DEF 14A of Tandem Diabetes Care Inc
Filed Apr 8, 2025 · FY20240001438133-25-000058
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES Nominees for Director The following table lists the persons recommended by our nominating and corporate governance committee, and nominated by our board of directors, to be elected as directors, including relevant information on their role served on our board, business experience, qualifications, attributes, skills and other directorships as of the date of this Annual Meeting Notice. Ages provided are as of March 31, 2025. NOMINEES FOR RE-ELECTION TO OUR BOARD OF DIRECTORS FOR A ONE-YEAR TERM EXPIRING AT THE 2026 ANNUAL MEETING OF STOCKHOLDERS.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| REBECCA ROBERTSON | Ms. Robertson has served as Chair of our board of directors since March 2023, and as a member of our board of directors since January 2019. Ms. Robertson is a founder and General Partner at Versant Ventures where she has specialized in investing in the areas of medical devices and diagnostics since 1999. In addition, through Longridge Business Advisors, she has provided business advisory services and board services since April 2017. Prior to Versant, she served as Senior Vice President at Chiron Diagnostics, a division of Chiron Corporation, where she had responsibility for the critical care business unit in addition to leading the division’s business development efforts. Prior to joining Chiron, Ms. Robertson was a co-founder and Vice President at Egis, a consumer products company, and held senior management positions in operations and finance at Lifescan, a Johnson & Johnson Company. Ms. Robertson holds a B.S. in Chemical Engineering from Cornell University. We believe Ms. Robertson’s extensive experience in management positions in the medical technology industry provides her with key skills in working with directors, understanding board process and functions and working with financial statements. We also believe she brings to our board of directors her long-term investing experience with numerous companies in the healthcare and medical device industries, all of which qualify her for service on our board of directors. | | Chair, Board of Directors Member, Compensation Committee Age: 64 Director since: 2019 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Tandem Diabetes Care | 8 | 2025 Proxy Statement |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Proposal 1 >> Election of Directors | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| MYOUNGIL CHA | Mr. Cha has served on our board of directors since June 2022. He has more than 20 years of global experience across the healthcare value chain. Mr. Cha currently serves as Chief Product Officer at Verily where he leads product development. Prior to joining Verily in March 2024, he served as President and Chief Strategy Officer at Carbon Health from June 2021 to February 2024. He served as Head of Health Strategic Initiatives at Apple from August 2015 to May 2021 where he developed and led product initiatives and global strategic partnerships. Earlier in his career, Mr. Cha was a Principal and Co-Leader of the West Coast Strategy and Corporate Finance Practice as well as Co-Leader of the Healthcare Investor Practice at McKinsey & Company. Mr. Cha holds a JD from Harvard Law School, an MBA from Harvard Business School and an AB in Biochemical Sciences from Harvard College. We believe Mr. Cha’s experience as a healthcare and consumer technology executive developing and leading global and strategic initiatives and partnerships, while maximizing the value of data and using analytics to drive enhanced customer experiences and better clinical outcomes, brings to the Board critical skills related to advancing the Company’s ecosystem of data-driven products and services, which qualify him to serve as one of the Company’s directors. | | Director Member, Compensation Committee Age: 48 Director since: 2022 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| PEYTON HOWELL | Ms. Howell joined our board of directors in August 2020 and brings more than 30 years of pharma services and healthcare industry experience. Ms. Howell was appointed Chief Executive Officer of Parexel, a leading global clinical research organization servicing the life sciences industry, in May 2024 and also serves on the company’s Board of Directors. She previously served as Parexel’s Chief Operating and Growth Officer since September 2022, and as its Chief Commercial and Strategy Officer since May 2018. Prior to joining Parexel, Ms. Howell’s experience includes senior leadership positions with AmerisourceBergen (now Cencora), a Fortune 20 company, most recently as President for Health Systems and Specialty Care Solutions. Prior to AmerisourceBergen, Ms. Howell was a founder of Lash Group and served as President for nearly 10 years following its acquisition by AmerisourceBergen. Ms. Howell currently serves on the board of directors of the Association of Clinical Research Organizations. She holds a B.A. in Health Communications from the University of Illinois at Urbana-Champaign and a Master’s of Health Administration from The Ohio State University. We believe Ms. Howell’s experience in reimbursement, health insurance and patient access, and in serving as executive management of companies in the healthcare industry brings to our board of directors critical skills relating to scaling complex organizations and strategic planning that qualify her to serve on our board of directors. | | Director Chair, Compensation Committee Age: 58 Director since: 2020 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Tandem Diabetes Care | 9 | 2025 Proxy Statement |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Proposal 1 >> Election of Directors | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| JOAO MALAGUEIRA | Mr. Malagueira has served on our board of directors since June 2022. He brings more than 25 years of experience in diabetes, medical devices and diagnostics solutions businesses with global corporations. Mr. Malagueira is currently President for three divisions at Hologic and responsible for the entire portfolio in the EMEA. Prior to starting this role in October 2023, he served as International Vice President, EMEA for three divisions at Hologic, since January 2019, and as International Vice President, EMEA and Canada, for the Hologic Diagnostics Solutions division, from June 2015 to December 2018. He possesses extensive experience and proven success of go-to-market models and strategies in Europe, Africa, CIS, and the Middle East. Prior to Hologic, Mr. Malagueira enjoyed more than 15 years at Johnson & Johnson, in commercial leading roles across EMEA, where he led successful turnarounds and market share growth of the diabetes solutions businesses, LifeScan and Animas. Mr. Malagueira holds an MBA and an Advanced Degree in Marketing from Catolica Lisbon School of Business and Economics. He holds a MS in Pharmaceutical Sciences and Clinical Analysis from University of Lisbon. We believe Mr. Malagueira’s experience in diabetes and medical devices across global organizations with extensive knowledge of international go-to-market models and strategies brings to the Board critical skills related to advancing the Company’s global reach and expansion of its global technology offerings, which qualifies him to serve as one of the Company’s directors. | | Director Member, Audit Committee Age: 59 Director since: 2022 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| KATHLEEN MCGRODDY-GOETZ, PH.D. | Dr. McGroddy-Goetz has served on our board of directors since June 2020. She has more than 25 years of experience leading global teams across business development, strategy, research and development, and product management. She has commercialized pioneering technologies spanning from microelectronics through cloud, advanced data analytics, artificial intelligence, hardware, software, and middleware with an emphasis on healthcare and life sciences applications. From October 2018 through June 2021, Dr. McGroddy-Goetz served as the Global Head of Strategic Partnerships at Medidata Solutions, a Dassault Systemès Company, where she also concurrently held other strategy, alliances and marketing executive roles. Previously, she held various leadership positions at IBM beginning in 1992, and most recently was Vice President, Strategy and Innovation, IBM Watson Health. She serves as an adjunct professor of healthcare informatics and administration at Sacred Heart University, and as board chair for Rides for Ridgefield, a non-profit organization dedicated to ensuring seniors and those with mobility disabilities maintain quality of life. Dr. McGroddy-Goetz holds a B.S. in Physics from SUNY Binghamton and a Ph.D. in Molecular Biophysics from Cornell University. We believe Dr. McGroddy-Goetz’s experience in managing and commercializing pioneering technologies spanning microelectronics, cloud-based technologies, advanced data analytics, artificial intelligence, hardware, software and middleware with an emphasis on healthcare and life sciences applications, brings to our board of directors critical skills related to digital health, scaling complex organizations, and strategic planning that qualify her to serve on our board of directors. | | Director Chair, Nominating and Corporate Governance Committee, and Member, Privacy and Security Subcommittee Age: 61 Director since: 2020 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Tandem Diabetes Care | 10 | 2025 Proxy Statement |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Proposal 1 >> Election of Directors | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| JOHN SHERIDAN | Mr. Sheridan has served on our board of directors since June 2019 and as our President and Chief Executive Officer since March 2019. Prior to that, Mr. Sheridan served as our Executive Vice President and Chief Operating Officer since April 2013. Prior to joining us, Mr. Sheridan served as Chief Operating Officer of Rapiscan Systems, Inc., a provider of security equipment and systems, from March 2012 to February 2013. Mr. Sheridan served as Executive Vice President of Research and Development and Operations for Volcano Corporation, a medical technology company, from November 2004 to March 2010. From May 2002 to May 2004, Mr. Sheridan served as Executive Vice President of Operations at CardioNet, Inc., a medical technology company, now operating as BioTelemetry, Inc. (Nasdaq: BEAT). From March 1998 to May 2002, he served as Vice President of Operations at Digirad Corporation, a medical imaging company. Mr. Sheridan previously served as a director of Acutus Medical, Inc. (Nasdaq: AFIB) from March 2021 to April 2025. Mr. Sheridan holds a B.S. in Chemistry from the University of West Florida and an MBA from Boston University. We believe Mr. Sheridan brings to our board of directors valuable perspective and experience as our former Executive Vice President and Chief Operating Officer, and as our current President and Chief Executive Officer. Mr. Sheridan has extensive experience at the management level of various healthcare companies, as well as leadership skills, industry experience and knowledge, all of which qualify him for service on our board of directors. | | President and Chief Executive Officer Director Age: 69 Director since: 2019 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| RAJWANT SODHI | Mr. Sodhi has served on our board of directors since January 2021. He has more than 25 years of experience in global informatics, software service technology and ecommerce business solutions, across the healthcare, financial, and telecom industries. Previously he served as the President of ResMed’s software as a service (SaaS) business from July 2017 to August 2021, and prior to that as President of Healthcare Informatics (HI) leading the development of ResMed’s HI solutions and ResMed itself to its current standing as a global digital health leader, with an expanding portfolio of device- and SaaS-based offerings. He joined ResMed in 2012 through the acquisition of Umbian Inc. of which he was co-founder and President. Before ResMed and Umbian, Mr. Sodhi worked in the financial services industry, designing, developing and managing SaaS solutions. He was Senior Vice President of Business Development and Chief Technology Officer for Skipjack Financial Services from 2005 to 2009, and co-founder and Chief Technology Officer of TransActive Ecommerce Solutions from 2000 to 2005. Mr. Sodhi is on the board of directors of Forefront Dermatology, EyeCare Partners and NovaResp Technologies. Mr. Sodhi holds an MBA and a B.S. in Mathematics and Statistics from Dalhousie University in Halifax, Nova Scotia. We believe Mr. Sodhi’s experience in global informatics, software service technology and e-commerce business solutions across the healthcare, financial, and telecom industries brings to our board of directors critical skills related to our ecosystem of data-driven products and services, all of which qualify him for service on our board of directors. | | Director Member, Nominating and Corporate Governance Committee, and Chair, Privacy and Security Subcommittee Age: 51 Director since: 2021 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Tandem Diabetes Care | 11 | 2025 Proxy Statement |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Proposal 1 >> Election of Directors | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| CHRISTOPHER TWOMEY | Mr. Twomey has served on our board of directors since July 2013. Mr. Twomey has served as a director and chair of the audit committee of Bionano Genomics (Nasdaq: BNGO), a life sciences genome analysis instrumentation company since July 2018. From March 1990 until his retirement in 2007, Mr. Twomey held various positions with Biosite, most recently serving as Senior Vice President, Finance and Chief Financial Officer. From 1981 to 1990, Mr. Twomey worked for Ernst & Young LLP, where he served as an Audit Manager. He previously served as a director and chair of the audit committee for public companies, such as Senomyx and Cadence Pharmaceuticals, prior to their acquisitions. Mr. Twomey holds a B.A. in Business Economics from the University of California, Santa Barbara. We believe Mr. Twomey’s experience in senior financial management and on boards of directors of companies in the life sciences industry, as well as his extensive accounting and auditing experience, brings to our board of directors critical skills related to financial oversight of complex organizations, strategic planning, and corporate governance, all of which qualify him for service on our board of directors. | | Director Chair, Audit Committee Age: 65 Director since: 2013 | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
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OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Proposal 2 >> Say-on-Pay | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
Say-on-Pay To approve, on a non-binding, advisory basis, the compensation of our named executive officers. Background In accordance with applicable SEC rules, we are providing our stockholders with the opportunity to cast a non-binding, advisory vote on the compensation of our Named Executive Officers as described in this Proxy Statement, or a “say-on-pay” proposal. We believe it reflects a sound corporate governance practice to seek the views of our stockholders on our executive compensation program. Summary The primary objective of our executive compensation program is to compensate our executive officers in a manner that will attract, retain and motivate talented executives with the skills needed to manage a demanding and high-growth business in a rapidly evolving, competitive and highly-regulated industry, while creating long-term value for our stockholders. When designing our 2024 executive compensation program, our Compensation Committee considered a number of factors, including stockholder feedback, feedback and advice from our independent compensation consultant, peer group and market survey data, our business objectives, the 2024 budget that was approved by our board of directors, the intense competition for executive talent within the medical device and technology industries, and the importance of retaining and motivating our employees. For 2024, we sought to advance our strong pay-for-performance philosophy and align the interests of our executives with those of our stockholders through the adoption of our 2024 performance-based short-term cash incentive program and the grant of equity-based awards, which we balanced with guaranteed elements of compensation such as base salary and standard employee benefits. Our short-term cash incentive program was designed to reward executives for achieving pre-established financial performance objectives, product development milestones, and customer-related objectives that the compensation committee believed were critical to both our short-term success and the creation of long-term stockholder value. We also sought to align the interests of our executives with those of our stockholders by tying a meaningful portion of total compensation to increases in our value through the grant of performance and restricted stock units and stock options that provided a mix of time-based and performance-based vesting. In 2024, we delivered record worldwide sales growth, high customer satisfaction, and progressed our product development initiatives. We believe the compensation paid to our NEOs in 2024 reflects our strong pay-for-performance philosophy, and strikes the appropriate balance between retaining and motivating our executives, and limiting compensation-related risk. For additional information about our executive compensation program, please refer to the section of this Proxy Statement entitled “Compensation Discussion and Analysis” and the related compensation tables, notes and narrative discussion.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Tandem Diabetes Care | 13 | 2025 Proxy Statement |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
| Proposal 2 >> Say-on-Pay | |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
Proposal In accordance with Section 14A of the Securities Exchange Act of 1934, as amended, we are asking our stockholders to vote FOR the approval of the following resolution at the Annual Meeting: “RESOLVED, that our stockholders approve, on a non-binding, advisory basis, the compensation of our named executive officers, as described in the Compensation Discussion and Analysis, including the related compensation tables, notes and narrative discussion, in the Proxy Statement for our 2025 Annual Meeting of Stockholders.” Effect of Proposal The resolution above reflects a non-binding, advisory proposal. The approval or disapproval of this proposal by stockholders will not require our board of directors or our compensation committee to take any action regarding our executive compensation practices. The final determination of the compensation of our executive officers will continue to be made by our board of directors and our compensation committee. Our board of directors, however, values the opinions of our stockholders as expressed through their votes, as well as through other communications with us. Accordingly, although the resolution is non-binding, our board of directors and our compensation committee will carefully consider the outcome of this advisory vote, as well as stockholder feedback received from other communications, when making future executive compensation decisions. We expect that we will conduct our next say-on-pay vote at our 2026 annual meeting of stockholders. Required Vote The approval of this non-binding proposal requires the affirmative vote of a majority of the shares of our Common Stock present virtually or represented by proxy and entitled to vote on this proposal at the Annual Meeting. This proposal is considered a non-routine matter under applicable stock exchange rules. As a result, a bank, broker or other nominee may not vote without instructions on this matter, so there may be broker non-votes in connection with this proposal. Broker non-votes will have no effect on the outcome of this proposal. Abstentions will have the same effect as a vote against this proposal. If no contrary indication is made, returned proxies will be voted “For” this proposal.
LEGAL PROCEEDINGS WITH DIRECTORS AND EXECUTIVE OFFICERS
LEGAL PROCEEDINGS WITH DIRECTORS AND EXECUTIVE OFFICERS There are no legal proceedings related to any of the directors, director nominees, or executive officers which require disclosure pursuant to applicable SEC rules.
LEGAL PROCEEDINGS WITH DIRECTORS AND EXECUTIVE OFFICERS
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LEGAL PROCEEDINGS WITH DIRECTORS AND EXECUTIVE OFFICERS
| Corporate Governance | |
LEGAL PROCEEDINGS WITH DIRECTORS AND EXECUTIVE OFFICERS
Board Committees Our board of directors has three standing committees: the audit committee, the compensation committee, and the nominating and corporate governance (N&CG) committee. The privacy and security subcommittee, formed in 2021, is a standing subcommittee of the N&CG committee, focused on cybersecurity and data privacy oversight. In addition, from time to time, special committees and subcommittees may be established under the direction of our board of directors when necessary to address specific issues. For instance, as needed we have established a pricing committee to determine the offering price and other terms of various financings we have pursued. Each of the three standing committees and one subcommittee has a written charter that has been approved by our board of directors. A copy of each charter is available at https://investor.tandemdiabetes.com/corporate-governance/esg. However, the information contained on our website is not incorporated by reference in, or considered part of, this Proxy Statement and references in this Proxy Statement to our website are to inactive textual references only. The current members of each standing committee are as follows:
LEGAL PROCEEDINGS WITH DIRECTORS AND EXECUTIVE OFFICERS
| Name | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | Privacy and Security Subcommittee | | Rebecca Robertson | | ■ | | | | John Sheridan | | | | | | Dick Allen*+ | ■ | | ■ | | | Myoungil Cha | | ■ | | | | Peyton Howell | | Chair | | | | Joao Malagueira | ■ | | | | | Kathleen McGroddy-Goetz | | | Chair | ■ | | Rajwant Sodhi | | | ■ | Chair | | Christopher Twomey* | Chair | | | | | Number of Meetings | 4 | 7 | 4 | 4 |
LEGAL PROCEEDINGS WITH DIRECTORS AND EXECUTIVE OFFICERS
*Audit Committee Financial Expert + Dick Allen, who has served on our Board of Directors since 2007, will not be standing for reelection at our 2025 annual meeting of stockholders. Ms. Robertson will fill his vacancy on the audit committee effective as of the 2025 annual meeting. The Nominating and Corporate Governance Committee is expected to continue with Ms. McGroddy-Goetz (chair) and Mr. Sodhi as its sole members.
2024 COMPENSATION OVERVIEW
2024 COMPENSATION OVERVIEW We entered 2024 expecting our business to achieve: •Substantial increases in product shipments and sales, both in the United States and outside the United States; •Improvement in our operating and gross margins; •Positive cash flow from operations; and •Various goals relating to our customer satisfaction and multiple new product launches in the United States. When designing our 2024 executive compensation program, the Committee considered a number of factors, including the business objectives set forth above, the 2024 budget approved by our board of directors, and the intense competition for talent within the medical device and technology industries, both generally and within the geographic regions in which we operate. In addition, the Committee considered the continued importance of retaining and motivating our employees during a period in which we launched multiple new products. In making compensation decisions for 2024, the Committee focused on several key factors of our executive compensation program, as follows: •Stockholder feedback; •A peer group analysis performed by our independent compensation consultant; •Reviewing total NEO compensation compared to the 60th percentile of the peer group; •Allocating a meaningful proportion of the total cash compensation opportunity to our annual short-term cash incentive plan, under which executives are only eligible to receive cash bonuses upon the achievement of certain predetermined financial and operational performance goals; and •Allocating a meaningful proportion of the total compensation opportunity to longer-term incentive equity awards aligning with the interests of our stockholders, a portion of which are earned based upon the achievement of certain predetermined financial and relative total shareholder return goals over a three-year period. Each of these factors and their impacts on our 2024 executive compensation program are explained in more detail on the following pages.
KEY COMPENSATION GOVERNANCE ATTRIBUTES
| What We Do | | What We Don’t Do | | | ☑ | Pay-for-performance philosophy | ✗ | Employment agreements | | ☑ | Independent compensation consultant | ✗ | Excise tax gross up provisions | | ☑ | Compensation committee comprised solely of independent directors | ✗ | Guaranteed bonuses or equity awards | | ☑ | Comprehensive peer group analysis updated annually | ✗ | Employee stock plan evergreen provisions | | ☑ | “Double trigger” change-in-control benefits | ✗ | Hedging or pledging of our securities | | ☑ | Multiple financial and strategic measures used to determine cash incentive payouts to encourage strong performance across the business | ✗ | Repricing of options or issuance of discounted equity awards | | ☑ | Stock ownership guidelines applicable to executive officers and directors | | | | ☑ | Clawback policy applicable to cash bonus and equity incentive compensation | | | | ☑ | Significant majority of incentive compensation as a proportion of total compensation | | |
Compensation Committee
Compensation Committee The Committee is comprised solely of directors who qualify as “independent directors” under Nasdaq rules and also meet the heightened independence requirements under SEC rules. The Committee is primarily responsible for developing, reviewing and approving our executive compensation program, including the compensation arrangements that apply to our NEOs, and regularly reporting to our board of directors regarding the adoption of such programs. In particular, the Committee is responsible for overseeing our short-term cash and long-term equity incentive plans, including approving individual grants or awards thereunder (subject to the delegation of limited discretion to certain executive officers to approve individual grants or awards to employees below the executive level). The Committee is also responsible for approving performance goals and objectives that are relevant to the compensation of our executive officers and other key employees. The Committee evaluates the total compensation of our NEOs and other executives relative to available compensation information from companies in our industry that are similar to us based on a number of factors, including size and stage of growth. The Committee’s historical practice was to benchmark our total executive compensation to just above market at the 60th percentile of our then-current peer group, in order to compete in the market for talented executives. This philosophy was used in making compensation decisions that were implemented in the first half of 2024. In the second half of 2024, the Committee updated its philosophy to begin benchmarking our total executive compensation to the 50th percentile compared to our current peer group. This change was made to better reflect the continued maturation of our Company and compensation practices and in response to stockholder feedback. This change will be reflected in 2025 compensation decisions. However, benchmarking is only the starting point for the Committee’s determination of compensation, and it retains the discretion to adjust executive compensation based on a number of factors, including changes to our peer group, changing pay practices in our industry, executive retention concerns, individual executive performance, and overall Company performance. The Committee has not established any formal policies or guidelines for allocating between long-term and short-term compensation, or between cash and equity compensation. In determining the amount and mix of compensation elements and whether each element provides the correct incentives in light of our compensation objectives, the Committee relies on its judgment and experience, as well as significant feedback from its independent compensation consultant, rather than adopting a formulaic approach to compensation decisions.
Independent Compensation Consultants
Independent Compensation Consultants The Committee has sole authority to engage and retain independent compensation consultants and to directly oversee their work and compensation. WTW, a leading global advisory, broking and solutions company, has provided advisory services to the Committee since 2020. In August 2023, the Committee reengaged WTW as its independent compensation consultant to provide advisory services for 2024. These services included advising the Committee on the selection of an appropriate peer group of other publicly traded healthcare companies, collecting and analyzing compensation data from those companies, and performing an independent review of our compensation practices for our executive officers, as well as our non-employee
Independent Compensation Consultants
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Independent Compensation Consultants
| Compensation Discussion and Analysis | |
Independent Compensation Consultants
directors, as compared to the peer group. The Committee selected WTW based on its experience providing expert, strategic and research-driven executive compensation advice to help companies balance talent and governance risks while driving business performance. In addition, the Committee assessed whether work performed or advice rendered by WTW would raise any conflicts of interest and determined that there are no conflicts of interest with respect to this advisor.
Stockholder Advisory Vote on Executive Compensation
Stockholder Advisory Vote on Executive Compensation At our 2024 annual meeting of stockholders, 95.42% of our stockholders approved, on a non-binding, advisory basis, the compensation of our NEOs (i.e., our “say-on-pay” proposal). Our board of directors has adopted a policy providing for annual “say-on-pay” votes, which was approved by our stockholders in 2019. Our board of directors believes that allowing our stockholders to vote on our executive compensation practices on an annual basis aligns with market best practices and provides our stockholders with an important opportunity to provide meaningful feedback to us. A vote on the frequency of future “say-on-pay” votes (commonly known as a “say-on-frequency” vote) is required every six years, with such vote being held at our 2025 annual meeting of stockholders. We took the results from our prior years’ “say-on-pay” advisory votes and the feedback we received from stockholder engagements into consideration in making decisions regarding executive compensation for 2024 and 2025. As a result of stockholder feedback: •Our LTI program has become increasingly performance-based with an increasing emphasis on TSR. For example, in 2024, the Committee further increased the weighting of the PSU components for our non-CEO NEOs to be 50%, which aligns with our CEO’s plan and included a TSR metric for a portion of the NEOs’ PSU targets. •The Committee increased the weighting of the TSR metric for the PSU component of our CEO and other NEOs LTI plan. •In the second half of 2024, the Committee updated its philosophy to begin benchmarking our total executive compensation to the 50th percentile compared to relevant survey data rather than the 60th percentile used historically. The Committee will monitor and continue to evaluate our executive compensation program going forward in light of our stockholders’ views and our transforming business needs. The Committee expects to continue to consider the outcome of our “say-on-pay” votes and our stockholders’ views when making future compensation decisions for our NEOs.
Peer Group
Peer Group WTW was engaged by the Committee to develop a set of peer group companies for use as a point of comparison in benchmarking 2024 compensation for executive officers and non-employee directors. Data compiled from this peer group was used as a baseline reference by the Committee to assist it in establishing and assessing target total compensation levels, as well as target compensation levels for individual components of compensation, for our executive officers. The inputs used to identify the peer group companies reflect the Global Industry Classification Standard and the determination of such companies included review of companies traded on major U.S. stock exchanges, companies classified in the health care equipment and health care services industries, and revenue. Our worldwide revenue for 2023 was approximately $750 million, which included the effect of net sales deferrals of approximately $25 million. This deferral related to the accounting treatment associated with our Tandem Choice Program. The revenue for our 2024 peer group companies generally fell within a range of approximately 0.5x to 2.5x our projected 2024 revenue. However, not every company in our 2024 peer group satisfied each criterion and the Committee applied its judgment and experience in making final determinations for the companies included in the peer group. For example, Dexcom exceeded our target criteria range, but the Committee determined that it should be included in our 2024 peer group because of its strong similarities to our business operations and industry. In comparison to our 2023 peer group, two companies, Abiomed (ABMD) and Cardiovascular Systems (CSII), were not included in our 2024 peer group following their respective acquisitions by companies that were no longer viable peers. In addition, three new companies were added, LivaNova PLC, Inspire Medical Systems Inc. and AngioDynamics, to more closely align our Company’s revenue with the peer median and to maintain a sufficient number of peer companies, Based on the factors discussed above, our 2024 peer group was comprised of the 18 companies listed below:
Peer Group
| AngioDynamics (ANGO) | Glaukos (GKOS) | Inspire Medical Systems (INSP) | Nevro (NVRO) | | Artivion (AORT) | Globus Medical (GMED) | Insulet (PODD) | QuidelOrtho (QDEL) | | AtriCure (ATRC) | Haemonetics (HAE) | iRhythm Technologies (IRTC) | STAAR Surgical (STAA) | | CONMED (CNMD) | ICU Medical (ICUI) | LivaNova PLC (LIVN) | | | Dexcom (DXCM) | Inogen (INGN) | Masimo (MASI) | |
Peer Group
We consider these companies to be our peers solely for executive and director compensation comparison purposes.
SHORT-TERM CASH INCENTIVE PROGRAM
SHORT-TERM CASH INCENTIVE PROGRAM The purpose of this element is to reward executives for achieving pre-established financial and strategic goals that the Committee believes are critical to our short-term success and the creation of long-term stockholder value. Target short-term incentive opportunities are expressed as a percent of base salaries and reviewed as part of the Committee’s annual compensation analysis, which includes an assessment of each NEO’s title and level of responsibility, and perceived ability to impact overall Company results.
SHORT-TERM CASH INCENTIVE PROGRAM
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SHORT-TERM CASH INCENTIVE PROGRAM
| Compensation Discussion and Analysis | |
2024 SHORT-TERM CASH INCENTIVE PROGRAM TARGETS
2024 SHORT-TERM CASH INCENTIVE PROGRAM TARGETS In 2024, no changes were made to the short-term incentive bonus percentage targets for the NEOs compared to 2023. The 2024 base salary, target bonus percentage and target cash bonus amount for each NEO was generally shown to be in alignment with benchmark data at the 60th percentile, and is set forth in the table below:
2024 SHORT-TERM CASH INCENTIVE PROGRAM TARGETS
| Name | 2024 Base Salary | Target Bonus Percentage | Target Cash Bonus | | John Sheridan | $732,021 | 100% | $732,021 | | Leigh Vosseller | $450,203 | 60% | $270,122 | | Elizabeth Gasser | $450,203 | 60% | $270,122 | | Jean-Claude Kyrillos(1) | $450,203 | 60% | $143,572 | | Susan Morrison | $450,203 | 60% | $270,122 | | Mark Novara | $450,203 | 60% | $270,122 |
2024 SHORT-TERM CASH INCENTIVE PROGRAM TARGETS
1)Mr. Kyrillos joined Tandem as EVP & Chief Operating Officer in June 2024. Mr. Kyrillos’s bonus opportunity reflected in the table above is prorated and paid based on 2024 salary paid.
2024 SHORT-TERM CASH INCENTIVE PROGRAM SUMMARY AND RESULTS
2024 SHORT-TERM CASH INCENTIVE PROGRAM SUMMARY AND RESULTS The 2024 short-term cash incentive program is referred to as our 2024 Cash Bonus Plan. The 2024 Cash Bonus Plan was designed to reward plan participants for their contributions to our achievement of pre-established financial performance objectives, a product development objective, and a customer-related objective for 2024. Based on stockholder feedback, our plan design has three components with minimum and outperformance thresholds for each component of the plan. In addition, payments for outperformance achievements are capped at 200% for each component of the plan. The metrics were approved by the Committee as representative measures of overall corporate performance for the fiscal year in February 2024 and were consistent with the 2024 budget approved by our board of directors at that time. These metrics were determined to be appropriately rigorous as an interim step toward meeting our longer-term growth and financial objectives.
2024 Cash Bonus Plan Components and Weighting
2024 Cash Bonus Plan Components and Weighting The goals associated with each component of the 2024 Cash Bonus Plan were set at the beginning of the year, and the Company’s performance against these goals was reviewed with the Committee periodically throughout 2024. For the financial performance objectives, a minimum threshold of 90% of the revenue target had to be achieved for 50% bonus to be earned. For achievement of 110% or greater of the revenue target, up to 200% of the bonus may be earned. For the portion of the cash bonuses that relates to product development, multiple new product launches must commence in 2024. In addition, there is a predefined number of product launches serving as a minimum threshold for achieving 50% payout and outperformance threshold for achieving up to 200% payout under this component of the plan. For the portion of the cash bonuses that relates to customer satisfaction, an annual metric must be achieved with predefined metrics serving as a minimum threshold for achieving 50% payout and outperformance threshold for achieving up to 200% payout under this component of the plan.
2024 Cash Bonus Plan Components and Weighting
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2024 Cash Bonus Plan Components and Weighting
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2024 Cash Bonus Plan Components and Weighting
The following table shows each of the components of the 2024 Cash Bonus Plan, their respective weightings, our level of achievement for each component as determined by the Committee, and the calculation of the payout for each component:
2024 Cash Bonus Plan Components and Weighting
| Component | Weighting | Metrics | Level of Achievement Compared to Target | Weighted % of Total Payout | | Financial Performance Objective | 80% | Worldwide revenue target | 86.9% | 69.5% | | Product Development Objective | 10% | Commenced launch of 3 new products | 100% | 10% | | Customer Satisfaction | 10% | Actual customer satisfaction key performance indicator score compared to target | 100% | 10% | | Payout Percentage Under 2024 Cash Bonus Plan | | | | 89.5% |
2024 Cash Bonus Plan Components and Weighting
Based on these achievements, the Committee approved cash bonuses to our NEOs in March 2025 in the amounts set forth in the table below:
2024 Cash Bonus Plan Components and Weighting
| Name | Total 2024 Cash Bonus (1) | | John Sheridan | $650,021 | | Leigh Vosseller | $239,863 | | Elizabeth Gasser | $239,863 | | Jean-Claude Kyrillos(2) | $121,810 | | Susan Morrison | $239,863 | | Mark Novara | $239,863 |
2024 Cash Bonus Plan Components and Weighting
1)Bonus calculations are based on 2024 salaries paid. 2)Mr. Kyrillos joined Tandem as EVP & Chief Operating Officer in June 2024. Mr. Kyrillos’s bonus in the table above is prorated and paid based on 2024 salary paid. The performance-based cash bonuses paid to our NEOs pursuant to the 2024 Cash Bonus Plan were directly aligned with our financial performance and the achievement of critical strategic and operational objectives. Overall, the Committee believes the cash bonuses reflect our strong pay-for-performance philosophy.
LONG-TERM INCENTIVE EQUITY COMPENSATION PROGRAM
LONG-TERM INCENTIVE EQUITY COMPENSATION PROGRAM We leverage long-term incentive (LTI) equity as a component of our executive compensation program to align the interests of our executives with those of our stockholders by tying a meaningful portion of total compensation to increases in the value of our Company through the grant of equity-based awards. The executives’ interests are aligned with those of our stockholders because as the value of our Company increases over time, the value of the executives’ equity grants increases as well. The Committee also believes that granting equity awards that vest upon the achievement of long-term performance metrics supports our pay-for-performance philosophy, while granting equity awards that vest over time promotes the retention of our executives.
LONG-TERM INCENTIVE EQUITY COMPENSATION PROGRAM
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Long-Term Incentive Equity Progression
Long-Term Incentive Equity Progression Our board of directors and stockholders approved our 2023 Long-Term Incentive Plan, as amended (2023 Plan), which allows for the issuance of equity awards to our officers, directors and employees in the form of stock options, restricted stock awards, stock appreciation rights, and restricted stock units (RSUs). Since 2019, the Compensation Committee has continued to evolve the long-term incentive equity programs for our NEOs to reflect incentives aligned with the Company’s maturation and evolving governance practices in response to stockholder feedback. For example, in 2020, the Committee modified our NEO equity compensation model from issuing predetermined, fixed share-denominated option awards to predetermined, value-denominated equity awards. In 2021, we also began including PSUs, in addition to RSUs and options, and scaled the weighting of the PSUs in 2022. In 2023, we further increased the weighting of the PSU components for Mr. Sheridan's LTI plan and based on stockholder feedback, included a TSR metric compared to the Russell 3000 index for a portion of his PSU targets. In 2024, the Committee further increased the weighting of the PSU components for our non-CEO NEOs plan to align with our CEO’s plan, and included a TSR metric for a portion of the NEO’s PSU targets. In addition, in 2024 the Committee approved moving from a three-month trailing average to an average of the daily closing market price of our Common Stock for the 15-trading day period ending on the 5th trading day prior to the grant date for the Company’s grant calculation process, effective for equity incentive grants starting in May 2024. In 2025, the Committee increased the weighting of the TSR metric for the PSU component of our CEO and other NEOs LTI plan. The Committee plans to continue to evaluate and change its compensation practices when appropriate, while attracting, motivating and retaining top executive talent who are dedicated to the future growth and success of our business.
CEO Long-Term Incentive Equity Progression
CEO Long-Term Incentive Equity Progression The Committee considered these allocations appropriate, as performance-orientation is reflected in PSUs (which only have value if the Company achieves certain predetermined goals), while grants of RSUs allow the program to support retention throughout a full business cycle. When determining the type, number and value of equity awards to be granted to each executive, the Committee generally considers several factors, including WTW’s analysis based on data from our peer group companies, the role and level of responsibility of the executive, the executive’s tenure with us, survey information regarding the level of equity ownership by executives with similar titles and levels of responsibility, and other compensation survey data. The Committee also takes into account our achievement of significant milestones during the period prior to the grant date, such as revenue growth achievement, completing or receiving regulatory clearance or approval to commercialize products.
CEO Long-Term Incentive Equity Progression
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Outstanding Performance-Based Awards Summary
| Performance-Based Awards | Number of Performance Stock Units (#) | | Non-vested shares outstanding at December 31, 2021 | 25,674 | | Granted | 53,662 | | Vested (Earned) | — | | Forfeited | — | | Non-vested shares outstanding at December 31, 2022 | 79,336 | | Granted | 110,074 | | Vested (Earned) | — | | Forfeited | (25,888) | | Non-vested shares outstanding at December 31, 2023 | 163,522 | | Granted | 140,893 | | Vested (Earned)(1) | (60,391) | | Forfeited(1) | (10,823) | | Non-vested shares outstanding at December 31, 2024 | 233,201 |
Outstanding Performance-Based Awards Summary
1)PSUs granted in 2021 and 2022 were measured and earned as of December 31, 2024, and released in February 2025 (the vest date). PSUs forfeited in 2024 were related to the measurement of awards as of December 31, 2024.
2024 LTI Equity Compensation Program
2024 LTI Equity Compensation Program In May 2024, in light of the various factors described above, and based on data provided by WTW, the Committee approved equity award values to each of our NEOs pursuant to our 2023 Plan as set forth in the table below:
2024 LTI Equity Compensation Program
| Name | Aggregate Value of Performance Stock Units ($) | Aggregate Number of Performance Stock Units (#) | Aggregate Value of Restricted Stock Units ($) | Aggregate Number of Restricted Stock Units (#) | | John Sheridan | $3,566,378 | 71,787 | $3,566,378 | 71,787 | | Leigh Vosseller | $891,557 | 17,946 | $891,557 | 17,946 | | Jean-Claude Kyrillos(1) | $0 | — | $0 | — | | Elizabeth Gasser | $653,789 | 13,160 | $653,838 | 13,161 | | Susan Morrison | $653,789 | 13,160 | $653,838 | 13,161 | | Mark D. Novara(1) | $45,358 | 913 | $45,358 | 913 |
2024 LTI Equity Compensation Program
1)Mr. Kyrillos joined Tandem as EVP & Chief Operating Officer in June 2024. 2)Mr. Novara joined Tandem as EVP & Chief Commercial Officer in November 2023. His 2024 grant was prorated based on months of employment in 2023.
2024 LTI Equity Compensation Program
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2024 LTI Equity Compensation Program
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2024 LTI Equity Compensation Program
Each of the PSUs has a grant date fair value of $49.68 per share and vests based on a three-year criteria that correlate with the year-end 2026 goals for our gross margin improvement and TSR, relative to our peer group. The PSUs will be measured at the end of 2026 and released in 2027. Each of the RSUs has a grant date fair value of $49.68 per share and vests over a period of 36 months, with 33% of the shares vesting on the 15th of the month corresponding to the anniversary of the grant date, and the remaining 67% of the shares vesting in equal quarterly installments over the remaining 24 months, subject to continued employment and the terms of the 2023 Plan. When establishing the plan design for the PSUs issued as part of the Company’s 2024 LTI equity program, the Committee identified that delivering gross margin growth was a key driver of long-term stockholder value, and in support of the Company’s additional priorities to improve operating margin. We consider the gross margin targeted to be commercially sensitive, and so are not disclosing the forward-looking goal due to risk of competitive harm, but will disclose the number retrospectively following the close of the performance period. The PSU component of our 2024 LTI plan is as follows:
2024 LTI Equity Compensation Program
| Target Metric | CEO Weighting | Other NEO Weighting | | Gross margin in fiscal year 2026 | 60% | 60% | | TSR performance compared to the Russell 3000 index in the three-year period between 2024 and 2026 | 40% | 40% |
2024 LTI Equity Compensation Program
Performance determination for CEO and all other NEOs under the 2024 LTI plan is as follows:
2024 LTI Equity Compensation Program
| Gross Margin in the fiscal year ending 2026 | Payout Factor* | | Maximum | 200% | | Target 2026 Gross Margin | 100% | | Threshold | 50% | | Below Threshold | —% |
2024 LTI Equity Compensation Program
*The payout factor is prorated on a straight-line basis (i.e., by linear interpolation) for performance that falls between the performance targets set forth in the table above. The payout factor cannot exceed 200%.
2024 LTI Equity Compensation Program
| TSR performance compared to the Russell 3000 index in the three-year period between 2024 and 2026 | Performance as a Percent to Target | Payout Factor* | | Maximum | 75th percentile rank | 200% | | Tandem Diabetes Care TSR Performance | 50th percentile rank | 100% | | Threshold | 25th percentile rank | 50% | | Below Threshold | Less than 25th percentile rank | —% |
2024 LTI Equity Compensation Program
*The payout factor is prorated on a straight-line basis (i.e., by linear interpolation) for performance that falls between the performance targets set forth in the table above. The payout factor cannot exceed 200%.
STOCK INCENTIVE PLANS
STOCK INCENTIVE PLANS As of December 31, 2024, the number of shares reserved for issuance, number of shares issued, number of shares underlying outstanding stock options, weighted-average exercise price of outstanding options, and number of shares remaining available for future issuance under our 2013 Stock Incentive Plan (2013 Plan) and 2023 Plan are set forth in the table below. For fiscal year 2024, our three-year average burn rate was 3.0% calculated in accordance with the value adjusted burn rate methodology. In 2023 and 2024, we made changes to our grant practices to further reduce our use of shares. Historically, we had granted incentive equity to employees at all levels of the organization. In alignment with benchmark practices, we ceased granting incentive equity to certain employee levels in the organization. This change in practice is also in support of our goal to reduce stock-based compensation as a percent of sales. As of December 31, 2024, the number of shares reserved for issuance, number of shares issued, and number of shares remaining available for future issuance under our 2013 Employee Stock Purchase Plan (ESPP), are also set forth in the table. We do not have any stock incentive plans that have not been approved by our stockholders.
STOCK INCENTIVE PLANS
| Name | Number of Shares Reserved for Issuance | Number of Shares Issued | Number of Shares Underlying Outstanding Awards | Weighted-Average Exercise Price of Outstanding Options (per share) | Number of Shares Remaining Available for Future Issuance | | 2013 Plan | 11,725,694 | 6,408,784 | 4,045,716 | $53.65 | — | | 2023 Plan | 5,602,184 | 520,399 | 3,219,610 | N/A | 1,862,175 | | ESPP | 5,264,725 | 2,581,103 | — | N/A | 2,683,622 |
2013 Stock Incentive Plan
2013 Stock Incentive Plan Our 2013 Plan was originally approved by our board of directors and our stockholders in November 2013 and was amended in May 2018 and May 2020. There were no shares of our Common Stock reserved for issuance under our 2013 Plan as of December 31, 2024. As of December 31, 2024, 4,045,716 shares of our Common Stock were underlying outstanding awards under our 2013 Plan.
2013 Stock Incentive Plan
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2013 Stock Incentive Plan
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2023 Long-Term Incentive Plan
2023 Long-Term Incentive Plan Our board of directors adopted, and in May 2023 our stockholders approved, our 2023 Plan. Our 2023 Plan provides us flexibility with respect to our ability to attract and retain the services of qualified employees, officers, directors, consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of our business depends, and to provide additional incentives to such persons to devote their effort and skill to the advancement of our Company, by providing them an opportunity to participate in the ownership of our Company and thereby have an interest in its success and increased value. In April 2024, our board of directors adopted, and in May 2024 our stockholders approved, an amendment to our 2023 Plan. Our board of directors believes that granting long-term incentives in the form of equity-based awards is crucial for promoting our long-term financial growth and stability, thereby enhancing stockholder value.
EMPLOYMENT AGREEMENTS
EMPLOYMENT AGREEMENTS We have not entered into employment agreements detailing any guaranteed term of employment or future compensation, beyond their offer letter for employment, with any of our current executive officers.
EMPLOYMENT SEVERANCE AGREEMENTS
EMPLOYMENT SEVERANCE AGREEMENTS Our board of directors has approved employment severance agreements with all of our senior management personnel, including each of our NEOs. Our board of directors believes it is important to provide our executive officers with severance benefits under limited circumstances to provide them with enhanced financial security and sufficient incentive and encouragement to remain employed by us in the event of a potential change-in-control transaction. Under the terms of each of the severance agreements, if within three months before or 12 months following a change of control (as defined in the severance agreements), the executive officer’s employment is terminated as a result of (i) an involuntary termination or (ii) a resignation for good reason (each as defined in the severance agreements), then the executive will continue to receive salary at the salary amount in effect at the time of such termination (less applicable withholdings and deductions) for the applicable severance period beginning immediately following such termination, as well as the executive’s target bonus for the year in which the termination occurs. The executive will also vest in and have the right to exercise all outstanding options, restricted stock awards and stock appreciation rights (SARs) (in each case, as applicable) that were unvested as of the date of such termination. Additionally, all of our repurchase rights with respect to any vested and unvested restricted stock will lapse and any right to repurchase any of our Common Stock will terminate. If, within 12 months following a change of control, the executive officer’s employment is terminated as a result of voluntary resignation, termination for cause, disability or death, then the executive officer will not be entitled to receive severance change of control benefits except for those as may be established under our then-existing severance and benefit plans and practices or under other written agreements between us and such executive officer.
EMPLOYMENT SEVERANCE AGREEMENTS
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EMPLOYMENT SEVERANCE AGREEMENTS
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EMPLOYMENT SEVERANCE AGREEMENTS
Under the terms of each of the severance agreements, upon the termination of the executive officer’s employment for any reason, we will pay the executive: •Any unpaid base salary due for periods prior to the termination date; and •All expenses reasonably and necessarily incurred and submitted on proper expense reports in connection with our business before the termination date. The severance agreements are substantially identical for each of our current NEOs except that the severance period for Mr. Sheridan is 24 months and the severance period for each of the other NEOs is 18 months. The benefits payable under the severance agreements may be immediately terminated in certain circumstances, including the unauthorized use by an executive officer of our material confidential information or any prohibited or unauthorized competitive activity undertaken by an executive officer.
EMPLOYMENT SEVERANCE AGREEMENTS
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EMPLOYMENT SEVERANCE AGREEMENTS
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EMPLOYMENT SEVERANCE AGREEMENTS
Executive Compensation Tables
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table provides a summary of the compensation of our NEOs for the fiscal years ended December 31, 2024, 2023, and 2022, as applicable:
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | John Sheridan President and Chief Executive Officer | 2024 | $732,021 | $7,132,756 | $— | $650,021 | $11,440 | $8,526,238 | | | 2023 | $710,700 | $3,663,250 | $— | $266,513 | $11,140 | $4,651,603 | | | 2022 | $710,700 | $3,452,202 | $1,700,348 | $359,418 | $155,847 | $6,378,515 | | Leigh Vosseller Executive Vice President, Chief Financial Officer and Treasurer | 2024 | $450,203 | $1,783,115 | $— | $239,863 | $6,900 | $2,480,081 | | | 2023 | $437,091 | $707,727 | $— | $98,345 | $7,946 | $1,251,109 | | | 2022 | $437,091 | $732,050 | $360,598 | $132,628 | $95,714 | $1,758,081 | | Elizabeth Gasser Executive Vice President, Chief Strategy and Product Officer | 2024 | $450,203 | $1,307,627 | $— | $239,863 | $7,778 | $2,005,471 | | | 2023 | $437,091 | $707,727 | $— | $98,345 | $7,478 | $1,250,641 | | | 2022 | $437,091 | $732,050 | $360,598 | $132,628 | $37,110 | $1,699,477 | | Jean-Claude Kyrillos(1) Executive Vice President, Chief Operating Officer | 2024 | $239,286 | $2,063,888 | $— | $121,810 | $6,616 | $2,431,600 | | Susan Morrison Executive Vice President, Chief Administrative Officer | 2024 | $450,203 | $1,307,627 | $— | $239,863 | $7,778 | $2,005,471 | | | 2023 | $437,091 | $707,727 | $— | $98,345 | $2,770 | $1,245,933 | | | 2022 | $437,091 | $732,050 | $360,598 | $132,628 | $105,040 | $1,767,407 | | Mark Novara(2) Executive Vice President, Chief Commercial Officer | 2024 | $450,203 | $90,716 | $— | $239,863 | $21,963 | $802,745 | | | 2023 | $57,480 | $2,547,354 | $— | $11,348 | $100,773 | $2,716,955 |
SUMMARY COMPENSATION TABLE
1)Mr. Kyrillos joined the Company in June 2024. 2)Amounts listed reflect the grant date fair value of stock awards granted during 2024, 2023 and 2022 calculated in accordance with FASB ASC 718, including the value of granted restricted stock units as well as performance stock units not yet deemed earned. In particular, amounts in the “Stock Awards” column include the grant date fair value of PSUs granted to our named executive officers, assuming that the target level of the Corporate Performance Metric was probable of being achieved on the date of grant. 3)Amounts listed reflect the grant date fair value of certain options awarded to each of our NEOs calculated in accordance with FASB ASC 718 (without regard to estimates of forfeitures related to service-based vesting). Information regarding assumptions made in valuing the stock option awards can be found in Note 8 of the “Notes to Financial Statements” included in Item 8 of our Annual Report. The amounts disclosed do not necessarily reflect the dollar amounts of compensation actually realized, or that may be realized, by our NEOs with respect to the options. 4)Amounts listed reflect the amounts earned and paid under the cash bonus plan for the respective years stated, based on our achievement related to certain pre-established financial performance objectives, product development milestones and customer-related objectives for 2024, 2023 and 2022. Our 2024 Cash Bonus Plan is described in the section of this Proxy Statement entitled “Compensation Discussion and Analysis - 2024 Short-Term Cash Incentive Program Summary and Results.” 5)During fiscal year 2024, Mr. Novara participated in our incentive award trip for selected members of our executive and sales teams. The amount listed for Mr. Novara includes the incremental costs to us of meals, entertainment and other expenses of $10,513, as well as statutory tax with respect to the imputed income associated with the trip of $4,550. The remaining amounts for each of our NEOs reflect the value of sign-on bonuses, premiums paid by us for group term life insurance for the benefit of our NEOs and matching contributions on the NEO’s behalf under our 401(k) Plan as listed in the table below.
SUMMARY COMPENSATION TABLE
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SUMMARY COMPENSATION TABLE
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SUMMARY COMPENSATION TABLE
| Name | Other Travel Expenses | Group Term Life Insurance | 401(k) Employer Contributions | 2024 All Other Compensation | | John Sheridan | $— | $4,540 | $6,900 | $11,440 | | Leigh Vosseller | $— | $— | $6,900 | $6,900 | | Elizabeth Gasser | $— | $878 | $6,900 | $7,778 | | Jean-Claude Kyrillos | $— | $2,079 | $4,537 | $6,616 | | Susan Morrison | $— | $878 | $6,900 | $7,778 | | Mark Novara | $15,063 | $— | $6,900 | $21,963 |
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS The following table presents, for each of our NEOs, information concerning grants of plan-based awards made during the fiscal year ended December 31, 2024. This information supplements the information about these awards set forth in the Summary Compensation Table above.
GRANTS OF PLAN-BASED AWARDS
| Name | Grant Date(3) | Estimated Possible Payouts Under 2024 Cash Bonus Plan($)(1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(#)(2) | | | All Other Stock Awards: Number of RSUs Granted (#)(5) | Grant Date Fair Value of Stock Awards ($)(6) | | | | Minimum(4) | Target | Maximum | Threshold | Target | Maximum | | | | John Sheridan | | $— | $732,021 | $1,464,042 | | | | | | | | 5/23/2024 | | | | 35,893 | 71,787 | 143,574 | 71,787 | $7,132,756 | | Leigh Vosseller | | $— | $270,122 | $540,244 | | | | | | | | 5/23/2024 | | | | 8,973 | 17,946 | 35,892 | 17,946 | $1,783,115 | | Elizabeth Gasser | | $— | $270,122 | $540,244 | | | | | | | | 5/23/2024 | | | | 6,580 | 13,160 | 26,320 | 13,161 | $1,307,627 | | Jean-Claude Kyrillos(7) | | $— | $143,572 | $287,144 | | | | | | | | 7/15/2024 | | | | — | — | — | 43,634 | $2,063,888 | | Susan Morrison | | $— | $270,122 | $540,244 | | | | | | | | 5/23/2024 | | | | 6,580 | 13,160 | 26,320 | 13,161 | $1,307,627 | | Mark Novara | | $— | $270,122 | $540,244 | | | | | | | | 5/23/2024 | | | | 456 | 913 | 1,826 | 913 | $90,716 |
GRANTS OF PLAN-BASED AWARDS
1)Amounts listed reflect the target and maximum amount of payouts under the 2024 Cash Bonus Plan. The 2024 Cash Bonus Plan was designed to reward plan participants for their individual contributions to our achievement of pre-established financial performance objectives and significant product development milestones and customer-related objectives for 2024. The actual amounts paid to our NEOs pursuant to the plan are set forth in the Summary Compensation Table above. For more information about the terms of the 2024 Cash Bonus Plan, including the calculation of the actual amounts paid pursuant to the plan, please see the section of this Proxy Statement entitled “Compensation Discussion and Analysis - 2024 Short-Term Cash Incentive Program Summary and Results.” 2)For more information about PSU equity awards granted in 2024, please see the section of this Proxy Statement entitled “Compensation Discussion and Analysis - 2024 LTI Equity Compensation Program.” 3)Dates in this column reflect the effective grant date for the award. The approval date for all NEOs except Mr. Kyrillos was on May 23, 2024. The approval date for Mr. Kyrillos’s was June 9, 2024, which approval was made in conjunction with his offer letter. 4)Each of the three components of the 2024 Cash Bonus Plan may be earned independent of one another. If the Company does not achieve any portion of the Cash Bonus Plan, no payouts will be made unless the Compensation Committee, in its sole discretion, determines that there are other factors that merit consideration in the determination of bonus awards, which may be determined on an individual basis. 5)Amounts listed reflect the RSU awards granted to our NEOs in 2024. Each of these RSUs vest over a period of 36 months, with 33% of the shares vesting on the date that is 12 months following the date of grant, and the remaining 67% of the shares vesting in equal quarterly installments over the remaining 24 months. For more information about equity awards granted in 2024, please see the section of this Proxy Statement entitled “Compensation Discussion and Analysis - 2024 LTI Equity Compensation Program.” 6)Amounts listed reflect the grant date fair value of the stock awards (RSUs and PSUs) granted to each of our NEOs in 2024, calculated in accordance with FASB ASC 718. 7)Mr. Kyrillos joined the Company in June 2024. The bonus amounts reflected above are prorated based on his start date. Mr. Kyrillos’s stock award was approved by the Compensation Committee following a recommendation based on benchmark data for his position provided by WTW, our independent compensation consultant.
GRANTS OF PLAN-BASED AWARDS
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END The following two tables summarize the outstanding RSU, PSU and stock option awards held by our NEOs as of December 31, 2024:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
| | Restricted Stock Units | | | Performance Stock Units | | | Name | Grant Date(1) | Number of Shares That Have Not Vested(#) | Market Value of Shares That Have Not Vested($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested(#) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested($)(3) | | John Sheridan | 5/18/2021 | 1,585 | $57,092 | 6,733 | $242,523 | | | 5/25/2022 | 4,473 | $161,117 | 26,047 | $938,213 | | | 5/25/2023 | 32,830 | $1,182,537 | 65,659 | $2,365,037 | | | 5/23/2024 | 71,787 | $2,585,768 | 71,787 | $2,585,768 | | Leigh Vosseller | 5/18/2021 | 325 | $11,707 | 1,380 | $49,708 | | | 5/25/2022 | 948 | $34,147 | 5,523 | $198,938 | | | 5/25/2023 | 9,019 | $324,864 | 8,883 | $319,966 | | | 5/23/2024 | 17,946 | $646,415 | 17,946 | $646,415 | | Elizabeth Gasser | 5/18/2021 | 325 | $11,707 | 1,380 | $49,708 | | | 5/25/2022 | 948 | $34,147 | 5,523 | $198,938 | | | 5/25/2023 | 9,019 | $324,864 | 8,883 | $319,966 | | | 5/23/2024 | 13,161 | $474,059 | 13,160 | $474,023 | | Jean-Claude Kyrillos | 7/15/2024 | 43,634 | $1,571,697 | N/A | N/A | | Susan Morrison | 5/18/2021 | 325 | $11,707 | 1,380 | $49,708 | | | 5/25/2022 | 948 | $34,147 | 5,523 | $198,938 | | | 5/25/2023 | 9,019 | $324,864 | 8,883 | $319,966 | | | 5/23/2024 | 13,161 | $474,059 | 13,160 | $474,023 | | Mark Novara | 12/15/2023 | 59,317 | $2,136,598 | N/A | N/A | | | 5/23/2024 | 913 | $32,886 | 913 | $32,886 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
1)RSUs granted in 2021 vest over a 48-month period from the date of grant as follows: 25% shall vest 12 months from the grant date, and the remaining balance shall vest in 12 quarterly installments thereafter. RSUs granted in 2022, 2023, and 2024 vest over a 36-month period from the date of grant as follows: 33% shall vest 12 months from the grant date, and the remaining balance shall vest in eight quarterly installments thereafter. 2)The market value of unvested RSU awards as of December 31, 2024 is calculated by multiplying the number of shares subject to such awards by the closing price of our Common Stock on December 31, 2024, which was $36.02. 3)Represents PSUs granted, the market value of which is calculated by multiplying the number of shares subject to such awards by the closing price of our Common Stock on December 31, 2024, which was $36.02. PSUs granted in 2021 and 2022 had a measurement date of December 31, 2024 and vested in 2025. PSUs granted in 2023 have a measurement date of December 31, 2025, and PSUs granted in 2024 have a measurement date of December 31, 2026.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
| Compensation Discussion and Analysis | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
| | Option Awards(1) | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable(#) | Number of Securities Underlying Unexercised Options Unexercisable(#) | Option Exercise Price ($)(2) | Option Expiration Date(3) | | John Sheridan | 5,639 | — | $119.20 | 5/21/2025 | | | 8,460 | — | $69.50 | 2/16/2026 | | | 63,000 | — | $18.86 | 6/14/2028 | | | 105,000 | — | $51.50 | 2/15/2029 | | | 105,000 | — | $48.36 | 2/25/2029 | | | 30,272 | — | $82.34 | 5/27/2030 | | | 34,698 | 4,035(4) | $81.63 | 5/18/2031 | | | 34,692 | 5,596(5) | $65.28 | 5/25/2032 | | Leigh Vosseller | 2,711 | — | $119.20 | 5/21/2025 | | | 3,390 | — | $69.50 | 2/16/2026 | | | 6,780 | — | $23.00 | 12/16/2026 | | | 2,340 | — | $9.00 | 5/17/2027 | | | 15,160 | — | $18.86 | 6/14/2028 | | | 105,000 | — | $51.50 | 2/15/2029 | | | 15,012 | — | $82.34 | 5/27/2030 | | | 7,113 | 827(4) | $81.63 | 5/18/2031 | | | 7,357 | 1,187(5) | $65.28 | 5/25/2032 | | Elizabeth Gasser | 20,717 | — | $89.54 | 2/18/2030 | | | 8,314 | — | $82.34 | 5/27/2030 | | | 7,113 | 827(4) | $81.63 | 5/18/2031 | | | 7,357 | 1,187(5) | $65.28 | 5/25/2032 | | Susan Morrison | 5,639 | — | $119.20 | 5/21/2025 | | | 8,460 | — | $69.50 | 2/16/2026 | | | 16,920 | — | $23.00 | 12/16/2026 | | | 20,000 | — | $18.86 | 6/14/2028 | | | 105,000 | — | $51.50 | 2/15/2029 | | | 15,012 | — | $82.34 | 5/27/2030 | | | 7,113 | 827(4) | $81.63 | 5/18/2031 | | | 7,357 | 1,187(5) | $65.28 | 5/25/2032 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
1)The company ceased granting stock options as part of its long-term incentive plan in 2022. As a result, Messrs. Novara and Kyrillos, who were hired in 2023 and 2024, respectively, are excluded from the table above. 2)Stock options are granted with an exercise price equal to the closing price of our Common Stock on the grant date. 3)The expiration date of the option awards is ten years from the date of grant. 4)Amount listed reflects options to purchase shares of our Common Stock that were granted on May 18, 2021 and remained unvested as of December 31, 2024. The shares underlying these options shall vest as to 25% of the shares on May 18, 2022, the first anniversary of the grant date, and thereafter the remaining shares vest in 36 equal monthly installments until May 18, 2025, provided that the option holder continues to provide services to us through such dates. 5)Amount listed reflects options to purchase shares of our Common Stock that were granted on May 25, 2022 and remained unvested as of December 31, 2024. The shares underlying these options shall vest as to 33% of the shares on May 15, 2023, and thereafter the remaining shares vest in 24 equal monthly installments until May 15, 2025, provided that the option holder continues to provide services to us through such dates.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
| Compensation Discussion and Analysis | |
OPTION EXERCISES AND STOCK VESTED AT FISCAL YEAR END
OPTION EXERCISES AND STOCK VESTED AT FISCAL YEAR END
OPTION EXERCISES AND STOCK VESTED AT FISCAL YEAR END
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | John Sheridan | — | $— | 25,403 | $1,923,485 | | Leigh Vosseller | — | $— | 7,925 | $514,825 | | Elizabeth Gasser | — | $— | 7,500 | $512,161 | | Jean-Claude Kyrillos | — | $— | — | $— | | Susan Morrison | — | $— | 8,802 | $514,825 | | Mark Novara | — | $— | 18,926 | $968,630 |
OPTION EXERCISES AND STOCK VESTED AT FISCAL YEAR END
1)In accordance with applicable SEC rules, the amounts in this column reflect the aggregate dollar amount realized upon exercise of the options, determined by taking the difference between the market price of our Common Stock at exercise and the exercise price of the options.
POTENTIAL PAYMENTS UPON CHANGE OF CONTROL
POTENTIAL PAYMENTS UPON CHANGE OF CONTROL The following table summarizes the potential payments and benefits that would have been paid or provided to our NEOs if a termination of employment had occurred on December 31, 2024, provided that such termination was a result of an involuntary termination or a resignation for good reason and occurred within three months before or 12 months following a change of control. The amounts reflected in the table are in addition to amounts that would have been payable for accrued but unpaid base salary and reimbursement of expenses, all of which would be paid upon termination of employment for any reason. Except as noted above, no payments or benefits will be provided to our NEOs in connection with a termination of employment as a result of a voluntary resignation or a termination for cause.
POTENTIAL PAYMENTS UPON CHANGE OF CONTROL
| | Type of Payment or Benefit: | | | | Name | Severance(1) | Accelerated Stock Options(2) | Accelerated RSUs(2) | | John Sheridan | $2,928,084 | $— | $10,332,229 | | Leigh Vosseller | $1,080,487 | $— | $2,276,068 | | Elizabeth Gasser | $1,080,487 | $— | $1,931,320 | | Jean-Claude Kyrillos | $1,080,487 | $— | $1,571,697 | | Susan Morrison | $1,080,487 | $— | $1,931,320 | | Mark Novara | $1,080,487 | $— | $2,202,371 |
POTENTIAL PAYMENTS UPON CHANGE OF CONTROL
1)Amount listed reflects 18 months’ worth of base salary plus target bonus for the year ended December 31, 2024 for each of Ms. Vosseller, Ms. Gasser, Ms. Morrison, Mr. Kyrillos and Mr. Novara, and 24 months’ worth of base salary plus target bonus for the year ended December 31, 2024 for Mr. Sheridan. 2)Amount listed reflects acceleration of stock options and RSUs (including PSUs), based on the closing price of our Common Stock on December 31, 2024 of $36.02. As of December 31, 2024, all unvested stock options had exercise prices above the closing price of $36.02.
POTENTIAL PAYMENTS UPON CHANGE OF CONTROL
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POTENTIAL PAYMENTS UPON CHANGE OF CONTROL
| Compensation Discussion and Analysis | |
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE In accordance with applicable SEC rules, we determined that the 2024 annualized total compensation of the median compensated employee of all our employees who were employed as of November 1, 2024, other than our Chief Executive Officer at that time, Mr. Sheridan, was $107,111. Mr. Sheridan’s 2024 annualized total compensation was $8,526,238. Among other items, total compensation includes base salary, cash incentive awards and equity-based compensation awards (valued based on the grant date fair value of awards granted during 2024), calculated as of December 31, 2024. As calculated in this manner, Mr. Sheridan’s 2024 annual total compensation was approximately 80 times that of the 2024 annualized total compensation of our median compensated employee. To identify the median compensated employee consistent with SEC rules, we used base salary for 2024 as a measure of annual total compensation. As of November 1, 2024, we had 2,435 full-time employees who were employed and not on leaves of absence, consisting of 2,314 U.S. employees, and 121 employees located in Canada and Europe. As permitted by applicable SEC rules, we did not include any of our 121 employees located outside the United States, consisting of less than 5% of our total employee population, pursuant to the de minimis exemption for foreign employees. Except for these foreign employees, we did not exclude from the calculation of the median employee any other employees pursuant to any other permitted exemptions. We did not apply any cost-of-living adjustments as part of the calculation. We believe the pay ratio is a reasonable estimate calculated in a manner consistent with applicable SEC rules based on our internal payroll and employment records and the methodology described above. However, because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies (including other companies within our peer group) may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
PAY RATIO DISCLOSURE
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PAY RATIO DISCLOSURE
| Compensation Discussion and Analysis | |
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE The table below sets forth key pay versus performance metrics for the past four fiscal years. Compensation Actually Paid (CAP) does not represent the value of cash and shares of our Common Stock received by NEOs during the year, but rather is an amount calculated under SEC rules and includes year-over-year changes in the value of unvested equity-based awards. As a result of the calculation methodology required by the SEC, amounts under the caption CAP below differ from compensation actually received by our NEOs and the compensation decisions described in the “Compensation Discussion and Analysis” section above.
PAY VERSUS PERFORMANCE TABLE
| | | | | | Value of initial fixed $100 investment based on: | | | | | Year | Summary Compensation Table Total for PEO(1) | CAP to PEO(1)(3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average CAP to Non-PEO NEOs(2)(3) | Total Shareholder Return(4) | Peer Group Total Shareholder Return TSR(4) | Net Income (loss) ($ in millions)(5) | Sales ($ in millions)(6) | | 2024 | $8,526,238 | $6,793,928 | $1,945,074 | $1,752,852 | $60.43 | $105.42 | $(96.0) | $940.2 | | 2023 | $4,651,603 | $1,510,100 | $1,497,536 | $1,086,227 | $49.62 | $106.34 | $(222.6) | $747.7 | | 2022 | $6,378,515 | $(8,343,937) | $1,746,125 | $(3,175,063) | $75.41 | $99.81 | $(94.6) | $801.2 | | 2021 | $5,739,882 | $16,412,581 | $1,616,639 | $5,058,736 | $252.51 | $125.43 | $15.6 | $702.8 | | 2020 | $3,790,739 | $11,403,151 | $1,956,362 | $6,027,149 | $160.51 | $130.04 | $(34.4) | $498.8 |
PAY VERSUS PERFORMANCE TABLE
1)John F. Sheridan, our Chief Executive Officer, was our Principal Executive Officer (PEO) for each year reported. 2)The non-PEO NEOs, for each year reported were as follows: • 2024: Elizabeth A. Gasser, Jean-Claude Kyrillos, Susan M. Morrison, Mark D. Novara and Leigh A. Vosseller • 2023: David B. Berger, Elizabeth A. Gasser, Brian B. Hansen, Susan M. Morrison, Mark D. Novara and Leigh A. Vosseller • 2022: David B. Berger, Elizabeth A. Gasser, Brian B. Hansen, Susan M. Morrison and Leigh A. Vosseller • 2021: David B. Berger, Elizabeth A. Gasser, Brian B. Hansen, Susan M. Morrison and Leigh A. Vosseller • 2020: David B. Berger, Brian B. Hansen, Susan M. Morrison and Leigh A. Vosseller 3)SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine CAP as reported in the table above. For purposes of the equity award adjustments shown below, no equity awards were cancelled due to a failure to meet vesting conditions. The following table details the adjustments that were made to determine the CAP for the PEO and the average for non-PEO NEOs in 2024:
PAY VERSUS PERFORMANCE TABLE
| Year | Executive(s) | Summary Compensation Table Total | Deduct: Stock Awards Granted in Year | Add: Year-End Fair Value of Unvested Equity Awards Granted in Year* | Add: Change in Year-End Fair Value of Unvested Equity Awards Granted in Prior Years | Add: Change in Year-End Fair Value of Equity Awards Granted in Prior Years Which Vested in Year | CAP | | 2024 | PEO | $8,526,238 | $(7,132,756) | $5,171,535 | $(638,433) | $867,344 | $6,793,928 | | | Non-PEO NEOs | $1,945,074 | $(1,310,595) | $965,293 | $(31,191) | $184,271 | $1,752,852 |
PAY VERSUS PERFORMANCE TABLE
*The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. 4)For the relevant fiscal year, represents the cumulative TSR of our Common Stock and the NASDAQ Health Care Index (IXHC) at the end of each fiscal year. TSR is determined based on the value of an initial fixed investment of $100 on December 31, 2019. 5)The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. 6)As required by Item 402(v) of Regulation S-K, we have determined that Sales is the Company-Selected Measure.
PAY VERSUS PERFORMANCE TABLE
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PAY VERSUS PERFORMANCE TABLE
| Compensation Discussion and Analysis | |
Performance Measures Used to Link Company Performance and Compensation Actually Paid to the NEOs
Performance Measures Used to Link Company Performance and Compensation Actually Paid to the NEOs The most important financial performance measures used by the company to link CAP to the company’s NEOs for the most recently completed fiscal year to the company’s performance are set forth below. Please see the section entitled “Compensation Discussion and Analysis” for additional information regarding the metrics used in the Company’s executive compensation program.
Performance Measures Used to Link Company Performance and Compensation Actually Paid to the NEOs
| Most Important Performance Measures Used to Link CAP to Company Performance: | | Sales | | Gross Margin | | Adjusted EBITDA Margin* | | Regulatory submission timing | | Customer satisfaction |
Performance Measures Used to Link Company Performance and Compensation Actually Paid to the NEOs
*EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP financial measures. GAAP refers to accounting principles generally accepted in the United States of America. EBITDA is defined as net income (loss) excluding income taxes, interest and other non-operating items and depreciation and amortization. Adjusted EBITDA further adjusts to exclude non-cash stock-based compensation expense, acquired in-process research and development, adjustments for the Tandem Choice program and other one time or non-recurring items. In particular, from the launch of Tandem Choice Program in September 2022 through the end in February 2024, the Company deferred a portion of sales for each eligible t:slim X2 pump shipped in the United States. When a customer elected to participate in Tandem Choice, the Company recognized the existing deferral, incremental fees received and the associated costs of providing the new insulin pump at the time of fulfillment. The timing of recognition was based on either (a) an affirmative election to participate in Tandem Choice or (b) expiration of the right to participate at program expiration, provided all obligations under the Tandem Choice program were satisfied. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by non-GAAP sales (GAAP sales excluding adjustments for Tandem Choice program). Please see the section entitled “Compensation Discussion and Analysis” for additional information regarding the metrics used in the Company’s executive compensation program. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.
DIRECTOR COMPENSATION OVERVIEW
DIRECTOR COMPENSATION OVERVIEW Our director compensation program is intended to provide a total compensation package that enables us to attract and retain diverse, qualified and experienced individuals to serve as our directors, and to align our directors’ interests with those of our stockholders.
DIRECTOR COMPENSATION PROGRAM FOR 2024
DIRECTOR COMPENSATION PROGRAM FOR 2024 During 2024, our non-employee directors earned a cash retainer for service on our board of directors and an additional amount for service on each committee of which the director was a member. The Chair of our board of directors earned a higher annual retainer for such service (which was in lieu of, and not in addition to, director annual retainers), and the chair of each committee earned a higher annual retainer for such service (which was in lieu of, and not in addition to, member annual retainers). The annual cash retainers for directors and committee members were pro-rated based on the period of time during which service was provided during the year and generally were paid on a quarterly basis. Under the director compensation program, the annual fees non-employee directors earned for service on our board of directors, and for service on each committee of our board of directors of which the director was a member, during 2024 were as follows:
DIRECTOR COMPENSATION PROGRAM FOR 2024
| | Member Annual Retainer | Chair Annual Retainer | | Board of Directors | $55,000 | $115,000 | | Audit Committee | $11,000 | $25,000 | | Compensation Committee | $9,000 | $20,000 | | Nominating and Corporate Governance Committee | $7,000 | $17,000 | | Cybersecurity and Data Privacy Subcommittee | $6,000 | $15,000 |
DIRECTOR COMPENSATION PROGRAM FOR 2024
For 2024, each non-employee director who commenced service on our board of directors was eligible to receive an onboarding award consisting of restricted stock units in such number or quantity of shares (rounded down to the nearest whole number of shares) determined by dividing $300,000 by an average of the daily closing market price of our Common Stock for the 15-trading day period ending on the 5th trading day prior to the grant date. The initial onboarding grants of restricted stock units vest in equal annual installments over a three-year period, subject to the director’s continued service. In addition, on the date of the 2024 annual meeting of stockholders, each non-employee director continuing to serve as a director following the annual meeting was granted restricted stock units in such number or quantity of shares (rounded down to the nearest whole number of shares) determined by dividing $180,000 by an average of the daily closing market price of our Common Stock for the 15-trading day period ending on the 5th trading day prior to the grant date. These annual grants were prorated based on the number of full months of service on our board of directors since the prior annual meeting of stockholders, and vest annually.
DIRECTOR COMPENSATION PROGRAM FOR 2024
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DIRECTOR COMPENSATION PROGRAM FOR 2024
| Compensation Discussion and Analysis | |
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE The following table provides a summary of the compensation of our non-employee directors for the fiscal year ended December 31, 2024.
DIRECTOR COMPENSATION TABLE
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards($)(2) | Total | | Dick Allen | $77,817 | $225,448 | $303,265 | | Myoungil Cha | $63,000 | $225,448 | $288,448 | | Peyton Howell | $73,500 | $225,448 | $298,948 | | Joao Malagueira | $64,500 | $225,448 | $289,948 | | Kathleen McGroddy-Goetz | $69,483 | $225,448 | $294,931 | | Rebecca Robertson | $118,000 | $225,448 | $343,448 | | Rajwant Sodhi | $69,150 | $225,448 | $294,598 | | Christopher Twomey | $78,000 | $225,448 | $303,448 |
DIRECTOR COMPENSATION TABLE
1)Amounts listed reflect cash retainers paid during 2024 for service on our board of directors and committees, in accordance with our non-employee director compensation program. Cash retainers are paid in arrears in quarterly installments. 2)Amounts listed reflect the grant date fair value of RSUs granted during 2024, computed in accordance with FASB ASC 718. A discussion of our valuation assumptions can be found in Note 8 of the “Notes to Financial Statements” included in Item 8 of our Annual Report. The following table summarizes the aggregate number of shares subject to outstanding equity awards held by our non-employee directors as of December 31, 2024:
DIRECTOR COMPENSATION TABLE
| Name | Aggregate Number of RSU Awards | Aggregate Number of Option Awards | | Dick Allen | 4,387 | 10,000 | | Myoungil Cha | 6,136 | — | | Peyton Howell | 4,387 | — | | Joao Malagueira | 6,136 | — | | Kathleen McGroddy-Goetz | 4,387 | — | | Rebecca Robertson | 4,387 | 33,447 | | Rajwant Sodhi | 4,387 | — | | Christopher Twomey | 4,387 | 39,132 |
DIRECTOR COMPENSATION TABLE
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DIRECTOR COMPENSATION TABLE
| Compensation Committee Report | |
DIRECTOR COMPENSATION TABLE
Compensation Committee Report The compensation committee of the board of directors of Tandem Diabetes Care, Inc. reviewed and discussed with management the Compensation Discussion and Analysis section of this Proxy Statement, including the related compensation tables, notes and narrative discussion. Based on our review and discussion, we recommended to the board of directors that the Compensation Discussion and Analysis section, including the related compensation tables, notes and narrative discussion, be included in this Proxy Statement and incorporated into the Company’s Annual Report for the fiscal year ended December 31, 2024. The foregoing report has been furnished by the compensation committee. Respectfully submitted,