DEF 14A of Cardiff Oncology, Inc.
Filed Apr 25, 2024 · FY20230001628280-24-018143
Considerations in Evaluating Director Nominees
Considerations in Evaluating Director Nominees The Corporate Governance/Nominating Committee is responsible for identifying, considering and recommending candidates to the Board of Directors for Board membership. A variety of methods are used to identify and evaluate director nominees, with the goal of maintaining and further developing a diverse, experienced and highly qualified Board of Directors. Candidates may come to our attention through current members of our Board of Directors, professional search firms, stockholders or other persons. The Corporate Governance/Nominating Committee will recommend to the Board of Directors for selection all nominees to be proposed by the Board of Directors for election by the stockholders, including approval or recommendation of a slate of director nominees to be proposed by the Board of Directors for election at each annual meeting of stockholders, and will recommend all director nominees to be appointed by the Board of Directors to fill interim director vacancies. Our Board of Directors encourages selection of directors who will contribute to the company’s overall corporate goals. The Corporate Governance/Nominating Committee may from time to time review and recommend to the Board of Directors the desired qualifications, expertise and characteristics of directors, including such factors as breadth of experience, knowledge about our business and industry, willingness and ability to devote adequate time and effort to the Board of Directors, ability to contribute to the Board of Directors’ overall effectiveness, and the needs of the Board of Directors and its committees. Exceptional candidates who do not meet all of these criteria may still be considered. In evaluating potential candidates for the Board of Directors, the Corporate Governance/Nominating Committee considers these factors in the light of the specific needs of the Board of Directors at that time. In addition, under our Corporate Governance Guidelines, a director is expected to spend the time and effort necessary to properly discharge such director’s responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board of Directors and committees on which such director sits, and to review prior to meetings material distributed in advance for such meetings. Thus, the number of other public company boards and other boards (or comparable governing bodies) on which a prospective nominee is a member, as well as his or her other professional responsibilities, will be considered. Also, under our Corporate Governance Guidelines, there are no limits on terms that may be served by a director. However, in connection with evaluating recommendations for nomination for reelection, the Corporate Governance/Nominating Committee considers director tenure. We value diversity on a company-wide basis but have not adopted a specific policy regarding Board diversity.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS At the Annual Meeting, the stockholders will elect seven (7) directors to hold office until the 2025 Annual Meeting. Directors are elected by a plurality of votes cast by stockholders. In the event the nominees are unable or unwilling to serve as directors at the time of the Annual Meeting, the proxies will be voted for any substitute nominees designated by the present Board or the proxy holders to fill such vacancy, or for the balance of the nominees named without nomination of a substitute, or the size of the Board will be reduced in accordance with the Bylaws of the Company. The Board has no reason to believe that the persons named below will be unable or unwilling to serve as nominees or as directors if elected. Assuming a quorum is present, the seven (7) nominees receiving the highest number of affirmative votes of shares entitled to be voted for such persons will be elected as directors of the Company to serve for a one-year term. Unless marked otherwise, proxies received will be voted “FOR” the election of the nominees named below. In the event that additional persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them in such a manner as will ensure the election of the nominees listed below, and, in such event, the specific nominees to be voted for will be determined by the proxy holders. Our Board of Directors, acting through the Corporate Governance/Nominating Committee, will make a determination whether or not to request the resignation of an incumbent director who failed to receive a majority of the vote cast. We will publicly disclose our Board of Directors' decision and reasoning.
Information with Respect to Director Nominees
Information with Respect to Director Nominees Listed below are the current directors who are nominated to hold office until their successors are elected and qualified, and their ages as of April 22, 2024.
Information with Respect to Director Nominees
| | | Committee Memberships | | | | Name | Age | Audit | Compensation | Governance/Nominating | | Dr. James O. Armitage, M.D. | 77 | | | X | | Mark Erlander, Ph.D. | 64 | | | | | Dr. Rodney S. Markin, M.D., Ph.D. | 67 | X | X | | | Mani Mohindru, Ph.D. | 52 | X | | X | | Gary W. Pace, Ph.D. | 76 | | X | C | | Renee P. Tannenbaum, Pharm.D. | 72 | | C | | | Lâle White | 68 | C | | |
Dr. James O. Armitage, M.D. - Independent Director
Dr. James O. Armitage, M.D. - Independent Director Dr. Armitage has been a director of our company since April 2020. Dr. Armitage has been a Professor of Internal Medicine in the division of Hematology and Oncology at the University of Nebraska Medical Center since 2003, after having served as Chairman of the Department of Internal Medicine, Dean of the College of Medicine, and in various other capacities since joining the Center in 1982. He also holds a hospital appointment at The Nebraska Medical Center. Dr. Armitage has authored or co-authored more than 600 articles, 108 book chapters and edited or co-edited 27 textbooks. He has previously served as President of the American Society of Clinical Oncology ("ASCO"), and as a member of the ASCO Board of Directors. Dr. Armitage received a bachelor of science degree from the University of Nebraska and a medical degree from the University of Nebraska Medical Center and completed his post-graduate training at the University of Nebraska Medical Center and the University of Iowa Hospitals and Clinics. The Board believes that Dr. Armitage's training as a physician, his research, clinical and administrative experience, and his previous service as a director of a publicly traded biopharmaceutical company provide him with the qualifications and skills to serve as a director.
Mark Erlander, Ph.D. - Chief Executive Officer and Director
Mark Erlander, Ph.D. - Chief Executive Officer and Director Dr. Erlander has served as our Chief Executive Officer since May 2020, a director since June 2020, and formerly as the Chief Scientific Officer from March 2013 to May 2020. Previously, he was Chief Scientific Officer at bioTheranostics, a subsidiary of bioMérieux, a molecular diagnostic testing company focused on clinical applications in oncology, where he served from 2008 to 2013. From 2000 to 2008, Dr. Erlander was Chief Scientific Officer at Arcturus, Inc. (later AviaraDx), which was acquired by bioMérieux in 2008. Dr. Erlander entered therapeutics as a Group Leader and then Research Fellow in drug discovery at Johnson & Johnson from 1994 to 2000. From 1991 to 1994, Dr. Erlander was a Postdoctoral Fellow and then Assistant Professor at Scripps Research. He has 44 issued patents, over 50 pending applications, and has co-authored more than 90 scientific publications. Dr. Erlander holds a B.S. in Biochemistry from the University of California, Davis, an M.S. degree in Biochemistry from Iowa State University, and a Ph.D. in Neuroscience from the University of California, Los Angeles. The Board believes that Dr. Erlander’s research and clinical experience qualifies him to serve as a director of our company.
Dr. Rodney S. Markin, M.D., Ph.D. - Chair of the Board & Independent Director
Dr. Rodney S. Markin, M.D., Ph.D. - Chair of the Board & Independent Director Dr. Markin has been Chairman of the Board of our company since December 2020 and a Director since February 2014. Dr. Markin has served as Chief Operating Officer of The University of Nebraska since August 2017. Dr. Markin has served as Chief Technology Officer and Associate Vice Chancellor for Business Development at The University of Nebraska Medical Center since 2011; as Professor of Pathology and Microbiology since 1985; as David T. Purtilo Distinguished Professor Pathology and Microbiology since 2005; as Courtesy Professor of Surgery since 1990 and as Courtesy Professor of Psychiatry since 2013. Dr. Markin is also a director on the Board of Children's Hospital and Medical Center Foundation, on the Board of Trustees for Keck Graduate Institute, on the Board of the Make-A-Wish Foundation and on the Board of PerceptiMed since July 2015. Dr. Markin served on the Board of Directors for Transgenomic, Inc. from March 2007 to December 2014. The Board believes that Dr. Markin’s valuable executive experience in the healthcare business qualifies him to serve as a director and Chairman of the Board of our company.
Mani Mohindru, Ph.D. - Independent Director
Mani Mohindru, Ph.D. - Independent Director Dr. Mohindru has been a director of our company since June 2021. Dr Mohindru was most recently the CEO of Novasenta, an oncology focused biotech company. In addition to Cardiff Oncology, she also serves as a director of CytomX Therapeutics, Inc., a public biotechnology company. From October 2020 to May 2021, she served as a director of SAB Biotherapeutics, a then private biotech company. From December 2019 to October 2020, Dr. Mohindru served as Chief Executive Officer of CereXis, a biotechnology company. Dr. Mohindru served as Chief Financial Officer and Chief Strategy Officer of Cara Therapeutics, Inc., a public biotechnology company, from August 2017 until December 2019. From March 2016 to July 2017, Dr. Mohindru served as the Chief Strategy Officer at Curis, Inc., a public biotechnology company. From April 2015 to February 2016, Dr. Mohindru served as Senior Vice President of Corporate Strategy and Investor Relations and from June 2013 to March 2015, Dr. Mohindru served as Vice President of Corporate Strategy and Investor Relations, each at Curis, Inc. In 2012, Dr. Mohindru co-founded ImmTox, Inc., a small private biotechnology company. From June 2011 to September 2012, Dr. Mohindru was a Senior Biotechnology Analyst at ThinkEquity, LLC, a research and investment banking firm. Previously, from June 2009 to May 2011, Dr. Mohindru was a Partner at Axon Healthcare Company, a strategic pharmaceutical and biotechnology consultancy firm that she co-founded. Dr. Mohindru was also a Managing Director at Capstone Investments in its investment banking division, a Vice President at Credit Suisse, and an Associate Research Analyst at global financial services firm, UBS. Dr. Mohindru completed her Ph.D. in Neurosciences at Northwestern University and she received both her B.S. in Human Biology and Masters in Biotechnology from the All India Institute of Medical Sciences, New Delhi, India. The Board believes that Dr. Mohindru’s years of biopharmaceutical industry leadership as well as Wall Street experience provides her with the qualifications and skills to serve as a director.
Gary W. Pace, Ph.D. - Independent Director
Gary W. Pace, Ph.D. - Independent Director Dr. Pace has been a director of our company since April 2020. In addition, Dr. Pace has been a Director of Pacira Biosciences, Inc. since 2008, as well as a director of several private companies. He previously served on the board of Antisense Therapeutics from 2015 to 2022, Simavita Ltd. from 2016 to 2021, ResMed Inc. from 1994 to 2018, Transition Therapeutics Inc. from 2002 to 2016 and QRxPharma Ltd. from 2001 to 2013. Dr. Pace is a seasoned biopharmaceutical executive with over 40 years of experience in the industry. He has co-founded several early stage life science companies, where he built products from the laboratory to commercialization. Dr. Pace has contributed to the development of the biotechnology industry through honorary university appointments and industry and government committees. In 2003, he was awarded a Centenary Medal by the Australian Government “for service to Australian society in research and development” and was recognized as the 2011 Director of the Year (corporate governance) by the San Diego Directors Forum. He is also a fellow of the Australian Academy of Technological Sciences and Engineering. Dr. Pace holds a B.Sc. (Hons I) from the University of New South Wales and a Ph.D. from the Massachusetts Institute of Technology where he was a Fulbright Fellow and General Foods Scholar. The Board believes that Dr. Pace’s years of experience providing strategic advisory services to complex organizations, including as a public company director provides him with the qualifications and skills to serve as a director.
Role of Independent Compensation Consultant
Role of Independent Compensation Consultant The Compensation Committee has the authority to engage independent advisors to assist it in carrying out its responsibilities. For fiscal 2023, the Compensation Committee engaged the Human Capital Solutions subdivision of Aon plc (“Aon”) as its independent executive and Board compensation consultant. Aon reports directly to the Compensation Committee and does not report to management. Aon is independent from Cardiff Oncology and its Board of Directors. Aon has not provided any services to us other than to the Compensation Committee, and receives compensation from us only for services provided to the Compensation Committee. The Compensation Committee assessed the independence of Aon pursuant to SEC and Nasdaq rules and concluded that the work of Aon has not raised any conflict of interest. Aon reviews and advises on all principal aspects of the executive and Board compensation program. Its main responsibilities are to: •advise on alignment of pay and performance; •review and advise on executive total compensation, including base salaries, short- and long-term incentives, associated performance goals and retention; •advise on trends in executive compensation; •advise on Board and Board committee compensation; •provide recommendations regarding the composition of our peer group; •analyze peer group proxy statements, compensation survey data, and other publicly available data (and apply its experience with other companies to this analysis); and •perform any special projects requested by the Compensation Committee. Aon has attended the Compensation Committee's meetings, including executive sessions at which management is not present. Aon communicates regularly with the Compensation Committee's Chair outside of Compensation Committee meetings, and also meets with management to gather information and review proposals. Aon is expected to remain the Compensation Committee's independent consultant until determined otherwise by the Compensation Committee or Aon.
Pay Positioning and Compensation Peers
Pay Positioning and Compensation Peers In setting compensation, the Compensation Committee compares base salaries, annual incentive opportunities and long-term compensation for each of our executive officers to those of a peer group of similarly sized companies. A key objective of our executive compensation program is to ensure that the overall compensation packages we offer our executives are competitive with the packages offered by companies with which we compete for executive talent. The Compensation Committee consults with Aon to develop a peer group of companies to serve as the basis for comparing our executive compensation program to the market. The Compensation Committee and Chief Executive Officer also solicit information from Aon to evaluate compensation for non-executive employees to ensure compensation levels across the entire company are consistent and competitive. Competitive market data is only one of several resources made available to the Compensation Committee to assist in setting executive compensation. When setting fiscal 2023 executive compensation, our Compensation Committee considered the peer group compensation data, along with employee skills and experience, individual performance, scope of responsibilities, and other factors. The Compensation Committee does not use a formula to determine compensation. In developing our 2023 peer group, the Compensation Committee considered the following key qualitative and quantitative considerations: •Sector & Stage— focus on US-based, public oncology companies in Phase I and Phase II of clinical trials; •Market Capitalization—between approximately $25 and $400 million (as of the date the peer group was determined and based on our market capitalization of $107 million at the time the analysis was conducted); •Headcount—generally under 100 employees; and •Geography – companies headquartered in San Diego and other biotech hubs such as SF/Bay Area and Boston/Cambridge area.
2023 Peer Group
2023 Peer Group The companies in our peer group analysis in 2023 included the following:
2023 Peer Group
| Actinium Pharmaceuticals | CymaBay Therapeutics | MEI Pharma | TRACON Pharmaceuticals | | Aldeyra Therapeutics | Frequency Therapeutics | Mustang Bio | Viking Therapeutics | | Ampio Pharmaceuticals | Genprex | Olema Pharmaceuticals | XOMA | | BioAtla | Harpoon Therapeutics | Oncternal Therapeutics | | | Calithera Biosciences | Infinity Pharmaceuticals | Surface Oncology | | | Curis | Kezar Life Sciences | TCR2 Therapeutics | |
2023 Peer Group
Effective for 2023, the Compensation Committee approved the following changes to the peer group: •removed AnaptysBio, Cogent Biosciences, Crinetics Pharmaceuticals, CTI BioPharma, Sierra Oncoloy, and Syndax Pharmaceuticals due to misalignment with the peer selection criteria or due to acquisition; and •added BioAtla, Genprex, Harpoon Therapeutics, Olema Pharmaceuticals, Surface Oncology and TRACON Pharmaceuticals.
Annual Performance Cash Bonuses
Annual Performance Cash Bonuses We design our annual cash incentive programs to be competitive in relation to the market. We monitor the market and adjust our cash incentive programs as needed. Our cash incentive programs are designed to motivate employees to achieve overall company goals and individual goals. Our programs are designed to avoid entitlements, to align actual payouts with the actual results achieved and to be easy to understand and administer. Each year, the Compensation Committee recommends, and the Board approves and establishes, the target cash incentive opportunity for each executive officer assuming full achievement of certain significant corporate goals and individual goals that are also reviewed and approved by the Board. The following table shows the possible cash bonus incentive for each of our current named executive officers for fiscal 2023, (each expressed as a percentage of annual base salary) and the actual dollar awarded, based on the Compensation Committee's assessment that we achieved 86% of our corporate goals and the achievement of individual goals:
Annual Performance Cash Bonuses
| Name and Position | Year | Bonus Potential | Cash incentive % of Annual Salary Actually Earned | Cash Incentive Bonus Actually Earned ($) | | Mark Erlander, CEO | 2023 | 55% | 47% | $280,394 | | | 2022 | 55% | 47% | $266,475 | | Fairooz Kabbinavar, CMO | 2023 | 45% | 37% | $177,120 | | James Levine, CFO | 2023 | 45% | 40% | $182,805 | | | 2022 | 45% | 38% | $168,252 |
Annual Performance Cash Bonuses
The 2023 annual performance cash bonus was approved by the Compensation Committee based on our achievement of a set of measurable, detailed goals. In the table below, we present an abbreviated list of the 2023 corporate goals to align with our current public disclosure, as well as the Compensation Committee’s assessment of our goal attainment:
Annual Performance Cash Bonuses
| Abbreviated Goal | % Available | Compensation Committee assessment | | Create Short to Mid-Term Value: Demonstrate the value of lead onvansertib first-line RAS mutated mCRC clinical program •Clinical operations •Regulatory activities •Trial reporting | 46% | The Compensation Committee’s assessment of goal achievement was based on FDA interactions and first-line trial start-up as well as clinical data releases and the release of the clinical development plan in August and September 2023. | | Create Long-Term Value: Strengthen onvansertib pipeline with additional indications •Evaluate additional indications •Initiate new clinical trials | 19% | The Compensation Committee’s assessment of goal achievement was based on a detailed review of initiation and enrollment in clinical trials outside of mCRC, and additional preclinical activity. | | Building the Future: Optimize onvansertib chemistry, manufacturing and controls (CMC) and lifecycle plan | 23% | The Compensation Committee’s assessment of goal achievement was based on progress made in CMC-related programs. | | Maintain Ongoing Operations: Conduct the internal and external investor-focused and partner-focused operations to maximize shareholder value. | 12% | The Compensation Committee's assessment of the goal achievement was based on defined parameters for investor and partner interactions, and Total Shareholder Return over the year. | | | 100% | |
Annual Performance Cash Bonuses
Based on the above assessment, the Compensation Committee determined that we achieved 86% of our corporate goals for 2023. The actual bonus payout for executives was calculated based on the achievement of corporate goals as well as individual goals.
Long-term Equity Incentive Awards
Long-term Equity Incentive Awards We grant stock options, pursuant to the 2021 Omnibus Equity Incentive Plan ("2021 Plan") to our employees within a competitive range of the market to complement cash salaries and cash incentives, incentivize all employees to achieve our corporate and strategic goals, and align executive compensation with the long-term interests of our stockholders. We historically provided stock option grants to our named executive officers upon their initial hiring, as negotiated in their employment agreements or offer letters, and on an annual basis thereafter. The Compensation Committee has the discretion to grant stock option awards and restricted stock awards to promote high performance and achievement of our corporate objectives by our executives at any time of the year. The Compensation Committee does not currently have a policy for the automatic awarding of equity awards to the named executive officers or our other employees, nor do we have any formal plan that requires us to award equity or equity-based compensation to any executive on a year-to-year basis. However, it has been our practice to grant awards annually in the first quarter of the fiscal year. The grant date is established when the Compensation Committee approves the grant and all key terms have been determined. In granting these awards, the Compensation Committee may establish any conditions or restrictions it deems appropriate in accordance with the 2021 Omnibus Equity Incentive Plan, as the case may be. Our Chief Executive Officer typically provides recommendations to the Compensation Committee for equity grants to the executive officers, taking into account each executive’s performance, achievements, and other criteria deemed relevant. The Compensation Committee, working closely with Aon, reviews the proposed grants, but reserves the right to reject or modify such recommendations. We size equity grants based on market data that expresses the awards as a percent of common shares outstanding. This sizing approach is helpful to ensure that the dilutive effects of the grants are balanced against the desire to provide employees with appropriate incentives for long-term value creation. The exercise price of the stock options will equal the closing price of our common stock published by Nasdaq on the date of the grant and the term of the options will be 10 years from the date of the grant. The options have a vesting term of four years, with 25% vesting at the first anniversary of the date of grant and the remaining amount vesting in 36 equal monthly installments thereafter. Equity awards granted to our named executive officers for fiscal 2023 and certain prior years are reported in the Summary Compensation Table included under the heading “Summary Compensation Table” on page 37 of this Proxy Statement. Inducement Grants Since 2021, we have utilized inducement grants in accordance with Nasdaq Listing Rule 5635(c)(4) at the time of hire for named executive officers and other key hires. The size of the inducement grants is based on competitive market data provided to us by Aon, and is negotiated as part of the executives offer letter or employment agreement. The vesting terms and expiration date of the inducement grants generally are the same as options granted under the 2021 Plan. In connection with Dr. Kabbinavar joining Cardiff Oncology, the Company’s Board of Directors approved the grant of non-qualified stock options to purchase 425,000 shares of Cardiff Oncology common stock outside of the Cardiff Oncology 2021 Omnibus Equity Incentive Plan. The stock option was granted as an inducement material to Dr. Kabbinavar becoming an employee of Cardiff Oncology in accordance with Nasdaq Listing Rule 5635(c)(4). The option was granted as of January 30, 2023, and has an exercise price of $1.75 per share, the closing price on the grant date. The option vests over four years with 25% vesting after 12 months and the remaining shares vesting monthly over the following 36-months, subject to Dr. Kabbinavar’s continued employment with Cardiff Oncology on such vesting dates.
Other Compensation Practices
Other Compensation Practices Clawback Policy In 2023, the Compensation Committee resolved to adopt a recoupment or “clawback” policy for annual cash incentive awards, long-term incentive awards (including stock options and restricted stock) and any other incentive awards paid to executive officers under certain circumstances. Our clawback policy provides that in the event the Company determines it must restate its financial results as reported in a Form 10-K, Form 10-Q or other report filed with the Securities and Exchange Commission to correct an accounting error due to material noncompliance with any financial reporting requirement under the U. S. federal securities laws (a Restatement), the Company will seek to recover, at the direction of the Compensation Committee after it has reviewed the facts and circumstances that led to the requirement for the Restatement and the costs and benefits of seeking recovery, incentive compensation (cash and equity-based) awarded or paid within one year following the filing of the financial report giving rise to the Restatement to a covered officer whose intentional misconduct caused or contributed to the need for the Restatement for a fiscal period if a lower award or payment would have been made to such covered officer based upon the restated financial results. The Committee will determine in its discretion the amount, if any, the Company will seek to recover from such covered officer.
Summary Compensation Table
Summary Compensation Table The following table provides certain summary information concerning compensation awarded to, earned by or paid to our NEO's for fiscal year 2023.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($)(1) | Total ($) | | Mark Erlander, CEO | 2023 | 594,400 | 672,978 | 280,394 | 1,547,772 | | | 2022 | 570,600 | 753,272 | 266,475 | 1,590,347 | | Fairooz Kabbinavar, CMO | 2023 | 443,865 | 601,468(3) | 212,120 | 1,257,453 | | James Levine, CFO | 2023 | 459,236 | 275,678 | 182,805 | 917,719 | | | 2022 | 440,475 | 350,752 | 168,252 | 959,479 |
Summary Compensation Table
(1)The amounts in this column relate to he Annual Performance Cash Bonuses, described above in the summary of compensation practices, earned by the Named Executive Officers in 2023 and 2022. (2)Amounts shown in this column do not reflect dollar amounts actually received by our named executive officers. Instead, these amounts represent the aggregate grant date fair value of stock option awards determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The valuation assumptions used in determining 2023 and 2022 amounts are described in Note 6 to our financial statements included in our Annual Reports on Form 10-K for the fiscal years ended December 31, 2023 and 2022. The exercise price and number of stock options granted to NEO's for fiscal 2023 and certain prior years are reported in the Outstanding Equity Awards Table included under the heading “Outstanding Equity Awards at Fiscal Year-End” on page 39 of this Proxy Statement. (3)Dr. Kabbinavar was hired in January 2023, and, as part of Dr. Kabbinavar's employment agreement, he was awarded a new-hire inducement grant of 425,000 non-qualified stock options, with an exercise price of $1.75. These options will vest over four years. The number of options granted was based on the competitive market at time of hire.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information for the named executive officers regarding the number of shares subject to both exercisable and unexercisable stock options as well as the exercise prices and expiration dates thereof, as of December 31, 2023. Except for the options set forth in the table below, no other equity awards were held by any of our named executive officers as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards(1) | | | | | Name | New Hire or Promotion-based Grant | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | | Mark Erlander | | 2,778 | — | 236.88 | 7/16/2024 | | | | 834 | — | 316.08 | 12/11/2024 | | | | 2,084 | — | 372.96 | 1/4/2026 | | | | 5,348 | — | 61.20 | 8/22/2027 | | | | 9,336 | — | 21.60 | 1/23/2028 | | | | 134,203 | — | 2.48 | 6/20/2029 | | | | 221,241 | — | 2.60 | 6/17/2030 | | | X | 271,920 | 163,152(2) | 7.98 | 6/10/2031 | | | | 161,931 | 208,197(3) | 2.50 | 3/9/2032 | | | | — | 482,064(4) | 1.72 | 3/15/2033 | | Fairooz Kabbinavar | X | — | 425,000(5) | 1.75 | 1/30/2033 | | James Levine | X | 235,625 | 154,375(6) | 6.55 | 7/12/2031 | | | | 74,382 | 95,634(7) | 2.50 | 3/9/2032 | | | | — | 197,472(8) | 1.72 | 3/15/2033 |
Outstanding Equity Awards at Fiscal Year-End
(1)For each executive officer, the shares listed in this table are subject to a single stock option award carrying the varying exercise prices as set forth herein. The option awards remain exercisable until they expire ten years from the date of grant, subject to earlier expiration following termination of employment. (2)9,064 will vest monthly from January 10, 2023 through June 10, 2025. The employee was promoted to CEO in 2020 and subsequently received a higher stock option grant in 2021. (3)7,711 will vest monthly from April 9, 2023 through March 9, 2026. (4)120,516 Stock Options will vest on March 15, 2024, and 10,043 will vest monthly from April 15, 2024 through March 15, 2027. (5)106,250 Stock Options will vest on January 30, 2024, and 8,854 will vest monthly from February 29, 2024 through January 30, 2027. (6)8,125 will vest monthly from January 12, 2023 through July 12, 2025. (7)42,504 Stock Options will vest on March 9, 2023, and 3,542 will vest monthly from April 9, 2023 through March 9, 2026. (8)49,638 Stock Options will vest on March 15, 2024, and 4,114 will vest monthly from April 15, 2024 through March 15, 2027.
Potential Payments Upon Termination or Change In Control
Potential Payments Upon Termination or Change In Control Other than the provisions of the executive severance benefits to which our named executive officers would be entitled to at December 31, 2023 as set forth above, we have no liabilities under termination or change in control conditions. We do not have a formal policy to determine executive severance benefits. Each executive severance arrangement is negotiated on an individual basis. The table below estimates the current value of amounts payable to our named executive officer in the event that a termination of employment occurred on December 31, 2023. The closing price of our common stock, as reported on the Nasdaq Capital Market, was $1.48 on December 29, 2023. The following table excludes certain benefits, such as accrued Paid Time Off ("PTO"), that are available to all employees generally. The actual amount of payments and benefits that would be provided can only be determined at the time of a change in control and/or the named executive officer’s qualifying separation from our Company. The table is merely an illustrative example of the impact of a hypothetical termination of employment or change in control and qualifying termination. The amounts that would actually be paid upon a termination of employment can only be determined at the time of such termination, based on the fact and circumstances then prevailing.
Director Compensation
Director Compensation Under our non-employee director compensation policy, a new non-employee director receives an initial grant of options to purchase a number of shares of common stock that considers competitive market for comparable companies. These options vest in equal annual installments over 3 years. In addition, each non-employee director receives the following annual compensation for his or her service:
Director Compensation
| | | Committee membership | | | | | Annual retainer non-employee board member | Audit | Compensation | Corporate Governance/Nominating | | Chair | $40,000 | $16,000 | $10,000 | $8,000 | | Member | $65,000 | $8,000 | $6,000 | $4,000 |
Director Compensation
In addition, each non-employee director receives an annual equity grant of options to purchase a number of shares of common stock that considers the market for comparable companies. As a result, the 2023 option grant for continuing directors was equal to 27,700 stock options, that vest on the one-year anniversary of the date of the grant, and had an exercise price of $1.59 (subject to adjustment for recapitalizations, stock split, stock dividends and the like). The following table sets forth summary information concerning the total compensation paid to our non-employee directors in 2023, paid quarterly in arrears, for services to our company:
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | Total ($) | | Dr. James O. Armitage, M.D.(2) | 69,000 | 35,434 | 104,434 | | Dr. Rodney S. Markin, M.D., Ph.D.(3) | 119,000 | 35,434 | 154,434 | | Mani Mohindru, Ph.D.(4) | 77,000 | 35,434 | 112,434 | | Gary W. Pace, Ph.D.(5) | 79,000 | 35,434 | 114,434 | | Renee P. Tannenbaum, Pharm.D.(6) | 75,000 | 35,434 | 110,434 | | Lâle White(7) | 81,000 | 35,434 | 116,434 |
Director Compensation
(1)Amounts shown in this column do not reflect dollar amounts actually received by our non-employee directors. Instead, these amounts represent the aggregate grant date fair value of stock option awards determined in accordance with FASB ASC Topic 718. The valuation assumptions used in determining 2023 amounts are described in Note 6 to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (2)As of December 31, 2023, 117,274 stock options were outstanding, of which 89,574 were exercisable. (3)As of December 31, 2023, 152,327 stock options were outstanding, of which 124,627 were exercisable. (4)As of December 31, 2023, 98,501 stock options were outstanding, of which 56,134 were exercisable. (5)As of December 31, 2023, 117,274 stock options were outstanding, of which 89,574 were exercisable. (6)As of December 31, 2023, 98,501 stock options were outstanding, of which 56,134 were exercisable. (7)As of December 31, 2023, 88,416 stock options were outstanding, of which 60,716 were exercisable.
Pay Versus Performance
Pay Versus Performance The following table reports the compensation of our Principal Executive Officer ("PEO") and our other highest paid executive officers as reported in the Summary Compensation Table, as well as compensation actually paid ("CAP") for fiscal year 2023, 2022 and 2021:
Pay Versus Performance
| Year(1) | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($) | Net Loss attributable to common stockholders($ in thousands) | | 2023 | 1,547,772 | 1,440,564 | 1,087,586 | 993,531 | 8 | (41,465) | | 2022 | 1,590,347 | 91,869 | 1,523,156 | 222,550 | 8 | (38,728) | | 2021 | 3,635,198 | (1,401,408) | 2,148,786 | 539,237 | 33 | (28,315) |
Pay Versus Performance
(1)Mr. Erlander served as our PEO during each year shown. The Non-PEO NEO's presented in the table represent the two highest paid NEO's during the respective years as follows: •2023: Fairooz Kabbinavar and James Levine •2022: James Levine and Tod Smeal •2021: Vicki Kelemen and James Levine (2)The 2023 Summary Compensation Table totals reported for the PEO and the average of the Other NEOs for each year were subject to the following adjustments per Item 402(v)(2)(iii) of Regulation S-K to calculate “compensation actually paid”:
Pay Versus Performance
| | 2023 | | 2022 | | 2021 | | | | PEO ($) | Average for Other NEO's ($) | PEO ($) | Average for Other NEO's ($) | PEO ($) | Average for Other NEO's ($) | | Summary Compensation Table | 1,547,772 | 1,087,586 | 1,590,347 | 1,523,156 | 3,635,198 | 2,148,786 | | Adjustments | | | | | | | | Deduction for amounts reported under the “Stock Awards” and “Option Awards” columns of the Summary Compensation Table(i) | (672,978) | (438,573) | (753,272) | (919,022) | (2,851,972) | (1,701,431) | | Increase/(decrease) for the Inclusion of "Rule 402(v) Equity Values" (i) | 565,770 | 344,518 | (745,206) | (381,584) | (2,184,634) | 91,882 | | Compensation Actually Paid | 1,440,564 | 993,531 | 91,869 | 222,550 | (1,401,408) | 539,237 |
Pay Versus Performance
(i)Compensation Actually Paid excludes the Stock Awards and Option Awards columns from the relevant fiscal year’s Summary Compensation Table total. The Rule 402(v) Equity Values instead reflect the aggregate of the following components, as applicable: (i) the fair value as of the end of the listed fiscal year of unvested equity awards granted in that year; (ii) the change in fair value during the listed fiscal year of equity awards granted in prior years that remained outstanding and unvested at the end of the listed fiscal year; and (iii) the change in fair value during the listed fiscal year through the vesting date of equity awards granted in prior years that vested during the listed fiscal year, less the fair value at the end of the prior year of awards granted prior to the listed fiscal year that failed to meet applicable vesting conditions during the listed fiscal year. Equity values are calculated in accordance with FASB ASC Topic 718, calculated as follows:
Pay Versus Performance
| | 2023 | | 2022 | | 2021 | | | “Inclusion of Rule 402(v) Equity Values” | PEO ($) | Average for Other NEO's ($) | PEO ($) | Average for Other NEO's ($) | PEO ($) | Average for Other NEO's ($) | | Add: Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year | 528,548 | 334,957 | 446,788 | 253,637 | 1,992,010 | 1,380,605 | | Add: Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards | 12,311 | 620 | (288,112) | (457,723) | (2,270,502) | (701,257) | | Add: Awards that are granted and vest in the same year, the fair value as of the vesting date | — | — | — | — | — | — | | Change in Fair Value of Prior Years’ Equity Awards that Vested During the Year | 24,911 | 8,941 | (903,882) | (177,498) | (1,906,142) | (587,466) | | Subtract: Awards Granted in any prior fiscal year that failed to vest Change in Value of Prior Years’ Equity Awards that Forfeited During the Year | — | — | — | — | — | — | | Increase/(decrease) for the “Inclusion of Rule 402(v) Equity Values” (i) | 565,770 | 344,518 | (745,206) | (381,584) | (2,184,634) | 91,882 |