EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Compensation Discussion and Analysis
Our Compensation Committee is responsible for overseeing the total compensation of our senior management team, which consists of our executive officers and certain other senior managers. In this capacity, our Compensation Committee designs, implements, reviews and approves all compensation for our Chief Executive Officer and our other executive officers. This section discusses the principles underlying our policies and decisions with respect to the compensation of our named executive officers, and all material factors relevant to an analysis of these policies and decisions. Our named executive officers for the fiscal year ended December 31, 2020, were:
•Nick Leschly, our Chief Executive Officer and Principal Executive Officer;
•William D. Baird, III, our Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer;
•Philip Gregory, D. Phil., our Chief Scientific Officer;
•David Davidson, M.D., our former Chief Medical Officer; and
•Joanne Smith-Farrell, our former Chief Operating Officer, Oncology.
Against the challenging backdrop of the COVID-19 pandemic, which had various impacts across our business, 2020 was a year in which we made significant progress across our programs in both severe genetic diseases and in oncology, while also managing setbacks in our clinical programs as well as our early-stage commercialization efforts. To that end, our Compensation Committee took multiple steps in 2020 to respond to the COVID-19 pandemic and its impacts on our business, and in response to concerns expressed by our stockholders, with whom we proactively engaged to deepen our understanding of their concerns.
As part of our comprehensive business review in the second quarter of 2020, and with the goal of ensuring our ability to execute on our strategy in light of the COVID-19 pandemic, certain senior executives voluntarily elected to reduce their base salary for a 12-month period beginning May 2020. Each participant received a grant of restricted stock units pursuant to our 2013 Stock Option and Incentive Plan equal to 80% of the amount of his or her salary reduction, which vests monthly over the 12-month period. Our Chief Executive Officer reduced his base salary by approximately 100% during this 12-month period, and each other participating senior executive reduced his or her base salary by 20%.
The Compensation Committee also reviewed our 2020 annual incentive plan and determined that (with limited exceptions) incentive awards would be paid in an equal mix of cash and fully-vested stock rather than entirely in cash. In addition, given the uncertainty of 2020 and the course of the COVID-19 pandemic, the Compensation Committee determined not to adjust the pre-established 2020 goals for purposes of the annual incentive program. Instead, the Compensation Committee determined that maintaining our pre-established 2020 goals maximized the potential for stockholder value creation. The Compensation Committee reviewed our 2020 performance against our 2020 goals; however, taking into account the impact the COVID-19 pandemic has had on our business, operations, and industry, in determining the overall performance level. As a consequence and consistent with our pay for performance philosophy, the Compensation Committee held the senior executives accountable and used its discretion to determine that the Chief Executive Officer did not earn an annual incentive award and the performance level applicable to him was 0%. Our overall company performance level in 2020 applicable to other senior executives, with limited exceptions, was determined to be 50%.
Furthermore, in 2021 we began to grant performance-based restricted stock units based on relative total shareholder return to our Chief Executive Officer, to further tie executive compensation to stock price performance and in response to stockholder feedback. This is intended as a first step to provide a greater emphasis on performance-based long-term incentive compensation, in response to our stockholder feedback, and the Compensation Committee intends to regularly evaluate this allocation as part of its overall review of our executive compensation program.
Company Background
We are a biotechnology company committed to researching, developing, and commercializing potentially transformative gene therapies for severe genetic diseases and cancer. We have built an integrated product platform with broad therapeutic potential in a variety of indications based on our lentiviral gene addition platform, gene editing and cancer immunotherapy capabilities. We have an early-stage commercial program with ZYNTEGLO, a treatment for transfusion-dependent beta-thalassemia, and late-stage clinical programs with LentiGlobin for sickle cell disease (SCD) and elivaldogene autotemcel (eli-cel; formerly Lenti-D gene therapy) as a treatment for cerebral adrenoleukodystrophy. Our recently-approved product candidate in multiple myeloma, idecabtagene vicleucel (ide-cel; being marketed as Abecma in the United States) is partnered with Bristol-Myers Squibb (BMS).
In 2020, the Company demonstrated resilience and flexibility in the midst of uncertainty and unexpected setbacks. In an extraordinary year globally and at the company, the impacts of COVID-19 were felt broadly and deeply across our business, operations, and industry. These effects included:
•increased restrictions on the number of people and activities in research and development laboratories and manufacturing facilities,
•disruption of clinical trial enrollment and other development activities,
•impacts to available healthcare resources within health systems to provide services and support activities unrelated to pandemic response,
•decreased patient demand in the commercial context,
•interruptions in activities in our supply chain due to staffing shortages at our third-party manufacturing sites, and
•effects on our ongoing interactions with health regulatory agencies and pricing and reimbursement agencies due to shifting priorities.
In response we:
•promptly transitioned to a remote work environment for nearly all of our people,
•prioritized research and manufacturing efforts in light of increased facilities restrictions while ensuring the safety of our people, and
•conducted a comprehensive business review to prioritize our investments across our programs with the goal of ensuring our ability to execute on our strategy in light of the increased uncertainty.
Thus, although we launched commercialization of ZYNTEGLO in Europe in early 2020, the onset of the COVID-19 pandemic meant that reaching patients in the commercial context was an uphill climb throughout the year, as we navigated changing circumstances in the global healthcare system, and at regulatory authorities and with pricing and reimbursement authorities.
Similarly, after the submission of the Biologics License Application (BLA) for ide-cel to the U.S. Food and Drug Administration (FDA) in March 2020, we responded quickly to resubmit the BLA in July 2020 with additional manufacturing-related information following a refuse-to-file letter from the FDA. In our LentiGlobin for SCD program, we made significant progress in gaining clarity on the requirements for submitting a BLA. However, we were disappointed with a shift in timing for our planned development activities relative to our earlier expectations.
Nevertheless, despite the challenges of the year, we made significant progress across our programs. By the end of 2020, the FDA had accepted for filing the BLA for ide-cel, which ultimately received marketing approval on March 26, 2021 as a treatment for relapsed and refractory multiple myeloma. In our LentiGlobin for SCD program, we reached general agreement with the FDA on the clinical data needed to support a BLA, as well as on the comparability data needed for our suspension vector manufacturing process. The Marketing Authorisation Application for eli-cel, was accepted by the European Medicines Agency in October 2020.
In January 2021, we announced our intent to separate our severe genetic disease and oncology programs into two independent, publicly-traded companies. The separation is expected to be completed by year-end 2021, and it is anticipated that the spinoff of the oncology business into a separate legal entity, which we refer to as "Oncology Newco," will be tax-free to stockholders, subject to the receipt of a favorable Internal Revenue Service ruling. Following the separation, bluebird bio, Inc. intends to focus on delivery of our therapies in severe genetic disease, expand access and reimbursement for our commercial product, ZYNTEGLO, in Europe and continue to explore innovative tools and technologies to ultimately bring these transformative medicines to more patients. Oncology Newco plans to support the commercialization of ide-cel and continued development of bb21217, our clinical program in multiple myeloma being developed in collaboration with BMS. In addition, Oncology Newco intends to progress the pipeline for next-generation engineered cell therapies for the treatment of non-Hodgkin's lymphoma, acute myeloid leukemia, multiple myeloma and solid tumors. The Board determined to separate the severe genetic disease and oncology programs into separate companies after extensive consideration and with the aim to better focus our operations and to drive long-term value for our stockholders.
Say on Pay and Stockholder Engagement
Following our 2020 Annual Meeting, our Board and the Compensation Committee determined to conduct robust outreach efforts in response to the results of our say-on-pay vote in the past two years, which received 61% support at the 2020 Annual Meeting, and 67% at the 2019 Annual Meeting. From late 2020 through the beginning of 2021, we reached out
to stockholders representing over 70% of our outstanding shares as of the end of the third quarter of 2020, including each of our largest stockholders. We made numerous outreach efforts to holders who had not initially responded and engaged with all of those who responded, as we sought to gain their feedback. As a result, we met with stockholders representing over 40% of shares outstanding, including several who voted against our 2020 "say-on-pay" proposal. The primary focus of these engagements was on our executive compensation program and on corporate governance, with our Chief People Officer and corporate counsel participating in these meetings, and the Chair of our Compensation Committee (who is also the Chair of our Board) participating in half of these meetings.
Feedback from our investors on these calls was reported to our Compensation Committee and Nominating and Corporate Governance Committee, and ultimately, the entire Board over multiple meetings for consideration and discussion. In general, there was a strong expectation of a robust response to low stockholder support in 2020 and 2019, even among investors who supported the "say-on-pay" proposal in 2020. As a consequence, in 2020 the Compensation Committee thoroughly evaluated our overall executive compensation program and consulted with Radford, its compensation consultant, for responsive action focused on enhancing our long-term incentive compensation elements. Our response included the introduction of performance-based restricted stock units granted to our Chief Executive Officer in 2021. This is intended as a first step to provide a greater emphasis on performance-based long-term incentive compensation, and the Compensation Committee intends to regularly evaluate this allocation as part of its overall review of our executive compensation program. The specific feedback we heard and the actions we took in response are summarized below:
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What we heard
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Our response
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Chief Executive Officer quantum of pay is too high relative to total shareholder return
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Our Chief Executive Officer did not receive an annual incentive award for 2020, and his 2020 total compensation decreased by over 50% from his 2019 total compensation, as reported on the Summary Compensation Table.
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Desire for stronger tie of Chief Executive Officer compensation to performance
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In 2021, approximately 20% of our Chief Executive Officer's target equity compensation is allocated to performance-based restricted stock units that vest based on relative total shareholder return. In addition, our Chief Executive Officer did not receive an annual incentive award with respect to 2020 performance.
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Members of our peer group have greater market capitalization relative to our current capital structure
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Three companies included in our 2020 peer group were removed and are not included in our 2021 peer group because their market capitalization exceeded our selection criteria. Our Compensation Committee reviews our peer group and selection criteria each year, adding and removing companies as our selection criteria evolves.
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Desire for more transparent disclosure regarding separation pay practices and use of Compensation Committee discretion
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We have enhanced our disclosure by highlighting where our Compensation Committee exercised its discretion and considerations that were taken into account. We have also included more context with respect to our separation arrangements with named executive officers and directors.
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No cap on short-term annual incentive award
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We have clarified in our disclosures that the maximum payout under our short-term annual incentive plan is 150% of the target amount.
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Disapproval of the evergreen provision in our stock option plan
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The 2013 Stock Option and Incentive Plan, including the evergreen provisions, was approved by our stockholders in connection with our initial public offering. Our Compensation Committee determined that the evergreen provision in our 2013 Stock Option and Incentive Plan has been crucial in supporting our high growth stage, and the evergreen provision has enabled us to execute on various goals in our strategic business plan. Our Compensation Committee's perspective is that the evergreen provision enables us to recruit and retain talented employees in our competitive biotech industry by ensuring we have enough shares to grant equity awards to new hires and continuing employees. We regularly review equity utilization to assess current dilution and our share needs in the upcoming year. However, the Compensation Committee does not intend to seek to extend the evergreen provisions, or adopt new ones, upon the expiration of our 2013 Stock Option and Incentive Plan in 2023.
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Furthermore, we intend to continue our stockholder outreach following the filing of this proxy statement with the SEC, to seek support for our annual meeting proposals and to solicit additional feedback regarding executive compensation and corporate governance matters of importance to our stockholders. We view this outreach effort as a valuable opportunity to discuss compensation and corporate governance measures that are important to our stockholders. We also intend to
continue our stockholder engagement efforts following the 2021 Annual Meeting regardless of the outcome of the 2021 "say-on-pay" proposal.
Compensation Philosophy
Our Compensation Committee believes a well-designed compensation program should align executive interests with the drivers of growth and stockholder returns by supporting the company’s achievement of its primary business goals, and our ability to attract and retain employees whose talents, expertise, leadership, and contributions are expected to sustain growth and drive long-term stockholder value. Consequently, we maintain an ongoing commitment to corporate governance principles and strong performance orientation in our compensation program. Our Compensation Committee regularly reviews our compensation policies and program design overall, to ensure that they are aligned with the interests of our stockholders and our business goals, and that the total compensation paid to our employees is fair, reasonable and competitive. The market for qualified and talented executives in the biopharmaceutical industry is highly competitive and we compete for talent with many companies that have greater resources than we do. Furthermore, as the biopharmaceutical industry is characterized by a very long product development cycle, including a lengthy research and development period and a rigorous approval phase involving clinical studies and governmental regulatory approval, many of the traditional benchmarking metrics, such as product sales, revenues and profits are inappropriate for a late-stage development or early-commercial stage biopharmaceutical company such as bluebird.
Overview of Our Compensation Programs
Key elements of our executive compensation programs include the following:
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Compensation Element
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Purpose
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Features
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Base salary
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To attract and retain highly skilled executives
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Fixed component of pay to provide financial stability, based on responsibilities, experience, individual contributions
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Short Term Incentive
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Annual incentive program
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To promote and reward the achievement of our key short-term strategic and business goals; to motivate and attract executives
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Variable component of pay based on annual quantitative and qualitative company performance goals and, for our executives other than our Chief Executive Officer, individual performance goals
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At-Risk Compensation
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Long-term equity incentive compensation
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To encourage executives to focus on long-term performance; to promote retention; to reward outstanding company and individual performance
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Typically subject to multi-year vesting based on continued service and are primarily in the form of stock options and restricted stock units, the value of which depends on the performance of our common stock price, in order to align employee interests with those of our stockholders over the longer-term
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Long Term Incentive
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We may award annual increases in base salary based upon an assessment of each executive’s performance, the scope of his or her responsibilities and an assessment of competitive market data based on our approved peer group. Our 2020 annual incentive program was designed to reward annual achievements as measured against pre-established quantitative and qualitative company performance goals, and, with respect to members of our senior management team other than our Chief Executive Officer, individual objectives. We awarded cash incentive payments as well as grants of fully-vested stock to our named executive officers and the other members of our senior management team under our 2020 annual incentive program, which is described in more detail below.
We typically make equity grants to each of our executive officers upon commencement of employment, annually in conjunction with our review of their individual performance and competitive market data based on our approved peer group, and in connection with a promotion. In addition, equity awards are our primary long-term incentive vehicle for our executives. We believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture, and help align the interests of our executives and our stockholders. Accordingly, we believe equity compensation is a crucial component of any competitive executive compensation package we offer.
The mix of compensation components is designed to reward annual results as well as drive long-term company performance and create stockholder value. The Compensation Committee generally targeted overall target compensation for our executive officers near the 50th percentile of compensation paid to similarly situated executives of companies in our peer group.
In addition to our direct compensation elements, the following features of our compensation program are designed to align our executive team with stockholder interests and with market best practices:
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What We Do
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What We Don’t Do
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Use market data from an industry-specific peer group to set competitive compensation levels
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Allow hedging or pledging of equity
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Deliver executive compensation primarily through performance-based pay
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Permit re-pricing of stock options without stockholder approval
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Have a clawback policy covering cash and equity incentive compensation paid to our Chief Executive Officer and other executive officers
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Provide excessive perquisites
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Set challenging short-term incentive program goals
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Provide supplemental executive retirement plans
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Offer market-competitive benefits for executives that are consistent with those offered to the rest of our employees
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Provide tax gross-up payments for any change-of-control payments
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Maximum payout of 150% of target under our short-term incentive program
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Have stock ownership guidelines applicable to our senior executive officers and non-employee directors
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Annual stockholder say-on-pay votes
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Double-trigger severance arrangements in a change of control
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Stockholder engagement efforts
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Consult with an independent compensation advisor on compensation levels and practices
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Management Changes Since the End of our Last Completed Fiscal Year
Dr. Davidson served as our Chief Medical Officer until the effectiveness of his resignation on April 16, 2021. Dr. Smith-Farrell served as our Chief Operating Officer, Oncology until her resignation from that role effective February 1, 2021, following which she remained with us and continued to support our preparations for the planned spinoff of oncology programs and portfolio through April 3, 2021.
Chief Executive Officer Compensation
We believe the target compensation mix provided to our Chief Executive Officer in 2020 encouraged him to focus on the our long-term success and was aligned with the long-term interests of our stockholders, in accordance with our compensation philosophy. Mr. Leschly’s total target compensation was set near the 50th percentile of compensation paid to similarly situated executives of companies in our 2020 peer group. In 2020 however, base salary for Mr. Leschly was approximately at the 35th percentile of our 2020 peer group, his target short-term incentive compensation was at the 30th percentile of our 2020 peer group, and his long-term incentive compensation was at the 25th percentile of our 2020 peer group.
The graphic below illustrates the target mix of compensation elements among base salary, annual incentive award, and long-term equity that vests over multiple years for our Chief Executive Officer in 2020. Approximately 89% of the target compensation mix was at-risk. Over 80% of the target compensation mix consisted of long-term incentive compensation in the form of equity awards that vest over multiple years.
Due to the strong alignment between pay and performance over the last year, our Chief Executive Officer’s total realizable pay in the year ended December 31, 2020, represented by his actual salary and restricted stock unit grants, is approximately 52% of the value disclosed in the Summary Compensation Table. Approximately 48% of Mr. Leschly’s 2020 total compensation as reported in the Summary Compensation Table relates to stock options which vest over a four-year period. Mr. Leschly will not realize any value from these stock option grants unless our share price increases above $73.84, our share price on the date of grant. Approximately 38% of his total 2020 compensation as reported in the Summary Compensation Table relates to restricted stock units that also vest over a four-year period, which promotes retention while using a fewer number of authorized shares to deliver equivalent value.
In addition, given the uncertainty facing the Company in 2020, Mr. Leschly voluntarily reduced his salary for a 12-month period beginning May 2020 and, received a grant of restricted stock units covering 80% of the salary reduction amount, which vests monthly during the 12-month period. In 2020, Mr. Leschly did not receive an annual incentive award under the Company's short-term incentive plan. Furthermore, after extensive consideration and incorporating stockholder feedback as more fully described below, the Compensation Committee introduced performance-based restricted stock units in addition to stock options and restricted stock units with time-based vesting for Mr. Leschly's equity compensation in 2021. Mr. Leschly's equity compensation in 2021 was allocated between stock options, restricted stock units with time-based vesting, and performance-based restricted stock units as summarized in the table below.
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Allocation of Mr. Leschly's Long-Term Equity Compensation
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2020
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2021
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Shares
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Grant date fair value
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Shares
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Grant date fair value
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#
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%
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$
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%
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#
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%
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$
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%
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Stock options with time-based vesting over multiple years
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65,000
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67
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%
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2,999,893
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56
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%
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90,000
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67
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%
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1,494,095
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40
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%
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Restricted stock units with time-based vesting over multiple years
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32,500
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33
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%
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2,399,800
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44
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%
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18,000
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13
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%
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511,920
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14
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%
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Restricted stock units with performance-based vesting (based on relative total shareholder return)
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—
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%
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—
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—
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%
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27,000
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20
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%
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1,708,560
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46
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%
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Total
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97,500
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100
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%
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5,399,693
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100
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%
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135,000
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100
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%
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3,714,575
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100
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%
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Role of Compensation Committee
Each year, our Compensation Committee reviews and establishes the levels of each element of total compensation for our employees, including our senior executives. As part of this process, our Compensation Committee reviews the mix of compensation elements to ensure our performance-based compensation is an appropriate proportion of overall compensation and is aligned with our business goals and strategy. The specific performance factors our Compensation Committee considers when determining the compensation of our named executive officers include:
•key research and development achievements, including advances in our gene addition and gene editing platforms in the fields of severe genetic diseases and cancer;
•initiation and progress of clinical studies for our product candidates;
•expansion of our manufacturing and operational capabilities, including our commercial readiness, on a global basis;
•achievement of regulatory milestones, including regulatory filings for marketing approval;
•achievement of commercialization milestones, including pricing and reimbursement approval, engagement of qualified treatment centers, and number of patients treated in the commercial context;
•establishment and maintenance of key strategic relationships and new business initiatives, including financings; and
•development of global organizational capabilities, success in hiring and growth management initiatives.
Our senior executives, including our named executive officers, are also evaluated based on factors such as individual, strategic, and leadership achievements. These performance factors are considered by our Compensation Committee in connection with our annual performance reviews described below and are a critical component in the determination of annual incentive awards for our executives.
By the end of the first quarter of each year, annual company goals and individual performance objectives applicable to incentive compensation are determined and set forth in writing. After the end of each year, our Compensation Committee determines executive compensation levels after carefully reviewing overall company performance and performing an evaluation of each named executive officer’s annual performance against established company goals, as well as each individual executive officer’s contributions to achievement of the company goals and, in the case of senior executives other than our Chief Executive Officer, the achievement of individual performance objectives. In addition, our Compensation Committee may apply its discretion, as it deems appropriate, in determining executive compensation.
Our Compensation Committee, with input from the Board, evaluates our Chief Executive Officer’s individual performance and determines whether to change his base salary, grant him an annual equity award and/or change his target percentage cash award under our annual incentive program. Our Compensation Committee typically grants annual equity awards, and determines changes in base salary and the amount of any incentive payments, at its first regularly scheduled meeting of the new year. Our Compensation Committee may also review the compensation of our senior executive officers throughout the course of the year. With respect to year-end reviews, any changes in base salary are effective at the beginning of the following year.
Role of Management
Annual company goals are proposed by our senior executive team and reviewed and approved by our Board and Compensation Committee. Our Chief Executive Officer’s annual incentive award is determined entirely on the company's performance relative to pre-established company goals (to drive maximal stockholder value) and the annual incentive awards of our other senior executives are based 80% on company goals and 20% on individual objectives. Individual goals for 2020 for our senior executives other than our Chief Executive Officer focused on leadership development objectives as well as individual contributions that were intended to drive achievement of the company goals and were proposed by each senior executive, with review and input from our Chief Executive Officer. Any merit increases in base salary and any annual equity awards or awards made under our 2020 annual incentive program were based on the achievement of these Company and individual, as applicable, performance goals. Our Compensation Committee establishes the target incentive award opportunity for each senior executive under the annual incentive program as a percentage of each individual’s base salary.
During the last quarter of each year, our senior executives evaluate our company performance as compared to the company goals and, as applicable, their own performance relative to their individual goals for that year. Based on these evaluations, our Chief Executive Officer recommends to our Compensation Committee any increases in base salary and any annual equity awards and/or awards under our annual incentive program for each senior executive other than himself.
Role of Our Independent Compensation Consultant
For 2020, our Compensation Committee engaged Radford, which is part of the Rewards Solutions practice at Aon plc, as its independent compensation consultant to advise on executive and Board compensation matters including: overall compensation program design, peer group development and updates, and collection of market data to inform our compensation programs for our executives and directors. We develop our compensation programs after reviewing publicly available compensation data and we also subscribe to Radford’s various global annual and specialized life sciences and general industry surveys on an ongoing basis. Radford advised the Compensation Committee on all of the principal aspects of executive compensation, including executive new hire compensation arrangements. Radford consultants attend meetings of the Compensation Committee when requested to do so. Radford reports directly to our Compensation Committee and not to management, although it meets with management for purposes of gathering information for its analyses and recommendations. Our Compensation Committee has assessed the independence of Radford consistent with SEC regulations and NASDAQ listing standards and has concluded that the engagement of Radford does not raise any conflict of interest.
Defining and Comparing Compensation to Market Benchmarks
The Compensation Committee uses competitive compensation data from the annual total compensation study of peer companies to inform its decisions about overall compensation opportunities and specific compensation elements. The Compensation Committee also considers other reference points and criteria when establishing targeted compensation levels, such as the executive’s experience level, contribution to established Company’s goals, individual performance against the executive’s individual goals where applicable, scope of responsibility, skill sets, and leadership potential, as well as the Company’s critical needs and succession planning.
In evaluating the total compensation of our named executive officers, our Compensation Committee, using information provided by Radford, in the middle of each fiscal year, establishes a peer group of publicly traded companies in the biopharmaceutical and biotechnology industries that is selected based on a balance of the following criteria:
•companies whose number of employees, stage of development and market capitalization are similar, though not necessarily identical, to ours;
•companies with similar executive positions to ours;
•companies against which we believe we compete for executive talent; and
•public companies based in the United States whose compensation and financial data are available in proxy statements or through widely available compensation surveys.
In addition to the criteria above, our Compensation Committee also reviewed the peer selection criteria used by proxy advisors and considered the specific peers identified independently by each advisor. Our Compensation Committee also takes into account companies who list bluebird as a peer in their compensation disclosures. Because the market for executive talent in the biopharmaceutical and biotechnology industries is competitive, and in particular the pool of candidates with relevant experience for our gene therapy business is small, our peer group reflects the fact that we compete for executive talent with companies who are larger than us and may have more resources than we do. In addition, in establishing the peer group for the following compensation cycle, the Compensation Committee reviews the current peer group with a view to preserve continuity in peer group from year to year, despite the inherent volatility in market capitalization and size of companies in the biopharmaceutical and biotechnology industries, as well as a high degree of merger and acquisition activity.
Furthermore, the Compensation Committee seeks to have an equal balance of smaller versus larger companies by market capitalization and by size.
For purposes of establishing the 2020 peer group, the selection criteria for inclusion in the peer group included biopharmaceutical and biotechnology companies that were: (1) in late-stage clinical development or early commercial stage; (2) revenue under $1.5 billion to exclude mature, commercial companies; (3) market capitalization of one third to three times bluebird's market capitalization at the time of review; and (4) headcount of one third to three times bluebird's projected headcount for the end of 2019, which resulted in a range of 350 to 3,300 employees in size. For purposes of establishing the 2021 peer group, the selection criteria were substantially the same, however the market capitalization range was adjusted downward to reflect our market capitalization at the time of review in mid-2020, and the headcount range was also adjusted to reflect our projected headcount for the end of 2020, which resulted in a range of 450 to 4,000 employees in size.
With reference to these and other key business metrics, the Compensation Committee established the following peer groups for 2020 and 2021 as set forth in the following table:
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Peer Group Company
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2020
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2021
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Description of change
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ACADIA Pharmaceuticals Inc.
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X
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Added in 2021
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Acceleron Pharma Inc.
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X
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Added in 2021
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Agios Pharmaceuticals, Inc.
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X
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X
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Alkermes p.l.c.
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X
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X
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Alnylam Pharmaceuticals, Inc.
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X
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X
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BioMarin Pharmaceutical Inc.
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X
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Removed for 2021: Market capitalization exceeded selection criteria
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Blueprint Medicines Corporation
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X
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Added in 2021
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Exelixis, Inc.
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X
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X
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FibroGen, Inc.
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X
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X
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Global Blood Therapeutics, Inc.
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X
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Added in 2021
|
Incyte Corporation
|
|
X
|
|
|
|
Removed for 2021: Market capitalization exceeded selection criteria
|
Ionis Pharmaceuticals, Inc.
|
|
X
|
|
X
|
|
|
Jazz Pharmaceuticals plc
|
|
X
|
|
X
|
|
|
Nektar Therapeutics
|
|
X
|
|
X
|
|
|
Neurocrine Biosciences, Inc.
|
|
X
|
|
X
|
|
|
Portola Pharmaceuticals, Inc.
|
|
X
|
|
X
|
|
|
Sage Therapeutics, Inc.
|
|
X
|
|
X
|
|
|
Sarepta Therapeutics, Inc.
|
|
X
|
|
X
|
|
|
Seattle Genetics, Inc.
|
|
X
|
|
|
|
Removed for 2021: Market capitalization exceeded selection criteria
|
Spark Therapeutics, Inc.
|
|
X
|
|
|
|
Acquired by Roche in December 2019
|
Ultragenyx Pharmaceutical Inc.
|
|
X
|
|
X
|
|
|
Base Salary
We provide base salaries to our named executive officers to compensate them with a fair and competitive base level of compensation for services rendered during the year. Our Compensation Committee typically determines the base salary for each executive based on the executive’s responsibilities, experience and, if applicable, the base salary level of the executive prior to joining bluebird. In addition, our Compensation Committee reviews and considers the level of base salary paid by companies in our peer group for similar positions. Our Compensation Committee's assessment of our named executive officers' base salary takes into account our compensation objectives and philosophy to retain highly qualified executives, to motivate them to achieve our business goals, and to reward them for superior short- and long-term performance.
At the beginning of 2020, our Compensation Committee reviewed the compensation for our Chief Executive Officer and each of our other named executive officers. With respect to Mr. Leschly, our Chief Executive Officer, our Compensation Committee reviewed his overall compensation and determined to increase his annual base salary from $660,000 to $725,000. This determination was based on his critical role at the company, company performance throughout 2019 in meeting key milestones and objectives, as well in consideration of the critical upcoming execution and risk inflection points throughout 2020 and into 2021. In addition, the Compensation Committee took into consideration the market conditions and a
comparison of his base salary to the base salary of chief executive officers in our 2020 peer group. The Compensation Committee also approved merit increases in base salary for each of our other named executive offices serving at that time, based on the company's performance against the 2019 company goals, as well as each named executive officer's achievement of individual goals in 2019, in addition to a consideration the market conditions and a comparison of their base salaries to similarly situated executives in our 2020 peer group. In the aggregate, the base salaries of our named executive officers reflect approximately the 40th percentile of our 2020 peer group. The table below sets forth the adjustments to the base salary, in dollars and as a percentage, for each of our named executive officers, as approved in early 2020:
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Name
|
|
2019
Base Salary ($)
|
|
2020
Base Salary ($)
|
|
Increase (%)
|
Nick Leschly
|
|
$
|
660,000
|
|
|
$
|
725,000
|
|
|
9.8%
|
William D. Baird, III
|
|
$
|
450,000
|
|
|
$
|
474,600
|
|
|
5.5%
|
Philip Gregory, D. Phil.
|
|
$
|
455,000
|
|
|
$
|
479,500
|
|
|
5.4%
|
David Davidson, M.D.
|
|
$
|
486,000
|
|
|
$
|
512,500
|
|
|
5.5%
|
Joanne Smith-Farrell, Ph.D.
|
|
$
|
369,870
|
|
|
$
|
455,000
|
|
|
23.0%
|
In April 2019, Dr. Smith-Farrell received a 9.5% promotional increase bringing her annualized base salary from $369,870 to $405,000 in connection with her promotion from SVP, Corporate Development & Strategy (reporting to our Chief Strategy Officer) to Chief Business Officer (reporting to our Chief Executive Officer). Subsequent to the Compensation Committee's determination of her 2020 base salary of $455,000 in early 2020, in connection with Dr. Smith-Farrell's exceptional performance, expanded scope of responsibilities and promotion to Chief Operating Officer, Oncology in October 2020, her annualized base salary was further increased by 5.5% to $480,000.
However, 2020 was an extraordinary year globally due to the COVID-19 pandemic, and our operations and ability to execute on our strategy were impacted as a result. As part of our comprehensive business review in the second quarter of 2020, and with the goal of ensuring our ability to execute on our strategy in light of the COVID-19 pandemic, certain senior executives voluntarily elected to reduce their base salary for a 12-month period beginning May 2020. Our Chief Executive Officer reduced his base salary by approximately 100% during this 12-month period, and each other participating senior executive reduced his or her base salary by 20%. Each participant received a grant of restricted stock units under our 2013 Stock Option and Incentive Plan equal to 80% of the amount of his or her salary reduction, determined using $50.77, the closing market price on the NASDAQ Stock Market of bluebird’s common stock on May 1, 2020, rounded down to the nearest whole share. The closing market price on the NASDAQ Stock Market of our common stock on April 19, 2021 was $27.98, below the grant date price. The grants vest in equal monthly installments over the 12-month period following the date of grant. The named executive officers participating in this program, their original 2020 base salaries, their base salaries as reduced through participation in this program, as well as the number of restricted stock units granted are set forth in the table below.
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|
Name
|
|
2020
Base Salary ($)
|
|
Reduction of Base Salary ($)
|
Reduced 2020 Base Salary (effective May 2020)
|
|
Number of Restricted Stock Units Granted
|
Nick Leschly
|
|
$
|
725,000
|
|
|
$
|
722,513
|
|
$
|
2,487
|
|
|
11,384
|
Philip Gregory, D. Phil.
|
|
$
|
479,500
|
|
|
$
|
95,900
|
|
$
|
383,600
|
|
|
1,511
|
David Davidson, M.D.
|
|
$
|
512,500
|
|
|
$
|
102,500
|
|
$
|
410,000
|
|
|
1,615
|
Joanne Smith-Farrell, Ph.D. (1)
|
|
$
|
455,000
|
|
|
$
|
91,000
|
|
$
|
364,000
|
|
|
1,433
|
(1) In connection with Dr. Smith-Farrell's exceptional performance, expanded scope of responsibilities and promotion to Chief Operating Officer, Oncology, her annualized base salary was increased to $480,000 in October 2020.
At the beginning of 2021, our Compensation Committee reviewed the base salaries of our named executive officers, including our Chief Executive Officer. Taking into account the Company's performance in 2020 amid the challenging context of the COVID-19 pandemic, and the need to provide a competitive base level of salary balanced against financial discipline, the
Compensation Committee determined that each named executive officer, including our Chief Executive Officer, would have an increase of base salary of approximately 3.5%, as set forth in the table below.
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|
|
|
|
Name
|
|
2020
Base Salary ($)
|
|
2021
Base Salary ($)
|
|
Increase (%)
|
Nick Leschly
|
|
$
|
725,000
|
|
|
$
|
750,500
|
|
|
3.5%
|
William D. Baird, III
|
|
$
|
474,600
|
|
|
$
|
491,300
|
|
|
3.5%
|
Philip Gregory, D. Phil.
|
|
$
|
479,500
|
|
|
$
|
496,300
|
|
|
3.5%
|
David Davidson, M.D.
|
|
$
|
512,500
|
|
|
$
|
530,500
|
|
|
3.5%
|
Joanne Smith-Farrell, Ph.D.
|
|
$
|
480,000
|
|
|
$
|
496,800
|
|
|
3.5%
|
The 2020 base salary for Dr. Smith-Farrell in the table above reflects her base salary at the end of 2020, following her promotion to Chief Operating Officer, Oncology and the accompanying increase in base salary.
Annual Incentive Program
At the beginning of 2020, our Compensation Committee approved the annual incentive program for 2020. At the time of such approval, consistent with past practice, the 2020 annual incentive program consisted of the opportunity for eligible participants to earn cash incentive awards calculated as a percentage of pre-established bonus targets based on the company's performance against pre-established company goals and, other than for the Chief Executive Officer, individual performance throughout 2020 against pre-established individual goals.
Each year, our pre-established Company goals are proposed by management, reviewed by our Board prior to the beginning of each fiscal year with an eye towards setting our overall business strategy and long-range planning, and approved by our Compensation Committee at the beginning of each fiscal year for purposes of determining compensation. Our goal-setting philosophy is to adopt goals that are challenging, to increase the likelihood of driving high value creation, but also with the expectation that performance against these pre-established goals will be considered in the full context of value creation. At the end of each fiscal year, management provides the Compensation Committee with its recommendation of company and individual performance against these pre-established goals, without taking into consideration overall value creation. The Compensation Committee's uses its discretion in its evaluation by taking into consideration management's recommendation, unplanned accomplishments, and also the overall value creation context such as stock performance, and the trajectory of company performance over the course of the year.
Under our annual incentive plan our Chief Executive Officer's incentive award is based entirely on the company's performance relative to these pre-established company goals, and the incentive award for each of our other named executive officers is based 80% on the company's performance relative to the pre-established company goals, and 20% on individual performance. Our Compensation Committee however, reserves the discretion to adjust upward or downward any cash incentive award as it deems appropriate, provided that neither company performance nor individual performance may exceed 150% and, accordingly, bonuses are capped at 150% of target amounts.
After careful consideration, the Compensation Committee determined not to adjust the pre-established 2020 company goals. Instead, the Compensation Committee determined that maintaining our pre-established 2020 company goals maximized the potential for stockholder value creation. Given the exceptional circumstances of 2020 however, and the impacts of the COVID-19 pandemic across our industry and our business, our Compensation Committee reviewed our 2020 annual incentive plan in Q2 2020 and determined that, with limited exceptions, incentive awards would be paid in an equal mix of cash and fully-vested stock rather than entirely in cash.
In Q4 2020, the Compensation Committee assessed company performance relative to the pre-established 2020 company goals and individual performance, taking into account the impact the COVID-19 pandemic has had on our business, operations, and industry, including: the transition to a work-from-home policy applicable to the majority of our personnel, increased restrictions on the number of our people and activities in research and development laboratories and manufacturing facilities, disruption of clinical trial enrollment and other development activities, impacts to available healthcare resources within health systems to provide services and support activities unrelated to pandemic response, decreased patient demand in the commercial context, interruptions in activities in our supply chain due to staffing shortages at our third-party manufacturing sites, and effects on our ongoing interactions with health regulatory agencies and pricing and reimbursement agencies due to shifting priorities. Ultimately, the Compensation Committee determined that overall, the company achieved an 85% performance level against the pre-established 2020 company goals, taking into consideration these external factors due to the COVID-19 pandemic and unplanned accomplishments. This performance level was used to establish the annual incentive awards to our employees other than the senior executive officers. The table below summarizes
the pre-established 2020 company goals, their relative weighting, and level of achievement for each Company goal as approved by the Compensation Committee.
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|
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2020 Company Goals
|
|
Weighting
|
|
2020 Company performance assessment
|
Deliver for patients
|
|
30%
|
|
75% (23%)
|
■Meet targets for commercial patient enrollment and treatment
|
|
We made substantial progress in establishing internal expertise and gaining experience in our first commercial launch; however, the impact of the COVID-19 pandemic on global healthcare systems, biotechnology operations, and regulatory authorities' and pricing authorities' priorities meaningfully affected the Company's ability to fully achieve these goals.
|
■Meet targets for pricing & reimbursement approval
|
|
■Meet milestones for manufacture of vector using suspension process
|
|
Launch the next wave
|
|
35%
|
|
80% (28%)
|
■Achieve milestones for ide-cel development
|
|
In our SCD program, we reached general agreement with FDA on clinical data needed to support accelerated approval, and on comparability data using suspension vector. We also submitted the Marketing Authorisation Application for eli-cel in Q3 2020. Nevertheless, we encountered unexpected regulatory setbacks with respect to manufacturing requirements and release assays across multiple programs, which negatively affected our ability to fully achieve our development goals.
|
■Achieve milestones for LentiGlobin for SCD development
|
|
■Achieve milestones for beti-cel development
|
|
■Achieve milestones for eli-cel development
|
|
Secure the future
|
|
20%
|
|
95% (19%)
|
■Execute on key pipeline objectives in oncology
|
|
We ended 2020 with multiple oncology programs on track for Investigational New Drug submission in 2021. In addition, we entered into a collaboration agreement with Magenta Therapeutics for clinical proof-of-concept for an alternative mobilization protocol.
|
■Execute on initiatives to lower cost-of-goods-sold and to expand patient reach
|
|
People business
|
|
15%
|
|
100% (15%)
|
■Meet targets for people engagement & organizational health metrics
|
|
The negative impacts of COVID-19 pandemic on people engagement and organizational health were mitigated by focused efforts at all levels of the organization; we implemented a successful and swift transition to virtual operations. Re-negotiation of BMS collaboration agreement and $575 million equity financing, with prioritized investments, meant we ended 2020 on solid financial footing.
|
■Conclude 2020 with at least 18 months of cash, cash equivalents and marketable securities
|
|
2020 Performance
|
|
100%
|
|
85%
|
However, the Compensation Committee also recognized that the company as a whole missed critical goals based on a failure to execute leading to meaningful impacts on our business, and that the efforts of the company at large did not translate into demonstrable results. As a consequence and consistent with our pay for performance philosophy, the Compensation Committee held the senior executives accountable and used its discretion to adjust downward the applicable company performance level applicable to the Chief Executive Officer to 0%, and to other senior executives with the exception of Dr. Smith-Farrell, to 50%. The Compensation Committee used its discretion to recognize Dr. Smith-Farrell's contributions to the company's achievements in its oncology programs during 2020 to adjust upward the 2020 Company performance applicable to determining her annual incentive award, to 100%. In addition, the Compensation Committee included in its consideration that although Dr. Smith-Farrell was resigning from her role as Chief Operating Officer, Oncology as of February 1, 2021, she intended to stay on through April 3, 2021 to support the preparations for the company's planned spinoff of the oncology programs and portfolio into a separate independent entity.
The pre-established individual goals and individual performance against those goals in 2020 applicable to our named executive officers other than our Chief Executive Officer were as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2020 Individual performance assessment
|
|
2020 Individual goals
|
William D. Baird, III
|
|
85%
|
|
Guide organization through re-prioritized budgeting and investment initiatives in light of impacts of COVID-19 pandemic
|
Philip Gregory, D. Phil.
|
|
85%
|
|
Execute on key pipeline objectives in oncology business unit
|
David Davidson, M.D.
|
|
80%
|
|
Execute on development strategy across platform; continue to build commercial medical affairs organization
|
Joanne Smith-Farrell, Ph.D.
|
|
100%
|
|
Re-negotiate BMS collaboration agreement; define and execute on business development strategy for oncology business; establish robust oncology operations
|
The table below shows each named executive officer’s target incentive award under the 2020 annual incentive program as a percentage of the named executive officer’s annual base salary in 2020, the target incentive award opportunity in dollars for 2020 and the actual incentive awards to our named executive officers for 2020 performance, which were paid in February 2021, as well as the actual 2020 incentive award payment as a percentage of the 2020 target incentive award opportunity. Dr. Smith-Farrell's incentive award was paid entirely in the form of cash, rather than an equal mix of cash and fully-vested stock, in light of her impending departure from bluebird and because equity compensation is intended for incentivizing long-term value creation. In the aggregate, the target incentive award opportunity for our named executive officers reflects approximately the 42nd percentile of our 2020 peer group.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2020
Target
Incentive
Award
(% of 2020
Base Salary)
|
|
2020
Target
Incentive
Award
Opportunity ($)
|
|
Actual Total 2020 Incentive Award Amount ($) (1)
|
|
Cash Portion of 2020 Incentive Award Amount ($)
|
|
Equity Portion of 2020 Incentive Award Amount (# of shares) (2)
|
|
2020
Actual Incentive
Award Amount
(% of 2020 Target Incentive Award
Opportunity)
|
Nick Leschly
|
|
65%
|
|
$
|
471,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
—%
|
William D. Baird, III
|
|
45%
|
|
$
|
213,570
|
|
|
$
|
121,800
|
|
|
$
|
60,900
|
|
|
2,141
|
|
57%
|
Philip Gregory, D. Phil.
|
|
45%
|
|
$
|
215,775
|
|
|
$
|
123,000
|
|
|
$
|
61,500
|
|
|
2,162
|
|
57%
|
David Davidson, M.D.
|
|
45%
|
|
$
|
230,625
|
|
|
$
|
129,200
|
|
|
$
|
64,600
|
|
|
2,271
|
|
56%
|
Joanne Smith-Farrell, Ph.D. (3)
|
|
45%
|
|
$
|
216,000
|
|
|
$
|
216,000
|
|
|
$
|
216,000
|
|
|
—
|
|
100%
|
(1) Represents the total 2020 incentive award amount, which, except as noted below, was paid 50% in cash, and 50% in the form of a grant of fully-vested stock.
(2) Represents the number of shares of stock granted, determined by dividing 50% of the total 2020 incentive award amount by $28.44, the closing price of our common stock on the date of the grant.
(3) Dr. Smith-Farrell's 2020 annual incentive award was paid out entirely in cash in Q1 2021.
In Q1 2021, the Compensation Committee approved the annual incentive program for 2021. The terms of the 2021 annual incentive program are substantially the same as the 2020 annual incentive program. As for 2020, the pre-established 2021 Company goals that will be used to assess Company performance in 2021 reflect the following imperatives:
|
|
|
|
|
|
|
|
|
2021 Company Goal
|
|
Weighting
|
« Deliver for patients
|
|
30%
|
Meet commercial launch milestones for ZYNTEGLO and ABECMA
|
|
|
« Create sustaining value
|
|
30%
|
Advance development of LentiGlobin for SCD and key oncology programs
|
|
|
« Eye on execution
|
|
30%
|
Meet milestones for regulatory submissions across programs in severe genetic disease and oncology
|
|
|
« People & Business
|
|
10%
|
Meet targets for diversity & inclusion, people engagement and organizational health; successfully complete planned spinoff transaction
|
|
|
Total
|
|
100%
|
In light of the planned transaction in which the oncology programs and portfolio will be spun off into an independent, publicly-traded entity, our Compensation Committee determined that 2021 performance for bluebird and Oncology Newco will be pro-rated for each business, to be defined by timing for completion of the separation. The annual incentive award target for each named executive officer is set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2021
Base Salary ($)
|
|
2021 Target Award (% of Base Salary)
|
|
2021 Target Award Opportunity ($)
|
Nick Leschly
|
|
$
|
750,500
|
|
|
65%
|
|
$487,825
|
William D. Baird, III
|
|
$
|
491,300
|
|
|
45%
|
|
$221,085
|
Philip Gregory, D. Phil.
|
|
$
|
496,300
|
|
|
45%
|
|
$223,335
|
David Davidson, M.D. (1)
|
|
$
|
530,500
|
|
|
45%
|
|
$238,725
|
Joanne Smith-Farrell, Ph.D. (1)
|
|
$
|
496,800
|
|
|
45%
|
|
$223,560
|
(1) Neither Dr. Davidson nor Dr. Smith-Farrell will be eligible to receive an annual incentive ward with respect to 2021 performance, due to their respective departures in 2021.
Long-Term Incentive Awards
Our long-term incentive equity awards are generally in the form of stock options and restricted stock units, which deliver equivalent value while using fewer authorized shares. We typically make equity award grants to each of our executive officers upon commencement of employment, and annually in conjunction with our review of their individual performance. Additional equity award grants may be made in connection with a promotion, or as a special incentive. Our executives benefit from stock options only if our stock price increases through the creation of stockholder value, and the value of restricted stock units increase as our stock price increases. Accordingly, we believe stock options and restricted stock units provide meaningful incentives to our executives to achieve increases in the value of our stock over time. In addition, the vesting feature of our long-term incentive grants contributes to executive retention by providing an incentive to our executives to remain employed by us during the vesting period. Beginning in 2021, we began to grant performance-based restricted stock units based on relative total shareholder return to our Chief Executive Officer, to further tie executive compensation to stock price performance and in response to stockholder feedback.
All equity awards to our executive officers are approved by our Compensation Committee and, other than equity awards to new hires, are typically granted at our Compensation Committee’s regularly scheduled meeting at the beginning of the year. The size of equity awards varies among our executive officers based on their positions, competitive market data, and annual performance assessments. All stock options granted by bluebird have exercise prices equal to the fair market value of our common stock on the date of grant, so that the recipient will not realize any value from his or her options unless our share price increases above the stock price on the date of grant. Accordingly, this portion of our executive officers’ compensation is at risk and is directly aligned with stockholder value creation.
As part of the ongoing review of our compensation strategy and practices, the Compensation Committee determines the appropriate mix of the type of equity awards, based in part on recommendations from Radford, its independent compensation consultant. Because of the volatility of our stock price in relation to when equity grants are made, our equity compensation guidelines set forth aggregate grant targets reflecting stock options plus restricted stock units based on number of shares (rather than value of the equity grants), and these guidelines are developed based on and in reference to our equity grant data for our peer companies. Beginning in 2020, the target mix for long-term incentive equity grants to our executive officers is generally split approximately one-half in stock options and one-half in restricted stock units based on option equivalents. The Compensation Committee believes that this deliberate mix of equity ensures that compensation remains tied to stock performance and promotes retention. The Compensation Committee may adjust the mix of award types or approve different award types as part of the overall compensation strategy. Awards made in connection with a new, extended or expanded employment relationship may involve a different mix of equity awards, depending on the Compensation Committee’s assessment of the total compensation package being offered.
In addition, long-term equity incentive grants of stock options and restricted stock units to our executive officers typically vest over four years, which we believe provides an incentive to our executives to add value to the Company over the long-term and to remain with bluebird. Typically, the stock options we grant to our executives have a ten-year term and vest as to 25% of the shares on the first anniversary of their hire date (in the case of initial equity grants) or on or about the first anniversary of the first business day of the year of grant (in the case of annual grants) and then the remaining shares vest in equal monthly installments thereafter until the fourth anniversary of such date. Vesting of option grants to employees ceases upon termination of employment and exercise rights typically cease three months following termination of employment, except in the case of death or disability. Prior to the exercise of an option, the stock option holder does not have any rights as a stockholder with respect to the shares subject to such option, including voting rights or the right to receive dividends or dividend equivalents. Annual restricted stock units granted to our executives generally vest in equal annual installments
beginning on or about the first anniversary of the first business day of the year of grant, until the fourth anniversary of such date.
In connection with the annual review of our named executive officers’ performance during 2019 and consistent with our compensation philosophy, in January 2020, our Compensation Committee approved the annual long-term equity incentive awards granted to our named executive officers serving at that time as set forth in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 Option Award
|
|
2020 RSU Award
|
Name
|
|
# Shares
|
|
Grant date fair value
|
|
# Shares
|
|
Grant date fair value
|
Nick Leschly
|
|
65,000
|
|
$2,999,893
|
|
32,500
|
|
$2,399,800
|
William D. Baird, III
|
|
20,000
|
|
$923,044
|
|
10,000
|
|
$738,400
|
Philip Gregory, D.Phil.
|
|
20,000
|
|
$923,044
|
|
10,000
|
|
$738,400
|
David Davidson, M.D.
|
|
20,000
|
|
$923,044
|
|
10,000
|
|
$738,400
|
Joanne Smith-Farrell, Ph.D.
|
|
20,000
|
|
$923,044
|
|
10,000
|
|
$738,400
|
The equity awards granted to our named executive officers during 2020, and the grant date fair values of those awards presented above and shown in the Summary Compensation Table and the 2020 Grants of Plan-Based Awards table below were determined in accordance with Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC), Topic 718. These values reflect approximately the 27th percentile of our 2020 peer group.
In connection with the annual review of our named executive officers' performance during 2020 and consistent with our compensation philosophy to motivate our named executive officers to achieve our business goals and to reward for superior short- and long-term performance, in January 2021, our Compensation Committee approved the annual long-term equity incentive awards to our named executive officer serving at that time as set forth in the table below:
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2021 Option Award
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2021 RSU Award Time-Based Vesting
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|
2021 RSU Award Performance-Based Vesting (based on relative total shareholder return)
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Name (1)
|
|
# Shares
|
|
Grant date fair value
|
|
# Shares
|
|
Grant date fair value
|
|
Target # Shares
|
|
Grant date fair value
|
Nick Leschly
|
|
90,000
|
|
$1,494,095
|
|
18,000
|
|
$511,920
|
|
27,000
|
|
$1,708,560
|
William D. Baird, III
|
|
25,000
|
|
$415,027
|
|
12,500
|
|
$355,500
|
|
—
|
|
—
|
Philip Gregory, D.Phil.
|
|
25,000
|
|
$415,027
|
|
12,500
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|
$355,500
|
|
—
|
|
—
|
David Davidson, M.D.
|
|
20,000
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|
$332,021
|
|
10,000
|
|
$284,400
|
|
—
|
|
—
|
(1) Dr. Smith-Farrell did not receive any equity awards in 2021, as she resigned as Chief Operating Officer, Oncology effective February 1, 2021, and left the company on April 3, 2021.
In 2021, we introduced a new type of performance-based restricted stock unit award to further align our Chief Executive Officer's compensation with stockholder experience, in response to investor feedback. This performance-based award is earned based on total shareholder return compared to a peer group of companies in the Standard & Poor Biotechnology Select Industry Index having a market value of between $750 million and $4.5 billion, which reflects a weighted average of current bluebird and the projected size of Oncology Newco following the anticipated spinoff transaction expected to be completed in the Q4 2021 over a three-year period of 2021 through 2023. The multiplier used to determine the number of earned restricted stock units could range between 50% and 200%, with a threshold achievement level at -25th percentile (as compared to the peer median) required to earn any restricted stock units, and a ceiling achievement level at the +50th percentile (as compared to the peer median). The total shareholder return performance-based restricted stock units, to the extent earned, vest in full on the third anniversary of the grant date, subject to Mr. Leschly's continued service. For 2021, the target number of shares subject to this performance-based restricted stock unit award is 27,000 shares and made up approximately 20% of our Chief Executive Officer's total target equity compensation for 2021. Under the terms of this award, the number of performance-based restricted stock units earned is calculated by multiplying the target number of performance-based restricted stock units by a performance multiplier.
The peer group consists of companies making up the Standard & Poor Biotechnology Select Industry Index.
In its design of the performance-based restricted stock units, the Compensation Committee considered various design elements and alternative approaches including milestone-based approaches. Given the stage of the company and the number of programs in late-stage development and one in early-stage commercialization, the Compensation Committee felt
that an overall relative stock performance metric best captures the value inflections that would potentially be unlocked through exceptional company performance, and is fully aligned with stockholder interests. Furthermore, a three-year measurement period provides an incentive for the Chief Executive Officer to take a long-term view with respect to company performance.
Benefits and Other Compensation
Other compensation to our executives consists primarily of the broad-based benefits we provide to all full-time employees in the United States, including medical, dental and vision insurance, group life and disability insurance, an employee stock purchase plan and a 401(k) plan. Pursuant to our employee stock purchase plan, employees, including our named executive officers, have an opportunity to purchase our common stock at a discount on a tax-qualified basis through payroll deductions. The employee stock purchase plan is designed to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. The purpose of the employee stock purchase plan is to encourage our employees, including our named executive officers, to become our stockholders and better align their interests with those of our other stockholders. Pursuant to our 401(k) plan, employees, including our named executive officers, may elect to defer a portion of their current compensation up to the statutorily prescribed annual limit (which was $19,500 in 2020), with additional salary deferrals not to exceed $26,000 available to those employees 50 years of age or older, and to have the amount of this deferral contributed to our 401(k) plan. We make discretionary matching contributions and other employer contributions on behalf of eligible employees under our 401(k) plan. For fiscal year 2020, we matched a portion of eligible employee contributions equal to 100% of the first 4% of eligible contributions pursuant to our 401(k) plan’s matching formula.
Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide perquisites to our named executive officers, except in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make him or her more efficient and effective, and for recruitment and retention purposes. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by our Compensation Committee.
Certain executives, including our named executive officers, may be entitled to certain severance and/or change in control protections pursuant to their employment agreements, which are described below under Executive Officer and Director Compensation—Employment Arrangements with Our Named Executive Officers. Our goal in providing severance and change in control benefits is to offer sufficient cash continuity protection such that our executives will focus their full time and attention on the requirements of the business rather than the potential implications for their respective position. We prefer to have certainty regarding the potential severance amounts payable to the named executive officers, rather than negotiating severance at the time that a named executive officer’s employment terminates.
Anti-Hedging and Anti-Pledging Policies; Insider Trading Policy
Our insider trading policy expressly prohibits short sales and derivative transactions of our stock by our named executive officers, directors and specified other employees, including short sales of our securities, including short sales “against the box”; purchases or sales of puts, calls or other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities; or other hedging or monetization transactions accomplished through the use of prepaid variable forwards, equity swaps, collars and exchange funds. In addition, our insider trading policy expressly prohibits our named executive officers, directors and specified other employees from purchasing our securities on margin, borrowing against Company securities held in a margin account, or pledging our securities as collateral for a loan.
Clawback Policy
In 2017, our Compensation Committee and Board adopted a clawback policy that covers incentive compensation paid to our executive officers, including our Chief Executive Officer, Principal Financial Officer and our Principal Accounting Officer. The policy provides that if we are required to prepare an accounting restatement due to our material non-compliance with any financial reporting requirement and/or intentional misconduct by a covered executive, our Compensation Committee may require the covered executive to repay to us any excess compensation received by the covered executive during the covered period. For purposes of this policy, excess compensation means annual cash bonus and long-term equity incentive compensation that is in excess of the amount such covered executive would have received, if the annual cash bonus and/or long term equity incentive compensation had been determined based on the financial results reported in the restated financial statement.
Share Ownership Guidelines
In 2017, our Compensation Committee and Board adopted share ownership guidelines applicable to our non-employee directors and our senior executive officers, including our Chief Executive Officer, to further align the interests of the
leadership of the Company with those of our stockholders. The equity ownership guidelines are as set forth on the table below:
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Covered Individuals
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Applicable Stock Ownership Guideline
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Chief Executive Officer
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3x base salary
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Other Senior Executive Officer
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1x base salary
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Non-Employee Director
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3x annual cash retainer for service on the Board
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Covered individuals and newly appointed or elected persons have five years to achieve the guideline. The following forms of equity will count toward the ownership guidelines: shares owned outright, vested but unexercised “in-the-money” stock options, and fifty percent of unvested restricted stock units. All senior executive officers and directors are currently meeting or are working to achieve these guidelines within the five-year time period.
Tax and Accounting Considerations
Deductibility of Executive Compensation
Generally, Section 162(m) of the Internal Revenue Code disallows a federal income tax deduction for public corporations of remuneration in excess of $1 million paid in any fiscal year to certain specified executive officers or former executive officers. For taxable years beginning before January 1, 2018 (i) these executive officers consisted of a public corporation’s chief executive officer and up to three other executive officers (other than the chief financial officer) whose compensation is required to be disclosed to stockholders under the Securities Exchange Act because they are our most highly-compensated executive officers and (ii) qualifying “performance-based compensation” was not subject to this deduction limit if specified requirements are met.
Pursuant to the Tax Cuts and Jobs Act of 2017, which was signed into law on December 22, 2017, for taxable years beginning after December 31, 2017, the remuneration of a public corporation’s chief financial officer is also subject to the deduction limit and anyone who was a named executive officer in any year after 2016 will remain a covered employee for as long as he or she (or his or her beneficiaries) receives compensation from the Company. In addition, subject to certain transition rules (which apply to remuneration provided pursuant to written binding contracts which were in effect on November 2, 2017 and which are not subsequently modified in any material respect), for taxable years beginning after December 31, 2017, the exemption from the deduction limit for “performance-based compensation” is no longer available. Consequently, for fiscal years beginning after December 31, 2017, all remuneration in excess of $1 million paid to a specified executive will not be deductible.
In designing our executive compensation program and determining the compensation of our executive officers, including our named executive officers, the Compensation Committee considers a variety of factors, including the potential impact of the Section 162(m) deduction limit. However, the Compensation Committee will not necessarily limit executive compensation to that which is or may be deductible under Section 162(m). The deductibility of some types of compensation depends upon the timing of an executive officer’s vesting or exercise of previously granted rights. Further, interpretations of and changes in the tax laws, and other factors beyond the Compensation Committee’s control also affect the deductibility of compensation. The Compensation Committee will consider various alternatives to preserving the deductibility of compensation payments and benefits to the extent consistent with its compensation goals.
To maintain flexibility to compensate our executive officers in a manner designed to promote our short-term and long-term company goals, the Compensation Committee has not adopted a policy that all compensation must be deductible. The Compensation Committee believes that our stockholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expense.
Taxation of “Parachute” Payments
Sections 280G and 4999 of the Internal Revenue Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any named executive officers, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the Internal Revenue Code.
Section 409A of the Internal Revenue Code
Section 409A of the Internal Revenue Code imposes additional significant taxes in the event that an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A of the Internal Revenue Code. Although we do not maintain a traditional nonqualified deferred compensation plan, Section 409A of the Internal Revenue Code may apply to certain severance arrangements, bonus arrangements and equity awards. We endeavor to structure all our severance arrangements, bonus arrangements and equity awards in a manner to either avoid the application of Section 409A or, to the extent doing so is not possible, to comply with the applicable requirements of Section 409A of the Internal Revenue Code.
Accounting for Stock-Based Compensation
We follow FASB ASC 718 for our stock-based compensation awards. FASB ASC 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and non-employee directors, including options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.
Equity Granting Practices
Currently, all of our full-time employees, including our named executive officers, are eligible to participate in our 2013 Stock Option and Incentive Plan (the 2013 Plan). All new full-time employees are granted stock options and restricted stock units when they start employment and all continuing employees are eligible for stock option and restricted stock unit awards on an annual basis based on performance and upon promotions to positions of greater responsibility. Our Compensation Committee has delegated to Mr. Leschly, our Chief Executive Officer, the authority to make equity awards under our 2013 Plan to new hires (other than to executive officers), in connection with promotions and with our annual incentive program (other than to executive officers) and in connection with certain performance-based restricted stock units (other than to executive officers). The number of shares underlying stock options and the number of restricted stock units he may grant to any one individual must be within the range specifically set by our Compensation Committee for these awards, and the aggregate number of shares underlying stock options and the number of restricted stock units that Mr. Leschly may grant within a period must be within specified limits set by our Compensation Committee for these awards. The exercise price of stock options must be equal to the closing price of our common stock on the NASDAQ Global Market on the date of grant. With respect to stock option awards and restricted stock units to new hires other than executive officers, Mr. Leschly approves the awards in connection with such hires and generally provides that the awards are to be granted to the new hires on the first business day of the calendar month following the date of such new hires’ first date of regular employment. With respect to stock option and restricted stock unit awards made in connection with promotions other than of executive officers, Mr. Leschly approves the awards in connection with such promotions and generally provides that the awards are to be granted on the first business day of the calendar month following the date of such promotions. Mr. Leschly is required to maintain a list of stock options and restricted stock units granted pursuant to such delegated authority and periodically report to our Compensation Committee regarding such awards.
Compensation Risk Assessment
We believe that our executive compensation program does not encourage excessive or unnecessary risk taking. As described more fully above, we structure our pay to consist of both fixed and variable compensation, particularly in connection with our pay-for-performance compensation philosophy. We believe this structure motivates our executives to produce superior short- and long-term results that are in the best interests of our company and our stockholders in order to attain our ultimate objective of increasing stockholder value, and we have established, and our Compensation Committee endorses, several controls to address and mitigate compensation related risk. These include stock ownership guidelines for our senior executive officers and our directors, a clawback policy that permits recovery of incentive compensation from our executive officers in the event that cash and equity incentive award amounts are based on financial results that are subsequently restated, and anti-hedging and anti-pledging policies. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.
Report of the Compensation Committee on Executive Compensation
Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based upon such review and discussions, our Compensation Committee recommended to our Board that such section be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 23, 2021.
By the Compensation Committee of the Board of Directors of bluebird bio, Inc.
Daniel S. Lynch, Chairperson
Wendy L. Dixon, Ph.D.
Denice Torres
Executive Compensation
Summary Compensation Table
The following table sets forth the total compensation awarded to, earned by and paid during the fiscal years ended December 31, 2020, December 31, 2019 and December 31, 2018 for each of our named executive officers.
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Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Option
awards
($)(1)
|
|
Stock awards
($)(1)
|
|
Non-equity
incentive plan
compensation
($)
|
|
All other compensation
($)
|
|
Total
($)
|
Nick Leschly
|
|
2020
|
|
830,554
|
|
(2)
|
—
|
|
|
2,999,893
|
|
|
2,399,800
|
|
|
—
|
|
|
11,400
|
|
(3)
|
6,241,647
|
|
Chief Executive Officer
|
|
2019
|
|
660,000
|
|
|
—
|
|
|
8,698,341
|
|
|
3,365,750
|
|
|
418,275
|
|
(4)
|
11,200
|
|
|
13,153,566
|
|
|
|
2018
|
|
610,000
|
|
|
—
|
|
|
16,719,582
|
|
|
6,157,500
|
|
|
465,888
|
|
(5)
|
9,250
|
|
|
23,962,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William D. Baird, III
|
|
2020
|
|
474,600
|
|
|
—
|
|
|
923,044
|
|
|
738,400
|
|
|
121,800
|
|
(6)
|
122,206
|
|
(8)
|
2,380,050
|
|
Chief Financial Officer
|
|
2019
|
|
398,077
|
|
(7)
|
—
|
|
|
6,093,675
|
|
|
2,349,900
|
|
|
178,200
|
|
(7)
|
180,072
|
|
|
9,199,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip Gregory, D. Phil.
|
|
2020
|
|
493,510
|
|
(2)
|
—
|
|
|
923,044
|
|
|
738,400
|
|
|
123,000
|
|
(6)
|
11,400
|
|
(3)
|
2,289,354
|
|
Chief Scientific Officer
|
|
2019
|
|
455,000
|
|
|
—
|
|
|
2,348,552
|
|
|
908,753
|
|
|
194,600
|
|
(4)
|
11,200
|
|
|
3,918,105
|
|
|
|
2018
|
|
425,000
|
|
|
—
|
|
|
4,737,215
|
|
|
3,284,000
|
|
|
223,800
|
|
(5)
|
9,250
|
|
|
8,679,265
|
|
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|
|
|
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|
|
|
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|
|
|
|
|
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David Davidson, M.D.
|
|
2020
|
|
527,474
|
|
(2)
|
—
|
|
|
923,044
|
|
|
738,400
|
|
|
129,200
|
|
(6)
|
11,400
|
|
(3)
|
2,329,518
|
|
Chief Medical Officer
|
|
2019
|
|
486,000
|
|
|
—
|
|
|
3,261,878
|
|
|
1,262,156
|
|
|
207,800
|
|
(4)
|
11,200
|
|
|
5,229,034
|
|
(former)
|
|
2018
|
|
442,500
|
|
|
—
|
|
|
6,269,843
|
|
|
2,309,063
|
|
|
237,000
|
|
(5)
|
12,250
|
|
|
9,270,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joanne Smith-Farrell, Ph.D.
|
|
2020
|
|
474,023
|
|
(2)
|
—
|
|
|
923,044
|
|
|
738,400
|
|
|
216,000
|
|
(6)
|
11,400
|
|
(3)
|
2,362,867
|
|
Chief Operating Officer, Oncology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(former)
|
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(1)The amounts reported in the Option awards and Stock awards columns above represent the aggregate grant date fair value of the stock options and restricted stock units granted to such named executive officers during 2018, 2019 and 2020 as computed in accordance with FASB ASC 718, not including any estimates of forfeitures related to service-based vesting conditions. See note 14 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed with the SEC on February 23, 2021 for a discussion of assumptions made by the Company in determining the aggregate grant date fair value of our stock option and restricted stock unit awards. Note that the amounts reported in these columns reflect the accounting cost for these stock options and restricted stock units, and do not correspond to the actual economic value that may be received by the named executive officers from the stock options and restricted stock units.
(2)Salary amounts reported in 2020 reflect voluntary reduction in salary paid in cash in 2020, beginning May 2020, and include the grant date fair value of restricted stock unit awards granted in 2020 equal to 80% of the voluntary salary reduction amount for each participating named executive officer, covering the 12-month period beginning May 2020. The restricted stock units granted to the named executive officers in lieu of salary are reported in the Grants of Plan-Based Awards table below.
(3)Amounts represent the employer matching contribution to the executive’s 401(k) plan contributions during the relevant year.
(4)Amounts represent cash payment under our annual cash incentive program earned in 2019, and paid during 2020, based on achievement of performance goals.
(5)Amounts represent cash incentive payment under our annual cash incentive program earned in 2018, and paid during 2019, based on achievement of performance goals.
(6)Amounts represent incentive payments under our annual incentive program earned in 2020, and paid during 2021, based on achievement of performance goals. For Mr. Baird and Drs. Gregory and Davidson, 50% of this amount was paid in cash, and 50% of this amount was paid in fully vested common stock.
(7)Mr. Baird's employment commenced on February 11, 2019. His annual base salary for 2019 was $450,000. The amounts reported in the Salary column and the Non-equity incentive plan compensation column for 2019 are prorated to reflect his start date.
(8)Amount represents the employer matching contributions to Mr. Baird's 401(k) plan contribution during the year as well as $50,581 of lodging and travel expenses and a related tax gross-up of $60,074 paid pursuant to the terms of his employment agreement.
Grants of Plan-Based Awards
The following table shows information regarding grants of plan-based awards to the Company’s named executive officers during the fiscal year ended December 31, 2020.
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Estimated future payouts under non-equity incentive plan awards (1)
|
|
All other stock
awards:
Number of
shares of stock or
units
(#)
|
|
All other
option awards:
Number of
securities
underlying options
(#)
|
|
Exercise or
base price
of option
awards
($/share)(2)
|
|
Grant date
fair value of
stock and
option
awards
($)(3)
|
Name
|
|
Grant
date
|
|
Target ($)(1)
|
|
Maximum ($)(1)
|
|
|
|
|
Nick Leschly
|
|
|
|
471,250
|
|
|
706,875
|
|
|
|
|
|
|
|
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
|
|
65,000
|
|
(4)
|
73.84
|
|
|
2,999,893
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
32,500
|
|
(5)
|
|
|
|
|
2,399,800
|
|
|
|
5/1/2020
|
|
—
|
|
|
—
|
|
|
11,384
|
|
(6)
|
|
|
|
|
577,966
|
|
William D. Baird, III
|
|
|
|
213,570
|
|
|
320,355
|
|
|
|
|
|
|
|
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
|
|
20,000
|
|
(4)
|
73.84
|
|
923,044
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
10,000
|
|
(5)
|
|
|
|
|
738,400
|
|
Philip Gregory, D. Phil.
|
|
|
|
215,775
|
|
|
323,663
|
|
|
|
|
|
|
|
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
|
|
20,000
|
|
(4)
|
73.84
|
|
|
923,044
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
10,000
|
|
(5)
|
|
|
|
|
738,400
|
|
|
|
5/1/2020
|
|
—
|
|
|
—
|
|
|
1,511
|
|
(6)
|
|
|
|
|
76,713
|
|
David Davidson, M.D.
|
|
|
|
230,625
|
|
|
345,938
|
|
|
|
|
|
|
|
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
|
|
20,000
|
|
(4)
|
73.84
|
|
|
923,044
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
10,000
|
|
(5)
|
|
|
|
|
738,400
|
|
|
|
5/1/2020
|
|
—
|
|
|
—
|
|
|
1,615
|
|
(6)
|
|
|
|
|
81,994
|
|
Joanne Smith-Farrell, Ph.D.
|
|
|
|
216,000
|
|
|
324,000
|
|
|
|
|
|
|
|
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
|
|
20,000
|
|
(4)
|
73.84
|
|
|
923,044
|
|
|
|
3/2/2020
|
|
—
|
|
|
—
|
|
|
10,000
|
|
(5)
|
|
|
|
|
738,400
|
|
|
|
5/1/2020
|
|
—
|
|
|
—
|
|
|
1,433
|
|
(6)
|
|
|
|
|
72,753
|
|
(1)Represents the target and maximum amount of each executive’s incentive payments under our 2020 annual incentive program as established by the Compensation Committee and described in Compensation Discussion and Analysis above. Actual payments made for 2020 are provided in the Summary Compensation Table. Incentive payments are not subject to threshold payout levels, and accordingly, that column has been omitted.
(2)The exercise price of these stock options is equal to the closing price of our common stock on the NASDAQ Global Select Market on the grant date.
(3)Amounts represent the grant date fair value of the named executive officer’s stock options and restricted stock units, calculated in accordance with FASB ASC 718. The grant date fair value of our stock options is calculated using a Black-Scholes valuation model. For purposes of these calculations, we have disregarded the estimate of forfeitures related to service-based vesting conditions.
(4)Options subject to time-based vesting criteria established by the Compensation Committee and described in the footnotes to the Outstanding Equity Awards at Fiscal Year End table below.
(5)Restricted stock units subject to time-based vesting criteria established by the Compensation Committee and described in the footnotes to the Outstanding Equity Awards at Fiscal Year End table below.
(6)Represents restricted stock units granted to the named executive officers in an amount equal to 80% of the voluntary salary reduction amount. These restricted stock units are subject to monthly time-based vesting criteria as established by the Compensation Committee and described in footnote (13) of the Outstanding Equity Awards at Fiscal Year End table below.
Outstanding Equity Awards at Fiscal Year End
The following table sets forth information concerning the outstanding equity awards held by each of the named executive officers as of December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards (1)
|
|
Stock Awards (1)
|
Name
|
|
Number of securities underlying unexercised options ((#) exercisable)
|
|
Number of securities underlying unexercised options (#) unexercisable)
|
|
|
|
Option
exercise
price
($/share)
|
|
Option
expiration
date
|
|
Number of shares
or units of stock
that have not
vested (#)
|
|
|
|
Market value of shares or units of stock that have not vested ($)
|
Nick Leschly
|
|
15,999
|
|
|
—
|
|
|
|
|
5.50
|
|
|
1/16/2023
|
|
—
|
|
|
|
|
—
|
|
|
|
33,649
|
|
|
—
|
|
|
|
|
5.50
|
|
|
1/16/2023
|
|
—
|
|
|
|
|
—
|
|
|
|
73,006
|
|
|
—
|
|
|
|
|
5.50
|
|
|
1/16/2023
|
|
—
|
|
|
|
|
—
|
|
|
|
70,504
|
|
|
—
|
|
|
|
|
5.50
|
|
|
1/16/2023
|
|
—
|
|
|
|
|
—
|
|
|
|
10,197
|
|
|
—
|
|
|
|
|
5.50
|
|
|
1/16/2023
|
|
—
|
|
|
|
|
—
|
|
|
|
165,000
|
|
|
—
|
|
|
|
|
24.47
|
|
|
3/3/2024
|
|
—
|
|
|
|
|
—
|
|
|
|
165,000
|
|
|
—
|
|
|
|
|
97.40
|
|
|
3/2/2025
|
|
—
|
|
|
|
|
—
|
|
|
|
90,000
|
|
|
—
|
|
|
|
|
50.51
|
|
|
3/1/2026
|
|
—
|
|
|
|
|
—
|
|
|
|
107,685
|
|
|
2,315
|
|
|
(2)
|
|
75.60
|
|
|
2/1/2027
|
|
—
|
|
|
|
|
—
|
|
|
|
87,500
|
|
|
32,500
|
|
|
(3)
|
|
205.25
|
|
|
2/1/2028
|
|
—
|
|
|
|
|
—
|
|
|
|
47,913
|
|
|
52,087
|
|
|
(4)
|
|
134.63
|
|
|
2/1/2029
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
65,000
|
|
|
(5)
|
|
73.84
|
|
|
3/2/2030
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
6,875
|
|
|
(7)
|
|
297,481
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
15,000
|
|
|
(8)
|
|
649,050
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
18,750
|
|
|
(9)
|
|
811,313
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
32,500
|
|
|
(10)
|
|
1,406,275
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
4,743
|
|
|
(13)
|
|
205,230
|
|
William D. Baird, III
|
|
27,500
|
|
|
32,500
|
|
|
(11)
|
|
156.66
|
|
|
3/1/2029
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
20,000
|
|
|
(5)
|
|
73.84
|
|
|
3/2/2030
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
11,250
|
|
|
(12)
|
|
486,788
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
10,000
|
|
|
(10)
|
|
432,700
|
|
Philip Gregory
|
|
50,000
|
|
|
—
|
|
|
|
|
163.07
|
|
|
7/1/2025
|
|
—
|
|
|
|
|
—
|
|
|
|
6,200
|
|
|
—
|
|
|
|
|
50.51
|
|
|
3/1/2026
|
|
—
|
|
|
|
|
—
|
|
|
|
24,275
|
|
|
725
|
|
|
(2)
|
|
75.60
|
|
|
2/1/2027
|
|
—
|
|
|
|
|
—
|
|
|
|
24,784
|
|
|
9,216
|
|
|
(3)
|
|
205.25
|
|
|
2/1/2028
|
|
—
|
|
|
|
|
—
|
|
|
|
12,932
|
|
|
14,068
|
|
|
(4)
|
|
134.63
|
|
|
2/1/2029
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
20,000
|
|
|
(5)
|
|
73.84
|
|
|
3/2/2030
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
2,125
|
|
|
(7)
|
|
91,949
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
4,250
|
|
|
(8)
|
|
183,898
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
5,063
|
|
|
(9)
|
|
219,076
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
10,000
|
|
|
(10)
|
|
432,700
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
630
|
|
|
(13)
|
|
27,260
|
|
David Davidson
|
|
1,239
|
|
|
—
|
|
|
|
|
2.09
|
|
|
4/13/2022
|
|
—
|
|
|
|
|
—
|
|
|
|
3,610
|
|
|
—
|
|
|
|
|
24.47
|
|
|
3/3/2024
|
|
—
|
|
|
|
|
—
|
|
|
|
60,000
|
|
|
—
|
|
|
|
|
97.40
|
|
|
3/2/2025
|
|
—
|
|
|
|
|
—
|
|
|
|
9,625
|
|
|
—
|
|
|
|
|
50.51
|
|
|
3/1/2026
|
|
—
|
|
|
|
|
—
|
|
|
|
33,375
|
|
|
725
|
|
|
(2)
|
|
75.60
|
|
|
2/1/2027
|
|
—
|
|
|
|
|
—
|
|
|
|
32,801
|
|
|
12,199
|
|
|
(3)
|
|
205.25
|
|
|
2/1/2028
|
|
—
|
|
|
|
|
—
|
|
|
|
17,966
|
|
|
19,534
|
|
|
(4)
|
|
134.63
|
|
|
2/1/2029
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
20,000
|
|
|
(5)
|
|
73.84
|
|
|
3/2/2030
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
2,125
|
|
|
(7)
|
|
91,949
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
5,626
|
|
|
(8)
|
|
243,437
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
7,032
|
|
|
(9)
|
|
304,275
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
10,000
|
|
|
(10)
|
|
432,700
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
673
|
|
|
(13)
|
|
29,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards (1)
|
|
Stock Awards (1)
|
Name
|
|
Number of securities underlying unexercised options ((#) exercisable)
|
|
Number of securities underlying unexercised options (#) unexercisable)
|
|
|
|
Option
exercise
price
($/share)
|
|
Option
expiration
date
|
|
Number of shares
or units of stock
that have not
vested (#)
|
|
|
|
Market value of shares or units of stock that have not vested ($)
|
Joanne Smith-Farrell
|
|
13,125
|
|
|
2,500
|
|
|
(17)
|
|
88.55
|
|
|
4/3/2027
|
|
—
|
|
|
|
|
—
|
|
|
|
6,409
|
|
|
2,391
|
|
|
(3)
|
|
205.25
|
|
|
2/1/2028
|
|
—
|
|
|
|
|
—
|
|
|
|
6,414
|
|
|
4,586
|
|
|
(6)
|
|
203.15
|
|
|
3/1/2028
|
|
—
|
|
|
|
|
—
|
|
|
|
4,542
|
|
|
4,958
|
|
|
(4)
|
|
134.63
|
|
|
2/1/2029
|
|
—
|
|
|
|
|
—
|
|
|
|
4,750
|
|
|
7,250
|
|
|
(18)
|
|
139.62
|
|
|
5/1/2029
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
20,000
|
|
|
(5)
|
|
73.84
|
|
|
3/2/2030
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
1,875
|
|
|
(14)
|
|
81,131
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
1,100
|
|
|
(8)
|
|
47,597
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
794
|
|
|
(19)
|
|
34,356
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
1,750
|
|
|
(15)
|
|
75,723
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
1,782
|
|
|
(9)
|
|
77,107
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
2,250
|
|
|
(16)
|
|
97,358
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
10,000
|
|
|
(10)
|
|
432,700
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
597
|
|
|
(13)
|
|
25,832
|
|
(1)All unvested stock options and restricted stock awards were granted under our 2013 Plan. The market value of the restricted stock unit award is based on the closing price of $43.27 per share for our common stock on December 31, 2020, as reported on the NASDAQ Global Select Market.
(2)Represents options to purchase shares of our common stock granted on February 1, 2017. The shares underlying these options vest as follows: 25% vested on January 4, 2018, with the remainder of the shares vesting in equal monthly installments over the following three years through January 4, 2021, subject to continued service with us through each applicable vesting date.
(3)Represents options to purchase shares of our common stock granted on February 1, 2018. The shares underlying these options vest as follows: 25% vested on January 4, 2019, with the remainder of the shares vesting in equal monthly installments over the following three years through January 4, 2022, subject to continued service with us through each applicable vesting date.
(4)Represents options to purchase shares of our common stock granted on February 1, 2019. The shares underlying these options vest as follows: 25% vested on January 4, 2020, with the remainder of the shares vesting in equal monthly installments over the following three years through January 4, 2023, subject to continued service with us through each applicable vesting date.
(5)Represents options to purchase shares of our common stock granted on March 2, 2020. The shares underlying these options vest as follows: 25% vested on January 4, 2021, with the remainder of the shares vesting in equal monthly installments over the following three years through January 4, 2024, subject to continued service with us through each applicable vesting date.
(6)Represents options to purchase shares of our common stock granted on September 28, 2018 with performance-based criteria that was met on August 24, 2018. The shares underlying these options vest as follows: 25% vested on August 24, 2019, with the remainder of the shares vesting in equal monthly installments over the following three years through August 24, 2022, subject to continued service with us through each applicable vesting date.
(7)Restricted stock unit award vests in four equal annual installments through January 4, 2021.
(8)Restricted stock unit award vests in four equal annual installments through January 4, 2022, subject to continued service with us through each applicable vesting date.
(9)Restricted stock unit award vests in four equal annual installments through January 4, 2023, subject to continued service with us through each applicable vesting date.
(10)Restricted stock unit award vests in four equal annual installments through January 4, 2024, subject to continued service with us through each applicable vesting date.
(11)Represents options to purchase shares of our common stock granted on March 1, 2019. The shares underlying these options vest as follows: 25% vested on February 11, 2020, with the remainder of the shares vesting in equal monthly installments over the following three years through February 11, 2023, subject to continued service with us through each applicable vesting date.
(12)Restricted stock unit award vests in four equal annual installments through February 11, 2023, subject to continued service with us through each applicable vesting date.
(13)Restricted stock unit award vests in 12 equal monthly installments through May 1, 2021.
(14)Restricted stock unit award vests in four equal annual installments through April 3, 2021, subject to continued service with us through each applicable vesting date.
(15)Restricted stock unit award with performance-based criteria that was met on August 24, 2018 vests in four equal annual installments through August 24, 2022, subject to continued service with us through each applicable vesting date.
(16)Restricted stock unit award vests in four equal annual installments through May 1, 2023, subject to continued service with us through each applicable vesting date.
(17)Represents options to purchase shares of our common stock granted on April 3, 2017. The shares underlying these options vest as follows: 25% vested on April 3, 2018, with the remainder of the shares vesting in equal monthly installments over the following three years through April 3, 2021.
(18)Represents options to purchase shares of our common stock granted on May 1, 2019. The shares underlying these options vest as follows: 25% vested on May 1, 2020, with the remainder of the shares vesting in equal monthly installments over the following three years through May 1, 2023.
(19)Restricted stock unit award with performance-based criteria that was met on June 3, 2019 vests as follows: 15% on June 3, 2019, 35% on June 3, 2020, and 50% on June 3, 2021.
Option Exercises and Stock Vested
The following table sets forth, for each of the named executive officers, information with respect to the exercise of stock options and the vesting of restricted stock unit awards during the year ended December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
shares acquired
on exercise (#)
|
|
Value
realized on
exercise ($)(1)
|
|
Number of
shares acquired
on vesting (#)
|
|
Value
realized on
vesting ($)(2)
|
Nick Leschly
|
|
—
|
|
|
—
|
|
|
32,891
|
|
|
2,656,969
|
|
William D. Baird, III
|
|
—
|
|
|
—
|
|
|
3,750
|
|
|
337,725
|
|
Philip Gregory, D. Phil.
|
|
600
|
|
|
24,054
|
|
|
12,568
|
|
|
1,065,875
|
|
David Davidson, M.D.
|
|
—
|
|
|
—
|
|
|
10,622
|
|
|
894,801
|
|
Joanne Smith-Farrell, Ph.D.
|
|
—
|
|
|
—
|
|
|
6,033
|
|
|
350,960
|
|
(1) Value realized on exercise of stock option awards does not represent proceeds from any sale of any common stock acquired upon exercise, but is determined by multiplying the number of shares acquired upon exercise by the difference between the per share exercise price of the option and the closing price of a share of our common stock on the NASDAQ Global Select Market at each time of exercise.
(2) The value realized on vesting is based on the closing market price per share of our common stock on the NASDAQ Global Select Market on the vesting date, multiplied by the number of restricted stock units that vested.
Employment Arrangements with our Named Executive Officers
Nick Leschly. We have entered into an amended and restated employment agreement, effective as of the closing of our initial public offering on June 24, 2013, with Mr. Leschly for the position of President and Chief Executive Officer. Mr. Leschly currently receives an annual base salary of $750,500, which is subject to adjustment at the discretion of the Compensation Committee. Mr. Leschly is also eligible for an annual cash incentive award targeted at 65% of his annual base salary. Mr. Leschly is eligible to participate in our employee benefit plans, subject to the terms of those plans.
William D. Baird, III. We have entered into an employment agreement, effective as of December 18, 2018, with Mr. Baird for the position of Chief Financial Officer. Mr. Baird currently receives an annual base salary of $491,300, which is subject to adjustment at the discretion of the Compensation Committee. Mr. Baird is also eligible for an annual cash incentive award targeted at 45% of his annual base salary, payable at the discretion of the Compensation Committee. Mr. Baird is eligible to participate in our employee benefit plans, subject to the terms of those plans. In addition, pursuant to the terms of the employment agreement, prior to Mr. Baird’s permanent relocation to the Cambridge, Massachusetts area for up to a period of three years, we have agreed to reimburse Mr. Baird for the cost of temporary living arrangements reasonably acceptable to us, grossed up for Mr. Baird’s anticipated income tax liability.
Philip Gregory, D. Phil. We have entered into an employment agreement with Dr. Gregory, effective as of May 30, 2015, and amended on November 3, 2016. Dr. Gregory currently serves as our Chief Scientific Officer and receives an annual base salary of $496,300, which is subject to adjustment at the discretion of the Compensation Committee. Dr. Gregory is also eligible for an annual cash incentive award targeted at 45% of his annual base salary, payable at the discretion of the Compensation Committee. Dr. Gregory is eligible to participate in our employee benefit plans, subject to the terms of those plans.
David Davidson, M.D. We entered into an amended and restated employment agreement, effective as of the closing of our initial public offering on June 24, 2013, with Dr. Davidson for the position of Chief Medical Officer. Dr. Davidson’s annual base salary prior to his resignation was $530,500, which was subject to adjustment at the discretion of the Compensation Committee. Dr. Davidson was also eligible for an annual cash incentive award targeted at 45% of his annual base salary, payable at the discretion of the Compensation Committee. Dr. Davidson was also eligible to participate in our employee benefit plans, subject to the terms of those plans. Dr. Davidson resigned as our Chief Medical Officer effective April 16, 2021 and the terms of his Separation Agreement are set forth below.
Joanne Smith-Farrell, Ph.D. We entered into an employment agreement with Dr. Smith-Farrell, effective as of April 8, 2019. Dr. Smith-Farrell's annual base salary prior to resignation was $496,800, which was subject to adjustment at the discretion of the Compensation Committee. Dr. Smith-Farrell was also eligible for an annual cash incentive award targeted at 45% of her annual base salary, payable at the discretion of the Compensation Committee. Dr. Smith-Farrell was also eligible to participate in our employee benefit plans, subject to the terms of those plans. Dr. Smith-Farrell resigned as our Chief Operating Officer, Oncology, effective February 1, 2021 and continued to support the Company's preparations for the planned spinoff of the oncology programs and portfolio through April 3, 2021. She did not receive any severance payments or benefits in connection with her resignation.
These employment agreements also contain provisions that provide for certain payments and benefits in the event of an involuntary termination of employment. In addition, the named executive officers may be entitled to accelerated vesting of their outstanding and unvested awards in certain circumstances. The information below describes certain compensation that may become due as a result of certain events. These payments and benefits are in addition to benefits available generally to salaried employees, including an ability to participate in our Section 401(k) plan, and our employee stock purchase plan, accrued benefits under our health and welfare plans and arrangements and vacation pay or other accrued benefits under our medical and dental insurance plans, that are not generally described. Outstanding equity awards for the named executive officers as of December 31, 2020 are set forth under Outstanding Equity Awards at Fiscal Year End above.
Involuntary termination of employment
Pursuant to their employment agreements, each named executive officer is (or in the case of Drs. Davidson and Smith-Farrell was) eligible to receive certain payments and benefits in the event his or her employment is (or in the case of Drs. Davidson and Smith-Farrell was)terminated by us without “cause” (as defined in the employment agreements) or in the event he or she terminates (or in the case of Drs. Davidson and Smith-Farrell terminated) his or her employment with “good reason” (as defined in the employment agreements). Upon the timely execution of a severance agreement, including a general release of claims, each named executive officer is (or in the case of Drs. Davidson and Smith-Farrell was) eligible to receive the following payments and benefits:
•12 months of base salary continuation; and
•if he or she elects (or in the case of Drs. Davidson and Smith-Farrell elected) to continue his or her group healthcare benefits, to the extent authorized by and consistent with COBRA, we will pay the named executive officer a monthly cash payment equal to the monthly employer contribution we would have made to provide him or her health insurance if he or she had remained employed by us until the earlier of (1) 12 months following the date of termination, or (2) the end of the named executive officer’s COBRA health continuation period.
Sale event
In addition, in the event that any of our named executive officers terminates (or in the case of Drs. Davidson and Smith-Farrell terminated) his or her employment with us for good reason or his or her employment with us is (or in the case of Drs. Davidson and Smith-Farrell was) terminated by us without cause, in either case within 12 months following a “sale event” (as defined in the 2013 Plan), he or she will be (or in the case of Drs. Davidson and Smith-Farrell would have been) entitled to receive the following payments and benefits (in lieu of the payments and benefits described above) upon the timely execution of a severance agreement, including a general release of claims:
•a lump sum cash payment equal to one times (or one and a half times in the case of Mr. Leschly) the sum of (1) the named executive officer’s then-current base salary (or base salary in effect immediately prior to the sale event, if higher) and (2) the named executive officer’s target annual cash incentive compensation; and
•if he or she elects (or in the case of Drs. Davidson and Smith-Farrell elected) to continue his or her group healthcare benefits, to the extent authorized by and consistent with COBRA, we will pay the named executive officer a monthly cash payment equal to the monthly employer contribution we would have made to provide him or her health insurance if he or she had remained employed by us until the earlier of (1) 12 months (or 18 months in the case of Mr. Leschly) following the date of termination or (2) the end of the named executive officer’s COBRA health continuation period; and
•all stock options and other stock-based awards granted to the named executive officer after the date of his or her employment agreement will (or in the case of Drs. Davidson and Smith-Farrell would have) become fully exercisable and non-forfeitable as of the date of the named executive officer’s termination.
Separation Agreement with Dr. Davidson
On March 15, 2021, we entered into a separation agreement with Dr. Davidson, pursuant to which his employment with us ended on April 16, 2021. The separation agreement provided for the benefits that he would otherwise have been entitled to as set forth in the severance provisions of his employment agreement, namely 12 months of base salary and health and dental insurance continuation. In addition, following his departure, Dr. Davidson is engaged as a consultant for a period of six months pursuant to a consulting agreement, under which we expect Dr. Davidson to provide ongoing guidance and support for our late-stage development programs in severe genetic disease, particularly as we navigate the regulatory interactions following the safety events reported to us in February 2021. We believe that Dr. Davidson's deep understanding
of and experience with our programs, product candidates, and the gene therapy field will be important during the term of the consulting agreement as we plan further clinical development activities. In addition, we expect Dr. Davidson to assist with the transition of his duties to our interim Chief Medical Officer, and supporting our preparations for the spinoff by supporting the medical leadership for our oncology business. Under the consulting agreement, Dr. Davidson is entitled to an hourly rate for his consulting services based on his 2021 base salary, and his outstanding equity awards will continue to vest during the 6-month term. The consulting agreement also provides for customary provisions governing confidentiality and inventions assignment.
Estimated Payment and Benefits Upon Termination or Change of Control
The amount of compensation and benefits payable to each named executive officer who was employed on December 31, 2020 under our current employment agreements in various termination and change in control situations has been estimated in the tables below. The value of the equity vesting acceleration was calculated for each of the tables below based on the assumption that the change in control and the named executive officer’s employment termination occurred on December 31, 2020, the last business day of the fiscal year ended December 31, 2020. The per share closing price of the Company’s stock on the NASDAQ Global Select Market as of December 31, 2020, the last trading day of 2020, was $43.27, which was used as the value of the Company’s stock in the change in control. The value of the option vesting acceleration was calculated by multiplying the number of unvested option shares subject to vesting acceleration as of December 31, 2020, by the difference between the per share closing price of the Company’s stock as of December 31, 2020, and the per share exercise price for such unvested option shares. The value of restricted stock unit vesting acceleration was calculated by multiplying the number of unvested restricted stock units subject to vesting acceleration as of December 31, 2020, by the per share closing price of the Company’s stock as of December 31, 2020.
Nick Leschly. The following table describes the potential payments and benefits upon employment termination for Mr. Leschly, as if his employment terminated as of December 31, 2020, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and
Payment upon Termination
|
|
Voluntary
Resignation not
For Good
Reason ($)
|
|
Voluntary
Resignation
For Good
Reason Not
in Connection
with a
Sale Event ($)
|
|
|
|
Termination
by Company
without Cause
Not in
Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
for Cause ($)
|
|
Termination by
Company without
Cause or Voluntary
Resignation for
Good Reason within
12 Months
Following a Sale
Event ($)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
—
|
|
|
725,000
|
|
|
(1)
|
|
725,000
|
|
|
(1)
|
|
—
|
|
|
1,087,500
|
|
|
(2)
|
Cash incentive compensation
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
706,875
|
|
|
(3)
|
Acceleration of unvested and outstanding stock options and restricted stock unit awards
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
3,369,348
|
|
|
(4)
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
—
|
|
|
24,380
|
|
|
(5)
|
|
24,380
|
|
|
(5)
|
|
—
|
|
|
36,571
|
|
|
(6)
|
Total
|
|
—
|
|
|
749,380
|
|
|
|
|
749,380
|
|
|
|
|
—
|
|
|
5,200,294
|
|
|
|
_______________________
(1)Twelve months of 2020 base salary continuation.
(2)One and a half times base salary in effect prior to the termination, payable in a lump sum.
(3)One and a half times Mr. Leschly’s target bonus for 2020, payable in a lump sum.
(4)Value attributable to the acceleration of 100% of Mr. Leschly’s (i) then unvested and outstanding options, determined by multiplying the number of shares underlying such options by the difference between the per share exercise price of the options and the per share closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020, and (ii) then unvested restricted stock units, determined by multiplying the number of restricted stock units accelerated by the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020.
(5)Payment of the COBRA health and dental insurance premiums for Mr. Leschly and his dependents until the earlier of (a) 12 months following the date of termination, or (b) the end of the named executive officer’s COBRA health continuation period.
(6)Payment of the COBRA health and dental insurance premiums for Mr. Leschly and his dependents until the earlier of (a) 18 months following the date of termination, or (b) the end of the named executive officer’s COBRA health continuation period.
William D. Baird, III. The following table describes the potential payments and benefits upon employment termination for Mr. Baird, as if his employment terminated as of December 31, 2020, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and
Payment upon Termination
|
|
Voluntary
Resignation not
For Good
Reason ($)
|
|
Voluntary
Resignation
For Good
Reason Not
in Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
without Cause
Not in
Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
for Cause ($)
|
|
Termination by
Company without
Cause or Voluntary
Resignation for
Good Reason within
12 Months
Following a Sale
Event ($)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
—
|
|
|
474,600
|
|
|
(1)
|
|
|
474,600
|
|
|
(1)
|
|
|
—
|
|
|
474,600
|
|
|
(2)
|
|
Cash incentive compensation
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
213,570
|
|
|
(3)
|
|
Acceleration of unvested and outstanding stock options and restricted stock unit awards
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
919,488
|
|
|
(4)
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
—
|
|
|
24,380
|
|
|
(5)
|
|
|
24,380
|
|
|
(5)
|
|
|
—
|
|
|
24,380
|
|
|
(5)
|
|
Total
|
|
—
|
|
|
498,980
|
|
|
|
|
498,980
|
|
|
|
|
—
|
|
|
1,632,038
|
|
|
|
_______________________
(1)Twelve months of 2020 base salary continuation.
(2)One times base salary in effect prior to the termination, payable in a lump sum.
(3)Target bonus for 2020, payable in a lump sum.
(4)Value attributable to the acceleration of 100% of Mr. Baird’s (i) then unvested options, determined by multiplying the number of shares accelerated by the difference between the exercise price of the option and the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020, and (ii) then unvested restricted stock units, determined by multiplying the number of restricted stock units accelerated by the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020.
(5)Payment of the COBRA health and dental insurance premiums for Mr. Baird and his dependents until the earlier of (a) 12 months following the date of termination, or (b) the end of the named executive officer’s COBRA health continuation period.
Philip Gregory. The following table describes the potential payments and benefits upon employment termination for Dr. Gregory, as if his employment terminated as of December 31, 2020, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and
Payment upon Termination
|
|
Voluntary
Resignation not
For Good
Reason ($)
|
|
Voluntary
Resignation
For Good
Reason Not
in Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
without Cause
Not in
Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
for Cause ($)
|
|
Termination by
Company without
Cause or Voluntary
Resignation for
Good Reason within
12 Months
Following a Sale
Event ($)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
—
|
|
|
479,500
|
|
|
(1)
|
|
479,500
|
|
|
(1)
|
|
—
|
|
|
479,500
|
|
|
(2)
|
Cash incentive compensation
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
215,775
|
|
|
(3)
|
Acceleration of unvested and outstanding stock options and restricted stock unit awards
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
954,882
|
|
|
(4)
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
—
|
|
|
24,380
|
|
|
(5)
|
|
24,380
|
|
|
(5)
|
|
—
|
|
|
24,380
|
|
|
(5)
|
Total
|
|
—
|
|
|
503,880
|
|
|
|
|
503,880
|
|
|
|
|
—
|
|
|
1,674,537
|
|
|
|
_______________________
(1)Twelve months of 2020 base salary continuation.
(2)Twelve months base salary in effect prior to the termination, payable in a lump sum.
(3)Target bonus for 2020, payable in a lump sum.
(4)Value attributable to the acceleration of 100% of Dr. Gregory’s (i) then unvested options, determined by multiplying the number of shares accelerated by the difference between the exercise price of the option and the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020, and (ii) then unvested restricted stock units, determined by multiplying the number of restricted stock units accelerated by the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020.
(5)Payment of the COBRA health and dental insurance premiums for Dr. Gregory and his dependents until the earlier of (a) 12 months following the date of termination, or (b) the end of the named executive officer’s COBRA health continuation period.
David Davidson. The following table describes the potential payments and benefits upon employment termination for Dr. Davidson, as if his employment terminated as of December 31, 2020, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and
Payment upon Termination
|
|
Voluntary
Resignation not
For Good
Reason ($)
|
|
Voluntary
Resignation
For Good
Reason Not
in Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
without Cause
Not in
Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
for Cause ($)
|
|
Termination by
Company without
Cause or Voluntary
Resignation for
Good Reason within
12 Months
Following a Sale
Event ($)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
—
|
|
|
512,500
|
|
|
(1)
|
|
512,500
|
|
|
(1)
|
|
—
|
|
|
512,500
|
|
|
(2)
|
Cash incentive compensation
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
230,625
|
|
|
(3)
|
Acceleration of unvested and outstanding stock options and restricted stock unit awards
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
1,101,481
|
|
|
(4)
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
—
|
|
|
24,227
|
|
|
(5)
|
|
24,227
|
|
|
(5)
|
|
—
|
|
|
24,227
|
|
|
(5)
|
Total
|
|
—
|
|
|
536,727
|
|
|
|
|
536,727
|
|
|
|
|
—
|
|
|
1,868,833
|
|
|
|
_______________________
(1)Twelve months of 2020 base salary continuation.
(2)Twelve months base salary in effect prior to termination, payable in a lump sum.
(3)Target bonus for 2020, payable in a lump sum.
(4)Value attributable to the acceleration of 100% of Dr. Davidson’s (i) then unvested options, determined by multiplying the number of shares accelerated by the difference between the exercise price of the option and the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020, and (ii) then unvested restricted stock units, determined by multiplying the number of restricted stock units accelerated by the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020.
(5)Payment of the COBRA health and dental insurance premiums for Dr. Davidson and his dependents until the earlier of (a) 12 months following the date of termination, or (b) the end of the named executive officer’s COBRA health continuation period.
Joanne Smith-Farrell. The following table describes the potential payments and benefits upon employment termination for Dr. Smith-Farrell, as if her employment terminated as of December 31, 2020, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Benefits and
Payment upon Termination
|
|
Voluntary
Resignation not
For Good
Reason ($)
|
|
Voluntary
Resignation
For Good
Reason Not
in Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
without Cause
Not in
Connection
with a Sale
Event ($)
|
|
|
|
Termination
by Company
for Cause ($)
|
|
Termination by
Company without
Cause or Voluntary
Resignation for
Good Reason within
12 Months
Following a Sale
Event ($)
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
—
|
|
|
480,000
|
|
|
(1)
|
|
480,000
|
|
|
(1)
|
|
—
|
|
|
480,000
|
|
|
(2)
|
Cash incentive compensation
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
216,000
|
|
|
(3)
|
Acceleration of unvested and outstanding stock options and restricted stock unit awards
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
871,804
|
|
|
(4)
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
—
|
|
|
24,380
|
|
|
(5)
|
|
24,380
|
|
|
(5)
|
|
—
|
|
|
24,380
|
|
|
(5)
|
Total
|
|
—
|
|
|
504,380
|
|
|
|
|
504,380
|
|
|
|
|
—
|
|
|
1,592,184
|
|
|
|
_______________________
(1)Twelve months of 2020 base salary continuation.
(2)Twelve months base salary in effect prior to the termination, payable in a lump sum.
(3)Target bonus for 2020, payable in a lump sum.
(4)Value attributable to the acceleration of 100% of Dr. Smith-Farrell’s (i) then unvested options, determined by multiplying the number of shares accelerated by the difference between the exercise price of the option and the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020, and (ii) then unvested restricted stock units, determined by multiplying the number of restricted stock units accelerated by the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2020.
(5)Payment of the COBRA health and dental insurance premiums for Dr. Smith-Farrell and her dependents until the earlier of (a) 12 months following the date of termination, or (b) the end of the named executive officer’s COBRA health continuation period.
CEO Pay Ratio
Our compensation and benefits philosophy and the overall structure of our compensation and benefit programs are broadly similar across the organization to encourage and reward all employees who contribute to our success. We strive to ensure the pay of every bluebird employee reflects the level of their job impact and responsibilities and is competitive within our peer group. Compensation rates are benchmarked and are generally set to be market-competitive in the country in which the jobs are performed. Our ongoing commitment to pay equity is critical to our success in supporting a diverse workforce with opportunities for all employees to grow, develop, and contribute. Under rules adopted pursuant to the Dodd-Frank Act, we are required to calculate and disclose the total compensation paid to our median paid employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our Chief Executive Officer, which we refer to as the CEO Pay Ratio. The paragraphs that follow describe our methodology and the resulting CEO Pay Ratio.
Measurement Date
We identified the median employee using our employee population on October 1, 2020 (including all employees, whether employed on a full-time, part-time, seasonal or temporary basis). The measurement date used for 2020 is the same date used to identify the median employee for 2018 and 2019.
Consistently Applied Compensation Measure (CACM)
Under the relevant rules, we were required to identify the median employee by use of a “consistently applied compensation measure,” or CACM. We chose a CACM that closely approximates the annual target total direct compensation of our employees. Specifically, we identified the median employee by looking at annual base pay, annual target cash incentive opportunity, and the grant date fair value for equity awards granted as of October 1, 2020 for all active employees as of that date. Amounts paid in non-U.S. currencies were converted to U.S. Dollars based on the average 2020 exchange rate as of October 1, 2020. The value of our 401(k) plan and health and welfare benefits provided was excluded as all employees, including the Chief Executive Officer, are offered the same benefits. We did not perform adjustments to the compensation paid to part-time employees to calculate what they would have been paid on a full-time basis. In identifying the median employee, we did not exclude workers in non-U.S. countries and did not make any cost-of-living adjustments. The CACM used for 2020 is the same applied to identify the median employee for 2019.
Methodology and Pay Ratio
After applying our CACM methodology, we identified the median employee. Once the median employee was identified, we calculated the median employee’s annual target total direct compensation in accordance with the requirements of the Summary Compensation Table. Our median employee compensation as calculated using Summary Compensation Table requirements was $183,956. Our Chief Executive Officer’s compensation as reported in the Summary Compensation Table was $6,241,647. Therefore, our CEO Pay Ratio is approximately 34:1.
This information is being provided for compliance purposes and is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Neither the Compensation Committee nor management of the Company used the CEO Pay Ratio measure in making compensation decisions
Director Compensation
The Compensation Committee of our Board is responsible for making recommendations to our Board on appropriate compensation levels and arrangements for our non-employee directors, ensuring they are consistent with our compensation policy and remain competitive with our peer companies. The Compensation Committee reviews our non-employee director compensation on an annual basis. In making recommendations, the Compensation Committee takes various factors into consideration, including:
•Non-employee directors’ responsibilities and the form and amount of compensation paid to directors at our peer companies;
•Ability to retain and attract the most qualified and experienced non-employee directors to oversee the management of our business and operations; and
•Advice of an independent compensation consultant to review our non-employee director compensation program and promote alignment with market practice and stockholder interests.
Our goal is to appropriately compensate non-employee directors for their leadership and expertise while aligning non-employee director interests with those of our stockholders. In line with this goal, our non-employee director compensation policy is underpinned by the same philosophy and principles that govern our executive compensation program. The Compensation Committee generally targeted non-employee director compensation near the 50th percentile of compensation paid non-employee directors with the companies in our peer group.
Our non-employee director compensation program is designed to:
✓ Align non-employee director and stockholder interests through grants of non-statutory stock option awards and restricted stock units;
✓ Encourage a vested interest in our long-term business performance through stock ownership requirements;
✓ Align non-employee director compensation with our peer companies of comparable stage of development, market capitalization and size;
✓ Ensure a robust non-employee director compensation governance framework is in place; and
✓ Help us attract and retain talent for Board service to support the long-term value of the Company.
Based on these considerations, our Board has adopted a non-employee director compensation policy, which provides for annual cash retainers. The non-executive chair of our Board and the chair of each of our committees is entitled to greater compensation for his or her services than other members of our Board, which we believe is commensurate with the additional time commitment and additional responsibility required by the position held and is consistent with the compensation practices of our peer group companies. The table below sets forth the cash retainer applicable to our directors in 2020.
|
|
|
|
|
|
|
|
|
Annual cash retainers under the Non-Employee Director Compensation Policy
|
|
2020 Cash Retainer ($)
|
Board:
|
|
|
All non-employee members of the Board
|
|
$
|
45,000
|
|
Additional retainer for non-executive chair of the
|
|
$
|
35,000
|
|
Audit Committee:
|
|
|
Additional retainer for chair of the Audit Committee
|
|
$
|
18,000
|
|
Additional retainer for other members of the Audit Committee
|
|
$
|
9,000
|
|
Compensation Committee:
|
|
|
Additional retainer for chair of the Compensation Committee
|
|
$
|
15,000
|
|
Additional retainer for other members of the Compensation
|
|
$
|
7,500
|
|
Nominating and Corporate Governance Committee:
|
|
|
Additional retainer for chair of the Nominating and Corporate Governance Committee
|
|
$
|
10,000
|
|
Additional retainer for other members of the Nominating and Corporate Governance Committee
|
|
$
|
5,000
|
|
In addition, under our non-employee director compensation policy, new members of our Board are eligible for an initial equity grant under our stock option plan. The initial equity grant takes the form of a grant of stock options and restricted stock units that vest in equal annual installments over a three-year period. In addition, on the date of the annual meeting of stockholders, each continuing non-employee director who has served on the Board for a minimum of six months will be eligible to receive an annual equity grant in the form stock options and restricted stock units. These annual equity grants will vest in full upon the earlier of the first anniversary of the date of grant or the date of the following annual meeting of stockholders. The number of shares subject to the initial equity grants and the annual equity grants are summarized in the table below. The non-executive chair of our Board is eligible to receive an additional equity grant with a value that is greater than those of the other members of the Board, which we believe is commensurate with the additional time commitment and additional responsibility that the chair of our Board takes on. In the case of each initial equity grant and annual equity grant, the Board or Compensation Committee may exercise their discretion to provide for a different number of shares subject to equity awards in the event they determine a variation from the stated amount is warranted. All of the foregoing options are granted with an exercise price equal to the fair market value of our common stock on the date of grant. The equity grant policy applicable to our directors in 2020 is summarized below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity grants under the Non-Employee Director Compensation Policy
|
|
Stock options (# of shares)
|
|
Restricted Stock Units (# of shares)
|
Initial equity grant
|
|
4,500
|
|
|
2,250
|
|
Annual equity grant
|
|
3,000
|
|
|
1,500
|
|
Additional equity grant for non-executive chair of the Board
|
|
1,200
|
|
|
600
|
|
As part of our comprehensive business review in the second quarter of 2020, and with the goal of ensuring our ability to execute on our strategy in light of the impact of the COVID-19 pandemic, the non-employee directors then-serving on the Board voluntarily reduced their cash retainers by 20% for a one-year period beginning July 1, 2020, and each non-employee member of the Board received an additional grant of restricted stock units with a value equal to 80% of the amount of the reduction on June 18, 2020 (the date of our 2020 annual meeting ), determined using the closing market price on the NASDAQ Global Select Market of bluebird’s common stock on such grant date, rounded down to the nearest whole share. These restricted stock units shall vest on the date of the 2021 annual meeting.
Going forward, non-employee director compensation (other than that for new directors or for the chair of the Board) will be limited to no more than the 75th percentile of director compensation of the peer group, as updated annually with the assistance and advice of an independent compensation consultant. At this time, our Compensation Committee is continuing to review our non-employee director compensation policy for 2021.
The following table sets forth the compensation we paid to our non-employee directors during the year ended December 31, 2020. Other than as set forth in the table we did not pay any compensation, reimburse any expense of (other than reasonable out-of-pocket expenses to attend meetings of the Board or any committee), make any equity awards or non-equity awards to, or pay any other compensation to any of the other non-employee members of our Board in the year ended December 31, 2020. Mr. Leschly, our Chief Executive Officer, receives no compensation for his service as a director, and, consequently, is not included in this table. The compensation received by Mr. Leschly as an employee during the year ended December 31, 2020 is presented in Summary Compensation Table above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name(1)
|
|
Fees earned or paid in cash($)(2)
|
|
Option
awards($)(3)
|
|
Stock
awards($)(3)
|
|
Total($)
|
John O. Agwunobi, M.D.
|
|
52,947
|
|
|
114,159
|
|
|
96,135
|
|
|
263,241
|
|
Wendy Dixon, Ph. D.
|
|
65,156
|
|
|
114,159
|
|
|
96,135
|
|
|
275,450
|
|
Daniel S. Lynch
|
|
110,199
|
|
|
159,823
|
|
|
134,589
|
|
|
404,611
|
|
Douglas A. Melton, Ph.D.
|
|
52,947
|
|
|
114,159
|
|
|
96,135
|
|
|
263,241
|
|
William R. Sellers, M.D.
|
|
47,678
|
|
|
114,159
|
|
|
96,135
|
|
|
257,972
|
|
Denice Torres (4)
|
|
13,125
|
|
|
180,330
|
|
|
147,983
|
|
|
341,438
|
|
Mark Vachon
|
|
66,762
|
|
|
114,159
|
|
|
96,135
|
|
|
277,056
|
|
David Schenkein, M.D. (5)
|
|
66,248
|
|
|
114,159
|
|
|
96,135
|
|
|
276,542
|
|
(1)The aggregate number of shares of our common stock underlying stock options outstanding as of December 31, 2020 for the non-employee directors were: Dr. Agwunobi: 21,700, Dr. Dixon: 60,361, Mr. Lynch: 70,942, Dr. Melton: 18,700, Dr. Sellers: 11,000, Ms. Torres: 4,500, Mr. Vachon: 22,500, and Dr. Schenkein: 53,361. The aggregate number of restricted stock units outstanding as of December 31, 2020 for the non-employee directors was: Dr. Agwunobi: 1,624, Dr. Dixon: 1,653, Mr. Lynch: 2,359, Dr. Melton: 0, Dr. Sellers: 2,946, Ms. Torres: 2,250, Mr. Vachon: 1,657, and Dr. Schenkein: 1,656.
(2)The amounts reported reflect voluntary reduction of cash retainer for Dr. Agwunobi, Dr. Dixon, Mr. Lynch, Dr. Melton, Dr. Sellers, Mr. Vachon, and Dr. Schenkein, and include the grant date fair value of restricted stock unit awards granted in 2020 equal to 80% of the voluntary salary reduction amount for each such director.
(3)The amounts reported represent the aggregate grant date fair value of the stock options and restricted stock units granted to our non-employee directors during 2020 as computed in accordance with FASB ASC Topic 718, not including any estimates of forfeitures. See note 14 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed with the SEC on February 23, 2021 for a discussion of assumptions made by the Company in determining the aggregate grant date fair value of our stock option and restricted stock unit awards for the fiscal year ended December 31, 2020. Note that the amounts reported in this column reflect the accounting cost for these grants, and do not correspond to the actual economic value that may be received by the non-employee directors from the exercise of the options or vesting of the restricted stock units.
(4)Ms. Torres was appointed to our Board effective August 10, 2020. The amounts reported for the option awards and restricted stock units granted to Ms. Torres represent the new director equity grant pursuant to the Company's Non-Executive Director Compensation Policy, which at the time of Ms. Torres's appointment provided for a grant of a stock option to purchase 4,500 shares of common stock and 2,250 restricted stock units.
(5)Dr. Schenkein resigned from our Board effective January 9, 2021. Also on January 9, 2021, we entered into a consulting agreement with Dr. Schenkein, with a term of one year, for Dr. Schenkein to advise our oncology pipeline programs, given his deep expertise in oncology research and development and understanding of our technologies. In consideration for these ongoing consultations, Dr. Schenkein's outstanding equity grants will continue to vest during the term of the consulting agreement, and upon effectiveness of the spinoff of Oncology Newco from bluebird bio, Inc. (should it occur during the term of the consulting agreement), his outstanding equity shall be treated in the same manner as the other members of our directors then-serving on our Board.