DEF 14A of Gossamer Bio, Inc.
Filed Apr 24, 2024 · FY20230001728117-24-000044
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our board of directors is divided into three classes, with one class of our directors standing for election each year, generally for a three-year term. Directors for each class are elected at the annual meeting of stockholders held in the year in which the term for their class expires and hold office until the third annual meeting following election and until such director’s successor is elected and qualified, or until such director’s earlier death, resignation or removal. Renée Galá will not stand for re-election as a director at the annual meeting of stockholders. Our board of directors determined that following the annual meeting, the size of the board of directors will automatically be reduced to seven directors. As detailed in the section below, following Ms. Galá not standing for re-election, the composition of our board of directors is as follows: Class I consists of Thomas Daniel, M.D. Sandra Milligan, M.D., J.D. and Steven Nathan, M.D.; Class II consists of Russell Cox. and Faheem Hasnain; and Class III consists of Skye Drynan and John Quisel, Ph.D., J.D. At this meeting, two nominees for director are to be elected as Class III directors for a three-year term expiring at our 2027 annual meeting of stockholders and until their successors are duly elected and qualified. The nominees, who were recommended for nomination by our board of directors, are Skye Drynan and John Quisel, Ph.D., J.D. The Class I directors have one year remaining on their terms of office and the Class II directors have two years remaining on their terms of office. If no contrary indication is made, proxies in the accompanying form are to be voted for Ms. Drynan and Dr. Quisel, or in the event that Ms. Drynan or Dr. Quisel is not a candidate or is unable to serve as a director at the time of the election (which is not currently expected), for any nominee who is designated by our board of directors to fill the vacancy. Each of Ms. Drynan and Dr. Quisel is currently a member of our board of directors. All of our directors bring to the board of directors significant leadership experience derived from their professional experience and service as executives or board members of other corporations, including in the biotechnology industry. The process undertaken by the nominating and corporate governance committee in recommending qualified director candidates is described below under “Director Nomination Process.” Certain individual qualifications and skills of our directors that contribute to the board of directors’ effectiveness as a whole are described in the following paragraphs.
Information Regarding Directors
Information Regarding Directors The information set forth below as to the directors and nominees for director has been furnished to us by the directors and nominees for director:
Nominees for Election to the Board of Directors
Nominees for Election to the Board of Directors
Members of the Board of Directors Continuing in Office
Members of the Board of Directors Continuing in Office
Director Compensation
Director Compensation Our non-employee director compensation program provides for annual retainer fees and/or long-term equity awards for our non-employee directors. Each non-employee director receives an annual retainer of $40,000. Our lead independent director receives an additional annual retainer of $30,000. Non-employee directors serving as the chairs of the audit, compensation and nominating and corporate governance committees receive additional annual retainers of $15,000, $12,000 and $8,000, respectively. Non-employee directors serving as members of the audit, compensation and nominating and corporate governance committees receive additional annual retainers of $7,500, $6,000 and $4,000, respectively. In November 2023, as a result of the large increase in total shares of common stock outstanding due to our private placement in July 2023, we amended our non-employee director compensation program to provide that non-employee directors will receive initial grants of options to purchase 230,000 (increased from 70,000) shares of our common stock, vesting monthly over three years, upon election to the board of directors, and thereafter annual grants of options to purchase 115,000 (increased from 35,000) shares of our common stock, vesting on the first to occur of (1) the first anniversary of the grant date or (2) the next occurring annual meeting of our stockholders. Awards granted to our non-employee directors will vest upon a change in control. Compensation under our non-employee director compensation policy is subject to the annual limits on non-employee director compensation set forth in our 2019 Incentive Award Plan, or the 2019 Plan. As provided in the 2019 Plan, our board of directors or its authorized committee may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the board of directors or its authorized committee may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other compensation decisions involving non-employee directors. We have reimbursed and will continue to reimburse all of our non-employee directors for their travel, lodging and other reasonable expenses incurred in attending meetings of our board of directors and committees of our board of directors. The following table sets forth the compensation that we paid or awarded during the year ended December 31, 2023 to each of our non-employee directors who served on the board during 2023. Mr. Hasnain is not included in the following table as he served as an executive officer during 2023 and his compensation is included in the Summary Compensation Table in the “Executive Compensation and Other Information” section below.
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) | | Joshua Bilenker, M.D. (2) | 27,750 | — | — | 27,750 | | Kristina Burow (3) | 28,017 | 27,818 | — | 55,835 | | Russell Cox | 59,500 | 27,818 | — | 87,318 | | Thomas Daniel, M.D. | 71,000 | 27,818 | — | 98,818 | | Renée Galá | 59,000 | 27,818 | — | 86,818 | | Sandra Milligan, M.D., J.D. | 54,000 | 27,818 | — | 81,818 | | John Quisel, Ph.D., J.D. | 4,306 | 129,306 | — | 133,612 |
Director Compensation
____________________ (1)This column reflects the grant date fair value of the option awards granted to the non-employee directors in 2023. In accordance with SEC rules, this column reflects the aggregate fair value of the option awards granted to the non-employee directors during 2023 computed as of the grant date in accordance with Financial Accounting Standards, Standard Board Accounting Codification Topic 718 for stock-based compensation transactions (ASC 718). Assumptions used in the calculation of this amount are included in Note 9 to our consolidated financial statements included in our Annual Report on Form 10‑K for the year ended December 31, 2023, which was filed with the SEC on March 5, 2024. This amount does not reflect the actual economic value that will be realized by the non-employee directors upon the vesting or exercise of the awards or the sale of the common stock underlying such awards. (2)Dr. Bilenker did not stand for re-election to our board of directors at our 2023 annual meeting of stockholders. (3)Ms. Burow resigned from our board of directors in September 2023. The aggregate number of shares subject to stock options outstanding at December 31, 2023 for each non-employee director is set forth in the table below. Our non-employee directors do not hold outstanding stock awards.
Director Compensation
| Name | Number of Securities Underlying Options Outstanding at December 31, 2023 | | Joshua Bilenker, M.D. | — | | Kristina Burow | — | | Russell Cox | 182,166 | | Thomas Daniel, M.D. | 266,611 | | Renée Galá | 182,166 | | Sandra Milligan, M.D., J.D. | 112,000 | | John Quisel, Ph.D., J.D. | 230,000 |
Overview of 2023 Executive Compensation Decisions
| Market-Based Base Salary Increases for NEOs | •Our named executive officers received base salary increases for 2023 consistent with our pay positioning philosophy of targeting target total cash compensation at the 50th percentile of similarly situated executives at comparable companies based on our peer group. | | Annual Cash Incentives Paid 90% Based on Corporate Performance | •Based on our achievement of our corporate performance goals during 2023, our named executive officers’ annual incentives tied to corporate performance were paid out at 90% of target. | | Long-Term Incentive Compensation in Form of Stock Options Over Multi-Year Periods | •Our named executive officers received stock options which vest over four years. ◦Stock options are an important vehicle for tying executive pay to performance, because they deliver future value only if the value of our common stock increases above the exercise price. As a result, they provide strong incentives for our executive officers to increase the value of our common stock over the long term, and they tightly align the interests of our executives with those of our stockholders. |
Role of Compensation Consultant and Comparable Company Information
Role of Compensation Consultant and Comparable Company Information The compensation committee is authorized to retain the services of third-party compensation consultants and other outside advisors, from time to time, to assist in its evaluation of executive compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. In 2023, the compensation committee retained Alpine Rewards as its independent third-party compensation consulting firm for guidance in making compensation decisions. Specifically, for 2023, the compensation committee requested Alpine Rewards to advise it on a variety of compensation-related issues, including: •conducting an analysis of current practices of comparable public companies to assist the compensation committee in developing director and executive compensation levels; •reviewing our peer group to determine whether additional or different peer companies or groups would be necessary to provide appropriate information on market practices and compensation levels; •advising on the stock option repricing implemented in May 2023; and •providing general information concerning director and executive compensation trends and developments. Alpine Rewards did not provide any other services to us in 2023 beyond their engagement as an advisor to the compensation committee on director and executive compensation matters. The compensation committee assessed the independence of Alpine Rewards pursuant to SEC and Nasdaq rules and concluded that Alpine Rewards is independent and no conflict of interest existed that would have prevented Alpine Rewards from serving as an independent consultant to the compensation committee currently or during 2023.
Competitive Positioning
Competitive Positioning The compensation committee reviews our peer group annually to reflect changes in market capitalization and other factors, including acquisitions, and revises the companies included in the peer group accordingly. For 2023, Alpine Rewards assisted the compensation committee in identifying an appropriate peer group of companies for use as a reference when determining certain 2023 and 2024 director and executive compensation. The peer group identified below was selected in August 2023 for purposes of setting certain 2023 compensation and the selection criteria identified below were measured at such date. The identified peer group consisted of 20 life sciences companies in similar phases of development as us with the following characteristics was selected based on the following parameters and not on the basis of executive compensation levels:
Competitive Positioning
| MARKET CAPITALIZATION | •Generally between $100M to $800M as of July 2023, representing a range of approximately 0.3x to 3x our market capitalization at the time the peer group was established (approximately $300M). •Our market capitalization was positioned near the 41st percentile of the peers at the time the peer group was selected in July 2023. | | SECTOR AND STAGE | •Public U.S. biopharma organizations focused on similar therapeutic focus areas. ➢ Emphasis on Phase 2 to 3 companies to reflect our Phase 3 stage of development at the time the peer group was selected ➢ Focus on companies that went public in the last five years | | HEADCOUNT | •Companies with generally between 50 and 400 employees based on Gossamer’s headcount of 129 employees in July 2023. | | GEOGRAPHIC LOCATION | •Focused on companies located in Southern California and other biotech talent hubs such as San Francisco Bay Area and Boston, where applicable. |
Competitive Positioning
For 2023, this peer group consisted of the following companies:
Competitive Positioning
| Aerovate Therapeutics | Erasca | | Alector | Fulcrum Therapeutics | | Allakos | Gritstone bio | | Allogene Thereapeutics | Kura Oncology | | AlloVir | Mersana Therapeutics | | AnaptysBio | NGM Biopharmaceuticals | | Annexon | Poseida Therapeutics | | Atara Biotherapeutics | RAPT Therapeutics | | Atea Pharmaceuticals | Reneo Therapeutics | | Crinetics Pharmaceuticals | Trevi Therapeutics |
Competitive Positioning
Based on the peer analysis performed by Alpine Rewards in 2023 for the purpose of selecting our 2023 peer group, Arcus Biosciences, Deciphera Pharmaceuticals, IDEAYA Biosciences, Kiniksa Pharmaceuticals, Prometheus Biosciences, Replimune Group, Tricida, Vaxcyte, Ventyx Biosciences and Xencor were removed, and Aerovate Therapeutics, Allakos, AlloVir, Annexon, Fulcrum Therapeutics, Mersana Therapeutics, Reneo Therapeutics and Trevi Therapeutics were added. In general, the removed peer companies no longer fit the selection criteria, as described further above, while the additions reflect companies with financial and industry characteristics more similar to our company. Our compensation committee reviewed the foregoing comparable company data from the 2022 and 2023 peer groups in connection with its determinations of the 2023 base salaries, target bonuses and equity awards for our named executive officers. The compensation committee generally attempts to set base salaries at target total cash compensation levels at the 50th percentile of the peer company data for comparable positions and total annual equity award value at approximately the 62nd percentile. The compensation committee does not, however, rely entirely on that data to determine named executive officer compensation. Instead, as described above and consistent with past practice, the compensation committee members rely on their judgment and experience in setting those compensation levels and making those awards. As a result, variations on this pay positioning occur from year to year. We expect that the compensation committee will continue to review comparable company data in connection with setting the compensation we offer our named executive officers to help ensure that our compensation programs are competitive and fair. The compensation levels of the named executive officers reflect to a significant degree the varying roles and responsibilities of such executives. As a result of the compensation committee’s and the board of director’s assessment of our Chief Executive Officer’s roles and responsibilities within our company, there are significant compensation differentials between the Chief Executive Officer and our other named executive officers.
Performance Bonuses
Performance Bonuses Each named executive officer is also eligible for a performance bonus based upon the achievement of certain corporate performance goals and objectives approved by our board of directors. Bonuses are set based on the executives’ respective base salaries for the relevant bonus year, and are expected to be paid out in the first quarter of the following year. The target levels for executive bonuses for 2023 were as follows: 55% of base salary for Mr. Hasnain, 45% of base salary for Mr. Giraudo, and 40% of base salary for Mr. Smith. The target cash incentive awards of Mr. Hasnain and Mr. Giraudo as a percentage of base salary remained unchanged from 2022. Due to his commencement of employment in December 2023, Mr. Smith was not eligible for an annual bonus for 2023. At the beginning of each year, the board of directors (considering the recommendations of the compensation committee and management) sets corporate goals and milestones for the year. These goals and milestones and the proportional emphasis placed on each are set by the board of directors after considering management input and our overall strategic objectives. These goals generally relate to factors such as clinical and regulatory development of our products, portfolio sustainability, business development and financial targets. The board of directors, upon recommendation of the compensation committee, determines the level of achievement of the corporate goals for each year. All final bonus payments to our named executive officers are determined by our compensation committee. The actual bonuses awarded in any year, if any, may be more or less than the target, depending on individual performance and the achievement of corporate objectives and may also vary based on other factors at the discretion of the compensation committee (or the full board of directors, with respect to our Chief Executive Officer). Under our annual incentive plan, the maximum bonus payable to an executive is 150% of his or her target bonus. Performance relative to the corporate goals set by our board of directors represents 100% of our Chief Executive Officer’s annual bonus opportunity and 70% of our other named executive officers’ annual bonus opportunities. The compensation committee’s determination of the individual performance percentage of the 2023 bonus awards for our named executive officers was not based on the achievement of any predetermined individual performance goals, but rather on the compensation committee’s subjective assessment of each officer’s overall performance of their duties during 2023. The compensation committee determined Mr. Giraudo’s individual performance percentage to be 120%.
Corporate Performance Goals
Corporate Performance Goals The corporate performance goals and their respective weighting for 2023 were approved by the board of directors on February 28, 2024. The 2023 performance goals were tied to clinical and regulatory development of seralutinib and certain quality and finance measures and were set at levels such that the attainment of executive target annual cash incentive award opportunities was not assured at the time they were set and would require a high level of effort and execution on the part of the executive officers and others in order to achieve the goals. The board of directors also specified a “target exceeds” weighting for each corporate goal, corresponding to additional credit that could be achieved for each goal in the event of over performance in a given area, representing up to 130% of the overall goals. To determine our corporate performance percentage for 2023, the compensation committee, in conjunction with the board of directors, employed a holistic analysis that took into account both the extent to which the performance goals had been achieved or exceeded as well as the relative difficulty of achieving the goals that were met and that were only partially met. In light of our strong performance against the objectives set by the compensation committee in early 2023, especially related to the clinical and regulatory development of seralutinib, the compensation committee determined our corporate performance percentage to be 90% of the target performance level for 2023. The table below provides additional details about the corporate performance goals for 2023 and the compensation committee’s assessment of our actual performance against our 2023 corporate performance goals:
Corporate Performance Goals
| 2023 CORPORATE GOAL | WEIGHTING | 2023 ACHIEVEMENTS | PERFORMANCE | WEIGHTED PERFORMANCE | | •Seralutinib Phase 3 first patient enrolled in third quarter of 2023 | 25% | •First patient enrolled in fourth quarter 2023. | 40% | 10% | | •20 Phase 3 clinical sites activated | 25% | •Significantly exceeded stretch goal of 25 sites active by end of 2023. | 140% | 35% | | •Advance alternative seralutinib formulation | 5% | •Achieved. | 100% | 5% | | •Submission of Phase 2 top line results to high tier journal | 5% | •Submitted to publication to Lancet in 2023. | 100% | 5% | | •Regulatory meetings with FDA and EMA in first and second quarters of 2023. | 10% | •Achieved. | 100% | 10% | | •Phase 3 readiness from quality perspective | 5% | •Achieved. | 100% | 5% | | •Complete at least one out-licensing agreement involving a program other than seralutinib | 5% | •Not achieved. | 0 | 0 | | •Secure financing to support the completion of a Phase 3 program for seralutinib in PAH | 20% | •Secured financing to support the completion of a Phase 3 program for seralutinib in PAH | 100% | 20% | | TOTAL | | | | 90% |
Corporate Performance Goals
This overall 90% achievement level was then used to determine each named executive officer’s bonus. The annual bonuses paid to our named executive officers for 2023 are set forth in the Summary Compensation Table below.
Long-Term Equity Incentives
Long-Term Equity Incentives The goal of our long-term, equity-based incentive awards is to align the interests of our named executive officers and other employees, non-employee directors and consultants with the interests of our stockholders. Because vesting is based on continued employment over multiple years, our equity-based incentives also encourage the retention of our named executive officers through the vesting period of the awards. In determining the size of the long-term equity incentives to be awarded to our named executive officers, we take into account a number of internal factors, such as the relative job scope, the value of existing long-term incentive awards, individual performance history, prior contributions to us, the size of prior grants as well as comparable company information, as described below. We have had no program, plan or practice pertaining to the timing of stock option grants to named executive officers coinciding with the release of material non-public information. We use equity awards to compensate our named executive officers both in the form of initial grants in connection with the commencement of employment and annual refresher grants. Annual equity awards to our named executive officers are typically granted during the first quarter of each year. While we intend that the majority of stock awards to our employees be made pursuant to initial grants or our annual grant program, the compensation committee retains discretion to make equity awards to employees at other times, including in connection with the promotion of an employee, to reward an employee, for retention purposes or for other circumstances recommended by management or the compensation committee.
Equity Vehicles
Equity Vehicles Annual equity awards are granted under our 2019 Plan, using a mix of different equity instruments to further the goal of attracting and retaining top performers and to balance the relative advantages of different instruments. •Stock options are an important vehicle for tying executive pay to performance because they deliver future value only if the value of our common stock increases above the exercise price. As a result, they provide strong incentives for our executive officers to increase the value of our common stock over the long term, tightly aligning the interests of our executives with those of our stockholders. •RSU awards are granted from time to time because they are less dilutive to our stockholders, as fewer shares of our common stock are granted to achieve an equivalent value relative to stock options, and because RSU awards are an effective retention tool that maintain value even if the share price is trading lower than the share price on the grant date. RSU awards were included in the annual awards to our named executive officers granted during 2021. However, for 2022, 2023 and 2024, no RSU awards were granted as part of our annual awards to our named executive officers. The exercise price of each stock option grant is the fair market value of our common stock on the grant date, as determined by our board of directors from time to time. Option awards generally vest over a four-year period as follows: 25% of the shares underlying the option vest on the first anniversary of the date of the vesting commencement date and the remainder of the shares underlying the option vest in equal monthly installments over the remaining 36 months thereafter. RSU awards generally vest in three equal annual installments. From time to time, our compensation committee may, however, determine that a different vesting schedule is appropriate. For example, the stock options granted as part of our annual equity awards granted in January 2022 and the retention awards granted in December 2022 vest over a three year period as follows: one-third of the shares underlying the option vest on the first anniversary of the date of the vesting commencement date and the remainder of the shares underlying the option vest in equal monthly installments over the remaining 24 months thereafter.
2023 Equity Awards
2023 Equity Awards Generally, the compensation committee determines the value of each executive officer’s annual equity grant using a holistic evaluation that takes into account a competitive market analysis prepared by our independent compensation consultant with market data for each role, the recommendations of our Chief Executive Officer based on his evaluation of their individual performance (except with respect to the Chief Executive Officer’s performance), the extent to which the executive officer is currently vested in his or her stock awards, scope and criticality of the executive’s role and parity in targets among executives in roles of a given level. For 2023, our compensation committee reviewed competitive market data prepared by Alpine Rewards in connection with its grant of long-term equity incentive awards to the named executive officers and approved equity awards to our named executive officers intended to approximate the 62nd percentile of comparable company data for similar positions, which it considers appropriate to create a meaningful opportunity for reward predicated on the creation of long-term stockholder value. Our named executive officers serving at the time were granted annual awards in January 2023. In addition, in November 2023, Messrs. Hasnain and Giraudo received an additional award equal to 25% of the annual award to be granted in early 2024 in the form of stock options. In May 2023, the compensation committee approved a one-time performance-based option award for Mr. Hasnain granted at same time of the stock option repricing, as described below. The option vests and becomes exercisable as follows: (1) with respect to 50% of the shares subject to the option, upon our common stock achieving a 30-day average stock price at or above $5.00 per share within four years of the grant date; (2) with respect to 25% of the shares subject to the option, upon our common stock achieving a 30-day average stock price at or above $7.50 per share within four years of the grant date; and (3) with respect to the remaining 25% of the shares subject to the option, upon our common stock achieving a 30-day average stock price at or above $10.00 per share within four years of the grant date, in each case subject to Mr. Hasnain’s continuous service with us through each vesting date. In no event will any portion of the option vest prior to the first anniversary of the grant date. In addition, in the event of Mr. Hasnain’s termination without cause or resignation for good reason, or his death or disability in each case prior to a change in control, the options shall remain eligible to vest upon attainment of any remaining unsatisfied price hurdles prior to the fourth anniversary of the grant date (or, if a price hurdle was achieved prior to the date of such termination but prior to the first anniversary of the grant date, the portion of the option for which the price hurdle was achieved will vest upon such termination. In the event of a change in control, any portion of the option that is eligible to vest based upon a stock price hurdle that is equal to or less than the closing price per share of our common stock on the date of the change in control will vest upon the change in control. The accelerated vesting described above will apply to Mr. Hasnain’s performance-based option in lieu of the acceleration provisions under his employment letter agreement, as described below. The equity awards granted to our named executive officers for 2023 are set forth in the “Grants of Plan-Based Awards Table” below. Except for the award granted to Mr. Hasnain in May 2023, each equity award granted in 2023 vests over four years in accordance with the standard vesting schedule described above. For a description of certain accelerated vesting provisions applicable to the stock awards granted to our named executive officers, see “Employment Letters with Our Named Executive Officers” below.
Stock Option Repricing
Stock Option Repricing Effective May 5, 2023, and in accordance with the terms of the 2019 Plan, the board of directors approved a stock option repricing whereby the exercise price of each stock option held by an eligible individual and outstanding as of May 5, 2023 and granted under the 2019 Plan prior to November 30, 2022 was immediately reduced to $1.36 per share, the closing stock price on such date. Mr. Giraudo was the only named executive officer to participate in the option repricing, and held an aggregate of 721,500 eligible options with original exercise prices ranging from $9.79 - $22.10. He agreed to cancel 240,999 options and a total of 481,001 options were repriced. Mr. Giraudo’s participation in the option exchange was subject to his agreement to cancel one-third of his eligible options, on a grant-by-grant basis, effective immediately. These cancelled options were deducted proportionately from the vested and unvested portions of each his repriced options. To the extent a repriced option is exercised prior to the Premium End Date (as defined below), or Mr. Giraudo’s employment terminates prior to the Premium End Date, he will be required to pay the original exercise price per share of the repriced options. The “Premium End Date” means the earliest of (i) May 5, 2024, (ii) the date of a change in control, (iii) his death or disability, or (iv) if he is terminated under circumstances giving rise to severance under his employment agreement, the date of such termination. Except for the reduction in the exercise prices of the repriced options as described above, the repriced options will retain their existing terms and conditions as set forth in the 2019 Plan and the applicable award agreements. The board of directors believes that the option repricing with the Premium End Date will provide added incentives to retain and motivate our key contributors, including Mr. Giraudo, without incurring the stock dilution resulting from significant additional equity grants to the eligible participants or significant additional cash expenditures resulting from additional cash compensation. In addition, in determining that the participation of the executive officers in the option repricing, including Mr. Giraudo, would be conditioned on the cancellation of one-third of their eligible options, the board of directors considered that the cancelled options would be returned to the share reserve under the 2019 Plan and available for future issuance thereunder by us, resulting in an immediate reduction in dilution to us for the benefit of stockholders and ensuring we have sufficient shares to incentivize new and ongoing employees for the foreseeable future.
Post Termination and Change in Control Benefits
Post Termination and Change in Control Benefits Our named executive officers may become entitled to certain benefits or enhanced benefits in connection with a change in control of our company. The employment letters with each of our named executive officers provide for accelerated vesting of all outstanding equity awards, as well as certain other benefits, upon a qualifying termination in connection with a change in control of our company. For additional discussion, please see “Employment Letters with Our Named Executive Officers” below.
Summary Compensation Table
Summary Compensation Table The following table shows information regarding the compensation earned by our named executive officers during the years ended December 31, 2023 and 2022.
Summary Compensation Table
| Name and Principal Position | Year | Salary($) | Bonus($) | Stock Awards($)(1) | Option Awards($)(1) | Non-equity Incentive Plan Compensation($)(2) | All Other Compensation($) | Total($) | | Faheem Hasnain | 2023 | 606,901 | — | — | 1,185,725 | 303,362 | — | 2,095,988 | | Chairman, President and Chief Executive Officer | 2022 | 591,637 | — | — | 6,359,885 | 310,888 | — | 7,262,410 | | Bryan Giraudo | 2023 | 485,624 | — | — | 579,791 | 218,467 | 4,000(3) | 1,287,882 | | Chief Operating Officer and Financial Officer | 2022 | 473,418 | — | — | 2,578,106 | 213,175 | 4,000(3) | 3,268,699 | | Robert Smith | 2023 | 35,795 | 100,000(4) | — | 1,195,050 | — | — | 1,330,845 | | Chief Commercial Officer | 2022 | — | — | — | — | — | — | — |
Summary Compensation Table
____________________ (1)This column reflects the grant date fair value of the stock and option awards granted to the named executive officers in the applicable fiscal year. In accordance with SEC rules, this column reflects the aggregate fair value of the award granted to the named executive officers computed as of its grant date in accordance with Financial Accounting Standards, Standard Board Accounting Codification Topic 718 for stock-based compensation transactions (ASC 718). For 2023, the amount for Mr. Giraudo also includes the incremental fair value of $283,292, computed as of the repricing date in accordance with ASC 718, as a result of the repricing of certain stock options held by Mr. Giraudo in May 2023. Assumptions used in the calculation of this amount is included in Note 9 to our consolidated financial statements included in our Annual Report on Form 10‑K for the year ended December 31, 2023, which was filed with the SEC on March 5, 2024. This amount does not reflect the actual economic value that will be realized by the named executive officers upon the vesting or exercise of the awards or the sale of the common stock underlying such awards. For the options granted to Mr. Hasnain in May 2023, which contain both service-based and market-based vesting conditions, the amount included in this column ($442,500) is based on fair value determined using the Geometric Brownian Motion/Monte Carlo model and the following assumptions: the company’s common stock price at the date of grant of $1.36; a seven-year continuously compounded equivalent risk-free rate of 3.38%; an expected stock price volatility of 71.97%; a dividend yield of 0%; and an expected term of 7 years. (2)Amounts represent cash awards earned pursuant to the terms of our annual performance bonus program, which are paid in the first quarter of the following year. See “—Executive Compensation and Other Information – Performance Bonuses” for more information. (3)Amounts represent company-paid 401(k) matching contributions. (4)Amount represents a sign-on bonus paid to Mr. Smith pursuant to his employment agreement with us. The sign-on bonus is subject to repayment in the event that Mr. Smith voluntarily terminates his employment without good reason or if the company terminates his employment for cause, in either event within the first year of his employment.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth specified information regarding the outstanding equity awards held by our named executive officers at December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards | | | | | Stock Awards | | | | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#)(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares That Have Not Vested ($)(2) | | Faheem Hasnain | 11/20/2023 | — | 437,500 | | $0.84 | 11/20/2033 | — | $— | | | 5/5/2023(3) | — | 750,000 | 750,000 | 1.36 | 5/5/2033 | — | — | | | 3/20/2023 | — | 544,500 | | 1.21 | 3/20/2033 | — | — | | | 12/7/2022(5) | 179,685 | 364,815 | | 2.16 | 12/7/2032 | — | — | | | 1/6/2022(5) | 414,104 | 235,896 | | 11.94 | 1/6/2032 | — | — | | | 2/25/2021 | 230,208 | 94,792 | | 9.79 | 2/25/2031 | 54,166(4) | 49,426 | | | 6/17/2020 | 47,000 | — | | 12.10 | 6/17/2030 | — | — | | | 3/25/2019 | 43,500 | — | | 22.10 | 3/25/2029 | — | — | | Bryan Giraudo | 11/20/2023 | — | 181,250 | | 0.84 | 11/20/2033 | — | — | | | 3/20/2023 | — | 211,500 | | 1.21 | 3/20/2033 | — | — | | | 1/6/2022(5)(6) | 112,556 | 64,119 | | 1.36 | 1/6/2032 | — | — | | | 9/16/2021(6) | 56,246 | 43,758 | | 1.36 | 9/16/2031 | — | — | | | 2/25/2021(6) | 42,500 | 17,502 | | 1.36 | 2/25/2031 | — | — | | | 2/14/2020(6) | 45,681 | 1,987 | | 1.36 | 2/14/2030 | — | — | | | 3/25/2019(6) | 96,671 | — | | 1.36 | 3/25/2029 | — | — | | | 12/7/2022(5) | 69,795 | 141,705 | | 2.16 | 12/7/2032 | — | — | | | 2/25/2021 | — | — | | — | — | 15,000(4) | 13,688 | | | 12/10/2018 | 155,555 | — | | 10.71 | 12/10/2028 | — | — | | | 5/21/2018 | 405,666 | — | | 2.61 | 5/21/2028 | — | — | | Bob Smith | 12/4/2023 | — | 1,500,000 | | 0.97 | 12/4/2033 | — | — |
Outstanding Equity Awards at Fiscal Year-End
(1)Except with respect to the options described in footnote (3) and (5) below, the options vest over a period of four years from the date of grant, with 25% of the option vesting on the first anniversary of such date, and the remainder vesting in equal monthly installments over the three years thereafter. All vesting is subject to the individual’s continuous service with us through the vesting dates and the potential vesting acceleration described above under “—Employment Letters with our Named Executive Officers” and “2023 Equity Awards.” (2)The market value was computed using $0.91, which was the closing price per share of our common stock on December 29, 2023, the last trading day of the year. (3)The option shall vest and become exercisable as follows: (i) with respect to 50% of the shares subject to the option, upon our common stock achieving a 30-day average stock price at or above $5.00 per share within four years of the grant date; (ii) with respect to 25% of the shares subject to the option, upon our common stock achieving a 30-day average stock price at or above $7.50 per share within four years of the grant date; and (iii) with respect to the remaining 25% of the shares subject to the option, upon our common stock achieving a 30-day average stock price at or above $10.00 per share within four years of the grant date, in each case subject to Mr. Hasnain’s continuous service with us through each vesting date. In no event will any portion of the option vest prior to the first anniversary of the grant date. (4)Represents restricted stock units. These RSUs vest in equal installments over a period of three years, each on the anniversary date of the vesting start date. The vesting start date for these awards is March 22, 2022. All vesting is subject to the individual’s continuous service with us through the vesting dates and the potential vesting acceleration described above under “—Employment Letters with our Named Executive Officers.” (5)The options vest over a period of three years from the date of grant, with one-third of the option vesting on the first anniversary of such date, and the remainder vesting in equal monthly installments over the two years thereafter. (6)These options were repriced on May 5, 2023, as described above. The exercise price of the repriced options, after giving effect to the option repricing, is reflected in the table above and assumes achievement of the Premium End Date. If the options in the table above were exercised prior to the Premium End Date, the exercise prices would be as follows: options granted January 6, 2022, $11.94; options granted September 16, 2021, $10.54; options granted February 25, 2021, $9.79; options granted February 14, 2020, $14.55; and options granted March 25, 2019, $22.10. For more information, see “Stock Option Repricing” above.
Pay Versus Performance
Pay Versus Performance In accordance with the SEC’s disclosure requirements regarding pay versus performance, or PVP, this section presents the SEC-defined “Compensation Actually Paid,” or CAP for our Chief Executive Officer, also referred to as our PEO, and remaining named executive officers, or NEOs, for the fiscal years ended December 31, 2021, 2022 and 2023. Also required by the SEC, this section compares CAP to various measures used to gauge performance at Gossamer. Compensation decisions at Gossamer are made independently of disclosure requirements. CAP is a supplemental measure to be viewed alongside performance measures as an addition to our philosophy and strategy of compensation-setting discussed elsewhere in the overview of the executive compensation program, and is not in replacement.
Pay Versus Performance Table - Compensation Definitions
Pay Versus Performance Table - Compensation Definitions Salary, Non-Equity Incentive Plan Compensation, and All Other Compensation are each calculated in the same manner for purposes of both CAP and Summary Compensation Table, or SCT, values. The primary difference between the calculation of CAP and SCT total compensation is the amount reported with respect to “Stock Awards” and “Option Awards.”
Pay Versus Performance Table - Compensation Definitions
| | SCT Total | CAP | | Stock and Option Awards | Grant date fair value of stock and option awards granted during the year | Year over year change in the fair value of stock and option awards that are unvested as of the end of the year (or, for stock and option awards that were granted in the applicable year and remain unvested at year end, the change in the fair value from the grant date), or vested or were forfeited or modified during the year |
Pay Versus Performance Table
Pay Versus Performance Table In accordance with the SEC’s PVP rules, the following table sets forth information concerning the compensation of our PEO and the average compensation of our remaining NEOs for each of the fiscal years ended December 31, 2021, 2022 and 2023, and our financial performance for each such fiscal year:
Pay Versus Performance Table
| 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 Income (Loss) ($) | | 2023 | 2,095,988 | 1,592,883 | 1,309,364 | 1,205,267 | 9 | (179,817,000) | | 2022 | 7,262,410 | (1,906,300) | 2,875,322 | (383,116) | 22 | (229,378,000) | | 2021 | 4,751,620 | 6,341,899 | 2,238,213 | 2,476,103 | 117 | (234,004,000) |
Pay Versus Performance Table
_____________ (1) The PEO in all reporting years is Faheem Hasnain. The non-PEO NEOs in the 2023 reporting year are Bryan Giraudo and Bob Smith. The non-PEO NEOs in the 2022 reporting year are Bryan Giraudo and Richard Aranda, M.D. The non-PEO NEOs in the 2021 reporting year are Bryan Giraudo and Christian Waage. (2) Amounts represent CAP to our PEO and the average CAP to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below). CAP to our NEOs represents the “Total” compensation reported in the SCT for the applicable fiscal year, as adjusted as follows:
Pay Versus Performance Table
| | 2021 | | 2022 | | 2023 | | | Adjustments(a) | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | $(3,856,060) | $(1,620,732) | $(6,359,885) | $(2,217,405) | $(1,185,725) | $(887,420) | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | 4,180,410 | 1,709,382 | 1,114,194 | 381,335 | 1,163,964 | 697,241 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | — | — | — | — | — | — | | Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | 1,178,667 | 110,943 | (2,681,136) | (1,182,532) | (454,994) | (64,086) | | Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | 87,262 | 38,297 | (1,241,883) | (239,836) | (26,350) | 57,086 | | Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | — | — | — | — | — | (48,564) | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | — | — | — | — | — | — | | Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | — | — | — | — | — | 141,646 | | TOTAL ADJUSTMENTS | $1,590,279 | $237,890 | $(9,168,710) | $(3,258,438) | $(503,105) | $(104,097) |
Pay Versus Performance Table
(a) The fair value of stock options reported for CAP purposes in the Adjustments table is estimated using a Black-Scholes and Monte Carlo option pricing models. These models uses both historical data and current market data to estimate the fair value of options and requires several assumptions. The assumptions used in estimating fair value for options (other than Mr. Hasnain’s performance-based options) included in the adjustments calculation are as follows:
Pay Versus Performance Table
| Year | 2021 | 2022 | 2023 | | Volatility | 72.43 - 77.32% | 62.29 - 77.22% | 62.34 - 131.17% | | Expected life (in years) | 2.46 - 5.79 years | 2.09 - 5.79 years | 1.96 - 6.01 years | | Expected dividend yield | —% | —% | —% | | Risk-free rate | 0.17 - 1.35% | 0.73 - 4.72% | 3.37 - 5.04% |
Pay Versus Performance Table
The assumptions used in estimating the fair value of Mr. Hasnain’s performance-based options granted in May 2023, which contain both service-based and market-based vesting conditions, as of the last day of 2023, was determined using the Geometric Brownian Motion/Monte Carlo model and the following assumptions: the company’s common stock price as of December 29, 2023 of $0.91; a six-year continuously compounded equivalent risk-free rate of 3.86%; an expected stock price volatility of 103.89%; a dividend yield of 0%; and an expected term of approximately 6 years.
Narrative Disclosure to Pay Versus Performance
Narrative Disclosure to Pay Versus Performance