UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| Date: | | ||||
| Wednesday, June | | ||||
Time: | | | 9:00 a.m. Eastern Time | | ||
Location: | | | Our | | ||
Purpose: | | | We are holding the annual meeting for stockholders to consider three company sponsored proposals: | | ||
| | | | 1. | To elect our | |
term extending until our 2023 annual meeting of stockholders and their successors are duly elected and qualified; 2. | To hold an advisory vote on named executive officer compensation; and | |||||
3. | To ratify our audit | |
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Letter From Our CEO | ||||||||
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| About Ironwood | | | | | 3 | | |
| Our Board of Directors | | | | | 6 | | |
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| Our Executives | |||||||
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| Executive Compensation | |||||||
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| Our Stockholders | |||||||
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| Certain Relationships and Related Person Transactions | |||||||
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| User’s Guide | | | | | 77 | | |
| Stockholder Communications, Proposals and Nominations for Directorships | |||||||
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| SEC Filings | | | | | 82 | | |
2020 Proxy Statement i
Dear Ironwood stockholders,
Turning to the business: I became CEO of Ironwood just over a year ago now, and what a remarkable year it has been. Following the separation from Cyclerion Therapeutics, Inc., or the Separation, Ironwood became a GI-focusedgastrointestinal (GI) healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for GI patients. There are approximately 70 million people in the U.S. suffering from GI diseases today - that is one in every five Americans. The GI landscape represents an area of substantial unmet need, and one where we believe we can achieve real impact for patients.
We are now in the early stages of executing on our post-Separation strategy and our priorities are clear: drive LINZESS® (linaclotide) growth, advance our GI pipeline, and deliver sustainable profits.
LINZESS is now the number one prescription medicine in the U.S. for treating irritable bowel syndrome with constipation, or IBS-C, or chronic idiopathic constipation, or CIC, with growth of 14% in prescription demand in 2019 versus 2018. This strong performance translated to $803 million in 2019 U.S. net sales, which we benefit from through our 50-50 profit share with Allergan plc (together with its affiliates), or Allergan, in the U.S. We are proud of the successful execution of our strategy for LINZESS; we are one of the few pharmaceutical companies to have successfully discovered, developed and commercialized a product that has become the prescription market leader in its category. We look forward to working with our partner to continue to drive the LINZESS franchise forward for many years to come.
2020 Proxy Statement 1
But LINZESS is only the first installment of the Ironwood story. We have two innovative GI product candidates in our pipeline that we believe, if approved, could make a huge difference in improving the lives of millions of patients. IW-3718 is our bile sequestering agent designed to treat the eight to 10 million adult patients suffering from refractory gastroesophageal reflux disease despite treatment on proton pump inhibitors. MD-7246 is our delayed release formulation of linaclotide that, together with Allergan, is being evaluated as an oral, non-opioid, pain-relieving agent for patients suffering from abdominal pain associated with certain GI diseases.
The company achieved strong financial results in 2019, reporting full year net income for the first time in Ironwood's history. We also met or exceeded all of our 2019 financial guidance metrics and took several important actions post-Separation, including relocating our headquarters to Boston, restructuring our debt and amending our ex-U.S. linaclotide partnerships for China (including Hong Kong and Macau) and Japan.
We have a remarkable team, that as of April 21, 2020, includes approximately 137 employees based in our Boston headquarters and another 170 customer-facing employees based around the country. I am proud of what this team accomplished in 2019 and believe strongly in the opportunities we have in front of us.
I encourage you to read the pages that follow that tell you more about our board, our team, our strategy, our pay, and our culture—all of the things that contributed to our strong results in 2019 and, we believe, position us well for the future. We ask for your voting support on the items described in this proxy statement so we can have the opportunity to continue to deliver for you and for all of our stockholders.
Sincerely,
Mark MallonChief Executive Officer and Director
2 Ironwood
2019 was a transformational year for Ironwood.
We are a gastrointestinal, or GI, healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for millions of GI patients. We are focused on the development and commercialization of innovative GI product opportunities in areas of largesignificant unmet need, leveraging our demonstrated expertise and capabilities in GI diseases. Our flagship
We also have two innovative late-stage development programs that we believe, if approved, could be importantaim to leverage our leading capabilities in GI to bring additional treatment options for millionsto GI patients.
On April 1, 2019, we completed a tax-free spin-off ofevolved our soluble guanylate cyclase, or sGC, business into a separate publicly traded company, Cyclerion Therapeutics, Inc., or Cyclerion. In completing the separation of our sGC business into Cyclerion, or the Separation, in 2019 we advanced our vision of becoming the leader in U.S. GI healthcare,GI-focused strategy, building on our commercial success with LINZESS and advancing our GI development portfolio. Our strategy is focusedcapabilities to focus on three core priorities: drivemaximize LINZESS, growth, advance our GI development portfolio and strengthen our financial profile. We made significant progress on each of these priorities in 2019:
2020 Proxy Statement 3
approximately $25.2$150.0 million in connection with associated capped call transactions, repurchase $215.0 million aggregate principal amount of our outstanding 2.25% Convertible Senior Notes dueshares of common stock through December 2022. During the year ended December 31, 2021, we repurchased 2.4 million shares of common stock for an aggregate of $27.1 million, and from January 1, 2022 and redeem allto February 15, 2022, we repurchased an additional 4.5 million shares of our outstanding 8.375% Notes due 2026.
4 Ironwood
Who We Are |
The following table sets forth certain information, as of April 21, 2020,2022, with respect to each of our directors:
| Name | | | Age | | | Audit Committee | | | Governance and Nominating Committee | | | Compensation and HR Committee | | ||||||||||||
| Mark Currie, Ph.D. | | | | | 67 | | | | | | | | | | | | | | | | | | | | |
| Alexander Denner, Ph.D. | | | | | 52 | | | | | | | | | | | | ✓ | | | | | | | | |
| Andrew Dreyfus | | | | | 63 | | | | | | | | | | | | | | | | | | C | | |
| Jon Duane | | | | | 63 | | | | | | | | | | | | ✓ | | | | | | ✓ | | |
| Marla Kessler | | | | | 52 | | | | | | | | | | | | | | | | | | ✓ | | |
| Thomas McCourt | | | | | 64 | | | | | | | | | | | | | | | | | | | | |
| Julie McHugh, Chair | | | | | 57 | | | | | | ✓ | | | | | | ✓ | | | | | | | | |
| Catherine Moukheibir | | | | | 62 | | | | | | C | | | | | | | | | | | | | | |
| Lawrence Olanoff, M.D., Ph.D. | | | | | 70 | | | | | | | | | | | | C | | | | | | | | |
| Edward Owens | | | | | 75 | | | | | | ✓ | | | | | | | | | | | | | | |
| Jay Shepard | | | | | 64 | | | | | | ✓ | | | | | | | | | | | | | | |
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Name | Age | Class | Year Term Expires | Audit Committee | Governance and Nominating Committee | Compensation & HR Committee | ||||||
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Mark G. Currie, Ph.D. | 65 | I | 2020 | | | | ||||||
Jon R. Duane | 61 | I | 2020 | ✓ | ✓ | |||||||
Mark Mallon, Chief Executive Officer | 57 | I | 2020 | | | | ||||||
Marla L. Kessler | 50 | II | 2021 | ✓ | ||||||||
Catherine Moukheibir | 60 | II | 2021 | C | | | ||||||
Lawrence S. Olanoff, M.D., Ph.D. | 68 | II | 2021 | C | ||||||||
Andrew Dreyfus | 61 | III | 2022 | | | C | ||||||
Julie H. McHugh, Chair | 55 | III | 2022 | ✓ | ✓ | |||||||
Edward P. Owens | 73 | III | 2022 | ✓ | | | ||||||
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"C"“C” indicates chair of the committee.
2020 Proxy Statement 5
Class I Directors (nominated for election at the 2020 annual meeting)
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MARK | ||||
CURRIE, Ph.D. 67 | | | • Dr. Currie has been the chair of the scientific advisory board of Cyclerion Therapeutics, Inc., or Cyclerion, a clinical-stage biopharmaceutical company, since January 2021. Dr. Currie previously served as Cyclerion’s president and chief scientific officer •
Prior to joining Ironwood, Dr. Currie directed cardiovascular and central nervous system disease research as vice president of discovery research at Sepracor, Inc.
• Dr. Currie currently serves on the board of directors of Science Exchange, Inc. and Sea Pharmaceuticals, LLC, privately held companies. • Dr. Currie earned a B.S. in biology from the University of South Alabama and holds a Ph.D. in cell biology from the •
We believe that Dr. | |
6 Ironwood
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and Chief 52 2020 |
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2020 Proxy Statement 7
Class II Directors (term expires at the 2021 annual meeting)
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2011. Prior to that, |
8 Ironwood
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Class III Directors (term expires at the 2022 annual meeting)
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ANDREW | ||||
DREYFUS 63 | | | • Mr. Dreyfus has served as president and chief executive officer for Blue Cross Blue Shield of Massachusetts, or BCBSMA, one of the largest Blue Cross Blue Shield insurance plans in the country, since •
Prior to joining BCBSMA, he served as the first president of the Blue Cross Blue Shield •
Mr. Dreyfus serves on the board of directors of BCBSMA, the Blue Cross Blue Shield Association, •
Mr. Dreyfus received a B.A. in English from Connecticut College. •
Mr. Dreyfus brings to our board of directors significant expertise in the healthcare payer and reimbursement market, and broad management and executive leadership experience, providing valuable insight as we continue to develop and commercialize medicines in an evolving healthcare landscape. | |
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JON DUANE Senior Partner Emeritus, McKinsey & Company Age: 63 Director since 2019 Board Committees • Governance and Nominating Committee • Compensation and HR Committee | | | • Mr. Duane is senior partner emeritus at McKinsey & Company, or McKinsey, an international management consulting company. Before his retirement in December 2017, Mr. Duane had served as a partner at McKinsey since 1992. Mr. Duane is an independent advisor to clients, including the San Francisco Giants, a professional sports team, and Makena Capital Management, LLC, an investment management company. • At McKinsey, Mr. Duane founded and led the firm’s biotech practice. In that role, Mr. Duane advised both private and public companies in the pharmaceutical, medical device and life science industries, as well as academic research centers, on various strategic initiatives. • Mr. Duane serves as the executive chair on the board of directors of Nashville Biosciences, LLC, a privately held company. • Mr. Duane graduated from Wesleyan University with a B.A. in government and received an M.B.A from Harvard Business School. • Mr. Duane brings to the board of directors significant experience advising academic research centers and companies across the life science and medical device industries. | |
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MARLA KESSLER Chief Customer Officer, Aetion, Inc. Age: 52 Director since 2019 Board Committees • Compensation and HR Committee | | | • Ms. Kessler has been chief customer officer of Aetion, Inc., or Aetion, a health care technology company, since September 2021. Prior to joining Aetion, Ms. Kessler served as an advisor to the chief executive officer of IQVIA Holdings Inc., or IQVIA (formerly IMS Health and Quintiles), a global analytics and technology company, from October 2020 to February 2021. Prior to that, Ms. Kessler had been the senior vice president for strategy, marketing and communications for IQVIA since October 2016. • Previously, Ms. Kessler served in various roles for IQVIA, including vice president for global services marketing and knowledge management from 2013 to September 2016, regional leader of the IMS Consulting Group in Europe from 2011 to 2013, location manager for the London IMS Consulting Group from 2009 to 2011 and senior principal from 2008 to 2009. • Before joining IQVIA, Ms. Kessler led several marketing efforts for Pfizer Inc. from 2004 to 2007 and worked in consulting for McKinsey & Company from 1996 to 2004. • Ms. Kessler received a B.S. in economics from Arizona State University and an M.B.A. from the Fuqua School of Business at Duke University. • Ms. Kessler provides an important commercial perspective to our board of directors given her expertise in strategic marketing, evidence-based research and customer experience in the life science industry. | |
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THOMAS McCOURT Chief Executive Officer, Ironwood Pharmaceuticals, Inc. Age: 64 Director since 2021 | | | • Mr. McCourt has served as our chief executive officer and member of the board of directors since June 2021 and had previously served as president and interim chief executive officer from March 2021 to June 2021 and as president from April 2019 to June 2021. Prior to April 2019, Mr. McCourt served as our senior vice president of marketing and sales and chief commercial officer since joining Ironwood in 2009. • Prior to joining Ironwood, Mr. McCourt led the U.S. brand team for denosumab at Amgen Inc. from 2008 to 2009. Prior to that, Mr. McCourt was with Novartis AG from 2001 to 2008, where he directed the launch and growth of ZELNORM™ for the treatment of patients with IBS-C and CIC and held a number of senior commercial roles, including vice president of strategic marketing and operations. • Mr. McCourt was also part of the founding team at Astra-Merck Inc., leading the development of the medical affairs and science liaison group and then serving as brand manager for PRILOSEC® and NEXIUM®. • Mr. McCourt serves on the board of trustees for the American Society of Gastrointestinal Endoscopy (ASGE). Mr. McCourt previously served on the board of directors of Acceleron Pharma Inc., including as a member of the audit committee and the chair of the nominating and governance committee. • Mr. McCourt received a B.S. in pharmacy from the University of Wisconsin. • Given his role as our chief executive officer and his previous leadership roles at the company since joining in 2009, we believe Mr. McCourt brings unique and in-depth insight into the operations and management of the company, which together with his extensive commercial experience, his deep knowledge of GI, and his experience launching and achieving blockbuster status for LINZESS, are valuable to our board of directors. | |
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JULIE | ||||
McHUGH, CHAIR 57 | | | • Ms. McHugh most recently served as chief operating officer for Endo Health Solutions, Inc., or Endo, from •
Prior to joining Endo, Ms. McHugh was the chief executive officer of Nora Therapeutics, Inc. •
Before that she served as company group chairman for the worldwide virology business unit of Johnson & Johnson, or J&J, and previously she was president of Centocor, Inc., a J&J subsidiary. While at J&J, Ms. McHugh oversaw the development and launches of several products, including • Prior to joining Centocor, Inc., Ms. McHugh led • Ms. McHugh currently serves on the board of directors of the following public companies: Aerie Pharmaceuticals, Inc. (Nasdaq: AERI), Lantheus Holdings, Inc. (Nasdaq: LNTH), and Evelo Biosciences, Inc. (Nasdaq: EVLO). Ms. McHugh also serves on the board of directors of Xellia Pharmaceuticals ApS, a privately held company. She •
Ms. McHugh received her M.B.A. degree from St. •
Ms. | |
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CATHERINE | ||||
Chief Executive Officer, 62 2019 | | | •
Ms. Moukheibir most recently served as chief executive officer of MedDay Pharmaceuticals, or MedDay, a biopharmaceutical company that focused on nervous system disorders, from July 2019 to January 2021. She was • Prior to that, Ms. Moukheibir served as the senior advisor for • Ms. Moukheibir previously served as the director of capital markets for Zeltia Group S.A. from 2001 to 2007. •
Ms. Moukheibir currently serves on the board of directors of • Ms. Moukheibir has an M.A. in economics and an M.B.A. from Yale University. • Ms. Moukheibir’s long leadership career in the biopharmaceutical industry, as well as her deep background in international finance, provide her with valuable business and financial expertise in support of our corporate objectives. | |
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JAY SHEPARD Former President and Chief Executive Officer of Aravive, Inc. Age: 64 Director since 2020 Board Committees • Audit Committee | | | • Mr. Shepard is an advisor at Caralys Pacific, a venture group focused on licensing drug programs and creating new companies in the U.S. and Japan. Mr. Shepard previously was president and chief executive officer of Aravive, Inc. (formerly Versartis, Inc.), a clinical-stage oncology company, from May 2015 to January 2020, when he retired. From 2013 to 2015, Mr. Shepard was executive chairman of Versartis, Inc. • From 2008 until May 2015, Mr. Shepard was an executive partner at Sofinnova Ventures, a venture capital firm focused on the healthcare industry. From 2010 to 2012, Mr. Shepard served as president and chief executive officer and was a member of the board of directors of NextWave Pharmaceuticals, Inc., a specialty pediatric pharmaceutical company. From 2005 to 2007, Mr. Shepard served as interim president and chief executive officer of Relypsa (Ilypsa, Inc.’s spin-out company, which was acquired by Galencia), a pharmaceutical company. Mr. Shepard was also vice president of commercial operations at Telik and oncology business unit head of Alza Pharmaceuticals (acquired by J&J). • Mr. Shepard has over 35 years of experience in the pharmaceutical, biotechnology and drug delivery arenas. Mr. Shepard has participated in or led over 16 product launches by preparing markets and establishing sales and marketing operations. • Mr. Shepard also currently serves on the board of directors of the following public companies: Inovio Pharmaceuticals, Inc. (Nasdaq: INO) and Esperion Therapeutics, Inc. (Nasdaq: ESPR). In addition, Mr. Shepard serves on the board of directors of Aculys Pharma, LLC and Pathalys Pharma, Inc. Mr. Shepard also serves as the chairman of the board of directors of the Christopher & Dana Reeve Foundation. Within the past five years, Mr. Shepard also served on the boards of directors of Marinus Pharmaceuticals, Inc. and Durect Corporation. • Mr. Shepard holds a B.S. in •
Mr. Shepard brings deep expertise to our board of directors, | |
10 Ironwood
How We are Selected and Evaluated |
We believe that our board of directors should be comprised of individuals with sophistication and experience in many substantive areas that will help us achieve our vision of becoming a leading U.S. GI healthcare company dedicated to advancing treatments forthe treatment of GI diseases and advancingredefining the standard of care for millions of GI patients.
other diversity criteria.
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| Ironwood Board of Directors | | | Capital Allocation / Finance / Accounting | | | Strategic Transactions | | | Risk Management | | | Human Capital | | | Public Company Board | | | Senior Leadership (small biotech) | | | Senior Leadership (large pharma) | | | Customer / Market Insights (patient, payer, physician) | | ||||||||||||||||||||||||
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| Alexander Denner, Ph.D. | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | |
| Andrew Dreyfus | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | |
| Jon Duane | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | |
| Marla Kessler | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | | | | ✓ | | | | | | ✓ | | |
| Thomas McCourt | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
| Julie McHugh | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
| Catherine Moukheibir | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | |
| Jay Shepard | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | |
| Board Diversity Matrix (as of April 21, 2022) | | ||||||||||||
| Board Size: | | | | | | | | | | | | | |
| Total Number of Directors | | | | | | | | | 11 | | | | |
| Gender Identity: | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose Gender | |
| Directors | | | 3 | | | 7 | | | | | | 1 | |
| Demographic Background: | | | | | | | | | | | | | |
| African American or Black | | | | | | | | | | | | | |
| Alaskan Native or Native American | | | | | | | | | | | | | |
| Asian | | | | | | | | | | | | | |
| Hispanic or Latinx | | | | | | | | | | | | | |
| Native Hawaiian or Pacific Islander | | | | | | | | | | | | | |
| White | | | 3 | | | 7 | | | | | | | |
| Two or More Races or Ethnicities | | | | | | | | | | | | | |
| LGBTQ+ | | | | | | | | | | | | | |
| Did Not Disclose Demographic Background | | | | | | | | | 1 | | | | |
| Directors who self-identify as Middle Eastern: 1 | |
Dr. Olanoff and Mr. Owens have not been nominated for election at the 2022 annual meeting of stockholders following the end of their current term. As a result, the size of our board of directors will decrease to nine members following the 2022 annual meeting of stockholders.
2020 Proxy Statement 11
committee evaluations and comments (including those from senior management) and the self and peer evaluations and comments were compiled, the chair of the governance and nominating committee met with our chair of the board and Thomas McCourt, our chief executive officer, to discuss the board and committee evaluations and individual evaluations for directors. The chair of the governance and nominating committee also conducted individual feedback sessions with each director to discuss the results of his or her individual evaluation and then provided the governance and nominating committee with a summary of the individual evaluations for the Class Iall directors up for election at the 20202022 annual meeting of stockholders. The chair of the governance and nominating committee then presented a summary of the collective board and committee evaluations and comments (including those from senior management) to the governance and nominating committee and full board of directors.
| Number of Independent Directors/Total Number of Directors | | | 10/11 | |
| All Board Committees Comprised Solely of Independent Directors | | | ✓ | |
| Separate Independent Chair and | | | ✓ | |
| Regular Executive Sessions of Independent Directors | | | ✓ | |
| Annual Board, Committee, and Individual Director Self-assessments | | | ✓ | |
| Annual Election of All Directors | | | ✓ | |
| Annual Advisory Stockholder Vote on Executive Compensation | | | ✓ | |
| Stock Ownership Guidelines for Directors and Executive Officers | | | ✓ | |
| Comprehensive Code of Business Conduct and Ethics | | | ✓ | |
| Corporate Governance Guidelines | | | ✓ | |
| Prohibition of Hedging and Pledging by Executive Officers and Directors | | | ✓ | |
| Anti-Overboarding Policy Limiting the Number of Other Public Company Boards on which our Directors May Serve | | | ✓ | |
| Clawback Policy | | | ✓ | |
In accordance with the terms of our Certificate of Incorporation, our board of directors is currently divided into three classes, which has resulted in staggered elections. Upon the expiration of the term of a class of directors, directors in that class will be eligible to be nominated and elected for a new term at the2019 annual meeting, in the year in which their term expires. The current members of each class are set forth in the table above underWho We Are.
Onour stockholders, at the recommendation of our board of directors, our stockholders voted at our 2019 annual meeting of stockholders to amend our Certificate of Incorporation to declassify our board of directors, to allowso that beginning with the company's2022 annual meeting of stockholders, to vote on the electionall of the entire board ofour directors are elected on an annual basis, rather than on a staggered basis. Consistent withIn addition, following the amendment to our Certificate of Incorporation that was approved by our stockholders, the declassification of the board of directors will be phased in as follows:
12 Ironwood
For so long as our board of directors is classified, directors may be removed by our stockholders only for cause. Following the declassification of our board of directors, our directors willcan be removableremoved with or without cause by our stockholders.
2020 Proxy Statement 13
measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. Together with our board of directors, we arecontinue to closely monitoringmonitor the developments and impact of the COVID-19 pandemic on our business and operations, including employees, and are workingwork diligently to quickly address and mitigate risks in the evolving and dynamic environment.
14 Ironwood
Table Among other things, our corporate governance guidelines limit the number of Contentsother public company boards on which our directors may serve. Accordingly, our directors should not serve on more than four public company boards of directors, including Ironwood. In addition, our directors who hold the position of chief executive officer of a public company should not serve on more than three public companies, including Ironwood and the board of his or her own company.
2020 Proxy Statement 15
Our board of directors has determined that Ms. Moukheibir is an audit committee financial expert, as defined in Item 407(d)(5) of Regulation S-K.
2021. officers, and oversees matters related to human capital management, including EDI, workplace environment and culture and talent development and retention. practices; and vest in full on the date immediately preceding the date of the next annual meeting of stockholders. All cash fees are payable quarterly in arrears and will be prorated for any quarter of partial As of March 31, 2022, each of our non-employee directors was in compliance with our stock ownership guidelines. was effective between January 2014 and May 2019, whether the shares of restricted stock are vested or not, while such person is a director of Ironwood, subject to limited exceptions. Andrew Dreyfus Jon R. Duane Marsha H. Fanucci Marla L. Kessler Terrance G. McGuire Julie H. McHugh Catherine Moukheibir Lawrence S. Olanoff Edward P. Owens Amy W. Schulman Douglas E. Williams, Ph.D.Ironwood'sIronwood’s financial reporting process, we have (i) reviewed and discussed with management the company'scompany’s audited financial statements for the fiscal year ended December 31, 2019,2021, (ii) discussed with Ernst & Young LLP, the company'scompany’s independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the PCAOB and the SEC, and (iii) received the written disclosures and the letter from Ernst & Young LLP, the company'scompany’s independent registered public accounting firm, required by applicable requirements of the PCAOB regarding the independent registered public accounting firm'sfirm’s communications with us concerning independence, discussed with the independent registered public accounting firm its independence, and considered whether the provision of non-audit services by the independent registered public accounting firm is compatible with maintaining its independence.company'scompany’s Annual Report on Form 10-K for the year ended December 31, 20192021 for filing with the SEC. By the Audit Committee,
Catherine Moukheibir, Chair
Julie H. McHugh
Edward P. Owens
Jay Shepard 2020 Proxy Statement 1720 IronwoodMessrs.Drs. Denner and Olanoff, andMr. Duane and Ms. McHugh. Mr.Dr. Olanoff chairs the governance and nominating committee. Our governance and nominating committee met two times during 2019.committee'scommittee’s responsibilities include:••••••••sevensix times during 2019.2021. Our compensation and HR committee assists our board of directors in fulfilling its responsibilities relating to the compensation of our board of directors and our executive officers.committee'scommittee’s responsibilities include:reviewingevaluating the performance of our chief executive officer and approvingother executive officers in light of pre-determined corporate goals and objectives relevant tothe chief executive officer compensation and evaluating the performance ofor such executive officers in light of those goals and objectives;officer’s compensation;•approvingrecommending to the board our chief executive officerofficer’s compensation including salary, bonus and incentive compensation, deferred compensation, perquisites, equity compensation, benefits provided upon retirement, severance or other termination of employment, and any other forms of executive compensation;•our chief executive officer'sofficer compensation based on its evaluation of(other than the chief executive officer's performance;officer), including salary, bonus and incentive compensation, deferred compensation, perquisites, equity compensation, benefits provided upon retirement, severance or other termination of employment, and any other forms of executive compensation;•••compensation;compensation and any stock ownership guidelines applicable to non-employee directors;••18 Ironwood• and•practices.How We Are PaidTheUnder our director compensation policy, effective May 2019, the majority of the compensation that our non-employee directors receive for service on our board of directors is paid in the form of restricted shares of our Class A common stock. Vesting of these shares of restricted stock is contingent on each non-employee director continuing to serve as a member of the board of directors on the last day of each applicable vesting period. If a director ceases serving as a member of our board of directors at any time during the vesting period of a restricted stock award, or RSA, unvested shares will be forfeited on the date of such director'sdirector’s termination of service.Director Compensation Plan, effective January 2014From January to May 2019, our directors were compensated pursuant to our prior director compensation plan, which became effective January 1, 2014, or the 2014 Director Compensation Plan. Under this plan, at each annual meeting Shares of stockholders, our non-employee directors received an annual grant of the number of restricted shares of our Class A common stock calculated by dividing (i) the dollar amount for total director compensation approximating the 25th percentile of our current peer group on the date of grant, by (ii) the average closing price of our Class A common stock on the Nasdaq Global Select Market for the six months preceding the month in which the applicable annual meeting of stockholders occurs. Such restricted shares vested 25% on each three-month anniversary of the grant date over a nine-month period and the remaining 25% on the day before the date of the annual meeting of stockholders for the next calendar year.Under our 2014 Director Compensation Plan, if a non-employee director was elected other than at an annual meeting of our stockholders, on the start date of such non-employee directors service on the board of directors, such non-employee director was granted the number of restricted shares of our Class A common stock granted to non-employee directors at the most recent annual meeting of our stockholders, prorated based on the number of days between the last annual meeting of our stockholders and the date on which the non-employee director began service with us. In connection with their election to the board, on April 1, 2019, each of Mses. Kessler and Moukheibir, Dr. Currie and Mr. Duane were issued 2,995 restricted shares of our Class A common stock, which vested in full on the day before the date of our 2019 annual meeting of stockholders.In addition, pursuant to our 2014 Director Compensation Plan, the chair of our board and each of the committee chairs received annual compensation of $10,000, payable quarterly in unrestricted stock or cash at the individual director's election. Shares of our Class A common stock issued to our directors2021 under our 2014 Director Compensation Plandirector compensation policy were granted under our Amended and Restated 2010 Employee, Director and Consultant2019 Equity Incentive Plan, or the 2010our 2019 Plan. Further, whether the shares of restricted stock are vested or not, no director may transfer any shares of restricted stock granted pursuant to our 2014 Director Compensation Plan while such person is a director of Ironwood, subject to limited exceptions.2020 Proxy Statement 19Under our 2014 Director Compensation Plan, non-employee directors also were reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the board of directors and its committees.Non-Employee Director Compensation Policy, effective May 2019Following a competitive assessment of market data related to non-executive director compensation provided by Pearl Meyer & Partners, LLC, or Pearl Meyer, our compensation consultant at the time, our compensation and HR committee approved our non-employee director compensation policy, or the 2019 Director Compensation Policy, effective in May 2019. Under our 2019 Director Compensation Policy,Plan, the aggregate value of all compensation paid or granted to any non-employee director for his or her service as a director in any calendar year may not exceed $600,000.Under our 2019 Director Compensation Policy, if a non-employee director is elected other than at an annual meeting of our stockholders, then upon his or her initial election to our board of directors, such director will be granted the number of restricted shares of our Class A common stock granted to non-employee directors at the most recent annual meeting of our stockholders, prorated based on the number of days between the last annual meeting of our stockholders and the date on which the non-employee director began service with us. Such restricted shares will vest in full on the date immediately preceding the date of the next annual meeting of stockholders. In addition, eachShares of restricted stock that were granted to our directors In addition, under our 2019 Director Compensation Policy in connection with our 2019director compensation policy, if a non-employee director is elected other than at an annual meeting of our stockholders, werethen upon his or her initial election to our board of directors, such director will be granted under our 2010 Plan. After May 2019,the number of restricted shares of restrictedour Class Aunderat the most recent annual meeting of our 2019 Director Compensation Policystockholders, prorated based on the number of days between the last annual meeting of our stockholders and the date on which the non-employee director began service with us. Such restricted shares will be granted under our 2019 Equity Incentive Plan, or our 2019 Plan.2019 Director Compensation Policydirector compensation policy for his or her service on our board of directors, as well as additional fees for board chair, committee or committee chair service as follows: Fees Fees Annual retainer for members of the board of directors $50,000 ($80,000 for the chair) Additional annual retainer for members of the audit committee $10,000 ($20,000 for the chair) Additional annual retainer for members of the compensation and HR committee $7,500 ($15,000 for the chair) Additional annual retainer for members of the governance and nominating committee $5,000 ($10,000 for the chair) 20 Ironwoodservice, and fees payable under our 2019 Director Compensation Policy were retroactive to April 1, 2019.service. Each non-employee director may elect, prior to January 1 of the year with respect to which such election will be effective, to receive fully vested shares of our Class A common stock at no cost in lieu of his or her annual cash retainer and any additional cash retainers for board chair, committee or committee chair service set forth above. The number of shares of our Class A common stock to be issued will beis determined by dividing the applicable cash retainer(s) the director would be eligible to receive by the closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) on the date the cash fees would otherwise be paid, rounded down to the nearest whole share. Further, non-employee directors are reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the board of directors and its committees. Name
Paid in
Cash ($)
($)(1)
($) Mark Currie, Ph.D. $ 50,000 $ 265,907 $ 315,907 Alexander Denner, Ph.D. $ 54,971(2) $ 265,907 $ 320,878 Andrew Dreyfus $ 64,978(3) $ 265,907 $ 330,885 Jon Duane $ 62,500 $ 265,907 $ 328,407 Marla Kessler $ 57,500 $ 265,907 $ 323,407 Julie McHugh $ 155,000(4) $ 292,557(4) $ 447,557 Catherine Moukheibir $ 69,981(5) $ 265,907 $ 335,888 Lawrence Olanoff, M.D., Ph.D. $ 60,000 $ 265,907 $ 325,907 Edward Owens $ 60,000 $ 265,907 $ 325,907 Jay Shepard $ 60,000 $ 265,907 $ 325,907 arewere required to achieve this level of ownership by the later of (a) May 30, 2021 (the date which is two years from the date of our 2019 annual meeting of stockholders) and (b) two years from the date the individual began service with us, or the Ownership Date.will beis measured on the date of the annual meeting of stockholders each year based on the annual retainer then in effect. Following the Ownership Date, until a non-employee director holds the required ownership level and if such director does not hold the number of shares of our Class A common stock to meet the stock ownership requirements at any time thereafter, such director will be required to retain 100% of any shares of our Class A common stock held or received upon the vesting or settlement of equity awards or the exercise of stock options, in each case, net of shares sold to cover applicable taxes and the payment of any exercise or purchase price (if applicable). Further, following the Ownership Date, to the extent a non-employee director does not hold the number of shares of our Class A common stock that meets this threshold, such director will be automatically deemed to have elected to receive any cash retainer for service on our board of directors or a committee thereof in the form of shares of our Class A common stock in an amount that satisfies the threshold shortfall.the non-employeeno director sharemay transfer restrictions described above under our 2014 Director Compensation Plan remain in effect with respect to any shares of restricted stock granted underpursuant to our director compensation policy that plan.Director Compensation TableThe following table sets forth information regarding the compensation earned during the year ended December 31, 2019 by each of our directors who served in 2019 other than (i) Mr. Mallon, our current chief executive officer and current member of our board of directors, (ii) Peter Hecht, our former chief executive officer and former member of board of directors, and (iii) Mark Currie, our former senior vice president, chief scientific officer and president of R&D and current member of our board of directors. Neither Mr. Mallon nor Dr. Hecht received compensation for his service on our board of directors, and Dr. Currie's compensation for service on our board of directors is included in theSummary Compensation Table available elsewhere in this proxy statement. Name* Fees Earned or
Paid in
Cash ($) Stock Awards
($)(1) Total
($) $ 48,736 (2) $ 244,317 $ 293,053 $ 45,795 (3) $ 286,306 $ 332,101 $ 2,500 (4) $ — $ 2,500 $ 43,125 (5) $ 286,306 $ 329,431 $ 2,492 (6) $ — $ 2,492 $ 73,750 (7) $ 244,317 $ 318,067 $ 52,500 (8) $ 286,306 $ 338,806 $ 45,000 (9) $ 244,317 $ 289,317 $ 47,500 (10) $ 244,317 $ 291,817 $ 2,492 (11) $ — $ 2,492 $ — $ — $ — *Mses. Fanucci and Schulman and Mr. McGuire transitioned off of the Ironwood board of directors and joined the Cyclerion board of directors on April 1, 2019, in connection with the Separation. Dr. Williams transitioned off of the Ironwood board of directors on April 1, 2019 in connection with the Separation.(1)On April 1, 2019, in connection with their election to our board of directors, each of Mses. Kessler and Moukheibir, Dr. Currie and Mr. Duane received a restricted stock grant in the amount of 2,995 shares of our Class A common stock, which vested in full on the day before the date of our 2019 annual meeting of stockholders. The number of shares subject to such restricted stock grant was determined by prorating the restricted stock grant of 16,223 shares of our Class A common stock awarded to the board of directors in connection with our 2018 annual meeting of stockholders by the number of days served on our board of directors between April 1, 2019, the date Mses. Kessler and Moukheibir, Dr. Currie and Mr. Duane joined our board of directors, and the date of our 2019 annual meeting of stockholders. Each such award of restricted stock had a grant date fair value of $14.02 per share and was granted pursuant to the terms of our 2014 Director Compensation Plan and our 2010 Plan.On May 29, 2019, each non-employee member of our board of directors who was serving on such date received a restricted stock grant in the amount of 22,706 shares of our Class A common stock for service on our board of directors from the date of our 2019 annual meeting of stockholders to the date of our 2020 annual meeting of stockholders, which shares will vest in full on the date immediately preceding the date of our 2020 annual meeting of stockholders. The number of shares subject to the restricted stock grant was determined by dividing (i) $250,000 by (ii) the average closing price of our Class A common stock on the Nasdaq Global Select Market for the six months preceding the month of the 2019 annual meeting of stockholders (which price was adjusted for the impact of the Separation). Each such award of restricted stock had a grant date fair value of $10.46 per share and was granted pursuant to the terms of our 2019 Director Compensation Policy and our 2010 Plan. As of December 31, 2019, each non-employee director held 22,706 restricted shares of Class A common stock as a result of this grant and held no other unvested equity awards.Amounts in the table represent the fair value of these restricted stock grants on the date of grant calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718,Compensation—Stock Compensation. For a discussion of the assumptions used in the valuation of awards made in 2019, see Note 15 to our consolidated financial statements for the year ended December 31, 2019 included in our Annual Report on Form 10-K that we filed with the SEC on February 13, 2020. All values reported exclude the effects of potential forfeitures.(2)Mr. Dreyfus received this compensation for his service on our board of directors and as chair of the compensation and HR committee from April 1, 2019 through December 31, 2019. Mr. Dreyfus elected to receive this compensation in unrestricted shares of our Class A common stock. Mr. Dreyfus received a total of 4,529 shares of our Class A common stock for such service in 2019.(3)Mr. Duane received this compensation for his service on our board of directors and as a member of our governance and nominating and compensation and HR committees from April 1, 2019 through December 31, 2019.(4)Ms. Fanucci received this compensation for her service as chair of our audit committee from January 1, 2019 through March 31, 2019.20202022 Proxy Statement 2125(5)Ms. Kessler received this compensation for her service on our board Election
of directors and as a member of our compensation and HR committee from April 1, 2019 through December 31, 2019.(6)Mr. McGuire received this compensation for his service as chair of our board of directors from January 1, 2019 through March 31, 2019. Mr. McGuire elected to receive this compensation in unrestricted shares of our Class A common stock. Mr. McGuire received a total of 183 shares of our Class A common stock for such service in 2019.(7)Ms. McHugh received this compensation for her service as chair of our governance and nominating committee from January 1, 2019 through March 31, 2019, and for her service as chair of our board of directors and service on our audit and compensation and HR committees from April 1, 2019 through December 31, 2019.(8)Ms. Moukheibir received this compensation for her service on our board of directors and as chair of our audit committee from April 1, 2019 through December 31, 2019.(9)Dr. Olanoff received this compensation for his service on our board of directors and as chair of our governance and nominating committee from April 1, 2019 through December 31, 2019.(10)Mr. Owens received this compensation for his service as chair of our compensation and HR committee from January 1, 2019 through March 31, 2019, and for his service on our audit committee from April 1, 2019 through December 31, 2019.(11)Ms. Schulman received this compensation for her service as chair of our capital allocation committee from January 1, 2019 through March 31, 2019. Ms. Schulman elected to receive this compensation in unrestricted shares of our Class A common stock. Ms. Schulman received a total of 183 shares of our Class A common stock for such service in 2019.22 IronwoodOn April 1, 2019, each of the non-employee directors who was on our board of directors prior to the date of the Separation held 4,056 unvested shares of our Class A common stock, which represented 25% of the annual restricted stock award of 16,223 shares of our Class A common stock granted on the date of our 2018 annual meeting of stockholders. In connection with the Separation, on April 1, 2019, each such director received a dividend of 405 shares of unrestricted shares of Cyclerion common stock, which amount was determined according to a fixed ratio of one share of Cyclerion common stock for every 10 shares of unvested Ironwood Class A common stock. In addition to receiving 405 shares of Cyclerion common stock, the Separation had the following impact on unvested restricted stock held by directors at the time of the Separation: DirectorsIronwoodCyclerion Directors who remained on Ironwood's board of directors following the Separation (Ms. McHugh, Messrs. Dreyfus and Owens and Dr. Olanoff)Retained the 4,056 shares of Ironwood Class A common stock that were unvested as of April 1, 2019, which shares vested in full on the date of our 2019 annual meeting of stockholders
THAT YOU VOTE FOR
EACH OF THE DIRECTORS
UP FOR ELECTION Directors who transitioned to Cyclerion's board of directors in connection with the Separation (Mses. Fanucci and Schulman and Mr. McGuire)Forfeited the 4,056 shares of Ironwood Class A common stock shares that were unvested as of April 1, 2019Received 3,279 shares of unvested Cyclerion common stock, which were granted on substantially the same terms and vesting conditions as were applicable to the 4,056 forfeited shares of Ironwood Class A common stock(1)Director who transitioned off of Ironwood's board of directors and did not join Cyclerion's Board of Directors (Dr. Williams)Forfeited 4,056 Ironwood shares that were unvested as of April 1, 2019 (1) The 3,279 shares of unvested Cyclerion common stock granted in connection with the Separation were calculated by dividing (i) $13.45 (the volume-weighted average price of Ironwood's Class A common stock for the 10 days preceding the Separation) by (ii) $14.81 (the purchase price of Cyclerion common stock as of the date of the Separation), then multiplying the quotient by (iii) 4,056 shares.Furthermore, the directors who joined Ironwood's board of directors in connection with the Separation (Mses. Kessler and Moukheibir, Dr. Currie and Mr. Duane) also received 405 shares of Cyclerion common stock in addition to the award of 2,995 shares of restricted Ironwood Class A common stock granted on April 1, 2019 in connection with joining our board of directors. Further information on the impact of the Separation on directors' equity is available elsewhere in this proxy statement under the captionCompensation Discussion and Analysis—Equity Impact of the Separation.2020 Proxy Statement 23
Proposal No. 1 |
Our board of directors has nominated eachnine of our eleven current Class I directors—Dr.directors — Drs. Currie and Denner, Messrs. Dreyfus, Duane, McCourt and Mallon—Shepard and Mses. Kessler, McHugh and Moukheibir — for election at the 20202022 annual meeting.meeting of stockholders. Dr. Olanoff and Mr. Owens have not been nominated for election at the 2022 annual meeting of stockholders. Each of Dr.Drs. Currie and Denner, Messrs. Dreyfus, Duane, McCourt and MallonShepard and Mses. Kessler, McHugh and Moukheibir has indicated his or her willingness to serve if elected and has consented to be named in the proxy statement. Should any nominee become unavailable for election at the annual meeting, the persons named on the enclosed proxy card as proxy holders may vote all proxies given in response to this solicitation for the election of a substitute nominee chosen by our board of directors.
26 Ironwood
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Name | |||||||||
| | | | Position(s) | | ||||
| Sravan Emany | | 44 | | | Senior Vice President, Chief Financial Officer | | ||
| John Minardo | | 46 | | | Senior Vice President, | | ||
| Jason Rickard | | 50 | ||||||
| | Senior Vice President, Chief Operating Officer | | ||||||
| Michael Shetzline, M.D., Ph.D. | | 63 | | | Senior Vice President, Chief Medical Officer | |
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44 | | | •
Mr. Emany has served as our •
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2020 Proxy Statement 27
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Prior to joining Ironwood, Mr. | |
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JOHN MINARDO Senior Vice President, Chief Legal Officer and Secretary of Ironwood Pharmaceuticals, Inc. Age: 46 Joined Ironwood 2021 | | | • Mr. Minardo has served as our chief legal officer since August 2021. • Prior to joining Ironwood, Mr. Minardo was with Seqirus, a pharmaceutical company, where he was vice president, general counsel and a member of the Seqirus executive leadership team, leading a global legal team overseeing activities including business transactions, regulatory matters, corporate governance, compliance and intellectual property from November 2015 to July 2021. Prior to Seqirus, Mr. Minardo was with Novartis
chief compliance officer at Novartis Influenza Vaccines. Mr. • Mr. Minardo holds a B.A. from Boston College and
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JASON RICKARD Senior Vice President, Chief Operating Officer of Ironwood Pharmaceuticals, Inc. Age: 50 Joined Ironwood 2012 | | | • Mr. Rickard has served as our chief operating officer since April 2020. Mr. Rickard was also designated by our board of directors as our principal financial officer from July 2021 to December 2021. Prior to his appointment as the •
Prior to joining Ironwood, Mr. Rickard was with Genentech, Inc. from 2000 to 2012 in roles of increasing responsibility in manufacturing and supply chain. Mr. Rickard began his career as a mechanical engineer at AMOT Controls Corporation. •
Mr. Rickard holds an M.S. from California State | |
| | | | |
MICHAEL SHETZLINE, M.D., Ph.D.
Senior Vice President, Chief Medical Officer and Head of Research and Drug Development of Ironwood Pharmaceuticals, Inc. Age: 63 Joined Ironwood 2019 | | | • Dr. Shetzline has served as our chief medical officer, •
Before joining Ironwood, Dr. Shetzline was vice president and head of gastroenterology clinical sciences at Takeda Pharmaceuticals International Co., or Takeda, a global pharmaceutical company, where he led global clinical development for all GI assets from January 2015 to January 2019. •
Prior to Dr. •
Dr. Shetzline also served as gastroenterology program director and assistant professor of medicine at Duke University Medical Center from 1997 to 2002. Dr. Shetzline has published over 40 full papers and book chapters and acted as a reviewer for a range of medicine journals. •
Dr. Shetzline earned his M.D. and Ph.D. from The Ohio State University in physiology and medicine. Dr. Shetzline completed his internal medicine residency and fellowship in gastroenterology and served on the faculty as a National Institutes of Health supported physician scientist at Duke University Medical Center. •
Dr. Shetzline is a Fellow of the American College of Physicians, the American College of Gastroenterology, and the American Gastroenterological Association and certified by the American Board of Internal Medicine. | |
20202022 Proxy Statement 29
Dear Ironwood stockholders,
2019 was a transformative year for Ironwood, underscored by the clear execution from the Ironwood team in driving forward our mission to advance treatment of GI diseases and redefine the standard of care for millions of GI patients. Ironwood is undeniably a very different company today than it was a little over a year ago.
In line with the changes in the company's focus, strategy and leadership team marked by the Separation, we took the opportunity in 2019 to refresh a number of the company's significant plans and policies. At our 2019 annual meeting of stockholders, our stockholders approved our 2019 Equity Incentive Plan, which, among other features that we believe will advance the interests of our stockholders, did not continue the "evergreen" feature of our prior equity incentive plan and limited share recycling under the plan. Additionally, in early 2019, we adopted a clawback policy that provides that our board of directors may recover from our current and former executive offers certain incentive compensation under certain conditions upon a financial restatement. We also instituted formal stock ownership guidelines for directors to further align our director compensation program with the long-term performance of the company.
We also made several important changes to Ironwood's executive compensation program. As we discuss further below, we developed a competitive compensation package to recruit Mark Mallon, who became our CEO in connection with the Separation. We adopted a new executive compensation peer group that includes similarly sized commercial biopharmaceuticals peers (based on market capitalization, median revenue, number of employees, as well as other factors) to align to our post-Separation profile. In addition, for our 2020 executive equity compensation program, we decided to replace stock option grants with performance-based stock unit awards that are designed to further align executive pay with our performance, including stock price performance. We believe this important adjustment will motivate our executive team and further tie our executives' compensation to stockholder value.
As always, we are open to your feedback. Thank you for the privilege of serving as your compensation and HR committee chair.
Sincerely,
Andrew Dreyfus
Chair, Compensation and HR Committee
30 Ironwood
Compensation Discussion and Analysis
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In 2019 and 2020, ourOur executive compensation program has evolved alongfor 2021 remained aligned with the changesmarket practice and our corporate performance as we reconstituted our leadership team to build towards our business marked by the Separation.future success. Two key highlights for this year as described further below, were: (1) the transitionappointment of Mr. McCourt, who had been our president and interim chief executive officer in connection with the Separation,March 2021 and his subsequent appointment as permanent chief executive officer in June 2021, and (2) the introductionrebuilding of performance-based units, or PSUs, into our 2020 equity compensation program forexecutive team through the hiring of Mr. Minardo, our new chief legal officer, in August 2021 and Mr. Emany, our new chief financial officer, in December 2021.
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Feedback from stockholders is an essential part of our executive compensation decision-making processes.process. We value stockholders’ perspectives and have a regular process throughout the year to discuss a range of topics, including our strategy, operations, financial and business performance. Discussions with our stockholders assist us in setting goals and expectations for our performance and facilitate the identification of emerging issues that may affect our strategies, corporate governance, compensation practices, and other aspects of our operations. Our company engages with many of our largest stockholders on an annual basis.a frequent basis year-round. This includes investor conferences, investor events, and one-on-one discussions. We invite feedback on a wide variety of topics, including corporate strategy, capital allocation, governance, human capital management and executive compensation. In 2019,2021, senior management met with nearly allthe majority of Ironwood'sIronwood’s largest 20 stockholders, which represented over 90%approximately 80% of our outstanding shares as of December 31, 2019.
2021.
2020 Proxy Statement 31
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Named Executive Officers for 20192021
Ironwood executive officers:
Ironwood executive officers prior to the Separation:
2019 CEO Transition Compensation
Mr. Mallon joined the company as a senior advisor to the board of directors on January 4, 2019 and was named chief executive officer of Ironwood on April 1, 2019and Mr. McCourt became our interim chief executive officer, in connection with the completion of the Separation. In orderaddition to compensate him, in part, for outstanding equity he forfeited by leaving his previous employer and to align his interests with stockholders,continued service as our president. Mr. Mallon's 2019 compensation includes certain one-time cash and equity awards.McCourt became our permanent chief executive officer effective June 2, 2021. For this reason, the total compensation that Mr. Mallon received in 2019 is higher than the total compensation that we expect Mr. Mallon will receive on a go-forward basis.
The terms of Mr. Mallon's offer letter provide for the following:
32 Ironwood
For a description of the impact of the Separation on the number of stock options and RSUs, and the exercise price of stock options, awarded to Mr. Mallon in January 2019 in connection with the commencement of his employment with Ironwood, please seeEquity Impact of the Separation and the footnotes to theGrants of Plan-Based Awards table elsewhere in this proxy statement.
Per his offer letter, upon becoming CEO on April 1, 2019, Mr. Mallon received an additional option to purchase 423,049 shares of our Class A common stock and an additional grant of 206,873 RSUs. As with his initial equity grant, 25% of the options vested on the first anniversary of his start date, with 1/48th of the options vesting each month thereafter for the next 36 months, and the RSUs vest as to 25% of the RSUs on the approximate first four anniversaries of the date of grant. This grant was made on April 1, 2019, the effective date of the Separation. In addition, the company has entered into an indemnification agreement and an executive severance agreement with Mr. Mallon, the terms of each of which are consistent with the forms of indemnification agreement and executive severance arrangements described elsewhere in this proxy statement. Additionalmore information on the factors considered in determining Mr. Mallon's initial compensation package is available under the captionour chief executive officer transition, please see Role of the Compensation and Human Resources Committee2021 Chief Executive Officer Transition elsewhere in this proxy statement.
The following table presents a summary of the payments made, and value of awards granted, to
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New Hire Package (effective January 4, 2019) | CEO Compensation (effective April 1, 2019) | ||||||
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Base Salary | $ | 750,000 | | (1) | |||
Sign-on Bonus | $ | 880,000 | — | ||||
Restricted Stock Units(2) | $ | 1,146,204 | (4) | $ | 2,546,607 | (4) | |
Stock Options(3) | $ | 999,516 | (4) | $ | 2,804,815 | (4) | |
Total | $ | 3,775,720 | $ | 5,351,422 | |||
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(1) Mr. Mallon's base salary did not change when he became CEO in April 2019 in connection with the Separation.
(2) Mr. Mallon's RSUs vest over four years as to 25% of the RSUs on each approximate anniversary of the grant date.
(3) Mr. Mallon's stock options vest as to 25% of the options on the first anniversary of the vesting commencement date and 1/48th of the options each month thereafter for the next 36 months.
(4) Reflects the fair value of time-based RSU and stock option awards on the date of grant calculated in accordance with Financial Accounting Standards Board issued Accounting Standards Codification Topic 718,Compensation—Stock Compensation. For a discussion of the assumptions used in the valuation of awards made in 2019, including these awards to Mr. Mallon, see Note 15 toRickard, our consolidated financial statements for the year ended December 31, 2019 included in our Annual Report on Form 10-K that we filed with the SEC on February 13, 2020. All values reported exclude the effects of potential forfeitures.
Mr. Mallonsenior vice president, chief operating officer, was not eligible to receive an annual equity award in fiscal year 2019 and instead received initial equity grants in early 2019 as described above.
For information on the cash bonus award paid to Mr. Mallon in 2020 for 2019 performance, as well as Mr. Mallon's base salary increase in 2020 and equity awards granted to Mr. Mallon in 2020, seeNEO Compensation Program, below.
NEO Compensation Program
As in prior years, the three primary elements of our executive compensation program are base salary, cash bonus and long-term equity incentive compensation. Unless the context suggests otherwise, "named executive officers" as used in this section refers to our named executive officers who remained at Ironwood through 2019.
2020 Proxy Statement 33
Goals and Accomplishments
In 2019, allocations of cash and equity awards to our named executive officers were, in large part, dependent upon our meeting certain weighted corporate performance goals. We work thoughtfully with our compensation and HR committee and other members ofdesignated by our board of directors to establish what we believe are challengingas our principal financial officer until December 6, 2021. Mr. Emany was appointed as our senior vice president, chief financial officer and principal financial officer effective December 6, 2021. For more information on our chief financial officer transition, please see
The 20192022.
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Corporate Goal | Stockholder Impact | Achievements | Target Percentage (%) | Actual Level of Achievement (%) | |||||||
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Grow the value of our IBS/constipation franchise | Grows the revenue base | • Delivered target U.S. LINZESS net sales with compliance excellence • Obtained top-line Phase III abdominal symptom data and executed a compliant marketing plan to achieve 2019 volume targets | 40 | % | 51 | % | |||||
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Create value from our innovative pipeline | Advances future business growth and profitability | • Advanced enrollment in Phase III pivotal studies in rGERD, including enrollment of patients with erosive esophagitis • Initiated MD-7246 Phase II study of abdominal pain associated with IBS-D and completed study enrollment well in advance of goals | 30 | % | 22 | % | |||||
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Strengthen our financial profile | Transitions to cash generation | • Delivered target adjusted EBITDA from continuing operations* • Raised a total of $400 million in convertible notes due 2024 and 2026, and used proceeds to pay for associated capped call transactions, redeem all the outstanding principal balance of our 8.375% notes due 2026, and repurchase $215 million aggregate principal amount of our convertible notes due 2022 | 15 | % | 15 | % | |||||
| | | | | | | | | | | |
Achieve value-creating corporate milestones | Supports potential for long-term growth and profitability | • Successfully executed the Separation • Entered into commercial partnerships in 2019 with Allergan to continue to promote Allergan's VIBERZI® and with Alnylam for Alnylam's GIVLAARI™ | 15 | % | 18 | % | |||||
| | | | | | | | | | | |
Totals | 100 | % | 106 | % | |||||||
| | | | | | | | | | | |
Stretch Goals for Additional Potential Achievement | 50 | % | 24 | % | |||||||
| | | | | | | | | | | |
TOTALS | 150 | % | 130 | % | |||||||
| | | | | | | | | | | |
* Adjusted EBITDA from continuing operations was calculated by subtracting net interest expense, taxes, depreciation, amortization, fair value of remeasurement of contingent consideration, mark-to-market adjustments on derivatives related to Ironwood's 2.25% convertible notes duegoals. In January 2022, impairment of intangibles, restructuring expenses, separation expenses, and loss on extinguishment of debt from GAAP net income (loss) from continuing operations.
34 Ironwood
In addition to the above corporate goals, the company achieved certain stretch goals in 2019, including higher LINZESS brand profitability compared to target and outperformance relative to adjusted EBITDA from continuing operations expectations. As a result,our compensation and HR committeeboard determined that the 20192021 company performance achievement multiplier, which was used as a key consideration in determining executive compensation awarded for 20192021 performance, was 130%117%.
| | | | Performance Targets (Weights) | | | | | |||||||||
| Company Goal | | | Not Achieved | | | Partially Achieved | | | Target | | | Over Achieved | | | Results | |
| MAXIMIZE LINZESS | | | | | | | | | | | | | | | | |
| LINZESS U.S. Net Sales | | | $<932M | | | $933M | | | $957M | | | $>980M | | | $1,005.9M(1) | |
| | | | (0%) | | | (3%) | | | (15%) | | | (20%) | | | (20%) | |
| Obtain U.S. FDA approval of modified LINZESS labeling to reflect pediatric clinical safety data | | | Specific goals are not disclosed for competitive reasons | | | Target(2) | | |||||||||
| | | | (0%) | | | (3%) | | | (5%) | | | (7%) | | | (5%) | |
| Gain partner alignment and advance LCM opportunity into mid- / late-stage clinical development | | | Specific goals are not disclosed for competitive reasons | | | Target(3) | | |||||||||
| | | | (0%) | | | (5%) | | | (10%) | | | (15%) | | | (10%) | |
| BUILD INNOVATIVE PIPELINE | | | | | | | | | | | | | | | | |
| Secure 1 GI asset aligned with prioritized criteria | | | Specific goals are not disclosed for competitive reasons | | | Target(4) | | |||||||||
| | | | (0%) | | | (13%) | | | (17%) | | | (24%) | | | (17%) | |
| Submit IND for IW-3300 in IC / BPS and on track to initiate Phase 1 study in the first quarter of 2022 | | | Specific goals are not disclosed for competitive reasons | | | Target(5) | | |||||||||
| | | | (0%) | | | (5%) | | | (8%) | | | (11%) | | | (8%) | |
| STRENGTHEN FINANCIAL PROFILE | | | | | | | | | | | | | | | | |
| Revenue | | | $<368M | | | $368M | | | $380M | | | $≥395M | | | $413.8M(6) | |
| | | | (0%) | | | (1%) | | | (5%) | | | (10%) | | | (10%) | |
| Adjusted EBITDA from organic business (excluding the impact of any corporate development transactions) | | | $<181M | | | $181M | | | $200M | | | $≥223M | | | $233.7M(7) | |
| | | | (0%) | | | (3%) | | | (15%) | | | (20%) | | | (20%) | |
| CREATE GREAT PLACE TO WORK | | | | | | | | | | | | | | | | |
| Achieve at least 7 out of 10 objectives on the corporate EDI scorecard | | | ≤5/10 | | | 6/10 | | | 7/10 | | | 10/10 | | | 7/10(8) | |
| | | | (0%) | | | (3%) | | | (5%) | | | (7%) | | | (5%) | |
| Increase understanding of and confidence in Ironwood’s strategy and culture, measured by >70% positive response rate on annual employee engagement survey | | | ≤60% | | | >60% | | | 70% | | | ≥80% | | | 61%(9) | |
| | | | (0%) | | | (2%) | | | (3%) | | | (5%) | | | (2%) | |
| STRENGTHEN GI CAPABILITIES | | | | | | | | | | | | | | | | |
| Strengthen virtual detailing capability | | | Specific goals are not disclosed for competitive reasons | | | Not Achieved(10) | | |||||||||
| | | | (0%) | | | (2%) | | | (3%) | | | (5%) | | | (0%) | |
| Leverage telehealth to increase conversion of monthly LINZESS.com visitors to completed telemedicine visits | | | Specific goals are not disclosed for competitive reasons | | | Not Achieved(11) | | |||||||||
| | | | (0%) | | | (3%) | | | (4%) | | | (6%) | | | (0%) | |
| | | | | | | | | | | | | TOTAL | | | 117% | |
| | |||
Summary of Individual Goals | | |||
| | • Lead the company through the chief executive officer, chief financial officer, and other talent transitions to re-establish a highly functional executive leadership team recruiting top talent to bolster our capabilities • Broaden and deepen business acumen and personal focus on corporate finance, board of directors and investor relations, corporate governance, and corporate development • Re-evaluate the company’s strategic opportunities and champion efforts where appropriate to drive corporate value • Ensure achievement of 2021 corporate goals established by the board of directors | | |
| ||||
| | |||
•
Assess and appropriately align our legal capabilities, including assessing the
• Guide our new head of compliance in establishing a comprehensive and sound compliance capability, enabling new promotion messaging, virtual promotion, telemedicine, revised speaker training, and people management •
Evaluate and reduce risk in our intellectual property • Lead effort to | |
| | Summary of Individual Goals | | |
| ||||
| | • Lead the organization’s response to the COVID-19 pandemic, including its impact on employee safety, our selling model, supplier and other financial risks, and our workplace • Develop and implement initiatives to sustain employee engagement and productivity, while accounting for remote and hybrid working models and challenging labor market conditions • Achieve functional objectives including specific pharmaceutical development, manufacturing science, and clinical supply deliverables associated with IW-3300; upgrade selected IT systems; and manage overall operational expenses • Support the company through the chief executive officer, chief financial officer, and other talent transitions to re-establish a highly functional executive leadership team; lead recruiting for senior executive roles and fill-in as needed to manage organization during transitions • Serve as the company’s cultural champion, including EDI initiatives, to ensure Ironwood continues to be a great place to work | | |
Michael Shetzline, M.D., Ph.D. | | | • Lead the Drug Development team to successfully negotiate and secure with the U.S. FDA updated label that modifies the boxed warning and contraindication applied to all children less than 18 years of age and less than 6 years of age, respectively, if appropriate • Advance the pediatric life-cycle management for LINZESS, accelerate enrollment of functional constipation/IBS-C study, and gain alignment to include 145 mcg dose for the functional constipation study • Expand our GI pipeline by advancing IW-3300 and collaborating with our Corporate Development team to identify, evaluate and enter into an agreement to secure a new asset • Strengthen the Drug Development team and establish a team of world-class experts and trusted opinion leaders in gastroenterology | |
2021, and peer group and other market data from the competitive assessment undertaken by our compensation and HR committee’s independent compensation consultant, Aon, as discussed below.
2020 Proxy Statement 35
In January 2019,February 2021, our compensation and HR committee reviewed and approved the following base salaries for 2019 for our named executive officers (other than Mr. Mallon, whose compensation was set when he commenced service with us, as described above): Ms. Consylman received a $65,000 increaseemployed at that time in 2021. These base salary from $415,000 to $480,000, Ms. Gilbert received a $20,000 increase in base salary from $460,000 to $480,000, and Mr. McCourt received a $20,000 increase from $465,000 to $485,000. The increase in base salary for Ms. Consylman, Ms. Gilbert and Mr. McCourt was based on our compensation and HR committee's determination that we achieved 100% of our corporate goals in 2018 and in recognition that each such named executive officer met or exceeded all or substantially all of his or her respective individual goals for 2018. This determination alsodeterminations took into account market data and peer group and other market datacompensation levels for the comparable executive roles from the Pearl MeyerAon competitive assessment discussed below. In addition, the increase in base salary for Ms. Consylman in 2019 also includes adjustments to better align her base salary with the external marketbelow, experience and her internal peers. In May 2019, Mr. McCourt received a $35,000 increase in base salary from $485,000 to $520,000 in connection with his promotion to president, which increase was effective ascontribution potential of April 1, 2019.
In January 2020, our compensationeach executive officer and HR committee reviewed and approved the following base salaries for 2020: Mr. Mallon received a $22,500 increase in base salary from $750,000 to $772,500, Ms. Consylman received a $14,400 increase in base salary from $480,000 to $494,400, and Mr. McCourt received a $36,400 increase from $520,000 to $556,400.general economic factors. The compensation and HR committee did not recommend, and the board did not increase, Ms. Gilbert'sMr. Mallon’s base salary in 2021 because Ms. GilbertMr. Mallon had provided notice of herhis intent to resign from the company at the time salary determinations for 2021 were made.
| Named Executive Officer | | | 2020 Base Salary | | | 2021 Base Salary | | | Increase ($) | | | Increase (%) | | ||||||||||||
| Thomas McCourt | | | | $ | 556,400 | | | | | $ | 775,000(1) | | | | | $ | 218,600 | | | | | | 39.3% | | |
| Sravan Emany | | | | | —(2) | | | | | $ | 500,000 | | | | | | — | | | | | | — | | |
| John Minardo | | | | | —(2) | | | | | $ | 475,000 | | | | | | — | | | | | | — | | |
| Jason Rickard | | | | $ | 456,750 | | | | | $ | 500,000(3) | | | | | $ | 43,250 | | | | | | 9.5% | | |
| Michael Shetzline, M.D., Ph.D. | | | | $ | 448,050 | | | | | $ | 484,000 | | | | | $ | 35,950 | | | | | | 8.0% | | |
| Mark Mallon | | | | $ | 772,500 | | | | | $ | 772,500(4) | | | | | $ | 0 | | | | | | 0% | | |
| Gina Consylman | | | | $ | 494,400 | | | | | $ | 509,400 | | | | | $ | 15,000 | | | | | | 3.0% | | |
Additionally, for
36 Ironwood
The following table summarizes the calculation of our named executive officers'officers’ cash bonus awards, paidother than our chief executive officer. Mr. Minardo’s cash bonus was prorated to 42% to reflect that he joined the company in 2020August 2021. Mr. McCourt’s 2021 cash bonus was calculated by multiplying his target bonus percentage (75%) by the corporate performance factor, as noted above. Messrs. Mallon and Emany, and Ms. Consylman were not eligible for 2019 performance:
a 2021 cash bonus.
| Component Calculation | | |||||||||||||||||||||||||||
| Company Performance Only Component (Weighted 70%) | | | 70% Weighting | | | × | | | Target Bonus | | | × | | | Corporate Performance Achievement Multiplier | | | = | | | Company Performance Only Component Payout | | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | + | |
| Company and Individual Performance Component (Weighted 30%) | | | 30% Weighting | | | × | | | Target Bonus | | | × | | | Corporate Performance Achievement Multiplier | | | × | | | Individual Performance Achievement Multiplier | | | = | | | Company and Individual Performance Component Payout | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Annual Bonus Payout | |
|
This approach was intended to closely align cash bonus awards toaward payouts with the achievement of our corporate goals, while taking into account individual performance (or, in the case of Mr. McCourt, equating company performance with individual performance) and providing equity and transparency to the calculation of our executive bonuses.making bonus determinations in a transparent way. As described above, the company performance achievement multiplier for 20192021 was 130%117%. In February 2020,March 2022, our compensation and HR committee, (i) determined that each of our current named executive officers strongly met or exceeded or far exceeded performance expectationspre-established individual goals for 2019,2021, resulting in the following individual performance achievement multipliers: Ms. Consylman, 150%multipliers and bonus ratios to target bonus percentage (after applying the 70%/30% weighting and taking into account the company performance achievement multiplier of 117%); Ms. Gilbert, 130% and (ii) reviewed and approved (or the board, in the case of Mr. McCourt, 140%. OurMcCourt) the following bonuses for 2021 performance for our current named executive officers, except for Mr. Emany who joined the company in December 2021:
| Named Executive Officer | | | Individual Performance | | | Actual Bonus to Target Bonus Ratio | | | Annual Cash Incentive Program for 2021 Performance | | |||||||||
| Thomas McCourt | | | | | 117%(1) | | | | | | 117% | | | | | $ | 680,063 | | |
| John Minardo | | | | | 100% | | | | | | 117% | | | | | $ | 105,037(2) | | |
| Jason Rickard | | | | | 140% | | | | | | 131% | | | | | $ | 327,600 | | |
| Michael Shetzline, M.D., Ph.D. | | | | | 140% | | | | | | 131% | | | | | $ | 285,405 | | |
| | | | |
Named Executive Officer | Annual Cash Bonus for 2019 Performance | |||
| | | | |
Mark Mallon | $ | 797,063 | ||
Gina Consylman | $ | 358,800 | ||
Halley E. Gilbert | $ | 340,080 | ||
Thomas A. McCourt | $ | 454,272 | ||
| | | | |
In additionofficer’s total compensation for the year (based on the grant date fair value of equity awards, with PSU awards measured at target). We believe this emphasis on equity, and particularly performance-based equity, strongly reinforces the principle of “pay for performance” and closely ties our executives’ pay outcomes to the annual cash bonus for 2019 performance described above, in May 2019, Mses. Consylman and Gilbert each received a special $250,000 cash award in recognition of their significant contributions to and performance in connection with the Separation and, with respect to Ms. Gilbert, for her expanded role overseeing our corporate development function.
Long-Term Equity Awards
stockholder value creation. We also use equity awards as our incentive vehicle for long-term compensation to attract, reward and motivateretain our named executive officers in a manner that is intendedand to align theirthe interests of our named executive officers with those of our stockholders. We typically grant equity awards in the first quarter of each year based on our performance in the prior year. Throughout the year, our compensation and HR committee may award additional grants as circumstances warrant. Our compensation and HR committee does not apply a rigid formula in allocating equity awards to our named executive officers as a group or to any particular named executive officer, but sets an equity pool each year based on achievement of our corporate goals forpeer group and other market data from the prior year, which for 2018 was 100% of our corporate goals, including certain stretch goals, and our expectations for future performance. Individual equity award amounts are then determined based on, among other factors,Aon competitive assessment discussed below. In addition to peer
2020 Proxy Statement 37
group and market data, and our compensation and HR committee adjusts these amounts after consideringalso considers other factors, including input from Aon and the amount of unvested equity held by a named executive officer, in determining the size of individual equity awards.
2019 Equity Awards
HR committee introduced PSUs into our executive equity compensation program in an effort to drive accountability to achieve key milestones and deliver stockholder returns. In 2019,introducing PSUs and providing for an equal number of PSUs and RSUs to our named executive officers, hadthe compensation and HR committee sought to design an executive equity compensation program that provides the appropriate combination of equity awards to incentivize performance, align executive interests with those of our stockholders, and encourage executive retention.
| Performance Metric | | | Performance Period | | | Threshold Goals (50% attainment) | | | Target Goals (100% attainment) | | | Stretch Goals (200% attainment) | |
| 2021 rTSR PSUs | | | Three-year performance period ending December 31, 2023 | | | rTSR at the 25th percentile compared to rTSR peer group through 2023 | | | rTSR at the 50th percentile compared to rTSR peer group through 2023 | | | rTSR at the 75th percentile compared to rTSR peer group through 2023(1) | |
| ACADIA Pharmaceuticals, Inc. | | | Jazz Pharmaceuticals plc | |
| Acceleron Pharma Inc. | | | Karyopharm Therapeutics Inc. | |
| Agios Pharmaceuticals, Inc. | | | Kronos Bio, Inc. | |
| Alkermes plc | | | Ligand Pharmaceuticals Incorporated | |
| Amarin Corporation plc | | | MannKind Corporation | |
| Amicus Therapeutics, Inc. | | | MiMedx Group, Inc. | |
| Amphastar Pharmaceuticals, Inc. | | | Neurocrine Biosciences, Inc. | |
| Biohaven Pharmaceutical Holding Company Ltd. | | | Ocular Therapeutix, Inc. | |
| bluebird bio, Inc. | | | Omeros Corporation | |
| Blueprint Medicines Corporation | | | OPKO Health, Inc. | |
| Coherus BioSciences, Inc. | | | Pacira BioSciences, Inc. | |
| Corcept Therapeutics Incorporated | | | Perrigo Company plc | |
| Deciphera Pharmaceuticals, Inc. | | | Prestige Consumer Healthcare Inc. | |
| Emergent BioSolutions Inc. | | | PTC Therapeutics, Inc. | |
| Endo International plc | | | Radius Health, Inc. | |
| Epizyme, Inc. | | | Revance Therapeutics, Inc. | |
| Esperion Therapeutics, Inc. | | | Sage Therapeutics, Inc. | |
| Exelixis, Inc. | | | Sorrento Therapeutics, Inc. | |
| Global Blood Therapeutics, Inc. | | | Supernus Pharmaceuticals, Inc. | |
| GW Pharmaceuticals plc | | | Taro Pharmaceutical Industries Ltd. | |
| Halozyme Therapeutics, Inc. | | | Theravance Biopharma, Inc. | |
| Harmony Biosciences Holdings, Inc. | | | United Therapeutics Corporation | |
| Heron Therapeutics, Inc. | | | Veracyte, Inc. | |
| Insmed Incorporated | | | Vericel Corporation | |
| Intercept Pharmaceuticals, Inc. | | | Viela Bio, Inc. | |
| Ionis Pharmaceuticals, Inc. | | | Zogenix, Inc. | |
| Named Executive Officer | | | 2021 Annual PSU Grant (# of Shares of Class A common stock Subject to PSUs) (at target) | | | 2021 Annual RSU Grant (# of Shares of Class A common stock Subject to RSUs) | | ||||||
| Thomas McCourt | | | | | 144,927 | | | | | | 145,631 | | |
| Jason Rickard | | | | | 84,541 | | | | | | 84,951 | | |
| Michael Shetzline, M.D., Ph.D. | | | | | 57,971 | | | | | | 58,252 | | |
| Gina Consylman | | | | | 84,541 | | | | | | 84,951 | | |
Named Executive Officer | 2019 Annual Stock Option Grant (# of Shares of Class A common stock Subject to Stock Options) | 2019 Annual RSU Grant (# of Shares of Class A common stock Subject to RSUs) | |||||
| | | | | | | |
Gina Consylman | | 145,000 | | 72,500 | |||
Halley E. Gilbert | 145,000 | 72,500 | |||||
Thomas A. McCourt | | 345,000 | | — | |||
| | | | | | | |
| Performance Metric | | | Weight | | | Performance Period | | | Threshold Goals (50% attainment) | | | Target Goals (100% attainment) | | | Stretch Goals (200% attainment) | |
| NDA Acceptance PSUs | | | 40% | | | Three-year performance period ending December 31, 2022 | | | N/A | | | Acceptance by the U.S. FDA of an NDA for IW-3718 or other internal or external development program | | | Acceptance by the U.S. FDA of two NDAs, including IW-3718 and/or other internal or external development programs | |
| Adjusted EBITDA PSUs(1) | | | 30% | | | 2020 — 2021 Cumulative Target | | | $266 million | | | $296 million | | | $355 million | |
| 2020 rTSR PSUs | | | 30% | | | Three-year performance period ending December 31, 2022 | | | rTSR at the 25th percentile compared to rTSR peer group through 2022 | | | rTSR at the 50th percentile compared to rTSR peer group through 2022 | | | rTSR at the 75th percentile compared to rTSR peer group through 2022(2) | |
In connection with the Separation in April 2019, Mr. McCourt was promoted to president and was granted an additional 45,704 stock options and 22,852 RSUs, each for shares of our Class A common stock under our 2010 Plan. The stock options have an exercise price of $11.78 per share (the closing price of our Class A common stock on the Nasdaq Global Select Market on the grant date). Subject to Mr. McCourt's continued employment with the company, the stock options will vest monthly over four years as to 1/48th of the options following the date of Mr. McCourt's promotion, and the RSUs will vest as to 25% of the RSUs on each approximate anniversary of the date they were granted.
Equity awards granted to Mr. Mallon in 2019 are described abovestatement under the captioncaptions 2019 CEO Transition CompensationExecutive Severance Agreements and Benefits in the Event of a Change of Control and Potential Payments Upon Termination or Change of Control.
Retention Grants
In December 2019, we made special retention awards of RSUs to our named executive officers, other than Mr. Mallon, which vest as to 100% of the RSUs after two years generally subject to the executives' continued employment with the company. Mses. Consylman and Gilbert received 41,150 RSUs and Mr. McCourt received 115,220 RSUs.
| Named Executive Officer | | | 2021 Cash Retention Bonus | | | 2021 Retention Grants (# of Shares of Class A common stock Subject to RSUs) | | ||||||
| Thomas McCourt | | | | $ | 286,600 | | | | | | 96,638 | | |
| Jason Rickard | | | | $ | 242,100 | | | | | | 56,372 | | |
| Michael Shetzline, M.D., Ph.D. | | | | $ | 242,000 | | | | | | 38,665 | | |
| Gina Consylman | | | | $ | 254,700(1) | | | | | | 56,372(1) | | |
2020 Equity Awardseffective July 2, 2021.
We believe that creating long-term shareholder value requires our executive team to balance their efforts on driving LINZESS growth and advancing our late-stage development programs while at the same time progressing on milestones necessary to expand future product offerings. Accordingly, our 2020 executive equity compensation program is comprised of 50% PSUs and 50% RSUs. New Hire Awards
38 Ironwood
date fair value (with PSUs measured at target),June 2021, the compensation and HR committee soughtapproved equity grants to design a 2020 executive equity compensation program that provides the appropriate combination of awards to incentivize performance, align executive interests with those of our stockholders, and encourage executive retention.
As in 2019, long-term equity incentive compensation granted in 2020 is expected to represent a majority of each named executive officer's total compensation for the year (based on the grant date fair value of equity awards, with PSU awards measured at target). We believe this emphasis on equity, and particularly performance-based equity, strongly reinforces the principle of "pay for performance," and closely ties our executives' pay outcomes to stockholder value creation.
Goals underlying 2020 PSU awards were set to be achieved over a two to three-year performance period based, in part, on our long-range operating plan. Our compensation and HR committee selected the following performance goals for our 2020 PSU awards, which we believe drive executive accountability for delivering value to our stockholders:
The 2020 PSUs use the following metrics, weighting and vesting opportunity:
Our compensation consultant, Aon, assisted our compensation and HR Committee with assessing our profile and market characteristics versus several potential benchmarks and then identifying an expanded peer group of commercial biopharmaceutical companies for purposes of the rTSR measurement goal under these PSUs. Our compensation and HR
2020 Proxy Statement 39
committee then approved the following custom, rTSR measurement peer group, which includes all of our current executive compensation peers:
40 Ironwood
In February 2020, our named executive officers were granted the following equity awards under our 2019 Equity Incentive Plan, or 2019 Plan:
Named Executive Officer | 2020 Annual PSU Grant (# of Shares of Class A common stock Subject to PSUs) (at target) | 2020 Annual RSU Grant (# of Shares of Class A common stock Subject to RSUs) | |||||
| | | | | | | |
Mark Mallon | | 221,061 | | 221,061 | |||
Gina Consylman | 68,327 | 68,327 | |||||
Halley E. Gilbert | | — | | — | |||
Thomas A. McCourt | 100,482 | 100,482 | |||||
| | | | | | | |
Equity awards granted to Messrs. Mallon andMr. McCourt, had target values based approximately on the peer group 50th percentile. Equity awards granted to Ms. Consylman were 13% above the 50th percentile in recognition of her outstanding performance in 2019. The compensation and HR committee did not make an equity award to Ms. Gilbert because she had provided noticehis appointment as the company’s permanent chief executive officer, with a grant date of her intent to resign from the company in February 2020. In addition, to facilitate the transition from stock optionsJune 7, 2021, of 104,690 RSUs that vested monthly to PSUs that are generally subject to two or three year cliff-based vesting, 2020 RSU grants to our named executive officerswill vest annually as to approximately 33%25% of the underlying shares on each approximate anniversary of the grant date.date of the award, subject to his continued employment on each vesting date, and 104,690 PSUs that will vest in accordance with the performance vesting criteria adopted and approved by the compensation and HR committee in March 2021. Please see
2021 Chief Executive Officer Transition for further information.
Other Compensation
eligible compensation and 50% of employee contributions on the next 3% of eligible compensation; or (b) 75% of the first $10,000 of employee contributions, up to $7,500.
specified repayment periods.
2020 Proxy Statement 41
Post-Employment Arrangements
In February 2020, the company entered into a consulting agreement with Ms. Gilbert under which Ms. Gilbert agreed to advise the company on various corporate development projects and governance matters. The agreement has a term of three months from the effective date, unless earlier terminated pursuant to its terms, and the company will pay Ms. Gilbert $90,000 for her services under the agreement.
Compensation of Named Executive Officers Who Transitioned to Cyclerion
Two of our 2019 named executive officers, Peter Hecht and Mark Currie, became Cyclerion employees in April 2019 in connection with the Separation. Prior to their transition from Ironwood to Cyclerion, the compensation and HR committee made decisions relating to Drs. Hecht and Currie's compensation in line with those made for the other named executive officers, including as described below under the captionCompensation Determination Process and elsewhere in thisCompensation Discussion and Analysis.
In January 2019,March 2022, our compensation and HR committee reviewed and approved a2022 base salaries for our current named executive officers for 2022, except for Mr. Emany, due to his joining the company in December 2021, and for Mr. McCourt whose base salary of $100,000 for Dr. Hecht, which amount was unchanged from his 2018 base salary. Dr. Hecht consistently declined increases in his base salary and he continued to earn the salary of $100,000 per year that he was first awarded in 1998. The compensation and HR committee alsois reviewed and approved Dr. Currie's base salary and provided him with a $15,000 increase in base salary from $485,000 to $500,000. Because they were only employedrecommended by Ironwood through March 2019, actual base salaries paid to Drs. Hecht and Currie for 2019 were $25,000 and $125,000, respectively.
In January 2019, our compensation and HR committee and approved by our board of directors. The increases in base salary for Messrs. McCourt, Minardo and Rickard and Dr. Shetzline were based on our compensation and HR committee’s determination that each executive officer achieved or exceeded substantially all of his respective individual goals for 2021. These base salary determinations also awarded 1,000,000 stock optionstook into account peer group and other market data from the competitive assessment conducted by Aon and discussed in more detail below. Base salary information for 2022 compared to Dr. Hechtbase salary information for 2021 for each of our current named executive officers, is as follows:
| Named Executive Officer | | | 2021 Base Salary | | | 2022 Base Salary | | | Increase ($) | | | Increase (%) | | ||||||||||||
| Thomas McCourt | | | | $ | 775,000 | | | | | $ | 806,000 | | | | | $ | 31,000 | | | | | | 4.0% | | |
| Sravan Emany | | | | $ | 500,000 | | | | | $ | 500,000 | | | | | $ | 0 | | | | | | 0% | | |
| John Minardo | | | | $ | 475,000 | | | | | $ | 494,000 | | | | | $ | 19,000 | | | | | | 4.0% | | |
| Jason Rickard | | | | $ | 500,000 | | | | | $ | 520,000 | | | | | $ | 20,000 | | | | | | 4.0% | | |
| Michael Shetzline, M.D., Ph.D. | | | | $ | 484,000 | | | | | $ | 513,040 | | | | | $ | 29,040 | | | | | | 6.0% | | |
Performance Metric | | | Performance Period | | | Threshold Goals (50% attainment) | | | Target Goals (100% attainment) | | | Stretch Goals (200% attainment) | |
2022 rTSR PSUs | | | Three-year performance period ending December 31, 2024 | | | rTSR at the 25th percentile compared to rTSR peer group through 2024 | | | rTSR at the 50th percentile compared to rTSR peer group through 2024 | | | rTSR at the 75th percentile compared to rTSR peer group through 2024(1) | |
| ACADIA Pharmaceuticals, Inc. | | | Intercept Pharmaceuticals, Inc. | |
| Agenus Inc. | | | Ligand Pharmaceuticals Incorporated | |
| Agios Pharmaceuticals, Inc. | | | MacroGenics, Inc. | |
| Alkermes plc | | | MannKing Corporation | |
| Amicus Therapeutics, Inc. | | | Myovant Sciences Ltd. | |
| Apellis Pharmaceuticals, Inc. | | | Neurocrine Biosciences, Inc. | |
| BioCryst Pharmaceuticals, Inc. | | | OPKO Health, Inc. | |
| Biohaven Pharmaceutical Holding Company Ltd. | | | Pacira BioSciences, Inc. | |
| bluebird bio, Inc. | | | PTC Therapeutics, Inc. | |
| Blueprint Medicines Corporation | | | Radius Health, Inc. | |
| BridgeBio Pharma, Inc. | | | Sage Therapeutics, Inc. | |
| ChemoCentryx, Inc. | | | Sarepta Therapeutics, Inc. | |
| Coherus BioSciences, Inc. | | | Sorrento Therapeutics, Inc. | |
| Corcept Therapeutics Incorporated | | | Supernus Pharmaceuticals, Inc. | |
| Dynavax Technologies Corporation | | | TG Therapeutics, Inc. | |
| Emergent BioSolutions Inc. | | | Travere Therapeutics, Inc. | |
| Exellis, Inc. | | | Ultragenyx Pharmaceutical Inc. | |
| Global Blood Therapeutics, Inc. | | | United Therapeutics Corporation | |
| Halozyme Therapeutics, Inc. | | | Vanda Pharmaceuticals Inc. | |
| Heron Therapeutics, Inc. | | | Vericel Corporation | |
| Insmed Incorporated | | | | |
For 2019, Dr. Hecht's bonus, with an individual bonus target of 50% of his base salary, was to be determined primarily based on the achievement of our corporate goals. Dr. Currie had an individual bonus target of 50% of his base salary, 70% of which was tied solely to the achievement of our corporate goals for 2019 and 30% of which was tied to the achievement of corporate and individual performance goals (though our compensation and HR committee did not assess Dr. Currie's achievement of his individual goals in 2019 because of Dr. Currie's anticipated transition to Cyclerion). Neither Dr. Hecht nor Dr. Currie received a cash bonus for 2019 performance because they were not employed by Ironwood on the date in 2020 that cash bonuses for 2019 performance were paid. Further, the Separation did not trigger payments under Drs. Hecht and Currie's respective severance agreements with the company.
In connection with the Separation, Dr. Currie joined our board of directors on April 1, 2019. Upon joining our board of directors, Dr. Currie received a restricted stock grant of 2,995 shares of our Class A common stock for his service on our board of directors between April 1, 2019 and the 2019 annual meeting of stockholders pursuantPSUs granted to our 2014 Director Compensation Plan. In May 2019, Dr. Currie then received a restricted stock grant of 22,706 shares of our Class A common stock pursuant to our 2019 Director Compensation Policy for service on our board of directors from the date of our 2019 annual meeting of stockholders to the date of our 2020 annual meeting of stockholders. Dr. Currie also received a cash retainer of $37,500 for his service on our board of directors from April 1, 2019 through December 31, 2019. Compensation for Dr. Currie's service on our board of directors in 2019 following the Separation, as well as his
42 Ironwood
compensation for services as an Ironwood employee in 2019 prior to the Separation, are included in theSummary Compensation Table, below.
Additional information on the basis for compensation decisions in 2019 relating to Drs. Hecht and Currie is available elsewhere in this proxy statement under the captionsRole of the Compensation and Human Resources Committee andRole of the Compensation Consultant: Benchmarking and Peer Group Analysis.
|
The employee matters agreement executed in connection with the Separation provided that outstanding Ironwood equity awards held by Ironwood and Cyclerion employees, including equity grants made in 2019 prior to the Separation to our 2019current named executive officers in March of 2022 were adjustedas follows:
| Named Executive Officer | | | 2022 Annual PSU Grant (# of Shares of Class A common stock Subject to PSUs) (at target) | | | 2022 Annual RSU Grant (# of Shares of Class A common stock Subject to RSUs) | | ||||||
| Thomas McCourt | | | | | 248,868 | | | | | | 248,869 | | |
| Sravan Emany* | | | | | 0 | | | | | | 0 | | |
| John Minardo | | | | | 67,873 | | | | | | 67,873 | | |
| Jason Rickard | | | | | 90,497 | | | | | | 90,498 | | |
| Michael Shetzline, M.D., Ph.D. | | | | | 81,447 | | | | | | 81,448 | | |
Basket Approach
Following the distribution, the number of shares underlying converted Cyclerion equity awards (whether held by Ironwood or Cyclerion employees) was determined according to a fixed ratio of one share of Cyclerion common stock for every 10 shares of Ironwood Class A common stock. The exercise price associated with converted Cyclerion equity awards (whether held by Ironwood or Cyclerion employees) was determined according to formulas based on the 10 day volume weighted average trading price of Ironwood Class A common stock for the 10 days immediately preceding the distribution and the purchase price of $175.0 million for Cyclerion common stock paid in a private placement Cyclerion executed in connection with the distribution.
Concentration Approach
Following the distribution, the number of shares underlying converted Cyclerion equity awards and any associated exercise prices was determined according to formulas based on the 10 day volume weighted average trading price of Ironwood Class A common stock for the 10 days immediately preceding the distribution and the purchase price of Cyclerion common stock paid in the private placement referenced above.
2020 Proxy Statement 43
The following table contains a summary of the treatment of each type of Ironwood equity award in the Separation:
Each Ironwood equity award that was converted into a Cyclerion equity award is subject to substantially the same terms and vesting conditions as were applicable to the Ironwood equity awards prior to the distribution. Please seeOutstanding Equity Awards at Fiscal Year-End—Ironwood Equity Awards at Fiscal Year-End andOutstanding Equity Awards at Fiscal Year-End—Cyclerion Equity Awards at Fiscal Year-End for detailed information on the impact of the Separation on the equity awards held by our 2019 named executive officers, including equity grants made in 2019 prior to the Separation.
|
Our Values and Goals
culture and values.
2020 Proxy Statement 45
Our
Early each year, our compensation and HR committee finalizes its assessment of our corporate performance for the prior year. Upon completion of such goal assessment, our bonus and equity pools are calibrated for corporate performance and approved by our compensation and HR committee. Our compensation and HR committee assigns a portion of each of these pools to all of our employees other than our executive officers, and delegates the allocation of these portions to our chief executive officer and our chief financial officer. Our compensation and HR committee also approves any salary increase, cash bonus and equity awards for our chief executive officer and, in consultation with our chief executive officer, for each of our other executive officers. In making these compensation-related decisions for 2019 performance, our compensation and HR committee considered the competitive assessment prepared by Pearl Meyer, and described in more detail below, as well as the other factors described in thisCompensation Discussion and Analysis.
factors. Additionally, our compensation and HR committee or board (in the case of the determinations relating to chief executive officer compensation) may recommend or decide, as appropriate, to modify the mix or amount of base salary, bonus, and long-term incentives to best fit an executive officer'sofficer’s specific circumstances or, if requiredwarranted by competitive market conditions, to attract, retain and motivate skilled personnel. For example, our compensation and HR committee may recommend or decide, and our board may decide with respect to our chief executive officer, to grant retention or additional equity awards to an executive officer if that executive officer receives a base salary or cash bonus award significantly below that of his or her counterparts in our peer group, despite successful attainment of our corporate goals or his or her individual goals. We believe that this discretion and flexibility allows our compensation and HR committee and board (in the case of determinations of our chief executive officer’s compensation) to better achieve our compensation objectives.
46 Ironwood
2020 Proxy Statement 47
In assisting ourexecutive compensation and HR committee in setting 2019 compensation, Pearl Meyer also presented proxy data from the Radford Global Life Sciences Survey, which was comprised of companies that represent a broader market perspective and similar employee population to us, and a Market Composite, which combined the peer group data and Radford Global Life Sciences Survey data by weighting each source equally. Although this competitive assessment was not used to mandate any specific compensation decisions, our compensation and HR committee considered the results of this assessment when making base salary, cash bonus and long-term equity incentive award determinations with respect to our named executive officers in early 2019.
group. Our peer group is reviewed at least annually by our compensation and HR committee. In setting our peer group, our compensation and HR committee applies a qualitative lens to help focus the potential group on the companies with which we are competing for talent. Our compensation and HR committee first identifies a potential pool of peer companies from a number of sources, including the companies listing Ironwood in their peer groups and the other companies listed in such peer companies'companies’ peer groups, as well as companies included in third-partythird party peer group assessments. Our compensation and HR committee then considers certain size filters including market capitalization, revenue, and number of employees, as well as certain business model filters including commercial focus, and growth.
The peer group that Aon proposed and that the compensation and HR committee used as a reference point in connection with 2021 compensation decisions is composed of the following 17 companies, which at the time they were designated as our peer group had a median market capitalization of approximately $3.1 billion, median revenue of approximately $260 million, a median of 536 employees, and a commercial drug or drug candidate in later stage development:
| ACADIA Pharmaceuticals, Inc. | | | Halozyme Therapeutics, Inc. | |
| Agios Pharmaceuticals, Inc. | | | Horizon Therapeutics plc | |
| Akcea Therapeutics, Inc. | | | Intercept Pharmaceuticals, Inc. | |
| Alkermes plc | | | Pacira BioSciences, Inc. | |
| Amicus Therapeutics, Inc. | | | PTC Therapeutics, Inc. | |
| bluebird bio, Inc. | | | Radius Health, Inc. | |
| Blueprint Medicines Corporation | | | Supernus Pharmaceuticals, Inc. | |
| Coherus BioSciences, Inc. | | | United Therapeutics Corporation | |
| Corcept Therapeutics Incorporated | | | | |
| |||||
ACADIA Pharmaceuticals, Inc. | | | Halozyme Therapeutics, Inc. | | |
| Agios Pharmaceuticals, Inc. | | |||
| Intercept Pharmaceuticals, Inc. | | |||
| Alkermes plc | | | Ligand Pharmaceuticals, Inc. | |
| Amicus Therapeutics, Inc. | | | Pacira BioSciences, Inc. | |
bluebird bio, Inc. | | | PTC Therapeutics, Inc. | | |
Blueprint Medicines Corporation | | | Radius Health, Inc. | | |
Coherus BioSciences, Inc. | | | Supernus Pharmaceuticals, Inc. | | |
Corcept Therapeutics Incorporated | |||||
| | Vanda Pharmaceuticals, Inc. | |
2021.
48 Ironwood
20202022 Proxy Statement 4953
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| | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position* | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Mark Mallon | | 2019 | | 750,000 | | 880,000 | (5) | | 3,692,810 | (6) | | 3,804,331 | (7) | | 797,063 | | 144,596 | | 10,068,800 | ||||||
Chief Executive Officer | | 2018 | | — | | — | | — | | — | | — | | — | | — | |||||||||
| | 2017 | | — | | — | | — | | — | | — | | — | | — | |||||||||
Gina Consylman | 2019 | 480,000 | 250,000 | (8) | 1,467,731 | (9) | 888,546 | 358,800 | 8,502 | 3,453,579 | |||||||||||||||
Chief Financial Officer and | 2018 | 415,000 | — | 782,385 | 501,764 | 207,500 | 8,040 | 1,914,688 | |||||||||||||||||
Senior Vice President | 2017 | 334,263 | — | 440,213 | — | 185,000 | 8,040 | 967,516 | |||||||||||||||||
Halley E. Gilbert | | 2019 | | 480,000 | | 250,000 | (8) | | 1,467,731 | (9) | | 888,546 | | 340,080 | | 8,502 | | 3,434,859 | |||||||
Former Chief Administrative Officer and | | 2018 | | 460,000 | | — | | 740,610 | | 463,722 | | 230,000 | | 33,425 | | 1,927,757 | |||||||||
Senior Vice President, Corporate Development | | 2017 | | 440,000 | | | | 670,800 | | 619,728 | | 195,000 | | 8,040 | | 1,933,568 | |||||||||
Thomas A. McCourt | 2019 | 511,250 | (10) | — | 1,760,143 | (11) | 2,370,159 | 454,272 | 8,502 | 5,104,326 | |||||||||||||||
President | 2018 | 465,000 | — | 549,641 | 869,479 | 232,500 | 34,002 | 2,150,622 | |||||||||||||||||
2017 | 450,000 | — | 440,212 | 1,220,089 | 191,000 | 8,040 | 2,309,341 | ||||||||||||||||||
Peter M. Hecht, Ph.D. | | 2019 | | 25,000 | (12) | | — | | — | | 6,127,900 | | — | | 6,589 | | 6,159,489 | ||||||||
Former Chief Executive Officer | | 2018 | | 100,000 | | 1,192,500 | | — | | 3,842,268 | | — | | 25,348 | | 5,160,116 | |||||||||
| | 2017 | | 100,000 | | — | | — | | 5,887,416 | | — | | 8,040 | | 5,995,456 | |||||||||
Mark G. Currie, Ph.D. | 2019 | 125,000 | (13) | — | 286,306 | (14) | 3,676,740 | — | 44,088 | 4,132,134 | |||||||||||||||
Former Senior Vice President, | 2018 | 485,000 | — | 231,360 | 1,424,289 | 242,500 | 62,271 | 2,445,420 | |||||||||||||||||
Chief Scientific Officer and President of R&D | 2017 | 470,000 | — | — | 1,936,650 | 210,000 | 8,040 | 2,624,690 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
* Mr. Mallon joinedas applicable (or such shorter period of the company in 2019. Ms. Gilbert was a named executive officer in 2017 but was not a named executive officer in 2018. Ms. Gilbertofficer’s service).
| Name and Principal Position* | | | Year | | | Salary ($)(1) | | | Bonus ($) | | | Stock Awards ($)(2) | | | Option Awards ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | | ||||||||||||||||||||||||
| Thomas McCourt Chief Executive Officer | | | | | 2021 | | | | | | 732,053 | | | | | | 143,300(5) | | | | | | 7,236,498(7) | | | | | | — | | | | | | 680,063 | | | | | | 18,090 | | | | | | 8,810,004 | | |
| | | 2020 | | | | | | 576,120 | | | | | | — | | | | | | 2,465,327 | | | | | | — | | | | | | 357,409 | | | | | | 11,040 | | | | | | 3,409,896 | | | |||
| | | 2019 | | | | | | 511,250 | | | | | | — | | | | | | 1,760,143 | | | | | | 2,370,159 | | | | | | 454,272 | | | | | | 8,502 | | | | | | 5,104,327 | | | |||
| Sravan Emany Senior Vice President, Chief Financial Officer | | | | | 2021 | | | | | | 28,846 | | | | | | 200,000(6) | | | | | | 2,300,100(8) | | | | | | — | | | | | | — | | | | | | 46 | | | | | | 2,528,992 | | |
| | | 2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| | | 2019 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| John Minardo Senior Vice President, Chief Legal Officer and Secretary | | | | | 2021 | | | | | | 191,827 | | | | | | 250,000(6) | | | | | | 2,595,002(9) | | | | | | — | | | | | | 105,037 | | | | | | 6,427 | | | | | | 3,148,293 | | |
| | | 2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| | | 2019 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| Jason Rickard Senior Vice President, Chief Operating Officer | | | | | 2021 | | | | | | 492,589 | | | | | | 121,050(5) | | | | | | 2,519,901(10) | | | | | | — | | | | | | 327,600 | | | | | | 18,090 | | | | | | 3,479,230 | | |
| | | 2020 | | | | | | 473,314 | | | | | | — | | | | | | 1,479,191 | | | | | | — | | | | | | 258,338 | | | | | | 11,040 | | | | | | 2,221,883 | | | |||
| | | 2019 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| Michael Shetzline Senior Vice President, Chief Medical Officer, and Head of Research and Drug Development | | | | | 2021 | | | | | | 483,447 | | | | | | 121,000(5) | | | | | | 1,727,931(11) | | | | | | — | | | | | | 285,405 | | | | | | 18,090 | | | | | | 2,635,873 | | |
| | | 2020 | | | | | | 464,681 | | | | | | 100,000 | | | | | | 1,121,001 | | | | | | — | | | | | | 194,588 | | | | | | 11,040 | | | | | | 1,891,310 | | | |||
| | | 2019 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| Mark Mallon Former Chief Executive Officer | | | | | 2021 | | | | | | 163,413 | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,163 | | | | | | 170,576 | | |
| | | 2020 | | | | | | 801,173 | | | | | | | | | | | | 5,423,731 | | | | | | — | | | | | | 585,169 | | | | | | 11,040 | | | | | | 6,821,113 | | | |||
| | | 2019 | | | | | | 750,000 | | | | | | 880,000 | | | | | | 3,692,810 | | | | | | 3,804,331 | | | | | | 797,063 | | | | | | 144,596 | | | | | | 10,068,800 | | | |||
| Gina Consylman Former Senior Vice President, Chief Financial Officer | | | | | 2021 | | | | | | 264,265 | | | | | | (5) | | | | | | 2,519,901(12) | | | | | | — | | | | | | — | | | | | | 8,714 | | | | | | 2,792,880 | | |
| | | 2020 | | | | | | 512,751 | | | | | | | | | | | | 1,676,402 | | | | | | — | | | | | | 264,652 | | | | | | 11,040 | | | | | | 2,464,845 | | | |||
| | | 2019 | | | | | | 480,000 | | | | | | 250,000 | | | | | | 1,467,731 | | | | | | 888,546 | | | | | | 358,800 | | | | | | 8,502 | | | | | | 3,453,579 | | |
2021 and 2020, respectively (as opposed to annual base salary rates). Fiscal year 2020 included one more pay date than fiscal years 2021 and 2019.
(2) Unless otherwise noted, reflects the fair value2021 is as follows: $2,221,737 for Ms. Consylman, $7,129,448 for Mr. McCourt, $2,697,000 for Mr. Emany, $3,069,671 for Mr. Minardo, $2,221,737 for Mr. Rickard, and $1,523,478 for Dr. Shetzline. Mr. Mallon and Ms. Consylman forfeited their unvested RSU, PSU and stock option awards upon each individual voluntary termination of stock options awarded in January 2019 in connection with annual equity awards.
their employment effective March 12, 2021 and July 2, 2021, respectively.
(5) continued employment. Ms. Consylman forfeited her cash retention award totaling $254,700 upon her voluntary termination effective July 2, 2021.
(6) December 2021.
(7) Includes theaggregate grant date fair value of (a) 171,526 stock options84,951 RSUs and 84,541 PSUs awarded to Mr. MallonRickard in January 2019 in connection with the commencement of his employment in January 2019February 2021 and (b) 423,049 stock options awarded to Mr. Mallon in April 2019 in connection with his promotion to chief executive officer upon completion of the Separation.
50 Ironwood
(8) Reflects a special bonus awarded to Ms. Consylman and Ms. Gilbert in May 2019 in recognition of their significant contributions to and performance in connection with the Separation, and with respect to Ms. Gilbert, her expanded role overseeing our corporate development function.
(9) Includes the fair value of (a) 72,500 RSUs awarded to each of Ms. Consylman and Ms. Gilbert in January 2019March 2021, respectively, in connection with annual equity awards and (b) 41,15056,372 RSUs awarded to each of Ms. Consylman and Ms. GilbertMr. Rickard in December 2019March 2021 in connection with a retention award as a special retention award.
(10) Reflects Mr. McCourt's pro-rated salary of $485,000 fordescribed elsewhere in this proxy statement under the period January 1, 2019 through March 31, 2019 during which time he served as our senior vice president, marketing and sales, and chief commercial officer, and his pro-rated salary of $520,000 forcaption 2021 Retention Awards.
(11) Includes theaggregate grant date fair value of (a) 22,85258,252 RSUs and 57,971 PSUs awarded to Dr. Shetzline in February 2021 and March 2021, respectively, in connection with annual equity awards and (b) 38,655 RSUs awarded to Mr. McCourtDr. Shetzline in May 2019March 2021 in connection with his promotion to president and (b) 115,220 RSUs awarded to Mr. McCourta retention award as described elsewhere in December 2019 as a special retention award.
(12) Reflectsthis proxy statement under the pro-rated portion of Dr. Hecht's $100,000 annual salary, which was paid forcaption
(13) Reflects the pro-rated portion of Dr. Currie's $500,000 annual salary, which was paid for the period January 1, 2019 through March 31, 2019, during which he served as our senior vice president, chief scientific officer and president of R&D.
(14) Includes theaggregate grant date fair value of (a) 2,995 RSAs84,951 RSUs and 84,541 PSUs awarded to Dr. CurrieMs. Consylman in April 2019February 2021 and March 2021, respectively, in connection with his service on our board of directors between April 1, 2019 and the 2019 annual meeting of stockholdersequity awards and (b) 22,706 RSAs56,372 RSUs awarded to Dr. CurrieMs. Consylman in May 2019March 2021 in connection with his service on our boardthe retention awards as described elsewhere in this proxy statement under the caption
2021, respectively.
Information presented in this table relating to grants made prior to the date of the Separation has not been adjusted for the impact of the Separation. For information on the impact of the Separation on grants made prior to the date of the Separation, please refer to the footnotes that follow this table. For additional information on adjustments made to
| Name | | | Grant Date | | | Compensation and HR Committee Approval Date (if different than Grant Date) | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) Target ($) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2)(#) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | | | Grant Date Fair Value of Stock Awards ($)(4) | | ||||||||||||||||||||||||||||||
| Threshold | | | Target | | | Maximum | | ||||||||||||||||||||||||||||||||||||||||||
| Thomas McCourt | | | | | 2/22/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 145,631 | | | | | $ | 1,363,106 | | |
| | | 3/26/2021 | | | | | | — | | | | | | — | | | | | | 72,464 | | | | | | 144,927 | | | | | | 289,854 | | | | | | — | | | | | $ | 1,904,341 | | | |||
| | | 3/26/2021(5) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 96,638 | | | | | $ | 1,052,388 | | | |||
| | | 6/7/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 104,690 | | | | | $ | 1,256,280 | | | |||
| | | 6/7/2021 | | | | | | — | | | | | | | | | | | | 52,345 | | | | | | 104,690 | | | | | | 209,380 | | | | | | — | | | | | $ | 1,660,383 | | | |||
| | | — | | | | | | — | | | | | | 581,250 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| Sravan Emany | | | | | 12/2/2021(6) | | | | | | 11/24/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 85,000 | | | | | $ | 951,150 | | |
| | | 12/2/2021(6) | | | | | | 11/24/2021 | | | | | | — | | | | | | 42,500 | | | | | | 85,000 | | | | | | 170,000 | | | | | | — | | | | | $ | 1,348,950 | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| John Minardo | | | | | 8/2/2021(7) | | | | | | 7/20/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 79,892 | | | | | $ | 1,060,167 | | |
| | | 8/2/2021(7) | | | | | | 7/20/2021 | | | | | | — | | | | | | 39,991 | | | | | | 79,981 | | | | | | 159,962 | | | | | | — | | | | | $ | 1,534,835 | | | |||
| | | — | | | | | | — | | | | | | 89,014 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| Jason Rickard | | | | | 2/22/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 84,951 | | | | | $ | 795,141 | | |
| | | 3/26/2021 | | | | | | — | | | | | | — | | | | | | 42,271 | | | | | | 84,541 | | | | | | 169,082 | | | | | | — | | | | | $ | 1,110,869 | | | |||
| | | 3/26/2021(5) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 56,372 | | | | | $ | 613,891 | | | |||
| | | | | | — | | | | | | — | | | | | | 250,000 | | | | | | — | | | | | | | | | | | | | | | | | | — | | | | | | — | | |
| Michael Shetzline | | | | | 2/22/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 58,252 | | | | | $ | 545,239 | | |
| | | 3/26/2021 | | | | | | — | | | | | | — | | | | | | 28,986 | | | | | | 57,971 | | | | | | 115,942 | | | | | | — | | | | | $ | 761,739 | | | |||
| | | 3/26/2021(5) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 38,655 | | | | | $ | 420,953 | | | |||
| | | — | | | | | | — | | | | | | 193,600 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||
| Gina Consylman | | | | | 2/22/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 84,951 | | | | | $ | 795,141 | | |
| | | 3/26/2021 | | | | | | — | | | | | | — | | | | | | 42,271 | | | | | | 84,541 | | | | | | 169,082 | | | | | | — | | | | | $ | 1,110,869 | | | |||
| | | 3/26/2021(5) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 56,372 | | | | | $ | 613,891 | | | |||
| | | — | | | | | | — | | | | | | 254,700 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
outstanding equity awards in connection with the Separation, please seeCompensation Discussion and Analysis—Equity Impact of the Separation, elsewhere in this proxy statement.
| | | | | | | | | | | | | | | | | | | | | | |
Name | Grant Date | Compensation and HR Committee Approval Date (if different than Grant Date) | Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) Target ($) | All Other Stock Awards: Number of Shares of Stock or Units (#)* | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(2) | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
Mark Mallon | | 1/9/2019 | (3) | | 1/3/2019 | | — | | 93,036 | (4) | | — | | — | | 1,146,204 | ||||||
| | 1/9/2019 | (3) | | 1/3/2019 | | — | | — | | 171,526 | (5) | | 12.32 | | 999,516 | ||||||
| | 4/1/2019 | (6) | | 3/29/2019 | | — | | 206,873 | | — | | — | | 2,546,607 | |||||||
| | 4/1/2019 | (6) | | 3/29/2019 | | — | | — | | 423,049 | | 14.02 | | 2,804,815 | |||||||
| | — | | — | | 562,500 | | — | | — | | — | | — | ||||||||
Gina Consylman | 1/29/2019 | 1/22/2019 | — | 72,500 | (7) | — | — | 935,250 | ||||||||||||||
1/29/2019 | 1/22/2019 | — | — | 145,000 | (8) | 12.90 | 888,546 | |||||||||||||||
12/16/2019 | (9) | 12/16/2019 | — | 41,150 | — | — | 532,481 | |||||||||||||||
— | — | 240,000 | — | — | — | — | ||||||||||||||||
Halley E. Gilbert | | 1/29/2019 | | 1/22/2019 | | — | | 72,500 | (7) | | — | | — | | 935,250 | |||||||
| | 1/29/2019 | | 1/22/2019 | | — | | — | | 145,000 | (8) | | 12.90 | | 888,546 | |||||||
| | 12/16/2019 | (9) | | 12/16/2019 | | — | | 41,150 | | — | | — | | 532,481 | |||||||
| | — | | — | | 240,000 | | — | | — | | — | | — | ||||||||
Thomas A. McCourt | 1/29/2019 | 1/22/2019 | — | — | 345,000 | (10) | 12.90 | 2,114,126 | ||||||||||||||
5/1/2019 | (11) | — | — | 22,852 | — | — | 269,197 | |||||||||||||||
5/1/2019 | (11) | — | — | — | 45,704 | 11.78 | 256,034 | |||||||||||||||
12/16/2019 | (9) | 12/16/2019 | — | 115,220 | — | — | 1,490,947 | |||||||||||||||
— | — | 312,000 | — | — | — | — | ||||||||||||||||
Peter M. Hecht, Ph.D | | 1/29/2019 | | 1/22/2019 | | — | | | | 1,000,000 | (12) | | 12.90 | | 6,127,900 | |||||||
| | — | | — | | 50,000 | | — | | — | | — | | — | ||||||||
Mark G. Currie, Ph.D | 1/29/2019 | 1/22/2019 | — | — | 600,000 | (13) | 12.90 | 3,676,740 | ||||||||||||||
4/1/2019 | — | — | 2,995 | (14) | — | — | 41,990 | |||||||||||||||
5/29/2019 | — | — | 22,706 | (14) | — | — | 244,317 | |||||||||||||||
— | — | 250,000 | — | — | — | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
* Unless otherwise noted, all stock awards listed in the "All Other Stock Awards: Number of Shares of Stock or Units (#)" column are RSUs.
(1) Consists of the target cash bonus paymentamount for 20192021 performance under our cash bonus program. As described in more detail elsewhere in this proxy statement under the caption2021 Cash Bonus, in 2019,2021, Mr. MallonMcCourt had an individual bonus target percentage of 75% of his base salary (which percentage was increased from 60% in connection with his appointment as chief executive officer in June 2021), Mr. Minardo had an individual bonus target percentage of 45% of his base salary (prorated for the portion of the year that he was employed), Mr. Rickard had an individual bonus target percentage of 50% of his base salary, and Dr. Shetzline had an individual bonus target percentage of 40% of his base salary. However, for the purpose of determining Dr. Shetzline’s 2021 bonus in March 2022, our compensation and HR committee used a bonus target percentage of 45%, as discussed elsewhere in the proxy statement under the caption Annual Cash Incentive Program for 2021 Performance. Mr. Emany was not eligible for a target cash bonus payment due to the substantial completion of fiscal year 2021 when he joined Ironwood in December 2021. 70% of which wasbonuses awarded for performance in 2021 were tied solely to the achievement of our corporate goals for 2019 (which was not determined as of December 31, 2019)2021, and 30% of which wasbonuses awarded were tied to the achievement of corporate and individual performance goals (the range of which was not determined as of December 31, 2019).goals. In determining
Dr. Hecht's bonus, with an individual bonus
Stock or Units (#)” column are RSUs.
TableReflects RSUs awarded to each of Contents
(3) AwardedReflects RSUs and PSUs awarded to Mr. MallonEmany in connection with his joining the companyappointment as senior vice president, chief financial officer in January 2019.
(4) As of the date of the Separation, 93,036December 2021.
(5) As of the date of the Separation, no stock options were vested and 171,526 stock options were unvested. Unvested stock options held as of the date of the Separation were converted into 192,729 unvested Ironwood stock options with an exercise price of $10.97.
(6) AwardedPSUs awarded to Mr. MallonMinardo in connection with his becomingappointment as senior vice president, chief executivelegal officer in connection with the Separation in April 2019.
(7) As of the date of the Separation, 72,500 RSUs were unvested. Unvested RSUs held as of the date of the Separation were converted into 81,462 unvested Ironwood RSUs.
(8) As of the date of the Separation, 9,062 stock options were vested and 135,938 stock options were unvested. Vested stock options held as of the date of the Separation were converted into 9,062 vested Ironwood stock options with an exercise price of $11.49 and 906 vested Cyclerion stock options with an exercise price of $14.21. Unvested stock options held as of the date of the Separation were converted into 152,742 unvested Ironwood stock options with an exercise price of $11.49.
(9) Awarded as a special RSU retention award in December 2019.
(10) As of the date of the Separation, 21,562 stock options were vested and 323,438 stock options were unvested. Vested stock options held as of the date of the Separation were converted into 21,562 vested Ironwood stock options with an exercise price of $11.49 and 2,156 vested Cyclerion stock options with an exercise price of $14.21. Unvested stock options held as of the date of the Separation were converted into 363,420 unvested Ironwood stock options with an exercise price of $11.49.
(11) Awarded to Mr. McCourt in connection with his promotion to president in April 2019.
(12) As of the date of the Separation, 62,500 stock options were vested and 937,500 stock options were unvested. Vested stock options held as of the date of the Separation were converted into 62,500 vested Ironwood stock options with an exercise price of $11.49 and 6,250 vested Cyclerion stock options with an exercise price of $14.21. Unvested stock options held as of the date of the Separation were converted into 851,580 unvested Cyclerion stock options with an exercise price of $14.21.
(13) As of the date of the Separation, 37,500 stock options were vested and 562,500 stock options were unvested. Vested stock options held as of the date of the Separation were converted into 37,500 Ironwood stock options with an exercise price of $11.49 and 3,750 Cyclerion stock options with an exercise price of $14.21. Unvested stock options held as of the date of the Separation were converted into 510,948 unvested Cyclerion stock options with an exercise price of $14.21.
(14) Reflects RSAs received as compensation for service on our board of directors.
| | | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||||||||
| Name | | | Number of Securities Underlying Unexercised Options Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares of Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | |||||||||||||||||||||||||||
| Thomas McCourt | | | | | 95,971 | | | | | | — | | | | | | — | | | | | | 13.11 | | | | | | 2/1/2022(2) | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 110,962 | | | | | | — | | | | | | — | | | | | | 11.65 | | | | | | 2/1/2023(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 80,504 | | | | | | — | | | | | | — | | | | | | 12.56 | | | | | | 3/3/2024(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 97,500 | | | | | | — | | | | | | — | | | | | | 13.91 | | | | | | 3/16/2025(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 179,056 | | | | | | — | | | | | | — | | | | | | 9.12 | | | | | | 3/1/2026(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 166,018 | | | | | | — | | | | | | — | | | | | | 14.93 | | | | | | 2/27/2027(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 139,331 | | | | | | 3,073 | | | | | | — | | | | | | 12.95 | | | | | | 2/21/2028(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 279,994 | | | | | | 104,988 | | | | | | — | | | | | | 11.49 | | | | | | 1/29/2029(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 29,517 | | | | | | 16,187 | | | | | | — | | | | | | 11.78 | | | | | | 5/1/2029(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 96,638(4) | | | | | | 1,126,799 | | | | | | — | | | | | | — | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 66,988(5) | | | | | | 781,080 | | | | | | — | | | | | | — | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 267,890(6) | | | | | | 3,123,597 | | | | | | — | | | | | | — | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 60,290(7) | | | | | | 702,981 | | | | | | 30,145(8) | | | | | | 351,491 | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 249,617(9) | | | | | | 2,910,534 | | | |||
| Sravan Emany | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 85,000(6) | | | | | | 991,100 | | | | | | — | | | | | | — | | |
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 85,000(9) | | | | | | 991,100 | | | |||
| John Minardo | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 79,892(6) | | | | | | 931,541 | | | | | | — | | | | | | — | | |
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 79,981(9) | | | | | | 932,578 | | | |||
| Jason Rickard | | | | | 18,041 | | | | | | — | | | | | | — | | | | | | 11.65 | | | | | | 2/1/2023(3) | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 7,754 | | | | | | — | | | | | | — | | | | | | 11.76 | | | | | | 6/10/2023(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 10,309 | | | | | | — | | | | | | — | | | | | | 9.66 | | | | | | 12/16/2023(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 40,834 | | | | | | — | | | | | | — | | | | | | 12.02 | | | | | | 11/3/2024(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | — | | | | | | — | | | | | | 11,236 | | | | | | 13.11 | | | | | | 2/1/2022(10) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 2,000 | | | | | | — | | | | | | — | | | | | | 13.11 | | | | | | 2/1/2022(11) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 15,550 | | | | | | — | | | | | | — | | | | | | 13.91 | | | | | | 3/16/2025(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 6,046 | | | | | | — | | | | | | — | | | | | | 9.79 | | | | | | 9/1/2025(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 17,956 | | | | | | — | | | | | | — | | | | | | 9.12 | | | | | | 3/1/2026(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 60,462 | | | | | | 22,671 | | | | | | — | | | | | | 11.49 | | | | | | 1/29/2029(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | 8,854 | | | | | | 4,857 | | | | | | — | | | | | | 11.78 | | | | | | 5/1/2029(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 56,372(4) | | | | | | 657,298 | | | | | | — | | | | | | — | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,193(5) | | | | | | 468,650 | | | | | | — | | | | | | — | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 116,958(6) | | | | | | 1,363,730 | | | | | | — | | | | | | — | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 36,174(7) | | | | | | 421,789 | | | | | | 18,087(8) | | | | | | 170,971 | | | |||
| | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 84,541(9) | | | | | | 985,748 | | |
| | | | | | | | | | | | | | | | | | | |
Option Awards | Stock Awards | ||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | |||||||||||||
| | | | | | | | | | | | | | | | | | | |
Mark Mallon | | — | | 192,729 | | 10.97 | | 1/9/2029 | (3) | | | | | ||||||
| | — | | 423,049 | | 14.02 | | 4/1/2029 | (3) | | | | | ||||||
| | — | | — | | | | | | 311,409 | | 4,144,854 | |||||||
Gina Consylman | 43,563 | — | 13.78 | 7/1/2024 | (3) | ||||||||||||||
8,500 | — | 13.91 | 3/16/2025 | (4) | |||||||||||||||
5,077 | — | 10.20 | 9/16/2025 | (4) | |||||||||||||||
29,993 | 702 | 9.12 | 3/1/2026 | (4) | |||||||||||||||
8,161 | 8,075 | 13.60 | 1/2/2028 | (4) | |||||||||||||||
29,986 | 35,113 | 12.95 | 2/21/2028 | (4) | |||||||||||||||
36,216 | 125,588 | 11.49 | 1/29/2029 | (4) | |||||||||||||||
— | — | — | — | 174,014 | (6) | 2,316,126 | |||||||||||||
Halley E. Gilbert | | 60,000 | | — | | 10.02 | | 2/2/2020 | (5) | | | | | ||||||
| | 60,000 | | — | | 9.89 | | 2/1/2021 | (5) | | | | | ||||||
| | 30,000 | | — | | 10.53 | | 12/12/2021 | (5) | | | | | ||||||
| | 45,000 | | — | | 13.11 | | 2/1/2022 | (5) | | | | | ||||||
| | 30,000 | | — | | 11.65 | | 2/1/2023 | (5) | | | | | ||||||
| | 25,000 | | — | | 10.25 | | 12/2/2023 | (5) | | | | | ||||||
| | 65,000 | | — | | 12.56 | | 3/3/2024 | (4) | | | | | ||||||
| | 57,500 | | — | | 13.91 | | 3/16/2025 | (4) | | | | | ||||||
| | 64,984 | | 1,522 | | 9.12 | | 3/1/2026 | (4) | | | | | ||||||
| | 59,982 | | 24,344 | | 14.93 | | 2/27/2027 | (4) | | | | | ||||||
| | 34,986 | | 40,963 | | 12.95 | | 2/21/2028 | (4) | | | | | ||||||
| | 36,216 | | 125,588 | | 11.49 | | 1/29/2029 | (4) | | | | | ||||||
| | — | | — | | — | | — | | 183,707 | (7) | | 2,445,140 | ||||||
Thomas A. McCourt | 20,000 | — | 10.02 | 2/2/2020 | (5) | ||||||||||||||
99,988 | — | 9.89 | 2/1/2021 | (5) | |||||||||||||||
95,971 | — | 13.11 | 2/1/2022 | (5) | |||||||||||||||
110,962 | — | 11.65 | 2/1/2023 | (5) | |||||||||||||||
80,504 | — | 12.56 | 3/3/2024 | (4) | |||||||||||||||
97,500 | — | 13.91 | 3/16/2025 | (4) | |||||||||||||||
174,959 | 4,097 | 9.12 | 3/1/2026 | (4) | |||||||||||||||
118,089 | 47,929 | 14.93 | 2/27/2027 | (4) | |||||||||||||||
65,595 | 76,809 | 12.95 | 2/21/2028 | (4) | |||||||||||||||
86,170 | 298,812 | 11.49 | 1/29/2029 | (4) | |||||||||||||||
6,665 | 39,039 | 11.78 | 5/1/2029 | (4) | |||||||||||||||
— | — | — | — | 171,252 | (8) | 2,279,364 |
54 Ironwood
| | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Peter M. Hecht, Ph.D. | | 125,000 | | — | | 10.02 | | 2/2/2020 | (5) | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | 130,980 | | — | | 9.89 | | 2/1/2021 | (5) | | | | | | | Option Awards | | | Stock Awards | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | 292,467 | | — | | 13.11 | | 2/1/2022 | (5) | | | | | Name | | Number of Securities Underlying Unexercised Options Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares of Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | ||||||||||||||||||||||||||||||||||||||||||
| | 367,355 | | — | | 11.65 | | 2/1/2023 | (5) | | | | | Michael Shetzline, M.D., Ph.D. | | | | | 67,592 | | | | | 25,106 | | | | | — | | | | | 13.19 | | | | | 3/1/ 2029(12) | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
| | 318,229 | | — | | 12.56 | | 3/3/2024 | (4) | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 38,655(4) | | | | | 450,717 | | | | | — | | | | | — | | | ||||||||||||||||
| | 565,000 | | — | | 13.91 | | 3/16/2025 | (4) | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 32,583(5) | | | | | 379,918 | | | | | — | | | | | — | | | ||||||||||||||||
| | 723,125 | | — | | 9.12 | | 3/1/2026 | (4) | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 65,976(6) | | | | | 769,280 | | | | | — | | | | | — | | | ||||||||||||||||
| | 427,500 | | — | | 14.93 | | 2/27/2027 | (4) | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 29,326(7) | | | | | 341,941 | | | | | 14,663(8) | | | | | 170,971 | | | ||||||||||||||||
| | 181,250 | | — | | 12.95 | | 2/21/2028 | (4) | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 57,971(9) | | | | | 675,942 | | | ||||||||||||||||
| | 62,500 | | — | | 11.49 | | 1/29/2029 | (5) | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | — | | — | | — | | — | | — | | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark G. Currie, Ph.D. | 8,888 | — | 10.02 | 2/2/2020 | (5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
101,971 | — | 13.11 | 2/1/2022 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
190,383 | — | 11.65 | 2/1/2023 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
83,229 | — | 12.56 | 3/3/2024 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
131,250 | — | 13.91 | 3/16/2025 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
25,000 | — | 13.91 | 3/16/2025 | (9) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
107,707 | — | 9.12 | 3/1/2026 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
140,625 | — | 14.93 | 2/27/2027 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
67,187 | — | 12.95 | 2/21/2028 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
37,500 | — | 11.49 | 1/29/2029 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 22,706 | (10) | 302,217 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | |
(1) Unless otherwise indicated, awards in this column reflect RSUs that vest over four years as to 25% of the award on each approximate anniversary of the grant thereof.
(2)
$11.66.
(4) The options vest as to 1/48th of the shares on each monthly anniversary of the vesting commencement date, generally subject to the executive's continued employment with the company on the applicable vesting date, until fully vested.
(5) The options vest as to 1.25% on each monthly anniversary of the vesting commencement date for the first 36 months, and as to 4.5833% of the award on each monthly anniversary thereafter until fully vested, generally subject to the executive's continued employment with the company on the applicable vesting date.
(6) Includes 41,150 RSUs held by Ms. Consylman, which vest in full on November 18, 2021, subject to continued employment with the company on the applicable vesting date.
(7) Includes 41,150 RSUs that were awarded to Ms. Gilbert, which were to vest in full on November 18, 2021, but were terminated in their entirety in connection with Ms. Gilbert's resignation from the company effective February 2020.
(8) Includes 115,220 RSUs held by Mr. McCourt, which vest in full on November 18, 2021, subject to continued employment with the company on the applicable vesting date.
(9) The option vested as to 25,000 shares upon the first-dosing in the first clinical study of the next phase following achievement of proof of concept for the first internally derived or externally accessed product (other than linaclotide) qualified by our compensation and HR committee as targeting a new indication, category or market.
(10) The RSAs vest as to 100% of the shares on the date immediately preceding the 2020 annual meeting of stockholders, subject to continued service as a director on the vesting date.
The Cyclerion equity awards reflected in the following table were granted in connection with the Separation. Each Ironwood equity award that was converted into a Cyclerion equity award is subject to substantially the same terms and vesting conditions as were applicable to the Ironwood equity awards prior to the distribution. The following table does
| | | | Number of Securities Underlying Unexercised Options Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | |||||||||
| Thomas McCourt | | | | | 8,713 | | | | | | 16.21 | | | | | | 2/1/2022 | | |
| | | 10,221 | | | | | | 14.40 | | | | | | 2/1/2023 | | | |||
| | | 7,591 | | | | | | 15.54 | | | | | | 3/3/2024 | | | |||
| | | 9,750 | | | | | | 17.20 | | | | | | 3/16/2025 | | | |||
| | | 14,218 | | | | | | 11.28 | | | | | | 3/1/2026 | | | |||
| | | 8,859 | | | | | | 18.47 | | | | | | 2/27/2027 | | | |||
| | | 4,101 | | | | | | 16.02 | | | | | | 2/21/2028 | | | |||
| | | 2,156 | | | | | | 14.21 | | | | | | 1/29/2029 | | | |||
| Jason Rickard | | | | | 200 | | | | | | 16.21 | | | | | | 2/1/2022 | | |
| | | 857 | | | | | | 14.40 | | | | | | 2/1/2023 | | | |||
| | | 543 | | | | | | 14.55 | | | | | | 6/10/2023 | | | |||
| | | 750 | | | | | | 11.95 | | | | | | 12/16/2023 | | | |||
| | | 3,324 | | | | | | 14.87 | | | | | | 11/3/2024 | | | |||
| | | 1,555 | | | | | | 17.20 | | | | | | 3/16/2025 | | | |||
| | | 562 | | | | | | 12.11 | | | | | | 9/1/2025 | | | |||
| | | 1,425 | | | | | | 11.28 | | | | | | 3/1/2026 | | | |||
| | | 465 | | | | | | 14.21 | | | | | | 1/29/2029 | | |
20202022 Proxy Statement 5561
not include any Cyclerion equity awards that may have been granted by Cyclerion to Drs. Hecht and Currie following the Separation.
| | | | | | | | | | | | | |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | |||||||||
| | | | | | | | | | | | | |
Mark Mallon | | — | | — | | — | | — | |||||
Gina Consylman | 1,117 | — | 17.05 | 7/1/2024 | |||||||||
850 | — | 17.20 | 3/16/2025 | ||||||||||
437 | — | 12.61 | 9/16/2025 | ||||||||||
2,437 | — | 11.28 | 3/1/2026 | ||||||||||
500 | — | 16.82 | 1/2/2028 | ||||||||||
1,875 | — | 16.02 | 2/21/2028 | ||||||||||
906 | — | 14.21 | 1/29/2029 | ||||||||||
Halley E. Gilbert | | 5,999 | | — | | 12.39 | | 2/2/2020 | |||||
| | 6,000 | | — | | 12.24 | | 2/1/2021 | |||||
| | 2,999 | | — | | 13.03 | | 12/12/2021 | |||||
| | 4,499 | | — | | 16.21 | | 2/1/2022 | |||||
| | 2,999 | | — | | 14.40 | | 2/1/2023 | |||||
| | 2,499 | | — | | 12.68 | | 12/2/2023 | |||||
| | 6,499 | | — | | 15.54 | | 3/3/2024 | |||||
| | 5,750 | | — | | 17.20 | | 3/16/2025 | |||||
| | 5,281 | | — | | 11.28 | | 3/1/2026 | |||||
| | 4,500 | | — | | 18.47 | | 2/27/2027 | |||||
| | 2,187 | | — | | 16.02 | | 2/21/2028 | |||||
| | 906 | | — | | 14.21 | | 1/29/2029 | |||||
Thomas A. McCourt | 1,999 | — | 12.39 | 2/2/2020 | |||||||||
5,464 | — | 12.24 | 2/1/2021 | ||||||||||
8,713 | — | 16.21 | 2/1/2022 | ||||||||||
10,221 | — | 14.40 | 2/1/2023 | ||||||||||
7,591 | — | 15.54 | 3/3/2024 | ||||||||||
9,750 | — | 17.20 | 3/16/2025 | ||||||||||
14,218 | — | 11.28 | 3/1/2026 | ||||||||||
8,859 | — | 18.47 | 2/27/2027 | ||||||||||
4,101 | — | 16.02 | 2/21/2028 | ||||||||||
2,156 | — | 14.21 | 1/29/2029 | ||||||||||
Peter M. Hecht, Ph.D. | | 12,499 | | — | | 12.39 | | 2/2/2020 | |||||
| | 53,083 | | — | | 12.24 | | 2/1/2021 | |||||
| | 36,088 | | — | | 16.21 | | 2/1/2022 | |||||
| | 43,679 | | — | | 14.40 | | 2/1/2023 | |||||
| | 37,972 | | — | | 15.54 | | 3/3/2024 | |||||
| | 56,500 | | — | | 17.20 | | 3/16/2025 | |||||
| | 207,051 | | 16,842 | | 11.28 | | 3/1/2026 | |||||
| | 157,809 | | 186,968 | | 18.47 | | 2/27/2027 | |||||
| | 105,933 | | 274,397 | | 16.02 | | 2/21/2028 | |||||
| | 157,642 | | 700,188 | | 14.21 | | 1/29/2029 | |||||
Mark G. Currie, Ph.D. | 888 | — | 12.39 | 2/2/2020 | |||||||||
37,279 | — | 12.24 | 2/1/2021 | ||||||||||
17,490 | — | 16.21 | 2/1/2022 | ||||||||||
27,772 | — | 14.40 | 2/1/2023 | ||||||||||
9,930 | — | 15.54 | 3/3/2024 | ||||||||||
15,625 | 22,708 | 17.20 | 3/16/2025 | ||||||||||
46,347 | 4,447 | 11.28 | 3/1/2026 | ||||||||||
51,910 | 61,503 | 18.47 | 2/27/2027 | ||||||||||
39,268 | 101,716 | 16.02 | 2/21/2028 | ||||||||||
94,588 | 420,110 | 14.21 | 1/29/2029 | ||||||||||
| | | | | | | | | | | | | |
56 Ironwood
Option Exercises and Stock Vested Table
| | | | 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) | | ||||||||||||
| Thomas McCourt | | | | | — | | | | | | — | | | | | | 167,945 | | | | | $ | 1,877,038 | | |
| Sravan Emany | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| John Minardo | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Jason Rickard | | | | | — | | | | | | — | | | | | | 89,858 | | | | | $ | 961,043 | | |
| Michael Shetzline | | | | | — | | | | | | — | | | | | | 64,023 | | | | | $ | 730,237 | | |
| Mark Mallon | | | | | 104,395(3) | | | | | $ | 89,713 | | | | | | 99,821 | | | | | $ | 928,335 | | |
| Gina Consylman | | | | | 193,151(3) | | | | | $ | 252,799 | | | | | | 58,942 | | | | | $ | 548,161 | | |
| | | | | | | | | | | | | |
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) | |||||||||
| | | | | | | | | | | | | |
Mark Mallon | | — | | — | | — | | — | |||||
Gina Consylman | — | — | 38,116 | 482,063 | |||||||||
Halley E. Gilbert | | 40,449 | (3) | | 274,365 | | 47,545 | | 642,588 | ||||
Thomas A. McCourt | 220,000 | (4) | 959,452 | 29,577 | 380,076 | ||||||||
Peter M. Hecht, Ph.D. | | 130,000 | (5) | | 958,114 | | — | | — | ||||
Mark G. Currie, Ph.D. | — | — | 21,946 | (6) | 266,820 | (7) | |||||||
| | | | | | | | | | | | | |
(1) Computed by determining the difference between the market price of our Class A common stock uponon the date of exercise and the exercise price of the exercised stock option, in each case on the date of exercise, multiplied by the number of shares acquired upon exercise of the option.
(4) Represents 220,000 shares of our Class A common stock that Mr. McCourt acquired through option exercises as such stock options were expiring, and then sold on the open market.
(5) Includes 20,449 shares of Class A common stock that Dr. Hecht acquired through an option exercise, as such stock options were expiring, and then held, thereby increasing his ownership of our Class A common stock by such amount. Also includes 109,551 shares of our Class A common stock that Dr. Hecht acquired through option exercises as such stock options were expiring, and then sold on the open market to satisfy tax withholding obligations.
(6) Includes (a) 18,951 shares of Class A common stock that Dr. Currie acquired through the vesting of RSUs granted in connection with Dr. Currie's employment with the company and (b) 2,995 shares of our Class A common stock that Dr. Currie acquired through the vesting of RSAs granted in April 2019 in connection with his joining our board of directors.
(7) Includes (a) $224,830 attributable to the vesting of RSUs, which were granted in connection with Dr. Currie's employment with the company, and (b) $41,990 attributable to the vesting of RSAs, which were granted in connection with Dr. Currie's joining our board of directors in April 2019.
2020 Proxy Statement 57
Severance Benefits not in Connection with a Change of Control
and Change of Control Severance Benefits are only payable if the named executive officer complies with all of Ironwood’s rules and policies, executes a separation agreement that includes a release of claims and complies with any post-employment non-disclosure, non-competition and non-solicitation obligations. The executive severance agreements further provide that in connection with the sale of all or substantially all of the assets of Ironwood, Ironwood would cause the acquirer of such assets to assume the executives’ severance arrangements.
”
”
58 Ironwood
multiplied by 1.5 (for Mr. Mallon,McCourt, multiplied by 2.0); (5) 18 months (for Mr. Mallon,McCourt, 24 months) of subsidized COBRA benefits; and (6) outplacement assistance benefits.
number of days the named executive officer remained employed during the applicable performance period.
Separation Agreement
In connection with her resignation in February 2020, Ms. Gilbert entered into a separation agreement with the company, which agreement generally served to implement the terms of Ms. Gilbert's existing severance agreement.
The separation agreement, which included a general release of claims, provided that, in exchange for Ms. Gilbert's signing and not revoking the separation agreement within the period set forth therein, the company would provide
2020 Proxy Statement 59
Ms. Gilbert with the Non-Equity Severance Benefits and the Equity Severance Benefits, in each case as defined above, with the lump-sum payment described in item (i) above equal to Ms. Gilbert's annual base salary of $480,000 (plus up to six months of salary continuation as described above), and the lump-sum payments described in items (ii)-(iv) above equal to the sum of the following: (A) $340,080 (representing Ms. Gilbert's annual bonus for 2019 determined based on actual performance); (B) $38,111 (representing Ms. Gilbert's pro-rated amount of annual target bonus for 2020); and (C) $240,000 (representing Ms. Gilbert's annual target bonus for 2020). The estimated aggregate cost associated with providing Ms. Gilbert with outplacement assistance benefits and 12 months of contributions towards the cost of COBRA coverage is $60,000 and approximately $24,000, respectively. With respect to PSUs, in the Equity Severance Benefits providedevent of a termination of the named executive officer’s employment as a result of his or her death or permanent disability, the awards, to Ms. Gilbert,the extent then outstanding, will not terminate and will remain eligible to vest based on the attainment of the applicable performance goals. Specifically, the NDA Acceptance PSUs will generally remain outstanding and eligible to vest based upon the achievement of the NDA acceptance performance goal until the earlier of (A) the end of the performance period or (B) the 12-month period following the death or permanent disability. The 2020 rTSR PSUs, 2021 rTSR PSUs or 2022 rTSR PSUs, as the case may be, will generally remain outstanding and eligible to vest based upon the achievement of the performance goals until the end of the applicable rTSR performance period with the number of unvested Ironwood equity awards that were accelerated as described above were 115,571 stock options and 56,736 RSUs andPSUs actually delivered subject to proration based on the number of unvested equity awards that were not subject todays the accelerated vesting described above but that will remain outstanding (but will not continue to vest)named executive officer remained employed during the applicable rTSR performance period.
By executing the separation agreement, Ms. Gilbert acknowledged and reaffirmed her obligations under herNon-competition Agreement
enforce the non-competition restriction included in such agreement.
60 Ironwood
$13.31 $11.66 per share. Drs. HechtAs described above, Mr. Mallon and Currie are not included inMs. Consylman terminated employment with the table below because they transitioned to Cyclerion in April 2019company on March 12, 2021 and July 2, 2021, respectively, and, in connection with the Separation.
| | | | | | | | | | | | |
Involuntary Termination without Cause or a Constructive Termination(1) | Termination Following a Change of Control | Death(2) | ||||||||||
| | | | | | | | | | | | |
Mark Mallon | Cash Severance | $ | 1,125,000 | $ | 1,500,000 | | | |||||
| Non-Equity Incentive Plan Compensation | $ | 1,406,250 | $ | 1,687,500 | | | |||||
| Equity Acceleration(4) | | | | | | | |||||
| Options | $ | 328,843 | $ | 450,986 | $ | 450,986 | |||||
| RSUs | $ | 2,417,828 | $ | 4,144,854 | $ | 4,144,854 | |||||
| Other Benefits(5) | $ | 96,234 | $ | 96,234 | | | |||||
| Total | $ | 5,374,155 | $ | 7,879,574 | $ | 4,595,840 | |||||
Gina Consylman | Cash Severance(3) | $ | 720,000 | $ | 720,000 | |||||||
Non-Equity Incentive Plan Compensation | $ | 480,000 | $ | 600,000 | ||||||||
Equity Acceleration(4) | ||||||||||||
Options | $ | 123,239 | $ | 163,337 | $ | 163,337 | ||||||
RSUs | $ | 1,673,826 | $ | 1,789,583 | $ | 1,789,583 | ||||||
Other Benefits(5) | $ | 96,234 | $ | 96,234 | ||||||||
Total | $ | 3,093,299 | $ | 3,369,154 | $ | 1,952,920 | ||||||
Halley E. Gilbert* | Cash Severance(3) | $ | 720,000 | $ | 720,000 | | | |||||
| Non-Equity Incentive Plan Compensation | $ | 480,000 | $ | 600,000 | | | |||||
| Equity Acceleration(4) | | | | | | | |||||
| Options | $ | 128,191 | $ | 168,795 | $ | 168,795 | |||||
| RSUs | $ | 1,801,069 | $ | 1,906,138 | $ | 1,906,138 | |||||
| Other Benefits(5) | $ | 96,234 | $ | 96,234 | | | |||||
| Total | $ | 3,225,494 | $ | 3,491,167 | $ | 2,074,933 | |||||
Thomas A. McCourt | Cash Severance(3) | $ | 780,000 | $ | 780,000 | |||||||
Non-Equity Incentive Plan Compensation | $ | 624,000 | $ | 780,000 | ||||||||
Equity Acceleration(4) | ||||||||||||
Options | $ | 327,868 | $ | 431,435 | $ | 431,435 | ||||||
RSUs | $ | 1,831,536 | $ | 2,098,122 | $ | 2,098,122 | ||||||
Other Benefits(5) | $ | 73,171 | $ | 73,171 | ||||||||
Total | $ | 3,636,575 | $ | 4,162,728 | $ | 2,529,557 | ||||||
| | | | | | | | | | | | |
* Ms. Gilbert resignedsuch termination, neither executive received any severance benefits from the company effective February 28, 2020. Information on separation payments and benefits provided to Ms. Gilbert in connection with her resignation is available elsewhere in this proxy statement under the captioncompany.
| | | | | | | Involuntary Termination without Cause or a Constructive Termination(1) | | | Termination Following a Change of Control | | | Death(2) | | |||||||||
| Thomas McCourt | | | Cash Severance | | | | $ | 1,162,500 | | | | | $ | 1,550,000 | | | | | | — | | |
| Non-Equity Incentive Plan Compensation | | | | $ | 1,453,125 | | | | | $ | 1,743,750 | | | | | | — | | | |||
| Equity Acceleration(4) | | | | | | | | | | | | | | | | | | | | |||
| Options | | | | $ | 17,848 | | | | | $ | 17,848 | | | | | $ | 17,848 | | | |||
| RSUs | | | | $ | 3,762,216 | | | | | $ | 5,031,47 | | | | | $ | 5,031,477 | | | |||
| PSUs | | | | | — | | | | | $ | 4,433,645 | | | | | | — | | | |||
| Other Benefits(5) | | | | $ | 74,796 | | | | | $ | 79,728 | | | | | | — | | | |||
| Total | | | | $ | 6,470,485 | | | | | $ | 12,856,448 | | | | | $ | 5,049,325 | | | |||
| Sravan Emany | | | Cash Severance | | | | $ | 500,000 | | | | | $ | 750,000 | | | | | $ | | | |
| Non-Equity Incentive Plan Compensation | | | | $ | 500,000 | | | | | $ | 625,000 | | | | | | — | | | |||
| Equity Acceleration(4) | | | | | | | | | | | | | | | | | | | | |||
| Options | | | | | — | | | | | | — | | | | | | — | | | |||
| RSUs | | | | | — | | | | | $ | 991,100 | | | | | $ | 991,100 | | | |||
| PSUs | | | | | — | | | | | $ | 991,100 | | | | | | — | | | |||
| Other Benefits(5) | | | | $ | 60,000 | | | | | $ | 60,000 | | | | | | — | | | |||
| Total | | | | $ | 1,060,000 | | | | | $ | 3,417,200 | | | | | $ | 991,100 | | | |||
| John Minardo | | | Cash Severance | | | | $ | 475,000 | | | | | $ | 712,500 | | | | | | — | | |
| Non-Equity Incentive Plan Compensation | | | | $ | 427,500 | | | | | $ | 534,375 | | | | | | — | | | |||
| Equity Acceleration(4) | | | | | | | | | | | | | | | | | | | | |||
| Options | | | | | — | | | | | | — | | | | | | — | | | |||
| RSUs | | | | | — | | | | | $ | 931,541 | | | | | $ | 931,541 | | | |||
| PSUs | | | | | — | | | | | $ | 932,578 | | | | | | — | | | |||
| Other Benefits(5) | | | | $ | 72,012 | | | | | $ | 72,012 | | | | | | — | | | |||
| Total | | | | $ | 974,512 | | | | | $ | 3,183,006 | | | | | $ | 931,541 | | | |||
| Jason Rickard | | | Cash Severance(3) | | | | $ | 750,000 | | | | | $ | 750,000 | | | | | | — | | |
| Non-Equity Incentive Plan Compensation | | | | $ | 500,000 | | | | | $ | 625,000 | | | | | | — | | | |||
| Equity Acceleration(4) | | | | | | | | | | | | | | | | | | | | |||
| Options | | | | $ | 3,854 | | | | | $ | 3,854 | | | | | $ | 3,854 | | | |||
| RSUs | | | | $ | 2,084,283 | | | | | $ | 2,489,678 | | | | | $ | 2,489,678 | | | |||
| PSUs | | | | | — | | | | | $ | 1,899,612 | | | | | | — | | | |||
| Other Benefits(5) | | | | $ | 101,040 | | | | | $ | 101,040 | | | | | $ | | | ||||
| Total | | | | $ | 3,439,177 | | | | | $ | 5,869,184 | | | | | $ | 2,493,532 | | |
| | | | | | | Involuntary Termination without Cause or a Constructive Termination(1) | | | Termination Following a Change of Control | | | Death(2) | | |||||||||
| Michael Shetzline, M.D., Ph.D. | | | Cash Severance(3) | | | | $ | 726,000 | | | | | $ | 726,000 | | | | | | — | | |
| Non-Equity Incentive Plan Compensation | | | | $ | 387,200 | | | | | $ | 484,000 | | | | | | — | | | |||
| Equity Acceleration(4) | | | | | | | | | | | | | | | | | | | | |||
| Options | | | | | — | | | | | | — | | | | | | — | | | |||
| RSUs | | | | $ | 1,231,856 | | | | | $ | 1,509,853 | | | | | $ | 1,509,853 | | | |||
| PSUs | | | | | — | | | | | $ | 1,416,795 | | | | | | — | | | |||
| Other Benefits(5) | | | | $ | 58,080 | | | | | $ | 58,080 | | | | | | — | | | |||
| Total | | | | $ | 2,403,136 | | | | | $ | 4,194,728 | | | | | $ | 1,509,853 | | |
(1)
2020 Proxy Statement 61
(3) With respect to PSUs, the treatment of such awards in the event of the named executive officer’s death or permanent disability is described elsewhere in this proxy statement under the caption Treatment of Equity in the Event of Death or Permanent Disability and in footnote 4 to this table.
62 Ironwood
To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and Mr. Mallon,McCourt, we took the following steps:
Since all our employees are located in the United States, as is Mr. Mallon, we
2020 Proxy Statement 63
Compensation Committee Report
We have:
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| | OUR BOARD RECOMMENDS THAT YOU |
THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT |
64 Ironwood
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6670 Ironwood
20202022 Proxy Statement 6771
Unless otherwise indicated, the address for each of the stockholders in the table below is c/o Ironwood Pharmaceuticals, Inc., 100 Summer Street, Suite 2300, Boston, Massachusetts 02110.
| Name of Beneficial Owner | | | Number of Shares of our Class A Common Stock | | | Percentage | | ||||||
| Named Executive Officers and Directors | | | | | | | | | | | | | |
| Thomas McCourt(1) | | | | | 1,442,150 | | | | | | * | | |
| Sravan Emany | | | | | 0 | | | | | | * | | |
| John Minardo | | | | | 0 | | | | | | * | | |
| Jason Rickard(2) | | | | | 396,649 | | | | | | * | | |
| Michael Shetzline, M.D., Ph.D.(3) | | | | | 189,458 | | | | | | * | | |
| Mark Mallon | | | | | 0 | | | | | | * | | |
| Gina Consylman | | | | | 26,329 | | | | | | * | | |
| Mark Currie, Ph.D.(4) | | | | | 1,293,068 | | | | | | * | | |
| Alexander Denner, Ph.D.(5) | | | | | 16,456,574 | | | | | | 10.5% | | |
| Andrew Dreyfus | | | | | 130,068 | | | | | | * | | |
| Jon Duane | | | | | 70,187 | | | | | | * | | |
| Marla Kessler | | | | | 70,187 | | | | | | * | | |
| Julie McHugh | | | | | 118,373 | | | | | | * | | |
| Catherine Moukheibir | | | | | 77,779 | | | | | | * | | |
| Lawrence Olanoff, M.D., Ph.D. | | | | | 91,395 | | | | | | * | | |
| Edward Owens | | | | | 281,720 | | | | | | * | | |
| Jay Shepard | | | | | 58,323 | | | | | | * | | |
| All current executive officers and directors as a group (15 persons)(6) | | | | | 20,675,931 | | | | | | 13.1% | | |
| 5% Security Holders | | | | | | | | | | | | | |
| Wellington Management Group LLP(7) | | | | | 17,339,587 | | | | | | 11.2% | | |
| Sarissa Capital Management LP(8) | | | | | 16,390,000 | | | | | | 10.6% | | |
| Brown Capital Management, LLC(9) | | | | | 16,257,899 | | | | | | 10.5% | | |
| BlackRock, Inc.(10) | | | | | 14,368,890 | | | | | | 9.3% | | |
| The Vanguard Group(11) | | | | | 13,487,762 | | | | | | 8.7% | | |
| Westfield Capital Management Company, LP(12) | | | | | 8,145,674 | | | | | | 5.3% | | |
| | | | | |
Name of Beneficial Owner | Number of Shares of our Class A Common Stock | Percentage | |||
| | | | | |
Named Executive Officers and Directors | | ||||
Mark Mallon(1) | 275,129 | * | |||
Peter M. Hecht(2) | | 5,285,772 | 3.3% | ||
Gina Consylman(3) | 257,100 | * | |||
Halley E. Gilbert(4) | | 779,295 | * | ||
Thomas A. McCourt(5) | 1,088,479 | * | |||
Andrew Dreyfus | | 86,938 | * | ||
Mark G. Currie(6) | 1,374,124 | * | |||
Julie H. McHugh | | 109,337 | * | ||
Lawrence S. Olanoff | 58,259 | * | |||
Edward P. Owens | | 182,234 | * | ||
Jon R. Duane | 25,701 | * | |||
Marla L. Kessler | | 25,701 | * | ||
Catherine Moukheibir | 25,701 | * | |||
All current executive officers and directors as a group (14 persons)(7) | | 3,843,894 | 2.4% | ||
| | | | | |
5% Security Holders | |||||
Wellington Management Group LLP(8) | | 21,777,701 | 13.7% | ||
Brown Capital Management, LLC(9) | 17,901,053 | 11.2% | |||
The Vanguard Group(10) | | 16,638,941 | 10.4% | ||
BlackRock, Inc.(11) | 13,541,545 | 8.5% | |||
Sarissa Capital Management LP(12) | | 12,493,000 | 7.8% | ||
FMR LLC (Fidelity)(13) | 11,353,494 | 7.1% | |||
UBS Group AG(14) | | 11,181,451 | 7.0% | ||
Janus Henderson Group PLC(15) | 8,289,895 | 5.2% | |||
| | | | | |
(1) Includes (i) 205,260 shares of Class A common stock issuable to Mr. Mallon upon the exercise of options that are exercisable within 60 days following March 31, 2020 and (ii) 51,719 restricted stock units that vest on May 7, 2020.
(2) Includes 3,068,406 shares of Class A common stock issuable to Dr. Hecht upon the exercise of options that are exercisable within 60 days following March 31, 2020.
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(3) Includes 187,948 shares of Class A common stock issuable to Ms. Consylman upon the exercise of options that are exercisable within 60 days following March 31, 2020.
(4) Includes 639,572 shares of Class A common stock issuable to Ms. Gilbert upon the exercise of options that are exercisable within 60 days following March 31, 2020.
(5) Includes (i) 1,019,4371,131,096 shares of Class A common stock issuable to Mr. McCourt upon the exercise of options that are exercisable within 60 days following March 31, 20202021 and (ii) 5,71380,205 restricted stock units that vest on May 7, 2020.
(6) 19, 2022.
(7) 2022.
(8) 19, 2022.
(11)
(12) Based upon the information provided by Sarissa Capital Management LP, or Sarissa, Alexander J. Denner, Ph.D., Sarissa Capital Offshore Master Fund LP, or Sarissa Capital Offshore, Sarissa Capital Catapult Fund LLC, or Sarissa Capital Catapult, Sarissa Capital Hawkeye Fund LP, or Sarissa Capital Hawkeye, and Sarissa Capital Athena Fund Ltd, or Sarissa Capital Athena and, collectively with Sarissa, Dr. Denner, Sarissa Capital Offshore, Sarissa Capital Catapult and Sarissa Capital Hawkeye, the Sarissa Holders, in a Schedule 13D/A filed on February 26, 2020, reporting as of February 25, 2020. According to this Schedule 13D/A, (i) Sarissa has sole voting and sole dispositive power with respect to 1,357,215 of these shares and shared voting and shared dispositive power with respect to 11,135,785 of these shares, (ii) Dr. Denner has sole voting and sole dispositive power with respect to none of these shares and shared voting and shared dispositive power with respect to all of these shares, (iii) Sarissa Capital Offshore has sole voting and sole dispositive power with respect to 5,682,660 of these shares and shared voting and shared dispositive power with respect to none of these shares, (iv) Sarissa Capital Catapult has sole voting and sole dispositive power with respect to 1,948,655 of these shares and shared voting and shared dispositive power with respect to none of these shares, (v) Sarissa Capital Hawkeye has sole voting and sole dispositive power with respect to 1,465,765 of these shares and shared voting and shared dispositive power with respect to none of these shares, and (vi) Sarissa Capital Athena has sole voting and sole dispositive power with respect to 2,038,705 of these shares and shared voting and shared dispositive power with respect to none of these shares, The address of the Sarissa Holders is c/o Sarissa Capital Management LP, 660 Steamboat Road, Greenwich, CT 06830.
(13) Based upon the information provided by FMR LLC, or FMR, and Abigail P. Johnson in a Schedule 13G/A filed on February 7, 2020, reporting as of December 31, 2019. According to this Schedule 13G/A, (i) FMR has sole voting power with respect to 2,874,977 of these shares, sole dispositive power with respect to all of these shares, and neither shared voting nor shared dispositive power with respect to these shares, and (ii) Ms. Johnson has neither sole nor shared voting power with respect to these shares, sole dispositive power with respect to all of these shares, and shared dispositive power with respect to none of these shares. The address of FMR and Ms. Johnson is 245 Summer Street,1 Financial Center, Boston, MA 02210.
(14) Based upon the information provided by UBS Group AG, or UBS, in a Schedule 13G/A filed on February 12, 2020, reporting as of December 31, 2019. According to this Schedule 13G, UBS has sole voting power with respect to 9,912,172 of these shares, shared dispositive power with respect to all of these shares, and shared voting power and sole dispositive power with respect to none of these shares. The address of UBS is Bahnhofstrasse 45, Zurich, Switzerland.
(15) Based upon the information provided by Janus Henderson Group PLC, or Janus, in a Schedule 13G filed on February 14, 2020, reporting as of December 31, 2019. According to this Schedule 13G, Janus has sole voting and sole dispositive power with respect to none of these shares and shared voting and shared dispositive power with respect to all of these shares. The address of Janus is c/o Janus Henderson Group plc, 201 Bishopsgate EC2M 3AE, United Kingdom.
20202022 Proxy Statement 6973
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We have entered into indemnification agreements with each of our current directors and certain of our executive officers. These agreements require us to indemnify these individuals to the fullest extent permitted under the General Corporation Law of the State of Delaware law against liabilities that may arise by reason of their service to us and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We intend to enter into indemnification agreements with our future directors and executive officers.
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On April 1, 2019, we completed the Separation. The Separation was effected by means of a distribution of all of the outstanding shares of common stock of Cyclerion through a dividend in-kind of Cyclerion's common stock, with no par value, to our stockholders of record as of the close of business on March 19, 2019. In connection with the Separation, we and Cyclerion entered into certain agreements that effected the separation of Cyclerion's business from us and govern our relationship with Cyclerion after the Separation. The following is a summary of the terms of the material agreements that we have entered into with Cyclerion in connection with the Separation. Dr. Hecht, our former chief executive officer, is chief executive officer of Cyclerion and Dr. Currie, our former senior vice president, chief scientific officer and president of R&D, is currently president and chief scientific officer of Cyclerion, as well as a member of our board of directors.
Separation Agreement
In connection with the Separation, Ironwood entered into a separation agreement with Cyclerion, dated as of March 30, 2019, that, among other things, set forth our agreements with Cyclerion regarding the principal actions to be taken in connection with the Separation, including the distribution detailed above. The separation agreement identified assets to be transferred, liabilities to be assumed and contracts to be assigned to each of Ironwood and Cyclerion as part of the Separation, and it provided for when and how these transfers, assumptions and assignments would occur. The separation agreement was intended to provide for those transfers of assets and assumptions of liabilities that were necessary so that after the Separation, Ironwood and Cyclerion would have the assets necessary to operate their respective businesses and retain or assume the liabilities related to those assets. Each of Ironwood and Cyclerion agreed to releases, with respect to pre-distribution claims, and cross indemnities, with respect to post-distribution claims, that, except as otherwise provided in the separation agreement, were principally designed to place financial responsibility for the obligations and liabilities allocated to Ironwood under the separation agreement with Ironwood and financial responsibility for the obligations and liabilities allocated to Cyclerion under the separation agreement with Cyclerion.
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Ironwood and Cyclerion are also each subject to two-year non-solicit and non-hire restrictions. In addition, the parties agreed to certain non-competition restrictions, including Ironwood's agreement not to engage, for three years following the Separation, in the business of discovering, researching, developing, importing, exporting, manufacturing, marketing, distributing, promoting or selling any pharmaceutical product (a) for the diagnosis, prevention or treatment of diabetic nephropathy, heart failure with preserved ejection fraction or sickle cell disease or (b) that contains one or more sGC stimulators.
Development Agreement
We entered into a development agreement with Cyclerion pursuant to which Cyclerion provides us with certain research and development services with respect to certain of our products and product candidates, including without limitation MD-7246 (linaclotide delayed release) and IW-3718. Such research and development activities are governed by a joint steering committee comprised of representatives from both Cyclerion and Ironwood. We pay Cyclerion fees for such research and development services as mutually agreed upon by us and Cyclerion as provided under this development agreement with certain allowances for specified overages. As of March 31, 2020, we have incurred approximately $5.5 million under this agreement.
Transition Services Agreements
Ironwood Transition Services
Prior to the Separation, we provided Cyclerion with significant corporate and shared services and resources related to corporate functions such as finance, human resources, internal audit, research and development, financial reporting and information technology, which we refer to collectively as the "Ironwood Services." Pursuant to this agreement, each of the Ironwood Services was to continue for an initial term of up to two years (as applicable), unless earlier terminated or extended according to the terms of the transition services agreement. We and Cyclerion agreed to terminate this agreement effective March 31, 2020. We earned approximately $313,000 in total fees for the Ironwood Services under this agreement, which fees were based on our cost of providing the Ironwood Services.
Cyclerion Transition Services
We also entered into a second transition services agreement whereby Cyclerion provided certain finance, procurement and facilities services to us, which we refer to herein collectively as the "Cyclerion Services." Pursuant to this agreement, each of the Cyclerion Services were available to us for a term of one year. We incurred approximately $105,000 in total fees for the Cyclerion Services under this agreement, which fees were based on Cyclerion's cost of providing the Cyclerion Services.
Intellectual Property License Agreement
We entered into an intellectual property license agreement with Cyclerion pursuant to which each party granted a license to the other party to certain know-how. We granted Cyclerion a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license to certain know-how to allow Cyclerion to use such know-how in connection with Cyclerion's ongoing and future research and development activities related to sGC stimulator products in any field. Cyclerion granted us a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license to certain know-how for use outside of the research and development of sGC stimulator products, including in our existing products and product candidates. Such licenses between the parties generally allow current or future uses of the know-how in connection with each party's respective fields.
2020 Proxy Statement 71
Tax Matters Agreement
We entered into a tax matters agreement with Cyclerion that governs Ironwood's and Cyclerion's respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the distribution of Cyclerion common stock to Ironwood stockholders and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and assistance and cooperation in respect of tax matters.
The tax matters agreement imposed certain restrictions on Cyclerion and its subsidiaries (including restrictions on share issuances, business combinations, sales of assets and similar transactions) designed to preserve the tax-free status of the distribution and certain related transactions. The tax matters agreement also provided special rules that allocate tax liabilities in the event the distribution, together with certain related transactions, is not tax-free. In general, under the tax matters agreement, each party is expected to be responsible for any taxes imposed on Ironwood or Cyclerion that arise from the failure of the distribution, together with certain related transactions, to qualify as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) and certain other relevant provisions of the Code, to the extent that the failure to so qualify is attributable to an acquisition of stock or assets of, or certain actions, omissions or failures to act of, such party. If both Cyclerion and Ironwood are responsible for such failure, liability will be shared according to relative fault. U.S. tax otherwise resulting from the failure of the distribution, together with certain related transactions, to qualify as a transaction that is tax-free generally is the responsibility of Ironwood.
Employee Matters Agreement
We entered into an employee matters agreement with Cyclerion, which allocated assets, liabilities and responsibilities relating to the employment, compensation, and employee benefits of Ironwood and Cyclerion employees, and other related matters in connection with the Separation, including the treatment of outstanding incentive equity awards and certain retirement and welfare benefit obligations. The employee matters agreement generally provided that, unless otherwise specified, Cyclerion is responsible for liabilities associated with employees who transferred to Cyclerion and employees whose employment terminated prior to the Separation but who primarily supported the Cyclerion business, whether incurred prior to or after the Separation, and Ironwood is responsible for liabilities associated with other employees, including employees retained by Ironwood.
The Private Placement
On February 25, 2019, Cyclerion, which was Ironwood's wholly owned subsidiary at the time, and various investors entered into an amended and restated common stock purchase agreement pursuant to which these investors agreed to make an aggregate cash investment in Cyclerion. These investors included the following, each of whom was either an Ironwood director, an Ironwood executive officer, an immediate family member of an Ironwood director or executive officer, an entity related to such a director, executive officer or immediate family member, or beneficially owned at least 5% of Ironwood's Class A common stock: accounts managed by direct or indirect subsidiaries of FMR LLC, a donor advised fund created by Dr. Hecht, Dr. Currie and certain members of Dr. Hecht's immediate family, including through a trust or donor advised fund. Pursuant to this agreement, accounts managed by direct or indirect subsidiaries of FMR LLC agreed to invest up to $17,500,004, the donor advised fund created by Dr. Hecht agreed to invest up to $34,000,000, Dr. Currie agreed to invest up to $4,000,000 and Dr. Hecht's immediate family agreed to invest up to $6,800,000 in the aggregate. This investment closed on April 2, 2019.
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Under our code of business conduct and ethics, our employees,directors, officers and directorsemployees are discouraged from entering into any transactionactivity that may create or give the appearance of a conflict of interest. In addition, they must report any potential conflict of interest, including related party transactions, to their supervisor, certain members of our management or the chair of our audit committee. Pursuant to its charter, our audit committee must review and approve anyall related party transactions including those transactions involving our directors.required to be disclosed under Item 404 of Regulation S-K under the Exchange Act. In approving or rejecting a proposed transaction, the audit committee considers the relevant facts and circumstances available to and deemed relevant by the audit committee, including the material terms of the transaction, risks, benefits, costs, availability of other comparable services or
72 Ironwood
products and, if applicable, the impact on a director'sdirector’s independence. Our audit committee will approve only those transactions that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our audit committee determines in the good faith exercise of its discretion. A copy of our code of business conduct and ethics and our audit committee charter are available through the Investors section of our website atwww.ironwoodpharma.com, under the heading Corporate Governance.
2020 Proxy Statement 73
| | | OUR BOARD RECOMMENDS THAT YOU | |
2022.
| | | | 2021 | | | 2020 | | ||||||
| Audit | | | | $ | 1,175,499 | | | | | $ | 1,372,342 | | |
| All other | | | | $ | 1,990 | | | | | $ | 6,860 | | |
| Total | | | | $ | 1,177,489 | | | | | $ | 1,379,202 | | |
| | | | | | | |
2019 | 2018 | ||||||
| | | | | | | |
Audit | $ | 1,840,900 | $ | 994,154 | |||
Audit-related | $ | — | $ | 1,564,161 | |||
Tax | $ | — | $ | — | |||
All other | $ | 1,735 | $ | 6,910 | |||
| $ | 1,842,635 | $ | 2,565,225 | |||
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Audit fees for 20192021 and 20182020 were for professional services rendered for the audits of our financial statements and internal controls over financial reporting, including accounting consultation,consultations and reviews of quarterly financial statements, as well as for services that are normally provided in connection with regulatory filings or engagements, including auditor consents. Audit fees for 2019 were significantly higher than they were in 2018 due to services provided in connection with the Separation, including the review and/or audit of discontinued operations, as well as accounting review of certain collaboration and co-promotion agreements and debt-related transactions.
Audit-related fees for 2018 were principally comprised of services provided in connection with the Separation, including the review and/or audit of Cyclerion carve-out financial statements, as well as accounting consultations associated with the anticipated adoption of new accounting standards.
Other
2020.
2020 Proxy Statement 75
2020 Proxy Statement 77
Householding of proxy materials.Table SEC rules concerning the delivery of Contentsproxy materials allow us or your broker to send a single notice or, if applicable, a single set of our proxy materials to any household at which two or more of our stockholders reside, if we or your broker believe that the stockholders are members of the same family, unless we have received contrary instructions from one or more of the stockholders. This practice, referred to as “householding,” benefits both you and us. It reduces the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our notices, annual reports, proxy statements and information statements.
receive your instructions.
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Costs of solicitation and solicitation participants. We will pay the costs of soliciting proxies. These costs also include support for the hosting of the virtual meeting. We will solicit proxies by email from stockholders who are our employees or who previously requested to receive proxy materials electronically. Our directors, our officers and our employees also may solicit proxies on our behalf, personally, electronically or by telephone, facsimile or mail or other means, without additional compensation. We may request that brokerage firms, banks and other agents forward proxy materials to beneficial owners and we would reimburse such institutions for their out-of-pocket expenses incurred.
If you want to submit a question you may do so electronically starting at the time of check-in or during the meeting. We will post any appropriate questions received during the meeting and our answers in the Investors section of our website atwww.ironwoodpharma.com as soon as practical after the meeting.
2020 Proxy Statement 79
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A stockholder may send general communications to our board of directors, any committee of our board of directors or any individual director by directing such communication to General Counsel,Secretary, Ironwood Pharmaceuticals, Inc., 100 Summer Street, Suite 2300, Boston, Massachusetts 02110. All communications will be reviewed by our general counselSecretary and, if requested by the stockholder, forwarded to our board of directors or an individual director, as applicable. Our general counselSecretary reserves the right not to forward to our board of directors or any individual director any abusive, threatening or otherwise inappropriate materials.
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Stockholders who wish to present a proposal for inclusion in our proxy materials for our 20212023 annual meeting should follow the procedures prescribed in Rule 14a-8 under the Exchange Act and our bylaws. Those procedures require that we receive a stockholder proposal in writing no later than December 22, 20202022 in order for such proposal to be included in our proxy materials.
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2020 Proxy Statement 81