DEF 14A of Omeros Corp, Apr 29, 2024

DEF 14A of Omeros Corp

Filed Apr 29, 2024 · FY20230001437749-24-013762

Open on EDGAR

  1. PROPOSAL 1 — ELECTION OF DIRECTORS

    PROPOSAL 1 — ELECTION OF DIRECTORS Our board of directors is divided into three classes, generally serving staggered three-year terms. The term of each director will expire on the date of our annual meeting of shareholders in the year set forth in the following table:

  2. PROPOSAL 1 — ELECTION OF DIRECTORS

    | Omeros Board of Directors | Term Expires | | Class III Directors | | | Thomas F. Bumol, Ph.D. | 2024 | | Gregory A. Demopulos, M.D. | 2024 | | Leroy E. Hood, M.D., Ph.D. | 2024 | | Class I Directors | | | Arnold C. Hanish | 2025 | | Rajiv Shah, M.D. | 2025 | | Class II Directors | | | Thomas J. Cable | 2026 | | Peter A. Demopulos, M.D. | 2026 | | Diana T. Perkinson, M.D. | 2026 |

  3. PROPOSAL 1 — ELECTION OF DIRECTORS

    Following the recommendation of the nominating and governance committee, our board of directors has nominated for election at the 2024 Annual Meeting our three current Class III directors, Thomas F. Bumol, Ph.D, Gregory A. Demopulos, M.D., and Leroy E. Hood, M.D., Ph.D. If elected, the Class III director nominees would serve until the 2027 Annual Meeting of Shareholders or, in each case, until his successor is duly elected and qualified, or until his earlier death, resignation or removal. The three director nominees receiving the highest number of votes will be elected. In addition, our corporate governance principles provide that if any of our incumbent nominees do not receive more votes for than against, such director shall tender a resignation following certification of the shareholder vote. See “Corporate Governance—Voting for Directors.”

  4. Nominees—Class III

    Nominees—Class III

  5. Nominees—Class III

    | THOMAS F. BUMOL, Ph.D. Age: 70 Director Since: 2019 Committees: Scientific (chair) |

  6. Nominees—Class III

    Thomas F. Bumol, Ph.D., has served on our board of directors since February 2019 and as chair of our scientific committee since September 2019. Dr. Bumol served as Executive Vice President of the Allen Institute for Immunology in Seattle, Washington, from March 2018 until August 2022. Dr. Bumol joined the Allen Institute following a 35‑year career at Eli Lilly and Company. Dr. Bumol held various positions at Eli Lilly from 1982 until his retirement in December 2017. He was most recently the senior vice president of biotechnology and immunology research and the site head of Eli Lilly’s Biotechnology Center in San Diego, California. While at Eli Lilly, Dr. Bumol’s teams and collaborators advanced over 100 molecules into clinical development, including TRULICITY® (dulaglutide), TALTZ® (ixekizumab), EMGALITY® (galcanezumab) and mirikizumab. Through strategic alliances, he and his teams also helped develop and support REOPRO® (abciximab) with Centocor Inc. (n/k/a Janssen Pharmaceutical Cos.) as well as OLUMIANT® (baricitinib) with Incyte Corporation. Dr. Bumol has over 50 publications and reviews and eight issued U.S. patents. He serves on the University of Michigan Technology Transfer National Advisory Board and as an advisor to Lilly Ventures. He is a member of the Board of Directors of Tentarix Biotherapeutics LP, a private biotechnology company, and serves as a scientific advisor to a number of biotechnology and immunology companies. Dr. Bumol earned his B.S. degree in microbiology from the University of Michigan and his Ph.D. in microbiology-immunology from the University of Minnesota. He completed postdoctoral studies through a fellowship in the Department of Molecular Immunology at Scripps Research in La Jolla, California. The nominating and governance committee and board of directors have determined that Dr. Bumol should continue to serve on the board of directors based on his scientific expertise in drug discovery and development and experience in strategic partnering and other collaborations within the life sciences and pharmaceutical industries.

  7. Nominees—Class III

    | GREGORY A. DEMOPULOS, M.D. Age: 65 Director Since: 1994 Committees: None |

  8. Nominees—Class III

    Gregory A. Demopulos, M.D., founded our company and has served as our president, chief executive officer and chairman of the board of directors since June 1994. He also served as our chief financial officer and treasurer from January 2009 to October 2013 in an interim capacity and as our chief medical officer from June 1994 to March 2010. Prior to founding Omeros, Dr. Demopulos completed his residency in orthopedic surgery at Stanford University and his fellowship training in hand and microvascular surgery at Duke University. In 2019, Dr. Demopulos was a recipient of the Prix Galien Canada Research Award. He has authored over 30 articles and reviews in peer-reviewed publications and is an inventor on 62 issued and allowed U.S. patents and over 1,000 issued and allowed foreign patents. Dr. Demopulos currently serves on the board of trustees of the Smead Funds Trust, an open-end mutual fund company registered under the Investment Company Act of 1940. Dr. Demopulos received his M.D. from Stanford University School of Medicine and his B.S. from Stanford University. The nominating and governance committee and board of directors have determined that Dr. Demopulos should continue to serve on the board of directors based on his position and experience as our president and chief executive officer, his medical and scientific expertise, experience with clinical development and design and detailed knowledge of our operations and development programs. Dr. Demopulos is the brother of Peter A. Demopulos, M.D., a member of our board of directors.

  9. Nominees—Class III

    | LEROY E. HOOD, M.D., Ph.D. Age: 85 Director Since: 2001 Committees: Compensation, Nominating and Governance and Scientific |

  10. Nominees—Class III

    Leroy E. Hood, M.D., Ph.D., has served on our board of directors since March 2001. He also has served on our nominating and governance committee since September 2009, on our compensation committee since July 2011 and on our scientific committee since September 2019. Dr. Hood is chief strategy officer and professor at the Institute for Systems Biology, a non-profit research institute dedicated to the study and application of systems biology. Dr. Hood co-founded the Institute for Systems Biology in 2000 and served as its first president through December 2017. Dr. Hood is the founding chief executive officer of Phenome Health, a non-profit organization dedicated to the development of phenomics as a tool for assessing and optimizing individual health. Previously, Dr. Hood served as senior vice president and chief science officer of Providence St. Joseph Health, a multi-state, not-for-profit health system, from 2016 to 2021. Dr. Hood was founder and chairman of the Department of Molecular Biotechnology at the University of Washington School of Medicine. Dr. Hood also co-founded Amgen, Inc., Applied Biosystems, Inc., Darwin Molecular Technologies, Inc., Rosetta Inpharmatics, Inc. and SyStemix, Inc. Dr. Hood is a member of the National Academy of Sciences, the National Academy of Engineering and the National Academy of Medicine. He has published more than 850 peer-reviewed articles, holds over 30 patents and is the recipient of numerous national and international awards, including the National Medal of Science, the Lasker Award and the Kyoto Prize. Dr. Hood received his Ph.D. and B.S. from the California Institute of Technology and his M.D. from The Johns Hopkins School of Medicine. The nominating and governance committee and board of directors have determined that Dr. Hood should continue to serve on the board of directors based on his scientific expertise in drug discovery and development and experience in founding and building biotechnology and pharmaceutical companies.

  11. Continuing Directors until the 2025 Annual Meeting

    Continuing Directors until the 2025 Annual Meeting

  12. Continuing Directors until the 2025 Annual Meeting

    | ARNOLD C. HANISH Age: 76 Director Since: 2012 Committee: Audit (chair) |

  13. Continuing Directors until the 2025 Annual Meeting

    Arnold C. Hanish has served on our board of directors and as chair of our audit committee since September 2012. From 1994 until his retirement in December 2012, Mr. Hanish served as vice president and chief accounting officer at Eli Lilly and Company. Prior to his appointment as chief accounting officer, Mr. Hanish held a number of senior financial positions at Eli Lilly. Before Eli Lilly, Mr. Hanish held various positions at Arthur Young & Company (currently Ernst & Young) for nearly 14 years. Mr. Hanish currently serves as a member of the board of directors of Salarius Pharmaceuticals, Inc., a biotechnology company focused on cancer therapeutics. Mr. Hanish was a member of the Deloitte and Touche Audit Quality Review Council from 2013 through December 2023. Mr. Hanish was a member of the Standing Advisory Group of the Public Company Accounting Oversight Board from 2004 through 2008 and from 2011 through 2012. In addition, from 2007 to 2010, he served as the chairperson of Financial Executives International’s Committee on Corporate Reporting. Mr. Hanish was inducted into the Financial Executives International Hall of Fame in 2016. Mr. Hanish is a Certified Public Accountant and earned his B.A. in accounting from the University of Cincinnati. Mr. Hanish’s qualifications to continue his service on the board of directors include his experience in public company finance and accounting, reporting to the U.S. Securities and Exchange Commission (the SEC), management and corporate governance, his knowledge of the pharmaceutical and biotechnology industry and his experience as the chair of our audit committee.

  14. Continuing Directors until the 2025 Annual Meeting

    | RAJIV SHAH, M.D. Age: 51 Director Since: 2015 Committees: Audit, Compensation and Scientific |

  15. Continuing Directors until the 2025 Annual Meeting

    Rajiv Shah, M.D., has served on our board of directors since June 2015 and on our audit committee, our compensation committee and our scientific committee since December 2021, May 2022 and September 2019, respectively. Dr. Shah has served as the president of the Rockefeller Foundation since February 2017. From March 2015 to February 2017, Dr. Shah was the managing partner of Latitude Capital, an emerging markets private equity firm that he founded. Dr. Shah served as administrator of the United States Agency for International Development (USAID) from January 2010 to February 2015. Dr. Shah served as undersecretary and chief scientist at the U.S. Department of Agriculture from May 2009 to January 2010, during which time he created the National Institute for Food and Agriculture. Prior to working in government, Dr. Shah worked in senior roles at the Bill & Melinda Gates Foundation, leading the Foundation’s efforts in global health, agriculture and financial services. Dr. Shah also serves on the boards of trustees of the Rockefeller Foundation and the National Geographic Society. He is a member of the Defense Policy Board. Dr. Shah serves on the boards of directors of several private biotechnology companies, including Altos Labs and Mobius Scientific. From March 2015 to June 2017, Dr. Shah served on the board of directors of Arcadia Biosciences, Inc., a publicly traded agricultural technology company. Dr. Shah earned his M.D. from the University of Pennsylvania Medical School, his M.S. in Health Economics at the Wharton School of Business and his B.S. in Economics from the University of Michigan. Dr. Shah’s qualifications to continue serving on the board of directors include his significant experience in government, regulatory affairs, international development and strategic partnerships, as well as his medical and scientific background.

  16. Continuing Directors until the 2026 Annual Meeting

    Continuing Directors until the 2026 Annual Meeting

  17. Continuing Directors until the 2026 Annual Meeting

    | THOMAS J. CABLE Age: 84 Director Since: 1995 Committees: Audit, Compensation (chair) and Nominating and Governance (chair) |

  18. Continuing Directors until the 2026 Annual Meeting

    Thomas J. Cable has served on our board of directors since January 1995 and as our lead independent director since 2010. He has also served on our audit committee since January 1995 and on our compensation committee since December 2007. In addition, Mr. Cable was appointed chair of our compensation committee in May 2022 and has served as chair of our nominating and governance committee since September 2009. Mr. Cable is the vice chairman of the board of the Washington Research Foundation, a technology transfer and early-stage venture capital organization affiliated with the University of Washington, which he co-founded in 1980. Mr. Cable also founded Cable & Howse Ventures, a venture capital firm, and Cable, Howse & Ragen, an investment banking firm, and co-founded Montgomery Securities, an investment banking firm acquired by Bank of America. A former U.S. Navy submarine officer, Mr. Cable received his M.B.A. from the Stanford Graduate School of Business and his B.A. from Harvard University. Mr. Cable’s qualifications to serve on the board of directors are based on his knowledge and experience in finance, investment banking, technology development and product commercialization, as well as his knowledge of Omeros and our industry, as well as his service as lead independent director and as chair of the compensation and nominating and governance committees.

  19. Continuing Directors until the 2026 Annual Meeting

    | PETER A. DEMOPULOS, M.D. Age: 70 Director Since: 1995 Committees: Scientific |

  20. Continuing Directors until the 2026 Annual Meeting

    Peter A. Demopulos, M.D., has served on our board of directors since January 1995 and on our scientific committee since September 2019. Dr. Demopulos is a practicing board-certified general and interventional cardiologist at Seattle Cardiology, part of the Swedish Heart & Vascular Institute. He has been a member of Seattle Cardiology since 2005, also serving as its Medical Director from 2005 to 2010. Dr. Demopulos is also a clinical assistant professor of cardiology at the University of Washington School of Medicine, a position that he has held since 1989. He also participates as an investigator in clinical trials evaluating interventional cardiology devices and drug therapies at Seattle Cardiovascular Research and Swedish Cardiovascular Research. Dr. Demopulos received his M.D. from the Stanford University School of Medicine and his B.S. from Stanford University. Dr. Demopulos’ qualifications to serve on the board of directors are based on his medical and scientific expertise, his experience as a clinical investigator and his experience with clinical development and trial design, as well as his knowledge of Omeros and our industry. Dr. Demopulos is the brother of Gregory A. Demopulos, M.D., our president and chief executive officer and the chairman of our board of directors.

  21. Continuing Directors until the 2026 Annual Meeting

    | Diana T. Perkinson, M.D. Age: 70 Director Since: 2023 Committees: Nominating and Governance and Scientific |

  22. Continuing Directors until the 2026 Annual Meeting

    Diana T. Perkinson, M.D., has served on our board of directors and as a member of our scientific committee since May 2023. She has also served on our nominating and governance committee since March 2024. Dr. Perkinson is a physician at MD(2)International LLC (MD(2)International), a premier concierge medicine network, where she has practiced since 2009. She holds dual board certifications in nephrology and internal medicine. From 1987 to 2009, Dr. Perkinson practiced nephrology and internal medicine at Minor & James Medical in Seattle. She previously served as a clinical assistant professor in the division of nephrology at the University of Washington, from 1987 until 2009, and as medical director, transplantation, at Swedish Hospital, from 1996 until 2007. Dr. Perkinson also served as a major in the United States Air Force and as director of the dialysis unit at Wilford Hall Medical Center at Lackland Air Force Base in San Antonio, Texas from 1984 until 1987. Dr. Perkinson received her M.D. from the University of Alabama and her B.S. from Birmingham Southern College. She completed her fellowship in nephrology at the University of Washington. Dr. Perkinson’s qualifications to serve on our board of directors are based on her medical experience and expertise as a nephrologist and internist.

  23. Continuing Directors until the 2026 Annual Meeting

    | THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF THE NOMINEES NAMED ABOVE |

  24. NON-EMPLOYEE DIRECTOR COMPENSATION

    NON-EMPLOYEE DIRECTOR COMPENSATION To attract and retain qualified non-employee candidates to serve on the board of directors, we utilize a combination of cash and equity-based incentive compensation. The significant amount of time that members of the board of directors expend in fulfilling their duties, as well as the skill level required of our directors, is evaluated in setting director compensation, along with director compensation levels at companies in our peer group. We also reimburse our directors for travel and incidental expenses incurred in the performance of their services for us. Our non-employee director compensation policy was updated by the board of directors in 2022 based on a recommendation by the compensation committee after reviewing an analysis of non-employee director compensation of our then-existing peer group. Our non-employee director compensation policy provides that a non-employee director is granted an option to purchase 30,000 shares of our common stock upon his or her initial appointment or election to the board of directors, subject to vesting in equal annual installments over a three-year period beginning on the date the director took office. In addition, on the date of each annual meeting of shareholders, each non-employee director who has served as a director for at least six months and who will continue to serve as a director after the annual meeting is granted an option to purchase 15,000 shares of our common stock that vests in full on the day prior to the date of the next annual meeting of shareholders. The per share exercise price for options granted to non-employee directors is equal to the closing public trading price of our common stock on the date of grant, and vesting is conditioned on the director’s continued service through the applicable vesting dates. Under our policy, each non-employee director receives an annual cash retainer of $50,000 for service on the board of directors, plus additional fees for committee service, as applicable. Committee fees are $10,000, $7,500, $5,000 and $5,000 per year for services as a non-chair member of the audit, compensation, nominating and governance, and scientific committees, respectively, while fees for the chairs of those committees are $20,000, $15,000, $10,000 and $10,000 per year, respectively. In addition, our lead independent director receives an annual retainer of $25,000 for his service in such capacity. Director fees are paid on a quarterly basis as earned on a prorated basis.

  25. 2023 Non-Employee Director Compensation

    2023 Non-Employee Director Compensation The following table shows the compensation of each person who served as a non-employee director during the fiscal year ended December 31, 2023:

  26. 2023 Non-Employee Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | Total ($) | | Thomas F. Bumol, Ph.D. | 60,000 | 67,602 | 127,602 | | Thomas J. Cable | 110,000 | 67,602 | 177,602 | | Peter A. Demopulos, M.D. | 55,000 | 67,602 | 122,602 | | Arnold C. Hanish | 70,000 | 67,602 | 137,602 | | Leroy E. Hood, M.D., Ph.D. | 67,500 | 67,602 | 135,102 | | Diana T. Perkinson, M.D. (3) | 34,986 | 139,677 | 174,663 | | Rajiv Shah, M.D. | 72,500 | 67,602 | 140,102 | | Kurt Zumwalt (4) | 24,028 | — | 24,028 |

  27. 2023 Non-Employee Director Compensation

    (1) The amounts reported in this column represent the grant date fair value of option awards granted to our non-employee directors during 2023 as computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. The assumptions used to calculate the value of these option awards are set forth in Note 12, Stock-Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2023. (2) As of December 31, 2023, Dr. Bumol, Mr. Cable, Dr. Peter Demopulos, Mr. Hanish, Dr. Hood, Dr. Perkinson and Dr. Shah held options to purchase 60,000, 87,500, 87,500, 87,500, 87,500, 30,000 and 92,500 shares of our common stock, respectively. (3) Dr. Perkinson was appointed to our board of directors on May 12, 2023. (4) Mr. Zumwalt did not stand for re-election at the 2023 Annual Meeting of Shareholders held on June 23, 2023 and his term as a director expired on that date. As of December 31, 2023, Mr. Zumwalt did not hold any options to purchase shares of our common stock.

  28. COMPENSATION DISCUSSION AND ANALYSIS

    We determine compensation for our named executive officers based on their ability to achieve operational goals that further our long-term business objectives and create sustainable long-term shareholder value in a cost-effective manner. We generally make adjustments to each element of compensation for our named executive officers on an annual basis in connection with annual awards of stock options to eligible employees, although, in historical periods, compensation adjustments or the timing thereof have been affected by the timing of independent compensation analyses from third parties, availability of cash, the need to preserve capital and the achievement of significant corporate objectives. In 2023, our compensation committee approved: ● base salary adjustments for our named executive officers, considering market competitiveness along with company and individual performance in 2022; ● cash bonuses for our named executive officers on the basis of company and individual performance, and, in the case of Dr. Demopulos, in recognition of certain additional considerations as described below; and ● stock option awards for all eligible employees, including our named executive officers, considering market competitiveness along with company and individual performance in 2022.

  29. Role of Compensation Consultant

    Role of Compensation Consultant The compensation committee is authorized to retain the services of compensation consultants and other advisors in connection with the discharge of its responsibilities. The compensation committee has engaged Compensia to assist it from time to time in assessing a set of executive compensation guiding principles, to evaluate the competitiveness of our executive officers’ compensation and to assist it in designing and implementing our executive compensation program. Compensia serves at the discretion of the compensation committee and provided certain advisory services to the compensation committee in 2023 as described below.

  30. Use of Competitive Data

    Use of Competitive Data To assess the competitiveness of our executive compensation program and current compensation levels and to assist it in setting compensation levels, the compensation committee refers to executive compensation data compiled from a peer group of comparable companies in our industry. With Compensia’s assistance, our compensation committee developed this group (the Peer Group) in 2023 and used Peer Group data in connection with compensation decisions in 2023. Peer companies were selected for the Peer Group based on their comparability to Omeros in terms of stage of development, depth and diversity of pipeline programs, therapeutic areas, financial health, revenue and market capitalization. The Peer Group is comprised of the following companies:

  31. Use of Competitive Data

    | ● Aclaris Therapeutics, Inc. ● Agios Pharmaceuticals, Inc. ● Arcus Biosciences, Inc. ● bluebird bio, Inc. ● Coherus BioSciences, Inc. ● Collegium Pharmaceutical, Inc. ● Enanta Pharmaceuticals, Inc. | ● Esperion Therapeutics, Inc. ● Ironwood Pharmaceuticals, Inc. ● Karyopharm Therapeutics Inc. ● Mersana Therapeutics, Inc. ● Pacira BioSciences, Inc. ● Vanda Pharmaceuticals, Inc. |

  32. Use of Competitive Data

    In addition to peer group and other data from Compensia, our compensation committee typically also refers to commercially available compensation survey data for relevant markets in connection with its compensation decisions.

  33. Base Salary

    Base Salary The compensation committee reviews the base salaries of our named executive officers each year. In assessing these base salary levels, the compensation committee considers market competitiveness based on Peer Group and survey data, the executive officer’s past and expected future contributions to Omeros, his knowledge, experience and responsibilities and the relative base salaries and responsibilities of the other members of our senior management team. In 2023, the compensation committee increased the base salaries of Dr. Demopulos, Mr. Jacobsen and Mr. Cancelmo after reviewing competitive market data as well as Peer Group data and considering the performance of our named executive officers and the company. The base salary increases were effective April 1, 2023. The new base salary rates for our named executive officers, following the salary increases, were as follows:

  34. Bonuses

    Bonuses Our compensation committee has the authority and discretion to award bonuses to our named executive officers. We believe bonuses provide an effective tool to motivate and retain our employees, including our named executive officers, and achieve our business objectives. With respect to our payment of bonuses, the compensation committee generally establishes an annual target bonus amount for each named executive officer. This amount is calculated as a percentage of the named executive officer’s base salary and typically ranges from 25% to 100%. The target amounts are reviewed and revised as needed to align with competitive market compensation paid to similarly situated executives at the companies in the Peer Group and to properly address individual responsibilities and experience, internal pay equity and other factors. The extent to which bonuses are actually paid is determined at the discretion of the compensation committee based primarily upon an assessment of our achievement of the corporate performance objectives for the year, with consideration also being given to an assessment of each named executive officer’s individual performance and contribution to the achievement of our corporate performance objectives. Preliminary performance objectives are established by the board of directors, with input from our named executive officers and other members of senior management, as corporate goals that reflect our business priorities for the year. For each performance year, the compensation committee, in consultation with the board of directors, reviews the corporate performance objectives to determine and confirm their appropriateness for use as performance metrics for purposes of named executive officer compensation. The objectives may be re-visited during the year and potentially restated in the event of significant changes in corporate strategy or the occurrence of significant corporate events. The compensation committee retains full discretion to adjust individual bonus awards upwards for exceptional performance and to otherwise adjust bonus awards upwards or downwards to respond to changes in competitive compensation or other factors not measured by corporate or individual performance in any given year. In addition, depending on the company’s cash position, the compensation committee has the discretion, after consulting with the board of directors and our CEO, to not pay cash bonuses to conserve cash and support ongoing development programs and commercialization efforts. Corporate performance factors established in connection with compensation decisions for the 2022 performance year included objectives related to: ● obtaining via appeal of the FDA’s complete response letter a more favorable regulatory pathway for narsoplimab in TA-TMA than was available under the complete response letter; ● completing enrollment in our pivotal trial of narsoplimab for IgA nephropathy, ARTEMIS-IgAN, to allow readout of proteinuria data during 2023; ● rapidly advancing our pipeline of earlier-stage complement inhibitors by completing multiple key clinical milestones in our OMS906 and OMS1029 programs; ● advancing development and filing patent applications relating to our immuno-oncology and other discovery-stage programs; ● strengthening our financial position by obtaining meaningful funding without diluting shareholders; ● supporting the successful transition of OMIDRIA to Rayner, including by ensuring continued separate payment for OMIDRIA during 2023; and ● other strategic objectives. In April 2023, our board of directors reviewed the corporate performance objectives previously established for 2022 and determined that the corporate performance objectives for 2022 had been achieved at the 115% level. In determining that the corporate objectives had been achieved at a level greater than 100%, the board of directors noted, along with other discretionary factors considered, that each performance goal had been achieved despite challenging circumstances and substantial volatility in the industry as a whole and for our company in particular. Following receipt and consideration of a refreshed analysis of executive pay from Compensia, the compensation committee approved cash bonuses for our named executive officers. The cash bonuses awarded to Messrs. Jacobsen and Cancelmo were equal to 115% of their target bonus amounts, which were 30% of their 2022 base salaries. Accordingly, Messrs. Jacobsen and Cancelmo received bonus payments of $151,127 and $147,550, respectively. In recognition of Dr. Demopulos’ leadership role in the achievement of each of the corporate performance objectives in 2022, the compensation committee approved a cash bonus payment to Dr. Demopulos of $1,024,179, equal to 115% of his target bonus amount, which was 100% of his base salary. In conjunction with approval of Dr. Demopulos’ annual bonus award, the compensation committee also approved a discretionary special bonus in the amount of $4,000,000. In determining to award the special bonus and the amount thereof, the compensation committee considered Dr. Demopulos’ leadership and significant effort in securing continued and long-term separate payment for OMIDRIA as well as obtaining, over a short period of time, $325 million of non-dilutive, no-fee financing. This financing was comprised of $125 million in proceeds from the September 2022 monetization transaction involving the sale of a portion of the royalties due from Rayner on its future net sales of OMIDRIA and the $200 million milestone payment received from Rayner as a result of the occurrence of the milestone-triggering event in December 2022. In addition to these transactions, the compensation committee gave consideration to the substantial value of 325,000 in-the-money stock options that Dr. Demopulos, in consultation with members of the compensation committee, allowed to expire in April 2020 due to exigencies related to our contemporaneous release of clinical data and ongoing clinical trials. Although the weight the compensation committee gave to this factor was not intended to make Dr. Demopulos fully whole for the decision to allow the options to expire unexercised, the committee believed it was appropriate to consider the substantial financial burden the decision imposed on Dr. Demopulos in connection with its award of the discretionary special bonus. During 2023, the compensation committee also established corporate objectives for the 2023 performance year including, among other identified goals, submission to FDA of a formal analysis plan in connection with our planned resubmission of our biologics license application for narsoplimab in TA-TMA, completing an interim analysis and reading out proteinuria data from our Phase 3 clinical trial evaluating narsoplimab for the treatment of IgA nephropathy, ARTEMIS-IgAN, rapidly advancing our pipeline of earlier-stage complement inhibitors by completing multiple key clinical milestones in our OMS906 and OMS1029 programs, securing the $200 million milestone payment from Rayner related to OMIDRIA, advancing development and filing patent applications relating to our immuno-oncology and other discovery-stage programs, as well as strengthening our financial position and advancing strategic objectives through non-dilutive transactions. Bonuses for the 2023 performance year were awarded to our named executive officers in April 2024, as described below under “2024 Executive Compensation Decisions.”

  35. Equity Compensation

    Equity Compensation Historically, we have not applied a specific formula to determine the size of the equity awards that are granted to our executive officers. Instead, the compensation committee has exercised its judgment, taking into consideration, among other things, Peer Group data compiled by Compensia as well as company performance, an evaluation of the expected and actual performance of each named executive officer, each named executive officer’s responsibilities, experience, skills and contributions, the cash compensation received by each named executive officer, relative internal pay equity and market conditions. The compensation committee generally also considers the existing equity holdings of each named executive officer, including the current economic value of their unvested equity and the ability of these unvested holdings to satisfy our objectives of retaining and incentivizing our executive officers. Based on these factors, the compensation committee, with data received from Compensia and, with respect to Mr. Jacobsen and Mr. Cancelmo, input from the CEO, determines the size of each award at levels it considers appropriate to create a meaningful opportunity for reward predicated on the creation of long-term shareholder value. The compensation committee has historically granted equity awards to our named executive officers in the form of stock options, although it is authorized to grant other types of equity awards, including restricted stock and restricted stock units, and may do so in the future. The compensation committee grants stock option awards on an annual basis. In September 2023, the compensation committee granted stock option awards to our employees, including our named executive officers. In determining the size of the stock option awards for the named executive officers, the compensation committee considered their individual performance and corporate milestones achieved in 2022, discussed above, as well as internal equity and related factors. Historically, stock option awards granted by our compensation committee in connection with annual performance reviews vest in equal monthly installments over a four-year period. The per share exercise price for our stock option awards is equal to the fair market value of our common stock on the date of grant. The fair market value is the closing public trading price of our common stock on the date of grant or, if the equity award is granted on a day when the trading market for our common stock is closed, the closing public trading price on the most recent trading day prior to the date of grant. The stock option awards granted to our named executive officers in September 2023 have an exercise price of $2.94 per share and vest in equal monthly installments over a four-year period commencing April 1, 2023. The stock option awards granted to our named executive officers in 2023 were as follows:

  36. Equity Compensation

    | | Number of Shares of Common Stock | | | Underlying Stock Option Awards | | Named Executive Officer | Granted in 2023 | | Gregory A. Demopulos, M.D. | 715,000 | | Michael A. Jacobsen | 100,000 | | Peter B. Cancelmo, J.D. | 100,000 |

  37. 2024 Executive Compensation Decisions

    | ● | Bonuses - Cash bonuses were approved for each of our named executive officers equal to 100% of their target bonus amounts. The bonus targets for Mr. Jacobsen and Mr. Cancelmo were 35% of their 2023 base salaries, resulting in bonus payments of $160,983 and $163,160, respectively. Dr. Demopulos’ target bonus was 100% of his 2023 base salary, resulting in a bonus payment of $926,214. |

  38. 2024 Executive Compensation Decisions

    | ● | Equity Compensation – Stock option awards were granted to Dr. Demopulos, Mr. Jacobsen and Mr. Cancelmo for 725,000 shares, 100,000 shares and 100,000 shares, respectively. These stock options awards have an exercise price of $3.06 per share and vest in equal monthly installments over a four-year period commencing April 1, 2024. |

  39. Employment Agreement and Post-Employment Compensation

    Employment Agreement and Post-Employment Compensation Except for our CEO, we do not have employment agreements with our named executive officers. For a summary of the material terms and conditions of the employment agreement with our CEO, see “Employment Agreement with Gregory A. Demopulos, M.D.” below. Our CEO’s current employment agreement, which was entered into in 2010, was deemed necessary by our compensation committee to provide a competitive compensation package to retain someone with his unique skill set and medical expertise. At the same time, the compensation committee was sensitive to the need to balance the market competitiveness with the financial limitations of a development-stage life sciences company. As part of his compensation package, the CEO’s employment agreement includes certain severance obligations and other provisions that apply in the event of termination of his employment under specified circumstances, including following a change in control of our company. The compensation committee determined that these provisions were necessary to induce our CEO to limit his medical practice in exchange for the uncertainty of a demanding position in the company and were developed based on negotiations with our CEO. The compensation committee believes that these protections continue to serve a retention purpose and help our CEO maintain his focus on his duty to maximize shareholder value if there is a potential transaction that could involve a change in control of our company. For a summary of these provisions, see “Potential Payments upon Termination or Change in Control” below. In addition, we provide all of our employees, including our named executive officers, with accelerated vesting benefits for their equity awards in the event of a change in control of the company. We have provided this benefit to encourage our employees to focus on their responsibilities and not be distracted by the potential effect of a change in control of our company on their employment status. For a summary of the material terms and conditions of these benefits, see “Potential Payments upon Termination or Change in Control” below.

  40. Taxation of “Parachute” Payments and Deferred Compensation

    Taxation of “Parachute” Payments and Deferred Compensation Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection with a change in control of our company that exceeds certain prescribed limits, and that our company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We are not obligated to provide any named executive officer with a “gross-up” or other reimbursement payment for any tax liability that may become payable as a result of the application of Sections 280G or 4999. Section 409A of the Code imposes significant additional taxes if an executive officer, director or service provider receives “deferred compensation” that does not satisfy the restrictive conditions of the provision. Although we did not have a traditional nonqualified deferred compensation plan in place for our executive officers during 2023, Section 409A applies to certain equity awards and severance arrangements. We believe that we have structured our equity awards in a manner intended to comply with the applicable Section 409A conditions.

  41. Summary Compensation Table

    Summary Compensation Table The following table reflects our named executive officers’ compensation for the years ended December 31, 2023, 2022 and 2021.

  42. Summary Compensation Table

    | | | | | Option | All Other | | | Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Awards ($)(2) | Compensation ($)(3) | Total ($) | | Gregory A. Demopulos, M.D. | 2023 | 917,308 | 5,024,179 | 1,724,564 | 23,792 | 7,689,843 | | President, Chief Executive Officer | 2022 | 882,027 | 890,000 | 1,934,052 | 22,607 | 3,728,686 | | and Chairman of the Board | 2021 | 848,103 | 875,000 | 5,670,963 | 21,609 | 7,415,675 | | Michael A. Jacobsen | 2023 | 454,475 | 151,127 | 241,198 | 7,169 | 853,969 | | Vice President, Finance, Chief | 2022 | 429,936 | 81,120 | 252,914 | 7,541 | 771,511 | | Accounting Officer and Treasurer | 2021 | 401,700 | 97,000 | 773,313 | 6,625 | 1,278,638 | | Peter B. Cancelmo, J.D. | 2023 | 456,548 | 147,550 | 241,198 | 7,337 | 852,633 | | Vice President, General Counsel | 2022 | 417,960 | 77,760 | 238,037 | 7,516 | 741,273 | | and Secretary | 2021 | 381,600 | 90,000 | 773,313 | 6,594 | 1,251,507 |

  43. Summary Compensation Table

    (1) The bonuses paid to each of our named executive officers in 2023, 2022 and 2021 relate to the respective prior year’s performance. In 2023, Dr. Demopulos received an annual bonus payment of $1,024,179 and a discretionary special bonus payment of $4,000,000 as described under “Executive Compensation Program Components” above. (2) Amounts shown in this column do not reflect compensation realized by the named executive officers. Instead, the dollar amounts reported in this column represent the grant date fair value of option awards granted to our named executive officers during the applicable year as computed in accordance with FASB ASC Topic 718. The assumptions used to calculate the value of option awards are set forth in Note 12, Stock-Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2023. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeiture related to service-based vesting conditions. Realization of the compensation reported in this column, if any, is dependent upon the price of our common stock at the time the stock options are exercised. (3) All Other Compensation includes perquisites and other personal benefits paid to Dr. Demopulos of $19,117, $17,857 and $17,009 in 2023, 2022 and 2021, respectively. Perquisites and personal benefits consisted of expenses incurred by Dr. Demopulos to retain his medical license, including medical malpractice insurance premiums and practice fees, and business-related information technology expenses. All Other Compensation for Dr. Demopulos, Mr. Jacobsen and Mr. Cancelmo includes life insurance premium payments, parking expenses and 401(k) matching contributions.

  44. 2023 Grants of Plan-Based Awards

    2023 Grants of Plan-Based Awards The following table shows certain information regarding grants of plan-based awards made to our executive officers for the year ended December 31, 2023.

  45. 2023 Grants of Plan-Based Awards

    | | | All Other Option | | | | | | Awards: Number | | Grant Date Fair | | | | of Securities | Exercise or Base | Value of Stock | | | | Underlying | Price of Option | and Option | | Name | Grant Date | Options (#)(1) | Awards ($/Sh) | Awards ($)(2) | | Gregory A. Demopulos, M.D. | 09/22/23 | 715,000(3) | 2.94 | 1,724,564 | | Michael A. Jacobsen | 09/22/23 | 100,000(3) | 2.94 | 241,198 | | Peter B. Cancelmo, J.D. | 09/22/23 | 100,000(3) | 2.94 | 241,198 |

  46. 2023 Grants of Plan-Based Awards

    (1) These option awards were granted under the 2017 Omnibus Incentive Compensation Plan. (2) Amounts shown in this column do not reflect compensation realized by the named executive officers. Instead, the dollar amounts reported in this column represent the grant date fair value of option awards granted to our named executive officers during the applicable year as computed in accordance with FASB ASC Topic 718. The assumptions used to calculate the value of option awards are set forth in Note 12, Stock-Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2023. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeiture related to service-based vesting conditions. Realization of the compensation reported in this column, if any, is dependent upon the price of our common stock at the time the stock options are exercised. (3) The shares subject to this option award vest on a monthly basis in equal amounts over a four-year period beginning on April 1, 2023.

  47. Outstanding Equity Awards at 2023 Fiscal Year-End

    Outstanding Equity Awards at 2023 Fiscal Year-End The following table reflects outstanding equity awards held by each of the named executive officers as of December 31, 2023. The vesting schedule applicable to each outstanding award is described in the footnotes to the table below.

  48. Outstanding Equity Awards at 2023 Fiscal Year-End

    | | Number of | Number of | | | | | Securities | Securities | | | | | Underlying | Underlying | | | | | Unexercised | Unexercised | | | | | Options (#) | Options (#) | Option Exercise | Option Expiration | | Name | Exercisable | Unexercisable | Price ($) | Date | | Gregory A. Demopulos, M.D. | 450,000(1) | — | 11.58 | 10/29/24 | | | 400,000(2) | — | 10.27 | 02/19/26 | | | 400,000(3) | — | 10.56 | 12/05/26 | | | 375,000(4) | — | 11.55 | 02/26/27 | | | 350,000(5) | — | 13.58 | 04/08/28 | | | 425,000(6) | — | 13.45 | 02/08/29 | | | 421,868(7) | 28,132 | 11.91 | 03/01/30 | | | 366,667(8) | 183,333 | 14.99 | 07/02/31 | | | 270,833(9) | 379,167 | 3.93 | 09/21/32 | | | 119,167(10) | 595,833 | 2.94 | 09/22/33 | | Michael A. Jacobsen | 100,000(1) | — | 11.58 | 10/29/24 | | | 65,000(2) | — | 10.27 | 02/19/26 | | | 85,000(3) | — | 10.56 | 12/05/26 | | | 70,000(4) | — | 11.55 | 02/26/27 | | | 60,000(5) | — | 13.58 | 04/08/28 | | | 65,000(6) | — | 13.45 | 02/08/29 | | | 65,623(7) | 4,377 | 11.91 | 03/01/30 | | | 50,000(8) | 25,000 | 14.99 | 07/02/31 | | | 35,417(9) | 49,583 | 3.93 | 09/21/32 | | | 16,667(10) | 83,333 | 2.94 | 09/22/33 | | Peter B. Cancelmo, J.D. | 20,000(11) | — | 11.85 | 01/02/29 | | | 20,000(12) | — | 16.63 | 06/10/29 | | | 46,874(7) | 3,126 | 11.91 | 03/01/30 | | | 15,833(13) | 4,167 | 10.22 | 10/26/30 | | | 50,000(8) | 25,000 | 14.99 | 07/02/31 | | | 33,333(9) | 46,667 | 3.93 | 09/21/32 | | | 16,667(10) | 83,333 | 2.94 | 09/22/33 |

  49. Outstanding Equity Awards at 2023 Fiscal Year-End

    (1) The shares subject to this option award vested on a monthly basis in equal amounts over a four-year period that began on April 1, 2014. (2) The shares subject to this option award vested on a monthly basis in equal amounts over a four-year period that began on April 1, 2015. (3) The shares subject to this option award vested on a monthly basis in equal amounts over a four-year period that began on April 1, 2016. (4) The shares subject to this option award vested on a monthly basis in equal amounts over a four-year period that began on February 26, 2017. (5) The shares subject to this option award vested on a monthly basis in equal amounts over a four-year period that began on April 1, 2018. (6) The shares subject to this option award vested on a monthly basis in equal amounts over a four-year period that began on February 8, 2019. (7) The shares subject to this option award vest on a monthly basis in equal installments over a four-year period that began on March 1, 2020. (8) The shares subject to this option award vest on a monthly basis in equal installments over a four-year period that began on April 1, 2021. (9) The shares subject to this option award vest on a monthly basis in equal installments over a four-year period that began on April 1, 2022. (10) The shares subject to this option award vest on a monthly basis in equal installments over a four-year period that began on April 1, 2023. (11) The shares subject to this option award vested over a four-year period that began on January 1, 2019, with 25% of the total number of shares subject to the option award vesting on January 1, 2020 and the remaining shares vesting on a monthly basis in equal amounts. (12) The shares subject to this option award vested on a monthly basis in equal amounts over a four-year period that began on June 10, 2019. (13) The shares subject to this option award vest on a monthly basis in equal installments over a four-year period that began on October 26, 2020.

  50. 2023 Option Exercises and Stock Vested

    2023 Option Exercises and Stock Vested There were no option exercises or stock vested by our named executive officers during the year ended December 31, 2023.

  51. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Pursuant to our employment agreement with Dr. Demopulos we are required to make payments to him upon termination of his employment in the circumstances described below. In addition, under the terms of our equity incentive plans, all of our named executive officers and significant employees are entitled to acceleration of vesting of their option awards upon a merger or change in control under certain conditions or pursuant to terms and conditions as may be determined by the compensation committee according to such plans. See “Equity Acceleration Upon a Change in Control” below. EMPLOYMENT AGREEMENT WITH GREGORY A. DEMOPULOS, M.D.

  52. CEO PAY RATIO DISCLOSURE

    CEO PAY RATIO DISCLOSURE We are required by SEC rules and regulations to disclose the annual total compensation for our CEO and the median annual total compensation for our worldwide employee population excluding our CEO, and the ratio of annual total compensation for our CEO to the annual total compensation for our median employee. For 2023, we chose to use the same median employee that we identified for 2021, as permitted by SEC rules, because there has been no change in our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio calculations. To identify our median employee in 2021, we took the following steps: 1. We determined that, as of December 31, 2021, our employee population consisted of 211 individuals (excluding our CEO), all of whom reside in the U.S. This population consisted of our full-time, part-time and temporary employees employed with us as of the determination date. 2. To identify the “median employee” from our employee population, we used total W‑2 compensation consistently applied to all employees included in the calculation. We annualized the compensation for employees who were not employed by us for all of 2021 for purposes of establishing the distribution of employee compensation within our population and identified the employee nearest the median of this distribution who was employed for the full year 2021 as our median employee. We did not use any statistical sampling techniques and did not make any cost of living adjustments in identifying our median employee. To determine our median employee’s annual total compensation, we identified and calculated the elements of that employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2) of Regulation S-K. Based on this analysis, for 2023 the total compensation of our CEO was $7,689,843, as reported in the Summary Compensation Table above, and the total compensation of our median employee was $188,271. This results in a ratio of annual total CEO compensation to annual total median employee compensation of approximately 40.8 to 1. Our reported CEO pay ratio is an estimate calculated in a manner consistent with SEC rules for identifying the median employee and determining the ratio of his or her compensation to that of our CEO. These rules permit companies to employ a wide range of methodologies, estimates and assumptions. CEO pay ratios reported by other companies, which may have used other permitted methodologies or assumptions, and which may have a significantly different work force structure from ours, are not necessarily comparable to our CEO pay ratio. Also, as noted above, the dollar amount of stock option awards included in the total compensation for our CEO and our median employee represent the grant date fair value of stock option awards as computed in accordance with FASB ASC Topic 718, using assumptions set forth in Note 12, Stock-Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2023. Realization of this compensation is dependent upon the price of our common stock at the time the stock options are exercised.

  53. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE We are required by SEC rules and regulations to disclose certain information about the relationship between executive compensation and corporate financial performance measures. The compensation committee does not use the following information as a primary basis for making compensation decisions, nor does it use the performance measures described below to measure performance for incentive-based compensation. This section should be read in conjunction with the section entitled “Executive Compensation—Compensation Discussion and Analysis” above in this proxy statement, which includes additional discussion of the objectives of our executive compensation program and how they are aligned with our financial and operational performance. We have prepared the disclosure in this section in accordance with the requirements that apply to smaller reporting companies.

  54. Pay Versus Performance Table

    Pay Versus Performance Table The following table reflects our named executive officers’ “compensation actually paid” (calculated in accordance with SEC regulations) and certain financial performance measures for each of the years ended December 31, 2023, 2022 and 2021.

  55. Pay Versus Performance Table

    | | | | | | Value of Initial | | | | | | Average Summary | Average | Fixed $100 | | | | | | Compensation | Compensation | Investment | | | | | | Table Total for | Actually Paid to | Based on | | | | Summary | Compensation | Non-CEO Named | Non-CEO Named | Total | | | | Compensation Table | Actually Paid | Executive | Executive | Shareholder | | | | Total for CEO | to CEO | Officers | Officers | Return (TSR) | Net Income (Loss) | | Year | ($)(1)(2) | ($)(1)(3)(4) | ($)(1)(2) | ($)(1)(3)(4) | ($)(5) | ($) | | 2023 | 7,689,843 | 8,692,540 | 853,301 | 989,547 | 22.88 | (117,813,000) | | 2022 | 3,728,686 | 1,333,430 | 756,392 | 422,578 | 15.82 | 47,417,000 | | 2021 | 7,415,675 | 1,356,879 | 1,265,073 | 416,881 | 45.00 | 194,235,000 |

  56. Pay Versus Performance Table

    (1) For each year shown, the CEO was Gregory A. Demopulos, M.D. and the other named executive officers were Michael A. Jacobsen and Peter B. Cancelmo, J.D. (2) Amounts shown in these columns reflect the corresponding amounts in the “Total” column set forth in the Summary Compensation Table above in this proxy statement. See the footnotes to the Summary Compensation Table for further detail regarding the calculation of the amounts in these columns. (3) Amounts shown in these columns do not reflect compensation realized by the named executive officers during the years presented. To calculate “compensation actually paid,” the following amounts were deducted from and added to the “Total” compensation set forth in the Summary Compensation Table:

  57. Pay Versus Performance Table

    | | Summary Compensation Table Total | Amounts Reported in the Summary Compensation Table for Option Awards | Fair Value of Option Awards Granted During the Year, Outstanding and Unvested at Year-End | Change in Fair Value of Option Awards Granted in Any Prior Year, Outstanding and Unvested at Year-End | Fair Value of Option Awards Granted and Vested in the Same Year | Change in Fair Value of Option Awards Granted in Any Prior Year, Vested During the Year | Fair Value of Option Awards Granted in Any Prior Year, Forfeited During the Year | Compensation Actually Paid | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Principal Executive Officer | | | | | | | | | | 2023 | 7,689,843 | (1,724,564) | 1,587,792 | 424,137 | 250,256 | 465,076 | - | 8,692,540 | | 2022 | 3,728,686 | (1,934,052) | 835,711 | (1,186,690) | 273,873 | (384,098) | - | 1,333,430 | | 2021 | 7,415,675 | (5,670,963) | 1,525,156 | (2,661,665) | 719,442 | 29,233 | - | 1,356,879 | | Average for Non-CEO Named Executive Officers | | | | | | | | | | 2023 | 853,301 | (241,198) | 222,068 | 55,986 | 35,002 | 64,389 | - | 989,547 | | 2022 | 756,392 | (245,476) | 106,071 | (174,002) | 34,761 | (55,168) | - | 422,578 | | 2021 | 1,265,073 | (773,313) | 207,976 | (384,474) | 98,103 | 3,517 | - | 416,881 |

  58. Pay Versus Performance Table

    (4) Fair value or change in fair value, as applicable, of option awards in the “Compensation Actually Paid” columns was determined by reference to a Black-Scholes value as of the applicable year-end or vesting date(s), determined based on the same methodology as used to determine grant date fair value but using the closing public trading price of our common stock on the applicable revaluation date as the current market price and with an expected life set equal to the original expected life determined at grant, reduced by the amount of time elapsed from the grant date to the revaluation date, and in all cases based on volatility and risk-free interest rates determined as of the revaluation date based on the remaining expected life and based on an expected dividend rate of 0%. In addition, the risk-free interest rates are based on the quarter-to-date average for the applicable U.S. Treasury yield as of the revaluation date. For additional information on the assumptions used to calculate the valuation of the awards, see the notes to our consolidated financial statements included in our Annual Report on Form 10‑K for the applicable year. (5) Represents the value, as of the last day of the indicated fiscal year, of an investment of $100 in our common stock on December 31, 2020.

  59. Relationship Between Compensation Actually Paid and Financial Performance Measures

    Relationship Between Compensation Actually Paid and Financial Performance Measures We do not use cumulative total shareholder return and net income (loss) as performance measures in our executive compensation program. However, we do use several other performance measures to align executive compensation with our performance. As described in more detail in the section entitled “Executive Compensation—Compensation Discussion and Analysis” above in this proxy statement, our named executive officers are eligible to receive annual performance-based cash bonuses that are designed to provide appropriate incentives to achieve defined annual corporate objectives that are primarily operational, rather than financial, in nature. We also provide equity compensation in the form of stock options to incentivize and reward our named executive officers for long-term corporate performance based on the anticipated increase in value of our common stock in the future (as opposed to historical total shareholder return). These equity awards strongly align our named executive officers’ interests with those of our shareholders by providing a continuing financial incentive to maximize long-term value for our shareholders. The following graphs illustrate the relationship between each of the financial performance measures in the Pay Versus Performance Table above and “compensation actually paid” to our CEO (referred to as “CEO CAP”) and, on average, to our other named executive officers (such average referred to as “NEO CAP”) for each of the three years ended December 31, 2023.

  60. Relationship Between Compensation Actually Paid and Financial Performance Measures

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  61. Relationship Between Compensation Actually Paid and Financial Performance Measures

    The information provided in this section entitled “Pay Versus Performance” will not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended, except to the extent that we specifically incorporate this information by reference.