voting therefor ensures that companies avoid the uncertainty that would otherwise be caused by board vacancies resulting from elections where directors fail to receive the votes necessaryTRANSACTION OF OTHER BUSINESS
Our Board does not know of any other matters to be elected (a so-called “failed election”), resulting eitherraised at the Annual Meeting. If any other matters not mentioned in this proxy statement are properly brought before the existing director continuingmeeting, the appropriate executive officers and directors named in this proxy statement intend to serve as a holdover director or a vacancy for our Board to fill. The possibility of failed elections introduces unnecessary legal uncertainty and risk to our director election process as vacancies onuse their discretionary voting authority under the Board could result in our inability to comply with certain Nasdaq listing requirements or other securities regulations, including those related to director independence, committee composition and the maintenance of an audit committee member with the requisite financial expertise.
The Board thus believes that our current nominating and voting procedures for director election under a plurality standard should be maintained in order to provide the Board with the flexibility to appropriately respond to stockholder interests without the risk of potential corporate governance complications arising from failed elections. Further, the rules governing plurality voting are well-established over many decades of experience and precedent, and we believe plurality voting is familiar to, and well understood by, stockholders. We do not believe that our interests, or our stockholders’ interests, would be better served by adopting majority voting at this time and abandoning a director election process that has served us well to date.
Our history and established governance approach fully support this conclusion and evidence our commitment to strong corporate governance. Notably:
We amended our Certificate of Incorporation in 2018 to declassify our Board and provide for one-year terms for each director, which ensures that stockholders have an annual opportunityproxy to vote for, or withhold support from, each director;the proxy in accordance with their best judgment on those matters.
COMPENSATION DISCUSSION AND ANALYSIS
Rocket Pharmaceuticals merged into Inotek Pharmaceuticals Corporation and
Our stockholders have voted overwhelmingly in favor of electing each of our directors in regular elections. Since we became a public company as a resultin January 2018, and we filed our proxy statements for the 2018 and 2019 fiscal years under the scaled reporting rules applicable to emerging growth companies. As of a business combination transaction with Inotek Pharmaceuticals Corporation in 2018, all but oneDecember 31, 2020, we ceased to be an emerging growth company and, therefore, this year’s proxy statement includes additional detail regarding executive compensation that was previously not required, including:
Compensation Discussion and Analysis and additional compensation tables and disclosure; and
Advisory votes on the compensation of our named executive officers and on the preferred frequency of advisory votes on the compensation of our named executive officers.
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides an overview of the directors nominated by our Board has received affirmative votes in favor of his or her election from more than 88% of the votes cast. In other words, the vast majoritymaterial elements of our stockholders, who can currently express dissatisfaction with an incumbent director’s performance by withholding their voteexecutive compensation program during the fiscal year ended December 31, 2020 (“fiscal 2020”) for the following “named executive officers,” whose compensation is set forth in the ordinary course,Summary Compensation Table and other compensation tables contained in this proxy statement:
Gaurav D. Shah, M.D., Chief Executive Officer (“CEO”) and Director;
Kinnari Patel, Pharm.D., MBA, President and Chief Operating Officer;
Jonathan Schwartz, M.D., Chief Medical Officer and SVP;
John Militello, CPA, Vice President – Finance, Principal Accounting Officer and former Principal Financial Officer; and
Kamran Alam, CPA, former Senior Vice President – Finance and Principal Financial Officer.
This section also discusses our executive compensation philosophy, objectives and design; how and why the Compensation Committee arrived at the specific compensation policies and decisions during fiscal 2020; the role of Semler Brossy, the Compensation Committee’s independent compensation consultant; and the peer group used in evaluating executive compensation.
Executive Summary
We are a clinical-stage, multi-platform biotechnology company focused on the development of first, only and best-in-class gene therapies, with direct on-target mechanism of action and clear clinical endpoints for rare and devastating diseases. We have rarely done so.
Additionally, adoptionfour clinical-stage ex vivo lentiviral vector programs. These include programs for Fanconi Anemia (“FA”), a genetic defect in the bone marrow that reduces production of blood cells or promotes the production of faulty blood cells, Leukocyte Adhesion Deficiency-I (“LAD-I”), a majority voting standard is unwarrantedgenetic disorder that causes the immune system to malfunction, Pyruvate Kinase Deficiency (“PKD”), a rare red blood cell autosomal recessive disorder that results in chronic non-spherocytic hemolytic anemia and unnecessaryInfantile Malignant Osteopetrosis (“IMO”), a genetic disorder characterized by increased bone density and bone mass secondary to impaired bone resorption. Of these, both the Phase 2 FA program and the Phase ½ LAD-I program are in our case becauseregistration-enabling studies in the United States (“U.S.”) and Europe (“EU”). In addition, in the U.S., we have a strong corporate governance process designedclinical stage in vivo adeno-associated virus (“AAV”) program for Danon disease, a multi-organ lysosomal-associated disorder leading to identifyearly death due to heart failure. We have global commercialization and propose director nominees who will best servedevelopment rights to all of these product candidates under royalty-bearing license agreements. Additional work on a gene therapy program for the interestsless common FA subtypes C and G is ongoing.
Through our gene therapy platforms, we aim to restore normal cellular function by modifying the defective genes that cause each of the Company and our stockholders. Our Nominating and Corporate Governance Committee is tasked with evaluating and recommending nominees for election to the Board. As part of the practice, and before making recommendations to the Board, the Nominating and Corporate Governance Committee reviews and considers individual director performance, Board and committee performance, governance practices, and prior stockholder approval levels for each particular nominee. The Nominating and Corporate Governance Committee will also consider qualified nominations for directors recommended by stockholders. In general, stockholder recommendations are evaluated on the same basis as any recommendation from members of the Board or management of the Company. In addition, stockholders who are truly dissatisfied with incumbent directors can, in accordance with the Company’s procedures, make their own nominations to our Board as described under Article I, Section 2 of our by-laws (“Notice of Stockholder Business and Nominations”).
In light of the risks and uncertainties that majority voting entails, given that our Board has already taken significant steps to enhance our corporate governance and because our stockholders have a history of electing highly-qualified and independent directors using our current nominations and voting system, a change in the director election process is not necessary or appropriate for us or in the best interest of our stockholders at this time.
Pursuant to the terms of our by-laws, the stockholder proposal to amend the Company’s articles of incorporation and/or by-laws to provide that directors shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of stockholders in uncontested elections will require “FOR” votes from at least seventy-five percent (75%) of the votes cast at the Annual Meeting by the holders of shares present virtually via the Internet or represented by proxy and entitled to vote on this proposal.
THE BOARD RECOMMENDS A VOTE “AGAINST” THE STOCKHOLDER MAJORITY VOTING PROPOSAL.targeted disorders.