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PROPOSAL 1
ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes, with each class having a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.
The Board currently consists of Directors presently hasnine directors. Dr. Vickers is retiring from the Board effective immediately prior to the Annual Meeting. As of the date of the Annual Meeting, the Board size will be eight members.directors. There are three directors in the class whose term of office expires in 2018,2023, Ms. Beraud, Ms. O’Connor Kolaja and allDr. Coric, and each of these directors areis standing for re-election at the Annual Meeting. Each of the nominees listed belowMs. Beraud, Ms. O’Connor Kolaja and Dr. Coric is currently a director of the Company.Company and was nominated by the Nominating and Corporate Governance Committee. Of the three nominees, Ms. Beraud and Ms. O’Connor Kolaja have previously been elected by the stockholders, while Dr. Coric was appointed by the Board on March 1, 2023. If elected at the Annual Meeting, each of these nominees wouldagreed to serve until the 20212026 annual meeting and until his or her successor has been duly elected and qualified, or, if sooner, until histheir death, resignation or removal. It is our policy to encourage directors and nominees for director to attend the Annual Meeting. All of the directors who were members of our Board at the time of the 2022 Annual Meeting of Stockholders attended the 2022 Annual Meeting of Stockholders. See the “Proxy Summary—Information About Our Directors—Director Backgrounds, Experience and Diversity” for information on director background and diversity. Required Vote and Board Recommendation
Directors are elected by a plurality of the votes of the holders of shares present in person, by remote communication, or represented by proxy at the meeting and entitled to vote generally on the election of directors. The three director nominees receiving the highest number of affirmative“For” votes will be elected. In tabulating the voting results for the election of directors, withhold votes and broker non-votes have no effect and will not be counted towards the number of shares voted “For”.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR EACH NAMED NOMINEE.
DIRECTORS
The following is a brief biography of each director nominee for director and each of our other currentcontinuing directors, including their respective ages as of December 31, 2017.the date of this Proxy Statement. Each biography includes information regarding the experience, qualifications, attributes or skills that caused our Board of Directors to determine that each applicable nominee or other current director should serve as a member of the Boardour Board. The categories of Directors.key skills are:
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2021 ANNUAL MEETING - CLASS I | | | | | | | | | | | | | | | | | |
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| Senior Leadership Experience | Financial and Accounting | Biotechnology/Life Science | Commercialization | Strategic Experience | Aesthetic Experience |
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| Financial Technology Innovation | Risk Oversight and Risk Management | Manufacturing and Supply Chain | Governance/Public Company
Board Experience | Human Capital Management | Therapeutics Experience |
Angus C. Russell, age | | | | | | | | | | | |
| 2022 Director Nominees and Continuing Directors |
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| Name | Age | Title | Class and Year Term Ending |
| Jill Beraud | 62 | Director | Class III (Term Ending 2026 if elected at the Annual Meeting) |
| Carey O'Connor Kolaja | 50 | Director | Class III (Term Ending 2026 if elected at the Annual Meeting) |
| Dr. Vlad Coric | 52 | Director | Class III (Term Ending 2026 if elected at the Annual Meeting) |
| Angus C. Russell | 67 | Chairman of the Board | Class I (Term Ending 2024) |
| Julian S. Gangolli | 65 | Director | Class I (Term Ending 2024) |
| Olivia C. Ware | 66 | Director | Class I (Term Ending 2024) |
| Mark J. Foley | 57 | CEO and Director | Class II (Term Ending 2025) |
| Christian W. Nolet | 66 | Director | Class II (Term Ending 2025) |
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| Jill Beraud has served as a director of our Company since June 2019. From August 2018 to December 2020, Ms. Beraud served as the Chief Executive Officer of Sh’nnong Beverage Company, a business creating a line of functional beverages. Ms. Beraud previously served as Chief Executive Officer of Seno Jewelry, L.L.C. (d/b/a Ippolita), a privately-held luxury jewelry company with distribution in high-end department stores, flagship and eCommerce, from October 2015 until September 2018. Prior to Ippolita, Ms. Beraud was Executive Vice President for Tiffany & Co., with responsibility for its Global Retail Operations and oversight of strategic store development and real estate from October 2014 until June 2015. Prior to Tiffany & Co., Ms. Beraud served as Chief Executive Officer of Living Proof, Inc., a privately-held company that uses advanced medical and materials technologies to create hair care and skin care products for women, from December 2011 to October 2014. Prior to Living Proof, Inc., Ms. Beraud served as President of Starbucks/Lipton Joint Ventures and Chief Marketing Officer of PepsiCo Americas Beverages from July 2009 to June 2011, and PepsiCo’s Global Chief Marketing Officer from December 2008 to July 2009. Before PepsiCo, Ms. Beraud spent 13 years at L. Brands, Inc. (formerly known as Limited Brands, Inc.) in various roles, including Chief Marketing Officer of Victoria’s Secret and Executive Vice President of Marketing for its broader portfolio of specialty brands, including Bath & Body Works, C.O. Bigelow, Express, Henri Bendel and Limited Stores. Ms. Beraud currently serves on the board of directors of Levi Strauss & Co. and Fashion for Good. Ms. Beraud served on the board of directors of New York & Company, Inc. (now known as RTW Retailwinds, Inc.) from May 2011 to June 2015.
Director Qualifications: Our Board believes that Ms. Beraud's extensive marketing and consumer branding experience, as well as her extensive managerial and operational knowledge make her qualified to serve on our Board.
Key Skills: |
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Former CEO of Sh'nnong Beverage Company
Director Since: 2019
Committee Memberships: •Brand Strategy Committee (member since October 2019) •Compensation Committee (member since May 2021)
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| Carey O'Connor Kolaja has served as a director of our Company since March 2021. Ms. Kolaja has over 29 years of experience in the financial technology and payments industries. In March 2023, Ms. Kolaja was appointed as the chief executive officer of Versapay, an accounts receivable software provider. From October 2020 to October 2022, Ms. Kolaja served as the Chief Executive Officer of AU10TIX, a global identification verification and authentication platform. She initially joined AU10TIX in May 2019 as President and Chief Operating Officer. From November 2015 to April 2019, Ms. Kolaja served as the Global Chief Product Officer of Citi Fintech at Citigroup Inc. From November 2003 to October 2015, Ms. Kolaja served in various leadership capacities at PayPal Holdings, Inc., including as Vice President, Global Consumer Products. During her time at PayPal, Ms. Kolaja led international teams to design, deploy, and operate global fintech and payments products. Ms. Kolaja holds a B.S. in Business from Indiana University Bloomington and is a graduate of the executive program of Stanford University.
Director Qualifications: Our Board believes that Ms. Kolaja’s leadership experience in the financial technology and payment industries and in product development and business strategy makes her qualified to serve on our Board.
Key Skills: |
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CEO, Versapay
Director Since: 2021
Committee Memberships: •Audit Committee (member as of the date of the Annual Meeting) •Brand Strategy Committee (member since May 2021) •Compensation Committee (member from May 2021 to May 2023) |
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| Dr. Vlad Coric has served as the chief executive officer and a director of Biohaven Ltd. since October 2015. From January 2007 to September 2015, he served as a group director of global clinical research at Bristol-Myers Squibb Company, focusing both in oncology global clinical research and neuroscience global clinical research. He has been involved in multiple drug development programs including marketed drugs such as Abilify (aripiprazole; partial dopamine agonist), Opdivo (nivolumab; anti-PD1), Yervoy (Ipilimumab; anti-CTLA-4), Daklinza (daclatasvir; NS5A inhibitor) and Sunvepra (asunaprevir; NS3 inhibitor). Since July 2001, Dr. Coric has also continued to serve as an associate clinical professor of psychiatry at Yale School of Medicine. He previously served as the chief of the Yale Clinical Neuroscience Research Unit and the director of the Yale Obsessive-Compulsive Disorder Research Clinic. He has served as president of the Connecticut Psychiatric Society. Dr. Coric received his M.D. from Wake Forest University School of Medicine. He completed his internship at Yale-New Haven Hospital and residency training at the Yale Psychiatry Residency Training Program, where he also served as the program-wide chief resident for the Yale Department of Psychiatry, and chief resident on the PTSD firm at the West-Haven Connecticut Veterans Administration Hospital. Dr. Coric was an honors scholar in neurobiology and physiology at the University of Connecticut where he received a B.S. degree. Dr. Coric previously served on the board of directors of Social Capital Suvretta Holdings Corp. from June 2021 to August 2022, and currently serves on the boards of Veradermics, Vita Therapeutics and Pyramid Biosciences.
Director Qualifications: Dr. Coric was nominated for election because of his drug development and drug commercialization expertise in the therapeutics space, executive leadership experience at a global biopharmaceutical company, and strategic and financial expertise.
Key Skills: |
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CEO and Chairman, Biohaven, Ltd.
Director Since: 2023
Committee Memberships: •Compensation Committee (member as of the date of the Annual Meeting) |
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| Angus C. Russell has served as a director and Chairman of the Board of our Company since March 2014. Mr. Russell was Chief Executive Officer of Shire plc (“Shire”), a biopharmaceutical company focused on the development of therapies for the treatment of rare and specialty conditions, from June 2008 until April 2013, and a member of its board of directors from 1999 until 2013. From December 1999 to June 2008, Mr. Russell served as Chief Financial Officer of Shire. Prior to joining Shire, Mr. Russell served at AstraZeneca plc, a pharmaceutical and biologics company, most recently as VP of Corporate Finance. Mr. Russell served on the board of directors at Mallinckrodt plc, a pharmaceuticals company, from August 2014 to June 2022, and TherapeuticsMD, Inc., a pharmaceutical company, from March 2015 until December 2022. Mr. Russell has also served on the board of directors for Lineage Cell Therapeutics, Inc. (formerly known as BioTime, Inc.), a biotechnology company, since December 2014.
Director Qualifications: Mr. Russell was nominated for election because of his leadership experience, financial expertise, experience at multiple public pharmaceutical companies and his expertise in the development and commercialization of specialty pharmaceutical products.
Key Skills: |
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Former CEO of Shire plc
Director Since: 2014
Committee Memberships: •Compensation Committee (member since February 2018) •Nominating and Corporate Governance Committee (member since May 2014) |
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| Julian S. Gangolli has served as a director since July 2016. From May 2015 to April 2019, he served as President, North America of GW Pharmaceuticals Inc., and President of Greenwich Biosciences, Inc., the U.S. subsidiary of GW Pharmaceuticals Inc., spearheading the buildout of the company's U.S. commercial infrastructure in advance of the potential launch of its lead therapeutic candidate, Epidiolex® (cannabidiol or CBD), which was in late-stage development for a number of child-onset epilepsy syndromes. Mr. Gangolli also served as a member of the board of directors of GW Pharmaceuticals Inc. from July 2015 to March 2017. Prior to joining GW Pharmaceuticals Inc., Mr. Gangolli served as President of the North American Pharmaceutical division of Allergan Inc. for 11 years. Prior to that, he served as Senior Vice President, U.S. Eye Care at Allergan. Prior to Allergan, Mr. Gangolli served in sales and marketing positions at VIVUS, Inc., Syntex Pharmaceuticals, Inc., and Ortho-Cilag Pharmaceuticals Ltd in the United Kingdom. Mr. Gangolli currently serves as a member of the board of directors of Krystal Biotech, Inc., a clinical-stage gene therapy company, and Outlook Therapeutics, Inc., a late clinical-stage biopharmaceutical company.
Director Qualifications: Mr. Gangolli was nominated for election because of his operating experience in the biopharmaceutical industry, experience at multiple public pharmaceutical companies and his expertise in the development and commercialization of aesthetic and therapeutic pharmaceutical products.
Key Skills: |
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Former President, North America of GW Pharmaceuticals Inc.
Director Since: 2016
Committee Memberships: •Audit Committee (member since July 2016) •Brand Strategy Committee (member since October 2019) |
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| Olivia C. Ware has served as a director of our Company since March 2021. Ms. Ware has more than 21 years of experience in pharmaceutical drug development, commercialization and healthcare management. From November 2019 to March 2021, Ms. Ware served as the Senior Vice President, BTK Franchise Head at Principia Biopharma Inc., which was acquired by Sanofi S.A. in 2020, where she was responsible for developing overall portfolio strategy for the company’s three BTKi molecules. From 2018 to 2019, Ms. Ware served as Senior Vice President, U.S. Market and Franchise Development at Proteus Digital Health, Inc. From 2011 to 2018, Ms. Ware worked in a number of public and private biopharma firms as a private consultant. From 2016 to 2017, Ms. Ware was the Chief Commercial Officer at CytRx, Inc. From 1997 to 2010, Ms. Ware worked at Genentech, Inc. in a variety of roles of increasing responsibility in commercial, team leadership and product development. During her time at Genentech, Ms. Ware played a key role in the launch of several commercial drug products, including Rituxan®, Herceptin®, Avastin® and Lucentis®, and as Head of Oncology Team Leadership was responsible for molecule, disease and platform strategic plans and oncology portfolio management. Ms. Ware served as a member of the board of Ambrx Biopharma Inc., a clinical-stage biopharmaceutical company, from April 2021 to June 2022 and has served as a director of Arcellx, Inc. since May 2022. Ms. Ware holds an A.B. in Psychology from Davidson College and an M.B.A. in Finance and Marketing from the University of North Carolina at Chapel Hill.
Director Qualifications: Ms. Ware was nominated for election to our Board because of her extensive leadership experience in pharmaceutical development and commercializing drug products at multiple pharmaceutical companies.
Key Skills: |
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Former SVP, BTK Franchise Head at Principia Biopharma Inc.
Director Since: 2021
Committee Memberships: •Nominating and Corporate Governance Committee (member since May 2021) •Science and Technology Committee (member from May 2021 to February 2023) |
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| Mark J. Foley has served as a director of our Company since September 2017, as our Chief Executive Officer since October 2019, and served as our President from October 2019 until November 2021. Mr. Foley has more than 26 years of operational and investment experience in the healthcare arena. Previously, Mr. Foley was Chairman, President and CEO of ZELTIQ Aesthetics, Inc. (“ZELTIQ”), a manufacturer of medical devices for cryolipolysis procedures, serving from 2012 through the company’s acquisition in 2017 by Allergan plc. Additionally, Mr. Foley served as a Managing Director at RWI Ventures, a technology and life sciences venture capital fund, from 2004 through 2018. Prior to ZELTIQ, Mr. Foley held a variety of senior operating roles in large public companies and venture-backed startups, including U.S. Surgical Corporation, Guidant Corporation, Devices for Vascular Intervention (acquired by Eli Lilly & Co.), Perclose (acquired by Abbott Laboratories) and Ventrica (acquired by Medtronic PLC) where he was the founder and CEO. Mr. Foley has served on the board of directors for Glaukos Corp., an opthalmic medical technology and pharmaceutical company, since 2014 and served on the board of directors for SI-BONE, Inc., a medical device company, from June 2019 to June 2021. Mr. Foley received a Bachelor of Arts degree from the University of Notre Dame.
Director Qualifications: Our Board believes that Mr. Foley’s leadership experience, financial expertise, experience at multiple public pharmaceutical companies and his expertise with the development and commercialization in the aesthetics, medical device, biotechnology and financial technology industries make him qualified to serve on our Board.
Key Skills: |
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CEO of Revance
Director Since: 2017 |
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| Christian W. Nolet has served as a director of our Company since July 2019. Mr. Nolet has more than 42 years of experience in various leadership roles in the audit services profession and in the life sciences industry. Mr. Nolet was an audit partner at Ernst & Young LLP (“EY”), a professional services firm, from November 2001 to June 2019. While at EY, he led the West EY Life Sciences Industry Group and currently serves on both the Executive Committee and Finance Committee (Chair) of the California Life Sciences Institute. He was also a member of the Finance & Investment Committee and Emerging Companies Section of BIO (the Biotechnology Innovation Organization). Prior to EY, Mr. Nolet was a partner at PricewaterhouseCoopers LLP from 1991 to 2001. Mr. Nolet holds a B.S. in Accounting from San Diego State University and is a Certified Public Accountant (CPA - Retired) in California. Mr. Nolet currently serves on the board of directors of Jasper Therapeutics, Inc., a biotechnology company. Mr. Nolet served on the board of directors of Viela Bio, Inc. until it was acquired in March of 2021, Ambrx Biopharma Inc. until November of 2021 and PolarityTE until January of 2023.
Director Qualifications: Our Board believes that Mr. Nolet’s experience with multiple life sciences companies ranging from growing venture-capital backed startups to Fortune 100 companies, combined with his financial expertise as a former audit partner and California CPA (Retired), makes him qualified to serve on our Board.
Key Skills: |
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Former Partner, EY
Director Since: 2019
Committee Memberships: •Audit Committee (member since July 2019) •Nominating and Corporate Governance Committee (member since May 2021) |
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BOARD MATTERS
Independence of the Board of our Company since March 2014. Mr. Russell was Chief Executive Officer of Shire plc, or Shire, a biopharmaceutical company, from June 2008 until April 2013, and a member of its board of directors from 1999 until 2013. From December 1999 to June 2008, Mr. Russell served as Chief Financial Officer of Shire. Prior to joining Shire, Mr. Russell served at AstraZeneca plc, a pharmaceutical and biologics company, most recently as VP of Corporate Finance. Mr. Russell is a former Non-Executive Director of the City of London Investment Trust plc. Mr. Russell is a Chartered Accountant and is a Fellow of the Association of Corporate Treasurers. Mr. Russell has served on the board of directors at Mallinckrodt plc, a pharmaceuticals company, since August 2014, BioTime, Inc., a biotechnology company, since December 2014 and TherapeuticsMD, Inc., a pharmaceutical company, since March 2015. Our board of directors believes that Mr. Russell’s financial expertise, experience at multiple public pharmaceutical companies and his expertise in the development and commercialization of specialty pharmaceutical products make him qualified to serve on our board of directors.
Phyllis Gardner, M.D., age 67, has served as a director of our Company since December 2006. Dr. Gardner has spent over 35 years in academia, medicine and industry. She served at Essex Woodlands, a growth equity firm that focuses on the healthcare industry, from June 1999 to 2014, in various capacities including as an adjunct Partner. Dr. Gardner has served on the board of directors of several public and private companies, including Corium International, Inc. since November 2007. She began her academic medical career at Stanford University, where she has held several positions including Senior Associate Dean for Education and Student Affairs and remains today as Professor of Medicine. From 1994 to 1998, she took a leave of absence from Stanford University to serve as Principal Scientist, Vice President of Research and Head of ALZA Technology Institute, a major drug delivery company. Dr. Gardner holds a B.S. from the University of Illinois and an M.D. from Harvard University. Our board of directors believes that Dr. Gardner’s medical, healthcare and private equity experience, operating experience and significant experience serving as a director of our company and other healthcare companies make her qualified to serve on our board of directors.
Julian S. Gangolli, age 60, has served as a director since July 2016. He is President, North America of GW Pharmaceuticals Inc., and President of Greenwich Biosciences, Inc., the U.S. subsidiary of GW Pharmaceuticals, spearheading the buildout of the company’s U.S. commercial infrastructure in advance of the potential launch of its lead therapeutic candidate, Epidiolex® (cannabidiol or CBD), which is in late-stage development for a number of child-onset epilepsy syndromes. Prior to joining GW Pharma, Mr. Gangolli served as President of the North American Pharmaceutical division of Allergan Inc. for 11 years. Prior to that, he served as Senior Vice President, U.S. Eye Care at Allergan. Prior to Allergan, Mr. Gangolli served in sales and marketing positions at VIVUS, Inc., Syntex Pharmaceuticals, Inc., and Ortho-Cilag Pharmaceuticals Ltd in the United Kingdom. Our board of directors believes that Mr. Gangolli’s operating experience in the biopharmaceutical industry, experience at multiple public pharmaceutical companies and his expertise in the development and commercialization of specialty pharmaceutical products make him qualified to serve on our board of directors.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2019 ANNUAL MEETING - CLASS II
Mark J. Foley, age 52, has served as a director of our Company since September 2017. Mr. Foley has more than 25 years of operational and investment experience in the healthcare arena. He is currently Managing Director of RWI Ventures, a venture capital firm focused on life sciences, networking, semiconductor and software investments. Previously, Mr. Foley was Chairman, President and CEO of ZELTIQ Aesthetics (ZLTQ), serving from 2012 through the company’s acquisition in 2017 by Allergan (AGN). Prior to ZELTIQ, Mr. Foley held a variety of senior operating roles in large public companies and venture-backed startups, including U.S. Surgical Corporation, Guidant Corporation, Devices for Vascular Intervention (acquired by Eli Lilly), Perclose (acquired by Abbott) and Ventrica (acquired by Medtronic) where he was the founder and CEO. He is a board member at Glaukos (GKOS) and also serves as Chairman of ULab, HintMD and Arrinex. Mr. Foley received a Bachelor of Arts degree from the University of Notre Dame. Our board of directors believes that Mr. Foley’s financial expertise, experience at multiple public pharmaceutical companies and his expertise with the development and commercialization in medical device and biotechnology industries make him qualified to serve on our board of directors.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2020 ANNUAL MEETING - CLASS III
L. Daniel Browne, age 56, is one of our co-founders and has served as our President and Chief Executive Officer and a member of our board of directors since we commenced operations in 2002. Mr. Browne served as President and Chief Executive Officer of Neomend, Inc., a medical technology and biomaterials company, from 2001 to 2003. From 1997 through 2000, Mr. Browne served as President of Prograft Medical Inc., a medical technology company. Previously, Mr. Browne served for more than 16 years in leadership positions in product development, sales and marketing and business development in the Gore Medical Products Division of W.L. Gore & Associates, Inc., a global technology company, lastly as Business Leader in the Medical Products Division. Mr. Browne holds a B.S. from the University of Hawaii in Cell and Molecular Biology and an M.B.A. from Pepperdine University. Our board of directors believes that Mr. Browne is qualified to serve on our board of directors based on such experience and leadership roles, and his management perspective of the company, including our strategic opportunities and challenges and his track record of new product development, sales and marketing and value creation, each of which relates to our commercial opportunities.
Robert Byrnes, age 73, has served as a director of our Company since August 2004. Mr. Byrnes has spent over forty years in the medical device and biotechnology industries. From October 1997 until October 2002, and from January 2005 to the present, Mr. Byrnes has served as the President and Chief Executive Officer of Roan Advisors, Inc., an advisory service for healthcare organizations. From November 2002 to January 2005, he served as the President and Chief Executive Officer of Thermage, Inc., a medical device company focused on non-invasive tissue tightening. Mr. Byrnes has also served as Chairman and Chief Executive Officer of Tokos Medical Corporation, a healthcare services company, President of Caremark, Inc., a home healthcare service company, and Vice President of Marketing and Business Development for Genentech, Inc., a biotechnology company. He currently serves on the board of directors of Allego Ophthalmics, LLC. Mr. Byrnes holds a B.S. in Pharmacy from Ferris State University and an M.B.A. degree in Marketing and Finance from Loyola University, Chicago. Our board of directors believes that Mr. Byrnes’s operating experience in the medical device and biotechnology industries, combined with his prior board positions, make him qualified to serve on our board of directors.
Philip J. Vickers, Ph.D., age 58, has served as a director of our company since February 2015. Dr. Vickers has over 25 years in the pharmaceutical industry experience. Since November 2017, he has been serving as the Chief Executive Officer and a member of the board of directors of Northern Biologics Inc. From 2011 until June 2017, Dr. Vickers served as Global Head of Research and Development and a member of the Executive Committee of Shire Plc, or Shire, a biotechnology company focused on the development of therapies for the treatment of rare and specialty conditions. Under Dr. Vickers’ leadership Shire’s pipeline had approximately 40 programs in clinical development in the areas of Genetic Disease, GI disease, Hematology, Immunology, Neuroscience, Ophthalmology and Oncology. Prior to Shire, Dr. Vickers held positions of increasing responsibility in Research and Development at Merck, Pfizer, Boehringer-Ingelheim and Resolvyx Pharmaceuticals. Dr. Vickers obtained his PhD in Biochemistry from the University of Toronto, which was followed by postdoctoral research in mechanisms of multidrug resistance in breast cancer at the National Cancer Institute in Bethesda, Maryland. Our board of directors believes that Dr. Vickers' experience at multiple pharmaceutical companies and his expertise in the development and commercialization of pharmaceutical products make him qualified to serve on our board of directors.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND CORPORATE GOVERNANCE
INDEPENDENCE OF THE BOARD OF DIRECTORS
As required under Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. The Board consults with the Company’s counselCompany's legal department to ensure that the board’sBoard's determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in the pertinent listing standards of Nasdaq, as in effect from time to time. Consistent with these considerations, after review of all relevant identified transactions orand relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, the Board has affirmatively determined that all of our directors, including our 2023 director nominees, except for Mr. Browne,Foley, our President and Chief Executive Officer, representing seven of our eight directors,CEO, are “independent directors” within the meaning of the applicable Nasdaq listing standards. In making this determination, the Board found that none of these directors or nominees for director had a material or other disqualifying relationship with the Company.
BOARD LEADERSHIP STRUCTUREBoard Leadership Structure
TheOur Board of Directors of the Company has an independent chair (the “Board Chair”), Mr. Russell, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board. Accordingly, the Board Chair has substantial ability to shape the work of the Board. The Company believes that separation of the positions of Board Chair and Chief Executive OfficerCEO reinforces the independence of the Board in its oversight of the business and affairs of the Company. In addition, the Company believes that having an independent Board Chair creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of the Company and its stockholders. As a result, the Company believeswe believe that having an independent Board Chair can enhance the effectiveness of the Board as a whole.
ROLE OF THE BOARD IN RISK OVERSIGHTRole of the Board in Risk Oversight
One of the Board’s key functions is informed oversight of the Company’s risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. Our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. TheIn addition, our Audit Committee has the responsibility to consider the adequacy and effectiveness of our information security policies and practices and the internal controls regarding information security, including those concerning data privacy, cybersecurity, backup of information systems and compliance with the payment data security standards set forth by the PCI DSS. Our Audit Committee also monitors compliance with legal and regulatory requirements.requirements, including through oversight of our enterprise risk management program. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines,policies and ESG strategy, including whether they are successful in preventing illegal or improper liability-creating conduct.conduct, and reviews our stockholder engagement efforts. Our Compensation Committee reviews and approves executive officer compensation and its alignment with the Company's business and strategic plans and assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
MEETINGS OF THE BOARD OF DIRECTORSMeetings of the Board
The Board met eightfive times during 2017.2022. All directors attended at least 75% of the aggregate number100% of meetings of the Board and of the committees on which they served held during the portion2022.
Information Regarding Committees of the last fiscal year for which they were directors or committee members, respectively.
INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORSBoard
The Board hashad an established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Science and Technology Committee.Committee and a Brand Strategy Committee during the year ended December 31, 2022. In February 2023, the Board dissolved the Science and Technology Committee in order to transition the responsibilities of that committee to the full Board. The following table provides membership information for fiscal 2017 for each of the Board committees:
committees as of December 31, 2022 and the number of meetings held by each committee during 2022:
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Name | Audit | Compensation | Nominating and Corporate Governance | Science and Technology |
Mr. Robert Byrnes | X | X* | X | |
Mr. Ronald W. Eastman(1)
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Mr. Mark Foley(2)
| X* | | | |
Mr. Julian S. Gangolli, Ph.D | X | | | |
Dr. Phyllis Gardner | | X | | X |
Mr. Mark A. Prygocki(3)
| X | | | |
Mr. Angus C. Russell(4)
| X | | X* | |
Dr. Philip Vickers | | | | X * |
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| Name | | Audit | | Compensation | | Nominating and Corporate Governance | | Science and Technology | | Brand Strategy |
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| Jill Beraud | | | | X | | | | | | X |
| Julian S. Gangolli | | X | | | | | | | | X |
| Chris Nolet | | X | | | | X | | | | |
| Carey O'Connor Kolaja | | | | X | | | | | | X |
| Angus C. Russell | | | | X | | X | | | | |
| Philip J. Vickers, Ph.D. | | X | | | | | | X | | |
| Olivia C. Ware | | | | | | X | | X | | |
| Meetings | | 5 | | 5 | | 5 | | 4 | | 4 |
*
Boxes including a bold X indicate committee chairperson
Dr. Vickers, Chair of the Science and Technology Committee Chairpersonand a member of the Audit Committee, is retiring from the Board effective immediately prior to the Annual Meeting. Effective as of the Annual Meeting, committee composition will change as follows: Dr. Coric will become a member of the Compensation Committee, and Ms. Kolaja will transition from the Compensation Committee to the Audit Committee.
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(1) | Mr. Eastman resigned from the Board of Directors effective as of September 5, 2017. |
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(2) | Mr. Foley joined our Board of Directors effective as of September 5, 2017. |
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(3) | Mr. Prygocki resigned from the Board of Directors effective as of May 11, 2017. |
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(4) | Mr. Russell joined the Audit Committee effective as of May 11, 2017 and resigned from the Audit Committee effective as of September 5, 2017. Mr. Russell joined the Compensation Committee effective as of February 8, 2018. |
Below is a description of each of the standing committeecommittees of the Board of Directors.in 2022.
AUDIT COMMITTEEAudit Committee
The Audit Committee of the Board of Directors was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended or the Exchange Act,(the “Exchange Act”), to oversee the Company’sour corporate accounting and financial reporting processes and audits of itsour consolidated financial statements. The principal duties and responsibilities of our Audit Committee include:
•appointing and retaining an independent registered public accounting firm to serve as independent auditor to audit our Consolidated Financial Statements,consolidated financial statements, overseeing the independent auditor’s work and determining the independent auditor’s compensation;
•approving in advance all audit services and non-audit services to be provided to us by our independent auditor;
•establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls, auditing or compliance matters, as well as for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;
•reviewing and discussing with management and our independent auditor the results of the annual audit and the independent auditor’s review of our quarterly Condensed Consolidated Financial Statements; andcondensed consolidated financial statements;
•conferring with management and our independent auditor about the scope, adequacy and effectiveness of our internal accounting controls, the objectivity of our financial reporting and our accounting policies and practices.practices;
•reviewing and discussing with management and, as appropriate, the independent auditor, the Company’s guidelines and policies with respect to risk assessment and risk management, including the Company’s major financial risk exposures and the steps taken by management to monitor and control these exposures and the adequacy and effectiveness of the Company’s information security policies and practices and the internal controls regarding information security, including those concerning data privacy, cybersecurity, backup of information systems and compliance with PCI DSS; and
•reviewing and assessing, annually, the performance of the Audit Committee and the adequacy of its charter.
The Audit Committee is currently composed of three directors: Mr. Foley, Mr. Byrnes andNolet, Mr. Gangolli and Dr. Vickers, with Mr. FoleyNolet serving as chair of the committee. TheEffective as of the Annual Meeting, Dr. Vickers will retire as a member of the Audit Committee met five times during 2017.and Ms. Kolaja will become a member of the Audit Committee. The Board has adopted a written Audit Committee charter that is available to stockholders on the Company’sour website at www.revance.com.www.revance.com.
Our Board of Directors has determined that all current members of our Audit Committee satisfy the independence requirements under Rule 5605(c)(2)(A)(i) and (ii) of the Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act. Each member of the Audit Committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq. Our Board of Directors has determined that each of Messrs. Byrnes and FoleyMr. Nolet is an “audit committee financial expert” within the meaning of the SEC regulations. Our board of directorsBoard has determined that the composition of our Audit Committee meets the criteria for independence under, and the functioning of our Audit Committee complies with, the applicable requirements of the Sarbanes-Oxley Act, applicable requirements of the Nasdaq listing rules and SEC rules and regulations. We intend to continue to evaluate the requirements applicable to us and comply with future requirements to the extent that they become applicable to our Audit Committee.
Report of the Audit Committee of the Board*
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee has reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 20172022 with management of the Company.our management. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees, as adopted bythe applicable requirements of the Public Company Accounting Oversight Board or PCAOB.(the “PCAOB”) and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’sour Annual Report on Form 10-K for the fiscal year ended December 31, 2017,2022, filed with the SEC on March 2, 2018.February 28, 2023.
The foregoing report has been furnished by the Audit Committee.
Mr. Mark J. Foley
Mr. Robert ByrnesChris Nolet
Mr. Julian S. Gangolli
Dr. Philip J. Vickers
*The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Companyour filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.filing.
COMPENSATION COMMITTEECompensation Committee
The Compensation Committee acts on behalf of the Board to review, recommend for adoption and oversee our compensation strategy, policies, plans and programs, including:
•establishment of corporate and individual performance objectives relevant to the compensation of our executive officers and other senior management and evaluation of performance in light of these stated objectives;
•review and approval of the compensation and other terms of employment or service, including severance and change-in-control arrangements, of our CEO and other executive officers;
•administration of our equity compensation plans, deferred compensation plans and other similar plans and programs;
•assisting the Board in its oversight of the development, implementation and effectiveness of the Company’s policies and strategies relating to its human capital management function, including, but not limited to, those policies and strategies regarding recruiting, retention, career development and progression, diversity and employment practices;
•reviewing and recommending to the Board compensation paid to the non-employee directors for their Board and Board committee service;
•overseeing engagement with stockholders and proxy advisory firms on executive compensation matters; and
•reviewing and assessing, annually, the performance of the Compensation Committee and the adequacy of its charter.
The Compensation Committee is currently composed of three directors: Mr. Byrnes, Dr. GardnerMs. Beraud, Ms. Kolaja and Mr. Russell, with Mr. ByrnesMs. Beraud serving as chair of the committee. Effective as of the Annual Meeting, Dr. Coric will become a member of the Compensation Committee, and Ms. Kolaja will no longer serve as a member of the Compensation Committee. All members of the Company’sour Compensation Committee are independent (as independence is currently defined in Rule 5605(d)(2) of the Nasdaq listing standards). The Compensation Committee met four times during the fiscal year. The Board has adopted a written Compensation Committee charter that is available to stockholders on the Company’sour website at www.revance.com.www.revance.com.
The Compensation Committee of the Board of Directors acts on behalf of the Board to review, recommend for adoption and oversee the Company’s compensation strategy, policies, plans and programs, including:
establishment of corporate and individual performance objectives relevant to the compensation of the Company’s executive officers and other senior management and evaluation of performance in light of these stated objectives;
review and approval of the compensation and other terms of employment or service, including severance and change-in-control arrangements, of the Company’s Chief Executive Officer and other executive officers; and
administration of the Company’s equity compensation plans, pension and profit-sharing plans, deferred compensation plans and other similar plan and programs.
Compensation Committee Processes and Procedures
Typically, the Compensation Committee meets at least four times annually and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chairchair of the Compensation Committee. The Compensation Committee meets regularly in executive session. However, from time to time, variousIn addition, members of management and other employees as well as outside advisors or consultants may beare regularly invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. See "Executive Compensation—Compensation Discussion and Analysis” for further information. The Chief Executive OfficerCEO may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at theour expense, of the Company, advice and assistance from compensation consultants and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. In particular, the Compensation Committee has the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluation of Chief Executive Officer,CEO, senior executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Compensation Committee, other than in-house legal counsel and certain other types of advisers, only after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the adviser’s independence; however, there is no requirement that any adviseradvisor be independent.
The Compensation Committee has retained Radford, anAon’s Human Capital Solutions practice, a division of Aon Hewitt company, or Radford,plc (“Aon”), through August 1, 2022 and retained Frederic W. Cook & Co., Inc. (“FW Cook”) as of August 2, 2022, as its independent compensation consultant. References herein to the Compensation Committee Consultant refer to Aon prior to August 2, 2022 and FW Cook on and following August 2, 2022. The Compensation Committee requested that Radford:the Compensation Committee Consultant:
•evaluate the efficacy of the Company’sour existing compensation strategy and practices in supporting and reinforcing the Company’sour long-term strategic goals; and
•assist in refining the Company’sour compensation strategy and in developing and implementing an executive compensation program to execute that strategy.
In addition, as part of its engagement, Radford wasour Compensation Committee requested bythat the Compensation Committee toConsultant develop a comparative group of companies and to perform analyses of competitive performance and compensation levels for that group. Although our Board and Compensation Committee consider the advice and recommendations of Radfordthe Compensation Committee Consultant as it relates to our executive compensation program, the Board and Compensation Committee ultimately make their own decisions about these matters. See “Executive Compensation—Compensation Discussion and Analysis” for further information. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONNominating and Corporate Governance Committee
As noted above, duringOur Nominating and Corporate Governance Committee makes recommendations regarding corporate governance, the fiscal year ended December 31, 2017, Mr. Byrnes and Dr. Gardner served on the Compensation Committee, with Mr. Byrnes serving as its chair. Neither Mr. Byrnes nor Dr. Gardner is currently or has been at any time onecomposition of our employees. NoneBoard, identification, evaluation and nomination of director candidates and the structure and composition of committees of our Board and has oversight responsibility for ESG matters. The Nominating and Corporate Governance Committee has the following responsibilities, among other things, as set forth in the Nominating and Corporate Governance Committee’s charter:
•identifying, evaluating, nominating and recommending individuals for membership on our Board;
•reviewing and evaluating director performance on our Board and its applicable committees, and recommending to our Board and management areas for improvement;
•reviewing and recommending to our Board any amendments to our corporate governance policies;
•overseeing and recommending to the Board the Company’s corporate social responsibility and sustainability (ESG) initiatives, policies and procedures;
•reviewing and recommending to the Board the selection of the chair and membership of each Board committee;
•overseeing and reviewing our processes and procedures to provide information to our Board and its committees;
•reviewing annually with the CEO and other key members of management plans for succession to the offices of our executive officers currently serves, or has served duringand recommending to the last year, as a memberBoard the selection of individuals to succeed to these positions; and
•reviewing and assessing, annually, the performance of the BoardNominating and Corporate Governance Committee and the adequacy of Directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.its charter.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee is currently composed of twothree directors: Mr. Russell, Mr. Nolet and Mr. Byrnes,Ms. Ware, with Mr. Russell serving as the chair of the committee. All members of the Nominating and Corporate Governance Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards). The Nominating and Corporate Governance Committee met four times during the fiscal year.
Our Nominating and Corporate Governance Committee makes recommendations regarding corporate governance, the composition of our Board identification, evaluation and nomination of director candidates and the structure and composition of committees of our Board. The Nominating and Corporate Governance Committee has the following responsibilities, among other things, as set forth in the Nominating and Corporate Governance Committee’s charter:
reviewing periodically and evaluating director performance on our Board and its applicable committees, and recommending to our Board and management areas for improvement;
interviewing, evaluating, nominating and recommending individuals for membership on our Board;
overseeing and reviewing our processes and procedures to provide information to our Board and its committees;
reviewing and recommending to our Board any amendments to our corporate governance policies; and
reviewing and assessing, at least annually, the performance of the Nominating and Corporate Governance Committee and the adequacy of its charter.
The Nominating and Corporate Governance Committee also has other responsibilities set forth in theadopted a written Nominating and Corporate Governance Committee charter adopted by the Board, whichthat is available to stockholders on the Company’sour website at www.revance.com.www.revance.com.
The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements being over 21 years of age and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to considerconsiders such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of the Company’sour stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity, age, skills and such other factors as it deems appropriate, given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability.
The Board believes that diversity of viewpoints, background, experience and other characteristics, such as race, gender, ethnicity, sexual orientation, culture and nationality, are an important part of its makeup, and it actively seeks these characteristics in identifying director candidates. See “Proxy Summary—Information About Directors—Director Backgrounds, Experience and Diversity” for a description of key skills, experience, and attributes that we consider important in light of our current business and structure and that our directors bring to our boardroom. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to the Company during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. The committee also will take into accountalso consider the results of the Board’s self-evaluation, conducted annually on a group and individual basis. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of contacts and of the Board and management to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, and applicable SEC rules and regulations. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: Revance Therapeutics, Inc., 7555 Gateway Blvd, Newark, CA 94560,1222 Demonbreun Street, Suite 2000, Nashville, Tennessee, 37203, not later than November 24, 2023, to be considered for inclusion in next year’s proxy materials, and not later than February 9, 2019,3, 2024, nor earlier than January 10, 2019.4, 2024, to be considered timely for purposes of the advance notice provisions set forth in the Company’s bylaws. Submissions must include the name, age, business address and residence address of such nominee, the principal occupation or employment of such nominee, the class and number of shares of each class of our capital stock of the Company which are owned of record and beneficially by such nominee, the date or dates on which such shares were acquired and the investment intent of such acquisition, and a statement whether such nominee, if elected, intends to tender, promptly following such person’s failure to receive the required vote for election or reelection at the next meeting at which such person would face election or re-election, an irrevocable resignation effective upon acceptance of such resignation by the Board.Board and such other information requirements set forth in the Company's bylaws. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.
SCIENCE AND TECHNOLOGY COMMITTEEBrand Strategy Committee
The Science and Technology Committee is composed of two directors: Dr. Vickers and Dr. Gardner, with Dr. Vickers serving as chair of the committee. All members of the Science and Technology Committee are independent (as independence is currently defined in Rule 5605(d)(2) of the Nasdaq listing standards). The Science and Technology Committee met six times during the fiscal year. The principal duties and responsibilities of our Brand Strategy Committee include:
•reviewing and advising the Board on overall strategy, direction and effectiveness of our brand and marketing plans and strategies and its role in achieving our long-term goals and objectives;
•identifying and providing the Board with the committee’s views on marketing and branding developments and trends that are relevant to the Company and in alignment with the Company’s strategy and success of the commercialization of the Company’s products and services;
•assessing and advising the Board, from time to time, on the committee’s view of the quality, expertise recruitment and retention of sales and marketing personnel in our commercial organization;
•advising the Board with respect to collaborations with physicians and influencers, and participation in other programs to enhance the Company’s value proposition and visibility of its products and services in the marketplace; and
•reviewing and assessing, annually, the performance of the committee and, periodically, the adequacy of its charter.
The Brand Strategy Committee is currently composed of three directors: Ms. Beraud, Mr. Gangolli and Ms. Kolaja, with Ms. Beraud serving as chair of the committee. The Board has adopted a written Brand Strategy Committee charter that is available to stockholders on our website at www.revance.com.
Science and Technology Committee
In February 2023, the Board dissolved the Science and Technology Committee include:in order to transition the responsibilities of that committee to the full Board.
During the year ended December 31, 2022, the Science and Technology Committee had the following responsibilities, among other things:
•reviewing and advising the Board on the overall strategy, direction and effectiveness of the Company’sour research and development programs and related investments and our progress on the Company’s progress in achieving itsour long-term strategic research and development goals and objectives;
•identifying and providing the Board with the Committee’scommittee’s views on emerging science and technology issues and trends which are relevant to the Companyus and in alignment with the Company’sour strategy and on areas that are important to the success of the Company’sour research and development activities;
•reviewing and making recommendations to the Board and management with respect to the Company’sour clinical pipeline;
•assessing and advising the Board, from time to time, on the Committee’scommittee’s view of the overall quality and expertise of medical and scientific talent in the Company’sour research and development organization;
•assessing and advising the Board, from time to time, on the Committee’scommittee’s view of the quality and competitiveness of the Company’sour research and development programs and technology initiatives from a scientific perspective, including associated risk profile;
•for any major external investments in research and development that require approval of the Board, assessing those opportunities and advising the Board of the Committee’scommittee’s view on the scientific, technical and/or medical merit of the opportunity; and
•reviewing and assessing, at least annually, the performance of the Sciencecommittee and, Technology Committee andperiodically, the adequacy of its charter.
TheDuring the year ended December 31, 2022, the Science and Technology Committee also has other responsibilities set forth inwas composed of two directors: Dr. Vickers and Ms. Ware, with Dr. Vickers serving as chair of the written Sciencecommittee.
CORPORATE GOVERNANCE
The Board, as well as management, is committed to responsible corporate governance to ensure that we are managed for the benefit of our stockholders. To that end, the Board and Technology Committee charter adoptedmanagement regularly review and update our corporate governance policies and practices, as appropriate and based on feedback received during stockholder engagement and, when required, make changes to such policies and practices as mandated by the Sarbanes-Oxley Act of 2022, the Dodd-Frank Act, other SEC rules and regulations and the Nasdaq listing standards.
Stockholder Engagement
We believe that regular and transparent engagement with our investors on topics such as ESG, corporate governance and executive compensation is important and promotes long-term value for our stakeholders.
At our 2022 Annual Meeting of Stockholders, we held our fourth “say on pay” advisory vote. Our stockholders approved, on an advisory basis, the compensation of our named executive officers, as disclosed in our 2022 proxy statement. The proposal was supported by approximately 78% of the total votes cast. In 2022, we reached out to holders of approximately 61% of our outstanding common stock, excluding shares held by directors and executive officers. Members of our executive management team and the Chairman of our Board held informative discussions with stockholders representing approximately 33% of our outstanding common stock, excluding shares held by directors and executive officers. Stockholder feedback is regularly reviewed by the Compensation Committee, the Nominating and Corporate Governance Committee and the management team.
Our Compensation Committee will continue to evaluate our executive compensation program going forward in light of our stockholders’ views and our transforming business needs. Our Compensation Committee will continue to consider the outcome of our “say on the Company’s website at www.revance.com.pay” votes and our stockholders’ views when making future compensation decisions for our NEOs. As part of our commitment to building strong corporate governance, we will continue to seek input from our stockholders on a variety of corporate governance and sustainability topics and other issues that may impact our business or reputation.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Company’s Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. This informationdirectors, through the “Contact Revance” page on our website at www.revance.com. These communications will be received and reviewed by our Senior Vice President, General Counsel & Corporate Secretary, who will determine whether the communication should be presented to the Board. The purpose of this screening is available onto allow the Board to avoid having to consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications). All communications directed to the Audit Committee in accordance with the Company’s website at www.revance.com.Whistleblower Policy are sent directly to the Chair of the Audit Committee and our Senior Vice President, General Counsel & Corporate Secretary.
CODE OF ETHICSCorporate Governance Guidelines
The CompanyBoard has adopted the Revance Code of Business Conduct and Ethics that applies to all officers, directors and employees. The Code of Business Conduct and Ethics is available on the Company’s website at www.revance.com. If the Company makes any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website or in a manner otherwise permitted by applicable rules.
CORPORATE GOVERNANCE GUIDELINES
In April 2013, the Board of Directors documented the governance practices followed by the Company by adopting Corporate Governance Guidelines to assureensure that the Board will have the necessary authority and practices in place to review and evaluate the Company’s business operations as needed and to make decisions that are independent of the Company’s management. The guidelines are also intended to align the interests of directors and management with those of the Company’s stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to followfollows with respect to board composition and selection, board responsibilities, board meetings and involvement of senior management, Chief Executive OfficerCEO performance evaluation and succession planning and board committees and compensation. The Corporate Governance Guidelines, as well as the charters for each committee of the Board, may be viewed at www.revance.com.www.revance.com.
Director Tenure
The Board considers the historical and institutional knowledge that longer-tenured directors possess to be important to an appropriately balanced Board. Directors who have served on the Board for an extended period of time are able to provide continuity and valuable insight into the Company, its operations and prospects based on their experience with, and understanding of the Company’s history, policies and objectives. The Board also appreciates the value of thoughtful Board refreshment and regularly identifies and considers qualities, skills and other director attributes that would enhance the composition of the Board. In light of the value the Board places on having a mix of long and short tenured directors, the Board adopted a director tenure policy. The Board does not believe it should limit the number of terms for which an individual may serve as a director. However, directors reaching 12 years of service will be evaluated by the full Board with the expectation of stepping down. In certain circumstances, a majority vote of the independent directors, can be used to extend the service of a 12-year term director. If a 12-year director’s term is extended, they will be evaluated annually with the expectation that they will step down unless a majority vote of independent directors extends their term for another year. Board members that step down will continue to provide service until a suitable replacement is found by the Nominating and Corporate Governance Committee and fully ratified by the Board.
Five of our eight continuing directors were newly nominated and appointed to the Board from 2019-2023. If each independent director nominee is elected to the Board, after the Annual Meeting, our independent directors will have served an average of just over three years on the Board. Overall, our Board, including both independent and employee directors will have an average tenure of nearly four years. We believe the composition of our Board reflects a diversity of perspectives and is aligned with the strategic direction of the Company.
Director Commitments
Our Board believes that all members of the Board must have sufficient time to devote the necessary attention to his or her Board duties. In 2021, our Nominating and Corporate Governance Committee reviewed the policies of institutional and proxy advisory firms on director time commitments. Based on the information reviewed, the Nominating and Corporate Governance Committee recommended to the Board, and the Board approved, revisions to our Corporate Governance Guidelines to limit the total number of public company boards that a director may serve on as set forth below. The Board may approve service on additional boards in certain circumstances.
•a director who is not a public company chief executive officer: four total public company boards, including our Board;
•a director who serves as a chief executive officer of a public company: two total public company boards, including our Board, in addition to their employer's board; and
•a director who serves on the Audit Committee: three public company audit committees, including our Audit Committee, unless the audit committee member is a retired certified public accountant, chief financial officer or controller.
All of our directors are currently in compliance with our policy.
Annual Board and Committee Self-Evaluations
In 2021, our Nominating and Corporate Governance Committee analyzed our Board and Committee assessment process and recommended to the Board, and the Board approved, revisions to our Corporate Governance Guidelines to require that the Nominating and Corporate Governance Committee annually review, discuss and assess the performance of the Board, including Board committees. The Nominating and Corporate Governance Committee recommended revisions to the charters of each Board committee to require annual committee assessments, which was approved by the Board.
Mr. Russell, the independent Chair of the Board, leads the evaluation process in conjunction with our external legal advisors. Our external legal advisors prepare questionnaires that are completed by each director in their capacities as Board members and Board Committee members. Following receipt of the questionnaire results, our external legal advisors prepare summaries analyzing the feedback received, and providing that feedback to Mr. Russell on an anonymous basis. Mr. Russell reviews the feedback with the Nominating and Corporate Governance Committee and the Board and identifies any themes or issues that have emerged and recommends proposed changes, as appropriate, to the governance structure, process and/or policies.
Code of Business Conduct and Ethics
The Board has adopted a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all officers, directors, employees and consultants. The Code of Conduct addresses, among other things, ethical principles, insider trading, conflicts of interest, compliance with laws, financial integrity and public reporting, fair dealing, gifts and entertainment, proper use of Company assets and confidentiality.
The Code of Conduct is available on our website at www.revance.com. If we make any substantive amendments to the Code of Conduct or grant any waiver from a provision of the Code of Conduct to any executive officer or director, we will disclose the nature of the amendment on our website, by filing a current report on Form 8-K with the SEC within four business days of such amendment, or in a manner otherwise permitted by applicable law.
Committee Charters
Insider Trading and Hedging Policy
As part of our Insider Trading and Trading Window Policy (“Insider Trading Policy”), we require that our executive officers, directors and certain designated employees limit their transactions in our stock to defined time periods, subject to certain exceptions. We also require that executive officers, directors and certain designated employees notify, and receive approval from, a Company clearing officer prior to engaging in transactions in our stock and observe other restrictions designed to minimize the risk of apparent or actual insider trading. These restrictions apply to any entities or family members whose trading activities are controlled or influenced by such executive officer, director or employee.
Further, our Insider Trading Policy prohibits our directors and employees, including our executive officers, from engaging in short sales, transactions in put or call options, hedging transactions, margin accounts, pledges, or other inherently speculative transactions with respect to our stock at any time.
The disclosure under the caption “Hedging Policy” is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Stock Ownership Guidelines
ESG
We are committed to setting new standards in aesthetics and therapeutics through the contributions of our people, products and services. This requires more than breakthrough science and successful execution of business fundamentals. We must also be cognizant of and responsive to a broader set of issues that are increasingly seen as potential risks or opportunities for businesses. These issues, which include environmental impacts, social responsibility and strong governance, are of great interest to our investors, consumers, employees and other stakeholders.
For these reasons, we believe it is vital that ESG at Revance is shaped by our SAGE values of Speed, Audacity, Authenticity, Grit and Empathy, and incorporated into our corporate strategy and overall enterprise risk management. Particularly as we enter our third year as a commercial company, our responsibility is to understand which ESG-related initiatives are most pertinent to our business and to our stakeholders, act swiftly in mitigating potential risks that we identify and take advantage of opportunities to differentiate ourselves in the marketplace.
Our Commitment and Progress
In 2020, we made a formal commitment to operating sustainably and responsibly. As a first step, we published our inaugural ESG report in January 2021, which was guided by the Sustainability Accounting Standards Board framework for our sector. The report outlined our ESG and corporate citizenship priorities of building a great culture, creating access to healthcare, and leading with business ethics, compliance and strong governance. It also highlighted the progress we have made on these priorities, including enhancements to board diversity, composition and refreshment, improvements to executive compensation, the formation of a D&I committee and the completion of our first comprehensive stockholder outreach. Further, the Nominating and Corporate Governance committee was designated to oversee the Company’s ESG strategy and initiatives.
Building upon our initial progress and our long-term commitment to ESG, we have since continued to advance the program. In 2023, we will be publishing our second ESG report, which details our progress across the three pillars of our ESG strategy and the results of our first ESG materiality assessment conducted in response to stockholder feedback and our effort to better align our program with our corporate strategy. We are committed to our ESG journey and evolving our program over time as we continue to grow as an organization. Please see our 2022 ESG Report, which will be published on the Sustainability page of our website, for additional details on our ESG strategy, initiatives and progress.
NON-EMPLOYEE DIRECTOR COMPENSATION
The compensation provided to our non-employee directors in 2017 is enumerated in the table below. Mr. Browne, who is also one of our employees, did not and will not receive any compensation for his services as a director.
2017 Director Compensation Table
The following table sets forth a summary of the compensation received during the year ended December 31, 2017:
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| | | | | |
| Name | Fees Earned ($) | Stock Options and Awards ($)* | | Total ($) |
| Robert Byrnes | 67,777 | 135,513 |
| (1) | 203,290 |
Ronald W. Eastman (2) | 30,011 | 135,513 |
|
| 165,524 |
Mark J. Foley (3) | 19,079 | 318,733 |
| (4) | 337,812 |
| Julian S. Gangolli | 47,000 | 135,513 |
| (5) | 182,513 |
| Phyllis Gardner, M.D. | 49,500 | 135,513 |
| (6) | 185,013 |
Mark A. Prygocki (7) | 21,577 | — |
|
| 21,577 |
| Angus C. Russell | 83,581 | 135,513 |
| (8) | 219,094 |
| Philip Vickers | 51,750 | 135,513 |
| (9) | 187,263 |
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* | The dollar amounts in this column represent the grant date fair value of the stock option and restricted stock awards. These amounts have been calculated in accordance with ASC 718 using the Black-Scholes option-pricing model. For a discussion of valuation assumptions, see Note 11 to our financial statements and the discussion under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Stock-Based Compensation” included elsewhere in the Form 10-K filed on March 2, 2018. These amounts do not necessarily correspond to the actual value that may be recognized from the option and awards by the applicable directors. |
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(1) | As of December 31, 2017, Mr. Byrnes had options to purchase 53,333 shares of our common stock and restricted stock awards of 3,000 shares. |
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(2) | Mr. Eastman resigned from our Board effective September 5, 2017. |
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(3) | Mr. Foley joined our Board effective September 5, 2017. |
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(4) | As of December 31, 2017, Mr. Foley had options to purchase 12,000 shares of our common stock and restricted stock awards of 6,000 shares. |
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(5) | As of December 31, 2017, Mr. Gangolli had options to purchase 24,000 shares of our common stock and restricted stock awards of 3,000 shares. |
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(6) | As of December 31, 2017, Dr. Gardner had options to purchase 35,333 shares of our common stock and restricted stock awards of 3,000 shares. |
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(7) | Mr. Prygocki resigned from our Board effective May 11, 2017. |
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(8) | As of December 31, 2017, Mr. Russell had options to purchase 40,000 shares of our common stock and restricted stock awards of 3,000 shares. |
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(9) | As of December 31, 2017, Dr. Vickers had options to purchase 40,000 shares of our common stock and restricted stock awards of 3,000 shares. |
2022 Non-Employee Director Compensation Policy
In December 2013, the Board of Directors approved aOur non-employee director compensation policy is intended to provide a total compensation package that became effective upon the completionenables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our initial public offering, or the IPO, and was subsequently amended effective as of July 30, 2015, January 1, 2016, and February 16, 2017.
stockholders.
Under thisour non-employee director compensation policy, we pay each of our non-employee directors a cash retainer for service on the Board of Directors and for service on each committee on which the director is a member. The chairmanBoard Chair and chair of each committee receives an additional retainer for such service. These retainers are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment will be prorated for any portion of such quarter that the director is not serving on our BoardBoard.
Our non-employee director compensation policy provides for an initial grant of Directors. The retainers paidoptions to non-employeepurchase shares of our common stock and restricted stock awards (“RSAs”) to new directors for service onupon their joining the Board of Directors and for service on each committee of the Board of Directors on which the director is a member are as follows:
|
| | | | | | | |
| | Member Annual Service Retainer | | Chairman Additional Annual Service Retainer |
| Board of Directors | $ | 39,500 |
| | $ | 34,500 |
|
| Audit Committee | 7,500 |
| | 12,500 |
|
| Compensation Committee | 5,000 |
| | 7,250 |
|
| Nominating and Corporate Governance Committee | 4,500 |
| | 3,500 |
|
| Science and Technology Committee | 5,000 |
| | 7,250 |
|
Board. In addition, onat the date of each annual meeting of stockholders, held, each then-serving non-employee director that continuesreceives a grant of options to serve as a non-employee member on our Board of Directors will receive an option to purchase 6,000 shares of our common stock and 3,000 sharesRSAs.
Our Board reviews our non-employee director compensation policy at least annually and considers market data provided by our independent compensation consultant (Aon, in the case of restricted stock.our 2022 compensation program) as a reference point when making adjustments to our annual compensation levels for our non-employee directors. Our non-employee director compensation policy is described below. We did not make any changes to our non-employee director compensation policy for 2022.
Cash Compensation
The following table describes the annual cash compensation applicable to each role performed by non-employee directors as outlined in our non-employee director compensation policy in effect for the fiscal year ended December 31, 2022.
| | | | | | | | | | | | | | |
| | 2022 |
| | Member Annual Service Retainer | | Committee Chair Annual Service Retainer |
| Board of Directors | | $ | 50,000 | | | $ | 36,000 | |
| Audit Committee | | $ | 10,000 | | | $ | 20,000 | |
| Compensation Committee | | $ | 7,500 | | | $ | 15,000 | |
| Nominating and Corporate Governance Committee | | $ | 7,500 | | | $ | 15,000 | |
| Science and Technology Committee | | $ | 7,500 | | | $ | 15,000 | |
| Brand Strategy Committee | | $ | 7,500 | | | $ | 15,000 | |
Equity Compensation
Our non-employee director compensation policy provides that (i) the initial equity grant for new Board members shall consist of 50% stock options and 50% RSAs, with the total value of the equity grant equal to $350,000 and (ii) the annual equity grant for then-serving non-employee directors at each annual meeting of stockholders shall consist of 50% stock options and 50% RSAs, with the total value of the equity grant equal to $225,000, pro-rated for then-serving non-employee directors who have served on the Board for less than a full year. The exercise price of these options will equal the fair market value of our common stock on the date of grant, and these options will vest on the one-year anniversary of the grant date, subject to the director’s continued service as a director. The RSAs granted pursuant to the non-employee director compensation policy will vest on the one year anniversary of the grant date, subject to the director’s continued service as a director. This policy
The number of shares underlying each RSA is intendeddetermined by dividing the equity grant date value by the thirty-day trailing average closing stock price of our common stock as of the date of grant and, in the case of options, by applying a Black-Scholes option pricing model using the same historical average closing price. The Compensation Committee used a historical average closing market price to determine the number of shares subject to each RSA and option, rather than a single day stock price on the date of grant, in order to provide a totalmore stabilized stock value less
susceptible to possible swings in the market.The Compensation Committee understands that using a historical average stock price can result in the ultimate grant date value of an award as required to be reported in the Director Compensation Table under Accounting Standards Codification (“ASC”) 718 being higher or lower than the equity grant value, but has considered, in consultation with its independent compensation packageconsultant and determined that enablesthe process described above is the most appropriate for us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders.at this time.
Expense Reimbursement
Directors have been and will continue to be reimbursed for expenses directly related to their activities as directors, including attendance at board and committee meetings. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws.
2022 Director Compensation Table
The compensation provided to our non-employee directors for the year ended December 31, 2022 is enumerated in the table below. The table excludes Mark J. Foley, our CEO, who served as an executive officer in 2022. Mr. Foley received no compensation for serving as a director in 2022. The table includes Aubrey Rankin, who served as a director up until the 2022 annual stockholders’ meeting. As a former executive officer, Mr. Rankin received no compensation for serving as a director in 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Option Awards ($)(1) | | Total ($) |
| Jill Beraud | | $ | 80,000 | | | $ | 109,785 | | | $ | 109,725 | | (2) | $ | 299,510 | |
| Julian S. Gangolli | | $ | 67,500 | | | $ | 109,785 | | | $ | 109,725 | | (3) | $ | 287,010 | |
| Carey O’Connor Kolaja | | $ | 65,000 | | | $ | 109,785 | | | $ | 109,725 | | (4) | $ | 284,510 | |
| Chris Nolet | | $ | 77,500 | | | $ | 109,785 | | | $ | 109,725 | | (5) | $ | 297,010 | |
| Aubrey Rankin | | $ | — | | | $ | — | | | $ | — | | (6) | $ | — | |
| Angus C. Russell | | $ | 108,500 | | | $ | 109,785 | | | $ | 109,725 | | (7) | $ | 328,010 | |
| Philip J. Vickers, Ph.D. | | $ | 75,000 | | | $ | 109,785 | | | $ | 109,725 | | (8) | $ | 294,510 | |
| Olivia C. Ware | | $ | 65,000 | | | $ | 109,785 | | | $ | 109,725 | | (9) | $ | 284,510 | |
| | | | | | | | |
| | | | | | | | |
(1)The dollar amounts in this column represent the grant date fair value of the stock options and RSAs granted during 2022. These amounts have been calculated in accordance with ASC 718, Compensation – Stock Compensation, and, with respect to stock options, using the Black-Scholes option-pricing model. For a discussion of valuation assumptions, see Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 28, 2023 (the “FY2022 10-K”). These amounts do not necessarily correspond to the actual value that may be recognized from the stock options and RSAs by the applicable directors. (2)As of December 31, 2022, Ms. Beraud held options to purchase 48,307 shares of our common stock and 6,059 shares of common stock underlying RSAs.
(3)As of December 31, 2022, Mr. Gangolli held options to purchase 69,307 shares of our common stock and RSAs of 6,059 shares of common stock underlying RSAs.
(4)As of December 31, 2022, Ms. Kolaja held options to purchase 23,441 shares of our common stock and 6,059 shares of common stock underlying RSAs.
(5)As of December 31, 2022, Mr. Nolet held options to purchase 48,307 shares of our common stock and 6,059 shares of common stock underlying RSAs.
(6)As of December 31, 2022, Mr. Rankin held 152,368 shares of our common stock in trust and options to purchase 43,567 shares of our common stock. This excludes 11,905 shares of common stock underlying PSAs.
(7)As of December 31, 2022, Mr. Russell held options to purchase 85,307 shares of our common stock and 6,059 shares of common stock underlying RSAs.
(8)As of December 31, 2022, Dr. Vickers held options to purchase 85,307 shares of our common stock and 6,059 shares of common stock underlying RSAs.
(9)As of December 31, 2022, Ms. Ware held options to purchase 23,185 shares of our common stock and 6,059 shares of common stock underlying RSAs.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of DirectorsAudit Committee has selected PricewaterhouseCoopers LLP or PwC,(PwC) as the Company’sour independent registered public accounting firm for the fiscal year ending December 31, 20182023 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Representatives of PwC are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither the Company’sour bylaws nor other governing documents or law require stockholder ratification of the selection of PwC as the Company’sour independent registered public accounting firm. However, the Board is submitting the selection of PwC to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Board in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in person or represented by proxyPrincipal Accountant Fees and entitled to vote on the matter at the Annual Meeting will be required to ratify the appointment of PwC.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Services
The following table presents the aggregate fees for professional audit services and other services renderedbilled to the Company by PwC for the fiscal years ended December 31, 20172022 and 2016.2021:
| | | | | | | | | | | |
| Year Ended December 31, |
| 2022 | | 2021 |
Audit Fees (1) | $ | 2,341,727 | | | $ | 1,854,900 | |
| Audit Related Fees | — | | | — | |
| Tax Fees | — | | | — | |
All Other Fees (2) | 4,150 | | | 900 | |
| Total | $ | 2,345,877 | | | $ | 1,855,800 | |
|
| | | | | | | |
| | Fiscal Year Ended |
| | 2017 | | 2016 |
Audit Fees(1) | $ | 752,645 |
| | $ | 792,598 |
|
Audit Related Fees(2) | 281,000 |
| | 178,000 |
|
| Total | $ | 1,033,645 |
| | $ | 970,598 |
|
| |
(1) | Audit Fees consist of professional services rendered in connection with the audit of our Consolidated Financial Statements and review of our quarterly Condensed Consolidated Financial Statements. |
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(2) | Audit Related Fees consisted of fees associated with our follow-on and at-the market offerings completed in 2017, which included delivery of comfort letters, consents and review of documents filed with the SEC. |
(2)All Other Fees consist of all other services that are not reported above. The services for the fees disclosed include annual subscription for accounting literature.
All fees described above were pre-approved by the Audit Committee.
AUDITOR INDEPENDENCE
Auditor Independence
In 2017,2022, there were no other professional services provided by PwC that would have required the Audit Committee to consider their compatibility with maintaining the independence of PwC.
PRE-APPROVAL POLICIES AND PROCEDURES25
Pre-approval Policies and Procedures
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board, or PCAOB regarding auditor independence, our Audit Committee is responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our Audit Committee has established a policy for the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services.
Before engagement of the independent registered public accounting firm for the next year’s audit, the independent registered public accounting firm submits a detailed description of services expected to be rendered during that year for each of the following categories of services to the Audit Committee for approval:
•Audit services. Audit services include work performed for the audit of our financial statements, the review of financial statements included in our quarterly reports and the audit of our internal control over financial reporting, as well as work that is normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings. |
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l | Audit services. Audit services include work performed for the audit of our financial statements and the review of financial statements included in our quarterly reports, as well as work that is normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings.
|
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l | Audit-related services. Audit-related services are for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not covered above under “audit services.”
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l | Tax services. Tax services include all services performed by the independent registered public accounting firm’s tax personnel for tax compliance, tax advice and tax planning.
|
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l | Other services. Other services are those services not described in the other categories.
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•Audit-related services. Audit-related services are for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not covered above under “audit services.”•Tax services. Tax services include all services performed by the independent registered public accounting firm’s tax personnel for tax compliance, tax advice and tax planning.
•Other services. Other services are those services not described in the other categories.
The Audit Committee pre-approves particular services or categories of services on a case-by-case basis. The fees are budgeted, and the Audit Committee requires the independent registered public accounting firm and management to report actual fees versus budgeted fees periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the services must be pre-approved by the Audit Committee before the independent registered public accounting firm is engaged.
Required Vote and Board Recommendation
Approval of Proposal 2 requires the affirmative vote of the holders of a majority of the shares present in person, by remote communication or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to ratify the appointment of PwC. Abstentions (and broker non-votes, if any) will be counted towards the vote total and will have the same effect as “Against” votes.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVORFOR PROPOSAL 2.
PROPOSAL 3
ADVISORY VOTE ON THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
At the 2019 Annual Meeting of Stockholders, our stockholders indicated their preference that the Company solicit a non-binding advisory vote on named executive officer compensation, commonly referred to as a “say-on-pay vote,” every year. The Board has adopted a policy that is consistent with that preference. In accordance with that policy, this year, we are again asking our stockholders to approve, on an advisory basis, the compensation of our named executive officers. We are presenting this Proposal 3 as required by Section 14A of the Exchange Act. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.
Accordingly, the Board recommends that our stockholders vote FOR the following resolution:
“RESOLVED, that the compensation paid to our named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
Because the vote is advisory, it is not binding on the Board or on us. Nevertheless, the views expressed by our stockholders, whether through this vote or otherwise, are important to management and the Board and, accordingly, the Compensation Committee and Board intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements. Your vote will serve as an additional tool to guide the Compensation Committee and Board in continuing to improve the alignment of our executive compensation programs with business objectives and performance and with the interests of our stockholders. Unless the Board decides to modify its policy regarding the frequency of soliciting say-on-pay votes, following this Annual Meeting, the next scheduled say-on-pay vote will be at the 2024 Annual Meeting of Stockholders.
Required Vote and Board Recommendation
Advisory approval of Proposal 3 requires the affirmative vote of a majority of the shares present in person, by remote communication or represented by proxy and entitled to vote on the matter at the Annual Meeting. Abstentions will be counted toward the tabulation of votes cast on the proposal and will have the same effect as votes against this proposal. Broker non-votes will have no effect and will not be counted towards the vote total.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.3.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forthprovides information regarding our executive officers as of January 15, 2018.
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| | | | | | | | | | | | | |
| Name | Age | Age | | Position(s) |
| Executive Officers | | | | |
L. Daniel BrowneMark J. Foley | 56 | President, Chief Executive Officer57 | | CEO and Director |
Abhay Joshi, Ph.D.Tobin C. Schilke | 55 | Chief Operating Officer |
Lauren P. Silvernail48 | 59 | Chief Financial Officer and Chief Business Officer |
Todd E. ZavodnickDustin Sjuts | 46 | Chief Commercial Officer43 | | President |
| Dwight Moxie | | 47 | | Senior Vice President, General Counsel and President, Aesthetics & TherapeuticsCorporate Secretary |
L. Daniel Browne.
Mark J. Foley - Mr. Browne’sFoley’s biography is included above under the section titled “Directors Continuing in Office Until the 2020 Annual Meeting - Class III.“Directors.” Abhay Joshi, Ph.D. has served our Chief Operating Officer since December 2015. Dr. Joshi brings over twenty-five years of global experience as a pharmaceutical and biotechnology executive. From March of 2007 to December 2015, Dr. Joshi served as the President and Chief Executive Officer of Alvine Pharmaceuticals, Inc., a pharmaceutical company developing therapeutic products for the treatment of autoimmune and inflammatory diseases, where he was responsible for overseeing all aspects of the company's business. Prior to Alvine Pharmaceuticals, he served as an Executive Vice President, Chief Technical Officer and member of the Executive Committee at CoTherix, Inc., which was acquired by Actelion Ltd in 2007. Prior to CoTherix, Dr. Joshi was the Vice President of Global Technical Operations, Specialty Pharmaceuticals at Allergan, Inc., where he was responsible for the company’s global biologics manufacturing operations for BOTOX® and its Latin America and Asia Pacific pharmaceutical operations, and held a series of senior management positions. Dr. Joshi currently serves on the board of directors of Genyous Biomed International and Sira Pharmaceuticals, Inc. Dr. Joshi received his BTech in Chemical Engineering from the Indian Institute of Technology, New Delhi, an MSE and a Ph.D. in Chemical Engineering from the University of Michigan, Ann Arbor, and an MBA from the University of California, Irvine.
Todd E. Zavodnick has served as our Chief Commercial Officer and President, Aesthetics & Therapeutics since September 2017. Mr. Zavodnick joined Revance from ZELTIQ Aesthetics, Inc., where he was President of International prior to the company’s acquisition by Allergan plc on April 28, 2017. Previously, he served in leadership roles at Galderma Laboratories, most recently as President and General Manager, North America. Prior to this, Mr. Zavodnick worked for 14 years at Alcon Laboratories in a series of ascending sales and marketing positions both domestically and internationally, ultimately serving as President of Alcon China and Mongolia. He serves on the board of directors for NovaBay Pharmaceuticals (NYSE: NBY), Inc., Allurion Technologies, and the Children’s Skin Disease Foundation. Mr. Zavodnick holds a M.B.A. from The University of Texas at Dallas and a B.S. in Pharmacy from Rutgers University.
Lauren P. SilvernailTobin C. Schilke has served as our Chief Financial Officer and Chief Business Officer since December 2015 andNovember 2018. Mr. Schilke served as Chief Financial Officer and Executive Vice President, Corporate Development from March 2013 to December 2015. From 2003 to 2012, Mrs. Silvernail was Chief Financial Officer and Vice President of Corporate Development at ISTA Pharmaceuticals,Achaogen, Inc., a pharmaceutical research and development company. During her tenure at ISTA, revenues grewbiopharmaceutical company, from July 2016 through October 2018. From 2002 to more than $160 million and headcount increased to more than 340 employees by the time ISTA was purchased by Bausch & Lomb in June 2012. From 1995 to 2003, Mrs. Silvernail2016, Mr. Schilke served in various operating and corporate development positions with Allergan,roles of increasing responsibility at the Roche Group (including Genentech, Inc.), a pharmaceutical company, including Vice President,serving as Finance Director and Company Director of Roche Products Limited in the United Kingdom from August 2014 to June 2016 and serving as Director of Genentech’s Commercial Finance BioOncology Business Development. PriorUnit from September 2012 to joining Allergan, Inc., Mrs. Silvernail worked at Glenwood Ventures, an investment firm, as a General Partner. She currently serves on the board of directors and the audit committee of Nicox S.A. Mrs. SilvernailAugust 2014. Mr. Schilke holds a B.A. in BiophysicsB.S. from Lafayette College, a M.S. from the University of California, Berkeley and an M.B.A. from the AndersonCornell University’s Johnson Graduate School of ManagementManagement.
Dustin Sjuts has served as our President since November 2021 and as our Chief Commercial Officer, Aesthetics & Therapeutics, from December 2019 to November 2021. Mr. Sjuts previously served as our Head of Commercial, Aesthetics and Therapeutics, from November 2018 to November 2019 and as our Vice President, Strategy and Sales from March 2018 to November 2018. Prior to joining Revance, Mr. Sjuts held leadership positions at Nestle Skin Health, including Business Unit Head, China, from January 2017 to April 2018 and Senior Director of Marketing from February 2015 to December 2016. Previously, Mr. Sjuts held positions of increasing responsibility across a range of markets and disciplines with Alphaeon Corporation and Allergan plc, where he was responsible for creating and executing product adoption and sales growth strategies. Mr. Sjuts holds a B.A.Sc. from Illinois State University.
Dwight Moxie has served as our Senior Vice President, General Counsel and Corporate Secretary since February 2020. From January 2017 to January 2020, Mr. Moxie served as the Chief Counsel World Wide R&D, Commercial Operations, European Operations at Ultragenyx Pharmaceutical Inc., a biotechnology company, where he oversaw commercial operations, litigation, research & development and regulatory matters. From September 2011 to December 2016, Mr. Moxie served as the Chief Counsel to Eye-Care Division at Allergan plc. Mr. Moxie currently serves on the board of directors of Visus Therapeutics, Inc., a private clinical stage pharmaceutical company and California Life Sciences, a life sciences membership organization. Mr. Moxie received a J.D. from Howard University School of California, Los Angeles.Law and a B.A. from the Florida State University.
EXECUTIVE COMPENSATION
SUMMARY
COMPENSATION TABLEDISCUSSION AND ANALYSIS
Overview
Our namedThis Compensation Discussion and Analysis provides an overview of the material components of our executive officers, or NEOs, consisting ofcompensation program for the fiscal year ended December 31, 2022, for our principal executive officer, andour principal financial officer, the next two most highly compensated executive officers serving as of the end of 2022 (we did not have any other executive officers serving at the end of 2022) and one former executive officer who terminated service during 2017, are:2022 (the “Named Executive Officers” or “NEOs”). This discussion and analysis is intended to enhance your understanding of the information provided in the compensation tables below and to provide additional context regarding our overall executive compensation program. In addition, we explain how and why our Board and Compensation Committee determined our compensation policies and specific compensation decisions for our NEOs during and for fiscal year 2022 and, to the extent material, 2023.
Our NEOs for 2022 consisted of the following individuals:
L. Daniel Browne,
•Mark J. Foley, CEO;
•Tobin C. Schilke, Chief Financial Officer;
•Dustin Sjuts, President;
•Dwight Moxie, Senior Vice President, General Counsel and Corporate Secretary; and
•Abhay Joshi, Ph.D., Former Chief Executive Officer;
Todd E. Zavodnick, Chief CommercialOperating Officer and President, Aesthetics & TherapeuticsR&D and Product Operations(1).
Abhay(1)Dr. Joshi Ph.D.,ceased serving as our Chief Operating Officer.Officer and President, R&D and Product Operations effective March 31, 2022. Dr. Joshi is expected to continue to provide consulting services to the Company in a non-executive officer capacity until June 2023.
Executive Summary
The following table sets forthHighlights of our 2022 Business Activities
•Secured DAXXIFY® GL Approval in September 2022.
•Achieved RHA® Collection of dermal fillers revenue of $107.2 million for the year ended December 31, 2022, a 51% increase compared to 2021.
•Submitted the sBLA for DAXXIFY® for the treatment of cervical dystonia in October 2022, which was accepted by the FDA in January 2023 and for which we received a PDUFA date of August 19, 2023.
•Closed financing transactions that totaled over $550 million, which included our $300 million note purchase agreement, proceeds from our at-the-market offering program and proceeds from our underwritten follow-on offering.
Highlights of 2022 and early 2023 Executive Compensation Program
•We continued to increase our emphasis on equity awards that vest based on performance goals. In 2022, we structured 80% of our CEO’s annual equity awards to consist of PSUs and 67%-75% of our other NEOs’ annual equity awards to consist of PSUs (based on target grant date value). In 2023, we further increased the focus on performance equity awards by granting 100% of our CEO’s annual equity award in the form of PSUs.
•We refined our performance goals for performance-vesting equity awards. Our 2021 performance-vesting stock awards vest upon achievement of a rigorous financial metric that must occur by a three-year deadline measured from a key business milestone.Our 2022 PSUs vest based on a combination of a
meaningful stock price goal and a key regulatory goal. Our 2023 PSUs vest based on revenue goals over a three-year performance period.
•We delivered 82% of our NEO’s 2022 total direct compensation, on average, to be ‘at-risk’ dependent on Company performance in the form of an annual performance bonus earned and equity incentive awards granted, as reported in the Summary Compensation Table(excluding Dr. Joshi who ceased employment during 2022).
•We included people and D&I goals in our executive bonus program. For 2022, the corporate goals on which our executive bonuses are based included a specific weighted category for the achievement of key people initiatives, which were predominantly comprised of goals related to D&I. We continued the practice of including a people initiatives component in our 2023 annual incentive plan.
•We structured our executive bonus opportunities to be based on key corporate objectives and we paid bonuses based solely on performance achievements. We paid all of the compensation awarded to, earned by or paid2022 bonuses to our NEOs during 2017based on ∼127% corporate goal achievement.
•We added an overall cap on executive bonuses equal to 200% of target bonus.
Executive Compensation Policies and 2016.Practices
Our executive compensation program adheres to the following practices:
| | | | | | | | |
| What We Do | | What We Don’t Do |
ü Emphasize “at-risk” compensation and long-term equity incentives ü Tie performance bonus opportunities to defined corporate objectives and cap payout ü Provide transparent disclosure of performance bonus metrics and payout structure ü Structure severance payments as “double-trigger” requiring both a change in control and an involuntary termination for payout ü Maintain a clawback policy and stock ownership guidelines ü Assess risks of our compensation program ü Maintain a Compensation Committee comprised entirely of independent directors ü Retain an independent compensation advisor ü Annual say on pay stockholder vote ü Reevaluate and adjust our program annually based on stockholder feedback and market developments | | ûNo guaranteed “single-trigger” change in control cash payments ûNo tax reimbursements or tax gross-ups on severance or change in control payments ûNo special executive welfare or health benefits, or supplemental retirement plans not available to our employees generally ûNo guaranteed salary increases or bonuses ûNo hedging or pledging of our stock ûNo extensive perquisites
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Results of 2022 Say-on-Pay Vote, Stockholder Outreach and Response
At our 2022 Annual Meeting of Stockholders, our stockholders approved, on an advisory basis, the compensation of our NEOs, as disclosed in our 2022 proxy statement. The proposal was supported by approximately 78% of the total votes cast. We value our stockholders views and conduct regular stockholder outreach regarding our executive compensation practices, including our alignment of pay to performance, to ensure that our practices are aligned with stockholder expectations and interests. See “Stockholder Engagement” for additional information. In 2022, we reached out to holders of approximately 61% of our outstanding common stock, excluding shares held by directors and executive officers. Members of our executive management team and the Chairman of our Board held informative discussions with stockholders representing approximately 33% of the shares of our outstanding common stock, excluding shares held by directors and executive officers.
We took the results from our 2021 and 2022 “say on pay” advisory votes and the feedback we received from stockholder engagements in 2021 and 2022 into consideration in making decisions regarding executive compensation for 2022 and 2023. Specifically, our compensation committee continued to increase the emphasis on PSUs in our executive
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| Name and Principal Position | Year | Salary($) | | Bonus($) | | Stock Awards | Option Awards($)(2) | Nonequity Incentive Plan Compensation(1) | All Other Compensation($) | | Total($) |
| L. Daniel Browne | 2017 | $ | 525,300 |
| | $ | — |
| | $ | 508,260 |
| $ | 1,905,694 |
| $ | 466,038 |
| $ | — |
| | $ | 3,405,292 |
|
President and Chief
Executive Officer | 2016 | $ | 510,000 |
| | $ | — |
| | $ | 428,000 |
| $ | 1,689,835 |
| $ | 273,488 |
| $ | — |
| | $ | 2,901,323 |
|
| Todd E. Zavodnick | 2017 | $ | 116,667 |
| (3) | $ | — |
| | $ | 2,318,000 |
| $ | 520,282 |
| $ | 103,846 |
| $ | 22,244 |
| (4) | $ | 3,081,039 |
|
| Chief Commercial Officer and President, Aesthetics & Therapeutics | 2016 | $ | — |
| | $ | — |
| | $ | — |
| $ | — |
| $ | — |
| $ | — |
|
| $ | — |
|
| Abhay Joshi, Ph.D. | 2017 | $ | 453,200 |
| | $ | — |
| | $ | 258,070 |
| $ | 971,289 |
| $ | 344,728 |
| $ | — |
| | $ | 2,027,287 |
|
| Chief Operating Officer | 2016 | $ | 440,000 |
|
| $ | 200,000 |
| | $ | 606,600 |
| $ | — |
| $ | 160,875 |
| $ | — |
| | $ | 1,407,475 |
|
Our Compensation Committee will monitor and continue to evaluate our executive compensation program going forward in light of our stockholders’ views and our transforming business needs. Our Compensation Committee expects to continue to consider the outcome of our “say on pay” votes and our stockholders’ views when making future compensation decisions for our NEOs.
Objectives, Philosophy and Elements of Compensation
The overall objectives of our executive compensation policies and programs are to:
•attract, retain and motivate superior executive talent;
•provide incentives that reward the achievement of performance goals that directly correlate to the enhancement of stockholder value, as well as to facilitate executive retention;
•align our executives’ interests with those of our stockholders;
•link pay to Company performance; and
•offer pay opportunities that are competitive with the biotechnology market in which we compete in order to recruit and retain top talent, while maintaining reasonable cost and dilution to our stockholders.
Our executive compensation program generally consists of, and is intended to strike a balance among, the following three principal components: base salary, annual performance-based bonuses and long-term incentive compensation. We also provide our executive officers with severance and change-in-control benefits, as well as other benefits available to all our employees, including retirement benefits under the Company’s 401(k) plan and participation in employee benefit plans. The following chart summarizes the three main elements of compensation, their objectives and key features.
| | | | | | | | | | | |
(1)Element of Compensation | Amounts shown in this column represent | Objectives | | Key Features |
Base Salary (fixed cash bonus awards granted) | | Provides financial stability and security through a fixed amount of cash for performing job responsibilities. | | Generally reviewed annually and determined based on a number of factors (including individual performance, internal equity, retention, expected cost of living increases and the overall performance of our Company) and by reference to market data provided by our independent compensation consultant. |
Performance Bonus (at-risk cash) | | Motivates and rewards for attaining rigorous annual corporate performance goals that relate to our NEOs underkey business objectives and individual contributions. | | Target bonus amounts, calculated as a percentage of base salary, are generally reviewed annually and determined based upon positions that have similar impact on the organization and competitive bonus opportunities in our annual incentive plan. Such bonusesmarket. Bonus opportunities are tied todependent upon achievement against clinical and financial goals that are set inof specific corporate performance measures established at the first quarter of the applicable fiscal year, with payouts determined after the closebeginning of the year and, primarilyexcept with respect to our CEO. individual performance. Actual bonus amounts earned are determined after the end of the year, based on achievement of the designated corporate performance objectives and, where applicable for NEOs other than our levelCEO, individual performance. |
Long-Term Incentive (at-risk equity) | | Motivates and rewards for long-term Company performance; fosters ownership culture, aligns executives’ interests with stockholder interests and long-term stockholder value. Attracts highly qualified executives and encourages their continued employment over the long-term. | | Equity opportunities are generally reviewed and determined annually or as appropriate during the year for new hires, promotions, or other special circumstances, such as to encourage retention, or as an incentive for significant achievement. Individual grants are determined based on a number of achievement againstfactors, including current corporate and individual performance, outstanding equity holdings and their retention value and total ownership, historical value of our stock, internal equity amongst executives and market data provided by our independent compensation consultant. Equity grants have historically been provided primarily in the form of stock options and restricted stock that typically vest over a four-year-period and a three-year-period, respectively.
To further align our NEOs’ interests with those goals. of our stockholders, we have also granted performance-vesting restricted stock awards or units to each of our NEOs since 2020. |
In evaluating our executive compensation policies and programs, as well as the short-term and long-term value of our executive compensation plans, we consider both the performance and skills of each of our NEOs, as well as the compensation paid to NEOs at similar companies with similar responsibilities. We focus on providing a competitive compensation package which provides significant short-term and long-term incentives for the achievement of measurable corporate objectives. We believe this approach provides an appropriate blend of short-term and long-term incentives to maximize stockholder value.
We do not have any formal policies for allocating compensation among salary, performance bonus awards, equity grants, short-term and long-term compensation, or among cash and non-cash compensation. Instead, the Compensation Committee uses its judgment to establish a total compensation program for each NEO that is a mix of current, short-term and long-term incentive compensation and cash and non-cash compensation, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. However, the Compensation Committee structures a majority of the NEOs’ total target compensation to be comprised of performance-based bonus opportunities and long-term equity awards, in order to align the NEOs’ incentives with the interests of our stockholders and our corporate objectives.
In making executive compensation decisions, the Compensation Committee generally considers each NEO’s total target direct compensation, which consists of base salary, target bonus opportunity, which together with base salary we refer to as target cash compensation and long-term equity awards (valued based on an approximation of grant date fair value).
How We Determine Executive Compensation
Role of the Compensation Committee and Executive Officers in Setting Executive Compensation
The Compensation Committee reviews and oversees our executive compensation policies, plans and programs and reviews and determines the compensation to be paid to all of our executive officers, including the NEOs. Our Compensation Committee consists solely of independent members of the Board. In making its executive compensation determinations, the Compensation Committee considers recommendations from the CEO, for executive officers other than himself and, with respect to the evaluation of the CEO’s performance, the Compensation Committee considers recommendations from the Board Chair and, if it determines appropriate, may also seek recommendations or approval of executive compensation decisions from the independent members of the Board. In making his recommendations for executive officers other than himself, the CEO receives input from our human resources department and has access to various third-party compensation surveys and compensation data provided by the independent compensation consultant to the Compensation Committee, as described below. While the CEO discusses his recommendations for the other executive officers with the Compensation Committee, he does not participate in the deliberations concerning, or the determination of, his own compensation. In addition to our CEO, our Senior Vice President, Human Resources and Head of People and Senior Vice President, General Counsel and Corporate Secretary also attend Compensation Committee meetings and may take part in discussions of executive compensation. The Compensation Committee makes its determinations with respect to executive compensation matters without any NEOs or other executive officers present (other than the CEO as described above). Various other members of management and other employees as well as outside advisers or consultants are also invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in the Compensation Committee meetings.
The Compensation Committee meets periodically throughout the year, typically four times or more, to manage and evaluate our executive compensation program, and generally determines the principal components of compensation (base salary, performance bonus and equity awards) for our executive officers on an annual basis. These annual decisions typically occur in the first quarter of the year, however, decisions may occur during the year for new hires, promotions or other special circumstances as our Compensation Committee determines appropriate. The Compensation Committee does not delegate its authority to approve executive officer compensation. Our general policy is to grant equity awards during regularly scheduled Compensation Committee meetings determined in advance, although there may be occasions when grants are made on other dates, such as new hires or other special circumstances. Annual equity awards are usually granted in the first quarter of the year at a regularly scheduled Compensation Committee meeting. All required approvals are obtained in advance of or on the actual grant date. The timing of equity award grants to our executive officers is not coordinated in a manner that intentionally benefits our executive officers.
Role of our Independent Compensation Consultant
The Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. For purposes of evaluating 2022 compensation for each of our executive officers and making 2022 compensation decisions in the first half of 2022, we retained Aon, an independent compensation consultant, to assist the Compensation Committee in reviewing our compensation programs and to ensure that our compensation programs remain competitive in attracting and retaining talented executives. In the second half of 2022, the Compensation Committee engaged FW Cook to serve as its independent compensation consultant.References herein to the Compensation Committee Consultant refer to Aon prior to August 2, 2022 and FW Cook on and following August 2, 2022.
Aon assisted the Compensation Committee in developing a group of peer companies to use as a reference in making 2022 compensation decisions, evaluating current pay practices and considering different compensation programs and best practices. As described further below, Aon also prepared an analysis of our compensation practices with respect to base salaries, annual bonuses and long-term incentive grants against market practices. The Compensation Committee Consultant reported directly to the Compensation Committee, which maintained the authority to direct their work and engagement, and advised the Compensation Committee from time to time. The Compensation Committee Consultant interacted with management to gain access to Company information that is required to perform services and to understand the culture and policies of our organization. The Compensation Committee and the Compensation Committee Consultant met in executive session with no members of management present as needed to address various compensation matters, including deliberations regarding the CEO’s compensation.
Our Compensation Committee has analyzed whether the work of each of Aon and FW Cook as a compensation consultant raised any conflict of interest, taking into consideration the independence factors set forth by NASDAQ and the SEC with respect to each Compensation Committee Consultant. Based on its analysis of these factors, our
Compensation Committee determined that the work of each of the Compensation Committee Consultants and the individual compensation advisors employed by the Compensation Committee Consultant does not create any conflicts of interest.
Use of Competitive Market Compensation Data
We aim to attract and retain the most highly qualified executive officers in an extremely competitive market. Accordingly, the Compensation Committee believes that it is important when making its compensation decisions to be informed as to the current practices of comparable public companies with which we compete for top talent. To this end, the Compensation Committee reviews market data for each executive officer’s position, compiled by Aon with respect to determining executive compensation in early 2022, as described below, including information relating to the compensation for executive officers in the development stage biotechnology industry.
In developing a proposed list of our peer group companies to be used in connection with making compensation decisions for 2022, Aon recommended and the Compensation Committee selected companies that would be appropriate peers based on geography, industry focus, employee size, stage of development and market capitalization. Specifically, companies were selected in September 2021 with the following parameters:
•Sector & Geography: We focused on biotechnology companies based in the United States with emphasis on companies in the medical device sector along with life sciences companies that have a fintech platform;
•Stage of development/Product Focus: Given the Company’s impending biologics license application (“BLA”), we primarily focused on including companies with recently commercial products, in addition to late stage pre-commercial companies;
•Employee size: We focused on companies with a headcount between 150 and 1,300 full-time employees;
•Market Capitalization: We focused on companies with market capitalization representing roughly 1/3 to 3 times our market capitalization; and
•Revenue:We focused on companies with annual sales generally below $500 million.
Based on these criteria, Aon recommended and our Compensation Committee approved the addition of three new peers to our peer group, as reflected below, and removal of the following five historical peers: Ardelyx, Biohaven Pharmaceuticals, Esperion Therapeutics, FibroGen and Flexion Therapeutics. The Compensation Committee believed these changes to the peer group provided the appropriate compensation benchmarks as the Company prepared for the approval of our impending BLA and the commercial launch of DAXXIFY® for the improvement of glabellar lines.
The peer group of publicly-traded companies set forth below was used to analyze 2022 compensation. At the time of evaluation, we fell at approximately the 20th percentile of our 2022 peer group in terms of market capitalization.
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(2)Agios Pharmaceuticals (AGIO) | The dollar amounts in this column represent the aggregate grant date fair value of all option awards granted during the indicated year. These amounts have been calculated in accordance with FASB ASC Topic 718, or ASC 718, using the Black-Scholes option-pricing model. For a discussion of valuation assumptions, see Note 11 to our financial statements and the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Stock-Based Compensation” included elsewhere in this Form 10-K. These amounts do not necessarily correspond to the actual value that may be recognized from the option awards by the NEOs.Glaukos (GKOS) |
| ArtiCure (ARTC) | Global Blood Therapeutics (GBT) |
| Blueprint Medicines (BPMC) | Heron Therapeutics (HRTX)* |
| Cardiovascular Systems (CSII) | Insmed (INSM) |
| ChemoCentryx (CCXI) | Intra-Cellular Therapies (ITCI) |
| Coherus BioSciences (CHRS) | Karyopharm Therapeutics (KPTI) |
| Corcept Therapeutics (CORT)* | Nevro (NVRO)* |
| Deciphera Pharmaceuticals (DCPH) | Sangamo Therapeutics (SGMO) |
| Dynavax Technologies (DVAX) | Theravance Biopharma (TBPH) |
| Epizyme (EPZM) | Zogenix (ZGNX) |
| *New for 2022 | |
In December 2021, Aon completed an assessment of executive compensation data based on our peer group to inform the Compensation Committee’s determination of executive compensation for 2022. The market data used for this assessment was compiled from the 2022 selected peer group companies’ publicly disclosed information and data from the Radford Global Compensation Database with respect to the 2022 selected peer group companies listed above.
Aon prepared, and the Compensation Committee reviewed, a range of market data reference points (generally at the 25th, 50th and 75th percentiles of the market data) with respect to base salary, performance bonuses, equity compensation (value based on an approximation of grant date fair value), total target cash compensation (including both base salary and the annual target performance bonus) and total direct compensation (total target cash compensation and equity compensation). This market data was used by the Compensation Committee as a reference point, in addition to other factors, in setting our NEOs’ 2022 compensation.
The Compensation Committee’s general aim is for compensation to remain competitive with the market, based on the median of the market as appropriate and corporate and individual executive performance and other factors deemed to be appropriate by the Compensation Committee. The Compensation Committee does not maintain a specific market positioning or “benchmark” that we consistently aim for in setting compensation levels; instead, our Compensation Committee determines each element of compensation and total target cash and direct compensation, for each NEO based on various facts and circumstances appropriate for our Company in any given year.
Competitive market positioning is only one of several factors, as described below under “—Factors Used in Determining Executive Compensation,” our Compensation Committee considers in making compensation decisions, and therefore individual NEO compensation may fall at varying levels as compared to the market data.
Factors Used in Determining Executive Compensation
Our Compensation Committee sets the compensation of our executive officers at levels they determine to be competitive and appropriate for each NEO, using their professional experience and judgment. Pay decisions are not made by use of a formulaic approach or benchmark; the Compensation Committee believes that executive pay decisions require consideration of a multitude of relevant factors that may vary from year to year and by individual circumstance. In making executive compensation decisions, the Compensation Committee generally takes into consideration the factors listed below:
•corporate performance, business needs and business impact;
•each NEO’s individual performance, experience, job function, change in position or responsibilities and expected future contributions to our Company;
•internal pay equity among NEOs;
•the need to attract new talent to our executive team and retain existing talent in a highly competitive industry and geographic region;
•the total compensation cost and stockholder dilution from executive compensation actions;
•trends and compensation paid to similarly situated officers within our market;
•recommendations of the outside compensation consultant;
•a review of a NEO’s total targeted and historical compensation and equity ownership;
•our CEO’s recommendations (with respect to executive officers other than himself), based on his direct knowledge of the performance by each NEO; and
•feedback from our stockholders and evolving best practices in compensation and governance.
Executive Compensation Program
Annual Base Salary
In reviewing and adjusting base salaries for 2022, the Compensation Committee considered the factors listed above in “—How We Determine Executive Compensation—Factors Used in Determining Executive Compensation”. The Compensation Committee approved increases to each of the NEOs’ 2022 base salaries (other than Dr. Joshi and Mr. Sjuts) ranging from approximately 2% to 5.5%, which the Compensation Committee felt represented the appropriate increase for general merit and market updates, based on market data provided by Aon. The NEOs’ 2022 base salaries and increases from each of their 2021 base salaries, if applicable, are reflected in the table below. The 2022 base salaries were effective January 1, 2022, except as otherwise noted below.
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| Name | | 2021 Base Salary | | 2022 Base Salary | | Increase from 2021 Base Salary |
| Executive Officers | | | | | | |
| Mark J. Foley | | $ | 660,000 | | | $ | 673,200 | | | 2.0 | % |
| Tobin C. Schilke | | $ | 429,802 | | | $ | 453,442 | | | 5.5 | % |
Dustin Sjuts(1) | | $ | 500,000 | | | $ | 500,000 | | | — | % |
| Dwight Moxie | | $ | 433,500 | | | $ | 446,505 | | | 3.0 | % |
Abhay Joshi, Ph.D.(2) | | $ | 519,754 | | | $ | 519,754 | | | — | % |
(1) Mr. Sjuts’ salary for 2021 was increased from $423,300 to $500,000 in November 2021 in connection with his promotion to President. The Compensation Committee determined the increase was appropriate to account for Mr. Sjuts’ increased responsibilities in the role of President and reasonable in relation to market data and our other executive officer compensation. As a result of Mr. Sjuts’ salary increase in late 2021, the Compensation Committee determined not to further increase his salary for 2022.
Annual Performance-Based Bonuses
Our 2022 Management Bonus Plan was developed by our Compensation Committee in late 2021 and formally approved in early 2022. Under the 2022 Management Bonus Plan, each NEO was eligible to be considered for a performance bonus based on (i) the individual’s target bonus, as a percentage of base salary, (ii) the percentage attainment of our 2022 corporate goals established by the Compensation Committee, and (iii) with respect to our NEOs other than our CEO, individual performance in the form of a modifier that may increase or decrease the total bonus payout, for each such NEO for significant underperformance or overperformance. Mr. Foley's performance bonus was solely based on attainment of the 2022 corporate goals. The NEOs actual bonuses were capped at 200% of each NEO’s target bonus amount.
Target Bonus Opportunity
In early 2022, the Compensation Committee reviewed each of our NEO’s target bonus percentages, and determined that the 2021 target bonus percentages remained appropriate for each of the NEOs, with the exception of Mr. Sjuts, whose target bonus was increased from 50% to 60%, after a review of market data, based on his increased responsibilities due to his promotion to President in late 2021. Each NEO's target bonus as a percentage of annual base salary is reflected below.
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(3)NEO | Mr. Zavodnick's annual base salary for 2017 was $400,000. The amount shown reflects the salary earned from his date of hire on September 18, 2017 through December 31, 2017. |
| 2022 Target Bonus Percentage (as a % of base salary) |
(4)Mark J. Foley | Represents taxable fringe benefits for housing and travel. | 75 | % |
| Tobin C. Schilke | | 50 | % |
| Dustin Sjuts | | 60 | % |
| Dwight Moxie | | 50 | % |
| Abhay Joshi, Ph.D. | | 55 | % |
Corporate Performance
NARRATIVE TO SUMMARY COMPENSATION TABLEThe table below reflects each of the corporate goals and their relative weightings approved by the Compensation Committee as well as the relevant corporate achievements and corresponding percentages.
| | | | | | | | | | | | | | | | | | | | |
| Corporate Goal | | Weighting | | 2022 Results | | Weighted Corporate Achievement Percentage |
Revenue Achievement of annual Adjusted Product and Service Revenue target (1) | | 35% | | Achieved above target Delivered $107 million in Adjusted Product and Service Revenue | | 36.93% |
Corporate Cash Burn Extend cash runway by one year into 2024 | | 10% | | Fully achieved | | 10% |
Services Achievement of specified milestones relating to our Services and solutions offerings: •Complete development of key platform capabilities by preset date •Improve delivery time and increase overall scaling support •Complete customer migration goals | | 10% | | Fully achieved | | 10% |
Clinical & Regulatory Achievement of specified milestones relating to the Company’s clinical development programs: | | 35% (+ additional 10% potential) | | Fully achieved
| | 45% |
•Receive DAXXIFY® GL Approval (with the potential for an additional 10% weighting if approval is received before the end of the third quarter of 2022) | | ⇾ | | Received DAXXIFY® GL Approval in September 2022 | | |
•Submit PAS for ABPS following BLA approval of DAXXIFY® by the Company deadline | | ⇾ | | ABPS PAS timely submitted by the Company | | |
| | | | | | | | | | | | | | | | | | | | |
| Corporate Goal | | Weighting | | 2022 Results | | Weighted Corporate Achievement Percentage |
D&I and Organizational Culture Achievement of specified milestones and activities relating to D&I and organizational health: | | 10% | | Fully achieved | | 10% |
•Continue to advance D&I initiatives, with focus on leadership, mentoring and education forums | | ⇾ | | Launched various developmental offerings including mentorship program, educational speaker series and unconscious bias training for all employees | | |
•Measure organizational health by delivering a cultural assessment tool across our distributed workforce and implement strategies to improve upon any opportunity areas identified | | ⇾ | | Conducted organizational cultural assessment, identified focus areas and developed improvement strategies | | |
Stretch Goals Stretch goal of achieving certain strategic milestones | | 25% | | Partially achieved | | 15% |
•Objectives related to product pipeline (10%) | | ⇾ | | Not achieved | | |
•Objective related to timely sBLA submission for treatment of cervical dystonia (10%) | | ⇾ | | Submitted sBLA for treatment of cervical dystonia | | |
•Objective related to DAXXIFY® revenue(1) (5%) | | ⇾ | | Achieved $11.0 million in DAXXIFY® revenue | | |
| Total | | | | | | ∼127% |
(1)Adjusted Product and Service Revenue is a non-GAAP financial measure, which means (a) product revenue recognized from the sale of the RHA® Collection of dermal fillers, as disclosed in our quarterly and annual financial statements and (b) revenue recognized from the Fintech Platform and classified as service revenue, as disclosed in our quarterly and annual financial statements, adjusted to exclude cost of service revenue (exclusive of amortization). We use Adjusted Product and Service Revenue, which has the effect of lowering our revenue achievement, because management uses adjusted service revenue to make decisions and assess performance of the Fintech Platform. The Adjusted Product and Service Revenue goal must meet a threshold level of performance or receive no credit for the goal. The ultimate achievement percentage for the Adjusted Product and Service Revenue goal is interpolated between the threshold and maximum. DAXXIFY® revenue is calculated in accordance with GAAP and means the product revenue recognized from the sale of DAXXIFY®, as disclosed in our annual financial statements. We are not disclosing target goal levels with respect to DAXXIFY® revenue or Adjusted Product and Service Revenue because we believe that disclosure would result in competitive harm. If the targets were disclosed, we believe the information would provide competitors with insights into our strategy, operations and clinical development and commercialization programs that would be harmful to us. The Compensation Committee aims to set corporate performance targets that are rigorous but achievable, and therefore established targets at levels that would be achievable, with effort, if we successfully executed our operating plan for fiscal 2022, unless there are achievements beyond expectations or unusual or unexpected factors that affect the Company’s business.
The Compensation Committee evaluates the corporate goals we believe are essential to building long-term stockholder value and that we use to assess our annual corporate performance. The 2022 corporate goals aimed to incentivize performance related to the Company becoming a commercial and revenue generating company and continuing to advance its clinical development program. In addition, our people goals were established to reward our commitment to inclusiveness and equality and reflect our mission to foster diversity, equality and belonging at the Company. In setting these goals, the Compensation Committee balances the consideration of the likelihood of achievement of these corporate goals with the effectiveness of such goals in incentivizing our NEOs’ performance. The relative weightings of the 2022 corporate goals are based upon our assessment of the importance of each goal in creating long-term value for the Company and our stockholders.
In early 2023, our Compensation Committee reviewed our 2022 performance and approved the extent to which we achieved each of our corporate goals based on our achievements, as described in the table above, which resulted in an overall 2022 corporate goal achievement of ∼127%, which was the sum of the weight of each corporate goal, multiplied by the performance achievement assigned to such goal by the Compensation Committee based on the actual
results during 2022. As a result, the portion of the bonus each NEO was eligible to earn that related to corporate goal achievement was ∼127%.
Individual Performance
In determining NEO bonus amounts (other than Mr. Foley), the Compensation Committee may also take into account the individual performance of the NEO in contributing to the achievement of our Corporate Goals. Individual performance, in both results achieved and targeted behavioral competencies (values), are assessed and measured by the CEO and recommended to the Compensation Committee. Revance’s four-point performance rating scale is used along with a corresponding individual performance percentage ranging from 0% for not meeting expectations to 125% for superior performance. As a result, an NEO’s actual performance bonus may range from 0% to up to 125% of the bonus to which the NEO would otherwise be entitled based solely on relative achievement of the corporate performance goals discussed above. The Compensation Committee awarded all of our NEOs (other than Mr. Foley) a 100% individual performance percentage for their performance in 2022.
Amounts Earned
In January 2023, the Compensation Committee awarded each of our NEOs the performance bonuses in the amounts reflected in the table below.As a result of the Compensation Committee awarding 100% individual performance percentage for each NEO other than Mr. Foley, each NEO’s bonus solely reflected our corporate goal achievement of ∼127%.
| | | | | | | | | | | | | | | | |
| Name | | | | Annual Target Bonus | | Actual Bonus |
| Mark J. Foley | | | | $ | 504,900 | | | $ | 640,870 | |
| Tobin C. Schilke | | | | $ | 226,721 | | | $ | 287,777 | |
| Dustin Sjuts | | | | $ | 300,000 | | | $ | 380,790 | |
| Dwight Moxie | | | | $ | 223,253 | | | $ | 283,374 | |
Abhay Joshi, Ph.D. (1) | | | | $ | 285,865 | | | $ | — | |
Equity-Based Incentive Awards
2022 Annual Grants
We have historically granted equity compensation to our executive officers primarily in the form of stock options and restricted stock. The Compensation Committee introduced performance vesting stock awards beginning in late 2019 for Mr. Foley and beginning in 2020 for our other executives. For 2022, the Compensation Committee continued to grant performance-vesting awards but structured such awards as units rather than restricted shares. This change was made in connection with the Company’s transition to the sell to cover method of tax withholding for employee stock vesting to provide more flexibility to delay the taxable event if necessary to avoid trading during blackout periods. Accordingly, each of our NEOs received annual 2022 equity grants consisting of a mix of stock options and PSUs.
The Compensation Committee decided to incorporate and emphasize PSUs to strengthen its pay for performance philosophy and in light of stockholder and institutional investor feedback. Because PSUs only vest upon achievement of key performance goals that drive our business and our stockholder value, the Compensation Committee believes that these awards increase the alignment between the interests of our executive officers and stockholders. Stock options that vest over a multi-year period also remain an important part of our executive compensation program. The Compensation Committee views stock options as inherently performance-based compensation that automatically links executive pay to stockholder return, as the value realized, if any, by the executive from an award of stock options, is dependent upon, and directly proportionate to, appreciation in stock price. Regardless of reported value in the “Summary Compensation Table”, executives will only receive value from the stock option awards if the price of the stock increases above the price of the stock at time of grant (the exercise price), and remains above such exercise price as the stock options continue to vest. Stock options also do not have downside protection, and the awards will not provide value to the holder when the stock price is below the exercise price. The Compensation Committee chose an award mix for the annual 2022 equity grants (based on target grant date values) consisting of approximately 80% PSUs and 20% options for Mr. Foley, 75% PSUs and 25% options for Mr. Sjuts and 67% PSUs and 33% options for each of the other NEOs.Compared to our 2021 annual equity grants, the 2022 annual equity grant mix represented an increase in proportion of the total annual equity delivered as performance-vesting awards and elimination of time-vesting restricted stock awards.
The annual 2022 equity grants the Compensation Committee approved for each NEO in February 2022 is reflected in the table below.
| | | | | | | | | | | | | | |
| NEO | | Stock Option Grant (# of shares) | | PSUs (# of shares) |
| Mark J. Foley | | 143,354 | | | 351,298 | |
| Tobin C. Schilke | | 68,093 | | | 84,698 | |
| Dustin Sjuts | | 57,016 | | | 104,791 | |
| Dwight Moxie | | 68,093 | | | 84,698 | |
Abhay Joshi, Ph.D. (1) | | — | | | — | |
The Compensation Committee chose each NEO’s grant level based on the amount which they felt, in their judgment, was appropriate to retain and incentivize the NEOs, while remaining reasonable within market standards and considering potential dilution of our share reserves and the factors listed above in “—Factors Used in Determining Executive Compensation.” In making these determinations, the Compensation Committee considered each of the NEO’s current equity holdings, including vested and unvested holdings and the extent to which such holdings were “in-the-money,” the extent to which such holdings remained unvested and therefore continued to serve as a retention tool, the market data provided by Aon reflecting equity value based on approximated grant date fair value, internal equity amongst the team, individual performance and length of service.
The number of shares underlying each 2022 equity grant was determined by, in the case of PSUs, dividing the target grant date value by the thirty-day trailing average closing stock price of our common stock as of the date of grant and, in the case of options, by applying a Black-Scholes option pricing model using the same historical average closing price. The Compensation Committee used a historical average closing market price to determine the number of shares subject to each equity award, rather than a single day stock price on the date of grant, in order to provide a more stabilized stock value less susceptible to possible swings in the market. The Compensation Committee understands that using a historical average stock price can result in the ultimate grant date value of an award as required to be reported in the Summary Compensation Table and the Grants of Plan-Based Awards table under ASC 718 being higher or lower than the target grant value, but has considered, in consultation with Aon and determined that the process described above is the most appropriate for us at this time.
The stock options granted in 2022 vest over a four-year period, subject to the executive officer’s continued service with us. The PSUs were structured to vest based on the Company’s performance and achievement of the milestones described below.
1.50% of the PSUs are eligible to vest upon the earlier of the following, as confirmed by the Board or Compensation Committee: (i) the 6-month anniversary of the date of DAXXIFY® GL Approval; or (ii) upon a Change in Control (as defined in the Company’s 2014 Equity Incentive Plan (the “2014 Plan”)); provided such FDA approval or Change in Control occur no later than December 31, 2023, subject to the executive officer's continuous service through the 6-month anniversary of the FDA Approval or the closing of such Change in Control.
2.50% of the PSUs are eligible to vest upon the earlier of the following, as confirmed by the Board or Compensation Committee on or before February 2, 2032: (i) the date that the closing share price of our common stock is at least $30 per share and remains at or above $30 per share during any 90 consecutive trading-day period on a volume weighted average price basis; or (ii) upon a Change in Control in which the purchase price of our common stock is at or above $30 per share.
The Compensation Committee chose this performance structure to incentivize Company performance over a meaningful period of time that would result in growth for the Company that would generate significant stockholder value. The Compensation Committee selected FDA approval as a performance measure because it was a critical driver of the Company's business strategy and value for all Company stakeholders. The $30 price was chosen because it incentivizes management to meaningfully increase stockholder value. From late October 2021 through February 2022 when the Compensation Committee approved the performance goals, the stock closed from a low of $12.36 to a high of $17.46.
We obtained DAXXIFY® GL Approval in September 2022; as a result, in March 2023, the NEOs vested in 50% of each of their 2022 PSUs. The PSUs based on the share price goal remain outstanding and unearned as of the date of this Proxy Statement.
2023 Annual Grants, Performance Stock Unit Awards
For 2023, the Compensation Committee revised the structure of its annual equity grants to our NEOs to further increase the proportion of equity delivered in the form of performance-vesting awards. Mr. Foley received an annual 2023 grant in February 2023 consisting of 100% PSUs. Mr. Sjuts received annual 2023 equity grants consisting of 75% PSUs and 25% options. Mr. Schilke and Mr. Moxie each received annual equity 2023 grants consisting of 67% PSUs and 33% options. The PSUs vest based on Company revenue goals over a three-year performance period.
Other Features of our Executive Compensation Program
Agreements with our NEOs
Executive Employment ArrangementsAgreements
We have entered into employment agreements with each of our named executive officers; these agreements have no specific term of employment andNEOs that provide for at-will employment. Eachthe basic terms of their employment, agreement provides the NEO with an annualincluding base salary, and targetperformance bonus opportunity eligibility for employee benefits offered to our other employees,and equity grants, as well as eligibility under our Executive Severance Plan, described below. The target annual bonus opportunity (expressed as a percentage of base salary) for Mr. Browne was 66% for 2017certain severance and 2018; for Mr. Zavodnick was 75% for 2017 and 2018; and for Dr. Joshi was 45% for 2017 and 2018.
Severance and Change of Control Benefits
change in control benefits. Each of our NEOs are participants underis employed at will and may be terminated at any time for any reason.
Severance and Change in Control Benefits
Regardless of the manner in which a NEO’s service terminates, the NEO is entitled to receive amounts earned during his or her term of service, including salary and any unused vacation accrual. Under our employment agreements, each of our NEOs is eligible to receive severance benefits pursuant to the terms of our Executive Severance Benefit Plan (the “Severance Benefit Plan”). We do not provide any tax gross ups in connection with severance or change in control transactions, nor are any of our NEOs entitled to “single trigger” cash payments upon a change in control without a termination event. The Severance Benefit Plan provides for “double trigger” vesting, such that 100% of the shares subject to outstanding stock awards vest upon a termination without Cause (as defined in the Severance Benefit Plan) or a resignation for Good Reason (as defined in the Severance Benefit Plan) within twelve months following a Change in Control. Our time-vesting equity award agreements provide for acceleration of vesting in the event of a Change in Control, but only to the extent that the acquiring company refuses to continue, assume or substitute such awards. Our Compensation Committee periodically reviews the severance and change in control benefits that we provide, including by reference to market data, to ensure that the benefits remain appropriately structured and at reasonable levels.
The Compensation Committee believes that the severance protection benefits we offer are necessary to provide stability among our executive officers, serve to focus our executive officers on our business operations and avoid distractions in connection with a potential change in control transaction or period of uncertainty. Please see “—Potential Payments upon Termination or Change in Control” for a more detailed description of the Severance Benefit Plan and each of our NEO benefit levels. In addition, each of our NEOs holds equity awards under our equity incentive plans that were granted subject to our form of award agreements. Certain performance-vesting awards held by our NEOs (including the PSUs granted to all NEOs in 2022) provide for vesting acceleration upon a Change in Control and, with respect to performance awards that vest based on stock price performance goals, only if we achieve those stock price goals as a result of the change in control.
Separation and Consulting Agreement with Dr. Joshi. In February 2022, we entered into a separation and consulting agreement with Dr. Joshi in connection with his separation from the Company, effective March 31, 2022 (the “Joshi Separation Agreement”). Pursuant to the Joshi Separation Agreement, Dr. Joshi received the following benefits pursuant to the terms of our Severance Benefit Plan which providesupon a termination without cause: severance benefits in the eventform of certain qualifying terminationsmonthly cash payments of employment, subject to the executive’s execution of a waiver and release of claims in favor of the Company.
Under the Severance Plan, upon an involuntary termination of a participant other than for cause, and where such termination is not within 12 months following a change of control, the benefits provided under the Severance Plan consist of: (i)continued base salary continuation payments for 15 months in the case of our chief executive officer, and for nine months inand continued COBRA premium payments for nine months. All severance benefits were contingent upon Dr. Joshi executing an effective release and waiver of claims against us as well as complying with certain other post-termination obligations to us. In addition, pursuant to the caseterms of the other named executive officers;Joshi Separation Agreement, effective beginning April 1, 2022, Dr. Joshi began providing consulting services to the Company which are expected to continue until June 30, 2023, unless terminated earlier (the “Joshi Consulting Period”). During the Joshi Consulting Period, Dr. Joshi is eligible to receive monthly consulting fees, and (ii) payment by usDr. Joshi’s outstanding equity awards will continue to be eligible to vest during the Joshi Consulting Period (subject to earlier expiration in accordance with the terms of COBRA premiums for the participantsuch awards and his eligible dependents for a period of up to 15 months in the case of our chief executive officer, and up to nine months in the case of the other NEOs.
For a period of 12 months following apotential acceleration upon certain change in control if we involuntarily terminate a participant for any reason other than cause, or the participant resigns for “good reason” (each as defined in the Severance Plan), then the benefits provided by the Severance Plan will consist of: (i) a lump sum payment equal to the sum of the participant’s monthly base salary and monthly annual target bonus, multiplied by 21 in the case of our chief executive officer, and by 12 in the case of the other NEOs; (ii) payment of COBRA premiums for the named executive officer and his eligible dependents for a period of up to 21 months in the case of our chief executive officer, and up to 12 months in the case of the other NEOs; and (iii) accelerated vesting of all unvested stock options then held by the NEO.events).
Under the Severance Plan, a “change of control” is defined the same way it is under our 2014 Equity Incentive Plan and 2014 Inducement Plan. If any of the benefits provided under the Severance Plan would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, or the Code, such that the payments would become subject to the excise tax imposed by Section 4999 of the Code, then the payments will either be paid in full to the participant, or reduced so that a smaller amount or no portion of such benefits will be subject to the excise tax, whichever provides the greater after-tax benefit to the participant.
Employee Benefit Plans
We sponsor a 401(k) retirement plan in which our named executive officersNEOs participate on the same basis as our other U.S. employees. Effective January 1, 2017, the Compensation Committee approved aIn 2022, we provided matching contribution of 25%contributions equal to (i) 100% of employee contributions up to 6%for the first 3% of an employee’s earnings and (ii) 50% of employee contributions for the next 2% of an employee’s earnings. During the year ended December 31, 2017, the Company made contributions to this plan of approximately $0.2 million.
All matching effective during 2022 is immediately fully vested.
Pension Benefits
We do not maintain a defined benefit pension plan for any of our employees.
Nonqualified Deferred Compensation
We do not maintain a plan providing nonqualifiednon-qualified deferred compensation for any of our employees.
Other Benefits
We generally do not offer perquisites or personal benefits to our NEOs, although we may from time to time provide reasonable relocation, signing bonuses, retention bonuses, or other benefits to our NEOs as our Compensation Committee determines appropriate.
In 2022, we paid Mr. Sjuts a grossed-up monthly car allowance pursuant to the terms of his employment agreement, as reported in the “Summary Compensation Table.” We provided a car allowance for Mr. Sjuts because of the travel required for his position. Stock Ownership Guidelines
We maintain Stock Ownership Guidelines to align the interests of our executive officers and directors with the interests of the Company's stockholders and to further promote the Company's commitment to sound corporate governance. The guidelines call for the achievement and maintenance of equity ownership with the following total values: 3X base salary for the CEO; 1X base salary for all other executive officers and 3X annual cash retainers for independent directors (excluding cash retainers for Board committee service). Each executive officer and director is required to meet the minimum stock ownership guidelines within five years of becoming subject to the guidelines. As of December 31, 2022, all participants are still within the five-year timeframe for compliance; however, all of our NEOs and directors met the stock ownership guidelines.
Clawback Policy
We maintain a Clawback Policy, adopted in December 2020, pursuant to which the Company may recoup certain compensation from the Company’s executive officers in the event of fraud or willful misconduct. The Clawback Policy provides that the Company can recoup from executive officers any cash or equity-based incentive compensation that an executive office was granted, earned, paid or that became vested during the prior 12 months in the event that there is a material restatement of financial results due to fraud or willful misconduct of the executive officer from whom recoupment is sought. The Board or an appropriate committee thereof has discretion to determine whether and to what extent to seek recoupment based on specific facts and circumstances. We will review and conform our Clawback Policy as necessary to comply with the final rules adopted by the SEC pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the final Nasdaq listing standards thereunder, once effective.
Additionally, as a public company, if we are required to restate our financial results due to our material noncompliance with any financial reporting requirements under the federal securities laws as a result of misconduct, the CEO and Chief Financial Officer may be legally required to reimburse our Company for any bonus or other incentive-based or equity-based compensation they receive in accordance with the provisions of section 304 of the Sarbanes-Oxley Act of 2002.
Accounting and Tax Considerations
We account and recognize share-based compensation expense in accordance with ASC 718, Compensation - Stock Compensation. We measure our stock-based awards using the estimated grant-date fair values. For stock options issued and for shares purchased under the 2014 Employee Stock Purchase Plan (the “2014 ESPP”), fair values are determined using the Black-Scholes option pricing model. For PSUs subject to performance-based vesting conditions, the grant-date fair values are determined using the closing price of our common stock on the grant date. For PSUs subject to market-based vesting conditions, fair values are determined using the Monte-Carlo simulation model.
The fair value of stock-based awards is recognized as compensation expense over the requisite service period (generally the vesting period). For PSUs not subject to market-based vesting conditions, the value of the stock-based awards is recognized as compensation expense when the performance condition is probable of achievement. Forfeitures are recognized when they occur. The accounting impact of our compensation programs are one of many factors that the Compensation Committee considers in determining the structure and size of our executive compensation programs.
Under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), compensation paid to each of our “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for (i) certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date or (ii) the reliance period exception for certain compensation paid by corporations that became publicly held on or before December 20, 2019.
Although the Compensation Committee considers tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the NEOs in a manner consistent with the goals of our executive compensation program and the best interests of our Company and our stockholders, which may include providing for compensation that is not deductible by us due to the deduction limit under Section 162(m). The Compensation Committee also retains the
flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with our business needs.
Risk Assessment Concerning Compensation Practices and Policies
With the assistance of the Compensation Committee’s compensation consultant and the Company’s outside counsel, the Compensation Committee reviews the Company’s compensation policies and practices to assess whether they encourage employees to take inappropriate risks. After reviewing and assessing the Company’s compensation philosophy, terms and practices, including the mix of fixed and variable, short and long-term incentives and overall pay, incentive plan structures, and the checks and balances built into, and oversight of, each plan and practice, the Compensation Committee determined that any risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on our Company as a whole. The Compensation Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks; the mix of short-term compensation (in the form of salary and annual bonus, if any, which is based on a variety of performance factors) and long-term compensation (in the form of stock options and PSUs) prevents undue focus on short-term results and helps align the interests of the Company’s executive officers with the interests of our stockholders. In addition, the Insider Trading Policy and prohibition against hedging and pledging in Company stock protects against short-term decision making.
Conclusion
It is the opinion of the Compensation Committee that the compensation policies and elements described above provide the necessary incentives to properly align our executive officers’ performance with the interests of our stockholders while maintaining equitable and competitive executive compensation practices that enable us to attract and retain the highest caliber of executive officers.
Report of the Compensation Committee of the Board
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis (“CD&A”) contained in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the CD&A be included in this Proxy Statement and incorporated into our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Ms. Jill Beraud
Ms. Carey O'Connor Kolaja
Mr. Angus C. Russell
The material in this report is not “soliciting material,” is furnished to, but not deemed “filed” with, the SEC and is not deemed to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, other than the Company’s Annual Report on Form 10‑K, where it shall be deemed to be “furnished,” whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE FOR FISCAL YEARS 2022, 2021 AND 2020
The following table sets forth all of the compensation awarded to, earned by, or paid to each of the NEOs for their services rendered for the years ended December 31, 2022, 2021 and 2020.
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| Name and Principal Position(s) | | Year | | Salary | | Bonus | | Stock Awards (1) | | Option Awards (2) | | Non-Equity Incentive Plan Compensation (3) | | All Other Compensation (4) | | Total |
| Mark J. Foley | | 2022 | | $ | 673,200 | | | $ | — | | | $ | 4,178,690 | | | $ | 1,099,525 | | | $ | 640,870 | | | $ | 14,631 | | | $ | 6,606,916 | |
| CEO | | 2021 | | $ | 660,000 | | | $ | — | | | $ | 4,561,652 | | | $ | 1,141,226 | | | $ | 425,700 | | | $ | 317,338 | | | $ | 7,105,916 | |
| | 2020 | | $ | 650,000 | | | $ | — | | | $ | 7,794,350 | | | $ | — | | | $ | 328,331 | | | $ | 8,255 | | | $ | 8,780,936 | |
| | | | | | | | | | | | | | | | |
| Tobin C. Schilke | | 2022 | | $ | 453,442 | | | $ | — | | | $ | 1,007,483 | | | $ | 518,664 | | | $ | 287,777 | | | $ | 12,465 | | | $ | 2,279,831 | |
| Chief Financial Officer | | 2021 | | $ | 429,802 | | | $ | — | | | $ | 1,267,172 | | | $ | 634,014 | | | $ | 192,336 | | | $ | 11,470 | | | $ | 2,534,794 | |
| | 2020 | | $ | 421,375 | | | $ | — | | | $ | 1,131,345 | | | $ | 1,273,662 | | | $ | 143,186 | | | $ | 11,531 | | | $ | 2,981,099 | |
| | | | | | | | | | | | | | | | |
| Dustin Sjuts | | 2022 | | $ | 500,000 | | | $ | — | | | $ | 1,246,490 | |
| $ | 434,291 | | | $ | 380,790 | | | $ | 30,878 | | | $ | 2,592,449 | |
| President | | 2021 | | $ | 434,805 | | | $ | — | | | $ | 1,767,178 | |
| $ | 634,014 | | | $ | 200,908 | | | $ | 193,506 | | | $ | 3,230,411 | |
| | 2020 | | $ | 415,000 | | | $ | — | | | $ | 1,294,250 | | | $ | 1,306,320 | | | $ | 141,020 | | | $ | 66,242 | | | $ | 3,222,832 | |
| | | | | | | | | | | | | | | | |
| Dwight Moxie | | 2022 | | $ | 446,505 | | | $ | — | | | $ | 1,007,483 | | | $ | 518,664 | | | $ | 283,374 | | | $ | 13,895 | | | $ | 2,269,921 | |
| Senior Vice President, General Counsel and Corporate Secretary | | 2021 | | $ | 433,500 | | | $ | — | | | $ | 1,083,763 | | | $ | 542,254 | | | $ | 174,593 | | | $ | 10,504 | | | $ | 2,244,615 | |
| | 2020 | | $ | 370,104 | | | $ | 125,000 | | | $ | 1,521,045 | | | $ | 2,579,240 | | | $ | 125,426 | | | $ | 10,356 | | | $ | 4,731,171 | |
| | | | | | | | | | | | | | | | |
| Abhay Joshi, Ph.D. (5) | | 2022 | | $ | 209,901 | | (6) | $ | — | | | $ | 309,543 | | (7) | $ | 2,309,087 | | (8) | $ | — | | | $ | 431,845 | | | $ | 3,260,376 | |
| Former Chief Operating Officer, President of R&D and Product Operations | | 2021 | | $ | 519,754 | | | $ | — | | | $ | 1,267,172 | | | $ | 634,014 | | | $ | 154,081 | | | $ | 11,738 | | | $ | 2,586,759 | |
| | 2020 | | $ | 514,608 | | | $ | — | | | $ | 1,405,850 | | | $ | 1,913,759 | | | $ | 213,726 | | | $ | 11,731 | | | $ | 4,059,674 | |
(1)The dollar amounts in this column represent the aggregated grant date fair value of all time-vesting and performance-vesting unit or stock awards granted during the indicated year. These amounts have been calculated in accordance with ASC 718. For a discussion of valuation assumptions, see Note 11 to our consolidated financial statements included in our FY2022 10-K. With respect to the performance-vesting equity awards granted during 2022 and 2021, the aggregate grant date fair value is based on the then-probable outcome of the applicable performance conditions. The grant date fair value of the performance-vesting units (PSUs) granted in 2022, assuming achievement of the maximum level of performance under the applicable performance conditions (and excluding the incremental fair value recognized from the modification of Dr. Joshi’s RSAs and PSAs) would have been as follows: | | | | | |
| Name | Grant Date Fair Value Assuming Maximum Performance |
| Mark J. Foley | $ | 4,178,690 | |
| Tobin C. Schilke | $ | 1,007,483 | |
| Dustin Sjuts | $ | 1,246,490 | |
| Dwight Moxie | $ | 1,007,483 | |
| Abhay Joshi, Ph.D. | $ | — | |
(2)The dollar amounts in this column represent the aggregate grant date fair value of all option awards granted during the indicated year. These amounts have been calculated in accordance with ASC 718, using the Black-Scholes option-pricing model. For a discussion of valuation assumptions, see Note 11 to our consolidated financial statements included in our FY2022 10-K. These amounts do not necessarily correspond to the actual value that may be recognized from the stock options by the NEOs. (3)Amounts shown in this column represent cash bonus awards earned by our NEOs under our 2022 Management Bonus Plan. Such bonuses are tied to achievement against clinical, regulatory, commercial and financial goals, with payouts determined after the close of the year and primarily based on our level of achievement against those goals. Payouts occur in the first quarter following the end of the applicable year.
(4)The table below shows the components of “All Other Compensation” for each of our NEOs.
Fiscal Year 2022 All Other Compensation Table
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| Name | Retirement Plan Contributions (A) | | Insurance Premiums (B) | | Other | | Total |
| Mark J. Foley | $ | 11,793 | | | $ | 2,838 | | | $ | — | | | $ | 14,631 | |
| Tobin C. Schilke | $ | 11,115 | | | $ | 1,350 | | | $ | — | | | $ | 12,465 | |
| Dustin Sjuts | $ | 14,292 | | | $ | 660 | | | $ | 15,926 | | (C) | $ | 30,878 | |
| Dwight Moxie | $ | 12,905 | | | $ | 990 | | | $ | — | | | $ | 13,895 | |
| Abhay Joshi, Ph.D. | $ | 7,032 | | | $ | 1,271 | | | $ | 423,542 | | (D) | $ | 431,845 | |
(A)Represents Company matching contributions to the accounts of our NEOs in the Company’s 401(k) plan.
(B)Represents life insurance policy premiums paid by the Company on behalf of our NEOs.
(C)Represents a car allowance of $15,000 and gross-up reimbursement of $926.
(D)Represents $389,816 in accrued severance payments, representing nine months of base salary, $20,227 of COBRA premiums and $13,500 in consulting fees pursuant to the Joshi Separation Agreement.
(6) Dr. Joshi’s 2022 salary includes amounts for accrued but unused vacation that was paid when his employment ceased.
(7) Dr. Joshi’s stock awards represent the incremental fair value of $309,543, computed in accordance with ASC 718, associated with the modification of RSAs granted to Dr. Joshi in January 2020 and February 2021 and the modification of the PSAs granted to Dr. Joshi in January 2020 and February 2021 pursuant to the Joshi Separation Agreement, which modified the vesting period of the RSAs and PSAs to continue vesting until the end of the Joshi Consulting Period.
(8) Dr. Joshi’s option awards represent an incremental fair value of $2,309,087, computed in accordance with ASC 718, associated with the modification of options granted to Dr. Joshi in December 2015, January 2017, February 2018, January 2019, January 2020 and February 2021 pursuant to the Joshi Separation Agreement, which extended the exercise period for options already vested as of March 31, 2022 and modified the vesting period of the unvested options to continue vesting until the end of the Joshi Consulting Period.
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2022
The following table presents, for each of the NEOs, certain information regarding grants of plan-based awards made for the year ended December 31, 2022.
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| | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | |
| Name and Principal Position(s) | | Award Type | | Grant Date or Modification Date | | Target | | Maximum | | | | Target (2) | | All Other Stock Awards: Number of Shares of Stock or Units | | All Other Option Awards: Number of Securities Underlying Options | | Exercise or Base Price Per Share of Option Awards | | Total Grant Date Fair Value of Stock and Option Awards (3) | |
| Mark J. Foley | | PSU | | 2/2/2022 | | — | | | — | | | | | 351,298 | | | — | | | — | | | — | | | $ | 4,178,690 | | |
| CEO | | Option Grant | | 2/2/2022 | | — | | | — | | | | | — | | | — | | | 143,354 | | (4) | $ | 13.08 | | | $ | 1,099,525 | | |
| | Cash Bonus | | — | | $ | 504,900 | | | $ | 1,009,800 | | | | | — | | | — | | | — | | | — | | | — | | |
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| Tobin C. Schilke | | PSU | | 2/2/2022 | | — | | | | | | | 84,698 | | | — | | | — | | | — | | | $ | 1,007,483 | | |
| Chief Financial Officer | | Option Grant | | 2/2/2022 | | — | | | | | | | — | | | — | | | 68,093 | | (4) | $ | 13.08 | | | $ | 518,664 | | |
| | Cash Bonus | | — | | $ | 226,721 | | | $ | 453,442 | | | | | — | | | — | | | — | | | — | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
| Dustin Sjuts | | PSU | | 2/2/2022 | | — | | | | | | | 104,791 | | | — | | | — | | | — | | | $ | 1,246,490 | | |
| President | | Option Grant | | 2/2/2022 | | — | | | | | | | — | | | — | | | 57,016 | | (4) | $ | 13.08 | | | $ | 434,291 | | |
| | Cash Bonus | | — | | $ | 300,000 | | | $ | 600,000 | | | | | — | | | — | | | — | | | — | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
| Dwight Moxie | | PSU | | 2/2/2022 | | — | | | | | | | 84,698 | | | — | | | — | | | — | | | $ | 1,007,483 | | |
| Senior Vice President, General Counsel and Corporate Secretary | | Option Grant | | 2/2/2022 | | — | | | | | | | — | | | — | | | 68,093 | | (4) | $ | 13.08 | | | $ | 518,664 | | |
| | Cash Bonus | | — | | $ | 223,253 | | | $ | 446,506 | | | | | — | | | — | | | — | | | — | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
| Abhay Joshi, Ph.D. | (5) | PSU | | — | | — | | | | | | | — | | | — | | | — | | | — | | | — | | |
| Former Chief Operating Officer, President of R&D and Product Operations | | Option Grant | | — | | — | | | | | | | — | | | — | | | — | | | — | | | — | | |
| | Cash Bonus | | — | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | |
| | Modified RSA | | 3/31/2022 | | — | | | — | | | | | — | | | 8,334 | | (6) | — | | | — | | | $ | 162,513 | | (6) |
| | Modified RSA | | 3/31/2022 | | — | | | — | | | | | — | | | 7,540 | | (7) | — | | | — | | | $ | 147,030 | | (7) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 19,584 | | (8) | $ | 17.23 | | | $ | 143,167 | | (8) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 45,781 | | (9) | $ | 22.32 | | | $ | 256,029 | | (9) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 12,789 | | (10) | $ | 28.01 | | | $ | 54,032 | | (10) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 206,250 | | (11) | $ | 36.32 | | | $ | 587,713 | | (11) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 79,000 | | (12) | $ | 19.70 | | | $ | 333,367 | | (12) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 70,500 | | (13) | $ | 29.15 | | | $ | 263,297 | | (13) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 74,416 | | (14) | $ | 17.23 | | | $ | 286,075 | | (14) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 79,354 | | (15) | $ | 22.32 | | | $ | 342,484 | | (15) |
| | Modified Option | | 3/31/2022 | | — | | | — | | | | | — | | | — | | | 11,083 | | (16) | $ | 28.01 | | | $ | 42,923 | | (16) |
(1)These columns set forth the target and maximum cash bonus amount for each NEO for the year ended December 31, 2022 under the 2022 Management Bonus Plan. There is no threshold bonus amount for each individual NEO established under the 2022 Management Bonus Plan. Target bonuses were set as a percentage of each NEO’s base salary earned for the year ended December 31, 2022. The maximum bonus amounts were capped at 200% of the NEO’s target bonus amount. The dollar value of the actual bonus award earned for the year ended December 31, 2022 for each NEO is set forth in the “Summary Compensation Table.” As such, the amounts set forth in this column do not represent either additional or actual compensation earned by the NEOs for the year ended December 31, 2022. (2)Represents the target number of shares that may be earned pursuant to PSUs granted to certain of our NEOs in 2022. The PSUs will vest as follows, subject to the NEO providing continuous service to us through the vesting date: (i) 50% of the PSUs will vest upon the earlier of the following, as confirmed by the Board or Compensation Committee: (a) the 6-month anniversary of the date of DAXXIFY® GL Approval; or (b) upon a Change in Control; provided the DAXXIFY® GL Approval or Change in Control occurs no later than December 31, 2023 (the “DAXXIFY® PSU Vesting Terms”), subject to the executive officer's continuous service through the 6-month anniversary of the DAXXIFY® GL Approval or the closing of such Change in Control and (ii) 50% of the PSUs will vest upon the earlier of the following conditions, as confirmed by the Board or Compensation Committee: (a) the date that the closing price of the Common Stock first equals or exceeds $30/share and remains at or above $30/share during any 90 consecutive trading day period on a VWAP basis; or (b) upon a Change in Control in which the Change in Control price equals or exceeds $30/share.
(3)Amounts shown in this column do not reflect compensation actually received or amounts that may be realized in the future by the NEOs. The amounts shown in this column reflect the aggregate grant date fair value for the Stock Options and/or PSUs granted to our NEOs in 2022 as computed in accordance with ASC 718 and as applicable, the incremental fair value of equity awards modified in 2022. For a discussion of valuation assumptions, see Note 11 to our consolidated financial statements included in our FY2022 10-K. Please see “Summary Compensation Table – footnote (1)” above for further detail on the grant date fair value of the PSUs granted in 2022, assuming achievement of the maximum level of performance under the applicable performance conditions. (4)The shares subject to the Stock Option vest over a four-year period, with one-forty-eighth of the shares vesting each month, commencing on February 2, 2022, subject to the NEO providing continued service to us through each vesting date.
(6)Represents the unvested shares of common stock subject to Dr. Joshi’s January 2020 RSA grant that were modified pursuant to the Joshi Separation Agreement and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the RSAs.
(7)Represents the unvested shares of common stock subject to Dr. Joshi’s February 2021 RSA grant that were modified pursuant to the Joshi Separation Agreement and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the RSAs.
(8)Represents the shares of common stock subject to Dr. Joshi’s January 2019 option grant that were modified by extending the vesting period and exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(9)Represents the shares of common stock subject to Dr. Joshi’s January 2020 option grant that were modified by extending the vesting period and exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(10)Represents the shares of common stock subject to Dr. Joshi’s February 2021 option grant that were modified by extending the vesting period and exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(11)Represents the shares of common stock subject to Dr. Joshi’s December 2015 option grant that were modified by extending the exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(12)Represents the shares of common stock subject to Dr. Joshi’s January 2017 option grant that were modified by extending the exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(13)Represents the shares of common stock subject to Dr. Joshi’s February 2018 option grant that were modified by extending the exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(14)Represents the shares of common stock subject to Dr. Joshi’s January 2019 option grant that were modified by extending the exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(15)Represents the shares of common stock subject to Dr. Joshi’s January 2020 option grant that were modified by extending the exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
(16)Represents the shares of common stock subject to Dr. Joshi’s February 2021 option grant that were modified by extending the exercise period of the options pursuant to the Joshi Separation Agreement, and the incremental fair value, computed in accordance with ASC 718, associated with the modification of the options.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2017
FISCAL YEAR-END 2022
The following table provides information regarding outstanding equity awards held by each of our NEOs as of December 31, 2017.2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards | | Stock Awards |
| Name | Grant Date | | Number of Shares of Common Stock Underlying Unexercised Stock Options Exercisable Shares (#) | | Number of Shares of Common Stock Underlying Unexercised Stock Options Unexercisable Shares (#) | | Option Exercise Price per Share | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| Mark J. Foley | 9/5/2017 | | 12,000 | | | — | | | $ | 24.55 | | | 9/4/2027 | | — | | | | — | | | — | | | | — | |
| CEO | 5/10/2018 | | 6,000 | | | — | | | $ | 29.15 | | | 5/9/2028 | | — | | | | — | | | — | | | | — | |
| 5/9/2019 | | 9,000 | | | — | | | $ | 12.82 | | | 5/8/2029 | | — | | | | — | | | — | | | | — | |
| 10/13/2019 | (1) | 585,833 | | | 154,167 | | | $ | 12.18 | | | 10/12/2029 | | — | | | | — | | | — | | | | — | |
| 2/2/2021 | (2) | 33,763 | | | 39,902 | | | $ | 28.01 | | | 2/1/2031 | | — | | | | — | | | — | | | | — | |
| 2/2/2022 | (2) | 29,865 | | | 113,489 | | | $ | 13.08 | | | 2/1/2032 | | — | | | | — | | | — | | | | — | |
| 10/13/2019 | (3) | — | | | — | | | — | | | — | | | — | | | | — | | | 344,000 | | | | $ | 6,350,240 | |
| 2/2/2021 | (4) | — | | | — | | | — | | | — | | | — | | | | — | | | 122,143 | | | | $ | 2,254,760 | |
| 2/2/2022 | (5) | — | | | — | | | — | | | — | | | 175,649 | | (6) | | $ | 3,242,481 | | | 175,649 | | | | $ | 3,242,481 | |
| 2/2/2021 | (7) | — | | | — | | | — | | | — | | | 27,144 | | | | $ | 501,078 | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
| Tobin C. Schilke | 11/5/2018 | (1) | 100,000 | | | — | | | $ | 24.96 | | | 11/4/2028 | | — | | | | — | | | — | | | | — | |
| Chief Financial Officer | 1/24/2019 | (2) | 29,375 | | | 625 | | | $ | 17.23 | | | 1/23/2029 | | — | | | | — | | | — | | | | — | |
| 1/23/2020 | (2) | 71,093 | | | 26,407 | | | $ | 22.32 | | | 1/22/2030 | | — | | | | — | | | — | | | | — | |
| 2/2/2021 | (2) | 18,757 | | | 22,168 | | | $ | 28.01 | | | 2/1/2031 | | — | | | | — | | | — | | | | — | |
| 2/2/2022 | (2) | 14,186 | | | 53,907 | | | $ | 13.08 | | | 2/1/2032 | | — | | | | — | | | — | | | | — | |
| 1/23/2020 | (3) | — | | | — | | | — | | | — | | | — | | | | — | | | 18,000 | | | | $ | 332,280 | |
| 2/2/2021 | (4) | — | | | — | | | — | | | — | | | — | | | | — | | | 22,620 | | | | $ | 417,565 | |
| 2/2/2022 | (5) | — | | | — | | | — | | | — | | | 42,349 | | (6) | | $ | 781,763 | | | 42,349 | | | | $ | 781,763 | |
| 1/23/2020 | (7) | — | | | — | | | — | | | — | | | 5,500 | | | | $ | 101,530 | | | — | | | | — | |
| 2/2/2021 | (7) | — | | | — | | | — | | | — | | | 15,080 | | | | $ | 278,377 | | | — | | | | — | |
|
| | | | | | | | | | | | | | | | | |
| | Option Awards | Stock Awards |
| | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | Option Expiration Date | Number of Shares that Have Not Vested | | Market Value of Shares That Have Not Vested |
| L. Daniel Browne | 20,000 |
| | — |
| | $ | 2.55 |
| 4/29/2018 |
| — |
| | — |
|
| | 10,990 |
| | — |
| | $ | 2.55 |
| 7/20/2020 |
| — |
| | — |
|
| | 298,750 |
|
| — |
| | $ | 8.70 |
| 5/26/2023 |
| — |
| | — |
|
| | 99,583 |
|
| — |
| | $ | 9.15 |
| 12/16/2023 |
| — |
| | — |
|
| | 264,987 |
| (1) | 30,813 |
| | $ | 32.22 |
| 5/18/2024 |
| — |
| | — |
|
| | 179,739 |
| (2) | 66,761 |
| | $ | 16.23 |
| 1/27/2025 |
| — |
| | — |
|
| | 80,208 |
| (7) | 94,792 |
| | $ | 17.12 |
| 2/8/2026 |
| — |
| | — |
|
| | 35,520 |
| (9) | 119,480 |
| | $ | 19.70 |
| 1/25/2027 |
| — |
|
| — |
|
| | — |
| | — |
| | $ | — |
| — |
| 14,500 |
| (3) | $ | 518,375 |
|
| | — |
| | — |
| | $ | — |
| — |
| 16,667 |
| (8) | $ | 595,845 |
|
| | — |
| | — |
| | $ | — |
| — |
| 25,800 |
| (10) | $ | 922,350 |
|
| Todd E. Zavodnick | — |
| (11) | 35,000 |
| | $ | 24.40 |
| 9/17/2027 |
| — |
| | — |
|
| | — |
| | — |
| | $ | — |
| — |
| 95,000 |
| (12) | $ | 3,396,250 |
|
| Abhay Joshi, Ph.D. | 666 |
| | — |
| | $ | 4.20 |
| 4/28/2019 |
| — |
| | — |
|
| | 666 |
| | — |
| | $ | 2.55 |
| 4/29/2018 |
| — |
| | — |
|
| | 103,124 |
| (4) | 103,126 |
| | $ | 36.32 |
| 12/13/2025 |
| — |
| | — |
|
| | 18,104 |
| (9) | 60,896 |
| | $ | 19.70 |
| 1/25/2027 |
| — |
| | — |
|
| | — |
| | — |
| | $ | — |
| — |
| 17,187 |
| (5) | $ | 614,435 |
|
| | — |
| | — |
| | $ | — |
| — |
| 36,000 |
| (6) | $ | 1,287,000 |
|
| | — |
| | — |
| | $ | — |
| — |
| 13,100 |
| (10) | $ | 468,325 |
|
| |
(1) | This option was granted on May 19, 2014. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting each month, subject to providing continued service to us through each vesting date. |
| |
(2) | This restricted stock award was granted on January 28, 2015. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting each month, subject to providing continued service to us through each vesting date. |
| |
(3) | This restricted stock award was granted on January 28, 2015. The shares subject to the stock award vest over a three year period, with one-third of the shares vesting each year, subject to providing continued service to us through each vesting date. |
| |
(4) | This option was granted on December 14, 2015. The shares subject to the stock option vest over a four year period, with 25% vesting on December 14, 2016 and the balance vesting each month over the remaining three-year period, subject to providing continued service to us through each vesting date. |
| |
(5) | This restricted stock award was granted on December 14, 2015. The shares subject to the stock award vest over a four year period, with one-fourth of the shares vesting each year, subject to providing continued service to us through each vesting date. |
| |
(6) | This restricted stock award was granted on December 15, 2016. The shares subject to the stock award vest over a three year period, with one-third of the shares vesting each year, subject to providing continued service to us through each vesting date. |
| |
(7) | This option was granted on February 9, 2016. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting each month, subject to providing continued service to us through each vesting date. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards | | Stock Awards |
| Name | Grant Date | | Number of Shares of Common Stock Underlying Unexercised Stock Options Exercisable Shares (#) | | Number of Shares of Common Stock Underlying Unexercised Stock Options Unexercisable Shares (#) | | Option Exercise Price per Share | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| Dustin Sjuts | 3/1/2018 | (1) | 28,000 | | | — | | | $ | 29.85 | | | 2/28/2028 | | — | | | | — | | | — | | | | — | |
| President | 11/5/2018 | (2) | 30,000 | | | — | | | $ | 24.96 | | | 11/4/2028 | | — | | | | — | | | — | | | | — | |
| 1/24/2019 | (2) | 9,791 | | | 209 | | | $ | 17.23 | | | 1/23/2029 | | — | | | | — | | | — | | | | — | |
| 1/23/2020 | (2) | 72,916 | | | 27,084 | | | $ | 22.32 | | | 1/22/2030 | | — | | | | — | | | — | | | | — | |
| 2/2/2021 | (2) | 18,757 | | | 22,168 | | | $ | 28.01 | | | 2/1/2031 | | — | | | | — | | | — | | | | — | |
| 2/2/2022 | (2) | 11,878 | | | 45,138 | | | $ | 13.08 | | | 2/1/2032 | | — | | | | — | | | — | | | | — | |
| 1/23/2020 | (3) | — | | | — | | | — | | | — | | | — | | | | — | | | 20,000 | | | | $ | 369,200 | |
| 2/2/2021 | (4) | — | | | — | | | — | | | — | | | — | | | | — | | | 22,620 | | | | $ | 417,565 | |
| 2/2/2022 | (5) | — | | | — | | | — | | | — | | | 52,396 | | (6) | | $ | 967,230 | | | 52,396 | | | | $ | 967,230 | |
| 1/23/2020 | (7) | | | | | | | | | 6,667 | | | | $ | 123,073 | | | — | | | | — | |
| 2/2/2021 | (7) | — | | | — | | | — | | | — | | | 15,080 | | | | $ | 278,377 | | | — | | | | — | |
| 11/9/2021 | (7) | | | | | | | | | 23,947 | | | | $ | 442,062 | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
| Dwight Moxie | 2/18/2020 | (1) | 120,416 | | | 49,584 | | | $ | 25.93 | | | 2/17/2030 | | — | | | | — | | | — | | | | — | |
| Senior Vice President, General Counsel and Corporate Secretary | 2/2/2021 | (2) | 16,042 | | | 18,960 | | | $ | 28.01 | | | 2/1/2031 | | — | | | | — | | | — | | | | — | |
| 2/2/2022 | (2) | 14,186 | | | 53,907 | | | $ | 13.08 | | | 2/1/2032 | | — | | | | — | | | — | | | | — | |
| 2/18/2020 | (3) | — | | | — | | | — | | | — | | | — | | | | — | | | 14,000 | | | | $ | 258,440 | |
| 2/2/2021 | (4) | — | | | — | | | — | | | — | | | — | | | | — | | | 19,346 | | | | $ | 357,127 | |
| 2/2/2022 | (5) | — | | | — | | | — | | | — | | | 42,349 | | (6) | | $ | 781,763 | | | 42,349 | | | | $ | 781,763 | |
| 2/18/2020 | (7) | — | | | — | | | — | | | — | | | 8,334 | | | $ | 153,846 | | | — | | | | — | |
| 2/2/2021 | (7) | — | | | — | | | — | | | — | | | 12,898 | | | $ | 238,097 | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
| |
(8) | This restricted stock award was granted on February 9, 2016. The shares subject to the stock award vest over a three year period, with one-third of the shares vesting each year, subject to providing continued service to us through each vesting date. |
| |
(9) | This option was granted on January 26, 2017. The shares subject to the stock option vest over a four year period, with one-forty-eighth of the shares vesting each month, subject to providing continued service to us through each vesting date. |
| |
(10) | This restricted stock award was granted on January 26, 2017. The shares subject to the stock award vest over a three year period, with one-third of the shares vesting each year, subject to providing continued service to us through each vesting date. |
| |
(11) | This option was granted on September 18, 2017. The shares subject to the stock option vest over a four year period, with 25% vesting on September 18, 2018, and the balance vesting each month over the remaining three-year period, subject to providing continued service to us through each vesting date. |
| |
(12) | This restricted stock award was granted on September 18, 2017. The shares subject to the stock award vest over a four year period, with one-fourth of the shares vesting each year beginning on October 15, 2018, subject to providing continued service to us through each vesting date. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards | | Stock Awards |
| Name | Grant Date | | Number of Shares of Common Stock Underlying Unexercised Stock Options Exercisable Shares (#) | | Number of Shares of Common Stock Underlying Unexercised Stock Options Unexercisable Shares (#) | | Option Exercise Price per Share | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| Abhay Joshi, Ph.D. | 12/14/2015 | (1) | 206,250 | | | — | | | $ | 36.32 | | | 9/30/2023 | (8) | — | | | — | | | — | | | $ | — | |
| Former Chief Operating Officer, President of R&D and Product Operations | 1/26/2017 | (2) | 79,000 | | | — | | | $ | 19.70 | | | 9/30/2023 | (8) | — | | | — | | | — | | | $ | — | |
| 2/8/2018 | (2) | 70,500 | | | — | | | $ | 29.15 | | | 9/30/2023 | (8) | — | | | — | | | — | | | $ | — | |
| 1/24/2019 | (2) | 92,041 | | | 1,959 | | | $ | 17.23 | | | 9/30/2023 | (8) | — | | | — | | | — | | | $ | — | |
| 1/23/2020 | (2) | 106,822 | | | 39,678 | | | $ | 22.32 | | | 9/30/2023 | (8) | — | | | — | | | — | | | $ | — | |
| 2/2/2021 | (2) | 18,757 | | | 22,168 | | | $ | 28.01 | | | 9/30/2023 | (8) | — | | | — | | | — | | | $ | — | |
| 1/23/2020 | (3) | — | | | — | | | — | | | — | | | — | | | — | | | 20,000 | | (9) | $ | 369,200 | |
| 2/2/2021 | (4) | — | | | — | | | — | | | — | | | — | | | — | | | 22,620 | | (9) | $ | 417,565 | |
| 1/23/2020 | (7) | — | | | — | | | — | | | — | | | 8,334 | (9) | $ | 153,846 | | | — | | | $ | — | |
| 2/2/2021 | (7) | — | | | — | | | — | | | — | | | 15,080 | (9) | $ | 278,377 | | | — | | | $ | — | |
(1)The shares subject to the stock options vest over a four-year period, with 25% vesting on the one-year-anniversary from the grant date, and the balance vesting each month over the remaining three-year period, subject to the NEO providing continued service to us through each vesting date.
(2)The shares subject to the stock option vest over a four-year period, with one-forty-eighth of the shares vesting each month, subject to the NEO providing continued service to us through each vesting date.
(3)The PSAs will vest as follows, subject to the NEO providing continued service to us through the vesting date: upon the earlier of the following, as confirmed by the Board or Compensation Committee on or before October 13, 2029: (i) the date that the closing share price of our common stock is at least $40 per share and remains at or above $40 per share during any 90 consecutive trading-day period on a volume-weighted average price basis; or (ii) upon a Change in Control in which the purchase price of our common stock is at or above $40 per share.
(4)The PSAs will vest as follows, subject to the NEO providing continuous service to us through the vesting date: (i) upon the Company’s achievement of a cumulative revenue goal, calculated in accordance with GAAP, adjusted to exclude revenue recognized from collaboration agreements and classified as collaboration revenue (“Revenue Target”), as confirmed by the Board or Compensation Committee on or before the three-year anniversary of the DAXXIFY® GL Approval or (ii) upon a Change in Control.
(5)The PSUs will vest as follows, subject to the NEO providing continuous service to us through the vesting date: (i) 50% of the PSUs will vest in accordance with the DAXXIFY® PSU Vesting Terms and (ii) 50% of the PSUs will vest upon the earlier of the following conditions, as confirmed by the Board or Compensation Committee: (a) the date that the closing price of the Common Stock first equals or exceeds $30/share and remains at or above $30/share during any 90 consecutive trading day period on a VWAP basis; or (b) upon a Change in Control in which the Change in Control price equals or exceeds $30/share.
(6)The goals related to the DAXXIFY® PSU Vesting Terms were achieved in September 2022, however the PSUs did not vest until 6 months from the date of DAXXIFY® approval in connection with the DAXXIFY® PSU Vesting Terms. Because the PSUs did not vest until March 8, 2023, the PSUs are reflected as outstanding.
(7)The shares subject to the time-based equity award vest over a three-year period, with one-third of the shares vesting each year, subject to the NEO providing continued service to us through each vesting date.
(8)The Joshi Separation Agreement provides for the continued vesting of outstanding equity awards until the end of the Joshi Consulting Period. Dr. Joshi’s options are exercisable until the date that is three months after the end of the Joshi Consulting Period (subject to earlier expiration in accordance with the terms of such awards). The option expiration date in the table assumes that the Joshi Consulting Period ends as expected on June 30, 2023.
(9)The Joshi Separation Agreement provides for the continued vesting of outstanding equity awards until the end of the Joshi Consulting Period. Dr. Joshi’s RSAs and PSAs will continue to vest until the end of the Joshi Consulting Period, and subsequently any unvested RSAs and PSAs will be forfeited.
OPTION EXERCISES AND STOCK VESTED
The following table includes certain information with respect to stock options exercised and RSAs that vested during the year ended December 31, 2022. No option awards were exercised during the year ended December 31, 2022.
| | | | | | | | | | | |
| Stock Awards |
| Name | Number of Shares Acquired on Vesting | | Value Realized on Vesting (1) |
| Mark J. Foley | 146,905 | | | $ | 3,810,304 | |
| Tobin C. Schilke | 19,207 | | | $ | 311,486 | |
| Dustin Sjuts | 28,264 | | | $ | 499,864 | |
| Dwight Moxie | 14,781 | | | $ | 233,392 | |
| Abhay Joshi, Ph.D. | 21,123 | | | $ | 300,390 | |
(1) Amount reflects the product of the fair market value of our common stock on the applicable vesting date multiplied by the number of shares subject to RSAs that vested and does not necessarily reflect proceeds actually received by the NEOs.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Severance Benefit Plan
Each of our NEOs are participants under our Severance Benefit Plan, which provides severance benefits in the event of certain qualifying terminations of employment, subject to the executive’s execution of a waiver and release of claims in favor of the Company and the existence of a proprietary information and inventions agreement between the executive and the Company.
Under our Severance Benefit Plan, upon an involuntary termination of a participant other than for “Cause” (as defined in the Severance Benefit Plan), and where such termination is not in connection with or within 12 months following a change in control, the benefits provided under the Severance Benefit Plan consist of: (i) monthly cash payments (a) in an amount equal to 18 times the officer’s monthly base salary, in the case of our CEO, and (b) in an amount equal to nine times the officer’s monthly base salary, in the case of our other NEOs; and (ii) payment by the Company of COBRA premiums for the participant and his or her eligible dependents for a period of up to 18 months in the case of our CEO, and up to nine months in the case of the other NEOs.
In connection with or for a period of 12 months following a change in control, upon an involuntary termination of a participant for any reason other than Cause, or upon the participant’s resignation for “Good Reason” (as defined in the Severance Benefit Plan), then the benefits provided by the Severance Benefit Plan will consist of: (i) a lump sum payment equal to the sum of the participant’s monthly base salary and monthly annual target bonus, multiplied by 24 in the case of our CEO, and by 12 in the case of the other NEOs; (ii) payment of COBRA premiums for the NEO and his or her eligible dependents for a period of up to 24 months in the case of our CEO, and up to 12 months in the case of the other NEOs; and (iii) accelerated vesting of all unvested stock options and other stock awards then held by the NEO.
Under the Severance Benefit Plan, a “change in control” is defined the same way it is under the 2014 Plan. If any of the benefits provided under the Severance Benefit Plan would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), such that the payments would become subject to the excise tax imposed by Section 4999 of the Code, then the payments will either be paid in full to the participant, or reduced so that no portion of such benefits will be subject to the excise tax, whichever provides the greater after-tax benefit to the participant.
A NEO’s right to receive payment of benefits under the Severance Benefit Plan will immediately terminate if, at any time prior to or during the period the NEO is receiving such benefits, the NEO (i) willfully breaches a material provision of the executive’s proprietary information and inventions agreement with the Company or any obligations of confidentiality, non-solicitation, non-disparagement, no conflicts or non-competition set forth in any other agreement between the executive and the Company, (ii) encourages or solicits any of our then-current employees to leave our employ for any reason or otherwise interferes in our employment relationships with our then-current employees or (iii) interferes in any of our existing business relationships, in each case of (i), (ii) or (iii) without the prior written approval of the Company.
The Severance Benefit Plan provides for “double trigger” vesting, such that 100% of the shares subject to outstanding stock awards vest upon a termination without Cause (as defined in the Severance Benefit Plan) or a resignation for Good Reason (as defined in the Severance Benefit Plan), in either case within twelve months following a change in control.
Joshi Separation and Consulting Agreement
Equity Awards
Our time-vesting equity award agreements provide for acceleration of vesting in the event of a change in control, if and to the extent that the acquiring company refuses to continue, assume or substitute such awards.
As described in detail above, the Severance Benefit Plan provides for “double trigger” vesting acceleration of outstanding equity awards, such that 100% of the shares subject to outstanding stock awards vest upon certain types of
involuntary terminations upon or a termination without Cause or a resignation for Good Reason within twelve months following a change in control.
In addition to the Severance Benefit Plan, the NEO’s PSAs granted in 2019 for Mr. Foley and 2020 for all other NEOs provides for full vesting acceleration in the event of a change in control as follows: the shares will vest upon a change in control that occurs on or before October 13, 2029 in which the purchase price of our common stock is at or above $40 per share, with all per share prices to be adjusted for any stock splits, recapitalizations and other similar transactions. The NEOs' PSAs granted in 2021 provides for full vesting acceleration in the event of a change in control that occurs prior to the three-year anniversary of the approval of the BLA for DAXI. The NEO’s PSUs granted in 2022 provide for full vesting acceleration in the event of a change in control as follows: (i) the shares subject to the DAXXIFY® Vesting Terms will vest upon a change in control that occurs on or before December 31, 2023 and (ii) the shares subject to the share price goal will vest upon a change in control that occurs on or before February 2, 2032 in which the purchase price of our common stock is at or above $30 per share, with all per share prices to be adjusted for any stock splits, recapitalizations and other similar transactions.
Potential Payments Upon Termination or Change-in-Control
The following table shows the potential payments upon termination of employment or a change in control for the NEOs. Except as otherwise indicated below, the table assumes that the triggering event took place on December 31, 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Benefit | | Involuntary Termination Without Cause or Resignation for Good Reason in Connection with a Change in Control ($) | | Involuntary Termination Without Cause Not in Connection with a Change in Control ($) | | Certain Change in Control Transactions without Termination ($)(1) |
| Mark J. Foley | | Severance Payments | | $ | 1,346,400 | | | $ | 1,009,800 | | | $ | — | |
| CEO | | Vesting Acceleration | (2) | $ | 7,737,732 | | | $ | — | | | $ | 7,737,732 | |
| | COBRA Payments | | $ | 52,880 | | | $ | 26,440 | | | $ | — | |
| | Benefit Total | | $ | 9,137,012 | | | $ | 1,036,240 | | | $ | 7,737,732 | |
| | | | | | | | |
| Tobin C. Schilke | | Severance Payments | | $ | 453,442 | | | $ | 340,082 | | | $ | — | |
| Chief Financial Officer | | Vesting Acceleration | (2) | $ | 1,869,490 | | | $ | — | | | $ | 1,869,490 | |
| | COBRA Payments | | $ | 15,660 | | | $ | 11,745 | | | $ | — | |
| | Benefit Total | | $ | 2,338,593 | | | $ | 351,827 | | | $ | 1,869,490 | |
| | | | | | | | |
| Dustin Sjuts | | Severance Payments | | $ | 500,000 | | | $ | 375,000 | | | $ | — | |
| President | | Vesting Acceleration | (2) | $ | 2,471,406 | | | $ | — | | | $ | 2,471,406 | |
| | COBRA Payments | | $ | 8,514 | | | $ | 6,385 | | | $ | — | |
| | Benefit Total | | $ | 2,979,920 | | | $ | 381,385 | | | $ | 2,471,406 | |
| | | | | | | | |
| Dwight Moxie | | Severance Payments | | $ | 446,505 | | | $ | 334,879 | | | $ | — | |
| Senior Vice President, General Counsel and Corporate Secretary | | Vesting Acceleration | (2) | $ | 1,820,852 | | | $ | — | | | $ | 1,820,852 | |
| | COBRA Payments | | $ | 37,008 | | | $ | 27,756 | | | $ | — | |
| | Benefit Total | | $ | 2,304,365 | | | $ | 362,634 | | | $ | 1,820,852 | |
| | | | | | | | |
Abhay Joshi, Ph.D.(3) | | Severance Payments | | $ | — | | | $ | 389,816 | | | $ | — | |
| Former Chief Operating Officer, President of R&D and Product Operations | | Vesting Acceleration | (2) | $ | — | | | $ | — | | | $ | 852,197 | |
| | COBRA Payments | | $ | — | | | $ | 20,227 | | | $ | — | |
| | Benefit Total | | $ | — | | | $ | 410,043 | | | $ | 852,197 | |
(1)In the event of a Change in Control, if our successor does not agree to assume the existing equity plans or to substitute equivalent awards or rights for the stock options, RSAs or RSUs, then the vesting of the unvested stock options and stock awards shall accelerate in full, effective immediately prior to a Change in Control, except that, for PSAs and PSUs subject to stock price goals, such stock price goal must be achieved as of the Change in Control. If a Change in Control occurred on December 31, 2022, none of the PSA and PSU stock price goals would be met and as a result, amounts reflected for such awards are zero in the table above. In addition, our milestone PSAs subject to the Revenue Target that were outstanding as of December 31, 2022 vest upon a Change in Control. The amount in this column assumes all outstanding PSAs subject to the Revenue Target and all PSUs subject to the FDA approval goal vest in full upon a Change in Control, although, as described above in “—Compensation Discussion and Analysis,” the performance goal for the PSUs was met upon DAXXIFY® GL Approval in September 2022 and accordingly such awards vested in March 2023. (2)Assumes that the triggering event occurred on December 30, 2022, when the closing sale price per share of our common stock was $18.46. The amount of the vesting acceleration is determined by: (i) aggregating for all accelerated stock options, the amount equal to the excess, if any, of $18.46 over the relevant exercise price of the stock option, multiplied by the number of shares underlying unvested stock options at such exercise price as of December 30, 2022; and (ii) aggregating for all accelerated RSAs, PSAs and PSUs, the amount equal to $18.46 multiplied by the number of shares underlying the unvested RSAs, PSAs and PSUs that are accelerated pursuant to the terms of the relevant award. There can be no assurance that a similar triggering
event would produce the same or similar results as those estimated if such event occurs on any other date or at a time when our closing sale price is different.
(3)Dr. Joshi ceased employment with us effective March 31, 2022. The amounts in the table under the column “Involuntary Termination Without Cause Not in Connection with a Change in Control” reflect the actual severance benefits paid to Dr. Joshi pursuant to the Joshi Separation Agreement. See “—Compensation Discussion and Analysis—Other Features of Our Executive Compensation Program—Agreements with our NEOs—Severance and Change in Control Benefits” for a discussion of severance benefits received in connection with Dr. Joshi's transition from the Company, effective March 31, 2022. Pursuant to the Joshi Separation Agreement, Dr. Joshi received $389,816 in severance payments and $20,227 of COBRA premiums. Because Dr. Joshi's equity awards continue to vest during his Consulting Period, his awards remain eligible to accelerate vesting upon a change in control during the Consulting Period. As a result, the amounts reflected in column 3 reflect the potential vesting acceleration if a change in control had occurred on December 31, 2022.
CEO PAY RATIO
Set forth below is a reasonable estimate, prepared under applicable SEC rules, of the ratio of the annual total compensation of our CEO, to the median of the annual total compensation of our other employees for 2022.
The annual total compensation for 2022 for our CEO, Mr. Foley, was $6,606,916, as reported in the Summary Compensation Table. The annual total compensation for 2022 for our median employee, identified as discussed below, was $222,907, calculated in accordance with the rules applicable to the Summary Compensation Table. Based on this information, for 2022, the ratio of the annual total compensation of Mr. Foley, our CEO, to the median of the annual total compensation of our other employees was approximately 30 to 1.
As permitted under SEC rules, we determined that there have not been any changes to our employee population and compensation arrangements from 2021 that we believe would result in a significant change to our pay ratio disclosure.As a result, for 2022, we used the same median employee that was identified for 2021.
To determine our total population of employees, we included all full-time, part-time, regular and temporary employees as of October 13, 2021. To identify our median employee from our employee population, we calculated the annual target amount of each employee’s (other than Mr. Foley) 2021 base salary using a reasonable estimate of the hours worked and no overtime for hourly employees and bonus or commission, as applicable, plus the aggregate grant date fair value of equity awards granted in 2021 as our compensation measure that we consistently applied to all employees. For purposes of base salaries, bonuses and commissions, we used an estimate based on the rates in effect on October 13, 2021. In making this determination, we annualized the base salaries, bonuses and commissions of permanent employees who were newly hired or on unpaid leaves of absence during 2021 and thus employed by us for less than the entire calendar year. Since the originally identified median employee was a new hire during 2021 with anomalous compensation characteristics, we selected as our median employee a continuing employee whose 2021 compensation was substantially similar to that of the original median employee.
The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.
ITEM 402(v) PAY VERSUS PERFORMANCE
The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee views the link between the Company’s performance and NEO pay. For additional information about our pay-for-performance philosophy and how we align executive compensation with Company performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”
Required Tabular Disclosure of Pay Versus Performance
The amounts set forth below under the headings “Compensation Actually Paid to CEO” and “Average Compensation Actually Paid for NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. Use of the term “compensation actually paid” (“CAP”) is required by the SEC’s rules and as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in “Executive Compensation – Compensation Discussion and Analysis.”
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Year | | Summary Compensation Table for PEO(1) | | Compensation Actually Paid to PEO(2) | | Average Summary Compensation Table Total for non-PEO NEOs(3) | | Average Compensation Actually Paid to non-PEO NEOs(4) | | Value of Initial Fixed $100 Investment Based On: | | Net Income(7) | | Product and Service Revenue(8) |
| | | | | Total Shareholder Return(5) | | Peer Group Total Shareholder Return(6) | | |
| (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) |
| 2022 | | $ | 6,606,916 | | | $ | 14,647,188 | | | $ | 2,600,645 | | | $ | 3,224,270 | | | $113.74 | | $111.27 | | $ | (356,422,516) | | | $ | 125,121,318 | |
| 2021 | | $ | 7,105,916 | | | $ | (14,431,563) | | | $ | 2,833,814 | | | $ | (18,373) | | | $100.55 | | $124.89 | | $ | (281,310,336) | | | $ | 72,142,717 | |
| 2020 | | $ | 8,780,936 | | | $ | 26,328,963 | | | $ | 2,878,149 | | | $ | 4,800,096 | | | $174.61 | | $125.69 | | $ | (282,089,412) | | | $ | 13,293,751 | |
(1)The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Foley (our CEO) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Executive Compensation Tables—Summary Compensation Table.”
(2)The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Foley, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Foley during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Foley’s total reported compensation for each year to determine the compensation actually paid:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Reported
Summary Compensation Table Total for PEO | | Reported Value of Equity Awards(a) | | Equity Award Adjustments(b) | | Compensation Actually Paid to PEO |
| 2022 | | $ | 6,606,916 | | - | $ | 5,278,215 | | + | $ | 13,318,487 | | = | $ | 14,647,188 | |
| 2021 | | $ | 7,105,916 | | - | $ | 5,702,878 | | + | $ | (15,834,601) | | = | $ | (14,431,563) | |
| 2020 | | $ | 8,780,936 | | - | $ | 7,794,350 | | + | $ | 25,342,377 | | = | $ | 26,328,963 | |
(a)The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year.
(b)The amounts deducted or added in calculating the equity award adjustments are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Year End Fair Value of Current Year Awards Outstanding as of Year End | | Fair Value as of Year End for Prior Year Awards Outstanding as of Year End | | Fair Value as of Vesting Date for Prior Year Awards That Vested During the Year | | Fair Value as of Vesting Date for Current Year Awards That Vested During the Year | | Fair Value as of Vesting Date for Dividend Equivalents That Vested During the Year | | Fair Value as of Prior Year End for Prior Year Awards | | Total Fair Value of Equity Adjustments (i) |
| 2022 | | $ | 7,615,229 | | + | $ | 10,148,509 | | + | $ | 6,169,273 | | + | $ | 377,663 | | + | $ | — | | - | $ | 10,992,188 | | = | $ | 13,318,487 | |
| 2021 | | $ | 1,065,121 | | + | $ | 9,927,068 | | + | $ | 6,344,538 | | + | $ | 206,812 | | + | $ | — | | - | $ | 33,378,139 | | = | $ | (15,834,601) | |
| 2020 | | $ | 3,778,686 | | + | $ | 29,599,453 | | + | $ | 13,823,263 | | + | $ | 1,841,315 | | + | $ | — | | - | $ | 23,700,340 | | = | $ | 25,342,377 | |
(i)Total Equity Award Adjustments value may differ from amount reported in the table under Footnote 2 above due to rounding. The fair values of stock options vested during the fiscal year or outstanding as of fiscal year end were estimated using the Black-Scholes option pricing model with the following assumptions, which are materially different from the assumptions used for estimating the grant-date fair value as reported in the “Option Awards” columns in the Summary Compensation Table:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2022 | | 2021 | | 2020 |
| Expected term (in years) | | 2.2 – 6.7 | | 3.6– 6.4 | | 3.6 – 6.1 |
| Expected volatility | | 60.1 - 72.9% | | 54.2 – 64.1% | | 56.9 – 63.4% |
| Risk-free interest rate | | 1.1 – 4.6% | | 0.3 – 1.4% | | 0.2 – 1.7% |
| Expected dividend rate | | — | % | | — | % | | — | % |
(3)The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Foley, who has served as our CEO since 2019) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Foley) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Tobin Schilke, Dustin Sjuts, Dwight Moxie and Abhay Joshi; (ii) for 2021, Tobin Schilke, Dustin Sjuts, Abhay Joshi and Aubrey Rankin and (iii) for 2020, Tobin Schilke, Dustin Sjuts, Dwight Moxie and Abhay Joshi.
(4)The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Foley), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Foley) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total reported compensation for the NEOs as a group (excluding Mr. Foley) for each year to determine the compensation actually paid, using the same methodology described above in Note 2:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Average
Reported Summary Compensation Table Total for Non-PEO NEOs | | Average
Reported
Value of Equity Awards | | Average Equity Award Adjustments(a) | | Average Compensation Actually Paid to Non-PEO NEOs |
| 2022 | | $ | 2,600,645 | | - | $ | 1,837,926 | | + | $ | 2,461,551 | | = | $ | 3,224,270 | |
| 2021 | | $ | 2,833,814 | | - | $ | 2,076,405 | | + | $ | (775,782) | | = | $ | (18,373) | |
| 2020 | | $ | 2,878,149 | | - | $ | 2,548,683 | | + | $ | 4,470,631 | | = | $ | 4,800,096 | |
(a)The amounts deducted or added in calculating the total average equity award adjustments are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | | Year End Fair Value of Current Year Awards Outstanding as of Year End | | Fair Value as of Year End for Prior Year Awards Outstanding as of Year End | | Fair Value as of Vesting Date for Prior Year Awards That Vested During the Year | | Fair Value as of Vesting Date for Current Year Awards That Vested During the Year | | Fair Value as of Vesting Date for Dividend Equivalents That Vested During the Year | | Fair Value as of Prior Year End for Prior Year Awards | | Total Fair Value of Equity Adjustments (i) |
| 2022 | | $ | 1,682,090 | | + | $ | 1,662,709 | | + | $ | 827,587 | | + | $ | 127,072 | | + | $ | — | | - | $ | 1,837,907 | | = | $ | 2,461,551 | |
| 2021 | | $ | 667,840 | | + | $ | 1,032,726 | | + | $ | 1,118,026 | | + | $ | 101,474 | | + | $ | — | | - | $ | 3,695,848 | | = | $ | (775,782) | |
| 2020 | | $ | 3,188,804 | | + | $ | 870,537 | | + | $ | 532,383 | | + | $ | 650,426 | | + | $ | — | | - | $ | 771,518 | | = | $ | 4,470,631 | |
(i)Total Equity Award Adjustments value may differ from amount reported in the table under Footnote 4 above due to rounding.
(5)Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.
(6)Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the same peer group identified in our stock performance graph on page 72 of our FY2022 10-K.
(7)The dollar amounts reported represent the amount of net loss reflected in the Company’s audited financial statements for the applicable year. Although we received DAXXIFY® GL Approval, we expect to continue to incur losses for the foreseeable future. Consequently, the Company did not use net income (loss) as a performance measure in its executive compensation program.
(8)Product and Service Revenue is selected as the measure we believe represents the most important financial performance measure not otherwise presented in the table above that we use to link compensation actually paid to our NEOs for 2022 to our Company’s performance. Product and Service Revenue is the Company’s Product Revenue plus Service Revenue, each as calculated in accordance with GAAP. Product Revenue means revenue recognized from the sale of DAXXIFY® and the RHA® Collection of dermal fillers, as disclosed in our quarterly and annual financial statements. Service Revenue means revenue recognized from the Fintech Platform and classified as service revenue, as disclosed in our quarterly and annual financial statements. Total Revenue, as calculated in accordance with GAAP, includes Collaboration Revenue, which represents collaboration revenue from our onabotulinumtoxinA biosimilar program with Viatris and partnership with Fosun, as disclosed in our quarterly an annual financial statements, in addition to Product and Service Revenue.
Financial Performance Measures
As described in greater detail in “Executive Compensation—Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our stockholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
•Product and Service Revenue
•DAXXIFY® GL Approval
•Stock Price
•Adjusted Product and Service Revenue, which is a non-GAAP financial measure, and means (a) product revenue recognized from the sale of the RHA® Collection of dermal fillers, as disclosed in our quarterly and annual financial statements and (b) revenue recognized from the Fintech Platform and classified as service revenue, as disclosed in our quarterly and annual financial statements, adjusted to exclude cost of service revenue (exclusive of amortization).
Analysis of the Information Presented in the Pay Versus Performance Table
As described in more detail in the section “Executive Compensation—Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a pay-for-performance philosophy that emphasizes variable pay opportunities based on performance goals and stockholder value. The Company generally seeks to incentivize long-term performance, and has not specifically aligned Company performance measures with “compensation actually paid”, as computed in accordance with Item 402(v) of Regulation S-K, for a particular year. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table.
Compensation Actually Paid and Cumulative TSR
As demonstrated by the following graph, the amount of compensation actually paid to Mr. Foley and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Foley) is aligned with the Company’s cumulative TSR over the three years presented in the table. The alignment of compensation actually paid with the Company’s cumulative TSR over the period presented is because a significant portion of the compensation actually paid to Mr. Foley and to the other NEOs is comprised of equity awards. As described in more detail in the section “Executive Compensation—Compensation Discussion and Analysis,” the Company generally structures a significant portion of target compensation granted to the NEOs to be comprised of equity awards, including time-vesting stock awards, option awards and performance-vesting stock awards.
Compensation Actually Paid and Net Income (Loss)
Although we received DAXXIFY® GL Approval, we expect to continue to incur losses for the foreseeable future. Consequently, we did not use net income (loss) as a performance measure in our executive compensation program. Moreover, as an early commercial stage company with a limited history of product revenue associated with DAXXIFY®, the RHA® Collection of dermal fillers and the Fintech Platform, we do not believe there is any meaningful relationship between our net loss and compensation actually paid to our NEOs during the periods presented.
Compensation Actually Paid and Revenue
While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Product and Service Revenue is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to Company performance.
The following graph demonstrates, the amount of compensation actually paid to Mr. Foley and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Foley) in comparison with the Company’s Product and Service Revenue over the three years presented in the table.
Cumulative TSR of the Company and Cumulative TSR of the Peer Group
As demonstrated by the following graph, the Company’s cumulative TSR over the three year period presented in the table was 14%, while the cumulative TSR of the peer group presented for this purpose, the NASDAQ Biotechnology Index, was 11% over the three years presented in the table. For more information regarding the Company’s performance and the companies that the Compensation Committee considers when determining compensation, refer to “Executive Compensation—Compensation Discussion and Analysis.”
All information provided above under this “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of our common stock as of January 15, 2018March 10, 2023 by: (i) each director; (ii) each named executive officer;NEO; (iii) all of our executive officers and directors as a group;group, and (iv) all those known by us to be beneficial owners of more than five percent of our common stock. We are aware that one or more institutional investors purchased a number of shares of our common stock in amounts representing in excess of five percent of our common stock as of January 15, 2018, and as a result, one or more of such institutional investors may continue to beneficially own in excess of five percent of our common stock as of January 15, 2018. However, as of the date of this Proxy Statement, other than as disclosed below, we are not aware of any filings made with the SEC with respect to the beneficial ownership of our common stock by such institutional investors and we were otherwise unable to verify the beneficial ownership of our common stock by any such institutional investor as of the date of this Proxy Statement.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Shares of common stock issuable under options or warrants that are exercisable within 60 days after January 15, 2018March 10, 2023 are deemed beneficially owned and such shares are used in computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. This table is based upon information supplied by officers, directors and principal stockholdersand Schedule 13Gs filed with the SEC.The percentage of beneficial ownership is based on 36,502,40983,850,063 shares of our common stock outstanding as of January 15, 2018.
March 10, 2023.
The information contained in the following table is not necessarily indicative of beneficial ownership for any other purpose and the inclusion of any shares in the table does not constitute an admission of beneficial ownership of those shares.
Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting and dispositive power with respect to their shares of common stock, except to the extent authority is shared by spouses under community property laws. Unless otherwise indicated below, the address of each beneficial owner listed in the table below is c/o Revance Therapeutics, Inc., 7555 Gateway Blvd., Newark, CA 94560.1222 Demonbreun Street, Suite 2000, Nashville, Tennessee 37203.
|
| | | | |
| | Beneficial Ownership |
| Name of Beneficial Owner | Number of Shares | Percentage of Total |
| Named Executive Officers and Directors: | | |
L. Daniel Browne (1) | 1,163,491 |
| 3.10 | % |
Abhay Joshi (2) | 212,098 |
| * |
|
Todd E. Zavodnick (16) | 95,000 |
| * |
|
Robert Byrnes (3) | 63,998 |
| * |
|
Mark J. Foley (17) | 26,000 |
| * |
|
Phyllis Gardner, M.D. (4) | 32,333 |
| * |
|
Angus C. Russell (5) | 37,000 |
| * |
|
Philip J. Vickers, Ph.D. (6) | 37,000 |
| * |
|
Julian S. Gangolli (7) | 21,000 |
| * |
|
Directors and officers as a group (total of 10 persons) (8) | 1,920,395 |
| 5.05 | % |
| Greater than 5% Stockholders: | | |
Entities affiliated with Essex VIII (9) | 3,842,047 |
| 10.53 | % |
Entities affiliated with NovaQuest (10) | 3,096,650 |
| 8.48 | % |
Entities affiliated with Franklin Resources, Inc. (11) | 3,394,202 |
| 9.30 | % |
Entities affiliated with JPMorgan Chase & Co. (12) | 3,561,679 |
| 9.76 | % |
Entities affiliated with The Bank of New York Mellon Corporation (13) | 2,144,669 |
| 5.88 | % |
Entities affiliated with BlackRock, Inc. (14) | 2,168,211 |
| 5.94 | % |
Entities affiliated with Wellington Management Group LLP (15) | 3,573,150 |
| 9.79 | % |
| | | | | | | | | | | | | | |
| | Beneficial Ownership |
| Name of Beneficial Owner | | Number of Shares | | Percentage of Total |
| NEOs and Directors: | | | | |
| Mark J. Foley | | 1,694,998 | | (1) | 2.0 | % |
| Tobin Schilke | | 329,891 | | (2) | * |
| Dustin Sjuts | | 316,724 | | (3) | * |
| Abhay Joshi, Ph.D. | | 541,466 | | (4) | * |
| Dwight Moxie | | 162,823 | | (5) | * |
| Jill Beraud | | 73,379 | | (6) | * |
| Julian S. Gangolli | | 95,879 | | (7) | * |
| Carey O'Connor Kolaja | | 36,468 | | (8) | * |
| Chris Nolet | | 73,379 | | (9) | * |
| Angus C. Russell | | 118,279 | | (10) | * |
| Philip J. Vickers, Ph.D. | | 115,029 | | (11) | * |
| Olivia C. Ware | | 36,326 | | (12) | * |
| Vlad Coric, M.D. | | 5,195 | | (13) | * |
| Directors and executive officers as a group (total of 12 persons) | | 3,058,370 | | (14) | 3.6 | % |
| Greater than 5% Stockholders: | | | | |
| Palo Alto Investors LP and affiliates | | 5,283,609 | | (15) | 6.3 | % |
| Capital World Investors | | 9,480,156 | | (16) | 11.3 | % |
| The Vanguard Group | | 4,496,316 | | (17) | 5.3 | % |
| Entities affiliated with GIC Private Limited | | 5,492,965 | | (18) | 6.6 | % |
| Entities affiliated with JPMorgan Chase & Co. | | 4,982,949 | | (19) | 5.9 | % |
| Entities affiliated with BlackRock, Inc. | | 7,072,681 | | (20) | 8.4 | % |
| Antara Capital LP and affiliates | | 5,239,600 | | (21) | 6.2 | % |
| Polar Capital Holdings PLC | | 4,848,633 | | (22) | 5.8 | % |
* Represents beneficial ownership of less than 1% of the outstanding common stock
(1)Consists of (i) 823,351 shares of common stock and 760,734 shares of common stock underlying options that are exercisable within 60 days of March 10, 2023 and (ii) 110,913 shares of common stock held by the Mark J Foley Living Trust. Mr. Foley is a Trustee of the Mark J Foley Living Trust. Excludes 817,441 shares underlying PSAs and 429,707 shares underlying PSUs held by Mr. Foley.
| |
(1) | Consists of 133,315 shares of common stock and 1,029,767 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2018 and 409 shares of common stock held by the Dan and Brenda Browne Living Trust. Mr. Browne is a Trustee of the Dan and Brenda Browne Living Trust. |
| |
(2) | Consists of 73,356 shares of common stock and 138,742 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2018 |
| |
(3) | Consists of 3,000 shares of common stock and 47,333 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2018, and 13,665 shares of common stock held by the Byrnes Family Trust. Mr. Byrnes is a Trustee of the Byrnes Family Trust. |
| |
(4) | Consists of 3,000 shares of common stock and 29,333 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2018. |
| |
(5) | Consists of 3,000 shares of common stock and 34,000 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2018. |
| |
(6) | Consists of 3,000 shares of common stock and 34,000 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2018. |
| |
(7) | Consists of 3,000 shares of common stock and 18,000 shares of common stock underlying options that are vested and exercisable withn 60 days of January 15, 2018. |
| |
(8) | Includes shares beneficially owned by all current executive officers and directors of the company. Consists of 423,700 shares of common stock and 1,496,695 shares of common stock underlying options that are vested and exercisable within 60 days of January 15, 2018. |
| |
(9) | Consists of 3,067,607 shares of common stock held by Essex Woodlands Health Ventures Fund VIII, L.P. (“Essex Fund VIII”), 457,085 shares of common stock held by Essex Woodlands Health Ventures Fund V, L.P. (“Essex Fund V”), 221,197 shares of common stock held by Essex Woodlands Health Ventures Fund VIII-A, L.P. (“Essex Fund VIII-A”) and 96,158 shares of common stock held by Essex Woodlands Health Ventures Fund VIII-B, L.P. (“Essex Fund VIII-B”). Essex Woodlands Health Ventures VIII, LLC, the general partner of Essex Fund VIII, Essex Fund V, Essex Fund VIII-A and Essex Fund VIII-B, may be deemed to have sole power to vote and sole power to dispose of shares directly owned by Essex Fund VIII, Essex Fund V, Essex Fund VIII-A and Essex Fund VIII-B. The address for Essex Fund VIII is 21 Waterway Avenue, Suite 225, The Woodlands, Texas 77380. |
| |
(10) | The indicated ownership is based on Schedule 13F-HR filed with the SEC by the reporting persons on February 13, 2018, reporting beneficial ownership as of December 31, 2017. According to the Schedule 13F-HR, the reporting persons beneficially own a total of 3,096,650 shares of common stock held by NovaQuest Pharma Opportunities Fund III, L.P. (“NovaQuest”), NQ HCIF General Partner, L.P., and NQ HCIF GP, Ltd.. The address for each of the foregoing persons and entities is 4208 Six Forks Road, Suite 920, Raleigh, North Carolina 27609. |
| |
(11) | The indicated ownership is based on a Schedule 13G/A filed with the SEC by the reporting persons on February 7, 2018, reporting beneficial ownership as of December 31, 2017. According to the Schedule 13G/A, the reporting persons beneficially own a total of shares of 3,370,402 common Stock held by Franklin Advisors, Inc. and 23,800 shares of Common Stock held by Fiduciary Trust Company International. The address for each of the foregoing persons and entities is One Franklin Parkway, San Mateo, CA 94403. |
| |
(12) | The indicated ownership is based on a Schedule 13G/A filed with the SEC by the reporting persons on January 25, 2018, reporting beneficial ownership as of December 29, 2017. According to the Schedule 13G/A, the reporting persons beneficially own a total of 3,561,679 shares of Common Stock held by JPMorgan Chase & Co. and its wholly owned subsidiaries JPMorgan Chase Bank, National Association, J.P. Morgan Investment Management Inc., and JPMorgan Asset Management (UK) Limited. The address for each of the foregoing persons and entities is 270 Park Ave. New York, NY 10017. |
| |
(13) | The indicated ownership is based on a Schedule 13G/A filed with the SEC by the reporting persons on February 7, 2018, reporting beneficial ownership as of December 31, 2017. According to the Schedule 13G/A, the reporting persons beneficially own a total of 2,144,669 shares of Common Stock held by The Bank of New York Mellon Corporation and its following affiliates: The Bank of New York Mellon, The Boston Company Asset Management LLC, The Dreyfus Corporation (parent holding company of MBSC Securities Corporation), Mellon Capital Management Corporation, MAM (MA) Holding Trust (parent holding company of Standish Mellon Asset Management Company LLC; The Boston Company Asset Management LLC) and MBC Investments Corporation (parent holding company of Mellon Capital Management Corporation; BNY Mellon Investment Management (Jersey) Ltd.). The address for each of the foregoing persons and entities is 225 Liberty Street, New York, NY 10286. |
| |
(14) | The indicated ownership is based on a Schedule 13G filed with the SEC by the reporting persons on January 23, 2018, reporting beneficial ownership as of December 31, 2017. According to the Schedule 13G, the reporting persons beneficially own a total of 2,168,211 shares of Common Stock held by BlackRock Inc. and its subsidiaries BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Asset Management Schweiz AG, BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A. and BlackRock Investment Management, LLC. The address for each of the foregoing persons and entities is 55 East 52nd Street, New York, NY 10055. |
(2)Consists of 73,222 shares of common stock and 256,669 shares of common stock underlying options that are exercisable within 60 days of March 10, 2023. Excludes 145,411 shares underlying PSAs and 104,999 shares underlying PSUs held by Mr. Schilke.
| |
(15) | The indicated ownership is based on a Schedule 13G filed with the SEC by the reporting persons on February 8, 2018, reporting beneficial ownership as of December 29, 2017. According to the Schedule 13G, the reporting persons beneficially own a total of 3,573,150 shares of Common Stock held by Wellington Management Group LLP and its following affiliates: Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP, and Wellington Management Company LLP. The address for each of the foregoing persons and entities is 280 Congress Street, Boston, MA 02210. |
| |
(16) | Consists of 95,000 shares of common stock. |
| |
(17) | Consists of 6,000 shares of common stock and 20,000 shares of common stock held by the Mark J Foley Living Trust. Mr. Foley is a Trustee of the Mark J Foley Living Trust. |
