DEF 14A of iRhythm Holdings, Inc.
Filed Apr 11, 2024 · FY20230001388658-24-000079
Director Nominee Expertise, Skills, and Experience
Director Nominee Expertise, Skills, and Experience Our director nominees possess relevant individual experiences, qualifications and skills that allow the Board of Directors to effectively oversee the company’s strategy and management. Our directors’ principal areas of expertise include:
Director Nominee Expertise, Skills, and Experience
| Skill | Abhijit Y. Talwalkar (Chairman) | Quentin Blackford | Bruce G. Bodaken | Karen Ling | C. Noel Bairey Merz, M.D. | Mojdeh Poul | Mark J. Rubash | Ralph Snyderman, M.D. | Brian Yoor | | Healthcare/Medical Device Industry | | X | X | X | X | X | X | X | X | | Technology and Data Security | X | | | | | | X | | X | | Marketing & Commercial | | X | | | X | X | | X | | | Senior Leadership | X | X | X | X | X | X | X | X | X | | Finance | X | X | X | | | X | X | X | X | | Public Company Governance | X | X | X | X | | X | X | X | X | | Global Operations | X | X | | X | | X | X | | X | | Medical Experience | | | | | X | | | X | | | Regulatory & Compliance | | | | | X | X | | X | | | Human Capital Management | X | X | X | X | | X | | X | X | | Enterprise Risk Management | X | X | X | | | | X | | X | | Environmental, Social & Governance | X | | X | X | | X | X | | |
PROPOSAL NO. 1 ELECTION OF DIRECTORS
PROPOSAL NO. 1 ELECTION OF DIRECTORS Our Board of Directors will be composed of nine members. At the Annual Meeting, each of our director nominees will be elected for a one-year term. Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal.
Nominees for Director
Nominees for Director
Nominees for Director
| Name of Director | Age | Position | Director Since | | Quentin Blackford | 45 | Chief Executive Officer and Director | October 2021 | | Abhijit Y. Talwalkar | 60 | Chairman of the Board | May 2016 | | C. Noel Bairey Merz, M.D. | 68 | Director | April 2018 | | Bruce G. Bodaken | 72 | Director | July 2017 | | Karen Ling | 60 | Director | November 2021 | | Mojdeh Poul | 61 | Director | June 2023 | | Mark J. Rubash | 66 | Director | March 2016 | | Ralph Snyderman, M.D. | 84 | Director | July 2017 | | Brian Yoor | 54 | Director | June 2023 |
Nominees for Director
Quentin S. Blackford has served as our President and Chief Executive Officer and a member of our Board of Directors since October 2021. From September 2017 to September 2021, Mr. Blackford, held various roles, the most recent one as the Chief Operating Officer at Dexcom Inc., a company that develops, manufactures, produces, and distributes continuous glucose monitoring systems for diabetes management. From February 2009 to September 2017, Mr. Blackford held various roles, the most recent one as the Chief Financial Officer at Nuvasive Inc., a medical device company for minimally invasive spine surgery. From June 1999 to September 2009, Mr. Blackford held various roles, the most recent one as the Director of Finance and Controller of the Dental Division at Zimmer Holdings, Inc., a medical device company. Mr. Blackford has served as an independent member of the Board of Directors of Alphatec Holdings, Inc. since October 2017 and Paragon 28, Inc. since August 2022. He is a Certified Public Accountant (inactive) and received dual B.S. degrees in Accounting and Business Administration from Grace College. We believe Mr. Blackford is qualified to serve on our Board of Directors due to his experience gained from serving as our Chief Executive Officer, combined with his previous training and qualifications and the skills and experience he has developed during his extensive career in the medical devices industry. Abhijit Y. Talwalkar has served as a member and Chairman of our Board of Directors since May 2016. Mr. Talwalkar served as President and Chief Executive Officer of LSI Corporation, a leading provider of silicon, systems and software technologies for the storage and networking markets, from May 2005 to May 2014. From 1993 to 2005, Mr. Talwalkar was employed by Intel Corporation and held a number of senior management positions, including Corporate Vice President and Co-General Manager of the Digital Enterprise Group, which was comprised of Intel’s business client, server, storage and communications business, and Vice President and General Manager for the Intel Enterprise Platform Group. Prior to joining Intel, Mr. Talwalkar held senior engineering and marketing positions at Sequent Computer Systems, a multiprocessing computer systems design and manufacturer, Bipolar Integrated Technology, Inc., a VLSI bipolar semiconductor company, and Lattice Semiconductor Inc., a service-driven developer of programmable design solutions. Mr. Talwalkar has served on the Board of Directors for Advanced Micro Devices, a leading provider of high-performance computing, graphics and visualization solutions since August 2017. Since March 2017, Mr. Talwalkar has served as a member of the Board of Directors of TE Connectivity Ltd. and previously served as an advisor to the Board of Directors from August 2016 to March 2017. Since 2011, Mr. Talwalkar has served on the Board of Directors of Lam Research Corporation and has previously served as a member of the Board of Directors of LSI from May 2005 to May 2014 and the U.S. Semiconductor Industry Association from May 2005 to May 2014. He has served as the Chairman of the Bay Area chapter of the nationwide non-profit organization Friends of the Children since January 2015. He holds a B.S. in Electrical Engineering from Oregon State University. We believe that Mr. Talwalkar is qualified to serve as Chairman of our Board of Directors because of his experience in leadership roles at major technology companies and his years of experience serving on public company boards of directors. C. Noel Bairey Merz, M.D. has served as a member of our Board of Directors since April 2018. Dr. Bairey Merz has been the Medical Director of the Preventive and Rehabilitative Center at the Cedars- Sinai Medical Center in Los Angeles, California since 1991. She also has been the Medical Director and Endowed Chair of the Barbra Streisand Women’s Heart Center at the Smidt Heart Institute at Cedars-Sinai since 2001, and a Professor of Medicine at Cedars Sinai Medical Center and the David Geffen School of Medicine at the University of California at Los Angeles. Dr. Bairey Merz is a member of the Association of American Physicians and the Association of University Cardiologists, where she served as President from 2015 to 2016. From 2005 to 2009, she served on the Scientific Advisory Board of CV Therapeutics, Inc, a biopharmaceutical company. She also has extensive experience on non-profit boards, councils and guideline panels, including the American College of Cardiology, the American Heart Association and the National Heart, Lung, and Blood Institute. Since 2016, Dr. Bairey Merz has served on multiple editorial boards, including for the Journal of the American College of Cardiology, Circulation, and European Heart Journal. Dr. Bairey Merz holds a B.A. (Honors) in Biological Sciences from the University of Chicago and a M.D. (Honors) from Harvard Medical School. She completed her training in Internal Medicine at the University of California, San Francisco, and Cardiology at Cedars-Sinai Medical Center. We believe that Dr. Bairey Merz is qualified to serve as a member of our Board of Directors because of her extensive medical training and her leadership experience with for-profit and non-profit organizations. Bruce G. Bodaken has served as a member of our Board of Directors since July 2017. Mr. Bodaken previously served as Chairman and Chief Executive Officer of Blue Shield of California, where he was responsible for strategy and management of California’s third largest insurer. He served as Blue Shield of California’s President and Chief Operating Officer from January 1996 to December 2000. Mr. Bodaken was previously a member of the faculty of the University of California, Berkeley in the Department of Public Health, and a visiting fellow at the Brookings Institution, focused on value-based care. Mr. Bodaken has served on the Board of Directors of Rite Aid Corporation since May 2013. Mr. Bodaken holds a B.A. in Philosophy from Colorado State University and a M.A. in Philosophy from the University of Colorado. We believe that Mr. Bodaken is qualified to serve as a member of our Board of Directors because of his extensive business and leadership experience in the healthcare industry. Karen Ling has served as a member of our Board of Directors since November 2021. From July 2019 to May 2021, Ms. Ling was the Executive Vice President and Chief Human Resources Officer for American International Group, Inc. In this role, Ms. Ling oversaw all aspects of human capital management, including talent acquisition, training, development, compensation and benefits, and diversity and inclusion. From March 2015 to July 2019, Ms. Ling was the Executive Vice President and Chief Human Resources Officer at Allergan plc., a pharmaceutical company. There, Ms. Ling developed and oversaw a global human resources strategy. From January 2014 to March 2015, Ms. Ling was the Senior Vice President and Chief Human Resources Officer at Forest Laboratories, Inc. and then Actavis plc., prior to its acquisition of Allergan plc. Previously, Ms. Ling was global Senior Vice President, Human Resources for Merck & Co., Inc.’s Global Human Health and Consumer Care business. Prior to Merck, she was Group Vice President, Global Compensation & Benefits at Schering- Plough. Ms. Ling also spent 14 years at Wyeth in various positions of increasing responsibility, developing human resources strategies for business units and working in Wyeth’s Labor & Employment department. She has also served as a member of the Advisory Committee of Galderma SA since March 2022. Ms. Ling has a B.A. in Economics from Yale University and a Juris Doctor from Boston University School of Law. We believe that Ms. Ling is qualified to serve as a member of our Board of Directors because of her extensive business and leadership experience in the healthcare industry.
Nominees for Director
Mojdeh Poul has served as a member of our Board of Directors since June 2023. Ms. Poul has over thirty years of experience leading global businesses and operations in large multinational organizations. From April 2019 to June 2022, Ms. Poul served as the Executive Vice President and Group President of 3M Company’s Healthcare Business, where she led the global P&L, strategy, manufacturing and commercial operations, and R&D for the $8.6B Healthcare Business Group. Prior to that and from April 2011, Ms. Poul held multiple leadership roles at 3M, including as Executive Vice President of Safety & Graphics Business Group, as President of 3M Canada, and as President of two divisions within the 3M Healthcare Business Group. Prior to 3M, Ms. Poul held global business leadership roles of increasing responsibility with leading global medical technology companies, including Medtronic, ev3, Boston Scientific, and Teleflex Medical. Ms. Poul has served on the Board of Directors of Stanley Black and Decker since February of 2021, where she is a member of the audit and talent & compensation committees. She has also served on the Board of Directors of Align Technology since December of 2023. Ms. Poul holds an M.B.A from University of North Carolina at Chapel Hill as well as a Master of Engineering and B.S. in Mechanical Engineering from University of Louisville. We believe that Ms. Poul is qualified to serve as a member of our Board of Directors because of her extensive experience leading global business and operations in large multinational organizations. Mark J. Rubash has served as a member of our Board of Directors since March 2016. Most recently, from December 2016 to September 2018, Mr. Rubash served as a Strategic Advisor to Eventbrite, Inc., a publicly held e-commerce company, where he previously served as the Chief Financial Officer from June 2013 to November 2016. Prior to Eventbrite, Mr. Rubash was the Chief Financial Officer at HeartFlow, Inc., a privately held medical device company, which he joined in March 2012, and at Shutterfly, Inc., a publicly held e-commerce company, which he joined in November 2007. Mr. Rubash was also the Chief Financial Officer of Deem, Inc. (formerly, Rearden Commerce), a privately held e-commerce company, from August 2007 to November 2007. From February 2007 to August 2007, Mr. Rubash was a Senior Vice President at Yahoo! Inc. and he held various senior finance positions at eBay Inc. from February 2001 to July 2005. Prior to that, Mr. Rubash was an audit partner at PricewaterhouseCoopers LLP, where he was most recently the Global Leader for their Internet Industry Practice and Managing Partner for their Silicon Valley Software Industry Practice. Mr. Rubash has served as a member of the Board of Directors and Chairman of the audit committee of Intuitive Surgical, Inc., a medical device company, since October 2007, as Chairman of the Intuitive Foundation, a not-for-profit organization since August 2018, as a member of the Board of Directors and Chairman of the audit committee of Line 6, Inc., a music technology company, from April 2007 to January 2014, as a member of the Board of Directors and audit committee of IronPlanet, Inc., a privately held e-commerce platform company for used heavy equipment, from March 2010 to May 2017, and as Chairman of IronPlanet’s audit committee from October 2015 to May 2017, and as a member of the Board of Directors of Minted Inc., a privately-held e-commerce company from June 2022 to October 2023. Mr. Rubash received his B.S. in Accounting from California State University, Sacramento. We believe that Mr. Rubash is qualified to serve as a member of our Board of Directors because of his financial expertise and his experience with private and public company financial accounting matters and risk management. Ralph Snyderman, M.D. has served as a member of our Board of Directors since July 2017. Dr. Snyderman is Chancellor Emeritus, James B. Duke Professor of Medicine, and Executive Director of the Center for Research on Personalized Health Care at Duke University. From 1989 to 2004, he served as Chancellor for Health Affairs at Duke and was the founding CEO and President of the Duke University Health System. From 2006 to 2009, he was a venture partner with New Enterprise Associates, a venture capital firm. Dr. Snyderman currently serves on the boards of DNAnexus and ZealCare, Inc., as well as several not-for-profit boards, including the Heartland Whole Health Institute. He previously served on the boards of directors of The Procter and Gamble Company (P&G), Press Ganey Associates, Inc, CareDx, and Pharmaceutical Product Development, LLC (PPD), in addition to others. Dr. Snyderman is a member of the Association of American Physicians, where he served as president from 2003 to 2004, the Association of American Medical Colleges, where he served as chair from 2001 to 2002, the National Academy of Medicine, and the American Academy of Arts & Sciences. Dr. Snyderman holds a B.S. in Pre-Medical Studies from Washington College and an M.D. from the State University of New York, Downstate Medical Center. He completed his internship and residency in Medicine at Duke University. We believe that Dr. Snyderman is qualified to serve as a member of our Board of Directors because of his extensive experience serving on the boards of directors of public and private companies and his deep knowledge of the healthcare industry. Brian Yoor has served as a member of our Board of Directors since June 2023. Mr. Yoor spent most of his career at Abbott Laboratories, where he last served as Chief Financial Officer. Prior to that, Mr. Yoor held multiple leadership roles at Abbott including Division Controller for multiple business units, and Vice President of Investor Relations. Mr. Yoor currently serves as chairman of the Board of Directors of Covira Surgical, a biotech start-up in the microbiome space, and also serves as the audit committee chair for Confluent Medical, a private equity medical device manufacturer. Mr. Yoor previously served as the founding Chairman and an Operating Partner at Portal Innovations, a venture capital company for early life science start-ups. Mr. Yoor attended the University of Toledo, where he earned his Bachelor of Business Administration in Accounting. We believe that Mr. Yoor is qualified to serve as a member of our Board of Directors because of his extensive financial expertise and his business and leadership experience in the healthcare industry.
Non-Employee Director Compensation
Non-Employee Director Compensation The following table provides information for 2023 regarding all compensation awarded to, earned by, or paid to each person who served as a director during 2023, other than Mr. Blackford, our Chief Executive Officer. Mr. Blackford is not included in the table below as he is an employee and receives no compensation for his service as a director. The compensation received by Mr. Blackford as an employee is set forth in the section titled “Executive Compensation” below.
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards(3) | Total | | Abhijit Y. Talwalkar | $113,618 | $173,118 | $286,736 | | C. Noel Bairey Merz, M.D. | $57,500 | $173,118 | $230,618 | | Bruce G. Bodaken | $67,129 | $173,118 | $240,247 | | Renee Budig(1) | $30,000 | $— | $30,000 | | Karen Ling | $66,855 | $173,118 | $239,973 | | Mark J. Rubash | $75,000 | $173,118 | $248,118 | | Ralph Snyderman, M.D. | $60,000 | $173,118 | $233,118 | | Mojdeh Poul(2) | $34,945 | $264,730 | $299,675 | | Brian Yoor(2) | $34,945 | $264,730 | $299,675 |
Non-Employee Director Compensation
(1)Ms. Budig did not stand for re-election at our 2023 annual meeting of stockholders and was no longer a member of our Board of Directors, effective May 24, 2023. (2)Ms. Poul and Mr. Yoor were appointed to our Board of Directors effective June 1, 2023. (3)The values of the stock awards reflect the grant date fair value of restricted stock units granted during 2023 and are based on the company’s closing price on the grant date in accordance with FASB ASC Topic 718. For a discussion of our valuation assumptions, see Note 2 and Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024. (4)For information regarding the number of restricted stock awards and stock options held by each non-employee director as of December 31, 2023, see the table below:
Non-Employee Director Compensation
| Name | Shares Underlying Option Awards Held as of December 31, 2023 | Shares Underlying Stock Awards Held as of December 31, 2023 | | Abhijit Y. Talwalkar | 24,230 | 1,396 | | C. Noel Bairey Merz, M.D. | — | 1,396 | | Bruce G. Bodaken | 228 | 1,396 | | Karen Ling | — | 2,836 | | Mojdeh Poul | — | 2,399 | | Mark J. Rubash | 23,901 | 1,396 | | Ralph Snyderman, M.D. | 3,839 | 1,396 | | Brian Yoor | — | 2,399 |
Pay for Performance Philosophy
Pay for Performance Philosophy iRhythm’s executive compensation programs and policies are designed to retain and motivate a strong, capable, high functioning and experienced executive team with the ability to execute on our strategic growth objectives, while aligning strong performance, collaboration and accountability with business results and the interests of our stockholders. To ensure this alignment and to reward individual initiative and effort, a substantial portion of the NEOs’ target total direct compensation is performance-based and “at-risk.” In 2023, we emphasized performance-based compensation through two separate compensation elements: •The first is the annual cash bonus award that is based on the company’s performance against financial objectives specified at the beginning of the performance year and an evaluation of individual accomplishments and performance during the year. •The second is the grant of PSU awards as part of our annual equity cycle, which comprise 50% of the NEOs’ annual long-term incentive compensation. These annual PSUs require our achievement of a target goal of compound annual growth rate in global unit volume over a three-year period, with the resulting achievement modified by our relative shareholder returns or TSR against an industry index. The performance-based and variable pay elements ensure that a substantial portion of the NEOs’ target total compensation for 2023 is “at risk”, with the amounts ultimately payable subject to variability above or below target levels commensurate with the company’s actual performance. Specifically, approximately 90% of the CEO’s and 84% of the other NEOs’ annual compensation is variable and connected to company’s operational, financial, and share price performance. The annual pay mix for the CEO and other NEOs in 2023 is reflected below and excludes the Strategic PSUs. To ensure ongoing alignment to the compensation philosophy, the Committee also periodically evaluates the relationship between the reported values of the equity awards granted to our executive officers, and the amount of compensation realizable (and, ultimately, realized) from such awards in subsequent years and corresponding company performance over the same period.
Executive Compensation Policies and Practices
| What We Do | What We Don’t Do | | ▪Maintain an Independent Committee. The Committee consists solely of independent directors. ▪Retain an Independent Compensation Adviser. The Committee engaged an independent consultant to advise on all executive compensation related matters independent of management. ▪Compensation At-Risk. Our executive compensation program is designed so that a significant portion of our NEOs’ compensation is “at risk” and directly linked to our corporate and stock performance, as well as equity-based to align with the interests of our stockholders. ▪“Double-Trigger” Change-in-Control Arrangements. Our post-employment compensation arrangements in the event of a change in control of the company are “double-trigger” arrangements that require both a change in control of the company plus a qualifying termination of employment before payments and benefits are paid. ▪Compensation Recovery (“Clawback”) and Misconduct Policies. We have adopted two separate and robust compensation recovery policies applicable to current and certain former executive officers – one is triggered by certain misconduct and one is triggered by an accounting restatement, which is intended to comply with the latest Nasdaq listing rule. ▪Stock Ownership Guidelines. We have a robust stock ownership policy for our NEOs and the non-employee members of our Board of Directors. ▪Declined 2023 Equity Incentive Plan Increase. We are committed to responsible management or our equity incentive plan, and decided to not take the evergreen equity refresh provision in 2023 that our current plan allows. | ▪No Executive Employment Agreements: We do not maintain employment agreements with any executive including the NEOs. ▪No Executive Retirement Plans. We do not offer supplemental pension or retirement plans or arrangements to our NEOs. ▪Limited Executive Perquisites. We do not provide perquisites or other personal benefits with an aggregate incremental amount of more than $10,000 to any NEO. ▪No Tax Gross-Ups on Perquisites: We do not provide any tax gross-ups on perquisites, other than related to standard relocation and corporate housing benefits. ▪No Special Welfare or Health Benefits. Our NEOs participate in broad-based company-sponsored health and welfare benefits programs on the same basis as our employees generally. ▪No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments including “gross-ups” on any severance or change-in-control payments or benefits. ▪No Hedging or Pledging of Our Equity Securities. We prohibit our employees, including our executive officers, and the members of our Board of Directors from engaging in certain derivative transactions and from hedging our securities, and from holding our securities in a margin account or pledging our securities as collateral for a loan. |
Compensation-Setting Process
Compensation-Setting Process The Committee reviews the base salary, annual cash bonus and long-term incentive compensation of the CEO and other NEOs at the beginning of the calendar year, or more frequently as warranted to develop the target total compensation opportunities. The Committee does not use a single method or measure in formulating the compensation program, nor does it establish specific targets for the total direct compensation of the NEOs. The Committee and our Board of Directors consider the following factors: •the company’s performance against the financial and operational objectives established earlier during the fiscal year and for the financial metrics, where available, our company’s performance relative to the compensation peer group selected by the Committee; •each individual NEO’s skills, experience, qualifications and scope of role and potential contributions; •the performance of each individual NEO based on a subjective assessment of their contributions to the overall Company performance, ability to lead their business function and work as part of a team, all of which reflect the Company’s core values; •internal compensation equity among the NEOs; •the compensation practices of the compensation peer group and the positioning of each NEO’s compensation relative to comparable positions at peer companies and other market compensation levels in the broader medical device industry; and •the compensation recommendations provided by the CEO with respect to other NEOs. These factors provide the framework to make decisions regarding the total direct compensation for each NEO. Neither the Committee, nor our Board of Directors, assigns relative weights or rankings to such factors. No particular factor is determinative in setting pay levels and our Committee and our Board of Directors is guided by their knowledge, experience and collective judgment in assessing the various qualitative and quantitative inputs to make compensation decisions.
Role of Compensation Consultant
Role of Compensation Consultant The Committee engages an independent external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. For 2023, the Committee engaged Aon to serve as its independent consultant to advise on executive compensation matters. Aon’s services included an analysis of competitive market pay practices for senior executives and data analysis and selection of the compensation peer group. The market analysis and Aon’s advice are key components of the Committee’s process to determine appropriate and competitive compensation for our NEOs. For 2023, Aon regularly attended meetings of the Committee and consulted on: •assessing competitive market practices and compensation levels for our executive officers, including our NEOs; •assessing the design of our 2023 annual bonus plan, as well as a review of short-term incentive compensation plan design practices of the competitive market; •assessing executive compensation trends within our industry, and updating on corporate governance and regulatory developments; •reviewing and providing input on the Compensation Discussion and Analysis section of our proxy statement; •reviewing and analyzing the compensation for the non-employee members of our Board of Directors; •reviewing competitive market practices for stock ownership guidelines; •assessing the design of the 2023 PSU awards, as well as a review of PSU awards design and grant practices of the competitive market; •assessing the design of the Strategic PSUs tied to critical long-term operational and strategic goals for select employees including key executives; •reviewing competitive market practices for equity compensation, including burn rate and overhang, and advising on the mix of equity award types; and •the research, development and review of our compensation peer group. The terms of Aon’s engagement include reporting directly to the Committee. Aon coordinates with the management team for data collection and job matching for our executive officers. In 2023, Aon also provided non-executive compensation consulting services. In aggregate, Aon provided services worth $570,033 related to our executive compensation, broad-based compensation and sales compensation programs. The Committee evaluated Aon’s independence pursuant to the listing standards of The Nasdaq Stock Market and the relevant SEC rules and determined that no conflict of interest has arisen as a result of the work performed.
Market Comparators
Market Comparators For the purpose of comparing the executive compensation of our executive officers against the competitive market, the Committee reviews and considers the compensation levels and practices of a group of peer companies. The Committee reviews the peer group at least annually and adjusts its composition if warranted, considering changes in the Company’s business profile and the business profile of the peer companies. The compensation peer group selection process considers companies that are similar to iRhythm based on multiple parameters such as industry sector, revenue, market capitalization, geographical location and number of employees. In August 2022, the Committee reviewed and updated the compensation peer group for use in 2023 compensation planning to reflect changes in the Company’s financial profile to recognize the evolving business focus and to account for merger and acquisition activity among the peer companies. During this annual review, the Committee evaluated the companies comprising the peer group based on the following criteria: •publicly traded medical device companies headquartered in the United States with a similar employee headcount of approximately one-third to approximately three times our headcount; •companies in the healthcare equipment, healthcare services, healthcare supplies, healthcare technology and life sciences tools and services sectors with a focus on organizations that market to the end user; •high growth companies within a similar revenue range, approximately one-third to approximately three times our estimated revenue for the previous four fiscal quarters; and •companies within a similar market capitalization range, approximately one-third to approximately three times our then-estimated market capitalization. Based on the assessment, the Committee determined to make the following changes:
Market Comparators
| Companies Added | Companies Removed | | •10x Genomics, Inc. •Abiomed, Inc. •Axonics •Globus Medical •Guardant Health, Inc. •Inari Medical •Insulet •Masimo Corporation •Natera, Inc. •NovoCure •Penumbra •ShockWave Medical •STAAR Surgical Company | •AngioDynamics •Atrion •Cardiovascular Systems •CareDx •Health Catalyst •Heska •Invitae •Myriad Genetics •Natus Medical •NeoGenomics •Nevro •Tabula Rasa HealthCare •Tactile Systems Technology |
Market Comparators
The Committee established the following peer group for use in evaluating and determining 2023 compensation:
Market Comparators
| 10x Genomics, Inc. | Guardant Health, Inc. | NovoCure | | Abiomed, Inc. | Inari Medical | Penumbra | | AtriCure, Inc. | Inspire Medical Systems, Inc. | ShockWave Medical | | Axonics | Insulet | STAAR Surgical Company | | Fulgent Genetics, Inc. | Lantheus Holdings, Inc. | Tandem Diabetes Care | | Glaukos Corp. | Masimo Corporation | | | Globus Medical | Natera, Inc. | |
Market Comparators
The Committee uses data from the peer group as well as data from custom cuts of the Radford Global Technology Survey and Global Life Sciences Survey, to evaluate the competitive market when determining the total direct compensation for the NEOs, including base salary, target annual bonus opportunities and long-term incentive compensation. Given the objective of attracting, retaining, motivating and rewarding a superior team of executive officers and employees, the aim is to provide a total direct compensation package that is competitive compared to the peers, with a great emphasis on equity incentive compensation to tie the NEOs’ and employees’ interests more effectively to those of the stockholders.
Individual Compensation Elements
| Element | Form of Element | Primary Objective | Reward Realized on Achievement of | | Base Salary | Fixed – Cash | Attract and retain highly talented executives by providing amounts that are competitive in the market and reward performance | Continued service | | Annual Cash Bonuses | Variable – Cash | Motivate our executives to achieve annual business objectives and provide financial incentives to meet or exceed these objectives | Pre-established performance metrics based on our annual operating plan | | Time-based RSUs | Variable - Equity | Retain our executives as RSUs vest over 4 years while also aligning their interests with those of our stockholders | Continued service and hold value even when there is no stock price appreciation | | Performance-based RSUs | Variable - Equity | Motivate our executives to achieve long-term stockholder value creation and align their interests with those of our stockholders by providing performance-based equity with opportunity to earn above target level through superior performance | Pre-established performance metrics tied to unit volume growth with the relative TSR modifier | | Strategic PSU Awards | Variable - Equity | Retain key talent and motivate our executives and other select key employees to achieve long-term stockholder value creation by focusing on multiple long-term operational and strategic goals that differ from annual PSU goals and align their interests with those of the stockholders. Ensure that our new executive leadership team quickly integrates and assimilates into the company and aligns to create one unified team focused on delivering on the long-term strategy. | Operational and strategic goals with the relative TSR modifier |
Individual Compensation Elements
We also provide certain post-employment severance and change in control provisions, and various health and welfare benefits, including a 401(k) retirement savings plan. In general, executive officers participate in the standard employee benefit programs available to our employees generally.
Annual Cash Bonus
Annual Cash Bonus In February 2023, the Committee approved the 2023 Annual Bonus Plan to provide cash incentives to meet or exceed the financial objectives set forth in our 2023 annual operating plan as well as individual performance measures. The final bonus payments are funded based on our level of achievement with respect to corporate performance goals and individual performance. The cash bonus is based upon a specific percentage of each NEO’s annual base salary. In determining the target bonus percentages, the Committee also considered current retention risks, external market challenges, and the other factors described in “Governance of Executive Compensation Program – Compensation-Setting Process” above. The Committee increased the target annual cash bonus opportunity in 2023 for Mr. Patterson and Mr. Turakhia to align with market data. The target bonus opportunity of the NEOs for 2022 and 2023 were as follows:
Annual Cash Bonus
| NEO | 2022 Target Bonus as % of Salary | 2023 Target Bonus as % of Salary | | Quentin Blackford | 100% | 100% | | Brice Bobzien | 60% | 60% | | Patrick Murphy | 60% | 60% | | Chad Patterson | 60% | 70% | | Minang Turakhia | 50% | 60% |
Corporate Performance Measures
Corporate Performance Measures In February 2023, the Committee selected two financial performance measures for the 2023 Annual Bonus Plan—Revenue (weighted 75%) and Adjusted EBITDA (weighted 25%). The Committee believed these performance measures were appropriate because they provided a strong emphasis on growth while also considering the management of expenses, which it believed would most directly influence long-term stockholder value. For purposes of the 2023 Annual Bonus Plan: •“Revenue” meant GAAP revenue as reported in our audited financial statements; and •“Adjusted EBITDA” excludes non-cash operating charges for stock-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, income taxes, impairment and restructuring charges, and business transformation costs. For each of these performance measures, the Committee established a target achievement level. Each performance measure was weighted according to the Committee’s assessment of its relative significance related to the successful execution of our annual operating plan. The Committee set the following performance levels, weighting and payout percentages for the two corporate performance measures as follows:
Corporate Performance Measures
| Performance Measure | Weighting | Threshold Payout % | Target Payout % | Maximum Payout % | | Revenue | 75% | 50% | 100% | 200% | | Adjusted EBITDA | 25% | 50% | 100% | 200% |
Corporate Performance Measures
The performance target levels were intended to require significant effort and, therefore, were set at levels ordinarily difficult to achieve and for which average, or below-average performance would not warrant a bonus payment. For actual performance between the threshold and maximum performance levels for the Revenue and Adjusted EBITDA measures, the actual bonus payment with respect to each measure was to be calculated by linear interpolation. The Committee believed the 2023 Revenue and Adjusted EBITDA targets to be challenging but achievable, requiring strong performance from each of our executive officers.
Individual Performance Factor
Individual Performance Factor The individual cash bonus payments for the NEOs were determined based on a combination of corporate and individual performance. The Committee reviews individual performance to determine the final annual cash bonus payment using a guidance of 0% to 115% for each executive officer including each NEO. Unless threshold performance is achieved on at least one of the Company metrics, there is no payout regardless of individual performance. The maximum bonus is capped at 200% irrespective of the individual performance factor.
Annual Cash Bonus Payments
Annual Cash Bonus Payments In February 2024, the Committee determined the achievement, and corresponding payment levels, with respect to the corporate performance measures under the 2023 Annual Bonus Plan were as follows:
Annual Cash Bonus Payments
| Performance Measure | Weighting | Actual (in $ million) | Payout % | Final Weighted Payout % | | Revenue | 75% | $492.7 | 111% | 83% | | Adjusted EBITDA | 25% | $(4.9) | 70% | 18% | | Final Corporate Factor | | | | 101% |
Annual Cash Bonus Payments
The Committee approved the final corporate factor score equal to 101% to determine the final bonus payout for the 2023 Annual Bonus Plan. In determining the awards for the NEOs, the Committee also evaluated the collective and individual performance of the NEOs, noting the following accomplishments in areas spanning our strategic pillars of Customer Growth and Experience, Accelerating Innovation, Operational Excellence, People and Culture, and Stakeholder Outcomes. Quentin Blackford, President, Chief Executive Officer and Director •Overall: Throughout 2023, although we saw unanticipated activities related to the DOJ subpoena and FDA Warning Letter, we maintained a clear vision for the organization with a focus on regaining momentum in the core business. In tandem, we elevated the focus on innovation and sustainability of our future business. We gained ground with our share of the long-term cardiac monitoring market (from ~68% to ~70%), reaccelerated growth in our existing customer channels (approximately 70% of unit growth year-over-year came from existing accounts versus approximately 50% in the prior year), expanded deeper into the primary care channel, and established reimbursement rates with government payers on a national level. In 2023, we achieved full-year revenue of $492.7 million, or 20% year-over-year growth, meaningfully improved our adjusted EBITDA profile by 180 basis points, and our share price improved by nearly 15% for the full year placing us in the top quartile of our peer group. •Company Culture & Leadership: We continued to build out a strong leadership team, working through transitions early in the year with the Chief Operating Officer and Chief Human Resource Officer roles. In 2023, we also refreshed our company cultural values and renewed investments in our company culture efforts. To ensure strong business continuity plans, we also partnered with the Board of Directors on succession planning efforts for the entire executive team. •Patient-Focus: In what was a transformative acceleration in the number of patients using Zio, we began 2023 by crossing the 6 million cumulative patient reports posted and closed the year rapidly approaching 8 million cumulative reports posted. Continuing our strong patient focus, we launched our next generation long-term continuous monitor (the Zio Monitor) and MyZio 2.0 patient mobile app, published the CAMELOT real-world evidence study of Zio XT, and made strong inroads in primary care. •Operational Discipline and Efficiency: We continued our focus on reducing G&A spend and paved new pathways for growing our business, setting us up to serve more patients worldwide. We opened our Global Business Services (GBS) center in Manila where we welcomed approximately 175 new iRhythm team members over the course of 2023. Furthermore, the implementation of an enhanced patient billing experience allowed us to streamline the patient experience, elevate our service to customers, and drive greater efficiency within our revenue cycle operations. Brice Bobzien, Chief Financial Officer •Significantly elevated forecasting and planning capabilities of the entire organization. •Drove adjusted EBITDA improvement of approximately 180-basis points as compared to 2022 as we continue to enhance the financial profile of the company. •Elevated talent in FP&A and accounting functions – including hiring of a critical leadership role with Chief Accounting Officer Marc Rosenbaum’s appointment – while also making meaningful organizational changes within IT. Patrick Murphy, Chief Business Officer and Chief Legal Officer •Launched data analysis project to support expanded use cases within adjacent market opportunities. •Co-led our responses to the FDA and DOJ. •Managed the implementation of technology and process revisions to client billing services. Chad Patterson, Chief Commercial Officer •Delivered 24% registration volume growth year-over-year and grew share in a competitive market while managing through FDA/DOJ headwinds. •Drove expansion into primary care physician channels through both core expansion and innovative channel growth. •Achieved record full year of new account onboarding for Zio LTCM in the United States and significantly upgraded our Public Relations function. •Reaccelerated commercial momentum in 2023 by increasing Zio’s share within the long-term cardiac monitoring market from ~68% in 2022 to ~70% in 2023. •Successfully launched next generation Zio Service. Minang Turakhia, MDMS, Chief Medical Officer, Chief Scientific Officer and EVP, Product Innovation •Delivered significant clinical research output with 8 manuscripts and 14 abstracts disseminated in 2023, including CAMELOT analysis, dissemination, and field activities. •Played a critical scientific and product leadership role in four product launches that included Zio Monitor, MyZio 2.0 mobile application, an enhanced customer experience platform, and atrial fibrillation burden reporting. •Stood up U.S. and international advisory boards, and established iRhythm’s first international medical affairs presence. The following table sets forth the target annual cash bonus opportunities and the actual cash bonus payments made to the NEOs for 2023:
Annual Cash Bonus Payments
| NEO | 2023 Target Bonus ($) | Company Performance Factor | Individual Performance Factor | Final Bonus ($) | Actual Bonus as % of Target | | Quentin Blackford | 675,000 | 101% | 105.0% | 716,000 | 106% | | Brice Bobzien | 258,000 | 101% | 100.0% | 260,580 | 101% | | Patrick Murphy | 273,000 | 101% | 100.0% | 275,730 | 101% | | Chad Patterson | 322,000 | 101% | 105.0% | 341,481 | 106% | | Minang Turakhia | 264,000 | 101% | 103.0% | 274,639 | 104% |
Long-Term Incentive Compensation
Long-Term Incentive Compensation The Company uses long-term incentive compensation in the form of equity awards to incentivize and deliver competitive compensation that recognizes executives for their contributions to the Company. The realized value of the equity awards is directly correlated to the stock performance, and thus aligns the interests of NEOs with stockholders by focusing them on long-term growth to create value for stockholders. The Committee views long-term incentives as a significant element of total compensation at the executive level and a crucial component of the Company’s total rewards compensation package. During fiscal 2023, the Committee evaluated all of the foregoing when designing the Company's long-term incentive program structure, as well as the Strategic PSUs, with input from Aon. •2023 Annual Equity Awards. Based on this evaluation, the Committee determined that an even split of PSUs (at target) and RSUs continued to serve the Company well for annual awards. The portfolio of PSU awards and RSU awards appropriately balances the incentive benefits of a performance-based equity award vehicle with executive retention and stockholder dilution (as compared to stock options) benefits, thereby aligning the interests of our executive officers and stockholders and enabling us to use our equity compensation resources efficiently. •This is a market leading practice for the NEOs other than CEO, as more emphasis is placed on performance-based equity compared to peer and broader market prevalence. •The Committee also evaluated the vesting schedule for each long-term incentive vehicle, taking into consideration current market practices and concluded that the previously adopted vesting period for PSUs and RSUs remained appropriate for annual awards. The PSUs cliff vest after 3 years and the RSUs vest 25% over four years. •2023 Strategic Performance Equity Awards. For the Strategic PSUs, it was determined that the award would be granted entirely in PSUs with a 3-year cliff vest and a maximum of 150% of target units granted. Generally, long-term incentive compensation opportunities are granted to our CEO by the independent members of our Board of Directors, based on the recommendations of the Committee, and to our other executive officers, including our other NEOs, by the Committee. The equity awards granted to our incumbent NEOs in 2023 are set forth in the “2023 Summary Compensation Table” and the “2023 Grants of Plan-Based Awards Table” later in the proxy document.
Annual Long-Term Incentive (LTI) Awards
Annual Long-Term Incentive (LTI) Awards In February 2023, as part of the annual review of the executive compensation program, the Committee determined the aggregate target value of each executive officer’s long-term incentive compensation, granted long-term incentive compensation in the form of 50% PSU awards and 50% RSU awards to the executive officers including the NEOs, and approved the aggregate target value of each NEO’s equity award as well as the design and performance metrics for the PSU awards. The Committee differentiates the award value of our incumbent NEOs based on the review of the competitive market data for their respective positions, the size of any previously granted equity awards and an evaluation of their performance. The annual equity awards granted to the NEOs in February 2023 which, in the case of the PSU awards, represent the target number of units eligible to be earned based on target performance, were as follows:
Annual Long-Term Incentive (LTI) Awards
| NEO | Target Value - RSUs | Number of Units(1) - RSUs | Target Value - PSUs | Number of Units(1) - PSUs | Total Annual LTI | | Quentin Blackford | $3,100,000 | 28,775 | $3,100,000 | 28,775 | $6,200,000 | | Chad Patterson | $1,150,000 | 10,674 | $1,150,000 | 10,674 | $2,300,000 | | Brice Bobzien | $1,000,000 | 9,282 | $1,000,000 | 9,282 | $2,000,000 | | Patrick Murphy | $1,000,000 | 9,282 | $1,000,000 | 9,282 | $2,000,000 | | Minang Turakhia | $1,000,000 | 9,282 | $1,000,000 | 9,282 | $2,000,000 |
Annual Long-Term Incentive (LTI) Awards
(1)The total number of units subject to a PSU award and a RSU award was equal to the Target Value divided by the 20 trading-day average closing price of our common stock on the date of grant. The use of a 20-day average closing price of our common stock is to minimize the variability between the award value approved and the actual number of units granted.
PSU Awards: 2023-2025 Cycle
PSU Awards: 2023-2025 Cycle The actual number of PSUs that will be eligible to vest will be determined based on the company’s compound annual growth rate of unit volume (“Unit Volume CAGR”) results measured for the performance period commencing on January 1, 2023 and ending on December 31, 2025, by comparing the unit volume for 2022 against the unit volume for 2025 (subject to the NEO’s continued employment through the certification date of such performance results, which certification must be made no later than March 15, 2026). The PSUs earned based on the Unit Volume CAGR will be adjusted based on achievement of TSR versus S&P Healthcare Equipment Select Industry Index for the same three-year performance period. We believe that Unit Volume CAGR is the appropriate internal metric that aligns with our long-range strategic plan, while relative TSR provides the external measurement of our share performance relative to broader industry performance.
Unit Volume CAGR
The exact number of earned units will be determined using linear interpolation based on our actual Unit Volume CAGR if it falls between the threshold and maximum performance achievement levels set forth in the table above. The Unit Volume CAGR performance goal is not disclosed because we strongly believe that it will be competitively harmful, as it would give competitors insight into our long-term strategic and financial planning processes. The Committee ensured that the performance measure target has sufficient stretch and ensured that participants would not be rewarded below a minimum growth target. For the three-year period from 2023 through 2025, we have maintained the same growth rate minimum, target and max thresholds as in prior plan years, despite starting at a higher volume than in prior years.
Relative TSR Modifier
Relative TSR Modifier In order to align the number of PSUs earned with our stockholders’ experience, the number of units earned based on the Unit Volume CAGR will be adjusted for certain levels of achievement of the company’s TSR as compared to the TSR achieved by the companies comprising the S&P Healthcare Equipment Select Industry Index as in effect on the last day of the performance period, as follows:
Relative TSR Modifier
| Company TSR Percentile Rank | Earned PSUs Adjustment | | At or below 25% | Decrease by 25% | | At 50% | No Change | | At or above 75% | Increase by 25% |
Relative TSR Modifier
To the extent that the company’s TSR results for the performance period fall between any levels set forth in the table above, the percentage adjustment to the number of units will be determined based on linear interpolation. The Committee established a maximum cap of 200% on the PSU payout starting with the 2024-2026 PSUs irrespective of above median TSR performance, and maximum Unit Volume CAGR performance level.
PSU Awards: 2021-2023 Cycle Final Payout
PSU Awards: 2021-2023 Cycle Final Payout In February 2024, the Committee certified the achievement of the Company’s CAGR Unit Volume for the performance period commencing on January 1, 2021 and ending on December 31, 2023 and approved a payout of 88.78% of target. Mr. Blackford is the only NEO who received this PSU grant when he joined the company in October 2021. The other NEOs did not receive this award as they were not yet hired when this award was made.
PSU Awards: 2021-2023 Cycle Final Payout
| Executive Name | Target PSUs | Actual Payout % | Actual Earned PSUs | | Quentin Blackford | 50,989 | 88.78% | 45,268 |
RSU Awards
RSU Awards The 2023 time-based RSU awards vest over a four-year period, with 25% of the units subject to the awards vesting on the first anniversary of the vesting commencement date of March 1, 2023, and 25% of the units subject to the awards vesting on each of the second, third and fourth anniversaries of the vesting commencement date, contingent upon the NEO remaining continuously employed by us through each applicable vesting date. Each unit granted pursuant to the RSU awards represents a contingent right to receive one share of our common stock for each unit that vests pursuant to the awards.
Long-Term Strategic PSU Award
Long-Term Strategic PSU Award On August 7, 2023, the Board of Directors, upon recommendation from the Committee, approved a strategic performance-based equity award for certain key employees. The Board of Directors and the Committee believed that broad- based alignment among these key critical talent with respect to several important long term operational objectives was important to achieve the following: •drive achievement of strategic objectives while we transform and scale our business model; •retain critical talent; and •create continuity and stability among our leadership team and motivate the team to collectively achieve strong and sustained performance. As part of this broader program, all the current incumbent NEOs received performance-based restricted stock unit awards The Strategic PSUs are designed to incentivize significant and sustained performance with vesting only occurring if the Company achieves certain operational goals during the period starting July 1, 2023 and ending June 30, 2026. The PSUs attributable to achieved operational goals are further subject to increase or decrease based on the level of achievement of the Company’s relative TSR performance subject to certain caps. The executive must continue to provide services to the Company through the later of the date on which the Committee determines achievement of the Strategic PSUs and August 7, 2026. The Strategic PSUs are 100% performance-based comprised of the following three goals (collectively, the “Operational Goals”) that may be achieved during the performance period, with each Operational Goal representing one-third of the total award value. i.enhancing the patient experience while significantly increasing patient registrations; ii.achieving certain adjusted EBITDA as a percentage of revenue goals; and iii.accelerating new product or service innovations. Additional detail regarding these goals is not disclosed because we strongly believe that it will be competitively harmful, as it would give competitors insight into our long-term operational and financial planning processes. The number of PSUs eligible to vest is first measured based on achievement of the Operational Goals (the “Earned PSUs”). Achievement of two Operational Goals is “target” level achievement and achievement of three Operational Goals is “maximum” level achievement, in each case subject to adjustment for the company’s relative TSR performance, as described below, provided however that in no event will the Earned PSUs be greater than the “maximum” level of achievement regardless of the level of relative TSR achievement. There is no interpolation for partial achievement of an Operational Goal. The number of Earned PSUs determined based on achievement of the Operational Goals will then be adjusted by the Company’s relative TSR as compared to the TSR achieved by the companies comprising the S&P Healthcare Equipment Select Industry Index over the performance period. Upon relative TSR performance of greater than the 75th percentile, the number of Earned PSUs will be adjusted upwards by 25%. However, if all three Operational Goals have been achieved, the Performance Award has already reached its cap and there will be no upward adjustment and no additional PSUs will become earned and vested. Upon relative TSR performance of less than the 33rd percentile, the number of Earned PSUs will be adjusted downward by 25%; however, if all three Operational Goals have been achieved, the number of Earned PSUs will be capped at the “target” level achievement, which is greater than a 25% reduction. There is no interpolation between relative TSR achievement levels. The summary below shows the key differences in the design and features of the annual PSU award and the Strategic PSU award:
Long-Term Strategic PSU Award
| Key Design Features | Compared to Annual PSU Design | | Performance Goals | Operational based goals with R-TSR | | Performance Scale | Target is defined as achieving 2 out of 3 goals with no interpolation between levels | | Negative Relative TSR (-25%) | Negative modifier kicks in below 33rd percentile instead of 25th percentile | | Relative TSR Interpolation | No interpolation between 33rd percentile to 75th percentile relative TSR performance | | Downside Payout Limit | If all three goals achieved, "floor feature" will cap payout at 100% if R-TSR is below 33rd percentile | | Upside Payout Cap | If all three goals achieved, "ceiling feature" will cap payout at 150% even if R-TSR is above 75th percentile |
Long-Term Strategic PSU Award
The following table summarizes the target level and maximum level of award value and corresponding units granted under this program to each NEO as of August 7, 2023. The total number of units subject to these Strategic PSUs are equal to the values in the table below divided by the 20 trading-day average closing price of our common stock on the date of grant. These amounts do not reflect, and are different from, the grant date fair value of the PSUs computed in accordance with FASB ASC Topic 718, which is set forth in the 2023 Summary Compensation Table and the 2023 Grants of Plan-Based Award Table below:
Long-Term Strategic PSU Award
| Name | Target Value ($) | Target # PSU Units | Maximum Value ($) | Maximum # PSU Units | | Quentin Blackford | 5,000,000 | 48,534 | 7,500,000 | 72,801 | | Brice Bobzien | 1,400,000 | 13,589 | 2,100,000 | 20,384 | | Patrick Murphy | 1,400,000 | 13,589 | 2,100,000 | 20,384 | | Chad Patterson | 1,400,000 | 13,589 | 2,100,000 | 20,384 | | Minang Turakhia | 1,400,000 | 13,589 | 2,100,000 | 20,384 |
Employment Arrangements
Employment Arrangements We have entered into written employment offer letters with each of our current NEOs that provide for “at will” employment, meaning that either we or the NEO may terminate the employment relationship at any time without cause. In addition, each of these letters required the executive to execute our standard At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement. For detailed descriptions of the employment offer letters of our NEOs, see “Potential Payments upon Termination or Change in Control” below.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
Executive CIC Policy
Executive CIC Policy Qualifying Termination in connection with a Change of Control. Under the Executive CIC Policy, if, within the period commencing three months prior to and ending 12 months following a “change of control” (such period, the “Change in Control Period”), we terminate the employment of the applicable employee other than for “cause,” death or “disability,” or the employee resigns for “good reason” (as such terms are defined in the Executive CIC Policy) and, the employee executes an irrevocable separation agreement and release of claims, the employee is entitled to receive: i.a lump sum severance payment equal to the payment of employee’s base salary, at the highest rate in effect during the term of the agreement, for 24 months for Mr. Blackford, and 15 months for Messrs. Bobzien, Murphy, Patterson and Turakhia, ii.payment of premiums to maintain group health insurance continuation benefits pursuant to “COBRA” for the employee and the employee’s dependents for up to 24 months for Mr. Blackford, and 15 months for Messrs. Bobzien, Murphy, Patterson and Turakhia, iii.a lump sum payment equal to 150% of target bonus in effect for the fiscal year in which termination occurs for Mr. Blackford, and 100% of target bonus for Messrs. Bobzien, Murphy, Patterson and Turakhia, and iv.accelerated vesting as to 100% of the employee’s outstanding unvested equity awards (if vesting depends on achievement of performance criteria, then assuming performance criteria has been achieved at target levels unless provided otherwise in the applicable performance-based equity award). Qualifying Termination outside of a Change of Control. Under the Executive CIC Policy, if we terminate the employment of the applicable employee other than for “cause,” death or “disability,” or the employee resigns for “good reason” outside of the Change in Control Period, and the employee executes an irrevocable separation agreement and release of claims, the employee is entitled to receive: i.a lump sum severance payment equal to the payment of employee’s base salary, at the highest rate in effect during the term of the agreement, for 18 months for Mr. Blackford, and 12 months for Messrs. Bobzien, Murphy, Patterson and Turakhia; and, ii.payment of premiums to maintain group health insurance continuation benefits pursuant to “COBRA” for the employee and the employee’s dependents for up to 18 months for Mr. Blackford, and 12 months for Messrs. Bobzien, Murphy, Patterson and Turakhia.
2023 Strategic PSU Awards
2023 Strategic PSU Awards In the event of a change in control of the company, the Operational Goals will be deemed achieved at the greater of actual achievement or target achievement (i.e., two Operational Goals), either as modified by the company’s relative TSR achievement measured upon the change in control. Any such resulting “achieved” Performance Awards will be subject to time-based vesting following the change in control through the end of the Performance Period and will be eligible for accelerated vesting in the event of the termination without “cause” or resignation for “good reason” of the Executive in connection with or following the change in control, as provided in the Executive CIC Policy. The following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described above for each of our eligible NEOs in accordance with the Executive CIC Policy, with no change in control and with change in control in effect on December 31, 2023. Except where otherwise noted, payments and benefits are estimated assuming that the triggering event took place on December 31, 2023, and the price per share of our common stock is the closing price on the Nasdaq Global Select Market as of December 29, 2023, the last trading day in fiscal year 2023 ($107.04). There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, of if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different.
2023 Strategic PSU Awards
| Named Executive Officer | Termination of Employment No Change-of-Control | | | Termination of Employment Change-of-Control | | | | | | | Severance Payment ($) | Medical Benefits Continuation ($) | Total ($) | Severance Payment ($) | Medical Benefits Continuation ($) | Accelerated Vesting of Equity Awards ($) | Bonus ($) | Total ($) | | Quentin S. Blackford | 1,012,500 | 57,675 | 1,070,175 | 1,350,000 | 76,900 | 27,644,204 | 1,012,500 | 30,083,604 | | Brice Bobzien | 430,000 | 41,462 | 471,462 | 537,500 | 51,828 | 5,338,977 | 258,000 | 6,186,305 | | Patrick M. Murphy | 455,000 | 41,462 | 496,462 | 568,750 | 51,828 | 7,685,722 | 273,000 | 8,579,300 | | Chad Patterson | 460,000 | 38,450 | 498,450 | 575,000 | 48,062 | 7,682,725 | 322,000 | 8,627,787 | | Minang Turakhia, M.D., M.S. | 440,000 | 39,414 | 479,414 | 550,000 | 49,268 | 5,525,548 | 264,000 | 6,388,816 |
CEO Pay Ratio
CEO Pay Ratio Under the US Dodd-Frank Wall Street Reform and Consumer Protection Act and applicable SEC rules, we are required to disclose the ratio of their Principal Executive Officer’s compensation to that of their median employee. For this required disclosure, Quentin S. Blackford, our President and Chief Executive Officer is considered to be our Principal Executive Officer (“PEO”). For fiscal year 2023: •the annual total compensation of Quentin Blackford was $16,595,149; and •the estimated median of the annual total compensation of all employees of our company, other than Mr. Blackford, was $94,941. Based on this information, for 2023 the ratio of the annual total compensation of Mr. Blackford to the median of the annual total compensation of all employees was 174.8 to 1. The SEC rules for identifying the median employee and calculating the pay ratio permit companies to use various methodologies and assumptions, to apply certain exclusions and to make reasonable estimates that reflect their employee population and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio that we have reported. To identify the median employee, we used base salary for all of our employees, excluding our PEO, who were employed by us on December 31, 2023. We included full-time, part-time and temporary employees. After identifying the median employee, we calculated annual total compensation for the median employee using the same methodology we used for determining total compensation for our NEOs as shown in the “2023 Summary Compensation Table” below.
2023 Summary Compensation Table
2023 Summary Compensation Table The following table provides information regarding the total compensation for services rendered in all capacities that was awarded to, earned by, or paid to our NEOs for the years ended December 31, 2023, 2022 and 2021:
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus (1) ($) | Stock Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Quentin S. Blackford; President and Chief Executive Officer (6) (11) | 2023 | 677,463 | — | 15,172,621 | 716,000 | 29,065 | 16,595,149 | | | 2022 | 650,000 | 675,000 | 5,787,285 | 829,000 | 25,459 | 7,966,744 | | | 2021 | 162,500 | — | 9,078,651 | — | 5,233 | 9,246,384 | | Brice Bobzien, Chief Financial Officer (7) (11) | 2023 | 420,926 | — | 4,566,853 | 260,580 | 33,730 | 5,282,089 | | | 2022 | 153,846 | — | 3,031,002 | 295,200 | 10,125 | 3,490,173 | | Patrick Murphy; Chief Business Officer and Chief Legal Officer (8) (11) | 2023 | 457,344 | — | 4,566,853 | 275,730 | 33,852 | 5,333,779 | | | 2022 | 440,000 | 478,500 | 4,057,106 | 357,200 | 31,268 | 5,364,074 | | | 2021 | 33,879 | — | 2,049,907 | — | 194 | 2,083,980 | | Chad Patterson; Chief Commercial Officer (9) (11) | 2023 | 461,068 | — | 4,928,829 | 341,481 | 33,999 | 5,765,377 | | | 2022 | 190,385 | — | 6,215,223 | 332,100 | 9,742 | 6,747,450 | | Minang Turakhia; Chief Medical Officer, Chief Scientific Officer and EVP, Product Innovation (10) (11) | 2023 | 442,230 | — | 4,566,853 | 274,639 | 32,309 | 5,316,031 | | | 2022 | 237,019 | 500,000 | 3,274,088 | 261,400 | 17,525 | 4,290,032 |
2023 Summary Compensation Table
__________________________________________ (1)Represents sign on bonuses paid pursuant to the offer letters for Mr. Blackford, Mr. Murphy and Dr. Turakhia. (2)The values of the stock awards reflect the grant date fair value of stock awards granted computed in accordance with FASB ASC Topic 718. For a discussion of our valuation assumptions, see Note 2 and Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024. The 2023 PSU awards include both a company performance component and Relative TSR component. The 2023 PSU fair values were based on a Monte Carlo simulation valuation method on the date of grant which included a likelihood of achievement of the company performance conditions. (3)The grant date fair value of stock awards assuming the maximum potential value of RSUs, PSUs, and Strategic PSU granted in 2023 is as follows: $19.2 million for Mr. Blackford; $5.9 million for Mr. Bobzien; $5.9 million for Mr. Murphy, $6.4 million for Mr. Patterson and $5.9 million for Dr. Turakhia. (4)The amounts in the Non-Equity Incentive Plan Compensation column for 2023, 2022, and 2021 for all NEOs were paid in March 2024, March 2023, and March 2022, respectively, pursuant to our 2023, 2022, and 2021 Annual Bonus Plans, respectively, as described in the section titled "Compensation Discussion and Analysis - Annual Cash Bonus Payments.” (5)All other compensation includes severance and related benefits (if applicable), company paid portion of the health plan, group term life, wellness plan , 401(k) matching of up to $5,000 per year. (6)Mr. Blackford started in October 2021; amounts reflect the pro rata portion of salary paid based on his period of service for 2021. Mr. Blackford was not eligible for an annual bonus in 2021. (7)Mr. Bobzien started in August 2022; amounts reflect the pro rata portion of his paid based on his period of service for 2022. Pursuant to his offer letter, Mr. Bobzien was eligible to receive a full-year bonus (not pro-rated based on his period of service) for 2022. (8)Mr. Murphy started in November 2021; amounts reflect the pro rata portion of his salary and bonus paid based on his period of service for 2021. (9)Mr. Patterson started in July 2022; amounts reflect the pro rata portion of his salary paid based on his period of service for 2022. Pursuant to his offer letter, Mr. Patterson was eligible to receive a full-year bonus (not pro-rated for his period of service) for 2022. (10)Dr. Turakhia started in June 2022; amounts reflect the pro rata portion of his salary and bonus paid based on his period of service for 2022. (11)Certain amounts relating to salary, stock awards, non-equity incentive plan compensation, and all other compensation for the years 2022 and 2021 have been corrected due to administrative error.
2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table The following table provides information concerning each grant of an award made for the year ended December 31, 2023, for each of our NEOs under any compensation plan. This information supplements the information about these awards set forth in the “2023 Summary Compensation Table.”
2023 Grants of Plan-Based Awards Table
| | | Estimated Possible Payouts Under 2023 Non-Equity Incentive Plan Awards(1) | | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | | | | Named Executive Officer | Grant Date | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of RSUs Granted | Grant Date Fair Value of Stock Awards ($)(3) | | Quentin Blackford | | | | | | | | | | | | 2023 Annual Bonus Plan Award | | | — | 675,000 | 1,350,000 | — | — | — | — | — | | 2023 Strategic PSUs | 8/7/2023 | | — | — | — | 24,267 | 48,534 | 72,801 | — | 7,689,970 | | 2023 Annual PSUs | 2/27/2023 | | — | — | — | 14,388 | 28,775 | 71,938 | — | 4,022,457 | | 2023 Annual RSUs | 2/27/2023 | | — | — | — | — | — | — | 28,775 | 3,460,194 | | Brice Bobzien | | | | | | | | | | | | 2023 Annual Bonus Plan Award | | | — | 258,000 | 516,000 | — | — | — | — | — | | 2023 Strategic PSUs | 8/7/2023 | | — | — | — | 6,795 | 13,589 | 20,384 | — | 2,153,162 | | 2023 Annual PSUs | 2/27/2023 | | — | — | — | 4,641 | 9,282 | 23,205 | — | 1,297,531 | | 2023 Annual RSUs | 2/27/2023 | | — | — | — | — | — | — | 9,282 | 1,116,161 | | Patrick Murphy | | | | | | | | | | | | 2023 Annual Bonus Plan Award | | | — | 273,000 | 546,000 | — | — | — | — | — | | 2023 Strategic PSUs | 8/7/2023 | | — | — | — | 6,795 | 13,589 | 20,384 | — | 2,153,162 | | 2023 Annual PSUs | 2/27/2023 | | — | — | — | 4,641 | 9,282 | 23,205 | — | 1,297,531 | | 2023 Annual RSUs | 2/27/2023 | | — | — | — | — | — | — | 9,282 | 1,116,161 | | Chad Patterson | | | | | | | | | | | | 2023 Annual Bonus Plan Award | | | — | 322,000 | 644,000 | — | — | — | — | — | | 2023 Strategic PSUs | 8/7/2023 | | — | — | — | 6,795 | 13,589 | 20,384 | — | 2,153,162 | | 2023 Annual PSUs | 2/27/2023 | | — | — | — | 5,337 | 10,674 | 26,685 | — | 1,492,118 | | 2023 Annual RSUs | 2/27/2023 | | — | — | — | — | — | — | 10,674 | 1,283,549 | | Minang Turakhia | | | | | | | | | | | | 2023 Annual Bonus Plan Award | | | — | 264,000 | 528,000 | — | — | — | — | — | | 2023 Strategic PSUs | 8/7/2023 | | — | — | — | 6,795 | 13,589 | 20,384 | — | 2,153,162 | | 2023 Annual PSUs | 2/27/2023 | | — | — | — | 4,641 | 9,282 | 23,205 | — | 1,297,531 | | 2023 Annual RSUs | 2/27/2023 | | — | — | — | — | — | — | 9,282 | 1,116,161 |
2023 Grants of Plan-Based Awards Table
__________________________ (1)Amounts in the “Estimated Payouts Under Non-Equity Incentive Plan Awards” columns relate to cash incentive opportunities under our 2023 Annual Bonus Plan based upon the combined achievement of corporate and individual performance goals over fiscal year 2023. The actual amounts paid to our NEOs are set forth in the “2023 Summary Compensation Table” above, and the calculation of the actual amounts paid is discussed more fully in the section titled “Compensation Discussion and Analysis— Annual Cash Bonus Payments.” Because the individual performance multipliers can range from 0-115%, the 2023 Annual Bonus Plan does not have a threshold level of performance. (2)Represents the hypothetical payments possible under our NEOs’ respective 2023 annual PSUs as described in the section entitled “Compensation Discussion and Analysis-Individual Compensation Elements-Annual Long-Term (LTI) Awards” and 2023 Strategic PSUs as described in the section entitled "Compensation Discussion and Analysis - Individual Compensation Elements - Long-term Strategic PSU Award." The 2023 annual PSUs are earned upon achievement of the Corporate Performance Measures and the 2023 Strategic PSUs are earned over a three-year period upon the achievement of the Operational Goals (further described above). In addition, each of the 2023 annual PSUs and the 2023 Strategic PSUs will be further adjusted based on achievement of TSR versus S&P Healthcare Equipment Select Industry Index. The maximum achievement of the 2023 Strategic PSUs will be 150% of target. (3)The values of the stock awards reflect the grant date fair value of stock awards granted under our 2016 Equity Incentive Plan during 2023 and are based on the Company’s closing price on the grant date in accordance with FASB ASC Topic 718. For a discussion of our valuation assumptions, see Note 2 and Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024.
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table presents, for each of our NEOs, information regarding outstanding equity awards, including RSUs and PSUs, as of December 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| Name | Grant Date (1) | Vesting Commencement Date | Stock Awards | | | | | | | | Number of Shares That Have Not Vested (#) | Market Value of Shares That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Number of Shares That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($)(2) | | Quentin Blackford | | | | | | | | | 8/7/2023(8) | 8/07/2026 | — | — | 48,534 | 5,195,079 | | | 2/27/2023(7) | 3/15/2026 | — | — | 28,775 | 3,080,076 | | | 2/27/2023(5) | 2/27/2023 | 28,775 | 3,080,076 | — | — | | | 2/16/2022(3) | 3/15/2025 | — | — | 40,159 | 4,298,619 | | | 10/5/2021(4) | 3/15/2024 | 45,268 | 4,845,487 | — | — | | | 10/5/2021(5) | 10/05/2021 | 50,989 | 5,457,863 | — | — | | Brice Bobzien | | | | | | | | | 8/7/2023(8) | 8/07/2026 | — | — | 13,589 | 1,454,567 | | | 2/27/2023(7) | 3/15/2026 | — | — | 9,282 | 993,545 | | | 2/27/2023(5) | 2/27/2023 | 9,282 | 993,545 | — | — | | | 8/8/2022(6) | 3/15/2025 | | | 10,129 | 1,084,208 | | | 8/8/2022(5) | 8/08/2022 | 7,596 | 813,076 | — | — | | Patrick Murphy | | | | | | | | | 8/7/2023(8) | 8/07/2026 | — | — | 13,589 | 1,454,567 | | | 2/27/2023(7) | 3/15/2026 | — | — | 9,282 | 993,545 | | | 2/27/2023(5) | 2/27/2023 | 9,282 | 993,545 | — | — | | | 2/15/2022(6) | 3/15/2025 | — | — | 19,412 | 2,077,860 | | | 2/15/2022(5) | 2/15/2022 | 4,513 | 483,072 | — | — | | | 2/15/2022(6) | 3/15/2025 | — | — | 6,018 | 644,167 | | | 11/30/2021(5) | 11/30/2021 | 9,706 | 1,038,930 | — | — | | Chad Patterson | | | | | | | | | 8/7/2023(8) | 8/07/2026 | — | — | 13,589 | 1,454,567 | | | 2/27/2023(7) | 3/15/2026 | — | — | 10,674 | 1,142,545 | | | 2/27/2023(5) | 2/27/2023 | 10,674 | 1,142,545 | — | — | | | 7/25/2022(6) | 3/15/2025 | — | — | 21,050 | 2,253,192 | | | 7/25/2022(5) | 7/25/2022 | 15,787 | 1,689,840 | — | — | | Minang Turakhia | | | | | | | | | 8/7/2023(8) | 8/07/2026 | — | — | 13,589 | 1,454,567 | | | 2/27/2023(7) | 3/15/2026 | — | — | 9,282 | 993,545 | | | 2/27/2023(5) | 2/27/2023 | 9,282 | 993,545 | — | — | | | 6/6/2022(6) | 3/15/2025 | — | — | 11,125 | 1,190,820 | | | 6/6/2022(5) | 6/06/2022 | 8,343 | 893,035 | — | — |
Outstanding Equity Awards at 2023 Fiscal Year-End
________________________ (1)Each of the outstanding equity awards was granted pursuant to our 2016 Equity Incentive Plan. (2)The market value of unvested equity awards as of December 31, 2023 is calculated by multiplying the number of shares subject to such awards by the closing price of our common stock on December 29, 2023, the final trading day in fiscal 2023, which was $107.04. (3)Represents the target number of shares that remain eligible to be earned as of December 31, 2023. Up to 250% of the performance shares of our common stock subject to this award are eligible to vest by March 15, 2025. (4)The performance period for this award ended as of December 31, 2023. Represents the number of shares achieved as of December 31, 2023, which vested in February 2024 upon certification by the Board of Directors that the applicable performance criteria were achieved. (5)25% to vest one year from the grant date and 25% at each of the next three years. (6)Represents the target number of shares that remain eligible to be earned as of December 31, 2023. Up to 200% of the performance shares of our common stock are eligible to vest by March 15, 2025. (7)Represents the target number of shares that remain eligible to be earned as of December 31, 2023. Up to 250% of the performance shares of our common stock are eligible to vest by March 15, 2026. (8)Represents the target number of shares that remain eligible to be earned as of December 31, 2023. Up to 150% of the performance shares of our common stock are eligible to vest by August 7, 2026.
2023 Stock Vested Table
2023 Stock Vested Table The following table summarizes the vesting of stock awards for each of our NEOs during the year ended December 31, 2023.
2023 Stock Vested Table
| | Stock Awards | | | | Number of Shares Acquired on Vesting # | Value Realized on Vesting $(1) | | Quentin Blackford | 25,495 | 2,012,065 | | Brice Bobzien | 2,533 | 283,899 | | Patrick Murphy | 6,358 | 610,673 | | Chad Patterson | 5,263 | 546,563 | | Minang Turakhia | 2,782 | 290,218 |
2023 Stock Vested Table
______________________ (1)Based on the market price of our common stock on the vesting date or last trading date prior to the vesting date, multiplied by the number of shares vested. Amounts shown are presented on an aggregate basis for all vesting and settlement that occurred in fiscal year 2023
Pension Benefits and Nonqualified Deferred Compensation
Pension Benefits and Nonqualified Deferred Compensation We do not provide a defined benefit pension plan for our employees, and none of our NEOs participated in a nonqualified deferred compensation plan in 2023.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officers (“PEOs”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs; these amounts reflect the Summary Compensation Table total with certain adjustments as described in the following table and footnotes.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for Kevin King1 ($) | Summary Compensation Table Total for Michael Coyle2 ($) | Summary Compensation Table Total for Douglas Devine3,5 ($) | Summary Compensation Table Total for Quentin Blackford4 ($) | Compensation Actually Paid to Kevin King1,6 ($) | Compensation Actually Paid to Michael Coyle2,6 ($) | Compensation Actually Paid to Douglas Devine3,5,6 ($) | Compensation Actually Paid to Quentin Blackford4,6 ($) | Average Summary Compensation Table Total for Non-PEO NEOs5 ($) | Average Compensation Actually Paid to Non-PEO NEOs5,6 ($) | | (a) | (b) | (b) | (b) | (b) | (c) | (c) | (c) | (c) | (d) | (e) | | 2023 | — | — | — | 16,595,149 | — | — | — | 16,262,069 | 5,424,319 | 4,909,386 | | 2022 | — | — | — | 7,966,744 | — | — | — | 5,272,014 | 4,422,956 | 4,044,855 | | 2021 | 30,709 | 461,422 | 5,699,043 | 9,246,384 | (9,810,498) | 461,422 | 2,902,001 | 18,170,537 | 3,360,713 | 136,903 | | 2020 | 4,885,062 | — | — | — | 24,257,924 | — | — | — | 1,769,376 | 6,988,690 |
PAY VERSUS PERFORMANCE
| Year | Value of Initial Fixed $100 Investment based on:7 | | | Net Income ($ Millions) | Revenue8 ($ Millions) | | | TSR ($) | Peer Group TSR ($) | Peer Group TSR ($) | | | | (a) | (f) | (g)(1) | (g)(2) | (h) | (i) | | 2023 | 157.20 | 118.87 | 99.63 | (123) | 493 | | 2022 | 137.57 | 113.65 | 105.61 | (116) | 411 | | 2021 | 172.84 | 126.45 | 137.80 | (101) | 323 | | 2020 | 348.38 | 126.42 | 133.15 | (44) | 265 |
PAY VERSUS PERFORMANCE
(1) Kevin King was our President and Chief Executive Officer from July 2012 through January 11, 2021. (2) Michael Coyle was our President and Chief Executive Officer from January 12, 2021, through June 1, 2021. (3) Douglas Devine was our Interim Chief Executive Officer from June 1, 2021, through October 3, 2021. Mr. Devine also served as our Chief Financial Officer from June 2020 until August 2022. In accordance with Item 402(v) of Regulation S-K, this table and the accompanying narrative present Mr. Devine as a PEO for 2021 and a Non-PEO NEO for 2020 and 2022. (4) Quentin Blackford has been our President and Chief Executive Officer since October 4, 2021. (5) The individuals comprising the Non-PEO NEOs for each year are listed below. As described above, this table and the accompanying narrative present Mr. Devine as a PEO for 2021 and a Non-PEO NEO for 2020 and 2022.
PAY VERSUS PERFORMANCE
| 2020 | 2021 | 2022 | 2023 | | Douglas Devine | Mark Day | Douglas Devine | Brice Bobzien | | Mark Day | Daniel Wilson | Brice Bobzien | Patrick Murphy | | Matthew Garrett | David Vort | Patrick Murphy | Chad Patterson | | Daniel Wilson | | Chad Patterson | Minang Turakhia | | David Vort | | Minang Turakhia | |
PAY VERSUS PERFORMANCE
(6) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for Quentin Blackford ($) | Exclusion of Stock Awards for Quentin Blackford ($) | Inclusion of Equity Values for Quentin Blackford ($) | Compensation Actually Paid to Quentin Blackford ($) | | 2023 | 16,595,149 | (15,172,621) | 14,839,541 | 16,262,069 |
PAY VERSUS PERFORMANCE
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 5,424,319 | (4,657,347) | 4,142,414 | 4,909,386 |
PAY VERSUS PERFORMANCE
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
PAY VERSUS PERFORMANCE
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Quentin Blackford ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Quentin Blackford ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Quentin Blackford ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Quentin Blackford ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Quentin Blackford ($) | Total - Inclusion of Equity Values for Quentin Blackford ($) | | 2023 | 14,876,834 | 338,758 | — | (376,051) | — | 14,839,541 |
PAY VERSUS PERFORMANCE
| Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | 4,575,928 | (469,753) | — | 36,239 | — | 4,142,414 |
PAY VERSUS PERFORMANCE
(7) The Peer Group TSR set forth in column (g)(1) in this table utilizes the NASDAQ Biotechnology Index, and the Peer Group TSR set forth in column (g)(2) in this table utilizes the S&P Healthcare Equipment Select Industry, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. For the year ended December 31, 2023, the Company has elected to present the S&P Healthcare Equipment Select Industry for its peer group comparison. The Company believes that the holdings of this index more accurately reflect its peer companies. Since the NASDAQ Biotechnology Index was presented in the prior year, it has also been presented in the current year for comparison purposes. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company, the NASDAQ Biotechnology Index and the S&P Healthcare Equipment Select Industry, respectively. Historical stock performance is not necessarily indicative of future stock performance. (8) We determined revenue to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2023 and 2022. This performance measure may not have been the most important financial performance measure for years 2021 and 2020 we may determine a different financial performance measure to be the most important financial performance measure in future years. Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Stockholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the four most recently completed fiscal years. Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the four most recently completed fiscal years. Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Revenue The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our revenue during the four most recently completed fiscal years. Description of Relationship Between Company TSR and Peer Group TSR The following chart compares our cumulative TSR over the four most recently completed fiscal years to that of the NASDAQ Biotechnology Index and S&P Healthcare Equipment Select Industry Index. Tabular List of Most Important Financial and Non-Financial Performance Measures The following table presents the financial and non-financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEO and non-PEO NEOs for 2023 to Company performance. The measures in this table are not ranked.
PAY VERSUS PERFORMANCE
| Revenue | | Adjusted EBITDA | | Unit volume growth |