DEF 14A of TG Therapeutics, Inc.
Filed Apr 29, 2024 · FY20230001437749-24-013719
Q: What percentage of our outstanding common stock do our directors and executive officers own?
Q: What percentage of our outstanding common stock do our directors and executive officers own? A. As of our Record Date of April 17, 2024, our directors and executive officers owned, or have the right to acquire, approximately 10.5% of our outstanding common stock. See the discussion under the heading “Stock Ownership of Our Directors, Executive Officers, and 5% Beneficial Owners” on page 36 for more details.
Our Board of Directors
Our Board of Directors Our Bylaws provide that the Board of Directors (the "Board") shall consist of one or more members, as determined from time to time by resolution of the Board. Currently, our Board consists of six members. The following individuals are being nominated to serve on our Board (See “Proposal 1 - Election of Directors; Nominees”):
Our Board of Directors
| | | | Director | | Name | Age | Position | Since | | Michael S. Weiss | 58 | Chairman, Chief Executive Officer and President | 2011 | | Laurence N. Charney | 77 | Lead Independent Director | 2012 | | Yann Echelard | 60 | Director | 2012 | | Kenneth Hoberman | 59 | Director | 2014 | | Daniel Hume | 57 | Director | 2015 | | Sagar Lonial, MD | 57 | Director | 2020 |
Our Board of Directors
The Board does not have a formal policy regarding the separation of the roles of Chief Executive Officer and Chairman, as the Board believes that it is in the best interests of the Company to make that determination based on the direction of the Company and the current membership of the Board. The Board has determined that having a director who is an executive officer serve as the Chairman is in the best interest of the Company’s stockholders at this time. In addition, our Board has a Lead Independent Director who is responsible for presiding at regular executive sessions of the independent directors, leading annual independent director evaluations of the Chairman and Chief Executive Officer, and serving as a liaison between the Chairman and Chief Executive Officer and the independent directors. TG has a risk management program overseen by Michael S. Weiss, our Chairman, Chief Executive Officer and President, and the Board. Mr. Weiss and management identify material risks and prioritize them for our Board. Our Board regularly reviews information regarding our credit, liquidity, operations, and compliance as well as the risks associated with each. The following biographies set forth the names of our directors and director nominees, their ages, the year in which they first became directors, their positions with us, their principal occupations and employers for at least the past five years, any other directorships held by them during the past five years in companies that are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), or any company registered as an investment company under the Investment Company Act of 1940, as well as additional information, all of which we believe sets forth each director nominee’s qualifications to serve on the Board. There is no family relationship between and among any of our executive officers or directors. There are no arrangements or understandings between any of our executive officers or directors and any other person pursuant to which any of them are elected as an officer or director, except as disclosed below. TG adheres to the corporate governance standards adopted by The Nasdaq Stock Market (“Nasdaq”). Nasdaq rules require our Board to make an affirmative determination as to the independence of each director. Consistent with these rules, our Board undertook its annual review of director independence on April 17, 2024. During the review, our Board considered relationships and transactions during 2024 and during the past three fiscal years between each director or any member of his immediate family, on the one hand, and the Company and our subsidiaries and affiliates, on the other hand. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. Based on this review, our Board determined that Yann Echelard, Laurence Charney, Kenneth Hoberman, Daniel Hume and Dr. Sagar Lonial are independent under the criteria established by Nasdaq and our Board. Michael S. Weiss, 58, has served as TG’s Chairman, President and CEO since December 2011. Mr. Weiss is also currently a director of the Company. From 2002 to 2009, Mr. Weiss was the Chairman and Chief Executive Officer of Keryx Biopharmaceuticals, Inc. Mr. Weiss began his professional career as a lawyer with Cravath, Swaine & Moore LLP. He earned his J.D. from Columbia Law School and his B.S. in Finance from The University at Albany. Based on Mr. Weiss’s biotechnology and pharmaceutical industry experience, as well as his extensive management experience, the Board of Directors believes that Mr. Weiss has the appropriate set of skills to serve as a member of the Board. Mr. Weiss also serves as a Director and Executive Vice Chairman, Strategic Development of Fortress Biotech, Inc., and as Chairman of the Board of Directors of Mustang Bio, Inc., and of Checkpoint Therapeutics, Inc. Additionally, Mr. Weiss co-founded and served as Co-Portfolio Manager and Managing Partner of Opus Point Partners, LLC from 2009 to 2019. Laurence N. Charney, 77, has served on our Board since April 2012. Since 2007, Mr. Charney has served as a business strategist and financial advisor to Boards, CEOs and investors. Previously, from 1970 through June 2007, Mr. Charney was a senior audit partner at Ernst & Young, LLP, a registered public accounting firm, retiring as a practice leader in the Americas Quality and Risk Management Group. Mr. Charney currently serves as a director and audit committee chairman of Kenon Holdings Ltd. In addition, Mr. Charney previously served as a director and audit committee member of Pacific Drillings S.A, Marvel Entertainment, Inc., and other growth-oriented companies. In addition to his extensive experience on the boards of various corporate entities, Mr. Charney is also very active on the boards of several non-profit organizations. Mr. Charney graduated with a B.B.A. degree from Hofstra University and completed the Executive MBA in Business program at Columbia University. Based on Mr. Charney’s financial industry experience and in-depth understanding of our business, the Board of Directors believes that Mr. Charney has the appropriate set of skills to serve as a member of the Board. Yann Echelard, 60, has served on our Board since November 2012. Dr. Echelard, current Operating Partner at Flagship Pioneering, has over 30 years of research and biopharmaceutical experience. Dr. Echelard holds a Ph.D. from Université de Montréal and has completed post-doctoral studies at Ludwig Institute of Cancer Research in Montreal (McGill University). As a visiting scientist at the Roche Institute and at Harvard University (Developmental Biology), he had a key role in the isolation and characterization of the Hedgehog genes, the first identified vertebrate morphogens. From 1994 to 2010, he progressed through various positions of increasing responsibility at Genzyme Transgenics Corporation and at GTC Biotherapeutics, including Vice President of Research and Development, Vice President of Corporate and Technology Development, and President. In 1998, he led the scientific team that first performed goat somatic cell nuclear transfer (cloning). In January of 2013, Dr. Echelard became the President and Chief Executive Officer of rEVO Biologics, Inc., the successor of GTC Biotherapeutics, Inc., a position he held until April 2018. Since joining Flagship Pioneering in 2018, Dr. Echelard has successively served as Founding President of Ring Therapeutics and Cellarity, as well as President and Co-Founder of Laronde (now Sail), ProFound Therapeutics, and Ampersand biomedicines. Based on Mr. Echelard’s biotechnology and pharmaceutical industry experience, as well as his extensive management experience, the Board of Directors believes that Mr. Echelard has the appropriate set of skills to serve as a member of the Board of Directors of TG Therapeutics.
Our Board of Directors
Kenneth Hoberman, 59, has served on our Board since December 2014. Mr. Hoberman is currently the Chief Operating Officer and Corporate Secretary of Stemline Therapeutics, Inc. where he is a key member of the founding team. Mr. Hoberman was instrumental in the company’s financings from early private, including institutional, rounds through the IPO and subsequent follow-on offerings. Mr. Hoberman originated and lead the acquisition of Stemline Therapeutics, Inc. by The Menari Group. He has extensive financial, accounting, investor relations, corporate governance and business development experience including M&A, strategic alliances and partnerships both domestic and international. Mr. Hoberman’s operational expertise includes regulatory and compliance oversight, human resources, manufacturing, quality assurance and clinical development. He was previously Vice President of Corporate and Business Development of Keryx Biopharmaceuticals, Inc., where he was instrumental in the success of the company. Mr. Hoberman helped to secure multiple sources of capital including over $200 million in equity investments through public and private offerings. He initiated and executed a $100 million strategic alliance and originated, negotiated and closed dozens of licensing and operational contracts, helping to grow the company’s market capitalization to over $1 billion. Mr. Hoberman also led the team that originated, in-licensed, and developed AuryxiaTM, which recently gained FDA approval. Mr. Hoberman is also very active on several boards, including Nuvectis Pharma (Nasdaq: NVCT), and Lirum Therapeutics, Inc. Mr. Hoberman received a B.S.B.A. in Finance from Boston University and completed post-baccalaureate studies at Columbia University. Based on Mr. Hoberman’s financial and pharmaceutical industry experience and in-depth understanding of our business, as well as his extensive management experience, the Board of Directors believes that Mr. Hoberman has the appropriate set of skills to serve as a member of the Board. Daniel Hume, 57, has served as a member of our Board of Directors since June 2015. Mr. Hume is currently a managing partner at Kirby McInerney, LLP. Mr. Hume’s law practice focuses on securities law regulation, structured finance, antitrust, and civil litigation. Mr. Hume is member of the board of directors of for Lirum Therapeutics, a private biopharmaceutical company. Mr. Hume was recently a member of the boards of directors of Stemline Therapeutics Inc. (Nasdaq: STML), a late clinical stage biopharmaceutical company, and National Holdings Corporation (Nasdaq: NHLD), a financial services company, until those companies’ successful acquisitions. Mr. Hume is admitted to the New York State Bar and federal courts around the country, including the United States Supreme Court. Mr. Hume received a B.A. in philosophy and graduated magna cum laude from the State University of New York at Albany, and earned a J.D. from the Columbia University Law School, where he served as Notes Editor for the Columbia Journal of Environmental Law. We believe that Mr. Hume is qualified to serve on our Board of Directors due to his substantial financial and legal experience as well as his experience on several other Boards, some within the pharmaceutical industry. Sagar Lonial, MD, 57, was nominated to serve as a member of our Board of Directors in April 2020. Dr. Sagar Lonial earned his medical degree from the University of Louisville School of Medicine. He completed his internship and residency at Baylor College of Medicine in Houston, Texas, followed by a fellowship in hematology and oncology at Emory University School of Medicine in Atlanta, Georgia. His previous laboratory work has focused on evaluating the impact of purified dendritic cell subsets on the nature of immune responses against antigen, and he has completed several trials evaluating the impact of cytokines on dendritic cell content and post-transplant immune recovery. More recently, Dr. Lonial has focused on combinations of novel agents as therapy for myeloma. He serves as Vice Chair of the Myeloma Committee in the Eastern Cooperative Oncology Group and as Myeloma editor for Clinical Lymphoma, Myeloma and Leukemia. He has received the Celgene Young Investigator Award, Indo American Cancer Association Lifetime Achievement Award, the COMY Multiple Myeloma Excellence Award for Clinical Science, and the Giants of Cancer Care inductee, and currently holds the Anne and Bernard Gray Family Chair in Cancer. Based on Dr. Lonial’s medical background and significant experience in oncology drug development, the Board of Directors believes that Dr. Lonial has the appropriate set of skills to serve as a member of the Board. During 2023, our Board held four meetings. Each incumbent director who served their full term and are standing for election attended at least 75% of the meetings of the Board of Directors and the meetings of those committees on which each incumbent director served, in each case during the period that such person was a director. The permanent committees established by our Board of Directors are the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, descriptions of which are set forth in more detail below. Our directors are expected to attend each Annual Meeting of Stockholders, and it is our expectation that all of the directors standing for election will attend this year’s Annual Meeting. Last year, all of our directors attended the 2023 Annual Meeting of Stockholders.
Consideration of Prior Advisory Stockholder Vote on Executive Compensation
Consideration of Prior Advisory Stockholder Vote on Executive Compensation We hold advisory votes on the compensation of our NEOs (a “say-on-pay vote”) at every annual meeting of stockholders. Our Board values the opinions of our stockholders, and an annual advisory vote allows our stockholders to provide us with input on our executive compensation program. At the 2023 Annual Meeting of Stockholders, approximately 46.7% of the shares represented and entitled to vote at the annual meeting voted to approve the compensation of the Company’s named executive officers, as discussed and disclosed in the 2023 Proxy Statement. This level of support was below our desired levels. We note that, like most public companies, most decisions relating to a year’s compensation program are made in the first quarter of the year. By the time we filed our 2022 proxy statement in the second quarter of 2023, many elements of the 2023 compensation program, such as salaries, target bonus opportunities, and pay mix, were already determined. As a result, the feedback we received from our stockholders during 2023 related to these elements was not - and could not have been - reflected in our 2023 compensation program design. Since 2022, the Compensation Committee and Board has engaged an independent compensation consultant (the “Compensation Consultant”) to advise the Compensation Committee regarding annual compensation for the Company’s Chief Executive Officer, Chief Financial Officer, and non-employee directors. The Compensation Consultant also assisted the Compensation Committee with its 2023 peer group selection and analysis. Following the 2023 say-on-pay vote result, the Compensation Committee worked with the Compensation Consultant, to evaluate the Company’s executive compensation program to determine what changes, if any, should be made to the program. After considering this input from our stockholders, as well as evaluating practices related to executive compensation by public companies generally, and our peer group specifically, the Compensation Committee believes that the core design of our executive compensation program is sound, with an emphasis on short and long-term incentive compensation that rewards our executives when they successfully achieve our corporate goals and objectives and, in turn, deliver value for our shareholders. The Compensation Committee invites our stockholders to communicate any concerns or views on executive pay directly to the Board of Directors. Please refer to “Corporate Governance- Communicating with the Board of Directors” for information about communicating with the Board. The advisory vote on executive compensation at the Annual Meeting, and at future meetings, will serve as an additional tool to guide the Board of Directors and the Compensation Committee in evaluating the alignment of the Company’s executive compensation program with the interests of the Company and its stockholders.
Compensation Mix and “At-Risk Pay”
Compensation Mix and “At-Risk Pay” The Compensation Committee has historically compensated executive officers with three compensation components: base salary, annual cash bonus, and equity-based compensation. Competitive base salaries are intended to recognize the performance of job responsibilities as well as attract and retain individuals with superior talent. The Compensation Committee believes that annual bonus opportunities provide our executive officers with short-term rewards for success in achieving annual goals and objectives, and that long-term compensation through the award of restricted stock, stock options, or other equity awards aligns the objectives of management with those of our stockholders with respect to long-term performance and success of the Company. In setting compensation levels for our executive officers, the Compensation Committee does not formulaically benchmark against any one specific reference point. Instead, it considers a variety of factors, including peer group data, tenure, role, responsibilities, performance, and local competitive market practices. Compensation paid to our named executive officers is delivered primarily through at-risk pay, based on both short-term and long-term incentives, including the achievement of corporate goals and objectives.
Determining Executive Compensation
Determining Executive Compensation Role of the Compensation Committee The Compensation Committee oversees our executive compensation programs, including approving incentive programs, granting equity awards, and determining appropriate levels of compensation for our NEOs. While the Compensation Committee draws on a number of resources, including input from the Board and the Chief Executive Officer, to make decisions regarding our executive compensation program, ultimate decision-making authority rests with the Compensation Committee. The Compensation Committee oversees and approves all compensation arrangements and actions for our executive officers. The Compensation Committee relies upon the judgment of its members in making compensation decisions, after reviewing our corporate performance and carefully evaluating an executive’s performance during the year against established goals, operational performance, and business responsibilities. In addition, the Compensation Committee utilizes discretion in the assessment process to respond to and adjust to a dynamic business environment. Information about the Compensation Committee and its composition and responsibilities can be found on page 9 under the caption “Compensation Committee.” Role of the Compensation Consultant The Compensation Committee engaged the Compensation Consultant, in 2023 and prior years, to provide advice on matters regarding annual compensation for the Company’s Chief Executive Officer, Chief Financial Officer, and non-employee directors. Arthur J. Gallaher & Co. served in this capacity during 2023. During 2023, the Compensation Consultant assisted the Compensation Committee with the Company’s peer group selection, compiling and analyzing the NEO and non-executive director compensation of the Company’s peer group, evaluating the Company’s compensation components and practices relative to the peer group, and reviewed and evaluated the Company’s 2022 Incentive Plan. The Compensation Consultant reported directly to the Compensation Committee and provided no other services to the Company. The Compensation Committee reviews the objectivity and independence of the advice provided by the Compensation Consultant. In 2023, the Committee considered the specific independence factors adopted by the Commission and the NASDAQ Capital Market and determined that the Compensation Consultant was independent and that its work did not raise any conflicts of interest. Role of the Chief Executive Officer Our Chief Executive Officer develops recommendations regarding the compensation levels for our Chief Financial Officer based upon a subjective assessment of his individual performance during the prior year, the overall performance of the Company achieving its goals and objectives, and overall trends in the marketplace. In addition, each year, management delivers a set of proposed corporate goals and objectives that management believes are essential to the achievement of the Company’s mission and long-term goals and objectives. The Board of Directors works with the Compensation Committee to review these recommendations and proposals and to make any modifications deemed appropriate, and the Compensation Committee approves the final compensation levels and goals and objectives for the NEOs.
Benchmarking and Role of Peer Group
Benchmarking and Role of Peer Group On at least an annual basis, our Compensation Committee analyzes our NEO compensation against competitive market data based on the companies in our peer group. In connection with this annual review, our Compensation Committee also reviews the Company’s peer group and determines whether changes are necessary. While we do not establish compensation levels based solely on benchmarking, pay practices at other companies are an important factor that the Compensation Committee considers in assessing the reasonableness of compensation and ensuring that our compensation practices are competitive in the marketplace. In order to evaluate the level of compensation for our named executive officers for 2023, in consultation with the Compensation Consultant we established a peer group of publicly traded companies that are relevant to the Company from a business and executive and director talent standpoint, based on some of the following criteria:
Benchmarking and Role of Peer Group
| ● | the peer group contains 18 companies from the biotechnology, life sciences, and pharmaceutical sectors; |
Benchmarking and Role of Peer Group
| ● | the peer group contains companies of comparable size, primarily market value (i.e., in the range of $700 million to approximately $8 billion) and revenues (i.e., in the range of $0 to $700 million); |
Benchmarking and Role of Peer Group
| ● | the peer group contains companies with early-stage commercial launches; and |
Benchmarking and Role of Peer Group
| ● | the peer group contains companies considered our peers by independent third-party corporate governance assessors. |
Benchmarking and Role of Peer Group
The peer group used to evaluate 2023 compensation was updated from 2022 due to peer companies being acquired or were no longer comparable to the Company based on the factors listed above. We believe that the compensation practices of our 2023 Peer Group provided us with appropriate benchmarks for evaluating the compensation of our named executive officers for 2023. At the time that we selected our 2023 Peer Group we ranked in the 36th percentile in terms of revenue, and 58th percentile in terms of market capitalization. Our Compensation Committee recognizes the importance of having a peer group that has been determined by evaluating both qualitative and quantitative factors. Our Compensation Committee evaluated this 2023 peer group in December 2023 for the purposes of establishing 2024 target bonuses and long-term incentive compensation, 2024 base salaries and overall total compensation for our named executive officers. This peer group is referred to as our “2024 Peer Group” and is comprised of the following 18 publicly traded companies:
Benchmarking and Role of Peer Group
| Acadia Pharmaceuticals, Inc. * | Deciphera Pharmaceuticals, Inc. | Mirati Therapeutics, Inc. * | | Adaptive Biotechnologies Corporation | EQRX, Inc. | PTC Therapeutics, Inc. | | Agios Pharmaceuticals, Inc. | Geron Corporation * | Reata Pharmaceuticals, Inc. * | | Amicus Therapeutics, Inc. | ImmunoGen, Inc. * | Rhythm Pharmaceuticals, Inc. * | | Aurina Pharmaceuticals Inc. | Iovance Biotherapeutics, Inc. * | Sage Therapeutics, Inc. * | | Corcept Therapeutics Incorporated | Madrigal Pharmaceuticals, Inc. | Twist Bioscience Corporation |
Benchmarking and Role of Peer Group
*Denotes companies that are new to the 2023 peer group +The following companies were removed from our prior year peer group: Allakos Inc, Bluebird bio, Inc, Bridgebio Pharma, Inc, ChemoCentryx, Inc, Heron Therapeutics, Inc, Kodiak Sciences, Inc, Urogen Pharma Ltd, and Y-Mabs Therapeutics, Inc.
Elements of Compensation
| ● | Our annual cash incentive awards and our annual equity awards are based principally upon the Company’s performance against pre-set corporate goals and objectives and partially upon the Compensation Committee’s assessment of each individual executive’s contribution to the Company’s performance. |
Elements of Compensation
| ● | The ultimate realized value of our equity awards (stock options and restricted stock awards) is tied to our stock price, in alignment with the interests of our stockholders. |
2023 Executive Compensation
2023 Executive Compensation Base Compensation The base salaries of our named executive officers are an important part of their total compensation package and are intended to reflect their respective positions, duties and responsibilities. Michael S. Weiss. Effective as of June 30, 2021, Mr. Weiss and the Company entered into an amended employment agreement pursuant to which Mr. Weiss’ base salary was set at $875,000. Mr. Weiss’ salary remained unchanged in 2023. Sean A. Power. Based on the individual performance of Mr. Power and an analysis of the Chief Financial Officer position prior years compensation and peer group analysis, effective January 1, 2023, the Compensation Committee approved an increase in Mr. Power’s base salary from $432,600 to $445,578. Annual Cash Incentive Awards We consider annual cash incentive bonuses to be an important component of our total compensation program. Annual cash bonuses provide incentives necessary to retain executive officers and drive annual performance of our key short-term corporate goals. In 2023, Mr. Weiss was eligible to earn a target annual cash incentive equal to 100% of his base salary, and Mr. Power was eligible to earn a target annual cash incentive equal to 40% of his base salary, per the terms of their respective employment agreements. Both executives’ annual cash incentive awards were based upon the Company’s performance against pre-established corporate goals and objectives (which payout at times may exceed 100% for performance exceeding corporate goals). In December 2023, the Compensation Committee assessed our overall 2023 performance against the achievement of the corporate goal to determine a total percentage of achievement between 0% and 150%. The Compensation Committee considered the Company’s performance against this goal, as well as the weighting, in assessing overall performance for the 2023 fiscal year. The following represents the major categories of performance goals and the material individual goals within each of those categories:
2023 Executive Compensation
| Core Goals by Category | Weighting | Percentage Achieved | | Commercial Launch Goals ● Launch BRIUMVI by February 1st ● Targeted full year revenue goal ● Obtain various payor coverage thresholds for BRIUMVI ● Achieve certain utilization thresholds | 45% | 45% | | Drug Supply, CMC & Quality ● Ensure sufficient and continued supply of BRIUMVI to support commercial launch ● Ensure no critical regulatory or quality observations from the Company or its vendors | 20% | 20% | | Regulatory Goals ● Obtain EMA approval of BRIUMVI | 10% | 10% | | Clinical Development Goals ● Opening and target enrollment goals for certain multiple sclerosis studies | 10% | 10% | | Financial Goals ● Ensure the company was adequately funded through mid-2025 | 15% | 15% | | Total Core Goals | 100% | 100% |
2023 Executive Compensation
In assessing performance against these goals, the Compensation Committee reviewed each goal and determined whether or not it was achieved. The Compensation Committee then determined an overall percentage of achievement for all goals combined, which resulted in 125% achievement for fiscal year 2023. The Compensation Committee also considered the 2023 peer group analysis prepared by its independent compensation consultant in December 2023 when determining the final annual incentive payouts for the NEOs relating to 2023 performance. The actual amounts paid to the executives pursuant to their annual cash incentive awards are reported in the “Summary Compensation Table” as non-equity incentive plan compensation. Long-Term Equity Incentive Awards We view equity-based compensation as a critical component of our balanced total compensation program, which establishes a performance-oriented culture at the Company for all levels of employees, including our executives. Equity-based compensation creates an ownership culture among our employees that provides an incentive to contribute to the continued growth and development of our business and aligns the interest of our executives with those of our stockholders. We rely on these long-term equity awards to attract, motivate, and retain an outstanding executive team and to ensure a strong connection between our executive compensation program and the long-term interests of our stockholders. Michael S. Weiss. Pursuant to Mr. Weiss’ amended employment agreement, during the term of his employment agreement, the Company will grant Mr. Weiss a number of restricted shares of the Company’s common stock, having a grant date value equal to ten times the sum of Mr. Weiss’ salary and annual cash bonus earned for the prior year. In 2023, following a thorough review of the report of the Compensation Consultant, and with Mr. Weiss’ consent, the Compensation Committee granted Mr. Weiss an award of 985,000 shares of restricted stock, which had a grant date fair value of approximately $13.9 million, a grant date value less than what Mr. Weiss was entitled to per the terms of his employment agreement. The shares of restricted stock will vest and become non-forfeitable based on the Company's total shareholder return relative to the Nasdaq Biotechnology Index over a one-year to five-year period. Sean A. Power. After consideration of the report of the Compensation Consultant, our 2022 goals and objectives, in March of 2023 the Compensation Committee granted Mr. Power an award of 85,000 shares of restricted stock. These shares of restricted stock will vest according to the following schedule: 25% on January 1, 2024, 25% on January 1, 2025, 25% on January 1, 2026, and 25% on January 1, 2027. For additional information regarding our named executive officers’ stock grants, see the “Summary Compensation Table,” the “Grants of Plan-Based Awards Table” and the “Outstanding Equity Awards at 2023 Fiscal Year End” table.
Severance Benefits
Severance Benefits We have employment agreements with our NEOs that provide, among other things, payment and benefits upon certain terminations of employment or a change in control of the Company. Further, these agreements are in line with customary practices at an executive level at our peer companies. We believe the severance benefits components of these agreements are an important component to recruiting and retaining high quality executive officers. The Compensation Committee also believes change in control benefits serve to minimize the distractions to the executive, reduce the risk that the executive will depart the Company before an acquisition is consummated, and allow the executive to focus on continuing normal business operations and the success of a potential transaction, rather than worrying about how business decisions that may be in our best interest and the interests of our stockholders will impact their own financial security. For more information on Mr. Weiss’ and Mr. Power’s employment agreements see the “Potential Payments upon Termination or Change-in-Control” section beginning on page 28 of this proxy statement.
Responsible Equity Grant Practices
Responsible Equity Grant Practices Our equity grant practices ensure all grants are made on fixed grant dates and at exercise prices or grant prices equal to the fair market value of our common stock on such dates. Equity grants are awarded under our stockholder approved plan, and we do not backdate, reprice or grant equity awards retroactively. Our stockholder approved equity plan prohibits repricing of awards or exchanges of underwater options for cash or other securities without stockholder approval.
Summary Compensation Table
Summary Compensation Table The following table sets forth the cash and other compensation that we paid to our current named executive officers (“NEOs”) or that was otherwise earned by our NEOs for their services in all capacities during 2021, 2022, and 2023.
Summary Compensation Table
| | | | | | Non-Equity | | | | Name and | | | | Option | Incentive Plan | All Other | | | Principal | | | Stock | Awards | Compensation | Compensation | | | Position | Year | Salary ($) | Awards ($)(1) | ($)(1) | ($) | ($) | Total ($) | | Michael S. Weiss | 2023 | 875,000(2) | 13,868,800(3) | - | 1,093,759 | - | 15,837,559 | | Chief Executive | 2022 | 875,000(2) | - | 8,466,400 | 1,093,750 | - | 10,435,150 | | Officer and President | 2021 | 1,289,985(2) | 40,593,721(3) | - | 783,125 | - | 42,666,831 | | Sean A. Power | 2023 | 445,578 | 1,196,800(4) | - | 225,000 | - | 1,867,378 | | Chief Financial Officer, Treasurer | 2022 | 432,600 | 514,500(4) | 798,800 | 220,000 | - | 1,965,900 | | and Corporate Secretary | 2021 | 420,000 | 939,000 | - | 150,360 | - | 1,509,360 |
Summary Compensation Table
| (1) Reflects the aggregate grant date fair value of stock and option awards granted by the Company as computed under FASB ASC Topic 718. The grant date fair value of the time-based restricted stock awards is based on the fair market value of the underlying shares on the date of grant and does not take into account any estimated forfeitures. The grant date value for the milestone-based restricted stock awards reflected in the table is based on the fair market value of the shares on the date the milestones were established and does not take into account any potential forfeitures. The grant date value for the milestone-based option awards reflected in the table was determined using the Black-Scholes option pricing model. The assumptions made in the valuation of the option awards are contained in Note 5 to our consolidated financial statements for 2023, which are included in our Annual Report on Form 10-K for the fiscal year 2023. |
Summary Compensation Table
| (2) Reflects $875,000, $875,000 and $539,985, in salary earned by Mr. Weiss in connection with his employment agreement for the fiscal years ended 2023, 2022 and 2021, respectively, and $750,000 in fees pursuant to an advisory agreement in 2021. |
Summary Compensation Table
| (3) Reflects grants to Mr. Weiss of 1,080,770 and 985,000 shares of restricted stock in 2021 and 2023, respectively. The 1,080,770 shares will not vest unless the market capitalization of the Company exceeds approximately $6.0 billion, which represents a stock price of approximately $38.82, utilizing the shares outstanding as of the Record Date. The 985,000 shares will vest based on the Company's total shareholder return relative to the Nasdaq Biotechnology Index over a one-year to five-year period. |
Summary Compensation Table
| (4) In July 2022, the Company granted 75,000 shares of restricted stock to Mr. Power, as a long-term incentive in special recognition for his efforts in several areas, including the Company’s multiple sclerosis program. In March 2023, the Company granted 85,000 shares of restricted stock to Mr. Power in recognition of 2022 service and performance. |
Grants of Plan-Based Awards For Fiscal Year 2023
Grants of Plan-Based Awards For Fiscal Year 2023 The following table below sets forth the individual grants of awards made to each of our NEOs during 2023. For a description of the individual amounts indicated below, please see our Compensation Discussion and Analysis beginning on page 15 of this proxy statement.
Grants of Plan-Based Awards For Fiscal Year 2023
| | | | | | All other | All other | | | | | | | | | Stock | Option | | | | | | | | | Awards: | Awards: | Exercise | | | | | | | | Number of | Number of | or | | | | | | | | Shares | Securities | Base Price | | | | Estimated Future Payouts Under | | | | of Stock | Underlying | of Options | Grant Date | | | Non-Equity Incentive Plan Awards(1) | | | | or Units | Options | Awards | Fair Value of | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | (#)(2) | (#) | ($/sh) | Awards ($)(3) | | Mr. Weiss | | | 875,000 | 1,312,500 | | | | | | | 3/12/2023 | | | | 985,000 | | | 13,868,800 | | Mr. Power | | | 178,231 | 267,347 | | | | | | | 3/12/2023 | | | | 85,000 | | | 1,196,800 |
Grants of Plan-Based Awards For Fiscal Year 2023
| (1) Represents target payout values for 2023 cash performance awards, assuming 100% achievement of corporate goals and objectives and a maximum payout based on full achievement of allotment of goals and objectives approved for 2023 (150%). The actual amount earned by each NEO in 2023 is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table on page 23 of this proxy statement. |
Grants of Plan-Based Awards For Fiscal Year 2023
| (2) Award of time and/or milestone based vesting restricted stock under the 2022 Incentive Plan. |
Grants of Plan-Based Awards For Fiscal Year 2023
| (3) Reflects the aggregate grant date fair value of stock and option awards granted by the Company as computed under FASB ASC Topic 718. The grant date fair value of the time-based restricted stock awards is based on the fair market value of the underlying shares on the date of grant and does not take into account any estimated forfeitures. The grant date value for the milestone-based restricted stock awards reflected in the table is based on the fair market value of the shares on the date the milestones were established and does not take into account any potential forfeitures. |
Grants of Plan-Based Awards For Fiscal Year 2023
For a description of the vesting schedules of the equity awards, please see the Outstanding Equity Awards at 2023 Fiscal Year End Table below.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table The Company’s executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and the Grants of Plan-Based Awards Table was paid or awarded, are described above under “Compensation Discussion and Analysis.”
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End The following table provides information concerning equity awards that are outstanding as of December 31, 2023 for each of our NEOs.
Outstanding Equity Awards at 2023 Fiscal Year End
| | Option Awards | | | | Stock Awards | | | | Number of | Number of | | | | Market | | | Securities | Securities | | | Number of | Value of | | | Underlying | Underlying | | | Shares or Units | Shares or Units | | | Unexercised | Unexercised | Option | Option | of Stock That | of Stock That | | | Options (#) | Options (#) | Exercise | Expiration | Have Not | Have Not | | Name | Exercisable | Unexercisable | Price ($) | Date | Vested (#) | Vested ($) | | Mr. Weiss | | | | | 1,556,029(1) | 26,576,975 | | | | | | | 1,080,770(2) | 18,459,552 | | | | | | | 56,394(3) | 963,210 | | | | | | | 985,000(4) | 16,823,800 | | | 500,000 | | $6.90 | 3/15/2029 | | | | | | 1,900,000(5) | $7.00 | 7/20/2027 | | | | Mr. Power | | | | | | | | | | | | | 12,500(6) | 213,500 | | | | | | | 50,000(6) | 854,000 | | | | | | | 10,000(7) | 170,800 | | | | | | | 6,250(8) | 106,750 | | | | | | | 85,000(9) | 1,451,800 | | | 3,750 | - | $11.30 | 2/1/2028 | | | | | 115,000 | - | $4.10 | 12/31/2028 | | | | | 50,000 | - | $6.90 | 3/15/2029 | | | | | 100,000 | 100,000(10) | $7.00 | 7/20/2027 | | |
Outstanding Equity Awards at 2023 Fiscal Year End
| (1) Restricted stock granted for Mr. Weiss’ services as Executive Chairman on June 22, 2020, under the 2012 Incentive Plan. The shares vest according to the following schedule: 25% on February 15, 2025, 25% on May 15, 2025, 25% on August 15, 2025, and 25% on November 15, 2025. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (2) Restricted stock granted for Mr. Weiss’ services as Executive Chairman on June 18, 2021, under the 2012 Incentive Plan. The shares vest on the date that the market capitalization of the Company is $500 million greater than the market capitalization on the date of grant as measured within a five-year timeframe, but in no event before December 1, 2022. Given the market capitalization at the date of grant, these shares will vest when the Company achieves a market capitalization of approximately $6.0 billion, which represents a stock price of approximately $38.82 utilizing the shares outstanding as of the Record Date. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (3) Restricted stock granted to Mr. Weiss in lieu of cash compensation owed to Caribe BioAdvisors, LLC, and Mr. Weiss for the 2021 fiscal year, which will fully vest on January 1, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (4) Restricted stock granted to Mr. Weiss on March 12, 2023, under the 2022 Incentive Plan. These shares vest based on the Company's total shareholder return relative to the Nasdaq Biotechnology Index over a one-year to five-year period. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (5) Stock options granted to Mr. Weiss on July 20, 2022, under the 2022 Incentive Plan. The stock options vest as follows: 33% on July 20, 2024, 33% on July 20, 2025, and 33% on July 20, 2026. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (6) Restricted stock granted to Mr. Power on July 16, 2020, under the 2012 Incentive Plan. These shares vest on January 1, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (7) Restricted stock granted to Mr. Power on December 30, 2020, under the 2012 Incentive Plan. These shares vest according to the following schedule: 50% on January 1, 2024, and 50% on January 1, 2025. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (8) Restricted stock granted to Mr. Power on June 18, 2021, under the 2012 Incentive Plan. These shares vest on January 1, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (9) Restricted stock granted to Mr. Power on March 12, 2023, under the 2022 Incentive Plan. These shares vest according to the following schedule: 25% on January 1, 2024, 25% on January 1, 2025, 25% on January 1, 2026 and 25% on January 1, 2027. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (10) Stock options granted to Mr. Power on July 20, 2022, under the 2022 Incentive Plan. The stock options vest on January 1, 2024. |
Stock Vested in Fiscal Year 2023
Stock Vested in Fiscal Year 2023 The following table provides information concerning the vesting of restricted stock awards during the year ended December 31, 2023. During 2023, our NEOs did not exercise any stock options.
Stock Vested in Fiscal Year 2023
| | Stock Awards | | | | Number of | | | | Shares Acquired | Value Realized | | Name | on Vesting (#) | on Vesting ($) | | Mr. Weiss | - | - | | Mr. Power | 148,750 | 3,961,213 |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control As detailed above, we have employment agreements with Mr. Weiss and Mr. Power that provide certain compensation and benefits in the event of the termination of their employment under certain conditions. In addition, our equity plan provides certain benefits in connection with a change in control. Equity Plan Pursuant to the terms of the 2012 Incentive Plan, upon the occurrence of a change in control, any awards outstanding under such plan will become fully vested. Pursuant to the terms of the 2022 Incentive Plan, outstanding unvested stock awards granted under such plan will vest upon a qualifying change in control (i) if the awards are not equitably converted or substituted in connection with the change in control or (i) if the awards are equitably converted or substituted and the employee is terminated without cause, or resigns for good reason, within two years after the effective date of the change in control. Michael S. Weiss The table below summarizes the value of potential payments and benefits that Mr. Weiss would receive if his employment was terminated on December 31, 2023 under the circumstances shown, or if a change in control of the Company occurred on December 31, 2023. The table excludes amounts that would be paid in the normal course of continued employment, such as accrued but unpaid salary. Actual amounts to be paid can only be determined at the time of such termination of service or change in control. Any amounts shown below to be paid in connection with a change in control do not reflect any 280G “net better of” reduction that might be made in accordance with the terms of Mr. Weiss’ employment agreement.
Potential Payments upon Termination or Change in Control
| | | | | Termination | | | | | | | Other Than For | | | | | Termination | Termination | Cause; | | | | | for Cause or | Other Than | Resignation For | | | | | Resignation | For Cause; | Good Reason | Change in | | | Death or | without | Resignation | (Following a | Control (Absent | | | Disability | Good Reason | for Good | Change in | Termination)(2)(3) | | Type of Payment | ($) | ($) | Reason ($) | Control) ($) | ($) | | Cash Severance | - | - | 3,500,000 | 5,250,000 | - | | Pro-Rated Target Bonus | 875,000 | - | 875,000 | 875,000 | - | | Continuation of Health Benefits | - | - | 64,821 | 86,428 | - | | Value of Accelerated Equity (1) | 86,809,136 | - | 86,809,136 | 86,809,136 | 86,809,136 | | Total | 87,684,136 | - | 91,248,957 | 93,020,564 | 86,809,136 |
Potential Payments upon Termination or Change in Control
| (1) Represents the fair market value of restricted shares that would be vested upon the event, based on the closing price of our stock on December 29, 2023 ($17.08), the last trading day of the most recently completed fiscal year. For purposes of this calculation, outstanding stock options having an exercise price greater than the closing price of our common stock on December 31, 2023 the value included here is the “in the money value” or the amount the closing price exceeds the exercise price. For those options having an exercise price equal to or more than the closing price of our common stock on such date, their value included here is $0. |
Potential Payments upon Termination or Change in Control
| (2) Outstanding unvested stock awards issued under out 2012 Incentive Plan vest upon a qualifying change in control. As described above, outstanding unvested awards granted under our 2022 Incentive Plan will vest upon a qualifying change in control (i) if the awards are not equitably converted or substituted in connection with the change in control or (i) if the awards are equitably converted or substituted and the employee is terminated without cause, or resigns for good reason, within two years after the effective date of the change in control. |
Potential Payments upon Termination or Change in Control
| (3) In the event of a change in control in excess of $10 billion, Mr. Weiss also would be entitled to a $16.7 million special cash bonus. |
Potential Payments upon Termination or Change in Control
Sean A. Power The table below summarizes the value of potential payments and benefits that Mr. Power would receive if his employment was terminated on December 31, 2023 under the circumstances shown, or if a change in control of the Company occurred on December 31, 2023. The table excludes amounts that would be paid in the normal course of continued employment, such as accrued but unpaid salary. Actual amounts to be paid can only be determined at the time of such termination of service. Any amounts shown below to be paid in connection with a change in control do not reflect any 280G “net better of” reduction that might be made in accordance with the terms of Mr. Power’s employment agreement.
Potential Payments upon Termination or Change in Control
| | | | | Termination | | | | | | | Other Than For | | | | | Termination | Termination | Cause; | | | | | for Cause or | Other Than | Resignation For | | | | | Resignation | For Cause; | Good Reason | Change in | | | Death or | without | Resignation | (Following a | Control (Absent | | | Disability | Good Reason | for Good | Change in | Termination)(2) | | Type of Payment | ($) | ($) | Reason ($) | Control) ($) | ($) | | Cash Severance | - | - | 311,905 | 623,809 | - | | Pro-Rated Target Bonus | 178,231 | - | 178,231 | 178,231 | - | | Continuation of Health Benefits | - | - | 43,214 | 43,214 | - | | Value of Accelerated Equity (1) | 3,804,850 | - | 3,804,850 | 3,804,850 | 3,804,850 | | Total | 3,983,081 | - | 4,338,200 | 4,650,104 | 3,804,850 |
Potential Payments upon Termination or Change in Control
| (1) Represents the fair market value of restricted shares that would be vested upon the event, based on the closing price of our stock on December 29, 2023 ($17.08), the last trading day of the most recently completed fiscal year (less the exercise price, in the case of the stock options). For purposes of this calculation, outstanding stock options having an exercise price greater than the closing price of our common stock on December 29, 2023 the value included here is the “in the money value” or the amount the closing price exceeds the exercise price. For those options having an exercise price equal to or more than the closing price of our common stock on such date, their value included here is $0. |
Potential Payments upon Termination or Change in Control
| (2) Outstanding unvested stock awards issued under our 2012 Incentive Plan vest upon a qualifying change in control. As described above, outstanding unvested awards granted under our 2022 Incentive Plan will vest upon a qualifying change in control (i) if the awards are not equitably converted or substituted in connection with the change in control or (i) if the awards are equitably converted or substituted and the employee is terminated without cause, or resigns for good reason, within two years after the effective date of the change in control. |
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship of the median of the annual total compensation of our employees and the annual total compensation of Michael S. Weiss, our CEO. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported below should not be used as a basis for comparison between companies. For 2023, our last completed fiscal year, the median of the annual total compensation of all employees of the Company (other than our CEO) was $277,796, and the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $15,837,559. Based on this information, for 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 57 to 1. We identified our median employee by examining 2023 Box 1 W-2 taxable income amounts for all individuals, excluding our CEO, who were employed by us on December 31, 2023, whether on a full-time or part-time basis. We annualized the compensation for any permanent (full-time or part-time) employees that were not employed by us for all of 2023. After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we use for our named executive officers as set forth in the 2023 Summary Compensation Table above.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE Background Item 402(v) of the SEC’s Regulation S-K, which was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires disclosure of information that demonstrates the relationship between executive “compensation actually paid” (CAP) and our performance against several specific financial metrics. We have included the table and disclosure below in accordance with the final rule, which was effective on October 11, 2023. For further information regarding our executive compensation programs, the metrics the Compensation Committee used to set executive compensation for 2023 and our pay-for-performance philosophy, please refer to “Compensation Discussion and Analysis.”
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE
| | | | | | Value of Initial Fixed | | | | | | | | | | $100 Investment Based | | | | | | | | | | On: | | | | | | | | Average | | | | | | | | | | Summary | Average | | Peer Group | Net | Company | | | Summary | | Compensation | Compensation | Company | Total | Income | Selected | | | Compensation | Compensation | Table Total for | Actually Paid | Total | Shareholder | (Loss) | Financial | | | Table Total for | Actually Paid to | Non-PEO | to Non-PEO | Shareholder | Return | (in | Measure: Revenue | | Year | PEO ($)(1) | PEO ($)(2) | NEOs ($)(3) | NEOs ($)(4) | Return ($)(5) | ($)(6) | millions) ($) | (in millions) ($) | | 2023 | 15,837,559 | 41,500,822 | 1,867,378 | 5,216,516 | 144 | 104 | 12.7 | 233.7 | | 2022 | 10,435,150 | (42,942,247) | 1,965,900 | 1,548,350 | 62 | 89 | (198.3) | 2.8 | | 2021 | 42,666,831 | (114,073,313) | 1,509,360 | (9,794,803) | 37 | 99 | (348.1) | 6.7 | | 2020 | 32,497,238 | 191,427,233 | 7,119,841 | 18,728,897 | 369 | 126 | (279.3) | 0.2 |
PAY VERSUS PERFORMANCE TABLE
| (1) Amounts represent amounts reported for the Company’s principal executive officer (PEO), Mr. Weiss, in the “Total” column of the Summary Compensation Table (SCT) in each applicable year. |
PAY VERSUS PERFORMANCE TABLE
| (2) Amounts represent Compensation Actually Paid (CAP) to the PEO, Mr. Weiss, as calculated in accordance with Item 402(v) of the Commission’s Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Weiss during the applicable year. As required by the rules of the Commission, the CAP amount for each year is determined by deducting from the SCT total compensation for the relevant year the amounts reported under the “Stock Awards” and “Option Awards” columns in the SCT and adding (or subtracting, as applicable) the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The adjustments to determine CAP for Mr. Weiss are as follows: |
PAY VERSUS PERFORMANCE TABLE
| | 2023 | 2022 | 2021 | 2020 | | Deduction for amounts reported under the "Stock Awards" and “Option Awards” columns in the SCT | (13,868,800) | (8,466,400) | (40,593,721) | (30,871,615) | | Fair value of awards granted during year that remain outstanding and unvested as of year-end | 16,823,800 | 16,454,000 | 21,606,116 | 80,944,629 | | Fair value of awards granted during year that vest during year | - | - | - | - | | Change in fair value from prior year-end to current year-end of awards granted in prior years that were outstanding and unvested as of year-end | 22,708,263 | (19,310,194) | (137,752,539) | 107,036,981 | | Change in fair value from prior year-end to current year-end of awards granted in prior years that vested during year | - | (42,054,803) | - | 1,820,000 | | Fair value of awards granted in prior years that were forfeited during year | - | - | - | - | | Incremental fair value of awards modified during year | - | - | - | - | | Total | 25,663,263 | (53,377,397) | (156,740,144) | 158,929,995 |
PAY VERSUS PERFORMANCE TABLE
| (3) Amounts represent the average of the amounts reported for the Company’s non-PEO NEOs as a group in the “Total” column of the SCT in each applicable year. The sole non-CEO NEO during these years was Mr. Power. |
PAY VERSUS PERFORMANCE TABLE
| (4) Amounts represent CAP to the sole non-PEO NEO, Mr. Power, as calculated in accordance with Item 402(v) of the Commission’s Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Power during the applicable year. As required by the rules of the Commission, the following adjustments were made to the SCT total compensation for each year to determine the CAP for Mr. Power, using the same methodology as described above in footnote 2: |
PAY VERSUS PERFORMANCE TABLE
| | 2023 | 2022 | 2021 | 2020 | | Deduction for amounts reported under the "Stock Awards" and “Option Awards” columns in the SCT | (1,196,800) | (1,313,300) | (939,000) | (6,610,300) | | Fair value of awards granted during year that remain outstanding and unvested as of year-end | 1,451,800 | 1,708,250 | 475,000 | 14,045,400 | | Fair value of awards granted during year that vest during year | 0 | 477,000 | - | - | | Change in fair value from prior year-end to current year-end of awards granted in prior years that were outstanding and unvested as of year-end | 843,438 | (1,289,500) | (10,792,200) | 4,149,281 | | Change in fair value from prior year-end to current year-end of awards granted in prior years that vested during year | 2,201,500 | - | (47,963) | 0 | | Fair value of awards granted in prior years that were forfeited during year | 49,200 | - | - | 24,675 | | Incremental fair value of awards modified during year | - | - | - | - | | Total | 3,349,138 | (417,550) | (11,304,163) | 11,609,056 |
PAY VERSUS PERFORMANCE TABLE
| (5) Cumulative TSR is calculated by dividing (a) the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. |
PAY VERSUS PERFORMANCE TABLE
| (6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the NASDAQ Biotechnology Index. |
PAY VERSUS PERFORMANCE TABLE
| Pay Versus Performance Tabular List |
PAY VERSUS PERFORMANCE TABLE
We believe the following financial performance measure represents the most important financial performance measure used by us to link compensation actually paid to our NEOs for the year ended December 31, 2023:
PAY VERSUS PERFORMANCE TABLE
| ● | Revenue |
PAY VERSUS PERFORMANCE TABLE
The list only includes one financial measure, revenue, because that is the only financial performance measure used in 2023. In our “Compensation Discussion and Analysis” above, we described how our compensation programs are effective at incentivizing and retaining our executives and closely aligning the interests of our senior management team with those of our shareholders.
Pay Versus Performance Relationship Disclosures
Pay Versus Performance Relationship Disclosures Compensation Actually Paid and Cumulative Total Shareholder Return The graph below compares the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEO, with our cumulative total stockholder return for the years ended December 31, 2023, 2022, 2021, and 2020. Total stockholder return amounts reported in the graph assume an initial fixed investment of $100 on December 31, 2019. Compensation Actually Paid and Net Income (Loss) The graph below compares the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEO, with our net income (loss) for the years ended December 31, 2023, 2022, 2021, and 2020. Compensation Actually Paid and Company Selected Financial Measure The graph below compares the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEO, with our Company selected financial measure, revenue, for the years ended December 31, 2023, 2022, 2021, and 2020.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Our director compensation program is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders. Under our non-employee director compensation program, we pay our non-employee directors a cash retainer (paid quarterly) for service on the board of directors and separately for service on each committee on which the director is a member. The lead independent director and the chairman of each committee receive additional retainers for such service. Each non-employee director receives reimbursement for reasonable travel expenses incurred in attending meetings of our Board of Directors and meetings of committees of our Board of Directors. In 2023, upon the recommendation of our compensation committee after reviewing the report of the Compensation Consultant on non-executive director compensation, which included benchmarking relative to the 2023 Peer Group utilized for named executive officer compensation, our board of directors determined that the 2023-2024 cash compensation of our directors remain at the same levels as the prior year. In evaluating annual equity compensation, as a result of work performed by the Compensation Consultant, certain changes were implemented to equity compensation for the 2023-2024 year. Fees paid to non-employee directors for service on the Board of Directors and for service on each committee of the Board of Directors on which the director is a member are as follows:
DIRECTOR COMPENSATION
| | | Lead Director or | | | Member Annual Retainer | Committee Chair | | Board of Directors | $70,000 | $40,000 | | Audit Committee | $10,000 | $20,000 | | Compensation Committee | $7,500 | $15,000 | | Nominating and Corporate Governance Committee | $5,000 | $10,000 |
DIRECTOR COMPENSATION
Equity Compensation. Our non-employee directors receive the following equity compensation under the 2022 Incentive Plan.
DIRECTOR COMPENSATION
| ● | Initial Stock Grant. Non-employee directors receive 50,000 shares of restricted common stock upon initial election or appointment to the Board of Directors. The stock will vest in equal annual installments over three years, beginning on the third anniversary of the date of grant. |
DIRECTOR COMPENSATION
| ● | Annual Equity Grants. Annual director equity grants will be determined on an annual basis in consultation with the Compensation Consultant, which will include an analysis of our peer group’s director compensation policies. Such grants of restricted stock will generally vest over the term of the directors, the one-year anniversary of their election. |
2023 Director Compensation
2023 Director Compensation The following table sets forth the cash and other compensation paid by the Company to the members of the Board for all services in all capacities during 2023.
2023 Director Compensation
| | Fees Earned or | Stock | | | | | Paid in Cash | Awards | Option Awards | | | Name | ($)(1) | ($)(2)(3) | ($) | Total ($) | | Laurence N. Charney | 137,500 | 167,200 | - | 304,700 | | Kenneth Hoberman | 97,500 | 167,200 | - | 264,700 | | Daniel Hume | 95,000 | 167,200 | - | 262,200 | | Yann Echelard | 95,000 | 167,200 | - | 262,200 | | Sagar Lonial, M.D. | 92,500 | 167,200 | - | 259,700 |
2023 Director Compensation
| (1) Represents cash retainer for serving on our Board and committees of the Board. |
2023 Director Compensation
| (2) Reflects the aggregate grant date fair value of stock awards granted by the Company as computed under FASB ASC Topic 718. The grant date fair value of the stock awards is based on the fair market value of the underlying shares on the date of grant and does not take into account any estimated forfeitures. |
2023 Director Compensation
| (3) All non-employee directors received a grant of 20,000 shares of restricted stock for their annual restricted stock grant. Grants of restricted stock will vest on June 14, 2024. |
2023 Director Compensation
The following table shows the number of stock awards granted to each director during 2023, and the grant date fair value for each award (determined in accordance with FASB ASC Topic 718) (during 2023 no option awards were granted to directors).
2023 Director Compensation
| | | | Grant Date Fair Value | | Name | Grant Date | Stock Awards (#) | of Awards ($) | | Laurence N. Charney | 9/29/2023 | 20,000(1) | 167,200 | | Sagar Lonial, M.D. | 9/29/2023 | 20,000(2) | 167,200 | | Kenneth Hoberman | 9/29/2023 | 20,000(2) | 167,200 | | Daniel Hume | 9/29/2023 | 20,000(2) | 167,200 | | Yann Echelard | 9/29/2023 | 20,000(2) | 167,200 |
2023 Director Compensation
| (1) All non-employee directors received a grant of 20,000 shares of restricted stock for their annual restricted stock grant which vest on June 14, 2024. |
2023 Director Compensation
As of December 31, 2023, the following aggregate number of unvested restricted stock awards were held by each of our non-employee directors. No stock options have been granted to our non-employee directors.
2023 Director Compensation
| Name | Stock Awards (#) | | Laurence N. Charney | 138,732 | | Kenneth Hoberman | 98,732 | | Daniel Hume | 98,732 | | Yann Echelard | 212,848 | | Sagar Lonial, M.D. | 73,333 |
ELECTION OF DIRECTORS; NOMINEES
ELECTION OF DIRECTORS; NOMINEES Our Bylaws provide that the Board shall consist of one or more members, as determined from time to time by resolution of the Board. Our Board currently consists of six members. The nominated directors are Michael S. Weiss, Laurence N. Charney, Yann Echelard, Kenneth Hoberman, Daniel Hume, and Sagar Lonial, MD. For information about each of the nominees and our Board generally, please see “Corporate Governance-Our Board of Directors” beginning on page 5. If elected, the nominees will hold office until the next annual meeting and until a respective successor is elected and has been qualified, or until such director resigns or is removed from office. Management expects that each of the nominees will be available for election, but if any of them is unable to serve at the time the election occurs, your proxy will be voted for the election of another nominee to be designated by a majority of the independent directors serving on our Board. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR. PROPOSAL TWO:
Key Data Relating to Outstanding Equity Awards and Shares Available
Key Data Relating to Outstanding Equity Awards and Shares Available The following table includes information regarding outstanding equity awards and shares available for future awards under the current terms of the 2022 Plan as of April 17, 2024 (and without giving effect to approval of the amendment to the 2022 Incentive Plan under this Proposal):
Key Data Relating to Outstanding Equity Awards and Shares Available
| Total shares underlying outstanding stock options | 2,272,500 | | Total shares underlying outstanding unvested time-based full-value awards | 5,170,033 | | Total shares underlying outstanding unvested performance-based full-value awards | 2,011,908 | | Total shares underlying all outstanding awards | 9,454,441 | | Weighted average exercise price of outstanding stock options | $7.00 | | Weighted average remaining contractual life of outstanding stock options | 2.3 | | Total shares currently available for grant of new awards | 5,605,599 | | Common Stock outstanding as of April 17, 2024 | 154,542,945 | | Market price of Common Stock as of April 17, 2024 | $13.82 |