UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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☒ | Definitive Proxy Statement |
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89bio, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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142 Sansome Street, Second Floor, San Francisco, California 94104
NOTICE OF THE 20202021 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 22, 20202, 2021
To the Stockholders of 89bio, Inc.:89bio:
89bio, Inc. (the “Company”) will hold its 20202021 Annual Meeting of Stockholders (the “Annual Meeting”) on Friday,Wednesday, June 222, 2021, at 9:00 a.m. (Pacific Time).Pacific Time. The Annual Meeting will be held as a virtual meeting of stockholders, which will be conducted exclusively online via live webcast. Stockholders may attend the Annual Meeting by visitingaudio webcast at www.virtualshareholdermeeting.com/ETNB2020ETNB2021. To participate in the virtual Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability, proxy card or voting instruction form.
By hosting the Annual Meeting virtually, we believe we are able to expand access, improve communication and lower costs while reducing the environmental impact of the meeting. This approach also provides for the health and safety of our stockholders and employees in light of the evolving public health and safety considerations posed by the ongoing coronavirus (COVID-19) pandemic.
The Annual Meeting will be held for the following purposes, as more fully described in the accompanying Proxy Statementproxy statement (the “Proxy Statement”):
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| To elect the two Class |
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| To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, |
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| To transact any other matters that may properly come before the Annual Meeting or any adjournments or postponements thereof. |
The Board of Directors has fixed April 8, 2021 as the record date. Only stockholders of record at the close of business on April 30, 2020 arethat date will be entitled to notice of, and to vote on,at, the proposals describedAnnual Meeting or any adjournment or postponement thereof.
Instructions for accessing the virtual Annual Meeting are provided in the Proxy Statement. In the event of a technical malfunction or other situation that the chairman of the Annual Meeting determines may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Annual Meeting, the chairman or secretary of the Annual Meeting will convene the meeting at 10:00 a.m. Pacific Time on the date specified above and at the Company’s address specified above solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the chairman or secretary of the Annual Meeting. Under either of the foregoing circumstances, we will post information regarding the announcement on the Investors page of the Company’s website at https://IR.89bio.com.
By Order of the Board of Directors,
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Rohan Palekar
Chief Executive Officer and Director
San Francisco, California
April 15, 2021
Important Notice RegardingWhether or not you expect to participate in the Availability of Proxy Materials for the 2020virtual Annual Meeting, please vote as promptly as possible in order to ensure your representation at the Annual Meeting. You may vote online or, if you requested printed copies of Stockholders to Be Held on June 22, 2020
The Proxy Statement and Annual Report for the year ended December 31, 2019
are available at www.proxyvote.com.
proxy materials, by telephone or by using the proxy card or voting instruction form provided with the printed proxy materials.
TABLE OF CONTENTS
LEGAL MATTERS
Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting of Stockholders to Be Held on June 2, 2021. The Proxy Statement and Annual Report for the year ended December 31, 2020 are available at www.proxyvote.com.
Forward-Looking Statements. The Proxy Statement may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements, other than statements of historical facts, included in the Proxy Statement are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the forward-looking statements expressed or implied in the Proxy Statement. Such risks, uncertainties and other factors include those identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC and other subsequent documents we file with the SEC. The Company expressly disclaims any obligation to update or alter any statements whether as a result of new information, future events or otherwise, except as required by law.
Website References. Website references throughout this document are inactive textual references and provided for convenience only, and the content on the referenced websites is not incorporated herein by reference and does not constitute a part of the Proxy Statement.
Use of Trademarks. 89bio is the trademark of 89bio, Inc. Other names and brands may be claimed as the property of others.
142 Sansome Street, Second Floor, San Francisco, California 94104
PROXY STATEMENT
FOR THE 20202021 ANNUAL MEETING OF STOCKHOLDERS
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND VOTING
What isIs the purposePurpose of these proxy materials?These Proxy Materials?
We are making these proxy materials available to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of 89bio, Inc. (“we,” “us,” “our” or the “Company”) for use at the 20202021 Annual Meeting of Stockholders (the “Annual Meeting”) to be held virtually at www.virtualshareholdermeeting.com/ETNB2020on June 22, 20202, 2021 at 9:00 a.m. Pacific Time, or at any other time following adjournmentsadjournment or postponementspostponement thereof. You are invited to virtually attendparticipate in the Annual Meeting and are entitled to, and requested to vote on the proposals described in this Proxy Statement. The proxy materials are first being made available to our stockholders on or about May 8, 2020.April 15, 2021.
Why didDid I receiveReceive a Notice of Internet Availability?
Pursuant to U.S. Securities and Exchange Commission (“SEC”) rules, we are furnishing the proxy materials to our stockholders primarily via the Internet instead of mailing printed copies. This process allows us to expedite our stockholders’ receipt of proxy materials, lower the costs of printing and mailing the proxy materials and reduce the environmental impact of our Annual Meeting. If you received a Notice of Internet Availability of Proxy Materials (the “Notice”), you will not receive a printed copy of the proxy materials unless you request one. The Notice provides instructions on how to access the proxy materials for the Annual Meeting via the Internet, how to request a printed set of proxy materials and how to vote your shares.
Why are we holdingAre We Holding a virtualVirtual Annual Meeting?
We have adopted a virtual meeting format for the Annual Meeting to provide a consistent experience to all stockholders regardless of geographic location. We believe this expands stockholder access, improves communications and lowers our costs while reducing the environmental impact of the meeting. Utilizing a virtual meeting format is particularly important this year to protect our stockholders and employees in light of the evolving public health and safety considerations posed by the ongoing coronavirus (COVID-19) pandemic. In structuring our virtual Annual Meeting, our goal is to enhance rather than constrain stockholder participation in the meeting, and we have designed the meeting to provide stockholders with the same rights and opportunities to participate as they would have at an in-person meeting.
Who can vote?Can Vote?
Only stockholders of record at the close of business on April 30, 20208, 2021 (the “Record Date”) are entitled to notice of, and to vote on, the proposals described in this Proxy Statement at the Annual Meeting. At the close of business on the Record Date, 13,793,85820,034,830 shares of our common stock were issued and outstanding.
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What isIs the differenceDifference between holding sharesHolding Shares of common stockCommon Stock as a stockholder of recordRegistered Stockholder and as a beneficial owner?Beneficial Owner?
Stockholder of Record:Registered Stockholder: Shares of Common Stock Registered in Your Name
If your shares of common stock are registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, LLC, you are considered to be, with respect to those shares of common stock, the registered stockholder, of record, and these proxy materials are being sent directly to you by us.
Beneficial Owner: Shares of Common Stock Registered in the Name of a Broker, Fiduciary or Custodian
If your shares of common stock are held by a broker, fiduciary or custodian, you are considered the beneficial owner of shares of common stock held in “street name,” and these proxy materials are being forwarded to you from that broker, fiduciary or custodian.
How Can I Participate in the Virtual Annual Meeting?
Stockholders of record as of the close of business on the record date are entitled to participate in and vote at the Annual Meeting. To participate in the Annual Meeting, including to vote, ask questions and view the list of registered stockholders as of the record date during the meeting, stockholders of record should go to the meeting website at www.virtualshareholdermeeting.com/ETNB2021, enter the 16-digit control number found on your proxy card or Notice, and follow the instructions on the website. If your shares are held in street name and your voting instruction form or Notice indicates that you may vote those shares through www.proxyvote.com, then you may access, participate in and vote at the Annual Meeting with the 16-digit access code indicated on that voting instruction form or Notice. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least five days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the Annual Meeting.
We will endeavor to answer as many stockholder-submitted questions as time permits that comply with the Annual Meeting rules of conduct. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or Company business. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition.
The meeting webcast will begin promptly at 9:00 a.m. Pacific Time. Online check-in will begin approximately 15 minutes before then, and we encourage you to allow ample time for check-in procedures. If you experience technical difficulties during the check-in process or during the meeting, please call the number listed on the meeting website for technical support. Additional information regarding the rules and procedures for participating in the Annual Meeting will be set forth in our meeting rules of conduct, which stockholders can view during the meeting at the meeting website. Regardless of whether you plan to participate in the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Accordingly, we encourage you to vote in advance of the Annual Meeting. Each stockholder may appoint only one proxy holder or representative to attend the meeting on his or her behalf.
What amAm I votingVoting on?
The proposals to be voted on at the Annual Meeting are as follows:
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| Election of the two Class |
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| Ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, |
How doesDoes the Board recommend thatRecommend That I vote?Vote?
The Board recommends that you vote your shares of common stock “FOR” each director nominee in Proposal 1 and “FOR” Proposal 2.
What if another matter is properly broughtIf Another Matter Is Properly Brought before the Annual Meeting?
As of the date of filing this Proxy Statement, the Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named as proxies in the proxy card to vote on such matters in accordance with their best judgment.
How many votes doMany Votes Do I have?Have?
Each share of common stock is entitled to one vote on each proposal to be voted on at the Annual Meeting. Shares of common stock cannot be voted at the Annual Meeting unless the holder thereof is virtually present or represented by proxy.
What does it mean ifDoes It Mean If I receive more than one setReceive More Than One Set of proxy materials?Proxy Materials?
If you receive more than one set of proxy materials, your shares of common stock may be registered in more than one name or held in different accounts. Please cast your vote with respect to each set of proxy materials that you receive to ensure that all of your shares of common stock are voted.
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Stockholder of Record:Registered Stockholder: Shares of Common Stock Registered in Your Name
If you are the registered stockholder, of record, you may vote your shares online during the virtual Annual Meeting or by proxy in advance of the Annual Meeting by Internet or, if you requested paper copies of the proxy materials, by completing and mailing a proxy card or by telephone. Even if you plan to attend the Annual Meeting, we recommend that you also submit your vote in advance so that your vote will be counted if you later decide not to, or are unable to, virtually attend the Annual Meeting.
Beneficial Owner: Shares of Common Stock Registered in the Name of a Broker, Fiduciary or Custodian
If you are the beneficial owner, of shares of common stock held in “street name,” you may vote your shares online during the virtual Annual Meeting or you may direct your broker, fiduciary or custodian how to vote in advance of the Annual Meeting by following the instructions they provide.
See “How Can I Participate in the Virtual Annual Meeting” above for information on how to access and participate in the Annual Meeting.
What happens ifHappens If I do not vote?Do Not Vote?
Stockholder of Record:Registered Stockholder: Shares of Common Stock Registered in Your Name
If you are the registered stockholder of record and do not vote by attending the Annual Meeting virtually,, vote by proxy using the enclosed proxy card or vote by proxy via telephone or the Internet, your shares of common stock will not be voted at the Annual Meeting and will not be counted toward the quorum requirement.
Beneficial Owner: Shares of Common Stock Registered in the Name of a Broker, Fiduciary or Custodian
If you are the beneficial owner of shares of common stock held in “street name” and do not direct your broker, fiduciary or custodian how to vote your shares of common stock, your broker, fiduciary or custodian will only be able to vote your shares of common stock with respect to proposals considered to be “routine.” Your broker, fiduciary or custodian is not entitled to vote your shares of common stock with respect to “non-routine” proposals. Such inability of your broker, fiduciary or custodian to vote on a “non-routine” proposal forproposals, which no instruction is received from the beneficial owner is referredwe refer to as a “broker non-vote.”
What ifIf I signSign and returnReturn a proxy cardProxy Card or otherwise voteOtherwise Vote but do not indicate specific choices?Do Not Indicate Specific Choices?
Stockholder of Record:Registered Stockholder: Shares of Common Stock Registered in Your Name
The shares of common stock represented by each signed and returned proxy will be voted at the Annual Meeting by the persons named as proxies in the proxy card in accordance with the instructions indicated on the proxy card. However, if you are the registered stockholder of record and sign and return your proxy card without giving specific instructions, the persons named as proxies in the proxy card will vote your shares of common stock in accordance with the recommendations of the Board. Your shares of common stock will be counted toward the quorum requirement.
Beneficial Owner: Shares of Common Stock Registered in the Name of a Broker, Fiduciary or Custodian
If you are the beneficial owner of shares of common stock held in “street name” and sign and return your voting instruction form without giving specific instructions, your broker, fiduciary or custodian will only be able to vote your shares of common stock with respect to proposals considered to be “routine.” Your broker, fiduciary or custodian is not entitled to vote your shares of common stock with respect to “non-routine” proposals, resulting in a broker non-vote with respect to such proposals.
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Can I change my voteChange My Vote after I submit my proxy?Submit My Proxy?
Stockholder of Record:Registered Stockholder: Shares of Common Stock Registered in Your Name
If you are the registered stockholder, of record, you may revoke your proxy at any time before the final vote at the Annual Meeting in any one of the following ways:
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| You may complete and submit a new proxy card, but it must bear a later date than the original proxy card; |
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| You may submit new proxy instructions via telephone or the |
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| You may vote by attending the Annual Meeting |
Your last submitted vote is the one that will be counted.
Beneficial Owner: Shares of Common Stock Registered in the Name of a Broker, Fiduciary or Custodian
If you are the beneficial owner, of shares of common stock held in “street name,” you must follow the instructions you receive from your broker, fiduciary or custodian with respect to changing your vote.
What isIs the quorum requirement?Quorum Requirement?
The holders of a majority of the shares of common stock outstanding and entitled to vote at the Annual Meeting must be present at the Annual Meeting, either virtually or represented by proxy, to constitute a quorum. A quorum is required to transact business at the Annual Meeting.
Your shares of common stock will be counted toward the quorum only if you submit a valid proxy (or a valid proxy is submitted on your behalf by your broker, fiduciary or custodian) or if you attend the Annual Meeting virtually and vote. Abstentions and broker non-votes will be counted toward the quorum requirement. If there is no quorum, the chairman of the Annual Meeting or the holders of a majority of shares of common stock virtually present at the Annual Meeting, either personally or by proxy, may adjourn the Annual Meeting to another time or date.
How many votes are requiredMany Votes Are Required to approve each proposalApprove Each Proposal and how are votes counted?How Are Votes Counted?
Votes will be counted by Broadridge Financial Solutions, the Inspector of Elections appointed for the Annual Meeting.
Proposal 1: Election of Directors
A nominee will be elected as a director at the Annual Meeting if the nominee receives a plurality of the votes cast “FOR” the applicable seat on the board of directors.his or her election. “Plurality” means that the individuals who receive the largest number of votes cast “FOR” are elected as directors. Broker non-votes and votes that are withheld will not be counted as votes cast on the matter and have no effect on the outcome of the election. We do not have cumulative voting rights for the election of directors.
Proposal 2: Ratification of Selection of Independent Registered Public Accounting FirmAuditor Selection
The affirmative vote of the holdersa majority of shares of common stock representing a majority ofpresent or represented at the votes cast on the matterAnnual Meeting is required for the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the year endedending December 31, 2020.2021. Abstentions will nothave the same effect as a vote “AGAINST” the matter. Proposal 2 is expected to be counted as votes castconsidered a routine voting matter on the matter and willwhich brokers have no effect on the outcome of this proposal.
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How can I participate in the virtual Annual Meeting?
You are entitled to participate in the Annual Meeting if you were a stockholder as of the close of business on the Record Date or hold a valid proxy for the meeting. To participate in the virtual meeting, includingdiscretion to vote your shares electronically, submit questions and view our list of stockholders as of the record date during the meeting, you must access the meeting website at www.virtualshareholdermeeting.com/ETNB2020, enter the 16-digit control number found on your Notice of Internet Availability, proxy card or voting instruction form, and follow the instructions on the website.
The meeting webcast will begin promptly at 9:00 a.m. Pacific Time. Online check-in will begin approximately 15 minutes before then and we encourage you to allow ample time for check-in procedures. If you experience technical difficulties during the check-in process or during the meeting, please call the number listed on the meeting website for technical support.
We will endeavor to answer as many stockholder-submitted questions as time permits that comply with the Annual Meeting rules of conduct. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or Company business. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition.
Regardless of whether you plan to participate in the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Accordingly, we encourage you to vote in advance of the Annual Meeting.
Additional information regarding the rules and procedures for participating in the Annual Meeting will be set forth in our meeting rules of conduct, which stockholders can view during the meeting at the meeting website or prior to the meeting at www.proxyvote.com.uninstructed shares.
Who is payingIs Paying for this proxy solicitation?This Proxy Solicitation?
We will pay the costs associated with the solicitation of proxies, including the preparation, assembly, printing and mailing of the proxy materials. We may also reimburse brokers, fiduciaries or custodians for the cost of forwarding proxy materials to beneficial owners of shares of common stock held in “street name.”
Our employees, officers and directors may solicit proxies in person or via telephone or the Internet. We will not pay additional compensation for any of these services.
How canCan I findFind out the voting results?Voting Results?
We expect to announce preliminary voting results at the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting.
When are stockholder proposals and director nominations due for next year’s annual meeting?
Pursuant to Rule 14a-8 of the Securities Exchange Act of 1934 (the “Exchange Act”), stockholders who wish to submit proposals for inclusion in the proxy statement for the 2021 Annual Meeting of Stockholders must send such proposals to our Corporate Secretary at 142 Sansome Street, Second Floor, San Francisco, California 94104. Such proposals must be received by us as of the close of business on January 8, 2021.
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As set forth in our bylaws, if a stockholder intends to make a nomination for director election or present a proposal for other business (other than pursuant to Rule 14a-8 of the Exchange Act) at the 2021 Annual Meeting of Stockholders, the stockholder’s notice must be received by our Corporate Secretary no earlier than the 120thday and no later than the 90th day before the anniversary of the last annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, the stockholder’s notice must be delivered no later than the 10th day after the first public announcement of the date of such annual meeting by the Company. Therefore, unless the 2021 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after June 22, 2021, notice of proposed nominations or proposals (other than pursuant to Rule 14a-8 of the Exchange Act) must be received by our Corporate Secretary no earlier than February 22, 2021 and no later than the close of business on March 24, 2021. Such nominations or proposals may or may not be included in the proxy statement.
Any stockholder proposal must be a proper matter for stockholder action and must comply either with Rule 14a-8 of the Exchange Act or the terms and conditions set forth in our bylaws, as applicable.
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PROPOSAL 1: ELECTIONELECTION OF DIRECTORS
At the Annual Meeting, the stockholders will vote to elect the two Class III director nominees named in this Proxy Statement to serve until the 20232024 Annual Meeting of Stockholders andor until their successors are duly elected and qualified. Our Board has unanimously nominated Rohan PalekarSteven Altschuler, M.D. and Gregory Grunberg, M.D.Michael Hayden, M.B. Ch.B., Ph.D. for election to our Board. For more information about each nominee, seeDr. Altschuler was recommended for appointment to the section titled “Directors, Executive OfficersBoard in March 2020 by a third-party search firm, and Corporate Governance”Dr. Hayden has served on our Board since prior to our initial public offering in this Proxy Statement.2019.
The director nominees have indicated that they are willing and able to serve as directors.
If However, if any of the director nominees becomes unable or, for good cause, unwilling to serve, proxies may be voted for the election of such other person as shall be designated by our Board, or the Board may decrease the size of the Board.
Board Recommendation
The Board recommends a vote “FOR” the election of each of the director nominees set forth above to serve until the 2023 Annual Meeting of StockholdersInformation Regarding Director Nominees and until their successors are duly elected and qualified.
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PROPOSAL 2: RATIFICATION OF SELECTION OFContinuing Directors
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has selected KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the year ending December 31, 2020, and in this Proposal 2 we are asking stockholders to vote to ratify this selection. Representatives of KPMG are expected to be present at the Annual Meeting. They will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions.
Stockholder ratification of the selection of KPMG as the Company’s independent registered public accounting firm is not required by law or our bylaws. However, we are seeking stockholder ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, our Audit Committee will reconsider its selection. Even if the selection is ratified, our Audit Committee, in its discretion, may direct the selection of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.
Deloitte & Touche LLP (“Deloitte”) was our independent registered public accounting firm for the year ended December 31, 2019. Brightman Almagor Zohar & Co. (“Brightman”), a Firm in the Deloitte Global Network, was our independent registered public accounting firm for the year ended December 31, 2018. The following table summarizes the fees Deloitte (after December 24, 2019) and Brightman (before December 24, 2019) billed to us for each of the last two fiscal years. All of such services and fees were pre-approved by our audit committee in accordance with the “Pre-Approval Policies and Procedures” described below.
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| Year Ended December 31, |
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| 2019 |
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| 2018 |
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Audit Fees(1) |
| $ | 546,387 |
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| $ | 30,590 |
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Audit-related Fees |
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| — |
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Tax Fees(2) |
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| 120,549 |
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| 18,425 |
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All Other Fees |
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| — |
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Total |
| $ | 666,936 |
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| $ | 49,015 |
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Pre-Approval Policies and Procedures
Our Audit Committee has adopted procedures requiring the pre-approval of all audit and non-audit services performed by our independent registered public accounting firm in order to assure that these services do not impair the auditor’s independence. These procedures generally approve the performance of specific services subject to a cost limit for all such services. This general approval is to be reviewed, and if necessary modified, at least annually. Management must obtain the specific prior approval of the Audit Committee for each engagement of the independent registered public accounting firm to perform other audit-related or other non-audit services. The Audit Committee does not delegate its responsibility to approve services performed by the independent registered public accounting firm to any member of management. Our Audit Committee has delegated authority to the committee chair to pre-approve any audit or non-audit service to be provided to us by our independent registered public accounting firm provided that the fees for such services do not exceed $100,000. Any approval of services by the committee chair pursuant to this delegated authority must be reported to the Audit Committee at the next meeting of the committee.
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Recent Changes in Independent Registered Public Accounting Firm
Dismissal of Deloitte
As previously reported on the Current Report on Form 8-K filed with the SEC on April 23, 2020, following a competitive process with several participants, the Audit Committee on April 17, 2020 dismissed Deloitte as the Company’s independent registered public accounting firm, effective as of that date.
Deloitte’s audit report on our consolidated financial statements for the year ended December 31, 2019, the only year for which Deloitte audited the Company’s financial statements, did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. Deloitte expressed no opinion on the effectiveness of the Company’s internal control over financial reporting, as the Company was not required to have, nor did the Company engage Deloitte to perform, an audit of the Company’s internal control over financial reporting.
During the Company’s fiscal year ended December 31, 2019 and the subsequent interim period through (and including) April 16, 2020, there were (i) no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which if not resolved to Deloitte’s satisfaction, would have caused Deloitte to make reference to the subject matter of the disagreements in its report on the Company’s consolidated financial statements for such year, and (ii) no “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K, except as set forth in the following sentence. As previously disclosed under Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, during the audit of the consolidated financial statements for the period from January 18, 2018 (inception) to December 31, 2018, the Company reported material weaknesses in its internal controls over financial reporting relating to (1) the lack of employees with sufficient expertise in U.S. generally accepted accounting principles, and (2) the lack of risk assessment procedures. Such remediation efforts were ongoing as of December 31, 2019.
Appointment of KPMG LLP
The Audit Committee, on and effective as of April 17, 2020, appointed KPMG LLP (“KPMG”) as 89bio’s independent registered public accounting firm for the year ending December 31, 2020. During the fiscal years ended December 31, 2018 and December 31, 2019 and the subsequent interim periods through April 16, 2020, neither the Company nor anyone acting on its behalf consulted with KPMG, regarding either: (i) the application of accounting principles to a specific transaction, completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company that KPMG concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K).
Dismissal of Brightman
As previously reported on the Current Report on Form 8-K filed with the SEC on December 31, 2019, the Audit Committee on December 24, 2019 dismissed Brightman as the Company’s independent registered public accounting firm, effective as of that date. On the same date, the Audit Committee approved the appointment of Deloitte as the Company’s new independent registered public accounting firm.
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Brightman’s reports on our financial statements did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except that the report from inception January 18, 2018 through December 31, 2018 contained an explanatory paragraph expressing substantial doubt as to the Company’s ability to continue as a going concern as a result of recurring losses and negative cash flows.
During the fiscal year ended December 31, 2018 and the subsequent interim period through December 24, 2019, there were (i) no disagreements (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions) between the Company and Brightman on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures which disagreements, if not resolved to the satisfaction of Brightman would have caused Brightman to make reference thereto in their reports on the financial statements for such years and (ii) no “reportable events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K and related instructions).
During the fiscal year ended December 31, 2018 and the subsequent interim period through December 24, 2019, neither the Company, nor anyone acting on its behalf, consulted with Deloitte regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on the Company’s financial statements, and Deloitte did not provide either a written report or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
Board Recommendation
The Board recommends a vote “FOR” the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020.
10
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following table sets forth certain information regarding members of our Board and our executive officers as of the date of this Proxy Statement. There are no family relationships among any of our directors or executive officers.
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Our Board is divided into three classes, with members of each class holding office for staggered three-year terms. There are currently two Class I directors, (Mr. Palekar and Dr. Grunberg), who are up for reelection for a new term expiringwhose terms expire at the 2023 Annual Meeting of Stockholders and who were previously elected by stockholders at the 2020 Annual Meeting of Stockholders; two Class II directors, (Drs. Altschuler and Hayden), whose terms expirewho are up for election for a term expiring at the 20212024 Annual Meeting of Stockholders; and twothree Class III directors, (Dr. DiRocco and Ms. Naschitz), whose terms expire at the 2022 Annual Meeting of Stockholders (in all cases until their successors have been elected and qualified or until the earlier of their resignation or removal).
The followingBiographical and other information regarding our director nominees and directors continuing in office, including the primary skills and experience considered by our Nominating and Corporate Governance Committee (the “Nominating Committee”) in determining to recommend them as directors, is a biographical summary of the experience of our directors and executive officers:set forth below.
Name | Class | Age (as of April 15) | Position | |||
Rohan Palekar | Class I | 55 | Chief Executive Officer and Director | |||
Steven M. Altschuler, M.D.(1)(2) | Class II | 67 | Independent Chairman of the Board | |||
Derek DiRocco, Ph.D.(1)(3)(4) | Class III | 40 | Independent Director | |||
Gregory Grunberg, M.D.(2)(3) | Class I | 48 | Independent Director | |||
Michael Hayden, M.B. Ch.B., Ph.D.(1)(2)(4) | Class II | 69 | Independent Director | |||
Anat Naschitz(2)(3)(4) | Class III | 53 | Independent Director | |||
Lota Zoth, C.P.A.(1) | Class III | 61 | Independent Director |
(1) | Member of the Audit Committee |
(2) | Member of the Compensation Committee |
(3) | Member of the Nominating Committee |
(4) | Member of the Science and Technology Committee (the “Science Committee”) |
Class I Director NomineesDirectors Continuing in Office
Rohan Palekar
.Mr. Palekar has served as our Chief Executive Officer and a member of our Board since June 2018. Prior to joining our company, Mr. Palekar served as the president and Chief Executive Officer of Avanir Pharmaceuticals, Inc., a specialty pharmaceutical company, from December 2015 to July 2017, where he led the company following its acquisition by Otsuka Pharmaceutical Co., Ltd. in 2015. Mr. Palekar also served as Executive Vice President and Chief Operating Officer of Avanir in 2015 and as Senior Vice President and Chief Commercial Officer of Avanir from March 2012 to March 2015. Prior to Avanir, Mr. Palekar served as Chief Commercial Officer for Medivation, Inc., a biopharmaceutical company, from 2008 to 2011, where he was responsible for all commercial activities, chemistry, manufacturing and controls, medical affairs and public relations functions. Prior to Medivation, Mr. Palekar spent over 16 years at Johnson & Johnson, a diversified healthcare company, in various senior commercial and strategic management roles. Since 2018, he has served as a trustee for Aim High for High School, a non-profit educational institution. Mr. Palekar earned his M.B.A. from the Tuck School of Business at Dartmouth College, his B.Com. in Accounting from the University of Mumbai and his L.L.B.
in Law from the University of Mumbai. Mr. Palekar is also a certified Chartered Accountant and a Cost and Management Accountant.
We believe Mr. Palekar is qualified to serve on our Board because of his broad and long experience in the biopharmaceutical industry.
11
Dr. Grunberg has served as a member of our Board since April 2018. Dr. Grunberg has been a Managing Director at Longitude Capital Management Co., LLC, a venture capital firm, since February 2012. Prior to joining Longitude, Dr. Grunberg was a Principal at Rho Ventures, a venture capital firm, where he worked from May 2007 to January 2012. Dr. Grunberg maintains a limited clinical practice in internal medicine and affiliations with University of California, San Francisco and Kaiser Permanente. Dr. Grunberg has served on the boards of Kala Pharmaceuticals Inc., a pharmaceutical company, since April 2016, and WelbeHealth LLC, a private healthcare services company, since April 2018. He has served as a board observer at Sydnexis, Inc., a private biotechnology company, since September 2017. He previously served on the board of California Cryobank (acquired by GI Partners) from August 2014 to August 2018 and led Longitude’s investment in Practice Fusion (acquired by Allscripts Healthcare Solutions, Inc.). While at Rho Ventures he served on the board of AqueSys Inc. (acquired by Allergan plc) from June 2010 to December 2011 and was a board observer at both SARCode Bioscience Inc. (acquired by Shire plc) from June 2011 to February 2012 and PHT Corporation (acquired by eResearchTechnology, Inc.) from November 2010 to November 2012. Dr. Grunberg earned his M.D. and M.B.A. from Duke University and his A.B. in Economics and English from Amherst College.
We believe Dr. Grunberg is qualified to serve on our Board because of his extensive experience investing in and guiding early phase companies.
Class II DirectorsDirector Nominees
Steven M. Altschuler, M.D.
Dr. Altschuler has served as a member of our Board since March 2020. Dr. Altschuler has served as a Managing Director, Healthcare Ventures, of Ziff Capital Partners, a private investment firm, since May 2018. He previously served as a consultant to the University of Miami Health Care System, a private research university, from September 2017 through December 2017, the Chief Executive Officer of University of Miami Health Care System and Executive Vice President for Healthcare at the University of Miami from January 2016 to September 2017, and the Chief Executive Officer of The Children’s Hospital of Philadelphia (“CHOP”), a hospital focused on pediatric medicine, from April 2000 until June 2015. Prior to assuming the role of Chief Executive Officer, Dr. Altschuler held several positions at CHOP and the Perelman School of Medicine at the University of Pennsylvania, including Physician-in-Chief/Chair of Pediatrics and chief of the Division of Gastroenterology, Hepatology and Nutrition. Dr. Altschuler has served as a director of WW International, Inc. since September 2012, as a director of Adtalem Global EducationImVaX Inc. since May 2018 and2019, as a director of Orchard Therapeutics plc since January 2020, and as a director of Affinivax, Inc., since April 2020. He is currently the Chair of the board of directors of AsclepiX Therapeutics LLC and Platelet BioGenesis, Inc. He previously served as Chair of the board of directors of Spark Therapeutics, Inc. from March 2013 to December 2019. Dr. Altschuler received a B.A. in mathematics and an M.D. from Case Western Reserve University.
We believe Dr. Altschuler is qualified to serve on our Board because of his extensive experience as a senior executive of various healthcare providers and member of the board of other life science companies.
12
Michael Hayden, M.B. Ch.B., Ph.D.
Dr. Hayden has served as a member of our Board since April 2018. Dr. Hayden has served as a Killam Professor at the University of British Columbia, a public research university, since 1983 and serves as the director of the Translational Laboratory in Genetic Medicine at the National University of Singapore and A*STAR.1983. Dr. Hayden was the President of Global Research and Development and Chief Scientific Officer at Teva Pharmaceutical Industries Ltd., a pharmaceutical company, from May 2012 to December 2017, and served as an advisor to Teva from December 2017 to August 2018. During this time approximately 35 new products were approved in major markets with many for diseases of the CNS such as migraine. He led the development of the first deuterated drug to be approved by the FDA and the second drug ever to be approved for Huntington disease. He is also the Founder and a Senior Scientist of the Centre for Molecular Medicine and Therapeutics at the University of British Columbia. Dr. Hayden has served on the boards of AbCellera Biologics Inc., a biopharmaceutical company, since October 2019, Aurinia Pharmaceuticals Inc., a biopharmaceutical company, since February 2018 (though is not expected to stand for reelection at Aurinia’s 2021 annual meeting), Ionis Pharmaceuticals, Inc., a
biopharmaceutical company, since September 2018, and Xenon Pharmaceuticals, Inc., a pharmaceutical company, since November 1996. Dr. Hayden received his M.B. Ch.B. in Medicine, Ph.D. in Genetics and Diploma in Child Health from the University of Cape Town. He received his American Board Certification in both internal medicine and clinical genetics from Harvard Medical School and an FRCPC in internal medicine from the University of British Columbia.
We believe Dr. Hayden is qualified to serve on our Board because of his extensive experience as a senior executive and member of the board of other life science companies.
Class III Directors Continuing in Office
Derek DiRocco, Ph.D.
Dr. DiRocco has served as a member of our Board since April 2018. Dr. DiRocco has been a principalpartner at RA Capital Management, LLC, an investment advisory firm that invests in healthcare and life science companies, since December 20172020 and was previously a principal from December 2017 to December 2020 and an analyst from June 2015 to December 2017 and an associate from July 2013 to June 2015. Dr. DiRocco earned his Ph.D. in Pharmacology from the University of Washington and his B.A. in Biology from College of the Holy Cross.
We believe Dr. DiRocco is qualified to serve on our Board because of his experience as an investor in biotechnology companies and role in early stage companies.
Anat Naschitz. Ms. Naschitz has served as a member of our Board since January 2018. Ms. Naschitz has been a Venture Partner at OrbiMed Israel, an investment firm, since January 2021 and previously served as Managing Director at OrbiMed Israel from January 2010 to January 2021. Ms. Naschitz currently serves as a director of several private companies, and previously served on the board of directors for Medigus Ltd., a medical device company, from March 2013 to June 2017.Prior to OrbiMed Israel, Ms. Naschitz created, invested in and advised healthcare companies across stages and substance. She was previously an Associate Partner with McKinsey in London, where she managed strategy, company formation through spinouts, and mergers and acquisitions projects for senior management of the world’s leading pharmaceutical and biotechnology companies. Subsequently, Ms. Naschitz was a Principal at Apax Partners, where she invested in healthcare companies. Ms. Naschitz earned her M.B.A. at INSEAD and her L.L.B. at Tel Aviv University.
We believe Ms. Naschitz is qualified to serve on our Board because of her long industry experience and experience as an investor in biotechnology companies.
Lota Zoth, C.P.A. Ms. Zoth has served as a member of our Board since August 2020. Ms. Zoth has served as a member of the board of directors and chair of the audit committee of Zymeworks, Inc., a clinical-stage biopharmaceutical company, since November 2016 and as chair of the board of directors since September 2019. She has served as a member of the board of directors and chair of the audit committee of Lumos Pharma, Inc. (previously, NewLink Genetics Corporation), a biopharmaceutical company, since November 2012. She has also served as a member of the board of directors and chair of the audit committee of Inovio Pharmaceuticals, Inc., a biotechnology company, since January 2018 and August 2018, respectively. Previously, she served as a member of the board of Spark Therapeutics, Inc., a gene therapy platform company, from January 2016 to December 2019, Circassia Pharmaceuticals, plc, a specialty biopharmaceutical company, from February 2015 to February 2019, Orexigen Therapeutics, Inc., a biopharmaceutical company, from April 2012 to May 2019, Aeras, a non-profit product development organization, from November 2011 to October 2018, Hyperion Therapeutics, Inc., a commercial-stage biopharmaceutical company, from February 2008 to May 2015 and Ikaria, Inc., a commercial-stage biopharmaceutical company, from January 2008 to February 2014. Prior to her retirement, Ms. Zoth most recently served as Senior Vice President and Chief Financial Officer of MedImmune, Inc., a biotechnology company, from April 2004 to July 2007 and as Vice President, Controller & Chief Accounting Officer from August 2002 to April 2004. Ms. Zoth is a Certified Public Accountant and received her B.B.A. from Texas Tech University.
We believe Ms. Zoth is qualified to serve on our Board because of her experience as a senior executive and member of the board of other life science companies.
Board Recommendation
The Board recommends a vote “FOR” the election of each of the Class II director nominees set forth above.
PROPOSAL 2: RATIFICATION OF AUDITOR SELECTION
Our Audit Committee has selected KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the year ending December 31, 2021. In this Proposal 2 we are asking stockholders to vote to ratify this selection. Representatives of KPMG are expected to be present at the Annual Meeting. They will have the opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions from stockholders.
Stockholder ratification of the selection of KPMG as the Company’s independent registered public accounting firm is not required by law or our bylaws. However, we are seeking stockholder ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, our Audit Committee will reconsider its selection. Even if the selection is ratified, the committee, in its discretion, may direct the selection of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.
KPMG served as our independent registered public accounting firm for the year ended December 31, 2020, and Deloitte & Touche LLP (“Deloitte”) served as our independent registered public accounting firm for the year ended December 31, 2019. The following table summarizes the fees KPMG (on or after April 17, 2020) and Deloitte (before April 17, 2020) billed to us for each of the last two fiscal years. All services associated with such fees were pre-approved by our Audit Committee in accordance with the “Pre-Approval Policies and Procedures” described below.
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| Year Ended December 31, |
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Fee Category |
| 2020 |
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| 2019 |
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Audit Fees(1) |
| $ | 633,060 |
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| $ | 546,387 |
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Audit-Related Fees |
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| — |
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| — |
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Tax Fees(2) |
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| — |
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| 120,549 |
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All Other Fees |
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| — |
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| — |
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Total Fees |
| $ | 633,060 |
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| $ |
| 666,936 |
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(2) | Consists of fees billed primarily for professional services for tax compliance, tax advice and tax planning. |
Pre-Approval Policies and Procedures
Our Audit Committee has adopted procedures requiring the pre-approval of all audit and non-audit services performed by our independent registered public accounting firm in order to assure that these services do not impair the auditor’s independence. These procedures generally approve the performance of specific services subject to a cost limit for all such services. This general approval is reviewed, and if necessary modified, at least annually. Management must obtain the specific prior approval of the committee for each engagement of our auditor to perform audit-related or other non-audit services. The committee does not delegate its responsibility to approve services performed by our auditor to any member of management. The committee has delegated authority to the committee chair to pre-approve any audit or non-audit service to be provided to us by our auditor provided that the fees for such services do not exceed $100,000. Any approval of services by the committee chair pursuant to this delegated authority must be reported to the committee at its next regularly scheduled meeting.
Recent Changes in Independent Registered Public Accounting Firm
As previously reported on the Current Report on Form 8-K filed with the SEC on April 23, 2020, following a competitive process with several participants, the Audit Committee on April 17, 2020 dismissed Deloitte as the Company’s independent registered public accounting firm, effective as of that date. Deloitte’s audit report on our consolidated financial statements for the year ended December 31, 2019, the only year for which Deloitte audited the Company’s financial statements, did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. Deloitte expressed no opinion on the effectiveness of the Company’s internal control over financial reporting, as the Company was not required to have, nor did the Company engage Deloitte to perform, an audit of the Company’s internal control over financial reporting. During the Company’s fiscal year ended December 31, 2019 and the subsequent interim period through (and including) April 16, 2020, there were (i) no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which if not resolved to Deloitte’s satisfaction, would have caused Deloitte to make reference to the subject matter of the disagreements in its report on the Company’s consolidated financial statements for such year, and (ii) no “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K, except as set forth in the following sentence. As previously disclosed under Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, during the audit of the consolidated financial statements for the period from January 18, 2018 (inception) to December 31, 2018, the Company reported material weaknesses in its internal controls over financial reporting relating to (1) the lack of employees with sufficient expertise in U.S. generally accepted accounting principles, and (2) the lack of risk assessment procedures. These issues have been remediated as of December 31, 2020.
The Audit Committee, on and effective as of April 17, 2020, appointed KPMG as 89bio’s independent registered public accounting firm for the year ended December 31, 2020. During the fiscal years ended December 31, 2018 and December 31, 2019 and the subsequent interim periods through April 16, 2020, neither the Company nor anyone acting on its behalf consulted with KPMG, regarding either: (i) the application of accounting principles to a specific transaction, completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company that KPMG concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K).
Report of the Audit Committee
The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2020 with the Company’s management and with KPMG, the Company’s independent registered public accounting firm. The Audit Committee has discussed with KPMG the matters required to be discussed by the applicable standards of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has also received the written disclosures and the letter from KPMG pursuant to applicable PCAOB requirements regarding its communications with the Audit Committee concerning independence, and the Audit Committee has discussed with KPMG its independence. Based on the foregoing, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the SEC.
This report is provided by the following directors, who serve on the Audit Committee:
Steven Altschuler, M.D.
Derek DiRocco, Ph.D.
Michael Hayden, M.B. Ch.B., Ph.D.
Lota Zoth, C.P.A. (Chair)
Board Recommendation
The Board recommends a vote “FOR” the ratification of the selection of KPMG to serve as our independent auditor.
Our business affairs are managed under the direction of our Board. Our Board has adopted a set of Principles of Corporate Governance as a framework for the governance of the Company, which is posted on our website located at https://IR.89bio.com, under “Corporate Governance.”
Board Composition
Director Nomination Process
The Nominating Committee is responsible for, among other things, overseeing succession planning for directors and ensuring that we have a qualified board to oversee management’s execution of the Company’s strategy and safeguard the long-term interests of stockholders. In this regard, the committee is charged with developing and recommending Board membership criteria to the Board for approval, evaluating the composition of the Board annually to assess the skills and experience that are currently represented on the Board and the skills and experience that the Board may find valuable in the future, and identifying, evaluating and recommending potential director candidates.
In identifying potential candidates for Board membership, the Nominating Committee considers recommendations from directors, stockholders, management and others, including, from time to time, third-party search firms to assist it in locating qualified candidates. The committee does not distinguish between nominees recommended by stockholders and other nominee recommendations. Once potential director candidates are identified, the committee, with the assistance of management, undertakes a vetting process that considers each candidate’s background, independence and fit with the Board’s priorities. As part of this vetting process, the committee, as well as other members of the Board and the CEO, may conduct interviews with the candidates. If the committee determines that a potential candidate meets the needs of the Board and has the desired qualifications, it recommends the candidate to the full Board for appointment or nomination and to the stockholders for election at the annual meeting.
Criteria for Board Membership
In assessing potential candidates for Board membership, and in assessing Board composition, the Nominating Committee considers a wide range of factors, including directors’ experience, knowledge, integrity, understanding of our business environment and specific skills they may possess that are helpful to the Company (including leadership experience, financial expertise and industry knowledge). The committee seeks to balance the experience, skills and characteristics represented on the Board and does not assign specific weight to any of these factors. In addition, the committee generally believes it is important for all Board members to possess the highest personal and professional ethics, integrity and values, an inquisitive and objective perspective, a sense for priorities and balance, the ability and willingness to devote sufficient time and attention to Board matters, and a willingness to represent the long-term interests of all our stockholders.
While we do not have a formal written policy regarding diversity in identifying director candidates, the Nominating and Corporate Governance Committee seeks to achieve a diversity of occupational and personal backgrounds on the Board, including with respect to gender, race/ethnicity and sexual orientation, and assesses its effectiveness in this regard in connection with its annual review of the Board’s composition.
Stockholder Recommendations for Directors
It is the Nominating Committee’s policy to consider written recommendations from stockholders for nominees for director. The committee considers nominees recommended by our stockholders in the same manner as a nominee recommended by our Board members or management. Any such recommendations should be submitted to the committee as described in the section titled “Stockholder Communications” below and should include the following information: (i) all information about the nominee that is required to be disclosed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such nominee’s written consent to being named in the proxy statement as a director nominee and to serving as a director, if elected); (ii)
such person’s written consent to serving as a director, if elected, for the full term for which such person is standing for election; (iii) the name(s) and address(es) for each stockholder of record and beneficial owner of shares of common stock held in “street name” making the nomination and the number of shares of common stock that are owned beneficially and of record by each such stockholder and beneficial owner of shares of common stock held in “street name”; and (iv) such stockholder’s representation that he or she (or a qualified representative) intends to appear at the meeting to make such nomination.
Board Leadership Structure
In March 2020, we appointed Dr. Steven M. Altschuler to serve as a director and as our independent Chairman. Our Principles of Corporate Governance provide our Board with the flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer. Currently, the Board believes that the roles of Chairman and CEO should be separate and that the Chairman should be an independent director as this structure enables our independent Chairman to oversee corporate governance matters and our CEO to focus on leading the Company’s business. At any time when there is not an independent Chairman, the Board will designate one or more independent directors to serve as lead director.
The independent directors generally meet in executive sessions without management present at every regular Board meeting. The purpose of these executive sessions is to encourage and enhance communication among non-management and independent directors.
The Board believes that its programs for overseeing risk, as described in the “Board Risk Oversight” section below, would be effective under a variety of leadership frameworks. Accordingly, the Board’s risk oversight function did not significantly impact its selection of the current leadership structure.
Director Independence
Nasdaq listing rules require a majority of a listed company’s board of directors to be comprised of independent directors who, in the opinion of the board of directors, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Subject to specified exceptions, each member of a listed company’s audit, compensation and nominating committees must be independent, and audit and compensation committee members must satisfy additional independence criteria under the Exchange Act.
Our Board undertook a review of its composition and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, our Board has determined that each of our current directors listed above under “Information Regarding Director Nominees and Continuing Directors,” with the exception of Rohan Palekar, is an “independent director” as defined under the Nasdaq listing rules. Mr. Palekar is not an independent director because he is our chief executive officer. In making such determinations, our Board considered the relationships that each such non-employee director has with our company and all other facts and circumstances our Board deemed relevant in determining independence, including the beneficial ownership of our capital stock by each non-employee director. Our Board also determined that each of the directors currently serving on the Audit Committee and the Compensation Committee satisfy the additional independence criteria under the Exchange Act.
Board Committees
Our Board has a separately designated Audit Committee, Compensation Committee, Nominating Committee and Science Committee, each of which is comprised solely of independent directors with the membership and responsibilities described below. Members serve on the committees until their resignation or until otherwise determined by our board of directors. Each of these committees is empowered to retain outside advisors as it deems appropriate, regularly reports its activities to the full Board and has a written charter that is posted on our website located at https://IR.89bio.com, under “Corporate Governance.”