DEF 14A of PTC Therapeutics, Inc.

Filed Apr 26, 2024 · FY20230001558370-24-005924

Open on EDGAR

Compensation Committee
| ● | reviewing and making recommendations to our Board with respect to director compensation. |
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
Information Regarding Directors and Director Nominees
Information Regarding Directors and Director Nominees
Board Composition
Board Composition We currently have a classified board of directors consisting of three classes: Class I, Class II, and Class III. The terms of service of the three classes are staggered so that the term of one class expires each year. At each annual meeting of stockholders, directors are elected for a full term of three years to continue in office or to succeed those directors whose terms are expiring. Our directors hold office until their successors have been elected and qualified, or until the earlier of their resignation or removal. Our certificate of incorporation and bylaws provide that the authorized number of directors may be changed only by resolution of our Board; that our directors may be removed only for cause by the affirmative vote of the holders of at least 75% of the votes entitled to be cast in an annual election of directors; and that any vacancy on our Board, including a vacancy resulting from an enlargement of our Board, may be filled only by vote of a majority of our directors then in office or at a meeting of stockholders. Our Board is authorized to have eleven directors and currently consists of eleven directors, four Class I directors, four Class II directors, and three Class III directors. There are no family relationships between or among any of our executive officers, directors or director nominees. The principal occupation and employment during the past five years of each of our directors and director nominees was carried on, in each case except as specifically identified below, with a corporation or organization that is not a parent, subsidiary or other affiliate of us. There is no arrangement or understanding between any of our directors or director nominees and any other person or persons pursuant to which he was or is to be selected as a director or director nominee.
Director Nominees
Director Nominees At the Annual Meeting, stockholders will be asked to consider the election of Emma Reeve, Michael Schmertzler, Mary Smith and Glenn D. Steele, Jr., M.D., Ph.D. Upon the recommendation of our Nominating and Corporate Governance Committee, our Board has nominated Ms. Reeve, Mr. Schmertzler, Ms. Smith and Dr. Steele for election at the Annual Meeting as Class II directors, each to serve until the 2027 annual meeting of stockholders. Each of Ms. Reeve, Mr. Schmertzler, Ms. Smith and Dr. Steele, our director nominees, has indicated his or her willingness to serve on our Board, if elected. If any director nominee should be unable to serve, the person acting under the proxy may vote the proxy for a substitute director nominee designated by our Board. We do not contemplate that any of our director nominees will be unable to serve if elected. Unless otherwise instructed in the proxy, all proxies will be voted "FOR" the election of each of the director nominees identified above to a three-year term ending in 2027, each such director nominee to hold office until his or her successor has been duly elected and qualified. A plurality of the voting power of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote is required to elect each director nominee as a director. Proxies cannot be voted for a greater number of persons than the number of nominees named. Our Board Recommends that You Vote "FOR" the Election of Emma Reeve, Michael Schmertzler, Mary Smith and Glenn D. Steele, Jr.
Biographical Information
Biographical Information The following table and biographical descriptions provide information as of April 22, 2024 relating to each director nominee and each director continuing in office, including age and period of service as a director of our Company; committee memberships; business experience during the past five years, including directorships at other public companies; community activities; and the other experience, qualifications, attributes or skills that led our Board to conclude that such director should serve as a director of PTC.
Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)
Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)
Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)
| Name | Age | Board Tenure, Principal Occupation, Other Business Experience During the Past Five Years and Other Directorships | | Emma Reeve Audit Committee (Chair) Compensation Committee | 63 | Ms. Reeve has served as a member of our Board since 2018. Ms. Reeve served as the Senior Vice President and Chief Financial Officer of Constellation Pharmaceuticals, Inc., a Nasdaq-listed biopharmaceutical company, from October 2017 to July 2021, its Treasurer from December 2017 to July 2021 and its Secretary from December 2017 to September 2018. Ms. Reeve served as the Corporate Controller of Parexel International, a Nasdaq-listed life sciences consulting firm and contract research organization, from September 2014 to October 2017 and as interim Chief Financial Officer and corporate controller of Parexel from July 2016 to May 2017. Previously, Ms. Reeve served as Head of Finance and Administration at Novartis Pharma Schweiz, a pharmaceutical company, from May 2012 to August 2014 and as Vice President, Global Head Business Planning and Analysis for Novartis Vaccines and Diagnostics, a division of Novartis, from January 2008 to April 2012. Prior to that, she served as the Chief Financial Officer of Inotek Pharmaceuticals, Inc., and of Aton Pharma, Inc., and in operational and finance roles at Merck Research Laboratories and Bristol Myers Squibb Company. Ms. Reeve has served on the board of directors of Editas Medicine, Inc. and Aadi Bioscience, Inc., both Nasdaq-listed biopharmaceutical companies, since September 2021 and has served on the board of directors of Cardurion Pharmaceuticals, Inc., a privately-held biopharmaceutical company since September 2023. Ms. Reeve received a B.Sc. degree in computer science from Imperial College, University of London and is an associate of the Institute of Chartered Accountants in England & Wales. We believe that Ms. Reeve is qualified to serve on the Board because of her extensive executive leadership experience, including her experience as chief financial officer and within the finance department for various companies in our industry. | | Michael Schmertzler Chair of the Board Compensation Committee Nominating and Corporate Governance Committee Development Committee | 72 | Mr. Schmertzler has served as a member of our Board since 2001 and as Chair of our Board since 2004. Mr. Schmertzler served as a director of our UK subsidiary until February 2016. Since 2008, he has been an Adjunct Professor and Lecturer in Economics at Yale University and, since 2018, a Visiting Professor at Yale NUS in Singapore. Mr. Schmertzler also serves as a Charter Trustee of the Phillips Academy Andover. Mr. Schmertzler currently also serves as Executive Chairman of SHY Therapeutics, a private biotechnology company, as Executive Chairman of Berryville Holdings and Disepl LLC, private cyber-technology companies, and as a Director of AgNovos, a private biotechnology company. From 2001 to 2015, Mr. Schmertzler served as a Managing Director of Aries Advisors, LLC, the sub-advisor to Credit Suisse First Boston Equity Partners, L.P., a private equity fund, and the Chair of the investment committee of Credit Suisse First Boston Equity Partners, L.P. From 1997 to 2001, Mr. Schmertzler was Co-Head of United States and Canadian Private Equity at Credit Suisse First Boston, an investment banking firm. Prior to 1997, Mr. Schmertzler held various management positions with Morgan Stanley and its affiliates, including President of Morgan Stanley |
Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)
| Name | Age | Board Tenure, Principal Occupation, Other Business Experience During the Past Five Years and Other Directorships | | | | Leveraged Capital Funds and founding Managing Director of Morgan Stanley's biotechnology pharmaceuticals group, and was Managing Director and Chief Financial Officer of Lehman Brothers Kuhn Loeb and Head of International Sales and Trading and Investment Banking at its successor, Lehman Brothers, both investment banking firms. Mr. Schmertzler recently served as a court-appointed director of Lehman Commercial Paper Incorporated, the largest liquidating post-bankruptcy subsidiary of Lehman Brothers Holdings, Incorporated. Mr. Schmertzler also previously served as a member of the board of directors of Cytokinetics, Inc., and Idenix Pharmaceuticals, Inc., both of which were at the time public biopharmaceutical companies. Mr. Schmertzler received a B.A. from Yale College in Molecular Biophysics and Biochemistry, History and City Planning and an M.B.A. from the Harvard Business School. We believe that Mr. Schmertzler is qualified to serve on our Board due to his extensive experience as an investment banking and financial professional, his extensive personal knowledge of our industry and his many years of service as one of our directors. | | Mary Smith Audit Committee Compensation Committee | 61 | Ms. Smith has served as a member of our Board since 2021. Since February 2018, Ms. Smith has served as Vice Chair at the VENG Group, a non-partisan government relations and public affairs firm, consulting clients on business development, strategy, healthcare and corporate governance. Ms. Smith served as Principal Deputy Director (Chief Executive Officer equivalent) from March 2016 to January 2017 and Deputy Director from October 2015 to March 2016 of Indian Health Service, a division of the U.S. Department of Health and Human Services and system of hospitals providing healthcare to over 2.2 million Native Americans in the United States. From July 2014 to April 2015, Ms. Smith served as Special Counsel & Estate Trust Officer at the Office of Special Deputy Receiver Chicago Illinois, managing and advising on mergers and acquisitions for financially troubled insurance companies. Previously, Ms. Smith served as General Counsel at the Illinois Department of Insurance from June 2012 to July 2014, Counselor at the United States Department of Justice, Civil Division from February 2010 to June 2012 and Partner at Schoeman, Updike, Kaufman & Scharf. Earlier in her career, Ms. Smith served in the White House from 1997 to 2001 as Associate Director of Policy Planning in the Domestic Policy Council and later as Associate Counsel to the U.S. President in the White House Counsel’s Office. Ms. Smith received a B.S. degree in mathematics and computer science from Loyola University Chicago and a J.D. degree from the University of Chicago Law School. Additionally, Ms. Smith, who is Native American and an enrolled member of the Cherokee Nation, started a foundation, the Caroline and Ora Smith Foundation, to train Native American girls in science, technology, engineering and math. We believe that Ms. Smith is qualified to serve on our Board because of her executive leadership experience, personal knowledge of the healthcare industry and corporate governance experience. |
Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)
| Name | Age | Board Tenure, Principal Occupation, Other Business Experience During the Past Five Years and Other Directorships | | Glenn D. Steele Jr., M.D., Ph.D. Compensation Committee (Chair) Development Committee | 79 | Dr. Steele has served as a member of our Board since 2015. Dr. Steele has served as the Chairman of xG Health Solutions, a health care redesign and optimization company affiliated with Geisinger Health System, from 2013 to 2018. From 2001 until 2015, Dr. Steele served as President and Chief Executive Officer of Geisinger Health System, an integrated health services organization in central and northeastern Pennsylvania. Dr. Steele previously served as the dean of the Biological Sciences Division and the Pritzker School of Medicine and vice president for medical affairs at the University of Chicago, as well as the Richard T. Crane Professor in the Department of Surgery. Prior to that, he was the William V. McDermott Professor of Surgery at Harvard Medical School, president and chief executive officer of Deaconess Professional Practice Group, Boston, MA, and chairman of the department of surgery at New England Deaconess Hospital (Boston, MA). Dr. Steele has served on the board of directors of several companies, including Wellcare Health Plans Inc., a NYSE-listed managed care company, from 2009 to 2019. We believe that Dr. Steele is qualified to serve on our Board because of his leadership and business experience, extensive experience in the health care industry, and his service on the boards of directors of other public companies. |
Class III Directors (terms expiring in 2025)
Class III Directors (terms expiring in 2025)
Class III Directors (terms expiring in 2025)
| Name | Age | Board Tenure, Principal Occupation, Other Business Experience During the Past Five Years and Other Directorships | | Allan Jacobson, Ph.D. Development Committee (Chair) | 78 | Dr. Jacobson is a co-founder of PTC Therapeutics, Inc., and has served as a member of our Board since our inception in 1998, and previously served as Chairman of our Board from 1998 to 2004. Since 2000, From 1994 to 2023, Dr. Jacobson was the Chairman of the Department of Microbiology and Physiological Systems at the University of Massachusetts Chan Medical School, where he is currently the Gerald L. and Zelda S. Haidak Professor of Cell Biology. In 1982, Dr. Jacobson co-founded Applied bioTechnology, Inc., a biotechnology company, and served as its chairman until its sale in 1991. From 1987 to 1990, Dr. Jacobson served as special limited partner at Euclid Partners, a venture capital firm. Dr. Jacobson received a Ph.D. from Brandeis University in 1971, has authored over 100 publications in the field of post-transcriptional control processes and is an elected member of the American Academy of Microbiology and the American Academy of Arts and Sciences and is a co-recipient of the 2023 Gruber Prize in Genetics. We believe that Dr. Jacobson is qualified to serve on our Board because of his service as one of our directors since our inception, his knowledge of our Company and his extensive experience as a founder and leader of new businesses in the life science industry. | | David P. Southwell Audit Committee Compensation Committee | 63 | Mr. Southwell has served as a member of our Board since 2005. From October 2018 to March 2023, he served as the Chief Executive Officer, and a member of the board of directors, of TScan Therapeutics, Inc., a Nasdaq-listed biotechnology company. Previously Mr. Southwell served as President and Chief Executive Officer of Inotek Pharmaceuticals, Inc., a formerly publicly listed biotechnology company from 2014 until its merger with Rocket Pharmaceuticals Inc., a Nasdaq-listed biotechnology company, in 2018. From March 2010 to September 2012, Mr. Southwell served as the Executive Vice President and Chief Financial Officer, and from 2008 to 2010 served as a member of the board of directors, of Human Genome Sciences, Inc., a formerly publicly listed biopharmaceutical company. Prior to joining Human Genome Sciences, he served as Executive Vice President and Chief Financial Officer of Sepracor, Inc., a research-based pharmaceutical company, from June 1994 to March 2008, and as Sepracor's Senior Vice President and Chief Financial Officer, from 1994 to 1995. From August 1988 until 1994, Mr. Southwell was associated with Lehman Brothers Inc., a securities firm, in various positions within the investment banking division. Mr. Southwell currently serves on the board of directors of Rocket Pharmaceuticals. From 2018 to 2019, Mr. Southwell served on the board of directors of Spero Therapeutics, Inc., a Nasdaq-listed biotechnology company. During 2016, Mr. Southwell served on the board of directors of inVentiv Health, Inc., a contract research organization prior to its recapitalization in late 2016. From 2007 to 2016, Mr. Southwell served on the board of directors of THL Credit, Inc., a Nasdaq-listed business development company under |
Class III Directors (terms expiring in 2025)
| Name | Age | Board Tenure, Principal Occupation, Other Business Experience During the Past Five Years and Other Directorships | | | | the Investment Company Act of 1940. Mr. Southwell received a B.A. from Rice University and an M.B.A. from the Tuck School of Business at Dartmouth College. We believe that Mr. Southwell is qualified to serve on our Board because of his extensive executive leadership experience and knowledge of our industry. | | Alethia Young Audit Committee Nominating & Corporate Governance Commttee | 45 | Ms. Young has served as a member of our Board since 2022. Ms. Young has more than 20 years of experience in healthcare and biotech equity research and investing and has served as the Chief Financial Officer of Bicycle Therapeutics PLC, a Nasdaq-listed biopharmaceutical company since June 2023. From April 2022 to June 2023, Ms. Young served as Chief Financial Officer of Graphite Bio, Inc., a Nasdaq-listed biopharmaceutical company. From 2018 to March 2022, Ms. Young served as senior biotech analyst and head of research at Cantor Fitzgerald, managing the equity research department covering small-cap, mid-cap and large-cap biotechnology companies. Prior to joining Cantor Fitzgerald in 2018, Ms. Young held senior biotech analyst positions at Credit Suisse from August 2015 to August 2018 and Deutsche Bank from July 2011 to July 2015. Earlier in her career, she was a research policy analyst and president at Marwood Group, providing healthcare-focused advisory services to institutional investors. She began her career at J.P. Morgan in the investment banking and asset management divisions. Ms. Young served on the board of directors for BUILD NYC from 2021 to 2023. Ms. Young has also served as a member of the board of directors of Pacira BioSciences, Inc., a Nasdaq-listed biopharmaceutical company, since October 2023. She earned a B.A. in Economics and Spanish from Duke University. We believe that Ms. Young is qualified to serve on the Board because of her extensive experience covering the biotechnology industry and her experience as chief financial officer of a biopharmaceutical company. |
Class I Directors (terms expiring in 2026)
Class I Directors (terms expiring in 2026)
Class I Directors (terms expiring in 2026)
| 8 | | | | Name | Age | Board Tenure, Principal Occupation, Other Business Experience During the Past Five Years and Other Directorships | | William F. Bell, Jr. Compensation Committee | 67 | Mr. Bell has served as a member of our Board since 2022. Mr. Bell has more than 30 years of experience at several global consulting firms advising senior executive clients, with a focus on the healthcare industry. He has served as the Managing Director and Head of Healthcare Services Practice for L.E.K. Consulting, a global strategy consulting partnership, since April 2013. From April 2005 to March 2013, Mr. Bell served as Partner and Head of Healthcare and Consumer Practices for the Parthenon Group, a global strategy consulting group. Prior to joining the Parthenon Group in 2005, Mr. Bell worked in multiple roles, including Vice President and Head of U.S. Operations at Mars & Co., a global strategy consulting firm. Mr. Bell earned a B.A. in Economics from Haverford College and an M.B.A. from Harvard Business School. We believe that Mr. Bell is qualified to serve on the Board because of his leadership experience, his knowledge of the healthcare industry and his understanding of how to advise healthcare companies on strategic business issues. | | Matthew B. Klein, M.D., M.S., F.A.C.S. Chief Executive Officer and Director Development Committee | 52 | Dr. Klein has been our Chief Executive Officer since March 2023. Dr. Klein joined the Company in October 2019 as Global Head Gene and Mitochondrial Therapies and became Global Head Clinical Development in March 2020, Chief Development Officer in April 2020 and Chief Operating Officer in January 2022. He also serves as a director of PTC Therapeutics International Limited, our international headquarters and indirect wholly-owned subsidiary. Prior to joining the Company, Dr. Klein was Chief Executive Officer of BioElectron from 2018 to 2019, and served as a member of the board of directors of BioElectron from 2018 to 2020. Dr. Klein served as the Chief Medical Officer of BioElectron from 2013 to 2019 and was Senior Vice President, Clinical Science at BioElectron from 2012 to 2013. Dr. Klein has also served as a member of the board of directors of ClearPoint Neuro, Inc., a Nasdaq-listed company, since 2020 as our director designee. Dr. Klein has a BA from the University of Pennsylvania, an MD from Yale University School of Medicine and an MS in epidemiology from the University of Washington School of Public Health. | | Stephanie S. Okey, M.S. Nominating and Corporate Governance Committee (Chair) | 64 | Ms. Okey has served as a member of our Board since 2018. For over 25 years, from 1987 until 2015, Ms. Okey served in various positions of increasing responsibility in the biopharmaceutical industry, first at Genentech, Inc., followed by 19 years at Genyzme, a Sanofi company ("Genzyme"). Ms. Okey’s management experience during her tenure at Genyzme included serving as Senior Vice President, Head of North America, Rare Diseases, and U.S. General Manager, Rare Diseases from August 2012 to July 2015 and as Vice President and General Manager, U.S. Genetic Diseases Business Unit from September 2011 to August 2012. Ms. Okey retired from Genzyme in July 2015. Ms. Okey has served as a member of the board of directors of Crinetics Pharmaceuticals, Inc., a Nasdaq-listed biopharmaceutical company, since July 2019 and Catalent, Inc., a NYSE-listed biopharmaceutical company, since August 2023. In addition, she |
Class I Directors (terms expiring in 2026)
| 8 | | | | Name | Age | Board Tenure, Principal Occupation, Other Business Experience During the Past Five Years and Other Directorships | | | | previously served as a member of the board of directors of the California Life Sciences Association from October 2014 to January 2016, as a member of the board of directors of Orphazyme A/S, a Nasdaq-listed biopharmaceutical company, from March 2021 to May, 2022 and as a member of the board of directors of Albireo Pharma, Inc., a Nasdaq-listed biopharmaceutical company, from June 2018 to March 2023. Ms. Okey received a B.S. degree in Zoology from The Ohio State University and a M.S. degree in Immunology and Medical Microbiology from Wright State University. We believe that Ms. Okey is qualified to serve on the Board because of her executive leadership experience and her extensive experience in the commercialization of orphan disease products. | | Jerome B. Zeldis, M.D., Ph.D. Nominating and Corporate Governance Committee Development Committee | 74 | Dr. Zeldis has served as a member of our Board since September 2012. Dr. Zeldis served as the Executive Vice President and Head of Research and Development of NexImmune, Inc., a Nasdaq-listed clinical-stage biotechnology company from January 2021 to March 2023. From August 2016 through March 2020, Dr. Zeldis served as the Chief Medical Officer of Sorrento Therapeutics, Inc., a public clinical-stage biopharmaceutical company. From August 2017 through September 2018, Dr. Zeldis served as the Chief Medical Officer of Celularity, Inc., a biotechnology company. Prior to joining Sorrento, Dr. Zeldis served as Chief Executive Officer of Celgene Global Health and the Chief Medical Officer of Celgene Corporation, a public biopharmaceutical company, where he had been employed since 1997. He previously served as Celgene's Senior Vice President of Clinical Research and Medical Affairs. Previously, Dr. Zeldis served as Assistant Professor of Medicine at Harvard Medical School, Associate Professor of Medicine at University of California, Davis, Clinical Associate Professor of Medicine at Cornell Medical School, and Professor of Clinical Medicine at the Robert Wood Johnson Medical School, Rutgers University. Dr. Zeldis received an A.B. and M.S. from Brown University and a M.Phil., M.D. and Ph.D. in Molecular Biophysics and Biochemistry (immunochemistry) from Yale University. Dr. Zeldis has served on the board of directors of Soligenix, Inc., a Nasdaq-listed biopharmaceutical company, since 2011; NexGel, Inc., a Nasdaq-listed company, since 2020; and has previously served on the board of directors of several public companies including; BioSig Technologies, Inc., a Nasdaq-listed diagnostic company, from 2015 to 2017 and from 2019 to 2020; Alliqua BioMedical, Inc., a Nasdaq-listed biomedical company, from 2011 to 2017; MetaStat, Inc., a medical device company traded on the OTCQB, from 2016 to 2019; and Kalytera Therapeutics, Inc., a pharmaceutical company traded on the TSXV, from 2015 to 2017. We believe that Dr. Zeldis is qualified to serve on our Board because of his executive leadership experience, his knowledge of the biopharmaceutical industry, his extensive role in drug development and clinical studies as well as his directorships in other life science companies. |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION This section describes the material elements of compensation awarded to, earned by or paid to our named executive officers, who, for fiscal year 2023, are:
EXECUTIVE COMPENSATION
| ● | Matthew B. Klein, M.D., M.S., F.A.C.S., Chief Executive Officer*; |
EXECUTIVE COMPENSATION
| ● | Pierre Gravier, Chief Financial Officer; |
EXECUTIVE COMPENSATION
| ● | Eric Pauwels, Chief Business Officer; |
EXECUTIVE COMPENSATION
| ● | Lee Golden M.D, Executive Vice President and Chief Medical Officer; |
EXECUTIVE COMPENSATION
| ● | Mark E. Boulding, Executive Vice President and Chief Legal Officer; |
EXECUTIVE COMPENSATION
| ● | Stuart W. Peltz, Ph.D., former Chief Executive Officer (until March 22, 2023); and |
EXECUTIVE COMPENSATION
| ● | Emily Hill, former Chief Financial Officer (separated from Company as of August 20, 2023 and ceased to be an executive officer as of May 20, 2023). |
EXECUTIVE COMPENSATION
*Dr. Klein was our Chief Operating Officer prior to his promotion to Chief Executive Officer on March 22, 2023. Additionally, this section discusses the principles underlying our decisions with respect to the compensation of our named executive officers, as well as qualitative information regarding the manner and context in which compensation is awarded to and earned by our named executive officers, and is intended to provide context for the data presented in the tables and narrative that follow.
Executive Summary
Executive Summary Our executive compensation program is intended to be competitive with our peers and to motivate our executive team to achieve our short-term and long-term strategy for creating stockholder value with a significant portion of our executive officers’ compensation being “at risk”. Base salaries are reviewed annually by our Compensation Committee to ensure that they are competitive against our peers and appropriate for each executive's responsibilities. Our Compensation Committee established a cash incentive program based on corporate goals set at the beginning of the year with further consideration being given to each named executive officer’s individual performance over the past year. The corporate rating for the 2023 cash incentive program was 80% of target and the individual performance modifier was 1.0 for our named executive officers, such that cash bonuses were not adjusted from the level funded for corporate performance. Our Compensation Committee continued to focus the majority of our named executive officers’ compensation in long-term incentives consisting of stock options and restricted stock units. Approximately 45% of our named executive officers’ 2023 annual equity awards was comprised of stock options, based upon the grant date fair value of the awards. This is consistent with our Compensation Committee’s belief that stock options are most effective in aligning our named executive officers’ motivations with our shareholders' long-term interests. In 2023, there was a CEO transition in which our long-tenured Chief Executive Officer, Dr. Peltz, retired and Dr. Klein, our Chief Operating Officer, was promoted to Chief Executive Officer. Dr. Peltz continued to provide services to us pursuant to a consulting agreement from his retirement in March 2023 until October 2023. Dr. Klein received standard annual equity awards at the beginning of 2023 in his role as Chief Operating Officer, and in connection with his promotion to Chief Executive Officer, received a base salary increase and additional equity awards. He also was granted an additional RSU and a PSU award in December 2023 with the PSUs vesting upon achievement of certain challenging regulatory milestones during the two years following the grant. The grant in December 2023 was made to reflect the success of the leadership transition and Dr. Klein’s first year as Chief Executive Officer, while emphasizing items that need to be achieved in the future through the use of PSUs. The 2023 total compensation value reported in the Summary Compensation Table to this proxy was below the total compensation median value for both the 2022 and 2023 peer groups for all ongoing named executive officers employed at the end of 2023.
Executive Compensation Objectives and Philosophy
| ● | drive the achievement of key corporate milestones and the execution of our long-term growth strategy by placing a significant portion of named executive officer compensation "at risk", |
Executive Compensation Objectives and Philosophy
| ● | align the interests of our executive officers and long-term stockholders. |
(base salary, annual cash incentive at target, and equity award)
(base salary, annual cash incentive at target, and equity award) The equity award portion of our Chief Executive Officer’s and other named executive officers’ 2023 primary compensation consisted of stock options and restricted stock units. Dr. Klein, our Chief Executive Officer, additionally received a performance stock unit, or PSU, award in December 2023, consisting of a target award of 75,000 PSUs, or the Target PSUs, that vest based upon achievement of challenging regulatory-related performance goals, with the opportunity to earn up to an additional 75,000 PSUs for over-achievement of the goals, as described further below. The PSUs remain subject to additional time-based vesting requirements following the achievement of the performance milestones. Dr. Peltz, our former Chief Executive Officer, was granted an annual equity award in January 2023, before he retired, consisting of 132,500 stock options and 53,000 restricted stock units, with a grant date fair value of $2,773,225 and $2,089,260, respectively. The stock option value was calculated using the Black-Scholes pricing model, as further described in our Summary Compensation Table below, with an exercise price of $39.42, which was the closing price of our common stock on January 5, 2023, the date the stock options were granted. Dr. Klein, our Chief Executive Officer, was granted an annual equity award as our Chief Operating Officer in January 2023 and an additional equity award in April 2023 in connection with his promotion to Chief Executive Officer. Dr. Klein’s 2023 annual equity award consisted of 65,000 stock options and 26,000 restricted stock units, with a grant date fair value of $1,360,450 and $1,024,920, respectively. The January stock options have an exercise price of $39.42, which was the closing price of our common stock on January 5, 2023, the date the stock options were granted. In connection with his promotion to Chief Executive Officer in March 2023, Dr. Klein was granted an additional equity award of 65,000 stock options and 26,000 restricted stock units, with a grant date fair value of $1,791,855 and $1,376,960, respectively. The stock options have an exercise price of $52.96, which was the closing price of our common stock on April 18, 2023, the date the stock options were granted. The stock option values were calculated using the Black-Scholes pricing model, as further described in our Summary Compensation Table below. Additionally, our Compensation Committee awarded Dr. Klein an equity grant in December 2023 consisting of 75,000 RSUs and 75,000 Target PSUs with an opportunity to earn additional PSUs for above-target performance. The restricted stock units had a grant date fair value of $2,143,500 and the Target PSUs had a grant date fair value of $2,143,500, assuming achievement of the relevant performance milestones. The achievement of the performance milestones for the Target PSUs and of the additional above-target performance milestones must occur in the two years following the grant, by December 31, 2025 Our Compensation Committee determined it was appropriate to make the December 2023 RSU and PSU grant to Dr. Klein in recognition of his exceptional performance during his time as Chief Executive Officer and the completion of the successful leadership transition to Chief Executive Officer while navigating difficult circumstances that had arisen in 2023. The December 2023 grant was structured to encourage and reward his future performance and company success. Our Chief Executive Officer and other named executive officers may only realize value on the stock options they received in connection with their annual equity awards if our stock price increases above the exercise price and such increased value is maintained through the vesting and exercise date. We believe that structuring the primary compensation of our Chief Executive Officer and other named executive officers with a high percentage of performance-based and equity-related compensation as illustrated above strongly aligns with stockholders’ interests. We believe that our annual cash incentive program contributes to the achievement of key short-term goals that drive the success of our long-term growth strategy. Our Compensation Committee works with management to establish corporate objectives under our annual cash incentive program that highlight the Company’s strategic goals and provide appropriate motivation toward the achievement of significant milestones that we believe directly correlate to the long-term enhancement of stockholder value. Equity awards are typically made at the start of the new year, which is after performance results for the previous year are known and before the results for the new year can be known. The January 2023 equity grant was therefore influenced by our Company’s performance in 2022. As further described in our Summary Compensation Table below, our Chief Executive Officer’s and named executive officers’ 2023 annual equity awards granted in January 2023 were composed of approximately 50% options and 50% restricted stock units, based upon the grant date fair value of the awards. Dr. Klein was granted a similar award comprised of 50% options and 50% RSUs in April 2023 with four-year vesting in connection with his March 2023 promotion to Chief Executive Officer. Additionally, in December 2023, Dr. Klein was granted an award consisting of 75,000 RSUs and 75,000 Target PSUs with an opportunity to earn additional PSUs for above-target performance for his exceptional performance transitioning from Chief Operating Officer to Chief Executive Officer. The RSUs granted in December 2023 vest in four equal tranches, with the first tranche vesting in in December 2023 and the remaining three tranches vesting annually thereafter. The PSUs will be earned for achieving several challenging milestone goals by the end of 2025 that are related to significant regulatory success enabling the commercialization our pipeline products over the next two years, and, if all of the milestone goals are achieved, Dr. Klein will double his target opportunity, earning a maximum of 2x of the Target PSUs. The PSUs remain subject to additional time-based vesting requirements following the achievement of the performance milestones. Attract and retain well-qualified executive management. We believe the Company’s growth and success can only be achieved through the contributions of our employees, as led by our executive officers. Our Compensation Committee regularly works with FW Cook, an independent compensation consultant, to understand the competitive landscape and assist in designing and maintaining a compensation program intended to attract, engage and retain high caliber, talented executives capable of executing on our short- and long-term growth strategy. For compensation decisions made in January 2023, our Compensation Committee utilized data from the 2022 peer group developed with the assistance of its independent compensation consultant as one tool to assist the Compensation Committee with respect to competitive positioning and internal parity for base salary, bonus target under our annual incentive program, and equity awards. Peer group data are a reference point in making compensation decisions, but the Compensation Committee does not utilize peer data in a formulaic manner. As a result, individual pay levels vary based on individual experience, scope of responsibilities, past performance and expectations with respect to future performance and leadership potential.
Peer Group Composition
Peer Group Composition General. Our Compensation Committee uses peer group benchmark information developed in coordination with FW Cook to assist it in understanding the range of base salary, target annual incentive compensation, and equity grant levels offered for comparable roles at peer companies. Our Compensation Committee considers the relevance of its compensation peer group based on factors that include the Company’s stage of development, therapeutics focus, market capitalization, revenue and headcount. 2022 Peer Group. Our Compensation Committee directed FW Cook to assist in the development of a reference peer group, which we refer to as the 2022 peer group, for compensation decisions to be made effective in January 2023, including 2023 base salary adjustments, annual cash incentive targets for 2023, and the annual equity awards granted on January 5, 2023 informed by 2022 performance. In developing the 2022 peer group, with input from FW Cook, the Compensation Committee selected companies within what it considered a relevant market cap range, that have at least one commercial product, have a clinical pipeline, employ an internal sales force and are headquartered on the east coast or the west coast of the United States to align cost-of-living and labor market. Amarin Corporation plc, bluebird bio, Inc. and Heron Therapeutics, Inc. were removed from the peer group because each company’s market cap was no longer in the intended range. Two new companies were added, Alkermes plc and Jazz Pharmaceuticals plc, with market caps in a 0.33x to 3x range of PTC’s market cap at the time of the 2022 peer group review, for a total of 17 peer companies. The 17 peer companies in the 2022 peer group had a median market cap of approximately $3.43 billion at the time of the 2022 peer group review. PTC’s market cap at that time was $3.68 billion, which was near the median. PTC’s trailing 12-month revenue was slightly higher than the median of the 2022 peer group. The 2022 peer group consisted of:
Peer Group Composition
| ACADIA Pharmaceuticals Inc. | Agios Pharmaceuticals, Inc. | Alkermes plc* | | Amicus Therapeutics, Inc. | Blueprint Medicines Corp. | Exelixis, Inc. | | Fibrogen, Inc. | Global Blood Therapeutics, Inc. | Insmed, Inc. | | Ionis Pharmaceuticals, Inc. | Ironwood Pharmaceuticals, Inc. | Jazz Pharmaceuticals plc* | | Neurocrine Biosciences, Inc. | Pacira BioSciences, Inc. | Sarepta Therapeutics, Inc. | | Supernus Pharmaceuticals, Inc. | Ultragenyx Pharmaceutical Inc. | |
Peer Group Composition
| * New peer group member in 2022 |
Peer Group Composition
2023 Peer Group. Our Compensation Committee directed FW Cook to assist in the development of a reference peer group, which we refer to as the 2023 peer group, for compensation decisions to be made effective in February 2024, including 2024 base salary adjustments, annual cash incentive targets for 2024, and the annual equity awards granted on February 15, 2024 informed by 2023 performance. The reference 2023 peer group data was also available when the Compensation Committee granted Dr. Klein the RSU and PSU awards in December 2023. In developing the 2023 peer group, with input from FW Cook, the Compensation Committee selected companies within what it considered a relevant market cap range, that have at least one commercial product, have a clinical pipeline, employ an internal sales force and are headquartered on the east coast or the west coast of the United States to align cost-of-living and labor market. Agios Pharmaceuticals, Inc. and Ironwood Pharmaceuticals, Inc. were removed from the peer group because each company’s market cap, combined with other metrics, such as employee headcount and revenue, were no longer in the intended range. Global Blood Therapeutics, Inc. was removed from the peer because it was acquired in 2022. Three new companies were added, Apellis Pharmaceuticals, Inc., Intra-Cellular Therapies, Inc. and United Therapeutics Corporation, with market caps between $6 billion and $10 billion, for a total of 17 peer companies. At the time that the 2023 peer group was approved in June 2023, PTC’s market cap was $3.2 billion, and its trailing 12-month average market cap was $3.3 billion, which was within the $1.5 billion to $10.8 billion range of peers’ trailing 12-month average market caps and near the $4.4 billion median. The 2023 peer group consisted of:
Peer Group Composition
| ACADIA Pharmaceuticals Inc. | Alkermes plc | Amicus Therapeutics, Inc. | | Apellis Pharmaceuticals, Inc.* | Blueprint Medicines Corp. | Exelixis, Inc. | | Fibrogen, Inc. | Insmed, Inc. | Intra-Cellular Therapies, Inc.* | | Ionis Pharmaceuticals, Inc. | Jazz Pharmaceuticals plc | Neurocrine Biosciences, Inc. | | Pacira BioSciences, Inc. | Sarepta Therapeutics, Inc. | Supernus Pharmaceuticals, Inc. | | Ultragenyx Pharmaceutical Inc. | United Therapeutics Corporation* | |
Peer Group Composition
| * New peer group member in 2023 |
Individual and Company Performance
Individual and Company Performance When making annual compensation determinations, the Compensation Committee considers each named executive officer’s individual performance over the past year, his or her contributions to the execution of the Company’s short-term goals and long-term strategy, the Board’s expectations of performance against key strategic, financial and operational objectives in the coming year, and demonstration of executive leadership at the Company. Individual performance is used together with other information resources to assist in a holistic evaluation of executive compensation. In connection with the close of each fiscal year, our Compensation Committee considers the Company’s performance against the objectives and metrics established for that fiscal year as well as the Company’s total shareholder return for that fiscal year and over the long-term and assigns a corporate rating value, defined as a percentage against goals, to corporate performance based on their assessment of results. This corporate rating is applied, together with the individual performance modifier described below, to determine the amounts earned by each named executive officer under the annual incentive program for the last closed (or closing) fiscal year. Awards under the 2023 annual cash incentive program were determined in February 2024 based on the Compensation Committee’s assessment of individual and Company performance during 2023. While individual performance is considered in connection with all aspects of executive compensation, the individual performance modifier only directly impacts the value of cash incentive compensation paid to our named executive officers under our annual incentive program. Quantitative weight is assigned to individual performance in the form of an individual performance modifier, which could range from above 1.0 for top performers to 1.0 for employees who consistently deliver on their position requirements and expectations. Performance below these levels can result in the application of an individual performance modifier that is less than 1.0, reducing the annual incentive award below the level determined by corporate performance. Our Compensation Committee generally considers our Chief Executive Officer’s assessment of each named executive officer’s performance, other than himself, around the end of the fiscal year at the same time that it considers the Company’s performance against the corporate goals established by the Compensation Committee and our Chief Executive Officer’s performance for the applicable fiscal year. Our Chief Executive Officer has overall responsibility for our business strategy, operations and corporate vision and our Compensation Committee generally assesses his performance in the context of the execution of our business strategy and the performance of the Company as a whole over the applicable fiscal year. As a result, our Compensation Committee considers individual and Company performance during the most recent fiscal year as well as expectations for individual and Company performance during the coming year when setting base salary, target annual cash incentive opportunity and annual equity awards that will become effective in January of the coming year. For example, 2023 base salary adjustments and annual option awards were considered in late 2022 and set in January 2023 after considering Company and individual performance during 2022. At the same time, our Compensation Committee considered the demands that would be placed on our executive team in order to execute our 2023 strategic goals. For a discussion of the Compensation Committee’s assessment of individual and corporate performance in 2023, which directly impacted annual cash incentive awards for 2023, see "Annual cash incentive program" on page 42. For information concerning individual and corporate performance in 2022, which directly impacted 2023 base salary and equity awards, see "Base salary" below.
Elements of Executive Compensation
| Element of compensation | 2023 compensation determinations finalized in | | Base salary | January 2023 | | Annual cash incentive award | February 2024 | | Annual equity award | January 2023 |
Elements of Executive Compensation
Base salary. Base salary is designed to attract, motivate and retain qualified employees by providing a consistent cash flow throughout the year as compensation for performance of day-to-day responsibilities. The responsibilities of the position; background and experience; individual, team, and corporate performance and contribution; market competitive conditions; and other factors described below are taken into account by the Compensation Committee when determining this component of compensation. 2023 base salary determinations. Base salary determinations for 2023 were discussed in December 2022, set in January 2023 and became effective as of March 1, 2023. Our Compensation Committee set 2023 base salaries near the median of our 2022 peer group for the named executive officers overall, subject to relatively modest individual variation based on experience, proficiency, and importance of their role. These base salary adjustments for 2022 reflected 3% to 6% increases over 2022 salaries for our named executive officers. These increases were generally similar to the rate of increases observed for comparable roles in the 2022 peer group during the year prior. Our Compensation Committee determined that each of the named executive officers consistently delivered on their position requirements and expectations during 2022. Dr. Klein’s base salary was increased in connection with his promotion to Chief Executive Officer and Mr. Gravier had his salary set when hired as CFO. Dr. Klein’s base salary as Chief Executive Officer was set below the median of the 2022 peer group upon promotion consistent with his new position. Tabular presentation of base salary adjustments in 2023. The table below sets forth our named executive officers salaries, as determined by our Compensation Committee for fiscal year 2023:
Elements of Executive Compensation
* Base salary reflects base salary following mid-year promotion or mid-year hire. Increases were given in line with all promotion and new-hire salary increases and were paid on a pro-rated basis. Prior to his promotion, Dr. Klein had a 2023 base salary of $618,000 for his role as our Chief Operating Officer, an increase of 3.0% over his 2022 base salary. In connection with his promotion to Chief Executive Officer in March 2023, Dr. Klein’s salary was increased to $788,000. Annual cash incentive program. Our annual cash incentive program is intended to motivate and reward our named executive officers to achieve and exceed annual goals and milestones that are expected to advance our long-term growth strategy. Both pre-established corporate goals and individual contributions toward these goals factor into the amount earned under the program. The corporate goals established under the program are tied to the Company’s operating plan for the applicable year and have typically been focused on the achievement of specific research, clinical, regulatory, commercial, financial, compliance or operational milestones developed in collaboration with our Compensation Committee. Our Compensation Committee strives to establish goals that challenge our management team and other employees to be “ever better” in accordance with the PTC Expectations and provide them with targets that are only achievable with exceptional effort. Achievement of these goals is viewed as conducive to the creation of stockholder value because the goals are designed to be consistent with our short-term and long-term strategic priorities. Mechanics of annual cash incentive program. Each named executive officer has the potential to realize a pre-established target value tied to a percentage of his or her salary, with the risk of earning no bonus and the ability to earn up to two times target. The 2023 target for Dr. Klein was 75% of his base salary following his promotion to Chief Executive Officer in March 2023, which was an increase from his prior 50% target as Chief Operating Officer prior to his promotion to Chief Executive Officer. The 2023 target for each of the other named executive officers remained the same as the level previously established by the Board for those roles, an amount equal to 45% of each of Mr. Gravier’s, Mr. Pauwels’, Dr. Golden’s and Mr. Boulding’s respective salaries. Pursuant to the terms of each of the named executive officers’ employment agreements, the target bonus level can be raised or lowered in any given year at the discretion of the Board. In connection with the close of each fiscal year, our Compensation Committee considers the Company’s performance against the objectives and metrics established for that fiscal year as well as the Company’s total shareholder return for that fiscal year and over the long-term and assigns a value to corporate performance based on the Compensation Committee’s assessment of results. The amounts that could be achieved under the corporate performance segment of the annual incentive program are capped at two times target. The program permits the exercise of both negative and positive discretion based on our Compensation Committee’s view of overall corporate performance during the year (subject to the maximum award cap). The corporate rating for the 2023 cash incentive program, as determined in January 2024, was 80% for the named executive officers, as further discussed below. Individual performance is considered in the manner described under "Individual and Company Performance" on page 41, with a maximum quantitative modifier for potential awards based on 2023 performance of up to 1.0. The combination of corporate and individual performance is applied using the following formula:
Elements of Executive Compensation
| Base SalaryX | Target Annual Incentive (%)X | Corporate Rating (%)X | Individual Performance Modifier | = | Incentive Award |
Elements of Executive Compensation
Amounts earned under 2023 annual incentive program. Our named executive officers earned the amounts set forth in the table below based on our Compensation Committee’s determinations with respect to the Company’s corporate rating and individual performance modifiers under the 2023 annual cash incentive program:
Elements of Executive Compensation
*Dr. Peltz and Ms. Hill were not eligible to receive awards for 2023 under our annual cash incentive program in light of their mid-year departures. **Mr. Gravier’s 2023 annual cash incentive was pro-rated based on his mid-year start date. Annual equity award. A significant portion of our executive compensation program in 2023 and in prior years has been in the form of an annual equity award that vests over a four-year period. The “Stock Award” and "Options Awards" columns of our Summary Compensation Table set forth the full grant date fair value of the restricted stock units and stock option awards, respectively, granted to each named executive officer in January 2023, calculated in accordance with the provisions of Financial Accounting Standards Board Accounting Standard Codification, Topic 718, or FASB ASC Topic 718. These amounts do not represent the actual value realized by the named executive officers in 2023; in fact, no portion of the applicable equity awards vested until January 2024. Our Compensation Committee views time-vested stock option awards as an important tool to align the interests of our named executive officers with the interests of our stockholders and believes that this form of equity is most effective at rewarding successful execution of our long-term growth strategy. The time vesting feature of the annual equity award, for both the stock options and restricted stock units, is also intended to promote employment retention of executives. In determining the size of the annual equity awards granted to our named executive officers, our Compensation Committee considers the Company’s performance during the year prior to grant, the individual’s key contributions to our execution of our short-term and long-term goals during that year, as well as expectations for the Company’s and the individual’s performance in the new year, including the individual’s potential for enhancing the long-term creation of value for our stockholders. Our Compensation Committee also considers information provided by its independent compensation consultant, including information regarding comparative stock ownership of, and equity awards received by, the executives in our peer group and our industry. Our Compensation Committee also considers matters of internal pay equity as well as individual expectations based on historic Company practices. In addition, our Chief Executive Officer provides his recommendations to our Compensation Committee for each named executive officer other than himself. Timing, pricing, material terms, of other matters related to equity awards. All grants to our named executive officers must be approved by our Compensation Committee. Annual equity awards are generally granted at predetermined meetings of the Compensation Committee, in the beginning of the calendar year when the prior year can be reviewed, and were held in January, in 2021, 2022 and 2023. The annual equity awards consider the prior year’s performance more than the current year’s, because the Compensation Committee does not know the results of the coming year at the time of grant. As a result, performance in the previous year is a key factor in determining the grant amount. Specifically, the equity awards granted in January 2023, which are disclosed in the Summary Compensation Table, were impacted by our Compensation Committee’s assessment of 2022 performance and expectations for 2023. We viewed 2022 as a year with significant corporate accomplishments, including reaching our overall full-year net product revenue guidance as well as our DMD franchise revenue guidance, expanding our geographical footprint and advancing various of our clinical programs in our pipeline. Our Compensation Committee’s assessment of 2023 performance and expectations for 2024 were factors in determining the equity awards granted in February 2024, which will be discussed in next year’s Summary Compensation Table. The exercise price for annual stock option awards is set at the closing price of the Company’s common stock on the date of the grant. Annual stock option awards granted to employees, including our named executive officers, since our initial public offering have generally vested over a four-year period, with 25% of the shares underlying such options vesting one year after grant and 6.25% of the shares vesting at the end of each successive three-month period thereafter. The restricted stock units granted to our named executive officers in 2021, 2022 and 2023 vest over a four-year period, with 25% of the shares vesting one year after grant, and an additional 25% of the shares vesting annually thereafter. Fiscal 2023 equity award determinations. In allocating equity awards among the named executive officers, our Compensation Committee considered individual performance in the context of both the Company’s achievements during 2022, as described under "Annual cash incentive program" beginning on page 42, as well as our Chief Executive Officer’s assessment and recommendations for each of the named executive officers. The Compensation Committee also considered the prevalence of restricted stock unit grants within the 2022 peer group and the usefulness of restricted stock units in managing the Company’s burn rate and dilution overhang. Based on the factors detailed above, our Compensation Committee granted the stock option awards and restricted stock units described under the "Tabular presentation of annual equity awards in 2023" below to our named executive officers, pursuant to our 2013 Long-Term Incentive Plan, on January 5, 2023. In addition, in connection with his March 2023 promotion to Chief Executive Officer, in April 2023 the Compensation Committee granted Dr. Klein an additional equity award consisting of 65,000 stock options and 26,000 restricted stock units. Additionally, in December 2023, our Compensation Committee awarded Dr. Klein an equity award consisting of 75,000 RSUs and 75,000 Target PSUs with an opportunity to earn additional PSUs for above-target performance. Our Compensation Committee determined it was appropriate to make the December 2023 RSU and PSU awards to Dr. Klein in recognition of his exceptional performance and the completion of the successful leadership transition to Chief Executive Officer while navigating difficult circumstances that had arisen in 2023 and structured the grant to encourage and reward his future performance. The PSUs vest upon successful achievement of three regulatory milestones over two years. The regulatory milestones cannot be disclosed publicly without creating competitive harm. The 75,000 Target PSUs vest upon successful completion of a specified regulatory milestone. An additional 37,500 PSUs vest upon successful completion of a second specified regulatory milestone. An additional tranche of 37,500 PSUs vest upon successful completion of a third specified regulatory milestone, however, this PSU tranche will only vest if either the first or second regulatory milestone has also been achieved, in each case prior to December 31, 2025. Upon achievement of the relevant performance condition, each PSU tranche remains subject to additional time-based vesting, with one-third of the earned shares vesting immediately upon the achievement of the milestone and the remaining shares vesting in two equal amounts on each successive anniversary date of the achievement of the milestone. Tabular presentation of annual equity awards in 2023. The table below sets forth the grant date fair value of the equity awards made to each of our named executive officers who were named executive officers in January 2023, calculated in accordance with the provisions of FASB ASC Topic 718.
Elements of Executive Compensation
| | Stock Option | Restricted Stock | Target PSU | 2023 grant date | | Name | award (#)(1) | Unit award (#) | award (#) | fair value ($) | | Matthew Klein (2) | 130,000 | 127,000 | 75,000 | $9,841,185 | | Eric Pauwels | 45,000 | 18,000 | — | $1,651,410 | | Mark E Boulding | 36,250 | 17,000 | — | $1,428,853 | | Stuart Peltz | 132,500 | 53,000 | — | $4,862,485 | | Emily Hill | 42,500 | 19,500 | — | $1,658,215 |
Elements of Executive Compensation
| (1) Except as otherwise described below, each stock option has an exercise price of $39.42, the closing price of our common stock on January 5, 2023, the date of grant. |
Elements of Executive Compensation
| (2) Dr. Klein’s equity awards include a grant made in connection with his promotion to Chief Executive Officer in March 2023 of 65,000 stock options and 26,000 restricted stock units. The vesting schedule of these awards is the same as the vesting schedule of the annual equity awards granted in January 2023. The stock option values were calculated using an exercise price of $52.96, which was the closing price of our common stock on the April 18, 2023 grant date. Additionally, Dr. Klein’s equity awards include the December 2023 RSU grant and the Target PSU grant, assuming achievement of the relevant performance milestones. As discussed above, the December PSU award has the potential to be earned at 2x target. |
Elements of Executive Compensation
Severance Benefits. Each of our named executive officers has an employment agreement that entitles such executive to certain cash payments and other benefits in the event such officer’s employment is terminated (other than for "cause") or the Company undergoes a change in control. See "Employment Agreements with Executive Officers" on page 55 for additional information with respect to the employment agreements in general and "Potential Payments Upon Termination or Change in Control (2022)" on page 60 for addition information concerning specific severance payments and other benefits that our named executive officers may be entitled to receive under their employment agreements. We believe the benefits under these employment agreements are consistent with market practice. The change in control provisions are intended to help to promote a continuity of management during a corporate transaction, while the severance arrangements are used primarily to attract, retain and motivate well-qualified executive management. Each employment agreement includes restrictive covenants (such as non-compete and non-solicitation provisions) that would apply in the event of the named executive officer’s termination, which our Board believes helps us protect our value. Our change in control benefits are "double trigger" benefits. A "double trigger" benefit means that a change in control, by itself, would not trigger benefits. Instead, benefits would be paid only if the employment of the named executive officer is terminated during a specified period before or after the change in control. We believe this structure would help us secure the continued employment and focus of our named executive officers during change in control negotiations in which they believe they may lose their jobs. Other Elements of Compensation. Our named executive officers are eligible to participate in all of our employee benefit plans, in each case on the same basis as other employees. We maintain broad-based benefits that are provided to eligible employees, including health, dental, life and disability insurance and our 401(k) savings and retirement plan, or 401(k) plan. During 2023, we provided a 100% matching contribution for up to the first 6%, subject to applicable federal limits, of each contributing employee’s eligible compensation under our 401(k) plan. The matching contribution is subject to vesting at the rate of 25% at the end of each year of employment, for an employee’s first four years of employment, following which the matching contribution vests at 100% upon receipt. We do not maintain an executive perquisite program or any guaranteed or funded retirement plan benefits other than the matching contributions under our 401(k) plan, which we make available to all employees. Our named executive officers are also eligible to participate in our ESPP, which is available on the same basis to other employees. Additionally, all of our employees, including our named executive officers, are reimbursed for all business related aircraft travel, including travel to and from their respective residences.
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding compensation awarded to, earned by or paid to our named executive officers during the years indicated:
Summary Compensation Table
| | | | | | | Non-equity | | | | | | | | | | incentive | | | | | | | | Stock | Option | plan | All other | | | | | Salary | Bonus | awards | awards | compensation | compensation | Total | | Name and principal position | Year | ($)(1) | ($) | ($)(2) | ($)(2) | ($)(3) | ($)(4) | ($) | | Matthew B. Klein(5) | 2023 | 747,222 | — | 4,545,380 | 3,152,305 | 472,800 | 19,318 | 8,937,025 | | Chief Executive Officer | 2022 | 598,417 | — | 1,562,100 | 2,451,800 | 379,500 | 17,482 | 5,009,299 | | Pierre Gravier(6) | 2023 | 245,000 | — | 1,035,320 | 1,358,045 | 94,500 | 1,610 | 2,734,475 | | Chief Financial Officer | | | | | | | | | | Eric Pauwels | 2023 | 549,117 | — | 709,560 | 941,850 | 198,600 | 13,463 | 2,412,590 | | Chief Business Officer | 2022 | 530,533 | — | 640,080 | 1,506,960 | 304,900 | 12,239 | 2,994,712 | | | 2021 | 502,250 | — | 678,198 | 2,790,550 | 297,700 | 10,518 | 4,279,216 | | Lee Golden(7) | 2023 | 507,917 | — | 863,369 | 814,842 | 189,000 | 19,868 | 2,394,995 | | Executive Vice President and Chief Medical Officer | | | | | | | | | | Mark E Boulding | 2023 | 539,567 | — | 670,140 | 758,713 | 195,200 | 27,169 | 2,190,788 | | Executive Vice President and Chief Legal Officer | 2022 | 523,067 | — | 548,640 | 1,291,680 | 272,400 | 21,756 | 2,657,543 | | | 2021 | 503,938 | — | 678,198 | 2,790,550 | 298,700 | 21,456 | 4,292,842 | | Stuart W. Peltz, Ph.D.(8) | 2023 | 188,033 | — | 2,089,260 | 2,773,225 | — | 608,866 | 5,659,384 | | Former Chief Executive Officer | 2022 | 791,833 | — | 1,676,400 | 3,946,800 | 720,600 | 28,107 | 7,163,740 | | | 2021 | 768,750 | — | 1,835,124 | 7,550,900 | 835,300 | 32,249 | 11,022,323 | | Emily Hill(9) | 2023 | 352,250 | — | 768,690 | 889,525 | — | 248,624 | 2,259,089 | | Former Chief Financial Officer | 2022 | 509,833 | — | 594,360 | 1,399,320 | 292,000 | 17,866 | 2,813,380 | | | 2021 | 489,500 | — | 718,092 | 2,954,700 | 312,100 | 12,740 | 4,487,132 |
Summary Compensation Table
| (1) Base salary determinations for 2023 were set by our Compensation Committee in January 2023 and became effective as of March 1, 2023. |
Summary Compensation Table
| (2) These amounts do not represent the actual value realized by the named executive officers during the respective year. The amounts reported in the "Stock awards" and "Option awards" columns reflect the full grant date fair value of share-based compensation awarded during the applicable fiscal year computed in accordance with the provisions of FASB ASC Topic 718. |
Summary Compensation Table
The stock option values were calculated using the Black-Scholes option pricing model. See Notes 2 and 10 to our audited financial statements for the fiscal year ended December 31, 2023, included in our 2023 Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for information regarding assumptions underlying the valuation of equity awards.
Summary Compensation Table
| (3) Represents cash awards earned by our named executive officers under our annual incentive program. |
Summary Compensation Table
| (4) The amounts reported in the "All other compensation" column in 2023 reflects, for each named executive officer, PTC’s 401(k) plan matching contribution and group term life insurance premiums paid by the Company. In addition, for Dr. Peltz, the figure includes the value of personal use of chartered aircraft by his family members in connection with Dr. Peltz’s business-related aircraft travel and for Mr. Boulding includes an amount paid to Mr. Boulding in connection with his 20-year employment anniversary, pursuant to a program available to all of our employees. Additionally, for Dr. Peltz and Ms. Hill, the figures include payments made in conjunction with their separations from the Company. For Dr. Peltz, this included payment of $387,700 for payouts for accrued but unused vacation days and payments in the aggregate of $197,903 pursuant to his Consulting Agreement as described under “Consulting Agreements” on page 56. For Ms. Hill, this included payments of $177,833 for severance and $51,298 for vacation day payouts. |
Summary Compensation Table
| (5) Dr. Klein also serves as a member of our Board but does not receive any additional compensation for his service as a director. Dr. Klein was appointed as our Chief Executive Officer effective as of March 22, 2023. In connection with his promotion, his annual base salary increased from $618,000 to $788,000 in 2023, which salary was pro-rated for 2023 based on the date of his appointment. Dr. Klein’s stock and options awards for 2023 include (i) a grant in April 2023 made in connection with his promotion to Chief Executive Officer in March 2023 of 65,000 stock options and 26,000 restricted stock units and (ii) a grant in December 2023 of 75,000 RSUs. Additionally, the December 2023 grant included 75,000 Target PSUs and the opportunity to earn 75,000 additional PSUs for above-target performance. On the date of the grant, for purposes of accounting recognition as required by the Summary Compensation Table, the PSUs were valued at $0 as the achievements of the performance goals have not yet been deemed probable. The maximum value of the PSUs on the grant date assuming achievement of all performance conditions was $2,143,500 for the Target PSUs and $2,143,500 for the additional, above-target PSUs. |
Summary Compensation Table
| (6) Mr. Gravier was appointed as our Chief Financial Officer effective as of July 13, 2023. In connection with his appointment, he received an annual base salary of $525,000, which salary was pro-rated for 2023 based on the date of his promotion. |
Summary Compensation Table
| (7) Dr. Golden received a promotion effective as of April 1, 2023. In connection with his promotion, his annual base salary increased to $525,000 in 2023, which increased salary was pro-rated for 2023 based on the date of his promotion. Prior to his April 1, 2023 promotion date, Dr. Golden received $114,167 of 2023 salary. |
Summary Compensation Table
| (8) Dr. Peltz also served as a member of our Board in 2023 but did not receive any additional compensation for his service as a director. Dr. Peltz retired as Chief Executive Officer and a member of our Board effective as of March 22, 2023. The amount reported in the “Salary” column is the amount earned by Dr. Peltz prior to his retirement from the Company. Dr. Peltz also received payments as a consultant during 2023 as reported in the "All other compensation" column pursuant to a consulting agreement, or the Consulting Agreement, he entered into with us in connection with his retirement. Dr. Peltz forfeited his entire annual equity award granted in 2023 upon the termination of his Consulting Agreement. |
Summary Compensation Table
| (9) Ms. Hill ceased being our Chief Financial Officer on May 20, 2023 and separated from the Company on August 20, 2023. The amount reported in the “Salary” column is the amount earned by Ms. Hill prior to her separation from the Company. Ms. Hill forfeited her entire annual equity award granted in 2023 upon her separation from the Company. |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table sets forth information concerning each grant of an award made in 2023 to the named executive officers under any Company compensation plan.
Grants of Plan-Based Awards in 2023
| | | | | | | | | | All Other | | | | | | | | | | | | All other | Option | | Grant Date | | | | Estimated Future Payouts | | | Estimated Future Payouts | | | Stock | Awards: | Exercise or | Fair Value of | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | Number of | Number of | base price | Stock and | | | | Plan Awards(1) | | | Plan Awards | | | Shares of | Securities | of Option | Option | | | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Stock units | Underlying | Awards | Awards | | Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#)(2) | Options (#)(3) | ($/Sh)(4) | ($)(5) | | Matthew Klein (6) | 1/5/2023 | | | | — | — | — | — | 65,000 | $39.42 | $1,360,450 | | | 1/5/2023 | | | | — | — | — | 26,000 | — | $39.42 | $1,024,920 | | | 4/18/2023 | | | | — | — | — | — | 65,000 | $52.96 | $1,791,855 | | | 4/18/2023 | | | | — | — | — | 26,000 | — | $52.96 | $1,376,960 | | | 12/28/2023 | | | | — | — | — | 75,000 | — | $28.58 | $2,143,500 | | | 12/28/2023 | | | | — | 75,000 | 150,000 | — | — | $28.58 | $— | | | | — | $591,000 | $1,182,000 | | | | | | | | | Pierre Gravier(7) | 7/13/2023 | | | | — | — | — | — | 65,000 | $39.82 | $1,358,045 | | | 7/13/2023 | | | | — | — | — | 26,000 | — | $39.82 | $1,035,320 | | | | — | $118,125 | $236,250 | | | | | | | | | Eric Pauwels | 1/5/2023 | | | | — | — | — | — | 45,000 | $39.42 | $941,850 | | | 1/5/2023 | | | | — | — | — | 18,000 | — | $39.42 | $709,560 | | | | — | $248,310 | $496,620 | | | | | | | | | Lee Golden(8) | 1/5/2023 | | | | — | — | — | — | 11,400 | $39.42 | $238,602 | | | 1/5/2023 | | | | — | — | — | 10,640 | — | $39.42 | $419,429 | | | 4/24/2023 | | | | — | — | — | — | 21,000 | $52.85 | $576,240 | | | 4/24/2023 | | | | — | — | — | 8,400 | — | $52.85 | $443,940 | | | | — | $236,250 | $472,500 | | | | | | | | | Mark Boulding | 1/5/2023 | | | | — | — | — | — | 36,250 | $39.42 | $758,713 | | | 1/5/2023 | | | | — | — | — | 17,000 | — | $39.42 | $670,140 | | | | — | $243,990 | $487,980 | | | | | | | | | Stuart Peltz | 1/5/2023 | | | | — | — | — | — | 132,500 | $39.42 | $2,773,225 | | | 1/5/2023 | | | | — | — | — | 53,000 | — | $39.42 | $2,089,260 | | | | — | — | — | | | | | | | | | Emily Hill | 1/5/2023 | | | | — | — | — | — | 42,500 | $39.42 | $889,525 | | | 1/5/2023 | | | | — | — | — | 19,500 | — | $39.42 | $768,690 | | | | — | — | — | | | | | | | |
Grants of Plan-Based Awards in 2023
| (1) Amounts represent potential awards under the annual cash incentive program, which equal a specified percentage of the participant’s 2023 base salary. Dr. Klein could earn, at target, an amount equal to 75% of his base salary, and each other named executive officer that is currently employed by the Company can earn, at target, an amount equal to 45% of his or her respective base salary. For Mr. Gravier, the potential award reflects the maximum bonus Mr. Gravier was eligible to receive pro-rated based on his start date. Dr. Peltz and Ms. Hill both separated from the Company in 2023 and therefore, were not eligible to receive an award under the cash incentive program. No definitive threshold value was established by the Compensation Committee in 2023. |
Grants of Plan-Based Awards in 2023
The amount reflected under “Maximum” is the largest potential award that was achievable by each named executive officer in 2023, which is two times the target. The maximum award may not be increased above this limitation to reflect the individual performance modifier. Since 2019, individual payouts under the annual cash incentive program to named executive officers have ranged from a low of 80% to a high of 148.5%, in each case based on the combination of the corporate rating and the individual performance modifier as describe above in “Mechanics of annual cash incentive program” on page 43. The actual amounts earned by each named executive officer are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For more information on the annual cash incentive program in 2023, please see “Compensation Discussion and Analysis—Annual cash incentive program” on page 42.
Grants of Plan-Based Awards in 2023
| (2) Other than as described herein, all of the restricted stock units granted in 2023 to each of our named executive officers vest in four equal installments over four years, with the initial 25% vesting on the anniversary date of grant. The restricted stock units granted to Dr. Golden on April 24, 2023 vest in four equal installment over four years, with the initial 25% vesting on April 1, 2024. The restricted stock units granted to Dr. Klein on December 28, 2023 vest in four equal installment over four years, with the initial 25% vesting on December 29, 2023. |
Grants of Plan-Based Awards in 2023
| (3) Other than as described herein, all of the options granted in 2023 to each of our named executive officers vest over four years, with 25% of the shares underlying such options vesting on the first anniversary of the grant date and 6.25% of the shares vesting at the end of each successive three-month period thereafter. The options granted to Dr. Golden on April 24, 2023 vest over four years, with 25% of the shares underlying such options vesting on April 1, 2024 and 6.25% of the shares vesting at the end of each successive three-month period thereafter. |
Grants of Plan-Based Awards in 2023
| (4) The exercise price is the closing price of PTC common stock, as traded on the Nasdaq Global Select Market on the date of the respective grant. For more information on stock options granted to the named executive officers in 2022, please see "Compensation Discussion and Analysis—Annual equity award" on page 47. |
Grants of Plan-Based Awards in 2023
| (5) This column represents the full grant date fair value of stock options and restricted stock units granted to each of the named executive officers in 2023, as calculated in accordance with FASB ASC Topic 718. These amounts do not represent the actual value realized by the named executive officers during 2023. |
Grants of Plan-Based Awards in 2023
| (6) The equity grant Dr. Klein received on January 5, 2023, relates to his award under the Company's annual equity incentive program based on his employment at the Company in 2022 as Chief Operating Officer. The equity grant Dr. Klein received on April 18, 2023 related to his award granted in connection with his promotion to Chief Executive Officer. Additionally, on December 28, 2023, Dr. Klein was granted a grant of (i) 75,000 RSUs and (2) 75,000 Target PSUs with an opportunity to earn additional PSUs (for a aggregate amount of 2x target) for above-target performance. The PSUs will vest only upon satisfaction of certain challenging performance goals relating to regulatory milestones that are achieved prior to December 31, 2025. The grant date fair value of the PSUs was $0 as the achievements of the performance goals had not yet been deemed probable. The value of the Target PSUs on the grant date assuming achievement of all performance conditions was $2,143,500, and the maximum PSU value on the grant date assuming achievement of all target and above-target performance conditions was $4,287,000. |
Grants of Plan-Based Awards in 2023
| (7) The equity grant Mr. Gravier received on July 13, 2023 was in connection with his appointment to Chief Financial Officer. |
Grants of Plan-Based Awards in 2023
| (8) The equity grant Dr. Golden received on January 5, 2023, relates to his award under the Company's annual equity incentive program based on his employment at the Company in 2022, prior to his appointment as an executive officer. The equity grant Dr. Golden received on April 24, 2023 related to his award granted in connection with a promotion to EVP. |
Outstanding Equity Awards at December 31, 2023
Outstanding Equity Awards at December 31, 2023 The following table sets forth information regarding outstanding stock options, restricted stock awards and restricted stock units held by our named executive officers as of December 31, 2023:
Outstanding Equity Awards at December 31, 2023
| | Option awards | | | | Stock awards | | | | | | | | | | | | Equity incentive | Equity incentive | | | | | | | | | plan awards: | plan awards: | | | Number of | Number of | | | Number of | Market value | number of | market or payout | | | securities | securities | | | shares of | of shares of | unearned shares, | value of unearned | | | underlying | underlying | Option | | stock that | stock that | units or other | shares, units or | | | unexercised | unexercised | exercise | Option | have not | have not | rights that have | other rights that | | | options | options | price | expiration | vested | vested | not vested | have not vested | | Name | exercisable(#) | unexercisable(#) | ($/share) | date | (#) | ($) | (#) | ($) | | Matthew Klein | 86,314 | — | $38.98 | 10/24/2029 | | | | | | | 43,750 | 6,250(1) | 47.49 | 4/15/2030 | | | | | | | 36,093 | 16,407(2) | 66.49 | 1/5/2031 | | | | | | | 22,968 | 29,532(3) | 38.10 | 1/6/2032 | | | | | | | 25,000 | 25,000(4) | 38.10 | 1/6/2032 | | | | | | | — | 65,000(5) | 39.42 | 1/4/2033 | | | | | | | — | 65,000(6) | 52.96 | 4/17/2033 | | | | | | | | | | | 2,500(7) | $68,900 | | | | | | | | | 4,500(8) | $124,020 | | | | | | | | | 15,750(9) | $434,070 | | | | | | | | | 10,000(10) | $275,600 | | | | | | | | | 26,000(11) | $716,560 | | | | | | | | | 26,000(12) | $716,560 | | | | | | | | | 56,250(13) | $1,550,250 | | | | | | | | | | | 150,000(14) | $4,134,000 | | Pierre Gravier | — | 65,000(15) | $39.82 | 2/14/2034 | | | | | | | | | | | 26,000(16) | $716,560 | | | | Eric Pauwels | 70,000 | — | $66.15 | 4/7/2025 | | | | | | | 20,411 | — | 30.86 | 1/3/2026 | | | | | | | 2,488 | — | 11.32 | 2/24/2026 | | | | | | | 8,423 | — | 11.23 | 1/2/2027 | | | | | | | 30,594 | — | 18.01 | 1/2/2028 | | | | | | | 26,950 | — | 33.02 | 1/21/2029 | | | | | | | 26,446 | 1,764(17) | 51.16 | 1/28/2030 | | | | | | | 43,750 | 6,250(1) | 47.49 | 4/15/2030 | | | | | | | 40,906 | 18,594(2) | 66.49 | 1/5/2031 | | | | | | | 27,562 | 35,438(3) | 38.10 | 1/6/2032 | | | | | | | — | 45,000(5) | 39.42 | 1/4/2033 | | | | | | | | | | | 1,198(18) | $33,017 | | | | | | | | | 2,500(7) | $68,900 | | | | | | | | | 5,100(8) | $140,556 | | | | | | | | | 12,600(9) | $347,256 | | | | | | | | | 18,000(11) | $496,080 | | | | Lee Golden | 35,437 | 5,063(19) | $47.06 | 5/10/2030 | | | | | | | 15,881 | 7,219(2) | 66.49 | 1/5/2031 | | | | | | | 4,375 | 5,625(3) | 38.10 | 1/6/2032 | | | | | | | 5,945 | 7,645(3) | 38.10 | 1/6/2032 | | | | | | | — | 11,400(5) | 39.42 | 1/4/2033 | | | | | | | — | 21,000(20) | 52.85 | 4/23/2033 | | | | | | | | | | | 713(21) | $19,650 | | | | | | | | | 1,980(8) | $54,569 | | | | | | | | | 4,500(9) | $124,020 | | | | | | | | | 6,117(9) | $168,585 | | | | | | | | | 10,640(11) | $293,238 | | | | | | | | | 8,400(22) | $231,504 | | | | Mark Boulding | 85,600 | — | $50.00 | 1/2/2025 | | | | | | | 72,500 | — | 33.02 | 1/21/2029 | | | | | | | 17,500 | — | 33.02 | 1/21/2029 | | | | | | | 55,781 | 3,719(17) | 51.16 | 1/28/2030 | | | | | | | 40,906 | 18,594(2) | 66.49 | 1/5/2031 | | | | | | | 23,625 | 30,375(3) | 38.10 | 1/6/2032 | | | | | | | — | 36,250(5) | 39.42 | 1/4/2033 | | | | | | | | | | | 2,550(18) | $70,278 | | | | | | | | | 5,100(8) | $140,556 | | | | | | | | | 10,800(9) | $297,648 | | | | | | | | | 17,000(11) | $468,520 | | | | Stuart Peltz | — | —(23) | | | —(23) | | | | | Emily Hill | — | —(24) | | | —(24) | | | |
Outstanding Equity Awards at December 31, 2023
| (1) This option vests over four years, with 25% of the shares underlying the option vesting on April 16, 2021 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on July 16, 2021. |
Outstanding Equity Awards at December 31, 2023
| (2) This option vests over four years, with 25% of the shares underlying the option vesting on January 6, 2022 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on April 6, 2022. |
Outstanding Equity Awards at December 31, 2023
| (3) This option vests over four years, with 25% of the shares underlying the option vesting on January 7, 2023 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on April 7, 2023. |
Outstanding Equity Awards at December 31, 2023
| (4) This option vests over two years, with 50% of the shares underlying the option vesting on January 7, 2023 and 50% of the shares vesting on January 7, 2024. |
Outstanding Equity Awards at December 31, 2023
| (5) This option vests over four years, with 25% of the shares underlying the option vesting on January 5, 2024 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on April 5, 2024. |
Outstanding Equity Awards at December 31, 2023
| (6) This option vests over four years, with 25% of the shares underlying the option vesting on April 18, 2024 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on July 18, 2024. |
Outstanding Equity Awards at December 31, 2023
| (7) This restricted stock unit vests in four equal annual installments, commencing on April 16, 2021. |
Outstanding Equity Awards at December 31, 2023
| (8) This restricted stock unit vests in four equal annual installments, commencing on January 6, 2022. |
Outstanding Equity Awards at December 31, 2023
| (9) This restricted stock unit vests in four equal annual installments, commencing on January 7, 2023. |
Outstanding Equity Awards at December 31, 2023
| (10) This restricted stock unit vests in two equal annual installments, commencing on January 7, 2023. |
Outstanding Equity Awards at December 31, 2023
| (11) This restricted stock unit vests in four equal annual installments, commencing on January 5, 2024. |
Outstanding Equity Awards at December 31, 2023
| (12) This restricted stock unit vests in four equal annual installments, commencing on April 18, 2024. |
Outstanding Equity Awards at December 31, 2023
| (13) This restricted stock unit vests in four equal annual installments, commencing on December 29, 2023. |
Outstanding Equity Awards at December 31, 2023
| (14) The 75,000 Target PSUs vest upon satisfaction of certain performance goals relating to regulatory milestones that are achieved prior to December 31, 2025. Upon achievement of the relevant performance condition, the Target PSU remains subject to additional time-based vesting, with one-third of the shares underlying the Target PSU vesting immediately upon the achievement of the milestone and the remaining shares underlying the Target PSU vesting in two equal amounts on each successive anniversary date of the achievement of the milestone. The additional 75,000 PSUs for above market performance vest upon satisfaction of certain performance goals relating to regulatory milestones that are achieved prior to December 31, 2025. Upon achievement of the relevant performance condition, the additional PSUs remains subject to additional time-based vesting, with one-third of the shares underlying the additional PSUs vesting immediately upon the achievement of the milestone and the remaining shares underlying the additional PSUs vesting in two equal amounts on each successive anniversary date of the achievement of the milestone. |
Outstanding Equity Awards at December 31, 2023
| (15) This option vests over four years, with 25% of the shares underlying the option vesting on July 13, 2024 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on October 13, 2024. |
Outstanding Equity Awards at December 31, 2023
| (16) This restricted stock unit vests in four equal annual installments, commencing on July 13, 2024. |
Outstanding Equity Awards at December 31, 2023
| (17) This option vests over four years, with 25% of the shares underlying the option vesting on January 29, 2021 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on April 29, 2021. |
Outstanding Equity Awards at December 31, 2023
| (18) This restricted stock unit vests in four equal annual installments, commencing on January 29, 2021. |
Outstanding Equity Awards at December 31, 2023
| (19) This option vests over four years, with 25% of the shares underlying the option vesting on May 4, 2020 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on August 4, 2020. |
Outstanding Equity Awards at December 31, 2023
| (20) This option vests over four years, with 25% of the shares underlying the option vesting on April 24, 2024 and 6.25% of the shares underlying the option vesting quarterly thereafter beginning on April 1, 2024. |
Outstanding Equity Awards at December 31, 2023
| (21) This restricted stock unit vests in four equal annual installments, commencing on May 4, 2021. |
Outstanding Equity Awards at December 31, 2023
| (22) This restricted stock unit vests in four equal annual installments, commencing on April 1, 2024. |
Outstanding Equity Awards at December 31, 2023
| (23) All of Dr. Peltz's unvested and vested outstanding stock option awards and unvested restricted stock unit awards were forfeited upon the termination of his Consulting Agreement with the Company. |
Outstanding Equity Awards at December 31, 2023
| (24) All of Ms. Hill's unvested outstanding stock option awards and restricted stock unit awards were forfeited upon her separation from the Company. All of Ms. Hill’s vested outstanding stock option awards that remained unexercised were forfeited 90 days following her separation from the Company. |
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023 The following table sets forth information concerning stock options that were exercised and restricted stock and restricted stock units that vested during 2023. All stock option exercises and sales effected by our named executive officers during 2023 were pursuant to Rule 10b-5 plans adopted in accordance with our Insider Trading Policy, with the exception of the option exercise by Ms. Hill, which occurred after her termination date, prior to the expiration of her vested but unexercised options. For additional information on our Insider Trading Policy, see "Compensation Discussion and Analysis—Insider Trading, Prohibition Against Pledging and Anti-Hedging Policies" above.
Option Exercises and Stock Vested in 2023
| | Option Awards | | Stock Awards | | | | Number of Shares | | Number of Shares | | | | Acquired on | Value Realized on | Acquired on Vesting | Value Realized on | | Name | Exercise (#) | Exercise ($)(1) | (#)(2) | Vesting ($)(3) | | Matthew Klein | — | $— | 38,750 | $1,347,528 | | Pierre Gravier | — | $— | — | $— | | Eric Pauwels | — | $— | 11,602 | $499,383 | | Lee Golden | — | $— | 5,240 | $217,627 | | Mark Boulding | 61,923 | $1,272,892 | 8,700 | $360,047 | | Stuart Peltz | — | $— | 26,150 | $1,086,191 | | Emily Hill | 3,500 | $17,605 | 9,834 | $410,748 |
Option Exercises and Stock Vested in 2023
| (1) Values realized upon stock option exercises are calculated based on the difference between the market price of PTC common stock at the time of exercise and the exercise price of the option. |
Option Exercises and Stock Vested in 2023
| (2) This column represents the vesting of restricted stock awards and restricted stock units granted in 2019, 2020, 2021, 2022 and 2023. |
Option Exercises and Stock Vested in 2023
| (3) The value realized for restricted stock was determined by multiplying the number of shares that vested by the market price of PTC common stock on the date of vesting. |
Potential Payments upon Termination or Change in Control (2023)
Potential Payments upon Termination or Change in Control (2023) As described below, each of our named executive officers has an employment agreement with us that entitles such executive to certain cash payments or other benefits in the event such officer’s employment is terminated or the Company undergoes a change in control. Pre-Conditions to Severance and Restrictive Covenants The receipt of severance benefits by a named executive officer is conditioned upon the execution and non-revocation of a separation and release of claims agreement. These agreements include standard continued assistance and cooperation clauses and require reconfirmation of each executive’s commitment to abide by the non-competition, non-solicitation and confidentiality provisions of their employment agreements. Pursuant to non-competition provisions in the employment agreements, each named executive officer has agreed that for, in the case of Dr. Klein, 24 months, in the case of Mr. Gravier, 15 months, and in the case of each other named executive officer, 18 months following his or her separation from the Company he or she will not engage in or assume any role involving directly or indirectly our field of interest, including, among other things, the research, development and commercialization of products relating to therapies for certain genetic disorders or diseases, including Duchenne muscular dystrophy and other therapeutic targets, mechanisms of action and/or therapies in which the Company has a research, development or commercialization program. In addition, non-solicitation provisions in the employment agreements also prohibit each named executive officer for a period of, in the case of Dr. Klein, 24 months, in the case of Mr. Gravier, 15 months, and in the case of each other named executive officer, 18 months following separation from the Company from soliciting, directly or indirectly, any customers, partners, vendors, employees or contractors. Each agreement includes confidentiality provisions and assignment of invention provisions that do not expire following a separation of employment. Definitions A named executive officer’s termination by the Company would generally be considered "without cause" unless our Board determined in writing that: there was a willful and continued failure by the named executive officer to substantially perform his or her duties or responsibilities; he or she engaged in willful misconduct or gross negligence with detrimental effect to the Company; he or she was convicted of a felony; he or she materially breached a fiduciary duty to the Company; or he or she materially breached the terms of his or her employment agreement. Unless the named executive officer has consented to any of the following, his or her decision to terminate his or her employment with the Company would generally be considered "for good reason" (following a failure of the Company to cure the condition) if: he or she was required to relocate more than 50 miles (or to New York City), or in the case of Mr. Gravier, outside of California for a period of longer than three months; there was a material adverse change in his or her responsibilities or a material reduction in his or her base compensation; the Company materially breached his or her employment agreement (and such breach was not promptly cured); or the Company failed to obtain the assumption of his or her employment agreement by any successor to the Company. In addition, the failure of the Board to appoint Dr. Klein as our Chief Executive Officer or re-nominate him as a Board member would generally be qualified as "good reason" for Dr. Klein to terminate his employment with us. A "change in control" would generally be deemed to have occurred if: as a result of a merger or other reorganization, the Company was not the surviving entity; there was a sale of, or agreement to sell, substantially all of the Company’s assets; any person or group acquires or gains control of more than 50% of the Company’s common stock; or, as a result of or in connection with a contested election of directors, the Company’s current Board members (or their approved nominees) ceased to comprise a majority of the Board. All stock option awards granted since our initial public offering are "double-trigger" awards that require both a change in control and a qualifying termination of employment before vesting is accelerated. Overview of Payments—Dr. Klein If we terminate Dr. Klein’s employment without cause or if he terminates his employment with us for good reason, we are obligated to: pay Dr. Klein 24 months of base salary continuation; a pro-rated bonus, based on his separation date, for the year in which termination occurs, based on actual corporate performance; extend the exercise period of certain of his option awards, subject to specified limitations; and, to the extent allowed by applicable law and the applicable plan documents, continue to provide him and certain of his dependents with group health insurance for a period of up to 18 months. Additionally, (i) the portion of any stock option held by Dr. Klein that is unvested at the time of termination shall remain outstanding and eligible to vest for a period of six months following such termination and shall vest on the date or dates that such portion of the stock option would have vested by its terms had Dr. Klein remained employed during such six-month period; provided, that in the event any such stock option was granted to Dr. Klein within the one-year period immediately prior to his termination, fifty percent of the shares of common stock subject to this stock option shall vest on the date that such portion of the stock option would have vested by its terms had Dr. Klein remained employed by the Company, (ii) fifty percent of the portion of any restricted stock units held by Dr. Klein that are subject to solely time-based vesting that would have otherwise vested on the next scheduled vesting date following the date termination occurs shall vest upon such termination, and (iii) with regards to his PSUs granted in December 2023, to the extent any of the performance milestones underlying the PSU have not yet occurred as of the termination date, then such PSUs shall remain outstanding until the earlier of (a) the date that is six months following the termination date, or (b) December 31, 2025 (such period, the “Tail Period”) and, to the extent the applicable performance milestone is achieved before the expiration of the Tail Period, then one-third of shares subject to the applicable PSU for which the performance milestone was achieved shall vest on the date the performance milestone is achieved. If we terminate Dr. Klein’s employment without cause or if he terminate his employment with us for good reason, in each case within three months prior to or 12 months following a change in control, we were obligated to: pay Dr. Klein two times his base salary and target annual bonus for the year in which termination occurs; a pro rata target bonus for the year in which termination occurs; accelerate in full the vesting of all of his time-based outstanding equity awards with performance-based equity awards subject to the terms of the agreements evidencing such awards; and, to the extent allowed by applicable law and the applicable plan documents, continue to provide him and certain of his dependents with group health insurance for a period of up to 18 months or, at the Company’s option, a lump sum payment equal to the amount of Company contributions to Dr. Klein’s then-current group health care premiums for the same 18 month period. Additionally, pursuant to the terms of the December 2023 PSU awards, such PSU awards would vest as to the greater of (i) 75,000 shares underlying the PSU awards or (ii) the total number of shares subject to the PSU for which the performance milestone has been achieved and that remain subject to time-based vesting.
Potential Payments upon Termination or Change in Control (2023)
Overview of Payments—Other Named Executive Officers For our named executive officers, other than Dr. Klein, if we terminate the named executive officer’s employment without cause or if such executive terminates his or her employment with us for good reason, we are obligated to: pay such named executive officer’s base salary for a period of 12 months, and with respect to Mr. Gravier, for a period of 15 months, and, to the extent allowed by applicable law and the applicable plan documents, continue to provide to such executive and certain of his or her dependents with group health insurance for a period of up to 12 months, and with respect to Mr. Gravier, for a period of 15 months. Other than as described below with respect to Dr. Klein, if we terminate any named executive officer’s employment without cause or if such named executive officer terminates his or her employment with us for good reason, in each case within three months prior to or 12 months following a change in control, we are obligated to: pay the named executive officer a lump sum amount equal to his or her base salary for 12 months, and with respect to Mr. Gravier, for a period of 15 months; to the extent allowed by applicable law and the applicable plan documents, continue to provide to such named executive officer and certain of his or her dependents with group health insurance for a period of up to 12 months, and with respect to Mr. Gravier, for a period of 15 months, or, at the Company’s option, a lump sum payment equal to the amount of Company contributions to Mr. Gravier’s then-current group health care premiums for the same 15 month period; accelerate in full the vesting of all outstanding equity awards held by such named executive officer; and pay each such named executive officer his or her annual cash incentive award at target for the year in which he or she is terminated, which for Mr. Gravier was pro-rated in 2023 based on his start date. Taxation To the extent that any severance or other compensation payment to any of our named executive officers pursuant to an employment agreement or any other agreement constitutes an "excess parachute payment" within the meaning of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, or the Code, then such named executive officer will receive the full amount of such severance and other payments, or a reduced amount intended to avoid the application of Sections 280G and 4999 of the Code, whichever provides the executive with the highest amount on an after-tax basis. Potential Payments upon Termination or Change in Control Table (2023) The following table summarizes the potential payments to each named executive officer under various termination events, assuming a hypothetical termination on December 31, 2023. Dr. Peltz is not included in the below table as no termination payments were made in connection with his mid-year departure in 2023.
Potential Payments upon Termination or Change in Control (2023)
| | Termination by PTC | Termination in | | | without "Cause" or | connection with a | | | by Executive with | "Change in | | Name | "Good Reason" | Control" | | Matthew Klein | | | | Cash Severance | $1,576,000 | $2,758,000 | | Continued Health Coverage(1) | $20,582 | $20,582 | | Stock Option Acceleration(2) | $— | $— | | Restricted Stock Acceleration(3) | $713,115 | $5,952,960 | | Total | $2,309,697 | $8,731,542 | | Pierre Gravier | | | | Cash Severance | $656,250 | $774,375 | | Continued Health Coverage(1) | $52,430 | $52,430 | | Stock Option Acceleration(2) | $— | $— | | Restricted Stock Acceleration(3) | $— | $716,560 | | Total | $708,680 | $1,543,365 | | Eric Pauwels | | | | Cash Severance | $551,800 | $800,110 | | Continued Health Coverage(1) | $32,274 | $32,274 | | Stock Option Acceleration(2) | $— | $470,125 | | Restricted Stock Acceleration(3) | $— | $1,085,809 | | Total | $584,074 | $2,388,318 | | Lee Golden | | | | Cash Severance | $525,000 | $761,250 | | Continued Health Coverage(1) | $41,821 | $41,821 | | Stock Option Acceleration(2) | $— | $— | | Restricted Stock Acceleration(3) | $— | $891,566 | | Total | $566,821 | $1,694,637 | | Mark Boulding | | | | Cash Severance | $542,200 | $786,190 | | Continued Health Coverage(1) | $34,010 | $34,010 | | Stock Option Acceleration(2) | $— | $— | | Restricted Stock Acceleration(3) | $— | $977,002 | | Total | $576,210 | $1,797,202 | | Emily Hill(4) | | | | Cash Severance | $533,500 | N/A | | Total | $533,500 | N/A |
Potential Payments upon Termination or Change in Control (2023)
| (1) Represents the COBRA premium for continued health care coverage for each named executive officer and their dependents that would be paid by the Company based on rates in effect January 1, 2024. |
Potential Payments upon Termination or Change in Control (2023)
| (2) Represents the aggregate value of the accelerated vesting of stock option awards, calculated by multiplying the difference between the closing price of PTC common stock on December 29, 2023 ($27.56) and the stock option exercise price by the number of stock options subject to accelerated vesting. All unvested stock option |
Potential Payments upon Termination or Change in Control (2023)
| awards are "double-trigger" awards that require both a change in control and a qualifying termination of employment before vesting is accelerated. |
Potential Payments upon Termination or Change in Control (2023)
| (3) Represents the aggregate value of the accelerated vesting of restricted stock awards, calculated by multiplying the closing price of PTC common stock on December 29, 2023 ($27.56) by the number of shares subject to accelerated vesting. |
Potential Payments upon Termination or Change in Control (2023)
| (4) Represents the aggregate severance payment to be paid to Ms. Hill, in accordance with her employment agreement, following her separation from the Company in 2023. The severance payment will be paid in equal monthly payments over 12 months, commencing in September 2023. Ms. Hill did not elect to participate in continued health coverage. |
Pay Ratio Disclosure
Pay Ratio Disclosure As required by the Dodd-Frank Act and SEC rules, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Dr. Klein, our Chief Executive Officer in 2023: For our fiscal year ended December 31, 2023:
Pay Ratio Disclosure
| ● | The median of the 2023 annual total compensation of all employees (other than our Chief Executive Officer) was $215,581; and |
Pay Ratio Disclosure
| ● | The 2023 annual total compensation of our Chief Executive Officer, as reported in the 2023 Summary Compensation Table included elsewhere in this proxy statement, was $8,937,025. |
Pay Ratio Disclosure
Based on this information the pay ratio of the annual total compensation of Dr. Klein to the median of the annual total compensation of our employees was approximately 41.5:1. We believe the above pay ratio is appropriately viewed as a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. To identify the employee who received the median annual compensation of all of our employees, we reviewed the base salary, on an annualized basis, in U.S. dollars, for all of our employees as of December 31, 2023, for the period from January 1, 2023 through December 31, 2023. As of December 31, 2023, we had 995 employees worldwide. No cost-of-living adjustment or other adjustments were made and exclusions for non-U.S. employees were not utilized in determining our median employee with the exception of converting base salaries into U.S. dollars with respect to our international employees. Once we identified our "median employee," using the methodology described above, we determined that employee's annual total compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K for purposes of calculating the required pay ratio.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure The following tables and related disclosures provides information required under Item 402(v) of Regulation S-K disclosing (i) a measure of total compensation and a measure reflecting “compensation actually paid,” or CAP, for our principal executive officer, or our PEO, and, as an average, for our other named executive officers, or our Non-PEO NEOs, and (ii) select financial performance measures, in each case, for our four most recently completed fiscal years and the relationship of CAP to those financial performance measures. Our Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. For a discussion of how our Compensation Committee seeks to align pay with performance when making compensation decisions, please review Compensation Discussion and Analysis beginning on page 36. The amounts shown for CAP have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the PEO or other NEOs; these amounts reflect the Summary Compensation Table totals with certain adjustments as described in the following table and footnotes.
Pay Versus Performance Disclosure
| | | | | | | | Value of Initial Fixed | | | | | | | | | | | | $100 Investment Based On: | | | | | | | | | | | | | NASDAQ | | | | | Summary | | Summary | | Average Summary | | Company | Biotechnology | | Company | | | Compensation | Compensation | Compensation | Compensation | Compensation | Average | Total | Index Total | | Selected | | | Table Total for | Actually Paid | Table Total for | Actually Paid | Table Total for | Compensation | Shareholder | Shareholder | Net Income / | Measure: | | | First PEO | for First PEO | Second PEO | for Second PEO | Non-PEO NEOs | Actually Paid to | Return | Return | Loss | Revenue | | Year | ($)(1) | ($)(2) | ($)(1) | ($)(2) | ($)(3) | Non-PEO NEOs ($)(4)(5) | ($)(6) | ($)(7) | ($ Millions) (8) | ($ Millions) | | 2023 | 5,659,384 | (3,542,201) | 8,937,025 | 4,769,312 | 2,398,388 | 781,089 | 57.38 | 115.42 | (626.6) | 937.8 | | 2022 | 7,163,740 | 5,403,785 | — | — | 3,371,920 | 2,655,391 | 79.47 | 111.27 | (559.0) | 698.8 | | 2021 | 11,022,323 | (4,946,916) | — | — | 4,334,690 | (1,002,836) | 82.93 | 124.89 | (523.9) | 538.6 | | 2020 | 10,552,792 | 12,568,762 | — | — | 3,982,716 | 2,566,938 | 127.07 | 125.69 | (438.2) | 380.8 |
Pay Versus Performance Disclosure
| (1) The dollar amounts reported in this column are the amounts of total compensation reported for our PEO for each corresponding year in the “Total” column of the Summary Compensation Table. For fiscal year 2023, Stuart Peltz was our First PEO and Matthew Klein was our Second PEO. Our PEO for fiscal years 2022, 2021 and 2020 was Stuart Peltz. |
Pay Versus Performance Disclosure
| (2) The dollar amounts reported in this column represent the amount of “compensation actually paid,” or CAP, for our PEO for the corresponding fiscal year, as calculated in accordance with Item 402(v) of Regulation S-K and as further described below. |
Pay Versus Performance Disclosure
| (3) The dollar amounts reported in this column represent the average of the amounts reported for our non-PEO NEOs as a group in the “Total” column of the Summary Compensation Table for the corresponding year. The non-PEO NEOs included for purposes of such calculations are as follows: (i) for fiscal year 2023, Pierre Gravier, Mark Boulding, Lee Golden, Eric Pauwels and Emily Hill; (ii) for fiscal year 2022, Emily Hill, Neil Almstead, Eric Pauwels and Matthew Klein; (iii) for fiscal year 2021, Emily Hill, Neil Almstead, Mark Boulding, and Eric Pauwels; and (iv) for fiscal year 2020, Emily Hill, Neil Almstead, Mark Boulding, Eric Pauwels and Marcio Souza. |
Pay Versus Performance Disclosure
| (4) The dollar amounts reported in this column represent the average amount of CAP to the non-PEO NEOs specified in footnote (3) as a group, as further described below. |
Pay Versus Performance Disclosure
| (5) The following tables describe the adjustments, each of which is prescribed by SEC rules, to calculate CAP from the amounts reported in the Summary Compensation Table. The amounts reported in the Summary Compensation Table and CAP do not reflect the actual amount of compensation earned by or paid to our executives during the applicable fiscal years, but rather are amounts determined in accordance with Item 402 of Regulation S-K under the Exchange Act. |
Pay Versus Performance Disclosure
PEO:
Pay Versus Performance Disclosure
| | | Deductions | Additions | | | Year | SCT Total ($) | from SCT Total ($) | to SCT Total ($) | CAP ($) | | 2023 (First PEO) | 5,659,384 | (4,862,485) | (4,339,101) | (3,542,201) | | 2023 (Second PEO) | 8,937,025 | (7,697,685) | 3,529,971 | 4,769,312 |
Pay Versus Performance Disclosure
| | | | | | | Value of Dividends | | | | | | | | Fair Value at the | or other Earnings | | | | | Year over Year | Fair Value as of | Year over Year | End of the Prior | Paid on Stock or | | | | | Change in Fair | Vesting Date of | Change in Fair | Year of Equity | Option Awards | | | | | Value of | Equity Awards | Value of Equity | Awards that | not Otherwise | | | | Year End Fair | Outstanding | Granted and | Awards Granted | Failed to Meet | Reflected in Fair | Total Equity | | | Value of Equity | and Unvested | Vested in | in Prior Years that | Vesting Conditions | Value or Total | Award | | | Awards | Equity Awards | the Year | Vested in the Year | in the Year | Compensation | Adjustments | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 (First PEO) | — | — | — | (128,891) | (4,210,210) | — | (4,339,101) | | 2023 (Second PEO) | 4,625,788 | (1,045,392) | — | (50,424) | — | — | 3,529,971 |
Pay Versus Performance Disclosure
Non-PEO NEO’s:
Pay Versus Performance Disclosure
| | | Deductions | Additions | CAP | | Year | SCT Total ($) | from SCT Total ($) | to SCT Total ($) | ($) | | 2023 | 2,398,388 | (1,762,011) | 144,712 | 781,089 |
Pay Versus Performance Disclosure
| | | | | | | Value of | | | | | | | | | Dividend or | | | | | | | | Fair Value at | other Earnings | | | | | | | Year over Year | the End of the | Paid on Stock or | | | | | Year over Year | Fair Value as of | Change in Fair | Prior Year of | Option Awards | | | | | Change in Fair | Vesting Date of | Value of Equity | Equity Awards | not Otherwise | | | | Year End | Value of | Equity Awards | Awards Granted | that Failed | Reflected | Total | | | Fair Value | Outstanding | Granted and | in Prior Years | to Meet Vesting | in Fair Value | Equity | | | of Equity | and Unvested | Vested in | that Vested in | Conditions in | or Total | Award | | | Awards | Equity Awards | the Year | the Year | the Year | Compensation | Adjustments | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 | 784,988 | (354,971) | — | (9,162) | (276,143) | — | 144,712 |
Pay Versus Performance Disclosure
The methodology used to develop the valuation assumptions as of each applicable measurement date is consistent with and did not materially differ from those disclosed at the time of grant.
Pay Versus Performance Disclosure
| (6) Amounts represent the cumulative total stockholder return of our common stock for the period beginning on the market close on December 31, 2019, the last trading day before the earliest fiscal year in the table, through and including December 31, 2023, the end of the last fiscal year in the table for which cumulative total stockholder return is being calculated. Amount assumes that $100 was invested for the period starting December 31, 2019. The amount included in the table is the value of such fixed investment based on the cumulative total stockholder return as of the end of each year, including reinvestment of dividends (if any). |
Pay Versus Performance Disclosure
| (7) The peer group used for this purpose is NASDAQ Biotechnology Index, which we also use in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. Amount assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the NASDAQ Biotechnology Index, respectively. |
Pay Versus Performance Disclosure
| (8) The dollar amounts in this column are the Company’s net loss as reflected in the Company’s audited consolidated financial statements for the applicable year. |
Pay Versus Performance Disclosure
Description of Relationship Between PEO and Non-PEO NEO CAP and Company Total Stockholder Return (“TSR”) The following chart sets forth graphically the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, the Company’s cumulative TSR and the index TSR over the four most recently completed fiscal years. Description of Relationship Between PEO and Non-PEO NEO CAP and Net Income The following chart sets forth graphically the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and our net income loss during the four most recently completed fiscal years. Description of Relationship Between PEO and Non-PEO NEO CAP and Revenue The following chart sets forth graphically the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and our revenue during the four most recently completed fiscal years.
2023 DIRECTOR COMPENSATION
2023 DIRECTOR COMPENSATION The following table sets forth information regarding compensation awarded to, earned by or paid to our directors, other than Dr. Klein and Dr. Peltz, during 2023:
2023 DIRECTOR COMPENSATION
| | Fees earned or | Option | Stock | All other | | | | paid in cash | awards | awards | compensation | Total | | Name | ($) | ($)(1) | ($)(1) | ($) | ($) | | Michael Schmertzler | $83,000 | $418,600 | $315,360 | $— | $816,960 | | William F. Bell Jr.(3) | 28,334 | 374,949 | 285,080 | — | 688,363 | | Allan Jacobson, Ph.D. | 50,000 | 209,300 | 157,680 | 95,000(2) | 511,980 | | Stephanie S. Okey, M.S. | 55,000 | 209,300 | 157,680 | — | 421,980 | | Emma Reeve | 75,000 | 209,300 | 157,680 | — | 441,980 | | Mary Smith | 72,000 | 209,300 | 157,680 | — | 438,980 | | David P. Southwell | 72,000 | 209,300 | 157,680 | — | 438,980 | | Glenn D. Steele, Jr., M.D., Ph.D. | 60,000 | 209,300 | 157,680 | — | 426,980 | | Alethia Young | 62,000 | 209,300 | 157,680 | — | 428,980 | | Jerome Zeldis, M.D., Ph.D. | 55,000 | 209,300 | 157,680 | — | 421,980 |
2023 DIRECTOR COMPENSATION
| (1) These amounts do not represent the actual value realized by the directors during the respective year. The amounts reported in the "Option awards" and “Stock awards” column reflect the full grant date fair value of stock options and restricted stock units awarded during 2023 computed in accordance with the provisions of FASB ASC Topic 718. |
2023 DIRECTOR COMPENSATION
The stock option values were calculated using the Black-Scholes option pricing model. See Notes 2 and 10 to our audited financial statements for the fiscal year ended December 31, 2023, included in our 2023 Form 10-K for the fiscal year ended December 31, 2023 for information regarding assumptions underlying the valuation of equity awards. At December 31, 2023, the aggregate number of shares of our common stock subject to each non-employee director’s outstanding option awards were as follows: Mr. Schmertzler—232,000; Mr. Bell—15,834; Dr. Jacobson—116,000; Ms. Okey—71,167; Ms. Reeve—58,399; Ms. Smith—37,834; Mr. Southwell—80,000; Dr. Steele—114,000; Ms. Young—17,334 and Dr. Zeldis—126,000. At December 31, 2023, the aggregate number of each non-employee director’s unvested restricted stock units were as follows: Mr. Schmertzler—4,666; Mr. Bell—6,333; Dr. Jacobson—2,333; Ms. Okey—2,333; Ms. Reeve—2,333; Ms. Smith—2,883; Mr. Southwell—2,333; Dr. Steele—2,333; Ms. Young—4,467 and Dr. Zeldis—2,333.
2023 DIRECTOR COMPENSATION
| (2) Represents fees received by Dr. Jacobson in connection with his service as chair of our scientific advisory board during the fiscal year ended December 31, 2023. |
2023 DIRECTOR COMPENSATION
| (3) Mr. Bell was elected to our Board on June 6, 2023 at our 2023 annual meeting of stockholders. |
Narrative to 2023 Director Compensation Table
Narrative to 2023 Director Compensation Table During 2023, our non-employee directors were compensated for their service as directors, including as members of the various committees of our Board, as follows:
Narrative to 2023 Director Compensation Table
| ● | an annual retainer for board service of $50,000; |
Narrative to 2023 Director Compensation Table
| ● | an annual option grant to purchase 10,000 shares of our common stock, which vests over one year in twelve equal monthly installments, commencing on February 5, 2023; |
Narrative to 2023 Director Compensation Table
| ● | a grant of 4,000 restricted stock units that vest over one year, with five-twelfths (5/12) of the shares underlying the restricted stock units vesting on June 6, 2023 and the remaining seven-twelfths (7/12) of the shares vesting on January 5, 2024; |
Narrative to 2023 Director Compensation Table
| ● | for our Chair of the Board, an additional annual option grant to purchase 10,000 shares of our common stock, which vests over one year in twelve equal monthly installments, commencing on February 5, 2023 and an additional grant of 4,000 restricted stock units that vest over one year, with five-twelfths (5/12) of the shares underlying the restricted stock units vesting on June 6, 2023 and the remaining seven-twelfths (7/12) of the shares vesting on January 5, 2024; |
Narrative to 2023 Director Compensation Table
| ● | for members of our Audit Committee, an additional annual retainer of $12,000 ($25,000 for the Chair); |
Narrative to 2023 Director Compensation Table
| ● | for members of our Compensation Committee, an additional annual retainer of $10,000 ($20,000 for the Chair); |
Narrative to 2023 Director Compensation Table
| ● | for members of our Nominating and Corporate Governance Committee, an additional annual retainer of $5,000 ($13,000 for the Chair); and |
Narrative to 2023 Director Compensation Table
| ● | for members of any ad hoc committee established by the Board, an additional retainer of $7,500 ($11,250 for the Chair); in 2023, the Board did not pay out any fees for any ad hoc committees. |
Narrative to 2023 Director Compensation Table
The retainers paid to our non-employee directors described above are paid in arrears and, if applicable, are prorated for the time in which each of our non-employee directors served as a member of our Board or as a member of a committee of our Board in 2023. In connection with his election to the Board on June 6, 2023, Mr. Bell was granted (i) an “initial director option grant” of 10,000 options to purchase shares of our common stock, which vests over three years in 36 approximately equal monthly installments, commencing on July 6, 2023, (ii) an “initial director restricted stock unit grant” of 4,000 restricted stock units that vests over three years, in three approximately equal annual installments, commencing on June 6, 2024, (iii) an "annual director option grant", pro-rated for the remainder of 2023, of 5,834 stock options to purchase shares of our common stock, which vested over seven months in seven approximately equal monthly installments, commencing on July 5, 2023 and (iv) an “annual director restricted stock unit grant”, pro-rated from the remainder of 2023, of 2,333 restricted stock units, which vested on January 5, 2024. Our Compensation Committee periodically reviews the compensation we pay our non-employee directors, with input from our independent compensation consultant. Our Compensation Committee compares our board compensation to compensation paid to non-employee directors of our peer group companies to ensure that our board compensation is reasonable and competitive. Our Compensation Committee also considers the responsibilities we ask of our Board members and those that hold Board leadership roles, along with the amount of time required to perform those responsibilities. During 2022, our Compensation Committee, with the assistance of FW Cook, performed a review of director compensation. Following this review, in January 2023, the Compensation Committee recommended, and our Board determined, to keep director fees the same for 2023 as in 2022 and to decrease the number of stock options and increase the number of restricted stock units granted. As set forth in the Amended 2013 LTIP, which was approved by our stockholders at our 2022 annual meeting of stockholders, the sum of all cash retainers and the reported value of equity compensation provided to the pool of all incumbent non-employee directors for their Board service in 2023 did not exceed an amount equal to one tenth of one percent of our weighted average market capitalization for the prior three years (measured on an annual basis) times the number of incumbent non-employee directors, excluding newly-appointed or elected non-employee directors. Mr. Bell, as a newly-appointed director, did not receive a combination of cash retainers and equity compensation in connection with his initial election to the Board in June 2023 of greater than two times the average incumbent director compensation. The stock options granted to our non-employee directors have an exercise price equal to the closing price of PTC’s common stock on the date of grant and expire ten years after the date of grant. Vesting of the option and restricted stock unit grants are subject to the director’s continued service to us. Each member of our Board is also entitled to reimbursement for reasonable travel and other expenses incurred in connection with attending meetings of the Board and any committee on which he or she serves.

DEF 14A of PTC Therapeutics, Inc.

Compensation Committee

PROPOSAL 1: ELECTION OF DIRECTORS

Information Regarding Directors and Director Nominees

Board Composition

Director Nominees

Biographical Information

Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)

Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)

Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)

Class II Director nominees to be elected at the Annual Meeting (terms expiring in 2024)

Class III Directors (terms expiring in 2025)

Class III Directors (terms expiring in 2025)

Class III Directors (terms expiring in 2025)

Class I Directors (terms expiring in 2026)

Class I Directors (terms expiring in 2026)

Class I Directors (terms expiring in 2026)

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

Executive Summary

Executive Compensation Objectives and Philosophy

Executive Compensation Objectives and Philosophy

(base salary, annual cash incentive at target, and equity award)

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Peer Group Composition

Individual and Company Performance

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Elements of Executive Compensation

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Summary Compensation Table

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Grants of Plan-Based Awards in 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023

Outstanding Equity Awards at December 31, 2023