DEF 14A of Vertex Pharmaceuticals Inc / Ma, Apr 4, 2024

DEF 14A of Vertex Pharmaceuticals Inc / Ma

Filed Apr 4, 2024 · FY20230001308179-24-000452

Open on EDGAR

  1. Director Nominees

    Director Nominees The following table provides summary information regarding our eleven director nominees. For detailed information about each nominee’s background and areas of expertise, please see Proposal No. 1: Election of Directors.

  2. Director Nominees

    | | | | | Committees | | | | | Name, Occupation or Experience | Age | Director Since | Independent | AC | MDCC | CGNC | S&T | | Jeffrey Leiden Executive Chairman, Vertex | 68 | 2009 | No | | | | | | Reshma Kewalramani CEO and President, Vertex | 51 | 2020 | No | | | | | | Sangeeta Bhatia John J. and Dorothy Wilson Professor of Health Sciences & Technology/Electrical Engineering & Computer Science, MIT | 55 | 2015 | Yes | | | | | | Lloyd Carney Former CEO, Brocade Communications | 62 | 2019 | Yes | | | | | | Alan Garber Interim President and Provost, Harvard University | 68 | 2017 | Yes | | | | | | Michel Lagarde Executive Vice President and Chief Operating Officer, Thermo Fisher Scientific Inc | 50 | 2023 | Yes | | | | | | Diana McKenzie Former Chief Information Officer, Workday Former Chief Information Officer, Amgen | 59 | 2020 | Yes | | | | | | Bruce Sachs Partner Emeritas, Charles River Ventures | 64 | 1998 | Yes | | | | | | Jennifer Schneider Co-Founder and CEO, Homeward Health, Inc. | 49 | Nominee | Yes | | | | | | Nancy Thornberry Former CEO, Kallyope, Inc. | 67 | 2023 | Yes | | | | | | Suketu Upadhyay Executive Vice President and Chief Financial Officer, Zimmer Biomet | 55 | 2022 | Yes | | | | | | = Chair | | | | | | | |

  3. Table of Contents

    | SUMMARY OF TERMINATION AND CHANGE OF CONTROL BENEFITS | 80 | | EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS | 82 | | PAY RATIO | 84 | | PAY VERSUS PERFORMANCE | 85 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 89 | | OTHER INFORMATION | 91 | | Other Matters | 91 | | Shareholder Proposals and Nominations for Director for the 2025 Annual Meeting | 91 | | Shareholder Communications to the Board | 92 | | Householding of Annual Meeting Materials | 92 | | Solicitation | 92 | | Forward-Looking Statements | 92 | | Equity Compensation Plan Information | 93 | | FREQUENTLY ASKED QUESTIONS REGARDING THE ANNUAL MEETING | 94 |

  4. PROPOSAL NO. 1: ELECTION OF DIRECTORS

    PROPOSAL NO. 1: ELECTION OF DIRECTORS Our board of directors has nominated the following current directors - Sangeeta Bhatia, Lloyd Carney, Alan Garber, Reshma Kewalramani, Michel Lagarde, Jeffrey Leiden, Diana McKenzie, Bruce Sachs, Nancy Thornberry, and Suketu Upadhyay - as well as Jennifer Schneider, for election at our 2024 annual meeting of shareholders to hold office until our 2025 annual meeting of shareholders. Terrence Kearney, one of our current directors, is not standing for re-election at our 2024 annual meeting of shareholders. Each of the nominees has agreed to be named in this proxy statement and to serve if elected. We believe that all of the nominees will be able and willing to serve if elected. However, if any nominee should become unable or unwilling to serve for any reason, proxies may be voted for another person nominated as a substitute by our board or our board may reduce the number of directors. Our board of directors is our company’s ultimate decision-making body, except with respect to those matters reserved to the shareholders. Our board selects our senior management team, which in turn is responsible for the day-to-day operations of our company. Our board acts as an advisor and counselor to senior management and oversees its performance.

  5. Board Structure and Composition

    Board Structure and Composition The corporate governance and nominating committee (“CGNC”) of our board of directors is responsible for the composition and structure of our board, including identifying, developing, and recommending qualified candidates for board membership. The CGNC regularly reviews director competencies, qualities, skills, and experiences with the goal of ensuring that our board consists of directors who function collegially and effectively and who are able to apply their experience toward meaningful contributions to general corporate strategy and oversight of corporate performance, risk management, organizational development, and succession planning. Our by-laws provide that the size of our board may range between three and eleven members. We currently have eleven members on our board and expect to have eleven members of our board immediately following the 2024 annual meeting of shareholders. Our CGNC may seek additional director candidates in the future who meet the criteria below to complement the qualifications and experience of our existing board members. Our CGNC may engage a search firm to recommend candidates who satisfy such criteria.

  6. Director Criteria, Qualifications and Experience; Diversity

    Director Criteria, Qualifications and Experience; Diversity The CGNC seeks to recommend for nomination experienced directors who have substantive knowledge of our business and industry or who can bring to the board specific and valuable strategic or management capabilities acquired in other industries. The committee expects each of our directors to have proven leadership, sound judgment, the highest ethics and integrity, and a commitment to our success. It also seeks personal qualities that foster a respectful environment in which our directors listen to one another and engage in robust and constructive discussions. These goals for our board composition presuppose a diverse range of viewpoints, experiences, and specific expertise. The CGNC considers a nominee’s personal characteristics and business experience relative to those of our existing board members, including the type of prior management experience, levels of expertise relevant to our business, prior board service, reputation in the business community, personal characteristics such as gender and race, and other factors that the committee believes to be important. When considering whether or not to re-nominate a director for board service, the CGNC also considers whether the director has served as a member of our board for more than 20 years and whether the director is over 72 years of age. Jennifer Schneider was selected and recommended as a nominee for our board of directors by the CGNC based on the criteria outlined above. Our commitment to diversity and inclusion is demonstrated by the composition of our board nominees, which includes five women and four members from underrepresented ethnic and racial groups. The following table and charts provide information regarding our director nominees:

  7. Director Criteria, Qualifications and Experience; Diversity

    | | | | | | | | | | | | | | Leadership Experience. We believe that directors who have held significant leadership positions over extended periods of time provide our company with special insights. | | | | | | | | | | | | | Industry Knowledge. We seek directors with substantive knowledge of the healthcare and biotechnology industries to successfully advise and oversee the strategic development and direction of our company. | | | | | | | | | | | | | Financial Expertise. We believe that an understanding of finance is important for members of our board, and our budgeting processes and financial and strategic transactions require our directors to be financially knowledgeable. | | | | | | | | | | | | | International Perspective. We have significant operations outside the United States and value directors with experience in the operation of complex multinational organizations. | | | | | | | | | | | | | Public Policy and Regulation. We operate in a highly-regulated industry and seek directors who have experience in public policy and the regulation of medicines. | | | | | | | | | | | | | Academic Experience or Technological Background. As a biotechnology company that seeks to develop transformative medicines for patients with serious diseases, we look for directors with backgrounds in academia, science and technology and, in particular, the research and development of pharmaceutical products. | | | | | | | | | | | | | Commitment to Company Values and Goals. We seek directors who are committed to our company and its values and goals and who value the contributions that can be provided by individuals who believe in our company and its prospects for success. | | | | | | | | | | | | | Independence | Y | Y | Y | N | Y | N | Y | Y | Y | Y | Y | | Age | 55 | 62 | 68 | 51 | 50 | 68 | 59 | 64 | 49 | 67 | 55 | | Tenure on Board | 8 | 5 | 6 | 4 | 0* | 14 | 4 | 25 | 0 | 0** | 2 | | Gender | F | M | M | F | M | M | F | M | F | F | M | | Underrepresented Ethnic and Racial Groups | | | | | | | | | | | |

  8. Director Criteria, Qualifications and Experience; Diversity

    | * Mr. Lagarde was appointed to the Board on October 5, 2023. | | ** Ms. Thornberry was appointed to the Board on December 5, 2023. |

  9. Board Diversity Matrix

    Board Diversity Matrix Our commitment to diversity and inclusion is also demonstrated by the current composition of our board, which includes four women and four members from underrepresented ethnic and racial groups. The table below provides certain self-identified characteristics of our current directors, in accordance with Nasdaq Rule 5605(f).

  10. Board Diversity Matrix

    | | Board Diversity Matrix as of April 4, 2024 | | | | | | Total Number of Directors | | | 11 | | | | | Female | Male | | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | | Directors | 4 | 7 | | 0 | 0 | | Part II: Demographic Background | | | | | | | African American or Black | 0 | 1 | | 0 | 0 | | Alaskan Native or Native American | 0 | 0 | | 0 | 0 | | Asian | 2 | 1 | | 0 | 0 | | Hispanic or Latinx | 0 | 0 | | 0 | 0 | | Native Hawaiian or Pacific Islander | 0 | 0 | | 0 | 0 | | White | 2 | 5 | | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | | 0 | 0 | | LGBTQ | | | 0 | | | | Did Not Disclose Demographic Background | | | 0 | | |

  11. Shareholder-Recommended Director Candidates

    Shareholder-Recommended Director Candidates The CGNC will consider director candidates recommended by shareholders using the same criteria for director selection described above under Director Criteria, Qualifications and Experience; Diversity. Shareholders recommending candidates for consideration should submit any pertinent information regarding the candidate, including biographical information and a statement by the proposed candidate that the candidate is willing to serve if nominated and elected, by mail to our corporate secretary at our offices at 50 Northern Avenue, Boston, Massachusetts 02210. If a shareholder wishes to nominate a candidate to be considered for election as a director at the 2025 annual meeting of shareholders using the procedures set forth in our by-laws, the shareholder must follow the procedures described in our by-laws and summarized in the section titled Other Information—Shareholder Proposals and Nominations for Director for the 2025 Annual Meeting on page 91 of this proxy statement. If a shareholder wishes to solicit proxies for a shareholder nominee for election to our board at the 2024 annual meeting of shareholders pursuant to Rule 14a-19 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the shareholder must follow the procedures set forth in Rule 14a-19 of the Exchange Act and our by-laws. Our by-laws provide for proxy access, a process that allows qualifying shareholders to nominate a director candidate for consideration at an annual meeting of shareholders and have such candidate be included in our proxy materials for the applicable shareholder meeting. The key elements of our proxy access by-law are as follows:

  12. Shareholder-Recommended Director Candidates

    | Provision | Requirement | | Ownership Threshold and Holding Period | Available to shareholders owning 3% or more of our voting shares continuously for at least 3 years. | | Number of Board Nominees | Total number of proxy access nominees is capped at the greater of 20% of the existing number of board seats (or the closest whole number below 20%) and two. | | Aggregation Limits | 20-shareholder limit on the number of shareholders who can aggregate their shares to satisfy the 3% ownership requirement. | | Proxy Fights | Proxy access nominees will not be included in the proxy materials if we receive notice that a shareholder intends to nominate a candidate who is not to be included in our proxy materials. | | Future Ineligibility | Proxy access nominees who fail to receive at least 10% of the votes cast “for” such nominee may not be re-nominated as a proxy access nominee for the next two annual meetings. |

  13. Shareholder-Recommended Director Candidates

    The above table is only a summary of our proxy access by-law and is qualified in its entirety by our by-laws. A shareholder who wishes to nominate a proxy access nominee to be considered for election as a director at the 2025 annual meeting of shareholders must follow the procedures set forth in our by-laws as well as those described in Other Information—Shareholder Proposals and Nominations for Director for the 2025 Annual Meeting on page 91 of this proxy statement.

  14. Majority Votes Cast Standard

    Majority Votes Cast Standard Our by-laws provide for a majority votes cast standard for uncontested elections of our directors. Under our by-laws, director nominees in an uncontested election who receive more votes cast “for” such director nominee than “against” such director nominee are elected. Our board’s policy is that any nominee for director in an uncontested election who receives a greater number of votes “against” than votes “for” the nominee’s election shall promptly tender their resignation to the chair of our board following certification of the shareholder vote. The CGNC will promptly consider the tendered resignation. Based on all factors it deems in its discretion to be relevant, the CGNC will recommend that our board either accept or reject the resignation and may recommend that the board adopt measures designed to address any issues perceived to underlie the election results. Our board will then act on the CGNC’s recommendation. We will promptly disclose our board’s decision, including, if applicable, the reasons for rejecting the tendered resignation. Any director whose resignation is being considered under this policy will not participate in the CGNC or board considerations, recommendations or actions with respect to the tendered resignation.

  15. Director Nominees

    Director Nominees

  16. Director Nominees

    | Other Public Company Boards: None | Sangeeta Bhatia | | | | Age: 55 Director Since: 2015 | Board Committees: Chair – Science and Technology Committee Member – Corporate Governance and Nominating Committee | | | Experience: Professor at the Massachusetts Institute of Technology (“MIT”); John J. and Dorothy Wilson Professor of Health Sciences & Technology/Electrical Engineering & Computer Science, since 2005 Co-Founder of Ropirio Therapeutics, a private biotechnology company focused on lymphatic medicine since 2023 Co-Founder of Amplifyer Bio, a private biotechnology company focused on oncology diagnostics, since 2023 Co-Founder of Matrisome Bio, a private biotechnology company, since 2023 Co-Founder of Port Therapeutics, a private company focused on thermal bioswitches in oncology, since 2022 Co-Founder of Satellite Bio, a private company focused on developing satellite organs as living therapeutic solutions, since 2020 Co-Founder of Glympse Bio, a private company focused on developing in vivo sensing technology dedicated to disease monitoring, from 2018 until it was acquired by Sunbird Bio, Inc. in August 2023 Professor of bioengineering and medicine at the University of California at San Diego, from 1998 through 2005 Investigator for the Howard Hughes Medical Institute, a member of the Department of Medicine at Brigham and Women’s Hospital, a member of the Broad Institute and a member of the Koch Institute for Integrative Cancer Research Holds a Sc.B. in biomedical engineering from Brown University, an S.M. and Ph.D. in Mechanical Engineering from MIT, and an M.D. from Harvard Medical School | | | | Key Skills and Qualifications: Dr. Bhatia is a leading academic scientist and medical researcher. Her extensive experience in the field of biomedical engineering and in-depth understanding on the use of advanced technologies in medical research provide valuable insights to our board of directors, including with respect to our key research and development initiatives. | |

  17. Director Nominees

    | Other Public Company Boards: Visa Inc. Grid Dynamics Holdings Inc. | Lloyd Carney | | | | Age: 62 Director Since: 2019 | Board Committees: Chair – Corporate Governance and Nominating Committee Member – Management Development and Compensation Committee | | | Experience: Chief Acquisition Officer of Carney Technology Acquisition Corp. II, a special purpose acquisition corporation, from October 2020 until February 2023 Chief Executive Officer of ChaSerg Technology Acquisition Corp., a technology acquisition company, from September 2018 until March 2020 Chief Executive Officer and Director of Brocade Communications Systems Inc., a global supplier of networking hardware and software, from 2013 until it was acquired by Broadcom in 2017 Chief Executive Officer of Xsigo Systems, a cloud-based infrastructure solutions provider, until it was acquired by Oracle in 2012 Chief Executive Officer and Chairman of Micromuse Inc., a software solutions provider for business and service assurance, from 2003 until it was acquired by IBM in 2006 Previously held senior leadership roles at Juniper Networks, Inc., Nortel Networks Inc., and Bay Networks, Inc. Member of the board of directors of Nuance Communications Inc., a publicly traded AI-enabled communication company, until it was acquired by Microsoft Corp in March 2022 Ambassador/Special Investment Envoy for Technology Jamaica, since May 2023 Chancellor, University of Technology, Jamaica, a public university in Jamaica, since August 2022 Holds a Bachelor of Science degree in Electrical Engineering Technology from Wentworth Institute of Technology, a Master of Science degree in Applied Business Management from Lesley College, a Honorary Doctorate degree in Engineering from Wentworth Institute of Technology and a Honorary Doctorate degree in Technology from University of Technology Jamaica | | | | Key Skills and Qualifications: Mr. Carney brings strong business judgment, honed through his time as a senior executive and board member of multiple global technology companies, to our board of directors. Mr. Carney has extensive corporate leadership experience, including service as the chief executive officer of several technology companies, as well as financial expertise. | |

  18. Director Nominees

    | Other Public Company Boards: Exelixis, Inc. | Alan Garber | | | | Age: 68 Director Since: 2017 | Board Committees: Member – Audit and Finance Committee Member – Science and Technology Committee | | | Experience: Interim President of Harvard University since January 2024; Provost of Harvard University and the Mallinckrodt Professor of Health Care Policy at Harvard Medical School, a Professor of Economics in the Faculty of Arts and Sciences, Professor of Public Policy in the Harvard Kennedy School of Government, and Professor in the Department of Health Policy and Management in the Harvard T.H. Chan School of Public Health, since 2011 Henry J. Kaiser Jr. Professor, a Professor of Medicine, and a Professor (by courtesy) of Economics, Health Research and Policy, and of Economics in the Graduate School of Business at Stanford University, from 1998 until 2011 Member of the National Academy of Medicine, the American Society of Clinical Investigation, the Association of American Physicians, and the American Academy of Arts and Sciences Fellow of the American Association for the Advancement of Science, the American College of Physicians, and the Royal College of Physicians Current Research Associate with the National Bureau of Economic Research and served for nineteen years as founding Director of its Health Care Program Previously served as a member of the National Advisory Council on Aging at the National Institutes of Health, as a member of the Board of Health Advisers of the Congressional Budget Office, and as Chair of the Medicare Evidence Development and Coverage Advisory Committee at the Centers for Medicare and Medicaid Services Holds an A.B. summa cum laude, an A.M. and a Ph.D., all in Economics, from Harvard University, and an M.D. with research honors from Stanford University | | | | Key Skills and Qualifications: Dr. Garber brings extensive leadership experience and knowledge regarding science, medicine, and the healthcare industry and in particular healthcare economics to our board of directors. His expertise in health care policy and as an advisor to government agencies provides our board important insights and perspectives on the issues facing our company. | |

  19. Director Nominees

    | Other Public Company Boards: Ginkgo Bioworks Holdings, Inc. | Reshma Kewalramani | | | | Age: 51 Director Since: 2020 | Position: Chief Executive Officer and President | | | Experience: Chief Executive Officer and President of Vertex Pharmaceuticals Incorporated since April 2020 Executive Vice President and Chief Medical Officer of Vertex from 2018 through March 2020 Senior Vice President, Late Development of Vertex from 2017 until 2018 Served in roles of increasing responsibility at Amgen Inc. from 2004 to 2017, most recently as Vice President and Head of U.S. Medical Organization Industry representative to the FDA’s Endocrine and Metabolic Drug Advisory Committee from 2014 through 2019 Holds a B.A. from Boston University and an M.D. from Boston University School of Medicine; Dr. Kewalramani completed her internship and residency in Internal Medicine at the Massachusetts General Hospital and her fellowship in Nephrology at the Massachusetts General Hospital and Brigham and Women’s Hospital combined program Dr. Kewalramani also completed the General Management Program at Harvard Business School and is an alumna of the school | | | | Key Skills and Qualifications: Dr. Kewalramani possesses strong leadership qualities, significant experience overseeing and scaling the operations of a global enterprise, deep expertise in drug development, and wide-ranging experience in policy matters, demonstrated through her services as a senior executive in the biotechnology sector. She is a physician-executive with extensive industry knowledge garnered through her scientific and medical roles and experience as a global senior leader across multiple disease areas and all stages of drug development. She provides our board of directors with in-depth knowledge of our company gained during her various senior management roles within Vertex and through the day-to-day leadership of our executives as CEO. | |

  20. Director Nominees

    | Other Public Company Boards: None | Michel Lagarde | | | | Age: 50 Director Since: 2023 | Board Committees: Member – Audit and Finance Committee | | | Experience: Executive Vice President and Chief Operating Officer at Thermo Fisher Scientific Inc. (“Thermo Fisher”), a supplier of analytical instruments, life sciences solutions, specialty diagnostics, laboratory, pharmaceutical and biotechnology services, since January 2022; Thermo Fisher is a supplier to Vertex Executive Vice President at Thermo Fisher from 2019 through 2021 Senior Vice President and President, Pharma Services at Thermo Fisher from 2017 to 2019, joining Thermo Fisher as Senior Vice President, as a result of its acquisition of Patheon N.V., a pharma services company, in 2017 President and Chief Operating Officer of Patheon N.V. from 2016 to 2017 Managing Director of JLL Partners, a private equity firm focused on healthcare, from 2008 to 2016 Holds a bachelor’s degree in business administration from European University in Antwerp and an executive master’s degree in finance and control from the University of Maastricht and University of Amsterdam | | | | Key Skills and Qualifications: Mr. Lagarde has deep experience across numerous segments of the health care industry and markets around the world, as well as a successful track record of growing and scaling profitable businesses. He brings to our board of directors strong leadership experience in biotechnology and pharmaceutical development and commercial manufacturing services as well as financial expertise across several international markets. | |

  21. Director Nominees

    | Other Public Company Boards: None | Jeffrey Leiden | | | | Age: 68 Director Since: 2009 | Position: Executive Chairman | | | Experience: Chief Executive Officer and President of Vertex Pharmaceuticals Incorporated from 2012 through March 2020 Chairman of Board of Directors of Vertex since 2012; previously served as lead independent director from 2010 through 2011 Managing Director at Clarus Ventures, a life sciences venture capital firm, from 2006 to 2012 President and Chief Operating Officer of Abbott Laboratories, Pharmaceuticals Products Group and a member of the board of directors of Abbott Laboratories from 2001 to 2006 Held several academic appointments from 1987 to 2000, including the Rawson Professor of Medicine and Pathology and Chief of Cardiology and Director of the Cardiovascular Research Institute at the University of Chicago, the Elkan R. Blout Professor of Biological Sciences at the Harvard School of Public Health, and Professor of Medicine at Harvard Medical School Elected member of both the American Academy of Arts and Sciences and the Institute of Medicine of the National Academy of Sciences Member of the board of directors of Quest Diagnostics Incorporated, a publicly traded medical diagnostics company, from 2014 to May 2019; member of the board of directors and non-executive Vice Chairman of Shire plc, a specialty biopharmaceutical company, from 2006 to 2012; Chairman of Revolution Healthcare Acquisition Corp., a special purpose acquisition corporation, from April 2021 to December 2022 Dr. Leiden received his M.D., Ph.D. and B.A. degrees from the University of Chicago | | | | Key Skills and Qualifications: Dr. Leiden possesses strong leadership qualities, demonstrated through his service as a senior executive in the biotechnology and pharmaceutical industries and as a life sciences venture capitalist, and has extensive knowledge of the science underlying drug discovery and development through his experiences as a distinguished physician, scientist, and teacher. As our former CEO and as a former senior executive at Abbott Laboratories, he brings a global perspective to our business and public policy issues facing our company. He also provides our board of directors with in-depth knowledge of our company and our corporate strategy. | |

  22. Director Nominees

    | Other Public Company Boards: MetLife Inc. agilon health, inc. | Diana McKenzie | | | | Age: 59 Director Since: 2020 | Board Committees: Member – Corporate Governance and Nominating Committee Member – Science and Technology Committee Member – Management Development and Compensation Committee | | | Experience: Chief Information Officer of Workday, Inc., a cloud-based financial and human capital management software company, from 2016 until April 2019 Held roles of increasing responsibility at Amgen Inc., a biotechnology company, for 12 years, most recently serving as Senior Vice President and Chief Information Officer Held various leadership roles at Eli Lilly and Company, a pharmaceutical company, for 17 years, focused on drug development, reducing time to market and improving technology and security standards Member of the board of directors of Change Healthcare, Inc., a publicly traded healthcare technology company, from August 2019 until it was acquired by United Health Group in October 2022 Holds a Bachelor of Science degree in Computer Information Systems from Purdue University and completed the Information Technology Management Program at University of California, Los Angeles and the CERT Certification for Cybersecurity Oversight from Carnegie Mellon’s Software Engineering Institute | | | | Key Skills and Qualifications: Ms. McKenzie has corporate leadership experience and industry knowledge that make her a valuable contributor to our board of directors. Her service as an executive and innovator in the biotechnology and technology industries and as a member of the board of directors of public companies involved in healthcare issues provide her with multiple perspectives on our industry. Ms. McKenzie brings extensive experience growing, scaling, and transforming global businesses in the healthcare and software industries. | |

  23. Director Nominees

    | Other Public Company Boards: None | Bruce Sachs | | | | Age: 64 Director Since: 1998 | Board Committees: Chair – Management Development and Compensation Committee Member – Corporate Governance and Nominating Committee | | | Experience: Partner Emeritus at Charles River Ventures (“CRV”), a venture capital firm; General Partner at CRV for more than 20 years, including more than 10 years as the Managing Partner Executive Vice President and General Manager of Ascend Communications, Inc. from 1998 to 1999 President and Chief Executive Officer of Stratus Computer, Inc. from 1997 until it was acquired by Ascend Communications in 1998 Executive Vice President and General Manager of the Internet Telecom Business Group at Bay Networks, Inc. from 1995 to 1997 President and Chief Executive Officer of Xylogics, Inc. from 1993 until it was acquired by Bay Networks in 1995 Holds a B.S.E.E. in electrical engineering from Bucknell University, an M.E.E. in electrical engineering from Cornell University, and an M.B.A. from Northeastern University | | | | Key Skills and Qualifications: Mr. Sachs brings strong business judgment, honed through his experience developing business strategy as a senior executive and in venture capital, to our board of directors. Mr. Sachs has a deep understanding of our business and the global business environment along with expertise in the technology that supports our infrastructure and operations. In addition, Mr. Sachs has extensive business leadership experience, including service as a technology company CEO, as well as financial expertise. | |

  24. Director Nominees

    | Other Public Company Boards: None | Jennifer Schneider | | | Age: 49 Director Nominee | | | Experience: Co-Founder and CEO of Homeward Health, Inc., a company committed to rearchitecting the delivery of health and care in rural America in partnership with communities, since 2022 President of Livongo Health, a biotechnology company, from December 2018 to October 2020, and served as the Chief Medical Officer from September 2015 to December 2018 Served in multiple leadership roles at Castlight Health, Inc., a healthcare navigation company, from 2010 to 2015, most recently as Chief Medical Officer Member of the board of directors at Revolution Healthcare Acquisition Corp., a special purpose acquisition company, from March 2021 to December 2022 Member of the board of directors at Health Assurance Acquisition Corp., a special purpose acquisition company, from September 2020 until it liquidated in November 2022 Holds a B.S. in Biology from the College of the Holy Cross, an M.D. from Johns Hopkins School of Medicine, and an M.S. in Health Services Research from Stanford University | | | Key Skills and Qualifications: Dr. Schneider has deep knowledge and expertise in healthcare and technology. She has led or held senior leadership roles in multiple companies focused on delivering innovative solutions in healthcare management. At Livongo, Dr. Schneider led the company through the largest consumer digital health initial public offering in history as well as its merger with Teladoc Health, the industry’s largest ever merger. Dr. Schneider brings extensive experience as a practicing physician and as a leader building healthcare companies that use technology to provide access to clinical services. |

  25. Director Nominees

    | Other Public Company Boards: Denali Therapeutics Schrödinger Inc. | Nancy Thornberry | | | | Age: 67 Director Since: 2023 | Board Committees: Member – Science and Technology Committee | | | Experience: Founder and Chief Executive Officer of Kallyope, Inc. (“Kallyope”), a private biotechnology company, from November 2015 to October 2021, and served as Chair of Research and Development through December 2023 Self-employed as a consultant to companies in the biotechnology and pharmaceutical industries from August 2013 to October 2015 Served in roles on increasing responsibility at Merck & Co., Inc., a pharmaceutical company, for more than 30 years, most recently as Senior Vice President and Franchise Head, Diabetes and Endocrinology Holds a B.S. in Chemistry and Biology from Muhlenberg College | | | | Key Skills and Qualifications: Ms. Thornberry has over 30 years of experience in the pharmaceutical and biotechnology industries and her scientific leadership has spanned across drug discovery, research & development, as well as business development. She brings to our board of directors leadership experience in critical scientific roles driving innovation at both public and private companies. Her industry experience, scientific acumen and strategic thinking brings great value to our board of directors. | |

  26. Director Nominees

    | Other Public Company Boards: None | Suketu Upadhyay | | | | Age: 55 Director Since: 2022 | Board Committees: Chair – Audit and Finance Committee | | | Experience: Executive Vice President and Chief Financial Officer of Zimmer Biomet, a leading global innovator and manufacturer of orthopedic solutions, since July 2019 Senior Vice President, Global Financial Operations at Bristol-Myers Squibb from 2016 to June 2019 Executive Vice President and Chief Financial Officer of Endo International from 2013 to 2016 Previously served as interim Chief Financial Officer and Senior Vice President of Finance, Corporate Controller and Principal Accounting Officer of Becton Dickinson and Senior Vice President of Global Financial Planning and Analysis and Vice President and Chief Financial Officer of Becton Dickinson’s international business Previously held a number of global finance and strategy roles across AstraZeneca and Johnson & Johnson, including Research and Development, Supply Chain, Commercial Operations and Business Development Spent the early part of his career in public accounting with KPMG, earning his CPA designation and his CMA designation (each designation currently inactive) Holds a Bachelor of Science in Finance from Albright College and an MBA from The Fuqua School of Business at Duke University | | | | Key Skills and Qualifications: Mr. Upadhyay has extensive experience in the health care industry in financial roles covering all major areas of a fully integrated life sciences business. His service as an executive in the pharmaceutical, hospital supply, and medical device industries provide him with multiple perspectives on our industry. His knowledge and expertise make him a valuable contributor to our board of directors and management. | |

  27. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  28. Non-Employee Director Compensation Program

    Non-Employee Director Compensation Program We have designed and implemented our compensation program for our non-employee directors to attract, motivate and retain highly experienced individuals who have strong industry knowledge, are committed to our values and goals, and who have the expertise and experience that we need to achieve those goals. The compensation program for our non-employee directors is:

  29. Non-Employee Director Compensation Program

    | Compensation Elements | | | | Cash | | | | Annual Cash Retainer | | $100,000 | | Annual Committee Chair Retainer | Audit and Finance Committee | $30,000 | | | Management Development and Compensation Committee | $25,000 | | | Corporate Governance and Nominating Committee | $25,000 | | | Science and Technology Committee | $25,000 | | Committee Membership Retainer | | | | | Audit and Finance Committee | $15,000 | | | Management Development and Compensation Committee | $12,500 | | | Corporate Governance and Nominating Committee | $10,000 | | | Science and Technology Committee | $10,000 | | Annual Lead Independent Director Retainer | | $40,000 | | Equity | | | | Initial Equity Grant | A $400,000 value-based award in restricted stock units vesting after 12 months | | | Annual Equity Retainer | On May 1 of each year, a $400,000 value-based award, which the directors can elect to receive in the form of: options that are fully-vested upon grant; restricted stock units that vest on the first anniversary of the date of grant; or a 50/50 mix of options and restricted stock units | |

  30. Non-Employee Director Compensation Program

    Each of our non-employee directors is eligible to defer 50% or 100% of the cash and restricted stock unit portion of their compensation set forth above and elect to receive deferred stock units that are paid out in common stock upon the earliest to occur of (i) termination of the non-employee director’s service on our board of directors, (ii) a change of control, and (iii) the non-employee director’s disability or death. Our non-employee directors also are reimbursed for their business-related expenses incurred in connection with attendance at board and committee meetings and related activities. Our two employee directors, Dr. Leiden and Dr. Kewalramani, do not receive compensation for their service as directors. We annually review the compensation program for our non-employee directors. We did not make any material changes to the compensation program for our non-employee directors in 2023.

  31. 2023 Summary Compensation

    | Director | Fees Earned or Paid in Cash | Stock Awards(1) | Option Awards(1) | All Other Compensation(3) | Total | | Sangeeta N. Bhatia | $135,000 | $400,309 | $— | $15,000 | $550,309 | | Lloyd Carney | $134,484 | $400,309 | $— | $25,000 | $559,793 | | Alan Garber | $125,000 | $200,154 | $200,076 | $12,400 | $537,630 | | Terrence C. Kearney | $133,146 | $— | $400,037 | $— | $533,183 | | Michel Lagarde | $23,913 | $400,162 | $— | $25,000 | $449,075 | | Yuchun Lee(4) | $48,337 | $— | $— | $— | $48,337 | | Margaret G. McGlynn(4) | $51,181 | $— | $— | $25,000 | $76,181 | | Diana McKenzie(2) | $127,796 | $400,309 | $— | $25,000 | $553,105 | | Bruce I. Sachs(2) | $175,001 | $— | $400,037 | $25,000 | $600,038 | | Nancy Thornberry | $7,337 | $400,315 | $— | $— | $407,652 | | Suketu Upadhyay | $124,354 | $400,309 | $— | $20,000 | $544,663 |

  32. Letter from Management Development and Compensation Committee to Our Shareholders

    | Dear Fellow Shareholders, The Management Development and Compensation Committee’s stewardship of Vertex’s compensation programs is guided by Vertex’s mission of developing transformative medicines for people with serious diseases and, by so doing, creating value for our shareholders. Toward that end, we have designed the company’s compensation programs to closely align management’s incentives with Vertex’s strategic long- and short-term goals and with the interests of Vertex’s shareholders. We believe that this alignment has contributed to Vertex’s remarkable accomplishments over the last decade as it has significantly increased the number of patients benefiting from Vertex medicines each year, established a strong financial position with significant growth in revenues, continued delivery of strong operating margins and cash flows, and accelerated the advancement of its pipeline of small molecule drug candidates and cutting edge cell and genetic therapies, all in accordance with its core strategy of investing in scientific innovation to create transformative medicines for people with serious diseases, with a focus on specialty markets. These accomplishments have been recognized by the company’s shareholders and have been reflected in the increasing value that the company’s shareholders have attributed to the company. Vertex’s market capitalization has increased from approximately $7 billion in early 2012 to approximately $105 billion at the end of 2023. We take seriously our role in the governance of compensation programs and the importance of recruiting, motivating, and retaining highly capable and critical executive talent. The success of the company and the execution of Vertex’s business strategy over the last several years has depended upon the leadership, stability and operational excellence of our senior executive team. 2023 was a landmark year for Vertex as the company continued to successfully execute its business strategy. The research and development team made significant progress in advancing multiple programs, including those designed to treat cystic fibrosis (“CF”), sickle cell disease (“SCD”), transfusion-dependent beta thalassemia (“TDT”), acute and neuropathic pain, APOL1-mediated kidney disease, type 1 diabetes, myotonic dystrophy type 1, alpha-1 antitrypsin deficiency, and autosomal dominant polycystic kidney disease. More recently, in 2024, the company announced positive results from the Phase 3 clinical trials of its triple combination of vanzacaftor/tezacaftor/deutivacaftor (the “vanzacaftor triple”), which holds the potential to deliver even greater benefits to people with CF than TRIKAFTA, as well as from the Phase 3 clinical trials of VX-548 for the treatment of moderate-to-severe acute pain. With these advancements, Vertex’s research and development strategy is continuing to deliver a broad and deep pipeline of potentially transformative therapies, and thereby providing the opportunity for meaningful value for patients and shareholders. 2023 also marked an important pivot point for the company, as it commercially diversified into new disease areas with the historic regulatory approvals for CASGEVY, the first CRISPR gene-edited cell therapy to be approved in the world, as a potential one-time functional cure for people with SCD or TDT. Vertex also continued to expand its long-term leadership in CF by reaching younger age groups and additional geographies with existing medicines. With the recent data from the vanzacaftor triple and VX-548, Vertex is well-positioned to maintain its leadership in CF and further diversify commercially into the pain market. The company delivered outstanding financial performance in 2023, achieving CF net product revenues of $9.87 billion, an 11% increase compared to 2022, representing over a decade of consecutive years of double-digit growth. This revenue growth drove significant growth in earnings, and the company finished the year in a strong financial position with $13.7 billion in total cash, cash equivalents, and marketable securities. The senior management team additionally strengthened the company’s organizational capabilities by recruiting and onboarding top-tier talent across the organization and filling critical hires with superior and diverse talent. The company’s comprehensive success in 2023 reflects the execution of our differentiated corporate strategy championed by our senior management team. Consistent with these outstanding results, for 2023, our executives received above-target cash bonuses and payouts on performance stock unit awards based both on one-year business and financial goals. We believe these outcomes are aligned with our commitment to directly link pay to performance. Looking ahead, we will continue to focus on the strong link between Vertex’s compensation programs and the execution of its corporate strategy. Central to executing our corporate strategy is the ability to attract and retain an outstanding and fully aligned executive team while also maintaining an executive compensation approach with a strong performance orientation and focus on creating long-term shareholder value. Sincerely, Bruce I. Sachs (Chair) Lloyd Carney Terrence C. Kearney Diana McKenzie |

  33. Research and Development

    We will continue investing in our research and development programs and fostering scientific innovation by identifying additional product candidates through our internal research efforts and investing in business development transactions to access emerging technologies, products and product candidates. The following chart represents our clinical stage programs and select pre-clinical programs.

  34. 2023 Compensation Decisions and Pay-for Performance

    | | Program Design: We maintained our compensation program design that directly ties pay with performance and that we believe has contributed to our short- and long-term successes. | | | Base Salary: In 2023, based on a comparative analysis of companies in our Peer Group (described below), we maintained base salary compensation for Dr. Kewalramani, Dr. Altshuler, Mr. Wagner and Mr. Arbuckle. Under his employment agreement, Dr. Leiden does not receive a base salary for his role of Executive Chairman. | | | Annual Cash Bonus: We maintained the target cash bonus, which is a percentage of base salary, for all of our NEOs. Dr. Leiden does not receive an annual cash bonus pursuant to his employment agreement. The company’s outstanding performance in 2023, as described above, resulted in the board determining that the company achieved a leading rating for 2023 (a rating of 150 out of a potential 150), and the payment of above-target annual cash bonuses. Please see Overview of Company Performance Rating & Achievement in 2023. |

  35. 2023 Compensation Decisions and Pay-for Performance

    | | Long-Term Equity Program: |

  36. 2023 Compensation Decisions and Pay-for Performance

    | – | In 2023, based in part on a comparative analysis of companies in our Peer Group, we maintained the target equity grant for Dr. Kewalramani and we maintained the target equity grants for our other NEOs. For his fourth year as Executive Chairman, Dr. Leiden received equity grants of $6.5 million pursuant to the terms of his employment agreement. Under his employment agreement, Dr. Leiden will continue to receive equity grants for the fifth year in his Executive Chairman role. | | – | We maintained our mix of equity granted under our compensation program with 50% of the awards consisting of PSUs that vest solely upon achievement of specific performance goals and 50% consisting of time-vesting RSUs. This mix rewards stock price appreciation and incentivizes long-term tenure at the company. The number of RSUs awarded may be adjusted to reflect an executive officer’s individual performance for the relevant performance period, and consequently are considered by the company to be performance-based awards. We replaced the performance-specific multiplier with a performance-specific multiplier range, as outlined under Annual Equity Awards on page 69 below. | | – | We achieved two of the three goals established for the 2021 non-financial based PSU awards and the maximum level of performance for the 2023 financial-based PSU awards, resulting in 100% and 200% payouts, respectively, under these awards in February 2024. | | – | In early 2024, the MDCC granted new awards of PSUs and established the financial and non-financial metrics that will determine whether and to what extent these awards become earned and vested. 50% of the PSUs, which vest annually in installments over three years measured from the date of grant, and are tied to net product revenue in 2024, while the remaining 50%, which cliff vest after three years, are tied to specific clinical and research milestones over a three-year period. |

  37. Compensation Governance Practices

    | What We Do | What We Don’t Do | | Caps on incentive awards | Excessive executive perquisites | | Multiple performance factors | Supplemental pension benefits for executives | | Range of awards; not all or nothing | Single-trigger vesting in connection with a change-in-control for equity awards | | Compensation recoupment (clawback) policy | Hedging or pledging or speculative transactions in our securities by directors and executive officers | | Balance of short- and long-term incentives (through annual cash bonuses and equity awards) | Re-pricing of stock options without shareholder approval | | Executive and Non-Employee Director Stock Ownership Guidelines | Allow payment of dividends on unvested performance shares or units | | Independent compensation consultant | 280G gross-ups (payments to offset excise taxes) | | Annual risk review | | | Pay for performance sensitivity and emphasis | | | Robust shareholder outreach | |

  38. Role of Compensation Consultant

    Role of Compensation Consultant The MDCC (i) is directly responsible for the appointment and oversight of its compensation consultants, (ii) has the authority to determine the fees that we pay for services provided by such compensation consultants, and (iii) prior to engaging any compensation consultant, considers applicable factors potentially affecting the independence of the compensation consultant, including the factors set forth in Nasdaq Marketplace Rule 5605(d)(3). Annually, the MDCC engages an independent compensation consultant to conduct an analysis of our compensation program as a whole, as well as all elements of our executive officer compensation program compared to similar elements paid to similarly situated executives at companies in our Peer Group (as defined below) and to provide a written report and presentation of findings at the meeting of the MDCC that occurs in the summer each year. The compensation consultant also provides guidance on other matters that may arise from time to time and participates in regular discussions with the MDCC Chair, as requested. In 2023, the MDCC continued its engagement with Pearl Meyer as its independent compensation consultant. Pearl Meyer is compensated for advice provided at the direction of the MDCC. The MDCC reviews Pearl Meyer’s independence in accordance with applicable Nasdaq and SEC rules. Based on this review, and other factors considered by the MDCC, the MDCC determined that Pearl Meyer’s work did not raise a conflict of interest.

  39. Use of Peer Group Companies

    Use of Peer Group Companies In order to conduct a thorough assessment about elements of executive compensation on a competitive basis, the MDCC and our board of directors considers information about the compensation practices of a representative group of companies with whom we compete for executive talent (our “Peer Group”). We conduct a detailed analysis to select companies for this Peer Group on the basis of similarity and complexity of business model. While revenue and industry are common peer selection criteria, we also use a mix of quantitative and qualitative factors in order to establish our peers, including the following:

  40. Use of Peer Group Companies

    | Factor Considered | What We Look For | | Similar industry | Biotechnology or pharmaceutical industry | | Importance of medicines to patients and society | Transformative medicines for serious diseases; therapeutics for unmet needs | | Recognized focus on innovation | Breakthrough Therapy designations, priority review and/or other markers indicating unmet need | | Global operations | Significant operations both within and outside the U.S. | | Commercial operations | Marketing and selling approved medicines | | Significant R&D investment | Greater than $2.2B or 25% of revenue | | Number of employees | Greater than 1,200 employees | | Market capitalization and significance to broader economy | Market cap at least ¼ our size and/or inclusion in S&P 500 or Nasdaq 100 | | Labor market competitor | Companies we compete with for executive talent | | Companies that use Vertex as a peer | Inclusion of Vertex in proxy reported peer group |

  41. Use of Peer Group Companies

    It is unlikely for companies to align on all of the factors listed above; therefore we look for companies meeting a majority of the criteria although we place greater weight on companies focused on innovation and the importance of medicines to patients and society as we believe these are the key drivers of our business model. On a regular basis, we review and revise the list of companies with the goal of maintaining a group of comparators comprised of at least twelve companies. As a result of this analysis, and on the basis of the criteria listed above, the MDCC approved the following comparator companies for 2023, which were the same comparator companies used in 2022. In 2024, we expect we will replace Seagen Inc. due to its acquisition by Pfizer.

  42. Use of Peer Group Companies

    | 2023 Peer Group | | | AbbVie Inc. | Gilead Sciences, Inc. | | Alnylam Pharmaceuticals | Incyte Corporation | | Amgen, Inc. | Jazz Pharmaceuticals plc | | Biogen, Inc. | Moderna, Inc. | | BioMarin Pharmaceuticals, Inc. | Regeneron Pharmaceuticals, Inc. | | Bristol-Myers Squibb Company | Seagen Inc. | | Eli Lilly and Company | |

  43. Properties of Peer Group

    Properties of Peer Group We believe, based on our discussions with major shareholders, that the Peer Group identified by the MDCC is consistent with our shareholders’ views of our relevant peers in the biotechnology industry. In addition, the Peer Group companies have many of the business model characteristics that we seek in comparator companies as set forth in the following table.

  44. Properties of Peer Group

    | | | | | | | Innovative and Importance of Medicines | | | | | | | Company Information | | R&D Expense(1) | | Operational Focus | | Orphan/ Unmet Clinical Need | Breakthrough Therapy Approvals and Regenerative Medicine Advanced Therapy Approvals(2) | Innovative Approved Drugs and Approved Regenerative Medicine Therapies in Last 13 Years(3) | Uses Vertex as Peer | Market Position | | | Company | Industry | $ (millions) | % of Revenue | Global | Commercial | | | | | Nasdaq 100 | S&P 500 | | AbbVie | Biotech | $8,453 | 16% | | | | 7 | 9 | | | | | Alnylam | Biotech | $994 | 58% | | | | 3 | 2 | | | | | Amgen | Biotech | $4,784 | 17% | | | | 2 | 9 | | | | | Biogen | Biotech | $2,832 | 28% | | | | 1 | 9 | | | | | BioMarin | Biotech | $713 | 31% | | | | 1 | 5 | | | | | Bristol-Myers | Pharma | $10,212 | 23% | | | | 12 | 16 | | | | | Eli Lilly | Pharma | $13,113 | 38% | | | | 4 | 12 | | | | | Gilead | Biotech | $5,718 | 21% | | | | 6 | 9 | | | | | Incyte | Biotech | $1,730 | 48% | | | | 2 | 5 | | | | | Jazz | Pharma | $1,647 | 43% | | | | — | 4 | | | | | Moderna | Biotech | $4,650 | 51% | | | | — | 1 | | | | | Regeneron | Biotech | $4,625 | 35% | | | | 9 | 8 | | | | | Seagen(4) | Biotech | $1,563 | 68% | | | | 5 | 3 | | | | | Vertex | Biotech | $3,960 | 37% | | | | 9 | 6 | | | |

  45. Properties of Peer Group

    | (1) R&D Expense (including certain expenses related to intangible assets) and R&D Expense as a % of Revenue reflect the trailing data for the most recent four quarters as of December 31, 2023 per the S&P Capital IQ database. | | (2) Per the Center for Drug Evaluation and Research (CDER) Breakthrough Therapy Approvals report, which lists approvals for breakthrough therapy designated drugs and the Center for Biologics Evaluation and Research (CBER) Regenerative Medicine Advanced Therapy Approvals report, which lists approvals for breakthrough therapy designated regenerative medicines. | | (3) Innovative drugs and regenerative therapies in the last thirteen years include: VIEKIRA PAK, IMBRUVICA, VENCLEXTA, ORILISSA, MAVYRET, RINVOQ, SKYRIZI, QULIPTA and EPKINLY (AbbVie), ONPATTRO and GIVLAARI (Alnylam), AIMOVIG, BLINCYTO, XGEVA, PROLIA, KYPROLIS, PARSABIV, EVENITY, TEZSPIRE, and LUMAKRAS (Amgen), TECFIDERA, ALPROLIX, SPINRAZA, ELOCTATE, VUMERITY, ADUHELM, LEQEMBI, SKYCLARYS and QALSODY (Biogen), BRINEURA, PALYNZIQ, VIMIZIM, VOXZOGO and ROCTAVIAN (BioMarin), ABECMA, BREYANZI, SOTYKTU, CAMZYOS, ZESPOSIA, ONUREG, REBLOZYL, INREBIC, IDHIFA, EVOTAZ, OPDIVO, POMALYST, ELIQUIS, YERVOY, OPDUALAG and AUGTYRO (Bristol-Myers), CYRAMZA, EMGALITY, JARDIANCE, OLUMIANT, PORTRAZZA, RETEVMO, REYVOW, TALTZ, VERZENIO, MOUNJARO, JAYPIRCA and OMVOH (Eli Lilly), YESCARTA, SOVALDI, HARVONI, VEMLIDY, CAYSTON, ZYDELIG, BIKTARVY, VEKLURY and SUNLENCA (Gilead), JAKAFI, OLUMIANT, PEMAZYRE, RUXOLITINIB and ZYNYZ (Incyte), VYXEOS, DEFITELIO, ZEPZELCA and RYLAZE (Jazz), SPIKEVAX (Moderna), DUPIXENT, LIBTAYO, PRALUENT, EYLEA, ZALTRAP, INMAZEB, EVKEEZA and VEOPOZ (Regeneron), and PADCEV, TUKYSA and TIVDAK (Seagen). | | (4) Seagen Inc. was acquired by Pfizer in December 2023; financials reflect trailing twelve months as of September 30, 2023. |

  46. Properties of Peer Group

    We do not solely benchmark to a particular level of compensation relative to compensation levels at the Peer Group companies, but rather assess compensation levels after considerable deliberation about where each executive should fall in comparison with executives with similar responsibilities at the Peer Group companies. The MDCC looks at Peer Group information to confirm that our compensation levels are competitive with those of the Peer Group companies and consistent with our compensation philosophy. In addition, the MDCC reviews broader industry specific executive compensation surveys published by Radford, Mercer SIRS, and Willis Towers Watson, but does not make any material compensation decisions based on any particular company participants in such surveys. Due to the low representation of the Chief Operating Officer role within the Peer Group, Pearl Meyer supplemented the Peer Group with broader life science industry companies for purposes of analyzing competitive compensation for this role. Pearl Meyer reviewed companies within the broader life sciences industry and included all companies with a chief operating officer or similar role and greater than $2 billion revenues and greater than $10 billion market capitalization. The MDCC reviewed the compensation practices for the following broader life science industry companies when considering compensation for Mr. Arbuckle:

  47. Properties of Peer Group

    | Peer Group Companies | Life Science Companies | | Amgen, Inc. | Bio-Rad Laboratories, Inc | | Bristol-Myers Squibb Company | DexCom, Inc. | | Jazz Pharmaceuticals plc | ResMed, Inc. | | | Thermo Fisher Scientific Inc. | | | Zimmer Biomet Holdings Inc. |

  48. Elements of Annual Compensation

    Elements of Annual Compensation Our practice is to target total direct compensation including base salary, target annual cash incentives, and target long-term incentive awards at market competitive levels depending upon the NEO’s responsibilities, expertise, and experience. At superior levels of performance, we aim for the design of our executive compensation program to result in actual total direct compensation at or above the seventy-fifth percentile of peer executive compensation. Each year we review the mix of elements of our executive compensation program to ensure they are appropriately designed in light of our goals to align the program with our business strategy, the competitive environment and our shareholders’ interests. Our executive compensation program emphasizes a mix of long-term equity compensation awards to incentivize and reward those individuals who make the greatest contribution to company performance over time. For the NEOs, this means compensation is primarily in the form of equity and directly tied to changes in shareholder value over time. For our 2023 equity grants, we maintained our mix of equity awards, including PSUs and time-based RSUs.

  49. Performance-Based Value-Based Program

    | Compensation Element | Performance Link | | | Annual Cash Bonus | | Annual bonus dependent on both company and individual performance factors | | Equity Awards | | Grant date value of equity awards based on target award values by level with differentiation for individual performance | | | | Value of shares granted based on target set by MDCC and Board, adjusted for individual performance ranging from 0% for below target individual performance, 100% at target performance, and up to 150% for above target individual performance | | PSU Awards | | 50% of PSUs with range of shares earned 0% to 200% of target based on one year financial metrics (vesting in equal installments over a three-year period) | | | | 50% of PSUs with range of shares earned 0% to 200% of target based on three-year non-financial metrics (cliff-vesting after three years) | | Time-Based RSUs | | Value of awards increases or decreases based on stock price over the three-year vesting period | | | | We consider our time-vesting RSU awards to be performance-based awards because the target number of RSUs awarded may be adjusted based on the corresponding executive’s individual performance for the relevant performance period as well as the resulting value dependent upon increases or decreases in our stock price over the three-year vesting period |

  50. Performance-Based Value-Based Program

    | | PSU Awards. Our CEO and executive vice presidents (“EVPs”) receive 50% of their annual equity compensation in the form of PSUs. 50% of the number of PSUs are eligible to vest based on the achievement of financial goals and the remaining 50% of the number of PSUs are eligible to vest based on the achievement of non-financial goals. The financial PSUs, if earned, vest in annual installments over a three-year period measured from the date of grant, and the non-financial PSUs, if earned, cliff vest after three years. The potential shares earned pursuant to these PSU awards range from 0% to 200% of the target number of shares, with the number of shares actually issued determined by the achievement of the financial and non-financial performance goals. The MDCC selected revenue and clinical development milestones as the performance goals applicable to the PSUs because the MDCC determined that these milestones are important, measurable metrics, the achievement of which would indicate successful execution toward our short- and long-term strategic objectives and build considerable shareholder value. | | | Time-based RSUs. Our CEO and EVPs receive 50% of their annual equity compensation in the form of time-based RSUs that vest over a three-year period measured from the date of grant. With 50% of the annual long-term incentive award at risk pending successful execution of our strategic objectives through the grant of PSUs, we believe that it is important to have the remaining half of the annual long-term equity award focused on retaining our key executive talent. As a result, we believe time-based RSUs encourage retention and focus on long-term value creation thereby aligning with the interests of our shareholders. |

  51. Base Salary

    Base Salary The MDCC recommends base salaries for our executive officers based on multiple factors, including a competitive market analysis on a position-by-position basis. Annually, the MDCC reviews a comparison of each executive’s prior year base salary and cash bonus opportunity, measured at the target level, to salaries and cash bonuses reported for executives with similar responsibilities at Peer Group companies. The MDCC does not solely benchmark to a particular level of compensation relative to compensation levels at the Peer Group companies. Instead, the MDCC’s judgment about where each executive should fall in comparison with executives with similar responsibilities at the Peer Group companies takes into account the executive’s general level of experience and capability, the significance of the executive’s job responsibilities to the achievement of our business strategy and company goals, and general performance over time, including demonstration of corporate values. On the basis of that information, including compensation at Peer Group companies, and taking into consideration the executive’s base salary for the previous year or years, the MDCC recommends an appropriate base salary for each executive officer, subject to final approval by our independent directors. Our current base salaries reflect each individual executive’s past and expected future contributions, performance, experience, specific responsibilities relative to peer benchmarks, and competitive positioning within the range around the median base salaries for our Peer Group companies. Dr. Kewalramani’s base salary for 2023, as our CEO and President, was maintained at $1.50 million, based on multiple factors, including her contributions as CEO and President, expected future contributions, experience and knowledge. We also maintained the base salaries for Dr. Altshuler, Mr. Arbuckle and Mr. Wagner based on a comparative analysis of compensation in our Peer Group.

  52. Maintenance of Broad-Based Equity Program While Reducing Dilution

    | (1) Burn rate” is defined as the number of equity awards granted in a specific year divided by the basic weighted average number of shares outstanding during that year. | | (2) Average number of employees as of January 1st and December 31st. |

  53. Annual Performance Ratings

    Annual Performance Ratings The 2023 results-based rating recommendation for each NEO, other than our CEO and Executive Chairman, is the combined result of the MDCC members’ own observations and a review of the executive’s role in the accomplishment of the corporate goals and recommendations, the latter of which is provided to the MDCC by our CEO and is made on the basis of her independent assessment of each executive officer’s performance. The MDCC, Dr. Leiden, and Dr. Kewalramani discussed each recommendation at length, on both an individual and comparative basis. Upon completion of these discussions, the MDCC finalized its recommendation for the results-based rating for each executive. The final recommendations took into account the recommendations of Dr. Kewalramani and Dr. Leiden, the opinions of MDCC members (based on the executive’s contributions and the MDCC members’ interactions with the executive), as well as other factors. The MDCC gave Dr. Kewalramani’s recommendations greater weight when determining the behaviors-based rating than when determining the results-based rating, as the behaviors-based rating is pertinent to the executive’s daily interactions in carrying out their duties. Furthermore, the MDCC believes that, in her role as CEO, Dr. Kewalramani had greater visibility than the MDCC members into the quality of these interactions. Taking into account all of the factors raised in the discussion and the assigned individual performance rating, the MDCC assigns an individual performance factor for each NEO within the ranges set forth below that, along with the annual corporate performance factor, determined each NEO’s annual bonus. While the individual ratings are not 100% objective, we view them as critical factors indicative of management success and crucial to achieving the more objective goals discussed above. The results-based and behaviors-based evaluations for our CEO is based on a similar assessment of individual performance by our MDCC and the independent directors. Individual performance can significantly affect an executive officer’s cash and equity compensation. In light of Dr. Leiden’s employment agreement, which reduced his base salary and bonus to zero following his first year as Executive Chairman, the MDCC did not assign an individual performance rating for Dr. Leiden.

  54. 2023 Actual Individual Ratings for Named Executive Officers

    | Dr. Reshma Kewalramani | 2023 Rating: | Leading Exemplary | | CEO and President | 2023 Salary: | $1,500,000 | | | 2023 Bonus: | $4,050,000 | | | LTI Equity Grants (Feb 2024): | $17,145,000 |

  55. 2023 Actual Individual Ratings for Named Executive Officers

    | Charles F. Wagner, Jr. | 2023 Rating: | Leading Exemplary | | EVP, Chief Financial Officer | 2023 Salary: | $825,000 | | | 2023 Bonus: | $1,256,063 | | | LTI Equity Grants (Feb 2024): | $6,000,000 |

  56. 2023 Actual Individual Ratings for Named Executive Officers

    | David M. Altshuler | 2023 Rating: | Leading Exemplary | | EVP, Chief Scientific Officer | 2023 Salary: | $825,000 | | | 2023 Bonus: | $1,299,375 | | | LTI Equity Grants (Feb 2024): | $6,000,000 |

  57. 2023 Actual Individual Ratings for Named Executive Officers

    | Stuart A. Arbuckle | 2023 Rating: | Leading Exemplary | | EVP, Chief Operating Officer | 2023 Salary: | $900,000 | | | 2023 Bonus: | $1,822,500 | | | LTI Equity Grants (Feb 2024): | $7,125,000 |

  58. Annual Cash Bonus

    Annual Cash Bonus The 2023 cash bonus for each NEO (referred to in the Summary Compensation Table on page 74 of this proxy statement as “Non-Equity Incentive Plan Compensation”) is calculated by multiplying the NEO’s target bonus by both the company performance factor and the individual performance factor, in accordance with the following formula:

  59. Annual Cash Bonus

    | Target Cash Bonus | | | | Performance Factors | | | | Cash Bonus | | Base Salary | | Individual Incentive Target (expressed as a percentage of base salary) | | Company Performance Factor (expressed as a percentage of the target bonus) | | Individual Performance Factor (expressed as a percentage of the target bonus) | | Annual Cash Bonus Award | | | | 70%-120% based on role | | 0%-150% | | 0-150% | | |

  60. Annual Cash Bonus

    The individual incentive targets were established, and are reviewed annually, by the MDCC based on available data about Peer Group company compensation (as supplemented for Mr. Arbuckle, as described above). For 2023, Dr. Kewalramani’s individual incentive target remained at 120% of her base salary and Mr. Arbuckle’s individual incentive target remained at 90% of his base salary. The individual incentive target for Mr. Wagner and Dr. Altshuler remained at 70% of their respective base salary during 2023; Dr. Leiden does not receive an annual cash bonus pursuant to his employment agreement. The resulting target annual cash bonuses of our executives approximate the median target annual cash bonuses for comparable executives at our Peer Group companies (as supplemented for Mr. Arbuckle, as described above). Company performance factors are determined annually and range from 0% to 150%. The possible individual ratings and corresponding individual performance factor ranges for our executive officers in 2023 are set forth in the table below:

  61. Annual Cash Bonus

    | Individual Rating | Individual Performance Factor | | Not Building | 0% | | Building | 50%-80% | | Strong | 80%-120% | | Leading | 120%-150% | | Leading/Exemplary | 140%-150% |

  62. Annual Cash Bonus

    On the basis of the factors described above, our MDCC recommended, and our independent directors approved, individual performance factors and annual bonus awards for each of the NEOs, on account of 2023 performance, as set forth in the table below.

  63. Annual Cash Bonus

    | Name | 2023 Base Salary | Individual Incentive Target | | 2023 Target Bonus | Company Performance Factor | Individual Performance Factor | | 2023 Performance Cash Bonus | | Reshma Kewalramani | $1,500,000x | 120% | = | $1,800,000x | 150%x | 150% | = | $4,050,000 | | Charles F. Wagner, Jr. | $825,000x | 70% | = | $577,500x | 150%x | 145% | = | $1,256,063 | | David M. Altshuler | $825,000x | 70% | = | $577,500x | 150%x | 150% | = | $1,299,375 | | Stuart A. Arbuckle | $900,000x | 90% | = | $810,000x | 150%x | 150% | = | $1,822,500 | | Jeffrey M. Leiden | $—x | —% | = | $—x | —%x | —% | = | $— |

  64. Annual Equity Awards

    Annual Equity Awards

  65. Value-Based Guidelines for Annual NEO Equity Grants

    Value-Based Guidelines for Annual NEO Equity Grants Under our compensation program, equity awards for our CEO and EVPs are calculated by multiplying the individual’s target equity award by his or her performance rating-based equity modifier. In 2023, we replaced the performance-specific multiplier with a performance-specific multiplier range, as outlined below. Prior to the 2023 performance year, our compensation program provided a specific equity modifier for each performance rating. Our new practice increases the performance sensitivity of the program by adding the flexibility to adjust the equity modifier to reflect performance and expected contributions, further aligning the interests of our CEO and EVPs with the interests of our shareholders. The target value, available individual ratings and corresponding performance rating-based equity modifier ranges for our executive officers are set forth in the table below.

  66. Value-Based Guidelines for Annual NEO Equity Grants

    | | | Performance Rating-Based Equity Modifiers | | | | | | | Target value | Not Building | Building | Strong | Leading | Leading Exemplary | | CEO | $13,500,000 | —% | 50% - 86.5% | 86.5% - 113.5% | 100% - 127% | 113.5% - 127% | | COO | $4,750,000 | —% | 50% - 80% | 80% - 120% | 100% - 150% | 120% - 150% | | EVP (excluding the COO) | $4,000,000 | —% | 50% - 80% | 80% - 120% | 100% - 150% | 120% - 150% |

  67. Value-Based Guidelines for Annual NEO Equity Grants

    The CEO equity modifier range is narrower relative to the COO and EVP ranges in order to reflect the tighter distribution of equity award values among the peer CEO comparators. Historically, equity awards were determined by the following formulaic approach for each performance rating.

  68. Value-Based Guidelines for Annual NEO Equity Grants

    | | Performance Ratings | | | | | | | Not Building | Building | Strong | Leading | Leading Exemplary | | CEO | —% | 50% | 100% | 113.5% | 127% | | NEOs (excluding the CEO) | —% | 50% | 100% | 125% | 150% |

  69. Value-Based Guidelines for Annual NEO Equity Grants

    Based on a comparative analysis of our Peer Group companies, as supplemented to address Mr. Arbuckle’s COO role, the MDCC set a target equity value for Dr. Kewalramani of $13.5 million, and maintained the target equity value for Mr. Arbuckle and our other EVPs of $4.75 million and $4.0 million, respectively. The mid-point of the performance factor range for Leading and highest performance factor for Leading Exemplary performance were selected based on award values approximating the 75th and mid upper quartile percentiles, respectively, of executives at our Peer Group companies. The number of shares granted pursuant to the time-vested RSU award and PSU award was based on the fair value of our common stock on the date of grant (with the number of shares subject to PSUs determined at target). Pursuant to the terms of his employment agreement, Dr. Leiden received equity grants of $6.5 million in the first quarter of 2024 and will receive an annual equity grant of $6.5 million in the first quarter of 2025 for his role as Executive Chairman. With respect to these grants, 50% will be in the form of fully-vested common stock and 50% in the form of PSUs based on financial goals with a one-year performance period.

  70. February 2024 Grants Based on 2023 Performance

    February 2024 Grants Based on 2023 Performance In February 2024, upon the MDCC’s recommendation, our independent directors approved individual performance factors and equity awards for 2023 performance for each of the NEOs as set forth in the table below. Dr. Leiden’s equity awards were determined by his employment agreement as described above.

  71. February 2024 Grants Based on 2023 Performance

    | Name | Individual Performance Rating | Performance Rating-Based Equity Modifier | Performance- Based RSU (50%) | Time-based RSU (50%) | Total Equity Value | | Reshma Kewalramani | Leading Exemplary | 127% | $8,572,500 | $8,572,500 | $17,145,000 | | Charles F. Wagner, Jr. | Leading Exemplary | 150% | $3,000,000 | $3,000,000 | $6,000,000 | | David M. Altshuler | Leading Exemplary | 150% | $3,000,000 | $3,000,000 | $6,000,000 | | Stuart A. Arbuckle | Leading Exemplary | 150% | $3,562,500 | $3,562,500 | $7,125,000 |

  72. Performance Units Results Table

    Performance Units Results Table We annually grant one-year financial-based PSU awards and three-year non-financial based PSU awards. We believe the combination of the one-year financial and three-year non-financial PSUs provides an appropriate balance of near- and long-term incentives for our management team. Our near-term objective of growing our CF business through increasing the number of people eligible and able to receive our medicines complements our long-term strategic objectives, which require the reinvestment of revenues into R&D to develop additional transformative medicines for serious diseases. The final performance multipliers for our 2023 financial-based PSU awards were determined by the MDCC and applied to the target units granted to determine the actual units earned and eligible to vest with a payout of 200% in February 2024. The following chart shows the pre-established financial goals and the actual results for the financial-based PSU awards granted in 2023:

  73. Performance Units Results Table

    | Award | | Below Threshold | Threshold | Target | | Max | Results | | | Year | Company Goal | 0% Payout | 50% Payout | 100% Payout | | 200% Payout | CF Revenue | Payout | | 2023 | 2023 CF Net Product Revenues | <$9.400 billion | $9.400 billion | $ $ | 9.550 to 9.650 billion | $9.800 billion | $9.86 billion(1) | 200.0% |

  74. Performance Units Results Table

    | (1) Reflects certain pre-established foreign exchange-related adjustments. |

  75. Performance Units Results Table

    Consistent with our philosophy of aligning compensation with performance, for 2023, a year in which we substantially exceeded our CF net product revenue expectations, the payout on our one-year financial PSU awards achieved the maximum level. The performance goals for the 2021 non-financial PSUs were established in February 2021 and our performance against these goals was determined in the first quarter of 2024. There were three non-financial goals and achievement of one goal would have resulted in a 50% payout, achievement of two goals resulted in a 100% payout and achievement of three goals would have resulted in a payout of 200%. While we achieved many significant milestones during this period, in part described above, we did not achieve one of the milestones associated with these PSUs.

  76. Performance Units Results Table

    | | | | Payout | | 2021 | CF Portfolio Milestone - Establish proof-of-concept for a Best in Class combination or genetic therapy (excluding the vanzacaftor triple) | Not Achieved | | | | Complete two Phase 2 studies in non-cystic fibrosis disease areas, including all non-cystic fibrosis products to the extent not already counted for other proof-of-concept performance milestones and any drug candidates or therapies in-licensed or acquired | Achieved | 100% | | | Obtain U.S. or ex-U.S. regulatory approval (accelerated or full) for a non-cystic fibrosis indication (including any in-licensed drug candidates or therapies) | Achieved | |

  77. Performance Units Results Table

    The final performance multipliers for our 2021 non-financial PSUs were determined by the MDCC and applied to the target units granted to determine the actual units earned and eligible to vest with a payout of 100% in February 2024. Performance achievement for the 2022, 2023 and 2024 non-financial based PSU awards will be determined in the first quarter of 2025, 2026 and 2027, respectively, based on performance over the relevant three-year performance period. The non-financial goals contained in our three-year PSU awards for 2022, 2023 and 2024 are based on multiple clinical milestones, and are not disclosed for competitive reasons and because the relevant performance periods are ongoing.

  78. Employment Agreements and Post-Termination Compensation and Benefits

    Employment Agreements and Post-Termination Compensation and Benefits The initial compensation terms for newly hired members of our executive team are the result of negotiations between us, in consultation with the MDCC and our board of directors, and the executive being hired. In general, each newly hired executive team member enters into an employment agreement and a change of control agreement and is granted an equity award, and in some cases a cash sign-on bonus, reimbursement of moving expenses, and other benefits. We also enter into employment and change of control agreements with EVPs who are promoted to our executive team, on the basis of standard terms and conditions that have been recommended by our MDCC and approved by our board for such circumstances. We have entered into agreements providing for severance and change of control payments with each EVP on our executive team because we believe that they are a fair and effective way to allow our executives to maintain focus on our business in the face of market and other volatility in our industry. In 2023, we extended Dr. Leiden’s amended employment agreement by one year, until March 31, 2025. Under his amended employment agreement, Dr. Leiden will not receive any cash compensation for his role as Executive Chairman other than an annual cash payment intended to facilitate participation in the company’s benefit plans, and he will continue to receive equity awards for his fifth year of service as Executive Chairman. In general, each employment arrangement provides for cash severance and continuation of certain employee benefits in the event that an executive’s employment is terminated by us without cause or is terminated by the executive for good reason. We use a “double trigger” with respect to benefits that are to be provided in connection with a change of control. A change of control does not itself trigger benefits; rather, benefits are paid only if the employment of the executive is terminated by us other than for cause, death or disability, or by the executive for good reason, during a specified period before or after a change of control. We believe a “double trigger” benefit maximizes shareholder value because it prevents a windfall to executives in the event of a change of control in which the executive retains significant responsibility as defined in their individual agreement, while still providing our executives appropriate incentives to cooperate in negotiating any change of control transaction that may put their jobs at risk. We offer a company-wide program that provides for accelerated vesting of equity awards held by qualified retirement-eligible participants that retire. Equity awards granted, including those granted to our NEOs, contain a retirement vesting provision, under which a “qualified” participant who retires under the terms of the provision will receive accelerated vesting of an additional number of shares underlying the award, equal to the sum of (x) 50% plus 10% for each year of service in excess of five full years of service multiplied by (y) the number of unvested shares subject to the award. A “qualified” participant is a participant (1) who is at least age 55, (2) has completed at least five full years of service, (3) whose age plus full years of service is 65 or greater, and (4) who has completed a mandatory transitional period of employment with the company following notice of their planned termination of service. In addition to the benefits that only accrue in connection with a change of control, our agreements with our executive officers provide benefits if we terminate their employment with us without cause or they terminate their employment with us for good reason, as such terms are defined in the applicable agreement with the executive officer. A further discussion of the terms and projected payments under each of our agreements with our NEOs is set forth below under the heading Employment Contracts and Change of Control Arrangements.

  79. Equity Grant Practices

    Equity Grant Practices Our board of directors generally grants annual equity awards to NEOs at a board meeting scheduled in advance for early February. Scheduling decisions are made without regard to anticipated earnings or other major announcements by the company. For all value-based equity grants, we convert value to shares on the date of grant using the average of the high and low price for the common stock on the day the equity grant is awarded. Newly hired employees, including executive officers, are sometimes granted equity awards effective on the first day of employment. The employees’ start dates are scheduled without regard to anticipated earnings or other major announcements by the company.

  80. Emphasis on Long-term Value Creation and Mitigation of Short-term Risk Taking

    Emphasis on Long-term Value Creation and Mitigation of Short-term Risk Taking Our board believes that a key element of its risk oversight responsibilities is ensuring that our executive compensation program encourages the implementation of our corporate strategy of investing in scientific innovation to create transformative medicines for people with serious diseases and discourages decisions focused on creating short-term financial gains at the expense of long-term value creation. The board reviews our business performance, focusing on financial metrics and non-financial metrics, as well as other strategic factors including talent development and diversity to ensure our leaders are focusing on long-term growth in a manner aligned with our values. Our MDCC reviews the performance of our executive officers using the above metrics. It also oversees the design of our executive compensation programs to ensure that our executive compensation program does not incentivize our executive officers, either individually or as a group, to make excessively risky business decisions that could maximize short-term results at the expense of long-term value. The independent directors who serve on the MDCC are informed of our most significant risks, including those associated with R&D of new medicines, competition, and the pricing of our medicines. Our MDCC, in consultation with its independent compensation consultant, ensures that our executive compensation programs are aligned with our long-term strategy and do not incentivize overly risky behavior.

  81. Summary Compensation Table

    Summary Compensation Table The following table provides summary information concerning the compensation for each of our NEOs for 2023, 2022, and 2021.

  82. Summary Compensation Table

    | Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Option Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | | Reshma Kewalramani | 2023 | $1,500,000 | $— | $15,001,894 | $— | $4,050,000 | $42,547 | $20,594,441 | | CEO and President | 2022 | $1,396,154 | $— | $10,640,784 | $— | $3,784,500 | $43,059 | $15,864,497 | | | 2021 | $1,221,923 | $— | $10,924,599 | $— | $3,016,570 | $35,764 | $15,198,856 | | Charles F. Wagner, Jr. | 2023 | $825,000 | $— | $5,250,552 | $— | $1,256,063 | $40,136 | $7,371,751 | | EVP & Chief Financial Officer | 2022 | $793,269 | $— | $3,750,197 | $— | $1,239,315 | $28,830 | $5,811,611 | | | 2021 | $729,615 | $— | $4,375,430 | $— | $1,078,539 | $40,348 | $6,223,932 | | David M. Altshuler | 2023 | $825,000 | $— | $4,375,089 | $— | $1,299,375 | $41,636 | $6,541,100 | | EVP & Chief Scientific Officer | 2022 | $810,577 | $— | $4,500,090 | $— | $1,172,325 | $42,137 | $6,525,129 | | | 2021 | $756,731 | $— | $4,375,430 | $— | $1,159,200 | $39,976 | $6,331,337 | | Stuart A. Arbuckle | 2023 | $900,000 | $— | $6,234,712 | $— | $1,822,500 | $41,737 | $8,998,949 | | EVP & Chief Operating Officer | 2022 | $900,000 | $— | $12,294,259 | $— | $1,761,750 | $43,097 | $14,999,106 | | | 2021 | $842,308 | $— | $5,250,173 | $— | $1,676,700 | $40,960 | $7,810,141 | | Jeffrey M. Leiden | 2023 | $— | $— | $6,500,260 | $— | $— | $95,022 | $6,595,282 | | Executive Chairman | 2022 | $— | $— | $8,500,250 | $— | $— | $92,930 | $8,593,180 | | | 2021 | $242,308 | $— | $7,875,259 | $— | $— | $39,672 | $8,157,239 |

  83. Summary Compensation Table

    | (1) Pursuant to applicable SEC rules, the grant-date fair values of the equity awards granted in February 2023 for 2022 performance are included in 2023 compensation. Also included in 2022 compensation is the grant-date fair value of a one-time equity awards granted in December 2022 to Mr. Arbuckle. The equity awards granted in February 2024 to Dr. Kewalramani, Mr. Wagner, Dr. Altshuler and Mr. Arbuckle for 2023 performance and the equity awards granted in February 2024 to Dr. Leiden pursuant to his employment agreement, in each case that are discussed in the Compensation Discussion and Analysis section above, are not reflected in the Summary Compensation Table above. |

  84. Grants of Plan-Based Awards During 2023

    Grants of Plan-Based Awards During 2023 The following table provides information with respect to grants of awards to each of our NEOs during 2023. Pursuant to SEC rules, (i) the threshold, target and maximum amounts payable pursuant to our 2023 annual cash bonus program are set forth in columns under “Estimated Possible Payouts under Non-Equity Incentive Plan Awards,” (ii) the threshold, target, and maximum number of shares that could vest pursuant to PSUs granted in 2023 are set forth in columns under “Estimated Future Payouts under Equity Incentive Plan Awards,” and (iii) the number of shares granted pursuant to other RSU awards in 2023 is set forth under “All Other Stock Awards: Number of Shares of Stock or Units.”

  85. Grants of Plan-Based Awards During 2023

    | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards (shares) | | | All Other Stock Awards: Number of Shares of | Grant-Date Fair Value of Stock and Option | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Stock or Units (#) | Awards ($) | | Reshma Kewalramani(1) | | $— | $1,800,000 | $4,050,000 | | | | | | | (2a) | 2/1/2023 | | | | — | 13,486 | 26,972 | | $4,286,255 | | (2b) | 2/1/2023 | | | | — | 13,486 | 26,972 | | $2,143,128 | | (3) | 2/1/2023 | | | | | | | 26,972 | $8,572,511 | | Charles F. Wagner, Jr.(1) | | $— | $577,500 | $1,299,375 | | | | | | | (2a) | 2/1/2023 | | | | — | 4,720 | 9,440 | | $1,500,158 | | (2b) | 2/1/2023 | | | | — | 4,720 | 9,440 | | $750,079 | | (3) | 2/1/2023 | | | | | | | 9,440 | $3,000,315 | | David M. Altshuler(1) | | $— | $577,500 | $1,299,375 | | | | | | | (2a) | 2/1/2023 | | | | — | 3,933 | 7,866 | | $1,250,025 | | (2b) | 2/1/2023 | | | | — | 3,933 | 7,866 | | $625,013 | | (3) | 2/1/2023 | | | | | | | 7,866 | $2,500,051 | | Stuart A. Arbuckle(1) | | $— | $810,000 | $1,822,500 | | | | | | | (2a) | 2/1/2023 | | | | — | 5,605 | 11,210 | | $1,781,437 | | (2b) | 2/1/2023 | | | | — | 5,605 | 11,210 | | $890,719 | | (3) | 2/1/2023 | | | | | | | 11,209 | $3,562,556 | | Jeffrey M. Leiden(1) | | $— | $— | $— | | | | | | | (2a) | 2/1/2023 | | | | — | 10,226 | 20,452 | | $3,250,130 | | (2b) | 2/1/2023 | | | | — | — | — | | $— | | (3) | 2/1/2023 | | | | | | | 10,226 | $3,250,130 |

  86. Grants of Plan-Based Awards During 2023

    (1) Annual Cash Bonus. The amounts in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” column represent the minimum threshold, target and maximum amounts that our NEOs were eligible to earn pursuant to our 2023 annual cash bonus program. Actual amounts paid to each of the NEOs under this program for 2023 performance are set forth in the Summary Compensation Table above. (2) PSU. The amounts in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column represent the minimum threshold, target and maximum number of shares that could be earned and vest pursuant to PSUs granted in 2023. Pursuant to U.S. GAAP, the grant date value of the financial PSU awards (2a) was based on 100% of the fair value of the target shares and the grant date value of the non-financial PSU awards (2b) was based on a fair value of 50% of the target shares in 2023. These awards vest if, and only if, performance objectives are achieved, as described in the footnotes to the table Outstanding Equity Awards at Fiscal Year-End for 2023 below. (3) Time-Based RSUs. The amounts in the “All Other Stock Awards: Number of Shares of Stock or Units” column represent the number of time-based RSUs granted to the NEOs in 2023, which (other than with respect to Dr. Leiden) generally vest annually over three years.

  87. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table Each NEO has entered into an employment agreement with the company, which provides the executives the right to participate in all of the company’s compensation and benefits plans and equity programs, as described in Compensation Discussion & Analysis.

  88. Outstanding Equity Awards at Fiscal Year-End for 2023

    Outstanding Equity Awards at Fiscal Year-End for 2023 The following table provides information with respect to outstanding equity awards held by each of our NEOs on December 31, 2023, based on the closing price of $406.89 per share of our common stock on December 29, 2023:

  89. Outstanding Equity Awards at Fiscal Year-End for 2023

    | | Option Awards | | | | | Stock Awards | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (shares)(1) | Number of Securities Underlying Unexercised Options Unexercisable (shares) | Option Exercise Price (per share) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (shares) | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (shares) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Reshma Kewalramani | Time-based RSU | | | | | | | | | | | | | | 9,677(2) | $3,937,475 | | | | | | | | | 19,412(3) | $7,898,549 | | | | | | | | | 26,972(4) | $10,974,637 | | | | | Performance-based RSU | | | | | | | | | | | | | | 9,678(5) | $3,937,881 | | | | | | | | | 19,412(6) | $7,898,549 | | | | | | | | | 14,516(7) | $5,906,415 | | | | | | | | | 26,972(8) | $10,974,637 | | | | | | | | | | | 14,559(9) | $5,923,912 | | | | | | | | | 13,486(10) | $5,487,319 | | | Stock Options | | | | | | | | | | 1,565 | 0 | $187.53 | 2/5/2029 | | | | | | Charles F. Wagner, Jr. | Time-based RSU | | | | | | | | | | | | | | 3,876(2) | $1,577,106 | | | | | | | | | 6,842(3) | $2,783,941 | | | | | | | | | 9,440(4) | $3,841,042 | | | | | Performance-based RSU | | | | | | | | | | | | | | 3,876(5) | $1,577,106 | | | | | | | | | 6,842(6) | $2,783,941 | | | | | | | | | 5,814(7) | $2,365,658 | | | | | | | | | 9,440(8) | $3,841,042 | | | | | | | | | | | 5,131(9) | $2,087,753 | | | | | | | | | 4,720(10) | $1,920,521 | | | Stock Options | | | | | | | | | | 9,532 | 0 | $189.38 | 4/9/2029 | | | | | | David M. Altshuler | Time-based RSU | | | | | | | | | | | | | | 3,876(2) | $1,577,106 | | | | | | | | | 8,210(3) | $3,340,567 | | | | | | | | | 7,866(4) | $3,200,597 | | | | | Performance-based RSU | | | | | | | | | | | | | | 3,876(5) | $1,577,106 | | | | | | | | | 8,210(6) | $3,340,567 | | | | | | | | | 5,814(7) | $2,365,658 | | | | | | | | | 7,866(8) | $3,200,597 | | | | | | | | | | | 6,157(9) | $2,505,222 | | | | | | | | | 3,933(10) | $1,600,298 |

  90. Outstanding Equity Awards at Fiscal Year-End for 2023

    | | Option Awards | | | | | Stock Awards | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (shares)(1) | Number of Securities Underlying Unexercised Options Unexercisable (shares) | Option Exercise Price (per share) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (shares) | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (shares) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Stuart A. Arbuckle | Time-based RSU | | | | | | | | | | | | | | 4,651(2) | $1,892,445 | | | | | | | | | 9,749(3) | $3,966,771 | | | | | | | | | 11,209(4) | $4,560,830 | | | | | | | | | 12,753(11) | $5,189,068 | | | | | Performance-based RSU | | | | | | | | | | | | | | 4,652(5) | $1,892,852 | | | | | | | | | 9,750(6) | $3,967,178 | | | | | | | | | 6,976(7) | $2,838,465 | | | | | | | | | 11,210(8) | $4,561,237 | | | | | | | | | | | 7,312(9) | $2,975,180 | | | | | | | | | 5,605(10) | $2,280,618 | | | | | | | | | 18,811(12) | $7,654,008 | | Jeffrey M. Leiden | Performance-based RSU | | | | | | | | | | | | | | 10,464(7) | $4,257,697 | | | | | | | | | 20,452(8) | $8,321,714 | | | | | Stock Options | | | | | | | | | | 33,524 | 0 | $91.05 | 2/1/2026 | | | | | | | 103,550 | 0 | $86.52 | 2/2/2027 | | | | |

  91. Outstanding Equity Awards at Fiscal Year-End for 2023

    | (1) The option expiration dates listed above reflect the final expiration date for each of the listed options. If the NEO’s service with us is terminated, the options would expire, subject to certain exceptions, 90 days after the termination of service. | | (2) These time-based RSU awards, which were granted on February 3, 2021, vest in three annual installments. The shares listed on the table above represent the third annual installment, which vested on February 17, 2024. | | (3) These time-based RSU awards, which were granted on February 1, 2022, vest in three annual installments. The shares listed on the table above represent the second and third annual installments, which vested on February 24, 2024 and are scheduled to vest February 24, 2025, respectively. | | (4) These time-based RSU awards, which were granted on February 1, 2023, vest in three annual installments. The shares listed on the table above represent the three annual installments, the first of which vested on February 10, 2024, and are scheduled to vest in two remaining annual installments on February 10, 2025 and 2026. | | (5) This PSU award was based on the achievement of one-year financial performance metrics tied to our net product revenue for medicines for the treatment of CF during 2021. In February 2022, our MDCC certified as to the level of performance at 200% of the number of target shares with the earned shares vesting in annual installments on February 17, 2022, 2023 and 2024. The shares listed on the table above represent the final installment of the earned shares, which vested on February 17, 2024. | | (6) This PSU award was based on the achievement of one-year financial performance metrics tied to our net product revenue for medicines for the treatment of CF during 2022, with vesting of the earned shares in three equal installments on each of February 24, 2023, 2024 and 2025. In February 2023, our MDCC certified as to the level of performance at 200% of the number of target shares. The shares listed on the table above represent the second and third installments of earned shares, which vested on February 24, 2024 and are scheduled to vest on February 24, 2025, respectively. | | (7) This PSU award is based on the achievement of three-year non-financial performance metrics, which were established by the MDCC on January 20, 2021. The performance conditions associated with the awards consist of multiple clinical and research milestones, with a payout range of zero to 200%. In February 2024, our MDCC certified as to the level of performance at 100% of the number of target shares, with the number of shares reported above reflected as such. The earned shares vested on February 20, 2024. | | (8) This PSU award was based on the achievement of one-year financial performance metrics, which were established by the MDCC on February 1, 2023, and are tied to our net product revenue for medicines for the treatment of CF during 2023, with vesting of the earned shares generally occurring in three equal installments scheduled for each of February 10, 2024, 2025 and 2026. In February 2024, our MDCC certified as to the level of performance at 200% of the number of target shares, with the number of shares reported above reflected as such. Dr Leiden’s earned shares fully vested on February 10, 2024 pursuant to the terms of his amended employment agreement. | | (9) This PSU award is based on the achievement of three-year non-financial performance metrics, which were established by the MDCC on January 24, 2022, with the number and value of shares reported assuming target performance (100%). The performance conditions associated with the awards consist of multiple clinical and research milestones, with a payout range of zero to 200%. The specific clinical and research milestones are not disclosed for competitive reasons. Performance against these goals will be certified by our MDCC in early 2025. | | (10) This PSU award is based on the achievement of three-year non-financial performance metrics, which were established by the MDCC on February 1, 2023, with the number of shares reported assuming target performance (100%). The performance conditions associated with the awards consist of multiple clinical and research milestones, with a payout range of zero to 200%. The specific clinical and research milestones are not disclosed for competitive reasons. Performance against these goals will be certified by our MDCC in early 2026. | | (11) This special, one-time time-based RSU award was granted to Mr. Arbuckle in December 2022 and will cliff vest on July 1, 2025. | | (12) This special, one-time PSU award was awarded to Mr. Arbuckle in December 2022. The number of shares reported assumes target performance (100%). The performance conditions associated with the awards consist of multiple commercial milestones, with a payout range of zero to 200%. The specific commercial milestones are not disclosed for competitive reasons. Performance against these goals will be certified by our MDCC in July 2025. |

  92. Option Exercises and Stock Vested for 2023

    Option Exercises and Stock Vested for 2023 The following table sets forth the value realized by our NEOs from options to purchase common stock exercised by the NEOs during 2023 and shares of stock that vested during 2023. The value realized per share for options is based on the difference between the exercise price and the fair market value of the shares of common stock on the date the options were exercised. The value realized on vesting of stock awards is based on the fair market value of the shares of common stock on the vesting date. Options to purchase common stock are no longer provided as an element of our executive compensation program.

  93. Option Exercises and Stock Vested for 2023

    | | 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 | | Reshma Kewalramani | 17,135 | $3,858,352 | 59,413 | $17,405,936 | | Charles F. Wagner, Jr. | — | $— | 31,799 | $9,352,864 | | David M. Altshuler | 1,304 | $154,486 | 36,607 | $10,768,987 | | Stuart A. Arbuckle | 17,206 | $3,208,405 | 39,696 | $11,667,856 | | Jeffrey M. Leiden | — | $— | 76,578 | $22,721,383 |

  94. PAY RATIO

    PAY RATIO Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC requires annual disclosure of the ratio of the annual total compensation of our CEO to that of our median employee. In 2023, Dr. Kewalramani’s annual total compensation, as reported in the Summary Compensation Table, was $20,594,441 and the median of the annual total compensation of all employees of the company (other than our Chief Executive Officer) was $247,549. The ratio of annual total compensation for Dr. Kewalramani to that of our median employee’s annual total compensation was approximately 83:1. Due to growth in our employee population, we identified a new median employee using target total annual compensation in 2023. Our measure of compensation for identifying the median employee was consistently applied to all employees (converting all non-USD currencies into USD based on 12-month foreign exchange rates for the 12-month period ending October 1, 2023) and includes:

  95. PAY RATIO

    | | Base salary | | | Target cash bonus | | | Target long-term equity awards |

  96. PAY RATIO

    The methodology included all 5,294 company employees across 21 countries as of October 1, 2023. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  97. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE Pursuant to Item 402(v) of Regulation S-K, we are presenting information that describes the relationship between compensation actually paid, as computed under the rules prescribed by Item 402(v), to our NEOs and certain financial performance measures for the company’s five most recently completed fiscal years. For more information about our executive compensation program, refer to the Compensation Discussion and Analysis section of this proxy statement starting on page 50.

  98. PAY VERSUS PERFORMANCE

    | | | | | | Average | | | | | | | | | | | | Summary | Average | Total Shareholder | | | | | | Summary | Summary | | | Compensation | Compensation | Return (Value of Initial | | | | | | Compensation | Compensation | Compensation | Compensation | Table Total | Actually Paid | Fixed $100 Investment) | | | | | | Table Total for | Table Total for | Actually Paid to | Actually Paid to | for Non-CEO | to Non-CEO | VRTX | | | Net Product | | Year | CEO(1) | CEO(2) | CEO(1)(3) | CEO(2)(4) | NEOs(5) | NEOs(6) | TSR(7) | NBI TSR(8) | Net Income(9) | Revenue(10) | | 2023 | $20,594,441 | N/A | $44,202,174 | N/A | $7,376,771 | $18,104,165 | $245.54 | $148.72 | $3.6 Billion | $9.9 Billion | | 2022 | $15,864,497 | N/A | $29,529,089 | N/A | $8,982,257 | $18,263,330 | $174.27 | $142.19 | $3.3 Billion | $8.9 Billion | | 2021 | $15,198,856 | N/A | $18,341,489 | N/A | $7,193,835 | $8,969,051 | $132.52 | $158.20 | $2.3 Billion | $7.6 Billion | | 2020 | $9,111,359 | $16,473,245 | $12,172,454 | $31,319,824 | $6,697,408 | $10,584,384 | $142.62 | $158.17 | $2.7 Billion | $6.2 Billion | | 2019 | N/A | $18,789,985 | N/A | $37,124,321 | $4,668,405 | $7,828,475 | $132.13 | $125.11 | $1.2 Billion | $4.2 Billion |

  99. PAY VERSUS PERFORMANCE

    | (1) This column reflects the amounts reported in the “Total” column of the Summary Compensation Table for Reshma Kewalramani, our CEO for a portion of 2020 (effective April 1, 2020), and for 2021, 2022 and 2023. | | (2) This column reflects the amounts reported in the “Total” column of the Summary Compensation Table for Jeffrey Leiden, our CEO for 2019 and a portion of 2020 (until April 1, 2020). |

  100. PAY VERSUS PERFORMANCE

    | (3) The amounts in this column reflect the Compensation Actually Paid for Reshma Kewalramani, our CEO for a portion of 2020 (effective April 1, 2020), and for 2021, 2022 and 2023. The amounts in the following table reflect the adjustments (additions/deductions) to the Summary Compensation Table Total to determine Compensation Actually Paid. Adjustments (additions/deductions) are not listed for Pension/Non-Qualified Deferred Compensation because we do not offer these plans. |

  101. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total | Amounts Deducted from Grant Date Value of Annual Equity | Amounts Added for the Fair Value of Awards Granted During Fiscal Year | Amounts Added for Awards Granted & Vested During Fiscal Year | Amounts Add/ Deducted for Awards that Vested During Fiscal Year | Amounts Added/ Deducted for the Change in Fair Value of Awards Outstanding at Fiscal Year End(a) | Compensation Actually Paid | | 2023 | $20,594,441 | $(15,001,894) | $24,692,933 | $— | $272,767 | $13,643,927 | $44,202,174 | | 2022 | $15,864,497 | $(10,640,784) | $16,817,103 | $— | $768,712 | $6,719,561 | $29,529,089 | | 2021 | $15,198,856 | $(10,924,599) | $14,344,492 | $— | $(659,323) | $382,063 | $18,341,489 | | 2020 | $9,111,359 | $(5,250,411) | $6,587,268 | $— | $345,685 | $1,378,553 | $12,172,454 |

  102. PAY VERSUS PERFORMANCE

    | (a) Pursuant to applicable SEC rules, the fair values at the end of each fiscal year for the financial PSU awards were valued at 200% as of December 31, 2023, 2022, 2021, 2020 and 2019; and, the non-financial PSU award for 2020 was valued at 200%, 50% and 50% as of December 31, 2022, 2021 and 2020, respectively; the non-financial PSU award for 2021 was valued at 100%, 50% and 50% as of December 31, 2023, 2022 and 2021, respectively; the non-financial PSU award for 2022 was valued at 50% and 0% as of December 31, 2023 and 2022, respectively; the non-financial PSU award for 2023 was valued at 50% as of December 31, 2023. |

  103. PAY VERSUS PERFORMANCE

    | (4) The amounts in this column reflect the Compensation Actually Paid for Jeffrey Leiden, our CEO for 2019 and a portion of 2020 (until April 1, 2020). The amounts in the following table reflect the adjustments (additions/deductions) to the Summary Compensation Table Total to determine Compensation Actually Paid. Adjustments (additions/deductions) are not listed for Pension/Non-Qualified Deferred Compensation because we do not offer these plans. |

  104. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total | Amounts Deducted from Grant Date Value of Annual Equity | Amounts Added for the Fair Value of Awards Granted During Fiscal Year | Amounts Added for Awards Granted & Vested During Fiscal Year | Amounts Add/ Deducted for Awards that Vested During Fiscal Year | Amounts Added/ Deducted for the Change in Fair Value of Awards Outstanding at Fiscal Year End(a) | Compensation Actually Paid | | 2020 | $16,473,245 | $(13,335,168) | $9,294,661 | $7,362,423 | $5,724,395 | $5,800,268 | $31,319,824 | | 2019 | $18,789,985 | $(13,906,720) | $17,220,100 | $509,338 | $4,201,319 | $10,310,299 | $37,124,321 |

  105. PAY VERSUS PERFORMANCE

    | (a) Pursuant to applicable SEC rules, the fair values at the end of each fiscal year for the financial PSU awards were valued at 200% as of December 31, 2020, 2019 and 2018; and, the non-financial PSU award for 2016 was valued at 200% as of December 31, 2018; the non-financial PSU award for 2017 was valued at 200% as of December 31, 2019 and 2018; the non-financial PSU award for 2018 was valued at 200%, 100% and 100% as of December 31, 2020, 2019 and 2018, respectively; the non-financial PSU award for 2019 was valued at 100% and 50% as of December 31, 2020 and 2019, respectively; the non-financial PSU award for 2020 was valued at 50% as of December 31, 2020. |

  106. PAY VERSUS PERFORMANCE

    | (5) This column reflects the average of the amounts reported in the “Total” column of the Summary Compensation Table for our NEOs as a group (excluding our CEO or CEOs, in the case of 2020) for each of the periods presented. The NEOs included for purposes of computing the amounts in this column were as follows: for 2023 and 2022, Mr. Wagner, Dr. Altshuler, Mr. Arbuckle, and Dr. Leiden; for 2021, Mr. Wagner, Mr. Arbuckle, Dr. Leiden, and Nia Tatsis; for 2020, Mr. Wagner, Dr. Altshuler, Mr. Arbuckle, and Michael Parini; and for 2019, Ms. Kewalramani, Mr. Wagner, Mr. Arbuckle, Amit Sachdev, Paul Silva and Ian Smith. |

  107. PAY VERSUS PERFORMANCE

    | (6) This column reflects the average of the Compensation Actually Paid for our NEOs as a group (excluding our CEO or CEOs, in the case of 2020) for each of the periods presented. The amounts in the following table reflect the adjustments to the Summary Compensation Table Total to determine Compensation Actually Paid. The NEOs included for purposes of computing the amounts in this column are listed in footnote (5) above. Adjustments (additions/deductions) are not listed for Pension/Non-Qualified Deferred Compensation because we do not offer these plans. |

  108. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total | Amounts Deducted from Grant Date Value of Annual Equity | Amounts Added for the Fair Value of Awards Granted During Fiscal Year | Amounts Added for Awards Granted & Vested During Fiscal Year | Amounts Add/ Deducted for Awards that Vested During Fiscal Year | Amounts Added/ Deducted for the Change in Fair Value of Awards Outstanding at Fiscal Year End(a) | Compensation Actually Paid | | 2023 | $7,376,771 | $(5,590,153) | $8,606,944 | $812,533 | $236,286 | $6,661,784 | $18,104,165 | | 2022 | $8,982,257 | $(7,261,199) | $9,489,852 | $1,062,531 | $538,093 | $5,451,796 | $18,263,330 | | 2021 | $7,193,835 | $(5,687,759) | $6,319,320 | $1,125,037 | $(778,741) | $797,359 | $8,969,051 | | 2020 | $6,697,408 | $(4,812,998) | $6,038,487 | $— | $1,048,920 | $1,612,567 | $10,584,384 | | 2019 | $4,668,405 | $(3,093,700) | $4,011,590 | $103,204 | $866,837 | $1,272,139 | $7,828,475 |

  109. PAY VERSUS PERFORMANCE

    | (a) Pursuant to applicable SEC rules, the fair values at the end of each fiscal year for the financial PSU awards were valued at 200% as of December 31, 2023, 2022, 2021, 2020, 2019, and 2018; and, the non-financial PSU award for 2016 was valued at 200% as of December 31, 2018; the non-financial PSU award for 2017 was valued at 200% as of December 31, 2019 and 2018; the non-financial PSU award for 2018 was valued at 200%, 100% and 100% as of December 31, 2020, 2019 and 2018, respectively; the non-financial PSU award for 2019 was valued at 200%, 100% and 50% as of December 31, 2021, 2020 and 2019; the non-financial PSU award for 2020 was valued at 200%, 50% and 50% as of December 31, 2022, 2021 and 2020; the non-financial PSU award for 2021 was valued at 100%, 50% and 50% as of December 31, 2023, 2022 and 2021, respectively; the non-financial PSU award for 2022 was valued at 50% and 0% as of December 31, 2023 and 2022, respectively; the non-financial PSU award for 2023 was valued at 50% as of December 31, 2023. |

  110. PAY VERSUS PERFORMANCE

    | (7) This column represents our cumulative total shareholder return (“TSR”) under SEC rules from December 31, 2018, the last trading day before the start of 2019, through the last trading day for the applicable fiscal year in the table. TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our share price at the end and the beginning of the measurement period by our share price at the beginning of the measurement period. |

  111. PAY VERSUS PERFORMANCE

    | (8) This column represents the TSR of the NBI, our selected peer group, which is the same peer group used for purposes of Item 201(e) of Regulation S-K from December 31, 2018, the last trading day before the start of 2019, through the last trading day for the applicable fiscal year in the table, assuming reinvestment of dividends and weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. |

  112. PAY VERSUS PERFORMANCE

    | (9) This column reflects net income as reported for each year in our Annual Report on Form 10-K. | | (10) This column reflects net product revenue as reported for each year in our Annual Report on Form 10-K. For purposes of the table above, we have selected net product revenue as the financial performance measure representing the most important financial performance measure used to link executive compensation actually paid to our financial performance in the most recently completed fiscal year. Please the Compensation Discussion and Analysis section beginning on page 50 of this proxy statement for additional information. |

  113. Compensation Actually Paid vs TSR (and TSR vs Peer Group TSR)

    Compensation Actually Paid vs TSR (and TSR vs Peer Group TSR)

  114. Compensation Actually Paid vs TSR (and TSR vs Peer Group TSR)

    | (1) 2020 Compensation Actually Paid represented here reflects 2020 compensation of Reshma Kewalramani, our current CEO, and excludes 2020 compensation paid to Jeffrey Leiden, our former CEO. |

  115. Compensation Actually Paid vs Net Income

    Compensation Actually Paid vs Net Income

  116. Compensation Actually Paid vs Net Income

    | (1) 2020 Compensation Actually Paid represented here reflects 2020 compensation of Reshma Kewalramani, our current CEO, and excludes 2020 compensation paid to Jeffrey Leiden, our former CEO. |

  117. Compensation Actually Paid vs Net Product Revenue

    Compensation Actually Paid vs Net Product Revenue

  118. Compensation Actually Paid vs Net Product Revenue

    | (1) 2020 Compensation Actually Paid represented here reflects 2020 compensation of Reshma Kewalramani, our current CEO, and excludes 2020 compensation paid to Jeffrey Leiden, our former CEO. |

  119. List of Performance Measures

    | Performance Measures Used to Link Executive Compensation Actually Paid to Company Performance for the Most Recently Completed Fiscal Year | | Net Product Revenue | | Pipeline Progression(1) | | Adjusted Non-GAAP EBITDA(2) |

  120. Proposal No. 1: Election of Directors

    Proposal No. 1: Election of Directors To be elected, the number of votes cast “FOR” each director nominee must exceed the number of votes cast “AGAINST” that nominee. Abstentions will have no effect on the results of this vote. Our Corporate Governance Principles contain procedures to be followed in the event that one or more directors do not receive a majority of the votes cast “FOR” their election.