DEF 14A of Vistagen Therapeutics, Inc.
Filed Jul 28, 2023 · FY20230001437749-23-021049
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
General
General Our current Bylaws provide that our Board of Directors (Board) shall consist of not less than one director, with the exact number to be determined from time to time by resolution of the Board of Directors or, in certain circumstances, by the vote or written consent of holders of a majority of our outstanding voting securities. Each of our current directors is nominated for election at the virtual Annual Meeting to serve until our next annual meeting of stockholders, or until her or his successor is duly elected and qualified. Each nominee has confirmed that she or he is able and willing to continue serving as a director if elected. If any of the nominees becomes unable or unwilling to serve before the Annual Meeting, your proxy will be voted for the election of a substitute nominee recommended by the current Board, if any. Our Board has nominated the following directors for election at our Annual Meeting:
General
| Jon S. Saxe, J.D., LL.M. Chairman and Independent Director | Ann M. Cunningham, MBA Non-Independent Director | | Joanne Curley, Ph.D. Independent Director | Margaret M. FitzPatrick, M.A. Independent Director | | Jerry B. Gin, Ph.D., MBA Independent Director | Mary L. Rotunno, J.D. Independent Director | | Shawn K. Singh, J.D. Chief Executive Officer and Director | |
Required Vote and Recommendation
Required Vote and Recommendation Directors shall be elected by a plurality of the votes cast, whether present or represented by proxy, and entitled to vote at the Annual Meeting. The seven nominees receiving the highest number of “FOR” votes will be elected to serve on our Board of Directors until our next annual meeting of stockholders, or until her or his successor is duly elected and qualified. Withholding the authority to vote your shares with respect to one or more director nominees will have no effect on the election of those nominees. Broker non-votes are not considered votes cast and will also have no effect on the election of the nominees. Unless otherwise instructed or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” the election of the nominees. The Board recommends that the stockholders vote “FOR” the election of Mr. Saxe, Ms. Cunningham, Dr. Curley, Ms. FitzPatrick, Dr. Gin, Ms. Rotunno and Mr. Singh.
BOARD OF DIRECTORS
BOARD OF DIRECTORS
Director Nominee Qualification and Experience
Director Nominee Qualification and Experience Our Board believes that our seven director nominees provide our Company with the combined skills, experience and personal qualities needed for an effective, engaged and well-functioning board of directors.
Director Nominee Diversity
Director Nominee Diversity Our seven directors come from diverse backgrounds, drawing on their substantial experience in the pharmaceutical industry, finance, law and business. We comply with California SB 826, which requires a minimum of three female directors for corporations with six or more directors, and California AB 979, which requires corporations with nine or more directors to have a minimum of three directors from underrepresented communities. We also comply with Nasdaq Listing Rule 5605(f), which requires Nasdaq-listed companies to have at least two diverse directors, including one self-identified woman and one individual who self-identifies as an underrepresented minority or as LGBTQ+. The table below provides certain highlights of the composition of our Board members and nominees as of July 28, 2023 and August 16, 2022. Each of the categories listed in the table below has the meaning as it is used in Nasdaq Listing Rule 5605(f).
Director Nominee Diversity
| Board Diversity Matrix (As of July 28, 2023) | | | | | | Total Number of Directors | 7 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Gender Identity | | | | | | Directors | 4 | 3 | — | — | | Demographic Background | | | | | | African American or Black | 1 | — | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | 1 | — | — | | Hispanic or Latinx | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 3 | 1 | — | — | | Two or More Races or Ethnicities | — | 1 | — | — | | LGBTQ+ | — | | | | | Did Not Disclose Demographic Background | 1* | | | |
Director Nominee Diversity
* Did not disclose with respect to LGBTQ+ background.
Director Nominee Diversity
| Board Diversity Matrix (As of August 16, 2022) | | | | | | Total Number of Directors | 7 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Gender Identity | | | | | | Directors | 4 | 3 | — | — | | Demographic Background | | | | | | African American or Black | 1 | — | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | 1 | — | — | | Hispanic or Latinx | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 3 | 1 | — | — | | Two or More Races or Ethnicities | — | 1 | — | — | | LGBTQ+ | — | | | | | Did Not Disclose Demographic Background | 1* | | | |
Director Nominee Diversity
* Did not disclose with respect to LGBTQ+ background.
Director Nominee Experience
Director Nominee Experience The following is a brief description of our current directors, each of whom has been nominated by the Board to stand for re-election as a director at the Annual Meeting. The age indicated in each nominee’s biography is as of July 28, 2023, the date of this Proxy Statement. There are no arrangements or understandings by which any of the directors or nominees for director of the Company were selected, and there are no family relationships between any of the directors, nominees or executive officers.
Director Nominee Experience
| Jon S. Saxe, J.D., LL.M. Chairman and Independent Director Age 87 | Mr. Saxe has served as Chairman of our Board since 2000, first as Chairman of the Board of Directors of Vistastem, Inc., a California corporation (formerly Vistagen Therapeutics, Inc.) (Vistastem), then as Chairman of our Board after the merger by and between the Company and Vistastem on May 11, 2011, at which time Vistastem became a wholly owned subsidiary of the Company (the Merger). He also serves as the Chairman of our Audit Committee. Mr. Saxe is the retired President and was a director of PDL BioPharma from 1989 to 2008. From 1989 to 1993, he was President, Chief Executive Officer and a director of Synergen, Inc. (acquired by Amgen). Mr. Saxe served as Vice President, Licensing & Corporate Development for Hoffmann-Roche from 1984 through 1989, and Head of Patent Law for Hoffmann-Roche from 1978 through 1989. Mr. Saxe currently is the lead director of Kyto Technology and Life Science, and also serves as a director of six additional private life science companies, Achelios, Arbor Vita Corporation, Aether, Inc., Arcuo Medical, LLC, Trellis Bioscience, Inc. and Epalex Corporation. Mr. Saxe has also served as a director of other biotechnology and pharmaceutical companies, including ID Biomedical (acquired by GlaxoSmithKline), Sciele Pharmaceuticals, Inc. (acquired by Shionogi), Amalyte (acquired by Kemin Industries), Cell Pathways (acquired by OSI Pharmaceuticals), Lumos Pharma, Inc. (merged with New Link Genetics) and other companies, both public and private. Mr. Saxe has a B.S.Ch.E. from Carnegie-Mellon University, a J.D. degree from George Washington University and an LL.M. degree from New York University. We selected Mr. Saxe to serve as Chairman of our Board of Directors due to his numerous years of experience as a senior executive with major pharmaceutical and biotechnology companies, including Protein Design Labs, Inc., Synergen, Inc. and Hoffmann-Roche, Inc., as well as his extensive experience serving as a director of numerous private and public biotechnology and pharmaceutical companies, serving as Chairman, and Chair and member of audit, compensation and governance committees of both private and public companies. Mr. Saxe provides us and our Board of Directors with highly valuable insight and perspective into the biotechnology and pharmaceutical industries, as well as the strategic opportunities and challenges that we face. |
Director Nominee Experience
| Ann M. Cunningham, MBA Non-Independent Director Age 55 | Ms. Cunningham has served as a member of our Board since January 2019. From May 2021 to November 2022, Ms. Cunningham served as our Chief Commercial Officer. Currently, Ms. Cunningham is the Founder and Managing Partner of i3 Strategy Partners, a consulting firm founded in 2018 specializing in assisting companies in the pharmaceutical space. Prior to founding i3 Strategy Partners, Ms. Cunningham served as Vice President, Neurodegenerative Diseases and Psychiatry for Teva Pharmaceuticals Industries, Ltd. From 2015 to 2018, as Senior Marketing Director for Otsuka Pharmaceutical Companies from 2013 to 2015 and in several marketing-focused positions for Eli Lily and Company from 1999 to 2013, including serving as Global Marketing Senior Director from 2009 to 2013. Ms. Cunningham holds a B.A. degree in Psychology from Yale University and an MBA, with a focus on marketing management, from the University of Michigan. We selected Ms. Cunningham to serve on our Board due to her substantial experience in healthcare marketing, particularly in the successful development, positioning and commercial launch of products to treat diseases of the central nervous system. Ms. Cunningham brings an insightful commercial perspective to us and to our Board that is critical as our pipeline products move from clinical development to commercialization. |
Director Nominee Experience
| Joanne Curley, Ph.D. Independent Director Age 55 | Dr. Curley has served as a member of our Board of Directors since April 2021. Dr. Curley brings more than 25 years of experience in the development and commercialization of pharmaceutical products, including research and development governance. Dr. Curley currently serves as the Chief Development Officer at Vera Therapeutics, Inc., a position she has held since March 2020. Prior to joining Vera, from June 2005 to March 2020, Dr. Curley held various director-level positions with Gilead Sciences, Inc., during which time the anti-viral portfolio grew from four to seventeen commercial products. While at Gilead, Dr. Curley led Project and Portfolio Management with oversight of the development pipeline across four therapeutic areas and was responsible for research and development governance. Before Gilead, Dr. Curley worked as an aerosol formulation scientist and subsequently as a project leader at Nektar Therapeutics. Dr. Curley received a BSc in Physics and Chemistry from Trinity College, Ireland, a Ph.D. in Polymer Science and Engineering from the University of Massachusetts, Amherst and completed a post-doctorate at Massachusetts Institute of Technology and Harvard Medical School, focused on long-acting biodegradable formulations. We selected Dr. Curley to serve on our Board due to her extensive experience in early product development, regulatory approval and commercialization of pharmaceutical products, giving her a unique perspective of the life cycle of drug development. |
Director Nominee Experience
| Margaret M. FitzPatrick, M.A. Independent Director Age 57 | Ms. FitzPatrick has served on our Board of Directors since July 2021. Ms. FitzPatrick is the Founder and Managing Director of FitzPatrick & Co. LLC, a communications and marketing advisory firm founded in July 2020. Prior to the founding of FitzPatrick & Co. LLC, Ms. FitzPatrick served as Senior Vice President, Corporate Affairs, Philanthropy and Customer Engagement at Exelon Corporation (NASDAQ: EXC), a diversified clean energy company, from 2016 to 2020, as Global Chief Communications Officer and led public affairs at Johnson & Johnson, the world’s largest and most broadly-based healthcare company, from 2013 to 2016, and as Global Chief Communication Officer and President of the Foundation at CIGNA. Ms. FitzPatrick also served as Executive Vice President at APCO Worldwide, a global public affairs and strategic communications consultancy, where she counseled executives on major global reputation efforts for notable industry leaders. Ms. FitzPatrick currently serves on the board of directors of AN2 Therapeutics, Inc. (NASDAQ: ANTX), Ms. FitzPatrick holds a B.A. in English and Policy Studies from Syracuse University, and an M.A. in Public Policy from The George Washington University. In 2018, she completed the Harvard Business School program for corporate directors. She is a National Association of Corporate Directors (NACD) Certified Director and a member of NACD's Board Advisory Services. We selected Ms. FitzPatrick to serve on the Board due to her extensive experience developing and executing multiple high impact customer-focused marketing communications initiatives for some of the world’s largest and most successful companies. The Board believes Ms. FitzPatrick’s expertise in positioning companies and products through public relations, marketing and digital media campaigns provides valuable contributions as the Company continues to advance development of it drug candidates. |
Director Nominee Experience
| Jerry B. Gin, Ph.D., MBA Independent Director Age 80 | Dr. Gin has served on our Board of Directors since March 2016. Dr. Gin is currently the co-founder and CEO of Nuvora, Inc., a private company founded in 2006 with a drug delivery platform for the sustained release of ingredients through the mouth for such indications as dry mouth, biofilm reduction and sore throat/cough relief. Dr. Gin is also co-founder and Chairman of Livionex, a private platform technology company founded in 2009 and focused on oral care, ophthalmology and wound care. Previously, Dr. Gin co-founded Oculex Pharmaceuticals in 1993, which developed technology for controlled release delivery of drugs to the interior of the eye, specifically to treat macular edema, and served as President and CEO until it was acquired by Allergan in 2003. Prior to forming Oculex, Dr. Gin co-founded and took public ChemTrak, which developed a home cholesterol test commonly available in drug stores today. Prior to ChemTrak, Dr. Gin was Director of New Business Development and Strategic Planning for Syva, the diagnostic arm of Syntex Pharmaceuticals, Director for Pharmaceutical and Diagnostic businesses for Dow Chemical, and Director of BioScience Labs (now Quest Laboratories), the clinical laboratories of Dow Chemical. Dr. Gin received his Bachelor’s degree in Chemistry from the University of Arizona, his Ph.D. in Biochemistry from the University of California, Berkeley, his MBA from Loyola College, and conducted his post-doctoral research at the National Institutes of Health. We selected Dr. Gin to serve on our Board due to his extensive experience in the healthcare industry, focusing his substantial business and scientific expertise on founding and developing numerous biopharmaceutical, diagnostic and biotechnology companies and propelling them to their next platforms of growth and value. |
Director Nominee Experience
| Mary L. Rotunno, J.D. Independent Director Age 63 | Ms. Rotunno has served as a member of our Board since July 2021. Ms. Rotunno has served as General Counsel of El Camino Health, a health care system, since January 2014, and has served as a Member of the Executive Leadership Team at El Camino Health since August 2015. Ms. Rotunno is also Board Chair and a member of Audit, Executive/Governance and Nominations Committees for health care provider, Momentum for Health, located in San Jose, California. Before joining El Camino Health, Ms. Rotunno spent over 11 years as Senior Counsel and Client Service Leader for Common Spirit Health, formerly Dignity Health, in California’s San Francisco Bay Area. Prior to Dignity Health, she held various legal roles at Varian Medical Systems, Manatt, Phelps & Phillips, Golden Living, and Pillsbury Winthrop Shaw Pitman. Ms. Rotunno graduated with honors from the University of Illinois with a Bachelor of Science in Nursing. She worked as a registered nurse before earning her Juris Doctor degree, cum laude, from the University of California, Hastings College of Law, San Francisco. Ms. Rotunno is a member of the State Bar of California. In addition, she obtained certification by the Women’s Corporate Board Readiness Program at Santa Clara University and completed the Hastings Leadership Academy for Women and Dignity Health Ministry Leadership Program. We selected Ms. Rotunno to serve on our Board due to her extensive experience as an advocate for both patients and healthcare providers and her insights into strategies for value-based care and an understanding of the life cycle of the mental healthcare experience. Ms. Rotunno also brings insights on complex governance, regulatory and compliance requirements to complement her strategic vision and skills for scenario planning and enterprise risk management. |
Director Nominee Experience
| Shawn K. Singh, J.D. Chief Executive Officer and Director Age 60 | Mr. Singh has served as our Chief Executive Officer since August 2009, first as the Chief Executive Officer of Vistastem,Inc., a California Corporation (Vistastem), then as Chief Executive Officer of the Company. Mr. Singh first joined the Board of Directors of Vistastem in 2000 and served on the Vistastem management team (part-time) from late-2003, following Vistastem’s acquisition of Artemis Neuroscience, of which he was President, to August 2009. In connection with the Merger, Mr. Singh was appointed as a member of our Board in 2011. Mr. Singh has over 30 years of experience working with biotechnology, medical device and pharmaceutical companies, both private and public. From 2001 to August 2009, Mr. Singh served as Managing Principal of Cato BioVentures, a life science venture capital firm, and as Chief Business Officer and General Counsel of Cato Research Ltd (now Allucent), a contract research organization (CRO) previously affiliated with Cato BioVentures. Mr. Singh served as President (part-time) of Echo Therapeutics, a medical device company, from 2007 to 2009, and as a member of its Board of Directors from 2007 to 2011. He also served as Chief Executive Officer (part-time) of Hemodynamic Therapeutics, a private biopharmaceutical company previously affiliated with Cato BioVentures, from 2004 to 2009. From 2000 to 2001, Mr. Singh served as Managing Director of Start-Up Law, a management consulting firm serving biotechnology companies. Mr. Singh also served as Chief Business Officer of SciClone Pharmaceuticals (formerly NASDAQ: SCLN), a specialty pharmaceutical company with a substantial commercial business in Greater China, from 1993 to 2000, and as a corporate finance associate of Morrison & Foerster LLP, an international law firm, from 1991 to 1993. Mr. Singh earned a B.A. degree, with honors, from the University of California, Berkeley, and a Juris Doctor degree from the University of Maryland School of Law. Mr. Singh is a member of the State Bar of California. We selected Mr. Singh to serve on our Board due to his substantial practical experience and expertise in senior leadership roles with multiple private and public biotechnology, pharmaceutical and medical device companies, and his extensive experience in corporate finance, venture capital, corporate governance, drug development, intellectual property, regulatory affairs and strategic collaborations. |
Director Compensation
Director Compensation Effective April 1, 2021, our Board adopted a director compensation policy for the non-executive members of our Board. Unless otherwise noted, all share references and related information, including stock option exercise prices, have been revised to give effect to the 1-for-30 reverse stock split of our issued and outstanding common stock effected on June 6, 2023.
Director Compensation
| | Schedule of Director Fees, effective April 1, 2021 | | | Description | Cash(1)($) | Equity(2) | | Director Annual Retainer | $50,000 | Non-executive members of our Board will be entitled to the following equity awards: (i) a one-time grant of stock options upon appointment to the Board in an amount to be determined at the sole discretion of the Compensation Committee, and (ii) an annual grant of stock options or restricted stock to be determined at the sole discretion of the Compensation Committee. | | Audit Committee | | | | Chair | $15,000 | | | Member | $10,000 | | | Compensation Committee | | | | Chair | $10,000 | | | Member | $5,000 | | | Corporate Governance and Nominating Committee | | | | Chair | $10,000 | | | Member | $5,000 | |
Director Compensation
| (1) Cash fees payable in quarterly installments. |
Director Compensation
| (2) All awards issued pursuant to the Director Compensation Plan will be issued pursuant to the 2019 Plan (defined below) or a successor plan, if any. Each award issued under the Director Compensation Plan will vest in equal monthly installments over a 12-month period beginning on the date of issuance. |
Director Compensation
We paid our non-executive directors cash compensation consistent with the policy noted above during our fiscal year ended March 31, 2023. The following table sets forth a summary of the compensation earned by our non-executive directors in our fiscal year ended March 31, 2023.
Director Compensation
| Name | Fees Paid in Cash(1) | Option Awards(2) | Other Compensation | Total | | Jon S. Saxe(3) | $70,000 | $- | $- | $70,000 | | Joanne Curley(4) | $55,000 | $- | $- | $55,000 | | Ann M. Cunningham(5) | $22,717 | $- | $120,000 | $142,717 | | Margaret M. FitzPatrick(6) | $58,424 | $- | $165,000 | $223,424 | | Jerry B. Gin(7) | $70,000 | $- | $- | $70,000 | | Mary L. Rotunno(8) | $70,000 | $- | $- | $70,000 |
Director Compensation
| (1) The amounts shown represent fees earned for service on our Board, and Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee during the year ended March 31, 2023 (Fiscal 2023), which amounts were paid in full during Fiscal 2023. | | (2) We did not grant any options to our non-executive directors during Fiscal 2023. | | (3) Mr. Saxe served as the Chairman of our Board, the Chairman of our Audit Committee and a member of our Compensation Committee throughout Fiscal 2023. At March 31, 2023, Mr. Saxe held (i) 1,858 shares of our common stock and (ii) options to purchase 22,837 registered shares of our common stock, all of which options were exercisable. |
Director Compensation
| (4) Dr. Curley was appointed to our Board in April 2021 and has also served as a member of our Corporate Governance and Nominating Committee since her appointment. At March 31, 2023, Dr. Curley held options to purchase 5,834 registered shares of our common stock, all of which were exercisable. |
Director Compensation
| (5) Ms. Cunningham served as a member of our Board and as a member of our Corporate Governance and Nominating Committee from January 2019 through April 30, 2021. On May 1, 2021, Ms. Cunningham joined the Company as its Chief Commercial Officer (CCO) and served in such capacity through November 11, 2022. During the period in which she served as CCO, her membership on the Corporate Governance and Nominating Committee terminated as she was no longer considered an independent director under the standards established by the SEC and the rules of The Nasdaq Stock Market, and her membership on the Board continued as a non-independent member. Following her departure as CCO of the Company, Ms. Cunningham continues to be considered a non-independent director and on November 21, 2022, she was reappointed as a member of the Corporate Governance and Nominating Committee. Following Ms. Cunningham’s resignation as CCO, i3 Strategy Partners, a consulting firm for which Ms. Cunningham is the Managing Partner, began providing certain advisory services to us pursuant to a consulting agreement. The initial term of the consulting agreement will end on March 31, 2024, and, pursuant to the agreement, i3 Strategy Partners received a fee of $120,000 for the period from the effective date of the agreement through March 31, 2023 and will receive $10,000 per month thereafter through the end of the consulting agreement’s initial term. At March 31, 2023, Ms. Cunningham held options to purchase 25,004 registered shares of our common stock, of which 17,722 shares were exercisable. | | (6) Ms. FitzPatrick was appointed to our Board in July 2021 and has also served as a member of our Corporate Governance and Nominating Committee since her appointment. On November 21, 2022, Ms. FitzPatrick was also appointed as a member of the Compensation Committee. During the fourth quarter of Fiscal 2022, we entered into a consulting agreement with FitzPatrick & Co LLC, a consulting firm for which Ms. FitzPatrick is the Managing Director, to provide corporate development and public relations advisory services. The agreement continued throughout Fiscal 2023, during which we incurred fees aggregating $165,000. The agreement, currently requiring monthly payments of $10,000, expired in June 2023 and has subsequently been extended through December 2023. At March 31, 2023, Ms. FitzPatrick held options to purchase 5,834 registered shares of our common stock, all of which were exercisable. | | (7) Dr. Gin has served as a member of our Board and as a member of our Audit Committee since his appointment to the Board in 2016. Beginning in July 2021, he was also appointed as the chairperson of our Compensation Committee. At March 31, 2023, Mr. Gin held: (i) 13,334 shares of our common stock, and (ii) options to purchase 23,671 registered shares of our common stock, all of which were exercisable. | | (8) Ms. Rotunno was appointed to our Board in July 2021 and, since her appointment to the Board, serves as a member of our Audit Committee and as chairperson of the Corporate Governance and Nominating Committee. At March 31, 2023, Ms. Rotunno held options to purchase 5,834 registered shares of our common stock, all of which were exercisable. |
Annual Bonus
Annual Bonus The Compensation Committee assesses both (i) the level of the executive officer’s achievement of meeting individual goals, as well as that executive officer’s contribution towards our corporate-wide goals, and (ii) overall corporate performance for the applicable year and the current state of the Company’s operations when considering annual cash bonus payments. Should the Compensation Committee approve of cash bonus payments, the amount of the cash bonus depends on the level of achievement of corporate and individual performance goals, with a target bonus generally set as a percentage of base salary and based on the achievement of pre-determined milestones. For Fiscal 2023, the key factor driving executive compensation decisions was preservation of the Company’s cash position to ensure optimal use of the Company’s available capital for the Company’s drug development programs following the precipitous decrease in the Company’s stock price and market value following the announcement of topline results of PALISADE-1, the Company’s single-dose administration Phase 3 clinical trial of fasedienol for SAD, which study was conducted during, and believed to have been affected by, the acute stages of the COVID-19 pandemic. As a result, to preserve capital, none of our NEOs received a bonus in Fiscal 2023.
Long-Term Equity Incentives
Long-Term Equity Incentives The Compensation Committee believes that to attract and retain management, employees and independent directors, the compensation paid to these persons should include non-cash equity-based compensation, in addition to base salary and potential annual cash incentives, that is competitive with peer companies. The Compensation Committee determines the amount and terms of non-cash equity-based compensation granted under our stock option plans or pursuant to other awards made to our executives, employees and independent directors. Any long-term equity compensation granted to our management, employees and independent directors does not represent cash payments made to such individuals, and there is no guarantee that any recipients of awards granted as long-term equity compensation will realize any cash value as a result of the awards. For the reasons described above, the Compensation Committee did not grant stock options or other equity securities to management or independent directors in Fiscal 2023, other than an option award granted to Mr. Adler upon his employment and appointment as Corporate Development Officer and General Counsel in May 2022. In the year ended March 31, 2022 (Fiscal 2022), the Compensation Committee granted stock options to management, employees and independent directors as a part of each individual's long-term compensation. Options granted to employees in Fiscal 2023 and to management, employees and independent directors in Fiscal 2022 have a term of ten years, and an exercise price that was at or above the market price of our common stock on the grant date, which the Compensation Committee believes align the long-term interests of our management, employees and independent directors with those of our stockholders.
2023 Summary Compensation Table
2023 Summary Compensation Table The following table shows information regarding the compensation of our NEOs for services performed in Fiscal 2023 and Fiscal 2022. Unless otherwise noted, all share references and related information, including stock option exercise prices, have been revised to give effect to the 1-for-30 reverse stock split of our issued and outstanding common stock effected on June 6, 2023.
2023 Summary Compensation Table
| | Fiscal | Salary | Bonus(1) | Option Awards (2)(6)(7) | All Other Compensation(8) | Total | | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | | Shawn K. Singh, J.D.(3) | 2023 | 600,000 | - | - | - | 600,000 | | Chief Executive Officer | 2022 | 562,500 | 350,000 | 269,960 | - | 1,182,460 | | Jerrold D. Dotson, CPA(4) | 2023 | 434,375 | - | - | - | 434,375 | | Chief Financial Officer | 2022 | 402,500 | 175,000 | 134,613 | - | 712,113 | | Reid G. Adler, J.D.(5) | 2023 | 371,875 | - | 180,568 | - | 552,443 | | Chief Corporate Development Officer and General Counsel | 2022 | - | - | - | - | - |
2023 Summary Compensation Table
| (1) Amounts reported in the Bonus column for Fiscal 2022 reflect bonuses awarded by the Compensation Committee that were earned during calendar year 2021 by each NEO for the attainment of performance-based objectives during that period and paid in February 2022. At the recommendation of our management team, the Compensation Committee did not award any bonuses and none were paid or accrued during Fiscal 2023. | | (2) The amounts in the Option Awards column represent the aggregate grant date fair value of options to purchase shares of our common stock awarded to the NEOs during the fiscal year presented, computed in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation – Stock Compensation (ASC 718). The amounts in this column do not represent any cash payments actually received by the NEOs with respect to any of such options to purchase shares of our common stock awarded to them during the periods presented. None of the NEOs have exercised any of such options to purchase common stock granted during Fiscal 2023 or Fiscal 2022, and there can be no assurance that any of them will ever realize any of the ASC 718 grant date fair value amounts presented in the Option Awards column. | | (3) Mr. Singh became Chief Executive Officer of VistaGen Therapeutics, Inc. (a California corporation) (now Vistastem) on August 20, 2009 and our Chief Executive Officer in May 2011. Pursuant to his January 2010 employment agreement, as amended in June 2016, Mr. Singh’s annual base cash salary was contractually set at $395,000. The Compensation Committee has since adjusted Mr. Singh’s base annual salary to $550,000 effective in January 2021 and to $600,000 effective in January 2022. Pursuant to his employment agreement, Mr. Singh is eligible to receive an annual cash incentive bonus of up to fifty percent (50%) of his base cash salary. | | (4) Mr. Dotson has served as our Chief Financial Officer since September 2011. During Fiscal 2022, Mr. Dotson’s annual base cash salary was $395,000 through December 31, 2021. The Compensation Committee adjusted Mr. Dotson’s base annual salary to $425,000 effective in January 2022 and to $450,000 effective in November 2022. |
2023 Summary Compensation Table
| (5) Mr. Adler was appointed as the Company’s Chief Corporate Development Officer and General Counsel in May 2022; accordingly, no employee compensation or stock option grants are reported for him for Fiscal 2022. Upon his employment with the Company, Mr. Adler’s annual base cash salary was set at $375,000 and was adjusted to $450,000 effective in November 2022. Prior to the appointment of Mr. Adler as Chief Corporate Development Officer and General Counsel, we engaged Capital Technology Law Group, of which Mr. Adler was a partner, to provide various legal services and advice. From April 1, 2022 until Mr. Adler’s appointment on May 2, 2022, the Company paid to Capital Technology Law Group fees of $18,000. Please see the section titled “Certain Relationships and Related Transactions” on page 37 below. | | (6) Mr. Adler received a grant of options to purchase 6,667 registered shares of our common stock upon his employment with the Company in May 2022. The compensation amount in the table below does not represent a cash payment actually received by Mr. Adler with respect to such option to purchase shares of our common stock awarded to him during Fiscal 2023. Rather, the table below provides information regarding the option awards we granted to Mr. Adler during Fiscal 2023 and the assumptions used in the Black Scholes Option Pricing Model to determine the grant date fair value of his award. |
2023 Summary Compensation Table
| Option Award Compensation | Option Grant | | Fiscal Year Ended March 31, 2023 | 5/2/2022 | | Mr. Adler | $180,568 | | Option Award Assumptions – | Option Grant | | Fiscal Year Ended March 31, 2023 | 5/2/2022 | | Market price per share | $38.40 | | Exercise price per share | $38.40 | | Risk-free interest rate | 3.00% | | Volatility | 80.07% | | Expected term (years) | 6.08 | | Dividend rate | 0.0% | | Fair value per share | $27.09 | | Aggregate shares | 6,667 |
2023 Summary Compensation Table
| (7) The compensation amounts in the table below do not represent any cash payments actually received by either Mr. Singh or Mr. Dotson with respect to any of such options to purchase shares of our common stock awarded to them during the period presented. Rather, the table below provides information regarding the option awards we granted to the Mr. Singh and Mr. Dotson during Fiscal 2022 and the assumptions used in the Black Scholes Option Pricing Model to determine the grant date fair values of the respective awards. |
2023 Summary Compensation Table
| Option Award Compensation | Option Grant | | Fiscal Year Ended March 31, 2022 | 3/1/2022 | | Mr. Singh | $269,960 | | Mr. Dotson | $134,613 |
2023 Summary Compensation Table
| Option Shares Granted | Option Grant | | Fiscal Year Ended March 31, 2022 | 3/1/2022 | | Mr. Singh | 10,001 | | Mr. Dotson | 5,001 |
2023 Summary Compensation Table
| Option Award Assumptions – | Option Grant | | Fiscal Year Ended March 31, 2021 | 3/1/2022 | | Market price per share | $41.10 | | Exercise price per share | $41.10 | | Risk-free interest rate | 1.58% | | Volatility | 79.09% | | Expected term (years) | 5.39 | | Dividend rate | 0.0% | | Fair value per share | $26.99 | | Aggregate shares | 15,002 |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table presents certain information regarding compensation paid to our Chief Executive Officer, who serves as our Principal Executive Officer (PEO), and other NEOs (Other NEOs or Non-PEOs), and certain measures of financial performance for Fiscal 2022 and Fiscal 2023. The amounts shown below are calculated in accordance with Item 402(v) of Regulation S-K. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Total for Non- PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(4) | Value of Initial $100 Investment based on Total Stockholder Return(5) | Net Income (Loss) Attributable to Common Stockholders ($) | | Fiscal 2023 | $600,000 | $225,350 | $493,409 | $304,160 | $5.85 | $(59,247,700) | | Fiscal 2022 | $1,182,400 | $(371,529) | $356,057 | $(67,169) | $58.22 | $(48,707,500) |
Pay Versus Performance Table
| (1) Shawn K. Singh, J.D. served as our PEO for each the years ended March 31, 2023 and 2022. | | (2) The following amounts were added and deducted to the Summary Compensation Table (SCT) amount to determine the compensation actually paid to the PEO as determined in accordance with SEC regulations: |
Pay Versus Performance Table
| Adjustments to Determine Compensation “Actually Paid” | Fiscal 2023 | Fiscal 2022 | | Deduction for amount reported under the “Stock Awards” column in the SCT | $- | $- | | Deduction for amount reported under the “Option Awards” column in the SCT | - | (269,960) | | Increase for the fair value of awards granted during year that remain unvested as of year-end | - | 181,190 | | Increase for the fair value of awards granted during year that remain vested as of year-end | - | 59,481 | | Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year-end that were outstanding and unvested as of year-end | (87,164) | (666,398) | | Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to year-end that vested during year | (287,486) | (858,242) | | Deduction of fair value of awards granted prior to year-end that were forfeited during year | - | - | | Increase based upon incremental fair value of awards modified during year | - | - | | Increase based on dividends or other earnings paid during year prior to vesting date of award. | - | - | | Total Adjustments | $(374,650) | $(1,553,929) |
Pay Versus Performance Table
Fair values used in the determination of compensation actually paid (CAP) are determined using the same methodology as used for determining grant date fair values in our financial statements. Specifically, the fair value of option awards was calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation - Stock Compensation, and does not reflect any amounts paid to or realized by Mr. Singh. The fair value of the option awards used in the determination of CAP was estimated using the Black-Scholes option pricing model and valuation assumptions reflecting the closing price of our common stock and related assumptions on the respective valuation dates. The grant date valuation assumptions used in the valuation of option awards may be found in the applicable footnotes to the SCT on page 20 above.
Pay Versus Performance Table
| (3) For the year ended March 31, 2023 and 2022, Jerrold D. Dotson, CPA and Reid G. Adler, J.D. were our other NEOs. | | (4) For our other NEOs, the following amounts were added and deducted to the SCT amount to determine the compensation actually paid as determined in accordance with SEC regulations. |
Pay Versus Performance Table
| Adjustments to Determine Compensation “Actually Paid” | Fiscal 2023 | Fiscal 2022 | | Deduction for amount reported under the “Stock Awards” column in the SCT | $- | $- | | Deduction for amount reported under the “Option Awards” column in the SCT | (90,284) | (67,307) | | Increase for the fair value of awards granted during year that remain unvested as of year-end | 4,306 | 68,438 | | Increase for the fair value of awards granted during year that remain vested as of year-end | - | 27,795 | | Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year-end that were outstanding and unvested as of year-end | (19,664) | (188,332) | | Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to year-end that vested during year | (83,607) | (263,846) | | Deduction of fair value of awards granted prior to year-end that were forfeited during year | - | - | | Increase based upon incremental fair value of awards modified during year | - | - | | Increase based on dividends or other earnings paid during year prior to vesting date of award. | - | - | | Total Adjustments | $(189,249) | $(423,252) |
Pay Versus Performance Table
Fair values used in the determination of CAP are determined using the same methodology as used for determining grant date fair values in our financial statements. Specifically, the fair value of option awards was calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation - Stock Compensation, and does not reflect any amounts paid to or realized by Messrs. Dotson or Adler. The fair value of the option awards used in the determination of CAP was estimated using the Black-Scholes option pricing model and valuation assumptions reflecting the closing price of our common stock and related assumptions on the respective valuation dates. The grant date valuation assumptions used in the valuation of option awards may be found in the applicable footnotes to the SCT on page 20 above.
Pay Versus Performance Table
| (5) Assumes $100 invested in our common stock on March 31, 2021, and calculated based on the difference between the closing price of our common stock, as reported on The Nasdaq Capital Market, on March 31, 2023 and 2022, the end and beginning of the measurement period, respectively. |
Relationship Between Compensation Actually Paid and Performance
Relationship Between Compensation Actually Paid and Performance We generally seek to incentivize a mix between current and long-term performance and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee views the relationship between the Company’s performance and the compensation of our NEOs. Compensation Actually Paid and Total Stockholder Return Although compensation actually paid (CAP), when calculated in accordance with Item 402(v) of Regulation S-K, increased in Fiscal 2023, when compared to Fiscal 2022, this increase is directly attributable to the reduction in fair value of options granted to our NEOs in Fiscal 2022 and in earlier years resulting from the sharp decrease in our stock price between the periods, as demonstrated by the decrease in total stockholder return (TSR) in Fiscal 2023 when compared to Fiscal 2022. For reasons more fully described below, during Fiscal 2023, none of our NEOs received a bonus and, other than an option award granted to Mr. Adler upon his employment and appointment as Corporate Development Officer and General Counsel, no option awards were granted to our NEOs. Compensation Actually Paid and Net Loss As a development-stage biopharmaceutical company, our Compensation Committee has not historically looked to net loss as a performance measure for our executive compensation program. Instead, our Compensation Committee considers several factors more closely related to the Company’s current operations and available resources, rather than solely corporate financial performance measures such as net loss and prevailing market price of the Company’s common stock. The key factor driving executive compensation decisions for Fiscal 2023 was preservation of the Company’s cash position to ensure optimal use of the Company’s available capital for the Company’s drug development programs following the precipitous decrease in the Company’s stock price and market value following the announcement of topline results of PALISADE-1, the Company’s single-dose administration Phase 3 clinical trial of fasedienol for SAD, which study was conducted during, and believed to have been affected by, the acute stages of the COVID-19 pandemic. As a result, to preserve capital, none of our NEOs received a bonus in Fiscal 2023. In addition, other than an option award granted to Mr. Adler upon his employment and appointment as Corporate Development Officer and General Counsel, no option awards were granted to our NEOs or Board in Fiscal 2023. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our Company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.