000 | 947,000 | | | | | | | | 3/4/2024 | | | | 64,310 | — | | — | 3,001,991 | | | 3/4/2024 | | | | — | 135,473 | | 46.68 | 3,002,025 | | William J. Peters | | 160,000 | 201,000 | 302,000 | | | | | | | | 3/4/2024 | | | | 19,440 | — | | — | 907,459 | | | 3/4/2024 | | | | — | 40,955 | | 46.68 | 907,546 | | Mary Z. Luo | | 192,000 | 238,000 | 357,000 | | | | | | | | 3/4/2024 | | | | 27,110 | — | | — | 1,265,495 | | | 3/4/2024 | | | | — | 57,109 | | 46.68 | 1,265,512 | | Rong Zhou | | 121,000 | 152,000 | 228,000 | | | | | | | | 3/4/2024 | | | | 12,521 | — | | — | 584,480 | | | 3/4/2024 | | | | — | 26,378 | | 46.68 | 584,525 | | Jacob Liawatidewi | | 93,000 | 115,000 | 175,000 | | | | | | | | 3/4/2024 | | | | 10,754 | — | | — | 501,997 | | | 3/4/2024 | | | | — | 22,655 | | 46.68 | 502,025 |
2024 Grants of Plan-Based Awards
| (1) The amounts in the threshold, target and maximum columns reflect the minimum, target, and super stretch PBB amounts payable, respectively, which is described above in the “Compensation Discussion and Analysis” under the heading “Performance-Based Bonus.” The actual amounts paid to each named executive officer can be found in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.” |
2024 Grants of Plan-Based Awards
| (2) For each of the named executive officers the exercise price represents the per share fair market value of our common stock on the grant date as determined by our Board of Directors. |
2024 Grants of Plan-Based Awards
| (3) This amount reflects the aggregate grant fair value computed in accordance with ASC Topic 718. The assumptions that we used to calculate these amounts are discussed in Note 16 to our consolidated financial statements included in our Annual Report on Form 10-K, as filed with the SEC on March 3, 2025. |
2024 Options Exercised and Stock Vested
2024 Options Exercised and Stock Vested The following table summarizes the option exercises and vesting of stock awards for each of the named executive officers for the fiscal year ended December 31, 2024.
2024 Options Exercised and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($)(2) | | Jack Y. Zhang | 922,046 | $28,122,387 | 71,376 | $3,139,065 | | William J. Peters | 26,534 | 846,739 | 30,708 | 1,341,808 | | Mary Z. Luo | 310,930 | 9,511,349 | 30,902 | 1,358,289 | | Rong Zhou | 28,893 | 970,279 | 19,293 | 842,896 | | Jacob Liawatidewi | 5,214 | 203,450 | 16,345 | 713,413 |
2024 Options Exercised and Stock Vested
| (1) The value realized on exercise is the difference between the market price of the shares of our common stock underlying the option when exercised and the applicable exercise price. |
2024 Options Exercised and Stock Vested
| (2) The value realized upon vesting of RSUs is calculated by multiplying the number of shares vested by the closing price of our common stock on the vesting date (or, in the event the vesting date occurs on a holiday or weekend, the closing price of our common stock on the immediately preceding trading day). |
2024 Nonqualified Deferred Compensation Plan
2024 Nonqualified Deferred Compensation Plan In order to enhance our ability to attract and retain qualified employees, in December 2019 our Board approved our Deferred Compensation Plan, which is intended to comply with the requirements of Section 409A of the Internal Revenue Code. The Deferred Compensation Plan is intended to be an unfunded plan which is maintained primarily to permit deferral of eligible compensation by a select group of management or highly compensated employees or independent contractors who have been notified during an applicable enrollment of their status as eligible participants, including our named executive officers. Under the Deferred Compensation Plan, participants will have the opportunity to make elections to defer up to a specified amount or percentage of their eligible cash compensation, as established by the administrator, and we have the option, but not the obligation, to make discretionary or matching cash contributions. Unless otherwise specified by the administrator of the Deferred Compensation Plan and subject to applicable tax laws, the Deferred Compensation Plan provides eligible participants the opportunity to defer up to 75% of their base salary and up to 100% of certain of their bonuses, commissions, and other cash or equity-based compensation approved by the administrator of the Deferred Compensation Plan. Participants will be 100% vested at all times in their cash deferrals, and participants’ deferrals of vesting awards will become vested according to the provisions of the underlying award. Each participant may allocate his or her deferrals to accounts under the Deferred Compensation Plan that provide for payment of deferred amounts upon specified events, such as the participant’s retirement, other separation from service, and/or other predetermined times. Participants may elect to receive payment of their account balances in a single lump-sum distribution or in annual installments (as elected by the participant in accordance with the Deferred Compensation Plan), except in certain limited circumstances and provided that payments upon a participant’s death will be provided in a single lump sum. In addition, the Company may, in its sole discretion, provide matching, profit sharing, and/or other contributions to the Deferred Compensation Plan, including make-up matching contributions with respect to deferrals that reduce 401(k) plan compensation below the compensation limit in Section 401(a)(17) of the Internal Revenue Code and supplemental matching contributions with respect to compensation deferred above such compensation limit. These contributions, if any, may be subject to a vesting schedule as provided by the administrator of the Deferred Compensation Plan. Make-up and supplemental matching contributions vest at the same rate as matching contributions under the Company’s 401(k) plan. Deferrals of equity-based compensation will vest as provided under the terms of the applicable award. All of a participant’s Company contributions become 100% vested, if while employed by the Company, the participant dies, becomes disabled, or attains the age of 65 or the Company experiences a change in control. Company contributions will be credited to the applicable participant’s account under the Deferred Compensation Plan that becomes payable upon the participant’s retirement. Participants can allocate their account balances amongst various investment choices established by the administrator under the Deferred Compensation Plan, with earnings accruing to the participant’s account. The value of the accounts may increase or decrease depending upon the performance of the selected investments. The administrator of the Deferred Compensation Plan may add or remove investment choices from time to time, provided that such changes will not be effective for any period before the effective date of such change. Participant investment allocations become effective on the same business day or, if an investment allocation is received after a specified period of time designated by the administrator of the Deferred Compensation Plan, the next business day. Participants may change investment allocations, which will become effective on the same business day or, if an investment allocation is received after a specified period of time designated by the administrator of the Deferred Compensation Plan, the next business day. If a participant does not make an investment allocation with respect to an account under the Deferred Compensation Plan, then the account balances will be invested in an investment choice selected by the administrator of the Deferred Compensation Plan for which its primary objective is preservation of capital. Valuations of accounts are performed in accordance with such procedures as are established by the administrator of the Deferred Compensation Plan. Upon a participant’s death or separation from service with the Company, the balances under any of the participant’s accounts that are payable in connection with retirement or separation from service will be paid in a single lump sum in the calendar year following the calendar year in which the separation from service occurs (or if the participant has attained 55 years of age and 10 years of service at the time of such separation, in any later calendar year that had been elected by the participant). If the separation from service occurs before the participant attains 55 years of age and 10 years of service, balances under any of the participant’s accounts payable on specified dates also will be paid in a single lump sum in the calendar year following the calendar year in which the separation from service occurs, notwithstanding the specified dates applicable to such accounts. The Deferred Compensation Plan provides its plan administrator with the authority to accelerate or delay the payment timing of account balances, provided such changes are permitted under applicable tax rules and requirements. Compensation deferred under the Deferred Compensation Plan represents an unsecured obligation of the Company. Amounts deferred under the Deferred Compensation Plan are held in a separate rabbi trust established to pay Deferred Compensation Plan benefits. The following table summarizes activity under the Deferred Compensation Plan in 2024:
2024 Nonqualified Deferred Compensation Plan
| Name | Executive Contribution in last FY ($)(1) | Registrant Contributions in last FY ($) | Aggregate Earnings (loss) in last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at last FYE ($)(2) | | Jack Y. Zhang | — | — | — | — | — | | William J. Peters | 205,884 | — | 80,343 | — | 717,542 | | Mary Z. Luo | — | — | — | — | — | | Rong Zhou | 539,467 | — | 152,373 | 7,577 | 2,055,591 | | Jacob Liawatidewi | — | — | 14,756 | 16,608 | 148,027 |
2024 Nonqualified Deferred Compensation Plan
| (1) These amounts represent each named executive officer’s deferrals of salary and/or bonus amounts earned for 2024 and were also reported in the columns entitled “Salary” and/or “Bonus” in the Summary Compensation Table. |
2024 Nonqualified Deferred Compensation Plan
| (2) These amounts include each named executive officer’s deferrals of salary and/or bonus amounts earned in aggregate for 2022, 2023 and 2023, are reported in the columns entitled “Salary” and/or “Bonus” in the Summary Compensation Table for 2022, 2023 and 2024: $717,542 for Mr. Peters, $2,055,591 for Mr. Zhou, and $148,027 for Mr. Liawatidewi. |
Potential Payments upon Termination or Change of Control
Potential Payments upon Termination or Change of Control We have entered into an employment agreement with Jack Y. Zhang, Mary Z. Luo and William J. Peters that govern the terms of each such named executive officer’s employment. Each employment agreement provided for an initial term of three years and is automatically extended for successive one-year periods, unless one of the parties provides the other 90 days’ prior notice before the expiration of the annual renewal term that the term will not be extended. Each employment agreement is terminable (i) by the applicable named executive officer at any time, provided the named executive officer gives at least four weeks’ prior notice of resignation; (ii) by us at any time; or (iii) due to the disability or death of the named executive officer. Pursuant to each employment agreement, unless the applicable named executive officer resigns without “good reason” (as defined in the employment agreement) or the named executive officer’s employment is terminated for “cause” (as defined in the employment agreement), the named executive officer is entitled to any applicable prorated bonus, based on actual performance for the year of termination, as determined by the Board of Directors in its discretion when making bonus determinations for other senior executives and payable at such time as annual bonuses are otherwise determined for such other senior executives. If we do not renew an employment agreement at the end of any renewal term, the applicable named executive officer’s employment is terminated by us without “cause” (as defined in the employment agreement), or the named executive officer resigns with “good reason” (as defined in the employment agreement), then such named executive officer, conditioned upon execution of a release in form and substance satisfactory to us, is entitled to: • an amount equal to three, or two in the case of Mr. Peters, times the sum of (i) the highest base annual salary in effect during the 12 months immediately prior to the date of termination, plus (ii) the average annual bonus earned by the named executive officer for the most recent three, or two in the case of Mr. Peters, fiscal years ending prior to the date of termination or the base salary for the remainder of the agreement, whichever is greater, such amount to be paid in cash or immediately-available funds in a lump sum thirty days following the date of termination;
Potential Payments upon Termination or Change of Control
| • | continued payment of his or her health insurance premiums as may be necessary to allow the named executive officer and his or her spouse and dependents to continue to receive health insurance coverage substantially similar to the coverage they received prior to the date of termination of the named executive officer’s employment, for a period of 12 months or the remainder of the term of the agreement, which is greater commencing on the date of termination; and |
Potential Payments upon Termination or Change of Control
| • | vesting of any restricted stock, stock option or other equity compensation awards granted by us, except to the extent that the provisions of the applicable restricted stock, stock option or other equity award are more favorable. |
Potential Payments upon Termination or Change of Control
Under each employment agreement, if, on or within one year after a “change of control” (as defined in the employment agreement), the applicable named executive officer’s employment is terminated by us without “cause” (as defined in the employment agreements), or the named executive officer resigns with “good reason” (as defined in the employment agreements), then such named executive officer, conditioned upon execution of a release in form and substance satisfactory to us, is also entitled to receive the following severance benefits, in addition to the severance benefits described above:
Potential Payments upon Termination or Change of Control
| • | payment in an amount equal to three, or two in the case of Mr. Peters, times the sum of (i) the highest base salary in effect during the 12 months immediately prior to the date of termination, plus (ii) the average annual bonus earned by the named executive officer for the most recent three, or two in the case of Mr. Peters, fiscal years ending prior to the date of termination, such amount to be paid in cash or immediately-available funds in a lump sum sixty days following the date of termination; |
Potential Payments upon Termination or Change of Control
| • | extension of the period that we will provide the health insurance premium payments described above by 12 months; and |
Potential Payments upon Termination or Change of Control
| • | full vesting of all restricted stock, stock options or other equity compensation awards granted by us that were unvested immediately prior to the change in control, except to the extent that the provisions of the applicable restricted stock, stock option or other equity award are more favorable. |
Potential Payments upon Termination or Change of Control
In addition, each of these employment agreements provides that in the event any payments and benefits (including the severance benefits under the employment agreement) provided to the applicable named executive officer would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and could be subject to the related excise tax, the named executive officer would be entitled to receive either the full amount of such payments and benefits or such lesser amount which would result in no portion of the benefits being subject to the excise tax, whichever results in the greater after-tax amount of payments and benefits to the named executive officer. As defined in the employment agreements, “cause” generally means (i) the continued willful failure by the applicable named executive officer to substantially perform his or her duties with the Company, (ii) the willful engaging by named executive officer in misconduct materially and demonstrably injurious to the Company or (iii) the named executive officer’s material breach of the employment agreement; provided, that with respect to any breach that is curable by the named executive officer, as determined by our Board of Directors in good faith, the Company has provided the named executive officer written notice of the material breach and the named executive officer has not cured such breach, as determined by our Board of Directors in good faith, within 15 days following the date the Company provides such notice. As defined in the employment agreements, “good reason” generally means: (i) a material reduction (without the applicable named executive officer’s express written consent) in the named executive officer’s duties or responsibilities; (ii) the requirement that the named executive officer relocate to an employment location that is more than 50 miles from his or her employment location on the effective date of the employment agreement; or (iii) the Company’s material breach (without the named executive officer’s express written consent) of the employment agreement; provided, that the named executive officer has provided the Company written notice of the material breach and the Company has not cured such breach within 15 days following the date the named executive officer provides such notice. The following table provides an estimate of the severance benefits that would be provided to Dr. Zhang, Dr. Luo, and Mr. Peters in the circumstances described above pursuant to their employment agreements, assuming the triggering event took place on December 31, 2024 (the last business day of 2024) and based on the $37.13 closing price for a share of our common stock on the Nasdaq Stock Market on that date. Due to the number of factors that affect the nature and amount of the severance benefits, the amount of the severance benefits actually provided (if any) may be different. For example, a triggering event may occur on a different date, the price per share of our common stock on the date of the triggering event may not be $37.13, or the assumptions relied upon in the estimate of potential severance benefits below may not reflect the actual circumstances of the triggering event. As a result, there is no guarantee that a qualifying termination would produce the same or similar results as those estimated below.
Potential Payments upon Termination or Change of Control
| Name | Severance Benefit | Termination Apart from a Change of Control ($) | Termination in Connection with a Change of Control ($) | | Jack Y. Zhang | Cash Severance(1) | 5,519,503 | 11,039,006 | | | Equity Acceleration(2) | 9,161,370 | 9,161,370 | | | Health Coverage(3) | 5,478 | 10,956 | | | Total | 14,686,351 | 20,211,332 | | William J. Peters | Cash Severance(1) | 2,209,848 | 4,419,696 | | | Equity Acceleration(2) | 2,680,828 | 2,680,828 | | | Health Coverage(3) | 11,718 | 23,436 | | | Total | 4,902,394 | 7,123,960 | | Mary Z. Luo | Cash Severance(1) | 3,872,887 | 7,745,774 | | | Equity Acceleration(2) | 3,928,575 | 3,928,575 | | | Health Coverage(3) | 7,426 | 14,852 | | | Total | 7,808,888 | 11,689,201 |
Potential Payments upon Termination or Change of Control
| (1) This amount represents (i) the prorated bonus based on actual performance for the year of termination and (ii) the lump sum cash severance payment(s) calculated based on the named executive officer’s base salary and average annual bonus, in each case as described above. |
Potential Payments upon Termination or Change of Control
| (2) This amount represents the value of the named executive officer’s vesting acceleration benefit described above, which is calculated for each equity award by multiplying (i) the number of shares covered by the equity award that accelerate multiplied |
Potential Payments upon Termination or Change of Control
by (ii) the excess, if any, of the closing sales price per share of our common stock on December 31, 2024 ($37.13) over the equity award’s exercise price, if any.
Potential Payments upon Termination or Change of Control
| (3) This amount represents the continued payment of health insurance premiums described above. |
CEO Pay Ratio
CEO Pay Ratio We calculated our President and CEO pay ratio described below in compliance with the requirements set forth in Item 402(u) of Regulation S-K. We identified the median employee using our employee population, excluding the CEO, as of December 31, 2024, which included 2,028 global full-time and part-time employees employed on that date, and used our consistently applied compensation measure of base salary or wages paid for the year through December 31, 2024. Nearly all of our employees receive an annual base salary (paid on an hourly, weekly, biweekly or monthly basis), which reasonably reflects the annual compensation of our employees. For employees outside the United States, we converted the annual base salary into United States dollars using the applicable exchange rates on December 31, 2024. Once we identified our median employee, we then calculated the median employee’s annual total compensation in the same manner as the named executive officers found in the Summary Compensation Table on page 44. Our median employee’s annual total compensation was $82,289. Our President and Chief Executive Officer’s annual total compensation disclosed in the Total column of the Summary Compensation Table was $7,734,759. Accordingly, our estimated President and Chief Executive Officer to median employee pay ratio for 2024 was 94:1. Approximately 26% of the employees who earned below the median were employed in China, where wages are systematically lower than in the U.S.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company’s aligns executive compensation with the Company’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”
PAY VERSUS PERFORMANCE
| | | | | | Value of Initial Fixed $100 Investment | | | | | | Summary | Compensation | Average Summary | Average | Based On: | | | | | | Compensation | Actually | Compensation | Compensation | Total | Peer Group Total | | | | | Table Total | Paid to | Table for | Actually Paid to | Shareholder | Shareholder | Net Income | Sales Growth | | Year | for PEO (1) | PEO (1)(3) | Non-PEO NEOs (2) | Non-PEO NEOs (2)(3) | Return (4) | Return (5) | (in '000) (6) | vs. 2023 (7) | | 2024 | $7,734,759 | $(7,626,181) | $2,664,810 | $(1,732,515) | $192.48 | $118.20 | $159,519 | 13.6% | | 2023 | 7,722,768 | 28,909,273 | 2,617,340 | 8,787,219 | 320.63 | 118.87 | 137,545 | 29.1% | | 2022 | 7,477,951 | 12,892,333 | 2,451,868 | 3,860,080 | 145.26 | 113.65 | 91,386 | 14.0% | | 2021 | 6,509,420 | 8,829,336 | 2,233,883 | 2,890,154 | 120.74 | 126.45 | 62,116 | 25.1% | | 2020 | 5,962,949 | 6,951,075 | 2,948,576 | 1,958,840 | 104.25 | 126.42 | 1,403 | 8.5% |
PAY VERSUS PERFORMANCE
| (1) Jack Y. Zhang served as our principal executive officer (PEO) for each of the years 2024, 2023, 2022, 2021, and 2020. |
PAY VERSUS PERFORMANCE
| (2) Our non-PEO named executive officers (NEOs) for each of the years 2024, 2023, 2022, 2021, and 2020 were: (i) William J. Peters, Mary Ziping Luo, Rong Zhou, and Jacob Liawatidewi for 2023, 2022 and 2021, and (ii) William J. Peters, Mary Ziping Luo, Jason B. Shandell, Rong Zhou, and Jacob Liawatidewi for 2020. |
PAY VERSUS PERFORMANCE
| (3) The Compensation Actually Paid Schedule shown below sets forth the adjustment made during each year represented in the Pay Versus Performance Table to arrive at the “compensation actually paid” to our PEO and average “compensation actually paid” to our non-PEO NEOs. |
Compensation Actually Paid Schedule
Compensation Actually Paid Schedule
Compensation Actually Paid Schedule
| | 2024 | | 2023 | | 2022 | | 2021 | | 2020 | | | | CEO | Average Non-PEO NEOs | CEO | Average Non-PEO NEOs | CEO | Average Non-PEO NEOs | CEO | Average Non-PEO NEOs | CEO | Average Non-PEO NEOs | | Summary Compensation table total for applicable year. | $7,734,759 | $2,664,810 | $7,722,768 | $2,617,340 | $7,477,951 | $2,451,868 | $6,509,420 | $2,233,883 | $5,962,949 | $2,948,576 | | Deduction for amounts reported under the “Stock Awards” and “Option Awards” columns in the Summary Compensation table for applicable year. | (6,004,016) | (1,629,760) | (5,718,012) | (1,512,509) | (5,344,009) | (1,382,259) | (4,577,008) | (1,215,707) | (3,980,003) | (1,624,237) | | Increase based on ASC Topic 718 fair value of Awards granted during applicable year that remain unvested as of applicable year end, determined as of applicable year end | 4,414,977 | 1,198,421 | 11,715,603 | 3,098,979 | 4,179,167 | 1,080,965 | 6,373,743 | 1,688,333 | 7,152,085 | 1,441,852 | | Increase/deduction for Awards granted in prior years that were outstanding and unvested as of applicable year end, determined based on change in ASC Topic 718 fair value from the prior year end to the applicable year end. | (9,857,768) | (2,591,675) | 12,258,999 | 3,821,789 | 2,338,630 | 701,571 | 1,010,138 | 291,068 | (231,663) | (31,974) | | Increase/deduction for Awards granted in prior years that vested during the applicable year, determined based on change in ASC Topic 718 fair value from the prior year end to the vesting date | (3,914,133) | (1,374,311) | 2,929,915 | 761,620 | 4,240,594 | 1,007,935 | (486,957) | (107,423) | (1,952,293) | (674,251) | | Deduction of Awards granted in prior year that were forfeited in the applicable year, determined based on ASC Topic 718 fair value as of prior year end | - | - | - | - | - | - | - | - | - | (101,127) | | Compensation Actually Paid for applicable year | $(7,626,181) | $(1,732,515) | $28,909,273 | $8,787,219 | $12,892,333 | $3,860,080 | $8,829,336 | $2,890,154 | $6,951,075 | $1,958,840 |
Compensation Actually Paid Schedule
| (4) Represents the cumulative total shareholder return of the Company’s common stock, based on an initial fixed investment of $100 made on the market close on the last trading day before the earliest fiscal year in the table, assuming the reinvestment of any dividends |
Compensation Actually Paid Schedule
| (5) Represents the cumulative total shareholder return of the NASDAQ Biotechnology index (which is the peer group we used for the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2024) based on an initial fixed investment of $100 made on the market close on the last trading day before the earliest fiscal year in the table, assuming the reinvestment of any dividends. |
Compensation Actually Paid Schedule
| (6) Represents the Company’s net income, calculated in accordance with U.S. GAAP, as reported in our Annual Report on Form 10-K, as filed with the SEC on March 3, 2025. |
Compensation Actually Paid Schedule
| (7) Represents the Company’s sales growth vs. 2023. |
Pay Versus Performance Relationship Descriptions
Pay Versus Performance Relationship Descriptions We believe the Company’s pay-for-performance philosophy is well reflected in the tables above because the Compensation Actually Paid tracks well to the performance measures disclosed in such tables. The graphs below describe, in a manner compliant with the relevant rules, the relationship between Compensation Actually Paid and the individual performance measures shown. The following graphical comparisons describe the relationship between certain figures included in the Pay versus Performance Table for the years 2024, 2023, 2022, 2021, and 2020, including: (a) a comparison between the Company’s total shareholder return and the total shareholder return for the NASDAQ Biotechnology index and (b) comparisons between (i) the compensation actually paid to the NEO and the average compensation actually paid to our Non-PEO NEOs and (ii) the Company’s net income and percentage of revenue growth set forth in the pay versus performance table above.