DEF 14A of Aurinia Pharmaceuticals Inc., May 3, 2024

DEF 14A of Aurinia Pharmaceuticals Inc.

Filed May 3, 2024 · FY20230001600620-24-000064

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The following section states the names of all of the persons proposed to be nominated by the Company for election as directors, their municipality, province or state and country of residence, their age, their principal occupation, their position in the Company (if any), and the period during which each proposed nominee has served as a director. The persons named in the Proxy intend to cast the votes to which the shares represented by such Proxy are entitled FOR the election of each of the nominees to the Board set forth in this Proxy Statement/Circular, unless otherwise directed by the shareholders instructing them. The Company is not aware that any of the below nominees will be unable or unwilling to serve; however, should the Company become aware of such an occurrence before the election of directors takes place at the Meeting, if one of the persons named in the Proxy is appointed as proxy holder, it is intended that the discretionary power granted under such Proxy will be used to vote for any substitute nominee or nominees whom the Company in its discretion may select. Directors are elected by a plurality of the "FOR" votes of the holders of shares by remote attendance at the Meeting or represented by proxy and entitled to vote on the election of directors. Accordingly, the nine nominees receiving the highest number of affirmative votes will be elected. However, in order not to be subject to the application of our Majority Voting Policy, as further described below, each director nominee must receive more “FOR” votes than “WITHHOLD” votes. Holders of proxies solicited by this Proxy Statement/Circular will vote the proxies received by them as directed on the proxy card or, if no direction is made, for the election of the Board’s nine nominees. If elected, each director will hold office until the next annual meeting of shareholders or until their successor is duly elected, unless their office is vacated earlier in accordance with the by-laws of the Company or the ABCA. On September 21, 2023, we entered into a cooperation agreement (the “Cooperation Agreement”) with MKT Capital Ltd., MKT Tactical Fund, SP and Antoine Khalife (collectively, “MKT”). Pursuant to the Cooperation Agreement, we agreed to appoint Dr. Robert T. Foster to the Board, with an initial term expiring at the Meeting. Under the terms of the Cooperation Agreement, MKT agreed to abide by certain customary standstill restrictions (subject to certain exceptions) and voting commitments, including voting in support of all nominees for director that we put forward at the Meeting, and voting in favor of all other matters put forward at the Meeting (subject to certain exceptions) until October 31, 2024 provided that we re-nominate Dr. Foster at the Meeting and Dr. Foster agrees to such re-nomination.

  2. Nominees for Election

    Nominees for Election Our Governance & Nomination Committee of the Board ("G&N Committee") and our Board seek to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business. To that end, our Board has identified and evaluated nominees in the broader context of our Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that our Board views as critical to effective functioning of our Board. The brief biographies below include information, as of the date of this Proxy Statement/Circular, regarding the specific and particular experience, qualifications, attributes or skills of each director or nominee that qualify such director or nominee to serve on our Board.

  3. Nominees for Election

    | Name, Province, State and Country of Residence | Date First Elected / Appointed | Age | Present Principal Occupation | Position Held With the Company | | Dr. Daniel G. Billen Mississauga, Ontario Canada | April 29, 2019 | 70 | Retired, previously commercial GM/VP at Amgen Inc., a biotechnology company | Chairman of the Board | | Peter Greenleaf Potomac, Maryland United States | April 29, 2019 | 54 | President and Chief Executive Officer ("CEO") of the Company | Director, President and Chief Executive Officer | | Dr. David R. W. Jayne Cambridge United Kingdom | May 26, 2015 | 67 | Professor of Clinical Autoimmunity in the Department of Medicine at the University of Cambridge, UK; fellow of the Royal Colleges of Physicians of London and Edinburgh, and the Academy of Medical Science; certified nephrologist and an Honorary Consultant Physician at Addenbrooke’s Hospital, Cambridge UK | Director | | R. Hector MacKay-Dunn Vancouver, British Columbia Canada | June 26, 2019 | 73 | Senior Partner, Farris LLP | Director | | Jill Leversage Vancouver, British Columbia Canada | November 13, 2019 | 67 | Corporate Director | Director | | Dr. Brinda Balakrishnan San Francisco, California United States | June 14, 2021 | 44 | Executive Vice President, Chief Corporate Strategy and Business Development Officer of BioMarin Pharmaceutical Inc. | Director | | Dr. Karen Smith Snowmass Village, CO United States | August 18, 2023 | 56 | Independent Consultant | Director | | Jeffrey A. Bailey Melvin Village, NH United States | August 18, 2023 | 62 | Former CEO of BioDelivery Sciences International, Inc.; Corporate Director | Director | | Dr. Robert T. Foster Edmonton, Alberta Canada | September 21, 2023 | 65 | Adjunct Professor, Faculty of Pharmacy and Pharmaceutical Sciences, University of Alberta | Director |

  4. INFORMATION REGARDING THE BOARD OF DIRECTORS

    INFORMATION REGARDING THE BOARD OF DIRECTORS

  5. Objectives, Philosophy and Elements of Executive Compensation

    Objectives, Philosophy and Elements of Executive Compensation The Company’s executive compensation program and strategy is designed to: •support the attraction, retention and engagement of global talent and talent mobility while recognizing differences across labor markets, where appropriate; •engage our talent to achieve critical business and financial objectives, R&D and product milestones that are set by management and the Board, through strategically-aligned annual and long-term incentive programs, as appropriate; •provide target total direct compensation opportunities that are generally aligned with the competitive market 50th percentile and provide both upside and downside earning potential around the 50th percentile based on company and individual performance; and •maintain a disciplined use of equity while appropriately recognizing performance, ensuring alignment with the competitive labor market and long-term shareholder interests. To further these objectives, the Compensation Committee oversees the design of the compensation program that appropriately aligns pay and performance outcomes and are reflective of competitive market practice relative to other pharmaceutical companies of similar size and commercial stage. It also aligns the annual cash incentive (bonus) program to the achievement of objectives that will drive future success and enhance the value of the Company by linking a significant portion of the bonus program to overall corporate performance and attainment of specific value enhancing goals and milestones. The Compensation Committee assesses the performance of the Company’s CEO in accordance with these objectives and makes recommendations to the Board, and the Board approves all decisions regarding the CEO's compensation. Annually, specific and measurable performance objectives are defined for each executive officer that are aligned with the annual corporate objectives. For 2023, the overall corporate level objectives against which the executive officers were evaluated, included financial and shareholder value targets, commercialization of LUPKYNIS, R&D and LUPKYNIS portfolio progression, and business development. The Company’s compensation program and strategy for its executive officers consists primarily of three main elements: base salary, an annual cash incentive (bonus) and equity-based compensation.

  6. Objectives, Philosophy and Elements of Executive Compensation

    We focus on providing a market-aligned compensation package to our executive officers which provides competitive base compensation along with significant short and long-term incentives for the achievement of measurable Company and executive officer goals and objectives. We believe that this approach provides an appropriate blend of short-term and long-term incentives to maximize alignment between management and the best interests of the Company. We have a compensation philosophy for allocating total compensation among salary, performance bonus awards and long-term equity grants (a portion of which are performance-based grants). The Compensation Committee with input from its compensation consultant regarding market competitive assessments of the Company's peer group, uses its judgment to establish a total compensation program for each NEO that is a mix of base salary, short-term and long-term incentive compensation, and cash compensation, that it believes appropriate to achieve the goals of the executive compensation program and our corporate objectives. The below charts illustrate the CEO and average NEO compensation mix between short term (base salary, annual performance incentive and other pay) and long-term incentives for 2023.

  7. How We Determine Executive Compensation

    How We Determine Executive Compensation Role of our Compensation Committee, Management and the Board The Compensation Committee is appointed by the Board and has responsibilities related to the compensation of the Company’s directors, officers, and employees and the development and administration of the Company’s compensation plans. For details on the Compensation Committee’s oversight of the executive compensation program, see the section titled “Compensation Committee” of this Proxy Statement/Circular. Our Compensation Committee consists solely of independent members of the Board. The Compensation Committee meets periodically throughout the year to manage and evaluate our executive compensation program, and generally determines the principal components of compensation (base salary, performance bonus and equity awards) for our executive officers on an annual basis; however, decisions may occur at other times for new hires, promotions or other special circumstances as our Compensation Committee determines appropriate. The Compensation Committee does not delegate authority to approve executive officer compensation. The Compensation Committee does not maintain a formal policy regarding the timing of equity awards to our executive officers. Role of Executive Officers in Compensation Decisions The Compensation Committee assesses the performance of the Company’s CEO and makes recommendations to the Board, and the Board approves all decisions regarding the CEO's compensation. The Compensation Committee consults with and receives input and recommendations from the CEO regarding the performance, assessment and compensation of all the other executive officers and determines the compensation of such executives. From time to time, various other members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in the Compensation Committee meetings. Although the Compensation Committee generally considers recommendations from the CEO, decisions regarding the compensation of the Company’s executive officers are made by the Compensation Committee and may reflect factors and consideration other than information and recommendations provided by the CEO. Role of Compensation Consultant The Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. The Compensation Committee has retained Willis Towers Watson US LLC (WTW) as its compensation consultant. A representative of WTW generally attends meetings of the Compensation Committee. In addition, WTW supports the selection of companies included in our compensation peer group, provides competitive market assessments of the compensation of our executive officers and non-employee director compensation programs, reviews the CD&A section of our proxy statements, and provides support on other matters as requested by the Compensation Committee. The Compensation Committee has analyzed whether the work of WTW as compensation consultant raises any conflict of interest, taking into account relevant factors in accordance with SEC guidelines. Based on its analysis, our Compensation Committee determined that the work of WTW and the individual compensation advisors employed by WTW does not create any conflict of interest pursuant to the SEC rules and Nasdaq listing standards. Factors Used in Determining Executive Compensation Our Compensation Committee sets the compensation of our executive officers at levels they determine to be competitive and appropriate for each NEO, using guidance and market data provided by WTW, as well as the professional experience and judgment of the members of the Compensation Committee. Pay decisions are not made by use of a formulaic approach; the Compensation Committee believes that executive pay decisions require consideration of a multitude of relevant factors which may vary from year to year. In making executive compensation decisions, the Compensation Committee generally takes into consideration the factors listed below. •Company performance and existing business needs; •Each NEO’s individual performance, scope of job function and the critical skill set of the NEO to the Company’s future performance; •The need to attract new talent to our executive team and retain existing talent in a highly competitive industry; •A range of market data reference points; and •Recommendations from consultants on compensation policy determinations for the executive officer group. Setting Executive Compensation Performance goals are determined early in the year for each executive officer and relate to milestones and/or achievements, which aim to facilitate the Company’s overall goals and objectives. These performance goals are assessed by the Compensation Committee. The Board makes the final determination in respect of setting the Company’s goals each year, based on the recommendation of the Compensation Committee. These objectives can be altered at the discretion of the Board if appropriate due to changes in business factors or conditions. Following the end of the year, the Compensation Committee assesses the achievement of such objectives with input from the CEO and based on such assessment, determines a corporate score based on actual performance and a resultant aggregate cash incentive bonus for each executive officer. The Compensation Committee approves the cash incentive bonus for the Company’s executive officers (other than the CEO), and recommends the cash incentive bonus for the CEO to the Board for approval. The Board has final approval authority for the cash incentive bonus for the CEO. Grants of equity-based compensation is subject to the discretion of the Compensation Committee and Board, which is determined annually based on the consideration of a variety of factors and is not subject to any minimum amount. As part of its review of management compensation and incentive programs, the Compensation Committee retains external independent consultants to review and provide benchmark data of a comparable group of companies. The Compensation Committee believes that it is important when making its compensation decisions to be informed as to the current practices of comparable public companies with which we compete for top talent. During 2023, the Compensation Committee engaged WTW to assist in updating the benchmarking data and provide advice on the total direct compensation (base salary, annual short and long-term incentives) for the NEOs (and the Company’s other officers) for the 2023 fiscal year. The Compensation Committee must pre-approve any additional services that WTW would provide to the Company at the request of management of the Company. As part of its 2023 benchmarking and review process, WTW (in consultation with the Compensation Committee) developed a comparator group, comprising 22 Canadian and U.S.-listed companies (the "2023 Peer Group"). The 2023 Peer Group includes multiple entities from the peer group selected for the 2022 compensation review but has removed and added various entities that are more comparable to the Company's size and status of operations or were merged or divested throughout 2023. Selection for the 2023 Peer Group included industry classification, revenue, market capitalization, trailing 12-month market capitalization, employee base, R&D expenses, and business focus. The Company’s market capitalization at the time fell slightly below the middle of the market cap range. The equity data used by WTW was obtained from public proxy filings and Radford’s 2022 Global Life Sciences survey (mid-size public company data used for equity benchmarking). The 2023 Peer Group consisted of the following 22 public companies:

  8. How We Determine Executive Compensation

    WTW provided the Compensation Committee with its assessment of competitive market practice with respect to NEO total direct compensation based on the benchmarking work it performed. The Compensation Committee considered the competitive market data provided by WTW where appropriate and in conjunction with its own assessment of competitive compensation requirements as well as management recommendations. The elements of compensation are targeted at ensuring that the compensation paid by the Company to its executive officers remains in a reasonably competitive range as compared to its comparator group. The compensation philosophy at a minimum is to focus on 50th percentile positioning for comparable roles in the comparator group with upside or downside based on performance, market demand and recognition of other inputs.

  9. 2023 Executive Compensation Program

    2023 Executive Compensation Program Base Salary The base salaries of our executive officers are designed to compensate them for day-to-day services rendered during the fiscal year. Appropriate base salaries are used to recognize the experience, skills, knowledge and responsibilities required of each executive officer and to allow us to attract and retain individuals capable of leading us to achieve our business goals in competitive market conditions. The base salaries of our executive officers are reviewed at least annually by our Compensation Committee and adjustments are made to reflect Company and individual performance, as well as competitive market practices. Our Compensation Committee also takes into account additional performance criteria, such as an executive officer’s ability to lead, organize and motivate others, develop the skills necessary to mature with us, set realistic goals to be achieved in his or her respective area, and recognize and pursue new business opportunities that enhance our growth and success. Our Compensation Committee does not apply specific formulas to determine increases, but instead makes an evaluation of each executive officer’s contribution to our long-term success. Any annual adjustment is also reflective of market practices from peer companies as advised by our compensation consultant taking into account factors including inflation adjustments and other merit considerations. Annual adjustments to base salaries are effective as of January 1 of each year, with mid-year adjustments to base salaries limited to special circumstances, such as promotions or increased responsibilities, or to align certain base salaries with those of individuals in comparable positions at the companies in our compensation peer group. The 2023 base salaries are as follows for our NEOs:

  10. 2023 Executive Compensation Program

    | | 2023 Target Annual Cash Incentive | | 2023 Actual Annual Cash Incentive Paid | | | Named Executive Officer | % of Base Salary | $ | % of Target Annual Cash Incentive | $ | | Peter Greenleaf | 70% | 576,014 | 123% | 710,760 | | Joe Miller | 50% | 250,351 | 137% | 342,980 | | Max Donley | 50% | 256,820 | 133% | 341,571 | | Stephen Robertson (1) | 50% | 239,364 | 137% | 327,928 | | Volker Knappertz(2) | 50% | 258,125 | 127% | 327,819 |

  11. 2023 Executive Compensation Program

    (1)Stephen Robertson's cash incentive paid was translated from CAD to USD using the year-end foreign exchange rate from the Bank of Canada. (2)Volker Knappertz was appointed as the Company's Executive Vice President, Research & Development effective July 14, 2022. His employment with the Company ceased on March 4, 2024. Long-term Incentive Grants In 2023, the Compensation Committee approved long-term incentive grants to our NEOs in the form of RSUs (representing the right to receive one common share) and performance awards (PAs) with performance metrics required to be met in order to receive the shares subject to the PAs.

  12. 2023 Executive Compensation Program

    | Executive | RSUs (# shares)(1) | PAs (# shares)(2) | | Peter Greenleaf | 667,407 | 333,705 | | Joe Miller | 229,421 | 114,711 | | Max Donley | 271,134 | 135,567 | | Stephen Robertson | 204,810 | 102,406 | | Volker Knappertz(3) | 191,462 | 95,731 |

  13. Other Features of Our Executive Compensation Program

    Other Features of Our Executive Compensation Program Agreements with Our Named Executive Officers We have entered into written employment agreements with each of our NEOs. Each of these employment agreements sets forth the initial compensation arrangements for the NEO, including an initial base salary, an annual cash bonus opportunity, and an equity award recommendation. These agreements and the proprietary information and invention assignment agreements each NEO executes upon commencing employment at the Company also set forth the rights and responsibilities of each party and include, among other rights and responsibilities, the prohibition on the executive officer from engaging directly or indirectly in competition with us, soliciting any of our employees, or disclosing our confidential information. Below are descriptions of our employment agreements with our NEOs including a discussion of the severance payments and other benefits to be provided in connection with an involuntary termination of employment, and a change in control of the Company.

  14. Peter Greenleaf, President and CEO

    Peter Greenleaf, President and CEO On April 11, 2019, Peter Greenleaf entered into an employment agreement with the Company for the position of President and CEO commencing on April 29, 2019. The agreement provides that he will devote his sole skill and efforts to discharging his duties to the Company on a full-time and exclusive basis and that he will serve as a member of the Board. He is eligible to receive a cash performance bonus with a target payment of 70% of his base salary if the Board, on the recommendation of the Compensation Committee, in its sole discretion, determines that the Company’s performance had met certain short-term and long-term business performance objectives established from time to time by the Board, on the recommendation of the Compensation Committee, subject to any rules the Company may develop regarding the bonus scheme. In addition, he is entitled to participate in the Company’s benefits programs and to vacation of 30 business days per year. Peter Greenleaf's base salary is reviewed annually by the Board, on the recommendation of the Compensation Committee. He agreed to non-competition, non-solicitation, non-disclosure and assignment of intellectual property provisions in favor of the Company. Pursuant to Peter Greenleaf’s employment agreement, as modified by resolution of the Board, termination and change of control benefits are as follows: 1.In the event that Peter Greenleaf’s employment is terminated by the Company without cause, he is entitled to receive continuing payments of severance pay for a period of 18 months equal to his then current base salary, plus such other sums, if granted, pursuant to the performance bonus section of the employment agreement. In addition, to the extent permitted by law and subject to the terms and conditions of any benefit plans in effect from time to time, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement for the duration of the severance period. Any options forming part of the initial option grant that are unvested as of the termination date, but would have vested during the severance period, would immediately vest upon termination. 2.In the event that Peter Greenleaf’s employment is terminated by the Company without cause or by the executive for "good reason" within 12 months following a change in control of the Company, he is entitled to receive a lump sum payment equal to 24 months of his then current base salary, and if awarded and payable, the target bonus for the year of termination. In addition, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement during the 12-month period following the termination date. All of his unexercised stock awards will immediately vest upon the termination of his employment and shall be fully exercisable in accordance with the terms and conditions under which the stock awards were granted, subject to the prior expiry of his stock options in accordance with their terms.

  15. Joe Miller, Chief Financial Officer

    Joe Miller, Chief Financial Officer On April 8, 2020, Joe Miller entered into an employment agreement with the Company for the position of Chief Financial Officer. The agreement provides that he will devote his sole skill and efforts to discharging his duties to the Company on a full-time and exclusive basis. In addition to his base salary, which is reviewed annually by the Compensation Committee in conjunction with the CEO, he is eligible to receive a cash bonus with a target payment of 50% of his base salary if the Board, on recommendation of the Compensation Committee, in their sole discretion, determines that the Company’s performance has met certain short-term and long-term business performance objectives established from time to time by the Board, subject to any rules the Company may develop regarding the bonus scheme. In addition, he is entitled to participate in the Company’s benefits program and to paid vacation of 20 business days per year. He agreed to non-competition, non-solicitation, non-disclosure and assignment of intellectual property provisions in favor of the Company. Pursuant to Joe Miller's employment agreement, as modified by resolution of the Compensation Committee, termination and change of control benefits are as follows: 1.In the event that Joe Miller’s employment is terminated by the Company without cause, he is entitled to receive continuing payments of severance pay for a period of 12 months, equal to his then current base salary, plus such other sums, if granted, pursuant to the performance bonus section of the employment agreement. In addition, to the extent permitted by law and subject to the terms and conditions of any benefit plans in effect from time to time, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement for the duration of the severance period. Any options forming part of the initial option grant that are unvested as of the termination date, but would have vested during the severance period, would immediately vest upon termination. 2.In the event that Joe Miller’s employment is terminated by the Company without cause or by the executive for "good reason" within 12 months following a change in control of the Company, he is entitled to receive a lump sum payment equal to 18 months of his then current base salary, and if awarded and payable, the target bonus for the year of termination. In addition, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement during the 12-month period following the termination date. All stock options and equity-based awards granted and outstanding at the time of termination, which have not yet vested, will immediately vest upon the termination of his employment and shall be fully exercisable in accordance with the terms and conditions under which the stock options were granted, subject to the prior expiry of his stock options in accordance with their terms.

  16. Matthew ("Max") Donley, Executive Vice President, Operations and Strategy

    Matthew ("Max") Donley, Executive Vice President, Operations and Strategy On July 15, 2019, Max Donley entered into an employment agreement with the Company for the position of Executive Vice President, Operations and Strategy. The agreement provides that he will devote his sole skill and efforts to discharging his duties to the Company on a full-time and exclusive basis. In addition to his base salary, which is reviewed annually by the Compensation Committee in conjunction with the CEO, he is eligible to receive a cash bonus with a target payment of 50% of his base salary if the Board, on recommendation of the Compensation Committee in their sole discretion, determines that the Company’s performance has met certain short-term and long-term business performance objectives established from time to time by the Board and CEO, subject to any rules the Company may develop regarding the bonus scheme. In addition, he is entitled to participate in the Company’s benefits program and to paid vacation of 20 business days per year. He agreed to non-competition, non-solicitation, non-disclosure and assignment of intellectual property provisions in favor of the Company. Pursuant to Max Donley's employment agreement, as modified by resolution of the Compensation Committee, termination and change of control benefits are as follows: 1.In the event that Max Donley’s employment is terminated by the Company without cause, he is entitled to receive continuing payments of severance pay for a period of 12 months, equal to his then current base salary, plus such other sums, if granted, pursuant to the performance bonus section of the employment agreement. In addition, to the extent permitted by law and subject to the terms and conditions of any benefit plans in effect from time to time, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement for the duration of the severance period. Any options forming part of the initial option grant that are unvested as of the termination date, but would have vested during the severance period, would immediately vest upon termination. 2.In the event that Max Donley’s employment is terminated by the Company without cause or by the executive for "good reason" within 12 months following a change in control of the Company, he is entitled to receive a lump sum payment equal to 18 months of his then current base salary, and if awarded and payable, the target bonus for the year of termination. In addition, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement during the 12-month period following the termination date. All stock awards outstanding at the time of termination, which stock awards have not yet vested, will immediately vest upon the termination of his employment and shall be fully exercisable in accordance with the terms and conditions under which the stock awards were granted, subject to the prior expiry of his stock options in accordance with their terms.

  17. Stephen Robertson, Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer

    Stephen Robertson, Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer On September 29, 2020, Stephen Robertson entered into an employment agreement with the Company for the position of Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer. The agreement provides that he will devote his sole skill and efforts to discharging his duties to the Company on a full-time and exclusive basis. In addition to his base salary, which is reviewed annually by the Compensation Committee in conjunction with the CEO, he is eligible to receive a cash bonus with a target payment of 50% of his base salary if the Board, on recommendation of the Compensation Committee, in their sole discretion, determines that the Company’s performance has met certain short-term and long-term business performance objectives established from time to time by the Board, subject to any rules the Company may develop regarding the bonus scheme. In addition, he is entitled to participate in the Company’s benefits program and to paid vacation of 20 business days per year. He agreed to non-competition, non-solicitation, non-disclosure and assignment of intellectual property provisions in favor of the Company. Pursuant to Stephen Robertson's employment agreement, termination and change of control benefits are as follows: 1.In the event that Stephen Robertson’s employment is terminated by the Company without cause, he is entitled to receive continuing payments of severance pay for a period of 12 months, plus one additional month for each full year of employment, up to a maximum of 18 months in the aggregate, equal to his then current base salary, plus such other sums, if granted, pursuant to the performance bonus section of the employment agreement. In addition, to the extent permitted by law and subject to the terms and conditions of any benefit plans in effect from time to time, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement for the duration of the severance period. 2.In the event that Stephen Robertson's employment is terminated by the Company upon Change of Control or by the executive for "good reason" within 12 months following a change in control of the Company, he is entitled to receive a continuance payment equal to 18 months of his then current base salary, and if awarded and payable, the target bonus for the year of termination. In addition, the Company is to maintain health and medical benefits pursuant to the benefits section of the employment agreement during the 12-month period following the termination date. All outstanding awards granted at the time of termination, which have not yet vested, will immediately vest upon the termination of his employment and shall be fully exercisable in accordance with the terms and conditions under which the stock awards were granted, subject to the prior expiry of his stock options in accordance with their terms.

  18. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table sets forth all of the compensation awarded to, earned by or paid to our NEOs during the fiscal years ended December 31, 2023, December 31, 2022, and December 31, 2021.

  19. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($)(8) | Bonus ($) | Stock Awards ($) (3)(4) | Option Awards ($) (5) | Non-Equity Incentive Plan Compensation ($) (6) | All Other Compensation ($) (7) | Total ($) | | Peter Greenleaf | 2023 | 822,877 | — | 8,999,997 | — | 710,760 | 39,725 | 10,573,359 | | Chief Executive Officer | 2022 | 791,228 | — | 3,750,002 | 3,752,009 | 498,474 | 45,684 | 8,837,397 | | | 2021 | 723,905 | — | — | — | 506,734 | 10,182 | 1,240,821 | | Joe Miller | 2023 | 500,701 | — | 3,093,747 | — | 342,980 | 39,509 | 3,976,937 | | Chief Financial Officer | 2022 | 481,443 | — | 1,250,001 | 1,250,672 | 264,794 | 45,684 | 3,292,594 | | | 2021 | 437,675 | — | — | — | 262,605 | 10,185 | 710,465 | | Max Donley | 2023 | 513,640 | — | 3,656,242 | — | 341,571 | 46,633 | 4,558,086 | | EVP, Operations and Strategy | 2022 | 493,885 | — | 1,250,001 | 1,250,672 | 271,637 | 46,302 | 3,312,497 | | | 2021 | 448,986 | — | — | — | 269,392 | 12,260 | 730,638 | | Stephen Robertson | 2023 | 478,727 | — | 2,761,872 | — | 327,928 | 29,727 | 3,598,254 | | EVP, General Counsel, Corporate Secretary and Chief Compliance Officer (2) | 2022 | 458,696 | — | 1,250,001 | 1,250,672 | 252,283 | 28,703 | 3,240,355 | | | 2021 | 448,373 | — | — | — | 252,209 | 22,108 | 722,690 | | Volker Knappertz | 2023 | 516,250 | — | 2,581,865 | — | 327,819 | 10,540 | 3,436,474 | | EVP, Research and Development (1) | 2022 | 229,167 | — | 1,250,002 | 1,249,337 | 250,000 | 5,180 | 2,983,686 | | | 2021 | — | — | — | — | — | — | — |

  20. 2023 Summary Compensation Table

    (1)Volker Knappertz was appointed as our EVP Research and Development on July 11, 2022. He ceased employment with the Company on March 4, 2024. (2)Stephen Robertson's salary, bonus and other non-equity compensation were translated to USD using the year-end foreign exchange rates from the Bank of Canada (See note 3 for equity translation information). (3)For 2022, this represents the grant date fair value of RSUs granted to the NEO for the applicable year, calculated in accordance with ASC Topic 718, and does not take into account estimated forfeitures related to service-based conditions. The assumptions used in the calculation of these amounts are included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023. The grant date market price for the RSUs was set at $12.01, which was the closing price on the date prior to the March 2, 2022 grant date. (4)For 2023, this represents the grant date fair value of RSUs and performance awards granted to the NEO for the applicable year, calculated in accordance with ASC Topic 718, and does not take into account estimated forfeitures related to service or performance based conditions. The assumptions used in the calculation of these amounts are included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 15, 2024. The grant date market price for the RSUs and performance awards is set at $8.99, which was the closing price on the date prior to the March 2, 2023 grant date. Amounts listed for performance awards are at 150% of initial grant (representing maximum performance), based on exceeding achievement of performance metrics as of December 31, 2023. Additional details regarding the 2023 equity grants can be found in the Grants of Plan-Based Awards table below. (5)Represents the aggregate grant-date fair value of the stock options awarded to the NEO for the applicable year, calculated in accordance with ASC Topic 718, and does not take into account estimated forfeitures related to service-based conditions. The assumptions used in the calculation of these amounts are included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023. The options granted based on a CAD fair value were converted to USD using the foreign exchange rate from the Bank of Canada on the grant date. (6)The amounts reported in this column represent annual performance-based bonuses earned for 2021, 2022 and 2023. For more information, see the section titled “Annual Performance Bonus” in the CD&A and the Grants of Plan-Based Awards table below. (7)The amounts reported in this column represent the following: for Peter Greenleaf, Joe Miller, Max Donley and Volker Knappertz employer contributions to 401(k), life insurance and for Peter Greenleaf, Joe Miller and Max Donley approximately $23 thousand for expenses related to work travel, plus an associated gross up payment of approximately $10 thousand for applicable taxes related to such travel expenses; for Stephen Robertson amounts represent employer contributions to RRSP, medical services plan and employer health tax benefits. (8)The salary increases for 2022 included an inflation adjustment.

  21. 2023 Grants of Plan-Based Awards Table

    2023 Grants of Plan-Based Awards Table The following table sets forth information relating to the grant of plan-based incentive awards to our NEOs in 2023:

  22. 2023 Grants of Plan-Based Awards Table

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All other Stock Awards: Number of Shares of Stock or Units (#) | All other Option Awards: Number of Securities Underlying Options (#) | Exercise Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock And Option Awards($)(3) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Peter Greenleaf | | | | | | | | | | | | | Annual Bonus | — | — | 576,014 | 1,152,028 | — | — | — | — | — | — | — | | Performance Award | 3/2/2023 | — | — | — | 166,852 | 222,470 | 333,705 | — | — | — | 3,000,008 | | Restricted Stock Unit Award | 3/2/2023 | — | — | — | — | — | — | 667,407 | — | — | 5,999,989 | | Joe Miller | | | | | | | | | | | | | Annual Bonus | — | — | 250,351 | 500,702 | — | — | — | — | — | — | — | | Performance Award | 3/2/2023 | — | — | — | 57,355 | 76,474 | 114,711 | — | — | — | 1,031,252 | | Restricted Stock Unit Award | 3/2/2023 | — | — | — | — | — | — | 229,421 | — | — | 2,062,495 | | Max Donley | | | | | | | | | | | | | Annual Bonus | — | — | 256,820 | 513,640 | — | — | — | — | — | — | — | | Performance Award | 3/2/2023 | — | — | — | 67,783 | 90,378 | 135,567 | — | — | — | 1,218,747 | | Restricted Stock Unit Award | 3/2/2023 | — | — | — | — | — | — | 271,134 | — | — | 2,437,495 | | Stephen Robertson | | | | | | | | | | | | | Annual Bonus(2) | — | — | 239,364 | 478,728 | — | — | — | — | — | — | — | | Performance Award | 3/2/2023 | — | — | — | 51,203 | 68,271 | 102,406 | — | — | — | 920,630 | | Restricted Stock Unit Award | 3/2/2023 | — | — | — | — | — | — | 204,810 | — | — | 1,841,242 | | Volker Knappertz | | | | | | | | | | | | | Annual Bonus | | — | 258,125 | 516,250 | — | — | — | — | — | — | — | | Performance Award | 3/2/2023 | — | — | — | 47,865 | 63,821 | 95,731 | — | — | — | 860,622 | | Restricted Stock Unit Award | 3/2/2023 | — | — | — | — | — | — | 191,462 | — | — | 1,721,243 |

  23. 2023 Grants of Plan-Based Awards Table

    (1)These amounts represent performance-based bonus payments for each NEO for 2023. There were no threshold amounts and maximum bonus amounts were set at 200%. (2)Stephen Robertson's cash incentive was translated from CAD to USD using the 2023 year-end foreign exchange rate from the Bank of Canada. (3)Value of performance awards at the grant date based upon the probable outcome of such conditions. The estimates of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures, are consistent between the performance award and restricted stock unit award.

  24. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    2023 Outstanding Equity Awards At Fiscal Year-End Table The following table shows for the fiscal year ended December 31, 2023, certain information regarding outstanding equity awards at fiscal year-end for our NEOs. The options to purchase our shares were granted with a per share exercise price equal to the fair market value of one share on the date of grant, as determined in good faith by the Compensation Committee (for NEOs other than the CEO) and the Board, on recommendation of the Compensation Committee (for our CEO and without the CEO being present for deliberations and approval). Except as noted below, all of the equity awards were granted under our Equity Incentive Plan.

  25. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | | Options Awards(1) | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or units of stock that have not vested (#)(3) | Market or Value of Shares or Units That Have Not Vested ($)(4) | | Peter Greenleaf | 4/29/2019(2) | 1,600,000 | — | 6.28 | 4/29/2029 | — | — | | | 12/21/2020 | 817,024 | — | 13.03 | 12/21/2030 | — | — | | | 3/2/2022 | 311,610 | 222,578 | 12.01 | 3/2/2032 | — | — | | | 3/2/2022 | — | — | — | — | 208,160 | 1,871,358 | | | 3/2/2023 | — | — | — | — | 333,705 | 3,000,008 | | | 3/2/2023 | — | — | — | — | 667,407 | 5,999,989 | | Joe Miller | 12/21/2020 | 270,610 | — | 13.03 | 12/21/2030 | — | — | | | 3/2/2022 | 103,870 | 74,193 | 12.01 | 3/2/2032 | — | — | | | 3/2/2022 | — | — | — | — | 69,387 | 623,789 | | | 3/2/2023 | — | — | — | — | 114,711 | 1,031,252 | | | 3/2/2023 | — | — | — | — | 229,421 | 2,062,495 | | Max Donley | 8/19/2019 | 250,000 | — | 5.90 | 8/19/2029 | — | — | | | 12/21/2020 | 236,952 | — | 13.03 | 12/21/2030 | — | — | | | 3/2/2022 | 103,870 | 74,193 | 12.01 | 3/2/2032 | — | — | | | 3/2/2022 | — | — | — | — | 69,387 | 623,789 | | | 3/2/2023 | — | — | — | — | 135,567 | 1,218,747 | | | 3/2/2023 | — | — | — | — | 271,134 | 2,437,495 | | Stephen Robertson | 11/16/2020(5) | 298,924 | — | 13.40 | 11/16/2030 | — | — | | | 12/21/2020 | 144,484 | — | 13.03 | 12/21/2030 | — | — | | | 3/2/2022 | 103,870 | 74,193 | 12.01 | 3/2/2032 | — | — | | | 3/2/2022 | — | — | — | — | 69,387 | 623,789 | | | 3/2/2023 | — | — | — | — | 102,406 | 920,630 | | | 3/2/2023 | — | — | — | — | 204,810 | 1,841,242 | | Volker Knappertz | 8/1/2022(5) | 114,174 | 142,718 | 8.18 | 8/1/2032 | — | — | | | 8/1/2022(5) | — | — | — | — | 101,875 | 915,856 | | | 3/2/2023 | — | — | — | — | 95,731 | 860,622 | | | 3/2/2023 | — | — | — | — | 191,462 | 1,721,243 |

  26. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    (1)All options above except as noted in (2) below vest as follows: 33.333% of the shares subject to the options vest on the 12-month anniversary of the vesting commencement date, and the remaining shares subject to the options vest in equal monthly installments over the next two years. All options with a grant date up to and including May 2020 were translated for the purposes of this proxy from CAD to USD using the Bank of Canada exchange rate on the date of grant. (2)25% of the shares subject to the options vested on the 12-month anniversary of the vesting commencement date, and the remaining shares subject to the options vested in equal monthly installments over the next three years. This award was granted outside of the Company's Equity Incentive Plan as an inducement material to the new employee entering into employment with the Company. (3)RSUs held at fiscal year-end vest in three equal annual installments on the first, second and third anniversary of the grant date. Amounts listed for PAs are at 150% of initial grant (maximum performance level), based on exceeding achievement of performance metrics as of December 31, 2023. PAs held at fiscal year-end shall vest in two equal installments as of December 31, 2024 and December 31, 2025. (4)Amounts reported are calculated using $8.99, the per share closing price on December 29, 2023 (the last trading day of 2023). (5)This award was granted outside of the Company's Equity Incentive Plan as an inducement material to the new employee entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).

  27. 2023 Option Exercises and Shares Vested

    2023 Option Exercises and Shares Vested The following table provides information on options to purchase our common shares that were exercised, including the number of common shares acquired upon exercise and the value realized, determined as described below, for our NEOs during the year ended December 31, 2023:

  28. 2023 Option Exercises and Shares Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Peter Greenleaf | — | — | 104,080 | 930,475 | | Joe Miller | — | — | 34,693 | 310,155 | | Max Donley | — | — | 34,693 | 310,155 | | Stephen Robertson | — | — | 34,693 | 310,155 | | Volker Knappertz | — | — | — | — |

  29. 2023 Option Exercises and Shares Vested

    (1)The value realized is based on the fair market value of the Company's common stock on the vesting date.

  30. Potential Payments Upon Termination or Change-in-Control

    Potential Payments Upon Termination or Change-in-Control We maintain certain agreements, plans, and programs that require us to provide compensation to our NEOs in the event of a termination of employment or a change in control. For more information, see “Other Features of Our Executive Compensation Program—Agreements with Our Named Executive Officers” beginning on page 55. The following table discloses the potential payments upon termination of employment or change in control with respect to each NEO, pursuant to their respective employment agreements with the Company, as of December 31, 2023. Each scenario assume each NEOs’ compliance with post-employment restrictive covenant agreement and execution of a release of claims.

  31. Potential Payments Upon Termination or Change-in-Control

    | Name | Benefit | Termination Without Cause Not in Connection with a Change in Control ($) | Termination Without Cause or Resignation for Good Reason in Connection with a Change in Control ($) | | Peter Greenleaf | Cash Severance Payment | 1,234,316 | 1,645,754 | | | Lump Sum Target Bonus Payment(2) | 576,014 | 576,014 | | | Health Insurance Premiums(3) | 38,190 | 25,460 | | | Vesting Acceleration(1) | 0(4) | 10,871,355 | | | Benefit Total | 1,848,520 | 13,118,583 | | Joe Miller | Cash Severance Payment | 500,701 | 751,052 | | | Lump Sum Target Bonus Payment(2) | 250,351 | 250,351 | | | Health Insurance Premiums(3) | 40,364 | 40,364 | | | Vesting Acceleration(1) | 0(4) | 3,717,536 | | | Benefit Total | 791,416 | 4,759,303 | | Max Donley | Cash Severance Payment | 513,640 | 770,460 | | | Lump Sum Target Bonus Payment(2) | 256,820 | 256,820 | | | Health Insurance Premiums(3) | 40,364 | 40,364 | | | Vesting Acceleration(1) | 0(4) | 4,280,031 | | | Benefit Total | 810,824 | 5,347,675 | | Stephen Robertson(5) | Cash Severance Payment | 598,409 | 718,091 | | | Lump Sum Target Bonus Payment(2) | 239,364 | 239,364 | | | Health Insurance Premiums(3) | 4,381 | 4,381 | | | Vesting Acceleration(1) | 0(4) | 3,265,323 | | | Benefit Total | 842,154 | 4,227,159 | | Volker Knappertz(6) | Cash Severance Payment | 516,250 | 774,375 | | | Lump Sum Target Bonus Payment(2) | 258,125 | 258,125 | | | Health Insurance Premiums(3) | 40,364 | 60,546 | | | Vesting Acceleration(1) | 0(4) | 3,613,323 | | | Benefit Total | 814,739 | 4,706,369 |

  32. Potential Payments Upon Termination or Change-in-Control

    (1)The value of vesting acceleration is based on the closing price of $8.99 per common share on December 31, 2023 for unvested awards. (2)The assumption used for lump sum target bonus payment is full year payment at 100% of target. For termination absent change in control, the performance bonus shown is at 100% target, however the performance bonus is subject to the terms of the employment agreement. (3)The assumption used for the health insurance premiums is 12 months of coverage, except for Volker Knappertz health insurance premium in connection with a change in control termination and Peter Greenleaf for a termination of employment not in connection with a change in control, which assume 18 months of coverage. (4)The assumption used for vesting acceleration not in connection with a change in control is a termination as of December 31, 2023. (5)Stephen Robertson's cash amounts were translated from CAD to USD using the 2023 year-end foreign exchange rate from the Bank of Canada. (6)The amounts shown for Volker Knappertz are payouts pursuant to his employment agreement that would have been owed upon termination as of December 31, 2023. His employment with the company ceased as of March 4, 2024.

  33. Pay Versus Performance Disclosure

    Pay Versus Performance Disclosure In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.

  34. Pay Versus Performance Disclosure

    | Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(1)˒(2)˒(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non-PEO NEOs(1),(2),(3) ($) | Value of Initial Fixed $100 Investment based on:(4) | | Net Income ($ Millions) | Net Revenue(5) ($ Millions) | | | | | | | TSR ($) | Peer Group TSR ($) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | 10,573,359 | 14,915,528 | 3,892,438 | 5,271,052 | 44.37 | 115.42 | (78) | 176 | | 2022 | 8,837,397 | (8,899,595) | 3,275,710 | (748,376) | 21.32 | 113.65 | (108) | 134 | | 2021 | 1,240,389 | 16,344,707 | 718,163 | 4,188,759 | 112.88 | 126.45 | (181) | 46 | | 2020 | 10,678,868 | (2,601,908) | 3,233,747 | 2,545,959 | 68.26 | 126.42 | (103) | 50 |

  35. Pay Versus Performance Disclosure

    (1)Peter Greenleaf was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below. For 2022, 2021 and 2020, please see respective proxy statements for assumptions and details.

  36. Pay Versus Performance Disclosure

    | 2023 | 2022 | 2021 | 2020 | | Joe Miller | Joe Miller | Joe Miller | Joe Miller | | Max Donley | Max Colao | Max Colao | Dennis Bourgeault | | Stephen Robertson | Max Donley | Max Donley | Max Colao | | Volker Knappertz | Stephen Robertson | Stephen Robertson | Max Donley | | | Volker Knappertz | | Stephen Robertson | | | Neil Solomons | | |

  37. Pay Versus Performance Disclosure

    (2)The amounts shown for Compensation Actually Paid 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 Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. (3)Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table. Reconciliation of Summary Compensation Table to Compensation Actually Paid Calculation

  38. Pay Versus Performance Disclosure

    | Year | Summary Compensation Table Total for Peter Greenleaf ($) | Exclusion of Stock Awards and Option Awards for Peter Greenleaf ($) | Inclusion of Equity Values for Peter Greenleaf ($) | Compensation Actually Paid to Peter Greenleaf ($) | | 2023 | 10,573,359 | (8,999,997) | 13,342,166 | 14,915,528 | | 2022 | 8,837,397 | (7,502,011) | (10,234,980) | (8,899,595) | | 2021 | 1,240,389 | — | 15,104,318 | 16,344,707 | | 2020 | 10,678,868 | (9,288,898) | (3,991,878) | (2,601,908) | | Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 3,892,438 | (3,023,431) | 4,402,045 | 5,271,052 | | 2022 | 3,275,710 | (2,375,417) | (1,648,669) | (748,376) | | 2021 | 718,163 | — | 3,470,596 | 4,188,759 | | 2020 | 3,233,747 | (2,741,071) | 2,053,283 | 2,545,959 |

  39. Pay Versus Performance Disclosure

    The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables: Inclusion of Equity Values Calculation

  40. Pay Versus Performance Disclosure

    | Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Peter Greenleaf ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Peter Greenleaf ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Peter Greenleaf ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Peter Greenleaf ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Peter Greenleaf ($) | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Peter Greenleaf ($) | Total - Inclusion of Equity Values for Peter Greenleaf ($) | | 2023 | 8,999,997 | 1,566,255 | — | 2,775,914 | — | — | 13,342,166 | | 2022 | 2,799,360 | (5,421,035) | — | (7,613,305) | — | — | (10,234,980) | | 2021 | — | 10,202,439 | — | 4,901,879 | — | — | 15,104,318 | | 2020 | 7,762,704 | (7,270,230) | — | (4,484,352) | — | — | (3,991,878) | | Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | 3,023,431 | 616,428 | — | 762,186 | — | — | 4,402,045 | | 2022 | 701,513 | (656,801) | — | (941,151) | (752,230) | — | (1,648,669) | | 2021 | — | 2,255,191 | — | 1,215,405 | — | — | 3,470,596 | | 2020 | 2,449,340 | (235,061) | 95,426 | (256,422) | — | — | 2,053,283 |

  41. Pay Versus Performance Disclosure

    (4)The Peer Group TSR set forth in this table utilizes the NASDAQ Biotechnology Index, which we also utilize 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. The comparison assumes $100 was invested for the period starting December 31, 2020, through the end of the listed year in the Company and in the NASDAQ Biotechnology Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. (5)We determined Net Revenue to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2021 and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years. Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the four most recently completed fiscal years. Equity awards are an important component of our executive compensation program, and as a result, TSR has a large impact on our Compensation Actually Paid metrics. Prior to the FDA approval of LUPKYNIS in January 2021, our PEO and Non-PEO NEO's received long term incentive grants in the form of stock options and one performance award grant in 2020. There were no additional equity grants to our executives in 2021. Since 2021, the equity grant cycle has continued to evolve. There was one annual grant consisting of a mix of stock options and RSUs to our PEO and Non-PEO NEO's in 2022 and in 2023, the annual grant consisted of a mix of RSUs and PAs. The timing of the equity grants along with the volatility of our stock price were contributing factors to the year over year changes in the Compensation Actually Paid calculations above. The market price of our common shares has fluctuated between $4.11 and $33.08 over the past 5 years. The grants to our executive officers occur (and are valued) based on then prevailing common share prices and can greatly increase or decrease in value due to the volatility in the Company's share price. Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the three most recently completed fiscal years. We launched our first commercial drug, LUPKYNIS, after FDA approval was received in January 2021. In connection with the launch in 2021, we had significant costs related to the expansion of the commercial and administrative functions to support the launch and commercialization of LUPKYNIS. As a result of this investment, the Company incurred significant losses in its initial launch year of LUPKYNIS. Certain of these costs continued in 2022 and 2023, but have been partially offset by an increase in net product revenue. Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Revenue The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Revenue during the three most recently completed fiscal years. Although our stock price has been volatile, we have continued to focus on increasing our revenue from sales of LUPKYNIS, and building our global partnership with Otsuka. Total revenues were $45.6 million and $50.1 million for the years ended December 31, 2021 and 2020, respectively. Our total revenues during 2021 primarily consisted of product revenues, net of adjustments, for LUPKYNIS following FDA approval in January 2021, as we could not conduct commercial operations prior to obtaining FDA approval of LUPKYNIS. Total revenues during 2020 were primarily due to the upfront payment from Otsuka of $50.0 million recorded as licensing revenue. In 2020, we did not have any drugs approved for commercial sale. In 2022, we experienced significant commercial growth, generating $134.0 million in total net revenue, a 194% increase over the previous year, and $103.5 million in net product revenue, a 127% increase over the previous year. For the year ended December 31, 2023, total net revenue was $175.5 million compared to $134.0 million in the previous year, an increase of approximately 31%. For the year ended December 31, 2023, product revenue, net was $158.5 million compared to $103.5 million in the previous year, an increase of approximately 53%. Description of Relationship Between Company TSR and Peer Group TSR The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the NASDAQ Biotechnology Index over the same period. The market price of our common shares has been subject to significant volatility between 2019 and 2023 and has fluctuated between $4.11 on December 27, 2022 and $33.08 on October 29, 2021. As of April 30, 2024, the closing market price of our common shares was $5.09. List of Most Important Financial Performance Measures Net Revenue was the sole financial performance measure that the Company used in linking Compensation Actually Paid to our PEO and other NEOs for 2023 to Company performance.

  42. CEO Pay Ratio Disclosure

    CEO Pay Ratio Disclosure Under the SEC rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to disclose the ratio of the annual total compensation of our CEO, Peter Greenleaf, to the median of the annual total compensation of all of our employees other than Peter Greenleaf (the "CEO Pay Ratio"). For fiscal year 2023, the median of the annual total compensation of all employees of the Company (other than the CEO) was $303,646 and the annual total compensation of the CEO, as reported in the Summary Compensation Table included in this Proxy Statement/Circular, was $10,573,359. Based on this information, the ratio of the annual total compensation of the CEO to the median of the annual total compensation of all other employees was approximately 35 to 1. To identify our median employee, we used the following methodology: •To determine our total population of employees, we included all employees other than our CEO as of December 31, 2023 (whether employed on a full-time or part-time basis). •To identify our median employee from our employee population, we chose as our consistently applied compensation measure the aggregate amount of each employee’s annual base salary and cash bonuses earned during fiscal 2023 and the grant date fair value of equity awards granted in fiscal 2023 determined in accordance with FASB ASC Topic 718. •We included all other compensation consistent with what is included in the Summary Compensation Table. For the U.S., this includes employer contributions to 401K, life insurance and expenses for work related travel. For Canada, this includes employer contributions to RRSP, medical services plan and employer health tax benefits. For the UK, this includes life insurance and pension. •In making this determination, we annualized the base salary of employees who were employed by us for less than the entire fiscal year but we did not make any cost-of-living adjustments. •We did not exclude any non-U.S. employees under the de minimis or other exceptions set forth in Item 402(u) of Regulation S-K. •Compensation paid in foreign currency was converted to U.S. dollars based on the year-end exchange rate for the year ended December 31, 2023 from the Bank of Canada. Once the median employee was identified, we calculated the median employee’s total annual compensation in accordance with the requirements of the "Summary Compensation Table" earlier in this Proxy Statement/Circular. The CEO Pay Ratio is a reasonable estimate calculated in a manner consistent with the SEC's rules and regulations, based on our records and the methodology described above. The SEC’s rules and regulations for identifying the median employee and calculating the CEO Pay Ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies and to use reasonable estimates and assumptions based on their own facts and circumstances.

  43. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  44. Non-Employee Director Compensation

    Non-Employee Director Compensation The following table sets forth in summary form information concerning the compensation of our non-employee directors for the year ended December 31, 2023.

  45. Non-Employee Director Compensation

    | Name | Fees Earned or Paid in Cash Fees ($) (1) | Stock Awards ($) (2) | Option Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) | Pension Value ($) | All Other Compensation ($) (4) | Total ($) (5) | | Dr. George M. Milne, Jr.(6) | 47,500 | — | — | — | — | — | 47,500 | | Dr. Daniel Billen(6) | 73,207 | 99,989 | 99,935 | — | — | — | 273,131 | | Joseph Hagan(6) | 35,000 | — | — | — | — | — | 35,000 | | Dr. David R.W. Jayne | 50,000 | 99,989 | 99,935 | — | — | — | 249,924 | | Jill Leversage | 67,351 | 99,989 | 99,935 | — | — | — | 267,275 | | R. Hector MacKay-Dunn | 62,500 | 99,989 | 99,935 | — | — | — | 262,424 | | Dr. Brinda Balakrishnan | 54,402 | 99,989 | 99,935 | — | — | — | 254,326 | | Dr. Karen Smith(7) | 19,429 | 169,989 | 169,994 | — | — | — | 359,412 | | Jeffrey A. Bailey(7) | 21,529 | 169,989 | 169,994 | — | — | — | 361,512 | | Dr. Robert T. Foster(8) | 12,473 | 169,994 | 170,093 | — | — | 121,654 | 474,214 |

  46. Non-Employee Director Compensation

    (1)This column includes the annual Board retainer and any applicable additional retainers for service as a member or Chair of a committee during 2023. (2)The Company granted each director 9,310 RSUs on May 19, 2023. The amounts reported represents the grant date fair value of RSUs granted to each of the then non-employee directors and are calculated in accordance with ASC Topic 718, which does not take into account estimated forfeitures related to service-based conditions. The assumptions used in the calculation of these amounts are included in our 2023 Annual Report on Form 10-K. The grant date market price for the restricted stock awards was set at $10.74, which was the closing price on the date prior to the May 19, 2023 grant date, consistent with our practice for granting equity awards to all employees. (3)The Company granted 15,234 stock options on May 19, 2023 with a fair value of $6.56 to each of the then non-management directors. The amounts reported represents the aggregate grant-date fair value of the stock options awarded to the non-employee directors for the applicable year, calculated in accordance with ASC Topic 718 and does not take into account estimated forfeitures related to service-based conditions. The assumptions used in the calculation of these amounts are included and described under the caption "Share-based compensation" in Note 2 to our consolidated financial statements included in our 2023 Annual Report on Form 10-K. (4)Represents deferred compensation arrangement paid after September 21, 2023 when he was appointed to the Board. (5)The aggregate remuneration paid to the directors of the Company in 2023 was $2,093,138. (6)Dr. George M. Milne, Jr. and Joseph Hagan ceased to be a director as of June 29, 2023. Dr. Daniel Billen was appointed Chair to replace Dr. George M. Milne, Jr. (7)On August 18, 2023, Dr. Karen Smith and Jeffrey A. Bailey were appointed to the Board. In relation to that appointment, Dr. Karen Smith and Jeffrey A. Bailey were granted 17,913 RSUs on August 17, 2023. The grant date market price for the RSUs was set at $9.49, which was the closing price on the date prior to the August 17, 2023 grant date. Additionally, Dr. Karen Smith and Jeffrey A. Bailey were granted 28,959 stock options with a fair value of $5.87. The amount reported represents the aggregate grant-date fair value of the stock options awarded to the non-employee directors for the applicable year, calculated in accordance with ASC Topic 718 and does not take into account estimated forfeitures related to service based conditions. The assumptions used in the calculation of these amounts are included and described under the caption "Share-based compensation" in Note 2 to our consolidated financial statements included in our 2023 Annual Report on Form 10-K. (8)Dr. Robert T. Foster was appointed to the Board. pursuant to the Cooperation Agreement. In relation to that appointment, Dr. Robert T. Foster was granted 20,383 RSUs on September 21, 2023. The grant date market price for the RSUs was set at $8.34, which was the closing price on the date prior to the September 21, 2023 grant date. Additionally, Dr. Robert T. Foster. was granted 32,900 stock options with a fair value of $5.17. The amount reported represents the aggregate grant-date fair value of the stock options awarded to the non-employee directors for the applicable year, calculated in accordance with ASC Topic 718 and does not take into account estimated forfeitures related to service based conditions. The assumptions used in the calculation of these amounts are included and described under the caption "Share-based compensation" in Note 2 to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.

  47. Non-Employee Director Compensation Policy

    Non-Employee Director Compensation Policy Compensation for the directors in such role is determined by the Board upon recommendation of the Compensation Committee. The Compensation Committee has sought advice from third party advisors in respect to the compensation of the directors, most recently WTW in 2023. During 2023, non-employee directors (other than the Chairman of the Board) earned an annual retainer fee of $45,000 for serving as a Board member. The Chairman of the Board earned an annual retainer fee of $80,000. Directors were paid in U.S. dollars at the end of each quarter. Annual committee compensation for 2023 was as follows: •Compensation Committee Chair Retainer: $15,000 Compensation Committee Member Retainer: $7,500 •Audit Committee Chair Retainer: $20,000 Audit Committee Member Retainer: $10,000 •G&N Committee Chair Retainer: $10,000 G&N Committee Member Retainer: $5,000 In addition to the cash retainers set out above, non-employee directors are entitled to an annual equity grant equivalent to $200,000 stock options and an equity grant equivalent to $340,000 upon the election or appointment of a new Board member. All of the director options are exercisable for ten years and vest in equal amounts over 12 months. All of the director RSUs vest 100% on the first anniversary of the grant date.