In accordance with Aon’s recommendations, the following companies
were removed from the fiscal year 2022 peer group: Apellis
Pharmaceuticals, Inc.; BridgeBio Pharma, Inc.; Eagle
Pharmaceuticals, Inc.; Fate Therapeutics, Inc.; Intercept
Pharmaceuticals, Inc.; Novavax, Inc.; Principia Biopharma Inc.; and
TG Therapeutics, Inc.
Executive Compensation Program for
Fiscal Year 2022
Based on recommendations by Aon, the Compensation Committee
structured our executive compensation program for fiscal year 2022
to include the elements described below. In making decisions on the
2022 program, the Compensation Committee determined that target
total direct compensation for our executive officers generally
should not exceed the 75th percentile of the
Company’s peer group. It also decided that stock option grants
should be used to align the executives’ compensation with value
creation for our stockholders and, where appropriate, to fix target
total direct compensation at the desired peer group percentile. For
Dr. Recknor and Mr. Migliarese, the Compensation Committee
determined that salaries should fall in the 25th to 50th percentile, with
target total direct compensation pegged at the 50th percentile compared
to the Company’s peer group. In making its determinations regarding
the 2022 executive officer compensation program, the Compensation
Committee did not expressly take into consideration the results of
the most recent advisory vote on executive compensation at the
Company’s annual meeting of stockholders held on November 24, 2021,
but has sought to act in accordance with its understanding of the
stockholders’ interests in considering and approving compensation
for the Company’s executive officers.
Base Salaries
The Compensation Committee determined base salaries for the named
executive officers for fiscal year 2022 based on a variety of
factors, including salary levels in the competitive labor market
and for similar positions at companies in the Company’s peer group,
individual performance, job responsibilities, and tenure with the
Company, as well as prior experience, economic conditions facing
the Company, and retention.
The Compensation Committee also solicited input from the Company’s
then CEO with respect to the compensation of the other named
executive officers and took into consideration the CEO’s
recommendations.
Based on comparative compensation information provided by
Aon/Radford in July 2021, the Compensation Committee fixed base
salaries for the Company’s named executive officers for
fiscal year 2022 as follows: Dr. Pourhassan, $665,000, a
decrease of approximately 33%; Dr. Kelly, $585,000, a decrease
of approximately 16%; Dr. Ray, $525,000, unchanged, Dr.
Recknor, $460,000; and Mr. Migliarese, $415,000. With respect to
Dr. Kelly, the Compensation Committee determined to peg his salary
at $100,000 above the 75th percentile for his
position as Chief Medical Officer in the market comparisons for the
Company’s peer group, in recognition of his service as Board Chair,
Head of Business Development, and additional public relations
responsibilities. Dr. Recknor’s increase was made retroactive to
March 11, 2021, when he became Chief Operating Officer, and Mr.
Migliarese’s increase was made retroactive to May 18, 2021, when he
was promoted to the position of Chief Financial Officer. In March
2022, in order to conserve cash resources, the Compensation
Committee authorized the payment of 25% of executive salaries in
the form of shares of common stock. In September 2022, Mr.
Migliarese’s salary for the period from January 24, 2022, until
July 9, 2022, was increased by $25,000 in recognition of his dual
service as CFO and interim President.
Annual Cash Incentive Plan
For fiscal year 2022, the Compensation Committee established
performance goals for each of our named executive officers under
our bonus plan for executive officers. The target level of annual
cash incentives for each named executive officer is fixed in the
executive’s employment agreement, and expressed as a percent of
base salary. For fiscal year 2022, all named executive officers had
a target bonus equal to 50% of the executive’s base salary other
than Dr. Pourhassan, whose target percentage was 100% of base
salary.
As recommended by Aon, the performance goals, established by the
Compensation Committee for the named executive officers for the
2022 fiscal year were corporate-wide goals intended to facilitate
the successful execution of the Company’s strategic objectives,
including completion of the resubmission of the Company’s Biologic
License Application for leronlimab as a combination therapy for
highly treatment-experienced HIV patients.